Big Nevada utility drops electricity sale plan

Thursday, March 2, 2000 | 10:41 a.m.

The decision doesn't affect the company's Sierra Pacific Power Co. and Nevada Power Co. units, which now provide electricity to northern and southern Nevada. When deregulation begins, those entities will enter the transmission and distribution marketplace.

A year ago, Sierra Pacific Energy Co. and Nevada Power Services were created in hopes of selling power in a deregulated environment. But on Monday, Gov. Kenny Guinn postponed Wednesday's scheduled start of deregulation while unresolved issues are addressed.

By dismantling the new subsidiaries and putting 38 people, two in Reno and 36 in Las Vegas, out of work, up to $20 million can be saved, Sierra Pacific Resources Chief Executive Officer Mike Niggli said Wednesday.

Sierra Pacific's stock has fallen about 50 percent from its prices of $27 after last summer's merger of Sierra Pacific Resources and Nevada Power Co. The stock closed Wednesday at $13.75, up 12.5 cents.

Niggli acknowledged the tumble was a factor in abandoning the electricity-selling marketplace.

"We owe it to our stockholders to get a reasonable rate of return," he said. "We have a large number of Nevadans who own stock. We're doing everything possible to restore the value."

He also cited the Nevada Public Utilities Commission ruling last month slashing a Nevada Power rate hike request from $110 million to $44 million. The utility is contesting that case.

Even when deregulation eventually begins, the company will not try to re-enter the electricity-selling business, Niggli said.

Niggli said Sierra Pacific Resources will proceed with the sale of its generating plants, including those at Tracy east of Sparks, as part of its preparation of a deregulated electricity marketplace, and hopes to have many, if not all, sold by year's end.