Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-4
REGISTRATION STATEMENT
UNDER
UNDER THE SECURITIES ACT OF 1933
Nevada Power Company
(Exact name of registrant as specified in its charter)
NEVADA
NEVADA
4911
(Primary Standard Industrial Classification Code No.)
88-0420104
(I.R.S. Employer Identification No.)
6226 West Sahara Avenue
Las Vegas, Nevada 89146
(702) 367-5000
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
with a copy to:
Paul J. Kaleta, Esq.
Senior Vice President, General Counsel and Corporate Secretary
Nevada Power Company
6226 West Sahara Avenue
Las Vegas, Nevada 89146
(702) 367-5690
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Withwith a copy to:
William C. Rogers, Esq.
Choate, Hall & Stewart LLP
Two International Place
Boston, Massachusetts 02109
(617) 248-5000
Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this registration statement becomes effective.
If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. o¨
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o¨
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o¨
CALCULATION OF REGISTRATION FEE
| Proposed Maximum | Proposed Maximum | Amount of | ||||||||||
| Title of Each Class of | Amount to be | Offering | Aggregate | Registration | ||||||||
| Securities to be Registered | Registered | Price Per Unit(1) | Offering Price(1) | Fee | ||||||||
57/8% General and Refunding Mortgage Notes, Series L, due 2015 | $250,000,000 | 100% | $250,000,000 | $29,425 | ||||||||
Title of Each Class of Securities to be Registered | Amount to be Registered | Proposed Maximum Offering Price Per Unit(1) | Proposed Maximum Aggregate Offering Price(1) | Amount of Registration Fee | ||||||||
5.95% General and Refunding Mortgage Notes, Series M, due 2016 | $ | 210,000,000 | 100 | % | $ | 210,000,000 | $ | 22,470 | ||||
6.650% General and Refunding Mortgage Notes, Series N, due 2036 | $ | 250,000,000 | 100 | % | $ | 250,000,000 | $ | 26,750 | ||||
6.50% General and Refunding Mortgage Notes, Series O, due 2018 | $ | 250,000,000 | 100 | % | $ | 250,000,000 | $ | 26,750 | ||||
Totals | $ | 710,000,000 | 100 | % | $ | 710,000,000 | $ | 75,970 | ||||
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
The Registrant hereby amendsinformation in this Registration Statement on such date or dates asprospectus is not complete and may be necessary to delay its effective datechanged. We may not complete the exchange offers and issue and deliver these securities until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordanceregistration statement filed with Section 8(a) of the Securities Act of 1933and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any state where the offer or until the Registration Statement shall become effective on such date as the Commission, acting pursuantsale is not permitted.
Subject to said Section 8(a), may determine.
Nevada Power Company Is Offering To Issue Its
| 5.95% General and Refunding Mortgage Notes, Series M, due 2016 | 6.650% General and Refunding Mortgage Notes, Series N, due 2036 | 6.50% General and Refunding Mortgage Notes, Series O, due 2018 | ||
(Registered Under the Securities Act of 1933) In Exchange for Its | (Registered Under the Securities Act of 1933) In Exchange for Its | (Registered Under the Securities Act of 1933) In Exchange for Its | ||
| 6.650% General and | 6.50% General and Refunding Mortgage Notes, Series O, due 2018 | |||||
(Not Registered Under the Securities Act of 1933) | ||||||
(Not Registered Under the Securities Act of 1933) | (Not Registered Under the |
The exchange offers
You should carefully consider the Each broker-dealer that receives new notes for its own account pursuant to The Securities and Exchange Commission and state regulators have not approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The date of this prospectus is , “RISK FACTORS”“RISK FACTORS” beginning on page 89 of this prospectus before participating in thisthe exchange offer.offers and exchanging old notes for new notes.theany exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such new notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new notes received in exchange for old notes where such old notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. Nevada Power Company has agreed that, for a period of one year after the Expiration Date (as defined herein), it will make this prospectus available to any broker-dealer for use in connection with any such resale. See “PLAN OF DISTRIBUTION.”2006.2005.
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THIS PROSPECTUS INCORPORATES BY REFERENCE IMPORTANT BUSINESS AND FINANCIAL INFORMATION ABOUT NEVADA POWER COMPANY THATCOMPANY. WE ARE PROVIDING TO EACH PERSON TO WHOM THIS PROSPECTUS IS NOT INCLUDED IN OR DELIVERED WITH THIS PROSPECTUS.A COPY OF OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2005 AND OUR QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2006. SEE “WHERE YOU CAN FIND MORE INFORMATION.” YOU MAY OBTAIN COPIES OF DOCUMENTS CONTAINING SUCH INFORMATIONINCORPORATED BY REFERENCE INTO THIS PROSPECTUS FROM US, WITHOUT CHARGE, BY EITHER CALLING OR WRITING TO US AT:
NEVADA POWER COMPANY
6226 W. SAHARA AVENUE
LAS VEGAS, NEVADA 89146
ATTENTION: ASSISTANT TREASURER
TELEPHONE: (702) 367-5000
IN ORDER TO OBTAIN TIMELY DELIVERY, YOU MUST REQUEST DOCUMENTS FROM US NO LATER THAN , 2005,2006, WHICH IS FIVE BUSINESS DAYS BEFORE THE EXPIRATION OF THE EXCHANGE OFFEROFFERS ON , 2005.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR IN THE LETTER OF TRANSMITTAL IN CONNECTION WITH THE EXCHANGE OFFER.OFFERS. WE HAVE NOT AUTHORIZED ANY OTHER PERSON TO PROVIDE YOU WITH ANY INFORMATION OTHER THAN THIS PROSPECTUS. IF ANYONE PROVIDES YOU WITH DIFFERENT OR INCONSISTENT INFORMATION, YOU SHOULD NOT RELY ON IT. YOU SHOULD ASSUME THAT THE INFORMATION APPEARING IN THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE ON THE FRONT COVER OF THIS PROSPECTUS. OUR BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS AND PROSPECTS MAY HAVE CHANGED SINCE THAT DATE. THIS PROSPECTUS IS NOT AN OFFER TO EXCHANGE THEANY OLD NOTES FOR THEANY NEW NOTES, AND IT IS NOT SOLICITING AN OFFER TO EXCHANGE THEANY OLD NOTES FOR THEANY NEW NOTES, IN ANY JURISDICTION IN WHICH THE EXCHANGE OFFER ISOFFERS ARE NOT PERMITTED.
The information in this prospectus includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to anticipated financial performance, management’s plans and objectives for future operations, business prospects, outcome of regulatory proceedings, market conditions and other matters, which may occur or be realized in the future. Words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan” and “objective” and other similar expressions identify those statements that are forward-looking. These statements are based on management’s beliefs and assumptions and on information currently available to management. Actual results could differ materially from those contemplated by the forward-looking statements. In addition to any assumptions and other factors referred to specifically in connection with such statements, factors that could cause our actual results to differ materially from those contemplated in any forward-looking statement include, among others, those described in the “RISK FACTORS” section of this prospectus beginning on page 89 and the following:
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Other factors and assumptions not identified above may also have been involved in deriving these forward-looking statements, and the failure of those other assumptions to be realized, as well as other factors, may also cause actual results to differ materially from those projected. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking statements.
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Our Company
We are a regulated public utility engaged in the distribution, transmission, generation, purchase and sale of electric energy in the southern Nevada communities of Las Vegas, North Las Vegas, Henderson, Searchlight, Laughlin and their adjoining areas. We also provide electricity toareas, including Nellis Air Force Base and the Department of Energy at Mercury and Jackass Flats at theEnergy’s Nevada Test Site.Site in Nye County. We are the only electric utility serving this area and have provided power to our customers in these communities continuously since 1906. We have a total generating capacity of 1,7403,066 megawatts (“MW”) from 2227 gas, oil and coal and natural gas/oil fired generationgenerating units in our generating plants.plants, including our interest in the Silverhawk generating plant and the Chuck Lenzie plant. We provide electricity to approximately 738,000774,000 residential and business customers in a 4,500 square mile service area.
We are a subsidiary of Sierra Pacific Resources, the publicly-traded utility holding company that owns all of our outstanding common stock.
We are incorporated in Nevada. Our principal executive office is located at 6226 West Sahara Avenue, Las Vegas, Nevada 89146 and our telephone number is (702) 367-5000.
Summary of the Terms of the Exchange Offer
Old Notes |
We refer to the notes issued in such private offerings collectively as the old notes. We refer to each series of old notes listed above as the Series M Old Notes, Series N Old Notes and Series O Old Notes, respectively. |
The Series M Old Notes may be exchanged in denominations of $1,000 and integral multiples of $1,000 in excess thereof. The Series N Old Notes may be exchanged in denominations of $100,000 and integral multiples of $1,000 in excess thereof. The Series O Old Notes may be exchanged in denominations of $2,000 and integral multiples of $1,000 in excess thereof. |
Registration Rights Agreements | Pursuant to the terms of the registration rights agreements that we have entered into with the respective initial purchasers for each series of old notes, we have agreed to offer, in three separate exchange offers, to exchange the old notes for $710,000,000 aggregate principal amount of |
We refer to the notes being issued for the old notes in the exchange offers collectively as the new notes. We refer to each series of the new notes | ||
The Exchange Offers | ||
We are offering to exchange |
Expiration Date | Each exchange offer will expire at 5:00 p.m., New York time, on , |
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If extended, the term “expiration date” will mean the latest date and time to which the applicable exchange offer is extended. |
Resale of New Notes | Based on interpretive letters written by the staff of the Securities and Exchange Commission to companies other than |
If |
All participating broker-dealers that receive new notes for their own accounts pursuant to the applicable exchange offer in exchange for old notes that were acquired as a result of market-making or other trading activity must acknowledge that they will deliver a prospectus in connection with any resale of the new notes. See “PLAN OF DISTRIBUTION.” |
Conditions to the Exchange | Subject to the terms of our registration rights |
See “THE EXCHANGE |
Tender | If you wish to tender old notes that are registered in the name of a broker, dealer, commercial bank, trust company or other |
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| nominee, you should contact the registered holder promptly and instruct the registered holder to tender on your behalf. |
IF YOU ARE A BENEFICIAL HOLDER, YOU SHOULD FOLLOW THE INSTRUCTIONS RECEIVED FROM YOUR BROKER OR NOMINEE WITH RESPECT TO TENDERING PROCEDURES AND CONTACT YOUR BROKER OR NOMINEE DIRECTLY. |
Tender | If you are a registered holder of old notes and you wish to participate in the applicable exchange offer, you must complete, sign and date the letter of transmittal delivered with this prospectus, or a facsimile thereof. If you are a participant in The Depository Trust Company (“DTC”) and you wish to participate in the applicable exchange offer, you must instruct DTC to transmit to the exchange agent a message indicating that you agree to be bound by the terms of the letter of transmittal. You should mail or otherwise transmit the letter of transmittal or facsimile (or DTC message), together with your old notes (in book-entry form if you are a participant in DTC) and any other required documentation to The Bank of New York, as exchange agent. |
Withdrawal Rights | You may withdraw tenders of old notes at any time before 5:00 p.m., New York City time, on the expiration date as provided in “THE EXCHANGE |
Effect on Holders of Old Notes | If you are a holder of old notes and do not tender your old notes in the applicable exchange offer, you will continue to hold the old notes and you will be entitled to all the rights and subject to all the limitations applicable to the old notes in the |
Consequences of Failure to | All untendered old notes will continue to be subject to the restrictions on transfer provided for in the old notes. In general, the old notes may not be offered or sold unless registered under the Securities Act of |
1933, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act of 1933 and applicable state securities laws. We do not currently anticipate that we will register the old notes under the Securities Act of 1933. |
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Certain Material U.S. Federal Income Tax Consequences | An exchange of old notes for new notes pursuant to the applicable exchange offer will not constitute a taxable event for U.S. federal income tax purposes. See “CERTAIN MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.” |
Use of Proceeds | We will not receive any proceeds from the issuance of the new notes in |
Exchange Agent | The Bank of New York is the exchange agent for |
Consequences of Exchanging Old Notes in the Exchange Offer
The following summary is based on interpretations by the staff of the Securities and Exchange Commission in no action letters issued to third parties. Unless you are an affiliate of Nevada Power, generally if you exchange your old notes for new notes in the applicable exchange offer, you may offer those new notes for resale, resell those new notes, and otherwise transfer those new notes without compliance with the registration and prospectus delivery provisions of the Securities Act of 1933. However, those new notes must have been acquired by you in the ordinary course of your business. In addition, unless you are a broker-dealer, you must not engage in, intend to engage in or have any arrangement or understanding with any person to participate in, a distribution of new notes.
If you do not exchange your old notes for new notes in the applicable exchange offer, your old notes will continue to be subject to provisions of the indenture under which they were issued regarding transfer and exchange of the old notes and the restrictions on transfer contained in the legend on the old notes. See “RISK FACTORS” and “THE EXCHANGE OFFER.OFFERS.” If you do not tender your old notes, or do so improperly, you will continue to hold unregistered notes and your ability to transfer such notes will be adversely affected.
The New Notes
The following summary contains basic information about the new notes. It does not contain all the information that may be important to you. For a more complete description of the new notes, please refer to the section of this prospectus entitled “DESCRIPTION OF THE NOTES.” The terms of each series of the new notes and the applicable series of the old notes are identical in all material respects, except for:
(1) the transfer restrictions and registration rights relating to such old notes, and
(2) provisions under the registration rights agreements providing for special interest on such old notes under circumstances relating to timing of the applicable exchange offer, which will terminate on completion of such exchange offer.
The Issuer | Nevada Power Company |
The New Notes |
Maturity Date |
Interest Payment Dates |
Denominations | We will issue the new notes in denominations |
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Optional Redemption | We may redeem the new notes in whole or in part at any time at a redemption price equal to the greater of (1) 100% of the principal amount of the new notes being redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest on the new notes being redeemed (excluding the portion of any such interest accrued to the date of redemption) discounted (for |
purposes of determining present value) to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below under “DESCRIPTION OF |
Change of Control | When a change of control event occurs, each holder of any series of the new notes may require us to repurchase all or a portion of its new notes at a purchase price equal to 101% of the principal amount of |
Ranking; Security | The new notes will be secured by the lien of the General and Refunding Mortgage Indenture dated as of May 1, 2001, as amended and supplemented to the date hereof (the |
Each series of the new notes will rank equally in right of payment with our existing |
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Description of Collateral | The |
Covenants | The new notes will contain covenants that, among other things, will limit our ability and the ability of our subsidiaries to: |
These covenants are subject to important exceptions and qualifications that are described under the headings “DESCRIPTION OF |
Form of Notes | The new notes initially will be issued in a fully registered book-entry form and will be represented by one or more registered global securities deposited with or on behalf of, and registered in the name of a nominee of The Depository Trust Company. |
Trustee | The Bank of New York |
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Ratio of Earnings to Fixed Charges(1)(2) |
| Three Months | ||||||||||||||||||||||||||
| Ended | ||||||||||||||||||||||||||
| Year Ended December 31, | March 31, | |||||||||||||||||||||||||
| 2000 | 2001 | 2002 | 2003 | 2004 | 2004 | 2005 | ||||||||||||||||||||
| — | 1.82x | — | 1.08x | 2.03x | — | — | ||||||||||||||||||||
Year Ended December 31, | Three months ended March 31, | |||||||||||
2001 | 2002 | 2003 | 2004 | 2005 | 2005 | 2006 | ||||||
1.84x | — | 1.08x | 2.07x | 2.09x | — | — | ||||||
(Dollars in Thousands)
| (1) | For the purpose of calculating the ratio of earnings to fixed charges, “Fixed Charges” represent the aggregate of interest charges on short-term and long-term debt, including allowance for borrowed funds used during construction |
| (2) | For the |
Investment in the new notes involves certain risks. You should carefully read the “RISK FACTORS”“RISK FACTORS” section beginning on page 89 of this prospectus before participating in the applicable exchange offer.
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You should consider carefully all of the information in this prospectus and incorporated by reference in this prospectus. See “WHERE YOU CAN FIND MORE INFORMATION.” In particular, you should carefully evaluate the following risks before tendering your old notes in the applicable exchange offer. However, the risk factors set forth below, other than the first risk factor, are generally applicable to the old notes as well as the new notes. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that are not presently known or that we currently believe to be less significant may also adversely affect us.
Risks Relating to the Exchange OfferOffers
If you do not tender your old notes, or do so improperly, you will continue to hold unregistered notes and your ability to transfer such notes will be adversely affected.
We will only issue new notes in exchange for old notes that are timely received by the exchange agent together with all required documents, including a properly completed and signed letter of transmittal (or agent’s message), as described in this prospectus. Therefore, you should allow sufficient time to ensure timely delivery of the old notes and you should carefully follow the instructions on how to tender your old notes. Neither we nor the exchange agent is required to tell you of any defects or irregularities with respect to your tender of the old notes. If you do not tender your old notes or if we do not accept your old notes because you did not tender your old notes properly, then, after we consummate the applicable exchange offer, you will continue to hold old notes that are subject to the existing transfer restrictions, and you will no longer have any registration rights with respect to the old notes. In addition:
We have agreed that, for a period of not less than one year after theeach exchange offer is consummated, we will make a prospectus available to any broker-dealer for use in connection with any such resale.
After theeach exchange offer is consummated, if you continue to hold any old notes, you may have difficulty selling them because there will be fewer old notes outstanding. In addition, if significant amounts of old notes are not tendered or are tendered improperly, the limited amount of new notes that would be issued and outstanding after we consummate theeach exchange offer could lower the market price of the new notes.
There is no existing market for the new notes, and we cannot assure you that an active trading market will develop.
The new notes are a new issue of securities with no established trading market. We do not intend to apply for listing of the new notes on any national securities exchange or for quotation of the new notes on any automated dealer quotation system. As a result, we cannot assure you that an active trading market will develop for the new notes.
Risks Relating to Us and Our Business
We may not be able to mitigate fuel and wholesale electricity pricing risks which could result in unanticipated liabilities or increased volatility in our earnings.
Our business and operations are subject to changes in purchased power prices and fuel costs that may cause increases in the amounts we must pay for power supplies on the wholesale market and the cost of producing
power in our generation plants. As evidenced by the western utility crisis that began in 2000, prices for electricity and fuel may fluctuate substantially over relatively short periods of time and expose us to significant commodity price risks.
Among the factors that could affect market prices for electricity and fuel are:
As a part of our risk management strategy, we focus on executing contracts for power deliveries to our physical points of delivery to mitigate the commodity-related risks listed above. To the extent that open positions exist, fluctuating commodity prices could have a material adverse effect on our cash flows and our ability to operate and, consequently, on our financial condition.
Increasing energy commodity prices, particularly with respect to natural gas, have a significant effect on our short-term liquidity. Although we are entitled to recover our prudently incurred power and fuel costs through deferred energy rate case filings with the PUCN, if current commodity prices hold or increase, our deferred energy balance will increase, which will negatively affect our cash flow and liquidity until such costs are recovered from customers.
We are also subject to credit risk for losses that we incur as a result of non-performance by counterparties of their contractual obligations to deliver fuel, purchased power or settlement payments. We often extend credit to counterparties and customers and we are exposed to the risk that we may not be able to collect amounts owed to us. Credit risk includes the risk that a counterparty may default due to circumstances relating directly to it, and also the risk that a counterparty may default due to circumstances that relate to other market participants that have a direct or indirect relationship with such counterparty. Should a counterparty, customer or supplier fail to perform, we may be required to replace existing contracts with contracts at then-current market prices or to honor the underlying commitment.
We are also subject to liquidity risk resulting from the exposure that our counterparties perceive with respect to the possible non-performance by us of our physical and financial obligations under our energy and fuel contracts. These counterparties may under certain circumstances, pursuant to our agreements with them, seek assurances of performance from us in its bankruptcy casethe form of letters of credit, prepayment or cash deposits. In periods of price volatility, our exposure level can change significantly, which could have a significant negative impact on our liquidity and earnings.
As of the date hereof, we have approximately $305 million outstanding under our $600 million Revolving Credit Facility, which amount includes letters of credit outstanding. The combined effects of a significant deferred energy balance and ongoing under-recovery of fuel and energy costs may have a negative effect on our short-term liquidity.
If we do not receive favorable rulings in the Bankruptcy Court (for the Southern District of New York) asserting claims against us for liquidated damages in the amount of
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The rates that we charge our customers and certain aspects of our operations are subject to the regulation of the PUCN, which significantly influences our operating environment and affects our ability to recover costs from our customers. Under Nevada law, purchased power and fuel costs in excess of those
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On January 17, 2006, we filed our annual deferred energy rate case seeking to recover past costs of $171.5 million and to increase going-forward rates by $138 million. The filing, if approved by the PUCN, would result in an overall 9% increase to recover past costs and an 8% increase in going-forward rates. On April 12, 2006, the PUCN approved a stipulation that provided for an increase of approximately 6.5% totaling $120.1 million in our going forward rates. A decision on the other portion of our deferred energy case is expected in the second quarter of 2006. As of March 31, 2006, our unapproved deferred energy costs, including claims for terminated energy supply contracts, were $305.4 million.
Material disallowances of our deferred energy costs or inadequate base tariff energy rates would have a significant adverse effect on our financial condition and future results of operations, could cause additional downgrades of our securities by the rating agencies and wouldcould make it more difficult for us to finance operations and construction projects and buy fuel and purchased power from third parties.
If we do not receive favorable rulings in our future general rate cases, it will have a significant adverse effect on our financial condition, cash flows and future results of operations.
Our revenues and earnings are subject to changes inchange pursuant to regulatory proceedings known as general rate cases which we file with the PUCN approximately every two years. In our general rate cases, the PUCN establishes, among other things, our recoverable rate base, our return on common equity, overall rate of return, depreciation rates and our cost of capital.
We cannot predict what the PUCN will direct in their orders on our pending or future general rate cases. Inadequate base rates would have a significant adverse effect on our financial condition and future results of operations and could cause additional downgrades of our securities by the rating agencies and make it significantly more difficult to finance operations and construction projects and to buy fuel and purchased power from third parties.
Past regulatory decisions significantly adversely affected our liquidity. Adverse regulatory decisions could cause downgrades of our maturing debt that comes due on or before December 31, 2009:
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On March 29, 2002, the PUCN issued a decision in our deferred energy rate case disallowing $434 million of our request to recover deferred purchased power and fuel costs through rate increases to our customers. Following this decision by the PUCN, each of Standard & Poor’s RatingRatings Services (“S&P”) and Moody’s InvestorInvestors Service, Inc. (“Moody’s”) lowered our unsecured debt ratings to below investment grade. Currently,As a result of these downgrades, our ability to access the capital markets to raise funds to service our debt obligations and refinance our maturing debt became limited. In addition, because the credit ratings of Sierra Pacific Resources
were similarly downgraded, and because of restrictions on our ability to pay dividends on our common stock, Sierra Pacific Resources’ ability to make capital contributions to us became limited. Since that time, we and Sierra Pacific Resources have completed a series of financings that have extended the debt maturities, reduced interest costs, improved our capital structure, increased liquidity and enhanced our credit. As a result, Moody’s improved our credit ratings, S&P changed our credit outlook to “positive” from “negative,” and Fitch Ratings Ltd. (“Fitch”) commenced credit coverage at the equivalent ratings as Moody’s. Currently, Moody’s and Fitch have our credit ratings on “negative”“stable” outlook. We will continue to look for opportunities to improve our financial strength and “stable” outlooks respectively. Anyimprove our credit quality. However, any future downgrades will furtherwould increase our cost of capital and limit our access to the capital markets.
Historically, we have purchased a significant portion of the power that we sell to our customers from power suppliers. If our credit ratings are downgraded, we may experience difficulty entering into new power supply contracts, and to the extent that we must rely on the spot market, we may experience difficulty obtaining such power from suppliers in the spot market in light of our financial condition. In addition, if we experience unexpected failures or outages in our generation facilities, we may need to purchase a greater portion of the power we provide to our customers. If we do not have sufficient funds or access to liquidity to obtain our power requirements, particularly at the onset of the summer months, and are unable to obtain power through other means, our business, operations and financial condition will be materially adversely affected.
We plan to make significant capital expenditures to construct new transmission and generating facilities. If we are unable to finance such construction or limit the amount of capital expenditures associated therewith to forecasted levels, our financial condition and results of operation could be adversely affected.
Our long term business objectives include plans to construct new generating and transmission facilities. Such construction will require significant capital expenditures that we may finance through significant additional borrowings under our credit facility, through additional debt financings in private or public offerings or through debt or equity financings by Sierra Pacific Resources. We cannot be sure that we will be able to obtain financing for such capital expenditures on favorable terms, or at all. Neither can we be sure that we will be successful in limiting capital expenditures to planned amounts. Failure to obtain favorable financing arrangements for our planned capital expenditures and to be able to limit such capital expenditures to forecasted amounts would adversely affect our financial condition and results of operation.
Our ability to access the capital markets is dependent on our ability to obtain regulatory approval to do so.
We will need to continue to support working capital and capital expenditures, and to refinance maturing debt, through external financing. We must obtain regulatory approval in Nevada in order to borrow money or to issue securities and will therefore be dependent on the PUCN to issue favorable orders in a timely manner to permit us to finance our operations, construction and acquisition costs and to purchase power and fuel necessary to serve our customers. We cannot assure you that the PUCN will issue such orders or that such orders will be issued on a timely basis.
We have substantial indebtedness that we may be required to refinance. The failure to refinance indebtedness would have an adverse effect on us.
The following is a description of our maturing debt that comes due on or before December 31, 2011:
We also have a $600 million Revolving Credit Facility that terminates on November 4, 2010. As of the date hereof, we have approximately $305 million outstanding, which amount includes $55 million of letters of credit outstanding, under this Revolving Credit Facility.
If we do not have sufficient funds from operations to repay our indebtedness at maturity or when otherwise due, we will have to refinance the indebtedness through additional debt financing in private or public offerings. If, at the time of any financing or refinancing, prevailing interest rates or other factors result in higher interest rates on the refinanced debt, the increase in interest expense associated with the refinancing could adversely affect our cash flow, and, consequently, the cash available for payments on our other indebtedness, including the notes. If we are unable to refinance or extend outstanding borrowings on commercially reasonable terms, or at all, we may have to:
We cannot assure you that we could effect or implement any of these alternatives on satisfactory terms, if at all. If we are unable to refinance indebtedness as it matures, our cash flow, financial conditions and liquidity could be materially adversely affected.
We may be adversely affected by the financial condition or liquidity problems of our parent, Sierra Pacific Resources, and/or its affiliates. As a wholly-owned subsidiary, we may be adversely affected by Sierra Pacific Resources’ decisions regarding our dividend policy and business and operations.
We are a wholly-owned subsidiary of Sierra Pacific Resources, the parent company of Sierra Pacific Power Company,SPPC, the public utility that provides power and natural gas to northern Nevada and the Lake Tahoe area of California. As our parent, Sierra Pacific Resources may exercise substantial control over our business and operations, the payment of dividends, our financing and other capital raising activities, mergers or other business combinations, and the acquisition or disposition of assets, among other things.
Sierra Pacific Resources is a holding company with no significant operations of its own. Its cash flows are substantially derived from dividends paid to it by us and Sierra Pacific Power Company,by SPPC, which are typicallycurrently utilized to service debt and pay dividends on common stockof Sierra Pacific Resources. In the future, subject to various factors to be considered by the Board of Directors of Sierra Pacific Resources, a portion of Sierra Pacific Resources’ cash flow may be used to resume dividend payments on its common stock, with the balance, if any, reinvested in us and Sierra Pacific Power CompanySPPC as contributions to capital.
We and Sierra Pacific Power CompanySPPC are subject to restrictions on our ability to pay dividends to Sierra Pacific Resources under the terms of certain of our financing agreements, a state regulatoryour PUCN order, and the Federal Power Act and a stipulation and agreement among us, Sierra Pacific Power Company and Enron Power Marketing, Inc. (see Note 9 — Dividend Restrictions of Notes to Financial Statements included in our annual report on Form 10-K for the year ended December 31, 2004 and incorporated by reference herein for a detailed description of these restrictions).
Sierra Pacific Resources currently has a substantial amount of debt and other obligations including, but not limited to: $240$99.1 million of its unsecured 7.93%7.803% Senior Notes due 2007; $300 million of its
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| fund capital expenditures and operations. We |
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regard to enforcement efforts focused on power plant emissions obligations. These laws and regulations generally require us to obtain and comply with a wide variety of environmental licenses, permits, inspections and other approvals, and may be enforced by both public officials and private individuals. We cannot predict the outcome or effect of any action or litigation that may arise from applicable environmental regulations.
In addition, we may be required to be a responsible party for environmental clean up at sites identified by environmental agencies or regulatory bodies. We cannot predict with certainty the amount or timing of future expenditures related to environmental matters because of the difficulty of estimating clean up costs. There is also uncertainty in quantifying liabilities under environmental laws that impose joint and several liability on all potentially responsible parties. Environmental regulations may also require us to install pollution control equipment at, or perform environmental remediation on, our facilities.
Existing environmental regulations may be revised or new regulations may be adopted or become applicable to us. Revised or additional regulations, which result in increased compliance costs or additional operating restrictions, could have a material adverse effect on our financial condition and results of operations particularly if those costs are not fully recoverable from our customers.
Furthermore, we may not be able to obtain or maintain all environmental regulatory approvals necessary to our business. If there is a delay in obtaining any required environmental regulatory approval or if we fail to obtain, maintain or comply with any such approval, operations at our affected facilities could be halted or subjected to additional costs. Further, at some of our older facilities the cost of installing the necessary equipment may cause us to shut down those generation units.
Our operating results will likely fluctuate on a seasonal and quarterly basis.
Electric power generation is generally a seasonal business. In many parts of the country, including our service areas, demand for power peaks during the hot summer months, with market prices also peaking at that time. As a result, our operating results in the future will likely fluctuate substantially on a seasonal basis. In addition, we have historically sold less power, and consequently earned less income, when weather conditions in our service areas are milder. Unusually mild weather in the future could diminish our results of operations and harm our financial condition.
War and the threat of terrorism or epidemics may harm our future growth and operating results.
The growth of our business depends in part on continued customer growth and tourism demand in the Las Vegas portion of our service area. Changes in consumer preferences or discretionary consumer spending in the Las Vegas portion of our service area could harm our business. The terrorist attacks of September 11, 2001 had a negative impact on travel and leisure expenditures, including lodging, gaming and tourism. Although activity levels in the Las Vegas area have recovered significantly since then, we cannot predict the extent to which future terrorist and war activities, or epidemics, in the United States and elsewhere may affect us, directly or indirectly. An extended period of reduced discretionary spending and/or disruptions or declines in airline travel and business conventions could significantly harm the businesses in
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A continued military presence in Iraq or any other military strikesoperations may affect our operations in unpredictable ways, such as increased security measures and disruptions of fuel supplies and markets, particularly oil. Uncertainty surrounding retaliatory military strikes or a sustained military campaign may affect our business in unpredictable ways, including disruptions of fuel supplies and markets, and the possibility that our infrastructure facilities (which includes our pipelines, production facilities, and transmission and distribution facilities) could be direct targets or indirect casualties of an act of terror. War and the possibility of a prolonged military presenceoperations may have an adverse effect on the economy in general.
Risks Relating to the Notes
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Under the terms of the G&R Indenture, the lien securing the notes and all other securities issued under the G&R Indenture is junior to the lien of our First Mortgage Indenture. As of the date hereof, there is $372.5were $154.5 million aggregate principal amount of bonds issued and outstanding under theour First Mortgage Indenture. In the event of bankruptcy, liquidation, reorganization or other winding-up of our company or upon a default in payment with respect to, or the acceleration of, any indebtedness under our secured debt, our assets that secure our secured debt will be available to pay obligations on the notes only after all indebtedness under the First Mortgage Indenture has been repaid in full from those assets. There may not be sufficient assets remaining to pay amounts due on all the securities then outstanding under the G&R Indenture.
The holders of the notes offered hereby do not have the power, acting alone, to enforce the lien of the Indenture.
If any event of default occurs under the notes, including any breach of a covenant that is still continuing after applicable grace periods, only the holders of a majority in principal amount of all of the
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Moreover, additional securities may be issued under the G&R Indenture on the basis of (i) 70% of net utility property additions, (ii) the principal amount of retired General and Refunding Mortgage bonds, and/or (iii) the principal amount of first mortgage bonds retired after delivery to the indenture trustee of the initial expert’s certificate under the G&R Indenture. On the basis of (i), (ii) and (iii) above and on plant accounting records as of March 31, 2005 (which amount does not include property additions from the acquisition of the Lenzie Generating Station),2006, we had the capacity to issue approximately $299$785 million of additional securities under the G&R Indenture. This amount does not reflect the issuance on April 3, 2006 of $250 million aggregate principal amount of 6.650% General and Refunding Mortgage Notes, Series N, the issuance on April 19, 2006 of $100 million General and Refunding Mortgage Bond, Series K, issued to secure the increase of our Revolving Credit Facility from $500 million to $600 million, or the issuance on May 12, 2006 of $250 million aggregate principal amount of 6.50% General and Refunding Mortgage Notes, Series O. Although we have capacity to issue additional G&RGeneral & Refunding Mortgage securities on the basis of property additions and retired G&RGeneral and Refunding Mortgage securities and First Mortgage Bonds, the financial covenants contained in certain of our financing agreements limit the amount of additional debt that we may issue and the reasons for which such indebtedness may be issued.
We may be unable to repurchase the notes if we experience a change in control.
We are required, under the terms of the notes, to offer to purchase all of the outstanding notes if we experience a change of control. Our failure to repay holders tendering notes upon a change of control will result in an event of default under the notes. If a change of control were to occur, we cannot assure you that we would have sufficient funds to repay debt outstanding to purchase the notes, or any other securities that we would be required to offer to purchase. We expect that we would require additional financing from third parties to fund any such purchases but we cannot assure you that we would be able to obtain such financing. See “DESCRIPTION OF NOTES — Repurchase at the Option of Holders — Change of Control.”
General
We are a regulated public utility engaged in the distribution, transmission, generation, purchase and sale of electric energy in the southern Nevada communities of Las Vegas, North Las Vegas, Henderson, Searchlight, Laughlin and their adjoining areas. We also provide electricity toareas, including Nellis Air Force Base and the Department of Energy at Mercury and Jackass Flats at theEnergy’s Nevada Test Site.Site in Nye County. We are the only electric utility serving this area and have provided power to our customers in these communities continuously since 1906. We have a total generating capacity of 1,7403,066 megawatts (“MW”) from 2227 gas, oil and coal and natural gas/oil fired generationgenerating units in our generating plants.plants, including our interest in the Silverhawk generating plant and the Chuck Lenzie plant. We provide electricity to approximately 738,000774,000 residential and business customers in a 4,500 square mile service area.
We are a subsidiary of Sierra Pacific Resources, the publicly-traded utility holding company that owns all of our outstanding common stock.
We are incorporated in Nevada. Our principal executive offices are located at 6226 W. Sahara Avenue, (P.O. Box 230), Las Vegas, Nevada 89146 and our telephone number is (702) 367-5000.
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The following tables summarize our selected historical financial data, which you should read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes incorporated by reference into this prospectus,herein from our Annual Report on Form 10-K for the year ended December 31, 2005 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2006, which financial statements and notes should be read in their entirety. Our obligations under the notes will not be guaranteed by Sierra Pacific Resources Sierra Pacific Power Company or any other entity.SPPC. The selected financial data have been derived from our consolidated financial statements. The selected financial information as of and for the three months ended March 31, 2005 and March 31, 2006 is unaudited and the selected financial information (other than the Ratio of Earnings to Fixed Charges) for each year in the five-year period ended December 31, 2005 is audited. The unaudited interim period selected financial data, in our opinion, reflectreflects all adjustments necessary to present fairly the data for such periods. Interim results for the three months ended March 31, 20052006 are not necessarily indicative of results that can be expected in future periods.
| Three Months Ended | ||||||||||||||||||||||||||||
| Year Ended December 31, | March 31, | |||||||||||||||||||||||||||
| 2000 | 2001 | 2002 | 2003 | 2004 | 2004 | 2005 | ||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||
| Operating Revenues | $ | 1,326,192 | $ | 3,025,103 | $ | 1,901,034 | $ | 1,756,146 | $ | 1,784,092 | $ | 326,533 | $ | 354,134 | ||||||||||||||
| Operating Income (Loss) | 74,182 | 144,364 | (104,003 | ) | 183,733 | 216,490 | 21,000 | 23,265 | ||||||||||||||||||||
| Net Income (Loss) | (7,928 | ) | 63,405 | (235,070 | ) | 19,277 | 104,312 | (15,406 | ) | (8,033 | ) | |||||||||||||||||
| Dividends Declared — Common Stock | 64,267 | 33,000 | 10,000 | — | 45,373 | 5,669 | 19,852 | |||||||||||||||||||||
| Ratio of Earnings to Fixed Charges(1)(2) | — | 1.82 | x | — | 1.08 | x | 2.03 | x | — | — | ||||||||||||||||||
| Year Ended December 31, | Three Months ended March 31, | |||||||||||||||||||||||
| 2001 | 2002 | 2003 | 2004 | 2005 | 2005 | 2006 | ||||||||||||||||||
| Dollars in Thousands, except Ratios | ||||||||||||||||||||||||
Operating Revenues | $ | 3,025,103 | $ | 1,901,034 | $ | 1,756,146 | $ | 1,784,092 | $ | 1,883,267 | $ | 354,134 | $ | 381,275 | ||||||||||
Operating Income (Loss) | 144,364 | (104,003 | ) | 183,733 | 216,490 | 228,827 | 23,265 | 25,663 | ||||||||||||||||
Net Income (Loss) | 63,405 | (235,070 | ) | 19,277 | 104,312 | 132,734 | (8,033 | ) | (3,296 | ) | ||||||||||||||
Dividends Declared—Common Stock | 33,000 | 10,000 | — | 45,373 | 35,258 | 19,852 | 17,272 | |||||||||||||||||
Ratio of Earnings to Fixed Charges(1)(2) | 1.84x | — | 1.08x | 2.07x | 2.09x | — | — | |||||||||||||||||
| (1) | For the purpose of calculating the ratio of earnings to fixed charges, “Fixed Charges” represent the aggregate of interest charges on short-term and long-term debt, including allowance for borrowed funds used during construction |
| (2) | For the |
| As of December 31, | As of | |||||||||||||||||||||||
| March 31, | ||||||||||||||||||||||||
| 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | |||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||
| Total Assets | $ | 2,980,326 | $ | 4,791,261 | $ | 4,166,988 | $ | 4,210,759 | $ | 4,883,540 | $ | 4,891,962 | ||||||||||||
| Long-Term Debt(1) | 1,375,407 | 1,822,060 | 2,037,987 | 2,035,279 | 2,281,781 | 2,278,864 | ||||||||||||||||||
| As of December 31, | Three Months ended March 31, 2006 | |||||||||||||||||
| 2001 | 2002 | 2003 | 2004 | 2005 | ||||||||||||||
| Dollars in Thousands | ||||||||||||||||||
Total Assets | $ | 4,791,261 | $ | 4,166,988 | $ | 4,210,759 | $ | 4,883,540 | $ | 5,173,921 | $ | 5,463,389 | ||||||
Long-Term Debt(1) | 1,822,060 | 2,037,987 | 2,035,279 | 2,281,781 | 2,220,572 | $ | 2,552,135 | |||||||||||
| (1) | Includes current maturities of long-term debt. |
We will not receive any proceeds from the issuance of any of the new notes. In consideration for issuing the new notes as contemplated in this prospectus, we will receive in exchange old notes in like principal amount, which will be cancelled and as such will not result in any increase in our indebtedness.
The proceeds of the old notes were used as follows:
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AND SIERRA PACIFIC POWER COMPANY
We are a wholly-owned subsidiary of Sierra Pacific Resources, a holding company that is also the parent company of Sierra Pacific Power Company,SPPC, the public utility that provides power and natural gas to northern Nevada and the Lake Tahoe area of California. Sierra Pacific Resources has no significant operations of its own. Its cash flows are substantially derived from dividends paid to it by us and by Sierra Pacific Power Company,SPPC, which are typicallycurrently utilized to service debt and pay dividends onof Sierra Pacific Resources. In the common stockfuture, a portion of the cash flows of Sierra Pacific Resources with the balance, if any,may be used to resume dividend payments on its common stock or reinvested in us and in Sierra Pacific Power CompanySPPC as capital contributions. Currently, we are subject to restrictions on the amount of dividends we may pay to our parentSierra Pacific Resources under the terms of certain financing agreements, a state regulatoryour PUCN order and the Federal Power Act and a stipulation and agreement among us, Sierra Pacific Power Company and Enron Power Marketing, Inc. (see(See Note 9 — Dividend Restrictions of10 “Debt Covenant Restrictions” in the Notes to Financial Statements included infinancial statements incorporated by reference to our annualquarterly report on Form 10-K10-Q for the yearquarter ended DecemberMarch 31, 2004 and incorporated by reference herein for a detailed description of these restrictions)2006).
Many of our officers are also officers of Sierra Pacific Resources and Sierra Pacific Power Company.SPPC. In addition, all of the members of our board of directors are also directors of Sierra Pacific Resources and Sierra Pacific Power Company.SPPC. Our board of directors exercises substantial control over our business and operations and makes determinations with respect to, among other things, the following:
Employees of Sierra Pacific Resources provide certain accounting, treasury, information technology and administrative services to us and to Sierra Pacific Power Company.SPPC. The costs of those services are allocated among the three companies according to each company’s usage.
Sierra Pacific Resources files a consolidated federal income tax return for itself and its subsidiaries. Current income taxes are allocated based on each entity’s respective taxable income or loss and investment tax credits as if each subsidiary filed a separate return. Based upon Sierra Pacific Resources’ filing practices, we do not believe we would incur any significant tax liability from our parent or its other subsidiaries; however, we may incur certain tax liabilities as a result of the joint tax filing in the event of a change in applicable law or as a result of an audit.
Purpose and Effect of the Exchange Offer
As described in this prospectus, we are offering to issue our 57/8% General and Refunding Mortgage Notes, Series L, due 2015, which have been registered under the Securities Actfollowing series of 1933, as amended (the “Securities Act”) (the “new notes”),new notes in exchange for our 57/8% General and Refunding Mortgage Notes, Series L, due 2015, which have not been so registered (the “old notes”), as described in this prospectus (the “Exchange Offer”).
| New Notes | Old Notes | |||
5.95% General and Refunding Mortgage Notes, Series M, due 2016 (Registered Under the Securities Act of 1933) | In Exchange for | 5.95% General and Refunding Mortgage Notes, Series M, due 2016 (Not Registered Under the Securities Act of 1933) | ||
6.650% General and Refunding Mortgage Notes, Series N, due 2036 (Registered Under the Securities Act of 1933) | In Exchange for | 6.650% General and Refunding Mortgage Notes, Series N, due 2036 (Not Registered Under the Securities Act of 1933) | ||
6.50% General and Refunding Mortgage Notes, Series O, due 2018 (Registered Under the Securities Act of 1933) | In Exchange for | 6.50% General and Refunding Mortgage Notes, Series O, due 2018 (Not Registered Under the Securities Act of 1933) | ||
In connection with the sale of the old notes, Nevada Power and the Initial Purchasersapplicable initial purchasers for each series of notes entered into registration rights agreements (each, a Registration Rights Agreement, dated November 16, 2004 (the “Registration Rights Agreement” and, collectively, the “Registration Rights Agreements”), which requires that, among other things, require Nevada Power among other things,
17(a) to file with the Securities and Exchange Commission a registration statement under the Securities Act with respect to new notes substantially identical in all material respects to the old notes, to use commercially reasonable efforts to cause such registration statement to be declared effective under the Securities Act and to make an exchange offer for the old notes as discussed below, or
In participating in the Exchange Offer,Offers, a Holder is deemed to represent to Nevada Power, among other things, that:
(a) the new notes acquired pursuant to the applicable Exchange Offer are being obtained in the ordinary course of business of the person receiving such new notes, whether or not such person is the Holder,
(b) neither the Holder nor any such other person receiving such new notes is engaging in or intends to engage in a distribution of such new notes,
(c) neither the Holder nor any such other person receiving such new notes has an arrangement or understanding with any person to participate in the distribution of such new notes, and
(d) neither the Holder nor any such other person receiving such new notes is an “affiliate,” as defined in Rule 405 under the Securities Act, of Nevada Power.
Based on interpretations by the staff of the Securities and Exchange Commission set forth in no-action letters issued to third-parties, Nevada Power believes that the new notes issued pursuant to theeach Exchange Offer may be offered for resale and resold or otherwise transferred by any Holder of such new notes (other than any such Holder which is an “affiliate” of Nevada Power within the meaning of Rule 405 under the Securities Act and except as otherwise discussed below with respect to Holders which are broker-dealers) without compliance with the registration and prospectus delivery requirements of the Securities Act, so long as such new notes are acquired in the ordinary course of such Holder’s business and such Holder has no arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of such new notes. Any Holder who tenders in theany Exchange Offer for the purpose of participating in a distribution of the new notes cannot rely on such interpretation by the staff of the Securities and Exchange Commission and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction. Under no circumstances may this prospectus be used for any offer to resell or any resale or other transfer in connection with a distribution of the new notes. In the event that Nevada Power’s belief is not correct, Holders of the new notes who transfer new notes in violation of the prospectus delivery provisions of the Securities Act and without an exemption from registration thereunder may incur liability thereunder. Nevada Power does not assume or indemnify Holders against such liability.
Each broker-dealer that receives new notes for its own account in exchange for old notes which were acquired by such broker-dealer as a result of market-making activities or other trading activities must, and must agree to, deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such new notes. This prospectus may be used for such purpose. Any such broker-dealer may be deemed to be an “underwriter” within the meaning of the Securities Act. The foregoing interpretation of the staff of the Securities and Exchange Commission does not apply to, and this prospectus may not be
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Nevada Power has not entered into any arrangement or understanding with any person to distribute the new notes to be received in theany Exchange Offer.
The Exchange Offer isOffers are not being made to, nor will Nevada Power accept tenders for exchange from, Holders of old notes in any jurisdiction in which the Exchange OfferOffers or the acceptance thereof would not be in compliance with the securities or blue sky laws of such jurisdiction. See “PLAN OF DISTRIBUTION.”
Terms of the Exchange Offer
Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal, we will accept for exchange any old notes properly tendered and not properly withdrawn prior to 5:00 p.m., New York City time, on the Expiration Date.expiration date. Old notes may be tendered only in denominations ofof:
We will issue $1,000 principal amount of new notes in exchange for each $1,000 principal amount of old notes surrendered in the applicable Exchange Offer.
The form and terms of each series of the new notes will be the same as the form and terms of the applicable series of the old notes except the new notes will be registered under the Securities Act while the old notes were not. The new notes will evidence the same debt as the old notes. The new notes will be issued under and entitled to the benefits of the same indenture that authorized the issuance of the old notes, and botheach series of the old notes and the corresponding series of the new notes will be treated as a single series of debt securities under that indenture.
As of the date of this prospectus, $210,000,000 in aggregate principal amount of the Series M Old Notes, $250,000,000 in aggregate principal amount of the old notes isSeries N Old Notes, and $250,000,000 in aggregate principal amount of the Series O Old Notes, are outstanding. This prospectus, together with the letter of transmittal, is being sent to all Holders of old notes. There will be no fixed record date for determining registered holders of old notes entitled to participate in the Exchange Offer.
We intend to conduct theeach Exchange Offer in accordance with the provisions of the applicable Registration Rights Agreement, the applicable requirements of the Securities Act and the Securities Exchange Act of 1934 and the rules and regulations of the Securities and Exchange Commission. Old notes that are not tendered for exchange in the Exchange OfferOffers will remain outstanding and continue to accrue interest and will be entitled to the rights and benefits those Holders have under the G&R Indenture. If any tendered old notes are not accepted for exchange because of an invalid tender, the occurrence of certain other events set forth herein or otherwise, certificates for any such unaccepted old notes will be returned, without expense, to the tendering Holder thereof promptly after the Expiration Date.
We will be deemed to have accepted for exchange properly tendered old notes when we have given oral or written notice of the acceptance to the Exchange Agent. The Exchange Agent will act as agent for the tendering Holders for the purposes of receiving the new notes from Nevada Power and delivering new notes to those Holders. Subject to the terms of the Registration Rights Agreement,Agreements, we expressly reserve the right to amend or terminate each of the Exchange Offer,Offers, and not to accept for exchange any old notes not previously accepted for exchange, upon the occurrence of any of the conditions specified below under the caption “—Conditions to the Exchange Offer.Offers.”
Holders who tender old notes in the Exchange OfferOffers will not be required to pay brokerage commissions or fees, or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of old notes. We will pay all charges and expenses, other than certain applicable taxes described below, in connection with the Exchange Offer.Offers. It is important that you read the “—Fees and Expenses” section below for more details regarding fees and expenses incurred in the Exchange Offer.
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The term “Expiration Date,” shall mean 5:00 p.m., New York City time on , 2005,2006, unless Nevada Power, in its sole discretion, extends each or any of the Exchange Offer,Offers in which case the term “Expiration Date” will mean the latest date and time to which thesuch Exchange Offer isor Exchange Offers are extended.
In order to extend the applicable Exchange Offer, we will notify the Exchange Agent of any extension orally or in writing and we will notify the registered Holders of the applicable series of old notes of the extension no later than 9:00 a.m., New York time, on the business day after the previously scheduled expiration date.
Nevada Power reserves the right, in its sole discretion:
Any delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by oral or written notice to the registered Holders of old notes. If we amend the Exchange OfferOffers in a manner that we determine to constitute a material change, we will promptly disclose such amendment in a manner reasonably calculated to inform the Holders of the applicable old notes of the amendment. During any of these extensions, all old notes previously tendered will remain subject to thesuch Exchange Offer, and we may accept them for exchange unless they have been previously withdrawn. We will return any old notes that we do not accept for exchange for any reason without expense to their tendering Holder promptly after the expiration or termination of thesuch Exchange Offer.
Without limiting the manner in which we may choose to make public announcements of any delay in acceptance, extension, termination or amendment of each or any of the Exchange Offer,Offers, we will have no obligation to publish, advertise or otherwise communicate any such public announcement, other than by making a timely release to a financial news service.
In connection with each Exchange Offer, upon satisfaction or waiver of all the conditions to thesuch Exchange Offer, Nevada Power will accept, promptly after the Expiration Date, all old notes properly tendered and will issue the new notes promptly after acceptance of the old notes. See “—Conditions to the Exchange Offer.Offers.” For purposes of the Exchange Offer,Offers, Nevada Power will be deemed to have accepted properly tendered old notes for exchange when, as and if Nevada Power shall have given oral or written notice thereof of the Exchange Agent.
In all cases, issuance of the new notes for old notes that are accepted for exchange pursuant to the Exchange OfferOffers will be made only after timely receipt by the Exchange Agent of a properly completed and duly executed letter of transmittal (or facsimile thereof or an Agent’s message in lieu thereof) and all other required documents;provided, however, that Nevada Power reserves the absolute right to waive any defects or irregularities in the tender or conditions of the Exchange Offer.Offers. If any tendered old notes are not accepted for any reason set forth in the terms and conditions of the Exchange OfferOffers or if old notes are submitted for a greater principal amount or a greater principal amount, respectively, than the Holder desires to exchange, then such unaccepted or non-exchange old notes evidencing the unaccepted portion, as appropriate, will be returned without expense to the tendering Holder thereof promptly after the expiration or termination of the applicable Exchange Offer.
Conditions to the Exchange Offers
In connection with each Exchange Offer,
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If Nevada Power determines in its sole discretion that any of these conditions are not satisfied, Nevada Power may:may, with respect to each of the Exchange Offers:
In addition, we will not be obligated to accept for exchange the old notes of any Holder that has not made:
No Exchange Offer is not conditioned upon any minimum aggregate principal amount of old notes being tendered for exchange.
These conditions are for our sole benefit and we may assert them regardless of the circumstances that may give rise to them or waive them in whole or in part, with respect to each Exchange Offer, at any or at various times in our sole discretion. If we fail at any time to exercise any of the foregoing rights, that failure will not constitute a waiver of that right. Each such right will be deemed an ongoing right that we may assert at any time or at various times.
In addition, we will not accept for exchange any old notes tendered, and will not issue new notes in exchange for any of those old notes, if at that time any stop order is threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the G&R Indenture under the Trust Indenture Act of 1939.
Procedures for Tendering — Tendering—Registered Holders and DTC Participants
REGISTERED HOLDERS OF OLD NOTES, AS WELL AS BENEFICIAL OWNERS WHO ARE DIRECT PARTICIPANTS IN DTC, WHO DESIRE TO PARTICIPATE IN THEANY EXCHANGE OFFER SHOULD FOLLOW THE DIRECTIONS SET FORTH BELOW AND IN THE LETTER OF TRANSMITTAL.
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Registered Holders
To tender in theany Exchange Offer, a Holder must complete, sign and date the letter of transmittal, or facsimile thereof, have the signatures thereon guaranteed if required by the letter of transmittal, and mail or otherwise deliver such letter of transmittal or such facsimile to the Exchange Agent prior to the expiration date.Expiration Date. In addition either
To be tendered effectively, the letter of transmittal and other required documents must be received by the Exchange Agent at the address set forth below under “—Exchange Agent” prior to the Expiration Date.
The tender by a Holder which is not withdrawn prior to the Expiration Date will constitute an agreement between such Holder and Nevada Power in accordance with the terms and subject to the conditions set forth herein and in the letter of transmittal.
THE METHOD OF DELIVERY OF OLD NOTES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF THE HOLDER, BUT THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO NEVADA POWER COMPANY. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS.
Signatures on a letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed by an Eligible Institution (as defined below) unless the old notes tendered pursuant thereto are tendered
In the event that signatures on a letter of transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, such guarantor must be a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or an “eligible guarantor institution” within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (an “Eligible Institution”).
If the letter of transmittal is signed by a person other than the registered Holder of any old notes listed therein, such old notes must be endorsed or accompanied by a properly completed note power signed by such registered Holder as such registered Holder’s name appears on such old notes.
If the letter of transmittal or any old notes or note or stock powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or
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DTC Participants
Any financial institution that is a participant in DTC’s systems may make book-entry delivery of old notes by causing DTC to transfer such old notes into the Exchange Agent’s account at DTC in accordance with DTC’s procedures for transfer. Such delivery must be accompanied by either
and any other required documents, and must, in any case, be transmitted to and received by the Exchange Agent at the address set forth below under “—Exchange Agent” prior to the Expiration Date or the guaranteed delivery procedures described above must be complied with.Date. The Exchange Agent will make a request to establish an account with respect to the old notes at DTC for purposes of the Exchange Offer within two business days after the date of this prospectus.
The term “Agent’s Message” means a message, electronically transmitted by DTC to and received by the Exchange Agent, and forming a part of the Book-Entry Confirmation, which states that DTC has received an express acknowledgment from a Holder of old notes stating that such Holder has received and agrees to be bound by, and makes each of the representations and warranties contained in, the letter of transmittal and, further, that such Holder agrees that Nevada Power may enforce the letter of transmittal against such Holder.
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By tendering, each Holder or the Person receiving the new notes, as the case may be, will be deemed to represent to Nevada Power that, among other things,
In all cases, issuance of new notes pursuant to theany Exchange Offer will be made only after timely receipt by the Exchange Agent of certificates for the old notes tendered for exchange or a timely Book-Entry Confirmation of such old notes into the Exchange Agent’s account at DTC, a properly completed and duly executed letter of transmittal (or facsimile thereof or Agent’s Message in lieu thereof) and all other required documents. If any tendered old notes are not accepted for any reason set forth in the terms and conditions of the applicable Exchange Offer or if old notes are submitted for a greater principal amount than the Holder desires to exchange, such unaccepted or non-exchanged old notes will be returned without expense to the tendering Holder thereof (or, in the case of old notes tendered by book-entry transfer into the Exchange Agent’s account at DTC pursuant to the book-entry transfer procedures described below, such non-exchanged old notes will be credited to an account maintained with DTC) as promptly as practicable after the expiration or termination of thesuch Exchange Offer.
Nevada Power reserves the right in its sole discretion to purchase or make offers for any old notes that remain outstanding subsequent to the Expiration Date or, as set forth above under “—Conditions to the Exchange Offer,Offers,” to terminate each or any of the Exchange OfferOffers and, to the extent permitted by applicable law, purchase old notes in the open market, in privately negotiated transactions or otherwise. The terms of any such purchases or offers could differ from the terms of the applicable Exchange Offer.
Book Entry Transfer
The Exchange Agent will establish an account with respect to each series of the old notes at DTC for purposes of theeach Exchange Offer within two business days after the date of this prospectus. Any financial institution participant in DTC’s system may make book-entry delivery of old notes by causing DTC to transfer those old notes into the Exchange Agent’s account at DTC in accordance with DTC’s procedures for transfer. Holders of old notes who are unable to deliver confirmation of the book-entry tender of their old notes into
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Except as otherwise provided in this prospectus, Holders of old notes may withdraw their tenders at any time prior to 5:00 p.m., New York City time, on the applicable Expiration Date.
To withdraw a tender of old notes in theany Exchange Offer, a written or facsimile transmission notice of withdrawal must be received by the Exchange Agent at its address set forth herein prior to 5:00 p.m., New York City time, on the applicable Expiration Date. Any such notice of withdrawal must
All questions as to the validity, form and eligibility (including time of receipt) of such notice will be determined by Nevada Power, whose determination shall be final and binding on all parties. Any old notes so withdrawn will be deemed not to have been validly tendered for purposes of thesuch Exchange Offer and will be returned to the Holder thereof without cost to such Holder promptly after withdrawal; and no new notes will be issued with respect thereto unless the old notes so withdrawn are validly retendered. Properly withdrawn old notes may be retendered by following one of the procedures described above under “—Procedures for Tendering” at any time prior to the applicable Expiration Date.
Exchange Agent
The Bank of New York has been appointed as Exchange Agent for theeach Exchange Offer. You should direct requests for additional copies of this prospectus or of the letter of transmittal and requests for the Notice of Guaranteed Delivery to the Exchange Agent addressed as follows:
The Bank of New York
Corporate Trust Operations
Reorganization Unit
101 Barclay Street, 7 East
New York, NY 10286
Attn: Randolph Holder
By Telephone: (212) 815-5098
By Facsimile: (212) 298-1915
Fees and Expenses
We will bear the expenses of soliciting tenders. The principal solicitation is being made by mail and overnight courier. However, where permitted by applicable law, we may make additional solicitations by facsimile, telephone email, or in person by our officers and regular employees and those of our affiliates.
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Our expenses in connection with theeach Exchange Offer are estimated in the aggregate to be approximately $100,000approximately$100,000 and include, among other things:
Transfer Taxes
We will pay all transfer taxes, if any, applicable to the exchange of old notes pursuant to theeach Exchange Offer. The tendering Holder, however, will be required to pay any transfer taxes (whether imposed on the registered Holder or any other person) if:
If satisfactory evidence of payment of those taxes is not submitted with the letter of transmittal, the amount of those transfer taxes will be billed to such tendering Holder.
Consequences of Failure to Exchange
Holders of old notes who do not exchange their old notes for new notes pursuant to the applicable Exchange Offer will remain subject to the restrictions on transfer applicable to the old notes as set forth in the offering memorandum distributed in connection with the private offering of the old notes.
In general, you may not offer or sell the old notes unless they are registered under the Securities Act, or if the offer or sale is exempt from registration under, or not subject to, the Securities Act and applicable state securities laws. Except as required by the Registration Rights Agreement,Agreements, we do not intend to register resales of the old notes under the Securities Act. Based on interpretations of the staff of the Securities and Exchange Commission, Nevada Power believes that new notes issued pursuant to the Exchange OfferOffers may be offered for resale, resold or otherwise transferred by their holders (other than any such Holder that is our “affiliate” within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such Holders acquired the new notes in the ordinary course of the Holders’ business and the Holders have no arrangement or understanding with respect to the
distribution of the new notes to be acquired in the Exchange Offer.Offers. Any Holder who tenders in the Exchange OfferOffers for the purpose of participating in a distribution of the new notes:
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Accounting Treatment
We will record the new notes in our accounting records at the same carrying value as the old notes, as reflected in our accounting records on the date of exchange. Accordingly, we will not recognize any gain or loss for accounting purposes in connection with any of the Exchange Offer.
Other
Participation in theeach Exchange Offer is voluntary, and you should carefully consider whether to accept. You are urged to consult your financial and tax advisors in making your own decision on what action to take.
We may in the future seek to acquire untendered old notes in open market or privately negotiated transactions, through subsequent Exchange Offers or otherwise. We have no present plans to acquire any old notes that are not tendered in the Exchange OfferOffers or to file a registration statement to permit resales of any untendered old notes.
You can find the definitions of certain terms used in this description under the subheading “Certain Definitions.” In this description, the word “Nevada Power” refers only to Nevada Power Company and not to any of its subsidiaries.
General
Each series of the old notes werewas issued under the General and Refunding Mortgage Indenture, dated as of May 1, 2001, as amended and supplemented to the date hereof (the “G&R Indenture”“Indenture”), between Nevada Power Company and The Bank of New York, as trustee, (the “Trustee”), pursuant to an officer’s certificate establishing the terms of each series of the notes (the “Officer’s Certificate”Certificates”) in a private transaction that wastransactions not subject to the registration requirements of the Securities Act. The old notes and the new notes are sometimes collectively called the “notes” and individually a “note.” The terms of each series of the notes include those stated in the respective Officer’s Certificate and the G&R Indenture and those made part of the G&R Indenture by reference to the Trust Indenture Act of 1939.
The following description is a summary of the material terms of the notes as set forth in the Officer’s CertificateCertificates and the registration rights agreementagreements entered into in connection with the issuance and sale of the notes. A summary of the provisions of the G&R Indenture can be found under “DESCRIPTION OF THE G&R INDENTURE.“Description of the Indenture.” The summaries do not restate the applicable documents and agreements in their entirety. Copies of the G&R Indenture, the Officer’s CertificateCertificates and the registration rights agreementagreements are available to prospective purchasers of the notes upon request. We urge you to read the G&R Indenture, the Officer’s Certificates and the Officer’s Certificateregistration rights agreements because they, and not this description, define your rights as holders of the notes. Certain defined terms used in this description but not defined below under “—Certain Definitions” have the meanings assigned to them in the G&R Indenture and the Officer’s Certificate.
As hereinafter discussed, the G&R Indenture provides that, in addition to the notes, other debt securities may be issued thereunder on the basis of Property Additions, Retired Securities or cash deposited with the trustee. See “DESCRIPTION OF THE G&R INDENTURE — “Description of the Indenture—Issuance of Additional Indenture Securities.” Any such issuance will be subject to
The Series M Old Notes were originally offered in an aggregate principal amount of $210,000,000, the covenant described below under “— Certain Covenants — IncurrenceSeries N Old Notes were originally offered in an aggregate principal amount of Indebtedness$250,000,000, and Issuance of Preferred Stock.”
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The registered holder of a note will be treated as the owner of it for all purposes. Only registered holders will have rights under the Officer’s CertificateCertificates and the G&R Indenture.
Brief Description of the Notes
The notes:
Principal, Maturity and Interest
Nevada Power may issue additional notes of the same series having the same terms as the notes offered hereby (except as to public offering price and date of issue) from time to time after this Exchange Offer. Any offering of additional notes is subject to the covenant described below under the caption “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock.”offering. The notes and any additional notes of the same series having the same terms as thesuch series of notes offered hereby subsequently issued under the G&R Indenture will be treated as a single class for all purposes under the G&R Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase.
With respect to the Series M New Notes, Nevada Power will issue notes in denominations of $1,000 and integral multiples of $1,000.$1,000 in excess thereof. The notesSeries M New Notes will mature on JanuaryMarch 15, 2015.
With respect to the Series N New Notes, Nevada Power will issue notes in denominations of $100,000 and integral multiples of $1,000 in excess thereof. The Series N New Notes will mature on April 1, 2036. Interest on the Series N New Notes will accrue at the rate of 6.650% per annum and will be payable semi-annually in arrears on April 1 and October 1, commencing on October 1, 2006. Nevada Power will make each interest payment to the holders of record of the Series N New Notes on the immediately preceding March 15 and September 15.
With respect to the Series O New Notes, Nevada Power will issue notes in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The Series O New Notes will mature on May 15, 2018. Interest on the Series O New Notes will accrue at the rate of 6.50% per annum and will be payable semi-annually in arrears on May 15 and November 15, commencing on November 15, 2006. Nevada Power will make each interest payment to the holders of record of the Series O New Notes on the immediately preceding May 1 and November 1.
Interest on the notes will accrue from the date of original issuance or, if interest has already been paid, from the date it was most recently paid. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.
Methods of Receiving Payments on the Notes
If a holder has given wire transfer instructions to Nevada Power prior to the fifth day preceding the record date, Nevada Power will pay all principal, interest and premium and Liquidated Damages, if any, on that holder’s notes in accordance with those instructions. All other payments on notes will be made at the office or agency of the paying agent and registrar within the City and State of New York unless Nevada Power elects to make interest payments by check mailed to the holders at their address set forth in the register of holders.
Paying Agent and Registrar for the Notes
The trustee will initially act as paying agent and registrar. Nevada Power may change the paying agent or registrar without prior notice to the holders of the notes, and Nevada Power or any of its Subsidiaries may act as paying agent or registrar.
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A holder may transfer or exchange notes in accordance with the G&R Indenture. The registrar and the trustee may require a holder to furnish appropriate endorsements and transfer documents in connection with a transfer of notes. Holders may be required to pay any taxes due on transfer. Nevada Power is not required to transfer or exchange any note selected for redemption. Also, Nevada Power is not required to transfer or exchange any note for a period of 15 days before the selection of notes to be redeemed.
Security and Ranking
The notes are senior obligations of Nevada Power and rank equally in right of payment with all existing and future senior obligations of Nevada Power and rank senior in right of payment to all subordinated obligations of Nevada Power. The notes are secured to the extent set forth under “DESCRIPTION OF THE G&R INDENTURE — “Description of the Indenture—Security.” The notes are junior in terms of priority of lien to obligations under the First Mortgage Indenture since the collateral securing the notes and all other securities issued under the G&R Indenture also secures all obligations under the First Mortgage Indenture, and the lien of the G&R Indenture on such collateral is junior, subject and subordinate to the prior lien of the First Mortgage Indenture. As of the date hereof, $372.5$154.5 million aggregate principal amount of first mortgage bonds wereare issued and outstanding under the First Mortgage Indenture. As of March 31, 2005,the date hereof, Nevada Power hadhas approximately $1.87$2.18 billion aggregate principal amount of securities outstanding under its G&R Indenture.
Optional Redemption
Nevada Power may redeem theeach series of notes at its option at any time, either in whole or in part at a redemption price equal to the greater of (1) 100% of the principal amount of the notes being redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest on the notes being redeemed (excluding the portion of any such interest accrued to the date of redemption) discounted (for purposes of determining present value) to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below) plus 5030 basis points, plus, in each case, accrued interest thereon to the date of redemption.
“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the notes that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the notes.
“Comparable Treasury Price” means, with respect to any redemption date, (1) the average of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) on the third business day preceding such redemption date, as set forth in the daily statistical release (or any successor release) published by the Federal Reserve Bank of New York and designated “Composite 3:30 p.m. Quotations for U.S. Government Securities” or (2) if such release (or
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“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by us.
“Reference Treasury Dealer” means a primary U.S. Government Securities Dealer selected by us.
“Reference Treasury Dealer Quotation” means, with respect to the Reference Treasury Dealer and any redemption date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker by such Reference Treasury Dealer at or before 5:00 p.m., New York City time, on the third business day preceding such redemption date.
“Treasury Rate” means, with respect to any redemption date, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.
If less than all of the notes are to be redeemed at any time, the trustee will select notes for redemption as follows:
(1) if the notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the notes are listed; or
(2) if the notes are not listed on any national securities exchange, on a pro rata basis, by lot or by such method as the trustee deems fair and appropriate.
No notes of $1,000 principal amount or less can be redeemed in part. Notices of redemption will be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each holder of notes to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the notes or a satisfaction and discharge of the notes under the G&R Indenture. Notices of redemption may not be conditional.
If any note is to be redeemed in part only, the notice of redemption that relates to that note will state the portion of the principal amount of that note that is to be redeemed. A new note in principal amount equal to the unredeemed portion of the original note will be issued in the name of the holder of notes upon cancellation of the original note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on notes or portions of them called for redemption.
Redemption at Option of Holders
Upon the occurrence of any of the following events (the “Triggering Events”):
(1) failure for 30 days to pay when due interest on, or Liquidated Damages with respect to, the notes;
(3) failure by Nevada Power or any of its Restricted Subsidiaries to comply with the provisions described under the caption “—Certain Covenants—Merger, Consolidation or Sale of Assets”;
(5) failure by Nevada Power or any of its Restricted Subsidiaries for 60 days after notice to comply with any of the other agreements in the applicable Officer’s Certificate or the notes;
(6) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by Nevada Power or any of its Restricted Subsidiaries (or the payment of which is guaranteed by Nevada Power or any of its Restricted Subsidiaries) whether such Indebtedness or guarantee now exists, or is created after the original issue date of the notes, if that default:
(a) is caused by a failure to pay principal of, or interest or premium, if any, on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a “Payment Default”); or
(b) results in the acceleration of such Indebtedness prior to its express maturity,
and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $15.0 million or more;
(7) failure by Nevada Power or any of its Subsidiaries to pay final judgments aggregating in excess of $15.0 million, which judgments are not paid, discharged or stayed for a period of 60 days; or
(8) an event of default under the First Mortgage Indenture (other than any such matured event of default which (i) is of similar kind or character to the Triggering Event described in (3) or (5) above and (ii) has not resulted in the acceleration of the securities outstanding under the First Mortgage Indenture);provided, however, that, anything in the Officer’s Certificates to the contrary notwithstanding, the waiver or cure of such event of default under the First Mortgage Indenture and the rescission and annulment of the
consequences thereof under the First Mortgage Indenture shall constitute a cure of the corresponding Triggering Event and a rescission and annulment of the consequences thereof,
the holders of at least 25% in principal amount of the then outstanding notes of a particular series may deliver a notice to Nevada Power requiring Nevada Power to redeem the notes of such series immediately, at a redemption price equal to 100% of the aggregate principal amount of the notes of such series plus accrued and unpaid interest and Liquidated Damages, if any, on thesuch notes to the date of redemption.
The holders of a majority in aggregate principal amount of the notes of a particular series then outstanding by notice to Nevada Power and the trustee may on behalf of the holders of all of the notes of such series waive any existing Triggering Event and its consequences except a continuing Triggering Event related to the payment of interest or Liquidated Damages on, or the principal of, thesuch notes.
For each series of notes, in the case of any Triggering Event occurring by reason of any willful action or inaction taken or not taken by or on behalf of Nevada Power with the intention of avoiding payment of the premium that Nevada Power would have had to pay if Nevada Power then had elected to redeem the notes pursuant to the provisions of the applicable Officer’s Certificate relating to redemption at the option of Nevada Power, an equivalent premium will also become and be immediately due and payable to the extent permitted by law upon the redemption of the notes at the option of the holders.
Nevada Power is required to deliver to the trustee annually a statement regarding compliance with the G&R Indenture. Upon becoming aware of any Triggering Event, Nevada Power is required to deliver to the trustee a statement specifying such Triggering Event.
Mandatory Redemption
Except as provided in the next paragraph, or under “Redemption at the Option of Holders” above, Nevada Power is not required to make mandatory redemption or sinking fund payments with respect to the notes.
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If a Change of Control occurs, each holder of notes will have the right to require Nevada Power to repurchase all or any part (equal to $1,000 or an integral multiple of $1,000) of that holder’s notes pursuant to a Change of Control Offer on the terms set forth in the applicable Officer’s Certificate. In the Change of Control Offer, Nevada Power will offer a Change of Control Payment in cash equal to 101% of the aggregate principal amount of notes repurchased plus accrued and unpaid interest and Liquidated Damages, if any, on the notes repurchased, to the date of purchase. Within ten days following any Change of Control, Nevada Power will mail a notice to each holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase notes on the Change of Control Payment Date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed, pursuant to the procedures required by the applicable Officer’s Certificate and described in such notice.
On the Change of Control Payment Date, Nevada Power will, to the extent lawful:
(1) accept for payment all notes or portions of notes properly tendered pursuant to the Change of Control Offer;
(2) deposit with the paying agent an amount equal to the Change of Control Payment in respect of all notes or portions of notes properly tendered; and
(3) deliver or cause to be delivered to the trustee the notes properly accepted together with an officer’s certificate stating the aggregate principal amount of notes or portions of notes being purchased by Nevada Power.
The paying agent will promptly mail to each holder of notes properly tendered the Change of Control Payment for such notes, and the trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each holder a new note equal in principal amount to any unpurchased portion of the notes surrendered, if any;providedthat each new note will be in a principal amount of $1,000 or an integral multiple of $1,000.
Nevada Power will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.
Nevada Power will comply with the requirements of Rule 14e-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control provisions of the applicable Officer’s Certificate, Nevada Power will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control provisions of the G&R Indenture by virtue of such conflict.
Nevada Power’s future agreements governing its Indebtedness, including Indebtedness issued under or secured by the G&R Indenture, may prohibit Nevada Power from purchasing any notes in the event of a Change of Control, and may also provide that a Change of Control would constitute a default or require repayment of the Indebtedness under these agreements, which, if such Indebtedness were issued under or secured by the G&R Indenture, could result in a default under the G&R Indenture. In the event a Change of Control occurs at a time when Nevada Power is prohibited from purchasing notes, Nevada Power could seek the consent of its lenders or its security holders to the purchase of notes or could attempt to refinance the borrowings that contain the prohibition. If Nevada Power does not obtain such a consent or repay those borrowings, Nevada Power will remain prohibited from purchasing notes. In such case, Nevada Power’s failure to comply with the foregoing provisions would constitute a Triggering Event,
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The provisions described above that require Nevada Power to make a Change of Control Offer following a Change of Control will be applicable whether or not any other provisions of the applicable Officer’s Certificate are applicable. Except as described above with respect to a Change of Control, the Officer’s Certificate doesCertificates do not contain provisions that permit the holders of the notes to require that Nevada Power repurchase or redeem the notes in the event of a takeover, recapitalization or similar transaction.
Nevada Power will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Officer’s CertificateCertificates applicable to a Change of Control Offer made by Nevada Power and purchases all notes properly tendered and not withdrawn under the Change of Control Offer.
The definition of Change of Control includes a phrase relating to the direct or indirect sale, lease, transfer, conveyance or other disposition of “all or substantially all” of the properties or assets of Nevada Power and its Subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase “substantially all,” there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a holder of notes to require Nevada Power to repurchase its notes as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of Nevada Power and its Subsidiaries taken as a whole to another Person or group may be uncertain.
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In addition to the covenants described under “DESCRIPTION OF THE G&R INDENTURE”“Description of the Indenture” below, the terms of the notes include the covenants described below. These covenants will apply unless the
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36Liens
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Merger, Consolidation or Sale of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to:
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42(1) either: (a) Nevada Power is the surviving corporation; or (b) the Person formed by or surviving any such consolidation or merger (if other than Nevada Power) or to which such sale, assignment, transfer, conveyance or other disposition has been made is a corporation organized or existing under the laws of the United States, any state of the United States or the District of Columbia;
(3) immediately after such transaction no Default or Event of Default exists; and
In addition, Nevada Power may not, directly or indirectly, lease all or substantially all of its properties or assets, in one or more related transactions, to any other Person. ClausesClause (4) and (5) under this “Merger, Consolidation or Sale of Assets” covenant will not apply to a sale, assignment, transfer, conveyance or other disposition of assets between or among Nevada Power and any of its Restricted Subsidiaries.
43Future Subsidiary Guarantees
Subsidiary Guarantee of such Restricted Subsidiary except that with respect to a guarantee of Indebtedness of Nevada Power if such Indebtedness is by its express terms subordinated in right of payment to the notes, any such guarantee of such Restricted Subsidiary with respect to such Indebtedness shall be subordinated in right of payment to such Restricted Subsidiary’s Subsidiary Guarantee with respect to the notes substantially to the same extent as such Indebtedness is subordinated to the notes; (ii) such Restricted Subsidiary waives and will not in any manner whatsoever claim or take the benefit or advantage of, any rights or reimbursement, indemnity or subrogation or any other rights against Nevada Power or any other Restricted Subsidiary as a result of any payment by such Restricted Subsidiary under its Subsidiary Guarantee of the notes; and (iii) such Restricted Subsidiary shall deliver to the trustee an
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Notwithstanding the foregoing and the other provisions of the Officer’s Certificate,Certificates, in the event a Subsidiary Guarantor is sold or disposed of (whether by merger, consolidation, the sale of its Capital Stock or the sale of all or substantially all of its assets (other than by lease) and whether or not the Subsidiary Guarantor is the surviving corporation in such transaction) to a Person which is not Nevada Power or a Restricted Subsidiary of Nevada Power (other than a Receivables Entity), such Subsidiary Guarantor will be released from its obligations under its Subsidiary Guarantee if:
(1) the sale or other disposition is in compliance with the applicable provisions of the Officer’s Certificates; and
(2) the Subsidiary Guarantor is also released or discharged from its obligations under the guarantee, which resulted in the creation of such Subsidiary Guarantee, except by or as a result of payment under such guarantee.
Sale and Leaseback Transactions
Nevada Power will not, and will not permit any of its Restricted Subsidiaries to, enter into any sale and leaseback transaction;providedthat Nevada Power or any Restricted Subsidiary may enter into a sale and leaseback transaction if:
Payments for Consent
Nevada Power will not, and will not permit any of its Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any holder of notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Officer’s CertificateCertificates or the
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ReportsCovenant Defeasance
For each series of its Subsidiaries as Unrestricted Subsidiaries, then the quarterly and annual financial information required by the preceding paragraph will include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, and in Management’s Discussion and Analysis of Financial Condition and Results of Operations, of the financial condition and results of operations of Nevada Power and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of Nevada Power.
For each series of notes, in order to exercise Covenant Defeasance:
46(1) Nevada Power must irrevocably deposit with the trustee or any paying agent (other than Nevada Power), in trust for the benefit of the holders of the notes: (a) money (including Funded Cash (as defined in the Indenture) not otherwise applied pursuant to the Indenture) in an amount which will be sufficient, or (b) Eligible Obligations which do not contain provisions permitting the redemption or other prepayment thereof at the option of the issuer thereof, the principal of and the interest on which when due, without any regard to reinvestment thereof, will provide monies which, together with the money, if any, deposited with or held by the trustee or such paying agent, will be sufficient, or (c) a combination of (a) and (b) which will be sufficient, to pay when due the principal of and premium, if any, and interest, if any, and Liquidated Damages, if any, due and to become due on the notes or portions thereof. For this purpose, “Eligible Obligations” include direct obligations of, or obligations unconditionally guaranteed by, the United States of America, entitled to the benefit of the full faith and credit thereof, and certificates, depositary receipts or other instruments that evidence a direct ownership interest in such obligations or in any specific interest or principal payments due in respect thereof;
(3) no Triggering Event shall have occurred and is continuing on the date of such deposit (other than a Triggering Event arising from the breach of a covenant under the applicable Officer’s Certificate resulting from the borrowing of funds to be applied to such deposit);
(5) Nevada Power must deliver to the trustee an officer’s certificate stating that the deposit was not made by Nevada Power with the intent of preferring the holders of notes over the other creditors of Nevada Power with the intent of defeating, hindering, delaying or defrauding creditors of Nevada Power or others; and
(6) Nevada Power must deliver to the trustee an officer’s certificate and an opinion of counsel, each stating that all conditions precedent relating to the Covenant Defeasance have been complied with.
Book-Entry, Delivery and Form
We expect that the new notes will initially be issued in the form of one or more Global Notes (the “Global Notes”). The Global Notes will be deposited with, or on behalf of, The Depository Trust Company (“DTC”) and registered in the name of Cede & Co., as nominee of DTC (such nominee being referred to herein as the “Global Note Holder”).
DTC has advised Nevada Power that DTC is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuantcreated to the provisions of Section 17A of the Exchange Act. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC, in turn, is owned by a number of Participants of DTC and members of the National Securities Clearing Corporation, Government Securities Clearing Corporation, MBS Clearing Corporation and Emerging Markets Clearing Corporation, as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC and the National Association of Securities Dealers, Inc. DTC holdshold securities for its participating organizations (collectively, the “Participants”) and facilitates the clearance and settlement of transactions in those securities between Participants through electronic book-entry changes in accounts of its Participants. The Participants include securities brokers and dealers (including the Initial Purchasers)initial purchasers), banks, trust companies, clearing corporations and certain other organizations. Access to DTC’s system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (collectively, the “Indirect Participants”). Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through the Participants or the Indirect Participants. The ownership interests in, and transfers of ownership interests in, each security held by or on behalf of DTC are recorded on the records of the Participants and Indirect Participants.
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(1) upon deposit of the Global Notes, DTC will credit the accounts of Participants designated by the Initial Purchasers with portions of the principal amount of the Global Notes; and
(2) ownership of these interests in the Global Notes will be shown on, and the transfer of ownership of these interests will be effected only through, records maintained by DTC (with respect to the Participants) or by the Participants and the Indirect Participants (with respect to other owners of beneficial interest in the Global Notes).
Prospective purchasers are advised that the laws of some states require that certain Persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interests in a Global Note to such Persons will be limited to such extent. For certain other restrictions on the transferability of the notes, see “Notice to Investors.”
So long as the Global Note Holder is the registered owner of any notes, the Global Note Holder will be considered the sole holder under the G&R Indentureindenture of any notes evidenced by the Global Notes.
Beneficial owners of notes evidenced by the Global Notes will not be considered the owners or holders of the notes under the G&R Indentureindenture for any purpose, including with respect to the giving of any directions, instructions or approvals to the trustee thereunder. Neither Nevada Power nor the trustee will have any responsibility or liability for any aspect of the records of DTC or for maintaining, supervising or reviewing any records of DTC relating to the notes.
More information about DTC can be found at www.dtcc.com.
Payments in respect of the principal of, and interest and premium and Liquidated Damages, if any, on a Global Note registered in the name of the Global Note Holder on the applicable record date will be payable by the trustee to or at the direction of the Global Note Holder in its capacity as the registered holder under the G&R Indenture. Under the terms of the G&R Indenture, Nevada Power and the trustee will treat the Persons in whose names the notes, including the Global Notes, are registered as the owners of the notes for the purpose of receiving payments and for all other purposes. Consequently, neither Nevada Power, the trustee nor any agent of Nevada Power or the trustee has or will have any responsibility or liability for:
(1) any aspect of DTC’s records or any Participant’s or Indirect Participant’s records relating to or payments made on account of beneficial ownership interest in the Global Notes or for maintaining, supervising or reviewing any of DTC’s records or any Participant’s or Indirect Participant’s records relating to the beneficial ownership interests in the Global Notes; or
(2) any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants.
DTC has advised Nevada Power that its current practice, upon receipt of any payment in respect of securities such as the notes (including principal and interest), is to credit the accounts of the relevant Participants with the payment on the payment date unless DTC has reason to believe it will not receive payment on such payment date. Each relevant Participant is credited with an amount proportionate to its beneficial ownership of an interest in the principal amount of the relevant security as shown on the records of DTC. Payments by the Participants and the Indirect Participants to the beneficial owners of notes will be governed by standing instructions and customary practices and will be the responsibility of the Participants or the Indirect Participants and will not be the responsibility of DTC, the trustee or Nevada Power. Neither Nevada Power nor the trustee will be liable for any delay by DTC or any of its Participants in identifying the beneficial owners of the notes, and Nevada Power and the trustee may conclusively rely on and will be protected in relying on instructions from DTC or the Global Note Holder for all purposes.
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Subject to certain conditions, any Person having a beneficial interest in a Global Note may, upon prior written request to the trustee, exchange such beneficial interest for notes in the form of certificated notes. Certificated notes will be issued in the form of registered definitive certificates (the “Certificated Notes”). Upon the transfer of Certificated Notes, Certificated Notes may, unless all Global Notes have previously been exchanged for Certificated Notes, be exchanged for an interest in the Global Note representing the principal amount of notes being transferred, subject to the transfer restrictions set forth in the G&R Indenture. Upon any such issuance, the trustee is required to register such Certificated Notes in the name of, and cause the same to be delivered to, such Person or Persons (or their nominee). In addition, if:
(1) DTC (a) notifies Nevada Power that it is unwilling or unable to continue as depositary for the Global Notes and fails to appoint a successor depositary or (b) has ceased to be a clearing agency registered under the Exchange Act;
(2) Nevada Power, at its option, notifies the trustee in writing that it elects to cause the issuance of the Certificated Notes; or
(3) there has occurred and is continuing a Default or Event of Default with respect to the notes;
then, upon surrender by the Global Note Holderholder of its Global Note, notes in such form will be issued to each person that the Global Note Holderholder and DTC identify as being the beneficial owner of the related notes.
Neither Nevada Power nor the trustee will be liable for any delay by the Global Note Holderholder or DTC in identifying the beneficial owners of notes and Nevada Power and the trustee may conclusively rely on, and will be protected in relying on, instructions from the Global Note Holderholder or DTC for all purposes.
Depository Procedures
The following description of the operations and procedures of DTC, Euroclear and Clearstream are provided solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are subject to changes by them. Nevada Power takes no responsibility for these operations and procedures and urges investors to contact the system or their participants directly to discuss these matters.
All interests in a Global Note, including those held through Euroclear or Clearstream, may be subject to the procedures and requirements of DTC. Those interests held through Euroclear or Clearstream may also be subject to the procedures and requirements of such systems. The laws of some states require that certain Persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interests in a Global Note to such Persons will be limited to that extent. Because DTC can act only on behalf of Participants, which in turn act on behalf of Indirect Participants, the ability of a Person having beneficial interests in a Global Note to pledge such interests to Persons that do not participate in the DTC system, or otherwise take actions in respect of such interests, may be affected by the lack of a physical certificate evidencing such interests.
49Except as described below, owners of interests in the Global Notes will not have notes registered in their names, will not receive physical delivery of notes in certificated form and will not be considered the registered owners or “holders” thereof under the Indenture for any purpose.
Subject to compliance with the transfer restrictions applicable to the notes described herein, cross-market transfers between the Participants in DTC, on the one hand, and Euroclear or Clearstream participants, on the other hand, will be effected through DTC in accordance with DTC’s rules on behalf of Euroclear or Clearstream,
as the case may be, by its respective depositary; however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such system in accordance with the rules and procedures and within the established deadlines (Brussels time) of such system.
Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the relevant Global Note in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Euroclear participants and Clearstream participants may not deliver instructions directly to the depositories for Euroclear or Clearstream.
DTC has advised Nevada Power that it will take any action permitted to be taken by a holder of notes only at the direction of one or more Participants to whose account DTC has credited the interests in the Global Notes and only in respect of such portion of the aggregate principal amount of the notes as to which such Participant or Participants has or have given such direction. However, if there is an Event of Default under the notes, DTC reserves the right to exchange the Global Notes for legended notes in certificated form, and to distribute such notes to its Participants.
Neither Nevada Power nor the trustee nor any of their respective agents will have any responsibility for the performance by DTC, Euroclear or Clearstream or their respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations.
Exchange of Global Notes for Certificated Notes
A Global Note is exchangeable for definitive notes in registered certificated form (“Certificated Notes”) if:
(1) DTC (a) notifies Nevada Power that it is unwilling or unable to continue as depositary for the Global Notes and Nevada Power fails to appoint a successor depositary or (b) has ceased to be a clearing agency registered under the Exchange Act;
(2) Nevada Power, at its option, notifies the trustee in writing that it elects to cause the issuance of the Certificated Notes; or
(3) there has occurred and is continuing a Default or Event of Default with respect to the notes.
In addition, beneficial interests in a Global Note may be exchanged for Certificated Notes upon prior written notice given to the trustee by or on behalf of DTC in accordance with the Officer’s Certificate.Indenture. In all cases, Certificated Notes delivered in exchange for any Global Note or beneficial interests in Global Notes will be registered in the names, and issued in any approved denominations, requested by or on behalf of the depositary (in accordance with its customary procedures) and will bear the applicable restrictive legend referred to in “Notice to Investors,” unless that legend is not required by applicable law.
Exchange of Certificated Notes for Global Notes
Certificated Notes may not be exchanged for beneficial interests in any Global Note unless the transferor first delivers to the trustee and Nevada Power a written certificate (in the form provided in the
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Same Day Settlement and Payment
Nevada Power will make payments in respect of the notes represented by the Global Notes (including principal, premium, if any, and interest and Liquidated Damages, if any) by wire transfer of immediately available funds to the accounts specified by the Global Note Holder. Nevada Power will make all payments of principal, interest and premium and Liquidated Damages, if any, with respect to Certificated Notes by wire transfer of immediately available funds to the accounts specified by the holdersHolders of the Certificated Notes or, if no such account is specified, by mailing a check to each such holder’sHolder’s registered address. The notes represented
by the Global Notes are expected to be eligible to trade in the PORTAL market and to trade in DTC’s Same-Day Funds Settlement System, and any permitted secondary market trading activity in such notes will, therefore, be required by DTC to be settled in immediately available funds. Nevada Power expects that secondary trading in any Certificated Notes will also be settled in immediately available funds.
Because of time zone differences, the securities account of a Euroclear or Clearstream participant purchasing an interest in a Global Note from a Participant in DTC will be credited, and any such crediting will be reported to the relevant Euroclear or Clearstream participant, during the securities settlement processing day (which must be a business day for Euroclear and Clearstream) immediately following the settlement date of DTC. DTC has advised Nevada Power that cash received in Euroclear or Clearstream as a result of sales of interests in a Global Note by or through a Euroclear or Clearstream participant to a Participant in DTC will be received with value on the settlement date of DTC but will be available in the relevant Euroclear or Clearstream cash account only as of the business day for Euroclear or Clearstream following DTC’s settlement date.
Certain Definitions
Set forth below are certain defined terms used in each of the Officer’s Certificate.Certificates, except where specified otherwise. Reference is made to the G&R Indenture for a full disclosure of all such terms, as well as any other capitalized terms used herein for which no definition is provided.
“Affiliate”of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control,” as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise; provided that beneficial ownership of 10% or more of the Voting Stock of a Person will be deemed to be control. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” have correlative meanings.
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“Beneficial Owner”has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition. The terms “Beneficially Owns” and “Beneficially Owned” have a corresponding meaning.
“Board of Directors”means:
52(1) with respect to a corporation, the board of directors of the corporation or any committee of such board of directors duly authorized to act for the corporation;
(3) with respect to any other Person, the board or committee of such Person serving a similar function.
“Capital Stock”means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;
(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.
“Change of Control”means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of Nevada Power | |
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(2) the adoption of a plan relating to the liquidation or dissolution of Nevada Power;
(3) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” (as defined above) becomes the Beneficial Owner, directly or indirectly, of more than 30% of the Voting Stock of Nevada Power or Sierra Pacific Resources, measured by voting power rather than number of shares; or
(4) the first day on which a consolidated basis, determined in accordance with GAAP;providedthat:
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(1) was a member of such Board of Directors on the original issue date of the notes; or
(2) was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board at the time of such nomination or election.
“Credit Facilities”means one or more debt facilities or commercial paper facilities, in each case with banks or other institutional lenders providing for revolving credit loans, term loans or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time, and includes any securities issued pursuant to the G&R Indenture in order to secure any amounts outstanding under a Credit Facility from time to time;providedthat the obligation of Nevada Power to make any payment on any such securities shall be:
(1) no greater than the amount required to be paid under such Credit Facility that is secured by such payment obligation; (2) payable no earlier than such amount is required to be paid under such Credit Facility; and (3) deemed to have been paid or otherwise satisfied and discharged to the extent that |
“Default”means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default as defined in the G&R Indenture.
“Equity Interests”means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).
“Event of Default”means an Event of Default as defined in the G&R Indenture.
“First Mortgage Indenture”means the Indenture of Mortgage, dated as of October 1, 1953, between Nevada Power and Deutsche Bank Trust Company Americas, as trustee, as modified, amended or supplemented at any time or from time to time by supplemental indentures.
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“Guarantee”means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner, including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness.
“Hedging Obligations”means, with respect to any specified Person, the obligations of such Person incurred in the normal course of business and consistent with past practices and not for speculative purposes under:
(1) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements designed to protect the person or entity entering into the agreement against fluctuations in interest rates with respect to Indebtedness incurred and not for purposes of speculation;
(2) foreign exchange contracts and currency protection agreements entered into with one of more financial institutions designed to protect the person or entity entering into the agreement against fluctuations in currency exchange rates with respect to Indebtedness incurred and not for purposes of speculation;
(3) any commodity futures contract, commodity option or other similar agreement or arrangement designed to protect against fluctuations in the price of commodities used by that entity at the time; and
(4) other agreements or arrangements designed to protect such Person against fluctuations in interest rates or currency exchange rates.
“Indebtedness”means, with respect to any specified Person, any indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);
(3) in respect of banker’s acceptances;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the purchase price of any property, except any such balance that constitutes an accrued expense or trade payable; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term “Indebtedness” includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and,
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The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; and
(2) the principal amount of the Indebtedness, together with any interest on the Indebtedness that is more than 30 days past due, in the case of any other Indebtedness.
“Investment Grade Rating”Lien”means, a rating equal to or higher than Baa3 (or the equivalent) by Moody’s or BBB- (or the equivalent) by S&P.
“Liquidated Damages” has the meaning given to it in respect of preferred stock dividends, excluding, however:
“Net Proceeds”Non-Recourse Debt”means Indebtedness:
(1) as to which neither Nevada Power nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise, or (c) constitutes the aggregate cash proceeds received bylender;
(2) no default with respect to which (including any rights that the holders of the Indebtedness may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness (other than the notes) of Nevada Power or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received uponto declare a default on such other Indebtedness or cause the sale or other disposition of any non-cash consideration received in any Asset Sale), netpayment of the direct costs relatingIndebtedness to such Asset Sale, including, without limitation, legal, accounting and investment banking fees, and sales
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(3) as a result ofto which the Asset Sale,lenders have been notified in each case, after taking into accountwriting that they will not have any available tax credits or deductions and any tax sharing arrangements, and amounts required to be appliedrecourse to the repayment of Indebtedness, other than Senior Debt secured by a Lien on the assetstock or assets that were the subject of such Asset Sale andNevada Power or any reserve for adjustment in respect of the sale price of such asset or assets established in accordance with GAAP.
“Obligations”means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.
“Permitted Business”Liens”meansmeans:
(1) Liens securing any business Indebtedness under a Credit Facility and all Obligations and Hedging Obligations relating to such Indebtedness;
(2) Liens in favor of Nevada Power or any Subsidiary Guarantors;
(3) Liens on property of a Person existing at the time such Person is merged with or into or consolidated with Nevada Power or any Restricted Subsidiary of Nevada Power;providedthat derives a majoritysuch Liens were in existence prior to the contemplation of its revenues fromsuch merger or consolidation and do not extend to any assets other than those of the business engaged inPerson merged into or consolidated with Nevada Power or the Restricted Subsidiary;
(4) Liens on property existing at the time of acquisition of the property by Nevada Power and itsor any Restricted SubsidiariesSubsidiary of Nevada Power, provided that such Liens were in existence prior to the contemplation of such acquisition;
(5) Liens to secure the performance of statutory or regulatory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business;
(6) Liens existing on the original issue date of the notes and/(including the Lien of the First Mortgage Indenture and the Lien of the Indenture);
(7) Liens for taxes, assessments or activitiesgovernmental charges or claims that are reasonably similar, ancillary, incidental, complementarynot yet delinquent or related to, or a reasonable extension, development or expansion of, the businesses in which Nevada Power and its Restricted Subsidiariesthat are engaged on the original issue date of the notes, as determinedbeing contested in good faith by appropriate proceedings promptly instituted and diligently concluded; provided that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor;
(8) Liens incurred in the Boardordinary course of Directorsbusiness of Nevada Power.
(9) Liens securing Permitted Investments”Refinancing Indebtedness incurred to refinance Indebtedness that was previously so secured;providedmeans:
59(10) Liens on assets transferred to a Receivables Entity or on assets of a Receivables Entity, in either case, incurred in connection with a Qualified Receivables Transaction; and
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61(1) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness extended, refinanced, renewed, replaced, defeased or refunded (plus all accrued and unpaid interest on the Indebtedness and the amount of all expenses and premiums incurred in connection therewith);
(3) if such Permitted Refinancing Indebtedness is issued on or after the first anniversary of the original issue date of the notes, and the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is contractually subordinated in right of payment to the notes, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the notes on terms at least as favorable to the holders of notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and
“Person”means, (i) with respect to the Series M New Notes, any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.
“Qualified Receivables Transaction”means any transaction or series of transactions that may be entered into by Nevada Power or any of its Restricted Subsidiaries pursuant to which Nevada Power or any of its Restricted Subsidiaries may sell, convey or otherwise transfer to (1) a Receivables Entity (in the case of a transfer by Nevada Power or any of its Restricted Subsidiaries) and (2) any other Person (in the case of a transfer by a Receivables Entity), or may grant a security interest in, any accounts receivable (whether now existing or arising in the future) of Nevada Power or any of its Restricted Subsidiaries, and any assets related thereto, including, without limitation, all collateral securing such accounts receivable, all contracts and all guarantees or other obligations in respect of such accounts receivable, the proceeds of such receivables and other assets which are customarily transferred, or in respect of which security interests are customarily granted in connection with asset securitization involving accounts receivable.
“Receivables Entity”means a Wholly-Owned Subsidiary of Nevada Power or Sierra Pacific Resources (or another Person in which Nevada Power or any Restricted Subsidiary of Nevada Power makes an Investment and to which Nevada Power or any Restricted Subsidiary of Nevada Power transfers accounts receivable and related assets) which engages in no activities other than in connection with the financing of accounts receivable and which is designated by the Board of Directors of Nevada Power (as provided below) as a Receivables Entity:
62(1) no portion of the Indebtedness or any other obligations (contingent or otherwise) of which:
(b) is recourse to or obligates Nevada Power or any Restricted Subsidiary of Nevada Power in any way other than pursuant to Standard Securitization Undertakings; or
(2) which is not party to any agreement, contract, arrangement or understanding (except in connection with a Purchase Money Note or Qualified Receivables Transaction) with Nevada Power or any Restricted Subsidiary of Nevada Power other than on terms no less favorable to Nevada Power or such Restricted Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of Nevada Power, other than fees payable in the ordinary course of business in connection with servicing accounts receivable; and
(3) to which neither Nevada Power nor any Restricted Subsidiary of Nevada Power has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results.
Any such designation by the Board of Directors of Nevada Power shall be evidenced to the trustee by filing with the trustee a certified copy of the Board Resolution giving effect to such designation and an officer’s certificate certifying that such designation complied with the foregoing conditions.
“Restricted Subsidiary”of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.
“Significant Subsidiary”means any Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date hereof.
“Standard Securitization Undertakings”means representations, warranties, covenants and indemnities entered into by Nevada Power or any Restricted Subsidiary of Nevada Power which are reasonably customary in securitization of accounts receivable transactions.
“Stated Maturity”means, (i) with respect to the Series M New Notes, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.
“Subsidiary”means, with respect to any specified Person:
(1) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees of the corporation, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are that Person or one or more Subsidiaries of that Person (or any combination thereof).
“Subsidiary Guarantee”means any Guarantee of the notes to be executed by any Subsidiary of Nevada Power pursuant to the covenant described above under “Certain Covenants — Covenants—Future Subsidiary Guarantees.”
“Subsidiary Guarantors”means any Subsidiary of Nevada Power that executes a Subsidiary Guarantee in accordance with the provisions of the G&R Indenture, and their respective successors and assigns.
“Unrestricted Subsidiary”means any Subsidiary of Nevada Power that is designated by the Board of Directors of Nevada Power as an Unrestricted Subsidiary pursuant to a Board Resolution, but only to the extent that such Subsidiary:
63(1) has no Indebtedness other than Non-Recourse Debt;
(3) is a Person with respect to which neither Nevada Power nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results;
(5) has at least one director on its Board of Directors that is not a director or executive officer of Nevada Power or any of its Restricted Subsidiaries and has at least one executive officer that is not a director or executive officer of Nevada Power or any of its Restricted Subsidiaries.
Any designation of a Subsidiary of Nevada Power as an Unrestricted Subsidiary will be evidenced to the trustee by filing with the trustee a certified copy of the Board Resolution giving effect to such designation and an officer’s certificate certifying that such designation complied with the preceding conditions and was permitted by the covenant described above under the caption “— Certain Covenants — Restricted Payments.”conditions. If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will
thereafter cease to be an Unrestricted Subsidiary for purposes of the G&R Indenture and any Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of Nevada Power as of such date and, if such Indebtedness is not permitted to be incurred as of such date under the covenant described under the caption “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock,” Nevada Power will be in default of such covenant.
“Voting Stock”of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.
“Weighted Average Life to Maturity”means, when applied to any Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect of the Indebtedness, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by
(2) the then outstanding principal amount of such Indebtedness.
Security
SecurityGeneral
Except as otherwise contemplated below under this heading and subject to the exceptions specifically discussed under “Release of Property” and “Defeasance,” all Outstanding Indenture Securities, equally and ratably, will be secured by the lien of the G&R Indenture on substantially all properties owned by us located in the State of Nevada (and not excepted or released from the lien thereof), and improvements, extensions and additions to, and renewals and replacements of, such properties, which lien, as to such properties, will be junior, subject and subordinate to the respective liens of our existing First Mortgage Indenture.
As used herein, the term “First Mortgage Indenture” means our Indenture of Mortgage, dated as of October 1, 1953, to Deutsche Bank Trust Company Americas, as trustee, as heretofore and hereafter amended and supplemented. Capitalized terms used under this heading which are not otherwise defined in
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The G&R Indenture provides that, after the issuance of the initial series of securities under the Indenture, we will not issue any additional bonds under the First Mortgage Indenture, except (a) as necessary to replace any mutilated, lost or destroyed bonds or to effect exchanges and transfers of bonds, and (b) up to $195 million of First Mortgage Bonds to cover certain of our negative pledge obligations and for other financing-related purposes of which $115 million has been issued. The G&R Indenture also provides that, as soon as practicable after we become entitled to release and discharge of the First Mortgage Indenture, we will take all necessary action to obtain and effect the release and cancellation of the lien of the First Mortgage Indenture upon any of the Mortgaged Property. (See Section 7.02.)
Lien of the Indenture
General. The G&R Indenture constitutes a lien on substantially all of our real property and tangible personal property located in the State of Nevada, other than property excepted from the lien thereof and such property as may have been released from the lien thereof in accordance with the terms thereof, subject to no liens prior to the lien of the G&R Indenture other than the lien of the First Mortgage Indenture (so long as the same remains in effect), Permitted Liens and certain other liens permitted to exist.
The G&R Indenture provides that after-acquired property (other than excepted property) located in the State of Nevada will be subject to the lien of the G&R Indenture;provided, however,that in the case of consolidation or merger (whether or not we are the surviving corporation) or transfer of the Mortgaged Property as or substantially as an entirety, the G&R Indenture will not be required to be a lien upon any of the properties then owned or thereafter acquired by the successor corporation except properties acquired from us in or as a result of such transaction and improvements, extensions and additions (as defined in the G&R Indenture) to such properties and renewals, replacements and substitutions of or for any part or parts thereof. (See Article XIII and “Consolidation, Merger, etc.” herein.) In addition, after-acquired property may be subject to liens existing or placed thereon at the time of acquisition thereof, including, but not limited to, Purchase Money Liens (as hereinafter defined), and, in certain circumstances, to liens attaching to such property prior to the recording and/or filing of an instrument specifically subjecting such property to the lien of the G&R Indenture.
Without the consent of the Holders, we may enter into supplemental indentures with the Trustee in order to subject to the lien of the G&R Indenture additional property (including property which would otherwise be excepted from such lien). (See Section 14.01.) Such property would thereupon constitute Property Additions (so long as it would otherwise qualify as Property Additions as described below) and be available as a basis for the issuance of Indenture Securities. (See “—Issuance of Additional Indenture Securities.”)
Excepted Property. There are excepted from the lien of the G&R Indenture, among other things, cash, deposit accounts, securities; contracts, leases and other agreements of all kinds; contract rights, bills, notes and other instruments; revenues, accounts and accounts receivable and unbilled revenues, claims, demands and judgments; governmental and other licenses, permits, franchises, consents and allowances (except to the extent that any of the same constitute rights or interests relating to the occupancy or use of real property); certain intellectual property rights, domain names and other general intangibles; vehicles, movable equipment and aircraft; all goods, stock in trade, wares, merchandise and inventory held for sale or lease in the ordinary course of business; materials, supplies, inventory and other personal property consumable in the operation of the Mortgaged Property; fuel; portable tools and equipment; furniture and furnishings; computers and data processing, telecommunications and other facilities used primarily for administrative or clerical purposes or otherwise not used in connection with the operation or maintenance of electric or gas utility facilities; coal, ore, gas, oil and other minerals and timber; electric energy, gas (natural or artificial), steam, water and other products generated, produced, manufactured, purchased or otherwise acquired by us; real property, gas wells, pipe lines, and other facilities used primarily for the
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In addition, our properties located outside of the State of Nevada are not subject to the lien of the G&R Indenture.
Permitted Liens. The lien of the G&R Indenture is subject to Permitted Liens and certain other liens permitted to exist. For purposes of the G&R Indenture, Permitted Liens includes any and all of the following, among other, liens: (a) liens for taxes which are not delinquent or are being contested in good faith; (b) mechanics’, workmen’s and similar liens and other liens arising in the ordinary cause of business; (c) liens in respect of judgments (i) in an amount not exceeding the greater of $10 million and 3% of the aggregate principal amount of Indenture Securities then Outstanding or (ii) with respect to which we shall in good faith be prosecuting an appeal or shall have the right to do so; (d) easements, leases or other rights of others in, and defects in title to, the Mortgaged Property which do not in the aggregate materially impair our use of the Mortgaged Property considered as a whole; (e) certain defects, irregularities and limitations in title to real property subject to rights-of-way in our favor or used primarily for right-of-way purposes; (f) liens securing indebtedness of others upon real property used for transmission or distribution or otherwise to obtain rights-of-way; (g) leases existing at the date of the G&R Indenture and subsequent leases for not more than 10 years or which do not materially impair our use of the property subject thereto; (h) liens of lessors or licensors for amounts due which are not delinquent or are being contested; (i) controls, restrictions or obligations imposed by Governmental Authorities upon our property or the operation thereof; (j) rights of Governmental Authorities to purchase or designate a purchase of our property; (k) liens required by law or governmental regulation as a condition to the transaction of any business or the exercise of any privilege or license, or to enable us to maintain self-insurance or to participate in any funds established to cover insurance risks or in connection with workmen’s compensation, unemployment insurance, social security or any pension or welfare benefit plan or program; (l) liens to secure duties or public or statutory obligations or surety, stay or appeal bonds; (m) rights of others to take minerals, timber, electric energy, gas, water, steam or other products produced by us or by others on our property; (n) rights and interests of Persons other than us arising out of agreements relating to the common ownership or joint use of property, and liens on the interests of such Persons in such property; (o) restrictions or assignment and/or qualification requirements on the assignee; (p) liens which have been bonded for the full amount in dispute or for the payment of which other security arrangements have been made; (q) easements, ground leases or rights-of-way on or across our property for the purpose of roads, pipelines, transmission or distribution lines, communication lines, railways and other similar purposes,providedthat the same do not materially impair our use of such property; and (r) Prepaid Liens. (See Granting Clauses and Section 1.01.)
Trustee’s Lien. The G&R Indenture provides that the Trustee will have a lien, prior to the lien on behalf of the holders of Indenture Securities, upon the Mortgaged Property for the payment of its reasonable compensation and expenses and for indemnity against certain liabilities. (See Section 11.07.)
Issuance of Additional Indenture Securities
The aggregate principal amount of Indenture Securities which may be authenticated and delivered under the G&R Indenture is unlimited. (See Section 3.01.) Securities of any series may be issued from time to time on the basis of Property Additions, Retired Securities and cash deposited with the trustee, and in an aggregate principal amount not exceeding:
66(i) 70% of the Cost or Fair Value to us (whichever is less) of Property Additions (as described below) which do not constitute Funded Property (generally, Property Additions which have been made the basis of the authentication and delivery of Indenture Securities, the release of Mortgaged Property or the withdrawal of cash, which have been substituted for retired Funded Property or which have been used for other specified purposes) after certain deductions and additions, primarily including adjustments to offset property retirements;
(iii) an amount of cash deposited with the Trustee. (See Article IV.)
Retired Securities means, generally, (a) Indenture Securities which are no longer Outstanding under the G&R Indenture, which have not been retired by the application of Funded Cash and which have not been used as the basis for the authentication and delivery of Indenture Securities, the release of property or the withdrawal of cash and (b) certain bonds issued under the First Mortgage Indenture which have been retired.
Release of Property
Unless an Event of Default has occurred and is continuing, we may obtain the release from the lien of the G&R Indenture of any Funded Property, except for cash held by the Trustee, upon delivery to the Trustee of an amount in cash equal to the amount, if any, by which 70% of the Cost of the property to be released (or, if less, the Fair Value to us of such property at the time it became Funded Property) exceeds the aggregate of:
(1) an amount equal to 70% of the aggregate principal amount of obligations secured by Purchase Money Lien upon the property to be released and delivered to the Trustee, subject to certain limitations described below;
(2) an amount equal to 70% of the Cost or Fair Value to us (whichever is less) of certified Property Additions not constituting Funded Property after certain deductions and additions, primarily including adjustments to offset property retirements (except that such adjustments need not be made if such Property Additions were acquired or made within the 90-day period preceding the release);
(3) the aggregate principal amount of Indenture Securities we would be entitled to issue on the basis of Retired Securities (with such entitlement being waived by operation of such release);
(4) any amount of cash and/or an amount equal to 70% of the aggregate principal amount of obligations secured by Purchase Money Lien upon the property released delivered to the trustee or other holder of a lien prior to the lien of the Indenture, subject to certain limitations described below;
(5) the aggregate principal amount of Indenture Securities delivered to the Trustee (with such Indenture Securities to be canceled by the Trustee); and
(6) any taxes and expenses incidental to any sale, exchange, dedication or other disposition of the property to be released. (See Section 8.03.)
As used in the G&R Indenture, the term “Purchase Money Lien” means, generally, a lien on the property being released which is retained by the transferor of such property or granted to one or more other Persons in connection with the transfer or release thereof, or granted to or held by a trustee or agent for any such Persons, and may include liens which cover property in addition to the property being released and/or which secure indebtedness in addition to indebtedness to the transferor of such property. (See Section 1.01.) Generally, the principal amount of obligations secured by Purchase Money Lien used as the basis for the release of property may not exceed 75% of the Fair Value of such property unless no additional obligations are outstanding, or are permitted to be issued, under such Purchase Money Lien. (See Section 8.03.)
Property which is not Funded Property may generally be released from the lien of the G&R Indenture without depositing any cash or property with the Trustee as long as (a) the aggregate amount of Cost or Fair Value to us (whichever is less) of all Property Additions which do not constitute Funded Property (excluding the property to be released) after certain deductions and additions, primarily including
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The G&R Indenture provides simplified procedures for the release of minor properties and property taken by eminent domain, and provides for dispositions of certain obsolete property and grants or surrender of certain rights without any release or consent by the Trustee. (See Sections 8.05, 8.07 and 8.08.)
If we retain any interest in any property released from the lien of the G&R Indenture, the G&R Indenture will not become a lien on such property or such interest therein or any improvements, extensions or additions to such property or renewals, replacements or substitutions of or for such property or any part or parts thereof. (See Section 8.09.)
Withdrawal of Cash
Unless an Event of Default has occurred and is continuing and subject to certain limitations, cash held by the Trustee may, generally, (1) be withdrawn by us (a) to the extent of an amount equal to 70% the Cost or Fair Value to us (whichever is less) of Property Additions not constituting Funded Property, after certain deductions and additions, primarily including adjustments to offset retirements (except that such adjustments need not be made if such Property Additions were acquired or made within the 90-day period preceding the withdrawal) or (b) in an amount equal to the aggregate principal amount of Indenture Securities that we would be entitled to issue on the basis of Retired Securities (with the entitlement to such issuance being waived by operation of such withdrawal) or (c) in an amount equal to the aggregate principal amount of any Outstanding Indenture Securities delivered to the Trustee; or (2) upon our request, be applied to (a) the purchase of Indenture Securities or (b) the payment (or provision therefor) at Stated Maturity of any Indenture Securities or the redemption (or provision therefor) of any Indenture Securities which are redeemable. (See Section 8.06.)
Consolidation, Merger, etc.
We may not consolidate with or merge into any other corporation or convey, otherwise transfer or lease the Mortgaged Property as or substantially as an entirety to any Person unless (a) the corporation formed by such consolidation or into which we are merged or the Person which acquires by conveyance or other transfer, or which leases, the Mortgaged Property as or substantially as an entirety is a corporation organized and existing under the laws of the United States, or any State or Territory thereof or the District of Columbia, and such corporation executes and delivers to the Trustee a supplemental indenture that in the case of a consolidation, merger, conveyance or other transfer, or in the case of a lease if the term thereof extends beyond the last stated maturity of the Indenture Securities then outstanding, contains an assumption by such corporation of the due and punctual payment of the principal of and premium, if any, and interest, if any, on the Indenture Securities and the performance of all of our covenants and conditions under the G&R Indenture and, in the case of a consolidation,
merger, conveyance or other transfer that contains a grant, conveyance, transfer and mortgage by such corporation confirming the lien of the G&R Indenture on the Mortgaged Property and subjecting to such lien all property thereafter acquired by such corporation that shall constitute an improvement, extension or addition to the Mortgaged Property or renewal, replacement or substitution of or for any part thereof and, at the election of such corporation, subjecting to the lien of the G&R Indenture such other property then owned or thereafter acquired by such corporation as such corporation shall specify and (b) in the case of a lease, such lease is made expressly subject to termination by us or by the Trustee at any time during the continuance of an Event of Default. (See Section 13.01.) In the case of the conveyance or other transfer of the Mortgaged Property as or substantially as an entirety to any other Person, upon the satisfaction of all the conditions described above, we would be released and discharged from all obligations under the G&R Indenture and on the Indenture Securities then Outstanding unless we elect to waive such release and discharge. (See Section 13.04.)
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Modification Without Consent
Without the consent of any Holders, we may enter into one or more supplemental indentures with the Trustee for any of the following purposes:
(a) to evidence the succession of another Person to us and the assumption by any such successor of our covenants in the Indenture and in the Indenture Securities; or
(b) to add one or more covenants by us or other provisions for the benefit of all Holders or for the benefit of the Holders of, or to remain in effect only so long as there shall be outstanding, Indenture Securities of one or more specified series (for the purposes of this subsection, “series” includes all tranches thereof), or to surrender any right or power conferred upon us by the Indenture; or
(c) to correct or amplify the description of any property at any time subject to the lien of the Indenture; or better to assure, convey and confirm to the Trustee any property subject or required to be subjected to the lien of the Indenture; or to subject to the lien of the Indenture additional property (including property of others), to specify any additional Permitted Liens with respect to such additional property and to modify the provisions in the Indenture for dispositions of certain types of property without release in order to specify any additional items with respect to such additional property; or
(d) to change or eliminate any provision of the Indenture or to add any new provision to the Indenture, provided that if such change, elimination or addition adversely affects the interests of the Holders of the Indenture Securities of any series in any material respect, such change, elimination or addition will become effective with respect to such series only when no Indenture Security of such series remains Outstanding; or
(e) to establish the form or terms of the Indenture Securities of any series as permitted by the Indenture; or
(f) to provide for the authentication and delivery of bearer securities and coupons appertaining thereto representing interest, if any, thereon and for the procedures for the registration, exchange and replacement thereof and for the giving of notice to, and the solicitation of the vote or consent of, the holders thereof, and for any and all other matters incidental thereto; or
(g) to evidence and provide for the acceptance of appointment by a successor trustee or by a co-trustee; or
(h) to provide for the procedures required to permit the utilization of a non-certificated system of registration for all, or any series of, the Indenture Securities; or
(i) to change any place or places where (1) the principal of and premium, if any, and interest, if any, on all or any series of Indenture Securities will be payable, (2) all or any series of Indenture Securities may be surrendered for registration of transfer, (3) all or any series of Indenture Securities may be surrendered for exchange and (4) notices and demands to or upon us in respect of all or any series of Indenture Securities and the Indenture may be served; or
(j) to cure any ambiguity, to correct or supplement any provision therein which may be defective or inconsistent with any other provision therein, or to make any other changes to the provisions thereof or to add or remove other provisions with respect to matters and questions arising under the Indenture, so long as such other changes or additions do not adversely affect the interests of the Holders of Indenture Securities of any series in any material respect. (See Section 14.01.)
Without limiting the generality of the foregoing, if the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), is amended after the date of the G&R Indenture in such a way as to require changes to the G&R Indenture or the incorporation therein of additional provisions or so as to permit
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Modifications Requiring Consent
Except as provided above, the consent of the Holders of not less than a majority in aggregate principal amount of the Indenture Securities of all series then Outstanding, considered as one class, is required for the purpose of adding any provisions to, or changing in any manner, or eliminating any of the provisions of, the G&R Indenture pursuant to one or more supplemental indentures;provided, however,that if less than all of the series of Indenture Securities Outstanding are directly affected by a proposed supplemental indenture, then the consent only of the Holders of a majority in aggregate principal amount of Outstanding Indenture Securities of all series so directly affected, considered as one class, will be required; andprovided, further, that if the Indenture Securities of any series have been issued in more than one tranche and if the proposed supplemental indenture directly affects the rights of the Holders of one or more, but less than all such tranches, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Indenture Securities of all such tranches so directly affected, considered as one class, will be required; andprovided, further,that no such amendment or modification may
(a) change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Indenture Security, or reduce the principal amount thereof or the rate of interest thereon (or the amount of any installment of interest thereon) or change the method of calculating such rate or reduce any premium payable thereon, or reduce the amount of the principal of any Discount Security that would be due and payable upon a declaration of acceleration of Maturity or change the coin or currency (or other property) in which any Indenture Security or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Maturity of any Indenture Security (or, in the case of redemption, on or after the redemption date) without, in any such case, the consent of the Holder of such Indenture Security,
(b) permit the creation of any lien not otherwise permitted by the Indenture ranking prior to the lien of the Indenture with respect to all or substantially all of the Mortgaged Property or terminate the lien of the Indenture on all or substantially all of the Mortgaged Property or deprive the Holders of the benefit of the lien of the Indenture, without, in any such case, the consent of the Holders of all Indenture Securities then Outstanding,
(c) reduce the percentage in principal amount of the Outstanding Indenture Securities of any series, or tranche thereof, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with any provision of the Indenture or of any default thereunder and its consequences, or reduce the requirements for quorum or voting, without, in any such case, the consent of the Holder of each Outstanding Indenture Security of such series, or
(d) modify certain of the provisions of the Indenture relating to supplemental indentures, waivers of certain covenants and waivers of past defaults with respect to the Indenture Securities of any series without the consent of the Holder of each Outstanding Indenture Security of such series.
A supplemental indenture that changes or eliminates any covenant or other provision of the G&R Indenture that has expressly been included solely for the benefit of the Holders of, or that is to remain in effect only so long as there shall be Outstanding, Indenture Securities of one or more specified series or modifies the rights of the Holders of Indenture Securities of such series with respect to such covenant or other provision, will be deemed not to affect the rights under the G&R Indenture of the Holders of the Indenture Securities of any other series. (See Section 14.02.)
70Waiver
Before any sale of any of the Mortgaged Property and before a judgment or decree for payment of the money due shall have been obtained by the Trustee, the Holders of at least a majority in principal amount of all Outstanding Securities may waive any past default under the G&R Indenture, except a default (a) in the payment of the principal of or premium, if any, or interest, if any, on any Security Outstanding, or (b) in respect of a covenant or provision of the G&R Indenture which cannot be modified or amended without the consent of the Holder of each Outstanding Security of any series or tranche affected. Upon any such waiver, such default shall cease to exist, and any and all Events of Default arising therefrom shall be deemed to have been cured; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. (Section 10.17.)
Events of Default
Each of the following events constitutes an Event of Default under the G&R Indenture (See Section 10.01.)10.01):
71(1) failure to pay interest on any Indenture Security within 60 days after the same becomes due and payable;
(3) failure to perform or breach of any of our covenants or warranties in the Indenture (other than a covenant or warranty which is to remain in effect only so long as the notes offered hereby remain outstanding or a default in the performance of which or breach of which is dealt with elsewhere under this paragraph) for a period of 90 days after there has been given to us by the Trustee, or to us and the Trustee by the Holders of at least 33% in principal amount of Outstanding Indenture Securities, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default,” unless the Trustee, or the Trustee and the Holders of a principal amount of Indenture Securities not less than the principal amount of Indenture Securities the Holders of which gave such notice, as the case may be, agree in writing to an extension of such period prior to its expiration; provided, however, that the Trustee, or the Trustee and such Holders, as the case may be, will be deemed to have agreed to an extension of such period if we have initiated corrective action within such period and is being diligently pursued;
(5) an event of default under the First Mortgage Indenture; provided, however, that, anything in the Indenture to the contrary notwithstanding, the waiver or cure of such event of default under the First Mortgage Indenture shall constitute a cure of the corresponding event of default under the Indenture.
Remedies
RemediesAcceleration of Maturity
If an Event of Default occurs and is continuing, then the Trustee or the Holders of not less than 33% in principal amount of Indenture Securities then Outstanding may declare the principal amount (or if the Indenture Securities are Discount Securities, such portion of the principal amount as may be provided for such Discount Securities pursuant to the terms of the G&R Indenture) of all of the Indenture Securities then Outstanding, together with premium, if any, and accrued interest, if any, thereon to be immediately due and payable. At any time after such declaration of acceleration of the Indenture Securities then Outstanding, but before the sale of any of the Mortgaged Property and before a judgment or decree for payment of money shall have been obtained by the Trustee as provided in the G&R Indenture, the Event or Events of Default giving rise to such declaration of acceleration will, without further act, be deemed to have been waived, and such declaration and its consequences will, without further act, be deemed to have been rescinded and annulled, if
(a) we have paid or deposited with the Trustee a sum sufficient to pay
(1) all overdue interest, if any, on all Indenture Securities then Outstanding;
(2) the principal of and premium, if any, on any Indenture Securities then Outstanding which have become due otherwise than by such declaration of acceleration and interest thereon at the rate or rates prescribed therefor in such Indenture Securities; and
(3) all amounts due to the Trustee as compensation and reimbursement as provided in the Indenture; and
(b) any other Event or Events of Default, other than the non-payment of the principal of Indenture Securities that shall have become due solely by such declaration of acceleration, shall have been cured or waived as provided in the G&R Indenture. (See Section 10.02.)
Possession of Mortgaged Property
Under certain circumstances and to the extent permitted by law, if an Event of Default occurs and is continuing, the Trustee has the power to take possession of, and to hold, operate and manage, the Mortgaged Property, or with or without entry, sell the Mortgaged Property. If the Mortgaged Property is sold, whether by the Trustee or pursuant to judicial proceedings, the principal of the Outstanding Indenture Securities, if not previously due, will become immediately due, together with premium, if any, and any accrued interest. (See Sections 10.03, 10.04 and 10.05.)
Right to Direct Proceedings
If an Event of Default occurs and is continuing, the Holders of a majority in principal amount of the Indenture Securities then Outstanding will have the right to direct the time, method and place of conducting any proceedings for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee,providedthat (a) such direction does not conflict with any rule of law or with the G&R Indenture, and could not involve the Trustee in personal liability in circumstances where indemnity would not, in the Trustee’s sole discretion, be adequate and (b) the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. (See Section 10.16.)
Limitation on Right to Institute Proceedings
No Holder of any Indenture Security will have any right to institute any proceeding, judicial or otherwise, with respect to the G&R Indenture or for the appointment of a receiver or for any other remedy thereunder unless
72(a) such Holder has previously given to the Trustee written notice of a continuing Event of Default;
(b) the Holders of not less than a majority in aggregate principal amount of the Indenture Securities then Outstanding have made written request to the Trustee to institute proceedings in respect of such Event of Default and have offered the Trustee reasonable indemnity against costs and liabilities to be incurred in complying with such request;
(c) such Holder or Holders shall have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request;
(e) no direction inconsistent with such written request shall have been given to the Trustee during such sixty day period by the Holders of a majority in aggregate principal amount of the Securities then Outstanding;
it being understood and intended that no one or more of such Holders shall have any right in any manner to affect, disturb or prejudice the lien of the G&R Indenture or the rights of any other of such Holders or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under the G&R Indenture, except in the manner provided in the G&R Indenture and for the equal and ratable benefit of all of such Holders.
Furthermore, no Holder will be entitled to institute any such action if and to the extent that such action would disturb or prejudice the rights of other Holders. (See Section 10.11.)
No Impairment of Right to Receive Payment
Notwithstanding that the right of a Holder to institute a proceeding with respect to the G&R Indenture is subject to certain conditions precedent, each Holder of an Indenture Security has the absolute and unconditional right to receive payment of the principal of and premium, if any, and interest, if any, on such Indenture Security when due and to institute suit for the enforcement of any such payment, and such rights may not be impaired without the consent of such Holder. (See Section 10.12.)
Notice of Default
The Trustee is required to give the Holders notice of any default under the G&R Indenture to the extent required by the Trust Indenture Act, unless such default shall have been cured or waived, except that no such notice to Holders of a default of the character described in clause (3) under “Events of Default” may be given until at least 75 days after the occurrence thereof. (See Section 11.02.) The Trust Indenture Act currently permits the Trustee to withhold notices of default (except for certain payment defaults) if the Trustee in good faith determines the withholding of such notice to be in the interests of the Holders.
Indemnification of Trustee
As a condition precedent to certain actions by the Trustee in the enforcement of the lien of the G&R Indenture and institution of action on the Indenture Securities, the Trustee may require adequate indemnity against costs, expenses and liabilities to be incurred in connection therewith. (See Sections 10.11 and 11.01.)
Remedies Limited by State Law
The laws of the State of Nevada where the Mortgaged Property is located may limit or deny the ability of the Trustee or securityholderssecurity holders to enforce certain rights and remedies provided in the G&R Indenture in accordance with their terms.
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Defeasance
Notwithstanding the foregoing, no note shall be deemed to have been paid as aforesaid unless we shall have delivered to the Trustee either:
(a) an opinion of counsel in the United States reasonably acceptable to the Trustee confirming that (i) we have received from, or there has been published by, the Internal Revenue Service a ruling or (ii) since the date of the Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion of counsel shall confirm that, the Holders of the outstanding notes will not recognize income, gain or loss for federal income tax purposes as a result of such defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred; or
(b) (i) an instrument wherein we, notwithstanding the satisfaction and discharge of our Indebtedness in respect of the notes, shall assume the obligation (which shall be absolute and unconditional) to irrevocably deposit with the Trustee such additional sums of money, if any, or additional Eligible Obligations, if any, or any combination thereof, at such time or times, as shall be necessary, together with the money and/or Eligible Obligations theretofore so deposited, to pay when due the principal of and premium, if any, and interest due and to become due on such notes or portions thereof; provided, however, that such instrument may state that our obligation to make additional deposits as aforesaid shall be subject to the delivery to us by the Trustee of a notice asserting the deficiency accompanied by an opinion of an independent public accountant of nationally recognized standing showing the calculation thereof; and (ii) an opinion of tax counsel in the United States reasonably acceptable to the Trustee to the effect that the Holders of the outstanding notes will not recognize income, gain or loss for federal income tax purposes as a result of such defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred.
Duties of the Trustee; Resignation; Removal
The Trustee will have, and will be subject to, all the duties and responsibilities specified with respect to an indenture trustee under the Trust Indenture Act. Subject to such provisions, the Trustee will be under no obligation to exercise any of the powers vested in it by the G&R Indenture at the request of any holder of Indenture Securities, unless offered reasonable indemnity by such holder against the costs, expenses and liabilities which might be incurred thereby. The Trustee will not be required to expend or risk its own funds or otherwise incur financial liability in the performance of its duties if the Trustee reasonably believes that repayment or adequate indemnity is not reasonably assured to it.
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the Trustee. No resignation or removal of the Trustee and no appointment of a successor trustee will become effective until the acceptance of appointment by a successor trustee in accordance with the requirements of the G&R Indenture. So long as no Event of Default or event which, after notice or lapse of time, or both, would become an Event of Default has occurred and is continuing, if we have delivered to the Trustee a resolution of our Board of Directors appointing a successor trustee and such successor has accepted such appointment in accordance with the terms of the G&R Indenture, the Trustee will be deemed to have resigned and the successor will be deemed to have been appointed as trustee in accordance with the G&R Indenture. (See Section 11.10.)
Evidence to be Furnished to the Trustee
Compliance with G&R Indenture provisions is evidenced by written statements of our officers or persons selected or paid by us. In certain cases, opinions of counsel and certification of an engineer, accountant, appraiser or other expert (who in some cases must be independent) must be furnished. In addition, the G&R Indenture requires us to give the Trustee, not less often than annually, a brief statement as to our compliance with the conditions and covenants under the G&R Indenture.
No Personal Liability of Directors, Officers, Employees and Stockholders
No director, officer, employee, incorporator or stockholder of Nevada Power will have any liability for any obligations of Nevada Power under the Indenture Securities, the G&R Indenture, or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of Indenture Securities by accepting a note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Indenture Securities. The waiver may not be effective to waive liabilities under the federal securities laws.
General
The summaries under this heading do not purport to be complete and are subject to the detailed provisions of the First Mortgage Indenture. Wherever particular provisions of the First Mortgage Indenture or terms defined therein are referred to, such provisions or definitions are incorporated by reference as a part of the statements made herein and such statements are qualified in their entirety by such reference.
Security
The First Mortgage Indenture covers substantially all of Nevada Power’s real and tangible properties located in the State of Nevada, Nevada Power’s interest in a generation station in the State of Arizona, as well as certain mining interests of Nevada Power in the State of Utah, and improvements, extensions and additions thereto and replacements thereof.
Property excepted from the lien of the First Mortgage Indenture includes: (a) cash, bills, notes or accounts receivable, contracts or chooses in action (except cash deposited with the Trustee pursuant to the G&R Indenture and except any of such items specifically subjected to the lien of the G&R Indenture); (b) notes, notes, evidences of indebtedness, judgments, shares of stock or other securities, except any of such items as are specifically subjected to the lien of the G&R Indenture; (c) automobiles or trucks; and (d) materials, supplies, merchandise, goods and appliances held for the purpose of sale in the ordinary course of business and fuel, materials, supplies and similar personal property which are consumable in their use in the operation of the plants or systems of Nevada Power. (See Granting Clause IV of the First Mortgage Indenture.)
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As of the date hereof, the aggregate principal amount of first mortgage bonds outstanding under the First Mortgage Indenture is $372.5$154.5 million.
The following is a general discussion of the material United States federal income tax considerations relevant to the purchase, ownership and disposition of the notes by holders thereof, based upon current provisions of the Internal Revenue Code of 1986, as amended (the “Code”), existing and proposed Treasury regulations promulgated thereunder, rulings, pronouncements, judicial decisions and administrative interpretations of the Internal Revenue Service, all of which are subject to change, possibly on a retroactive basis, at any time by legislative, judicial or administrative action. Any such changes may be applied retroactively in a manner that could affect adversely a holder of the notes. We cannot assure you that the Internal Revenue Service will not challenge the conclusions stated below, and no ruling from the Internal Revenue Service has been or will be sought on any of the matters discussed below.
The following discussion does not address the effect of any special rules applicable to certain types of holders, including, without limitation, dealers in securities or currencies, insurance companies, financial institutions, regulated investment companies, real estate investment trusts, thrifts, tax-exempt entities, persons who hold notes as part of a straddle, hedge, conversion transaction, or other risk reduction or integrated investment transaction, traders in securities that elect to use a mark-to-market method of accounting for their securities holdings, U.S. Holders (as defined below) whose “functional currency” is not the U.S. dollar, persons subject to the alternative minimum tax, or investors in partnerships or other pass-through entities. In addition, this discussion is limited to holders who are the initial purchasers of the notes at their original issue price and hold the notes as capital assets within the meaning of Section 1221 of the Code. This discussion does not address the effect of any United States state or local income or other tax laws, any United States federal estate and gift tax laws, any foreign tax laws, or any tax treaties.
PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR OWN ADVISORS WITH RESPECT TO THEIR PARTICULAR CIRCUMSTANCES.
If a partnership holds our notes, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. If you are a partner in a partnership holding our notes, you should consult your tax advisor.
U.S. Holders
In general, the term “U.S. Holder” means:
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Payments of Interest. Stated interest on a note generally will be taxable to a U.S. Holder as ordinary income from domestic sources at the time it is paid or accrued in accordance with the U.S. Holder’s method of accounting for tax purposes.
Liquidated Damages.The notes provide for the payment of additional amounts ofunder certain circumstances, which amounts shall be treated as interest under certain circumstances.the Indenture. Although the matter is not free from doubt, we
intend to take the position that a U.S. Holder of notes should be required to report any such liquidated damages as income for U.S. federal income tax purposes at the time it accrues or is received in accordance with such holder’s method of accounting. It is possible, however, that the Internal Revenue Service may take a different position, in which case the timing and amount of income may be different.
Sale, Exchange or Other Disposition of a Note. A U.S. Holder will generally recognize capital gain or loss on a sale, exchange, redemption, retirement or other taxable disposition of a note (other than an exchange of a note for a publicly registered Exchange Note pursuant to the exchange offer, see “—Exchange Offer”Offers” below) measured by the difference, if any, between
A U.S. Holder’s adjusted tax basis in a note will, in general, be the U.S. Holder’s cost therefor. Such capital gain or loss will be treated as a long-term gain or loss if, at the time of the disposition, the note has been held by the holder for more than one year; otherwise, the capital gain or loss will be short-term. Non-corporate taxpayers are subject to a lower tax rate on their long-term capital gains than those applicable to ordinary income. All taxpayers are subject to certain limitations on the deductibility of their capital losses.
Exchange Offer. A U.S. Holder will recognize no gain or loss on the subsequent exchange of a note for a publicly registered Exchange Notenote pursuant to the exchange offer.offers. Consequently, the holding period of the Exchange Note will include the holding period of the note exchanged therefor and the adjusted tax basis of the Exchange Note will be the same as the adjusted tax basis of the note exchanged therefor immediately before the exchange.
Information Reporting and Backup Withholding. In general, information reporting requirements will apply to payments of principal, interest and liquidated damages on the notes and the proceeds of sale of a note paid to U.S. Holders other than exempt recipients (such as corporations). U.S. Holders of notes may be subject, under certain circumstances, to backup withholding at a rate of 28% on such payments. Backup withholding applies only if the U.S. Holder:
Backup withholding is not an additional tax. Any amount withheld from a payment to a U.S. Holder under the backup withholding rules is allowable as a credit against such U.S. Holder’s United States federal income tax liability and may entitle such holder to a refund,providedthat the required
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We will furnish annually to the Internal Revenue Service, and to record holders of the notes to whom we are required to furnish such information, information relating to the amount of interest paid and the amount of tax withheld, if any, with respect to payments on the notes.
Non-U.S. Holders
The following summary is limited to the United States federal income tax consequences relevant to a holder of a note (other than a partnership) that is not a U.S. Holder (a “Non-U.S. Holder”). Special rules may apply to Non-U.SNon-U.S. Holders, such as “controlled foreign corporations,” “passive foreign investment companies,” “foreign personal holding companies” and certain expatriates, that are subject to special treatment under the Code. Such Non U.S.-HoldersNon-U.S. Holders should consult their own tax advisors to determine the U.S. federal, state, local and other tax consequences that may be relevant.
Taxation of Interest. Subject to the summary of backup withholding rules below, payments of interest on a note to any Non-U.S. Holder generally will not be subject to United States federal income or withholding taxprovidedthat:
To satisfy the above statement requirement, the Non-U.S. Holder must provide us or our paying agent with a properly completed Internal Revenue Service Form W-8BEN (or substitute Form W-8BEN or the appropriate successor form) under penalties of perjury which provides the Non-U.S. Holder’s name and address and certifies that the Non-U.S. Holder is a Non-U.S. Holder. Alternatively, in a case where a security clearing organization, bank or other financial institution holds the notes in the ordinary course of its trade or business on behalf of the Non-U.S. Holder, certification requires that we or our paying agent receive from the financial institution a certification under penalties of perjury that a properly completed Form W-8BEN (or substitute Form W-8BEN or the appropriate successor form) has been received by it, or by another such financial institution, from the Non-U.S. Holder, and a copy of such a form is furnished to us or our paying agent. Special rules apply to payments made through a qualified intermediary.
A Non-U.S. Holder that does not qualify for exemption from withholding under the preceding paragraph generally will be subject to withholding of United States federal income tax at the rate of 30%, or lower applicable treaty rate, on payments of interest on the notes. A Non-U.S. Holder who is eligible for a lower rate pursuant to an applicable treaty and wishes to claim such lower rate should submit a properly completed Form W-8BEN (or substitute Form W-8BEN or the appropriate successor form) to us or our paying agent.
If the payments of interest on a note are effectively connected with the conduct by a Non-U.S. Holder of a trade or business in the United States (and, if required by an applicable income tax treaty, are attributable to a United States permanent establishment of such Non-U.S. Holder), such
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Non-U.S. Holders should consult their tax advisors regarding any applicable income tax treaties, which may provide for a lower rate of withholding tax, exemption from or reduction of branch profits tax, or other rules different from those described above.
Sale, Exchange or Other Disposition of a Note. Subject to the summary of backup withholding rules below, any gain realized by a Non-U.S. Holder on the sale, exchange, redemption, retirement or other disposition of a note generally will not be subject to United States federal income tax, unless:
Liquidated Damages.Upon the occurrence of certain enumerated events we may be required to make additional payments to you. The U.S. federal income tax treatment of the liquidated damages is unclear. Such liquidated damages paid to a Non-U.S. Holder may be subject to United States withholding tax.
Information Reporting and Backup Withholding. CertainWe must report annually to the Internal Revenue Service and to each Non-U.S. HoldersHolder any interest that is paid to the Non-U.S. Holder, and the amount of tax, if any, withheld. Copies of these information returns also may be made available under the provisions of a specific treaty or other agreement to the tax authorities of the country in which the Non-U.S. Holder resides.
Treasury regulations provide that the backup withholding tax will not apply to such payments of interest with respect to which either the requisite certification, as described above, has been received or an exemption otherwise has been established,providedthat neither we nor our paying agent have actual knowledge or reason to know that the Non-U.S. Holder is, in fact, a United States person or that the conditions of any other exemption are not, in fact, satisfied.
The payment of the proceeds from the disposition of the notes to or through the United States office of any broker, United States or foreign, will be subject to information reporting and possible backup withholding with respectunless the owner certifies as to payments on the notes. Treasury regulations provide that such information reporting and backup withholding generally will not apply to payments on the notes to a Non-U.S. Holder if such Non-U.S. Holder certifies that it is not a U.S. personits non-U.S. status under penalties of perjury or otherwise establishes an exemption,providedthat the payorbroker does not have actual knowledge that such Non-U.S. Holderor reason to know the holder is a U.S.United States person or that any otherthe conditions of theany other exemption are not, in fact, satisfied.
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a Non-U.S. Holder generally willmay be allowed as a refundrefunded or a creditcredited against suchthe Non-U.S. Holder’s U.S.United States federal income tax liability,providedthat the required procedures are followed.
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Before making an investment in the notes, a benefit plan investor subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and/or the prohibited transaction provisions of the theInternal Revenue Code of 1986, as amended (the “Code”) (collectively, an “ERISA Plan”) should review the following summary of issues.
This summary is based on the provisions of ERISA and the Code (and the related regulations and administrative and judicial interpretations) as of the date hereof. This summary does not purport to be complete, and no assurance can be given that future legislation, court decisions, administrative regulations, rulings or administrative pronouncements will not significantly modify the requirements summarized herein. Any such changes may be retroactive and may thereby apply to transactions entered into prior to the date of their enactment or release.
In contemplating an investment of a portion of an ERISA Plan in the notes, the fiduciary of the ERISA Plan who is responsible for making such investment should carefully consider, taking into account the facts and circumstances of the ERISA Plan, whether such investment is consistent with the fiduciary responsibility requirements of ERISA, including, but not limited to, whether: (i) such investment is consistent with the prudence and diversification requirements of ERISA; (ii) the fiduciary has authority to make such investment under the appropriate governing instrument and Title I of ERISA; (iii) such investment is made solely in the interest of the participants in and beneficiaries of the ERISA Plan; (iv) the acquisition and holding of the notes does not result in a non-exempt “prohibited transaction” under Section 406 of ERISA or Section 4975 of the Code; and (v) such investment does not violate ERISA’s prohibition on improper delegation of control over or responsibility for “plan assets.”
Fiduciaries of ERISA Plans should also carefully consider the definition of the term “plan assets” in Regulations Section 2510.3-101 promulgated by the United States Department of Labor (“DOL”) on November 13, 1986 (the “Plan Asset Regulations”). Under the Plan Asset Regulations, if an ERISA Plan invests in an “equity interest” in a corporation, partnership, trust or another specified entity, the underlying assets and properties of the entity may be deemed for purposes of ERISA and Section 4975 of the Code to be assets of the investing ERISA Plan. According to the Plan Asset Regulations, an interest is not an “equity interest” if it is treated as an indebtedness under applicable local law and has no substantial equity features. Although there is little statutory or regulatory guidance on this subject, and there can be no assurances in this regard, it appears that the notes should not be treated as equity interests for purposes of the Plan Asset Regulations. Accordingly, the assets of Nevada Power should not be treated as the assets of any ERISA Plans investing in the notes.
In addition, ERISA and the Code generally prohibit certain transactions involving the assets of an ERISA Plan and persons who have certain specified relationships to the ERISA Plan (“parties in interest” as defined in ERISA or “disqualified persons” as defined in the Code).
The notes may not be sold or transferred to, and each purchaser by its purchase of the notes shall be deemed to have represented and covenanted that it is not acquiring the notes for or on behalf of, and will not transfer the notes to, any ERISA Plan except that such purchase for or on behalf of an ERISA Plan shall be permitted:
80(i) to the extent such purchase is made by or on behalf of a bank collective investment fund maintained by the purchaser in which no ERISA Plan (together with any other plan maintained by the same employer or employee organization) has an interest in excess of 10% of the total assets in such collective investment fund, and the other applicable conditions of Prohibited Transaction Class Exemption 91-38 issued by the DOL are satisfied;
in excess of 10% of the total of all assets in such pooled separate account, and the other applicable conditions of Prohibited Transaction Class Exemption 90-1 issued by the DOL are satisfied;
(iv) to the extent such plan is a governmental plan (as defined in Section 3(32) of ERISA) which is not subject to the provisions of the Title I of ERISA or Section 401 of the Code;
(v) to the extent such purchase is made by or on behalf of an insurance company using the assets of its general account, the reserves and liabilities for the general account contracts held by or on behalf of any plan, together with any other plans maintained by the same employer (or its affiliates) or employee organization, do not exceed 10% of the total reserves and liabilities of the insurance company general account (exclusive of separate account liabilities), plus surplus as set forth in the National Association of Insurance Commissioners Annual Statement filed with the State of domicile of the insurer, in accordance with Prohibited Transaction Class Exemption 95-60 issued by the DOL, and the other applicable conditions of such exemption are otherwise satisfied;
(vi) to the extent such purchase is made by an in-house asset manager within the meaning of Part IV(a) of Prohibited Transaction Class Exemption 96-23 issued by the DOL, such manager has made or properly authorized the decision for such plan to purchase notes, under circumstances such that Prohibited Transaction Class Exemption 96-23 is applicable to the purchase and holding of such notes; or
(vii) to the extent such purchase will not otherwise give rise to a transaction described in Section 406 of ERISA or Section 4975(c)(1) of the Code for which a statutory or administrative exemption is unavailable.
PROSPECTIVE INVESTORS THAT ARE ERISA PLANS ARE STRONGLY URGED TO CONSULT THEIR OWN ERISA AND TAX ADVISORS REGARDING THE CONSEQUENCES OF AN INVESTMENT IN THE NOTES.
The sale of the notes to an ERISA Plan shall not be deemed a representation by Nevada Power or the initial purchasers that this investment meets all relevant legal requirements with respect to ERISA Plans generally or any particular ERISA Plan.
As discussed under the Section entitled “THE EXCHANGE OFFER,OFFERS,” based on an interpretation of the staff of the Securities and Exchange Commission, Nevada Power believes that new notes issued pursuant to theany exchange offer may be offered for resale and resold or otherwise transferred by any holder
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Each broker-dealer that receives new notes for its own account pursuant to the Exchange OfferOffers must acknowledge that it will deliver a prospectus in connection with any resale of those new notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new notes received in exchange for old notes only where those old notes were acquired as a result of market-making activities or other trading activities. This is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions. Nevada Power has agreed that, for a period of one year after the applicable Expiration Date, they will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale.
Nevada Power will not receive any proceeds from any sale of new notes by broker-dealers. New notes received by broker-dealers for their own account pursuant to theany exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the new notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or at negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any new notes. Any broker-dealer that resells new notes that were received by it for its own account pursuant to the Exchange OfferOffers and any broker or dealer that participates in a distribution of those new notes may be deemed to be an “underwriter” within the meaning of the Securities Act and any profit on any such resale of new notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.
For a period of one year after the Expiration Date, Nevada Power will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests those documents in the letter of transmittal. Nevada Power has agreed to pay all expenses incident to the Exchange OfferOffers (including the expenses of one counsel for holders of the notes) other than commissions or concessions of any broker-dealers and will indemnify the holders of the notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.
We have filed a registration statement on Form S-4 to register with the Securities and Exchange Commission the new notes to be issued in exchange for the old notes. This prospectus is part of that registration statement. As allowed by the Securities and Exchange Commission’s rules, this prospectus does not contain all of the information you can find in the registration statement and the exhibits to the registration statement. Because the prospectus may not contain all the information that you may find important, you should review the full text of these documents.
Although all of the common stock of Nevada Power is owned by Sierra Pacific Resources, we remain subject to the informational requirements of the Exchange Act with respect to certain other classes of securities currently outstanding. Therefore, we file reports and other information with the Securities and Exchange Commission. Such reports, proxy statements and other information filed by us with the Securities and Exchange Commission can be inspected and copied at the public reference facilities maintained by the Securities and Exchange Commission at the Securities and Exchange Commission’s public reference room, 100 F Street, N.E., Room 1024 at Judiciary Plaza, 450 Fifth Street, N.W.,1580, Washington, D.C. 20549.
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SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission allows us to incorporate by reference the information we file with them, which means:
We incorporate by reference the documents listed below which were filed with the Securities and Exchange Commission under the Exchange Act:
We also incorporate by referenceare providing to each of the following documents that we will file with the Securities and Exchange Commission after the date ofperson to whom this prospectus until this offering is completed:
You should rely only on information contained or incorporated by reference in this prospectus. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted.
You should assume that the information appearing in this prospectus is accurate as of the date of this prospectus only. Our business, financial condition and results of operations may have changed since that date.
You may request a copy of any filings referred to above (excluding exhibits), at no cost, by contacting us at the following address:
Nevada Power Company
6226 W. Sahara Avenue
Las Vegas, Nevada 89146
Attention: Assistant Treasurer
Telephone: (702) 367-5000
83The validity of the new notes offered hereby and certain tax matters will be passed upon for Nevada Power by Choate, Hall & Stewart LLP, Boston, Massachusetts. Matters of Nevada law will be passed upon for Nevada Power by Woodburn and Wedge, Reno, Nevada.
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INFORMATION NOT REQUIRED IN PROSPECTUS
| Item 20. | Indemnification of Directors and Officers |
The Nevada Revised Statutes provide that a director or officer is not individually liable to the corporation or its stockholders or creditors for any damages as a result of any act or failure to act in his capacity as a director or officer unless it is proven that his act or failure to act constituted a breach of his fiduciary duties as a director or officer and his breach of those duties involved intentional misconduct, fraud or a knowing violation of law. The Articles of Incorporation or an amendment thereto may, however, provide for greater individual liability. Furthermore, directors may be jointly and severally liable for the payment of certain distributions in violation of Chapter 78 of the Nevada Revised Statutes.
The Company’s Articles of Incorporation and By-laws provide in substance that no director, officer, employee, fiduciary or authorized representative of the Company shall be personally liable for monetary damages as such for any action taken, or any failure to take any action, as a director, officer or other representative capacity to the fullest extent that the laws of the State of Nevada permit elimination or limitation of the liability of directors and officers.
The Nevada Revised Statutes also provide that under certain circumstances, a corporation may indemnify any person for amounts incurred in connection with a pending, threatened or completed action, suit or proceeding in which he is, or is threatened to be made, a party by reason of his being a director, officer, employee or agent of the corporation or serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, if such person (a) is not liable for a breach of fiduciary duty involving intentional misconduct, fraud or a knowing violation of law or such greater standard imposed by the corporation’s articles of incorporation; or (b) acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Additionally, a corporation may indemnify a director, officer, employee or agent with respect to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor, if such person (a) is not liable for a breach of fiduciary duty involving intentional misconduct, fraud or a knowing violation of law or such greater standard imposed by the corporation’s articles of incorporation; or (b) acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, however, indemnification may not be made for any claim, issue or matter as to which such a person has been adjudged by a court to be liable to the corporation or for amounts paid in settlement to the corporation, unless the court determines that the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper. To the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to above, or in defense of any claim, issue or matter therein, the corporation shall indemnify him against expenses, including attorneys’ fees, actually and reasonably incurred by him in connection with the defense.
The Company’s By-laws provide in substance that every director and officer of the Company shall be entitled to indemnification against reasonable expense and any liability incurred in connection with the defense of any actual or threatened claim, action, suit or proceeding, civil, criminal, administrative, investigative or other, whether brought by or in the right of the Company or otherwise, in which he or she may be involved, as a party or otherwise, by reason of being or having been a director or officer of the Company or by reason of the fact that such person is or was serving at the request of the Company as a director, officer, employee, fiduciary or other representative of the Company or another corporation, partnership, joint venture, trust, employee benefit plan or other entity, except to the extent prohibited by law.
The Company has purchased insurance coverage under a policy insuring its directors and officers against certain liabilities which they may incur in their capacity as such.
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| Item 21. | Exhibits |
See Index to Exhibits immediately preceding the Exhibits included as part of this Registration Statement.
| Item 22. | Undertakings |
The undersigned registrant hereby undertakes:
II-2(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
ii. To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) To respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of the Form S-4, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.
(5) To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions referred to in Item 20 hereof, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
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SIGNATURES
NEVADA POWER COMPANY | ||
By | /s/ MICHAEL W. YACKIRA | |
| Michael W. Yackira | ||
| Chief Financial Officer |
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Walter M. Higgins III, Michael W. Yackira, Ernest E. EastWilliam D. Rogers, Paul J. Kaleta and John E. Brown as his or her true and lawful attorneys-in-fact and agents, with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all supplements and amendments (including post-effective amendments and Registration Statements filed pursuant to Rule 462(b) of the Securities Act) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitutes, shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:
Signature | Title | Date | ||||
/s/ WALTER M. HIGGINS III Walter M. Higgins III | Director, President and Chief Executive Officer | |||||
/s/ MICHAEL W. YACKIRA Michael W. Yackira | ||||||
/s/ JOHN E. BROWN John E. Brown | Controller | |||||
/s/ JOSEPH B. ANDERSON, JR. Joseph B. Anderson, Jr. | Director | |||||
/s/ MARY LEE COLEMAN Mary Lee Coleman | Director | |||||
/s/ KRESTINE M. CORBIN Krestine M. Corbin | Director | |||||
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| June 6, 2006 | ||||||
/s/ THEODORE J. DAY Theodore J. Day | Director | |||||
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Signature | Title | Date | ||
/s/ JAMES R. DONNELLEY James R. Donnelley | Director | |||
Jerry E. Herbst | Director | |||
/s/ JOHN F. O’REILLY John F. O’Reilly | Director | |||
/s/ PHILIP G. SATRE Philip G. Satre | Director | |||
/s/ DONALD D. SNYDER
| Director | |||
/s/ CLYDE T. TURNER Clyde T. Turner | Director | June 6, 2006 | ||
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| 1 | .1† | Registration Rights Agreement dated as of November 16, 2005 among Nevada Power Company and Merrill Lynch Pierce, Fenner & Smith Incorporated as representative of the Initial Purchasers (previously filed as Exhibit 4(C) to Form 10-K for the year ended December 31, 2004) | ||
| 3 | .1† | Articles of Incorporation (previously filed as Exhibit 3(B) to Form 10-K for the year ended December 31, 1999) | ||
| 3 | .2† | By-Laws (previously filed as Exhibit 3(C) to Form 10-K for the year ended December 31, 1999) | ||
| 4 | .1† | General and Refunding Mortgage Indenture, dated as of May 1, 2001 between Nevada Power Company and The Bank of New York, as Trustee (previously filed as Exhibit 4.1(a) to Form 10-Q for the quarter ended June 30, 2001) | ||
| 4 | .2† | First Supplemental Indenture, dated as of May 1, 2001(previously filed as Exhibit 4.1(b) to Form 10-Q for the quarter ended June 30, 2001) | ||
| 4 | .3† | Officer’s Certificate establishing the terms of Nevada Power Company’s 8.25% General and Refunding Mortgage Bonds, Series A, due June 1, 2011 (previously filed as Exhibit 4.1(c) to Form 10-Q for the quarter ended June 30, 2001) | ||
| 4 | .4† | Second Supplemental Indenture, dated as of October 2001(previously filed as Exhibit 4(A) to Form 10-K for the year ended December 31, 2001) | ||
| 4 | .5† | Officer’s Certificate establishing the terms of Nevada Power Company’s 107/8% General and Refunding Mortgage Notes, Series E, due 2009 (previously filed as Exhibit 4.1 to Form 10-Q for the quarter ended September 30, 2002) | ||
| 4 | .6† | Officer’s Certificate establishing the terms of Nevada Power Company’s 9% General and Refunding Mortgage Notes, Series G, due 2013 (previously filed as Exhibit 4.1 to Form 10-Q for the quarter ended September 30, 2003) | ||
| 4 | .7† | Officer’s Certificate establishing the terms of Nevada Power Company’s 61/2% General and Refunding Mortgage Notes, Series I, due 2012 (previously filed as Exhibit 4.1 to Form 10-Q for the quarter ended June 30, 2004) | ||
| 4 | .8† | Officer’s Certificate establishing the terms of Nevada Power Company’s 57/8% General and Refunding Mortgage Notes, Series L, due 2015 (previously filed as Exhibit 4(A) to Form 10-K for the year ended December 31, 2004) | ||
| 4 | .9† | Form of 57/8% General and Refunding Mortgage Notes, Series L, due 2015 (previously filed as Exhibit 4(B) to Form 10-K for the year ended December 31, 2004) | ||
| 5 | .1 | Opinion of Choate, Hall & Stewart LLP | ||
| 5 | .2 | Opinion of Woodburn and Wedge | ||
| 8 | .1 | Opinion of Choate, Hall & Stewart LLP as to Tax Matters (included in Exhibit 5.1) | ||
| 12 | .1 | Statement regarding computation of Ratios of Earnings to Fixed Charges | ||
| 23 | .1 | Consent of Independent Registered Public Accounting Firm | ||
| 23 | .2 | Consent of Choate, Hall & Stewart LLP (included in Exhibit 5.1) | ||
| 23 | .3 | Consent of Woodburn and Wedge (included in Exhibit 5.2) | ||
| 23 | .4 | Consent of Choate, Hall & Stewart LLP as to Tax Matters (included in Exhibit 5.1) | ||
| 24 | .1 | Powers of Attorney (included in signature page) | ||
| 25 | .1 | Statement of Eligibility of Trustee on Form T-1 of The Bank of New York | ||
| 99 | .1 | Form of Letter of Transmittal | ||
| 99 | .2* | Form of Exchange Agent Agreement | ||
| 1.1† | Registration Rights Agreement dated as of January 18, 2006, with respect to the Series M Old Notes, among Nevada Power Company and Credit Suisse First Boston LLC and Merrill Lynch, Pierce, Fenner & Smith, Incorporated, as representative of the Initial Purchasers (previously filed as Exhibit 4(C) to Form 10-K for the year ended December 31, 2005) | |
| 1.2† | Registration Rights Agreement dated as of April 3, 2006, with respect to the Series N Old Notes, among Nevada Power Company and Lehman Brothers Inc. and Wachovia Capital Markets, LLC, as representative of the Initial Purchasers (previously filed as Exhibit 4.3 to Form 10-Q for the quarter ended March 31, 2006) | |
| 1.3 | Registration Rights Agreement dated as of May 12, 2006, with respect to the Series O Old Notes, among Nevada Power Company and Banc of America Securities LLC, Barclays Capital Inc. and BNY Capital Markets, Inc., as representative of the Initial Purchasers | |
| 3.1† | Articles of Incorporation (previously filed as Exhibit 3(B) to Form 10-K for the year ended December 31, 1999) | |
| 3.2† | By-Laws (previously filed as Exhibit 3(C) to Form 10-K for the year ended December 31, 1999) | |
| 4.1† | General and Refunding Mortgage Indenture, dated as of May 1, 2001 between Nevada Power Company and The Bank of New York, as Trustee (previously filed as Exhibit 4.1(a) to Form 10-Q for the quarter ended June 30, 2001) | |
| 4.2† | Second Supplemental Indenture, dated as of October 2001(previously filed as Exhibit 4(A) to Form 10-K for the year ended December 31, 2001) | |
| 4.3† | Officer’s Certificate establishing the terms of Nevada Power Company’s 5.95% General and Refunding Mortgage Notes, Series M, due 2016 (previously filed as Exhibit 4(A) to Form 10-K for the year ended December 31, 2005) | |
| 4.4† | Form of 5.95% General and Refunding Mortgage Notes, Series M, due 2016 (previously filed as Exhibit 4(B) to Form 10-K for the year ended December 31, 2005) | |
| 4.5† | Officer’s Certificate establishing the terms of Nevada Power Company’s 6.650% General and Refunding Mortgage Notes, Series N, due 2036 (previously filed as Exhibit 4.1 to Form 10-Q for the quarter ended March 31, 2006) | |
| 4.6† | Form of 6.650% General and Refunding Mortgage Notes, Series N, due 2036 (previously filed as Exhibit 4.2 to Form 10-Q for the quarter ended March 31, 2006) | |
| 4.7 | Officer’s Certificate establishing the terms of Nevada Power Company’s 6.50% General and Refunding Mortgage Notes, Series O, due 2018 | |
| 4.8 | Form of 6.50% General and Refunding Mortgage Notes, Series O, due 2018 (included in Exhibit 4.7) | |
| 5.1* | Opinion of Choate, Hall & Stewart LLP | |
| 5.2* | Opinion of Woodburn and Wedge | |
| 8.1* | Opinion of Choate, Hall & Stewart LLP as to Tax Matters (included in Exhibit 5.1) | |
| 12.1 | Statement regarding computation of Ratios of Earnings to Fixed Charges | |
| 13.1† | Annual Report on Form 10-K for the year ended December 31, 2005, as filed on March 6, 2006 | |
| 13.2† | Quarterly Report on Form 10-Q for the quarter ended March 31, 2006, as filed on May 8, 2006 | |
| 23.1 | Consent of Independent Registered Public Accounting Firm | |
| 23.2* | Consent of Choate, Hall & Stewart LLP (included in Exhibit 5.1) | |
| 23.3* | Consent of Woodburn and Wedge (included in Exhibit 5.2) | |
| 23.4* | Consent of Choate, Hall & Stewart LLP as to Tax Matters (included in Exhibit 5.1) | |
| 24.1 | Powers of Attorney (included in signature page) | |
| 25.1 | Statement of Eligibility of Trustee on Form T-1 of The Bank of New York | |
| 99.1 | Form of Letter of Transmittal | |
| 99.2* | Exchange Agent Agreement | |
| † | Previously filed |
| * | To be filed by Amendment |