Sierra Pacific officials resigns

Wednesday, April 19, 2000 | 10:22 a.m.

Malyn K. Malquist, 47, president and chief operating officer of Sierra Pacific Resources and president of Sierra Pacific Power Co. and Nevada Power Co., announced his resignation Tuesday during a board meeting in Las Vegas, according to company spokeswoman Faye Anderson.

Anderson said she believed Malquist's departure was effective immediately.

Sierra Pacific chairman and CEO Michael R. Niggli said officers who had reported to Malquist would report directly to him. He said the company is looking at restructuring the organization and executive reporting responsibilities so it can easily transition to a new, larger structure that incorporates the anticipated acquisition of Portland General Electric in the face of federal deregulation delays.

"It would not surprise me that an executive in that position might want to pursue other ventures," said Steve Fleishman, a utility analyst with Merrill Lynch & Co.

Fleishman noted Sierra Pacific stock has been cut in half due to adverse regulatory rulings and termed the company's immediate future as an "ugly situation."

Fleishman said Sierra Pacific faces multiple challenges from an uncertain competitive environment due to deregulation, to a 50 percent stock decline, to negative regulatory rulings that make repairing the company appear arduous and time-consuming.

"It looks like a long fix," he said.

In July 1999, Sierra Pacific completed a $2.5 billion merger with Las Vegas-based Nevada Power Co. and Malquist assumed the No. 2 position as president behind Michael Niggli, who had been the CEO of Nevada Power.

Malquist joined Sierra Pacific Resources in 1994 as senior vice president and chief financial officer and was promoted in 1998 when Walter Higgins, 53, left to run an Atlanta utility.

Sierra Pacific Resources announced in November 1999 it had entered into a purchase and sale agreement for Portland General Electric, owned by utility giant Enron Corp., in a $3.1 billion deal that would make the local power company one of the largest in the West.

In March, Malquist criticized the federal deregulation process.

"We've lost a billion dollars in shareholder value," he said.

"Deregulation was the biggest reason Nevada Power and Sierra Pacific merged. We thought we had a bill we could with. But we can't sit by and have our shareholders harmed as they've been."

The two mergers were in reaction to a 1999 law opening Nevada's electric industry to competition. Sierra Pacific wanted to position itself to become the state's regulated transmission and distribution utility the company that feeds electricity into customer businesses and homes when Nevada's power markets opened for competition March 1, 2000.

However, as the March 1 deadline approached, Gov. Kenny Guinn delayed deregulation, saying the state was not ready to proceed.

The Nevada Public Utilities Commission also ruled against a proposed $44 million Nevada Power rate hike. The company considered the increase pivotal to its success in the marketplace following deregulation.

Following that announcement, Sierra Pacific filed a lawsuit in Reno federal court at the end of March to overturn the 1999 law, calling deregulation unconstitutional and saying it was having a negative impact on the company's worth.

Fleishman said Malquist may have grown weary of the onslaught of bad regulatory news that has come down recently against Sierra Pacific.