News Releases

Sierra Pacific Files to Recover Higher Natural Gas Costs

Jun 28, 2001

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

For Immediate Release

Taking essential and appropriate action to counter unprecedented hikes in the cost of natural gas, Sierra Pacific Power Co. filed a request today seeking a rate increase to help stabilize natural gas prices in northern Nevada.

To correct serious imbalances between prices currently charged its customers and the higher cost Sierra Pacific has already paid to its suppliers, the request, which was filed with the Public Utilities Commission of Nevada (PUCN), provides natural gas price adjustments averaging 55 percent for residential customers.

The gas bill for a typical Sierra Pacific residential customer who uses 60 therms of natural gas per month will rise by $27.43 (from $49.90 to $77.33). Even with this increase Sierra Pacific residential customers will still be paying the lowest price for natural gas in northern Nevada (based on an average usage of 60 therms per month). The earliest that the increase could go into effect would be August 1, 2001.

The imbalance that led to the near collapse of the California power system is sweeping the western U.S. and causing natural gas utilities regionwide to take similar measures to assure reliable utility service.

"Northern Nevada is not immune from what has happened in California and this filing is a direct result of the higher cost of natural gas being charged to Sierra Pacific by its gas suppliers," said Jeff Ceccarelli, President of Sierra Pacific Power Co.

"Sierra Pacific has worked hard to protect customers from the full impact of higher prices by aggressively managing how and when we purchase our gas supplies. Unfortunately, natural gas prices, driven sky high by the western energy crisis, reached historic levels this last winter. While prices have recently started to come down from the absolute highs, they remain well above the prices used to calculate the company's current rates. If gas prices continue to decrease, we will see rates come down quickly in the future."

Ceccarelli emphasized that the request does not include any profit or operating costs for Sierra Pacific, but simply reflects a reimbursement to the company for costs it has already paid for natural gas from its suppliers. The adjustment, which will be reviewed by the PUCN before becoming effective, will bring Sierra Pacific's prices in similar range to other natural gas utilities in the region.

Increases in natural gas prices nationwide are a result of growing demand coupled with tight domestic supplies, volatile prices for oil, as well as northern Nevada's close proximity to California and that state's failed deregulation attempt.

A customer's bill for natural gas is determined both by the price paid for the gas itself and by the amount of gas they use. As a result, many customers have the ability to control their bills by reducing gas usage, particularly during cold winter months. Some steps that can be taken to reduce gas usage include turning down thermostats, adding extra attic insulation, and weather-stripping and caulking doors and windows. Customers interested in learning more about how to save gas and conserve energy can contact Sierra Pacific at 834-4556.

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