News Releases

Sierra Pacific Resources Initiates Discussions With Suppliers To Improve Liquidity

May 6, 2002

Sierra Pacific Resources
Contact: Andrea Smith, 702-367-5683
Analyst Contacts: Rich Atkinson, 775/834-5640;
Barbara Doble, 702/367-5647
Phone: please see above

For Immediate Release

RENO,Â- Sierra Pacific Resources (NYSE: SRP), whose electric utility subsidiaries provide power to much of Nevada and the Lake Tahoe area of California, said today that it has approached its suppliers with a program designed to help its Nevada Power unit meet its liquidity needs during this summer's peak power-delivery period. The program is designed to ensure continuation of deliveries under existing power supply contracts and to reduce near- term cash outlays for power.

Sierra Pacific Resources Chairman and Chief Executive Officer Walt Higgins said,"This supplier payment program is an important demonstration of our commitment to do everything possible to ensure that our customers have the power they need without interruption. With the continued cooperation with power suppliers, we should have adequate power and cash to meet our customers'needs through the peak power season."

The Company began informing suppliers of specific terms of the program on Friday, May 3. Discussions are ongoing.

"We remain convinced that continuation of deliveries under existing power supply contracts is in the best interest of the our customers, our suppliers, Company and the State of Nevada," he said,"and we are working to assure uninterrupted power supply."

Mr. Higgins continued,"We are presently current with all of our vendors. We expect to be able to meet our obligations to suppliers who work with us. Those suppliers who choose not to work with us, however, may have to wait longer for payment."

Nevada Power does not anticipate paying any terminating supplier's claim until resolution of the Federal Energy Regulatory Commission Section 206 complaint proceedings and does not intend to pay any terminating supplier's claim any sooner than it pays continuing suppliers. Claims may be subject to the Company's pending FERC 206 proceeding challenging contract prices, as well as to other defenses.

Termination by suppliers will not reduce the Company's potential liability under the power contracts. As previously announced, Enron Power Marketing Inc. terminated supply under contracts covering about 10% of purchased power supplies for the combined utilities for the remainder of the year. Sierra Pacific said that it expects Enron will assert claims of up to $305 million under those contracts, which represents nearly 50% of the Company's estimated total potential mark-to-market liability for all its power supply contracts for this year.

Mr. Higgins stated that he was optimistic that the Company's suppliers would continue to work with the company."It is in their self-interest not only because they stand to get paid sooner than if they terminate, but also because suppliers who support us will generate goodwill within the State of Nevada by doing their part to ensure reliability of power supply during the peak summer months."

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 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.

This press release contains forward-looking statements regarding the future performance of Sierra Pacific Resources 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, further unfavorable rulings in pending and future rate cases, the ability of the Company to access capital markets in light of recent ratings downgrades, whether suppliers will continue to honor existing power and fuel supply contracts, whether long-term power costs can be lowered through negotiation or administrative proceedings, weather conditions during the summer of 2002 and beyond, operating hazards, uninsured risks and changes in energy- related federal or state legislation and regulations. Additional cautionary statements regarding other risk factors that could have an effect on the future performance of the Company are contained in the Company's Form 10-K filed with the SEC. The 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.