News Releases

Nevada Power Company Acquisition and Financing of Power Plant in Moapa Approved

Sep 16, 2004

Nevada Power
Contact: media:
Sonya Headen; (702) 367-5222
Analyst Contact:
Vicki Erickson; (775) 834-5656
Phone:please see above

For Immediate Release

Renewables and Energy Conservation Also Encouraged in Order

Las Vegas, Nev. -- Nevada Power Company received approval from the Public Utilities Commission of Nevada (PUCN) today of the acquisition and financing of a partially constructed 1200 MW (megawatts) natural gas-fired combined- cycle power plant located in the Moapa Valley, 20 miles northeast of Las Vegas. Total costs to acquire and complete construction of the facility were estimated at $558 million.

The PUCN's final order deemed the plant a critical facility and provided the company with an additional 2 percent return on equity on construction costs.

Walter Higgins, chairman and chief executive officer of Sierra Pacific Resources (NYSE:SRP), parent company of Nevada Power, said,"Our company will now expeditiously move forward with this project which is very important to the state of Nevada. As we've previously stated, this facility will afford us a more balanced mix of our own generation and purchased power, thereby reducing our state's reliance on potentially volatile energy markets. It is a sound investment in reliability for our customers and makes good sense financially for our investors."

The PUCN order includes incentives for early completion of the plant and/or penalties for any delays. Nevada Power plans to finance the project with a combination of internally generated cash and external financing.

The facility consists of four natural gas-fired combustion turbines, two steam turbines and four heat recovery steam generators operating in combined-cycle mode. The facility is expected to be fully operational by the summer of 2006.

Order Also Advocates Renewables and Conservation Measures

Among other items in the PUCN order was a call for Nevada Power to increase its emphasis on renewables, conservation and efficiency measures in company-owned buildings, to identify additional incentives for residential customers who utilize this type of technology in their homes, and to file a"green power" pricing tariff in the company's next general rate case in 2005.

"Our company wholeheartedly supports and is dedicated to aggressively pursuing programs involving various renewable energy and conservation measures," Higgins said."This is an ongoing commitment and we look forward to updating the Commission on our progress in these areas."

The Commission also approved additional transmission and gas capacity and issued a requirement for the company to file an amendment to its resource plan related to a planned coal study.

Nevada Power Company is a regulated public utility engaged in the distribution, transmission, generation, purchase and sale of electric energy in the southern Nevada communities of Las Vegas, North Las Vegas, Henderson, Searchlight, Laughlin and their adjoining areas. The Company also provides electricity to Nellis Air Force Base, the Department of Energy at Mercury and Jackass Flats at the Nevada Test Site. Nevada Power Company provides electricity to approximately 703,000 residential and business customers in a 4,500 square mile service area.

Headquartered in Nevada, Sierra Pacific Resources is a holding company whose principal subsidiaries are Nevada Power Company, the electric utility for most of southern Nevada, and Sierra Pacific Power Company, the electric utility for most of northern Nevada and the Lake Tahoe area of California. Sierra Pacific Power Company also distributes natural gas in the Reno-Sparks area of northern Nevada. Other subsidiaries include the Tuscarora Gas Pipeline Company, which owns 50 percent interest in an interstate natural gas transmission partnership and several unregulated energy services companies.

Forward Looking Statements:This press release contains forward-looking statements regarding the future performance of Nevada Power Company, within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from current expectations. These risks and uncertainties include, but are not limited to, the parties'abilities to satisfy any applicable closing conditions, construction risk related to the completion of the plant, Nevada Power's ability to access the capital markets to finance the acquisition on favorable terms and to obtain required regulatory approvals for the amendment to Nevada Power's IRP and for the financing of the acquisition. Additional cautionary statements regarding other risk factors that could have an effect on the future performance of Nevada Power Company are contained in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2004 and its Annual Report on Form 10-K for the year ended December 31, 2003, filed with the SEC. Nevada Power Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.