As filed with the Securities and Exchange Commission on May 4, 1999
File No . 70-09451
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2 TO
FORM U-1 APPLICATION OR DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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Sierra Pacific Resources Nevada Power Company
6100 Neil Road 6226 West Sahara Avenue
Reno, Nevada, 89511 Las Vegas, Nevada 89146
(Name of company or companies filing this statement
and address of principal executive offices)
None
(Name of top registered holding company parent of each applicant or declarant)
Malyn K. Malquist Michael R. Niggli
Chairman of the Board, President President and Chief Operating Officer
and Chief Executive Officer Nevada Power Company
Sierra Pacific Resources 6226 West Sahara Avenue
6100 Neil Road Las Vegas, Nevada 89146
Reno, Nevada, 89511 (702)367-5000
(702) 834-3600
(Name and addresses of agents for service)
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The Commission is requested to send copies of all notices, orders and
communications in connection with this Application to:
Clifford (Mike) M. Naeve, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
1440 New York Avenue, N.W.
Washington, D.C. 20005
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Sierra Pacific Resources ("Sierra Pacific"), a public utility holding
company incorporated in the State of Nevada, and Nevada Power Company ("Nevada
Power"), a public utility incorporated in the State of Nevada (collectively,
"Applicants"), hereby amend their Application or Declaration on Form U-1 in File
No. 70-09451 by amending and restating Item 1.A. as follows:
"A. DESCRIPTION OF THE PARTIES TO THE TRANSACTION.
1. SIERRA PACIFIC.
Sierra Pacific is a public utility holding company incorporated
in the State of Nevada, which is exempt from regulation by the Commission
under the Act (except for Section 9(a)(2) thereof) pursuant to Section
3(a)(1) of the Act and by order of the Commission.1 Sierra Pacific is
headquartered in Reno, Nevada, with operating subsidiaries primarily
engaged in the energy and utility businesses.
SPPC, the principal subsidiary of Sierra Pacific, is a public
utility incorporated in the State of Nevada. SPPC provides electric service
to approximately 287,000 retail customers in northern Nevada and
northeastern California. SPPC also sells electric power at wholesale. In
the Reno/Sparks area of Nevada, SPPC distributes natural gas at retail to
approximately 101,000 customers and provides water service to about 65,000
customers. During 1997, 92% of SPPC's revenues were from retail sales of
electricity, natural gas and water in Nevada, 6% from retail sales of
electricity in California and 2% from wholesale sales of electricity in
Nevada and California . SPPC's 1997 operating revenues, which totaled
$657.5 million, were comprised of its electric business ($540.3 million, or
82%), natural gas business ($70.7 million, or 11%) and water business
($46.5 million, or 7%). As of December 31, 1997, SPPC's net utility plant
in service was $ 1.4 billion. A map of SPPC's electric/gas service area is
attached as Exhibit E-1.
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1 Sierra Pacific Resources, Holding Co. Act Release No. 24566 (Jan. 28,
1988), aff'd, Environmental Action, Inc. v. SEC, 895 F.2d 1255 (D.C. Cir.
1990).
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During 1997, the peak electric demand experienced by SPPC was
1342 megawatts ("MW"). SPPC served this demand, plus a reserve margin, with
a combination of the following: (i) 1049 MW of power generated by plants
owned by SPPC, (ii) 334 MW of power purchased pursuant to long term
contracts, and (iii) additional firm and short-term power purchases. SPPC's
fuel requirements for electric generation were provided by natural gas
(62%), coal (37%) and oil (1%).
As of December 31, 1997, SPPC's electric transmission facilities
consisted of approximately 3,900 overhead pole line miles and 80
substations. Its electric distribution facilities consisted of
approximately 9,200 overhead pole line miles, 4,500 underground cable miles
and 176 substations.
SPPC's natural gas business consists of providing local
distribution service in the Reno/Sparks area that accounted for $70.7
million in 1997 operating revenues; 11% of total SPPC operating revenues.
SPPC has contracted for firm winter-only and annual natural gas supplies
with Canadian and domestic suppliers to meet the firm gas requirements of
its local distribution and electric operations. The contracts total 125,000
decatherms per day through March 1998; 72,000 decatherms per day for April
through October 1998 and 75,000 decatherms per day for the remainder of
1998. SPPC's firm natural gas supply is supplemented with natural gas
storage services and supplies from a Northwest Pipeline Company facility
located at Jackson Prairie in southern Washington and a liquid natural gas
storage facility. For 1997, SPPC's total local gas distribution supply
requirements were 12.4 million decatherms and its electric generating fuel
requirements were 32.0 million decatherms. As of December 31, 1997, SPPC
owned and operated 1,219 miles of three-inch equivalent natural gas
distribution lines.
SPPC is subject to regulation by the Nevada PUC and the
California Public Utilities Commission ("California PUC") with respect to
its rates for retail sales of electricity as well as terms of service,
issuance of certain securities, siting of and necessity for generation and
certain transmission facilities, accounting and other matters. In addition,
SPPC is subject to regulation by FERC under the Federal Power Act with
respect to rates for the sale of electricity for resale, the terms and
conditions for providing interstate electric transmission service, and
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other matters. SPPC also is subject to applicable federal and state
environmental regulations.
Sierra Pacific is engaged in non-utility businesses, as well as
certain other utility businesses that are not jurisdictional under the Act,
through the following subsidiaries:
1. Tuscarora Gas Pipeline Company was formed as a wholly-owned
subsidiary in 1993 for the purpose of entering into a partnership (the
Tuscarora Gas Transmission Company or, "TGTC") with a subsidiary of
TransCanada to develop, construct and operate a natural gas pipeline to
serve an expanding gas market in Reno, northern Nevada and northeastern
California. Sierra Pacific has an investment of approximately $15.5 million
in this subsidiary. In 1995, TGTC completed construction and began service
of its 229-mile pipeline extending from Malin, Oregon to Reno, Nevada. At
Malin, Oregon, TGTC interconnects with Pacific Gas Transmission Company
("PGT"), a major interstate natural gas pipeline extending from Oregon to
the U.S./Canadian border. The PGT system provides TGTC customers access to
natural gas reserves in the Western Canadian Sedimentary basin, one of the
largest natural gas reserve basins in North America. As an interstate
pipeline, TGTC provides only transportation service. During 1997, SPPC and
Sierra Pacific were the two largest customers of TGTC, contributing 92.2%
and 6.3 % of TGTC's revenues, respectively. Malin, Oregon began taking
service from TGTC during the later part of 1996. The Sierra Army Depot at
Herlong, California began taking service from TGTC during the later part of
1997.
2. Sierra Energy Company d/b/a e-three ("e-three") is an
unregulated, wholly-owned subsidiary that provides energy-related products
and services both inside and outside SPPC's service territory. e-three
recently has entered into a 50% Nevada limited liability company, e-three
Custom Energy Solutions LLC, with a subsidiary of Nevada Power to do
performance contracts and similar energy-related services in southern
Nevada.
3. Lands of Sierra, Inc. ("LOS") was organized in 1964 to
develop and manage SPPC non-utility property in Nevada and California. In
recent years, Sierra Pacific has focused on selling the LOS properties and
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the properties remaining include only vacant land in Nevada and land leases
in the Lake Tahoe region.
4. Sierra Pacific Energy Company ("SPEC"), which is developing
a customer information system for the energy industry. SPEC also is engaged
in providing certain products and services in Nevada through a partnership
with Enable, which is a partnership consisting of KN Energy and PacifiCorp
subsidiaries.
Sierra Pacific also has four immaterial subsidiaries. Three of
these subsidiaries are no longer actively engaged in business activities,
namely Sierra Water Development Company (a subsidiary formerly engaged in
water exploration activities in northern Nevada), Sierra Gas Holdings
Company (a subsidiary formerly engaged in gas and oil exploration) and
Great Basin Energy Company (a subsidiary formerly engaged in generation
activities in northern Nevada). The fourth subsidiary, SPR Media Group, was
established to explore fiber optics opportunities in Nevada but never
engaged in business activities.
The common stock of Sierra Pacific, par value $1 per share
("Sierra Pacific Common Stock"), is listed on the New York Stock Exchange
(the "NYSE"), under the symbol SRP. As of the close of business on December
31, 1998, there were 31,009,364 shares of Sierra Pacific Common Stock
issued and outstanding.
For the year ended December 31, 1997, Sierra Pacific's operating
revenues on a consolidated basis were approximately $663 million, of which
$6 million are attributable to non-utility activities. Consolidated assets
of Sierra Pacific and its subsidiaries at December 31, 1997, were
approximately $1.9 billion, of which approximately $1.4 billion consisted
of net utility plant and equipment.
Sierra Pacific's principal executive office is located at 6100
Neil Road, Reno, Nevada, 89511. At December 31, 1997, Sierra Pacific and
its subsidiaries employed 1,478 employees, of which 1,473 were employed by
SPPC.
More detailed information concerning Sierra Pacific and its
subsidiaries is contained in Sierra Pacific's and SPPC's Annual Reports on
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Form 10-K for the year ended December 31, 1997, which are incorporated
herein by reference as Exhibits G-1 and G-3, respectively.
2. NEVADA POWER.
Nevada Power is a public utility, incorporated in the State of
Nevada, that provides retail electric service predominantly to the more
than 1.3 million residents of Clark County, Nevada, with limited service
provided to the Federal Department of Energy (U.S. Government Test Site) in
Nye County, Nevada. Nevada Power also sells electric power at wholesale.
Nevada Power has total generating capacity of 2,714 MW, which
includes (i) 1,964 MW of power generated by plants owned by Nevada Power,
(ii) 235 MW of Hoover Dam power purchased pursuant to a contract with the
State of Nevada , (iii) 210 MW of power purchased pursuant to a contract
with Nevada Sun-Peak Limited Partnership, an independent power producer,
and (iv) 305 MW of power purchased pursuant to contracts with four
qualifying facilities. In addition, Nevada Power has agreements with other
suppliers to purchase 1,130 MW of firm capacity and associated energy.
During 1997, the peak demand experienced by Nevada Power was 3,469 MW on
August 7, 1997. Nevada Power served this demand, plus a reserve margin,
with a combination of its 2,714 MW of generating capacity and additional
firm and short-term power purchases. To obtain additional firm capacity and
associated energy to meet peak needs, Nevada Power utilizes a competitive
bidding process and spot market purchases. During 1997, 67% of the energy
generated by Nevada Power's plants came from coal-fired stations and 33%
from natural gas-fired stations.
As of December 31, 1997, Nevada Power owned approximately 1,575
miles of electric transmission facilities (a portion of that under shared
ownership), 108 transmission and distribution substations, and a
distribution system consisting of approximately 3,162 overhead pole line
miles and 8,957 underground cable miles.
Nevada Power is subject to regulation by the Nevada PUC with
respect to its rates for retail sales of electricity as well as terms of
service, issuance of certain securities, siting of and necessity for
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generation and certain transmission facilities, and accounting and other
matters. In addition, Nevada Power is subject to regulation by FERC under
the Federal Power Act with respect to rates for the sale of electricity for
resale, the terms and conditions for providing interstate electric
transmission service, and other matters. Nevada Power is also subject to
applicable federal and state environmental regulations.
The common stock of Nevada Power, par value $1 per share ("Nevada
Power Common Stock"), is listed on the NYSE and the Pacific Exchange, Inc.,
under the symbol NVP. As of the close of business on December 31, 1998,
there were 51,265,117 shares of Nevada Power Common Stock issued and
outstanding.
For the year ended December 31, 1997, Nevada Power's utility
operating revenues on a consolidated basis were approximately $799 million.
Consolidated assets of Nevada Power and its subsidiaries at December 31,
1997, were approximately $2.3 billion, of which approximately $1.7 billion
consisted of net electric plant and equipment. Nevada Power does not have
any material revenue generating subsidiaries. Nevada Power has the
following subsidiaries, listed by category, that it considers immaterial:
1. Non-profit making subsidiaries created to assist other
business activities.
Commonsite Inc. - A Nevada corporation owned entirely by Nevada
Power. It owns the real estate occupied by Reid Gardner 4, a coal fired
plant owned jointly by Nevada Power and the California Department of Water
Resources.
NVP Capital I - A Delaware corporation needed for Nevada Power to
issue QUIPS, Quarterly Income Preferred Securities.
NVP Capital II - A Delaware corporation needed for Nevada Power
to issue QUIPS, Quarterly Income Preferred Securities.
2. Subsidiaries generating no profits.
Nevada Electric Investment Company ("NEICO") - A Nevada
corporation owned entirely by Nevada Power. In the past, NEICO has
conducted energy-related business activities. It also owns two corporations
that once were involved in mining activities, and another corporation that
has never conducted business. All three of these corporations are listed
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below. NEICO was inactive for a period of years, and in recent months, has
obtained ownership interests in three new limited liability companies
involved in various energy-related activities. None of these three
companies, listed below, have yet made a profit.
Northwind Las Vegas, L.L.C. - NEICO owns 50% of this Nevada
limited liability company. UTT Nevada. Inc. , an affiliate of Unicom, owns
the other 50%. Northwind Las Vegas, L.L.C. develops opportunities for
district heating and cooling within Nevada.
Northwind Aladdin, LLC - NEICO owns 25% of this Nevada limited
liability company. UTT Nevada. Inc., an affiliate of Unicom, owns the other
75%. Northwind Aladdin, LLC will construct, own and operate district
heating and cooling facilities at the Aladdin casino complex, currently
under construction.
e-three Custom Energy Solutions, LLC - NEICO owns 50% of this
Nevada limited liability company, and e-three, a wholly owned subsidiary of
Sierra Pacific, owns the other half. This limited liability subsidiary
recently was formed to enter into performance contracts and similar
energy-related services in southern Nevada.
3. Subsidiaries no longer actively engaged in business
activities.
Genwal Coal Co. - A Nevada corporation owned entirely by NEICO.
Inactive but kept in good standing. Assets were sold on January 1, 1995.
Castle Valley Resources Inc. - A Nevada corporation owned
entirely by NEICO. Inactive but kept in good standing. Previously, it
was the sales arm of the coal mining company.
4. Subsidiaries never engaged in business activities.
Alkan Mining Company - A Nevada corporation owned entirely by
NEICO that has never conducted business but has been kept in good standing.
Nevada Power recently created several Nevada limited liability
companies that have conducted no business activities but are in good
standing. They are: Nevada Power Services, LLC; Nevada Power Choices, LLC;
Nevada Power Solutions, LLC; Las Vegas Energy, LLC; Nevada Solutions, LLC;
Power Choice, LLC; Nevada Power Energy Services, LLC; and Nevada Choices,
LLC.
Nevada Power's principal executive office is located at 6226 West
Sahara Avenue, Las Vegas, Nevada, 89146. At December 31, 1997, Nevada Power
employed approximately 1,909 employees.
More detailed information concerning Nevada Power is contained in
Nevada Power's Annual Report on Form 10-K for the year ended December 31,
1997, which is incorporated herein by reference as Exhibit G-5.
3. DESERT MERGER SUB AND LAKE MERGER SUB.
Sierra Pacific created Desert Merger Sub and Lake Merger
Sub, both Nevada corporations, solely for the purpose of merging with
Nevada Power and Sierra Pacific, respectively. Neither Desert Merger Sub
nor Lake Merger Sub is engaged in any business operations. The mailing
address for Desert Merger Sub and Lake Merger Sub is the same as that for
Sierra Pacific."
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned Applicants have duly caused this Application to be
signed on their behalf by the undersigned thereunto duly authorized.
SIERRA PACIFIC RESOURCES / SIERRA PACIFIC POWER COMPANY:
By: /s/ William E. Peterson Date: 5/4/99
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Title: Senior Vice President, General Counsel and Corporate Secretary
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NEVADA POWER COMPANY:
By: /s/ Richard L. Hinckley Date: 5/4/99
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Title: Vice President, Secretary and General Counsel
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