Customers and leaders of this state can be confident that we are planning and investing in the infrastructure that will protect and serve Nevada in the future. We have done everything within our control to ensure reliability and have signed long-term contracts for firm power with wholesalers from throughout the West.

We are well along in our plans to invest more than a quarter of a billion dollars in new transmission networks in Nevada. The new transmission lines will bring energy where it is needed to attract much-needed new generating capacity to our state.

New Generating Plants in Nevada -- As many as 14 new power plants could be developed in Nevada by competitive generation companies. Governor Kenny Guinn, in his Energy Protection Plan announced earlier this year, ordered a streamlining of the permit appeal process from its previous length of 12-24 months to no more than 30 days. This expedited approval process has greatly accelerated the construction of needed power plants. One new plant, located in Storey County approximately 20 miles east of Reno, went on line in late June and is already generating electricity for Sierra Pacific customers.

This additional energy will provide enough power to meet much of Nevada's peak demand. But, without a way to transport that newly created power, it cannot get to the homes and businesses that are counting on it.

Centennial Projects -- In southern Nevada, the Centennial Projects will create a high capacity energy network to connect Nevada Power customers to new sources of power. This new infrastructure will enable the utility to supply roughly 3,000 megawatts of new energy to southern Nevada, helping to assure reliability and reducing customer dependence on high-cost peak power.

At least 100 miles of new and upgraded transmission lines must be constructed to connect customers to these new power sources. The process for selecting routes will seek to optimize the use of existing corridors wherever possible to minimize the impact on the Las Vegas Valley.

With project route studies and the permitting process already under way, Nevada Power will be helping to distribute the power we currently generate in southern Nevada and that which we obtain from the western power grid. The Centennial Projects will also allow the distribution of power from new generation plants in the area.

Falcon to Gonder Project - To further meet growing energy needs in northern Nevada, Sierra Pacific plans to construct, operate and maintain a new 345 kilovolt overhead transmission line in north central Nevada. An application for the Falcon to Gonder project has been filed with the Bureau of Land Management. Upon approval, the project would connect existing electrical facilities at the Falcon substation (north of Dunphy) to facilities at the Gonder substation (north of Ely.)

The project would improve Sierra Pacific's electric transmission system import capability by 260 megawatts and would enable the utility to provide electric transmission service between Nevada, Idaho, Utah and the Northwest. The Falcon to Gonder project is scheduled to begin construction in April 2002 and be completed by June 2003.

Tuscarora Pipeline Expansion - The Tuscarora Gas Transmission Company plans to expand its pipeline system to meet the growing needs of natural gas customers in northern Nevada. The expanded capacity will also serve two new power generation facilities near Tracy and Wadsworth, Nevada. A pipeline subsidiary of Sierra Pacific Resources holds a 50% interest in the Tuscarora Gas Transmission Company.