Las Vegas-area power plant sold to Arizona firm

Tuesday, Dec. 5, 2000 | 11:12 a.m.

Nevada Power Co.'s parent company will sell its Harry Allen Power Station to an Arizona company.

Reno-based Sierra Pacific Resources Inc. is selling the 72-megawatt generating station to Pinnacle West Energy, a subsidiary of Pinnacle West Capital Corp., for $69.8 million. The deal is expected to close in mid-2001.

Located on 6,000 acres near Apex, the plant can be fueled by either natural gas or diesel fuel. The newest plant in Nevada Power's system, the Harry Allen station began operation in 1995 and produces electricity for the entire Southern Nevada region.

It was the third power plant sale announced by Sierra Pacific in three weeks. The company sold the 740-megawatt gas-fired Clark Generating Station and the majority of the generating capacity of the 605-megawatt coal-fired Reid Gardner Generating Station near Moapa to NRG Energy Inc., Minneapolis, and Dynegy Inc., Houston.

In conjunction with the purchase, Nevada Power negotiated the right to buy energy and ancillary services from Pinnacle West Energy for agreed-upon prices at a cost of about $4.61 million based on the time of closing. That results in a net price for the generating plant at closing of $65.2 million.

"Following the sale of Harry Allen Station, there are three of nine bundles of generating assets that remain to be sold," Walter Higgins, chairman, president and chief executive officer of Sierra Pacific Resources, said in a statement issued today. "These sales will benefit electric industry competition in Nevada and allow us to fully concentrate on building a premier transmission and distribution company in the West."

Phoenix-based Pinnacle West is buying the plant to improve its growth strategy to become one of the top power producers in the West.

"There are tremendous opportunities to expand the capacity at this site, and it's ideally situated to help meet the increasing demand throughout the Southwest," said Bill Stewart, president of Pinnacle West Energy. "In Southern Nevada alone, particularly Las Vegas, electricity needs are growing four times faster than the national average."

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