Nevada Power (NVP) 8-K Results of Operations and Financial Condition

EXHIBIT 99.2

Funds from Operations (“FFO”) and Adjusted FFO, which is FFO adjusted to account for cash inflows or outflows associated with the deferred energy accounts, are presented here because NV Energy, Inc. (the “Company”) believes that these measures are useful to investors because the rating agencies use these measures when determining a company’s credit ratings.  The cost of the Company’s debt, the ability of the Company’s subsidiaries to pay dividends to the Company, and other capital and operational costs and expenses are impacted by the Company’s credit ratings.  The Company believes that net income is the most directly comparable GAAP measure to FFO.

Since FFO excludes certain items includable in net income, reliance on the measure has limitations; management compensates for these limitations by using the measure simply as a supplemental measure that is weighed in the balance with other GAAP measures.  FFO is not necessarily an indication of the Company’s cash flow available to fund cash needs.  Additionally, it should not be used as an alternative to net income when evaluating the Company’s financial performance or to cash flow from (used by) operating, investing and financing activities when evaluating the Company’s liquidity or ability to make cash distributions or pay debt service.  The FFO presented by the Company may not be comparable to the FFO presented by other utility companies.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Dollars in Thousands)
NV Energy, Inc.
Funds From Operations (FFO)
	Year Ended December 31,
	2010			2009			2008
Net Income	$	226,984		$	182,936		$	208,887
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		333,059			321,921			260,608
Deferred taxes and deferred investment tax credit		129,231			111,219			52,060
AFUDC(1) (debt and equity)		(51,467	)		(44,503	)		(67,968	)
Gain on sale of asset		(7,575	)		-			-
Amortization of other regulatory assets		110,654			101,641			7,453
Deferred rate increase		(8,343	)		(95,890	)		-
Other, net		(20,666	)		(7,755	)		93,029
FFO (before deferred energy)		711,877			569,569			554,069
Deferred energy		147,497			306,406			2,717
Adjusted FFO	$	859,374		$	875,975		$	556,786
Long-term debt	$	4,924,109		$	5,303,357		$	5,266,982
Current maturities of long-term debt		355,929			134,474			9,291
Total Debt	$	5,280,038		$	5,437,831		$	5,276,273
Interest expense (net of AFUDC(1) debt)	$	333,010		$	334,314		$	300,857
AFUDC(1) (debt)		23,355			20,229			29,527
Adjusted Interest Expense	$	356,365		$	354,543		$	330,384
Total Debt/FFO		7.42	x		9.55	x		9.52	x
Total Debt/Adjusted FFO		6.14	x		6.21	x		9.48	x
FFO Adjusted Interest Coverage		3.00	x		2.61	x		2.68	x
Adjusted FFO/Adjusted Interest Coverage		3.41	x		3.47	x		2.69	x
Shareholders' Equity	$	3,350,818		$	3,223,922		$	3,131,186
Total Capitalization (including current maturities of long-term debt)	$	8,630,856		$	8,661,753		$	8,407,459
Total Debt/Total Capitalization		61.18	%		62.78	%		62.76	%
(1) Allowance for borrowed funds used during construction or allowance for equity funds used during construction.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Dollars in thousands)
Nevada Power Company
Funds From Operations (FFO)
	Year Ended December 31,
	2010			2009			2008
Net Income	$	185,943		$	134,284		$	151,431
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		226,252			215,873			171,080
Deferred taxes and deferred investment tax credit		92,859			96,831			45,039
AFUDC(1) (debt and equity)		(46,672	)		(38,209	)		(45,980	)
Amortization of other regulatory assets		74,625			61,758			24,459
Deferred rate increase		(8,343	)		(95,890	)		-
Other, net		(16,153	)		(159	)		48,750
FFO (Before Deferred Energy Costs)		508,511			374,488			394,779
Deferred energy		116,230			216,629			4,211
Adjusted FFO	$	624,741		$	591,117		$	398,990
Long-term debt	$	3,221,833		$	3,535,440		$	3,385,106
Current maturities of long-term debt		355,929			119,474			8,691
Total Debt	$	3,577,762		$	3,654,914		$	3,393,797
Interest expense (net of AFUDC(1) debt)	$	214,367		$	226,252		$	186,822
AFUDC(1) (debt)		21,443			17,184			20,063
Adjusted Interest Expense	$	235,810		$	243,436		$	206,885
Total Debt/FFO		7.04	x		9.76	x		8.60	x
Total Debt/Adjusted FFO		5.73	x		6.18	x		8.51	x
FFO Adjusted Interest Coverage		3.16	x		2.54	x		2.91	x
Adjusted FFO/Adjusted Interest Coverage		3.65	x		3.43	x		2.93	x
Shareholder's Equity	$	2,761,632		$	2,650,039		$	2,627,567
Total Capitalization (including current maturities of long-term debt)	$	6,339,394		$	6,304,953		$	6,021,364
Total Debt/Total Capitalization		56.44	%		57.97	%		56.36	%
(1) Allowance for borrowed funds used during construction or allowance for equity funds used during construction.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Dollars in thousands)
Sierra Pacific Power Company
Funds From Operations (FFO)
	Year Ended December 31,
	2010			2009			2008
Net Income	$	72,375		$	73,085		$	90,582
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		106,807			106,048			89,528
Deferred taxes and deferred investment tax credit		39,220			32,548			24,598
AFUDC(1) (debt and equity)		(4,795	)		(6,293	)		(21,988	)
Gain on sale of asset		(7,575	)		-			-
Amortization of other regulatory assets		35,799			39,146			(13,822	)
Other, net		(7,929	)		(8,778	)		36,694
FFO (before deferred energy)		233,902			235,756			205,592
Deferred energy		31,267			89,777			(1,494	)
Adjusted FFO	$	265,169		$	325,533		$	204,098
Long-term debt	$	1,195,775		$	1,282,225		$	1,395,987
Current maturities of long-term debt		-			15,000			600
Total Debt	$	1,195,775		$	1,297,225		$	1,396,587
Interest expense (net of AFUDC(1) debt)	$	68,514		$	69,413		$	72,712
AFUDC(1) (debt)		1,912			3,044			9,464
Adjusted Interest Expense	$	70,426		$	72,457		$	82,176
Total Debt/FFO		5.11	x		5.50	x		6.79	x
Total Debt/Adjusted FFO		4.51	x		3.98	x		6.84	x
FFO Adjusted Interest Coverage		4.32	x		4.25	x		3.50	x
Adjusted FFO/Adjusted Interest Coverage		4.77	x		5.49	x		3.48	x
Shareholder's Equity	$	973,420		$	1,009,258		$	877,961
Total Capitalization (including current maturities of long-term debt)	$	2,169,195		$	2,306,483		$	2,274,548
Total Debt/Total Capitalization		55.13	%		56.24	%		61.40	%
(1) Allowance for borrowed funds used during construction or allowance for equity funds used during construction.