SIERRA PACIFIC RESOURCES /NV/ - 10-Q Quarterly Report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED March 31, 2004

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO


Commission File Number	Registrant, Address of Principal Executive Offices and Telephone Number	I.R.S. employer Identification Number	State of Incorporation
1-08788	SIERRA PACIFIC RESOURCES	88-0198358	Nevada
	P.O. Box 10100
	(6100 Neil Road)
	Reno, Nevada 89520-0400 (89511)
	(775) 834-4011

2-28348	NEVADA POWER COMPANY	88-0420104	Nevada
	6226 West Sahara Avenue
	Las Vegas, Nevada 89146
	(702) 367-5000

0-00508	SIERRA PACIFIC POWER COMPANY	88-0044418	Nevada
	P.O. Box 10100
	(6100 Neil Road)
	Reno, Nevada 89520-0400 (89511)
	(775) 834-4011

Indicate by check mark whether 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 whether any registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).

Sierra Pacific Resources Yes x No ¨; Nevada Power Company Yes ¨ No x; Sierra Pacific Power Company Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date.


Class		Outstanding at May 6, 2004
Common Stock, $1.00 par value of Sierra Pacific Resources		117,260,004 Shares

Sierra Pacific Resources is the sole holder of the 1,000 shares of outstanding Common Stock, $1.00 stated value, of Nevada Power Company. Sierra Pacific Resources is the sole holder of the 1,000 shares of outstanding Common Stock, $3.75 stated value, of Sierra Pacific Power Company.

This combined Quarterly Report on Form 10-Q is separately filed by Sierra Pacific Resources, Nevada Power Company and Sierra Pacific Power Company. Information contained in this document relating to Nevada Power Company is filed by Sierra Pacific Resources and separately by Nevada Power Company on its own behalf. Nevada Power Company makes no representation as to information relating to Sierra Pacific Resources or its subsidiaries, except as it may relate to Nevada Power Company. Information contained in this document relating to Sierra Pacific Power Company is filed by Sierra Pacific Resources and separately by Sierra Pacific Power Company on its own behalf. Sierra Pacific Power Company makes no representation as to information relating to Sierra Pacific Resources or its subsidiaries, except as it may relate to Sierra Pacific Power Company.

SIERRA PACIFIC RESOURCES

NEVADA POWER COMPANY

SIERRA PACIFIC POWER COMPANY

QUARTERLY REPORTS ON FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2004

CONTENTS


	PART I - FINANCIAL INFORMATION

ITEM 1.	Financial Statements

Sierra Pacific Resources -
	Consolidated Balance Sheets – March 31, 2004 and December 31, 2003	3

	Consolidated Statements of Operations – Three Months Ended March 31, 2004 and 2003	4

	Consolidated Statements of Cash Flows – Three Months Ended March 31, 2004 and 2003	5

Nevada Power Company -
	Consolidated Balance Sheets – March 31, 2004 and December 31, 2003	6

	Consolidated Statements of Operations – Three Months Ended March 31, 2004 and 2003	7

	Consolidated Statements of Cash Flows – Three Months Ended March 31, 2004 and 2003	8

Sierra Pacific Power Company -
	Consolidated Balance Sheets – March 31, 2004 and December 31, 2003	9

	Consolidated Statements of Operations – Three Months Ended March 31, 2004 and 2003	10

	Consolidated Statements of Cash Flows – Three Months Ended March 31, 2004 and 2003	11

	Condensed Notes to Consolidated Financial Statements	12

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
	Sierra Pacific Resources	46
	Nevada Power Company	52
	Sierra Pacific Power Company	60

ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	71

ITEM 4.	Controls and Procedures	71

	PART II - OTHER INFORMATION

ITEM 1.	Legal Proceedings	72

ITEM 4.	Submission of Matters to a Vote of Security Holders	78

ITEM 5.	Other Information	78

ITEM 6.	Exhibits and Reports on Form 8-K	78

Signature Page and Certifications		80

SIERRA PACIFIC RESOURCES

CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands)

(Unaudited)


	March 31, 2004		December 31, 2003
ASSETS
Utility Plant at Original Cost:
Plant in service	$	6,410,436	$	6,353,399
Less accumulated provision for depreciation		1,993,873		1,953,271

		4,416,563		4,400,128
Construction work-in-progress		244,310		242,522

		4,660,873		4,642,650

Investments and other property, net		110,800		109,642

Current Assets:
Cash and cash equivalents		159,113		181,789
Restricted cash and investments (Note 1)		219,730		54,705
Accounts receivable less allowance for uncollectible accounts:
2004-$44,905; 2003-$44,917		272,660		301,615
Deferred energy costs - electric		242,240		295,677
Deferred energy costs - gas		2,831		1,358
Materials, supplies and fuel, at average cost		75,863		80,941
Risk management assets		25,343		22,099
Deposits and prepayments for energy		60,832		63,847
Other		39,392		34,832

		1,098,004		1,036,863

Deferred Charges and Other Assets:
Goodwill (Note 11)		119,347		309,971
Deferred energy costs - electric		508,350		497,905
Regulatory tax asset		259,636		155,547
Other regulatory assets		346,562		142,507
Risk management regulatory assets - net (Note 8)		—		14,283
Unamortized debt issuance expense		55,811		50,842
Other		107,938		103,548

		1,397,644		1,274,603

	$	7,267,321	$	7,063,758

CAPITALIZATION AND LIABILITIES
Capitalization:
Common shareholders’ equity	$	1,391,022	$	1,435,394
Preferred stock		50,000		50,000
Long-term debt		3,715,427		3,579,674

		5,156,449		5,065,068

Current Liabilities:
Short-term borrowings		—		25,000
Current maturities of long-term debt		263,020		238,636
Accounts payable		160,783		166,440
Accrued interest		85,782		62,199
Dividends declared		975		968
Accrued salaries and benefits		19,656		24,428
Deferred taxes		126,096		133,844
Risk management liabilities (Note 8)		3,840		16,540
Contract termination liabilities (Note 9)		339,541		338,704
Other current liabilities		48,091		45,065

		1,047,784		1,051,824

Commitments and Contingencies (Note 9)

Deferred Credits and Other Liabilities:
Deferred federal income taxes		363,724		271,091
Deferred investment tax credit		44,512		45,329
Regulatory tax liability		40,908		41,877
Customer advances for construction		131,410		126,506
Accrued retirement benefits		123,419		112,075
Risk management regulatory liability - net (Note 8)		8,734		—
Contract termination liabilities (Note 9)		46,053		45,766
Regulatory liabilities		220,073		218,158
Other		84,255		86,064

		1,063,088		946,866

	$	7,267,321	$	7,063,758

The accompanying notes are an integral part of the financial statements.

SIERRA PACIFIC RESOURCES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in Thousands, Except Share and Per Share Amounts)

(Unaudited)


	Three Months Ended March 31,
	2004			2003
				As Revised (Note 1)
OPERATING REVENUES:
Electric	$	528,374		$	537,106
Gas		59,476			64,617
Other		630			1,087

		588,480			602,810

OPERATING EXPENSES:
Operation:
Purchased power		193,491			206,435
Fuel for power generation		103,157			80,213
Gas purchased for resale		47,917			42,334
Deferred energy costs disallowed		1,586			—
Deferral of energy costs - electric - net		47,889			84,187
Deferral of energy costs - gas - net		(1,407	)		10,803
Impairment of Goodwill		11,695			—
Other		74,337			72,271
Maintenance		24,888			18,724
Depreciation and amortization		49,941			45,811
Taxes:
Income tax benefit		(22,425	)		(15,555	)
Other than income		11,851			11,046

		542,920			556,269

OPERATING INCOME		45,560			46,541
OTHER INCOME (EXPENSE):
Allowance for other funds used during construction		1,373			1,760
Interest accrued on deferred energy		6,549			7,635
Disallowed merger costs		(5,890	)		—
Other income		8,639			6,495
Other expense		(3,125	)		(3,731	)
Income taxes		(1,558	)		(2,844	)
Unrealized gain on derivative instrument		—			15,925

		5,988			25,240

Total Income (Loss) Before Interest Charges		51,548			71,781
INTEREST CHARGES:
Long-term debt		75,608			72,505
Other		21,588			10,268
Allowance for borrowed funds used during construction		(2,173	)		(1,756	)

		95,023			81,017

LOSS FROM CONTINUING OPERATIONS		(43,475	)		(9,236	)
DISCONTINUED OPERATIONS:
Loss from discontinued operations (net of income taxes of $290)		—			(1,008	)

NET LOSS		(43,475	)		(10,244	)
Preferred stock dividend requirements of subsidiary		975			975

LOSS APPLICABLE TO COMMON STOCK	$	(44,450	)	$	(11,219	)

Amount per share - basic and diluted
Loss from continuing operations	$	(0.37	)	$	(0.08	)
Loss per share applicable to common stock	$	(0.38	)	$	(0.10	)
Weighted Average Shares of Common Stock Outstanding		117,239,947			111,499,881

Dividends Paid Per Share of Common Stock	$	—		$	—

The accompanying notes are an integral part of the financial statements.

SIERRA PACIFIC RESOURCES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)


	Three Months Ended March 31,
	2004	2003
CASH FLOWS FROM OPERATING ACTIVITIES:

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