Sierra Pacific Power Company
Contact: Charlie Fletcher
Phone: 775-834-3959

For Immediate Release

(Reno, NV) April 27, 2001Â- The sale of Sierra Pacific Power Company's water business received final regulatory approval today with the Public Utilities Commission of Nevada (PUCN) adopting a stipulation that would provide a $21.5 million refund to water customers. With this approval, the sale of the water business to the Truckee Meadows Water Authority (TMWA) is scheduled to close in mid- June 2001.

Water Customers of record on June 1, 2001, will be eligible for the refund, which will result in an approximate total of $244 for residential customers and $800 for commercial customers.

"This sale has great benefits for both customers and the company,"according to Jeff Ceccarelli, Sierra Pacific Power Company president."We're very pleased to complete this sale to TMWA, which maintains a local perspective and local control over a critical resource in the Reno-Sparks area."Ceccarelli praised the efforts of the local governments in working together and concluding a fair deal that benefits everyone.

Sierra Pacific's water supply and distribution business serves more than 72,000 customers in the Reno-Sparks metropolitan area and has approximately 85 employees. The water company assets include state-of-the-art treatment facilities and distribution infrastructure, water rights (surface and ground) and storage rights in Donner and Independence Lakes.

Earlier this month, the PUCN issued an Interim Order approving Sierra's petition for termination of its water service in the Truckee Meadows. Another important component for completion of the sale was received earlier this week when the U.S. Government assigned to TMWA the Interim Storage Agreement for storage of water for the Reno/Sparks area during drought years.

Sierra Pacific said that after-tax proceeds from the sale will be used to reduce the company's existing debt.

"We maintain our commitment to the reliable, low-cost delivery of electricity and gas to our customers in Nevada, as we move towards our vision of becoming a premier energy distribution company in the West,"said Ceccarelli.

Sierra Pacific announced plans to sell its water business September 7, 2000 through an auction process conducted by Lehman Brothers, Sierra's financial advisors. The auction was concluded with the announcement on January 15, 2001 Sierra had entered into a purchase agreement with Truckee Meadows Water Authority (TMWA) for the sale of the water business. TMWA is a joint powers authority whose members are the City of Reno, the City of Sparks and Washoe County.