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September 16, 2014

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NV Energy’s CEO pumps up profits, walks away with millions

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Steve Marcus

Michael Yackira, CEO of NV Energy, participates on a panel during the National Clean Energy Summit 6.0 at the Mandalay Bay Tuesday, Aug. 13, 2013.

When Michael Yackira took charge of NV Energy in 2007, the company was earning big profits just a few years after it almost went bankrupt.

Nevada’s main electric utility stayed in the black on his watch, and he was able to steer more cash to shareholders, cash in on $21 million when he sold the company to Warren Buffett, and undertake some big projects, including the planned closure of a coal-fired power plant.

Yackira, who joined the utility in 2003, is retiring June 30. He will be succeeded as the top boss by Paul Caudill, named company president late last year.

Bills

Power bills for Southern Nevada homes have been climbing for decades, and that didn’t change much with Yackira.

Monthly bills were more erratic during the first several years of his tenure, but they’ve steadily climbed since 2013, up 11 percent to an estimated $161 a month for the average household.

Compensation

Yackira has been one of the highest-earning executives in the valley, but his biggest payout came last year when MidAmerican Energy Holdings Co. bought NV Energy. Buffett’s company paid $23.75 per share, or about $5.6 billion. Including debt, the deal was valued at $10 billion.

Based on his stock holdings, Yackira was poised to collect $21.2 million from the buyout. His annual compensation regularly outweighed that of his predecessor, Walter Higgins.

Dividends

Yackira steadily raised dividend payments to shareholders after a years-long lull. The company paid investors 20 cents a share in 2001 and 2002, stopped payments for five years, then resumed them in 2007 with an 8-cent dividend. Payments rose to 19 cents per share last year.

Earnings

NV Energy’s annual profits rose to $322 million in 2012 but bounced up and down under Yackira. But earnings were vastly better than in the 1990s and early 2000s. Then, the company, known as Sierra Pacific Resources, was losing hundreds of millions of dollars and nearing bankruptcy amid legal disputes with collapsed energy-trader Enron Corp.

Projects

Under Yackira’s leadership, NV Energy built a 231-mile, half-billion-dollar transmission line connecting Northern and Southern Nevada electric systems. The project, backed by a federal loan guarantee, was completed in January, a year behind schedule after wind-related construction delays.

The company also launched plans to close the coal-fueled Reid Gardner Generating Station near Moapa and replace the 800 megawatts of power it generated with cleaner sources of energy. State Senate Bill 123, which Gov. Brian Sandoval signed into law last June, requires NV Energy to close three coal-plant units at Reid Gardner by the end of this year and to shutter the fourth unit by the end of 2017.

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