An agreement between Sierra Pacific Resources and Duke Energy Corp. will boost Nevada's energy supply during peak summer months.
The agreement announced Monday helps fill an energy gap in the wake of the West Coast's energy shakeup and bankruptcy of Enron Corp. that left Sierra Pacific short on suppliers.
Duke agreed to supply up to 1,000 megawatts of electricity per hour between June 15 and Sept. 15, as well as natural gas, to Sierra Pacific Power Co. and Nevada Power Co., subsidiaries of Sierra Pacific Resources.
"That's approximately 25 percent of Nevada Power's peak summer load and 10 percent of Sierra Pacific's," according to Andrea Smith, director of corporate communications for Sierra Pacific.
"What this does is it meets our requirements for an average summer. If we get additional heat waves, we'll be buying on the spot market."
Duke Energy also agreed to accept a deferred payment program in which Sierra Pacific will make smaller payments over a longer period of time.
In return for guaranteed power access, Sierra Pacific agreed to drop its complaint against Duke with the Federal Energy Regulatory Commission.
The Nevada company accused Duke of price-gouging during last summer's energy crises in violation of Section 206 of the federal code requiring "just and reasonable" power contracts.
Sierra Pacific has similar complaints filed against numerous other power suppliers and ongoing negotiations with those companies.
The governor's office praised Sierra Pacific's efforts to increase the energy supply to the state.
"This additional electricity and gas will significantly improve energy reliability in Nevada this summer," Gov. Kenny Guinn said in a written statement.
"I appreciate Duke Energy's efforts to work with Nevada Power and Sierra Pacific. I hope other suppliers will follow."
Duke Energy is a diversified multinational energy company managing a portfolio of natural gas and electric supply, delivery and trading businesses. Headquartered in Charlotte, N.C., Duke (NYSE symbol DUK) is a Fortune 100 company.