News Releases

Companies Signal Green Light on Merger Plans Following PUCN's Clarification Today

Jan 28, 1999

January 29, 1999
Sierra Pacific Resources
Contact: Sierra Pacific Media: Faye I. Andersen , Investors: Richard Atkinson/Nevada Power Media:Tom Henley Investors:Lauran M. Watson
Phone: (775) 834-4822,(775) 834-4358 (NP)(775) 367-5681,(775) 367-5610

For Immediate Release

RENO, NEVADA (January 29, 1999) --Expressing optimism their merger will remain on track, officials from Nevada Power Company and Sierra Pacific said that they were pleased by the clarifications they received today in their merger decision from the Public Utilities Commission of Nevada (PUCN). The companies had sought clarification on issues raised in the PUCN's December 31 unanimous approval, subject to conditions, of the two companies'plans to merge.

"We've now completed the most important step on the road to merging our two companies," said Nevada Power President and COO Michael R. Niggli."We are encouraged by this clarification of the PUCN and thank the commissioners for their vision in helping us create a company that will increase efficiencies, provide price stability and jump start competition in the state."

On December 31, the PUCN unanimously approved, subject to conditions, the merger of the two companies. Earlier this month, the utilities had sought clarification on issues in the decision regarding recovery of goodwill costs and the timing of compliance items in the PUCN's decision, such as filing plans to sell each company's generation assets and filing applications to recover stranded costs.

"With this clarification and direction provided by the PUCN, we can now turn our full attention to focusing on the additional steps necessary to complete the merger," said Sierra Pacific President and CEO Malyn K. Malquist.

Both Niggli and Malquist said no further review by their companies of the PUCN's decision was necessary and that the utilities would move forward with other required regulatory approvals. Before the merger can be completed, additional approvals are needed from the Federal Energy Regulatory Commission (FERC), the Securities and Exchange Commission (SEC) and the Department of Justice. The entire process is expected to be completed by mid-1999.

Once merged, the combined entity will be named Sierra Pacific Resources and serve a total of more than 800,000 electric, 100,000 gas and 65,000 water customers living in southern and northern Nevada, and the Lake Tahoe area of California. Combining Nevada Power, the fastest growing utility in the country, with Sierra Pacific creates a company with annual customer and kilowatt-hour sales growth of 5% and 7% respectively, the highest in the industry. Based on 1997 results, total annual revenues for the combined company would be approximately $1.5 billion, with annual earnings of approximately $160 million, and assets of $4.3 billion.