Nevada utility posts profitable fourth quarter, year
RENO, Nev. (AP) — Sierra Pacific Resources reported its third consecutive profitable quarter and a healthy year in fiscal 2001, largely due to a new law letting the utility defer rate increases.
“The return to deferred energy stemmed the ongoing damage to the income statement,” Treasurer Richard K. Atkinson said during a Thursday conference call with investors and analysts.
The parent company of Sierra Pacific Power and Nevada Power companies made $56.7 million or 65 cents a share last year compared with a loss of $39.8 million or 61 cent a share in 2000. In the fourth quarter ending Dec. 31, the company produced revenues of $5.8 million or 6 cents a share after a loss of $18.2 million or 23 cents a share in the same period a year earlier.
“The 2001 results include losses incurred during the first quarter as a result of unrecovered fuel and purchased power costs prior to the re-establishment of deferred energy accounting,” Atkinson said.
A bill approved by the Legislature in April allows the two subsidiaries to recover what they pay for wholesale power through deferred rate increases while not showing the amount as a debt on their balance sheets.
The subsidiaries’ pending general and deferred energy rate cases are before the Public Utilities Commission of Nevada. A decision on the Nevada Power request is expected April 1 and on June 1 for Sierra Pacific Power, Atkinson said.
Consolidated net income for 2001 of $73.3 million was tempered by two extraordinary items — a $25.8 million gain on the sale of Sierra Pacific Power’s water business and $42.4 million in one-time charges, including termination of the Portland General Electric acquisition and uncontrollable accounts receivable, Atkinson said.
Nevada Power earned $63.4 million last year, compared with a loss of $7.9 million in fiscal 2000. Sierra Pacific earned $45.9 million in 2001 compared with earnings of $2.1 million the previous fiscal year.
The two companies’ earnings total more than Sierra Pacific Resources’ earnings because of interest expenses on the parent utility’s debt, according to company investor relations analyst Barbara Doble.
Sierra Pacific Power earned $9.3 million last quarter compared with a loss of $16.4 million a year earlier. Nevada Power had $6.9 million income last quarter, compared with $10.7 million in 2000.
Shares in Sierra Pacific Resources fell 52 cents, or 3.33 percent, to close at $15.10 Thursday on the New York Stock Exchange.
Sierra Pacific Resources was formed in 1999 by the merger of Reno-based Sierra Pacific Power and Nevada Power headquartered in Las Vegas. It supplies electricity to 954,000 customers over a 55,000-mile area in Nevada and the eastern Sierra and natural gas to 119,500 people in the Reno-Sparks area.
Atkinson said Sierra Pacific Resources had been able to weather both the collapse of Enron Corp. and a shaky economy.
“We had some contracts, in fact considerable contracts, with Enron given that they were a large part of the market,” Atkinson said. “For the most part they have delivered under those contracts. There’s virtually no effect of that bankruptcy filing on us.”
He said seemingly endless growth in Las Vegas helped carry the company through last year’s downturn.
“It’s absolutely clear that we haven’t been insulated from the fact that the economy as a whole across the country has taken a dip, but there have also been a lot of positive signs in the economy,” he said. “We haven’t seen a significant change with respect to our operations at this stage.”