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Exhibit 99.1
CARSON CITY, Nev., (July 20) Sierra Pacific Resources announced that Nevada's
electric utilities, state regulators and several other parties took critical
steps today toward a global settlement of issues revolving around restructuring
the electric utility industry in the state, setting new electric rates for
Nevada Power Company customers and resolving other issues involved in state and
federal court cases filed by the utilities.
Additional agreements between the parties that settle other electric utility
issues are likely to be heard by the Public Utilities Commission of Nevada
(PUCN) in early August. The agreements involving the state court case must also
be approved by Nevada District Court Judge Michael Griffin.
Under terms of the agreements, Nevada Power Company will be permitted to
increase its electricity prices by approximately $48 million to recover costs
for fuel and purchased power. Monthly rates for an average residential customer
in southern Nevada using 1,100-kilowatt hours of electricity will rise
approximately $3.53, or 4.7 percent, as a result of the increase. Prices for
commercial and industrial customers will increase between 5 and 6 percent. The
utility does not realize a profit on rates related to fuel and purchased power
costs.
Despite the increase, electricity prices in southern Nevada remain significantly
lower than in other areas of the Pacific Southwest: 30 percent lower than major
cities in Arizona, and 50 percent lower than major cities in California.
Like other electric utilities in the West, Nevada Power has been confronted with
an unprecedented and extremely volatile energy market over the past several
months. That has forced the company to pay significantly more for fuel and
purchased power, costs the company has not been able to recover, while meeting
increased demands for electricity caused by a period of above-normal
temperatures, particularly in southern Nevada.
Current rates for Nevada Power's northern Nevada affiliate, Sierra Pacific Power
Company, will not immediately change. However, both utilities will institute
mandatory monthly rate adjustments to reflect changes in fuel and purchased
power costs (both increases and decreases), beginning Sept. 1, 2000. Limits are
set on the adjustments.
General rates for Nevada Power and Sierra Pacific customers -- the component of
electric rates that includes everything but fuel and purchased power -- will
remain frozen until March 1, 2003.
During the hearings, the PUCN Commissioners called the phased in transition for
Customer Choice a "wise course."
The agreement also outlines procedures for the opening of the state's retail
electric market to competition. These procedures are intended to balance the
interests of customers, employees and shareholders as restructuring moves
forward. The agreement states that
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restructuring will be phased in for different customer groups, beginning
November 1, 2000, and ending December 31, 2001, according to the following
schedule:
November 1, 2000 - the largest commercial customers, including large resorts,
mines and the Southern Nevada Water Authority
April 1, 2001 - medium commercial customers
June 1, 2001 - small commercial customers
September 1, 2001 - December 1, 2001 - residential customers
To facilitate retail open access, the companies filed a transmission tariff this
week with the Federal Energy Regulatory Commission and will pursue formation of
a regional transmission organization to oversee the operation of the various
electric transmission systems.
Sierra Pacific Power and Nevada Power are subsidiaries of Sierra Pacific
Resources (NYSE: SRP - news), a holding company headquartered in Reno Nevada.
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Nevada Power is the electric utility for southern Nevada, and Sierra Pacific
Power is 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.
