SRP Sierra Pacific Resources (New)

LAS VEGAS, Nov. 3 /PRNewswire-FirstCall/ -- Sierra Pacific Resources (NYSE:SRP) today announced consolidated net income applicable to common stock of $150.8 million, or 64 cents per share, for the quarter ended September 30, 2008, compared with consolidated net income applicable to common stock of $152.2 million, or 69 cents per share, for the same period in 2007. During the first nine months of 2008, the company earned $211 million, or 90 cents per share, compared with $193.6 million, or 87 cents per share, for the first nine months of 2007. The increase in earnings for the nine-month period was primarily the result of general rate increases at the company's utilities, Nevada Power Company and Sierra Pacific Power Company -- now both doing business as NV Energy -- and an increase in allowance for funds used during construction. These increases were partially offset by higher interest charges in 2008 on long-term debt and income recognized in 2007 as a result of the settlement with the PUCN regarding accrued interest charges. Michael Yackira, president and chief executive officer of Sierra Pacific Resources, said, "We are pleased that our financial and operating results remain strong despite our slower rate of growth. We continue to concentrate on programs and infrastructure improvements within Nevada for Nevadans and we believe these actions are essential to meet the current and future energy demands for not only our state but the entire nation. "In keeping with our core three-part energy supply strategy, we continue to focus on efficiency and conservation programs, moving forward with renewable energy developments, and adding more efficient generation facilities utilizing traditional technologies," Yackira said. "Just two weeks ago, we completed the acquisition of the 598-megawatt Bighorn Generation Facility in southern Nevada, which we will be renaming the Walter M. Higgins Generating Station in honor of our former Chairman and CEO. This past summer we added 600 megawatts of peaking capacity at our Clark Generating Station in Las Vegas. Earlier in the year, the 541-megawatt combined cycle generation unit was completed at our Tracy Generating Station, making the northern Nevada operations virtually energy independent for the first time." Yackira added, "The current economic downturn has impacted our operations somewhat, but our state continues to grow. Major resort projects are scheduled to come on line in southern Nevada over the next two years. We will continue to deliver reliable service throughout our state." Sierra Pacific Resources' two utilities contributed gross margin of $478.5 million for the quarter ended September 30, 2008, compared with $476.5 million in the same period in 2007. Retail megawatt hour sales were down for the two utilities by 1.5 percent for the third quarter 2008 when compared with the third quarter 2007, primarily due to decreased usage driven by milder summer weather and a change in customer usage patterns. Customer growth remains strong with the average number of residential, commercial and industrial electric customers in southern Nevada increasing by .9 percent, 2.9 percent and 3.9 percent, respectively, for the first nine months of 2008, compared with the average customer counts for the same period in 2007. In northern Nevada, average residential, commercial and industrial electric customers increased by 0.7 percent, 2.0 percent and 4.5 percent, respectively, for the first nine months of 2008, compared with the average customer counts for the first nine months of 2007. Webcast Scheduled for 7 a.m. PST Monday November 3 Senior management of Sierra Pacific Resources will review the company's third quarter 2008 financial results, regulatory issues and other matters during a conference call and live webcast Monday, November 3, at 7 a.m. Pacific Standard Time. The webcast will be accessible on the Sierra Pacific Resources website: http://www.sierrapacificresources.com/. An archived version of the webcast will remain on the Sierra Pacific Resources' website for approximately one month following the live webcast. To listen to a recording of the call by telephone, call (800) 475-6701, and international callers should dial (320) 365-3844. Use the conference call access code, 965502, to listen to the recording. Headquartered in Nevada, Sierra Pacific Resources is a holding company whose principal subsidiaries are Nevada Power Company, the electric utility for most of southern Nevada, and Sierra Pacific Power Company, the electric utility for most of northern Nevada and the Lake Tahoe area of California. Nevada Power Company and Sierra Pacific Power Company are now both doing business as NV Energy. NV Energy 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 Resources and its subsidiaries, Nevada Power Company d/b/a NV Energy and Sierra Pacific Power Company d/b/a NV Energy 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. For Sierra Pacific Resources, these risks and uncertainties include, but are not limited to, Sierra Pacific Resources' ability to maintain access to the capital markets, Sierra Pacific Resources' ability to receive dividends from its subsidiaries, the financial performance of Sierra Pacific Resources' subsidiaries, particularly Nevada Power Company and Sierra Pacific Power Company, and the discretion of Sierra Pacific Resources' Board of Directors with respect to the payment of future dividends based on its periodic review of factors that ordinarily affect dividend policy, such as current and prospective financial condition, earnings and liquidity, prospective business conditions, regulatory factors, and dividend restrictions in Sierra Pacific Resources' and its subsidiaries' financing agreements. For Nevada Power Company and Sierra Pacific Power Company, these risks and uncertainties include, but are not limited to, future economic conditions both nationally and regionally, changes in the rate of industrial, commercial and residential growth in their service territories, unfavorable rulings in their pending and future regulatory filings, their ability to maintain access to the capital markets for general corporate purposes and to finance construction projects, their ability to purchase sufficient fuel, natural gas and power to meet their power demands and natural gas demands for Sierra Pacific Power Company, financial market conditions, changes in environmental laws and regulations, and construction risks. Additional cautionary statements regarding other risk factors that could have an effect on the future performance of Sierra Pacific Resources, Nevada Power Company and Sierra Pacific Power Company are contained in their Quarterly Reports on Form 10-Q for the quarter ended June 30, 2008 and their Annual Reports on Form 10-K and/or Form 10-K/A for the year ended December 31, 2007, each filed with the SEC. The companies undertake 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. Financial Highlights (Dollars in thousands, except per share amounts) (Unaudited) Sierra Pacific Resources Three Months Ended Nine Months Ended September 30, September 30, 2008 2007 2008 2007 Operating revenues $1,118,131 $1,206,050 $2,761,976 $2,814,375 Other operating expenses $105,087 $98,399 $295,409 $275,414 Maintenance $20,337 $23,308 $64,931 $77,686 Depreciation and amortization $59,245 $58,876 $185,656 $174,787 Income taxes $61,148 $69,677 $82,695 $76,166 Taxes other than income $13,701 $13,091 $40,266 $37,710 Operating income $218,952 $213,137 $389,966 $361,498 Other income (expense): Allowance for other funds used during construction $7,865 $9,214 $32,935 $22,393 Income taxes $(4,263) $(4,572) $(16,451) $(20,630) Interest charges (net of AFUDC) $77,696 $69,751 $213,500 $210,037 Net Income Applicable to Common Stock $150,783 $152,222 $210,975 $193,583 Amount per share basic and diluted - Net income applicable to common stock $0.64 $0.69 $0.90 $0.87 Weighted Average Shares of Common Stock Outstanding: Basic - 234,096,559 221,612,243 233,975,552 221,424,682 Diluted - 234,655,132 221,968,802 234,499,269 221,783,424 Capital Structure September 30, 2008 September 30, 2007 Current maturities of long-term debt $9,794 0.1% $109,614 1.5% Long-term debt 4,793,078 60.2% 4,337,745 59.8% Total Debt $4,802,872 60.3% $4,447,359 61.3% Common shareholders' equity $3,156,607 39.7% $2,808,253 38.7% Total Capitalization (including current maturities of long- term debt) $7,959,479 100.0% $7,255,612 100.0% Nevada Power Company Three Months Ended Nine Months Ended September 30, September 30, 2008 2007 2008 2007 Operating revenues $826,825 $894,226 $1,866,220 $1,887,499 Other operating expenses $69,432 $61,400 $189,144 $167,401 Maintenance $12,469 $16,360 $42,727 $54,143 Depreciation and amortization $37,902 $38,151 $120,855 $112,745 Income taxes $54,595 $65,407 $69,592 $65,849 Taxes other than income $8,266 $8,005 $24,015 $22,431 Operating income $165,001 $170,264 $272,865 $259,460 Other income (expense): Allowance for other funds used during construction $6,543 $4,701 $21,093 $11,046 Carrying charge for Lenzie $- $- $- $16,080 Reinstated interest on deferred energy $- $- $- $11,076 Income taxes $(3,828) $(3,518) $(11,350) $(17,649) Interest charges (net of AFUDC) $48,271 $43,895 $130,732 $132,155 Net Income $124,336 $133,094 $165,482 $161,280 Capital Structure September 30, 2008 September 30, 2007 Current maturities of long-term debt $8,656 0.2% $7,971 0.2% Long-term debt 2,975,201 53.0% 2,677,193 53.4% Total Debt $2,983,857 53.2% $2,685,164 53.6% Common shareholder's equity $2,629,078 46.8% $2,323,684 46.4% Total Capitalization (including current maturities of long- term debt) $5,612,935 100.0% $5,008,848 100.0% Sierra Pacific Power Three Months Ended Nine Months Ended September 30, September 30, 2008 2007 2008 2007 Operating revenues $291,298 $311,818 $895,737 $926,551 Other operating expenses $35,474 $36,228 $103,744 $105,070 Maintenance $7,868 $6,948 $22,204 $23,543 Depreciation and amortization $21,343 $20,726 $64,801 $62,043 Income taxes $10,602 $9,825 $24,213 $20,871 Taxes other than income $5,402 $5,050 $16,128 $15,138 Operating Income $50,108 $38,118 $108,616 $94,242 Other income (expense): Allowance for other funds used during construction $1,322 $4,513 $11,842 $11,347 Income taxes $(683) $(1,104) $(5,210) $(3,597) Interest charges (net of AFUDC) $18,992 $14,962 $51,548 $45,199 Net Income $32,919 $25,552 $68,052 $57,528 Capital Structure September 30, 2008 September 30, 2007 Current maturities of long-term debt $1,139 0.0% $101,643 4.7% Long-term debt 1,292,867 56.0% 1,110,166 51.7% Total Debt $1,294,006 56.0% $1,211,809 56.4% Common shareholder's equity $1,015,690 44.0% $937,546 43.6% Total Capitalization (including current maturities of long- term debt) $2,309,696 100.0% $2,149,355 100.0% Gross margin is presented by Nevada Power Company and Sierra Pacific Power Company in order to provide information by segment that management believes aids the reader in determining how profitable the electric and gas business is at the most fundamental level. Gross margin, which is a "non-GAAP financial measure" as defined in accordance with SEC rules, provides a measure of income available to support the other operating expenses of the business and is utilized by management in its analysis of its business. Nevada Power Company d/b/a NV Energy and Sierra Pacific Power Company d/b/a NV Energy believe presenting gross margin allows the reader to assess the impact of regulatory treatment and their overall regulatory environment on a consistent basis. Gross margin, as a percentage of revenue, is primarily impacted by the fluctuations in regulated electric and natural gas supply costs versus the fixed rates collected from customers. While these fluctuating costs impact gross margin as a percentage of revenue, they only impact gross margin amounts if the costs cannot be passed through to customers. Gross margin, which Nevada Power Company and Sierra Pacific Power Company calculate as operating revenues less fuel and purchased power costs, provides a measure of income available to support the other operating expenses. Gross margin changes based on such factors as general base rate adjustments (which are required to be filed by statute every three years) and reflect Nevada Power Company and Sierra Pacific Power Company's strategy to increase internal power generation versus purchased power, which generates no gross margin. Reconciliations between GAAP operating revenues and gross margin are provided in tables herein. These non-GAAP measures should not be considered as substitutes for the GAAP measures. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Gross Margin (Dollars in thousands) (Unaudited) Nevada Power Company Three Months Ended Nine Months Ended September 30, September 30, 2008 2007 2008 2007 Operating Revenues: Electric $826,825 $894,226 $1,866,220 $1,887,499 Energy Costs: Purchased Power $319,324 $313,487 $577,161 $584,797 Fuel for power generation 240,027 166,284 613,968 471,142 Deferral of energy costs-net (80,191) 54,868 (44,107) 149,531 $479,160 $534,639 $1,147,022 $1,205,470 Gross Margin $347,665 $359,587 $719,198 $682,029 Sierra Pacific Power Company Three Months Ended Nine Months Ended September 30, September 30, 2008 2007 2008 2007 Operating Revenues: Electric $271,919 $290,979 $758,612 $789,214 Gas 19,379 20,839 137,125 137,337 $291,298 $311,818 $895,737 $926,551 Energy Costs: Purchased Power $64,005 $96,980 $251,474 $266,599 Fuel for power generation 92,845 71,896 211,137 187,250 Deferral of energy costs- electric-net (9,384) 11,792 (12,572) 44,423 Gas purchased for resale 13,760 11,661 108,288 103,169 Deferral of energy costs- gas-net (725) 2,594 (2,296) 4,203 $160,501 $194,923 $556,031 $605,644 Energy Costs by Segment: Electric $147,466 $180,668 $450,039 $498,272 Gas 13,035 14,255 105,992 107,372 $160,501 $194,923 $556,031 $605,644 Gross Margin by Segment: Electric $124,453 $110,311 $308,573 $290,942 Gas 6,344 6,584 31,133 29,965 $130,797 $116,895 $339,706 $320,907 DATASOURCE: Sierra Pacific Resources CONTACT: Analysts, Britta Carlson, +1-702-402-5624, or Media, Faye Andersen, +1-775-834-4822, both of Sierra Pacific Resources Web site: http://www.sierrapacific.com/

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