Sierra Pacific’s sale of plant shouldn’t affect Lake Tahoe | TahoeDailyTribune.com
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Sierra Pacific’s sale of plant shouldn’t affect Lake Tahoe

The parent company of Sierra Pacific Power, which provides electric power to more than 50,000 customers around Lake Tahoe, sold its Sunrise Station generating plant outside Las Vegas to a Houston-based firm.

But company officials note the $106 million sale should not hinder its capacity to provide power to residents on both sides of the lake.

Unlike California’s power woes that have plagued both ends of the state in recent days, spokesman Karl Walquist said the utility company hasn’t reached its peak levels of 1,253 of megawatts a day, not to mention its 1,700-mg capacity limit.



And the shift in ownership should not bring on any unwanted power shortages. Part of the deal calls for the buyback of power to Sierra Pacific from Reliant Energy Power Generation, Inc.

The deal is subject to approval by state and federal regulators and should be completed by the middle of next year.



This sale symbolizes a step in the Nevada utility’s move away from producing electricity to focusing, instead, on power distribution and transmission in light of the state’s shift into its first year of deregulation.

California’s predominant provider, Pacific Gas & Electric, has made similar moves since the Golden State’s transition away from investor-owned monopolies into a deregulated electricity system.

PG&E had its power plants appraised in the hopes of selling them off. Officials at the major utility company have indicated the goal is to get out of the power plant business, even as no new plants are expected to go on line anytime soon.

Since the 1996 law went into effect, alerts of power demand surpassing the supply have bedeviled the system statewide. Businesses have made some dramatic cutbacks in usage, and the state administration has called on holiday users to do the same.

California declared an unprecedented Stage 3 electricity alert last Thursday evening, after the state’s overwhelmed grid that has been crippled by idled power plants and scant supplies, struggled to meet demands, the Associated Press reported.

This is not the case in Nevada with Sierra Pacific, Walquist pledged, adding Nevada’s usage is a lot lower than its neighbor to the west.

“Typically, the peak demand is in the wintertime and summertime, so we plan accordingly,” he said, also acknowledging the colder-than-usual temperatures in recent weeks.

In 1999, Reno-based Sierra Pacific merged with Nevada Power of Las Vegas.

The company decided to sell its generating plants after state lawmakers deregulated the industry at the time of the merger to open doors to competition.

“The environment will certainly become competitive,” Walquist said.

But after deregulation in California caused electricity prices there to soar, the Nevada law was put on hold. In a settlement reached this summer with the state Public Utilities Commission, Sierra Pacific Resources agreed to seek capped incremental rate hikes to recoup their costs for fuel.

Gov. Kenny Guinn created a special commission to review the state’s energy circumstances and report to him before the 2001 Legislature convenes Feb. 5.


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