LAS VEGAS, Aug. 22, 2002 — At a public meeting this morning, the board of the Southern Nevada Water Authority (SNWA) approved an agenda item authorizing SNWA General Manager Patricia Mulroy to submit a purchase proposal to Sierra Pacific Resources (SRP) for Nevada Power Company, a wholly owned subsidiary of SRP.
The board approved, by a vote of 7-0, a measure authorizing SNWA management to submit a proposal to SRP offering to purchase Nevada Power Company’s assets for $1.2 billion and the assumption and/or refinancing of approximately $2 billion of Nevada Power Company debt obligations currently outstanding, subject to customary conditions.
“The SNWA estimates it will be able to reduce rates to Nevada Power customers by 20 percent upon completion of the acquisition,” Mulroy said. “The purchase of Nevada Power Company by SNWA not only will ensure significant savings to ratepayers and boost the local economy, but will deliver exceptional value to Sierra Pacific Resources’ shareholders and bondholders and help return Sierra Pacific Resources to a position of financial health.”
The decision follows the July 18, 2002, engagement of Morgan Stanley to develop an offer to purchase the Nevada Power Company. Since that time, Morgan Stanley, SNWA management and its financial and legal advisors have been analyzing publicly available information to assess Nevada Power’s value, quantify the customer benefits of a potential SNWA purchase and determine the terms and conditions of a fair commercial offer to SRP. If the proposal were to result in a purchase agreement, it would be presented to the SNWA board for final approval.
The Southern Nevada Water Authority and its member agencies treat and deliver water to essentially the same customer base as Nevada Power Company. The largest single electricity user in Southern Nevada, the SNWA holds a AA-rating by Standard and Poor’s.
SOURCE: Southern Nevada Water Authority