The California Public UtilitiesCommission (CPUC) today granted Sierra Pacific Power Company's requestto increase its rates for the 45,000 electric customers it serves in California.The company originally requested the increase in June 2001 and has notincreased its rates in California since 1995.

"Even with this increase,our rates will still be 35-50 percent lower than they are for Californiansserved by the state's largest utilities," said Mary Simmons, vicepresident of Rates and Regulation for Sierra Pacific Power.

According to Simmons, SierraPacific requested the increase a year ago to recover soaring energy pricesduring the 2000-2001 energy crisis throughout the West. She added thatSierra Pacific's average wholesale fuel and electricity costs have increased98 percent since the company's rates were last updated.

On June 29, 2001, Sierra Pacificsought an emergency rate increase of 2 cents per kilowatt hour (kWh) inits California service territory. CPUC hearings were held on the matterin November 2001. The overall increase to customers is $10.0 million,or an average of approximately 26 percent. The typical residential monthlyelectric bill for a customer using 650 kWh would increase from $51.63to $64.63. The new rates are effective July 18, 2002.

The increase does not applyto those low-income customers eligible for the California Alternate Ratesfor Energy (CARE), or to medical baseline customers.

Simmons explained that priorto this increase, Sierra Pacific's rates were set at 1995 levels."Thecompany's electric rates were reduced by 5.6 percent in 1996 and frozenat that level in 1998, when residential and eligible small commercialcustomers rates were reduced by an additional 10 percent," she said.

The increase is the first ofa two-part request by Sierra Pacific to change customer rates. The secondpart of the request was filed April 1, 2002, when the company requestedan $8.9 million increase, or a 17.1 percent increase. CPUC hearings willbe held on this request some time in 2002, with a decision expected in2003.

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

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