Sierra Pacific Resources (NYSE:SRP), parent company of Nevada Power Company And Sierra Pacific Power Co., announced Monday that Nevada Power Co. has agreed to sell its Harry Allen Power Station to Pinnacle West Energy, a subsidiary of Pinnacle West Capital Corporation (NYSE:PNW).
The sale price of the generating plant was $69.81 million, subject to taxes and other adjustments at closing.
In conjunction with the purchase, Nevada Power Co. negotiated the right to buy energy and ancillary services from Pinnacle West Energy for agreed upon prices at a cost of approximately $4.61 million based on the time of closing. This will result in a net price for the generating plant upon closing of $65.2 million.
"Following the sale of Harry Allen Station, there are three of nine bundles of generating assets that remain to be sold," said Walter M. Higgins, chairman, president and chief executive officer of Sierra Pacific Resources. "These sales will benefit electric industry competition in Nevada and allow us to fully concentrate on building a premier transmission and distribution company in the West."
The newest plant on Nevada Power Co.'s system, Harry Allen Station began commercial operation of its 72-megawatt combustion turbine unit in 1995. Fueled by natural gas or diesel oil, the power station produces electricity for Southern Nevada and surrounding markets. The power station is located off Interstate Highway 15 about 30 miles north of the city of North Las Vegas. It is a remote-start facility located on a 6,000-acre site.
Sale of the generation assets is a regulatory condition of the 1999 merger of Sierra Pacific and Nevada Power. Harry Allen Station is one of the nine asset bundles included in an auction started earlier this year. The sale is expected to close in mid-2001, subject to approval and review by various regulatory agencies.
The company intends to complete the sale and transfer of all its generating assets in 2001.
