Sierra Pacific Power Company
Contact: Malyn Malquist
Phone: (775)834-5400

For Immediate Release

As required by a September 1994 rate settlement which froze Sierra Pacific's electricity and natural gas prices for approximately two years, Sierra Pacific Power Co. has filed with the Public Service Commission of Nevada to decrease electric prices $8.2 million and increase natural gas prices $1.3 million, effective Jan. 1, 1997. (Sierra Pacific's last price change was a $6.5 million electric price decrease in early 1995.) As an alternative to these price changes, Sierra Pacific filed a motion with the Commission to adopt the rate plan previously approved by the Commission in the recently terminated Sierra Pacific/Washington Water Power (NYSE: WWP) merger. Highlights of this previously approved settlement are:

A one-time refund of $9 million to Nevada electric customers;

A one-time refund of $4 million to Nevada natural gas customers;

A general electric price freeze through Dec. 31, 1999, and a fuel and purchased power electric rate freeze through December 31, 1999;

A general gas price freeze through Dec. 31, 1999, and;

A 50/50 sharing between customers and shareholders of utility earnings over 12 percent.

In addition, Sierra Pacific stated it is willing to forego reinstatement of deferred energy accounting for its gas division through Dec. 31, 1999. For a typical residential customer using 650 kilowatt hours of electricity per month, the proposed one-time refund would be approximately $14. A typical natural gas customer using 55 therms of gas per month would see a one-time refund of approximately $29.

Sierra Pacific serves more than 230,000 electric customers in northern Nevada and more than 92,000 natural gas customers in the Reno/Sparks area.