Nevada Power, El Paso part ways

Friday, Oct. 4, 2002 | 11:07 a.m.

SUN WIRE REPORTS

El Paso Merchant Energy Group notified Nevada Power Co. this week that it was terminating all transactions between the companies entered under the Western Systems Power Pool Agreement, according to a Form 8-K filed Wednesday with the Securities and Exchange Commission.

No reason was given in the filing for the terminations.

El Paso Merchant Energy is part of El Paso Corp. and Nevada Power is part of Sierra Pacific Resources.

Sierra Pacific said that under the agreement, termination payments are about equal to the present value of the net gains and losses under the contract.

Sierra Pacific said that after aggregating the net gains and losses, and including a delayed payment of about $19 million owed El Paso Merchant Energy for power deliveries through Sept. 15, a small payment will be owed to Sierra Pacific.

Sierra Pacific said it has adequate power and fuel supplies to meet current needs despite the terminationof agreements by El Paso Merchant Energy.

Separately, Sierra Pacific said Nevada Power reached delayed payment agreements with BP Energy, Mirant, Constellation Energy and Tractabel for last summer's power deliveries. Nevada Power and Duke Energy previously had reached a delayed payment agreement.

Separately, Nevada Power said today it plans to sell $250 million of notes maturing in 2009.

The company will finish the sale by the end of the month, the utility said. Funds raised through the sale will be used to pay a $200 million credit facility and for general purposes.

Lehman Brothers Holdings Inc. will manage the offering of first mortgage bonds, or debt that has as collateral the first mortgage on the issuer's property, said people familiar with the sale.