Sierra Pacific Resources
Contact: Media contact: Charlie Fletcher / Investor contact: Jim McMorran
Phone: (775) 834-3959 / (775) 834-4640
For Immediate Release
Reno, Nev., Oct. 20, 2000: Sierra Pacific Resources (NYSE: SRP)announced today, that in light of continued volatility in the energy markets, it is providing further information to all investors. The company noted that the global settlement implemented on August 1, is working as expected, with the"phase-in" of higher rates under way. But it also stated that its operating utilities, Nevada Power Company and Sierra Pacific Power Company, continue to experience very high prices for fuel and purchased power not yet reflected in rates charged to customers.
"While we are now increasing electric rates to begin recovery of these costs as permitted under the global settlement, it is important for investors to realize that the monthly fuel and purchased power recovery tracking mechanism lags changes in actual fuel and purchased power expenses, which will continue to negatively affect earnings," said Mark Ruelle, senior vice president, chief financial officer and treasurer for Sierra Pacific Resources. The company noted that the parties to the global settlement designed the"phase in" of higher fuel and purchased power costs into rates to protect customers from adverse impacts that might come from an immediate flow-through of sharp increases in these costs.
The global settlement permits Resources'operating utilities to receive, subject to certain limitations, monthly increases to reflect higher fuel and purchased power expenses. As a result, both Nevada Power Company andSierra Pacific Power Company have filed for increases.
Nevada Power Company has already implemented the following annualized rate increases provided under the settlement:
August 1 - $63 million
September 1 - $15 million
October 1 - $15 million
Furthermore, Nevada Power Company has filed for Public Utilities Commission of Nevada (PUCN) approval of additional increases of $ 16 million to be effective November 1 and $ 16 million to be effective December 1. Sierra Pacific Power Company has filed with the PUCN for approval of electric rate increases of $ 26 million to be effective November 1 and $ 8 million to be effective December 1.
Resources noted that consistent with its prior practice, it would be providing further details with its third quarter earnings release in early November.
Headquartered in Reno, Nev, Sierra Pacific Resources is a holding company whose principal subsidiaries are Nevada Power Company, the electric utility for southern Nevada, and 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 area. Other Subsidiaries include the Tuscarora Gas Pipeline Company, which owns 50 percent interest in an interstate natural gas transmission partnership and Sierra Pacific Communications, a telecommunications company.
This press release contains forward-looking statements regarding the future performance of Sierra Pacific Resources. 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, in addition to those discussed herein, all of the factors discussed in the company's Annual Report on Form 10-K for the year ended Dec. 31, 1999 and its Form 10-Q for the quarter ended June 30, 2000. These reports have been filed with the Securities and Exchange Commission and are available without charge through the EDGAR system at its Web site, www.sec.gov..
