Fixed Income Presentation July 31, 2006. 2 Forward Looking Statements & Non-GAAP Measures Safe...

Fixed Income PresentationJuly 31, 2006

2

Forward Looking Statements & Non-GAAP Measures

Safe Harbor Statement

This presentation contains statements that may be considered forward looking within the

meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities

Exchange Act of 1934, such as management’s expectations of future earnings, cash position,

sources of funds, coverage ratios, market conditions, customer growth, regulatory action, and

the anticipated completion of various facilities under development. These statements speak of

the Company’s plans, goals, beliefs, or expectations, refer to estimates or use similar terms.

Actual results could differ materially, because the realization of those results is subject to many

uncertainties, some of which are discussed in more detail in the Company’s Annual Report filed

on Form 10-K for the fiscal year ended December 31, 2005 and on Form 10-Q for the quarter

ended March 31, 2006. All forward looking statements included in this presentation are based

upon information presently available, and the Company assumes no obligation to update any

forward looking statements.

Non-GAAP Measures

This presentation also includes non-GAAP measures when describing the Company’s results of

operations and financial performance. A reconciliation of each of these measures to the most

directly comparable GAAP measure is provided in the Appendix.

3

Table of Contents

1: Executive Summary

2: Corporate Overview

3: Operations & Generation Strategies

4: Regulatory Update

5: Financial Update

4

SECTION 1:

Executive Summary

5

Executive Summary

The Utilities are proactively managing their growth through increasing investment in generating plant at both Nevada Power and Sierra Pacific Power

NPC has substantially eliminated its short energy position with the recent acquisition of Silverhawk and the completion of Lenzie

Non-regulated, holding company investments are largely eliminated Operating in one regulatory environment with commissioners, staff and intervenors that have a high degree of experience

with regulatory filings, rate cases, the current and prospective energy needs in the state and the state government’s position on energy policy matters

The integrated resource plans allow for pre-prudency hearings on investments in generation and high voltage transmission

There have been no disallowances of energy costs since the 2002 case The PUCN is developing a track record on critical facility designation, to include accompanying incentive return on equity,

and allowance for improved cash flow through the allowance of construction work in process in general rates Statutory requirements for the Integrated Resource Plan and amendments offer pre-prudency with respect to investments in

generation assets and high voltage transmission The Base Tariff Energy Rate is reset to reflect the forward rate of gas and electricity based upon the company’s dispatch

model and the region’s implied heat rate SPPC’s authorized ROE was recently increased from 10.25% to 10.60%

Sierra Pacific Resources remains focused on increasing its vertical integration within the state of Nevada

Recent history documents a consistent and constructive regulatory relationship

6

Executive Summary

The conversion offer and forward settlement of mandatory convertible securities in 2005 increased shareholders’ equity by approximately $500 million

Management has placed restoration of the Utilities’ credit quality ahead of restoration of the shareholder’s dividend The proposed sale of the Company’s interest in Tuscarora will redeploy equity into the utilities

The PUCN, staff and intervenors are part of the process through annual filing of the Energy Supply Plan and regular workshop updates

The load forecast’s financial risk associated with commodity prices is completely hedged in advance of the current season The Company does not trade around its financial hedging contracts

Multiple refinancings in 2005 and 2006 have significantly reduced interest expense Liquidity has improved through larger ($950 million) credit facilities with longer (2010) final maturities and lower costs of

borrowings Refinancing risk and new financing risk has been diminished through debt maturity extensions and timely market financings The improvement in liquidity and capital structure has broadened the number of physical gas suppliers and financial

counterparties, improving both payment terms and pricing The investment in generating assets and the improved financial profile have increased the Utilities’ bargaining leverage with

merchant power producers in the Las Vegas Valley

The Company has demonstrated its commitment to an improved capital structure

The Company has a proactive and consistent fuel and purchased power hedging program

The Company has leveraged its improving operational profile and capital structure

7

SECTION 2:

Corporate Overview

8

Corporate Structure

• $1.88 billion in revenues• $132.7 million in earnings• $5.2 billion in assets• Approx. $35.3 million in dividends

to SPR • Serves Las Vegas / Henderson• 774,000 electric customers• 4,500 sq. mile service territory• Approx. 3,066 MW of generation• 5 % annual customer growth

(1997-2005)

• $1.1 billion in revenues• $48.2 million in earnings• $2.5 billion in assets• Approx. $23.9 million in dividends

to SPR • Serves Northern Nevada• 353,000 electric customers• 140,000 gas customers• 50,000 sq. mile service territory• 1,045 MW of generation• 514 MW under construction• 2.5 % annual customer growth

(1997-2005)

• Approx. $5.1 million in net income and dividends to SPR

• 50% / 50% JV with TransCanada

• 229 mile pipeline delivering gas to Reno

9

SECTION 3:

Operations & Generation Strategy

10

High Growth Service Territory

The state of Nevada has experienced an average annual population growth of 3.9% in the last 3 years vs. the national average of 1.1%.

11

High Growth Markets

518549 567

611 639669

703738

774808

842875

909

500

650

800

950

1100

1250

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Customers

1,000

1,200

1,400

1,600

1,800

2,000

Population

NPC Electric Customers Clark County Population

Fastest growing electric utility in the U.S., demonstrating industry-leading customer growth for 19 years.

Nevada PowerFaster growth than industry average, driven by new residential, manufacturing and warehousing (does not include gas distribution).

Sierra Pacific Power

Both NPC and SPPC continue to see high customer growth.

287 294302

310 315 322333

349 353359

369378 388

175

225

275

325

375

425

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

350

400

450

500

550

600

650

700

750

SPPC Electric Customers Northern Nevada Pop

287 294302

310 315 322333

349 353359

369378 388

175

225

275

325

375

425

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

350

400

450

500

550

600

650

700

750

SPPC Electric Customers Northern Nevada Pop

PopulationCustomers*

CAGR 2.5 %

CAGR 4.8%

Note: Customers are in thousands.

12

Diverse Customer Mix in 2005

Notes:

- For NPC, no commercial customers have left under AB 661, however Las Vegas Water District and Southern Nevada Water Authority went to T&D service under SB 211 in June 2005.

- For SPPC, Barrick moved to T&D service in November of 2005 under AB 661. Newmont Mining will remain a retail customer and sell energy to SPPC from their plant.

Total MWh Sales: 20,083,133

2005 SPPC - Customer Mix (MwH Sales)

Mining, 29.11%

All Other, 44.33%

Streetlights, 0.16%Wholesale, 0.88%

Residential, 25.52%

Total MWh Sales: 9,330,867

2005 NPC - Customer Mix (MwH Sales)

Public Authorities, 1.74%

Wholesale, 1.39%

All Other Commercial &

Industry, 35.55%

Residential, 41.27%

Gaming/Recreation/Restaurants,

20.05%

Nevada Power CompanyCustomer Mix (MwH Sales)

Sierra Pacific PowerCustomer Mix (MwH Sales)

All OtherCommercial & Industry,

44.33%

13

NPC Peak Loads and Resources

As seasonal peaks increase, NPC will meet demand spikes with purchased power, including short term tolling agreements.

No significant increases in base load generation expected to come online until 2012.

NPC’s Energy Supply Plan will likely continue to incorporate short-term and seasonal tolling agreements.

.

Note: Summer peaks include reserve margins.

Nevada Power CompanyAnnual Loads and Resources

3,133 3,133 3,533 3,733 3,733 3,733

771 771771 771 771 771305 305305

305 305 305

1,905 2,1121,944

1,992 2,208 2,339

380137093592

345233073195

7,1487,0176,8016,5536,3216,114

0

1000

2000

3000

4000

5000

6000

7000

8000

2006 2007 2008 2009 2010 2011

MW

NPC LT Contracts Qualifying Facilities

Purchased Power Winter Peak Summer Peak

14

SPPC Peak Loads and Resources

Beginning in 2008 seasonal peak loads will be largely met by SPPC’s generation.

Sierra Pacific Power CompanyAnnual Loads and Resources

1,029 1,029

1,543 1,543 1,543 1,543

50 49

338 356 359 377

85 85

85 85 85 85

656 681

83 97 108 107

180717851771172515481541

2,1122,0952,0812,025

1,8441,820

0

500

1000

1500

2000

2500

2006 2007 2008 2009 2010 2011

MW

SPPC LT Contracts Qualifying Facilities

Purchased Power Winter Peak Summer Peak

SPPC’s commitment to renewables will increase the percentage of power purchased from long-term contracts

Owned generation will increase significantly over the 2007-2001 period.

Note: Summer peaks include reserve margins.

15

Load Duration Forecast – Nevada Power Company

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Percent of Time

Lo

ad

(M

W)

20072012

2017 2022

NPC’s load duration curve indicates the unique energy demand requirements for Las Vegas’ southwestern desert mountain environment.

NPC Load Duration Forecast

Source: 2006 NPC Integrated Resource Plan.

16

Projected Hourly Peak Load – Nevada Power Company

The Las Vegas Valley energy demands are “needle peaking” in the summer, requiring NPC to either own or toll peaking plants, or to acquire firm transmission capacity.

NPC 2007 Hourly Peak Load

Source: 2006 NPC Integrated Resource Plan.

17

Generation Strategy

Completed Construction & Investments 1,200 MW high efficiency gas-fired combined cycle Chuck Lenzie Generation Station: Block 1 and

Block 2 online ahead of the PUCN target date of June 30, 2006. (approximately $416/KW); granted incentive return (3.0% above authorized ROE)

560 MW Silverhawk Generation Station acquired in January 2006 (approximately $500/KW) 80 MW CT at Harry Allen site

Approved & Current Construction PUCN approval for 514 MW gas-fired, combined cycle plant at Tracy, to be completed by summer of

2008; granted incentive return (1.5% above authorized ROE)

Filed & Pending Construction 1,500 MW Ely Energy Center 600 MW Combustion Turbine Clark Plant

Announced Retirements 222 MW Mojave 175 MW Clark Stations 1-3

Both Utilities are focusing on self-generated power. Nevada Power Company’s IRP filing on June 30, 2006 outlines construction plans for generation.

18

Generation Strategy

NPC 2006 Integrated Resource PlanNo New Generation

2007 - 2015

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Year

Lo

ad &

Res

ou

rce

(MW

)

Existing Generation Net Purchase Renewables Open Position Load + Reserves

Without new generation, Nevada Power Company’s open position would likely double by 2015.

19

Generation Strategy

NPC 2006 Integrated Resource PlanPreferred Plan

2007 - 2015

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Year

Lo

ad &

Res

ou

rce

(MW

)

Existing Generation Net Purchase

New Generation(Incl Renewables) Open Position

Load + Reserves

NPC’s preferred generation plan will maintain a relatively consistent open position through the year 2015.

20

Ely Energy Center: Generation & Transmission

The Ely Energy Center will replace current coal plant construction projects included in the 2005 Form 10-K

Two-750 MW Coal units – Unit One in service by 2011 with Unit Two coming on line by 2014

Costs of the initial power complex/transmission line is expected to be approximately $4 billion

Requested CWIP in rate base and 2.0% ROE incentive

Single control center• Redundancies may allow for lower reserve margins• Redundancies should allow for more competitive

purchased power agreements

250-mile 500 KV transmission infrastructure will create new energy options

• Interconnect Nevada Power and Sierra Pacific Power • Capacity for renewable energy resources

• Renewable resources built in eastern Nevada• Geothermal from north to south• Potentially move solar from south to north

Ely Energy Center will increase fuel diversity through coal fuel generation, reducing reliance on natural gas and oil.

21

Fuel Mix Comparison – NPC & SPPC

Ely Energy Center will increase both Utilities’ combined fuel diversification, diminishing reliance on gas and purchased power.

Nevada Power Company - Energy Mix

2008 2015

Renew9%

Gas48%

Purch25%

Coal18%

Total Natural Gas & Purchase

73%

Renew20%

Gas21%

Purch14%

Coal45%

Total Natural Gas &

Purchase

35%

22

SPR Remains Vigilant on Process Improvements

Consolidated functional activities

Integrated systems

Coordinated decision making and execution across utilities

Capitalized on benefits of our merger

In first quarter 2005 Sierra Pacific Resources announced SPR 2005 and Beyond.

23

Improved terms with our fuel suppliers

Better management of short-term investments and accounts payable

Improved crew scheduling

Increased efficiencies in our planning and design process

Implementation and integration of enhanced risk management systems


In 2006 our improved financial strength has allowed us to invest in and focus on process improvements that will increase our margins and reduce our risk profile, including:

24


Developing and increasing our technical talent

Further integrating our systems

Leveraging technology to reduce operating and maintenance expenses

With the approval of the Integrated Resource Plans and the rapid growth of the Utilities, we will address more opportunities, including:

25

SECTION 4:

Regulatory Update

26

Regulatory Environment Continues to Improve

SPR and the PUCN demonstrate harmonized efforts to manage the region’s energy costs.

Gradual Rate Adjustments vs. Rate Freezes

• Prudent, systematic and graduated increases have prevented extreme shocks

• Rates adapt more quickly to market changes

• Regulatory lag is diminished with frequent adjustments

• DEAA, BTGR and BTER are regularly adjusted

Average Retail Electric Revenue($/KWh)

$0.075

$0.088

$0.102

$0.115

2002 2003 2004 2005

NPC

SPPC

Note: Data source from 2004 and 2005 Forms 10-K.

Continued Support of Long-Term Capital Projects

• Construction Work in Progress (CWIP) recovery is allowed in rate base for certain cases (e.g., Tracy)

• “Critical facilities” status can increase the Companies’ earnings on equity by up to 5%, by project• 3% ROE incentive adder assigned to Lenzie; 1.5% ROE adder for Tracy

27

Regulatory Environment Continues to Improve

Hybrid Test Year • In May 2006 the PUCN proposed use of

the "hybrid" test year method • Utilities will be allowed to submit updates

of expected future costs and historical test period data for general rate cases

• Subject to state legislative review and approval (2007)

Strong Management Commitment • Gas rate cases to be filed every 3 years• Focus is on a single jurisdiction• Michael Yackira, EVP and CFO,

frequently testifies on behalf the Companies’ operational and financial strategies

BTGR: Base Tariff General Rate DEAA: Dfd Energy Acct Adj.BTER: Base Tariff Energy Rate UEC: Universal Electric Charge

Current Residential Rates ($/KWh)

BTGR BTER DEAA (1) UECTOTAL RATE

0.03550 0.06141 0.00748 0.00039 0.10500

0.04876 0.07000 0.00525 0.00039 0.12400

(1) NPC's DEAA will go into effect as of August 1, 2006. Rate shown is an approximation based on a two year recovery with the following schedule: .00009 from 8/1/06- 2/28/07, .00748 from 3/1/07-5/31/07, .00583 from 6/1/07-7/31/08.

Single jurisdiction allows for a focused and dedicated regulatory relationship.

28

Regulatory Update – Nevada Power Company

Deferred Energy Filing• New BTER stipulated and approved by the PUCN (annual increase $120.1 million)

• New rates went into effect May 1, 2006• Full recovery of $171.4 million in Fuel & Purchased Power expenses

• $20 million regulatory credit used to offset deferred energy balance• Recovery of costs over an asymmetrical 2-year period• New rates effective August 1, 2006

Integrated Resource Plan Filing• June 30, 2006

General Rate Case 2006 Filing• New rates effective mid-2007

Current authorized ROE is 10.25% (2003 Filing)

Frequent filings with the commission increase transparency and regulatory communication.

29

Regulatory Update – Sierra Pacific Power Company

Deferred Energy Filing• New BTER stipulated and approved by PUCN (annual increase $31 million)

• New rates for BTER effective May 1, 2006• Proposed $24.5 million in gas BTER

• New rates effective December 1, 2006• Stipulated and approved by PUCN full recovery $46.7 million of Fuel &

Purchased Power recovery over an asymmetrical 2-year period• New rates for DEAA effective July 1, 2006

General Rate Case 2005 - New rates effective as of May 2006• New authorized ROE is 10.60%• Electric revenues were readjusted to reflect lower projected costs• Received $4.4 million increase in gas revenue

• First Natural Gas General Rate Case since 1992

PUCN continues to approve full recovery of stipulated rates.

30

SECTION 5:

Financial Update

31

2005 Financial Performance

Full Year 2005 after tax consolidated earnings applicable to common stock of $82.2 million compared to $28.6 million in 2004

$132.7 million in net income at NPC compared to income of $104.3 million in 2004

$48.2 million in earnings applicable to common stock at SPPC compared to $14.7 million in 2004

2005 (after tax)Early Conversion costs and fees - $35.1 million

Legal Fees - $7.4 million

2004 (after tax)Goodwill impairment - $7.6 million

Disallowed merger costs - $ 3.8 million Tender/interest costs - $15.4 million

Piñon Pine disallowance - $ 30.6 million

The Company continues to see improving operating results.

32

Gross Margin

Year End Gross Margin increased YOY 6.4% at NPC and 7.7% at SPPC between 2004 and 2005

• Strong continued customer growth

• Increases in general rates

Gross margin, a non-GAAP financial metric, is used to measure income available to support other operating expenses of the business It helps to determine the profitability of the utility business, excluding fuel and purchased power.

(in 000s)2005 2004 2003 2005 2004 2003

Operating Revenues: Electric 1,883,267$ 1,784,092$ 1,756,146$ 967,427$ 881,908$ 868,280$ Gas 178,270 153,752 161,586Subtotal 1,883,267$ 1,784,092$ 1,756,146$ 1,145,697$ 1,035,660$ 1,029,866$

Energy Costs: Purchased Power 963,888 764,347 781,014 352,098$ 304,955$ 364,205$ Fuel for Power Generation 277,083 235,404 282,968 233,653 224,074 197,569Deferred Energy Costs - Disallowed 0 1,586 45,964 0 0 45,000Deferral of Energy Costs - Electric-Net (45,668) 135,973 95,911 8,110 7,060 1,982Gas Purchased for Resale 140,850 121,526 111,675Deferred Energy Costs - Gas - Net (749) (4,136) 16,155Subtotal $1,195,303 $1,137,310 $1,205,857 $733,962 $653,479 $736,586

Gross Margin By Segment: Electric 687,964$ 646,782$ 550,289$ 373,566$ 345,819$ 259,524$ Gas 38,169 36,362 33,756

Gross Margin 687,964$ 646,782$ 550,289$ 411,735$ 382,181$ 293,280$

Sierra Pacific Power Company Nevada Power Company (Dollars in thousands)

33

2006 Year to Date Financial Performance

The Companies continue to see operating improvements driven by strong customer growth, decreased interest charges and increases in Other Income due to the commercial operation of the Chuck Lenzie Generation Station.

Improving Operating Results

Six months ended June 30, 2006 consolidated earnings applicable to common stock of $30.4 million, or $.14/share, compared to a loss of $435,000 in 2005

$25.2 million at NPC compared to net income of $12.9 million in 2005 $21.3 million in earnings applicable to common stock at SPPC compared to net

income of $15.1 million in 2005 Strong continued customer growth and warmer weather contributed to the

improved results

34

Total Capitalization

(1) For purposes of this presentation, total capitalization includes current maturities of long-term debt.

Year-End Capitalization As of December 31, 2005

(Dollars in Thousands)

Amt % of Total Amt % of Total Amt % of TotalCurrent Maturities of Long-Term Debt 58,909$ 0.98% 6,509$ 0.16% 52,400$ 2.96%Long Term Debt 3,817,122 63.77% 2,214,063 55.59% 941,804 53.15%Common Equity 2,060,154 34.42% 1,762,089 44.24% 727,777 41.07%Preferred Equity 50,000 0.84% 0 0.00% 50,000 2.82%Total (1) 5,986,185$ 100.00% 3,982,661$ 100.00% 1,771,981$ 100.00%

2006 1Q Capitalization As of March 31, 2006

(Dollars in Thousands)

Amt % of Total Amt % of Total Amt % of TotalCurrent Maturities of Long-Term Debt 196,325$ 3.05% 163,925$ 3.82% 32,400$ 1.72%Long Term Debt 4,122,580 64.11% 2,388,210 55.62% 1,073,197 56.87%Common Equity 2,061,378 32.06% 1,741,843 40.56% 731,438 38.76%Preferred Equity 50,000 0.78% 0 0.00% 50,000 2.65%Total (1) 6,430,283$ 100.00% 4,293,978$ 100.00% 1,887,035$ 100.00%

SPR NPC SPPC

SPR NPC SPPC

35

Financial and Credit Profile

• Net Income: $138 million• FFO: $288 million• Adjusted FFO: $184 million• Debt: $2,552 million• Debt/Cap: 59.44%• FFO/Interest Coverage: 2.82x• Debt/FFO: 8.85x


Note: Figures are LTM as of March 31,2006. Reconciliation for LTM and non-GAAP figures can be found in the Appendix.


Rating: Ba1/BB/BB+ (Secured)

Rating: B1/B-/B+ (Unsecured)

Rating: Ba1/BB/BB+ (Secured)

36

0

100

200

300

400

500

600

2003 2004 2005 LTM 1Q06

FFO Adjusted FFO

$253

$167

$406

$293$303

$239

$293

$189

Improving Credit Metrics – Sierra Pacific Resources

Total Debt/FFO

4.00

10.00

16.00

22.00

28.00

2003 2004 2005 LTM 1Q06

22.85x

13.98x 13.22x 14.25x

SPR: FFO and Adjusted FFO

The Company uses non-GAAP measures of cash flow to analyze its credit metrics.

Notes: - Adjusted FFO includes adjustments for deferred energy costs. - Reconciliation of non-GAAP metrics can be found in the Appendix.

FFO Interest Coverage

0.50

1.00

1.50

2.00

2.50

3.00

3.50

2003 2004 2005 LTM 1Q06

1.45x

1.93x1.95x

2.00x

37

0

50

100

150

200

250

300

350

400

2003 2004 2005 LTM 1Q06

FFO Adjusted FFO

$163

$236

$343

$228

$184

$294

$240

$288

Improving Credit Metrics – Nevada Power Company


0.50

1.00

1.50

2.00

2.50

3.00

3.50

2003 2004 2005 LTM 1Q06

1.84x

2.59x

2.87x 2.82x

NPC: FFO and Adjusted FFO


0

50

100

150

200

250

300

350

400

2003 2004 2005 LTM 2Q06

FFO Adjusted FFO


Total Debt/FFO

4.00

10.00

16.00

22.00

28.00

2003 2004 2005 LTM 1Q06

12.48x10.02x

7.54x8.85x

38

-10

40

90

140

190

2003 2004 2005 LTM 1Q06

FFO Adjusted FFO

$84

$71

$160$158

$105

$140

$95

$141

Improving Credit Metrics – Sierra Pacific Power


0.50

1.75

3.00

4.25

5.50

2003 2004 2005 LTM 1Q06

1.71x

3.44x2.98x

2.48x

SPPC: FFO and Adjusted FFO



Total Debt/FFO

4.00

10.00

16.00

22.00

28.00

2003 2004 2005 LTM 1Q06

14.39x

6.23x 7.10x10.53x

39

Improving Financial Flexibility

Decreased Refinancing Risks No sizable maturities until

2008: $320mm at SPPC

Improved Liquidity Credit Facility of $600mm at NPC and

$350mm at SPPC Maturity in 2010 Current cost LIBOR + .875%

Reduced Interest Expense Annualized cash interest savings due to

recent refinancings, debt redemption and conversion offer

NPC Redemption Notices On July 24, 2006, NPC provided notices of

redemption to holders of the Company’s Clark County and Coconino County tax-exempt bonds (shown in the table provided)

Increased available G&R bond capacity

Recent refinancings have strengthened the balance sheet through lower debt levels and interest costs. In addition to significant improvements in operating cash flows and net income, SPR has diminished refinancing risk, improved its liquidity and reduced ongoing interest expense.

Consolidated Debt Maturity Profile(in millions)

0100200300400500600700800900

1000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Sierra Pac ific Resource Nevada Power Company

Sierra Pac ific Power Company Revolving Credit Fac ility

Maturity of Credit Facilities

Issuer Cpn Principal

Series 1996 due 2036 6.375 20,000,000 Series 1997B due 2032 5.800 20,000,000 Series 1995E due 2022 5.350 13,000,000 Series 1992B due 2019 6.600 39,500,000

Nevada Power Redemption Notices

40

2006 Financing Activities

Recent offerings at NPC and SPPC have refinanced high coupon debt and replaced First Mortgage Bonds with General & Refunding Mortgage Bonds.

Issuer Security

Size ($mm) Coupon

Reference Benchmark

Credit Spread

Issue Date Maturity Use of Proceeds

Series N Series O

G&R

$120 $75

6.65% 6.50%

30 Year Treasury 10 Year Treasury

200 bps 178 bps

6/20/20064/01/2036 5/18/2018

Funding of tender offer for 10 7/8% Series Edue 2009, and new money used to pay downrevolving credit.

Series O G&R

$250 6.50% 10 Year Treasury 140 bps 5/9/2006 5/18/2018

Redemption of the following: $78mm ofSeries 1992C due 2022, $72mm 7.75%Junior Debentures due 2038. $96mm used topay down the revolving credit facility at NPC.

Series N G&R


Redemption of the following: $35mm ofSeries Z due 2023, $105mm of the IndustrialDevelopment Bonds Series 1992A due 2022and $123mm of Junior SubordinatedDebentures due 2037.

Series M G&R


Redemption of the following: $110mm of MTNSeries A due 2022, $58mm of MTN Series Bdue 2023 and $50mm of MTN Series C due2006. Additionally, $51mm of Series APreferred Stock due 2006 and $21mm in newmoney.

$210 5.95% 10 Year Treasury 155 bps 1/10/2006 3/15/2016 Financial acquisition of Silverhawk.Series M

G&R

41

Conclusion

Addressing the challenges and benefits of a high growth rate area Improving financial and operating performance as well as financial flexibility Refinancing debt at significantly lower interest expense Greatly improving liquidity Growing generation portfolio

• Improves earnings, cash flow and credit metrics

• Reduce price volatility and market risk exposure for customers and company History of improving relationships with regulators, customers and community

The company continues to demonstrate high growth, improved performance, stronger credit and reduced risk.

42

Appendix

43

Non-GAAP Reconciliation - SPR

Sierra Pacific ResourcesFunds From Operations (FFO)

LTM endedMarch 31,

2006 2005 2005 2004 2003 2006

Net Income (Loss) 2,217$ (8,511)$ 86,137$ 32,471$ (136,629)$ 96,865$

Non-Cash items included in net incomeDepreciation and amortization 57,461 52,789 214,662 205,647 191,259 219,334 Deferred taxes and deferred investment tax credit (1,822) (4,442) 41,609 33,690 (50,724) 44,229 AFUDC (12,134) (8,412) (45,013) (14,536) (11,741) (48,735) Deferred Energy Costs Disallowed - - - 1,586 90,964 - Goodwill Impairment - - - 11,695 - - Early retirement and severance amortization - - - - 2,786 - Unrealized loss on derivative instrument - - - - 46,065 - Impairment of assets of subsidiary - - - - 32,911 - Loss on disposal of discontinued operations - - - 2,346 9,555 - Plant Costs disallowed - - - 47,092 - - Other non-cash (3,990) 511 (4,119) (27,353) (7,131) (8,620) Funds from Operations (Before Deferred Energy Costs) 41,732 31,935 293,276 292,638 167,315 303,073 Amortization Deferred energy costs - electric 32,560 55,854 188,221 265,418 250,134 164,927 Amortization Deferred energy costs - gas 3,021 (466) 1,446 3,242 13,095 4,933 Deferral of energy costs - electric plus terminated suppliers (34,776) (16,630) (241,103) (1) (147,589) (179,826) (259,249) Deferral of energy costs - gas 1,592 18 (2,519) (7,480) 2,592 (945) Payment to terminating supplier (65,368) - - - - (65,368) Proceeds from claim on terminating supplier 41,365 - - - - 41,365 Adjusted Funds from Operations 20,126$ 70,711$ 239,321$ 406,229$ 253,310$ 188,736$

Long-term Debt 4,122,580 4,060,012 3,817,122 4,081,281 3,579,674 4,122,580 Current maturities of long term debt plus short-term borrowings 196,325 28,593 58,909 8,491 243,970 196,325 Total Debt 4,318,905$ 4,088,605$ 3,876,031$ 4,089,772$ 3,823,644$ 4,318,905$

Preferred Stock 50,000 50,000 50,000 50,000 50,000 50,000

Net interest expense 72,599 79,990 284,927 306,427 366,282 277,536 AFUDC 6,002 4,603 24,691 8,587 5,976 26,090 Adjusted Interest Expense 78,601$ 84,593$ 309,618$ 315,014$ 372,258$ 303,626$

Debt/Funds from operations 13.22x 13.98x 22.85x 14.25xDebt/adjusted FFO 16.20x 10.07x 15.09x 22.88xFunds from Operations Interest Coverage 1.95x 1.93x 1.45x 2.00xAdjusted Funds From Operations Interest Coverage 1.77x 2.29x 1.68x 1.62xCommon shareholders equity 2,060,154$ 1,498,616$ 1,435,394$ 2,061,378$ Total Capitalization 5,986,185$ 5,638,388$ 5,309,038$ 6,430,283$ Debt/Capitalization 64.75% 72.53% 72.02% 67.17%

(1) For 2005, deferral of energy costs electric plus terminated suppliers does not include the non-cash net change in deferred energy of $218 million associated primarily with the November 2005 settlement with Enron.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES(Dollars in thousands)

Quarter ended March 31, Year ended December 31,

44

Non-GAAP Reconciliation - NPC

Nevada Power CompanyFunds From Operations (FFO)

LTM endedMarch 31,

2006 2005 2005 2004 2003 2006

Net Income (Loss) (3,296)$ (8,033)$ 132,734$ 104,312$ 19,277$ 137,471$ -

Non-Cash items included in net income - Depreciation and amortization 34,237 30,402 124,098 118,841 109,655 127,933 Deferred taxes and deferred investment tax credit (4,820) (3,692) 86,910 57,066 2,710 85,782 AFUDC (10,801) (7,803) (41,870) (9,969) (5,545) (44,868) Deferred Energy Costs Disallowed - - - 1,586 45,964 - Plant Costs disallowed - - - - - - Other non-cash (4,436) 6,020 (7,433) (44,149) (8,962) (17,889) Funds from Operations (Before Deferred Energy Costs) 10,884 16,894 294,439 227,687 163,099 288,429 Amortization Deferred energy costs 21,278 46,673 131,471 228,765 204,610 106,076 Deferral of energy costs plus terminated suppliers (23,286) (10,280) (186,338) (1) (112,992) (131,591) (199,344) Payment to terminating supplier (37,410) - - - - (37,410) Proceeds from claim on terminating supplier 26,391 - - - - 26,391 Adjusted Funds from Operations (2,143)$ 53,287$ 239,572$ 343,460$ 236,118$ 184,142$

Long-term Debt 2,388,210 2,272,669 2,214,063 2,275,690 1,899,709 2,388,210 Current maturities of long term debt 163,925 6,195 6,509 6,091 135,570 163,925 Total Debt 2,552,135$ 2,278,864$ 2,220,572$ 2,281,781$ 2,035,279$ 2,552,135$

Net interest expense 41,194 41,548 134,657 137,388 190,472 134,303 AFUDC 5,372 4,313 23,187 5,738 2,700 24,246 Adjusted Interest Expense 46,566$ 45,861$ 157,844$ 143,126$ 193,172$ 158,549$

Debt/Funds from operations 7.54x 10.02x 12.48x 8.85xDebt/adjusted FFO 9.27x 6.64x 8.62x 13.86xFunds from Operations Interest Coverage 2.87x 2.59x 1.84x 2.82xAdjusted Funds From Operations Interest Coverage 2.52x 3.40x 2.22x 2.16xCommon shareholders equity 1,762,089$ 1,436,788$ 1,174,645$ 1,741,843$ Total Capitalization 3,982,661$ 3,718,569$ 3,209,924$ 4,293,978$ Debt/Capitalization 55.76% 61.36% 63.41% 59.44%




45

Non-GAAP Reconciliation - SPPC

Sierra Pacific Power CompanyFunds From Operations (FFO)

LTM endedMarch 31,

2006 2005 2005 2004 2003 2006

Net Income (Loss) 13,272$ 12,137$ 52,074$ 18,577$ (23,275)$ 53,209$ -

Non-Cash items included in net income - Depreciation and amortization 23,224 22,387 90,569 86,806 81,514 91,406 Deferred taxes and deferred investment tax credit (41,878) (2,848) 209 11,640 (23,676) (38,821) AFUDC (1,333) (609) (3,143) (4,567) (6,196) (3,867) Deferred Energy Costs Disallowed - - - - 45,000 - Early retirement and severance amortization - - - - 2,786 - Plant Costs disallowed - - - 47,092 - - Other non-cash 1,090 (1,641) 318 474 (5,203) 3,049 Funds from Operations (Before Deferred Energy Costs) (5,625) 29,426 140,027 160,022 70,950 104,976 Amortization Deferred energy costs - electric 11,282 9,181 56,750 36,653 45,524 58,851 Amortization Deferred energy costs - gas 3,021 (466) 1,446 3,241 13,095 4,933 Deferral of energy costs - electric plus terminated suppliers (11,490) (6,350) (54,765) (1) (34,598) (48,236) (59,905) Deferral of energy costs - gas 1,592 18 (2,519) (7,480) 2,592 (945) Payment to terminating supplier (27,958) - - - - (27,958) Proceeds from claim on terminating supplier 14,974 - - - - 14,974 Adjusted Funds from Operations (14,204)$ 31,809$ 140,939$ 157,838$ 83,925$ 94,926$

Long-term Debt 1,073,197 973,623 941,804 994,309 912,800 1,073,197 Current maturities of long term debt plus short-term borrowings 32,400 22,398 52,400 2,400 108,400 32,400 Total Debt 1,105,597$ 996,021$ 994,204$ 996,709$ 1,021,200$ 1,105,597$

Preferred Stock 50,000 50,000 50,000 50,000 50,000 50,000

Net interest expense 18,156 18,163 69,067 62,831 96,093 69,060 AFUDC 630 290 1,504 2,849 3,276 1,844 Adjusted Interest Expense 18,786$ 18,453$ 70,571$ 65,680$ 99,369$ 70,904$

Debt/Funds from operations 7.10x 6.23x 14.39x 10.53xDebt/adjusted FFO 7.05x 6.31x 12.17x 11.65xFunds from Operations Interest Coverage 2.98x 3.44x 1.71x 2.48xAdjusted Funds From Operations Interest Coverage 3.00x 3.40x 1.84x 2.34xCommon shareholders equity 727,777$ 705,395$ 593,771$ 731,438$ Total Capitalization 1,771,981$ 1,752,104$ 1,664,971$ 1,887,035$ Debt/Capitalization 56.11% 56.89% 61.33% 58.59%




46

Non-GAAP Reconciliation - SPR

Sierra Pacific ResourcesEBITDA

LTM endedMarch 31,

2006 2005 2005 2004 2003 2006Net Income (Loss) 2,217$ (8,511)$ 86,137$ 32,471$ (136,629)$ 96,865$

Interest Charges 72,599 79,990 284,927 306,427 366,282 277,536 Income taxes 1,286 (4,566) 43,173 20,631 (44,207) 49,025 Depreciation and Amortization 57,461 52,789 214,662 205,647 191,259 219,334

EBITDA 133,563$ 119,702$ 628,899$ 565,176$ 376,705$ 642,760$

EBITDA/Interest Expense 2.21x 1.84x 1.03x 2.32xDebt/EBITDA 6.16x 7.24x 10.15x 6.72x

Sierra Pacific Resources

Net interest expense 72,599$ 79,990$ 284,927$ 306,427$ 366,282$ 277,536$

Long-Term Debt 4,122,580$ 4,060,012$ 3,817,122$ 4,081,281$ 3,579,674$ 4,122,580$ Current maturities of long term debt plus short-term borrowings 196,325 28,593 58,909 8,491 243,970 196,325 Total Debt 4,318,905$ 4,088,605$ 3,876,031$ 4,089,772$ 3,823,644$ 4,318,905$


Year ended December 31,Quarter ended March 31,

47

Non-GAAP Reconciliation – NPC & SPPC

Nevada Power CompanyEBITDA

LTM endedMarch 31,

2006 2005 2005 2004 2003 2006Net Income (Loss) (3,296)$ (8,033)$ 132,734$ 104,312$ 19,277$ 137,471$

Interest Charges 41,194 41,548 134,657 137,388 190,472 134,303 Income taxes (1,686) (3,692) 63,995 56,572 (614) 66,001 Depreciation and Amortization 34,237 30,402 124,098 118,841 109,655 127,933

- EBITDA 70,449$ 60,225$ 455,484$ 417,113$ 318,790$ 465,708$


Nevada Power Company


Long-Term Debt 2,388,210$ 2,272,669$ 2,214,063$ 2,275,690$ 1,899,709$ 2,388,210$ Current maturities of long term debt 163,925 6,195 6,509 6,091 135,570 163,925 Total Debt 2,552,135$ 2,278,864$ 2,220,572$ 2,281,781$ 2,035,279$ 2,552,135$

Sierra Pacific Power CompanyEBITDA

LTM endedMarch 31,

2006 2005 2005 2004 2003 2006Net Income (Loss) 13,272$ 12,137$ 52,074$ 18,577$ (23,275)$ 53,209$

Interest Charges 18,156 18,163 69,067 62,831 96,093 69,060 Income Taxes 7,672 7,055 28,379 325 (12,237) 28,996 Depreciation and Amortization 23,224 22,387 90,569 86,806 81,514 91,406

EBITDA 62,324$ 59,742$ 240,089$ 168,539$ 142,095$ 242,671$


Sierra Pacific Power Company


Long-Term Debt 1,073,197$ 973,623$ 941,804$ 994,309 912,800 1,073,197$ Current maturities of long term debt plus short-term borrowings 32,400 22,398 52,400 2,400 108,400 32,400 Total Debt 1,105,597$ 996,021$ 994,204$ 996,709$ 1,021,200$ 1,105,597$




Fixed Income Presentation July 31, 2006. 2 Forward Looking Statements & Non-GAAP Measures Safe...

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