As filed with the Securities and Exchange Commission on May 17, 1999
File No . 70-09451
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 3 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 as follows:
1. By amending and restating the second paragraph in Item 1.A.1. as follows:
"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 northwestern 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 electric and gas
operating revenues, which totaled $611 million, were comprised of its
electric business ($540.3 million, or 88%) and its natural gas business
($70.7 million, or 12%). In addition SPPC's water business operative
revenues were $46.5 million. 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."
2. By amending and restating the sixth paragraph in Item 1.A.1. as follows:
"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. The Nevada
PUC also has jurisdiction with respect to SPPC's gas and water business. 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
other matters. SPPC also is subject to applicable federal and state
environmental regulations."
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3. By amending and restating the eighth paragraph in Item 1.A.1. as follows:
"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, a non-affiliated Canadian natural gas transportation company,
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."
4. By amending and restating the first paragraph in Item 1.A.2. as follows:
"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. Both Clark County and Nye County are located in
southern Nevada. Nevada Power also sells electric power at wholesale."
5. By amending and restating the second paragraph in Item 1.A.2. as follows:
"Nevada Power owns plants with generating capacity totaling 1,964
MW. Nevada Power purchases an additional 750 MW of generating capacity,
including (i) 235 MW of Hoover Dam power purchased pursuant to a contract
with the State of Nevada , (ii) 210 MW of power purchased pursuant to a
contract with Nevada Sun-Peak Limited Partnership, an independent power
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producer, and (iii) 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 1,964 MW of owned generating capacity,
750 MW of purchased 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."
6. By amending and restating the paragraph describing Nevada Electric
Investment Company, located under the heading "2. Subsidiaries generating no
profits." in Item 1.A.2. as follows:
"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 (Genwal Coal Co. and Castle
Valley Resources, Inc.), and another corporation that has never conducted
business (Alkan Mining Company). All three of these corporations are listed
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."
7. By amending and restating the description of Castle Valley Resources Inc.,
located under the heading "3. Subsidiaries no longer actively engaged in
business activities." in Item 1.A.2. as follows:
"Castle Valley Resources Inc. - A Nevada corporation owned
entirely by NEICO. Inactive but kept in good standing. Previously, it was
the sales arm of Genwal Coal Co."
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8. By amending and restating the fifth paragraph in Item 3.B.1.a. as follows:
"Under a new Nevada law (Assembly Bill 366, codified at Nev. Rev.
Stat. ss.ss. 704.961-990 (1997)), Nevada Power's and SPPC's retail electric
service territories in Nevada will be opened to retail competition as early
as December 31, 1999. FERC already has introduced competition into
wholesale electric markets through its many orders authorizing market-based
rates for wholesale power sales and a series of orders mandating
non-discriminatory access to electric transmission facilities. The
Transaction will facilitate both state and federal efforts to increase
competition in electric markets because, as part of the merger, the
Applicants have committed to the Nevada PUC to divest their generation
assets and, subject to state resource planning approvals, invest the
proceeds in the expansion of their transmission and distribution capacity.
This expansion is important because there is limited import capability into
the Nevada Power and SPPC service territories. Increasing the import
capability will expand the number of suppliers that can compete to serve
customers in the Nevada electricity market. The goal of generation
divestiture is to balance market power mitigation while retaining the value
of the underlying assets. The divestiture proposal is contingent upon
consummation of the Transaction and receipt of necessary authorizations.
The exact timing of the closing of the divestiture depends on the date that
the Applicants obtain all of the necessary regulatory approvals, including
FERC approval of rate schedules for the sale of power by the new owners of
the divested generation units. The Applicants hope to complete the
divestiture in the year 2000. Another pro-competitive benefit accompanying
the merger is the Applicants' commitment to either join a regional
transmission organization ("RTO") or form an independent "Transco" that
would operate the Applicants' transmission facilities, within no more than
three years."
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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: 5/17/99
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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: 5/17/99
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Title: Vice President, Secretary and General Counsel
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