Sale of Sierra Pacific's water business receives final regulatory approval

The sale of Sierra Pacific Power Company's water business received final regulatory approval with the Public Utilities Commission of Nevada (PUCN) adopting a stipulation that would result in a sale price of approximately $329 million.

RENO, Nev., April 27, 2001 — The sale of Sierra Pacific Power Company's water business received final regulatory approval with the Public Utilities Commission of Nevada (PUCN) adopting a stipulation that would result in a sale price of approximately $329 million.

Sierra Pacific Power Company is a wholly owned subsidiary of Sierra Pacific Resources.

With this approval, the sale of the water business to the Truckee Meadows Water Authority (TMWA) is scheduled to close in mid-June 2001.

"This sale provides good value for our shareholders as we concentrate our focus on becoming a premier energy distribution company in the West," according to Jeff Ceccarelli, Sierra Pacific Power Company president. He praised the efforts of the local governments of Reno, Sparks and Washoe County, Nevada, in working together and concluding a fair deal that benefits everyone.

Sierra Pacific Resources said after-tax sale proceeds of approximately $290 million will be used to reduce the company's existing debt.

Sierra Pacific Resources' water supply and distribution business serves more than 72,000 customers in the Reno-Sparks metropolitan area and has approximately 85 employees. The water company assets include state-of-the-art treatment facilities and distribution infrastructure, water rights (surface and ground) and storage rights in Donner and Independence Lakes.

Earlier this month, the PUCN issued an Interim Order approving Sierra's petition for termination of its water service in the Truckee Meadows. Another important component for completion of the sale was received earlier this week when the U.S. Government assigned to TMWA the Interim Storage Agreement for storage of water for the Reno/Sparks area during drought years.

Sierra Pacific Resources announced plans to sell its water business September 7, 2000, through an auction process conducted by Lehman Brothers, Sierra's financial advisors. The auction was concluded with the announcement on January 15, 2001 Sierra had entered into a purchase agreement with Truckee Meadows Water Authority (TMWA) for the sale of the water business. TMWA is a joint powers authority whose members are the City of Reno, the City of Sparks and Washoe County.

Headquartered in Reno, Nev., Sierra Pacific Resources is a holding company whose principal subsidiaries are Nevada Power Company, the electric utility for southern Nevada, and Sierra Pacific Power Co., the electric utility for most of northern Nevada and the Lake Tahoe area of California, and a natural gas and water distributor in the Reno-Sparks area. Other subsidiaries include the Tuscarora Gas Pipeline Co., which owns 50 percent interest in an interstate natural gas transmission partnership and Sierra Pacific Communications, a telecommunications company.

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