News Releases

Nevada Court Rules on Sierra Pacific's Appeal of Pinon Pine Disallowance

RENO, Nev.
Jan 26, 2006

Sierra Pacific Power Company, a wholly owned subsidiary of Sierra Pacific Resources (NYSE: SRP), today said the Second Judicial District Court of the State of Nevada has vacated and remanded back to the Public Utilities Commission of Nevada (PUCN) for review a 2004 PUCN order which disallowed recovery of $47 million in costs related to the Pinon Pine generating facility in northern Nevada.

The court said, "This matter needs to be returned to the Commission for review of the expenditures to determine if they were justly and reasonably incurred."

Sierra Pacific had appealed the PUCN's 2004 decision which allowed the company to recover $48 million of a $95 million request for costs associated with Pinon Pine. As a result of that decision, in the second quarter of 2004 Sierra Pacific recorded a charge to earnings of approximately $47 million ($30 million after-tax) for the disallowed costs.

Sierra Pacific Power said it will have no further comment on the District Court's ruling until it has had an opportunity to study the decision and is informed by the PUCN of the review process procedures.

Sierra Pacific Power Company

Headquartered in Reno, Nevada, Sierra Pacific Power Company is the principal utility for most of northern Nevada and the Lake Tahoe area of California. It is a wholly owned subsidiary of Sierra Pacific Resources which also is the holding company for Nevada Power Company, the electric utility for southern Nevada. Sierra Pacific Power also distributes natural gas in the Reno-Sparks area of northern Nevada. Other subsidiaries of Sierra Pacific Resources include the Tuscarora Gas Pipeline Company, which owns 50 percent interest in an interstate natural gas transmission partnership.

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, an unfavorable ruling by the Public Utilities Commission of Nevada in its reconsideration of the previous disallowed costs associated with the Pinon Pine generating facility. 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 Report on Form 10-Q for the quarter ended September 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 Resources

CONTACT: Media, Karl Walquist, +1-775-834-3891, or Analysts, Britta
Carlson, +1-702-367-5624, both of Sierra Pacific Resources