Escalating Energy Prices Cited as Main Driver of Increases
RENO, Nev., Oct. 27 /PRNewswire-FirstCall/ -- The Public Utilities
Commission of Nevada (PUCN) today approved increases in electric and natural
gas rates in northern Nevada for Sierra Pacific Power Company, a wholly-owned
subsidiary of Sierra Pacific Resources (NYSE: SRP).
The rate changes are a result of filings the company made this spring and
summer to increase its rates due to the escalating and unprecedented high
prices for natural gas being experienced across the nation, that is used in
both producing electricity as well as supplying natural gas customers in the
Reno-Sparks area. The new rates become effective November 1.
The PUCN approved a $64 million increase in electric rates, which for the
typical residential customer using 715 kilowatt hours of electricity means a
6.5 percent increase, or a rise of approximately $5.66 per month, from $88.16
to $93.82. For natural gas customers in the Reno-Sparks metropolitan area, a
$34 million increase means the typical natural gas customer using 59 therms of
natural gas would see a 24.4 percent increase, or $15.56 per month, from
$63.79 to $79.35.
"In the past few months, natural gas prices throughout the United States
have reached their highest levels in history, double of what was predicted
just one year ago," said Mary Simmons, vice president of external affairs for
Sierra Pacific. The Energy Information Administration, a division of the U.S.
Department of Energy, predicts that regional prices for natural gas this
winter will range from 30 to 60 percent higher than last year. "Our company's
increases for this coming winter are considerably less than the expected
national averages because we contracted for our winter gas supplies before the
recent, significant run-up in prices," Simmons added.
She emphasized that the increases announced today do not include any
profit for the company. "These increases reflect prices we have already paid
for natural gas to serve our customers, as well as the forecasted price the
company expects to pay for fuel and power to supply customers this winter,"
she said.
Noting the increases granted today by the PUCN were higher than the
company originally requested, Simmons added, "The PUCN and their staff
recognize the sharp increases in prices that have occurred throughout the
summer months and the anticipation that they will continue to remain high
throughout this winter. By matching the prices we charge closer to the actual
cost of energy, we avoid building a big deficit that we will have to recover
from customers later."
On July 1, the company also requested to update its electric rates for
northern Nevada customers in the face of escalating energy prices for fuel it
uses to generate electricity and power that it purchases to serve customers.
Sierra Pacific is required by the PUCN to update its energy rates annually,
but may file mid-year if prices fluctuate significantly. The purpose of the
company's July filing was an attempt to prevent or reduce the build-up of a
large under collection that customers would be asked to pay at a later time.
Simmons encouraged customers to take steps to winterize their homes before
the winter heating season arrives. "There are many things each of us can do
that are no or low-cost measures to conserve energy and reduce monthly bills,
like setting thermostats no higher than 68-degrees. Each degree of
temperature means a three percent impact on bills."
Many no cost, low cost and added cost conservation tips and ideas can be
found on the company's website at http://sierrapacific.com.
Sierra Pacific Power Company serves approximately 300,000 electric
customers in northern Nevada and 135,000 natural gas customers in the
Reno-Sparks metropolitan area. Sierra Pacific Power Company is a wholly-owned
subsidiary of Sierra Pacific Resources (NYSE: SRP).
Forward-Looking Statements: This press release contains forward-looking
statements regarding the future performance of Sierra Pacific Power Company,
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements are subject to a variety of risks and uncertainties that
could cause actual results to differ materially from current expectations.
These risks and uncertainties include, but are not limited to, increased
prices and limited availability of fuel, purchased power and natural gas,
unfavorable rulings in Sierra Pacific Power's future deferred energy and
general rate cases and Sierra Pacific Power's ability to maintain access to
the capital markets to support its working capital and liquidity needs.
Additional cautionary statements regarding other risk factors that could have
an effect on the future performance of Sierra Pacific Power Company are
contained in its Quarterly Reports on Form 10-Q for the quarter ended June 30,
2005 and its Annual Report on Form 10-K for the year ended December 31, 2004,
filed with the SEC. Sierra Pacific Power Company undertakes no obligation to
release publicly the result of any revisions to these forward-looking
statements that may be made to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.
SOURCE Sierra Pacific Power Company
 back to top
Related links:
http://sierrapacific.com
CONTACT:
Media, Faye I. Andersen, +1-775-834-4822, or
Analysts, Britta Carlson, +1-702-367-5624, both of Sierra Pacific
Power Company
|
