Severance payouts detailed for state electricity executives

Kevin Ferguson

Thursday, March 22, 2001 | 11:09 a.m.

Two former top executives of Sierra Pacific Resources, whom the company previously said had resigned, in fact had their employment contracts terminated and were paid a combined $6.1 million in severance, the utility disclosed Wednesday.

Michael Niggli, who was said to have resigned last July as chairman and chief executive of the holding company for Nevada Power Co. and Sierra Pacific Power Co., was paid a severance package of $3.5 million. Malyn Malquist, who departed the company as president and chief operating officer in April, was paid a severance of $2.6 million. This is according to a Wednesday filing with the Securities and Exchange Commission.

Sierra Pacific spokesman Karl Walquist said the company stands by its previous statement that Malquist and Niggli resigned.

"Whether you quit or you are asked to leave, you are still terminated," Walquist said this morning.

However, Sierra Pacific for the first time -- on the record -- today detailed why the executives departed.

"Malquist and Niggli resigned because they had a difference of opinion with the board of directors about the direction of the company," Walquist said.

In last year's resignation announcements, Sierra Pacific said the executives resigned to pursue other business opportunities.

In one section of the Wednesday filing with the Securities and Exchange Commission, Sierra Pacific states the former executives did indeed resign, but in another section it states: "Mr. Malquist's employment was terminated on April 18, 2000, and Mr. Niggli's employment was terminated on July 21, 2000.

Walquist said its not uncommon for resigning executives to receive severance packages, but he declined to comment on the size of the payouts.

"(The size of) severance packages depend on the circumstances," Walquist said, declining to explain the circumstances in this particular case.

The value of the severance packages was not unusual compared to other payouts to U.S. executives in recent years. But they were disclosed at a time when Nevada consumers are facing a massive electricity rate increase. Residential electric bills rose 17 percent March 1.

Tim Hay, the state's consumer advocate, filed a motion Tuesday to throw out the $311 million rate increase implemented by Nevada Power and Sierra Pacific Power, suggesting the rate increase went forward without holding the necessary public hearings.

Hay is demanding that the Public Utilities Commission throw out the rate hike and refund an estimated $20 million that he said was illegally collected so far. The PUC is set to hear the motion Friday morning.

Walter Higgins was named Sierra Pacific's new chairman, president and chief executive on Aug. 8, at an annual salary of $215,151, the SEC filing states. Niggli, who joined Nevada Power in 1998 and oversaw its merger with Sierra Pacific Power Co. of Reno, was paid an annual salary of $350,654 in 2000. Malquist departed with a 2000 annual salary of $177,306.

Last October, Niggli was named president of Sempra Energy Resources of San Diego, which develops and operates energy projects for the competitive market.