10 January 2006 - Sierra Pacific Resources said Monday it planned to move forward with the development of a 1500 MW coal-fired power complex in White Pine County, located in eastern Nevada and an approximately 250-mile transmission line linking the northern and southern parts of the state.

The power facility, which would be the largest energy development project in the state since Hoover Dam, will serve customers of Sierra Pacific Power Company and Nevada Power Company in northern and southern Nevada, respectively. It initially calls for two 750 MW units utilizing the latest, state-of-the-art, and fully environmental compliant, clean pulverized coal technologies. The plans also provide for expansion with two 500 MW coal gasification units when the technology becomes commercially viable. The company said the facility's initial 750 MW operating unit is expected to become operational during 2011 with the second unit coming on stream within the following three years.

The planned transmission line not only will provide the all-important tie between northern and southern Nevada, but also will address the company's and the state's emphasis on development of renewable energy resources. The line will include several hundred megawatts of capacity for power generated by renewable resources in the eastern and northern portions of Nevada and will allow that power to be efficiently transported throughout the state.

Cost of the initial power complex/transmission line project is expected to exceed $3bn. The two coal gasification units would be additional.

"We are confident that the benefits that will be derived in the city of Ely, White Pine County and throughout Nevada will be very clear from employment, taxes, renewables development, and other important economic perspectives," said Walter Higgins, chairman and chief executive officer of Sierra Pacific Resources, the parent of Nevada Power Company and Sierra Pacific Power Company.

Higgins emphasized that the proposed power facility will directly address the state's desire to diversify its energy sources away from a heavy reliance on expensive natural gas and, at the same time, will answer many environmental concerns by utilizing the latest "clean coal" technologies. It also will incorporate "hybrid cooling" thereby greatly reducing the amounts of water needed. "Equally important," Higgins said, "by using a portion of our transmission line to transport electricity generated by renewable resources, we expect this project to help spur development of much-needed and desirable renewable energy within our state."

Higgins added that the company decided to move forward with the project when recent discussions with out-of-state developers stalled and have now been abandoned due to economic considerations that were not in the best interests of the State of Nevada and its citizens, nor the company.

The company said it would release further details of the project in a forthcoming filing with the Public Utilities Commission of Nevada, which it expects to submit during February 2006.