News Releases

Agreement on PGE Sale to Sierra Pacific Resources Will Benefit Customers

Sep 1, 2000

Sierra Pacific Resources (NYSE: SRP), Oregon Public Utility Commission (OPUC) staff, and industrial customers and consumer advocate groups have reached a settlement that paves the way for the acquisition of Portland General Electric (PGE) by Sierra Pacific Resources. The net result is a six-year freeze on certain electricity prices and a $95 million price credit for PGE customers over the next seven years.

Last fall, Sierra Pacific announced its intention to acquire PGE, a wholly-owned subsidiary of Enron Corp. (NYSE: ENE). PGE is the electric provider to more than 700,000 electric customers in the Portland-Salem, Ore. area.

In papers filed with the Oregon Public Utility Commission today, Sierra Pacific, the OPUC Staff, the Citizens' Utility Board of Oregon (CUB), and the Industrial Customers of Northwest Utilities (ICNU) recommended that the commission adopt the settlement of Sierra Pacific Resources' acquisition of PGE. The terms and conditions of the agreement establish that approval of the acquisition is in the public interest.

"We're very pleased with this outcome and wish to thank all of the parties for their diligent work to make today's settlement agreement a reality," said Sierra Pacific Resources Chairman, President and CEO Walter M. Higgins. "PGE is one of the premier electric utilities in the West and this agreement today moves us one step closer to the merging of our two companies."

OPUC commissioners are expected to rule on the agreement in the weeks to come. Sierra Pacific has already gained approval of the transaction from the Department of Justice and the Federal Trade Commission. The company is awaiting approvals from the Federal Energy Regulatory Commission and the Securities and Exchange Commission.

"PGE is pleased at the progress Sierra Pacific has made with OPUC staff and customer groups to bring our companies together," said PGE CEO and President Peggy Fowler. "This agreement, if approved by the commissioners, will ensure that Northwest customers can continue to depend on PGE and its employees for great service and a continued commitment to the Oregon community, just as they've done for the last 110 years."

During settlement conferences over the past five months, the parties worked out the details of the transaction. At the heart of the settlement agreement are provisions that ensure that Sierra Pacific has an incentive to achieve the maximum possible efficiencies and savings from the integration of the two companies which will benefit customers in Oregon, Nevada and California. The settlement also provides rate credits which secure immediate benefits from the transaction for PGE customers.

  The conditions of approval include:

  -- A six-year price freeze on distribution, customer services and
     transmission services for PGE customers beginning October 1, 2001 and
     continuing until October 1, 2007.  The freeze does not affect PGE's
     ability to adjust prices in response to changing wholesale electricity
     costs and the amount the company pays for fuel to power its generation

  -- An approximate $95 million acquisition credit that Sierra Pacific will
     credit to customer bills, which will begin as soon as this transaction
     is complete.  The credits will continue through Sept. 30, 2007.

  -- PGE's and Sierra Pacific's agreement to continue its leadership role
     and support of Oregon's electric restructuring legislation, SB 1149.
     Among its first actions, the utility will unbundle its electric prices
     in a filing with the OPUC to be made on October 1, 2000.  (The
     unbundling of prices is accomplished by separating the generation,
     transmission and distribution components of a customer's bill.)

  -- The company also agreed to 30 different customer protections that
     guarantee a continued high level of service quality and reliability for
     PGE customers.

"We look forward to the beginning of a long and mutually prosperous relationship with Oregon's electric customers, the regulators and the communities served by PGE," Higgins said.

SOURCE: Sierra Pacific Resources

Contact: analysts, Rich Atkinson, 775-834-4358, or media, Faye I.
Andersen, 775-834-4822, both of Sierra Pacific Resources