-----Original Message-----
From: 	Dasovich, Jeff  
Sent:	Thursday, October 11, 2001 12:48 PM
To:	Calger, Christopher F.; Belden, Tim; Kaufman, Paul
Subject:	Nevada PUC Acts To Change Or Void Long-Term Pwr Contracts 

FYI.

Nevada PUC Acts To Change Or Void Long-Term Pwr Contracts 
LOS ANGELES -(Dow Jones)- The Nevada Public Utilities Commission Wednesday voted to allow its General Counsel Office to take any action necessary to try to void or renegotiate long-term electricity contracts entered into by the state's two largest utilities, a PUC spokeswoman said. 
The contracts would force Sierra Pacific Resources' (SRP) utilities Sierra Pacific Power Co. and Nevada Power Co. to pay a higher price for power than current market rates, said Don Soderberg, PUC chairman. 
"We paid high prices when the prices were high, but to pay high prices when the prices are low is outrageous," Soderberg said. 
No one at Sierra Pacific or Nevada Power was available to comment on which companies have signed contracts with the utilities, or the value of the contracts. 
The PUC action follows a letter sent by Gov. Kenny Guinn to the Federal Energy Regulatory Commission in early October asking that the utilities be allowed to renegotiate the contracts. 
The General Counsel's office will now have authority to file with FERC and in court to plead against the current contracts. 
Sierra Pacific has said that a June FERC order that capped wholesale power prices has penalized the company. Sierra Pacific signed its forward contracts to escape high spot market prices, only to have those contracts end up being more expensive than the capped spot market prices, the company has said. As well, if the company wants to sell any surplus power into the spot market, it will now receive less for that power under the cap, it has said. 
California 's Public Utilities Commission is also pushing for renegotiation of $43 billion in long-term contracts signed by the state, which has been buying power on behalf of cash-strapped utilities since January.