SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 28, 2000
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SIERRA PACIFIC RESOURCES
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(Exact name of the registrant as specified in its charter)
Nevada
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(State or other jurisdiction of incorporation)
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1-8788 88-0198358
(Commission File Number) (IRS Employer Identification Number)
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P.O. Box 30150 (6100 Neil Road), Reno, Nevada 89511
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(Address of principal executive offices) (Zip Code)
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775-834-4011
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(Registrant"s telephone number, including area code)
N/A
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(Former name or former address, if changed since last report)
Item 5. Other Events.
This Current Report on Form 8-K describes further developments relating to
regulatory actions by the Public Utilities Commission of Nevada (the "PUCN")
which were initially discussed in the Current Report on Form 8-K dated February
25, 2000 of Sierra Pacific Resources (the "Company") and in the Company's Annual
Report on Form 10-K for the year ended December 31, 2000. The PUCN actions
relate to one of the Company's subsidiaries, Nevada Power Company ("Nevada
Power").
Recent Decisions in Nevada Power Company Deferred Energy Case
In 1999, the Nevada Legislature passed Senate Bill 438, which amended
earlier restructuring legislation and, with one exception, froze for three years
the rates for Nevada Power Company at the levels that were in effect on July 1,
1999. The legislation, however, mandated that the PUCN modify those rates to
reflect the outcomes of deferred energy accounting cases filed by Nevada Power
Company prior to October 1, 1999. Nevada Power filed its annual deferred energy
case on July 15, 1999, covering the period from June 1, 1998 through May 31,
1999. This filing requested:
o an increase in ongoing charges for fuel and purchased power to
reflect increased costs during the applicable test period,
o an increase in ongoing charges for fuel and purchased power to
reflect the cost of purchased energy which was being imputed as
"capacity" under a previous PUCN order,
o an increase to recover accumulated deferred balances for fuel and
purchased power, and
o an increase to recover accumulated deferred "capacity" balances.
In accordance with SB 438, on September 30, 1999, Nevada Power filed an
amendment to its deferred energy filing covering charges through August 31,
1999. In the amended filing, Nevada Power updated the earlier calculations of
ongoing fuel and purchased power costs so as to reflect the most recent 12
months historical data and updated the two categories of deferred balances to
reflect deferrals through August 31, 1999.
On February 4, 2000 the PUCN issued an order that rejected the September
30 amendment. In addition, on March 28, 2000 the PUCN issued a decision on the
original deferred energy filing which:
o confirmed the dismissal of the September 30th filing,
o disallowed recovery of substantially all of the imputed capacity
previously deferred,
o stopped all purchased fuel and energy deferrals retroactive to May
31, 1999, and
o prohibited the recovery of any ongoing cost of imputed capacity
deferrals.
The PUCN decision had both an immediate and an ongoing financial impact on
Nevada
Power Company. The immediate impact was that Nevada Power Company recognized a
reserve for previously deferred energy and imputed capacity costs of $80 million
in 1999. The ongoing impact results from the fact the decision reduced Nevada
Power Company's request for ongoing rate increases by between 85 and 90 percent,
just as the company is entering the three-year rate freeze imposed by Senate
Bill 438. The Company estimates that the resulting reduction in Nevada Power
Company's revenue will equal approximately $30 million over each of the next
three years. Nevada Power Company has appealed the decisions, as discussed below
under "Material Litigation".
Material Litigation
On March 28, 2000, Sierra Pacific Resources, Nevada Power Company and
Sierra Pacific Power Company filed a lawsuit in Federal District Court in Nevada
asking the court to declare certain aspects of the Nevada laws that created the
framework for a deregulated electric market in Nevada unconstitutional. These
laws, which are described in more detail in "Management's Discussion and
Analysis of Results of Operations and Financial Condition" contained in the
Company's Annual Report on Form 10-K for the year ended December 31, 1999,
require that competitive services in the electric power industry be available
for Nevada customers beginning on March 1, 2000, unless otherwise ordered by the
Governor of Nevada. The Governor has deferred the effective date of these laws,
but only for so long as may be necessary to make a transition to a deregulated
market for electric services. The lawsuit alleges that the restructuring laws
fail to provide an adequate mechanism for the recovery by the Company's utility
subsidiaries of the substantial costs incurred by them to assure reliable
electric power supplies to Nevada customers in the historically regulated
market. Specifically, the lawsuit states that the federal Public Utility
Regulatory Policies Act requires the utilities to purchase power from certain
non-utility generators but that the Nevada restructuring laws are being carried
out so as to prevent the utilities from recovering sufficient revenues from
customers to compensate the companies for all of these purchased power costs.
Therefore, the lawsuit alleges that Nevada's restructuring laws are preempted by
the federal Public Utility Regulatory Policies Act and the Federal Power Act and
that they violate the Contract Clause and the Fifth and Fourteenth Amendments to
the U.S. Constitution. The lawsuit requests that the court stay the
effectiveness of the Nevada restructuring laws until the PUCN adopts
implementing regulations that protect the utilities' rights under federal law.
The Company is not able at this time to predict how long it will take for this
lawsuit to be resolved and nor can it predict the outcome of the case.
In response to the PUCN decisions described above under "Recent Decisions
in Nevada Power Company Deferred Energy Case", Nevada Power Company filed a
lawsuit against the PUCN on March 30, 2000 in the First Judicial District of
Nevada in Carson City. The lawsuit alleges fourteen causes of action against the
PUCN and requests that the court:
o set aside the PUCN's March 28, 2000 order,
o reinstate Nevada Power Company's September 30th filing, and
o enter an order allowing Nevada Power Company to recover deferrals of
imputed capacity through March 28, 2000 and implement ongoing rates
for fuel and purchased power that reflect the costs of purchased
energy.
The Company is not able at this time to predict how long it will take for this
lawsuit to be resolved nor can it predict the outcome of the case.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of businesses acquired.
None
(b) Pro forma financial information.
None
(c) Exhibits.
99.1 Petition for Judicial Review of an Order of the Public Utilities
Commission of Nevada, Case No. 00-00416A, filed on March 30, 2000 in
the case of Nevada Power Company, Petitioner v. Public Utilities
Commission of Nevada, Defendant, in the First Judicial District
Court of the State of Nevada in and for Carson City.
99.2 Complaint for Declaratory and Injunctive Relief, filed on March 28,
2000, in the case of Sierra Pacific Resources, Sierra Pacific Power
Company and Nevada Power Company v. Public Utility Commission of
Nevada et al., Civil Action No. CV-N-0157-DWH-VPC, in the United
States District Court for the District of Nevada.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Dated: April 14, 2000
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SIERRA PACIFIC RESOURCES
By: /s/ William E. Peterson
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William E. Peterson
Title: Senior Vice President,
General Counsel and
Corporate Secretary
EXHIBIT INDEX
Exhibit Description
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99.1 Petition for Judicial Review of an Order of the Public Utilities
Commission of Nevada, Case No. 00-00416A, filed on March 30, 2000 in the
case of Nevada Power Company, Petitioner v. Public Utilities Commission of
Nevada, Defendant, in the First Judicial District Court of the State of
Nevada in and for Carson City.
99.2 Complaint for Declaratory and Injunctive Relief, filed on March 28, 2000,
in the case of Sierra Pacific Resources, Sierra Pacific Power Company and
Nevada Power Company v. Public Utility Commission of Nevada et al., Civil
Action No. CV-N-0157-DWH-VPC, in the United States District Court for the
District of Nevada.