Nevada Power Co. finances improve

Wednesday, Aug. 14, 2002 | 10:57 a.m.

Three months after posting a staggering first-quarter loss of $303.9 million, Nevada's main electricity utility today reported substantially improved financial results for the second quarter ending June 30.

Sierra Pacific Resources lost $41.9 million or 41 cents per share in the most recent quarter versus a profit of $54 million or 69 cents in the year-ago quarter.

Still, the results were an improvement from the first quarter, which was marked by the $303.9 million loss. That was caused by a $311 million write-off of deferred energy costs for Sierra's Nevada Power Co. subsidiary and other rate-related write-offs because of regulators' rejection of $434 million in electricity costs.

The second quarter results suffered from a one-time charge for the disallowance of $53.1 million in power costs paid from December 2000 through November 2001 by Sierra Pacific Power, the company's electric utility in Northern Nevada. Also blamed were cooler weather in May and energy conservation by customers that resulted in lower demand.

For the second quarter, the Sierra Pacific Power subsidiary had a loss of $34.9 million, compared with net income of $29.5 million in the second quarter of 2001. Nevada Power, the company's utility in Southern Nevada, earned $5.7 million, compared with $33.1 million in the same period a year ago.

"We are pleased that Nevada Power Co. returned to profitability during the second quarter, particularly as a precursor to the third quarter, which is traditionally a period of peak demand for our company," said Sierra Pacific Chairman and Chief Executive Walt Higgins. "Except for the one-time charges related to the Sierra Pacific Power deferred energy case disallowance, both Sierra Pacific Power and our company overall would have been profitable."

During the recently concluded quarter, residential electric revenues decreased at Nevada Power by 3.3 percent compared to the same quarter in 2001 because of cooler weather. Second quarter commercial and industrial revenues increased by 8.1 percent and 14.2 percent, respectively, due in part to increases in rates and customer growth.

Sierra stock traded today at $6.03, down 8 cents from Tuesday.