SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For fiscal year ended December 31, 1993 Commission file number 1-4698 NEVADA POWER COMPANY (Exact name of Registrant as Specified in its Charter) Nevada 88-0045330 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 6226 West Sahara Avenue 89102 Las Vegas, Nevada (Zip Code) (Address of principal executive offices) Registrant's telephone number, including area code: (702) 367-5000 Securities registered pursuant to Section 12(b) of the Act: Name of Each Exchange Title of Each Class on which Registered ------------------- --------------------- Common Stock, $1 Par Value New York Stock Exchange Pacific Stock Exchange Stock Purchase Rights New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: Cumulative Preferred Stock, $20 Par Value, 5.40% Series (Title of Class) Cumulative Preferred Stock, $20 Par Value, 5.20% Series (Title of Class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO --- --- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. X --- 41,944,428 shares of Common Stock were outstanding as of March 24, 1994. The aggregate market value of Common Stock, which is the only voting stock, held by non-affiliates as of March 24, 1994, was $943,749,630. (Computed by reference to the closing price on March 24, 1994, as reported by the Wall Street Journal as New York Stock Exchange Composite Transactions.) DOCUMENTS INCORPORATED BY REFERENCE (1) Portions of the Registrant's Annual Report to Shareholders for the year ended December 31, 1993 are incorporated by reference into Parts II and IV hereof. (2) Portions of the Registrant's definitive Proxy Statement dated March 14, 1994 for the Company's annual meeting of shareholders on May 6, 1994, are incorporated by reference into Part III hereof. TABLE OF CONTENTS Page PART I ---- Item 1. Business ...................................... 1 Item 2. Properties .................................... 9 Item 3. Legal Proceedings ............................. 10 Item 4. Submission of Matters to a Vote of Security Holders........................................ 11 Supplemental Item. Executive Officers of Registrant ................. 11 PART II Item 5. Market for the Registrant's Common Stock and Related Security Holder Matters ............... 12 Item 6. Selected Financial Data ....................... 12 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation... 12 Item 8. Financial Statements and Supplementary Data ... 13 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ........ 13 PART III Item 10. Directors and Executive Officers of the Registrant .................................... 13 Item 11. Executive Compensation ........................ 14 Item 12. Security Ownership of Certain Beneficial Owners and Management ................................ 14 Item 13. Certain Relationships and Related Transactions. 14 PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K ........................... 15 SIGNATURES .................................................. 29 PART I ITEM 1. BUSINESS THE COMPANY Nevada Power Company (the Company), incorporated in 1929 under the laws of Nevada, is an operating public utility engaged in the electric utility business in the City of Las Vegas and vicinity in Southern Nevada. Most of the Company's operations are conducted in Clark County, Nevada (with an estimated service area population of 916,000 at December 31, 1993) where the Company furnishes electric service in the communities of Las Vegas, North Las Vegas, Henderson, Searchlight, Laughlin and adjoining areas and to Nellis Air Force Base (a permanent military installation northeast of Las Vegas and the USAF Tactical Fighter Weapons Center). Electric service is also supplied to the Department of Energy at Mercury and Jackass Flats in Nye County, where the Nevada Test Site is located. SOURCES OF ELECTRIC ENERGY SUPPLY The electric energy obtained from the Company's own generating facilities will be produced at the following plants: Number Net Capacity Plant of Units (Megawatts) ----- -------- ------------ Coal Fuel: Reid Gardner (Steam).............. 3 330 Reid Gardner Unit No. 4 (Steam)... 1 275(1) Mohave (Steam).................... 2 178(2) Navajo (Steam).................... 3 255(3) Natural Gas and Oil Fuel: Clark (Steam)..................... 3 175 Clark (Gas Turbine).............. 1 50 Clark (Combined Cycle)............ 2 466(4) Sunrise (Steam)................... 1 80 Sunrise (Gas Turbine)............. 1 69 ----- 1,878 _________________ ===== (1) This represents 25 megawatts of base load capacity, 235 megawatts of peaking capacity and 15 megawatts upgrade capacity. Reid Gardner Unit No. 4, placed in service July 25, 1983, is a coal- fired unit which is owned 32.2% by the Company and 67.8% by the Department of Water Resources of the State of California. The Company is entitled to use 100% of the unit's capacity for 1,500 hours each year excepting that from 1993 through 1997, the Company has agreed to reduce its allocation of peaking capacity by 20 MW. The Company is entitled to 9.6% of the first 260 megawatts of capacity and associated energy and is entitled to all the 15 megawatt upgrade accomplished in 1990. Beginning in 1998, the Company has options for the use of increasing amounts of energy from the unit so that the Company may be entitled to use all of the unit's output 15 years from that date. The 1998 option for 10.17 MW was not exercised by the Company and has expired. (2) This represents the Company's 14% undivided interest in the Mohave Generating Station as tenant in common without right of partition with three other non-affiliated utilities. 1 (3) This represents the Company's 11.3% undivided interest in the Navajo Generating Station as tenant in common without right of partition with five other non-affiliated utilities. (4) This includes additional capacity of 87 MW expected to be available in April 1994, due to conversion from simple cycle combustion turbine to combined cycle operation. The Company purchases Hoover Dam power pursuant to a contract with the State of Nevada which became effective June 1, 1987 and will continue through September 30, 2017. The Company's allocation of capacity is 235 MW. The peak electric demand experienced by the Company was 2,681 megawatts on August 2, 1993. This demand plus a reserve margin was served by a combination of Company owned generation, and firm and short-term power purchases. For 1994, the Company has contracts to purchase power from an independent power producer (IPP) and four qualifying facilities (QF), also known as cogenerators, as follows: Contract Term --------------------- Net Capacity From To (Megawatts) -------- -------- ------------ Independent Power Producer: --------------------------- Nevada Sun-Peak Limited Partnership 06/08/91 05/31/16 210 Qualifying Facilities: ---------------------- Saguaro Power Company 10/17/91 04/30/22 90 Nevada Cogeneration Associates #1 06/18/92 04/30/23 85 Nevada Cogeneration Associates #2 02/01/93 04/30/23 85 Las Vegas Cogeneration Limited Partnership 06/01/94(1) 05/31/24 45 --- 515 === (1) Expected operation date. The Company's total generating capacity of 2,628 megawatts, including 235 megawatts of Hoover Dam power, 210 megawatts of IPP power and 305 megawatts of QF power, for the summer of 1994 will not be sufficient to meet the 1994 anticipated peak load demand and reserve margin needs. Accordingly, the Company has agreements with other utilities to purchase 465 megawatts of firm capacity and associated energy and plans to enter into agreements for an estimated additional 100 megawatts of firm capacity and associated energy for the months of June, July and August 1994. FUEL SUPPLIES The fuels used to provide energy for the Company's generating facilities are coal, natural gas and oil. Its other sources of electricity are hydroelectric (Hoover Dam) and purchased power. The Company's primary fuel source for generation is coal. The following table shows the actual sources of fuel for generation for 1993 and anticipated sources of fuel for generation in 1994 and 1995. 1993 1994 1995 ---- ---- ---- Coal........................ 93% 93% 93% Natural Gas................. 7 7 7 --- --- --- 100% 100% 100% === === === 2 The Company's average delivered cost per ton of coal burned was as follows: 1991 - $32.78; 1992 - $34.54; 1993 - $34.43. Coal for both the Mohave and Navajo Stations is obtained from surface mining operations conducted by Peabody Coal Company (Peabody) on portions of the Black Mesa in Arizona within the Navajo and Hopi Indian reservations. The supply contracts with Peabody extend to December 31, 2005 for Mohave and to June 1, 2011 for Navajo, each contract having an option to extend for an additional 15 years. The anticipated full requirements for coal at the Reid Gardner Generating Station are covered by contracts through 1994. Partial requirements for coal are presently under contract through the year 2007. The Company anticipates no major difficulties in purchasing the remainder of its coal requirements based upon current coal market conditions in the Western United States. All coal for Reid Gardner presently comes from underground mines in Utah and Colorado. All of the Company's long-term coal supply contracts contain provisions providing for adjustments in the price of coal to reflect increases or decreases in the costs of mining operations. The Company's natural gas supply is subject to curtailment due to limited pipeline capacity. All the Company's plants using natural gas also have the capability of burning oil on a sustained basis. CONSTRUCTION AND FINANCING PROGRAMS The Company carries on a continuing program to extend and enlarge its facilities to meet current and future loads on its system. Gross plant additions and retirements for the five years ended December 31, 1993 amounted to $880,969,000 and $50,047,000 respectively. The following table sets forth the Company's actual construction expenditures for 1993, and currently estimated construction expenditures, including Allowance for Funds Used During Construction, for 1994 and 1995. 1993 1994 1995 -------- -------- -------- (In Thousands) Generating Facilities............ $ 74,456 $ 65,026 $ 62,769 Transmission Facilities.......... 10,112 28,812 35,724 Distribution Facilities.......... 72,865 71,160 66,017 Other............................ 15,704 9,890 10,000 -------- -------- -------- $173,137 $174,888 $174,510 ======== ======== ======== The Company's construction program and estimated expenditures are subject to continuing review and are revised from time to time due to various factors, including the rate of load growth, escalation of construction costs, availability of fuel types, changes in environmental regulations, adequacy of rate relief and the Company's ability to raise necessary capital. To meet capital expenditure requirements through 1995, the Company will utilize internally generated cash, the proceeds from industrial development revenue bonds, first mortgage bonds, and common stock issues through public offerings and the Stock Purchase and Dividend Reinvestment Plan (SPP). 3 The Company has the option of issuing new shares or using open market purchases of its common stock to meet the requirements of the SPP. The Company issued 1,640,326 shares of its common stock in 1993 under the SPP. At the end of 1993, common equity represented 46.0% of total capitalization. The Company sold 2.7 million shares of common stock for net proceeds of $65.7 million through an underwritten public offering in 1993. The net proceeds were used to reduce short-term debt which was incurred primarily to construct necessary plant facilities. On January 13, 1993, the Company sold $45 million of First Mortgage Bonds, Series Z, through a public offering. The bonds will mature in 2023 and will require interest payments due on January 1 and July 1 at the annual rate of 8.50%. Net proceeds from the sale of the bonds were used for the redemption of the Company's 9.375% Series S on February 15, 1993. The Indenture under which the Company's first mortgage bonds are issued provides that no additional bonds may be issued unless earnings as defined equal at least two and one-half times the interest requirements on all bonds to be outstanding after the new issue. Based on its earnings through December 31, 1993 and assuming an 8 1/2 percent interest rate on new bonds, the Company would be able to issue approximately $379 million of additional first mortgage bonds. The Company's ability to issue additional debt is also limited by the need to maintain a reasonable ratio of debt to equity. The Company's ability to sell additional preferred stock is limited by the necessity to meet required dividend coverages. At December 31, 1993, this test would permit the issuance of $371 million of additional preferred stock at a dividend rate of 8 1/2 percent. RESOURCE PLANNING The Company's rate of customer growth, especially in recent years, has been among the highest in the nation. The annual customer growth rate was 5.4 percent, 4.6 percent, and 5.3 percent in 1993, 1992, and 1991, respectively. The peak demand for electricity by the Company's customers increased from 2,501 megawatts in 1992 to 2,681 megawatts in 1993. The Company's 1993 energy sales reached 11,155,270 megawatthours, an increase of 5.8 percent over 1992. Every three years Nevada law requires the Company to file with the Public Service Commission of Nevada (PSC) a forecast of electricity demands for the next 20 years and the Company's plans to meet those demands. On September 16, 1991, the PSC approved the Company's 1991 Resource Plan, and during 1992 and 1993, the PSC approved the first through fourth amendments to the Resource Plan. The Resource Plan, as amended and approved in 1992 and 1993, includes the following major projects: (1) two 90 megawatt (MW) combined-cycle generating units at the Clark Generating Station, one added in 1993 and one to be added in 1994; 4 (2) the construction of two 70 (MW) combustion turbine generating units at the Harry Allen Project site, one unit in 1995 and one unit in 1996. The 1996 Allen combustion turbine will be subject to a cost comparison of purchased power resources that will be competitively bid with the least expensive resource taken as the Company's supply choice; (3) a total of 305 (MW) in purchased power from four qualifying facilities, with 175 (MW) and 85 (MW) received beginning in 1992 and 1993, respectively, and 45 (MW) expected to be received beginning in 1994; (4) planning costs for a 500 kilovolt (KV) transmission system from the Harry Allen Substation, located north of the Las Vegas Valley, to Marketplace, a future 500 KV switching station located near the McCullough Substation south of the Las Vegas Valley. The Company must present final plans on this system for PSC approval. If PSC approval is received, the transmission system could be operational by 1998; (5) installation of additional emissions reduction equipment at the Navajo Generating Station; (6) firm purchased power of 75 (MW); (7) the construction of a 230 KV transmission line from Arden Substation, located southwest of Las Vegas, to Northwest Substation, located northwest of Las Vegas; and (8) several demand-side pilot projects. On September 29, 1993, a fifth amendment to the Company's 20-year Resource Plan was filed with the PSC. On February 25, 1994, the PSC approved a stipulation among the Company, PSC Staff, Office of the Consumer Advocate and other intervenors granting the Company's request. The amendment calls for three purchase power contracts with Southern California Edison, the City of Glendale and the Salt River Project totaling 160 MWs for the years 1996 to 2000. These purchase power contracts are a result of the Company's 1996 Request for Proposal for supply-side resources. The stipulation also approved a 50 (MW) purchase power contract with Arizona Public Service for the years 1995 to 1997. The Company will file its 1994 Resource Plan on July 1, 1994. As part of the plan, the Company anticipates a portion of the supply-side resources and demand-side programs to be obtained through a Request For Proposal process. REGULATION AND RATES The Company is subject to regulation by the PSC which has regulatory powers with respect to rates, facilities, services, reports, issuance of securities and other matters. 5 Following is a summary of the rate increases or decreases that have been granted the Company during the past three years. Amount in Effective Millions Date Nature of Increase (Decrease) of Dollars ------------- ------------------------------ ---------- Jan. 1, 1991 Energy rate increase 24.4 March 4, 1991 Energy and resource plan rate increase 1.0 Nov. 12, 1991 General rate increase 12.2 Energy rate increase 11.4 July 27, 1992 General rate increase 22.2 Energy and resource plan net rate decrease (26.4) June 28, 1993 Energy and resource plan net rate increase 42.1 All amounts are on an annual basis. In 1985, the Company incurred $15.8 million in increased fuel and purchased power expenses after a ruptured steam line at the jointly owned Mohave Generating Station resulted in a loss of the plant for six months. The PSC allowed the Company to recover one half of the increased expenses subject to refund. Fourth quarter 1990 earnings reflected a $12.9 million charge to record a subsequent proposed order issued by the PSC which stated that the Company shall not recover any of the increased costs. The Company has fully reserved for any negative financial effect related to the proposed order. In 1991, the PSC set aside the proposed order and ordered the parties to participate in joint hearings before the California Public Utilities Commission (CPUC). The CPUC hearings are now concluded, and the PSC will prepare its own opinion based on the record created in the CPUC hearings. In January 1994, the administrative law judge in the CPUC proceeding issued a proposed opinion denying recovery to Southern California Edison (SCE) of its incremental purchased power costs resulting from the accident. SCE has filed comments with the CPUC concerning the proposed decision. On August 12, 1993, the Company filed a request with the PSC to recover additional fuel and purchased power costs of $29.7 million under the state's deferred energy accounting procedures. This request included $9.8 million of deferred energy costs for the period of December 1, 1992, to May 31, 1993, and $19.9 million to adjust the base energy rate. The Company subsequently amended its request to $26.8 million. Hearings in this matter were concluded in December 1993, and the PSC granted an increase in rates of $23.6 million, effective February 1, 1994. The PSC order resulted in fourth quarter 1993 charges of $2 million net of taxes for deferred energy costs. On November 19, 1993, the PSC Staff filed a petition with the PSC alleging that the Company may be overearning as much as $17 million annually because business conditions have changed substantially since the Company received its last general rate case decision in July 1992. On January 10, 1994, the PSC voted to open an investigation into the Company's earnings. Management believes the Company's earnings are within the authorized rate of return granted to the Company in July 1992. Hearings on this proceeding are scheduled to commence in June 1994. On February 28, 1994, the Company filed requests with the PSC to recover additional fuel and purchased power costs of $38.5 million and resource planning costs of $1 million. The energy rate request included 6 $28.7 million of deferred energy costs for the test period ended November 30, 1993, and $9.8 million to adjust the base energy rate. As permitted by state statute, the Company defers differences between the current cost of fuel and purchased power, and base energy costs as defined. Under regulations adopted by the PSC, the balance in the deferred energy account at the end of twelve months should be cleared, over a subsequent period. Recovery of increased costs is permitted to the extent that the Company has not realized its authorized overall rate of return. If the Company has exceeded the authorized rate of return, the portion of deferred energy costs represented in such excess is transferred to the next deferred energy recovery period. The energy costs deferred are included as a current item in determining taxable income for federal income tax purposes. However, for financial statement purposes, the federal income tax effect is deferred and amortized to income as the deferred energy account is cleared. PSC regulations allow the fuel base portion of the Company's general rates to be changed at the time of a hearing to clear the balance in the deferred energy account. This permits the recovery of fuel expenses on a deferred basis, however, recovery will have no effect on the Company's earnings. The Company is allowed to recover on an annual basis the costs of developing its 20-year resource plan. Also, by an order of the PSC in June 1988, the Company is allowed to capitalize certain costs associated with Commission approved conservation programs. ENVIRONMENTAL MATTERS The Company is subject to regulation by federal, state and local authorities with regard to air and water quality control and other environmental matters. Environmental expenditures made by the Company are currently being recovered through customer rates. Management believes environmental expenditures will increase over time and the increased costs will also be recovered as necessary utility expenses. A discussion of pending environmental matters is provided below. The Federal Clean Air Act Amendments of 1990 include provisions which will affect the Company's existing steam generating facilities and all new fossil fuel fired facilities. Title IV of the Amendments provides a national cap on sulfur dioxide emissions by mandating emissions reductions for many electric steam generating facilities. The sulfur dioxide provisions of the Amendments will not adversely affect the Company because the Company's steam units burn low sulfur fuels or have sulfur dioxide control equipment. Title IV of the Amendments also provides for reduction of emissions of oxides of nitrogen by establishing new emission limits for coal-fired generating units. This Title will require the installation of additional pollution-control technology at some of the Reid Gardner Station generating units before 2000 at an estimated cost to the Company of no more than $6 million. Other provisions of the Amendments will require the Company to install or upgrade Continuous Emission Monitoring systems at all steam generating units before 1995, at an expected cost of up to $3.3 million. The United States Congress authorized $2 million for the Environmental Protection Agency (EPA) to study the potential impact the Mohave Generating Station (MGS) may have on visibility in the Grand Canyon. The EPA report is expected to be finalized in late 1995, with a follow-up report from the Grand Canyon Visibility Transport Commission in late 1996. Also, the 7 Nevada Division of Environmental Protection has imposed more stringent stack opacity limits for the MGS. This change may affect the Company's utilization of resources, but, until more experience is gained by operating at the new opacity levels, any effect cannot be determined. As a 14 percent owner of the MGS, the Company will be required to fund any plant improvements that may result from the EPA study and operation at the new opacity levels. The cost of any potential improvements cannot be estimated at this time. In 1991, the U.S. Environmental Protection Agency published an order requiring the Navajo Generating Station (NGS) to install scrubbers to remove 90 percent of sulfur dioxide beginning in 1997. As an 11.3 percent owner of the NGS, the Company will be required to fund an estimated $46.6 million for installation of the scrubbers. In 1992, the Company received resource planning approval from the PSC for its share of the cost of the scrubbers up to $46.6 million. COMPETITION Deregulation of the electric utility industry is accelerating with the enactment of the National Energy Policy Act of 1992 (Act). Deregulation will lead to further competition in the industry as generators of power obtain greater access to transmission facilities linking them to potential new customers. Most observers believe the electric utility beneficiaries of the Act will be twofold; those who can provide low cost generation for sale and those who have strategically located transmission highways that can transmit low cost power from one area to another. Within the region the Company's residential rates are competitive. However, large industrial customer rates may require adjustment to remain competitive in the changing environment. In recognition of the changing regional competitive environment, the Company is focusing on the costs of serving various classes of customers and the appropriate rates to be charged based on those costs of service. The Company will seek through the PSC any rate adjustments necessary to maintain a competitive position. An opportunity exists given the Company's strategic location in the center of a region of price diversity. As generators arrange for sales of electricity to customers in other areas, some of the power may need to be transmitted through the Company's service territory. The Company would have an opportunity to charge the generators for the transmission of energy through its system. The Company is studying the feasibility of constructing additional cost effective transmission facilities to maximize the advantage of its strategic location. In September 1993, as a part of a comprehensive organizational study, the Company offered a voluntary early retirement package to 175 employees who would be at least 55 years of age, and have completed at least 10 years of service by March 31, 1994. A total of 109 employees, or approximately 6 percent of the work force, accepted the package. In October 1993, the Company's Board of Directors unanimously approved a new organization structure that realigns functions to improve operations and customer service. The Company expects that the net result from the change in organizational structure will be a leaner work force that operates more efficiently and makes the Company more competitive in a changing electric energy industry. At December 31, 1993, organizational study, early retirement and severance costs of $6.7 million are included in other deferred charges. EMPLOYEES The Company had 1,741 active employees at December 31, 1993. 8 ITEM 2. PROPERTIES The Company's generating facilities are described under "Item 1. Business, Sources of Electric Energy Supply". The Company shares ownership in a 59-mile, 500 kilovolt line and two 15-mile, 230 kilovolt lines that transmit power from the Mohave Generating Station near Davis Dam on the Colorado River via Eldorado Substation to Mead Substation located near Boulder City, Nevada. The Company has 32 miles of 230 kilovolt line from Mead Substation to Las Vegas. This line, together with two Company-owned 230 kilovolt lines presently connected to the Bureau of Reclamation lines between Mead Substation and Henderson, Nevada, transmit the Mohave Generating Station power to the Las Vegas area. A 25-mile, 230 kilovolt line between the Mead Substation and the Company's Winterwood Substation was energized in 1988. This line brings the additional Hoover energy to the Las Vegas Area and increases the Company's interconnected transmission capabilities. The Company shares ownership in 76 miles of 500 kilovolt transmission line from the Navajo Generating Station to the Moenkopi Switchyard in Coconino County, Arizona (the Southern Transmission System) and 274 miles of 500 kilovolt transmission line from the Navajo Generating Station to the McCullough Substation in Clark County, Nevada (the Western Transmission System). Power is transmitted from the McCullough Substation to the Las Vegas area via three 230 kilovolt lines of 23 miles, 25 miles and 32 miles in length, respectively. The 25-mile line was energized in May 1992. Two 39-mile, 230 kilovolt lines transmit power from the Reid Gardner Station located near Glendale, Nevada to the Pecos Substation near North Las Vegas. A 7 mile, 230 kilovolt line between Westside and Decatur Substations, both located in Las Vegas, was energized in 1991. In addition to the above, the Company has 263 miles of 138 kilovolt and 483 miles of 69 kilovolt transmission lines in service. In 1990 the Company added a new transmission interconnection consisting of a 345 kilovolt line from Harry Allen Substation in Southern Nevada to Red Butte Substation in Southern Utah near the City of St. George and a 230 kilovolt line from Harry Allen Substation to Westside Substation which is located in Las Vegas. The Company owns the 50-mile, 230 kilovolt line and 100 percent of the 69 miles of the 345 kilovolt line from Harry Allen Substation to the Nevada-Utah border; PacifiCorp owns 100 percent of the 345 kilovolt line portion from the Nevada-Utah border to Red Butte Substation. At December 31, 1993, the Company owned 98 transmission and distribution substations with a total installed transformer capacity of 10,186,441 kilovolt-amperes. In addition it co-owns with others the above mentioned Eldorado Substation with installed transformer capacity of 1,000,000 kilovolt-amperes, the McCullough Substation with installed transformer capacity of 1,250,000 kilovolt-amperes and the Reid Gardner Unit No. 4 Substation with installed capacity of 318,000 kilovolt-amperes. At Harry Allen Substation, the Company has a 336,000 kilovolt-ampere transformer and two 336,000 kilovolt-ampere 345 kilovolt phase shifting transformers which are used for necessary voltage transformations and to control flows on the interconnection. As of December 31, 1993, there were approximately 3,029 miles of pole line together with approximately 5,609 cable miles of underground in the Company's distribution system with a total installed distribution transformer capacity of 5,160,941 kilovolt-amperes. 9 ITEM 3. LEGAL PROCEEDINGS SUSPENDED DELIVERIES UNDER MOUNTAIN COAL COMPANY CONTRACT In December 1992, the Company suspended deliveries under a coal contract with Mountain Coal Co. based on a pricing dispute. Mountain Coal Co. filed a lawsuit in the federal district court for the State of Utah seeking a determination that the Company had repudiated the coal supply agreement. In October 1993, the court found in favor of Mountain Coal Co.'s position. The Company appealed the court's order, however, in March 1994, the Company resolved the litigation and bought out the remaining obligation under the contract by issuing a promissory note (bearing interest at 10%) for a total of $25 million. The facility using the coal under this contract is jointly owned; accordingly, the Company's portion of this settlement is $15.25 million. The settlement and buyout have been recorded as of December 31, 1993, with $25 million included in notes payable, $15.25 million included in deferred energy costs and $9.75 million included in other receivables. The settlement and buyout will result in lower fuel costs to the Company's customers over the otherwise remaining life of the contract; accordingly, based on similar past buyouts, management believes that the cost of the buyout will be recovered through Nevada's deferred energy accounting procedures. 10 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matter was submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report, through the solicitation of proxies or otherwise. SUPPLEMENTAL ITEM. EXECUTIVE OFFICERS OF REGISTRANT The Company's executive officers are as follows: Age as of Name December 31, 1993 Position ---- ----------------- -------- Charles A. Lenzie 56 Chairman of the Board and Chief Executive Officer James C. Holcombe 48 President and Chief Operating Officer David G. Barneby 48 Vice President, Power Delivery Cynthia K. Gilliam 45 Vice President, Retail Customer Operations Richard L. Hinckley 38 Vice President, Secretary and General Counsel Steven W. Rigazio 39 Vice President, Finance and Planning, Treasurer, Chief Financial Officer Gloria T. Banks Weddle 44 Vice President, Human Resources and Corporate Services Each of the executive officers has been actively engaged in the business of the Company for more than five years. Charles A. Lenzie was elected Chairman of the Board and Chief Executive Officer on May 1, 1989. Prior to that time he was President of the Company. James C. Holcombe joined the Company as Executive Vice President on March 1, 1989 and was elected President and Chief Operating Officer on May 1, 1989. Prior to joining the Company he was Vice President of Resource Development for San Diego Gas and Electric Company. David G. Barneby was elected Vice President, Power Delivery effective October 14, 1993. He joined the Company in 1965 as a Student Engineer and was made a Junior Engineer in 1967. He was promoted to Superintendent of the Reid Gardner Generating Station in 1976; Project Manager - Reid Gardner Unit 4 in 1979 and in 1985 appointed Manager - Generation Engineering and Construction. He was elected Vice President - Generation in 1989. His title was changed to Vice President - Power Supply later that year. Cynthia K. Gilliam was elected Vice President - Retail Customer Operations effective October 14, 1993. She joined the Company in 1974 as a Rate Analyst and was promoted to Rates Administrator in 1979 and to Manager of Financial Planning in 1983. In 1987, she was appointed Manager of Human Resource Planning. She was elected Vice President - Personnel in l988 and her title was changed to Vice President - Human Resources in l989. In 1992, she was elected Vice President - Customer Service. Richard L. Hinckley was elected Vice President, Secretary and General Counsel effective October 14, 1993. He joined the Company as Staff Counsel in l985; was promoted to Assistant Secretary and Chief Counsel in 1989 and elected Vice President, Chief Counsel and secretary in 1991. Prior to 11 joining the Company, he served as Staff Attorney with the Nevada Public Service Commission and as Assistant Attorney General in Utah. Steven W. Rigazio was elected Vice President, Finance and Planning, Treasurer, Chief Financial Officer effective October 14, 1993. He joined the Company in l984 as a Rates Administrator and was promoted to Supervisor of Rates and Regulations in l985, Manager of Rates and Regulatory Affairs in l986, Director of System Planning in l990, Vice President - Planning in 1991 and Vice President and Treasurer, Chief Financial Officer in 1992. Gloria T. Banks Weddle was elected Vice President - Human Resources and Corporate Services effective October 14, 1993. She first joined the Company in 1973, was promoted to Manager of Compensation and Benefits in 1988 and Director of Human Resources in 1991. She was elected Vice President - Human Resources in 1992. PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER MATTERS Information with respect to the principal market for the Company's common stock, securities exchange, shareholders of record, quarterly high and low sales prices and quarterly dividend payments for 1992 and 1991 are hereby incorporated by reference from page 43 of the Company's Annual Report to Shareholders for the year ended December 31, 1993, which is filed herewith as Exhibit 13. ITEM 6. SELECTED FINANCIAL DATA The information required by Item 6 is hereby incorporated by reference from pages 44 to 45 of the Company's Annual Report to Shareholders for the year ended December 31, 1993, which is filed herewith as Exhibit 13. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION The information required by Item 7 is hereby incorporated by reference from pages 16 to 21 of the Company's Annual Report to Shareholders for the year ended December 31, 1993, which are filed herewith as Exhibit 13. 12 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The Company's financial statements for the years ended December 31, 1993, 1992 and 1991 together with the auditors' report thereon required by Item 8 are incorporated by reference from the following pages of the Company's Annual Report to Shareholders for the year ended December 31, 1993, which are filed herewith as Exhibit 13. Annual Report Page ------ Statements of Income for the Years Ended December 31, 1993, 1992 and 1991...................... 22 Statements of Retained Earnings for the Years Ended December 31, 1993, 1992 and 1991................ 23 Balance Sheets - December 31, 1993 and 1992............ 24-25 Schedules of Capitalization - December 31, 1993 and 1992............................ 26-27 Schedules of Long-Term Debt - December 31, 1993 and 1992............................ 28-29 Statements of Cash Flows for the Years Ended December 31, 1993, 1992 and 1991...................... 30 Notes to Financial Statements.......................... 31-41 Independent Auditors' Report........................... 42 Report of Management................................... 42 See Note 10 of Notes to Financial Statements in the Company's Annual Report to Shareholders for the unaudited selected quarterly financial data required to be presented in this Item 8. Financial statements and supplemental schedules of the Company's subsidiaries are omitted since their aggregate total assets, sales and revenues, and income before income taxes are not material in relation to the Company's total assets, sales and revenues, and income before income taxes. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE There has been no Report on Form 8-K filed within the twenty-four months prior to the date of the most recent financial statements, December 31, 1993, reporting a change of accountants. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Information required by Item 10 with respect to the Company's executive officers is set forth in Part I, Item 4., under the preceding heading "Supplemental Item. Executive Officers of Registrant". The other information required by Item 10 is hereby incorporated by reference from the Company's definitive Proxy Statement dated March 14, 1994 and heretofore filed with the Securities and Exchange Commission ("SEC"). (See the heading therein "Election of Directors".) 13 ITEM 11. EXECUTIVE COMPENSATION The information required by Item 11 is hereby incorporated by reference from the Company's definitive Proxy Statement dated March 14, 1994 and heretofore filed with the SEC. (See the heading therein "Executive Compensation".) ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The information required by Item 12 is hereby incorporated by reference from the Company's definitive Proxy Statement dated March 14, 1994 and heretofore filed with the SEC. (See the heading therein "Security Ownership of Management".) ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The Management of the Company has no knowledge of any transaction, relationship or indebtedness which is required to be disclosed by Item 13. 14 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K The Company's financial statements for the years ended December 31, 1993, 1992 and 1991 together with the auditors' report appearing on pages 22 to 42 of Nevada Power Company's 1993 Annual Report to Shareholders are incorporated herein by reference and filed as Exhibit 13. FINANCIAL STATEMENT SCHEDULES FOR THE YEARS ENDED DECEMBER 31, 1993, 1992, and 1991 PAGE - ------------------------------------------------------------------------- Independent Auditors' Consent and Report on Schedules............. 24 Schedule V - Electric Plant....................................... 25-27 Schedule VI - Accumulated Depreciation............................ 25-27 Schedule VIII - Valuation and Qualifying Accounts................. 28 All other schedules and financial statements of subsidiaries not consolidated are omitted because they are not applicable, not required, or because the information is included in the financial statements or notes thereto. EXHIBITS FILED DESCRIPTION - -------------- ----------- 13 Pages 16 to 45 of Nevada Power Company's Annual Report to Shareholders for the Year Ended December 31, 1993 (incorporated by reference in Parts II and IV hereof). 10.69 Long-Term Incentive Plan dated as of January 1, 1993. 10.70 Contract for Long-Term Power Purchases from Qualifying Facilities dated May 27, 1992 between Las Vegas Co-generation, Inc. and Nevada Power Company, Replaces Exhibit 10.50. 10.71 Settlement Agreement and Promissory Note between Mountain Coal Company and Atlantic Richfield Company and Nevada Power Company dated March 9, 1994. 15 In addition to those Exhibits shown above, the Company hereby incorporates the following Exhibits pursuant to Exchange Act Rule 12B-32 and Regulation #201.24 by reference to the filings set forth below: EXHIBIT ORIGINALLY FILED NO. DESCRIPTION AS EXHIBIT FILE NO. - ------- ----------- ---------------- -------- 3.1 Bylaws, as amended February 9, 1984 3 to Form 10-K 1-4698 Year 1983 3.2 Restated Bylaws, as amended May 13, 1988 4.8 to Form S-3 33-33545 January 10, 1991 3.2 to Form 10-K 1-4698 Year 1990 3.3 Restated Articles of Incorporation, 2.2 to Form S-7 2-65097 filed November 7, 1978 3.4 Amendment to Restated Articles of 2.3 to Form S-16 2-67853 Incorporation, filed May 19, 1980 3.5 Amendment to Restated Articles of 3.4 to Form 10-K 1-4698 Incorporation filed May 31, 1983 Year 1983 3.6 Amendment to Restated Articles of 4.4 to Form S-3 33-4567 Incorporation, filed May 12, 1986 3.7 Amendment to Restated Articles of 4.6 to Form S-3 33-15554 Incorporation, filed May 12, 1987 3.8 Amendment to Restated Articles of 3.7 to Form 10-K 1-4698 Incorporation filed June 10, 1988 Year 1988 3.9 Restated Articles of Incorporation 3.8 to Form 10-K 1-4698 filed June 10, 1988 Year 1988 3.10 Amendment to Restated Articles of 4.7 to Form S-8 33-32372 Incorporation filed May 23, 1989. 3.11 Amendment to Restated Articles of 4.8 to Form S-3 33-55698 Incorporation filed June 8, 1992. 4.1 Certificate of Designation of Cumulative Preferred Stock as follows: 5.40% Series 2.1 to Form S-1 2-16968 5.20% Series 2.1 to Form S-1 2-20618 4.70% Series 3.2 to Form 8-K 1-4698 July 1965 8% Series 2.1 to Form S-7 2-44513 8.70% Series 2.1 to Form S-7 2-49622 11.50% Series 2.1 to Form S-7 2-52238 9.75% Series 2.1 to Form S-7 2-56788 Auction Series A 4.6 to Form S-3 33-15554 Auction Series A as amended November 14, 1991 4.9 to Form S-3 33-44460 Auction Series A as amended December 12, 1991 4.1 to Form 10-K 1-4698 Year 1992 9.90% Series 4.1 to Form 10-K 1-4698 Year 1992 4.2 Indenture of Mortgage and Deed of 4.2 to Form S-1 2-10932 Trust Providing for First Mortgage Bonds, dated October 1, 1953 and Nineteen Supplemental Indentures as follows: First Supplemental Indenture, 4.2 to Form S-1 2-11440 dated August 1, 1954 Second Supplemental Indenture, 4.9 to Form S-1 2-12566 dated September 1, 1956 Third Supplemental Indenture, 4.13 to Form S-1 2-14949 dated May 1, 1959 16 EXHIBIT ORIGINALLY FILED NO. DESCRIPTION AS EXHIBIT FILE NO. - ------- ----------- ---------------- -------- Fourth Supplemental Indenture, 4.5 to Form S-1 2-16968 dated October 1, 1960 Fifth Supplemental Indenture, 4.6 to Form S-16 2-74929 dated December 1, 1961 Sixth Supplemental Indenture, 4.6A to Form S-1 2-21689 dated October 1, 1963 Seventh Supplemental Indenture, 4.6B to Form S-1 2-22560 dated August 1, 1964 Eighth Supplemental Indenture, 4.6C to Form S-9 2-28348 dated April 1, 1968 Ninth Supplemental Indenture, 4.6D to Form S-1 2-34588 dated October 1, 1969 Tenth Supplemental Indenture, 4.6E to Form S-7 2-38314 dated October 1, 1970 Eleventh Supplemental Indenture, 2.12 to Form S-7 2-45728 dated November 1, 1972 Twelfth Supplemental Indenture, 2.13 to Form S-7 2-52350 dated December 1, 1974 Thirteenth Supplemental 4.14 to Form S-16 2-74929 Indenture, dated October 1, 1976 Fourteenth Supplemental 4.15 to Form S-16 2-74929 Indenture, dated May 1, 1977 Fifteenth Supplemental 4.16 to Form S-16 2-74929 Indenture dated September 1, 1978 Sixteenth Supplemental Indenture, 4.17 to Form S-16 2-74929 dated December 1, 1981 Seventeenth Supplemental 4.2 to Form 10-K 1-4698 Indenture, dated August 1, 1982 Year 1982 Eighteenth Supplemental Indenture, 4.6 to Form S-3 33-9537 dated November 1, 1986 Nineteenth Supplemental Indenture, 4.2 to Form 10-K 1-4698 dated October 1, 1989 Year 1989 Twentieth Supplemental Indenture, 4.21 to Form S-3 33-53034 dated May 1, 1992 Twenty-First Supplemental 4.22 to Form S-3 33-53034 Indenture, dated June 1, 1992 Twenty-Second Supplemental 4.23 to Form S-3 33-53034 Indenture, dated June 1, 1992 Twenty-Third Supplemental 4.23 to Form S-3 33-53034 Indenture, dated October 1, 1992 Twenty-Fourth Supplemental 4.23 to Form S-3 33-53034 Indenture, dated October 1, 1992 Twenty-Fifth Supplemental 4.23 to Form S-3 33-53034 Indenture, dated January 1, 1993 4.3 Instrument of Further Assurance 4.8 to Form S-1 2-12566 dated April 1, 1956 to Indenture of Mortgage and Deed of Trust dated October 1, 1953 4.4 Rights Agreement dated October 15, 4.1 to Form 8-A 1-4698 1990 between Manufacturers Hanover Year 1990 Trust Company and Nevada Power Company 17 EXHIBIT ORIGINALLY FILED NO. DESCRIPTION AS EXHIBIT FILE NO. - ------- ----------- ---------------- -------- 10.1 Contract for Sale of Electrical 13.9A to Form S-1 2-10932 Energy between State of Nevada and the Company, dated October 10, 1941 10.2 Amendment dated June 30, 1953 to 13.9A to Form S-1 2-10932 Exhibit 10.1 10.3 Contract for Sale of Electrical 13.10 to Form S-1 2-10932 Energy between State of Nevada and the Company, dated June 1, 1951 10.4 Agreement dated November 10, 1948 13.18 to Form S-1 2-12697 between the Company and Lincoln County Power District No. 1 and Overton Power District No. 5 10.5 Agreement dated October 21, 1949 13.19 to Form S-9 2-12697 between the Company and Lincoln County Power District No. 1 and Overton Power District No. 5 10.6 Mohave Project Plant Site 13.27 to Form S-9 2-28348 Conveyance and Co-tenancy Agreement dated May 29, 1967 between the Company and Salt River Project Agricultural Improvement and Power District Southern California Edison Company 10.7 Eldorado System Conveyance and 13.30 to Form S-9 2-28348 Co-tenancy Agreement dated December 20, 1967 between the Company and Salt River Project Agricultural Improvement and Power District and Southern California Edison Company 10.8 Mohave Operating Agreement dated 13.26F to Form S-1 2-38314 July 6, 1970 between the Company, Salt River Project Agricultural Improvement and Power District, Southern California Edison Company and Department of Water and Power of the City of Los Angeles 10.9 Navajo Project Participation 13.27A to Form S-1 2-38314 Agreement dated September 30, 1969 between the Company, the United States of America, Arizona Public Service Company, Department of Water and Power of the City of Los Angeles, Salt River Project Agricultural Improvement and Power District and Tucson Gas & Electric Company 18 EXHIBIT ORIGINALLY FILED NO. DESCRIPTION AS EXHIBIT FILE NO. - ------- ----------- ---------------- -------- 10.10 Navajo Project Coal Supply 13.27B to Form S-1 2-38314 Agreement dated June 1, 1970 between the Company, the United States of America, Arizona Public Service Company, Department of Water and Power of the City of Los Angeles, Salt River Project Agricultural District, Tucson Gas & Electric Company and the Peabody Coal Company 10.11 Contract dated January 1, 1968 13.32 to Form S-1 2-34588 between the Company and United States Bureau of Reclamation for interconnections at Mead Station 10.12 Note Agreement dated December 11, 5.35 to Form S-7 2-49622 1973 relating to $25,000,000 8-1/2% Promissory Notes due 1998 10.13 Reclaimed Wastewater Purchase 5.36 to Form S-7 2-52238 Agreement dated June 21, 1974 among City of Las Vegas, Nevada, Clark County Sanitation District No. 1, County of Clark, Nevada and Nevada Power Company 10.14 Equipment Lease dated as of 5.37 to Form 8-K 1-4698 March 1, 1974 between Nevada Power April 1974 Company, Lessor, and Clark County, Nevada, Lessee 10.15 Sublease Agreement dated as of 5.38 to Form 8-K 1-4698 March 1, 1974 between Clark April 1974 County, Nevada, Sublessor, and Nevada Power Company, Sublessee 10.16 Guaranty Agreement dated as of 5.39 to Form 8-K 1-4698 March 1, 1974 between Nevada April 1974 Power Company and Commerce Union Bank as Trustee 10.17 Navajo Project Co-tenancy 5.31 to Form 8-K 1-4698 Agreement dated March 23, 1976 April 1974 between the Company, Arizona Public Service Company, Department of Water and Power of the City of Los Angeles, Salt River Project Agricultural Improvement and Power District, Tucson Gas & Electric Company and the United States of America 10.18 Amended Mohave Project Coal Supply 5.35 to Form S-7 2-56356 Agreement dated May 26, 1976 between the Company and Southern California Edison Company, Department of Water and Power of the City of Los Angeles, Salt River Project Agricultural Improvement and Power District and the Peabody Coal Company 19 EXHIBIT ORIGINALLY FILED NO. DESCRIPTION AS EXHIBIT FILE NO. - ------- ----------- ---------------- -------- 10.19 Amended Mohave Project Coal Slurry 5.36 to Form S-7 2-56356 Pipeline Agreement dated May 26, 1976 between Peabody Coal Company and Black Mesa Pipeline, Inc. (Exhibit B to Exhibit 10.18) 10.20 Coal Supply Agreement dated October 5.38 to Form S-7 2-56356 15, 1975 between the Company and United States Fuel Company 10.21 Amendment dated November 19, 1976 5.30 to Form S-7 2-62105 to Exhibit 10.20 10.22 Participation Agreement Reid 5.34 to Form S-7 2-65097 Gardner Unit No. 4 dated July 11, 1979 between the Company and California Department of Water Resources 10.23 Coal Supply Agreement dated 5.37 to Form S-7 2-62509 March 1, 1980 between the Company and Beaver Creek Coal Company 10.24 Coal Supply Agreement dated 5.38 to Form S-7 2-62509 March 1, 1980 between the Company and Trail Mountain Coal Company 10.25 Coal Supply Agreement dated 10.26 to Form 10-K 1-4698 December 8, 1980 between the Year 1981 Company and Plateau Mining Company 10.26 Coal Supply Agreement dated 10.26 to Form 10-K 1-4698 August 31, 1982 between Year 1982 the Company and CO-OP Mining Company 10.27 Coal Supply Agreement dated 10.27 to Form 10-K 1-4698 September 8, 1982 between the Year 1982 Company and Getty Mining Company 10.28 Coal Supply Agreement dated 10.28 to Form 10-K 1-4698 September 8, 1982 between the Year 1982 Company and Tower Resources, Inc. 10.29 Coal Supply Agreement dated 10.29 to Form 10-K 1-4698 September 22, 1982 between the Year 1982 Company and Beaver Creek Coal Company 10.30 Memorandum of Understanding 10.30 to Form 10-K 1-4698 Concerning Interconnection Year 1983 between Utah Power & Light Company and Nevada Power Company dated February 2, 1984 10.31 Sublease Agreement between Powveg 10.31 to Form 10-K 1-4698 Leasing Corp., as Lessor and Year 1983 Nevada Power Company as Lessee, dated January 11, 1984 for lease of administrative headquarters 20 EXHIBIT ORIGINALLY FILED NO. DESCRIPTION AS EXHIBIT FILE NO. - ------- ----------- ---------------- -------- 10.32 Participation Agreement between 10.32 to Form 10-K 1-4698 Utah Power & Light Company and Year 1985 the Company dated December 19, 1985 10.33 Sale and Purchase Agreement dated 10.33 to Form 10-K 1-4698 as of December 23, 1985 by and Year 1985 between Nevada Power Company and CP National Corporation 10.34 Restated Coal Sales Agreement as 10.34 to Form 10-K 1-4698 of July 1, 1985 by and between Year 1985 Nevada Power Company and Trail Mountain Coal Company 10.35 Summary of Supplemental Executive 10.35 to Form 10-K 1-4698 Retirement Plan as approved Year 1985 November 14, 1985 10.36 Financing Agreement dated as of 10.36 to Form 10-K 1-4698 February 1, 1983 between Clark Year 1985 County, Nevada and Nevada Power Company 10.37 Financing Agreement between Clark 10.37 to Form 10-K 1-4698 County, Nevada and Nevada Power Year 1985 Company dated as of December 1, 1985 10.38 Reimbursement Agreement dated 10.38 to Form 10-K 1-4698 as of December 1, 1985 between Year 1986 The Fuji Bank, Limited and Nevada Power Company 10.39 Contract for Sale of Electrical 10.39 to Form 10-K 1-4698 Energy between the State of Year 1987 Nevada and the Company, dated July 8, 1987 10.40 Power Sales Agreement between 10.40 to Form 10-K 1-4698 Utah Power & Light Company and Year 1987 the Company, dated August 17, 1987 10.41 Transmission Facilities Agreement 10.41 to Form 10-K 1-4698 between Utah Power & Light Year 1987 Company and the Company, dated August 17, 1987 10.42 Financing Agreement between Clark 10.42 to Form 10-K 1-4698 County, Nevada and Nevada Power Year 1988 Company dated as of November 1, 1988 10.43 Reimbursement Agreement dated 10.43 to Form 10-K 1-4698 as of November 1, 1988 between Year 1988 The Fuji Bank, Limited and Nevada Power Company 10.44 401(k) Savings Plan 28.1 to Form S-8 33-32372 10.45 Power Purchase Contract dated 10.45 to Form 10-K 1-4698 February 15, 1990 between Year 1989 Mission Energy Company and Nevada Power Company 21 EXHIBIT ORIGINALLY FILED NO. DESCRIPTION AS EXHIBIT FILE NO. - ------- ----------- ---------------- -------- 10.46 Contact for Long-Term Power 10.46 to Form 10-K 1-4698 Purchases from Qualifying Year 1989 Facilities dated May 1, 1989 between Oxford Energy of Nevada and Nevada Power Company 10.47 Contract A for Long-Term Power 10.47 to Form 10-K 1-4698 Purchases from Qualifying Year 1989 Facilities dated May 2, 1989 between Bonneville Nevada Corporation and Nevada Power Company 10.48 Contract for Long-Term Power 10.48 to Form 10-K 1-4698 Purchases from Qualifying Year 1989 Facilities dated April 10, 1989 between Magna Energy Systems, Eastern Sierra Energy Company and Nevada Power Company 10.49 Contract B for Long-Term Power 10.49 to Form 10-K 1-4698 Purchases from a Qualifying Year 1989 Facility dated October 27, 1989 between Bonneville Nevada Corporation and Nevada Power Company 10.50 Contract for Long-Term Power 10.50 to Form 10-K 1-4698 Purchases from Qualified Year 1989 Facilities dated February 12, 1990 between Las Vegas Co-generation, Inc. and Nevada Power Company 10.51 Agreement for Transmission 10.51 to Form 10-K 1-4698 Service dated March 29, 1989 Year 1989 between Overton Power District No. 5 , Lincoln County Power District No. 1 and Nevada Power Company 10.52 Contract dated June 30, 1988 10.52 to Form 10-K 1-4698 between United States Department Year 1989 of Energy Western Area Power Administration and Nevada Power Company 10.53 Executive Performance Incentive 10.53 to Form 10-K 1-4698 Plan dated as of January 1, 1989 Year 1989 10.54 Severance Allowance Plan 10.54 to Form 10-K 1-4698 adopted September 14, 1989 Year 1989 10.55 Power Purchase Contract dated 10.55 to Form 10-K 1-4698 July 5, 1990 between Year 1990 Mission Energy Company and Nevada Power Company 10.56 Contract B for Long-Term Power 10.56 to Form 10-K 1-4698 Purchases from a Qualifying Year 1990 Facility dated May 24, 1990 between Bonneville Nevada Corporation and Nevada Power Company 10.57 Amendment dated June 15, 1989 to 10.57 to Form 10-K 1-4698 Exhibit 10.46 Year 1990 22 EXHIBIT ORIGINALLY FILED NO. DESCRIPTION AS EXHIBIT FILE NO. - ------- ----------- ---------------- -------- 10.58 Amendment dated August 23, 1989 10.58 to Form 10-K 1-4698 to Exhibit 10.46 Year 1990 10.59 Amendment dated April 23, 1990 10.59 to Form 10-K 1-4698 to Exhibit 10.46 Year 1990 10.60 Exhibit H dated August 13, 1990 10.60 to Form 10-K 1-4698 to Exhibit 10.46 Year 1990 10.61 Western Systems Power Pool 10.61 to Form 10-K 1-4698 Agreement (Agreement) dated Year 1990 January 2, 1991 between thirty-nine other Western Systems Power Pool members as listed on pages 1 and 2 of the Agreement and Nevada Power Company 10.62 Financing Agreement between Clark 10.62 to Form 10-K 1-4698 County, Nevada and Nevada Power Year 1990 Company dated June 1, 1990 10.63 Restated Power Sales Agreement 10.63 to Form 10-K 1-4698 dated March 25, 1991 between Year 1991 Pacificorp and Nevada Power Company 10.64 Amendment dated July 17, 1990 to 10.64 to Form 10-K 1-4698 Exhibit 10.55 Year 1991 10.65 Financing Agreement between Clark 10.65 to Form 10-K 1-4698 County, Nevada and Nevada Power Year 1992 Company dated June 1, 1992 (Series 1992A) 10.66 Financing Agreement between Clark 10.66 to Form 10-K 1-4698 County, Nevada and Nevada Power Year 1992 Company dated June 1, 1992 (Series 1992B) 10.67 Financing Agreement between Clark 10.67 to Form 10-K 1-4698 County, Nevada and Nevada Power Year 1992 Company dated October 1, 1992 10.68 Power Sales Agreement dated 10.68 to Form 10-K 1-4698 October 19, 1992 Between the Year 1992 Department of Water and Power of the City of Los Angeles and Nevada Power Company REPORTS ON FORM 8-K The Company filed no current report on Form 8-K during the quarter ended December 31, 1993. 23 INDEPENDENT AUDITORS' CONSENT AND REPORT ON SCHEDULES We consent to the incorporation by reference in Registration Statement No. 33-18622 on Form S-3 and in Registration Statement No. 33-15554 on Form S-3 of Nevada Power Company of our report dated February 10, 1994 (March 11, 1994 as to the fourth paragragh of Note 7) (which expresses an unqualified opinion and includes an explanatory paragraph relating to the Company's change in method of accounting for income taxes to conform with Statement of Financial Accounting Standards No. 109) incorporated by reference in this Annual Report on Form 10-K of Nevada Power Company for the year ended December 31, 1993. Our audits of the financial statements referred to in our aforementioned report also included the financial statement schedules of Nevada Power Company, listed in Item 14. These financial statement schedules are the responsibility of Nevada Power Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, such financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein. DELOITTE & TOUCHE DELOITTE & TOUCHE Las Vegas, Nevada March 28, 1994 24 NEVADA POWER COMPANY SCHEDULE V - ELECTRIC PLANT FOR THE YEAR ENDED DECEMBER 31, 1993 (IN THOUSANDS OF DOLLARS) Balance at Balance at Beginning Additions Retirements End of of Period At Cost (1) and Other Period ---------- ----------- ----------- ---------- Production............$ 588,492 $ 93,859 $ (824) $ 681,527 Transmission.......... 263,807 13,869 (133) 277,543 Distribution.......... 536,644 61,923 (3,693) 594,874 General............... 77,402 7,927 (713) 84,616 Construction work-in- progress............. 172,093 (4,441) -- 167,652 Property under capital lease................ 96,753 -- (5,236) 91,517 Plant held for future use.................. 4,442 -- (723) 3,719 ---------- ----------- ----------- ---------- $1,739,633 $ 173,137 $ (11,322) $1,901,448 ========== =========== =========== ========== SCHEDULE VI - ACCUMULATED DEPRECIATION FOR THE YEAR ENDED DECEMBER 31, 1993 (IN THOUSANDS OF DOLLARS) Balance at Salvage, Less Balance at Beginning Cost of End of of Period Provisions(2) Removal Retirements Period ---------- ----------- ---------- --------- --------- Production...$ 250,545 $ 19,919 $ (87) $ (823) $ 269,554 Transmission. 50,030 6,658 (108) (133) 56,447 Distribution. 98,355 14,817 121 (2,717) 110,576 General...... 12,755 3,104 74 (713) 15,220 Retirement work- in-progress. (722) -- 227 -- (495) ---------- ----------- ---------- --------- --------- $ 410,963 $ 44,498 $ 227 $ (4,386) $ 451,302 ========== =========== ========== ========= ========= ______________ (1) Additions include Allowance for Funds Used During Construction capitalized in the amount of $9,880,000. (2) Provisions include $43,341,000 charged to income and $1,157,000 charged to other accounts. The depreciation provision on the statement of income includes additional amounts for amortization of the electric plant acquisition adjustments in the amount of $17,000. 25 NEVADA POWER COMPANY SCHEDULE V - ELECTRIC PLANT FOR THE YEAR ENDED DECEMBER 31, 1992 (IN THOUSANDS OF DOLLARS) Balance at Balance at Beginning Additions Retirements End of of Period At Cost (1) and Other Period ---------- ----------- ----------- ---------- Production............$ 577,565 $ 12,222 $ (1,295) $ 588,492 Transmission.......... 235,282 28,719 (194) 263,807 Distribution.......... 460,406 66,383 9,855 (2) 536,644 General............... 70,917 8,913 (2,428) 77,402 Construction work-in- progress............. 112,257 62,382 (2,546)(3) 172,093 Property under capital lease................ 96,358 -- 395 96,753 Plant held for future use.................. 9,706 -- (5,264)(4) 4,442 ---------- ----------- ----------- ---------- $1,562,491 $ 178,619 $ (1,477) $1,739,633 ========== =========== =========== ========== SCHEDULE VI - ACCUMULATED DEPRECIATION FOR THE YEAR ENDED DECEMBER 31, 1992 (IN THOUSANDS OF DOLLARS) Balance at Salvage, Less Balance at Beginning Cost of End of of Period Provisions(5) Removal Retirements Period ---------- ----------- ---------- --------- --------- Production...$ 233,539 $ 18,190 $ 111 $ (1,295) $ 250,545 Transmission. 44,151 6,102 (40) (183) 50,030 Distribution. 86,574 14,925 266 (3,410) 98,355 General...... 12,229 2,910 44 (2,428) 12,755 Retirement work- in-progress. (726) -- 4 -- (722) ---------- ----------- ---------- --------- --------- $ 375,767 $ 42,127 $ 385 $ (7,316) $ 410,963 ========== =========== ========== ========= ========= ______________ (1) Additions include Allowance for Funds Used During Construction capitalized in the amount of $7,544,000. (2) Included in retirements and other is $13,567,000 for AFUDC on Industrial Development Revenue Bond Trust Fund balances reclassified from other deferred charges. (3) Included in retirements and other is $2,546,000 for costs related to a property loss at Reid Gardner Generating Station No. 4 which were reclassified to other deferred charges. (4) Included in retirements and other is $5,794,000 reclassified as property under capital lease. (5) Provisions include $39,433,000 charged to income and $2,694,000 charged to other accounts. The depreciation provision on the statement of income includes additional amounts for amortization of the electric plant acquisition adjustments in the amount of $18,000. 26 NEVADA POWER COMPANY SCHEDULE V - ELECTRIC PLANT FOR THE YEAR ENDED DECEMBER 31, 1991 (IN THOUSANDS OF DOLLARS) Balance at Balance at Beginning Additions Retirements End of of Period At Cost (1) and Other Period ---------- ----------- ----------- ---------- Production............$ 562,858 $ 20,347 $ (5,640) $ 577,565 Transmission.......... 217,852 18,214 (784) 235,282 Distribution.......... 400,869 76,386 (16,849)(2) 460,406 General............... 63,597 8,013 (693) 70,917 Construction work-in- progress............. 75,946 30,992 5,319 (3) 112,257 Property under capital lease................ 18,199 83,000 (5) (4,841) 96,358 Plant held for future use.................. 5,786 3,188 732 (4) 9,706 ---------- ----------- ----------- ---------- $1,345,107 $ 240,140 $ (22,756) $1,562,491 ========== =========== =========== ========== SCHEDULE VI - ACCUMULATED DEPRECIATION FOR THE YEAR ENDED DECEMBER 31, 1991 (IN THOUSANDS OF DOLLARS) Balance at Salvage, Less Balance at Beginning Cost of End of of Period Provisions(6) Removal Retirements Period ---------- ----------- ---------- --------- --------- Production...$ 217,606 $ 19,807 $ 1,766 $ (5,640) $ 233,539 Transmission. 39,999 5,001 (65) (784) 44,151 Distribution. 80,618 9,084 152 (3,280) 86,574 General...... 10,633 2,151 38 (593) 12,229 Retirement work- in-progress. (634) -- (92) -- (726) ---------- ----------- ---------- --------- --------- $ 348,222 $ 36,043 $ 1,799 $ (10,297) $ 375,767 ========== =========== ========== ========= ========= ______________ (1) Additions include Allowance for Funds Used During Construction capitalized in the amount of $6,051,000. (2) Included in retirements and other is $13,567,000 for AFUDC over- accrued on Industrial Development Revenue Bond Trust Fund balances and reclassified to other deferred charges to be amortized over eight years. (3) Included in retirements and other is $5,319,000 for costs related to the Company's Harry Allen Generating Facility project which were reclassified from other deferred charges. (4) Included in retirements and other is $732,000 for amortization and interest cost for l991 reclassified as plant held for future use. (5) Additions include $83,000,000 for a capitalized lease which was recorded as a result of a power purchase contract between the Company and Mission Energy Company. (6) Provisions include $34,663,000 charged to income and $l,380,000 charged to other accounts. The depreciation provision on the statement of income includes additional amounts for amortization of the electric plant acquisition adjustments in the amount of $485,000. 27 NEVADA POWER COMPANY SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991 (IN THOUSANDS OF DOLLARS) Reserve for Doubtful Accounts ---------- BALANCE AT DECEMBER 31, 1990............................. $ 924 Provision charged to income............................. 2,487 Amounts written off, less recoveries.................... (2,305) ------- BALANCE AT DECEMBER 31, 1991............................. $ 1,106 Provision charged to income............................. 2,068 Amounts written off, less recoveries.................... (2,371) ------- BALANCE AT DECEMBER 31, 1992............................. $ 803 Provision charged to income............................. 3,161 Amounts written off, less recoveries.................... (2,839) ------- BALANCE AT DECEMBER 31, 1993............................ $ 1,125 ======= 28 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. NEVADA POWER COMPANY ------------------------------------- (Registrant) March 28, 1994 By CHARLES A. LENZIE ------------------------------------- Charles A. Lenzie Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. March 28, 1994 By CHARLES A. LENZIE ------------------------------------- Charles A. Lenzie, Chairman of the Board, Chief Executive Officer and Director (Principal Executive Officer) March 28, 1994 By STEVEN W. RIGAZIO ------------------------------------- Steven W. Rigazio, Vice President, Finance and Planning, Treasurer, Chief Financial Officer (Principal Financial and Principal Accounting Officer) March 28, 1994 By JAMES CASHMAN III ------------------------------------- James Cashman III, Director March 28, 1994 By MARY LEE COLEMAN ------------------------------------- Mary Lee Coleman, Director March 28, 1994 By FRED D. GIBSON JR. ------------------------------------- Fred D. Gibson Jr., Director March 28, 1994 By JOHN L. GOOLSBY ------------------------------------- John L. Goolsby, Director March 28, 1994 By JERRY HERBST ------------------------------------- Jerry Herbst, Director March 28, 1994 By JAMES C. HOLCOMBE ------------------------------------- James C. Holcombe, President and Director March 28, 1994 By CONRAD L. RYAN ------------------------------------- Conrad L. Ryan, Director March 28, 1994 By FRANK E. SCOTT ------------------------------------- Frank E. Scott, Director March 28, 1994 By ARTHUR M. SMITH ------------------------------------- Arthur M. Smith, Director March 28, 1994 By JELINDO A. TIBERTI ------------------------------------- Jelindo A. Tiberti, Director 29