Public Utilities Commission Grants Rate Change
30 Junho 2008 - 5:03PM
PR Newswire (US)
RENO, Nev., June 30 /PRNewswire-FirstCall/ -- The Public Utilities
Commission of Nevada (PUCN) has approved an increase in electric
rates for Sierra Pacific Power Company, a subsidiary of Sierra
Pacific Resources (NYSE:SRP). The increase, effective July 1, 2008,
is the result of the company's mandatory rate case filing made
every three years. The general rate case decision calls for an
overall 10.45 percent increase, largely attributable to costs
associated with a new, highly efficient unit at the company's Tracy
Generating Station near Reno. However the increase will be
partially offset when, also on July 1, previously approved fuel and
purchased power costs the company has been recovering from
customers will expire. When the two rate changes are combined, the
typical residential customer using 750 kilowatt hours of
electricity per month will see a 9.2 percent increase from $96.86
to $105.76. When compared with July 2007, residential customer
rates will be 6.4 percent higher than they were one year ago due to
decreases in rates over the past year. The new Tracy facility, the
company's first new electric power plant to be built in the last
decade, greatly increases the energy independence of northern
Nevada customers. The new 541-megawatt, gas-fired Tracy Combined
Cycle Plant, which was previously approved by the PUCN, is
scheduled for commercial operation next month. One megawatt of
electricity will serve approximately 600 homes. "With the
completion of this new plant, we move closer to fulfilling our
strategy to reduce northern Nevada's dependence on outside energy
suppliers. We can now meet virtually all of our customers'
electricity demand with generation from within Nevada," said Sierra
Pacific Resources President and CEO Michael Yackira. The new plant
is a highly efficient, state-of-the art combined cycle unit that is
30 percent more efficient than the company's existing gas-fired
generators at the Tracy Station. Fuel and purchased power savings
resulting from this new plant are estimated to be $27 million for
the first year of operation alone. The remainder of the general
rate increase granted by the PUCN today allows the company to
recover costs associated with investments in new transmission and
distribution lines, substation and equipment improvements, labor
and a return to the company's shareholders. The PUCN established an
overall rate of return for the company of 8.41 percent and a return
on equity of 10.6 percent. The overall revenue increase to the
company is $87 million. In its order, the PUCN also established a
surcharge for electric customers in Washoe County, Nevada to
recover incremental costs to place certain electric transmission
lines in Washoe County underground, as required by the Washoe
County Board of Commissioners. The surcharge will be collected over
a three-year period and for the typical residential customer
amounts to approximately 45 cents per month. Headquartered in Reno,
Nevada, Sierra Pacific Power Company is the principal utility for
most of northern Nevada and the Lake Tahoe area of California. It
is a wholly owned subsidiary of Sierra Pacific Resources which also
is the holding company for Nevada Power Company, the electric
utility for southern Nevada. Sierra Pacific Power also distributes
natural gas in the Reno-Sparks area of northern Nevada. This press
release contains forward-looking statements regarding the future
performance of 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, Sierra Pacific Power's ability to obtain necessary
regulatory approvals and permits, risks related to construction of
power plants, changes in applicable environmental laws or
regulations, and Sierra Pacific Power's ability to obtain financing
on favorable terms. Additional cautionary statements regarding
other risk factors that could have an effect on the future
performance of Sierra Pacific Power Company are contained in its
Quarterly Report on Form 10-Q for the quarter ended March 31, 2008
and its Annual Report on Form 10-K for the year ended December 31,
2007, filed with the SEC. Sierra Pacific Power Company undertakes
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 unanticipated events. DATASOURCE: Sierra Pacific Resources
CONTACT: Media, Faye I. Andersen, +1-775-834-4822, or Analysts,
Britta Carlson, +1-702-402-5624, both of Sierra Pacific Resources
Web site: http://www.sierrapacific.com/
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