Sierra Pacific Resources
Contact: Media Contacts: Karl Walquist (775)834-3891
Sonya Headen (702)367-5680
Analyst Contacts:Rich Atkinson (775)834-4358
Jim McMorran (775)834-4640
Phone: See Contacts
For Immediate Release
RENO, NEVADA, Dec. 11/PR Newswire/ -- Sierra Pacific Resources (NYSE: SRP),parent company of Nevada Power Company and Sierra Pacific Power Company, today announced that Nevada Power Company has agreed to sell the Sunrise Station electric generating plant in Las Vegas, Nev., to Reliant Energy Power Generation, Inc., a subsidiary of Reliant Energy (NYSE: REI). The sale includes two generating units owned by Nevada Power and rights to electricity produced by three additional units on the Sunrise site owned by an independent power producer.
The sale price of the generating station was $106 million, subject to taxes and other adjustments at closing. In conjunction with the purchase, Nevada Power negotiated the right to buy energy and ancillary services from Reliant Energy Power Generation for agreed upon prices from closing until March 1, 2003, at a cost of $73 million based on time of closing. This will result in a net price for the generating plant upon closing of approximately $33 million.
"With the sale of Sunrise Station, divestiture of our generation assets is nearly complete. The buyer is a leader in power generation and has already established a strong presence in southern Nevada," said Walter M. Higgins, chairman, president and chief executive officer of Sierra Pacific Resources."We'll soon be able to devote all our resources to building the best energy transmission and distribution company in the West."
Sunrise Station consists of two generating units that can be fueled by natural gas or oil capable of producing up to 149 megawatts of electricity. The facility also includes three additional gas turbine generating units rated at 222 megawatts. These three units are owned by an independent power producer, Nevada Sun-Peak Limited Partnership, under contract to Nevada Power. All five of the units are located on a 38-acre site at the base of Frenchman Mountain near the eastern edge of Las Vegas. There are no regular full-time employees at Sunrise Station.
Sale of the generating assets is a regulatory condition of the 1999 merger of Sierra Pacific Resources and Nevada Power. The sale is expected to close in mid-2001, subject to approval and review by various regulatory agencies.
The company intends to complete the sale and transfer of all its generating assets in Nevada in 2001.
Credit Suisse First Boston acted as financial advisor to Sierra Pacific Resources on the Sunrise Station sale. Navigant Consulting served as the technical advisor.
Headquartered in Nevada, 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.
Reliant Energy and a partner jointly own and operate El Dorado Energy, a 480-megawatt, natural gas-fired facility southeast of Las Vegas. In October, Reliant Energy announced plans to construct a 500-megawatt, natural gas-fired power plant about 20 miles north of Las Vegas, off Interstate 15.
Based in Houston, Tex., Reliant Energy is an international energy services and energy delivery company with $20 billion in annual revenue and assets totaling $30 billion. The company has a wholesale energy trading and marketing business that ranks among the top five in the U.S. in combined electricity and natural gas volumes and a presence in most of the major power regions of the U.S. The company has nearly 27,000 megawatts of power generation in operation in the U.S. and Western Europe and has announced acquisitions and development projects that will add another 4,000 megawatts.
