Sierra Pacific Power 8-K Results of Operations and Financial Condition

Exhibit 99.1

     EBITDA represents net income before interest, taxes, depreciation and amortization. EBITDA is presented here because Sierra Pacific Resources (the “Company”) considers it a supplemental measure of its performance and believes debt-holders frequently use EBITDA to analyze operating performance and debt service capacity. EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are:

• EBITDA does not reflect cash expenditures, or future requirements for capital expenditures, or contractual commitments;

• EBITDA does not reflect changes in, or cash requirements for, working capital needs;

• EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debts;

• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements; and

• Other companies in this industry may calculate EBITDA differently than we do, which will limit its usefulness as a comparative measure.

     Because of these limitations, the Company’s management relies primarily on our GAAP results as a measure of the Company’s performance and uses EBITDA on a supplemental basis.

     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

EBITDA

												LTM ended
	Six months ended June 30				Year ended December 31,							June 30,
	2006		2005		2005		2004		2003			2006
Net Income (Loss)	$	31,419	$	1,515	$	86,137	$	32,471	$	(136,629	)	$	116,041
Interest Charges		150,887		159,156		284,927		306,427		366,282			276,658
Income taxes		15,380		1,419		43,173		20,631		(44,207	)		57,134
Depreciation and Amortization		114,083		106,087		214,662		205,647		191,259			222,658
EBITDA	$	311,769	$	268,177	$	628,899	$	565,176	$	376,705		$	672,491
EBITDA/Interest Expense						2.21x		1.84x		1.03x			2.43x
Debt/EBITDA						6.16x		7.24x		10.15x			6.59x
Sierra Pacific Resources
Net interest expense	$	150,887	$	159,156	$	284,927	$	306,427	$	366,282		$	276,658
Long-Term Debt	$	4,403,714	$	3,817,122	$	3,817,122	$	4,081,281	$	3,579,674		$	4,403,714
Current maturities of long term debt plus short-term borrowings		28,640		58,909		58,909		8,491		243,970			28,640
Total Debt	$	4,432,354	$	3,876,031	$	3,876,031	$	4,089,772	$	3,823,644		$	4,432,354

Nevada Power Company

EBITDA

												LTM ended
	Six months ended June 30				Year ended December 31,							June 30,
	2006		2005		2005		2004		2003			2006
Net Income	$	25,160	$	12,936	$	132,734	$	104,312	$	19,277		$	144,958
Interest Charges		88,149		81,921		134,657		137,388		190,472			140,885
Income taxes		12,814		6,009		63,995		56,572		(614	)		70,800
Depreciation and Amortization		69,121		61,163		124,098		118,841		109,655			132,056
EBITDA	$	195,244	$	162,029	$	455,484	$	417,113	$	318,790		$	488,699
EBITDA/Interest Expense						3.38x		3.04x		1.67x			3.47x
Debt/EBITDA						4.88x		5.47x		6.38x			5.48x
Nevada Power Company
Net interest expense	$	88,149	$	81,921	$	134,657	$	137,388	$	190,472		$	140,885
Long-Term Debt	$	2,670,057	$	2,214,063	$	2,214,063	$	2,275,690	$	1,899,709		$	2,670,057
Current maturities of long term debt		6,240		6,509		6,509		6,091		135,570			6,240
Total Debt	$	2,676,297	$	2,220,572	$	2,220,572	$	2,281,781	$	2,035,279		$	2,676,297

Sierra Pacific Power Company

EBITDA

												LTM ended
	Six months ended June 30				Year ended December 31,							June 30,
	2006		2005		2005		2004		2003			2006
Net Income (Loss)	$	22,271	$	17,036	$	52,074	$	18,577	$	(23,275	)	$	57,309
Interest Charges		36,240		36,288		69,067		62,831		96,093			69,019
Income Taxes		11,749		10,569		28,379		325		(12,237	)		29,559
Depreciation and Amortization		44,962		44,924		90,569		86,806		81,514			90,607
EBITDA	$	115,222	$	108,817	$	240,089	$	168,539	$	142,095		$	246,494
EBITDA/Interest Expense						3.48x		2.68x		1.48x			3.57x
Debt/EBITDA						4.14x		5.91x		7.19x			4.44x
Sierra Pacific Power Company
Net interest expense	$	36,240	$	36,288	$	69,067	$	62,831	$	96,093		$	69,019
Long-Term Debt	$	1,072,566	$	941,804	$	941,804		994,309		912,800		$	1,072,566
Current maturities of long term debt plus short-term borrowings		22,400		52,400		52,400		2,400		108,400			22,400
Total Debt	$	1,094,966	$	994,204	$	994,204	$	996,709	$	1,021,200		$	1,094,966

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Dollars in thousands)

Sierra Pacific Resources
Funds From Operations (FFO)

																LTM ended
	Six months ended June 30,						Year ended December 31,									June 30,
	2006			2005			2005			2004			2003			2006
Net Income (Loss)	$	31,419		$	1,515		$	86,137		$	32,471		$	(136,629	)	$	116,041
Non-Cash items included in net income
Depreciation and amortization		114,083			106,087			214,662			205,647			191,259			222,658
Deferred taxes and deferred investment tax credit		6,510			1,393			41,609			33,690			(50,724	)		46,726
AFUDC		(20,315	)		(19,229	)		(45,013	)		(14,536	)		(11,741	)		(46,099	)
Deferred energy costs disallowed		—			—			—			1,586			90,964			—
Goodwill impairment		—			—			—			11,695			—			—
Early retirement and severance amortization		—			—			—			—			2,786			—
Unrealized loss on derivative instrument		—			—			—			—			46,065			—
Impairment of assets of subsidiary		—			—			—			—			32,911			—
Loss on disposal of discontinued operations		—			—			—			2,346			9,555			—
Plant costs disallowed		—			—			—			47,092			—			—
Other non-cash		(19,001	)		19,270			(4,119	)		(27,353	)		(7,131	)		(42,390	)
Funds from Operations (Before Deferred Energy Costs)		112,696			109,036			293,276			292,638			167,315			296,936
Amortization Deferred energy costs — electric		75,025			90,831			188,221			265,418			250,134			172,415
Amortization Deferred energy costs — gas		4,136			(666	)		1,446			3,242			13,095			6,248
Deferral of energy costs — electric plus terminated suppliers		(31,842	)		(38,625	)		(241,103	) (1)		(147,589	)		(179,826	)		(234,320	) (1)
Deferral of energy costs — gas		1,744			1,427			(2,519	)		(7,480	)		2,592			(2,202	)
Payment to terminating supplier		(65,368	)		—			—			—			—			(65,368	)
Proceeds from claim on terminating supplier		41,365			—			—			—			—			41,365
Adjusted Funds from Operations	$	137,756		$	162,003		$	239,321		$	406,229		$	253,310		$	215,074
Long-term debt		4,403,714			3,817,122			3,817,122			4,081,281			3,579,674			4,403,714
Current maturities of long term debt plus short-term borrowings		28,640			58,909			58,909			8,491			243,970			28,640
Total Debt	$	4,432,354		$	3,876,031		$	3,876,031		$	4,089,772		$	3,823,644		$	4,432,354
Preferred Stock		—			50,000			50,000			50,000			50,000			—
Net interest expense		150,887			159,156			284,927			306,427			366,282			276,658
AFUDC		10,009			10,531			24,691			8,587			5,976			24,169
Adjusted Interest Expense	$	160,896		$	169,687		$	309,618		$	315,014		$	372,258		$	300,827
Debt/Funds from operations								13.22x			13.98x			22.85x			14.93x
Debt/adjusted FFO								16.20x			10.07x			15.09x			20.61x
Funds from Operations Interest Coverage								1.95x			1.93x			1.45x			1.99x
Adjusted Funds From Operations Interest Coverage								1.77x			2.29x			1.68x			1.71x
Common shareholders equity							$	2,060,154		$	1,498,616		$	1,435,394		$	2,090,491
Total Capitalization							$	5,986,185		$	5,638,388		$	5,309,038		$	6,522,845
Debt/Capitalization								64.75	%		72.53	%		72.02	%		67.95	%

(1) For 2005, deferral of energy costs electric plus terminated suppliers does not include the non-cash net change in deferred energy of $218 million associated primarily with the November 2005 settlement with Enron.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Dollars in thousands)

Nevada Power Company
Funds From Operations (FFO)

																LTM ended
	Six months ended June 30,						Year ended December 31,									June 30,
	2006			2005			2005			2004			2003			2006
Net Income	$	25,160		$	12,936		$	132,734		$	104,312		$	19,277		$	144,958
Non-Cash items included in net income
Depreciation and amortization		69,121			61,163			124,098			118,841			109,655			132,056
Deferred taxes and deferred investment tax credit		3,983			6,010			86,910			57,066			2,710			84,883
AFUDC		(16,226	)		(17,690	)		(41,870	)		(9,969	)		(5,545	)		(40,406	)
Deferred energy costs disallowed		—			—			—			1,586			45,964			—
Plant Costs disallowed		—			—			—			—			—			—
Other non-cash		(25,816	)		17,670			(7,433	)		(44,149	)		(8,962	)		(50,919	)
Funds from Operations (Before Deferred Energy Costs)		56,222			80,089			294,439			227,687			163,099			270,572
Amortization deferred energy costs		52,399			72,135			131,471			228,765			204,610			111,735
Deferral of energy costs plus terminated suppliers		(29,909	)		(26,718	)		(186,338	) (1)		(112,992	)		(131,591	)		(189,529	) (1)
Payment to terminating supplier		(37,410	)		—			—			—			—			(37,410	)
Proceeds from claim on terminating supplier		26,391			—			—			—			—			26,391
Adjusted Funds from Operations	$	67,693		$	125,506		$	239,572		$	343,460		$	236,118		$	181,759
Long-term Debt		2,670,057			2,214,063			2,214,063			2,275,690			1,899,709			2,670,057
Current maturities of long term debt		6,240			6,509			6,509			6,091			135,570			6,240
Total Debt	$	2,676,297		$	2,220,572		$	2,220,572		$	2,281,781		$	2,035,279		$	2,676,297
Net interest expense		88,149			81,921			134,657			137,388			190,472			140,885
AFUDC		8,072			9,792			23,187			5,738			2,700			21,467
Adjusted Interest Expense	$	96,221		$	91,713		$	157,844		$	143,126		$	193,172		$	162,352
Debt/Funds from operations								7.54x			10.02x			12.48x			9.89x
Debt/adjusted FFO								9.27x			6.64x			8.62x			14.72x
Funds from Operations Interest Coverage								2.87x			2.59x			1.84x			2.67x
Adjusted Funds From Operations Interest Coverage								2.52x			3.40x			2.22x			2.12x
Common shareholders equity							$	1,762,089		$	1,436,788		$	1,174,645		$	1,755,605
Total Capitalization							$	3,982,661		$	3,718,569		$	3,209,924		$	4,431,902
Debt/Capitalization								55.76	%		61.36	%		63.41	%		60.39	%

(1) For 2005, deferral of energy costs electric plus terminated suppliers does not include the non-cash net change in deferred energy of $155 million associated primarily with the November 2005 settlement with Enron.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Dollars in thousands)

Sierra Pacific Power Company
Funds From Operations (FFO)

																LTM ended
	Six months ended June 30,						Year ended December 31,									June 30,
	2006			2005			2005			2004			2003			2006
Net Income (Loss)	$	22,271		$	17,036		$	52,074		$	18,577		$	(23,275	)	$	57,309
Non-Cash items included in net income
Depreciation and amortization		44,962			44,924			90,569			86,806			81,514			90,607
Deferred taxes and deferred investment tax credit		(37,847	)		(11,456	)		209			11,640			(23,676	)		(26,182	)
AFUDC		(4,089	)		(1,539	)		(3,143	)		(4,567	)		(6,196	)		(5,693	)
Deferred Energy Costs Disallowed		—			—			—			—			45,000			—
Early retirement and severance amortization		—			—			—			—			2,786			—
Plant Costs disallowed		—			—			—			47,092			—			—
Other non-cash		6,230			3,511			318			474			(5,203	)		3,037
Funds from Operations (Before Deferred Energy Costs)		31,527			52,476			140,027			160,022			70,950			119,078
Amortization Deferred energy costs — electric		22,626			18,696			56,750			36,653			45,524			60,680
Amortization Deferred energy costs — gas		4,136			(666	)		1,446			3,241			13,095			6,248
Deferral of energy costs — electric plus terminated suppliers		(1,932	)		(11,907	)		(54,765	) (1)		(34,598	)		(48,236	)		(44,790	) (1)
Deferral of energy costs — gas		1,744			1,427			(2,519	)		(7,480	)		2,592			(2,202	)
Payment to terminating supplier		(27,958	)		—			—			—			—			(27,958	)
Proceeds from claim on terminating supplier		14,974			—			—			—			—			14,974
Adjusted Funds from Operations	$	45,117		$	60,026		$	140,939		$	157,838		$	83,925		$	126,030
Long-term Debt		1,072,566			941,804			941,804			994,309			912,800			1,072,566
Current maturities of long term debt plus short-term borrowings		22,400			52,400			52,400			2,400			108,400			22,400
Total Debt	$	1,094,966		$	994,204		$	994,204		$	996,709		$	1,021,200		$	1,094,966
Preferred Stock		—			50,000			50,000			50,000			50,000			—
Net interest expense		36,240			36,288			69,067			62,831			96,093			69,019
AFUDC		1,937			739			1,504			2,849			3,276			2,702
Adjusted Interest Expense	$	38,177		$	37,027		$	70,571		$	65,680		$	99,369		$	71,721
Debt/Funds from operations								7.10x			6.23x			14.39x			9.20x
Debt/adjusted FFO								7.05x			6.31x			12.17x			8.69x
Funds from Operations Interest Coverage								2.98x			3.44x			1.71x			2.66x
Adjusted Funds From Operations Interest Coverage								3.00x			3.40x			1.84x			2.76x
Common shareholders equity							$	727,777		$	705,395		$	593,771		$	750,611
Total Capitalization							$	1,771,981		$	1,752,104		$	1,664,971		$	1,845,577
Debt/Capitalization								56.11	%		56.89	%		61.33	%		59.33	%

(1) For 2005, deferral of energy costs electric plus terminated suppliers does not include the non-cash net change in deferred energy of $63 million associated primarily with the November 2005 settlement with Enron.