Fitch Comment: No Change in SRP Ratings upon Enron Litigation

Settlement 
NEW YORK--(BUSINESS WIRE)--Nov. 17, 2005
Fitch will not change the ratings or Stable Rating
Outlook of Sierra Pacific Resources Co. (SRP) and its operating
utility subsidiaries Nevada Power Co. (NPC) and Sierra Pacific Power
Company (SPPC) following the announcement that the company has agreed
to settle pending litigation with creditors of Enron Corp. The
settlement is a favorable development for the company in that it
removes a major source of uncertainty and is consistent with the
current Stable Rating Outlook. 
The settlement agreement, if approved by the Federal Energy
Regulatory Commission (FERC) and the bankruptcy court in the Enron
bankruptcy, is nominally valued at $129 million but entails only
modest cash payments by the SRP group. The settlement will resolve all
pending litigation between SRP and Enron. Rulings from the FERC and
bankruptcy court required to finalize the proposed settlement are
expected by the end of the first-quarter 2006. SRP management
estimates that the net cash required for the settlement payments is
roughly $90 million, of which $60 million had already been deposited
in an escrow account, so the incremental funds required are on the
order of $30 million or less. This amount is less than amounts Fitch
had considered in stress cases. SRP's utility subsidiaries recently
expanded and amended their revolving credit facilities earlier this
month, and Fitch believes that there is ample liquidity at the
subsidiaries to meet the required settlement payment. 
SRP, NVP, and SPPC's ratings are rated by Fitch as follows with a
Stable Rating Outlook: 
Sierra Pacific Resources 
-- Senior unsecured debt 'B+'. 
Nevada Power Company 
-- First mortgage bonds 'BB+'; 
-- General and refunding mortgage bonds 'BB+'; 
-- Secured revolving bank facility 'BB+'; 
-- Senior unsecured debt 'BB-'; 
-- Trust preferred securities 'B+'. 
Sierra Pacific Power Company 
-- First mortgage bonds 'BB+'; 
-- General and refunding mortgage bonds 'BB+'; 
-- Secured revolving bank facility 'BB+'; 
-- Preferred stock 'B+'. 
Fitch's rating definitions and the terms of use of such ratings
are available on the agency's public site, www.fitchratings.com.
Published ratings, criteria, and methodologies are available from this
site, at all times. Fitch's code of conduct, confidentiality,
conflicts of interest, affiliate firewall, compliance, and other
relevant policies and procedures are also available from the 'Code of
Conduct' section of this site. 
CONTACT:
Fitch Ratings
Ari Kagan, CFA, 212-908 0644
Philip Smyth, CFA, 212-908-0531
Brian Bertsch, 212-908-0549 (Media Relations)
 
 
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