LAS VEGAS, Nov. 16 /PRNewswire-FirstCall/ -- Sierra Pacific Resources
(NYSE: SRP) today announced that a settlement agreement has been reached with
Enron Power Marketing Inc. (Enron) that resolves the long-term, ongoing
litigation involving more than $300 million in terminated contracts between
Enron and Sierra Pacific's utility subsidiaries, Nevada Power Company and
Sierra Pacific Power Company.
Sierra Pacific said that after all terms of the agreement are finalized,
the company expects its net payment for resolving its Enron-related issues
will be no more than $89.9 million. Key terms of the agreement are as
* The Sierra Pacific utilities agree to pay $129 million to settle
Enron's claim of more that $300 million for payment on contracts Enron
terminated in 2002.
* Enron agrees to provide and pay an unsecured claim of $126.5 million
against its bankruptcy estate in settlement of the Nevada utilities'
claims that are currently being litigated on appeal before the 9th
Circuit Court of Appeals and before the Federal Energy Regulatory
The Nevada utilities expect to realize no less than 30 percent of the face
value of the claim against the bankruptcy estate which would guarantee that
Sierra Pacific's total payment will be no more than the $89.9 million. The
payment could be less if the utilities receive more than 30 percent of the
face value of the claim.
"The resolution of this lengthy period of litigation with Enron is in the
best interests of our company, our state and our customers," said Walter
Higgins, chairman and chief executive officer of Sierra Pacific Resources.
"It is certain that without this agreement we faced many more years of costly
and time consuming litigation. With these legal issues now behind us, Sierra
Pacific can more effectively focus on doing a good job for our customers and
continue making progress toward restoring our utilities to investment grade
Higgins added, "The FERC ordered us to enter into these most recent
settlement discussions and the outcome is in the best interests of all. We
especially appreciate the courageous and tireless support of Nevada Senators
Ensign and Reid, Representatives Porter, Berkley and Gibbons as well as
officials of Nevada's Public Utilities Commission and the Attorney General's
Bureau of Consumer Protection. They have been powerful forces in our meetings
with Enron and the FERC to conclude this matter. Without this backing and
influence, the Enron litigation would have remained an unresolved threat to
our company and state for an undetermined but lengthy period of time."
During 2003 and 2004, Sierra Pacific set aside in a cash escrow a total of
$60 million. With this security and the accrued interest, the company will
now need to pay less than $30 million of additional cash to complete the
Sierra Pacific and Enron will submit the settlement agreement for approval
by the FERC this week and subsequently to the Enron Bankruptcy Court.
WEBCAST SCHEDULED FOR TODAY
A conference call and live webcast will be held today, Wednesday, Nov. 16,
at 6:30 a.m. Pacific Standard Time.
The webcast will be accessible on the Sierra Pacific Resources web site
An archived version of the webcast will remain on the Sierra Pacific
Resources web site for approximately one month following the live webcast. To
listen to a recording of the call by telephone, call (800) 475-6701.
International callers should dial (320) 365-3844 and use the conference access
ABOUT SIERRA PACIFIC RESOURCES
Headquartered in Nevada, Sierra Pacific Resources is a holding company
whose principal subsidiaries are Nevada Power Company, the electric utility
for most of southern Nevada, and Sierra Pacific Power Company, the electric
utility for most of northern Nevada and the Lake Tahoe area of California.
Sierra Pacific Power Company also distributes natural gas in the Reno-Sparks
area of northern Nevada. Other subsidiaries include the Tuscarora Gas
Pipeline Company, which owns a 50 % interest in an interstate natural gas
Forward-Looking Statements: This press release contains forward-looking
statements regarding the future performance of Sierra Pacific Resources and
its subsidiaries, Nevada Power Company and Sierra Pacific Power Company,
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements are subject to a variety of risks and uncertainties that
could cause actual results to differ materially from current expectations.
These risks and uncertainties include, but are not limited to, the parties'
receipt of necessary regulatory and court approvals for the settlement, the
Utilities' ability to sell or otherwise dispose of the Enron unsecured claim,
the Utilities' ability to pay the settlement amounts and the Utilities'
ability to recover amounts paid with respect to the settlement agreement in
their future rate cases filed with the Public Utilities Commission of Nevada.
Additional cautionary statements regarding other risk factors that could have
an effect on the future performance of Sierra Pacific Resources, Nevada Power
Company and Sierra Pacific Power Company are contained in their Quarterly
Reports on Form 10-Q for the quarter ended September 30, 2005 and their Annual
Reports on Form 10-K for the year ended December 31, 2004, filed with the SEC.
The Companies undertake no obligation to release publicly the result of any
revisions to these forward-looking statements that may be made to reflect
events or circumstances after the date hereof or to reflect the occurrence of
SOURCE Sierra Pacific Resources
Media, Karl Walquist, +1-775-834-3891, or Analysts, Britta Carlson, +1-702-367-5624, both of Sierra Pacific Resources
-0- Nov/16/2005 12:30 GMT
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