Sierra Pacific to sell water division

Friday, Sept. 8, 2000 | 9:01 a.m.

The company recently merged with Las Vegas-based Nevada Power Co., and is in the process of acquiring Portland General Electric.

The company's water division, which serves 71,000 homes and businesses in the Reno-Sparks area, had revenues of $54.3 million in 1999, miniscule when compared to the company's total 1999 revenues of $1.7 billion.

"Post the PGE deal, water revenues will be 2 percent of our total," Jeff Ceccarelli, president of Sierra Pacific Power Co., said when the company announced its intent Thursday.

He said the water business "has become an increasingly smaller part of our strategy."

The sale of the water division raises the possibility of outsiders becoming a major player in decisions involving one of the West's most politically complicated water systems - the Truckee River.

Sierra Pacific got in the water business in 1922 when its predecessor, the Truckee River General Electric Co., acquired Reno Power Light and Water Co.

For the past 10 years, Sierra Pacific has been involved in delicate negotiations with the states of Nevada and California, the Pyramid Lake Paiute Tribe and the U.S. Interior Department to come up with a new agreement for operating the Truckee River.

"Whoever buys that company would be obligated to assume (Sierra's) position in the negotiations," Bob Firth, who worked for Sierra Pacific for 30 years and now owns a water rights consulting business, told the Reno Gazette-Journal.

"Even if they bring in a world-class water company, they'd be coming in here cold, without any experience, to a very complex water system. They'd have to get up to speed fast and keep the train on the track."

Ceccarelli said Sierra Pacific will make sure the purchaser is committed to completing the Truckee River negotiations and maintaining good relations with local governments and customers.

"Our selection process is not just price," he said. "It's also about ensuring that a new buyer has all the expertise necessary to run the business in a way that doesn't negatively impact our customers, employees or the community."

Any sale would have to be approved by state utility regulators.