Nevada Power, merger partner are sharing ideas

Nevada Power Co. will take its proposed $2.3 billion merger with Sierra Pacific Resources to state regulatory officials late next month or in early July, an executive with the utility said today.

Michael Niggli, president and chief operating officer with Nevada Power, told members of the Nevada Development Authority that representatives of both companies have formed about 12 "best practices teams" to take the best ideas from the two electrical utilities serving Northern and Southern Nevada and emerge with policies that will be in the best interests of the joint company.

Niggli said he has conferred with Nevada's congressional delegation and with state politicians and he said they have offered their support for the merger, which was announced on April 30.

"I think they are convinced that this is the right deal at the right time for the right reasons," Niggli said.

Nevada Power and Sierra Pacific still have a few hurdles to clear before the merger, which is expected to take about a year to complete.

The companies must get the blessing of the Public Utilities Commission, which will get the utility's official filing first in late June or early July. Then, within a month, the proposal would go to the Federal Energy Regulatory Commission. California's utility regulators also would have to review plans since there are a handful of Sierra Pacific customers on the California side of Lake Tahoe.

Nevada Power shareholders also must approve the merger. When the proposal was first presented to them earlier this month at the company's annual meeting, some were concerned about Nevada Power's plan to reduce dividends by 60 cents per share to $1 starting in November.

Niggli said the types of questions he has fielded in public appearances on the merger generally deal with rates. He said the greatest concern has been expressed about rate equalization. Since Nevada Power customers in Southern Nevada pay a lower rate per kilowatt hour than Sierra Pacific customers in Northern Nevada, some customers in the south have been concerned about rate increases. The companies have said they intend to maintain current rate policies.

Niggli also said he has received questions on joining the two grid systems (they aren't planning to), whether the combined company will be strong against out-of-state competitors (it should be more formidable than the two companies would have been separately) and whether Nevada Power plans to get into the gas business as Sierra Pacific does in Northern Nevada (it doesn't).

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