V. Assignment of Proceeding

Susan P. Kennedy is the Assigned Commissioner and Sarah R. Thomas is the assigned Administrative Law Judge in this proceeding.

Findings of Fact

1. The hydroelectric facilities at issue are old and are not needed for system reliability.

2. The CPUC is the Lead Agency for the proposed project under CEQA

3. On June 9, 2004, the CPUC prepared a Draft Negative Declaration for the project, which found that the proposed project would have a less than significant effect on the environment.

4. No party filed comments on the Draft Negative Declaration.

5. On August 6, 2004, the CPUC issued a Final Negative Declaration.

6. The proposed project will not result in adverse environmental impact.

7. Sierra does not adequately detail its proposed allocation of the gain on sale.

Conclusions of Law

1. The sale of the hydroelectric plants is authorized by Pub. Util. Code § 377.1.

2. The sale is in the public interest.

3. The sale is authorized pursuant to § 851.

4. The Final Negative Declaration was prepared and completed in accordance with the requirements of CEQA.

5. Disposition of the gain on sale of the power plants should await a decision in R.04-09-003.

ORDER

IT IS ORDERED that:

1. Pursuant to Pub. Util. Code § 851, Sierra Pacific Power Company (Sierra) is authorized to enter into the Asset Purchase Agreement attached as Exhibit B to its application with the Truckee Meadows Water Authority (TMWA).

2. This order does not allow TMWA to engage in the provision of water or electricity service in California.

3. Sierra shall place the gain on sale from the power plants in a memorandum account for the time being. Once we issue a decision in Rulemaking (R.) 04-09-003, Sierra shall file an Advice Letter, and serve it on the service list for R.04-09-003, setting forth its proposed allocation in detail, and proposing an allocation consistent with the decision in R.04-09-003.

4. We adopt the Final Negative Declaration.

5. This proceeding is closed.

This order is effective today.

Dated November 19, 2004, at San Francisco, California.

MICHAEL R. PEEVEY

President

GEOFFREY F. BROWN
SUSAN P. KENNEDY Commissioners

I dissent.

/s/ CARL W. WOOD
Commissioner

I reserve the right to file a dissent.

/s/ LORRETA M. LYNCH
Commissioner