Duke Energy to supply Nevada Power this summer

Monday, June 10, 2002 | 10:58 a.m.

Duke Energy of Houston said today it settled disputes with Sierra Pacific Resources and will supply energy on credit to the Nevada utility -- potentially easing fears of power shortages because of Sierra Pacific's financial troubles.

Duke agreed to supply up to 1,000 megawatts of electricity per hour, as well as natural gas, to Sierra subsidiaries Nevada Power Co. of Las Vegas and Sierra Pacific Power Co. of Reno to meet power requirements during the peak summer period.

Duke also said it will buy and sell power between June 15 and Dec. 31 "under mutually agreeable terms" to assist the subsidiaries of Sierra Pacific Resources in balancing electricity demands.

Duke accepted a deferred-payment program for a portion of the summer costs under its existing power-supply contracts with Nevada Power.

At the same time, Nevada Power and Sierra Pacific Power agreed to drop their Federal Energy Regulatory Commission complaint against Duke Energy challenging the market-rate pricing of existing power-supply contracts entered into with Duke Energy during fall 2001.

"This agreement reinforces the strength and viability of long-term, power-supply contracts and ensures that Nevada consumers' power needs will be met during the summer," said Jim Donnell, chief executive of Duke Energy North America.

"We are committed to doing everything possible to ensure that our customers have the power they need without interruption. The agreements with Duke Energy are a major step in that direction. We appreciate Duke Energy's cooperation in our efforts to reliably serve our customers and meet our obligations. Our agreement with Duke Energy should give other suppliers confidence to adopt the extended payment program," said Sierra Pacific Chief Executive Walter Higgins.

Other terms of the deal were not disclosed.

Sierra Pacific stock jumped 13 percent, or 96 cents, on this morning's news.