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.
