News Releases

Nevada Power Company Commences Tender Offer for 10 7/8% General and Refunding Mortgage Notes, Series E, Due 2009

May 31, 2006

Media Contact:
Andrea Smith, 702-367-5843
Analyst Contact:
Britta Carlson, 702-367-5624

LAS VEGAS, NV, Jun 01, 2006 (MARKET WIRE via COMTEX News Network) -- Nevada Power Company (the"Company"), a wholly owned subsidiary of Sierra Pacific Resources (NYSE: SRP), announced today that it has commenced a tender offer for any and all of 10 7/8% General and Refunding Mortgage Notes, Series E, due 2009 (CUSIP No. 641423 BD9) (the"Notes"). Approximately $162.5 million in aggregate principal amount of Notes are currently outstanding. In conjunction with the tender offer, the Company is soliciting the consent of the holders of a majority in aggregate principal amount of the Notes (the"Holders") to eliminate substantially all of the restrictive covenants and certain rights to redeem the Notes at the option of the Holders contained in the officer's certificate governing the Notes. The terms and conditions of the tender offer and consent solicitation are set forth in an Offer to Purchase and Consent Solicitation Statement (the"Offer to Purchase") dated June 1, 2006.

Subject to certain precedent conditions described in the Offer to Purchase, Holders who validly tender Notes and deliver consents at or prior to 5:00 p.m., New York City time, on Wednesday, June 14, 2006, unless such time is extended (the"Consent Time"), will be entitled to receive the Total Consideration (as described below), which includes a consent payment of $30 per $1,000 principal amount of Notes (the"Consent Payment"). Holders who validly tender Notes after the Consent Time but at or prior to 12:00 midnight, New York City time, on Wednesday, June 28, 2006, unless such time is extended (the"Expiration Time"), will be entitled to receive the Tender Consideration, which is equal to the Total Consideration less the Consent Payment. Tendered Notes and related consents may be withdrawn prior to the Consent Time. After the Consent Time, they may be withdrawn only under certain limited circumstances.

The Tender Consideration for each $1,000 principal amount of Notes validly tendered and accepted for payment pursuant to the Offer will be an amount equal to (i) the present value on the Settlement Date of $1,054.38 per $1,000 principal amount of Notes (the redemption price payable for the Notes on October 15, 2006, the first date on which the Notes are redeemable at a fixed redemption price) and all scheduled interest payments on the Notes from the Settlement Date up to and including October 15, 2006, calculated based on the assumption that the Notes will be redeemed in full on October 15, 2006, discounted on the basis of a yield to October 15, 2006 equal to the sum of (a) the yield to maturity on the 2.5% U.S. Treasury Note due September 30, 2006, as calculated by the dealer manager in accordance with standard market practice, on the second business day immediately preceding the Expiration Time, plus (b) 50 basis points, minus (ii) accrued and unpaid interest to, but not including, the Settlement Date, minus (iii) the Consent Payment, being rounded to the nearest cent per $1,000 principal amount of the Notes. The Total Consideration is equal to the Tender Consideration plus the Consent Payment.

All Notes accepted for payment will also receive accrued and unpaid interest to, but excluding, the Settlement Date.

The Company intends to finance the tender offer with the net proceeds from a debt financing (the"New Offering"). The Company's obligation to accept for purchase and to pay the Total Consideration or Tender Consideration, as applicable, for each of the Notes validly tendered in the tender offer is subject to, and conditioned upon, the satisfaction of or waiver of the following: (i) the completion of the New Offering on terms and conditions satisfactory to the Company, and receipt by the Company before the Expiration Time of net proceeds from the New Offering sufficient to purchase all Notes pursuant to the Offer; (ii) the receipt of the requisite consents from the holders of at least a majority in aggregate principal amount of the Notes; and (iii) certain other customary conditions.

This press release does not constitute an offer to buy or the solicitation of an offer to sell any of the Notes, described above. The tender offer is being made pursuant to an Offer to Purchase and related applicable Letter of Transmittal and Consent dated June 1, 2006. The Company has retained Goldman, Sachs& Co. to serve as the exclusive Dealer Manager and Solicitation Agent for the tender offer and Morrow& Co., Inc. to serve as the Information Agent. Requests for documents may be directed to Morrow& Co., Inc. by telephone at (800) 654-2468 (toll-free) or (203) 658-9400. Questions regarding the tender offer and consent solicitation may be directed to Goldman, Sachs& Co. at (800) 828-3182 (toll-free) or (212) 902-3440.

The 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, including Nellis Air Force Base and the Department of Energy's Nevada Test Site in Nye County. The Company provides electricity to approximately 774,000 residential and business customers.

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 naturalgas transmission partnership and several unregulated energy services companies.

This press release may contain forward-looking statements regarding the future performance of the Company 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. For the Company, these risks and uncertainties include, but are not limited to, the Company's ability to maintain access to the capital markets to finance (on terms favorable to the Company) the purchase of the Notes tendered in the offer. Additional cautionary statements regarding other risk factors that could have an effect on the future performance of the Company are contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2005 and the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2006, both filed with the Securities and Exchange Commission. The 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.