New legislation aids Nevada Power parent

Tuesday, Nov. 6, 2001 | 9:42 a.m.

Sierra Pacific Resources Inc. of Reno, the parent company of Nevada Power Co. of Las Vegas, said today its third-quarter earnings rebounded, thanks to a new Nevada law that stopped deregulation and allowed recovery of energy costs.

The company reported earnings of $80.4 million, 89 cents a share, compared with a loss of $19.5 million, 25 cents a share, for the same quarter a year earlier.

Of that, Nevada Power -- Sierra Pacific's Southern Nevada subsidiary -- contributed earnings of $78.8 million, 87 cents a share, compared with a loss of $8.8 million, 11 cents a share, a year ago.

Sierra Pacific said the earnings recovery was aided by Assembly Bill 369, approved earlier this year by the Nevada Legislature.

The new law enables the utilities to recover from customers the costs for power and fuel the companies purchased to meet customer needs.

Nevada Power plans to file a request with the Public Utilities Commission in December to recover deferred energy costs. The company's Northern Nevada subsidiary, Sierra Pacific Power Co., will file a similar request in the first quarter of 2002.

The requests are expected to be carefully scrutinized by Consumer Advocate Tim Hay, who has indicated he will fight any excessive rate increase requests. Hay has estimated that the rate increase application could be up to $900 million.

Nevada Power, which has estimated the total cost of the increase at $870 million, was given permission to raise customer rates by 27 percent in late 2000 and early 2001 to begin collecting the amount it paid for power and fuel. The state law enables utilities to spread the recovery amount over three years.

Hay also has said he would oppose Sierra Pacific's separate bid for a $40 million general rate increase covering administrative expenses.

If approved by the PUC, the deferred energy and general rate increases could take effect in April.