Water agency says its bid would help north Nevada

It's official: The Southern Nevada

Water Authority last week approved a

plan to make a $1.2 billion bid for

Nevada Power Co., a subsidiary of

Sierra Pacific Resources.

As part of the proposal the water

authority will also assume or refinance

Sierra Pacific Resources' $2 billion debt

incurred during the 2001 Western

energy crisis.

The deal, claims the water authority, is

good for northern Nevada customers of

Sierra Pacific Power, a Reno-based subsidiary

of Sierra Pacific Resources that is

not part of the water authority's bid.

"We're paying a fair price and that will

leave the company a lot stronger," said

Richard Wimmer, deputy general manager

of SNWA in Las Vegas.

It was rumored that SNWA would be

making a play for Nevada Power, then last

month SNWA hired Morgan Stanley &

Co. to prepare the offer. The offer was

scheduled to be delivered to Sierra Pacific

Resources late last week.

Wimmer didn't expect the utility to

respond until it reviewed the proposal.

Before the water agency formally

decided to make its bid, Sierra Pacific

Resources officials said that they hadn't

undertaken any studies to determine the

possible effects of selling the portion of

the company that serves southern Nevada.

Two weeks ago Sierra Pacific

Resources reported a second quarter loss

of $41.9 million. At the time, management

said it would consider all offers but

that it had no plans to sell Nevada Power.

Nevada Power serves more than

643,000 electric customers in Las Vegas,

North Las Vegas, Henderson, and several

nearby rural areas.

Sierra Pacific Power, the company's

subsidiary in northern Nevada, provides

electricity and natural gas service to the

Reno area and provides electricity to an

a region that includes portions of

eastern Calfornia.