Rise in Sierra Pacific earnings

RENO " Sierra Pacific Resources today reported that second-quarter income rose, bolstered by rate increases and recovered construction costs for two power plants despite lower operating revenue.

The parent company of Nevada's two electric utilities said income for the quarter ending June 30 increased to $36.1 million, or 15 cents per share, up from $25.7 million, or 12 cents per share, for the same quarter last year.

Revenue fell to $838.7 million from $851.8 million.

The results were below expectations of analysts surveyed by Thomson Financial. They projected earnings of 17 cents per share and revenue of $884 million.

Shares fell to $11.47, down 28 cents or 2.4 percent, in early trading.

Sierra Pacific Resources, headquartered in Reno, is the holding firm of Nevada's two main utilities, Nevada Power Co. in southern Nevada and Sierra Pacific Power Co. in the north. They serve a combined 1.3 million customers.

Nevada Power reported net income of $33.2 million, up from $23.6 million for the prior-year quarter.

Company executives blamed Nevada Power's decline in revenue, to $570.2 million from $575.1 million, on cooler weather during the spring that lowered demand for electricity to power air conditioners, as well as customer conservation efforts.

In northern Nevada, Sierra Pacific Power reported income of $10.8 million, up from $10 million in 2007. Revenue dropped $8.2 million, to $268.5 million.

Retail megawatt hour sales were down 6.1 percent at Nevada Power and 2 percent at Sierra Pacific Power.

"We are very pleased that our financial and operating results remain strong as we address the challenges that lie ahead," said Michael Yackira, Sierra Pacific president and chief executive.

While the softening economy has slowed growth, Yackira said the long-term growth outlook remains strong.

In southern Nevada, the average number of residential, commercial and industrial electric customers served by Nevada Power increased 1.1 percent, 3.1 percent and 3.4 percent, respectively, during the last six months, compared with the same period in 2007, the company said.

Yackira said growth would continue as three casino resort projects under construction on the Las Vegas Strip open and hire thousands of workers.

At Sierra Pacific Power, residential, commercial and industrial customers increased 0.9 percent, 2.4 percent and 2 percent.