Nevada Power parent reports narrower loss

Kevin Rademacher

Tuesday, May 10, 2005 | 11:11 a.m.

Sierra Pacific Resources, parent company of Nevada Power Co. of Las Vegas, said rate increases and continued customer growth helped narrow its first-quarter loss.

Sierra Pacific said this morning that it lost $9.5 million, or 8 cents a share, in the first quarter, compared with a loss of $44.5 million, or 38 cents a share, in the same period a year ago.

"The past quarter's results represent a substantial improvement over the comparable 2004 quarter, and we are today a significantly stronger company as a result of initiatives that have and will continue to strengthen the company's performance in the future," Walter Higgins, Sierra Pacific's chief executive, said in a statement.

The results were buoyed by the absence of major charges that dragged down earnings for the first quarter of 2004, including an $11.7 million charge for goodwill impairment, a $5.9 million write-off for disallowed merger costs and a $12.6 million charge for fees associated with the early extinguishment of debt.

Revenue for the first quarter was $649 million, up from $588 million for the year-ago quarter.

Higher costs for purchased power increased operating expenses for the company during the quarter. Sierra spent $220 million on purchased power -- electricity generated by other companies and bought on the open market -- compared with $193 million in purchased power expenses a year ago.

Also higher was the cost for fuel -- predominantly natural gas -- purchased to run power plants which reached $110 million for the first quarter 2005, compared to $103 million a year ago.

Nevada Power lost $8 million for the first quarter, compared with a $15.4 million loss a year ago.

Revenue increased 8.5 percent for Nevada Power, compared with the same 2004 quarter. The company credited that jump to higher rates and a 5.6 percent increase in the number of residential customers. Commercial customer count jumped by 5.7 percent and industrial customers increased by 4.8 percent.

The company said the effect of customer growth was partially offset by a decrease in customer usage because of mild weather during the quarter.

The company's Reno-based subsidiary -- Sierra Pacific Power Co. -- reported earnings of $11.2 million for the first quarter, compared to $6.7 million for the same 2004 quarter.

Electric operating revenue increased by 12.5 percent over the first quarter 2004 for Sierra Pacific Power. Gas operating revenue for the company jumped 13.6 percent, primarily based on colder weather.