Sierra Pacific Power Company
Contact: Bob Sagan or Karl Walquist
Phone: (775)834-4345

For Immediate Release

Northern Nevada Electric Prices Lower than 1994 Proving its ability to reduce operating costs, Sierra Pacific Power Co. will rebate approximately $9.35 million to its Nevada electric and natural gas customers for 1998, beginning in September. The action follows on the heels of an earlier $10 million electric and gas rebate made by the company in May for 1997.

In its September bill insert to customers, Sierra Pacific will use the message,"Twice is Nice," referring to the two rebates, which totaled nearly $20 million in less than six months.

The latest rebate is the result of an agreement first negotiated by Sierra Pacific in 1997 with the Office of Consumer Advocate and the Public Utilities Commission of Nevada (PUCN). The rebate was approved today by the PUCN."Shared Earnings" Split

Under this"shared earnings" agreement, any Sierra Pacific earnings for 1997, 1998 and 1999 that exceed a certain plateau are split evenly between the utility's customers and its shareholders.

"Our employees have been working hard to hold down our costs, and achieve new operating efficiencies," said Douglas R. Ponn, vice president for Governmental and Regulatory Affairs."In 1993, we had one employee for every 222 customers. Today, that ratio is one employee to 322 customers, an improvement of 45 percent.

"There also are agreements in place to guarantee that the price customers are paying for electricity today will be exactly the same in 2003.

What all that means is that electric prices today are lower than they were in 1994, and come the year 2003, they will still be lower than in'94." Utility Prices Tumble

According to Ponn, Sierra Pacific first froze its electric and natural gas prices in 1994. Electric prices were subsequently reduced in May 1995, and customers were given a rebate in July 1995. In 1997, Sierra Pacific further reduced Nevada's electric prices by $7.1 million, extended the price freeze until the year 2000, and rebated $13 million to Nevada electric customers.

Of the total $9.35 million being rebated to customers beginning this September, approximately $7.37 million is on the electric side of the business. The remaining $1.98 million comes from natural gas operations. Typical residential electric customers will see a one-time electric credit of approximately $10 on their utility bills effective in September. Typical residential gas customers will see a one-time gas credit of approximately $11.40 on their bills. Commercial Customers Included

Large commercial customers will receive a check for their rebates, while other commercial accounts will have their bills credited. In all cases, the sum rebated will reflect both the electric and natural gas rebates, where applicable (Sierra Pacific does not provide natural gas service outside the Reno/Sparks area).

Each group of customers will receive its rebate based on the portion of Sierra Pacific's business for which that group was responsible during the time period. For example, if residential customers represented 30 percent of the utility's business in 1998, that group would receive 30 percent of the total rebate. The rebate will be credited on the September utility bill to active residential customers.

If a customer does not have an active account at the time of billing, he or she will not automatically receive the rebate. All commercial customers who received service in 1998, and are still active, will also qualify for the rebate.

Any customers who think they qualify, but who have not received a rebate, can call the toll-free number provided. Sierra Pacific will research the account and rebate as appropriate.

Those customers with questions can call toll-free 1.877.273.2283 (1.877.2.REBATE)