Wednesday, Oct. 30, 2002 | 9:27 a.m.
The Southern Nevada Water Authority on Tuesday issued $200 million in general obligation bonds to fund improvements to the Las Vegas Valley's water treatment and distribution system.
The Water Authority used the bond issue to compare its performance with that of Nevada Power Co. The agency and the privately held power company are battling over a Water Authority proposal to buy Nevada Power and create a public power agency.
The Water Authority's 30-year tax exempt bonds were issued at an interest rate of 4.82 percent. By contrast, Nevada Power last week borrowed $250 million at more than 12 percent interest.
Had the Water Authority borrowed that same amount of money with its superior credit rating, power customers would have saved more than $130 million in interest, the Water Authority said in a Tuesday statement.
"This is an example of how a superior AA- credit rating translates into savings for customers," authority General Manager Patricia Mulroy said. "We have the trust of Wall Street, and that allows us to acquire capital at very attractive interest rates."
Executives with Nevada Power and its parent company, Sierra Pacific Resources, do not dispute that the company has financial problems that make borrowing money more expensive than in years past.
But Sierra Pacific Chairman Walt Higgins has said the company's financial crisis is passing and he expects the company to recover, thus allowing the company to get past its junk-bond debt status.
The Water Authority said its aggregate interest rate on more than $1.5 billion borrowed to date is 4.74 percent. The agency's $2.2 billion Capital Improvements Program is $56.8 million under budget.
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