Sierra Pacific Resources
Contact: Mark Ruelle/Rich Atkinson
Phone: 775.834.5400/775.834.435

For Immediate Release

Sierra Pacific Re-Elects Three Directors, Declares Quarterly Dividend

Sierra Pacific Resources (NYSE:SRP) shareholders, gathered today at their annual meeting in Reno, Nevada re-elected three members of their board of directors. Re-elected to three-year terms, expiring in 2001, were Sierra Pacific Chairman, President and Chief Operating Officer Malyn K. Malquist; James R. Donnelley, vice chairman of the board of R.R. Donnelley&Sons; and James L. Murphy, CPA and retired partner of and consultant to Grant Thornton, L.L.P.

The Sierra Pacific Resources Board also approved a quarterly dividend on common stock of 32.5 cents per share, payable August 1, 1998, to shareholders of record at the close of business on July 17, 1998. At their February 24, 1998, meeting, the Sierra Pacific Board increased the dividend 1.5 cents per share, an increase of 4.8 percent.

On April 30, the boards of directors of Sierra Pacific and Nevada Power Company approved a merger of the two companies. The merger of equals allows both companies, plus their subsidiary companies, to operate under the holding company, Sierra Pacific Resources. Chairman, President and CEO of Sierra Pacific Malyn Malquist told shareholders,"Together, Sierra Pacific and Nevada Power will create a rapidly growing, customer focused energy company that can effectively serve the needs of Nevada. This combination offers us the opportunity to lower costs, increase operating efficiencies and take advantage of economies of scale, providing benefits for both customers and shareholders. More than 1.5 million Nevada and California residents will see benefits from the merger in the form of stable prices and superior customer service."

Malquist expressed the appreciation of the management and the board for the many community, state and federal leaders who have expressed their support of the proposed merger. Nevada State Assembly Speaker Joe Dini stated in a news release that,"Having an in-state utility that can provide safe, quality and reliable power is important to the State of Nevada." In the same release, State Senator Randolph Townsend said,"The advantage to Nevadans is they will continue to receive fair and reasonable rates into the next century and an even greater expectation that rates won't artificially skyrocket as a result of out-of-state decision making." In a separate statement, Nevada State Senate Majority Leader William J. Raggio said,"Both Nevada Power and Sierra Pacific understand the needs of our state and have been exemplary corporate citizens. I am confident that the result of this merger will be strong corporate leadership and a valuable ally in Nevada's economic development efforts."

Malquist, currently chairman, president and chief executive officer of Sierra Pacific Resources, and president and chief executive officer of Sierra Pacific Power Company, will become president and chief operating officer of the holding company and president and chief executive officer of Nevada Power Company and Sierra Pacific Power Company. Michael R. Niggli, president and chief operating officer of Nevada Power Company, will become chairman and chief executive officer of the holding company and chairman of its subsidiaries.

Charles A. Lenzie, currently chairman and chief executive officer of Nevada Power Company, will retire upon completion of the transaction. The boards of directors of the holding company will consist of an equal number of members selected by both Nevada Power Company and Sierra Pacific.

"By combining Sierra Pacific and Nevada Power Company, we are creating a premier distribution, transmission and energy services company, Malquist said."Our new organization will be uniquely positioned to meet the needs of customers living in Nevada, the fastest growing state in the nation. Our employees are excited about the merger and it has been well received by Wall Street. In fact, the new company that would be formed by the merger has been described by Merrill Lynch as America's New Growth Utility."

Following the merger, Sierra Pacific Resources will be the holding company for Nevada Power Company, Sierra Pacific Power Company and other subsidiaries. Each shareholder of Nevada Power will have the opportunity to elect to receive 1.00 shares of the combined company's common stock per share or $26.00 in cash per share, such cash representing a 5% premium to Nevada Power's 10-day average trading price through April 29, 1998; and each shareholder of Sierra Pacific Resources will have the opportunity to elect to receive 1.44 shares of the combined company's common stock per share of $37.55 in cash per share, such cash representing 5% premium to Sierra Pacific's 10-day average trading price through April 28, 1998.

The merger is conditioned, among other things, upon approvals of the Public Utilities Commission of Nevada, the Federal Energy Regulatory Commission, the Securities and Exchange Commission and the approval of both companies'common shareholders. No approval is required from the holders of debt or preferred stock of the two utilities. The companies anticipate that the regulatory process can be completed in about one year. Nevada has a 180-day approval process by statute.

Sierra Pacific Resources is a holding company whose principal subsidiary is Sierra Pacific Power Company, the electric utility for most of northern Nevada and the Lake Tahoe area of California, and a natural gas and water distributor in the Reno-Sparks, Nevada area. Other subsidiaries include the Tuscarora Gas Pipeline Company, which owns 50 percent interest in an interstate natural gas transmission partnership; Lands of Sierra, a real estate management company; and eothree, an energy services company.