RENO, Nev., Jan. 15, 2001 (Prnewswire) — The Sierra Pacific Resources (NYSE: SRP) Board of Directors today approved a definitive agreement to sell its water business to the Truckee Meadows Water Authority (TMWA) $350 million. The transaction is expected to close in the second quarter 2001.
Sierra Pacific Resources' water supply and distribution business serves more than 72,000 customers in the Reno-Sparks metropolitan area and has approximately 85 employees. The water company assets include state-of-the-art treatment facilities and distribution infrastructure, hydroelectric facilities located on the Truckee River and water rights (surface and ground) and storage rights appurtenant to Donner and Independence Lakes.
Jeff Ceccarelli, President of Sierra Pacific Power Company, said, "This is a very good outcome for us and TMWA. Their bid was evaluated against our selection criteria which included price, time to close the deal, and the ability to handle the important customer and employee issues. TMWA's proposal best met these criteria. Plus, TMWA has a local perspective in providing critical services and understands the important role that water plays in the Reno-Sparks area.
"We look forward to working alongside TMWA to provide a smooth and positive transition for our water customers and employees," Ceccarelli said. "We maintain our commitment to the reliable, low-cost delivery of electricity and gas to our customers in Nevada, as we move towards our vision of becoming a premier energy distribution company in the West."
Sierra Pacific Resources said that proceeds from the sale will be used for reduction of debt and for investment in the company's core businesses of electric and gas distribution and transmission. The company recently completed a merger between Sierra Pacific Resources and Nevada Power Company and is currently in the process of divesting its generation assets and acquiring Portland General Electric.
Lehman Brothers served as the financial advisor to Sierra Pacific Resources.
Headquartered in Reno, Nev., Sierra Pacific Resources is a holding company whose principal subsidiaries are Nevada Power Company, the electric utility for southern Nevada, and Sierra Pacific Power Co., the electric utility for most of northern Nevada and the Lake Tahoe area of California, and a natural gas and water distributor in the Reno-Sparks area. Other subsidiaries include the Tuscarora Gas Pipeline Co., which owns 50 percent interest in an interstate natural gas transmission partnership and Sierra Pacific Communications, a telecommunications company.
Reno, Sparks and Washoe County officials began negotiations among themselves to acquire the water system in September 2000 and consequently formed a joint powers authority under the name of Truckee Meadows Water Authority (TMWA). TMWA is governed by a Board of Directors consisting of seven representatives chosen by these three principals — three from the City of Reno; two from the City of Sparks; one from Washoe County; and one at-large Director. A Technical Advisory Committee, made up of staff of the three principals, reports to the Board of Directors and provides recommendations on operational and budget issues.
