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 Sierra Pacific Resources (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 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 ResourcesFunds From Operations (FFO)

	Year Ended December 31,
	2007			2006			2005			2004
Net Income Applicable to Common Stock	$	197,295		$	277,451		$	82,237		$	28,571
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		235,532			228,875			214,662			205,922
Deferred taxes and deferred investment tax credit		79,337			136,026			41,609			33,690
AFUDC (Debt and Equity)		(57,776	)		(35,345	)		(45,013	)		(14,535	)
Deferred energy costs disallowed		—			—			—			1,586
Goodwill impairment		—			—			—			11,695
Impairment of asset subsidiary		—			—			—			10,997
Gain on sale of discontinued operations		—			—			—			(2,506	)
Reinstatement of deferred energy costs		—			(178,825	)		—			—
Carrying charge on Lenzie plant		(16,080	)		(33,440	)		—			—
Plant costs disallowed		—			—			—			47,092
Reinstated interest on deferred energy		(11,076	)		—			—			—
Gain on sale of investment		(1,369	)		(62,927	)		—			—
Other, net		23,679			24,650			(219	)		(23,453	)
Funds from Operations (Before Deferred Energy Costs)		449,542			356,465			293,276			299,059
Amortization of deferred energy costs — electric		246,907			166,821			188,221			265,418
Amortization of deferred energy costs — gas		701			6,234			1,446			3,242
Deferral of energy costs — electric plus terminated suppliers		51,311			(45,996	)		(23,063	)		(147,589	)
Deferral of energy costs — gas		10,668			436			(2,519	)		(7,480	)
Payment to terminating supplier		—			(65,368	)		—			(61,129	)
Proceeds from claim on terminating supplier		—			41,365			—			—
Adjusted Funds from Operations	$	759,129		$	459,957		$	457,361		$	351,521
Long-term debt	$	4,137,864		$	4,001,542		$	3,817,122		$	4,081,281
Current maturities of long-term debt		110,285			8,348			58,909			8,491
Total Debt	$	4,248,149		$	4,009,890		$	3,876,031		$	4,089,772
Preferred Stock	$	—		$	—		$	50,000		$	50,000
Interest charges	$	279,788		$	311,088		$	284,927		$	307,546
AFUDC (Debt)		25,967			17,119			24,691			8,587
Adjusted Interest Expense	$	305,755		$	328,207		$	309,618		$	316,133
Total Debt/Funds from Operations		9.45x			11.25x			13.22x			13.68x
Total Debt/Adjusted FFO		5.60x			8.72x			8.47x			11.63x
Funds from Operations Interest Coverage		2.47x			2.09x			1.95x			1.95x
Adjusted Funds From Operations Interest Coverage		3.48x			2.40x			2.48x			2.11x
Common Shareholders’ Equity	$	2,996,575		$	2,622,297		$	2,060,154		$	1,498,616
Total Capitalization (including current maturities of long-term debt)	$	7,244,724		$	6,632,187		$	5,986,185		$	5,638,388
Total Debt/Total Capitalization		58.64	%		60.46	%		64.75	%		72.53	%

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

Nevada Power Company
Funds From Operations (FFO)

	Year Ended December 31,
	2007			2006			2005			2004
Net Income	$	165,694		$	224,540		$	132,734		$	104,312
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		152,139			141,585			124,098			118,841
Deferred taxes and deferred investment tax credit		56,868			107,392			86,910			57,066
AFUDC (Debt and Equity)		(29,057	)		(23,369	)		(41,870	)		(9,968	)
Deferred energy costs disallowed		—			—			—			1,586
Reinstatement of deferred energy costs		—			(178,825	)		—			—
Carrying charge on Lenzie plant		(16,080	)		(33,440	)		—			—
Reinstated interest on deferred energy		(11,076	)		—			—			—
Other, net		5,831			3,394			(7,433	)		(44,149	)
Funds from Operations (Before Deferred Energy Costs)		324,319			241,277			294,439			227,688
Amortization of deferred energy costs		203,213			120,499			131,471			228,765
Deferral of energy costs plus terminated suppliers		15,779			(46,086	)		(31,219	)		(112,992	)
Payment to terminating supplier		—			(37,410	)		—			(50,311	)
Proceeds from claim on terminating supplier		—			26,391			—			—
Adjusted Funds from Operations	$	543,311		$	304,671		$	394,691		$	293,150
Long-term debt	$	2,528,141		$	2,380,139		$	2,214,063		$	2,275,690
Current maturities of long-term debt		8,642			5,948			6,509			6,091
Total Debt	$	2,536,783		$	2,386,087		$	2,220,572		$	2,281,781
Interest charges	$	174,667		$	176,612		$	134,657		$	137,388
AFUDC (Debt)		13,196			11,614			23,187			5,738
Adjusted Interest Expense	$	187,863		$	188,226		$	157,844		$	143,126
Total Debt/Funds from Operations		7.82x			9.89x			7.54x			10.02x
Total Debt/Adjusted FFO		4.67x			7.83x			5.63x			7.78x
Funds from Operations Interest Coverage		2.73x			2.28x			2.87x			2.59x
Adjusted Funds From Operations Interest Coverage		3.89x			2.62x			3.50x			3.05x
Common Shareholder’s Equity	$	2,376,740		$	2,172,198		$	1,762,089		$	1,436,788
Total Capitalization (including current maturities of long-term debt)	$	4,913,523		$	4,558,285		$	3,982,661		$	3,718,569
Total Debt/Total Capitalization		51.63	%		52.35	%		55.76	%		61.36	%

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

Sierra Pacific Power Company
Funds From Operations (FFO)

	Year Ended December 31,
	2007			2006			2005			2004
Net Income	$	65,667		$	57,709		$	52,074		$	18,577
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		83,393			87,279			90,569			86,806
Deferred taxes and deferred investment tax credit		(36,713	)		(39,361	)		209			11,640
AFUDC (Debt and Equity)		(28,719	)		(11,976	)		(3,143	)		(4,567	)
Plant costs disallowed		—			—			—			47,092
Other, net		14,577			16,935			318			474
Funds from Operations (Before Deferred Energy Costs)		98,205			110,586			140,027			160,022
Amortization of deferred energy costs — electric		43,694			46,322			56,750			36,653
Amortization of deferred energy costs — gas		701			6,234			1,446			3,241
Deferral of energy costs — electric plus terminated suppliers		35,532			90			8,156			(34,598	)
Deferral of energy costs — gas		10,668			436			(2,519	)		(7,480	)
Payment to terminating supplier		—			(27,958	)		—			(10,818	)
Proceeds from claim on terminating supplier		—			14,974			—			—
Adjusted Funds from Operations	$	188,800		$	150,684		$	203,860		$	147,020
Long-term debt	$	1,084,550		$	1,070,858		$	941,804		$	994,309
Current maturities of long-term debt		101,643			2,400			52,400			2,400
Total Debt	$	1,186,193		$	1,073,258		$	994,204		$	996,709
Preferred Stock	$	—		$	—		$	50,000		$	50,000
Interest charges	$	60,735		$	71,506		$	69,067		$	62,831
AFUDC (Debt)		12,771			5,505			1,504			2,849
Adjusted Interest Expense	$	73,506		$	77,011		$	70,571		$	65,680
Total Debt/Funds from Operations		12.08x			9.71x			7.10x			6.23x
Total Debt/Adjusted FFO		6.28x			7.12x			4.88x			6.78x
Funds from Operations Interest Coverage		2.34x			2.44x			2.98x			3.44x
Adjusted Funds From Operations Interest Coverage		3.57x			2.96x			3.89x			3.24x
Common Shareholder’s Equity	$	1,001,840		$	884,737		$	727,777		$	705,395
Total Capitalization (including current maturities of long-term debt)	$	2,188,033		$	1,957,995		$	1,771,981		$	1,752,104
Total Debt/Total Capitalization		54.21	%		54.81	%		56.11	%		56.89	%