HOUSTON AND RENO, NEV. -- Duke Energy North America, a subsidiary of Duke Energy has agreed to supply up to 1,000 megawatts of electricity per hour, as well as natural gas, to Nevada Power Company and Sierra Pacific Power Company to fulfill customers’ power requirements during the peak summer period, the companies announced today. The two utilities, which serve much of Nevada and the Lake Tahoe portion of California, are subsidiaries of Sierra Pacific Resources (NYSE: SRP).
In addition, Duke Energy will further provide real-time purchases and sales of power between June 15 and Dec. 31, 2002, under mutually agreeable terms to assist Nevada Power and Sierra Pacific Power in balancing electricity demands.
These agreements will be physically executed through its affiliate Duke Energy Trading and Marketing and will not increase Duke Energy’s credit risk. Specific terms of the arrangement are confidential.
Duke Energy also agreed to accept a deferred-payment program for a portion of the summer costs under its existing power-supply contracts with Nevada Power. This plan was proposed to all continuing power suppliers in April to help Nevada Power address its short-term liquidity issues.
Concurrently, Nevada Power and Sierra Pacific Power agreed to drop their Federal Energy Regulatory Commission Section 206 complaint proceeding against Duke Energy challenging the market-rate pricing of existing power-supply contracts entered into with Duke Energy during fall 2001.
Under terms of the agreements, Duke Energy will supply varying amounts up to 1,000 megawatts of electricity per hour between June 15 and Sept. 15, 2002, as well as natural gas. This would offset power and gas supply terminations by certain other suppliers, as well as previously unfilled short positions.
“Duke Energy worked earnestly with Sierra Pacific Resources to reach a solution that is beneficial to all parties with the most important objective of providing reliable power resources to consumers in Nevada,” said Jim Donnell, president and chief executive officer of Duke Energy North America. “This agreement reinforces the strength and viability of long-term, power-supply contracts and ensures that Nevada consumers’ power needs will be met during the summer.”
Walter Higgins, chairman, president and chief executive officer of Sierra Pacific Resources, said, "We are committed to doing everything possible to ensure that our customers have the power they need without interruption. The agreements with Duke Energy are a major step in that direction. We appreciate Duke Energy’s cooperation in our efforts to reliably serve our customers and meet our obligations. Our agreement with Duke Energy should give other suppliers confidence to adopt the extended payment program.”