Sierra Pacific Power Company
Contact: Faye I. Andersen
Phone: (775) 834-4822

For Immediate Release

Sierra Pacific Power Company filed a second request with the California Public Utilities Commission (CPUC) today to increase its rates for the 45,000 electric customers it serves in California. Company officials said Sierra Pacific had not increased its rates in California since 1995 and cited the need to update its prices to reflect what's happened in the energy market over the past few years.

"Our wholesale costs have gone through the roof since the energy crisis in the West,"said Mary Simmons, vice president of Rates and Regulation for Sierra Pacific Power Co. She added that Sierra Pacific's average wholesale fuel and electricity costs have risen 98 percent since our rates were last updated."We've been buying energy at prices far in excess of what we've been able to collect from our customers,"she said.

In June 2001, the company first filed to increase customers'rates and the CPUC held hearings on the request in December. That request, in which the company sought to recover the cost of fuel and power it purchased on behalf of its customers, would increase the bill for the typical residential customer using 650 kilowatt hours per month from $47.13 to $60.13. The overall increase is approximately 26 percent, or $10.2 million.

At the time, the company notified the CPUC that it would be making a second filing in 2002 that would cover the costs of new investments in Sierra Pacific's electric system and maintenance of facilities to distribute electricity to customers.

Today's request seeks to raise the typical residential monthly electric bill for a customer using 650 kWh by $7.67. In the event that the CPUC grants the phase one request filed in 2001, the increase in overall revenues for phase two would be approximately 21.7 percent, or $8.9 million.

"Electric rates for Sierra Pacific's California customers are currently at 1995 levels,"Simmons said. In explaining the company's requests, Simmons said the company's electric rates were reduced by 5.6 percent in 1996 and frozen at that level until 1998, when residential and eligible small commercial customers'rates were reduced by an additional 10 percent.

The CPUC is expected to make a decision on the company's 2001 request sometime this spring, and if approved, new electric rates for California customers would be effective immediately.

For the request filed today, the CPUC will schedule hearings sometime in 2002, with a decision expected in 2003.

The company buys fuel, primarily natural gas and coal, to run its northern Nevada power plants and it buys electricity from other suppliers to supplement the power generated at its own facilities. About one-half of the electricity Sierra Pacific provides to customers annually is produced at company-owned power stations in Nevada; the balance is purchased from the wholesale market.

Approximately 80 percent of Sierra Pacific's California customers reside in the Lake Tahoe Basin. The company's California service area extends from Portola in the north to Markleeville and Topaz Lake and Coleville in the south. Sierra Pacific has approximately 270,000 customers in Nevada.