Reno-based Sierra Pacific Resources last week wrestled with uneasy shareholders who eager to find out what the future holds for Las Vegas-based Nevada Power Co. By Thursday, the holding company for Nevada’s two major private-sector electric utilities named a new president for the utility and vowed to fight pending public sector takeover attempts.

Corporate officials conceded to a group of shareholders at an annual meeting last Monday that they have lost much of their investment in the past year, but assured them that the employees at Sierra’s two beleaguered Nevada power utilities remain focused.

A public takeover of Las Vegas-based Nevada Power won’t work, said CEO Walt Higgins. Blackouts are not an option either, he added.

Noting that the Southern Nevada Water Authority board has indicated it has harbored a desire to bid on Nevada Power for several years, Higgins said the pubic entity’s decision to hire financial and investment advisors for a possible deal still has not provided any “specifics on the proposed offer and left many unanswered questions.” Thus, at this point he told shareholders, “it is impossible [for us] to sufficiently respond.”

Sierra Pacific on Thursday named the former head of the Las Vegas Chamber of Commerce, Donald “Pat” Shalmy, as the Nevada Power president. Shalmy has been with the corporation as a senior vice president for just two months. The 61-year-old well-known local business leader will head the utility’s efforts to defeat a local nonbinding ballot measure asking voters if they favor forming a not-for-profit electric utility to replace Nevada Power.

Shalmy last week reiterated what the Sierra Pacific Resources senior executives have been saying for several weeks: (1) the Las Vegas-based utility is not for sale; (2) the ballot measure is misleading in masking a government takeover attempt; and (3) halfway through the summer Nevada Power has demonstrated that its reliability is in tact, despite the financial burden it has carried since last March when state regulators disallowed almost half of a $922 million three-year rate increase to cover unrecovered wholesale power costs from last year’s price spikes.

Shalmy said he would also be dealing with the Southern Nevada Water Authority’s unsolicited move to eventually buy Nevada Power and turn it into a public sector utility. “Philosophically, I feel very strongly that private enterprise can provide certain services better than the government,” Shalmy told the Las Vegas Review-Journal Thursday.

While defending the utility company’s decisions in the midst of last year’s western power supply/price crisis to lock in long-term supplies and the steps it has taken to reverse what it thinks are adverse state regulatory decisions on its retail rates, Higgins acknowledged that the two Sierra Pacific Resources utilities (Sierra Pacific Power being the second one) face “a long and difficult journey ahead.”

Higgins said the company must take more steps to conserve cash after fully drawing down on bank lines of $350 million for the two utilities. Sierra Pacific has dropped planned capital expenses by $125 million and suspended its common stock dividend to conserve another $80 million.

Nevada Power has authority from the Nevada Public Utilities Commission to sell up to $300 million in long-term, secured bonds, but Higgins told shareholders that “it remains to be seen how willing the market will be to accept new debt.” The Sierra Pacific CEO called the past year “extremely difficult,” noting the company has had to absorb close to $500 million in energy costs that they were not allowed by state regulators to recover in rates. “The consequences have been devastating,” Higgins said. The situation has been “painful” for shareholders, customers and employees alike, he added.

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