News Releases

Sierra Pacific Resources Reports Quarterly Loss; Charges Reflect Costs Prior to Rate Relief

May 11, 2001


Sierra Pacific Resources
Contact: Analyst Contacts:
Rich Atkinson, 775-834-5300
Barbara Doble, 702-367-5604

News Media Contacts:
Faye I. Andersen, 775-834-4822
Karl Walquist, 775-834-3891

Phone: see above

For Immediate Release

Las Vegas, Nev.- Reflecting, as expected, the remaining impacts of the western power crisis on its two utility operations, Sierra Pacific Resources (NYSE: SRP) today reported consolidated net losses of $83.5 million, or $1.06 per share, for the quarter ended March 31, 2001. Most of the losses were associated with unrecovered costs or uncollected accounts in the wholesale fuel and power markets, various one-time expenses associated with Nevada's decision to repeal deregulation, and customary expenses from the termination of the company's planned acquisition of Portland General Electric.

The losses include unprecedented increases in the cost of wholesale fuel and power purchased under an old rate structure that limited the ability of the company to recover the full amount of those costs through rates. Since then, Nevada's governor signed a measure passed by the legislature that now allows Sierra Pacific's two utilities - Nevada Power and Sierra Pacific Power -- to recover all of their wholesale power and fuel costs through rates on a deferred basis. The instability of the western power markets was also responsible for additional reserves for losses related to as yet uncollected payments from routine power sales last year to the now-bankrupt California Power Exchange.

Other one-time charges during the quarter included a portion of the expenses associated with the passage of AB369, which repealed deregulation, halted divestiture of company-owned power plants and , importantly, re-established deferred energy cost recovery for both utilities. These one-time charges also include administrative and legal expenses from the termination of the planned acquisition of Portland General Electric. The company had reported net income of $18.2 million for the same period last year, prior to the collapse of the California energy market.

"These losses are significant and profound evidence of just how serious the energy crisis is in the west and the threat it could have posed to Nevada,"said Walt Higgins, chairman and CEO of Sierra Pacific."However, the actions by the governor, the legislature and continued focus by our public utilities commission on actions that ensure reliable energy supply can and will be a major factor in putting this dark chapter behind us and distinguishing Nevada as a favorable environment for needed energy investment.

"With these solutions now in place, we look forward to restoring earnings performance that reflects the true underlying strength of our operations in a growing market."

Operating revenues for Nevada Power increased by $163 million over first quarter 2000 to $359 million as a result of increase sales and customer additions in Las Vegas, recently ranked as the nation's fastest growing city. However, the revenue gains were more than offset by increases in wholesale power and fuel costs incurred prior to the state's deferred energy legislation. Average fuel and purchased power cost per megawatt hour was 142 percent higher than in 2000. General operating and maintenance expenses were stable, but overall expenses rose sharply due to a write-down of uncollected accounts from power sales to California last year.

Sierra Pacific Power Company

Sierra Pacific Power operating revenues for the quarter increased by $183.8 million over first quarter 2000 to $376.3 million, but also were largely offset by soaring wholesale power costs. Electric revenues, as adjusted, increased by 98 percent over 2000, as a result of customer growth and new rates structures designed to help offset soaring wholesale power costs, which also more than doubled from the same period last year. Similarly, gas revenues increased by 84.2 percent over first quarter 2000 primarily due customer growth and the pass-through of rising wholesale gas prices.

Earnings Conference Call/Webcast

Sierra Pacific Resources'executives will discuss the first quarter financial results during a live webcast today, May 11, at 7 a.m. Pacific Daylight Time. Interested parties can access the webcast on the Sierra Pacific Resources Investor News Page. Click on the StreetFusion icon to access the webcast.

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 September 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,


Sierra Pacific Resources Financial Highlights
(In thousands, except for per share amounts)

First Quarter

  2001 2000 Change
Revenues $737,926 $329,649 87.9%
Operating Expenses $768,413 $335,456 129.1%
Net (Loss) Income Available for Common $(83,479) $18,178 (559.2%)
Average Shares Outstanding 78,475 78416 0%
Net (Loss) Income Per Share $(1.06) $ 0.23 (560.8%)