Another Nevada Power Co. generating plant sold off

Monday, Dec. 11, 2000 | 11:49 a.m.

Nevada Power Co.'s parent company today announced its fourth Southern Nevada power plant sale in three weeks.

Officials with Reno-based Sierra Pacific Resources Inc. said the five-unit Sunrise Station electric generating plant, located on 38 acres at the base of Frenchman Mountain on the eastern edge of Las Vegas, will be sold to Reliant Energy Power Generation Inc., a subsidiary of Reliant Energy, Houston, for $106 million.

There are no regular full-time employees at Sunrise. Sierra said with the sale, it is nearing the end of the divestiture of its power plants, a condition of the merger of Sierra Pacific and Nevada Power in July 1999.

The sale bolsters Reliant Energy's position as a power-generating company in Southern Nevada. Reliant and a partner, Sempra Energy Resources, San Diego, jointly own and operate El Dorado Energy, a 480-megawatt, natural gas-fired facility near Boulder City. In October, Reliant Energy also announced plans to build a 500-megawatt, natural gas-fired power plant about 20 miles north of Las Vegas, off Interstate 15.

Reliant's acquisition of the Sunrise plant includes two generating units that can be fueled by natural gas or oil and are capable of producing 149 megawatts of electricity. Three other gas-fueled units, which can produce 222 megawatts, are owned by Nevada Sun-Peak LP and are under contract to Nevada Power. The deal, which is expected to close by mid-2001, would give Reliant the rights to the power generated by Nevada Sun-Peak.

Under terms of the agreement, Nevada Power negotiated the right to buy electricity from Reliant for agreed-upon prices from closing until March 1, 2003, at a cost of $73 million based on time of closing. That will result in a net price for the generating plant upon closing of about $33 million.

March 1, 2003, is the target date that Nevada Power hopes to be out of the power-generation business and the electrical industry would be deregulated.

Reliant is an international energy services and energy delivery company with about $20 billion in annual revenue and assets totaling more than $28 billion. Company officials say it is among the top five in combined electricity and natural gas production in the United States.

Sierra Pacific sold the 740-megawatt gas-fired Clark Generating Station and the 605-megawatt coal-fired Reid Gardner Generation Station to NRG Energy Inc., Minneapolis, and Dynegy Inc., Houston, for $634 million in a deal announced in November.

On Wednesday, Sierra Pacific announced it had sold its 72-megawatt gas- or diesel-fueled Harry Allen Power Station to Pinnacle West Energy, Phoenix, for $69.8 million.