Sierra Pacific reorganization costs 25 jobs

A sweeping reorganization of Sierra Pacific Resources, the Reno-based utility, resulted in the loss of about 25 jobs in northern Nevada.

A total of approximately 70 jobs were trimmed from a company-wide staff of 3,100, said Karl Walquist, spokesman for Sierra Pacific.

Along with Sierra Pacific Power in northern Nevada, the company operates Nevada Power Co.

in the Las Vegas area.

The company spent approximately $2.9 million on severance payments during the first quarter, said Walt Higgins, the chairman and chief executive officer of Sierra Pacific Resources.

Higgins told securities analysts last week the company expects that the reorganization will pay for itself in one to two years.

When the reorganization plan was announced in November,Higgins said the company's goal was reduction of costs through better integration of Sierra Pacific and Nevada Power.

The companies merged in 1999.

Since then,Walquist said, accounting functions for both companies have been centralized at its Reno headquarters.Also centralized at the Reno office are the companies' transmission staff and the regulatory affairs staff that works closely with the Public Utilities Commission of Nevada.

On the other hand, the company centralized its resource planning department, energy traders and generation executives in Las Vegas.

The net effect of the shifts in employment, Walquist said, was essentially a wash neither Reno nor Las Vegas gained significantly.

Over the long term, however, it's likely that the utility's staff in Las Vegas will grow more quickly than its staff at Reno,Higgins said in November.

That's mostly because Las Vegas increasingly is the center of gravity for the state.

The reorganization is part of the ongoing effort by Higgins and his team to restore the troubled utility to profitability.

In the first quarter, Sierra Pacific reported last week, it lost $8.5 million.While that's a dramatic improvement from the $43.5 million it lost a year earlier, Higgins said he was disappointed in the loss.

The loss from a year ago included more than $30 million in one-time charges such as tender fees the utility paid to pay off some debt early.

Sierra Pacific Power Co.

continued to be profitable during the quarter.

It earned $11.1 million on revenues of $294.5 million.

That compares with profits of $6.7 million on revenues of $262.3 million a year ago.

Electric revenues were up 12.5 percent as the result of increased numbers of customers and rate increases.

Colder winter weather and higher rates, meanwhile, boosted natural gas revenues by 13.6 percent.