News Releases

Nevada Power Announces Agreement to Purchase 75% Interest in Silverhawk Power Plant

Jun 20, 2005

Media Contact: 
Sonya Headen 702-367-5222

Analyst Contact: 
Britta Carlson 702-367-5624

Las Vegas, Nev.  -- Nevada Power Company, a wholly-owned subsidiary of Sierra Pacific Resources (NYSE:SRP), announced today that it will acquire 75% ownership of the Silverhawk Power Station located 20 miles northeast of Las Vegas.  The agreement was signed today with the current owner, GenWest LLC, a wholly-owned subsidiary of Pinnacle West Capital Corporation (NYSE:PNW).

Under the agreement, which is subject to certain regulatory approvals, Nevada Power will pay approximately $208 million for its stake in the facility.

Silverhawk is a 570-megawatt natural gas-fueled, combined-cycle generating unit that has been operating since May 2004.  The power plant is fuel efficient and environmentally friendly, utilizing the best available control technology to keep the emission rates at some of the lowest in the country for a gas-fired generating facility. 

Walter Higgins, chairman and chief executive officer of Sierra Pacific Resources, said the acquisition of the state-of-the-art generating facility addresses a number of goals the company has established to more efficiently and cost effectively meet the growing power demands in southern Nevada. 

“Acquiring this facility makes perfect sense as we continue executing our strategy to decrease our dependence on outside power supply sources, which ultimately reduces price volatility for our customers,” Higgins said. Ã¢â‚¬Å“Additionally, because the Silverhawk technology allows us to produce more power using less fuel than in many of our current sources, we anticipate that the long-term benefit to our customers will be a savings of approximately $260 million over the next 20 years. This acquisition is another very positive step in our company's quest to support our present and future power needs through more efficient energy sources.”

Nevada Power currently estimates a peak load of 5,100 MW for this summer.    Summer peak demand growth is projected to continue increasing approximately 200 MW per year. The company presently owns less than half of what is needed to meet its customers' energy needs.

In addition to GenWest's current interest in Silverhawk, the Southern Nevada Water Authority (SNWA) holds the remaining 25% interest.  In February, Nevada Power entered into a long-term agreement to operate the SNWA's interest in the plant. In exchange, the SNWA retains its ownership and has begun receiving a firm energy supply at a predictable price.

The acquisition announced today is subject to approval by the Public Utilities Commission of Nevada, the Federal Energy Regulatory Commission and the Department of Justice through a Hart-Scott-Rodino filing.  Higgins said the company currently plans to close the transaction utilizing debt.

Nevada Power Company is a regulated public utility engaged in the distribution, transmission, generation, purchase and sale of electric energy in the southern Nevada communities of Las Vegas, North Las Vegas, Henderson, Searchlight, Laughlin and their adjoining areas. The company also provides electricity to Nellis Air Force Base, the Department of Energy at Mercury and Jackass Flats at the Nevada Test Site. Nevada Power Company provides electricity to approximately 725,000 residential and business customers in a 4,500 square mile service area.

Headquartered in Nevada, Sierra Pacific Resources is a holding company whose principal subsidiaries are Nevada Power Company, the electric utility for most of southern Nevada, and Sierra Pacific Power Company, the electric utility for most of northern Nevada and the Lake Tahoe area of California. Sierra Pacific Power Company also distributes natural gas in the Reno-Sparks area of northern Nevada. Other subsidiaries include the Tuscarora Gas Pipeline Company, which owns 50 percent interest in an interstate natural gas transmission partnership and several unregulated energy services companies.

Certain matters in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  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, but are not limited to, the parties' abilities to satisfy applicable closing conditions, and Nevada Power's ability to obtain required state and federal regulatory approvals for the transaction and to maintain access to the capital markets to finance the acquisition on favorable terms.  Additional cautionary statements regarding other risk factors that could have an effect on the future performance of Nevada Power Company are contained in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, filed with the SEC.  Nevada Power Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.