Sierra Pacific Power 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 the Company believes that these measures are useful to investors because the ratings 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 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)
Sierra Pacific Resources
Funds From Operations (FFO)
	Six Months ended June 30,						Year ended December 31,									LTM June 30,
	2007			2006			2006			2005			2004			2007
Net Income Applicable to Common Stock	$	41,361		$	29,078		$	277,451		$	82,237		$	28,571		$	289,734
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		115,911			114,083			228,875			214,662			205,922			230,703
Deferred taxes and deferred investment tax credit		31,661			6,510			136,026			41,609			33,690			161,177
AFUDC (Debt and Equity)		(23,887	)		(20,315	)		(35,345	)		(45,013	)		(14,535	)		(38,917	)
Deferred Energy Costs Disallowed		-			-			-			-			1,586			-
Goodwill Impairment		-			-			-			-			11,695			-
Impairment of assets of subsidiary		-			-			-			-			10,997			-
Gain on Sale of Discontinued Operations		-			-			-			-			(2,506	)		-
Plant Costs disallowed		-			-			-			-			47,092			-
Reinstatement of deferred energy costs		-			-			(178,825	)		-			-			(178,825	)
Reinstated Interest on Deferred Energy		(11,076	)		-			-			-			-			(11,076	)
Carrying Charge on Lenzie Plant		(16,080	)		(13,166	)		(33,440	)		-			-			(36,354	)
Gain on Sale of Investment		-			-			(62,927	)		-			-			(62,927	)
Other, net		7,805			(3,494	)		24,650			(219	)		(23,453	)		35,949
Funds from Operations (Before Deferred Energy Costs)		145,695			112,696			356,465			293,276			299,059			389,464
Amortization Deferred energy costs - electric		88,482			75,025			166,821			188,221			265,418			180,278
Amortization Deferred energy costs - gas		638			4,136			6,234			1,446			3,242			2,736
Deferral of energy costs - electric plus terminated suppliers		30,941			(31,842	)		(45,996	)		(23,063	)		(147,589	)		16,787
Deferral of energy costs - gas		(638	)		1,744			436			(2,519	)		(7,480	)		(1,946	)
Payment to terminating supplier		-			(65,368	)		(65,368	)		-			(61,129	)		-
Proceeds from claim on terminating supplier		-			41,365			41,365			-			-			-
Adjusted Funds from Operations	$	265,118		$	137,756		$	459,957		$	457,361		$	351,521		$	587,319
Long-term Debt		4,291,833			4,403,714			4,001,542			3,817,122			4,081,281			4,291,833
Current maturities of long term debt		109,092			28,640			8,348			58,909			8,491			109,092
Total Debt	$	4,400,925		$	4,432,354		$	4,009,890		$	3,876,031		$	4,089,772		$	4,400,925
Preferred Stock		-			-			-			50,000			50,000			-
Net interest expense		140,286			150,887			311,088			284,927			307,546			300,487
AFUDC Debt		10,708			10,009			17,119			24,691			8,587			17,818
Adjusted Interest Expense	$	150,994		$	160,896		$	328,207		$	309,618		$	316,133		$	318,305
Debt/Funds from operations								11.25x			13.22x			13.68x			11.30x
Debt/Adjusted FFO								8.72x			8.47x			11.63x			7.49x
Funds from Operations Interest Coverage								2.09x			1.95x			1.95x			2.22x
Adjusted Funds From Operations Interest Coverage								2.40x			2.48x			2.11x			2.85x
Common shareholders equity							$	2,622,297		$	2,060,154		$	1,498,616		$	2,673,234
Total Capitalization (including current maturities of long-term debt)							$	6,632,187		$	5,986,185		$	5,638,388		$	7,074,159
Debt/Capitalization								60.46	%		64.75	%		72.53	%		62.21	%

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Dollars in thousands)
Nevada Power Company
Funds From Operations (FFO)
	Six Months ended June 30,						Year ended December 31,									LTM June 30,
	2007			2006			2006			2005			2004			2007
Net Income	$	28,186		$	25,160		$	224,540		$	132,734		$	104,312		$	227,566
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		74,594			69,121			141,585			124,098			118,841			147,058
Deferred taxes and deferred investment tax credit		9,826			3,983			107,392			86,910			57,066			113,235
AFUDC (Debt and Equity)		(11,598	)		(16,226	)		(23,369	)		(41,870	)		(9,968	)		(18,741	)
Deferred Energy Costs Disallowed		-			-			-			-			1,586			-
Reinstatement of Deferred Energy Costs		-			-			(178,825	)								(178,825	)
Reinstated Interest on Deferred Energy		(11,076	)		-			-			-			-			(11,076	)
Carrying Charge on Lenzie Plant		(16,080	)		(13,166	)		(33,440	)		-			-			(36,354	)
Other, net		(3,394	)		(12,650	)		3,394			(7,433	)		(44,149	)		12,650
Funds from Operations (Before Deferred Energy Costs)		70,458			56,222			241,277			294,439			227,688			255,513
Amortization Deferred energy costs		64,747			52,399			120,499			131,471			228,765			132,847
Deferral of energy costs plus terminated suppliers		23,023			(29,909	)		(46,086	)		(31,219	)		(112,992	)		6,846
Payment to terminating supplier		-			(37,410	)		(37,410	)		-			(50,311	)		-
Proceeds from claim on terminating supplier		-			26,391			26,391			-			-			-
Adjusted Funds from Operations	$	158,228		$	67,693		$	304,671		$	394,691		$	293,150		$	395,206
Long-term Debt		2,655,630			2,670,057			2,380,139			2,214,063			2,275,690			2,655,630
Current maturities of long term debt		7,449			6,240			5,948			6,509			6,091			7,449
Total Debt	$	2,663,079		$	2,676,297		$	2,386,087		$	2,220,572		$	2,281,781		$	2,663,079
Net interest expense		88,260			88,149			176,612			134,657			137,388			176,723
AFUDC Debt		5,253			8,072			11,614			23,187			5,738			8,795
Adjusted Interest Expense		93,513			96,221		$	188,226		$	157,844		$	143,126		$	185,518
Debt/Funds from operations								9.89x			7.54x			10.02x			10.42x
Debt/Adjusted FFO								7.83x			5.63x			7.78x			6.74x
Funds from Operations Interest Coverage								2.28x			2.87x			2.59x			2.38x
Adjusted Funds From Operations Interest Coverage								2.62x			3.50x			3.05x			3.13x
Common shareholders equity							$	2,172,198		$	1,762,089		$	1,436,788		$	2,200,590
Total Capitalization (including current maturities of long-term debt)							$	4,558,285		$	3,982,661		$	3,718,569		$	4,863,669
Debt/Capitalization								52.35	%		55.76	%		61.36	%		54.75	%

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Dollars in thousands)
Sierra Pacific Power Company
Funds From Operations (FFO)
	Six Months ended June 30,						Year ended December 31,									LTM June 30,
	2007			2006			2006			2005			2004			2007
Net Income	$	31,976		$	22,271		$	57,709		$	52,074		$	18,577		$	67,414
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		41,317			44,962			87,279			90,569			86,806			83,634
Deferred taxes and deferred investment tax credit		(7,652	)		(37,847	)		(39,361	)		209			11,640			(9,166	)
AFUDC (Debt and Equity)		(12,289	)		(4,089	)		(11,976	)		(3,143	)		(4,567	)		(20,176	)
Plant Costs disallowed		-			-			-			-			47,092			-
Other, net		11,221			6,230			16,935			318			474			21,926
Funds from Operations (Before Deferred Energy Costs)		64,573			31,527			110,586			140,027			160,022			143,632
Amortization Deferred energy costs - electric		23,735			22,626			46,322			56,750			36,653			47,431
Amortization Deferred energy costs - gas		638			4,136			6,234			1,446			3,241			2,736
Deferral of energy costs - electric plus terminated suppliers		7,918			(1,932	)		90			8,156			(34,598	)		9,940
Deferral of energy costs - gas		(638	)		1,744			436			(2,519	)		(7,480	)		(1,946	)
Payment to terminating supplier		-			(27,958	)		(27,958	)		-			(10,818	)		-
Proceeds from claim on terminating supplier		-			14,974			14,974			-			-			-
Adjusted Funds from Operations	$	96,226		$	45,117		$	150,684		$	203,860		$	147,020		$	201,793
Long-term Debt		1,085,764			1,072,566			1,070,858			941,804			994,309			1,085,764
Current maturities of long term debt		101,643			22,400			2,400			52,400			2,400			101,643
Total Debt	$	1,187,407		$	1,094,966		$	1,073,258		$	994,204		$	996,709			1,187,407
Preferred Stock		-			-			-			50,000			50,000			-
Net interest expense		30,237			36,240			71,506			69,067			62,831			65,503
AFUDC Debt		5,455			1,937			5,505			1,504			2,849			9,023
Adjusted Interest Expense	$	35,692		$	38,177		$	77,011		$	70,571		$	65,680			74,526
Debt/Funds from operations								9.71x			7.10x			6.23x			8.27x
Debt/Adjusted FFO								7.12x			4.88x			6.78x			5.88x
Funds from Operations Interest Coverage								2.44x			2.98x			3.44x			2.93x
Adjusted Funds From Operations Interest Coverage								2.96x			3.89x			3.24x			3.71x
Common shareholders equity							$	884,737		$	727,777		$	705,395		$	916,994
Total Capitalization (including current maturities of long-term debt)							$	1,957,995		$	1,771,981		$	1,752,104		$	2,104,401
Debt/Capitalization								54.81	%		56.11	%		56.89	%		56.42	%