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Resources West Merger Promises Big Savings

Fortnightly Magazine - May 1 1995

Sierra Pacific Resources and The Washington Water Power Co. have filed a report at the Nevada Public Service Commission on their proposed merger to form Resources West Energy (RWE), estimating a combined savings of $449 million over the next 10 years. As a result, the utilities propose to freeze rates until at least 2000, except for one limited price increase in Nevada in 1997 and selected adjustments for energy supplies or extenuating circumstances.

About 42 percent of the savings will result from consolidation of duplicate functions and reductions in the workforce. Staff will be reduced by 372 employees (em 297 as a direct result of the merger (254 from Sierra Pacific; 18 from Washington Water Power). The two utilities will be reorganized into four primary lines of business, each responsible for its own financial results: 1) retail utility services for residential/small commercial, 2) retail utility service for large commercial/industrial, 3) wholesale energy, and 4) nonutility businesses. t

Lori A. Burkhart is an associate legal editor of PUBLIC UTILITIES FORTNIGHTLY.

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