10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	FOR THE QUARTERLY PERIOD ENDED    September 30, 2007

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM      TO  

	Registrant, Address of	I.R.S. Employer
	Principal Executive Offices	Identification	State of
Commission File Number	and Telephone Number	Number	Incorporation
1-08788	SIERRA PACIFIC RESOURCES	88-0198358	Nevada
	P.O. Box 10100
	(6100 Neil Road)
	Reno, Nevada 89520-0400 (89511)
	(775) 834-4011
2-28348	NEVADA POWER COMPANY	88-0420104	Nevada
	6226 West Sahara Avenue
	Las Vegas, Nevada 89146
	(702) 367-5000
0-00508	SIERRA PACIFIC POWER COMPANY	88-0044418	Nevada
	P.O. Box 10100
	(6100 Neil Road)
	Reno, Nevada 89520-0400 (89511)
	(775) 834-4011

Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes    þ No o (Response applicable to all registrants)

Indicate by check mark whether any registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. (See definition of  “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act).

Sierra Pacific Resources:	Large accelerated filerþ	Accelerated filero	Non-accelerated filero
Nevada Power Company:	Large accelerated filero	Accelerated filero	Non-accelerated filerþ
Sierra Pacific Power Company:	Large accelerated filero	Accelerated filero	Non-accelerated filerþ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yeso Noþ (Response applicable to all registrants)

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date.

Class	Outstanding at October 31, 2007
Common Stock, $1.00 par value of Sierra Pacific Resources	221,647,972 Shares

Sierra Pacific Resources is the sole holder of the 1,000 shares of outstanding Common Stock, $1.00 stated value, of Nevada Power Company.

Sierra Pacific Resources is the sole holder of the 1,000 shares of outstanding Common Stock, $3.75 stated value, of Sierra Pacific Power Company.

This combined Quarterly Report on Form 10-Q is separately filed by Sierra Pacific Resources, Nevada Power Company and Sierra Pacific Power Company. Information contained in this document relating to Nevada Power Company is filed by Sierra Pacific Resources and separately by Nevada Power Company on its own behalf. Nevada Power Company makes no representation as to information relating to Sierra Pacific Resources or its subsidiaries, except as it may relate to Nevada Power Company. Information contained in this document relating to Sierra Pacific Power Company is filed by Sierra Pacific Resources and separately by Sierra Pacific Power Company on its own behalf. Sierra Pacific Power Company makes no representation as to information relating to Sierra Pacific Resources or its subsidiaries, except as it may relate to Sierra Pacific Power Company.

1

SIERRA PACIFIC RESOURCES

NEVADA POWER COMPANY

SIERRA PACIFIC POWER COMPANY

QUARTERLY REPORTS ON FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2007

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

ITEM 1.	Financial Statements
Sierra Pacific Resources -
	Consolidated Balance Sheets – September 30, 2007 and December 31, 2006…………...……...…………......................................	3
	Consolidated Income Statements – Three Months and Nine Months Ended September 30, 2007 and 2006...….................................	4
	Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2007 and 2006…..…………....................................	5
Nevada Power Company -
	Consolidated Balance Sheets – September 30, 2007 and December 31, 2006…………...…………..….........................................	6
	Consolidated Income Statements – Three Months and Nine Months Ended September 30, 2007 and 2006.….................................	7
	Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2007 and 2006….…………....................................	8
Sierra Pacific Power Company -
	Consolidated Balance Sheets – September 30, 2007 and December 31, 2006…………...…………..….........................................	9
	Consolidated Income Statements – Three Months and Nine Months Ended September 30, 2007 and 2006.…..................................	10
	Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2007 and 2006…………….....................................	11
Condensed Notes to Consolidated Financial Statements……………………………………………………………………................................		12
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations…………………........................................	27
	Sierra Pacific Resources………………………………………………….……………………………...................................	32
	Nevada Power Company…………………………………………………….…………………………….............................	35
	Sierra Pacific Power Company……………………………………………………………………………..............................	43
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk…………………………………………………....................................	53
ITEM 4.	Controls and Procedures…………………………………………………………………………………………............................	54
	PART II - OTHER INFORMATION
ITEM 1.	Legal Proceedings…………………………………………………………………………...…………….......................................	54
ITEM 1A.	Risk Factors……………………………………………………………………………………………………..............................	56
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds.............................................................................................................	56
ITEM 3.	Defaults Upon Senior Securities........................................................................................................................................................	56
ITEM 4.	Submission of Matters to a Vote of Security Holders…………………………………………………………..................................	56
ITEM 5.	Other Information…………………………………………………………………………………………......................................	56
ITEM 6.	Exhibits…………………………………………………….…………………………………………………................................	57
Signature Page and Certifications…..…………………………………………………………………………...…………..........................................		60

2

SIERRA PACIFIC RESOURCES
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
		September 30, 2007		December 31,2006
ASSETS
Utility Plant at Original Cost:
Plant in service		$	8,336,827	$	7,954,337
Less accumulated provision for depreciation			2,458,329		2,333,357
			5,878,498		5,620,980
Construction work-in-progress			867,378		466,018
			6,745,876		6,086,998
Investments and other property, net			31,522		34,325
Current Assets:
Cash and cash equivalents			100,860		115,709
Accounts receivable less allowance for uncollectible accounts:
	2007-$39,483; 2006-$39,566		561,947		415,082
Deferred energy costs - electric (Note 1)			186,854		168,260
Materials, supplies and fuel, at average cost			117,345		103,757
Risk management assets (Note 5)			22,461		27,305
Deferred income taxes			34,316		55,546
Deposits and prepayments for energy			708		15,968
Other			44,856		31,580
			1,069,347		933,207
Deferred Charges and Other Assets:
Deferred energy costs - electric (Note 1)			190,824		382,286
Regulatory tax asset			259,305		263,170
Regulatory asset for pension plans			209,426		223,218
Other regulatory assets			727,830		668,624
Risk management assets (Note 5)			32,560		7,586
Risk management regulatory assets - net (Note 5)			55,814		122,911
Unamortized debt issuance costs			67,698		67,106
Other			89,676		42,645
			1,633,133		1,777,546
TOTAL ASSETS		$	9,479,878	$	8,832,076
CAPITALIZATION AND LIABILITIES
Capitalization:
Common shareholders' equity		$	2,808,253	$	2,622,297
Long-term debt			4,337,745		4,001,542
			7,145,998		6,623,839
Current Liabilities:
Current maturities of long-term debt			109,614		8,348
Accounts payable			295,834		282,463
Accrued interest			72,655		56,426
Accrued salaries and benefits			35,719		33,146
Current income taxes payable			3,489		5,914
Risk management liabilities (Note 5)			85,756		123,065
Accrued taxes			7,638		6,290
Deferred energy costs - gas (Note 1)			4,484		-
Other current liabilities			64,693		60,422
			679,882		576,074
Commitments and Contingencies (Note 6)
Deferred Credits and Other Liabilities:
Deferred income taxes			852,837		791,428
Deferred investment tax credit			32,685		35,218
Regulatory tax liability			31,672		34,075
Customer advances for construction			96,645		91,895
Accrued retirement benefits			134,129		226,420
Risk management liabilities (Note 5)			12,892		10,746
Regulatory liabilities			313,178		301,903
Other			179,960		140,478
			1,653,998		1,632,163
TOTAL CAPITALIZATION AND LIABILITIES		$	9,479,878	$	8,832,076
The accompanying notes are an integral part of the financial statements.

3

SIERRA PACIFIC RESOURCES
CONSOLIDATED INCOME STATEMENTS
(Dollars in Thousands, Except Per Share Amounts)
(Unaudited)
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2007			2006			2007			2006
OPERATING REVENUES:
Electric	$	1,185,205		$	1,060,574		$	2,676,713		$	2,468,512
Gas		20,839			21,106			137,337			141,128
Other		6			287			325			1,302
		1,206,050			1,081,967			2,814,375			2,610,942
OPERATING EXPENSES:
Operation:
Purchased power		410,467			396,133			851,396			906,578
Fuel for power generation		238,180			256,688			658,392			613,965
Gas purchased for resale		11,661			13,492			103,169			105,240
Deferral of energy costs - electric - net		66,660			17,700			193,954			74,721
Deferral of energy costs - gas - net		2,594			1,130			4,203			7,214
Reinstatement of deferred energy (Note 3)		-			(178,825	)		-			(178,825	)
Other		98,399			91,255			275,414			264,612
Maintenance		23,308			23,784			77,686			69,140
Depreciation and amortization		58,876			56,029			174,787			170,112
Taxes:
Income taxes		69,677			108,986			76,166			107,392
Other than income		13,091			11,802			37,710			36,740
		992,913			798,174			2,452,877			2,176,889
OPERATING INCOME		213,137			283,793			361,498			434,053
OTHER INCOME (EXPENSE):
Allowance for other funds used during construction		9,214			3,343			22,393			13,649
Interest accrued on deferred energy		4,633			6,219			13,020			22,573
Carrying charge for Lenzie		-			10,040			16,080			23,206
Reinstated interest on deferred energy (Note 3)		-			-			11,076			-
Other income		4,605			9,430			18,293			28,027
Other expense		(5,044	)		(4,534	)		(18,110	)		(13,968	)
Income taxes		(4,572	)		(8,262	)		(20,630	)		(25,205	)
		8,836			16,236			42,122			48,282
Total Income Before Interest Charges		221,973			300,029			403,620			482,335
INTEREST CHARGES:
Long-term debt		69,686			74,444			204,681			225,106
Other		7,626			6,199			23,625			16,433
Allowance for borrowed funds used during construction		(7,561	)		(2,860	)		(18,269	)		(12,869	)
		69,751			77,783			210,037			228,670
Preferred stock dividend requirements of subsidiary and premium on redemption		-			-			-			2,341
NET INCOME APPLICABLE TO COMMON STOCK	$	152,222		$	222,246		$	193,583		$	251,324
Amount per share basic and diluted - (Note 7)
Net Income applicable to common stock	$	0.69		$	1.05		$	0.87		$	1.23
Weighted Average Shares of Common Stock Outstanding - basic		221,612,243			211,143,616			221,424,682			204,303,110
Weighted Average Shares of Common Stock Outstanding - diluted		221,968,802			211,641,821			221,783,424			204,744,823
The accompanying notes are an integral part of the financial statements.

4

SIERRA PACIFIC RESOURCES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
	Nine Months Ended
	September 30,
	2007			2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income applicable to common stock	$	193,583		$	251,324
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		174,787			170,113
Deferred taxes and deferred investment tax credit		103,598			122,062
AFUDC		(22,393	)		(26,518	)
Amortization of deferred energy costs - electric		172,046			130,279
Amortization of deferred energy costs - gas		734			4,773
Deferral of energy costs - electric		11,900			(77,908	)
Deferral of energy costs - gas		3,749			1,897
Deferral of energy costs - terminated suppliers		-			2,309
Reinstatement of deferred energy		-			(178,825	)
Carrying charge on Lenzie plant		(16,080	)		(26,957	)
Reinstated interest on deferred energy		(11,076	)		-
Other, net		11,422			(24,985	)
Changes in certain assets and liabilities:
Accounts receivable		(146,865	)		(127,424	)
Materials, supplies and fuel		(13,588	)		(10,651	)
Other current assets		1,982			36,397
Accounts payable		37,232			(17,129	)
Payment to terminating supplier		-			(65,368	)
Proceeds from claim on terminating supplier		-			41,365
Accrued retirement benefits		(92,291	)		4,807
Other current liabilities		24,422			33,085
Risk Management assets and liabilities		11,805			(2,654	)
Other assets		7,964			10,526
Other liabilities		(9,872	)		(9,810	)
Net Cash from Operating Activities		443,059			240,708
CASH FLOWS USED BY INVESTING ACTIVITIES:
Additions to utility plant		(921,998	)		(769,080	)
AFUDC		22,393			26,518
Customer advances for construction		4,749			19,402
Contributions in aid of construction		41,243			28,874
Investments and other property - net		2,928			13,559
Net Cash used by Investing Activities		(850,685	)		(680,727	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in restricted cash and investments		-			3,612
Proceeds from issuance of long-term debt		1,201,354			2,181,753
Retirement of long-term debt		(800,471	)		(1,894,875	)
Redemption of preferred stock		-			(51,366	)
Proceeds from exercise of stock options		5,112			1,040
Sale of common stock, net of issuance cost		4,525			280,499
Dividends paid		(17,743	)		(1,944	)
Net Cash from Financing Activities		392,777			518,719
Net Increase (Decrease) in Cash and Cash Equivalents		(14,849	)		78,700
Beginning Balance in Cash and Cash Equivalents		115,709			172,735
Ending Balance in Cash and Cash Equivalents	$	100,860		$	251,435
Supplemental Disclosures of Cash Flow Information:
Cash paid during period for:
Interest	$	193,549		$	227,418
Income taxes	$	9,727		$	4,726
The accompanying notes are an integral part of the financial statements

5

NEVADA POWER COMPANY
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
		September 30,		December 31,
		2007		2006
ASSETS
Utility Plant at Original Cost:
Plant in service		$	5,486,226	$	5,187,665
Less accumulated provision for depreciation			1,359,402		1,276,192
			4,126,824		3,911,473
Construction work-in-progress			434,595		238,518
			4,561,419		4,149,991
Investments and other property, net			19,403		22,176
Current Assets:
Cash and cash equivalents			44,888		36,633
Accounts receivable less allowance for uncollectible accounts:
$	2007-33,460; 2006-$32,834		425,028		244,623
Deferred energy costs - electric (Note 1)			170,813		129,304
Materials, supplies and fuel, at average cost			67,943		60,754
Risk management assets (Note 5)			14,443		16,378
Deferred income taxes			92,246		72,294
Deposits and prepayments for energy			280		7,056
Other			31,357		19,901
			846,998		586,943
Deferred Charges and Other Assets:
Deferred energy costs - electric (Note 1)			190,824		359,589
Regulatory tax asset			155,009		153,471
Regulatory asset for pension plans			108,672		113,646
Other regulatory assets (Note 1)			499,241		440,369
Risk management assets			29,190		5,379
Risk management regulatory assets - net (Note 5)			32,889		83,886
Unamortized debt issuance costs			37,711		38,856
Other			69,336		33,209
			1,122,872		1,228,405
TOTAL ASSETS		$	6,550,692	$	5,987,515
CAPITALIZATION AND LIABILITIES
Capitalization:
Common shareholder's equity		$	2,323,684	$	2,172,198
Long-term debt			2,677,193		2,380,139
			5,000,877		4,552,337
Current Liabilities:
Current maturities of long-term debt			7,971		5,948
Accounts payable			178,194		148,003
Accounts payable, affiliated companies			37,831		20,656
Accrued interest			49,667		37,010
Dividends declared			-		13,472
Accrued salaries and benefits			17,848		14,989
Current income taxes payable			3,489		3,981
Intercompany income taxes payable			100,170		884
Risk management liabilities (Note 5)			59,887		84,674
Accrued taxes			3,809		2,671
Other current liabilities			49,941		48,298
			508,807		380,586
Commitments and Contingencies (Note 6)
Deferred Credits and Other Liabilities:
Deferred income taxes			594,039		599,747
Deferred investment tax credit			14,076		15,213
Regulatory tax liability			12,482		13,451
Customer advances for construction			61,468		60,040
Accrued retirement benefits			40,680		90,474
Risk management liabilities (Note 5)			8,217		7,061
Regulatory liabilities			179,355		171,298
Other			130,691		97,308
			1,041,008		1,054,592
TOTAL CAPITALIZATION AND LIABILITIES		$	6,550,692	$	5,987,515
The accompanying notes are an integral part of the financial statements.

6

NEVADA POWER COMPANY
CONSOLIDATED INCOME STATEMENTS
(Dollars in Thousands, Except Per Share Amounts)
(Unaudited)
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2007			2006			2007			2006
OPERATING REVENUES:
Electric	$	894,226		$	776,235		$	1,887,499		$	1,701,379
OPERATING EXPENSES:
Operation:
Purchased power		313,487			289,975			584,797			638,664
Fuel for power generation		166,284			183,622			471,142			425,138
Deferral of energy costs-net		54,868			19,960			149,531			53,748
Reinstatement of deferred energy (Note 3)		-			(178,825	)		-			(178,825	)
Other		61,400			54,927			167,401			156,765
Maintenance		16,360			15,719			54,143			44,307
Depreciation and amortization		38,151			34,955			112,745			104,076
Taxes:
Income taxes		65,407			103,853			65,849			103,617
Other than income		8,005			7,129			22,431			21,287
		723,962			531,315			1,628,039			1,368,777
OPERATING INCOME		170,264			244,920			259,460			332,602
OTHER INCOME (EXPENSE):
Allowance for other funds used during construction		4,701			1,986			11,046			10,140
Interest accrued on deferred energy		4,573			4,786			11,849			17,695
Carrying charge for Lenzie		-			10,040			16,080			23,206
Reinstated interest on deferred energy (Note 3)		-			-			11,076			-
Other income		2,315			4,080			10,345			12,831
Other expense		(1,346	)		(2,050	)		(8,772	)		(6,353	)
Income taxes		(3,518	)		(6,735	)		(17,649	)		(19,785	)
		6,725			12,107			33,975			37,734
Total Income Before Interest Charges		176,989			257,027			293,435			370,336
INTEREST CHARGES:
Long-term debt		41,955			43,355			123,029			132,285
Other		5,876			4,537			18,315			11,828
Allowance for borrowed funds used during construction		(3,936	)		(1,978	)		(9,189	)		(10,050	)
		43,895			45,914			132,155			134,063
NET INCOME	$	133,094		$	211,113		$	161,280		$	236,273
The accompanying notes are an integral part of the financial statements.

7

NEVADA POWER COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
	Nine Months Ended
	September 30,
	2007			2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	161,280		$	236,273
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		112,745			104,076
Deferred taxes and deferred investment tax credit		76,188			113,015
AFUDC		(11,046	)		(20,190	)
Amortization of deferred energy costs		137,633			95,830
Deferral of energy costs		700			(59,765	)
Deferral of energy costs - terminated suppliers		-			1,607
Reinstatement of deferred energy		-			(178,825	)
Carrying charge on Lenzie plant		(16,080	)		(26,957	)
Reinstated interest on deferred energy		(11,076	)		-
Other, net		(8,461	)		(26,129	)
Changes in certain assets and liabilities:
Accounts receivable		(180,404	)		(159,526	)
Materials, supplies and fuel		(7,189	)		(11,336	)
Other current assets		(4,680	)		12,868
Accounts payable		60,407			(13,302	)
Payment to terminating supplier		-			(37,410	)
Proceeds from claim on terminating supplier		-			26,391
Accrued retirement benefits		(49,794	)		78
Other current liabilities		18,298			20,152
Risk Management assets and liabilities		5,490			(1,161	)
Other assets		6,495			10,205
Other liabilities		8,101			(8,055	)
Net Cash from Operating Activities		298,607			77,839
CASH FLOWS USED BY INVESTING ACTIVITIES:
Additions to utility plant		(584,967	)		(555,786	)
AFUDC		11,046			20,190
Customer advances for construction		1,428			13,913
Contributions in aid of construction		26,240			19,673
Investments and other property - net		2,899			6,351
Net Cash used by Investing Activities		(543,354	)		(495,659	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt		699,254			1,689,134
Retirement of long-term debt		(422,780	)		(1,491,958	)
Additional investment by parent company		-			200,000
Dividends paid		(23,472	)		(31,968	)
Net Cash from Financing Activities		253,002			365,208
Net Increase (Decrease) in Cash and Cash Equivalents		8,255			(52,612	)
Beginning Balance in Cash and Cash Equivalents		36,633			98,681
Ending Balance in Cash and Cash Equivalents	$	44,888		$	46,069
Supplemental Disclosures of Cash Flow Information:
Cash paid during period for:
Interest	$	115,047		$	136,072
Income taxes	$	6,760		$	4,714
The accompanying notes are an integral part of the financial statements

8

SIERRA PACIFIC POWER COMPANY
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
	September 30,		December 31,
	2007		2006
ASSETS
Utility Plant at Original Cost:
Plant in service	$	2,850,601	$	2,766,672
Less accumulated provision for depreciation		1,098,928		1,057,165
		1,751,673		1,709,507
Construction work-in-progress		432,783		227,500
		2,184,456		1,937,007
Investments and other property, net		584		609
Current Assets:
Cash and cash equivalents		28,574		53,260
Accounts receivable less allowance for uncollectible accounts:
2007-$6,023 :2006 - $6,732		136,850		170,106
Deferred energy costs - electric (Note 1)		16,041		38,956
Materials, supplies and fuel, at average cost		49,389		42,990
Risk management assets (Note 5)		8,018		10,927
Deferred income taxes		403		-
Deposits and prepayments for energy		428		8,912
Other		13,154		11,184
		252,857		336,335
Deferred Charges and Other Assets:
Deferred energy costs - electric (Note 1)		-		22,697
Regulatory tax asset		104,296		109,699
Regulatory asset for pension plans		98,090		106,666
Other regulatory assets		228,589		228,255
Risk management assets (Note 5)		3,370		2,207
Risk management regulatory assets - net (Note 5)		22,925		39,025
Unamortized debt issuance costs		20,654		17,981
Other		18,389		7,356
		496,313		533,886
TOTAL ASSETS	$	2,934,210	$	2,807,837
CAPITALIZATION AND LIABILITIES
Capitalization:
Common shareholder’s equity	$	937,546	$	884,737
Long-term debt		1,110,166		1,070,858
		2,047,712		1,955,595
Current Liabilities:
Current maturities of long-term debt		101,643		2,400
Accounts payable		74,627		89,743
Accounts payable, affiliated companies		19,375		11,769
Accrued interest		18,514		7,200
Dividends declared		-		6,736
Accrued salaries and benefits		14,946		15,209
Intercompany income taxes payable		5,530		9,055
Deferred income taxes		-		8,881
Risk management liabilities (Note 5)		25,869		38,391
Accrued taxes		3,669		3,407
Deferred energy costs - gas (Note 1)		4,484		-
Other current liabilities		14,752		12,125
		283,409		204,916
Commitments and Contingencies (Note 6)
Deferred Credits and Other Liabilities:
Deferred income taxes		258,721		278,515
Deferred investment tax credit		18,609		20,005
Regulatory tax liability		19,190		20,624
Customer advances for construction		35,176		31,855
Accrued retirement benefits		88,115		124,254
Risk management liabilities (Note 5)		4,675		3,685
Regulatory liabilities		133,823		130,605
Other		44,780		37,783
		603,089		647,326
TOTAL CAPITALIZATION AND LIABILITIES	$	2,934,210	$	2,807,837
The accompanying notes are an integral part of the financial statements.

9

SIERRA PACIFIC POWER COMPANY
CONSOLIDATED INCOME STATEMENTS
(Dollars in Thousands, Except Per Share Amounts)
(Unaudited)
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2007			2006			2007			2006
OPERATING REVENUES:
Electric	$	290,979		$	284,339		$	789,214		$	767,133
Gas		20,839			21,106			137,337			141,128
		311,818			305,445			926,551			908,261
OPERATING EXPENSES:
Operation:
Purchased power		96,980			106,158			266,599			267,914
Fuel for power generation		71,896			73,066			187,250			188,827
Gas purchased for resale		11,661			13,492			103,169			105,240
Deferral of energy costs - electric - net		11,792			(2,260	)		44,423			20,973
Deferral of energy costs - gas - net		2,594			1,130			4,203			7,214
Other		36,228			34,119			105,070			101,413
Maintenance		6,948			8,065			23,543			24,833
Depreciation and amortization		20,726			21,075			62,043			66,037
Taxes:
Income taxes		9,825			9,435			20,871			19,162
Other than income		5,050			4,622			15,138			15,311
		273,700			268,902			832,309			816,924
OPERATING INCOME		38,118			36,543			94,242			91,337
OTHER INCOME (EXPENSE):
Allowance for other funds used during construction		4,513			1,357			11,347			3,509
Interest accrued on deferred energy		60			1,433			1,171			4,878
Other income		1,865			2,491			6,707			7,301
Other expense		(2,938	)		(2,138	)		(7,143	)		(6,806	)
Income taxes		(1,104	)		(1,065	)		(3,597	)		(3,087	)
		2,396			2,078			8,485			5,795
Total Income Before Interest Charges		40,514			38,621			102,727			97,132
INTEREST CHARGES:
Long-term debt		17,096			18,134			49,746			53,958
Other		1,491			1,341			4,533			3,694
Allowance for borrowed funds used during construction		(3,625	)		(882	)		(9,080	)		(2,819	)
		14,962			18,593			45,199			54,833
NET INCOME		25,552			20,028			57,528			42,299
Preferred stock dividend requirements of subsidiary and premium on redemption		-			-			-			2,341
EARNINGS APPLICABLE TO COMMON STOCK	$	25,552		$	20,028		$	57,528		$	39,958
The accompanying notes are an integral part of the financial statements.

10

SIERRA PACIFIC POWER COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
	Nine Months Ended
	September 30,
	2007			2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	57,528		$	42,299
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		62,043			66,037
Deferred taxes and deferred investment tax credit		(25,456	)		(27,392	)
AFUDC		(11,347	)		(6,328	)
Amortization of deferred energy costs - electric		34,413			34,449
Amortization of deferred energy costs - gas		734			4,773
Deferral of energy costs - electric		11,200			(18,143	)
Deferral of energy costs - gas		3,749			1,897
Deferral of energy costs - terminated suppliers		-			702
Other, net		18,583			2,470
Changes in certain assets and liabilities:
Accounts receivable		33,257			64,902
Materials, supplies and fuel		(6,399	)		695
Other current assets		6,512			22,832
Accounts payable		3,310			12,914
Payment to terminating supplier		-			(27,958	)
Proceeds from claim on terminating supplier		-			14,974
Accrued retirement benefits		(36,139	)		4,938
Other current liabilities		13,940			22,004
Risk Management assets and liabilities		6,315			(1,493	)
Other assets		1,468			321
Other liabilities		(3,896	)		(1,630	)
Net Cash from Operating Activities		169,815			213,263
CASH FLOWS USED BY INVESTING ACTIVITIES:
Additions to utility plant		(337,031	)		(213,294	)
AFUDC		11,347			6,328
Customer advances for construction		3,321			5,489
Contributions in aid of construction		15,004			9,201
Investments and other property - net		25			40
Net Cash used by Investing Activities		(307,334	)		(192,236	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in restricted cash and investments		-			3,612
Proceeds from issuance of long-term debt		502,100			492,619
Retirement of long-term debt		(377,531	)		(402,671	)
Redemption of preferred stock		-			(51,366	)
Dividends paid		(11,736	)		(17,926	)
Net Cash from Financing Activities		112,833			24,268
Net Increase (Decrease) in Cash and Cash Equivalents		(24,686	)		45,295
Beginning Balance in Cash and Cash Equivalents		53,260			38,153
Ending Balance in Cash and Cash Equivalents	$	28,574		$	83,448
Supplemental Disclosures of Cash Flow Information:
Cash paid during period for:
Interest	$	38,854		$	42,358
Income taxes	$	64		$	12
Noncash Activities:
Transfer of Regulatory Asset	$	-		$	18,888
The accompanying notes are an integral part of the financial statements

11

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.                      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements of Sierra Pacific Resources (SPR) include the accounts of SPR and its wholly-owned subsidiaries, Nevada Power Company (NPC) and Sierra Pacific Power Company (SPPC) (collectively, the "Utilities"), Tuscarora Gas Pipeline Company (TGPC), Sierra Gas Holding Company (SGHC), Sierra Pacific Energy Company (SPE), Lands of Sierra (LOS), Sierra Pacific Communications (SPC) and Sierra Water Development Company (SWDC).  The consolidated financial statements of NPC include the accounts of NPC and its wholly-owned subsidiary, Nevada Electric Investment Company (NEICO).  The consolidated financial statements of SPPC include the accounts of SPPC and its wholly-owned subsidiaries, GPSF-B, Piñon Pine Corporation (PPC), Piñon Pine Investment Company, Piñon Pine Company, L.L.C. and Sierra Pacific Funding L.L.C.  All significant intercompany transactions and balances have been eliminated in consolidation.

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities.  These estimates and assumptions also affect the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of certain revenues and expenses during the reporting period.  Actual results could differ from these estimates.

In the opinion of the management of SPR, NPC and SPPC, the accompanying unaudited interim consolidated financial statements contain all adjustments necessary to present fairly the consolidated financial position, results of operations and cash flows for the periods shown.  These consolidated financial statements do not contain the complete detail or footnote disclosure concerning accounting policies and other matters, which are included in full year financial statements; therefore, they should be read in conjunction with the audited financial statements included in SPR’s, NPC’s and SPPC’s Annual Reports on Form 10-K for the year ended December 31, 2006 (the “2006 Form 10-K”).

The results of operations and cash flows of SPR, NPC and SPPC for the nine months ended September 30, 2007, are not necessarily indicative of the results to be expected for the full year.

Carrying Charge on the Lenzie Generating Station

In 2004, the Public Utilities Commission of Nevada (PUCN) granted NPC’s request to designate the Chuck Lenzie Generating Station (Lenzie) as a critical facility and allowed a 2% enhanced Return on Equity (ROE) to be applied to the Lenzie construction costs expended after acquisition.  The order allowed for an additional 1% enhanced ROE if the two Lenzie generating units were brought on line early.  In addition, the PUCN granted NPC’s request to begin accumulating a carrying charge as a regulatory asset including the 3% enhanced ROE (collectively referred to as “carrying charges”), until the plant is included in rates.  Units 1 and 2 were declared commercially operable in January 2006 and April 2006, respectively, qualifying for the incentive ROE treatment.

Through June 30, 2007, NPC had accumulated approximately $57.6 million in carrying charges; however, $8.1 million of this amount was not recorded for financial reporting purposes as it represents equity carrying costs that are not recognized until collected through rates.  For the nine month period ending September 30, 2007, NPC recognized $16.1 million in income.  NPC did not record a separate carrying charge component related to Lenzie for the three months ended September 30, 2007, as the plant is in rate base effective June 1, as discussed below.

In May 2007, the PUCN issued its order on NPC’s 2006 General Rate Case (GRC) authorizing recovery of the carrying charges, effective as of June 1, 2007.  NPC was authorized to recover over a 35 year period $30.3 million of the carrying charges calculated through the certification period ending October 31, 2006.  Beginning June 1, 2007, NPC began recognizing its full return on Lenzie through rates rather than as a separate carrying charge component.  NPC will seek recovery of the remaining $27.3 million of carrying charges calculated subsequent to the certification period in its next GRC.

Deferral of Energy Costs

NPC and SPPC follow deferred energy accounting.  See the 2006 Form 10-K, Note 1, Summary of Significant Accounting Policies, of Notes to Financial Statements for additional information regarding the implementation of deferred energy accounting by the Utilities.

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The following deferred energy costs were included in the consolidated balance sheets as of September 30, 2007 (dollars in thousands):

	September 30, 2007
	NPC			SPPC			SPPC			SPR
Description	Electric			Electric			Gas			Total
Unamortized balances approved for collection in current rates
Reinstatement of Deferred Energy       (effective 6/07, 10 years) (1)	$	182,477		$	-		$	-		$	182,477
Electric – NPC Period 5                     (effective 8/06, 2 years)		75,546			-			-			75,546
Electric – SPPC Period 5                   (effective 7/06, 2 years)		-			10,075			-			10,075
Electric – NPC Period 6                     (effective 6/07, 14 months)		35,334			-			-			35,334
Electric – SPPC Period 6                   (effective 7/07, 1 year)		-			11,566			-			11,566
Nat Gas – P6, LPG – P5                   (effective 12/06, 1 year)		-			-			190			190
Western Energy Crisis Rate Case (2)  (effective 6/07, 3 years)		69,381			-			-			69,381
Balances pending PUCN approval		-			-			860			860
Cumulative CPUC balance		-			5,352			-			5,352
Balances accrued since end of periods submitted for PUCN approval (3)		(1,101	)		(25,123	)		(5,534	)		(31,758	)
Western Energy Crisis Rate Case (2)		-			14,171			-			14,171
Total	$	361,637		$	16,041		$	(4,484	)	$	373,194
Current Assets
Deferred energy costs – electric	$	170,813		$	16,041			-		$	186,854
Deferred Assets
Deferred energy costs - electric	$	190,824			-			-		$	190,824
Current Liabilities
Deferred energy costs - gas		-			-		$	(4,484	)	$	(4,484	)
Total	$	361,637		$	16,041		$	(4,484	)	$	373,194

(1)  Reinstatement of Deferred Energy is discussed in Note 3, Regulatory Actions, of the Condensed Notes to Consolidated Financial Statements.

  (2)  NPC’s and SPPC's Western Energy Crisis Rate Case is discussed in Note 3, Regulatory Actions, of the Condensed Notes to the Consolidated Financial Statements.

(3)   Credit balances repreeent potential refunds to the Utilities' customers.

Recent Pronouncements

FIN 48

In July 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109” (“FIN 48”) to clarify certain aspects of accounting for uncertain tax positions, including issues related to the recognition and measurement of those tax positions.  This interpretation is effective for fiscal years beginning after December 15, 2006, and, therefore, has been adopted as of January 1, 2007 by SPR and the Utilities.  As a result of the implementation of FIN 48, SPR and the Utilities recorded an increase of approximately $487 thousand to the January 1, 2007 balance of retained earnings as a cumulative effect adjustment.

SPR and the Utilities file a consolidated U.S. federal income tax return.  The U.S. federal jurisdiction is the only “major” tax jurisdiction for the Company.  In connection with the previous examination cycles, the statute of limitations for tax years 1997 through 2003 was extended to December 31, 2008.  The audits of tax years 1997 through 2004 have been completed, but are pending Joint Committee on Taxation notification.  The statute of limitations for tax years 2004 and 2005 expire on September 15, 2008 and 2009, respectively.  All earlier years are closed by statute.

SPR and the Utilities classify interest and penalties related to income taxes as interest and other expense, respectively.  The total amount of unrecognized tax benefits as of September 30, 2007 is $15.5 million, of which $2.3 million would affect the effective tax rate if recognized.  The amount of unrecognized tax benefits decreased from the second quarter by a total of $723 thousand.  No interest or penalties have been accrued as of September 30, 2007.  No significant increases or decreases to unrecognized tax benefits are expected within the next 12 months.

13

SFAS 157

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurement” (“SFAS 157”).  SFAS 157 addresses the need for increased consistency in fair value measurements, defining fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  It also establishes a framework for measuring fair value and expands disclosure requirements.  SFAS 157 is effective for SPR and the Utilities beginning January 2008.  SPR and the Utilities are currently evaluating the impact of the adoption of SFAS 157 on their consolidated financial statements, but does not expect the adoption of SFAS 157 to have a material impact on the consolidated financial statements of SPR and the Utilities.

SFAS 159

In February 2007, the FASB issued FASB Statement No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”), which permits entities to choose to measure many financial instruments and certain other items at fair value.  The objective of the statement is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions.  The provisions of SFAS 159 are effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years.  SPR and the Utilities are currently evaluating the potential impact of the adoption of SFAS 159 on their consolidated financial statements.

FIN 39-1

In April 2007, the FASB issued FASB Staff Position on Interpretation 39, “Amendment of FASB Interpretation No. 39,” (“FIN 39-1”).  Under FIN 39-1, a reporting entity is permitted to offset the fair value amounts recognized for cash collateral paid or cash collateral received against the fair value amounts recognized for derivative instruments executed with the same counterparty under a master netting arrangement.  FIN 39-1 is effective for fiscal years beginning after November 15, 2007.  SPR and the Utilities are currently evaluating the potential impact of the adoption of FIN 39-1 on their consolidated financial statements.

NOTE 2.                      SEGMENT INFORMATION

SPR has three reportable business segments (as defined by SFAS 131, “Disclosure about Segments of an Enterprise and Related Information”); which are NPC electric, SPPC electric and SPPC natural gas service.  Electric service is provided to Las Vegas and surrounding Clark County by NPC, and northern Nevada and the Lake Tahoe area of California by SPPC.  Natural gas services are provided by SPPC in the Reno-Sparks area of Nevada.  Other segment information includes other miscellaneous operating activities.

Operational information of the different business segments is set forth below based on the nature of products and services offered.  SPR evaluates performance based on several factors, of which, the primary financial measure is business segment operating income.  The accounting policies of the business segments are the same as those described in the 2006 Form 10-K, Note 1, Summary of Significant Accounting Policies of the Notes to Financial Statements. Inter-segment revenues are insignificant (dollars in thousands).

Three Months Ended	NPC		SPPC		Total		SPPC		SPR		SPR
September 30, 2007	Electric		Electric		Electric		Gas		Other		Consolidated
Operating Revenues	$	894,226	$	290,979	$	1,185,205	$	20,839	$	6	$	1,206,050
Operating Income	$	170,264	$	37,893	$	208,157	$	225	$	4,755	$	213,137
Three Months Ended	NPC		SPPC		Total		SPPC		SPR		SPR
September 30, 2006	Electric		Electric		Electric		Gas		Other		Consolidated
Operating Revenues	$	776,235	$	284,339	$	1,060,574	$	21,106	$	287	$	1,081,967
Operating Income	$	244,920	$	36,056	$	280,976	$	487	$	2,330	$	283,793
Nine Months Ended	NPC		SPPC		Total		SPPC		SPR		SPR
September 30, 2007	Electric		Electric		Electric		Gas		Other		Consolidated
Operating Revenues	$	1,887,499	$	789,214	$	2,676,713	$	137,337	$	325	$	2,814,375
Operating Income	$	259,460	$	87,411	$	346,871	$	6,831	$	7,796	$	361,498
Nine Months Ended	NPC		SPPC		Total		SPPC		SPR		SPR
September 30, 2006	Electric		Electric		Electric		Gas		Other		Consolidated
Operating Revenues	$	1,701,379	$	767,133	$	2,468,512	$	141,128	$	1,302	$	2,610,942
Operating Income	$	332,602	$	84,866	$	417,468	$	6,471	$	10,114	$	434,053

14

NOTE 3.                      REGULATORY ACTIONS

Pending Rate Cases

Nevada Power Company

    NPC Fourth Amendment to 2006 Integrated Resource Plan (IRP)

In July 2007, NPC filed its fourth amendment to its 2006 IRP requesting to expend an additional $13.2 million on various transmission projects.  In addition, NPC requested approval of various renewable energy purchase power agreements, totaling 139.5 megawatts (MWs), to be built over the next two to four years.  Hearings on this matter were held in early October 2007 and a decision is expected by the end of November 2007.

Sierra Pacific Power Company

    SPPC 2007 Nevada Integrated Resource Plan

In June 2007, SPPC filed its 2007 triennial IRP with the PUCN.  The following are the key elements of the filing:

·   requested approval for approximately $176 million in transmission projects;

·   requested approval of four new demand side programs and to increase spending on seven existing demand side programs (total expenditures of $28.4 million).  The demand side programs are intended to help customers use electricity more efficiently and also contribute to SPPC’s Renewable Portfolio requirements; and

·   requested approval to expend $16.5 million, an increase of $8.2 million, on the replacement of the diesel units in Kings Beach, California.  The increase in costs is the result of higher material costs and the costs to meet the environmental requirements of the Tahoe Regional Planning Administration.

Hearings on these matters are scheduled to be held early November 2007.

SPPC 2007 Nevada Natural Gas and Propane Deferred Energy Rate Case and Base Tariff Energy Rate (BTER) Update

In May 2007, SPPC filed an application to create a new Deferred Energy Accounting Adjustment (DEAA) rate and to update the going forward BTER.  SPPC requested to increase rates by $13.4 million, while recovering approximately $900 thousand of deferred gas costs.  This application requested an overall rate increase of 7.05%.  Hearings on these matters were held in the end of October 2007 and a decision is expected before December 2007.

    SPPC 2006 Nevada Western Energy Crisis Rate Case

In December 2006, SPPC filed an application to recover $22.6 million in deferred legal and settlement costs incurred to resolve claims arising from the Western Energy Crisis.  This application requested an overall rate increase of 0.53% and to begin amortizing the costs over a four-year period beginning July 1, 2007.

In February 2007, SPPC entered into a stipulation pursuant to which SPPC replaced its request to implement rates on July 1, 2007 with a request to recover approximately $16.3 million and $6.3 million, respectively, in deferred settlement and legal costs.  SPPC further requested authority to recover carrying charges on the regulatory asset.  Hearings on this matter were held in early October 2007 and a decision is expected during the fourth quarter of 2007.

    SPPC Nevada 2003 General Rate Case

As described in more detail in the 2006 Form 10-K, Note 13 Commitments and Contingencies of the Notes to Financial Statements, in connection with SPPC’s 2003 GRC, the PUCN disallowed $43 million of unreimbursed costs associated with the Pinon Pine Coal Gasification Demonstration Project.  The PUCN decision was appealed by SPPC, and the case was ultimately remanded to the PUCN for further review of whether the costs were justly and reasonably incurred.

A pre-hearing conference on this matter was held in June 2007, during which the parties were directed to file briefs on the scope of the issues they believe are before the PUCN.  A second pre-hearing conference was held in August 2007 in which the PUCN determined the scope of the proceedings and set a procedural schedule.  Hearings are expected to be held in early January 2008.

15

Approved Rate Cases

Nevada Power Company

NPC 2007 Quarterly BTER Filing

 In August 2007, NPC filed an application to update the going forward BTER.  NPC requested to increase rates by $22.7 million, resulting in a 1% increase.  The PUCN approved the requested rate change with rates effective October 1, 2007.

    NPC 2006 General Rate Case

In November 2006, NPC filed its statutorily required electric GRC and further updated the filing in February 2007.  The filing requested an ROE and rate of return (ROR) of 11.4% and 9.39%, respectively, and an increase to general revenues of $156.4 million.

The PUCN issued its order in May 2007, with rates effective as of June 1, 2007.  The PUCN order resulted in the following significant items:

·   increase in general rates of $120.1 million, a 5.66% increase;

·   ROE and ROR of 10.7% and 9.06%, respectively;

·   authorized 100% recovery of  unamortized 1999 NPC / SPPC merger costs;

·   authorized incentive rate making for Lenzie;  and

·   authorized recovery of accumulated cost and savings, including the net book value of Mohave over an eight year period (see Note 6, Commitments and Contingencies for further discussion of Mohave).

    NPC 2007 Deferred Energy Rate Case and BTER Update

In January 2007, NPC filed an application to create a new DEAA rate and to update the going forward BTER.  NPC requested to decrease rates by $33.2 million, while recovering $75 million of deferred fuel and purchased power costs.

In March 2007, NPC filed an update to its going forward BTER which lowered the overall decrease in rates from $33.2 million to $5.9 million, resulting in less than a 1% decrease.  NPC requested the amortization to begin June 1, 2007 and to continue for a 14-month period.

In June 2007, the PUCN approved a stipulation between the parties that resolved all the issues in this case with no material impact to the requested rate change with rates effective June 1, 2007.

    Material Amendments to NPC’s 2006 Integrated Resource Plan

InJanuary 2007, NPC filed an amendment to its 2006 IRP requesting approval to expend $60 million to install new ultra-low emission burners on the four combustion turbines serving the combined cycle units at the Clark Generating Station.  In May 2007, the PUCN approved a stipulation pursuant to which NPC was authorized to expend $60 million to install the new ultra-low emission burners.

    NPC 2007 Western Energy Crisis Rate Case

In January 2007, NPC filed an application to recover $83.6 million in deferred legal and settlement costs incurred to resolve claims associated with power supply contracts terminated during the Western Energy Crisis.  This application requested to begin amortizing the costs over a four-year period beginning June 1, 2007.

In March 2007, the PUCN approved a negotiated settlement pursuant to which NPC is authorized to recover the $83.6 million plus carrying charges over a three-year period beginning June 1, 2007, which differed from the four-year period requested in the application.

    NPC 2001 Deferred Energy Case

In November 2001, NPC made a deferred energy filing with the PUCN seeking repayment for purchased fuel and power costs accumulated between March 1, 2001, and September 30, 2001, as required by law.  The application sought to establish a rate to repay purchased fuel and power costs of $922 million and to spread the recovery of the deferred costs, together with a carrying charge, over a period of not more than three years.

16

In March 2002, the PUCN issued its Order on the application, allowing NPC to recover $478 million over a three-year period, but disallowing $434 million of deferred purchased fuel and power costs and $30.9 million in carrying charges consisting of $10.1 million in carrying charges accrued through September 2001 and $20.8 million in carrying charges accrued from October 2001 through February 2002.  The Order stated that the disallowance was based on alleged imprudence in incurring the disallowed costs.  NPC and the Bureau of Consumer Protection (BCP) both sought individual review of the PUCN Order in the First District Court of Nevada (the District Court).  The District Court affirmed the PUCN’s decision.  Both NPC and the BCP filed Notices of Appeal with the Nevada Supreme Court.

In July 2006, the Supreme Court of Nevada issued a ruling reversing $178.8 million of the PUCN’s disallowance which was part of the NPC’s 2001 Deferred Energy Case.  The decision directed the District Court to remand the matter back to the PUCN to determine the appropriate rate schedule.

In March 2007, the PUCN approved a stipulation that authorizes NPC to recover in rates $189.9 million over ten years beginning on June 1, 2007, with no additional carrying charges.  The $189.9 million represents Nevada’s jurisdictional portion of the $178.8 million disallowance plus carrying charges of $11.1 million from the date the costs were incurred to the date of disallowance by the PUCN.

Sierra Pacific Power Company

SPPC  2007 Quarterly BTER Filing

 In August 2007, SPPC filed an application to update the going forward BTER.  SPPC requested to decrease rates by $17.4 million, resulting in a 1.85% decrease.  The PUCN approved the requested rate change with rates effective October 1, 2007.

    SPPC 2006 Nevada Electric Deferred Energy Rate Case and BTER Update

In December 2006, SPPC filed an application to create a new electric DEAA rate and to update the electric BTER.  SPPC requested to decrease rates by $7.9 million, a decrease of .86%, while recovering $18.7 million of deferred fuel and purchased power costs.  SPPC sought recovery using a symmetrical two-year amortization period beginning July 1, 2007.

In June 2007, the PUCN approved a stipulation between the parties that resolved all the issues in this case with no material impact to the requested rate change with rates effective July 1, 2007.

NOTE 4.                      LONG-TERM DEBT

           As of September 30, 2007, NPC’s, SPPC’s and SPR’s aggregate annual amount of maturities for long-term debt (including obligations related to capital leases) for the balance of 2007, for the next four years and thereafter are shown below (dollars in thousands):

	NPC			SPPC		SPR Holding Co. and Other Subs.		SPR Consolidated
2007	$	-		$	534	$	-	$	534
2008		6,363			101,643		-		108,006
2009		22,128			600		-		22,728
2010		157,908			25,000		-		182,908
2011		369,821			-		-		369,821
		556,220			127,777		-		683,997
Thereafter		2,141,845			1,073,250		549,209		3,764,304
		2,698,065			1,201,027		549,209		4,448,301
Unamortized Premium(Discount) Amount		(12,901	)		10,782		1,177		(942	)
Total	$	2,685,164		$	1,211,809	$	550,386	$	4,447,359

Substantially all utility plant is subject to the liens of NPC’s and SPPC’s indentures under which their respective General and Refunding Mortgage bonds are issued.

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Financing Transactions

Nevada Power Company

6.75% General and Refunding Mortgage Notes, Series R

 On June 28, 2007, NPC issued and sold $350 million of its 6.75% General and Refunding Mortgage Notes, Series R, due July 1, 2037.  The Series R Notes were issued pursuant to a registration statement previously filed with the Securities and Exchange Commission (SEC).  The net proceeds from the issuance were used to fund the purchase of the tendered Series G Notes (discussed below), repay amounts outstanding under NPC’s revolving credit facility and for general corporate purposes.

Tender Offer for General and Refunding Mortgage Notes, Series G

On June 28, 2007, NPC settled its cash tender offer, which commenced on June 15, 2007 and expired on June 22, 2007, for its 9.00% General and Refunding Mortgage Notes, Series G, due 2013.  Those holders who tendered their notes by the expiration date were entitled to receive a purchase price of $1,079.75 per $1,000 principal amount of Series G Notes.  Approximately $210.3 million of the $227.5 million Series G Notes outstanding were validly tendered and accepted by NPC.

Sierra Pacific Power Company

6.75% General and Refunding Mortgage Notes, Series P

 On June 28, 2007, SPPC issued and sold $325 million of its 6.75% General and Refunding Mortgage Notes, Series P, due July 1, 2037.  The Series P Notes were issued pursuant to a registration statement previously filed with the SEC.  The net proceeds from the issuance were used to fund the purchase of the tendered Series A Bonds (discussed below), repay amounts outstanding under SPPC’s revolving credit facility and for general corporate purposes.

Tender Offer for General and Refunding Mortgage Bonds, Series A

On June 28, 2007, SPPC settled its cash tender offer, which commenced on June 15 and expired on June 22, 2007, for its 8.00% General and Refunding Mortgage Bonds, Series A, due 2008.  Those holders who tendered their bonds by the expiration date were entitled to receive a purchase price of $1,022.10 per $1,000 principal amount of Series A Bonds.  Approximately $220.8 million of the $320 million Series A Bonds outstanding were validly tendered and accepted by SPPC.

Washoe County Water Facilities Refunding Revenue Bonds

On April 27, 2007, on behalf of SPPC, Washoe County, Nevada (Washoe County) issued $80 million aggregate principal amount of its Water Facilities Refunding Revenue Bonds, Series 2007A and B, due March 1, 2036 (the “Water Bonds”).

In connection with the issuance of the Water Bonds, SPPC entered into financing agreements with Washoe County, pursuant to which Washoe County loaned the proceeds from the sales of the Water Bonds to SPPC.  SPPC’s payment obligations under the financing agreements are secured by SPPC’s General and Refunding Mortgage Notes, Series O.

The Water Bonds initial rates, as determined by auction on April 25, 2007, were 3.85%.  The method of determining the interest rate on the Water Bonds may be converted from time to time so that the Water Bonds would thereafter bear interest at a daily, weekly, flexible, auction or term rate as designated.

The proceeds of the offerings were used to refund the $80 million aggregate principal amount of 5.00% Washoe County Water Facilities Revenue Bonds, Series 2001, which had a mandatory remarketing in 2009.

Lease Commitments

NPC entered into a 20-year lease, with three 10-year renewal options, to occupy land and building for its Southern Operations Center (“Southern Ops lease”).  In accordance with SFAS 13, “Accounting for Leases”, NPC accounts for the building portion of the lease as a capital lease and the land portion of the lease as an operating lease.  As of September 30, 2007, NPC has recorded property of $15.2 million; however, NPC has not begun depreciation of the building as it continues to construct leasehold improvements and is not using the facilities as of September 30, 2007.  NPC expects to transfer operations to the facilities in or around mid summer 2008.  In addition, NPC is preparing to sublease portions of the building.

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Minimum lease payments (capital lease portion) for the Southern Ops lease as of September 30, 2007 are as follows (dollars in thousands):

Remainder of 2007	$	60
2008	$	1,489
2009	$	1,463
2010	$	1,535
2011	$	1,551
Thereafter	$	31,941
Total Minimum Lease Payments	$	38,039
Less amounts representing interest	$	22,195
Present Value of Net minimum lease payments	$	15,844

Minimum lease payments (operating lease portion) for the Southern Ops lease as of September 30, 2007 are as follows (dollars in thousands):

Remainder of 2007	$	65
2008	$	1,596
2009	$	1,567
2010	$	1,645
2011	$	1,661
Thereafter	$	34,222
Total Operating Lease Payments	$	40,756

NOTE 5.                      DERIVATIVES AND HEDGING ACTIVITIES

SPR, SPPC and NPC apply SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" (“SFAS 133”), as amended by SFAS 138, SFAS No. 149 and SFAS No. 155.  As amended, SFAS 133 establishes accounting and reporting standards for derivatives instruments, including certain derivative instruments embedded in other contracts and for hedging activities.  It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position, measure those instruments at fair value, and recognize changes in the fair value of the derivative instruments in earnings in the period of change, unless the derivative meets certain defined conditions and qualifies as an effective hedge.  SFAS 133 also provides a scope exception for contracts that meet the normal purchase and sales criteria specified in the standard.  The normal purchases and normal sales exception requires, among other things, physical delivery in quantities expected to be used or sold over a reasonable period in the normal course of business.  Contracts that are designated as normal purchase and normal sales are accounted for under accrual accounting and not recorded on the Consolidated Balance Sheets at fair value.  A majority of the contracts entered into by the Utilities meet the criteria specified for this exception.

 Commodity Risk

The energy supply function encompasses the reliable and efficient operation of the Utilities’ generation, the procurement of all fuels and power and resource optimization (i.e., physical and economic dispatch) and is exposed to risks relating to, but not limited to, changes in commodity prices.  SPR’s and the Utilities’ objective in using derivative instruments is to reduce exposure to energy price risk.  Energy price risks result from activities that include the generation, procurement and marketing of power and the procurement and marketing of natural gas.  Derivative instruments used to manage energy price risk from time to time may include: forward contracts, which involve physical delivery of an energy commodity; over-the-counter options with financial institutions and other energy companies, which mitigate price risk by providing the right, but not the requirement, to buy or sell energy related commodities at a fixed price; and swaps, which require the Utilities to receive or make payments based on the difference between a specified price and the actual price of the underlying commodity. These contracts assist the Utilities to reduce the risks associated with volatile electricity and natural gas markets.

 Interest Rate Risk

In March 2007, SPPC entered into three forward-starting interest rate swap agreements, with an aggregate notional principal amount of $250 million, to manage the risk associated with changes in interest rates and the impact on future interest payments.

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In June 2007, SPPC settled its three forward-starting interest rate swap agreements in connection with the issuance of $325 million of its 6.75% fixed rate General and Refunding Mortgage Notes, Series P, due 2037.  SPPC received a gain of $11.3 million from the counterparty and recorded the amount as a premium on long term debt to be amortized over the life of the debt in accordance with regulatory accounting practices under SFAS No. 71, “Accounting for the Effects of Certain Types of Regulation” (“SFAS 71”).

NPC entered into and settled an interest rate lock agreement in June 2007, in connection with the issuance of $350 million of its 6.75% fixed rate General and Refunding Mortgage Notes, Series R, due 2037.  NPC made a payment to the counterparty of $546 thousand and recorded the amount as a discount on long term debt to be amortized over the life of the debt in accordance with regulatory accounting practices under SFAS 71.

Risk Management Assets/Liabilities

The following table shows the fair value of the open derivative positions recorded on the Consolidated Balance Sheets of SPR, NPC and SPPC and the related regulatory assets/liabilities that did not meet the normal purchase and normal sales exception criteria in SFAS 133.  The fair values of the open derivative positions are determined using quoted exchange prices, external dealer prices and available market pricing curves.  Due to deferred energy accounting treatment under which the Utilities operate, regulatory assets and liabilities are established to the extent that electricity and natural gas derivative gains and losses are recoverable or payable through future rates, once realized.  This accounting treatment is intended to defer the recognition of mark-to-market gains and losses on energy commodity transactions until the period of settlement and to not recognize unrealized gains and losses on the Consolidated Statements of Income (dollars in millions):

	September 30, 2007										December 31, 2006
	Fair Value										Fair Value
		SPR			NPC			SPPC			SPR			NPC			SPPC
Risk management assets - current		$	22.4		$	14.4		$	8.0		$	27.3		$	16.4		$	10.9
Risk management assets – non-current			32.6			29.2			3.4			7.6			5.4			2.2
Total risk management assets			55.0			43.6			11.4			34.9			21.8			13.1
Risk management liabilities- current			85.8			59.9			25.9			123.1			84.7			38.4
Risk management liabilities - non-current			12.9			8.2			4.7			10.8			7.1			3.7
Total risk management liabilities			98.7			68.1			30.6			133.9			91.8			42.1
Less prepaid electric and gas options (at cost)			12.1			8.4			3.7			23.9			13.9			10.1
Total Risk Management Regulatory (Asset)/Liability - net (1)		$	(55.8	)	$	(32.9	)	$	(22.9	)	$	(122.9	)	$	(83.9	)	$	(39.1	)

¹ When amount is negative (loss) it represents a Risk Management Regulatory Asset, when positive (gain) it represents a Risk Management Regulatory Liability.

As a result of the nature of operations and the use of mark-to-market accounting for certain derivatives that do not meet the normal purchase and normal sales exception criteria, mark-to-market fair values will fluctuate.  The Utilities cannot predict these fluctuations, but the primary factors that cause changes in the fair values are the number and size of the Utilities open derivative positions with its counterparties and the changes in forward commodity prices.  The increase in risk management assets and the reduction of risk management liabilities as of September 30, 2007, as compared to December 31, 2006, is mainly due to favorable open derivative positions on natural gas options held by the Utilities to hedge energy price risk for their customers resulting from higher commodity prices for natural gas at September 2007 relative to contract prices.

NOTE 6.                      COMMITMENTS AND CONTINGENCIES

Environmental

Nevada Power Company

Reid Gardner Station

In August 1999, the Nevada Department of Environmental Protection (NDEP) issued a discharge permit to Reid Gardner Station and an order that requires all wastewater ponds to be closed or lined with impermeable liners over the next ten years.  This order also required NPC to submit a Site Characterization Plan to NDEP to ascertain impacts.  This plan has been reviewed and approved by NDEP.  In collaboration with NDEP, NPC has evaluated remediation requirements.  In May 2004, NPC submitted a schedule of remediation actions to NDEP which included proposed dates for corrective action plans and/or suggested additional assessment plans for each specified area.  Any future ponds will be double-lined with inter-liner leak detection in accordance with the NDEP Authorization to Discharge Permit issued October 2005.

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Pond construction and lining costs to satisfy the NDEP order expended to date is approximately $39.1 million.  Expenditures for 2007 through 2010 are projected to be approximately $8.8 million.  NPC is currently considering additional assessment plans to address historical groundwater impacts associated with facility operations; however, management cannot reasonably estimate costs at this time.   

As disclosed in prior filings, in June 2006, the Environmental Protection Agency (EPA) issued a Finding and Notice of Violation (NOV) related to monitoring, recordkeeping and emission exceedances at the Reid Gardner facility.  In April 2007, NPC lodged a Consent Decree in federal district court with NDEP, EPA and the Department of Justice (DOJ) regarding the NOVs and providing for additional environmental controls and equipment changes, environmental benefit projects, monetary penalties, and/or other measures that will be required to resolve the alleged violations.  Terms of the Consent Decree include a $1.1 million fine, funding of projects, of which NPC expects to spend approximately $2 million for the Supplemental Environmental Project with the Clark County School District, and the installation of emission reduction equipment at the facility.  The environmental project is aimed at achieving increased energy efficiency and cost savings for the school district.  Certain environmental controls and equipment changes needed to assure compliance with existing or modified regulations, and which will satisfy the terms of the consent decree, were previously submitted by NPC to the PUCN in NPC’s 2006 IRP filing.  These expenditures were approved by the PUCN in late 2006 and include equipment installation on the various units to control startup opacity and particulates and reduce operating opacity and oxides of nitrogen.  Capital expenditures are estimated at $84.2 million as approved by the PUCN; however, amounts may change depending on the procurement of material and services.

Clark Station

As disclosed in prior filings, in May 2006, the EPA, by letter from the DOJ, notified NPC that it intended to initiate an enforcement action against NPC seeking unspecified civil penalties, together with injunctive relief, for alleged violations of the Prevention of Significant Deterioration requirements and Title V operating permit requirements of the Clean Air Act at Clark Station.  NPC then entered into ongoing dialogue and settlement discussions with the EPA and DOJ regarding the alleged violations and in August 2007, a final Consent Decree between NPC and the EPA was entered with the Court.  Terms of the Consent Decree include installation of an advanced NOx reduction burner technology on four existing units with an estimated cost of up to $60 million, which cost was previously submitted by NPC to the PUCN in January 2007 in NPC’s Second Amendment to the 2006 IRP filing and was approved in May 2007.  Additionally, NPC will pay a minimal fine and make a contribution to Vegas Public Broadcasting Service (PBS) to fund a solar panel array on its new Educational Technology Campus planned in Clark County.  

NEICO

NEICO, a wholly-owned subsidiary of NPC, owns property in Wellington, Utah, which was the site of a coal washing and load-out facility.  The site has a reclamation estimate supported by a bond of approximately $5 million with the Utah Division of Oil and Gas Mining, which management believes is sufficient to cover reclamation costs.  Management is continuing to evaluate various options including reclamation and sale.

Litigation

Nevada Power Company

Peabody Western Coal Company

NPC owns an 11%, 255 MW interest in the Navajo Generating Station (Navajo) which includes three coal-fired electrical generating units and is located in Northern Arizona.  Other participants in Navajo, are the Salt River Project (Salt River), Arizona Public Service Company, Los Angeles Department of Water and Power and Tucson Electric Power Company (together, the Joint Owners).

On October 15, 2004, coal supplier Peabody Western Coal Co. (Peabody) filed a complaint against the Joint Owners in Missouri State Court in St. Louis, alleging, among other things, a declaration that the participants are obligated to reimburse Peabody for any royalty, tax or other obligations arising out of a lawsuit that the Navajo Nation filed against Peabody and others, including Southern California Edison (SCE) and Salt River, in June 1999 in the United States District Court for the District of Columbia (DC Lawsuit). In January 2005, the Joint Owners were served and operating agent, Salt River, has engaged counsel and is defending the suit on behalf of the Joint Owners.  NPC believes Peabody’s claims are without merit and intends to contest these.

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On February 10, 2005, the Joint Owners filed Notice of Removal of the complaint to the U. S. District Court, Eastern District of Missouri.  On May 30, 2006, the Federal District Court remanded the case back to state court upon motion made by Peabody.  On June 29, 2006, Joint Owners filed a motion to dismiss with the Missouri state court and requested a stay of the discovery proceedings pending the ruling on the new motion.  On April 3, 2007, the Missouri state court denied Joint Owners’ motion to dismiss.  Discovery is ongoing.  On October 4, 2007, Joint Owners filed a motion for partial summary judgment against Peabody’s claims for reimbursement of attorney fees and indemnification of liability in the event Peabody is held liable in the DC Lawsuit.  The court has yet to rule on the partial summary judgment motion.  The case is set for trial in December, 2008.  NPC is unable to predict the outcome of the decisions.

In addition to the above action before the Missouri State Court, Peabody further asserted in 1994 that Joint Owners are liable under the Coal Supply Agreement (CSA) for Retiree Health Care Costs (RHCC) and Final Reclamation Costs (FRC), which Peabody is obligated to pay after the CSA expires and the Kayenta Mine closes.

 In 1996, Salt River and the Joint Owners filed a complaint in the Maricopa County (Arizona) Supreme Court seeking determinations that they are not liable for RHCC or FRC or, alternatively, that Peabody cannot recover RHCC and FRC until after the CSA ends.  The case was dormant for several years, while Peabody pursued other RHCC and FRC claims arising out of similar coal contracts.  The RHCC matter is in the early stages of litigation.  The FRC claim went to arbitration and parties are in the early process of selecting a panel.  Settlement discussions, led by Salt River, are continuous and ongoing.  NPC is briefed periodically by Salt River as settlement discussions advance.  NPC cannot predict the final outcome of the settlement but has recorded a $12.8 million liability, which management has assessed as the approximate amount to be paid, and a corresponding deferred debit for such claims, as management believes NPC will recover these costs through deferred energy.

Sierra Pacific Power Company

Farad Dam

SPPC owns four hydro generating plants (10.3 MW capacity) located in California that were to be included in the sale of SPPC’s water business for $8 million to the Truckee Meadows Water Authority (TMWA) in June 2001.  The contract with TMWA requires that SPPC transfer the hydro assets in working condition.  However, one of the four hydro generating plants, Farad 2.8 MW, has been out of service since the summer of 1996 due to a collapsed flume.  While planning the reconstruction, a flood on the Truckee River in January 1997 destroyed the diversion dam.  The current estimate to rebuild the diversion dam, if management decides to proceed, is approximately $20 million.

SPPC filed a claim with the insurers Hartford Steam Boiler Inspection and Insurance Co. and Zurich-American Insurance Company (Insurers) for the flume and dam.  In December, 2003, SPPC sued the Insurers in the U.S. District Court for the District of Nevada on a coverage dispute relating to potential rebuild costs.  In May 2005, Insurers filed a motion for summary judgment on the coverage issue, which has been denied.  In October 2005, Insurers filed another partial summary judgment motion with respect to coverage, which the court also denied.  On June 16, 2006, Insurers filed new summary judgment motions, which SPPC opposed.  The Court denied the motions and asked parties to brief the Court on certain insurance coverage issues involving timing and cost recovery associated with rebuilding the dam.  A trial date has not been set.  Management believes that it has a valid insurance claim and is likely to recover the costs to rebuild the dam through the courts or from other sources.  Management has not recorded a loss contingency for this matter, as the loss, if any, can not be estimated at this time.

Other Legal Matters

SPR and its subsidiaries, through the course of their normal business operations, are currently involved in a number of other legal actions, none of which, in the opinion of management, is expected to have a significant impact on their financial positions, results of operations or cash flows.

Regulatory Contingencies

Nevada Power Company

Mohave Generation Station (Mohave)

NPC owns approximately 14% of the Mohave facility.  Southern California Edison (SCE) is the operating partner of Mohave.

When operating, Mohave obtained all of its coal supply from a mine in northeast Arizona on lands of the Navajo Nation and the Hopi Tribe (the Tribes).  This coal was delivered from the mine to Mohave by means of a coal slurry pipeline, which requires water that is obtained from groundwater wells located on lands of the Tribes in the mine vicinity.

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The Grand Canyon Trust and Sierra Club filed a lawsuit in the U.S. District Court, District of Nevada in February 1998 against the owners (including NPC) of Mohave, alleging violations of the Clean Air Act regarding emissions of sulfur dioxide and particulates.  An additional plaintiff, National Parks and Conservation Association, later joined the suit.  In 1999, the plant owners and plaintiffs filed a settlement with the court, which resulted in a consent decree, approved by the court in November 1999.  The consent decree established emission limits for sulfur dioxide and opacity and required installation of air pollution controls for sulfur dioxide, nitrogen oxides, and particulate matter.  Pursuant to the decree, Mohave Units 1 and 2 ceased operations as of January 2006 as the new emission limits were not met.  Due to the lack of resolution regarding continual availability of the coal and water supply with the Tribes, the Owners did not proceed with the Consent Decree.

In December 2005, the Owners of the Mohave plant suspended operation, pending resolution of these issues.  However, in June 2006, majority stake holder SCE announced it would no longer participate in the efforts to return the plant to service.  As a result, NPC decided it is not economically feasible to continue its participation in the project.  In September 2006, Salt River’s co-tenancy agreement expired and the operating agreement between the Owners expired in July 2006.  The Owners are negotiating an extension of both agreements including a process that addresses how Owners may sell or assign their right, title, interest and obligations in Mohave.

In NPC’s 2003 GRC, the PUCN ordered the use of a regulatory asset to accumulate the costs and savings associated with Mohave in the event of its shutdown with recovery of any accumulated costs in a future rate case proceeding.  As a result, NPC accumulated all costs net of savings associated with the shut down of Mohave, including unrecovered plant costs, in Other Regulatory Assets.  In NPC’s 2006 GRC, the PUCN approved the recovery of the net book value of the plant and costs and savings related to the plant through the certification period of October 31, 2006.  The balance to be recovered, over an eight year period, is approximately $22.9 million as of September 30, 2007.  All costs incurred subsequent to the certification period will continue to be accumulated in Other Regulatory Assets and NPC will seek recovery in its next GRC for those costs.  The accumulated balance subsequent to the certification period is approximately $4.7 million as of September 30, 2007.

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NOTE 7.                      EARNINGS PER SHARE (EPS) (SPR)

 The difference, if any, between basic EPS and diluted EPS is due to potentially dilutive common shares resulting from stock options, the employee stock purchase plan, performance and restricted stock plans, and the non-employee director stock plan.

The following table outlines the calculation for earnings per share (EPS):

		Three months ended September 30,				Nine months ended September 30,
		2007		2006		2007		2006
Basic EPS
Numerator ($000)
	Net income applicable to common stock	$	152,222	$	222,246	$	193,583	$	251,324
Denominator
	Weighted average number of common shares outstanding		221,612,243		211,143,616		221,424,682		204,303,110
Per Share Amounts
	Net income applicable to common stock	$	0.69	$	1.05	$	0.87	$	1.23
Diluted EPS
Numerator ($000)
	Net income applicable to common stock	$	152,222	$	222,246	$	193,583	$	251,324
Denominator (1)
	Weighted average number of shares outstanding before dilution		221,612,243		211,143,616		221,424,682		204,303,110
	Stock options		73,834		86,145		124,013		78,774
	Executive long term incentive plan - restricted		-		125,432		-		114,189
	Non-Employee Director stock plan		48,513		32,576		44,597		28,798
	Employee stock purchase plan		-		3,604		2,630		3,016
	Performance Shares		234,212		250,448		187,502		216,936
			221,968,802		211,641,821		221,783,424		204,744,823
Per Share Amounts
	Net income applicable to common stock	$	0.69	$	1.05	$	0.87	$	1.23

(1)   The denominator does not include stock equivalents resulting from the options issued under the nonqualified stock option plan for the three and nine months ended September 30, 2007 and 2006, due to conversion prices being higher than market prices for all periods.  Under the nonqualified stock option plan for the three and nine months ended September 30, 2007, 685,582 and 713,826 shares, respectively, would be included and 953,995 and 940,287 shares, respectively, would be included for the three and nine months ended September 30, 2006.

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NOTE 8.                      PENSION AND OTHER POST-RETIREMENT BENEFITS

A summary of the components of net periodic pension and other postretirement costs for the nine months ended September 30 follows.  This summary is based on a September 30 measurement date (dollars in thousands):

	For the Three Months Ended September 30,
	Pension Benefits		Other Postretirement Benefits
	2007	2006	2007	2006
Service cost	$          5,725	$          5,758	$             268	$             903
Interest cost	9,855	9,157	2,570	2,629
Expected return on plan assets	(10,474)	(10,182)	(1,309)	(1,258)
Amortization of prior service cost	407	473	30	31
Amortization of Transition Obligation	-	-	815	248
Amortization of net (gain)/loss	1,803	2,445	242	1,180
Net periodic benefit cost	$          7,316	$          7,651	$          2,616	$          3,733
	For the Nine Months Ended September 30,
	Pension Benefits		Other Postretirement Benefits
	2007	2006	2007	2006
Service cost	$        17,175	$        17,275	$          1,804	$          2,710
Interest cost	29,565	27,470	7,711	7,887
Expected return on plan assets	(31,422)	(30,547)	(3,927)	(3,773)
Amortization of prior service cost	1,222	1,419	91	94
Amortization of Transition Obligation	-	-	2,444	743
Amortization of net (gain)/loss	5,409	7,334	727	3,539
Net periodic benefit cost	$        21,949	$        22,951	$          8,850	$        11,200

In the third quarter ended September 30, SPR and the Utilities made contributions to the pension plan and the other postretirement benefits plan in the amount of $54 million and $46 million, respectively.  Due to SPR’s and the Utilities’ improved financial condition, management believed a higher contribution than previously estimated to be more appropriate.  At the present time, there is not expected to be any further contributions to either plan in 2007.

NOTE 9.                      DEBT COVENANT AND OTHER RESTRICTIONS

Since SPR is a holding company, substantially all of its cash flow is provided by dividends paid to SPR by NPC and SPPC on their common stock, all of which is owned by SPR.  As of September 30, 2007, NPC had paid $23.5 million in dividends to SPR and SPPC had paid $11.7 million in dividends to SPR in 2007.

Since NPC and SPPC are public utilities, they are subject to regulation by state utility commissions, which impose limits on investment returns or otherwise may impact the amount of dividends that the Utilities may declare and pay.  In June, 2007, the PUCN terminated the dividend restriction previously imposed by the PUCN in February 2006, which limited the amount of cash that NPC and SPPC could pay to SPR on a combined basis to actual cash necessary to service SPR’s debt for the year.

Debt agreements entered into by SPR and the Utilities set restrictions on the amount of dividends they may declare and pay and restrict the circumstances under which such dividends may be declared and paid.  The specific agreements entered into by SPR and the Utilities, and restrictions on dividends contained in agreements to which they are party, as well as the effect of the Federal Power Act on the payment of dividends by the Utilities, are discussed in the 2006 Form 10-K, Note 8, Debt Covenant Restrictions in the Notes to Financial Statements.

As of September 30, 2007, SPR and the Utilities were able to pay dividends, subject to a cap, under the most restrictive test in their financing agreements; however, their financing agreements do not currently significantly restrict SPR’s and the Utilities’ ability to pay dividends.

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NOTE 10.  DIVIDENDS

On July 28, 2007, SPR’s Board of Directors declared a quarterly cash dividend of $0.08 per share paid on September 12, 2007, to common shareholders of record on August 24, 2007.  The dividend was the first dividend declared by SPR since February 2002.

On November 1, 2007, SPR’s Board of Directors declared a quarterly cash dividend of $0.08 per share payable on December 12, 2007, to common shareholders of record on November 19, 2007.

As of September 30, 2007, NPC and SPPC have paid $23.5 million and $11.7 million, respectively in dividends to SPR in 2007.  On November 1, 2007, NPC and SPPC declared a dividend to SPR of $10.7 million and $7.8 million, respectively.

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ITEM 2.          MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements and Risk Factors

The information in this Form 10-Q 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.

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 the actual results of Sierra Pacific Resources (SPR), Nevada Power Company (NPC), or Sierra Pacific Power Company (SPPC) to differ materially from those contemplated in any forward-looking statement include, among others, the following:

(1)   the effect that changes in environmental laws or regulations, including the imposition of significant new limits on emissions from electric generating facilities, such as requirements to reduce greenhouse gases and/or other pollutants in response to climate change legislation, may have on our existing operations as well as on our construction program, especially the proposed Ely Energy Center;

(2)   the effect that any construction risks may have on our business, such as the risk of delays in permitting, changes in environmental laws, securing adequate skilled labor, cost and availability of materials and equipment, equipment failure, work accidents, fire or explosions, business interruptions, possible cost overruns, delay of in-service dates, and pollution and environmental damage;

(3)   whether the Utilities can procure sufficient renewable energy sources in each compliance year to satisfy the Nevada Portfolio Standard;

(4)   unseasonable weather and other natural phenomena, which, in addition to affecting NPC’s and SPPC’s (collectively referred to as the Utilities) customers’ demand for power, can have a potentially serious impact on the Utilities’ ability to procure adequate supplies of fuel or purchased power to serve their respective customers and on the cost of procuring such supplies;

(5)   whether the Utilities will be able to continue to obtain fuel and power from their suppliers on favorable payment terms and favorable prices, particularly in the event of unanticipated power demands (for example, due to unseasonably hot weather), sharp increases in the prices for fuel and/or power or a ratings downgrade;

(6)   the ability and terms upon which SPR, NPC and SPPC will be able to access the capital markets to support their requirements for working capital, including amounts necessary for construction and acquisition costs and other capital expenditures, as well as to finance deferred energy costs, particularly in the event of unfavorable rulings by the Public Utilities Commission of Nevada (PUCN), untimely regulatory approval for such financings, and/or a downgrade of the current debt ratings of SPR, NPC, or SPPC;

(7)   financial market conditions, including changes in availability of capital or interest rate fluctuations;

(8)   future economic conditions, including inflation rates and monetary policy;

(9)   unfavorable or untimely rulings in rate cases filed or to be filed by the Utilities with the PUCN, including the periodic applications to recover costs for fuel and purchased power that have been recorded by the Utilities in their deferred energy accounts, and deferred natural gas costs recorded by SPPC for its gas distribution business;

(10)   wholesale market conditions, including availability of power on the spot market, which affect the prices the Utilities have to pay for power as well as the prices at which the Utilities can sell any excess power;

(11)   changes in the rate of industrial, commercial and residential growth in the service territories of the Utilities;

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(12)   whether the Utilities will be able to continue to pay SPR dividends under the terms of their respective financing and credit agreements and limitations imposed by the Federal Power Act;

(13)   the discretion of SPR’s Board of Directors regarding SPR’s future common stock dividends based on the Board’s periodic consideration of factors ordinarily affecting dividend policy, such as current and prospective financial condition, earnings and liquidity, prospective business conditions, regulatory factors, and restrictions in SPR’s and the Utilities’ financing agreements;

(14)   the effect that any future terrorist attacks, wars, threats of war or epidemics may have on the tourism and gaming industries in Nevada, particularly in Las Vegas, as well as on the economy in general;

(15)   the final outcome of the proceedings to reverse the PUCN’s 2004 decision on SPPC’s 2003 General Rate Case, which disallowed the recovery of a portion of SPPC’s costs, expenses and investment in the Piñon Pine Project;

(16)   the timing and final outcome of the PUCN’s decision regarding SPPC’s recovery of deferred energy costs associated with claims for terminated supplier contracts;

(17)   employee workforce factors, including changes in collective bargaining unit agreements, strikes or work stoppages;

(18)   changes in tax or accounting matters or other laws and regulations to which SPR or the Utilities are subject;

(19)   the effect of existing or future Nevada, California or federal legislation or regulations affecting electric industry restructuring, including laws or regulations which could allow additional customers to choose new electricity suppliers or change the conditions under which they may do so;

(20)   changes in the business or power demands of the Utilities’ major customers, including those engaged in gold mining or gaming, which may result in changes in the demand for services of the Utilities, including the effect on the Nevada gaming industry of the opening of additional Indian gaming establishments in California and other states; and

(21)   unusual or unanticipated changes in normal business operations, including unusual maintenance or repairs.

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.  SPR, NPC and SPPC 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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EXECUTIVE OVERVIEW

Management’s Discussion and Analysis of Financial Condition and Results of Operations explains the general financial condition and the results of operations of Sierra Pacific Resources (SPR) and its two primary subsidiaries, Nevada Power Company (NPC) and Sierra Pacific Power Company (SPPC), collectively referred to as the “Utilities” (references to “we,” “us” and “our” refer to SPR and the Utilities collectively), and includes the following for each of SPR, NPC and SPPC:

• Results of Operations

• Analysis of Cash Flows

• Liquidity and Capital Resources

•       Regulatory Proceedings (Utilities)

SPR operates three reportable business segments which are NPC electric, SPPC electric and SPPC natural gas.  The Utilities are public utilities engaged in the distribution, transmission, generation and sale of electricity and, in the case of SPPC, sale of natural gas.  Other operations consist mainly of unregulated operations and the holding company operations.  The Utilities are the principal operating subsidiaries of SPR and account for substantially all of SPR’s assets and revenues.  SPR, NPC and SPPC are separate filers for Securities and Exchange Commission (SEC) reporting purposes and as such this discussion has been divided to reflect the individual filers (SPR, NPC and SPPC), except for discussions that relate to all three entities or the Utilities.

SPR recognized net income applicable to common stock of $152.2 million and $193.6 million for the three and nine months ended September 30, 2007 respectively, compared to $222.2 million and $251.3 million for the same respective periods in 2006.  Earnings decreased primarily as a result of the reinstatement of deferred energy in 2006 of approximately $116.2 million net of taxes recorded.  Partially offsetting this was:

·   an increase to operating income as a result of increased rates

·   settlement with the PUCN regarding accrued interest on NPC’s 2001 deferred energy case

·   an increase in AFUDC and allowance for borrowed funds used during construction due to the construction of  NPC’s Clark Peaking Units and SPPC’s Tracy Generating Station and;

·   a decrease in interest charges.

On November 1, SPR declared a dividend of $0.08 per share for shareholders of record on November 19, 2007.  The dividend will be paid on December 12.  The amount payable will be approximately $17.7 million.

The Utilities’ revenues and operating income are subject to fluctuations during the year due to the impacts of seasonal weather, rate changes and customer usage patterns on demand for electric energy and services.  NPC is a summer peaking utility experiencing its highest retail energy sales in response to the demand for air conditioning.  SPPC’s electric system peak typically occurs in the summer, with a slightly lower peak demand in the winter.  SPPC's gas business typically peaks in the winter.

For the three and nine months ended September 30, 2007, NPC’s revenues increased compared to the same periods in 2006 primarily due to higher rates, customer growth and hotter weather.  NPC’s rates increased primarily due to NPC’s General Rate Case (GRC), effective June 1, 2007 and various Base Tariff Energy Rate (BTER) and Deferred Energy Cases.  NPC’s net income for the three months ended and nine months ended September 30, 2007 decreased compared to the same periods in 2006 primarily due to the reinstatement of deferred energy of approximately $116.2 million net of taxes recorded in 2006.  Partially offsetting this was an increase in operating income as a result of increased rates and settlement with the PUCN regarding accrued interest on NPC’s 2001 deferred energy case.  See Note 3, Regulatory Actions, of the Condensed Notes to Financial Statements and the 2006 Form 10-K for further discussion or regulatory matters.

For the three and nine months ended September 30, 2007, SPPC’s electric revenues increased from the same period in 2006, while gas revenues dropped slightly.  Electric revenues increased primarily as a result of higher rates and customer growth.  Electric rates increased as a result of SPPC’s GRC and various deferred energy cases and BTER updates as discussed in the 2006 Form 10-K.  SPPC’s gas revenues decreased primarily due to warmer weather in 2007 and a decrease in rates.  SPPC’s net income for the three months and nine months ending September 30, 2007 increased compared to the same period in 2006 primarily due to an increase in allowance for funds used during construction (AFUDC) and allowance for borrowed funds used during construction due to the construction at Tracy Generating Station and a decrease in interest charges.

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Business Issues

SPR’s and the Utilities’ strategies are aimed at owning more generating facilities, reducing dependence on purchased power and diversifying fuel mix including the use of renewable energy and energy efficiency and conservation programs, while the Utilities’ service areas continue to grow.  Population growth forecasts, however, may be influenced by economic trends in hotel room expansion and changes in the local housing markets.  Growth in Nevada continues, although at a slower pace than in 2006.  While growth in the State of Nevada, particularly in the Las Vegas area, has leveled out after the surge earlier this decade, the slower pace of housing starts has been partly offset by new casino projects in Las Vegas.  To meet the Utilities' obligations to serve their customers, the Utilities will continue to be subject to purchased power and natural gas markets that have been volatile in recent years.

With significant amounts of construction costs in the Utilities’ future, SPR and the Utilities will need to raise substantial amounts of capital to fund expenditures.  As a result, strengthening our balance sheet and further improving liquidity continues to be, a significant business focus for 2007 and beyond.

Summarized below are significant business issues and challenges ahead in 2007 and beyond.  It is not intended to be an exhaustive discussion, nor to suggest that other issues may not arise during 2007 or thereafter.  Details relating to the discussion below can be found in the Condensed Notes to the Financial Statements and elsewhere within this Management’s Discussion and Analysis of Financial Condition and Results of Operations, as well as the 2006 Form 10-K.

Generation Strategy

The Utilities’ Integrated Resource Plans (IRP) focus on conventional generation, renewable energy, conservation, and transmission projects to meet Nevada’s growing electricity needs while diversifying the fuel mix of the Utilities’ generation portfolios.  As a result, the Utilities have embarked on owning, constructing and purchasing energy to meet demand.  NPC purchased and completed construction of Lenzie and purchased the Silverhawk facility, both of which are highly efficient natural gas burning generating stations.  In 2007, NPC began construction of natural gas-fired combustion turbine peaking units at Clark Station to be in service for the summers of 2008 and 2009.  SPPC is expanding its Tracy Generating Station.  Both NPC and SPPC are working on the development and construction of the Ely Energy Center, consisting of two 750 MW coal-fired generation units and the Utilities continue to seek opportunities to purchase renewable energy.

Coal Generating Units

Included in the PUCN’s approval of the IRP is Phase 1 of the construction of the Ely Energy Center that consists of two 750 MW coal generation units to be located near Ely, Nevada. In addition to the generation units, the PUCN approved the development and construction of a 250-mile 500 kilovolt (kV) transmission line that would deliver electricity from the Ely Energy Center and from any possible future renewable resource projects in the area, as well as link NPC’s and SPPC’s transmission systems in the southern and northern portions of the state.  The PUCN approved spending up to $300 million for development activities associated with the Ely Energy Center and transmission line; however, the PUCN placed a $155 million spending limit until the appropriate permits, as discussed below, are obtained.  For planning purposes, it is currently assumed that the capacity of the project, as well as the development and construction costs, would be shared by NPC and SPPC on an 80% - 20% basis, respectively.  The PUCN established the project as a “critical facility,” thereby allowing it to qualify for incentives that will be determined in a later filing.  NPC and SPPC are required to file amendments to their IRPs once elements of the plan, including final costs and timing of completion, can be more accurately estimated.  The Utilities expect to file an amendment to their IRP no later than Spring 2008.  As currently filed with the PUCN, the estimated cost for the Ely Energy Center and the 500 kV transmission line is approximately $3.8 billion; however, depending on timing of construction, negotiation of certain contracts, the potential initiation of any litigation challenging the project, and the timing and terms of permitting, among other factors, actual costs, scope, and timing of the completion of the project could differ materially from initial estimates.

In addition to PUCN approval and other factors, the timing and construction of the Ely Energy Center and transmission line are dependent on obtaining land use permits from the Bureau of Land Management and air permits from the Nevada Division of Environmental Protection (NDEP).  On October 31, 2007, the NDEP published a notice of intent to issue a Class I air quality permit, together with a draft operating permit, with respect to the Ely Energy Center.  The draft operating permit is subject to public comment, and a public hearing on the permit has been scheduled for January 9, 2008.  Possible changes to state and federal environmental laws or regulations, including those relating to carbon emissions from coal-fired power plants, could impact either permitting process and thereby affect the Utilities’ ability to proceed or could require design changes to the project overall. At this time we are unable to predict the timing or outcome of the permitting processes.

Additionally, due to concerns about the possible effect of carbon dioxide and other “greenhouse gases” on the environment, and particularly on climate change, there is considerable debate as to whether or not additional coal-fired generating stations should be built in the United States.  For example, U.S. Senator Harry Reid from the State of Nevada, Majority Leader of the U.S. Senate, has voiced objections to the construction of coal generating facilities in Nevada, including the Ely Energy Center. Moreover, there are many legislative and rulemaking initiatives pending at the federal and state level which are aimed at the reduction of greenhouse gas emissions.    While the Utilities believe that the Ely Energy Center represents the best alternative for meeting the increasing electricity requirements of the State of Nevada, the Utilities cannot predict the outcome of pending or future legislative and rulemaking proposals, their effect on the permitting requirements for the Ely Energy Center described above, or their effect otherwise on the project overall, including future PUCN review and approval.  It is possible that the adoption of one or more such legislative or regulatory proposals could trigger a need to reevaluate the feasibility, economic and otherwise, of the Ely Energy Center as a coal generating facility or other aspects of the project overall.

If the Ely Energy Center is delayed or if the current planning assumptions for the project change materially, the Utilities would need to explore alternative sources of power for meeting the projected electricity demand in their service territories.  The most likely alternative to coal generation would involve increased use of natural gas, either through increased use of natural gas fueled purchased power or the construction of additional Utility-owned natural gas generating facilities, or a combination of both.  Such increased use of natural gas likely would further subject the Utilities and their customers to natural gas price volatility, as well as to any potential regional supply adequacy issues.

Natural Gas Generating Units

NPC has begun the construction of 600 MWs of natural gas-fired combustion turbine peaking units at Clark Station to be in service for the summers of 2008 and 2009 at an approximate cost of $405 million.

SPPC continues to construct a 541 MW gas fired high efficiency combined cycle generator at the Tracy Plant.  SPPC anticipates an in-service date of June 2008.  The PUCN ordered that SPPC be allowed to include construction work in progress balances in rate base between mandated general rate cases, prior to the in-service date, and granted a 1.5% enhanced Return on Equity (ROE) for the estimated $421 million investment.  The unit will provide needed generation within SPPC’s control area to reliably serve the growing needs of Northern Nevada.

For more details of NPC’s and SPPC’s IRP, see the 2006 Form 10-K, Regulatory Proceedings, and Note 3, Regulatory Actions of the Condensed Notes to Financial Statements.

Renewable Energy

 Nevada law sets forth the renewable energy portfolio standard (Portfolio Standard) requiring providers of electric service to acquire, generate, or save a specific percentage of its energy from renewable energy resources (Renewables).  Renewables include, but are not limited to: biomass, geothermal, solar and wind projects.  In 2006, the Utilities were required to obtain 6% of their total energy from Renewables.  The Portfolio Standard increases by 3% every other year until it reaches 20% in 2015.  In addition, the Portfolio Standard allows energy efficiency measures from qualified conservation programs to meet up to 25% of the Portfolio Standard.  Moreover, not less than 5% of the total Portfolio Standard must be met from solar resources.  In 2007 and 2008, the Utilities will be required to obtain 9% of their total energy from Renewables.  Currently, NPC and SPPC obtain 78.6 MWs and 184.9 MWs, respectively of renewable energy from sources such as geothermal, solar, hydroelectric, biomass and certain other forms of renewable energy.  In addition, NPC and SPPC have contracts with similar renewable providers for 160.4 MWs and 26.5 MWs, respectively, which are currently under development and NPC has an additional 139.5 MWs pending PUCN approval.  The Utilities have embarked on a strategy to invest in renewable energy that, along with third party contracts, and an increase in qualified conservation programs, will provide the opportunity for the Utilities to meet the Portfolio Standard as set forth by Nevada law.  The Utilities' compliance with the Portfolio Standard is dependent on the availability of renewable energy resources.

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In the second quarter 2007, Nevada Solar One, owned by Acciona Solar Power, the largest-capacity solar power plant built in the world in 16 years and the third-largest of its kind began supplying power to the Nevada Power Grid.  Approximately 43.5 MWs of the plant’s electricity production is being sold to NPC and SPPC under long-term power purchase agreements.

Management of Energy Risk

The Utilities buy coal, natural gas, and oil to operate generating plants as well as buy wholesale power to meet the energy requirements of their customers.  The Utilities also have invested in and maintain extensive transmission systems that allow the Utilities to move energy to meet customers’ needs.  While NPC has greatly reduced its dependence on wholesale power markets to meet its customers’ demand, both Utilities continue to have a significant need to tap energy markets due to the fact that the Utilities’ owned generation is insufficient to meet their customers’ energy needs.  This situation exposes the Utilities to energy risk and uncertainty as to the Utilities’ cash flow requirements for fuel and wholesale power, the expense the Utilities will incur as a result of their energy procurement efforts, and the rates the Utilities need to recover those costs.  Energy risk also encompasses reliability risk, the prospect that energy supplies will not be sufficient to fulfill customer requirements.

The Utilities systematically manage and control each of the energy-related risks through three primary vehicles: organization and governance, energy risk management programs, and energy risk control practices.

The Utilities, through the purchases and sale of specified financial instruments and physical products, maintain an energy risk management program that limits energy risk to levels consistent with an approved energy supply plan.  Reference details of the Utilities’ PUCN-approved energy supply plan in their 2006 Form 10-K.  The energy risk management program provides for the systematic identification, quantification, evaluation, and management of the energy risk inherent in the Utilities’ operations.

The Utilities follow PUCN-approved energy supply plans that encompass the reliable and efficient operation of the Utilities’ owned generation, the procurement of all fuels and purchased power and resource optimization.  The process includes assessments of projected loads and resources, assessments of expected market prices, evaluations of relevant supply portfolio options available to the Utilities, and evaluations of the risk attributable to those supply portfolio options.  Financial instruments for economic hedging in conjunction with energy purchases and sales are also used to mitigate these risks.  However, once in place, the Utilities do not trade these financial instruments.

Access to Capital Markets

With substantial commitments to existing and prospective construction and exposure to volatile energy costs, SPR and the Utilities’ access to capital markets, including both debt and equity, continues to be a significant business issue.  Management continues to be focused on improving the credit quality of the Utilities’ senior secured debt.  Significant amounts of capital may be necessary to fund construction costs of generating units and, as a result, management may be required to meet such financial obligations with a combination of internally generated funds, the use of the Utilities’ revolving credit facilities, the issuance of long-term debt, and capital contributions from SPR.  If energy costs rise at a rapid rate and the Utilities do not recover the cost of fuel and purchased power in a timely manner, the Utilities may need to issue more debt to support their operating costs or may need to delay capital expenditures.

In addition to cash on hand and the use of the Utilities’ revolving credit facilities, SPR and the Utilities may issue debt up to $1.1 billion consolidated, subject to certain limitations as discussed in the respective Liquidity and Capital Resources sections of SPR and the Utilities to meet its financial obligations.  Furthermore in September 2007, SPR, as a well known seasoned issuer, together with NPC and SPPC, filed a form S-3 shelf registration statement covering securities of SPR and the Utilities and which is expected to provide SPR and the Utilities with more timely access to the capital markets.

Currently, three of the four rating agencies now rate the Utilities’ senior secured debt investment grade.  The recent credit ratings upgrade will reduce the cost of borrowing under the Utilities’ revolving credit facilities.  In addition, the upgrades have the potential to provide SPR and the Utilities better access to capital markets and to reduce the cost of issuing additional long-term debt.  However, disruptions in the banking and capital markets not specifically related to SPR or the Utilities may affect their ability to access funding sources or cause an increase in the return required by investors.

Regulatory

As is the case with most regulated entities, the Utilities are frequently involved in various regulatory proceedings.  The Utilities are required to file for quarterly rate adjustments to provide recovery of their fuel and purchased power costs.  They are also required to file rate cases every three years to adjust general rates that include their cost of service and return on investment in order to more closely align earned returns with those allowed by regulators.  The Utilities remain committed to maintaining a positive relationship with their regulators.  Details regarding recently approved and pending rate cases are discussed in Note 3, Regulatory Actions, of the Condensed Notes to Consolidated Financial Statements.

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SIERRA PACIFIC RESOURCES

RESULTS OF OPERATIONS

Sierra Pacific Resources (Consolidated)

The operating results of SPR primarily reflect those of NPC and SPPC, discussed later.  The Holding Company’s (stand alone) operating results included approximately $31.9 million and $38.9 million of long term debt interest costs for the nine months ended September 30, 2007 and 2006, respectively.

During the three months ended September 30, 2007, SPR’s recognized net income applicable to common stock of approximately $152.2 million compared to $222.2 million for the same period in 2006.  During the nine months ended September 30, 2007, SPR recognized net income applicable to common stock of approximately $193.6 million compared to $251.3 million for the same period in 2006.  Net income applicable to common stock was lower in the three months and nine months ended September 30, 2007 compared to the same period in 2006 primarily due to the reinstatement of deferred energy of approximately $116.2 million net of taxes recorded in 2006.  Partially offsetting this decrease was an increase to operating income as a result of increased rates, settlement with the PUCN regarding accrued interest on NPC’s 2001 deferred energy case, an increase in AFUDC due to the construction of NPC’s Clark Peaking Units and SPPC’s Tracy Generating Station and a decrease in interest charges.

As of September 30, 2007, NPC and SPPC had paid $23.5 million and $11.7 million, respectively, in dividends to SPR in 2007.  On November 1, 2007, NPC and SPPC declared a dividend to SPR of $10.7 million and $7.8 million, respectively.

ANALYSIS OF CASH FLOWS

Cash flows decreased during the nine months ended September 30, 2007 compared to the same period in 2006 due to an increase in cash used by investing activities and a decrease in cash from financing activities partially offset by an increase to cash from operating activities.

Cash From Operating Activities  Cash flows from operating activities increased during the nine months ended September 30, 2007 compared to the same period in 2006 primarily due to NPC’s increased operating income (excluding Reinstated Deferred Energy).  NPC’s Operating income (excluding Reinstated Deferred Energy) increased primarily as a result of increases in rates due to NPC’s GRC, the Western Energy Crisis Rate Case and the 2001 Deferred Energy Case, as discussed in Note 3, Regulatory Actions of the Condensed Notes to Financial Statements.

Other factors contributing to the increase in cash flows were:

·   a decrease in payments made to suppliers;

·   the timing of payments;

·   improved credit terms with vendors;

·   a BTER rate which better reflects actual fuel and purchased power costs;

·   a decrease in interest expense paid; and

·   the net settlement with Enron in 2006.

This was partially offset by an increase in payments for Pension and Other Post Retirement Benefits of $100 million.

Cash Used by Investing Activities   Cash used by investing activities for the nine months ended September 30, 2007 increased compared to the same period in 2006 primarily due to expenditures for the Clark Peaking Units, the expansion of the Tracy Generating Station, the Ely Energy Center and utility infrastructure to support growth, offset by expenditures in 2006 for the Silverhawk and the Lenzie Generating Station.

Cash From Financing Activities   Cash from financing activities decreased during the nine months ended September 30, 2007 compared to the same period in 2006 primarily due to net proceeds of $280.5 million from the issuance of 20 million shares of common stock in August 2006.  Also contributing to the decrease in cash was the payment of dividends in the third quarter of 2007 of approximately $17.7 million.  Partially offsetting these decreases was the issuance of new debt by NPC and SPPC in 2007.

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LIQUIDITY AND CAPITAL RESOURCES (SPR CONSOLIDATED)

Overall Liquidity

SPR’s consolidated operating cash flows are primarily derived from the operations of NPC and SPPC.  The primary source of operating cash flows for the Utilities is revenues (including the recovery of previously deferred energy costs and natural gas costs) from sales of electricity and natural gas.  Significant uses of cash flows from operations include the purchase of electricity and natural gas, other operating expenses, capital expenditures and interest.  Operating cash flows can be significantly influenced by factors such as weather, regulatory outcomes, and economic conditions.

Available Liquidity as of September 30, 2007 (in millions)
	SPR		NPC		SPPC
Cash and cash equivalents	$	27.2	$	44.9	$	28.6
Balance available on revolving credit facility	N/A			411.8		305.9
	$	27.2	$	456.7	$	334.5

In addition to cash on hand and the Utilities’ revolving credit facilities, SPR and the Utilities may issue debt up to $1.1 billion consolidated, subject to certain limitations discussed below and in the Utilities respective Liquidity and Capital Resources sections to meet their financial obligations.

SPR and the Utilities anticipate that they will be able to meet short-term operating costs, such as fuel and purchased power costs, with internally generated funds, including the recovery of deferred energy, and the use of their revolving credit facilities.  To manage liquidity needs as a result of seasonal peaks in fuel requirements, SPR and the Utilities may use hedging activities.  However, to fund long-term capital requirements, as discussed in the 2006 Form 10-K, SPR and the Utilities may meet such financial obligations with a combination of internally generated funds, the use of the Utilities’ revolving credit facilities and the issuance of long-term debt, preferred securities, and/or capital contributions from SPR.

Continued improvement in the credit ratings of SPR and the Utilities (see Credit Ratings below) has strengthened the liquidity position of the Utilities by allowing for the resumption of normal payment terms with our counterparties and the elimination of cash collateral requirements.  Existing collateral requirements with counterparties have been satisfied with letters of credit.  The recent credit rating upgrades reduce the cost of borrowing under the Utilities’ revolving credit facilities.  In addition, the upgrades have the potential to provide SPR and the Utilities better access to capital markets and to reduce the cost of issuing additional long-term debt.  However, disruptions in the banking and capital markets not specifically related to SPR or the Utilities may affect their ability to access funding sources or cause an increase in the return required by investors.

SPR has approximately $42.5 million payable of debt service obligations for 2007, of which SPR paid approximately $39.6 million during the nine months ended September 30, 2007.  SPR has approximately $2.9 million payable of debt service obligations remaining during 2007.  On September 12, 2007, SPR paid a dividend of $0.08 per share to common shareholders of record on August 24, 2007.  On November 1, SPR declared a dividend of $0.08 per share for shareholders of record on November 19, 2007.  The dividend will be paid on December 12.  The amount payable will be approximately $17.7 million, which SPR will pay from cash on hand.  SPR expects to meet its debt service obligations with cash on hand and/or through dividends from the Utilities.  See Dividends from Subsidiaries below.

During the nine months ended September 30, 2007, there were no material changes to contractual obligations as set forth in SPR’s 2006 Form 10-K for SPR (holding company).  See NPC and SPPC’s respective sections for changes in contractual obligations.

Registration Statements

In September 2007, SPR, as a well-known seasoned issuer, filed a Form S-3 automatic shelf registration statement, together with NPC and SPPC, under which an indeterminate number of shares of common stock and principal amount of debt securities may be issued by SPR; an indeterminate principal amount of general and refunding mortgage securities may be issued by NPC; and an indeterminate principal amount of general and refunding mortgage securities may be issued by SPPC.  The registration statement is expected to allow the companies to gain access to the capital markets in a timelier manner.  It is effective for a three-year period.

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Factors Affecting Liquidity

Effect of Holding Company Structure

As of September 30, 2007, SPR (on a stand-alone basis) has outstanding debt and other obligations including, but not limited to: $74.2 million of its unsecured 7.803% Senior Notes due 2012; $225 million of its 6.75% Senior Notes due 2017; and $250 million of its unsecured 8.625% Senior Notes due 2014.

Due to the holding company structure, SPR’s right as a common shareholder to receive assets of any of its direct or indirect subsidiaries upon a subsidiary’s liquidation or reorganization is junior to the claims against the assets of such subsidiary by its creditors.  Therefore, SPR’s debt obligations are effectively subordinated to all existing and future claims of the creditors of NPC and SPPC and its other subsidiaries, including trade creditors, debt holders, secured creditors, taxing authorities and guarantee holders.

As of September 30, 2007, SPR, NPC, SPPC and their subsidiaries had approximately $4.3 billion of debt and other obligations outstanding, consisting of approximately $2.7 billion of debt at NPC, approximately $1.1 billion of debt at SPPC and approximately $550 million of debt at the holding company.  Although SPR and the Utilities are parties to agreements that limit the amount of additional indebtedness they may incur, SPR and the Utilities retain the ability to incur substantial additional indebtedness and other liabilities.

Dividends from Subsidiaries

Since SPR is a holding company, substantially all of its cash flow is provided by dividends paid to SPR by NPC and SPPC on their common stock, all of which is owned by SPR.  As of September 30, 2007, NPC had paid $23.5 million in dividends to SPR and SPPC had paid $11.7 million in dividends to SPR in 2007.  On November 1, 2007, NPC and SPPC declared a $15.7 million and $7.8 million dividend, respectively, to SPR.

Since NPC and SPPC are public utilities, they are subject to regulation by state utility commissions, which impose limits on investment returns or otherwise may impact the amount of dividends that the Utilities may declare and pay.  In June, 2007, the PUCN terminated the dividend restriction previously imposed by the PUCN in February 2006 which limited the amount of cash that NPC and SPPC could pay to SPR on a combined basis to actual cash necessary to service SPR’s debt for the year.

Debt agreements entered into by SPR and the Utilities set restrictions on the amount of dividends they may declare and pay and restrict the circumstances under which such dividends may be declared and paid.  The specific agreements entered into by SPR and the Utilities, and restrictions on dividends contained in agreements to which they are party, as well as the effect of the Federal Power Act on the payment of dividends by the Utilities, are discussed in the 2006 Form 10-K, Note 8, Debt Covenant Restrictions in the Notes to Financial Statements.

As of September 30, 2007, SPR and the Utilities were able to pay dividends, subject to a cap, under the most restrictive test in their financing agreements; however, their financing agreements do not currently significantly restrict SPR’s and the Utilities’ ability to pay dividends.

Credit Ratings

SPR, NPC and SPPC are rated by four Nationally Recognized Statistical Rating Organizations:  Standard & Poor’s (S&P), Moody’s Investors Service, Inc. (Moody’s), Fitch Ratings Ltd. (Fitch), and Dominion Bond Rating Service (DBRS).  As of November 1, 2007 the ratings are as follows:

		Rating Agency
		DBRS	Fitch	Moody’s	S&P
SPR	Sr. Unsecured Debt	BB (low)	BB-	Ba3	B
NPC	Sr. Secured Debt	BBB(low)*	BBB-*	Baa3*	BB+
NPC	Sr. Unsecured Debt	Not rated	BB	Not rated	B
SPPC	Sr. Secured Debt	BBB(low)*	BBB-*	Baa3*	BB+

     * Ratings are investment grade

In October 2007, Moody’s upgraded SPR’s corporate family rating to Ba1 from Ba2.  At the same time, Moody’s upgraded the senior unsecured debt at SPR to Ba3, and the senior secured debt at NPC and SPPC to Baa3, which is investment grade.  Moody’s rating outlook for SPR, NPC and SPPC is Stable.  In June 2007, S&P and Fitch revised their outlook on all three companies to Positive from Stable.  In February 2007, DBRS, who had not previously issued ratings on the companies, assigned new ratings to SPR, NPC and SPPC.  The ratings for the senior secured debt of NPC and SPPC are BBB (low), which is the minimum level for investment grade.  The rating assigned to SPR’s senior notes is BB (low), which is non-investment grade.  DBRS’s trend for all three companies is Stable.  With the upgrade by Moody’s, three of the four rating agencies now rate the Utilities’ senior secured debt investment grade.

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A security rating is not a recommendation to buy, sell or hold securities.  Security ratings are subject to revision and withdrawal at any time by the assigning rating organization, and each rating should be evaluated independently of any other rating.

Financial Covenants

Nevada Power Company and Sierra Pacific Power Company

Each of NPC's $600 million Second Amended and Restated Revolving Credit Agreement and SPPC's $350 million Amended and Restated Revolving Credit Agreement, dated November 2005, and amended in April 2006, contains two financial maintenance covenants.  The first requires that the Utility maintain a ratio of consolidated indebtedness to consolidated capital, determined as of the last day of each fiscal quarter, not to exceed 0.68 to 1.  The second requires that the Utility maintain a ratio of consolidated cash flow to consolidated interest expense, determined as of the last day of each fiscal quarter for the period of four consecutive fiscal quarters, not to be less than 2.0 to 1.  As of September 30, 2007, both Utilities were in compliance with these covenants.

Ability to Issue Debt

The terms of SPR’s $250 million 8.625% Senior Unsecured Notes due March 15, 2014, $74.2 million 7.803% Senior Unsecured Notes due 2012 and $225 million 6.75% Senior Unsecured Notes due 2017 restrict SPR and NPC and SPPC from incurring any additional indebtedness unless:

1.    at the time the debt is incurred, the ratio of consolidated cash flow to fixed charges for SPR’s most recently ended four quarter period on a pro forma basis is at least 2 to 1; or

2.   the debt incurred is specifically permitted under the terms of the respective series of Senior Notes, which permits the incurrence of certain credit facility or letter of credit indebtedness, obligations incurred to finance property construction or improvement, indebtedness incurred to refinance existing indebtedness, certain intercompany indebtedness, hedging obligations, indebtedness incurred to support bid, performance or surety bonds, and certain letters of credit supporting SPR’s or any Restricted Subsidiary’s obligations to energy suppliers; or

3.   the indebtedness is incurred to finance capital expenditures pursuant to NPC’s and SPPC’s Integrated Resource Plan, as approved or amended under order by the PUCN.

If the respective series of Senior Notes are upgraded to investment grade by both Moody’s and S&P, these restrictions will be suspended and will no longer be in effect so long as the respective series of Senior Notes remain investment grade.  As of September 30, 2007, SPR, NPC and SPPC would have been able to issue approximately $1.1 billion of additional indebtedness on a consolidated basis, assuming an interest rate of 7%, per the requirement stated in number 1 above.

Cross Default Provisions

None of the Utilities’ financing agreements contains a cross-default provision that would result in an event of default by that Utility upon an event of default by SPR or the other Utility under any of their respective financing agreements.  Certain of SPR’s financing agreements, however, do contain cross-default provisions that would result in event of default by SPR upon an event of default by the Utilities under their respective financing agreements.  In addition, certain financing agreements of each of SPR and the Utilities provide for an event of default if there is a failure under other financing agreements of that entity to meet payment terms or to observe other covenants that would result in an acceleration of payments due.  Most of these default provisions (other than ones relating to a failure to pay other indebtedness) provide for a cure period of 30-60 days from the occurrence of a specified event, during which time SPR or the Utilities may rectify or correct the situation before it becomes an event of default.

NEVADA POWER COMPANY

RESULTS OF OPERATIONS

During the three months ended September 30, 2007, NPC recognized net income of approximately $133.1 million compared to net income of approximately $211.1 million for the same period in 2006.  During the nine months ended September 30, 2007, NPC recognized net income of approximately $161.3 million compared to net income of approximately $236.3 million for the same period in 2006.  The decrease in net income for the three and nine months ended September 30, 2007 was primarily due to the reinstatement of deferred energy of approximately $116.2 million net of taxes recorded in 2006.

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During the nine months ended September 30, 2007, NPC paid $23.5 million in dividends to SPR.  On November 1, 2007, NPC declared a dividend to SPR of $10.7 million.

Gross margin is presented by NPC in order to provide information that management believes aids the reader in determining how profitable the electric business is at the most fundamental level.  Gross margin, which is a “non-GAAP financial measure” as defined in accordance with SEC rules, provides a measure of income available to support the other operating expenses of the business and is utilized by management in its analysis of its business.

NPC believes presenting gross margin allows the reader to assess the impact of NPC’s regulatory treatment and its overall regulatory environment on a consistent basis.  Gross margin, as a percentage of revenue, is primarily impacted by the fluctuations in regulated electric and natural gas supply costs versus the fixed rates collected from customers.  While these fluctuating costs impact gross margin as a percentage of revenue, they only impact gross margin amounts if the costs cannot be passed through to customers.  Gross margin, which NPC calculates as operating revenues less fuel and purchased power costs, provides a measure of income available to support the other operating expenses of NPC.  Gross margin changes based on such factors as general base rate adjustments (which are required to be filed by statute every three years) and reflect NPC’s strategy to increase internal power generation versus purchased power, which generates no gross margin.

The components of gross margin were (dollars in thousands):

	Three Months Ended September 30,			Nine Months Ended September 30,
	2007	2006	Change from	2007	2006	Change from
			Prior Year  %			Prior Year  %
Operating Revenues:
Electric	$  894,226	$    776,235	15.2%	$1,887,499	$ 1,701,379	10.9%
Energy Costs:
Purchased power	313,487	289,975	8.1%	584,797	638,664	-8.4%
Fuel for power generation	166,284	183,622	-9.4%	471,142	425,138	10.8%
Deferral of energy costs-net	54,868	19,960	174.9%	149,531	53,748	178.2%
	$  534,639	$    493,557	8.3%	$1,205,470	$ 1,117,550	7.9%
Gross Margin before reinstatement of Deferred Energy Cost	$  359,587	$    282,678	27.2%	$   682,029	$    583,829	16.8%
Reinstatement of Deferred Energy Costs (1)	$            -	$    178,825	N/A	$             -	$    178,825	N/A
Gross Margin after reinstatement of Deferred Energy Costs	$  359,587	$    461,503	-22.1%	$   682,029	$   762,654	-10.6%
(1) Gross Margin, after reinstatement of deferred energy costs for the three and nine months ended September 30, 2007, decreased significantly from prior periods primarily due to the reinstatement of deferred energy costs as discussed further in the 2006 Form 10-K.

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The causes for significant changes in specific lines comprising the results of operations for NPC are discussed below (dollars in thousands except for amounts per unit):

Electric Operating Revenue

	Three Months							Nine Months
	Ended September 30,							Ended September 30,
					Change from							Change from
	2007		2006		Prior Year %			2007		2006		Prior Year %
Electric Operating Revenues:
Residential	$	475,201	$	402,746		18.0	%	$	921,510	$	811,100		13.6	%
Commercial		147,821		135,031		9.5	%		365,854		338,159		8.2	%
Industrial		242,963		218,301		11.3	%		535,309		495,829		8.0	%
Retail  revenues		865,985		756,078		14.5	%		1,822,673		1,645,088		10.8	%
Other		28,241		20,157		40.1	%		64,826		56,291		15.2	%
Total Revenues	$	894,226	$	776,235		15.2	%	$	1,887,499	$	1,701,379		10.9	%
Retail sales in thousands
Of megawatt-hours (MWh)		7,502		7,105		5.6	%		17,283		16,567		4.3	%
Average retail revenue per MWh	$	115.43	$	106.41		8.5	%	$	105.46	$	99.30		6.2	%

NPC’s retail revenues increased for the three and nine months ended September 30, 2007, as compared to the same period in 2006, due to increases in retail rates, customer growth and hotter summer weather.  Retail rates increased as a result of NPC’s various Base Tariff Energy Rate (BTER) and Deferred Energy Cases and NPC 2006 GRC, effective June 1, 2007 (see Note 3, Regulatory Actions of the Condensed Notes to Financial Statements and in the 2006 Form 10-K, Management’s Discussion and Analysis, Regulatory Proceedings, for details).  Retail customers increased by 2.9%, and 3.2% for the three and nine months ended September 30, 2007, respectively.

Electric Operating Revenues – Other increased for the three months ended September, 2007 compared to the same period in 2006 primarily due to a decrease in the reclassification of revenues in 2007 associated with Mohave which have been reclassified to Other Regulatory Assets as a result of the shut down of the Mohave Generating Station.  For further discussion on Mohave refer to Note 6, Commitments and Contingencies in the Notes to Financial Statements.

Electric Operating Revenues – Other increased for the nine months ended September 30, 2007 compared to the same period in 2006 primarily due to a decrease in the reclassification of revenues associated with Mohave, as described above, partially offset by a decrease in energy usage by Public Authority customers due to their transitioning to distribution only services by purchasing their energy from other sources, as allowed by Nevada law under certain circumstances.

Purchased Power

	Three Months							Nine Months
	Ended September 30,							Ended September 30,
					Change from							Change from
	2007		2006		Prior Year %			2007		2006		Prior Year %
Purchased Power	$	313,487	$	289,975		8.1	%	$	584,797	$	638,664		(8.4	)%
Purchased Power in thousands
of MWhs		3,648		3,441		6.0	%		7,200		8,363		(13.9	)%
Average cost per MWh of
purchased power	$	85.93	$	84.27		2.0	%	$	81.22	$	76.37		6.4	%

NPC’s purchased power costs and megawatt hours (MWhs) increased for the three months ended September 30, 2007 compared to the same period in 2006 primarily due to an increase in total system demand of approximately 4.0% as a result of customer growth and hotter weather.

For the nine months ended September 30, 2007, NPC’s purchased power costs and MWhs decreased primarily due to a decrease in volume compared to the same period in 2006.  Volume decreased as a result of NPC’s increased usage of internal generation, which was more economical than purchased power.  The average cost per MWh increased primarily due to fixed capacity charges associated with long term Qualified Facility (QF) contracts and other mid to long term contracts, coupled with a decrease in volume in the first two quarters of 2007.

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Fuel for Power Generation

	Three Months							Nine Months
	Ended September 30,							Ended September 30,
					Change from							Change from
	2007		2006		Prior Year %			2007		2006		Prior Year %
Fuel for Power Generation	$	166,284	$	183,622		-9.4	%	$	471,142	$	425,138		10.8	%
Thousands of MWhs generated		4,193		4,099		2.3	%		11,127		9,314		19.5	%
Average cost per MWh of
Generated Power	$	39.66	$	44.80		-11.5	%	$	42.34	$	45.65		-7.3	%

Fuel for power generation and the average cost per MWh decreased for the three months ended September 30, 2007 as compared to the same period in 2006 primarily due to lower natural gas prices partially offset by the cost of hedging activities.  Volume increased as a result of increased demand on NPC’s total system as a result of customer growth and hotter weather.

Fuel for power generation increased for the nine months ended September 30, 2007 as compared to the same time period in 2006 primarily due to an increase in volume, which resulted from increased usage of internal generation.  In addition, an increase in NPC’s total system of approximately 3.7% partially contributed to the increase in volume.  The average cost per MWh decreased primarily due to lower natural gas prices, slightly offset by the increased usage of the Lenzie and Silverhawk generating stations which are natural gas-fired high efficiency combined cycle power plants and the cost of hedging activities.

Deferred Energy Costs - Net

	Three Months						Nine Months
	Ended September 30,						Ended September 30,
	2007		2006			Change from Prior Year %	2007		2006			Change from Prior Year %
Reinstatement of deferred energy costs	$	-	$	(178,825	)	N/A	$	-	$	(178,825	)	N/A
Deferred energy costs - net	$	54,868	$	19,960		174.9%	$	149,531	$	53,748		178.2%

Reinstatement of deferred energy costs for the three and nine months ended September 30, 2006 represents the July 20, 2006 decision by the Nevada Supreme Court which allowed NPC to recover $178.8 million of previously disallowed deferred energy costs.  In March 2007, the PUCN approved the settlement agreement allowing NPC to recover such costs.   Reference further discussion in Note 3, Regulatory Actions, of the Condensed Notes to Consolidated Financial Statements.

Deferred energy costs – net represents the difference between actual fuel and purchased power costs incurred during the period and amounts recoverable through current rates.  To the extent actual costs exceed amounts recoverable through current rates, the excess is recognized as a reduction in costs.  Conversely to the extent actual costs are less than amounts recoverable through current rates, the difference is recognized as an increase in costs.  Deferred energy costs – net also include the current amortization of fuel and purchased power costs previously deferred.  See Note 1, Summary of Significant Accounting Policies of the Condensed Notes to Financial Statements for further detail of deferred energy balances.

Amounts for the three months ended September 30, 2007 and 2006 include amortization of deferred energy costs of $73.0 million and $43.4 million, respectively; and an under-collection of amounts recoverable in rates of $18.2 million and $23.5 million, respectively.  Amounts for the nine months ended September 30, 2007 and 2006 include amortization of deferred energy costs of $137.8 million and $95.8 million, respectively; and an over-collection of amounts recoverable in rates of $11.8 million in 2007, compared to an under-collection of $42.1 million in 2006.

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Allowance for Funds Used During Construction (AFUDC)

	Three Months							Nine Months
	Ended September 30,							Ended September 30,
	2007		2006		Change from Prior Year %			2007		2006		Change from Prior Year %
Allowance for other funds used during construction	$	4,701	$	1,986		136.7	%	$	11,046	$	10,140		8.9	%
Allowance for borrowed funds used during construction	$	3,936	$	1,978		99.0	%	$	9,189	$	10,050		-8.6	%
	$	8,637	$	3,964		117.9	%	$	20,235	$	20,190		0.2	%

AFUDC increased for the three months and nine months ended September 30, 2007, compared to the same period in 2006 primarily due to the start of construction of the Clark Peaking Units in 2007.  The debt component of AFUDC for the  nine months ended September 30, 2007 decreased compared to the same period in 2006, primarily due to lower debt costs which lowered the rate at which the debt component is calculated and a change to the debt to equity ratio.

Other (Income) and Expenses

	Three Months									Nine Months
	Ended September 30,									Ended September 30,
	2007			2006			Change from Prior Year %			2007			2006			Change from Prior Year %
Other operating expense	$	61,400		$	54,927			11.8	%	$	167,401		$	156,765			6.8	%
Maintenance expense	$	16,360		$	15,719			4.1	%	$	54,143		$	44,307			22.2	%
Depreciation and amortization	$	38,151		$	34,955			9.1	%	$	112,745		$	104,076			8.3	%
Interest charges on long-term debt	$	41,955		$	43,355			-3.2	%	$	123,029		$	132,285			-7.0	%
Interest charges-other	$	5,876		$	4,537			29.5	%	$	18,315		$	11,828			54.8	%
Interest accrued on deferred energy	$	(4,573	)	$	(4,786	)		-4.5	%	$	(11,849	)	$	(17,695	)		-33.0	%
Carrying charge for Lenzie		-		$	(10,040	)	N/A			$	(16,080	)	$	(23,206	)		-30.7	%
Reinstated interest on deferred energy		-			-		N/A			$	(11,076	)		-		N/A
Other income	$	(2,315	)	$	(4,080	)		-43.3	%	$	(10,345	)	$	(12,831	)		-19.4	%
Other expense	$	1,346		$	2,050			-34.3	%	$	8,772		$	6,353			38.1	%

Other operating expense increased for the three and nine months ended September 30, 2007, compared to the same periods in 2006.  In 2007, operating expenses increased as a result of higher operating expenses for Lenzie and Navajo, increased costs for claims and higher regulatory amortizations, partially offset by lower consulting fees and the reversal of Enron legal fees, which are now being recovered in rates as a result of NPC’s Western Energy Crisis Rate Case, see Note 3, Regulatory Actions of the Condensed Notes to Financial Statements for further discussion, and the reversal of consulting fees.  Additionally, in 2006, operating expenses were lower primarily as a result of the settlement of contingency fees associated with Enron in the second quarter and a reallocation of expenses to our joint facility partner which decreased other operating expenses.

Maintenance expense increased for the three months ended September 30, 2007, compared to the same period in 2006, mainly due to the timing of outages at Reid Gardner and increased maintenance cost for Silverhawk in 2007.

Maintenance expense increased for the nine months ended September 30, 2007, compared to the same period in 2006, mainly due to the operation of Lenzie Units 1 and 2, which were placed in service in January 2006 and April 2006, respectively, the timing of outages at Reid Gardner (forced outages and accelerated maintenance in 2007 and deferred maintenance in 2006), and forced outages at Harry Allen in 2007 and increased maintenance cost for Silverhawk in 2007, partially offset by scheduled and forced outages at Clark Station in 2006.

Depreciation and amortization expenses increased during the three months and nine months ended September 30, 2007, compared to the same periods in 2006, primarily as a result of the inclusion of Lenzie in depreciation as of June 2007 as a result of NPC’s 2007 GRC, an adjustment for Silverhawk depreciation based on regulatory clarification, an increase to plant-in-service for Harry Allen Unit IV in May 2006, an increase to plant-in-service for Centennial Transmission Project in March 2007, offset by the overall reduction in depreciation rates, as ordered by the PUCN in NPC’s General Electric Rate Case in June 2007.

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Interest charges on Long-Term Debt decreased during the three months and nine months ended September 30, 2007, compared to the same periods in 2006, due primarily to various re-financings of debt in 2006 and 2007 at lower interest rates and a decrease in the use of the Revolving Credit Facility in the first nine months of 2007.  The Revolving Credit Facility was used in 2006 primarily to fund capital expenditures and fuel and purchased power expenses.  Interest expense for the Revolving Credit Facility for the three months and nine months ended September 30, 2007, was approximately $2.0 million and $5.6 million respectively, compared to $3.9 million and $11.8 million, respectively, for the same periods in the prior year.  See Note 6, Long-Term Debt of the Notes to Financial Statements in the 2006 10-K for additional information regarding long-term debt and Note 4, Long-Term Debt of the Condensed Notes to Financial Statements.

Interest charges-other increased for the three months and nine months ended September 30, 2007, as compared to the same periods in 2006, due to amortization of debt issuance and redemption costs, as well as additional interest associated with customer transmission deposits, and lease of property.

Interest accrued on deferred energy costs decreased for the three months and nine months ended September 30, 2007, compared to the same periods in 2006, due to lower deferred energy balances, partially offset by carrying charges associated with NPC’s Western Energy Crisis Rate Case, which began June 1, 2007.  See Note 1, Summary of Significant Accounting Policies of the Condensed Notes to Financial Statements for further details of deferred energy balances and Note 3, Regulatory Actions of the Condensed Notes to Financial Statements for further discussion of NPC’s Western Energy Crisis Rate Case.

Carrying charges for Lenzie represent carrying charges earned on the incurred debt component of the acquisition and construction costs of the completed Lenzie plant.  The PUCN authorized NPC to accrue a carrying charge for the cost of acquisition and construction until the plant is included in rates.  Carrying charges decreased for the three months and nine months ended September 30, 2007 as compared to the same periods in 2006, as a result of NPC’s 2006 GRC, which includes the cost of Lenzie in rates.  See Note 1, Summary of Significant Accounting Policies, of the Condensed Notes to Financial Statements for discussion of the accounting for the carrying charge for Lenzie and Note 3, Regulatory Actions of the Condensed Notes to Financial Statements for discussion of NPC’s 2006 GRC.

Reinstated interest on deferred energy represents the carrying charges which were previously expensed as a result of the PUCN’s decision on NPC’s 2001 Deferred Energy Case.  In March 2007, the PUCN approved a settlement agreement allowing NPC to recover past carrying charges.

Other income decreased for the three months and nine months ended September 30, 2007, as compared to the same periods in 2006, due to lower interest income and the adjustment and expiration of the amortization of gains associated with the disposition of property.

Other expense decreased during the three months ended September 30, 2007 compared to the same period in 2006, due to several items all of which were not individually significant.  Other expense increased during the nine months ended September 30, 2007 compared to the same period in 2006, primarily due to costs associated with the Energy Savings Project for the Clark County School District, as agreed upon in the Reid Gardner Consent Decree discussed in Note 6, Commitments and Contingencies of the Condensed Notes to Financial Statements and higher advertising expenses in 2007.

ANALYSIS OF CASH FLOWS

Cash flows increased during the nine months ended September 30, 2007, when compared to the same period in 2006 due to an increase in cash from operating activities offset by a decrease in cash from financing activities and an increase in cash used by investing activities.

Cash From Operating Activities   Cash flows from operating activities increased during the nine months ended September 30, 2007 compared to the same period in 2006 primarily due to increased operating income (excluding Reinstated Deferred Energy).  Operating income (excluding Reinstated Deferred Energy) increased primarily as a result of increases in rates due to NPC’s GRC, the Western Energy Crisis Rate Case and the 2001 Deferred Energy Case as discussed in Note 3, Regulatory Actions of the Condensed Notes to Financial Statements.

In addition, operating cash flow (excluding Reinstated Deferred Energy) increased as a result of:

·   a decrease in payments made to suppliers;

·   the timing of payments;

·   improved credit terms with vendors, resulting in a decrease in deposits and prepayments;

·   a BTER rate which better reflects actual fuel and purchased power costs;

·   a decrease in interest expense paid; and

·   the net settlement with Enron in 2006.

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This was partially offset by an increase in payments for Pension and Other Post Retirement Benefits of $60.4 million.

Cash Used by Investing Activities   Cash used by investing activities for the nine months ended September 30, 2007 increased compared to the same period in 2006 primarily due to expenditures for the Clark Peaking Units, the Ely Energy Center and utility infrastructure to support the growth in the Las Vegas area, offset by expenditures in 2006 for the Silverhawk and the Lenzie Generating Station.

Cash From Financing Activities   Cash flows from financing activities decreased during the nine months ended September 30, 2007 compared to the same period in 2006 due to a decrease in financing activities and a capital contribution from SPR of $200 million in 2006.  Financing activities decreased as a result of the utilization of cash generated from operating activities.

LIQUIDITY AND CAPITAL RESOURCES

Overall Liquidity

NPC’s primary sources of operating cash flows are electric revenues, including the recovery of previously deferred energy costs.  Significant uses of cash flows from operations include the purchase of electricity and natural gas, other operating expenses, capital expenditures, and the payment of interest on NPC’s outstanding indebtedness.  Operating cash flows can be significantly influenced by factors such as weather, regulatory outcomes, and economic conditions.

	Available Liquidity as of September 30, 2007 (in millions)
Cash and cash equivalents	$	44.9
Balance available on Revolving Credit Facility (1)		411.8
	$	456.7

     ¹ As of November 1, 2007, NPC had approximately $545.1 million available under its revolving credit facility.

NPC anticipates it will be able to meet short-term operating costs, such as fuel and purchased power costs, with internally generated funds, including the recovery of deferred energy, and the use of its revolving credit facility.  To manage liquidity needs as a result of seasonal peaks in fuel requirement, NPC may use hedging activities.  However, to fund long-term capital requirements, as discussed in the 2006 Form 10-K, NPC may meet such financial obligations with a combination of internally generated funds, the use of the revolving credit facility and the issuance of long-term debt, preferred securities, and/or capital contributions from SPR.

Continued improvement in the credit ratings of NPC (see Credit Ratings below) has strengthened the liquidity position of the company by allowing for the resumption of normal payment terms with our counterparties and the elimination of cash collateral requirements.  Existing collateral requirements with counterparties have been satisfied with letters of credit.  The recent credit rating upgrades reduce the cost of borrowing under NPC’s revolving credit facility.  In addition, the upgrades have the potential to provide NPC better access to capital markets and to reduce the cost of issuing additional long-term debt.  However, disruptions in the banking and capital markets not specifically related to NPC may affect its ability to access funding sources or cause an increase in the return required by investors.

During the nine months ended September 30, 2007, there were no material changes to the contractual obligations described in NPC’s 2006 Form 10-K, except for construction contracts entered into in January 2007 related to NPC’s peaking units at Clark Station for approximately $350.6 million and tenant improvements for Phase 1 and Phase 2 for the Beltway Business Park of approximately $52 million.

Registration Statements

In September 2007, NPC filed a Form S-3 automatic shelf registration statement under which an indeterminate principal amount of general and refunding mortgage securities may be issued by NPC.  The registration statement is expected to allow NPC to gain access to the capital markets in a timelier manner.  It is effective for a three-year period.

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Financing Transactions

6.75% General and Refunding Mortgage Notes, Series R

 On June 28, 2007, NPC issued and sold $350 million of its 6.750% General and Refunding Mortgage Notes, Series R, due July 1, 2037.  The Series R Notes were issued pursuant to a registration statement previously filed with the SEC.  The net proceeds from the issuance were used to fund the purchase of the tendered Series G Notes (discussed below), repay amounts outstanding under NPC’s revolving credit facility, and for general corporate purposes.

Tender Offer for General and Refunding Mortgage Notes, Series G

On June 28, 2007, NPC settled its cash tender offer, which commenced on June 15, 2007 and expired on June 22, 2007, for its 9.00% General and Refunding Mortgage Notes, Series G, due 2013.  Those holders who tendered their notes by the expiration date were entitled to receive a purchase price of $1,079.75 per $1,000 principal amount of Series G Notes.  Approximately $210.3 million of the $227.5 million Series G Notes outstanding were validly tendered and accepted by NPC.

Factors Affecting Liquidity

Financial Covenants

NPC's $600 million Second Amended and Restated Revolving Credit Agreement dated November 2005, and amended in April 2006, contain two financial maintenance covenants.  The first requires that NPC maintain a ratio of consolidated indebtedness to consolidated capital, determined as of the last day of each fiscal quarter, not to exceed 0.68 to 1.  The second requires that NPC maintain a ratio of consolidated cash flow to consolidated interest expense, determined as of the last day of each fiscal quarter for the period of four consecutive fiscal quarters, not to be less than 2.0 to 1.  As of September 30, 2007, NPC was in compliance with these covenants.

Ability to Issue Debt

Certain factors impact NPC’s ability to issue debt:

1.   Financing Authority from the PUCN: On June 22, 2007, NPC received PUCN authorization to enter into financings of $3.91 billion through 2009.  Of this total, $1.35 billion is contingent upon the PUCN’s approval of the Ely Energy Center in 2008.  The remaining authority, $2.56 billion, includes authority for the revolving credit facility, and authority to issue new debt and to refinance existing debt.  As of September 30, 2007, NPC used approximately $950 million of the $2.56 billion authority, as such approximately $1.6 billion of the authority remains.

2.   Limits on Bondable Property: To the extent that NPC has the ability to issue debt under the most restrictive covenants in its financing agreements and has financing authority to do so from the PUCN, NPC’s ability to issue secured debt is still limited by the amount of bondable property or retired bonds that can be used to issue debt under the General and Refunding Mortgage Indenture.  Bondable property includes plant in service and specific assets in construction work in progress.  As of September 30, 2007, NPC had the capacity to issue $710.6 million of General and Refunding Mortgage Securities.  The amount of bond capacity listed does not include eligible property in construction work in progress.

3.   Financial Covenants in its financing agreements.

The terms of certain SPR debt further prohibit NPC and SPPC from incurring additional indebtedness unless certain conditions have been met.  See SPR’s Limitations on Indebtedness for details of these restrictions.  In addition to the SPR debt, the terms of NPC’s Series G Notes, which mature in 2013, NPC’s Series I Notes, which mature in 2012, NPC’s Series L Notes, which mature in 2015, and NPC's Second Amended and Restated Revolving Credit Facility restrict NPC from incurring any additional indebtedness unless certain covenants are satisfied.  See the 2006 Form 10-K, Note 8, Debt Covenant Restrictions of the Notes to Financial Statements.  If NPC’s Series G Notes, Series I Notes, or the Series L Notes are upgraded to investment grade by both Moody’s and S&P, these restrictions will be suspended and will no longer be in effect so long as the applicable series of securities remains investment grade.

As of September 30, 2007, the financial covenants under the revolving credit facility, which are more restrictive than the Series G, I and L Notes restrictions, would allow NPC to issue up to $2.2 billion of additional debt.  The covenant limitations of certain SPR debt place a cap on additional indebtedness, on a consolidated basis, including SPPC and NPC, of $1.1 billion as of September 30, 2007.  Therefore, NPC is limited by SPR’s cap on additional indebtedness.

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Since SPR’s debt covenant limitations are calculated on a consolidated basis, SPR’s debt covenant limitations may allow for higher or lower borrowings than $1.1 billion, depending on the Utilities’ combined usage of their respective revolving credit facilities at the time of the covenant calculation.

 Ability to Issue General and Refunding Mortgage Bonds

NPC’s General and Refunding Mortgage Indenture creates a lien on substantially all of NPC’s properties in Nevada.  As of September 30, 2007, $2.8 billion of NPC’s General and Refunding Mortgage Securities were outstanding.  As mentioned in (2) above under “Ability to Issue Debt,” $710.6 million of additional securities may be issued under the General and Refunding Mortgage Indenture as of September 30, 2007.  That amount is determined on the basis of:

1.   70% of net utility property additions;

2.   the principal amount of retired General and Refunding Mortgage Securities; and/or

3.   the principal amount of first mortgage bonds retired after October 2001.

NPC also has the ability to release property from the lien of the mortgage indenture on the basis of net property additions, cash and/or retired bonds.  To the extent NPC releases property from the lien of its General and Refunding Mortgage Indenture, it will reduce the amount of securities issuable under that indenture.

Credit Ratings

NPC is rated by four Nationally Recognized Statistical Rating Organizations:  S&P, Moody’s, Fitch, and DBRS.  As of November 1, 2007 the ratings are as follows:

		Rating Agency
		DBRS	Fitch	Moody’s	S&P
NPC	Sr. Secured Debt	BBB (low)*	BBB-*	Baa3*	BB+
NPC	Sr. Unsecured Debt	Not rated	BB	Not rated	B

* Ratings are investment grade

In October 2007, Moody’s upgraded the senior secured debt at NPC to Baa3, which is investment grade.  Moody’s rating outlook for NPC is Stable.  In June 2007, S&P and Fitch revised their outlook on the company to Positive from Stable.  In February 2007, DBRS, who had not previously issued ratings on the companies, assigned new ratings to NPC’s senior secured debt.  The rating is BBB (low), which is the minimum level for investment grade.  DBRS’s trend for the company is Stable.  With the upgrade by Moody’s, three of the four rating agencies now rate NPC’s senior secured debt investment grade.

A security rating is not a recommendation to buy, sell or hold securities.  Security ratings are subject to revision and withdrawal at any time by the assigning rating organization, and each rating should be evaluated independently of any other rating.

Cross Default Provisions

None of the financing agreements of NPC contain a cross default provision that would result in an event of default by NPC upon an event of default by SPR or SPPC under any of its financing agreements.  In addition, certain financing agreements of NPC provide for an event of default if there is a failure under other financing agreements of NPC to meet payment terms or to observe other covenants that would result in an acceleration of payments due.  Most of these default provisions (other than ones relating to a failure to pay such other indebtedness when due) provide for a cure period of 30-60 days from the occurrence of a specified event during which time NPC may rectify or correct the situation before it becomes an event of default.

SIERRA PACIFIC POWER COMPANY

RESULTS OF OPERATIONS

During the three months ended September 30, 2007, SPPC recognized earnings applicable to common stock of approximately $25.6 million compared to $20.0 million for the same period in 2006.  During the nine months ended September 30, 2007, SPPC recognized earnings applicable to common stock of approximately $57.5 million compared to $40.0 million for the same period in 2006.

During the nine months ended September 30, 2007, SPPC paid $11.7 million in dividends to SPR.  On November 1, 2007, SPPC declared a dividend to SPR of $7.8 million.

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Gross margin is presented by SPPC in order to provide information by segment that management believes aids the reader in determining how profitable the electric and gas businesses are at the most fundamental level.  Gross margin, which is a “non-GAAP financial measure” as defined in accordance with SEC rules, provides a measure of income available to support the other operating expenses of the business and is utilized by management in its analysis of its business.

SPPC believes presenting gross margin allows the reader to assess the impact of SPPC’s regulatory treatment and its overall regulatory environment on a consistent basis.  Gross margin, as a percentage of revenue, is primarily impacted by the fluctuations in regulated electric and natural gas supply costs versus the fixed rates collected from customers.  While these fluctuating costs impact gross margin as a percentage of revenue, they only impact gross margin amounts if the costs cannot be passed through to customers.  Gross margin, which SPPC calculates as operating revenues less fuel and purchased power costs, provides a measure of income available to support the other operating expenses of SPPC.  Gross margin changes based on such factors as general base rate adjustments (which are required to be filed by statute every three years) and reflect SPPC’s strategy to increase internal power generation versus purchased power, which generates no gross margin.

The components of gross margin were (dollars in thousands):

	Three Months Ended September 30,			Nine Months Ended September 30,
	2007	2006	Change from Prior Year %	2007	2006	Change from Prior Year %
Operating Revenues:
Electric	$     290,979	$    284,339	2.3%	$     789,214	$     767,133	2.9%
Gas	20,839	21,106	-1.3%	137,337	141,128	-2.7%
	$     311,818	$    305,445	2.1%	$     926,551	$     908,261	2.0%
Energy Costs:
Purchased power	$      96,980	$    106,158	-8.6%	$     266,599	$     267,914	-0.5%
Fuel for power generation	71,896	73,066	-1.6%	187,250	188,827	-0.8%
Gas purchased for resale	11,661	13,492	-13.6%	103,169	105,240	-2.0%
Deferral of energy costs-electric-net	11,792	(2,260)	-621.8%	44,423	20,973	111.8%
Deferral of energy costs-gas-net	2,594	1,130	129.6%	4,203	7,214	-41.7%
	$    194,923	$    191,586	1.7%	$     605,644	$     590,168	2.6%
Energy Costs by Segment:
Electric	$    180,668	$    176,964	2.1%	$     498,272	$     477,714	4.3%
Gas	14,255	14,622	-2.5%	107,372	112,454	-4.5%
	$    194,923	$    191,586	1.7%	$     605,644	$     590,168	2.6%
Gross Margin by Segment:
Electric	$    110,311	$    107,375	2.7%	$     290,942	$     289,419	0.5%
Gas	6,584	6,484	1.5%	29,965	28,674	4.5%
	$    116,895	$    113,859	2.7%	$     320,907	$     318,093	0.9%

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The causes of significant changes in specific lines comprising the results of operations are provided below (dollars in thousands except for amounts per unit):

Electric Operating Revenues

	Three Months Ended September 30,			Nine Months Ended September 30,
			Change from			Change from
	2007	2006	Prior Year %	2007	2006	Prior Year %
Electric Operating Revenues:
Residential	$  93,353	$  88,528	5.5%	$251,709	$239,109	5.3%
Commercial	111,701	107,502	3.9%	294,574	280,740	4.9%
Industrial	77,816	80,438	-3.3%	219,690	222,755	-1.4%
Retail  revenues	282,870	276,468	2.3%	765,973	742,604	3.1%
Other (1)	8,109	7,871	3.0%	23,241	24,529	-5.3%
Total Revenues	$290,979	$284,339	2.3%	$789,214	$767,133	2.9%
Retail sales in thousands
of megawatt-hours (MWh)	2,394	2,376	0.8%	6,632	6,546	1.3%
Average retail revenue per MWh	$  118.16	$  116.36	1.5%	$  115.50	$  113.44	1.8%

¹Primarily, wholesale, as discussed below

SPPC’s retail revenues increased for the three and nine months ended September 30, 2007 as compared to the same period in the prior year primarily due to customer growth and increases in retail rates.  The number of retail customers increased 1.6%, and 2.0% for the three and nine months ended September 30, 2007, respectively.  Retail rates increased as a result of SPPC’s various general, energy, and deferred energy cases.  For details see Management’s Discussion and Analysis, Regulatory Proceedings in the 2006 Form 10-K.  These increases were partially offset by lower industrial energy revenues and MWh’s as a result of two large industrial customers, moving to distribution-only and standby service.

Electric Operating Revenues – Other was comparable for the three months ended September 30, 2007 compared to the same period in 2006.  Electric Operating Revenues – Other decreased for the nine months ended September 30, 2007 compared to the same period in 2007 primarily due to a decrease in charges related to the departure of Barrick Gold from SPPC’s system.

Gas Operating Revenues

	Three Months Ended September 30,							Nine Months Ended September 30,
					Change from							Change from
	2007		2006		Prior Year %			2007		2006		Prior Year %
Gas Operating Revenues:
Residential	$	11,384	$	11,369		0.1	%	$	76,592	$	78,901		-2.9	%
Commercial		5,415		5,448		-0.6	%		37,255		37,187		0.2	%
Industrial		2,600		2,895		-10.2	%		13,605		14,643		-7.1	%
Retail revenues		19,399		19,712		-1.6	%		127,452		130,731		-2.5	%
Wholesale revenue		943		776		21.5	%		7,922		8,275		-4.3	%
Miscellaneous		497		618		-19.6	%		1,963		2,122		-7.5	%
Total Revenues	$	20,839	$	21,106		-1.3	%	$	137,337	$	141,128		-2.7	%
Retail sales in thousands
of decatherms		1,318		1,324		-0.5	%		9,797		10,004		-2.1	%
Average retail revenue per
decatherm	$	14.72	$	14.89		-1.1	%	$	13.01	$	13.07		-0.5	%

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SPPC’s retail gas revenues was comparable for the three months ended September 30, 2007 compared to the same period in 2006.  SPPC’s retail gas revenues decreased for the nine months ended September 30, 2007 as compared to the same period in 2006 primarily due to warmer winter temperatures during 2007 and decreases in retail customer rates.  Retail rates decreased as a result of SPPC’s Gas GRC and 2006 Natural Gas and Propane Deferred Rate Case and BTER update.  For details see the 2006 Form 10-K Management’s Discussion and Analysis, Regulatory Proceedings.  Partially offsetting these decreases was an increase in retail customers of 2.8%, and 3.3% for the three and nine months ended September 2007, respectively.

On May 15, 2007, SPPC filed an application with the PUCN to implement a new deferred energy account adjustment in order to recover natural gas costs and to reset the BTER.  If approved by the PUCN, SPPC has requested rates to become effective December 2007.  See Note 3, Regulatory Actions, in the Condensed Notes to Financial Statements.

Purchased Power

	Three Months							Nine Months
	Ended September 30,							Ended September 30,
					Change from							Change from
	2007		2006		Prior Year %			2007		2006		Prior Year %
Purchased Power	$	96,980	$	106,158		-8.6	%	$	266,599	$	267,914		-0.5	%
Purchased Power in thousands
of MWhs		1,347		1,399		-3.7	%		4,127		4,103		0.6	%
Average cost per MW of
Purchased Power	$	72.00	$	75.88		-5.1	%	$	64.60	$	65.30		-1.1	%

Purchased Power decreased for the three months ended September 30, 2007 as compared to the same period in 2006 primarily due to a decrease in natural gas prices and a decrease in the cost of power received through Idaho Power’s transmission system.  However, Idaho Power’s limited transmission capacity constrained SPPC’s ability to purchase additional power at those lower rates.

MWhs decreased for the three months ended September 30, 2007 compared to the same period in 2006 primarily due to increased reliance on internal generation, which was more economical than Purchased Power.

Purchased Power decreased slightly for the nine months ended September 30, 2007 compared to the same period in 2006 primarily for the same reasons as discussed above for the three months ended September 30, 2007, offset by increased natural gas prices in the first six months of 2007 and a slight increase in SPPC’s total system demand.

Fuel for Power Generation

	Three Months							Nine Months
	Ended September 30,							Ended September 30,
					Change from							Change from
	2007		2006		Prior Year %			2007		2006		Prior Year %
Fuel for power generation	$	71,896	$	73,066		-1.6	%	$	187,250	$	188,827		-0.8	%
Thousands of MWh generated		1,235		1,129		9.4	%		2,996		2,930		2.3	%
Average fuel cost per MWh
of generated power	$	58.22	$	64.72		-10.0	%	$	62.50	$	64.45		-3.0	%

Fuel for power generation and the average cost per MWh decreased for the three and nine months ended September 30, 2007, as compared to the same period in 2006 due to a decrease in natural gas prices in 2007 and higher costs for hedging activities in 2006.

The volume of MWh generated increased in the three months ended September 30, 2007 compared to the same period in 2006 primarily due to an increase in internal generation, as a result of lower natural gas prices, an increase in customers and hotter weather.  The volume of MWh for the nine months ended September 30, 2007 increased compared to the same period in 2006 due to an increase in customers and hotter weather in the third quarter 2007.

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Gas Purchased for Resale

	Three Months							Nine Months
	Ended September 30,							Ended September 30,
					Change from							Change from
	2007		2006		Prior Year %			2007		2006		Prior Year %
Gas purchased for resale	$	11,661	$	13,492		-13.6	%	$	103,169	$	105,240		-2.0	%
Gas purchased for resale
(in thousands of decatherms)		1,553		1,464		6.1	%		11,348		11,470		-1.1	%
Average cost per decatherm	$	7.51	$	9.22		-18.5	%	$	9.09	$	9.18		-1.0	%

Gas purchased for resale and the average cost per decatherm decreased for the three and nine months ended September 30, 2007 as compared to the same period in 2006 primarily due to a decrease in natural gas prices in 2007 and higher costs for hedging activities in 2006.  The volume of gas purchased for resale increased for the three months ended September 30, 2007 as compared to the same period in 2006 due to an increase in customers in 2007.  The decrease in gas purchased for resale for the nine months ending September 2007 was primarily due to milder winter weather partially offset by an increase in customers.

Deferred Energy Costs

	Three Months								Nine Months
	Ended September 30,								Ended September 30,
	2007		2006			Change from Prior Year %			2007		2006		Change from Prior Year %
Deferred energy costs - electric - net	$	11,792	$	(2,260	)		-621.8	%	$	44,423	$	20,973		111.8	%
Deferred energy costs - gas - net		2,594		1,130			129.6	%		4,203		7,214		-41.7	%
	$	14,386	$	(1,130	)				$	48,626	$	28,187

Deferred energy costs–net represents the difference between actual fuel and purchased power costs incurred during the period and amounts recoverable through current rates.  To the extent actual costs exceed amounts recoverable through current rates the excess is recognized as a reduction in costs.  Conversely to the extent actual costs are less than amounts recoverable through current rates the difference is recognized as an increase in costs.  Deferred energy costs–net also include the current amortization of fuel and purchased power costs previously deferred.  See Note 1, Summary of Significant Accounting Policies of the Condensed Notes to Financial Statements for further detail of deferred energy balances.

Deferred energy costs-electric–net for the three months ended September 30, 2007 and 2006 reflect amortization of deferred energy costs of $10.7 million and $11.8 million, respectively; and an over-collection of amounts recoverable in rates of $1.1 million in 2007, compared to an under-collection of $14.1 million in 2006.  For the nine months ended September 30, 2007 and 2006, amortization of deferred energy costs were $34.5 million and $34.4 million, respectively; with an over-collection of amounts recoverable in rates of $9.9 million in 2007, compared to an under-collection of $13.5 million in 2006.

Deferred energy costs - gas - net for the three months ended September 30, 2007 and 2006 reflect amortization of deferred energy costs of $0.1 million and $0.6 million, respectively; and an over-collection of amounts recoverable in rates of $2.5 million and $0.5 million, respectively.  For the nine months ended September 30, 2007 and 2006, amortization of deferred energy costs were $0.7 million and $4.8 million, respectively; with an over-collection of amounts recoverable in rates of $3.5 million and $2.4 million, respectively.

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Allowance for Funds Used During Construction (AFUDC)

	Three Months							Nine Months
	Ended September 30,							Ended September 30,
	2007		2006		Change from Prior Year %			2007		2006		Change from Prior Year %
Allowance for other funds
used during construction	$	4,513	$	1,357		232.6	%	$	11,347	$	3,509		223.4	%
Allowance for borrowed funds used during construction	$	3,625	$	882		311.1	%	$	9,080	$	2,819		222.1	%
	$	8,138	$	2,239		263.5	%	$	20,427	$	6,328		222.8	%

AFUDC increased for the three and nine months ended September 30, 2007 compared to the same periods in 2006 due to an increase in Construction Work-In-Progress (CWIP) associated with the expansion of the Tracy Generating Station.

Other (Income) and Expense

	Three Months									Nine Months
	Ended September 30,									Ended September 30,
	2007			2006			Change from Prior Year %			2007			2006			Change from Prior Year %
Other operating expense	$	36,228		$	34,119			6.2	%	$	105,070		$	101,413			3.6	%
Maintenance expense	$	6,948		$	8,065			-13.8	%	$	23,543		$	24,833			-5.2	%
Depreciation and amortization	$	20,726		$	21,075			-1.7	%	$	62,043		$	66,037			-6.0	%
Interest charges on long-term debt	$	17,096		$	18,134			-5.7	%	$	49,746		$	53,958			-7.8	%
Interest charges-other	$	1,491		$	1,341			11.2	%	$	4,533		$	3,694			22.7	%
Interest accrued on deferred energy	$	(60	)	$	(1,433	)		-95.8	%	$	(1,171	)	$	(4,878	)		-76.0	%
Other income	$	(1,865	)	$	(2,491	)		-25.1	%	$	(6,707	)	$	(7,301	)		-8.1	%
Other expense	$	2,938		$	2,138			37.4	%	$	7,143		$	6,806			5.0	%

Other operating expense increased for the three months ended September 30, 2007 compared to the same period in 2006 primarily due to several items all of which were not individually significant.

Other operating expense increased for the nine months ended September 30, 2007 compared to the same period in 2006, due to the settlement of contingency fees related to Enron in 2006 and higher regulatory amortizations and increased costs for claims in 2007.

Maintenance expense decreased for the three and nine months ended September 30, 2007 compared to the same period in 2006 primarily due to a planned outage at Ft. Churchill #1 during the third quarter in 2006 and planned outage for Ft. Churchill #2 that was delayed in 2007.

Depreciation and amortization expenses decreased for the three months ended September 30, 2007 compared to the same period in 2006 due to the retirement of plant assets as approved by the PUCN in SPPC’s General Electric and Gas Rate Cases in June 2006.

Depreciation and amortization expenses decreased for the nine months ended September 30, 2007 compared to the same period in 2006 due to the retirement of plant assets, as discussed above, and, a decrease in rates as ordered by the PUCN in SPPC’s General Electric and Gas Rate Cases in June 2006.

Interest charges on Long-Term Debt decreased during the three months and nine months ended September 30, 2007, as compared to the same periods in 2006, due primarily to various re-financings of debt in 2006 at lower interest rates, redemption of debt, and the refinancing of $80 million Water Facilities Refunding Revenue Bonds from fixed to variable rate in April 2007. These re-financings and redemptions were partially offset by the issue of $300 million Series M notes in March 2006 and the issue of $325 million Series P notes in June 2007.  See Note 6, Long-Term Debt of the Notes to Financial Statements in the 2006 10-K for additional information regarding long-term debt and Note 4, Long-Term Debt of the Condensed Notes to Financial Statements.

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Interest charges-other increased during the three months and nine months ended September 30, 2007, as compared to the same periods in 2006, due to higher amortization costs related to new debt issues and redemptions in 2006 and 2007.

Interest accrued on deferred energy costs decreased for the three months and nine months ended September 30, 2007, due to lower deferred energy balances compared to the same periods in 2006.  See Note 1, Summary of Significant Accounting Policies of the Notes to Financial Statements for further details of deferred energy balances.

Other income decreased during the three months and nine months ended September 30, 2007, as compared to the same periods in 2006, due to the expiration of the amortization of gains associated with the disposition of property and lower interest income in 2007, offset by a refund of expenses.

Other expense increased during the three months ended and nine months ended September 30, 2007, as compared to the same period in 2006, primarily due to development costs associated with an information technology system conversion project.

ANALYSIS OF CASH FLOWS

Cash flows decreased for the nine months ended September 30, 2007 compared to the same period in 2006 due to an increase in cash used by investing activities and a decrease in cash from operating activities, partially offset by an increase in cash from financing activities.

Cash From Operating Activities   Cash from operating activities decreased as a result of a decrease in cash from accounts receivable and an increase in payments for Pension and Other Post Retirement Benefits of $36.5 million.  The decrease in cash from accounts receivable is primarily due to $49.7 million affiliated accounts receivable related to tax sharing agreements which were outstanding at December 31, 2005 and settled in 2006.

Cash Used by Investing Activities   Cash used by investing activities increased during the nine months ended September 30, 2007 compared to the same period in 2006 primarily due to construction costs associated with the expansion of the Tracy Generating Station and utility infrastructure to support growth.

Cash From Financing Activities   Cash from financing activities increased during the nine months ended September 30, 2007 compared to the same period in 2006 primarily due to the issuance of $325 million of SPPC’s 6.75% General and Refunding Mortgage Notes, Series P, a reduction in the redemption of debt and dividends paid to SPR from 2006.

LIQUIDITY AND CAPITAL RESOURCES

Overall Liquidity

SPPC’s primary sources of operating cash flows are electric and gas revenues, including the recovery of previously deferred energy and gas costs.  Significant uses of cash flows from operations include the purchase of electricity and natural gas, other operating expenses, capital expenditures and the payment of interest on SPPC’s outstanding indebtedness.  Operating cash flows can be significantly influenced by factors such as weather, regulatory outcomes, and economic conditions.

Available Liquidity as of September 30, 2007 (in millions)
Cash and Cash Equivalents	$	28.6
Balance available on Revolving Credit Facility (1)		305.9
	$	334.5

     ¹ As of November 1, 2007, SPPC had approximately $306 million available under its revolving credit facility.

 SPPC anticipates it will be able to meet short-term operating costs, such as fuel and purchased power costs, with internally generated funds, including the recovery of deferred energy, and the use of its revolving credit facility.  To manage liquidity needs as a result of seasonal peaks in fuel requirement, SPPC may use hedging activities.  However, to fund long-term capital requirements, as discussed in the 2006 Form 10-K, SPPC may meet such financial obligations with a combination of internally generated funds, the use of the revolving credit facility and the issuance of long-term debt, preferred securities, and/or capital contributions from SPR.

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Continued improvement in the credit ratings of SPPC (see Credit Ratings below) has strengthened the liquidity position of the company by allowing for the resumption of normal payment terms with our counterparties and the elimination of cash collateral requirements.  Existing collateral requirements with counterparties have been satisfied with letters of credit.  The recent credit rating upgrades reduce the cost of borrowing under SPPC’s revolving credit facility.  In addition, the upgrades have the potential to provide SPPC better access to capital markets and to reduce the cost of issuing additional long-term debt.  However, disruptions in the banking and capital markets not specifically related to SPPC may affect its ability to access funding sources or cause an increase in the return required by investors.

During the nine months ended September 30, 2007, there were no material changes to the contractual obligations described in SPPC’s 2006 Form 10-K except for certain financing transactions as discussed below.

Registration Statements

In September 2007, SPPC filed a Form S-3 automatic shelf registration statement under which an indeterminate principal amount of general and refunding mortgage securities may be issued by SPPC.  The registration statement is expected to allow SPPC to gain access to the capital markets in a timelier manner.  It is effective for a three-year period.

Financing Transactions

6.75% General and Refunding Mortgage Notes, Series P

 On June 28, 2007, SPPC issued and sold $325 million of its 6.75% General and Refunding Mortgage Notes, Series P, due July 1, 2037.  The Series P Notes were issued pursuant to a registration statement previously filed with the SEC.  The net proceeds from the issuance were used to fund the purchase of the tendered Series A Bonds (discussed below), repay amounts outstanding under SPPC’s revolving credit facility, and for general corporate purposes.

Tender Offer for General and Refunding Mortgage Bonds, Series A

On June 28, 2007, SPPC settled its cash tender offer, which commenced on June 15 and expired on June 22, 2007, for its 8.00% General and Refunding Mortgage Bonds, Series A, due 2008.  Those holders who tendered their bonds by the expiration date were entitled to receive a purchase price of $1,022.10 per $1,000 principal amount of Series A Bonds.  Approximately $220.8 million of the $320 million Series A Bonds outstanding were validly tendered and accepted by SPPC.

Washoe County Water Facilities Refunding Revenue Bonds

On April 27, 2007, on behalf of SPPC, Washoe County, Nevada (Washoe County) issued $80 million aggregate principal amount of its Water Facilities Refunding Revenue Bonds, Series 2007A and B, due March 1, 2036 (the “Water Bonds”).

In connection with the issuance of the Water Bonds, SPPC entered into financing agreements with Washoe County, pursuant to which Washoe County loaned the proceeds from the sales of the Water Bonds to SPPC.  SPPC’s payment obligations under the financing agreements are secured by SPPC’s General and Refunding Mortgage Notes, Series O.

The Water Bonds initial rates, as determined by auction on April 25, 2007, were 3.85%.  The method of determining the interest rate on the Water Bonds may be converted from time to time so that such Bonds would thereafter bear interest at a daily, weekly, flexible, auction or term rate as designated.

The proceeds of the offerings were used to refund the $80 million aggregate principal amount of 5.00% Washoe County Water Facilities Revenue Bonds, Series 2001.

Factors Affecting Liquidity

Financial Covenants

SPPC's $350 million Amended and Restated Revolving Credit Agreement, dated November 2005, and amended in April 2006, contains two financial maintenance covenants.  The first requires that SPPC maintain a ratio of consolidated indebtedness to consolidated capital, determined as of the last day of each fiscal quarter, not to exceed 0.68 to 1.  The second requires that SPPC maintain a ratio of consolidated cash flow to consolidated interest expense, determined as of the last day of each fiscal quarter for the period of four consecutive fiscal quarters, not to be less than 2.0 to 1.  As of September 30, 2007, SPPC was in compliance with these covenants.

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Ability to Issue Debt

Certain factors impact SPPC’s ability to issue debt:

1.   Financing Authority from the PUCN: On June 22, 2007, SPPC received PUCN authorization to enter into financings of $1.72 billion through the year 2009.  Of this total, $300 million is contingent upon the PUCN’s approval of the Ely Energy Center in 2008.  The remaining authority, $1.42 billion, includes authority for the revolving credit facility, authority to issue new debt and to refinance existing debt.  As of September 30, 2007, SPPC used approximately $675 million of the $1.42 billion authority, as such approximately $745 million of the authority remains.

2.   Limits on Bondable Property: To the extent that SPPC has the ability to issue debt under the most restrictive covenants in its financing agreements and has financing authority to do so from the PUCN, SPPC’s ability to issue secured debt is still limited by the amount of bondable property or retired bonds that can be used to issue debt under the General and Refunding Mortgage Indenture.  Bondable property includes plant in service and specific assets in construction work in progress.  As of September 30, 2007, SPPC has the capacity to issue $324 million of General and Refunding Mortgage Securities.  The amount of bond capacity listed does not include eligible property in construction work in progress.

3.      Financial Covenants in its financing agreements.

The terms of certain SPR debt further prohibit SPPC and NPC from incurring additional indebtedness unless certain conditions have been met.  See SPR’s Limitations on Indebtedness for details of these restrictions.  In addition to the SPR debt, the terms of SPPC’s Series H Notes and SPPC’s Amended and Restated Revolving Credit Agreement restrict SPPC from issuing additional indebtedness unless certain covenants are satisfied.  See the 2006 Form 10-K, Note 8, Debt Covenant and Other Restrictions of the Notes to Financial Statements.

As of September 30, 2007, the financial covenants under the revolving credit facility, which are more restrictive than the Series H Notes restriction, would allow SPPC to issue up to $761 million of additional debt.  The covenant limitations of certain SPR debt place a cap on additional indebtedness, on a consolidated basis, including NPC and SPPC, at $1.1 billion as of September 30, 2007.  

Since SPR’s debt covenant limitations are calculated on a consolidated basis, SPR’s debt covenant limitations may allow for higher or lower borrowings than $1.1 billion, depending on the Utilities’ combined usage of their revolving credit facilities at the time of the covenant calculation.

Ability to Issue General and Refunding Mortgage Bonds

SPPC’s General and Refunding Mortgage Indenture creates a lien on substantially all of SPPC’s properties in Nevada and California.  As of September 30, 2007, $1.5 billion of SPPC’s General and Refunding Mortgage Securities were outstanding.  As mentioned in (2) above under “Ability to IssueDebt," $324 million of additional securities may be issued under the General and Refunding Mortgage Indenture as of September 30, 2007.  That amount has been determined on the basis of:

1.   70% of net utility property additions;

2.   the principal amount of retired General and Refunding Mortgage Securities; and/or

3.   the principal amount of first mortgage bonds retired after October 19, 2001.

SPPC also has the ability to release property from the lien of the mortgage indenture on the basis of net property additions, cash and/or retired bonds.  To the extent SPPC releases property from the lien of its General and Refunding Mortgage Indenture, it will reduce the amount of securities issuable under that indenture.

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Credit Ratings

SPPC is rated by four Nationally Recognized Statistical Rating Organizations:  S&P, Moody’s, Fitch and DBRS.  As of November 1, 2007 the ratings are as follows:

		Rating Agency
		DBRS	Fitch	Moody’s	S&P
SPPC	Sr. Secured Debt	BBB (low)*	BBB-*	Baa3	BB+

* Ratings are investment grade

In October 2007, Moody’s upgraded the senior secured debt at SPPC to Baa3, which is investment grade.  Moody’s rating outlook for SPPC is Stable.  In June 2007, S&P and Fitch revised their outlook on the company to Positive from Stable.  In February 2007, DBRS, who had not previously issued ratings on the companies, assigned new ratings to SPPC’s senior secured debt.  The rating is BBB (low), which is the minimum level for investment grade.  DBRS’s trend for the company is Stable.  With the upgrade by Moody’s, three of the four rating agencies now rate SPPC’s senior secured debt investment grade.

A security rating is not a recommendation to buy, sell or hold securities.  Security ratings are subject to revision and withdrawal at any time by the assigning rating organization, and each rating should be evaluated independently of any other rating.

Cross Default Provisions

SPPC’s financing agreements do not contain any cross default provisions that would result in an event of default by SPPC upon an event of default by SPR or SPPC under any of their respective financing agreements.  Certain financing agreements of SPPC provide for an event of default if there is a failure under other financing agreements of SPPC to meet payment terms or to observe other covenants that would result in an acceleration of payments due.  Most of these default provisions (other than ones relating to a failure to pay such other indebtedness when due) provide for a cure period of 30-60 days from the occurrence of a specified event during which time SPPC may rectify or correct the situation before it becomes an event of default.

REGULATORY PROCEEDINGS (UTILITIES)

SPR is a “holding company” under the Public Utility Holding Company Act of 2005 (PUHCA 2005).  As a result, SPR and all of its subsidiaries (whether or not engaged in any energy related business) are required to maintain books, accounts and other records in accordance with FERC regulations and to make them available to the FERC, the PUCN and CPUC.  In addition, the PUCN, CPUC, or the FERC have the authority to review allocations of costs of non-power goods and administrative services among SPR and its subsidiaries.  The FERC has the authority generally to require that rates subject to its jurisdiction be just and reasonable and in this context would continue to be able to, among other things, review transactions between SPR, NPC and/or SPPC and/or any other affiliated company.

The Utilities are subject to the jurisdiction of the PUCN and, in the case of SPPC, the California Public Utilities Commission (CPUC) with respect to rates, standards of service, siting of and necessity for generation and certain transmission facilities, accounting, issuance of securities and other matters with respect to electric distribution and transmission operations.  NPC and SPPC submit Integrated Resource Plans (IRPs) to the PUCN for approval.

Under federal law, the Utilities are subject to certain jurisdictional regulation, primarily by the FERC.  The FERC has jurisdiction under the Federal Power Act with respect to rates, service, interconnection, accounting and other matters in connection with the Utilities’ sale of electricity for resale and interstate transmission.  The FERC also has jurisdiction over the natural gas pipeline companies from which the Utilities take service.

As a result of regulation, many of the fundamental business decisions of the Utilities, as well as the rate of return they are permitted to earn on their utility assets, are subject to the approval of governmental agencies.  The following regulatory proceedings have affected, or are expected to affect the utilities financial positions, results of operations and cash flows.

The Utilities are required to file annual Deferred Energy Accounting Adjustment (DEAA) cases, quarterly Base Tariff Energy Rate (BTER) Updates and triennial General Rate Cases (GRCs) in Nevada.  A DEAA case is filed to recover/refund any under/over collection of prior energy costs and the BTER update is to set rates to recover current energy costs.  As of September 30, 2007, NPC’s and SPPC’s balance sheet included approximately $361.6 million and $11.6 million, respectively, of deferred energy costs of which $362.7 and $27.2 million had been previously approved for collection over various periods.  The remaining amounts will be requested in future DEAA filings.  Refer to Note 1, Summary of Significant Accounting Policies, of the Notes to Financial Statements.  A GRC filing is to set rates to recover operation and maintenance expenses, depreciation, taxes and provide a return on invested capital.

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Rate case applications filed in 2006 and 2007, as well as other regulatory matters such as, the Utilities’ Integrated Resource Plans and subsequent amendments, other Nevada matters, California matters and FERC matters, are discussed in more detail in Note 3, Regulatory Actions, of the Condensed Notes to Financial Statements and the 2006 Form 10K.

RECENT PRONOUNCEMENTS

See Note 1, Summary of Significant Accounting Policies of the Condensed Notes to Financial Statements, for discussion of accounting policies and recent pronouncements.

ITEM 3.                      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

As of September 30, 2007, SPR, NPC and SPPC have evaluated their risk related to financial instruments whose values are subject to market sensitivity.  Such instruments are fixed and variable rate debt.  Fair market value is determined using quoted market price for the same or similar issues or on the current rates offered for debt of the same remaining maturities (dollars in thousands).

	Expected Maturity Date
																						Fair
	2007			2008			2009			2010			2011			Thereafter			Total			Value
Long-term Debt
SPR
Fixed Rate	$	-		$	-		$	-		$	-		$	-		$	549,209		$	549,209		$	561,023
Average Interest Rate		-			-			-			-			-			7.75	%		7.75	%
NPC
Fixed Rate	$	5		$	12		$	-		$	-		$	364,000		$	1,916,579		$	2,280,596		$	2,313,387
Average Interest Rate		8.17	%		8.17	%		-			-			8.14	%		6.35	%		6.64	%
Variable Rate	$	-		$	-		$	15,000		$	150,000		$	-		$	192,500		$	357,500		$	357,500
Average Interest Rate		-			-			4.21	%		6.74	%		-			3.93	%		5.12	%
SPPC
Fixed Rate	$	534		$	101,643		$	600		$	-		$	-		$	725,000		$	827,777		$	826,918
Average Interest Rate		6.40	%		7.96	%		6.40	%		-			-			6.37	%		6.57	%
Variable Rate	$	-		$	-		$	-		$	25,000		$	-		$	348,250		$	373,250		$	373,250
Average Interest Rate		-			-			-			6.01	%		-			3.72	%		3.87	%
Total Debt	$	539		$	101,655		$	15,600		$	175,000		$	364,000		$	3,731,538		$	4,388,332		$	4,432,078

Commodity Price Risk

See the 2006 Form 10-K, Item 7A, Quantitative and Qualitative Disclosures About Market Risk, Commodity Price Risk, for a discussion of Commodity Price Risk.  No material changes in commodity risk have occurred since December 31, 2006.

Credit Risk

The Utilities monitor and manage credit risk with their trading counterparties.  Credit risk is defined as the possibility that counterparty to one or more contracts will be unable or unwilling to fulfill its financial or physical obligations to the Utilities because of the counterparty’s financial condition.  The Utilities’ credit risk associated with trading counterparties was approximately $6.4 million as of September 30, 2007, which decreased from the $31.1 million balance at December 31, 2006.  The decrease from December 31, 2006 is primarily due to primarily due to summer tolling agreements that terminated during the period ended September 30, 2007.

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ITEM 4.                      CONTROLS AND PROCEDURES

(a)   Evaluation of disclosure controls and procedures.

SPR, NPC and SPPC’s principal executive officers and principal financial officers, based on their evaluation of the registrants’ disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) have concluded that, as of September 30, 2007, the registrants’ disclosure controls and procedures were effective.

(b)   Change in internal controls over financial reporting.

There were no changes in internal controls over financial reporting in the third quarter of 2007 that have materially affected, or are reasonably likely to materially affect, internal controls over financial reporting.

PART II

ITEM 1.                      LEGAL PROCEEDINGS

As of the date of this report, there have been no material changes with regard to administrative and judicial proceedings involving regulatory, environmental and other matters as disclosed in SPR’s, NPC’s and SPPC’s Annual Reports on Form 10-K for the year ended December 31, 2006 and Quarterly Reports on Form 10-Q for the quarter ended March 31, 2007 and June 30, 2007, except as discussed below.

Sierra Pacific Resources and Nevada Power Company

Merrill Lynch/Allegheny Lawsuit

          In May 2003, SPR and NPC filed suit against Merrill Lynch & Co., Inc. and Merrill Lynch Capital Services, Inc. (collectively, Merrill Lynch) and Allegheny Energy, Inc. and Allegheny Energy Supply Co., LLC (collectively, Allegheny) in the United States District Court, District of Nevada, for compensatory and punitive damages of $850 million for causing the PUCN to disallow the approximate $180 million rate adjustment for NPC in its 2001 deferred energy case (as discussed in Note 3, Regulatory Actions, in the Condensed Notes to Financial Statements). The PUCN held that NPC acted imprudently when it refused to enter into an electricity supply contract with Merrill Lynch and subsequently paid too much for electricity from another source.  SPR and NPC allege that Merrill Lynch and Allegheny’s fraudulent testimony and wrongful conduct caused the PUCN disallowance, among other allegations.

Merrill Lynch filed motions to dismiss in May 2003 and June 2003.  Thereafter, the case was stayed pending resolution of NPC’s appeal of the 2001 deferred energy case pending before the Nevada Supreme Court, which was decided in August 2006 and discussed further in Note 13, Commitments and Contingencies of the Notes to Financial Statements.  The Nevada Supreme Court has since rendered its decision in the appeal.  In October 2006, the District Court approved a stipulation continuing a stay of the proceeding pending final resolution of the PUCN remand proceedings in the 2001 deferred energy case.  On May 10, 2007, Allegheny and Merrill Lynch filed renewed motions to dismiss before the Nevada District Court on the ground that the Utilities’ recovery of the $189.9 million in rates under the PUCN Order on remand from the Nevada Supreme Court is all that SPR and NPC are entitled to recover and otherwise for failure to file a timely amended complaint.  NPC opposed the motion to dismiss.  On July 30, 2007 the Court denied the Motion and further set the case for trial in July 2008.

Lawsuit Against Natural Gas Providers

In April 2003, SPR and NPC filed a complaint in the U.S. District Court for the District of Nevada against several natural gas providers and traders.  In July 2003, SPR and NPC filed a First Amended Complaint.  A Second Amended Complaint was filed in June 2004, which named three different groups of defendants:  (1) El Paso Corporation, El Paso Natural Gas Company, El Paso Merchant Energy, L.P., El Paso Merchant Energy Company, El Paso Tennessee Pipeline Company, El Paso Merchant Energy-Gas Company; (2) Dynegy Marketing and Trade; and (3) Sempra Energy, Sempra Energy Trading Corporation, Southern California Gas Company, and San Diego Gas and Electric.  On December 13, 2005, the District Court dismissed SPR and NPC’s claims.  SPR and NPC appealed that decision to the Ninth Circuit Court of Appeals.  Subsequently, SPR abandoned its appeal and the matter proceeded only with respect to NPC.  On September 21, 2007, the Ninth Circuit reversed the District Court’s decision.  On October 5, 2007, defendants filed a petition for rehearing with the Ninth Circuit.  Management cannot predict the timing or outcome of a decision on the petition for rehearing.

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Nevada Power Company and Sierra Pacific Power Company

Western United States Energy Crisis Proceedings before the FERC

FERC 206 complaints

    In December 2001, the Utilities filed ten complaints with the FERC against various power suppliers under Section 206 of the Federal Power Act, seeking price reduction of forward wholesale power purchase contracts entered into prior to the FERC mandated price caps imposed in June 2001 in reaction to the Western United States energy crisis.  The Utilities contested the amounts paid for power actually delivered as well as termination claims for undelivered power.  The Utilities have since negotiated bilateral settlement agreements with all power suppliers that had termination claims for undelivered power against the Utilities.  The Utilities were unable to reach settlement with other respondents.

    In June 2003, the FERC dismissed the Utilities’ Section 206 complaints, stating that the Utilities had failed to satisfy their burden of proof under the strict public interest standard.  In July 2003, the Utilities filed a petition for rehearing, but the FERC reaffirmed its June decision (“July decision”).  The Utilities appealed the July decision to the Ninth Circuit.  In December 2006, a three judge panel of the Ninth Circuit overturned the July decision and remanded the case back to the FERC for application of the factors that the Ninth Circuit outlines in its decision.  On May 3, 2007, American Electric Power Service Corporation and Allegheny Energy Supply Company and other interested parties filed petitions for certiorari (“Petitions”) with the U.S. Supreme Court seeking review of the Ninth Circuit decision.  The Utilities, together with other parties and the Federal Energy Regulatory Commission, filed their opposition to these Petitions on August 6, 2007.  On September 25, 2007, the U.S. Supreme Court granted certiorari and ordered the submission of briefs in November of 2007 and January and February 2008.  Oral argument before the U.S. Supreme has not been scheduled.  The Utilities cannot predict the outcome of this matter.

Environmental

Nevada Power Company

Reid Gardner Station

In August 1999, the Nevada Department of Environmental Protection (NDEP) issued a discharge permit to Reid Gardner Station and an order that requires all wastewater ponds to be closed or lined with impermeable liners over the next ten years.  This order also required NPC to submit a Site Characterization Plan to NDEP to ascertain impacts.  This plan has been reviewed and approved by NDEP.  In collaboration with NDEP, NPC has evaluated remediation requirements.  In May 2004, NPC submitted a schedule of remediation actions to NDEP which included proposed dates for corrective action plans and/or suggested additional assessment plans for each specified area.  Any future ponds will be double-lined with inter-liner leak detection in accordance with the NDEP Authorization to Discharge Permit issued October 2005.

Pond construction and lining costs to satisfy the NDEP order expended to date is approximately $39.1 million.  Expenditures for 2007 through 2010 are projected to be approximately $8.8 million.  NPC is currently considering additional assessment plans to address historical groundwater impacts associated with facility operations; however, management cannot reasonably estimate costs at this time.   

As disclosed in prior filings, in June 2006, the Environmental Protection Agency (EPA) issued a Finding and Notice of Violation (NOV) related to monitoring, recordkeeping and emission exceedances at the Reid Gardner facility.  In April 2007, NPC lodged a Consent Decree in federal district court with NDEP, EPA and the Department of Justice (DOJ) regarding the NOVs and providing for additional environmental controls and equipment changes, environmental benefit projects, monetary penalties, and/or other measures that will be required to resolve the alleged violations.  Terms of the Consent Decree include a $1.1 million fine, funding of projects, of which NPC expects to spend approximately $2 million for the Supplemental Environmental Project with the Clark County School District, and the installation of emission reduction equipment at the facility.  The environmental project is aimed at achieving increased energy efficiency and cost savings for the school district.  Certain environmental controls and equipment changes needed to assure compliance with existing or modified regulations, and which will satisfy the terms of the consent decree, were previously submitted by NPC to the PUCN in NPC’s 2006 IRP filing.  These expenditures were approved by the PUCN in late 2006 and include equipment installation on the various units to control startup opacity and particulates and reduce operating opacity and oxides of nitrogen.  Capital expenditures are estimated at $84.2 million as approved by the PUCN; however, amounts may change depending on the procurement of material and services.

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Clark Station

As disclosed in prior filings, in May 2006, the EPA, by letter from the DOJ, notified NPC that it intended to initiate an enforcement action against NPC seeking unspecified civil penalties, together with injunctive relief, for alleged violations of the Prevention of Significant Deterioration requirements and Title V operating permit requirements of the Clean Air Act at Clark Station.  NPC then entered into ongoing dialogue and settlement discussions with the EPA and DOJ regarding the alleged violations and in August 2007, a final Consent Decree between NPC and the EPA was entered with the Court.  Terms of the Consent Decree include installation of an advanced NOx reduction burner technology on four existing units with an estimated cost of up to $60 million, which cost was previously submitted by NPC to the PUCN in January 2007 in NPC’s Second Amendment to the 2006 IRP filing and was approved in May 2007.  Additionally, NPC will pay a minimal fine and make a contribution to Vegas Public Broadcasting Service (PBS) to fund a solar panel array on its new Educational Technology Campus planned in Clark County.  

ITEM 1A                      RISK FACTORS

For the purposes of this section, the terms “we,” “us” and “our” refer to SPR on a consolidated basis (including NPC and SPPC).  The following information updates, and should be read in conjunction with, the information disclosed in Item 1A, “Risk Factors,” of our 2006 Form 10-K.  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.

As of the date of this report, there have been no material changes with regard to the Risk Factors disclosed in SPR’s, NPC’s and SPPC’s Annual Reports on Form 10-K for the year ended December 31, 2006 and Quarterly Reports on Form 10-Q for the quarter ended March 31, 2007 and June 30, 2007, except as discussed below.

SPR’s indebtedness is effectively subordinated to the liabilities of its subsidiaries, particularly NPC and SPPC. SPR and the Utilities have the ability to issue a significant amount of additional indebtedness under the terms of their various financing agreements.

Because SPR is a holding company, its indebtedness is effectively subordinated to the Utilities’ existing indebtedness and other future liabilities, including claims by the Utilities’ trade creditors, debt holders, secured creditors, taxing authorities, and guarantee holders. SPR conducts substantially all of its operations through its subsidiaries, and thus SPR’s ability to meet its obligations under its indebtedness will be dependent on the earnings and cash flows of those subsidiaries and the ability of those subsidiaries to pay dividends or to advance or repay funds to SPR.  As of September 30, 2007, the Utilities had approximately $4.3 billion of debt outstanding. The terms of SPR’s indebtedness restrict the amount of additional indebtedness that SPR and the Utilities may issue. Based on SPR’s September 30, 2007 financial statements, assuming an interest rate of 7%, SPR’s indebtedness restrictions would allow SPR and the Utilities to issue up to approximately $1.1 billion of additional indebtedness in the aggregate, unless the indebtedness being issued is specifically permitted under the terms of SPR’s indebtedness. In addition, NPC and SPPC are subject to restrictions under the terms of their various financing agreements on their ability to issue additional indebtedness.

ITEM 2.                      UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.                      DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.                      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5.                      OTHER INFORMATION

On November 2, 2007, SPR announced that E. Kevin Bethel, CPA, will be joining SPR as the chief accounting officer, effective December 10, 2007.  Mr. Bethel, 43, will also serve as the chief accounting officer of SPPC and NPC.  Prior to joining SPR, Mr. Bethel served as the assistant controller for American Electric Power since March 2007, director of utility general and regulated accounting from 2004 to 2007, and director of investment accounting from 2001 to 2004.  Mr. Bethel has served in various accounting positions within the utility industry since 1991.

As of December 10, 2007, John E. Brown will no longer be the current principal accounting officer of SPR and each of the Utilities, but will retain the position of controller for each company and will report to Mr. Bethel in his capacity as chief accounting officer.

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ITEM 6.   EXHIBITS

(10)    Nevada Power Company:

10.1    Joint Tenant Contract, dated September 18, 2007, between Nevada Power Company as Tenant, and Beltway Business Park Warehouse No. 2, LLC as Owner, relating to Nevada Power Company’s South Operations Center facility.

(12)    Sierra Pacific Resources:

12.1   Statement regarding computation of Ratios of Earnings to Fixed Charges.

          Nevada Power Company:

12.2   Statement regarding computation of Ratios of Earnings to Fixed Charges.

          Sierra Pacific Power Company:

12.3   Statement regarding computation of Ratios of Earnings to Fixed Charges.

(31)    Sierra Pacific Resources, Nevada Power Company and Sierra Pacific Power Company:

31.1   Certification of Chief Executive Officer of Sierra Pacific Resources Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2   Certification of Chief Executive Officer of Nevada Power Company Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.3   Certification of Chief Executive Officer of Sierra Pacific Power Company Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.4   Certification of Chief Financial Officer of Sierra Pacific Resources Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.5   Certification of Chief Financial Officer of Nevada Power Company Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.6   Certification of Chief Financial Officer of Sierra Pacific Power Company Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

(32)    Sierra Pacific Resources, Nevada Power Company and Sierra Pacific Power Company:

32.1  Certification of Chief Executive Officer of Sierra Pacific Resources Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2  Certification of Chief Executive Officer of Nevada Power Company Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.3  Certification of Chief Executive Officer of Sierra Pacific Power Company Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.4  Certification of Chief Financial Officer of Sierra Pacific Resources Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.5  Certification of Chief Financial Officer of Nevada Power Company Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.6  Certification of Chief Financial Officer of Sierra Pacific Power Company Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the under­signed thereunto duly authorized.

                                                                Sierra Pacific Resources

                           (Registrant)

                 Date:      November 1, 2007                                                By:   /s/ William D. Rogers   

                                         William D. Rogers

                                   Chief Financial Officer

                                                               (Principal Financial Officer)

                  Date:      November 1, 2007                                              By:    /s/ John E. Brown

                                      John E. Brown

                                   Controller

                                      (Principal Accounting Officer)

Nevada Power Company

                        (Registrant)

                  Date:      November 1, 2007                                              By:   /s/ William D. Rogers   

                                        William D. Rogers

                                  Chief Financial Officer

                                                              (Principal Financial Officer)

                  Date:      November 1, 2007                                             By:   /s/ John E. Brown

                                    John E. Brown

                                 Controller

                                    (Principal Accounting Officer)

                                                                                                         Sierra Pacific Power Company

                         (Registrant)

                  Date:      November 1, 2007                                              By:   /s/ William D. Rogers   

                                        William D. Rogers

                                   Chief Financial Officer

                                                              (Principal Financial Officer)

                  Date:      November 1, 2007                                              By:   /s/ John E. Brown

                                     John E. Brown

                                  Controller

                                    (Principal Accounting Officer)

EX-10.1

AGREEMENT made as of the 18th day of September in the year 2007

(In words, indicate day, month and year)

BETWEEN the Owner:

(Name, address and other information)

 BELTWAY BUSINESS PARK WAREHOUSE NO. 2, LLC

c/o Majestic Realty Co.

13191 Crossroads Pkwy., N. 6^th Floor

City of Industry, CA 91746

and the Contractor:

(Name, address and other information)

 COMMERCE CONSTRUCTION CO., L.P.

 13191 Crossroads Pkwy. North, Sixth Floor

 City of Industry, CA  91746

The Project is:

(Name and location)

 BELTWAY BUSINESS PARK WAREHOUSE NO. 2, BLDG. 5

 7155 Lindell Road

 Las Vegas, NV 89118

The Architect is:

(Name, address and other information)

SH ARCHITECTURE

7373 Peak Drive, Suite 250

Las Vegas, NV 89128

The Tenant is:

(Name, address and other information)

NEVADA POWER COMPANY

6226 West Sahara Avenue

Las Vegas, Nevada  89146

The Owner and Contractor agree as follows.

ARTICLE 1THE CONTRACT DOCUMENTS

The Contract Documents consist of this Agreement, Conditions of the Contract (General, Supplementary and other Conditions), Drawings, Specifications, Addenda issued prior to execution of this Agreement, other documents listed in this Agreement and Modifications issued after full execution of this Agreement; these form the Contract, and are as fully a part of the Contract as if attached to this Agreement or repeated herein. The Contract represents the entire and integrated agreement between the parties hereto and supersedes prior negotiations, representations or agreements, either written or oral. An enumeration of the Contract Documents, other than Modifications, appears in Article 15. If anything in the other Contract Documents is inconsistent with this Agreement, this Agreement shall govern.  If anything in this Agreement is inconsistent with any provision of Exhibit “B”, Exhibit “C” or Exhibit “D” hereto, the provisions of the Exhibits shall govern.

ARTICLE 2THE WORK OF THIS CONTRACT

The Contractor shall fully execute the Work described in the Contract Documents, except to the extent specifically indicated in the Contract Documents to be the responsibility of others. The Work shall be performed in Phases as defined and described in Exhibit “D,” Special Provisions, attached hereto.  See Exhibit “D,” Special Provisions, attached hereto.

ARTICLE 3RELATIONSHIP OF THE PARTIES

The Contractor accepts the relationship of trust and confidence established by this Agreement and covenants with the Owner to cooperate with the Architect and exercise the Contractor's skill and judgment in furthering the interests of the Owner; to furnish efficient business administration and supervision; to furnish at all times an adequate supply of workers and materials; and to perform the Work in an expeditious and economical manner consistent with the Owner's interests. The Owner agrees to furnish and approve, in a timely manner, information required by the Contractor and to make payments to the Contractor in accordance with the requirements of the Contract Documents.

ARTICLE 4DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION

§ 4.1 The date of commencement of Phase 1 of the Work shall be the date of this Agreement.   The date of commencement of Phase 2 of the Work shall be the later to occur of (i) the date of issuance by Clark County, Nevada of the first building permit other than a grading permit for any portion of the Work to be completed for Phase 2 or (ii) the date that the Change Order for Phase 2 provided for in §15.1.4 has been executed by Owner and Contractor.  The date of commencement of Phase 3 of the Work shall be the later to occur of (i) the date of issuance by Clark County, Nevada of the first building permit  for any portion of the Work to be completed for Phase 3 or (ii) the date that the Change Order for Phase 3 provided for in §15.1.4 has been executed by Owner and Contractor.  A building permit for Phase 2 Work or Phase 3 Work shall be deemed “issued” for purposes of this §4.1 no later than the second business day following the date the (i) the building permit has been approved by the Clark County Building Department and made available to pick up upon payment of applicable fees and (ii) Contractor has been so informed, by e-mail, orally or in writing by Owner, Tenant, Architect or the Clark County Building Department.

§ 4.2 The Contract Time for a Phase of the Work shall be measured from the date of commencement for such Phase.

§ 4.3 The Contractor shall achieve Substantial Completion of the  Work for each Phase as follows:

Phase 1:  Within twelve (12) months of the date of this Agreement;

Phase 2:  Within eight (8) months of the date of commencement of Phase 2;

Phase 3:  Within eight (8) months of the date of commencement of Phase 3;

  subject to adjustments of these Contract Times as provided in the Contract Documents.

§4.4 In the event the Contractor does not achieve Substantial Completion of the Work to be completed within a Phase within the applicable Contract Time, including approved extensions, the Contractor shall pay Tenant, as liquidated damages and not as a penalty, the sum of $2,000 per each day the actual time performance exceeds the authorized Contract Time.  Contractor and Owner stipulate, acknowledge and agree that the exact amount of costs, expenses and damages, including consequential damages, incurred and suffered by Tenant as a result of Contractor’s failure to timely achieve Substantial Completion of the Work to be completed within a Phase would be difficult to determine, and that the foregoing liquidated damages constitute a reasonable estimate of that amount.

§4.5  Included in the construction are up to seventy-five (75) days that are anticipated to be lost due to inclement weather.  Any request for extension of the periods set forth in §4.3 within which to achieve Substantial Completion of the Work to be completed within such Phase shall be processed in the manner set forth in §8.2 and §8.3 of Exhibit “A,” General Conditions of the Contract for Construction, as modified and supplemented by the Supplementary Conditions.

§4.6  Any delays by the applicable governmental authority in issuing any building permit required for completion of a Phase of the Work not attributable to causes within Contractor’s control shall be excused by Owner and Tenant, and the applicable Contract Time shall be extended by all such delays.

ARTICLE 5   BASIS FOR PAYMENT

§ 5.1 CONTRACT SUM

§ 5.1.1 The Owner shall pay the Contractor the Contract Sum in current funds for the Contractor's performance of the Contract. The Contract Sum is the Cost of the Work as defined in Article 7 plus the Contractor's Fee.

§ 5.1.2 The Contractor's Fee is:  _5__% of the Cost of the Work

§ 5.2 GUARANTEED MAXIMUM PRICE

§ 5.2.1The sum of the Cost of the Work for Phases 1 and 2 and the Contractor's Fee for Phases 1 and 2 is guaranteed by the Contractor not to cumulatively exceed FIFTY-TWO MILLION NINETY-SIX THOUSAND, THREE HUNDRED SEVENTY-FOUR DOLLARS ($52,096,374), subject to additions and deductions by Change Order as provided in the Contract Documents (the “Phase 1 and 2 GMP”); provided, however, that if (i) the date of commencement of Phase 2 of the Work is delayed beyond four (4) months following the date of this Agreement, (ii) Contractor has not caused such delay and (iii) such delay causes a delay in Substantial Completion of Phase 2 of the Work, then the Phase 1 and 2 GMP shall be increased by the increased cost of Project General Conditions caused by such delay in Substantial Completion of Phase 2 of the Work.   Costs of the Work for Phases 1 and 2 that would cause the Phase 1 and 2 GMP to be exceeded shall be paid by the Contractor without reimbursement by the Owner.  The sum of the Cost of the Work for Phase 3 and the Contractor’s Fee for Phase 3 is guaranteed by the Contractor not to exceed an amount (the “Phase 3 GMP”) to be set forth in a Change Order to be executed by the parties as provided in §15.1.4, subject to additions and deductions by subsequent Change Order as provided in the Contract Documents.  The Phase 3 GMP shall be ONE HUNDRED THREE PERCENT (103%) of the total dollar amount of the initial bids for the Phase 3 Work received by Contractor after full execution of this Agreement, plus Other Allowances (defined below), subject to increase adjustment for the following:  (i) actual Cost of the Work in Phase 3 in excess of any allowance amounts set forth in those bids; (ii) actual cost of items first disclosed in final Drawings and Specifications for Phase 3 and not the subject of those bids or allowances; (iii) cost of Project General Conditions for Phase 3, including but not limited to those attributable to an increase in the Contract Time for Phase 3; and (iv) Contractor’s Fee for Phase 3 of the Work, all of which shall be subject to additions and deductions by Change Order as provided in the Contract Documents; provided, however, that if (i) the date of commencement of Phase 3 of the Work is delayed beyond four (4) months following the date of this Agreement, (ii) Contractor has not caused such delay and (iii) such delay causes a delay in Substantial Completion of Phase 3 of the Work, then the Phase 3 GMP shall be increased by the increased cost of Project General Conditions caused by such delay in Substantial Completion of Phase 3 of the Work.  Costs of the Work for Phase 3 that would cause the Phase 3 GMP to be exceeded shall be paid by the Contractor without reimbursement by the Owner.  As used above, “Other Allowances” means the reasonable allowances provided by Architect or, if not provided by Architect, provided by Contractor, in the absence of specifications or other detail not yet available and not included in the Drawings and Specifications for Phase 3 to the extent not covered by allowances in the initial bids for Phase 3 Work.  The sum total of the Phase 1 and 2 GMP and the Phase 3 GMP is sometimes collectively referred to in the Contract Documents as the “Guaranteed Maximum Price.”

§ 5.2.2 The Guaranteed Maximum Price is based on the following alternates, if any, which are described in the Contract Documents and are hereby accepted by the Owner:

  Not applicable

§ 5.2.3 Unit prices, if any, are as follows:

See Exhibit “D”, Special Provisions, attached hereto.

§ 5.2.4 Allowances, if any, are as follows

See Exhibit “D”, Special Provisions, attached hereto.

§ 5.2.5 Assumptions, if any, on which the Guaranteed Maximum Price is based are as follows:

See Exhibit “D”, Special Provisions, attached hereto.

§ 5.2.6 To the extent that the Drawings and Specifications are anticipated to require further development by the Architect, the Contractor has provided in the Guaranteed Maximum Price for such further development consistent with the Contract Documents and reasonably inferable therefrom.  Such further development does not include such things as changes in scope, systems, kinds and quality of materials, finishes or equipment, all of which, if required, shall be incorporated by Change Order.

ARTICLE 6   CHANGES IN THE WORK

§ 6.1 Adjustments to the Guaranteed Maximum Price  on account of changes in the Work may be determined by any of the methods listed in Section 7.3.3 of AIA Document A201-1997.

§ 6.2 In calculating adjustments to subcontracts (except those awarded with the Owner's prior consent on the basis of cost plus a fee), the terms "cost" and "fee" as used in Section 7.3.3.3 of AIA Document A201-1997 and the terms "costs" and "a reasonable allowance for overhead and profit" as used in Section 7.3.6 of AIA Document A201-1997 shall have the meanings assigned to them in AIA Document A201-1997 and shall not be modified by Articles 5, 7 and 8 of this Agreement. Adjustments to subcontracts awarded with the Owner's prior consent on the basis of cost plus a fee shall be calculated in accordance with the terms of those subcontracts.

§ 6.3 In calculating adjustments to the Guaranteed Maximum Price, the terms "cost" and "costs" as used in the above-referenced provisions of AIA Document A201-1997 shall mean the Cost of the Work as defined in Article 7 of this Agreement and the terms "fee" and "a reasonable allowance for overhead and profit" shall mean the Contractor's Fee as defined in Section 5.1.2 of this Agreement.

§ 6.4 If no specific provision is made in Section 5.1 for adjustment of the Contractor's Fee in the case of changes in the Work, or if the extent of such changes is such, in the aggregate, that application of the adjustment provisions of Section 5.1 will cause substantial inequity to the Owner or Contractor, the Contractor's Fee shall be equitably adjusted on the basis of the Fee established for the original Work, and the Guaranteed Maximum Price shall be adjusted accordingly.

ARTICLE 7   COSTS TO BE REIMBURSED

Costs to be reimbursed shall be as defined in Exhibit “B”, Cost of the Work, attached hereto.

ARTICLE 8   COSTS NOT TO BE REIMBURSED

Exhibit “B”, Cost of the Work, attached hereto sets forth the items to be properly included in the Cost of the Work.

ARTICLE 9   DISCOUNTS, REBATES AND REFUNDS

§ 9.1 Cash discounts obtained on payments made by the Contractor shall accrue to the Owner if (1) before making the payment, the Contractor included them in an Application for Payment and received payment therefor from the Owner, or (2) the Owner has deposited funds with the Contractor with which to make payments; otherwise, cash discounts shall accrue to the Contractor. Trade discounts, rebates, refunds and amounts received from sales of surplus materials and equipment shall accrue to the Owner, and the Contractor shall make provisions so that they can be secured.

§ 9.2 Amounts that accrue to the Owner in accordance with the provisions of Section 9.1 shall be credited to the Owner as a deduction from the Cost of the Work.

ARTICLE 10   SUBCONTRACTS AND OTHER AGREEMENTS

§ 10.1 Those portions of the Work that the Contractor does not customarily perform with the Contractor's own personnel shall be performed under subcontracts or by other appropriate agreements with the Contractor. The Owner may designate specific persons or entities from whom the Contractor shall obtain bids. The Contractor shall obtain bids from Subcontractors and from suppliers of materials or equipment fabricated especially for the Work and shall deliver such bids to the Architect. The Owner shall then determine, with the advice of the Contractor and the Architect, which bids will be accepted. The Contractor shall not be required to contract with anyone to whom the Contractor has reasonable objection.

§ 10.2 If a specific bidder among those whose bids are delivered by the Contractor to the Architect (1) is recommended to the Owner by the Contractor; (2) is qualified to perform that portion of the Work; and (3) has submitted a bid that conforms to the requirements of the Contract Documents without reservations or exceptions, but the Owner requires that another bid be accepted, then the Contractor may require that a Change Order be issued to adjust the Guaranteed Maximum Price by the difference between the bid of the person or entity recommended to the Owner by the Contractor and the amount of the subcontract or other agreement actually signed with the person or entity designated by the Owner.

§ 10.3 Subcontracts or other agreements shall conform to the applicable payment provisions of this Agreement, and shall not be awarded on the basis of cost plus a fee without the prior consent of the Owner.

ARTICLE 11   ACCOUNTING RECORDS

The Contractor shall keep full and detailed accounts and exercise such controls as may be necessary for proper financial management under this Contract, and the accounting and control systems shall be satisfactory to the Tenant and Owner. The Owner, Tenant and their accountants shall be afforded access to, and shall be permitted to audit and copy, the Contractor's records, books, correspondence, instructions, drawings, receipts, subcontracts, purchase orders, vouchers, memoranda and other data relating to this Contract, and the Contractor shall preserve these for a period of three years after final payment, or for such longer period as may be required by law.  If the Owner or Tenant chooses to audit the final contract amount, and if the audit results in a discovery of overcharges by the Contractor in excess of 1% of the total billings, then the Contractor shall pay for the cost of the audit.

ARTICLE 12   PAYMENTS

§ 12.1 PROGRESS PAYMENTS

§ 12.1.1 Based upon Applications for Payment submitted to the Architect by the Contractor and Certificates for Payment issued by the Architect, the Owner shall make progress payments on account of the Contract Sum to the Contractor as provided below and elsewhere in the Contract Documents.

§ 12.1.2 The period covered by each Application for Payment shall be one calendar month ending on the last day of the month.

§ 12.1.3 Provided that an Application for Payment is received by the Architect not later than the 1st day of a month, the Owner shall make payment to the Contractor not later than the last day of the same month. If an Application for Payment is received by the Architect after the application date fixed above, payment shall be made by the Owner not later than  thirty (30) days after the Architect receives the Application for Payment.

§ 12.1.4 With each Application for Payment, the Contractor shall submit payrolls, petty cash accounts, receipted invoices or invoices with check vouchers attached, and any other evidence required by the Owner or Architect to demonstrate that cash disbursements already made by the Contractor on account of the Cost of the Work equal or exceed (1) progress payments already received by the Contractor; less (2) that portion of those payments attributable to the Contractor's Fee; plus (3) payrolls for the period covered by the present Application for Payment.

§ 12.1.5 Each Application for Payment shall be based on the most recent schedule of values submitted by the Contractor in accordance with the Contract Documents. The schedule of values shall allocate the entire Guaranteed Maximum Price among the various portions of the Work, except that the Contractor's Fee shall be shown as a single separate item. The schedule of values shall be prepared in such form and supported by such data to substantiate its accuracy as the Architect may require. This schedule, unless objected to by the  Architect, shall be used as a basis for reviewing the Contractor's Applications for Payment.  The initial schedule of values referred to in the Contract Documents shall be set forth in Exhibit “F”, Cost Breakdown, attached hereto.  Exhibit “F”, Cost Breakdown, shall be amended by Change Order once the Phase 3 GMP has been determined.

§ 12.1.6 Applications for Payment shall show the percentage of completion of each portion of the Work as of the end of the period covered by the Application for Payment. The percentage of completion shall be the lesser of (1) the percentage of that portion of the Work which has actually been completed; or (2) the percentage obtained by dividing (a) the expense that has actually been incurred by the Contractor on account of that portion of the Work for which the Contractor has made or intends to make actual payment prior to the next Application for Payment by (b) the share of the Guaranteed Maximum Price allocated to that portion of the Work in the schedule of values.

§ 12.1.7 Subject to other provisions of the Contract Documents, the amount of each progress payment shall be computed as follows:

.1 take that portion of the Guaranteed Maximum Price properly allocable to completed Work as determined by multiplying the percentage of completion of each portion of the Work by the share of the Guaranteed Maximum Price allocated to that portion of the Work in the schedule of values. Pending final determination of cost to the Owner of changes in the Work, amounts not in dispute shall be included as provided in Section 7.3.8 of AIA Document A201-1997;

.2 add that portion of the Guaranteed Maximum Price properly allocable to materials and equipment delivered and suitably stored at the site for subsequent incorporation in the Work, or if approved in advance by the Owner, suitably stored off the site at a location agreed upon in writing;

.3 add the Contractor's Fee, less retainage of five percent (5%).  The Contractor's Fee shall be computed upon the Cost of the Work described in the two preceding Clauses at the rate stated in Section 5.1.2 or, if the Contractor's Fee is stated as a fixed sum in that Subparagraph, shall be an amount that bears the same ratio to that fixed-sum fee as the Cost of the Work in the two preceding Clauses bears to a reasonable estimate of the probable Cost of the Work upon its completion;

.4 subtract the aggregate of previous payments made by the Owner;

.5 subtract the shortfall, if any, indicated by the Contractor in the documentation required by Section 12.1.4 to substantiate prior Applications for Payment, or resulting from errors subsequently discovered by the Owner's accountants in such documentation; and

.6 subtract amounts, if any, for which the Architect has withheld or nullified a Certificate for Payment as provided in Section 9.5 of AIA Document A201-1997.

§ 12.1.8 Except with the Owner's prior approval, payments  for subcontracted work shall be subject to retainage of  not less than ten percent (10%).   The Owner and the Contractor shall agree upon a mutually acceptable procedure for review and approval of payments and retention for Subcontractors.  No retention shall be withheld on Project General Conditions.

§ 12.1.9 In taking action on the Contractor's Applications for Payment, the Architect shall be entitled to rely on the accuracy and completeness of the information furnished by the Contractor and shall not be deemed to represent that the Architect has made a detailed examination, audit or arithmetic verification of the documentation submitted in accordance with Section 12.1.4 or other supporting data; that the Architect has made exhaustive or continuous on-site inspections or that the Architect has made examinations to ascertain how or for what purposes the Contractor has used amounts previously paid on account of the Contract. Such examinations, audits and verifications, if required by the Owner, will be performed by the Owner's accountants acting in the sole interest of the Owner.

§ 12.2 FINAL PAYMENT

§ 12.2.1 Final payment, constituting the entire unpaid balance of the Contract Sum, shall be made by the Owner to the Contractor when:

.1 the Contractor has fully performed the Contract except for the Contractor's responsibility to correct Work as provided in Section 12.2.2 of AIA Document A201-1997, and to satisfy other requirements, if any, which extend beyond final payment; and

.2 a final Certificate for Payment has been issued by the Architect.

§ 12.2.2 The Owner's final payment to the Contractor shall be made no later than 30 days after the issuance of the Architect's final Certificate for Payment , or as follows:

§ 12.2.3 The Tenant's accountants will review and report in writing on the Contractor's final accounting within 30 days after delivery of the final accounting to the Architect by the Contractor. Based upon such Cost of the Work as the Tenant's accountants report to be substantiated by the Contractor's final accounting, and provided the other conditions of Section 12.2.1 have been met, the Architect will, within  ten (10) days after receipt of the written report of the Tenant's accountants, either issue to the Tenant a final Certificate for Payment  with a copy to the Contractor, or notify the Contractor and Tenant in writing of the Architect's reasons for withholding a certificate as provided in Section 9.5.1 of the AIA Document A201-1997. The time periods stated in this Section 12.2.3 supersede those stated in Section 9.4.1 of the AIA Document A201-1997.

§ 12.2.4 If the Owner's accountants report the Cost of the Work as substantiated by the Contractor's final accounting to be less than claimed by the Contractor, the Contractor shall be entitled to demand arbitration of the disputed amount without a further decision of the Architect. Such demand for arbitration shall be made by the Contractor within 30 days after the Contractor's receipt of a copy of the Architect's final Certificate for Payment; failure to demand arbitration within this 30-day period shall result in the substantiated amount reported by the Owner's accountants becoming binding on the Contractor. Pending a final resolution by arbitration, the Owner shall pay the Contractor the amount certified in the Architect's final Certificate for Payment.

§ 12.2.5 If, subsequent to final payment and at the Owner's request, the Contractor incurs costs described in Article 7 and not excluded by Article 8 to correct defective or nonconforming Work, the Owner shall reimburse the Contractor such costs and the Contractor's Fee applicable thereto on the same basis as if such costs had been incurred prior to final payment, but not in excess of the Guaranteed Maximum Price. If the Contractor has participated in savings as provided in Section 5.2, the amount of such savings shall be recalculated and appropriate credit given to the Owner in determining the net amount to be paid by the Owner to the Contractor.

ARTICLE 13   TERMINATION OR SUSPENSION

§ 13.1 The Contract may be terminated by the Contractor, or by the Owner for convenience, as provided in Article 14 of AIA Document A201-1997.  However, the amount to be paid to the Contractor under Section 14.1.3 of AIA Document A201-1997 shall not exceed the amount the Contractor would be entitled to receive under Section 13.2 below, except that the Contractor's Fee shall be calculated as if the Work had been fully completed by the Contractor, including a reasonable estimate of the Cost of the Work for Work not actually completed.

§ 13.2 The Contract may be terminated by the Owner for cause as provided in Article 14 of AIA Document A201-1997. The amount, if any, to be paid to the Contractor under Section 14.2.4 of AIA Document A201-1997 shall not cause the Guaranteed Maximum Price to be exceeded, nor shall it exceed an amount calculated as follows:

§ 13.2.1 Take the Cost of the Work incurred by the Contractor to the date of termination;

§ 13.2.2 Add the Contractor's Fee computed upon the Cost of the Work to the date of termination at the rate stated in Section 5.1.2 or, if the Contractor's Fee is stated as a fixed sum in that Section, an amount that bears the same ratio to that fixed-sum Fee as the Cost of the Work at the time of termination bears to a reasonable estimate of the probable Cost of the Work upon its completion; and

§ 13.2.3 Subtract the aggregate of previous payments made by the Owner.

§ 13.3 The Owner shall also pay the Contractor fair compensation, either by purchase or rental at the election of the Owner, for any equipment owned by the Contractor that the Owner elects to retain and that is not otherwise included in the Cost of the Work under Section 13.2.1. To the extent that the Owner elects to take legal assignment of subcontracts and purchase orders (including rental agreements), the Contractor shall, as a condition of receiving the payments referred to in this Article 13, execute and deliver all such papers and take all such steps, including the legal assignment of such subcontracts and other contractual rights of the Contractor, as the Owner may require for the purpose of fully vesting in the Owner the rights and benefits of the Contractor under such subcontracts or purchase orders.

§ 13.4 The Work may be suspended by the Owner as provided in Article 14 of AIA Document A201-1997; in such case, the Guaranteed Maximum Price and applicable Contract Time(s) shall be increased as provided in Section 14.3.2 of AIA Document A201-1997 except that the term "profit" shall be understood to mean the Contractor's Fee as described in Sections 5.1.2 and Section 6.4 of this Agreement.

ARTICLE 14   MISCELLANEOUS PROVISIONS

§ 14.1 Where reference is made in this Agreement to a provision AIA Document A201-1997 or another Contract Document, the reference refers to that provision as amended or supplemented by other provisions of the Contract Documents.

§ 14.2 Payments due and unpaid under the Contract shall bear interest from the date payment is due at the rate stated below, or in the absence thereof, at the legal rate prevailing from time to time at the place where the Project is located.

       9% per annum

(Usury laws and requirements under the Federal Truth in Lending Act, similar state and local consumer credit laws and other regulations at the Owner's and Contractor's principal places of business, the location of the Project and elsewhere may affect the validity of this provision. Legal advice should be obtained with respect to deletions or modifications, and also regarding requirements such as written disclosures or waivers.)

§ 14.3 The Owner's representative is:  See Exhibit “D” attached hereto.

§ 14.4 The Contractor's representative is:  Bill Gray

§ 14.5 Neither the Owner's nor the Contractor's representative shall be changed without ten days' written notice to the other party.

§ 14.6 Other provisions:

 See Exhibit “D”, Special Provisions, attached hereto.

ARTICLE 15   ENUMERATION OF CONTRACT DOCUMENTS

§ 15.1 The Contract Documents, except for Modifications issued after full execution of this Agreement, are enumerated as follows:

§ 15.1.1 The Agreement is this executed 1997 edition of the Standard Form of Agreement Between Owner and Contractor, AIA Document A111-1997.

§ 15.1.2 The General Conditions are the 1997 edition of the General Conditions of the Contract for Construction, AIA Document A201-1997 modified and attached hereto as Exhibit “A”.

§ 15.1.3 The Supplementary and other Conditions of the Contract, if applicable, are those contained within the Contract Documents (including the Supplementary Conditions appended to the end of the General Conditions of the Contract for Construction attached hereto as Exhibit “A”

§ 15.1.4 The Specifications for Phase 1 of the Work are those contained within (i) the Project Manual - Nevada Power South District Operations Center - Tenant Improvements, dated January 22, 2007 and (ii) the Contract Documents listed in Exhibit “E-1”, List of Phase 1 Documents, attached hereto.  The Specifications for Phase 2 of the Work are those contained within (i) the Project Manual - Nevada Power South District Operations Center - Site Improvements, dated May 25, 2007, and (ii) the Contract Documents listed in Exhibit “E-2”, List of Phase 2 Documents, attached to this Agreement.  The Specifications for Phase 3 of the Work are those contained within (i) the Project Manual - Nevada Power System Control Room dated October 30, 2006, and (ii) the Contract Documents to be listed in Exhibit “E-3,” List of Phase 3 Documents, to be incorporated into this Agreement.  As of the date of this Agreement, Exhibit “E-2” lists the current Drawings for the Phase 2 Work.  Once final Drawings for the Phase 2 Work have been determined, Exhibit “E-2” shall be amended by the parties, who shall proceed expeditiously and in good faith to execute a Change Order incorporating the revised Exhibit “E-2” into this Agreement.  Once final Drawings for the Phase 3 Work have been determined, Exhibit “E-3” shall be completed by the parties, and the parties shall proceed expeditiously and in good faith to execute a Change Order setting forth the amount of the Phase 3 GMP, determined as provided in §5.2.1, and incorporating Exhibit “E-3” into this Agreement.

§ 15.1.5 The Drawings are set forth, or shall be set forth, in Exhibits “E-1”, “E-2” and “E-3” hereto.

§ 15.1.6 The Addenda, if any, are set forth, or shall be set forth in Exhibits “E-1”, “E-2”, and “E-3” hereto

Portions of Addenda relating to bidding requirements are not part of the Contract Documents unless the bidding requirements are also enumerated in this Article 15.

§ 15.1.7 Other Documents, if any, forming part of the Contract Documents are as follows:

Exhibit “A” – AIA A201 General Conditions

Exhibit “B” - Cost of the Work

Exhibit “C” – Insurance and Bonds

Exhibit “D” – Special Provisions

Exhibit “E-1” - List of Phase 1 Documents

Exhibit “E-2” - List of Phase 2 Documents

Exhibit “E-3” - List of Phase 3 Documents

Exhibit “F” – Cost Breakdown

Exhibit “G” – Project General Conditions

ARTICLE 16   INSURANCE AND BONDS

See Exhibit “C”, Insurance and Bonds, attached hereto.

This Agreement is entered into as of the day and year first written above and is executed in at least three original copies, of which one is to be delivered to the Contractor, one to the Architect for use in the administration of the Contract,  one to the Owner and one to the Tenant.

OWNER:                                                                                     CONTRACTOR:          NV Lic. No. 42911

BELTWAY BUSINESS PARK WAREHOUSE NO. 2,               COMMERCE CONSTRUCTION CO., L.P.

LLC, a Nevada limited liability company By:  Commerce C & R, Inc., Its General   Partner

By:   MAJESTIC BELTWAY WAREHOUSE BUILDINGS,        By: ________________________________

        LLC, a Delaware limited liability company, its Manager                John R. Burroughs

           President

        By: MAJESTIC REALTY CO., a California corporation,

              Manager’s Agent                                                             By: ________________________________

           William A. Gray Vice President

  By:_____________________________________                                                                                                           

              Name: __________________________________

              Its:_____________________________________

               By: ____________________________________

               Name: ________________________________

               Its:_____________________________________

By: THOMAS & MACK BELTWAY, L.L.C,

       a Nevada limited liability company, its Manager

       By:     _________________________

       Name: Thomas A. Thomas

       Its:       Manager

TENANT:

NEVADA POWER COMPANY, a Nevada corporation

By:  ______________________

Stephen R. Wood, Corporate Senior Vice President, Administration

Exhibit “A”

 for the following PROJECT:

(Name and location or address):

 BELTWAY BUSINESS PARK WAREHOUSE NO. 2, BLDG. 5

 7155 Lindell Road

 Las Vegas, NV 89118                                                                           Job #1914

THE OWNER:

(Name and address):

 BELTWAY BUSINESS PARK WAREHOUSE NO. 2, LLC

 c/o Majestic Realty Co.

 13191 Crossroads Pkwy., N. 6^th Floor

 City of Industry, CA 91746

THE ARCHITECT:

(Name and address):

 SH ARCHITECTURE

7373 Peak Drive, Suite 250

Las Vegas, NV 89128

TABLE OF ARTICLES

1 GENERAL PROVISIONS

2 OWNER

3 CONTRACTOR

4 ADMINISTRATION OF THE CONTRACT

5 SUBCONTRACTORS

6 CONSTRUCTION BY OWNER OR BY SEPARATE CONTRACTORS

7 CHANGES IN THE WORK

8 TIME

9 PAYMENTS AND COMPLETION

10 PROTECTION OF PERSONS AND PROPERTY

11 INSURANCE AND BONDS

12 UNCOVERING AND CORRECTION OF WORK

13 MISCELLANEOUS PROVISIONS

14 TERMINATION OR SUSPENSION OF THE CONTRACT

INDEX

(Numbers and Topics in Bold are Section Headings)

Acceptance of Nonconforming Work

9.6.6, 9.9.3, 12.3

Acceptance of Work

9.6.6, 9.8.2, 9.9.3, 9.10.1, 9.10.3, 12.3

Access to Work

3.16, 6.2.1, 12.1

Accident Prevention

4.2.3, 10

Acts and Omissions

3.2, 3.3.2, 3.12.8, 3.18, 4.2.3, 4.3.8, 4.4.1, 8.3.1, 9.5.1, 10.2.5, 13.4.2, 13.7, 14.1

Addenda

1.1.1, 3.11

Additional Costs, Claims for

4.3.4, 4.3.5, 4.3.6, 6.1.1, 10.3

Additional Inspections and Testing

9.8.3, 12.2.1, 13.5

Additional Time, Claims for

4.3.4, 4.3.7, 8.3.2

ADMINISTRATION OF THE CONTRACT

3.1.3, 4, 9.4, 9.5

Advertisement or Invitation to Bid

1.1.1

Aesthetic Effect

4.2.13, 4.5.1

Allowances

3.8

All-risk Insurance

11.4.1.1

Applications for Payment

4.2.5, 7.3.8, 9.2, 9.3, 9.4, 9.5.1, 9.6.3, 9.7.1, 9.8.5, 9.10, 11.1.3, 14.2.4, 14.4.3

Approvals

2.4, 3.1.3, 3.5, 3.10.2, 3.12, 4.2.7, 9.3.2, 13.4.2, 13.5

Arbitration

4.3.3, 4.4, 4.5.1, 4.5.2, 4.6, 8.3.1, 9.7.1, 11.4.9, 11.4.10

Architect

4.1

Architect, Definition of

4.1.1

Architect, Extent of Authority

2.4, 3.12.7, 4.2, 4.3.6, 4.4, 5.2, 6.3, 7.1.2, 7.3.6, 7.4, 9.2, 9.3.1, 9.4, 9.5, 9.8.3, 9.10.1,  9.10.3, 12.1, 12.2.1, 13.5.1, 13.5.2, 14.2.2, 14.2.4

Architect, Limitations of Authority and Responsibility

2.1.1, 3.3.3, 3.12.4, 3.12.8, 3.12.10, 4.1.2, 4.2.1, 4.2.2, 4.2.3, 4.2.6, 4.2.7, 4.2.10, 4.2.12, 4.2.13, 4.4, 5.2.1, 7.4, 9.4.2, 9.6.4, 9.6.6

Architect's Additional Services and Expenses

2.4, 11.4.1.1, 12.2.1, 13.5.2, 13.5.3, 14.2.4

Architect's Administration of the Contract

3.1.3, 4.2, 4.3.4, 4.4, 9.4, 9.5

Architect's Approvals

2.4, 3.1.3, 3.5.1, 3.10.2, 4.2.7

Architect's Authority to Reject Work

3.5.1, 4.2.6, 12.1.2, 12.2.1

Architect's Copyright

1.6

Architect's Decisions

4.2.6, 4.2.7, 4.2.11, 4.2.12, 4.2.13, 4.3.4, 4.4.1, 4.4.5, 4.4.6, 4.5, 6.3, 7.3.6, 7.3.8, 8.1.3, 8.3.1, 9.2, 9.4, 9.5.1, 9.8.4, 9.9.1, 13.5.2, 14.2.2, 14.2.4

Architect's Inspections

4.2.2, 4.2.9, 4.3.4, 9.4.2, 9.8.3, 9.9.2, 9.10.1, 13.5

Architect's Instructions

3.2.3, 3.3.1, 4.2.6, 4.2.7, 4.2.8, 7.4.1, 12.1, 13.5.2

Architect's Interpretations

4.2.11, 4.2.12, 4.3.6

Architect's Project Representative

4.2.10

Architect's Relationship with Contractor

1.1.2, 1.6, 3.1.3, 3.2.1, 3.2.2, 3.2.3, 3.3.1, 3.4.2, 3.5.1, 3.7.3, 3.10, 3.11, 3.12, 3.16, 3.18, 4.1.2, 4.1.3, 4.2, 4.3.4, 4.4.1, 4.4.7, 5.2, 6.2.2, 7, 8.3.1, 9.2, 9.3, 9.4, 9.5, 9.7, 9.8, 9.9,  10.2.6, 10.3, 11.3, 11.4.7, 12, 13.4.2, 13.5

Architect's Relationship with Subcontractors

1.1.2, 4.2.3, 4.2.4, 4.2.6, 9.6.3, 9.6.4, 11.4.7

Architect's Representations

9.4.2, 9.5.1, 9.10.1

Architect's Site Visits

4.2.2, 4.2.5, 4.2.9, 4.3.4, 9.4.2, 9.5.1, 9.9.2, 9.10.1, 13.5

Asbestos

10.3.1

Attorneys' Fees

3.18.1, 9.10.2, 10.3.3

Award of Separate Contracts

6.1.1, 6.1.2

Award of Subcontracts and Other Contracts for Portions of the Work

5.2

Basic Definitions

1.1

Bidding Requirements

1.1.1, 1.1.7, 5.2.1, 11.5.1

Boiler and Machinery Insurance

11.4.2

Bonds, Lien

9.10.2

Bonds, Performance, and Payment

7.3.6.4, 9.6.7, 9.10.3, 11.4.9, 11.5

Building Permit

3.7.1

Capitalization

1.3

Certificate of Substantial Completion

9.8.3, 9.8.4, 9.8.5

Certificates for Payment

4.2.5, 4.2.9, 9.3.3, 9.4, 9.5, 9.6.1, 9.6.6, 9.7.1, 9.10.1, 9.10.3, 13.7, 14.1.1.3, 14.2.4

Certificates of Inspection, Testing or Approval

13.5.4

Certificates of Insurance

9.10.2, 11.1.3

Change Orders

1.1.1, 2.4.1, 3.4.2, 3.8.2.3, 3.11.1, 3.12.8, 4.2.8, 4.3.4, 4.3.9, 5.2.3, 7.1, 7.2, 7.3, 8.3.1, 9.3.1.1, 9.10.3, 11.4.1.2, 11.4.4, 11.4.9, 12.1.2

Change Orders, Definition of

7.2.1

CHANGES IN THE WORK

3.11, 4.2.8, 7, 8.3.1, 9.3.1.1, 11.4.9

Claim, Definition of

4.3.1

Claims and Disputes

3.2.3, 4.3, 4.4, 4.5, 4.6, 6.1.1, 6.3, 7.3.8, 9.3.3, 9.10.4, 10.3.3

Claims and Timely Assertion of Claims

4.6.5

Claims for Additional Cost

3.2.3, 4.3.4, 4.3.5, 4.3.6, 6.1.1, 7.3.8, 10.3.2

Claims for Additional Time

3.2.3, 4.3.4, 4.3.7, 6.1.1, 8.3.2, 10.3.2

Claims for Concealed or Unknown Conditions

4.3.4

Claims for Damages

3.2.3, 3.18, 4.3.10, 6.1.1, 8.3.3, 9.5.1, 9.6.7, 10.3.3, 11.1.1, 11.4.5, 11.4.7, 14.1.3, 14.2.4

Claims Subject to Arbitration

4.4.1, 4.5.1, 4.6.1

Cleaning Up

3.15, 6.3

Commencement of Statutory Limitation Period

13.7

Commencement of the Work, Conditions Relating to

2.2.1, 3.2.1, 3.4.1, 3.7.1, 3.10.1, 3.12.6, 4.3.5, 5.2.1, 5.2.3, 6.2.2, 8.1.2, 8.2.2, 8.3.1, 11.1,  11.4.1, 11.4.6, 11.5.1

Commencement of the Work, Definition of

8.1.2

Communications Facilitating Contract Administration

3.9.1, 4.2.4

Completion, Conditions Relating to

1.6.1, 3.4.1, 3.11, 3.15, 4.2.2, 4.2.9, 8.2, 9.4.2, 9.8, 9.9.1, 9.10, 12.2, 13.7, 14.1.2

COMPLETION, PAYMENTS AND

9

Completion, Substantial

4.2.9, 8.1.1, 8.1.3, 8.2.3, 9.4.2, 9.8, 9.9.1, 9.10.3, 9.10.4.2, 12.2, 13.7

Compliance with Laws

1.6.1, 3.2.2, 3.6, 3.7, 3.12.10, 3.13, 4.1.1, 4.4.8, 4.6.4, 4.6.6, 9.6.4, 10.2.2, 11.1, 11.4, 13.1, 13.4, 13.5.1, 13.5.2, 13.6, 14.1.1, 14.2.1.3

Concealed or Unknown Conditions

4.3.4, 8.3.1, 10.3

Conditions of the Contract

1.1.1, 1.1.7, 6.1.1, 6.1.4

Consent, Written

1.6, 3.4.2, 3.12.8, 3.14.2, 4.1.2, 4.3.4, 4.6.4, 9.3.2, 9.8.5, 9.9.1, 9.10.2, 9.10.3, 11.4.1,  13.2, 13.4.2

CONSTRUCTION BY OWNER OR BY SEPARATE CONTRACTORS

1.1.4, 6

Construction Change Directive, Definition of

7.3.1

Construction Change Directives

1.1.1, 3.12.8, 4.2.8, 4.3.9, 7.1, 7.3, 9.3.1.1

Construction Schedules, Contractor's

1.4.1.2, 3.10, 3.12.1, 3.12.2, 4.3.7.2, 6.1.3

Contingent Assignment of Subcontracts

5.4, 14.2.2.2

Continuing Contract Performance

4.3.3

Contract, Definition of

1.1.2

CONTRACT, TERMINATION OR SUSPENSION OF THE

5.4.1.1, 11.4.9, 14

Contract Administration

3.1.3, 4, 9.4, 9.5

Contract Award and Execution, Conditions Relating to

3.7.1, 3.10, 5.2, 6.1, 11.1.3, 11.4.6, 11.5.1

Contract Documents, The

1.1, 1.2

Contract Documents, Copies Furnished and Use of

1.6, 2.2.5, 5.3

Contract Documents, Definition of

1.1.1

Contract Sum

3.8, 4.3.4, 4.3.5, 4.4.5, 5.2.3, 7.2, 7.3, 7.4, 9.1, 9.4.2, 9.5.1.4, 9.6.7, 9.7, 10.3.2, 11.4.1,  14.2.4, 14.3.2

Contract Sum, Definition of

9.1

Contract Time

4.3.4, 4.3.7, 4.4.5, 5.2.3, 7.2.1.3, 7.3, 7.4, 8.1.1, 8.2, 8.3.1, 9.5.1, 9.7, 10.3.2, 12.1.1,  14.3.2

Contract Time, Definition of

8.1.1

CONTRACTOR

3

Contractor, Definition of

3.1, 6.1.2

Contractor's Construction Schedules

1.4.1.2, 3.10, 3.12.1, 3.12.2, 4.3.7.2, 6.1.3

Contractor's Employees

3.3.2, 3.4.3, 3.8.1, 3.9, 3.18.2, 4.2.3, 4.2.6, 10.2, 10.3, 11.1.1, 11.4.7, 14.1, 14.2.1.1,

Contractor's Liability Insurance

11.1

Contractor's Relationship with Separate Contractors and Owner's Forces

3.12.5, 3.14.2, 4.2.4, 6, 11.4.7, 12.1.2, 12.2.4

Contractor's Relationship with Subcontractors

1.2.2, 3.3.2, 3.18.1, 3.18.2, 5, 9.6.2, 9.6.7, 9.10.2, 11.4.1.2, 11.4.7, 11.4.8

Contractor's Relationship with the Architect

1.1.2, 1.6, 3.1.3, 3.2.1, 3.2.2, 3.2.3, 3.3.1, 3.4.2, 3.5.1, 3.7.3, 3.10, 3.11, 3.12, 3.16, 3.18,  4.1.2, 4.1.3, 4.2, 4.3.4, 4.4.1, 4.4.7, 5.2, 6.2.2, 7, 8.3.1, 9.2, 9.3, 9.4, 9.5, 9.7, 9.8, 9.9,  10.2.6, 10.3, 11.3, 11.4.7, 12, 13.4.2, 13.5

Contractor's Representations

1.5.2, 3.5.1, 3.12.6, 6.2.2, 8.2.1, 9.3.3, 9.8.2

Contractor's Responsibility for Those Performing the Work

3.3.2, 3.18, 4.2.3, 4.3.8, 5.3.1, 6.1.3, 6.2, 6.3, 9.5.1, 10

Contractor's Review of Contract Documents

1.5.2, 3.2, 3.7.3

Contractor's Right to Stop the Work

9.7

Contractor's Right to Terminate the Contract

4.3.10, 14.1

Contractor's Submittals

3.10, 3.11, 3.12, 4.2.7, 5.2.1, 5.2.3, 7.3.6, 9.2, 9.3, 9.8.2, 9.8.3, 9.9.1, 9.10.2, 9.10.3,  11.1.3, 11.5.2

Contractor's Superintendent

3.9, 10.2.6

Contractor's Supervision and Construction Procedures

1.2.2, 3.3, 3.4, 3.12.10, 4.2.2, 4.2.7, 4.3.3, 6.1.3, 6.2.4, 7.1.3, 7.3.4, 7.3.6, 8.2, 10, 12, 14

Contractual Liability Insurance

11.1.1.8, 11.2, 11.3

Coordination and Correlation

1.2, 1.5.2, 3.3.1, 3.10, 3.12.6, 6.1.3, 6.2.1

Copies Furnished of Drawings and Specifications

1.6, 2.2.5, 3.11

Copyrights

1.6, 3.17

Correction of Work

2.3, 2.4, 3.7.4, 4.2.1, 9.4.2, 9.8.2, 9.8.3, 9.9.1, 12.1.2, 12.2, 13.7.1.3

Correlation and Intent of the Contract Documents

1.2

Cost, Definition of

7.3.6

Costs

2.4, 3.2.3, 3.7.4, 3.8.2, 3.15.2, 4.3, 5.4.2, 6.1.1, 6.2.3, 7.3.3.3, 7.3.6, 7.3.7, 7.3.8, 9.10.2, 10.3.2, 10.5, 11.3, 11.4, 12.1, 12.2.1, 12.2.4, 13.5, 14

Cutting and Patching

6.2.5, 3.14

Damage to Construction of Owner or Separate Contractors

3.14.2, 6.2.4, 9.2.1.5, 10.2.1.2, 10.2.5, 10.6, 11.1, 11.4, 12.2.4

Damage to the Work

3.14.2, 9.9.1, 10.2.1.2, 10.2.5, 10.6, 11.4, 12.2.4

Damages, Claims for

3.2.3, 3.18, 4.3.10, 6.1.1, 8.3.3, 9.5.1, 9.6.7, 10.3.3, 11.1.1, 11.4.5, 11.4.7, 14.1.3, 14.2.4

Damages for Delay

6.1.1, 8.3.3, 9.5.1.6, 9.7, 10.3.2

Date of Commencement of the Work, Definition of

8.1.2

Date of Substantial Completion, Definition of

8.1.3

Day, Definition of

8.1.4

Decisions of the Architect

4.2.6, 4.2.7, 4.2.11, 4.2.12, 4.2.13, 4.3.4, 4.4.1, 4.4.5, 4.4.6, 4.5, 6.3, 7.3.6, 7.3.8, 8.1.3, 8.3.1, 9.2, 9.4, 9.5.1, 9.8.4, 9.9.1, 13.5.2, 14.2.2, 14.2.4

Decisions to Withhold Certification

9.4.1, 9.5, 9.7, 14.1.1.3

Defective or Nonconforming Work, Acceptance, Rejection and Correction of

2.3, 2.4, 3.5.1, 4.2.6, 6.2.5, 9.5.1, 9.5.2, 9.6.6, 9.8.2, 9.9.3, 9.10.4, 12.2.1, 13.7.1.3

Defective Work, Definition of

3.5.1

Definitions

1.1, 2.1.1, 3.1, 3.5.1, 3.12.1, 3.12.2, 3.12.3, 4.1.1, 4.3.1, 5.1, 6.1.2, 7.2.1, 7.3.1, 7.3.6, 8.1,  9.1, 9.8.1

Delays and Extensions of Time

3.2.3, 4.3.1, 4.3.4, 4.3.7, 4.4.5, 5.2.3, 7.2.1, 7.3.1, 7.4.1, 8.3, 9.5.1, 9.7.1, 10.3.2,  10.6.1, 14.3.2

Disputes

4.1.4, 4.3, 4.4, 4.5, 4.6, 6.3, 7.3.8

Documents and Samples at the Site

3.11

Drawings, Definition of

1.1.5

Drawings and Specifications, Use and Ownership of

1.1.1, 1.3, 2.2.5, 3.11, 5.3

Effective Date of Insurance

8.2.2, 11.1.2

Emergencies

4.3.5, 10.6, 14.1.1.2

Employees, Contractor's

3.3.2, 3.4.3, 3.8.1, 3.9, 3.18.2, 4.2.3, 4.2.6, 10.2, 10.3, 11.1.1, 11.4.7, 14.1, 14.2.1.1

Equipment, Labor, Materials and

1.1.3, 1.1.6, 3.4, 3.5.1, 3.8.2, 3.8.3, 3.12, 3.13, 3.15.1, 4.2.6, 4.2.7, 5.2.1, 6.2.1, 7.3.6,  9.3.2, 9.3.3, 9.5.1.3, 9.10.2, 10.2.1, 10.2.4, 14.2.1.2

Execution and Progress of the Work

1.1.3, 1.2.1, 1.2.2, 2.2.3, 2.2.5, 3.1, 3.3, 3.4, 3.5, 3.7, 3.10, 3.12, 3.14, 4.2.2, 4.2.3, 4.3.3, 6.2.2, 7.1.3, 7.3.4, 8.2, 9.5, 9.9.1, 10.2, 10.3, 12.2, 14.2, 14.3

Extensions of Time

3.2.3, 4.3.1, 4.3.4, 4.3.7, 4.4.5, 5.2.3, 7.2.1, 7.3, 7.4.1, 9.5.1, 9.7.1, 10.3.2, 10.6.1, 14.3.2

Failure of Payment

4.3.6, 9.5.1.3, 9.7, 9.10.2, 14.1.1.3, 14.2.1.2, 13.6

Faulty Work

(See Defective or Nonconforming Work)

Final Completion and Final Payment

4.2.1, 4.2.9, 4.3.2, 9.8.2, 9.10, 11.1.2, 11.1.3, 11.4.1, 11.4.5, 12.3.1, 13.7, 14.2.4, 14.4.3

Financial Arrangements, Owner's

2.2.1, 13.2.2, 14.1.1.5

Fire and Extended Coverage Insurance

11.4

GENERAL PROVISIONS

1

Governing Law

13.1

Guarantees (See Warranty)

Hazardous Materials

10.2.4, 10.3, 10.5

Identification of Contract Documents

1.5.1

Identification of Subcontractors and Suppliers

5.2.1

Indemnification

3.17, 3.18, 9.10.2, 10.3.3, 10.5, 11.4.1.2, 11.4.7

Information and Services Required of the Owner

2.1.2, 2.2, 3.2.1, 3.12.4, 3.12.10, 4.2.7, 4.3.3, 6.1.3, 6.1.4, 6.2.5, 9.3.2, 9.6.1, 9.6.4, 9.9.2, 9.10.3, 10.3.3, 11.2, 11.4, 13.5.1, 13.5.2, 14.1.1.4, 14.1.4

Injury or Damage to Person or Property

4.3.8, 10.2, 10.6

Inspections

3.1.3, 3.3.3, 3.7.1, 4.2.2, 4.2.6, 4.2.9, 9.4.2, 9.8.2, 9.8.3, 9.9.2, 9.10.1, 12.2.1, 13.5

Instructions to Bidders

1.1.1

Instructions to the Contractor

3.2.3, 3.3.1, 3.8.1, 4.2.8, 5.2.1, 7, 12, 8.2.2, 13.5.2

Insurance

3.18.1, 6.1.1, 7.3.6, 8.2.1, 9.3.2, 9.8.4, 9.9.1, 9.10.2,  9.10.5, 11

Insurance, Boiler and Machinery

11.4.2

Insurance, Contractor's Liability

11.1

Insurance, Effective Date of

8.2.2, 11.1.2

Insurance, Loss of Use

11.4.3

Insurance, Owner's Liability

11.2

Insurance, Project Management Protective Liability

11.3

Insurance, Property

10.2.5, 11.4

Insurance, Stored Materials

9.3.2, 11.4.1.4

INSURANCE AND BONDS

11

Insurance Companies, Consent to Partial Occupancy

9.9.1, 11.4.1.5

Insurance Companies, Settlement with

11.4.10

Intent of the Contract Documents

1.2.1, 4.2.7, 4.2.12, 4.2.13, 7.4

Interest

13.6

Interpretation

1.2.3, 1.4, 4.1.1, 4.3.1, 5.1, 6.1.2, 8.1.4

Interpretations, Written

4.2.11, 4.2.12, 4.3.6

Joinder and Consolidation of Claims Required

4.6.4

Judgment on Final Award

4.6.6

Labor and Materials, Equipment

1.1.3, 1.1.6, 3.4, 3.5.1, 3.8.2, 3.8.3, 3.12, 3.13, 3.15.1, 42.6, 4.2.7, 5.2.1, 6.2.1, 7.3.6,  9.3.2, 9.3.3, 9.5.1.3, 9.10.2, 10.2.1, 10.2.4, 14.2.1.2

Labor Disputes

8.3.1

Laws and Regulations

1.6, 3.2.2, 3.6, 3.7, 3.12.10, 3.13, 4.1.1, 4.4.8, 4.6, 9.6.4, 9.9.1, 10.2.2, 11.1, 11.4, 13.1,  13.4, 13.5.1, 13.5.2, 13.6, 14

Liens

2.1.2, 4.4.8, 8.2.2, 9.3.3, 9.10

Limitation on Consolidation or Joinder

4.6.4

Limitations, Statutes of

4.6.3, 12.2.6, 13.7

Limitations of Liability

2.3, 3.2.1, 3.5.1, 3.7.3, 3.12.8, 3.12.10, 3.17, 3.18, 4.2.6, 4.2.7, 4.2.12, 6.2.2, 9.4.2, 9.6.4,  9.6.7, 9.10.4, 10.3.3, 10.2.5, 11.1.2, 11.2.1, 11.4.7, 12.2.5, 13.4.2

Limitations of Time

2.1.2, 2.2, 2.4, 3.2.1, 3.7.3, 3.10, 3.11, 3.12.5, 3.15.1, 4.2.7, 4.3, 4.4, 4.5, 4.6, 5.2, 5.3,  5.4, 6.2.4, 7.3, 7.4, 8.2, 9.2, 9.3.1, 9.3.3, 9.4.1, 9.5, 9.6, 9.7, 9.8, 9.9, 9.10, 11.1.3, 11.4.1.5, 11.4.6, 11.4.10, 12.2, 13.5, 13.7, 14

Loss of Use Insurance

11.4.3

Material Suppliers

1.6, 3.12.1, 4.2.4, 4.2.6, 5.2.1, 9.3, 9.4.2, 9.6, 9.10.5

Materials, Hazardous

10.2.4, 10.3, 10.5

Materials, Labor, Equipment and

1.1.3, 1.1.6, 1.6.1, 3.4, 3.5.1, 3.8.2, 3.8.23, 3.12, 3.13, 3.15.1, 4.2.6, 4.2.7, 5.2.1, 6.2.1,  7.3.6, 9.3.2, 9.3.3, 9.5.1.3, 9.10.2, 10.2.1, 10.2.4, 14.2.1.2

Means, Methods, Techniques, Sequences and Procedures of Construction

3.3.1, 3.12.10, 4.2.2, 4.2.7, 9.4.2

Mechanic's Lien

4.4.8

Mediation

4.4.1, 4.4.5, 4.4.6, 4.4.8, 4.5, 4.6.1, 4.6.2, 8.3.1, 10.5

Minor Changes in the Work

1.1.1, 3.12.8, 4.2.8, 4.3.6, 7.1, 7.4

MISCELLANEOUS PROVISIONS

13

Modifications, Definition of

1.1.1

Modifications to the Contract

1.1.1, 1.1.2, 3.7.3, 3.11, 4.1.2, 4.2.1, 5.2.3, 7, 8.3.1, 9.7, 10.3.2, 11.4.1

Mutual Responsibility

6.2

Nonconforming Work, Acceptance of

9.6.6, 9.9.3, 12.3

Nonconforming Work, Rejection and Correction of

2.3, 2.4, 3.5.1, 4.2.6, 6.2.5, 9.5.1, 9.8.2, 9.9.3, 9.10.4, 12.2.1, 13.7.1.3

Notice

2.2.1, 2.3, 2.4, 3.2.3, 3.3.1, 3.7.2, 3.7.4, 3.12.9, 4.3, 4.4.8, 4.6.5, 5.2.1, 8.2.2, 9.7, 9.10, 10.2.2, 11.1.3, 11.4.6, 12.2.2, 12.2.4, 13.3, 13.5.1, 13.5.2, 14.1, 14.2

Notice, Written

2.3, 2.4, 3.3.1, 3.9, 3.12.9, 3.12.10, 4.3, 4.4.8, 4.6.5, 5.2.1, 8.2.2, 9.7, 9.10, 10.2.2, 10.3,  11.1.3, 11.4.6, 12.2.2, 12.2.4, 13.3, 14

Notice of Testing and Inspections

13.5.1, 13.5.2

Notice to Proceed

8.2.2

Notices, Permits, Fees and

2.2.2, 3.7, 3.13, 7.3.6.4, 10.2.2

Observations, Contractor's

1.5.2, 3.2, 3.7.3, 4.3.4

Occupancy

2.2.2, 9.6.6, 9.8, 11.4.1.5

Orders, Written

1.1.1, 2.3, 3.9, 4.3.6, 7, 8.2.2, 11.4.9, 12.1, 12.2, 13.5.2, 14.3.1

OWNER

2

Owner, Definition of

2.1

Owner, Information and Services Required of the

2.1.2, 2.2, 3.2.1, 3.12.4, 3.12.10, 4.2.7, 4.3.3, 6.1.3, 6.1.4, 6.2.5, 9.3.2, 9.6.1, 9.6.4, 9.9.2, 9.10.3, 10.3.3, 11.2, 11.4, 13.5.1, 13.5.2, 14.1.1.4, 14.1.4

Owner's Authority

1.6, 2.1.1, 2.3, 2.4, 3.4.2, 3.8.1, 3.12.10, 3.14.2, 4.1.2, 4.1.3, 4.2.4, 4.2.9, 4.3.6, 4.4.7,  5.2.1, 5.2.4, 5.4.1, 6.1, 6.3, 7.2.1, 7.3.1, 8.2.2, 8.3.1, 9.3.1, 9.3.2, 9.5.1, 9.9.1, 9.10.2,  10.3.2, 11.1.3, 11.3.1, 11.4.3, 11.4.10, 12.2.2, 12.3.1, 13.2.2, 14.3, 14.4

Owner's Financial Capability

2.2.1, 13.2.2, 14.1.1.5

Owner's Liability Insurance

11.2

Owner's Loss of Use Insurance

11.4.3

Owner's Relationship with Subcontractors

1.1.2, 5.2, 5.3, 5.4, 9.6.4, 9.10.2, 14.2.2

Owner's Right to Carry Out the Work

2.4, 12.2.4. 14.2.2.2

Owner's Right to Clean Up

6.3

Owner's Right to Perform Construction and to Award Separate Contracts

6.1

Owner's Right to Stop the Work

2.3

Owner's Right to Suspend the Work

14.3

Owner's Right to Terminate the Contract

14.2

Ownership and Use of Drawings, Specifications and Other Instruments of Service

1.1.1, 1.6, 2.2.5, 3.2.1, 3.11.1, 3.17.1, 4.2.12, 5.3

Partial Occupancy or Use

9.6.6, 9.9, 11.4.1.5

Patching, Cutting and

3.14, 6.2.5

Patents

3.17

Payment, Applications for

4.2.5, 7.3.8, 9.2, 9.3, 9.4, 9.5.1, 9.6.3, 9.7.1, 9.8.5, 9.10.1, 9.10.3, 9.10.5, 11.1.3, 14.2.4, 14.4.3

Payment, Certificates for

4.2.5, 4.2.9, 9.3.3, 9.4, 9.5, 9.6.1, 9.6.6, 9.7.1, 9.10.1, 9.10.3, 13.7, 14.1.1.3, 14.2.4

Payment, Failure of

4.3.6, 9.5.1.3, 9.7, 9.10.2, 14.1.1.3, 14.2.1.2, 13.6

Payment, Final

4.2.1, 4.2.9, 4.3.2, 9.8.2, 9.10, 11.1.2, 11.1.3, 11.4.1, 11.4.5, 12.3.1, 13.7, 14.2.4, 14.4.3

Payment Bond, Performance Bond and

7.3.6.4, 9.6.7, 9.10.3, 11.4.9, 11.5

Payments, Progress

4.3.3, 9.3, 9.6, 9.8.5, 9.10.3, 13.6, 14.2.3

PAYMENTS AND COMPLETION

9

Payments to Subcontractors

5.4.2, 9.5.1.3, 9.6.2, 9.6.3, 9.6.4, 9.6.7, 11.4.8, 14.2.1.2

PCB

10.3.1

Performance Bond and Payment Bond

7.3.6.4, 9.6.7, 9.10.3, 11.4.9, 11.5

Permits, Fees and Notices

2.2.2, 3.7, 3.13, 7.3.6.4, 10.2.2

PERSONS AND PROPERTY, PROTECTION OF

10

Polychlorinated Biphenyl

10.3.1

Product Data, Definition of

3.12.2

Product Data and Samples, Shop Drawings

3.11, 3.12, 4.2.7

Progress and Completion

4.2.2, 4.3.3, 8.2, 9.8, 9.9.1, 14.1.4

Progress Payments

4.3.3, 9.3, 9.6, 9.8.5, 9.10.3, 13.6, 14.2.3

Project, Definition of the

1.1.4

Project Management Protective Liability Insurance

11.3

Project Manual, Definition of the

1.1.7

Project Manuals

2.2.5

Project Representatives

4.2.10

Property Insurance

10.2.5, 11.4

PROTECTION OF PERSONS AND PROPERTY

10

Regulations and Laws

1.6, 3.2.2, 3.6, 3.7, 3.12.10, 3.13, 4.1.1, 4.4.8, 4.6, 9.6.4, 9.9.1, 10.2.2, 11.1, 11.4, 13.1,  13.4, 13.5.1, 13.5.2, 13.6, 14

Rejection of Work

3.5.1, 4.2.6, 12.2.1

Releases and Waivers of Liens

9.10.2

Representations

1.5.2, 3.5.1, 3.12.6, 6.2.2, 8.2.1, 9.3.3, 9.4.2, 9.5.1, 9.8.2, 9.10.1

Representatives

2.1.1, 3.1.1, 3.9, 4.1.1, 4.2.1, 4.2.10, 5.1.1, 5.1.2, 13.2.1

Resolution of Claims and Disputes

4.4, 4.5, 4.6

Responsibility for Those Performing the Work

3.3.2, 3.18, 4.2.3, 4.3.8, 5.3.1, 6.1.3, 6.2, 6.3, 9.5.1, 10

Retainage

9.3.1, 9.6.2, 9.8.5, 9.9.1, 9.10.2, 9.10.3

Review of Contract Documents and Field Conditions by Contractor

1.5.2, 3.2, 3.7.3, 3.12.7, 6.1.3

Review of Contractor's Submittals by Owner and Architect

3.10.1, 3.10.2, 3.11, 3.12, 4.2, 5.2, 6.1.3, 9.2, 9.8.2

Review of Shop Drawings, Product Data and Samples by Contractor

3.12

Rights and Remedies

1.1.2, 2.3, 2.4, 3.5.1, 3.15.2, 4.2.6, 4.3.4, 4.5, 4.6, 5.3, 5.4, 6.1, 6.3, 7.3.1, 8.3, 9.5.1, 9.7,  10.2.5, 10.3, 12.2.2, 12.2.4, 13.4, 14

Royalties, Patents and Copyrights

3.17

Rules and Notices for Arbitration

4.6.2

Safety of Persons and Property

10.2, 10.6

Safety Precautions and Programs

3.3.1, 4.2.2, 4.2.7, 5.3.1, 10.1, 10.2, 10.6

Samples, Definition of

3.12.3

Samples, Shop Drawings, Product Data and

3.11, 3.12, 4.2.7

Samples at the Site, Documents and

3.11

Schedule of Values

9.2, 9.3.1

Schedules,

1.4.1.2, 3.10, 3.Construction12.1, 3.12.2, 4.3.7.2, 6.1.3

Separate Contracts and Contractors

1.1.4, 3.12.5, 3.14.2, 4.2.4, 4.2.7, 4.6.4, 6, 8.3.1, 11.4.7,  12.1.2, 12.2.5

Shop Drawings, Definition of

3.12.1

Shop Drawings, Product Data and Samples

3.11, 3.12, 4.2.7

Site, Use of

3.13, 6.1.1, 6.2.1

Site Inspections

1.2.2, 3.2.1, 3.3.3, 3.7.1, 4.2, 4.3.4, 9.4.2, 9.10.1, 13.5

Site Visits, Architect's

4.2.2, 4.2.9, 4.3.4, 9.4.2, 9.5.1, 9.9.2, 9.10.1, 13.5

Special Inspections and Testing

4.2.6, 12.2.1, 13.5

Specifications, Definition of the

1.1.6

Specifications, The

1.1.1, 1.1.6, 1.1.7, 1.2.2, 1.6, 3.11, 3.12.10, 3.17

Statute of Limitations

4.6.3, 12.2.6, 13.7

Stopping the Work

2.3, 4.3.6, 9.7, 10.3, 14.1

Stored Materials

6.2.1, 9.3.2, 10.2.1.2, 10.2.4, 11.4.1.4

Subcontractor, Definition of

5.1.1

SUBCONTRACTORS

5

Subcontractors, Work by

1.2.2, 3.3.2, 3.12.1, 4.2.3, 5.2.3, 5.3, 5.4, 9.3.1.2, 9.6.7

Subcontractual Relations

5.3, 5.4, 9.3.1.2, 9.6, 9.10 10.2.1, 11.4.7, 11.4.8, 14.1, 14.2.1, 14.3.2

Submittals

1.6, 3.10, 3.11, 3.12, 4.2.7, 5.2.1, 5.2.3, 7.3.6, 9.2, 9.3, 9.8, 9.9.1, 9.10.2, 9.10.3, 11.1.3

Subrogation, Waivers of

6.1.1, 11.4.5, 11.4.7

Substantial Completion

4.2.9, 8.1.1, 8.1.3, 8.2.3, 9.4.2, 9.8, 9.9.1, 9.10.3, 9.10.4.2, 12.2, 13.7

Substantial Completion, Definition of

9.8.1

Substitution of Subcontractors

5.2.3, 5.2.4

Substitution of Architect

4.1.3

Substitutions of Materials

3.4.2, 3.5.1, 7.3.7

Sub-subcontractor, Definition of

5.1.2

Subsurface Conditions

4.3.4

Successors and Assigns

13.2

Superintendent

3.9, 10.2.6

Supervision and Construction Procedures

1.2.2, 3.3, 3.4, 3.12.10, 4.2.2, 4.2.7, 4.3.3, 6.1.3, 6.2.4, 7.1.3, 7.3.6, 8.2, 8.3.1, 9.4.2, 10,  12, 14

Surety

4.4.7, 5.4.1.2, 9.8.5, 9.10.2, 9.10.3, 14.2.2

Surety, Consent of

9.10.2, 9.10.3

Surveys

2.2.3

Suspension by the Owner for Convenience

14.4

Suspension of the Work

5.4.2, 14.3

Suspension or Termination of the Contract

4.3.6, 5.4.1.1, 11.4.9, 14

Taxes

3.6, 3.8.2.1, 7.3.6.4

Termination by the Contractor

4.3.10, 14.1

Termination by the Owner for Cause

4.3.10, 5.4.1.1, 14.2

Termination of the Architect

4.1.3

Termination of the Contractor

14.2.2

TERMINATION OR SUSPENSION OF THE CONTRACT

14

Tests and Inspections

3.1.3, 3.3.3, 4.2.2, 4.2.6, 4.2.9, 9.4.2, 9.8.3, 9.9.2, 9.10.1, 10.3.2, 11.4.1.1, 12.2.1,13.5

TIME

8

Time, Delays and Extensions of

3.2.3, 4.3.1, 4.3.4, 4.3.7, 4.4.5, 5.2.3, 7.2.1, 7.3.1, 7.4.1, 8.3, 9.5.1, 9.7.1, 10.3.2,  10.6.1, 14.3.2

Time Limits

2.1.2, 2.2, 2.4, 3.2.1, 3.7.3, 3.10, 3.11, 3.12.5, 3.15.1, 4.2, 4.3, 4.4, 4.5, 4.6, 5.2, 5.3, 5.4,  6.2.4, 7.3, 7.4, 8.2, 9.2, 9.3.1, 9.3.3, 9.4.1, 9.5, 9.6, 9.7, 9.8, 9.9, 9.10, 11.1.3, 11.4.1.5,  11.4.6, 11.4.10, 12.2, 13.5, 13.7, 14

Time Limits on Claims

4.3.2, 4.3.4, 4.3.8, 4.4, 4.5, 4.6

Title to Work

9.3.2, 9.3.3

UNCOVERING AND CORRECTION OF WORK

12

Uncovering of Work

12.1

Unforeseen Conditions

4.3.4, 8.3.1, 10.3

Unit Prices

4.3.9, 7.3.3.2

Use of Documents

1.1.1, 1.6, 2.2.5, 3.12.6, 5.3

Use of Site

3.13, 6.1.1, 6.2.1

Values, Schedule of

9.2, 9.3.1

Waiver of Claims by the Architect

13.4.2

Waiver of Claims by the Contractor

4.3.10, 9.10.5, 11.4.7, 13.4.2

Waiver of Claims by the Owner

4.3.10, 9.9.3, 9.10.3, 9.10.4, 11.4.3, 11.4.5, 11.4.7, 12.2.2.1, 13.4.2, 14.2.4

Waiver of Consequential Damages

4.3.10, 14.2.4

Waiver of Liens

9.10.2, 9.10.4

Waivers of Subrogation

6.1.1, 11.4.5, 11.4.7

Warranty

3.5, 4.2.9, 4.3.5.3, 9.3.3, 9.8.4, 9.9.1, 9.10.4, 12.2.2, 13.7.1.3

Weather Delays

4.3.7.2

Work, Definition of

1.1.3

Written Consent

1.6, 3.4.2, 3.12.8, 3.14.2, 4.1.2, 4.3.4, 4.6.4, 9.3.2, 9.8.5, 9.9.1, 9.10.2, 9.10.3, 11.4.1,  13.2, 13.4.2

Written Interpretations

4.2.11, 4.2.12, 4.3.6

Written Notice

2.3, 2.4, 3.3.1, 3.9, 3.12.9, 3.12.10, 4.3, 4.4.8, 4.6.5, 5.2.1, 8.2.2, 9.7, 9.10, 10.2.2, 10.3,  11.1.3, 11.4.6, 12.2.2, 12.2.4, 13.3, 14

Written Orders

1.1.1, 2.3, 3.9, 4.3.6, 7, 8.2.2, 11.4.9, 12.1, 12.2, 13.5.2, 14.3.1

ARTICLE 1   GENERAL PROVISIONS

§ 1.1 BASIC DEFINITIONS

§ 1.1.1 THE CONTRACT DOCUMENTS

The Contract Documents consist of the Agreement between Owner and Contractor (hereinafter the Agreement), Conditions of the Contract (General, Supplementary and other Conditions), Drawings, Specifications, Addenda issued prior to execution of the Contract, other documents listed in the Agreement and Modifications issued after execution of the Contract. A Modification is (1) a written amendment to the Contract signed by both parties, (2) a Change Order, (3) a Construction Change Directive or (4) a written order for a minor change in the Work issued by the Architect. Unless specifically enumerated in the Agreement, the Contract Documents do not include other documents such as bidding requirements (advertisement or invitation to bid, Instructions to Bidders, sample forms, the Contractor's bid or portions of Addenda relating to bidding requirements).

§ 1.1.2 THE CONTRACT

The Contract Documents form the Contract for Construction. The Contract represents the entire and integrated agreement between the parties hereto and supersedes prior negotiations, representations or agreements, either written or oral. The Contract may be amended or modified only by a Modification. Except as otherwise expressly stated in the Contract Documents and as set forth in Exhibit “D” to the Agreement, the Contract Documents shall not be construed to create a contractual relationship of any kind (1) between the Architect and Contractor, (2) between the Owner and a Subcontractor or Sub-subcontractor, (3) between the Owner and Architect or (4) between any persons or entities other than the Owner and Contractor. At the Owner’s discretion, the Architect shall, however, be entitled to performance and enforcement of obligations under the Contract intended to facilitate performance of the Architect's duties.

§ 1.1.3 THE WORK

The term "Work" means the construction and services required by the Contract Documents, whether completed or partially completed, and includes all other labor, materials, equipment and services provided or to be provided by the Contractor to fulfill the Contractor's obligations. The Work may constitute the whole or a part of the Project.  The Work shall be completed in Phases as defined and described in Exhibit “D” attached hereto.

§ 1.1.4 THE PROJECT

The Project is the total construction of which the Work performed under the Contract Documents may be the whole or a part and which may include construction by the Owner or by separate contractors.

§ 1.1.5 THE DRAWINGS

The Drawings are the graphic and pictorial portions of the Contract Documents showing the design, location and dimensions of the Work, generally including plans, elevations, sections, details, schedules and diagrams.

§ 1.1.6 THE SPECIFICATIONS

The Specifications are that portion of the Contract Documents consisting of the written requirements for materials, equipment, systems, standards and workmanship for the Work, and performance of related services.

§ 1.1.7 THE PROJECT MANUAL

The Project Manual is a volume assembled for the Work which may include the bidding requirements, sample forms, Conditions of the Contract and Specifications.

§ 1.2 CORRELATION AND INTENT OF THE CONTRACT DOCUMENTS

§ 1.2.1 The intent of the Contract Documents is to include all items necessary for the proper execution and completion of the Work by the Contractor. The Contract Documents are complementary, and what is required by one shall be as binding as if required by all; performance by the Contractor shall be required only to the extent consistent with the Contract Documents and reasonably inferable from them as being necessary to produce the indicated results.

§ 1.2.2 Organization of the Specifications into divisions, sections and articles, and arrangement of Drawings shall not control the Contractor in dividing the Work among Subcontractors or in establishing the extent of Work to be performed by any trade.

§ 1.2.3 Unless otherwise stated in the Contract Documents, words which have well-known technical or construction industry meanings are used in the Contract Documents in accordance with such recognized meanings.

§ 1.3 CAPITALIZATION

§ 1.3.1 Terms capitalized in these General Conditions include those which are (1) specifically defined, (2) the titles of numbered articles or (3) the titles of other documents published by the American Institute of Architects.

§ 1.4 INTERPRETATION

§ 1.4.1 In the interest of brevity the Contract Documents frequently omit modifying words such as "all" and "any" and articles such as "the" and "an," but the fact that a modifier or an article is absent from one statement and appears in another is not intended to affect the interpretation of either statement.

§ 1.5 EXECUTION OF CONTRACT DOCUMENTS

§ 1.5.1 The Contract Documents shall be signed by the Owner and Contractor. If either the Owner or Contractor or both do not sign all the Contract Documents, the Architect shall identify such unsigned Documents upon request.

§ 1.5.2 Execution of the Contract by the Contractor is a representation that the Contractor has visited the site, become generally familiar with local conditions under which the Work is to be performed and correlated personal observations with requirements of the Contract Documents.

§ 1.6 OWNERSHIP AND USE OF DRAWINGS, SPECIFICATIONS AND OTHER INSTRUMENTS OF SERVICE

§ 1.6.1 The Drawings, Specifications and other documents, including those in electronic form, prepared by the Architect and the Architect's consultants are Instruments of Service through which the Work to be executed by the Contractor is described. The Contractor may retain one record set. Neither the Contractor nor any Subcontractor, Sub-subcontractor or material or equipment supplier shall own or claim a copyright in the Drawings, Specifications and other documents prepared by the Architect or the Architect's consultants, and unless otherwise indicated the Architect and the Architect's consultants shall be deemed the authors of them and will retain all common law, statutory and other reserved rights, in addition to the copyrights. All copies of Instruments of Service, except the Contractor's record set, shall be returned or suitably accounted for to the Architect, on request, upon completion of the Work. The Drawings, Specifications and other documents prepared by the Architect and the Architect's consultants, and copies thereof furnished to the Contractor, are for use solely with respect to this Project. They are not to be used by the Contractor or any Subcontractor, Sub-subcontractor or material or equipment supplier on other projects or for additions to this Project outside the scope of the Work without the specific written consent of the Owner, Architect and the Architect's consultants. The Contractor, Subcontractors, Sub-subcontractors and material or equipment suppliers are authorized to use and reproduce applicable portions of the Drawings, Specifications and other documents prepared by the Architect and the Architect's consultants appropriate to and for use in the execution of their Work under the Contract Documents. All copies made under this authorization shall bear the statutory copyright notice, if any, shown on the Drawings, Specifications and other documents prepared by the Architect and the Architect's consultants. Submittal or distribution to meet official regulatory requirements or for other purposes in connection with this Project is not to be construed as publication in derogation of the Architect's or Architect's consultants' copyrights or other reserved rights.

ARTICLE 2   OWNER

§ 2.1 GENERAL

§ 2.1.1 The Owner is the person or entity identified as such in the Agreement and is referred to throughout the Contract Documents as if singular in number. The Owner shall designate in writing a representative who shall have express authority to bind the Owner with respect to all matters requiring the Owner's approval or authorization. Except as otherwise provided in Section 4.2.1, the Architect does not have such authority. The term "Owner" means the Owner or the Owner's authorized representative.

§ 2.1.2 The Owner shall furnish to the Contractor within fifteen days after receipt of a written request, information necessary and relevant for the Contractor to evaluate, give notice of or enforce mechanic's lien rights. Such information shall include a correct statement of the record legal title to the property on which the Project is located, usually referred to as the site, and the Owner's interest therein.

§ 2.2 INFORMATION AND SERVICES REQUIRED OF THE OWNER

§ 2.2.1 The Owner shall, at the written request of the Contractor, prior to commencement of the Work and thereafter, furnish to the Contractor reasonable evidence that financial arrangements have been made to fulfill the Owner's obligations under the Contract. Furnishing of such evidence shall be a condition precedent to commencement or continuation of the Work. After such evidence has been furnished, the Owner shall not materially vary such financial arrangements without prior notice to the Contractor.

§ 2.2.2 Except for permits and fees, including those required under Section 3.7.1, which are the responsibility of the Contractor under the Contract Documents, the Owner shall secure and pay for necessary approvals, easements, assessments and charges required for construction, use or occupancy of permanent structures or for permanent changes in existing facilities.

§ 2.2.3 The Owner shall furnish surveys describing physical characteristics, legal limitations and utility locations for the site of the Project, and a legal description of the site. The Contractor shall be entitled to rely on the accuracy of information furnished by the Owner but shall exercise proper precautions relating to the safe performance of the Work.

§ 2.2.4 Information or services required of the Owner by the Contract Documents shall be furnished by the Owner with reasonable promptness. Any other information or services relevant to the Contractor's performance of the Work under the Owner's control shall be furnished by the Owner after receipt from the Contractor of a written request for such information or services.

§ 2.2.5 Unless otherwise provided in the Contract Documents, the Contractor will be furnished, free of charge, such copies of Drawings and Project Manuals as are reasonably necessary for execution of the Work.

§ 2.3 OWNER'S RIGHT TO STOP THE WORK

§ 2.3.1 If the Contractor fails to correct Work which is not in accordance with the requirements of the Contract Documents as required by Section 12.2 or persistently fails to carry out Work in accordance with the Contract Documents, the Owner may issue a written order to the Contractor to stop the Work, or any portion thereof, until the cause for such order has been eliminated; however, the right of the Owner to stop the Work shall not give rise to a duty on the part of the Owner to exercise this right for the benefit of the Contractor or any other person or entity, except to the extent required by Section 6.1.3.

§ 2.4 OWNER'S RIGHT TO CARRY OUT THE WORK

§ 2.4.1 If the Contractor defaults or neglects to carry out the Work in accordance with the Contract Documents and fails within a seven-day period after receipt of written notice from the Owner to commence and continue correction of such default or neglect with diligence and promptness, the Owner may after such seven-day period give the Contractor a second written notice to correct such deficiencies within a three-day period. If the Contractor within such three-day period after receipt of such second notice fails to commence and continue to correct any deficiencies, the Owner may, without prejudice to other remedies the Owner may have, correct such deficiencies. In such case an appropriate Change Order shall be issued deducting from payments then or thereafter due the Contractor the reasonable cost of correcting such deficiencies, including Owner's expenses and compensation for the Architect's additional services made necessary by such default, neglect or failure. Such action by the Owner and amounts charged to the Contractor are both subject to prior approval of the Architect. If payments then or thereafter due the Contractor are not sufficient to cover such amounts, the Contractor shall pay the difference to the Owner.

ARTICLE 3   CONTRACTOR

§ 3.1 GENERAL

§ 3.1.1 The Contractor is the person or entity identified as such in the Agreement and is referred to throughout the Contract Documents as if singular in number. The term "Contractor" means the Contractor or the Contractor's authorized representative.

§ 3.1.2 The Contractor shall perform the Work in accordance with the Contract Documents.

§ 3.1.3 The Contractor shall not be relieved of obligations to perform the Work in accordance with the Contract Documents either by activities or duties of the Architect in the Architect's administration of the Contract, or by tests, inspections or approvals required or performed by persons other than the Contractor.

§ 3.2 REVIEW OF CONTRACT DOCUMENTS AND FIELD CONDITIONS BY CONTRACTOR

§ 3.2.1 Since the Contract Documents are complementary, before starting each portion of the Work, the Contractor shall carefully study and compare the various Drawings and other Contract Documents relative to that portion of the Work, as well as the information furnished by the Owner pursuant to Section 2.2.3, shall take field measurements of any existing conditions related to that portion of the Work and shall observe any conditions at the site affecting it. These obligations are for the purpose of facilitating construction by the Contractor and are not for the purpose of discovering errors, omissions, or inconsistencies in the Contract Documents; however, any errors, inconsistencies or omissions discovered by the Contractor shall be reported promptly to the Architect and the Owner as a request for information in such form as the Architect and Owner may require.

§ 3.2.2 Any design errors or omissions noted by the Contractor during this review shall be reported promptly to the Architect and the Owner, but it is recognized that the Contractor's review is made in the Contractor's capacity as a contractor and not as a licensed design professional unless the error or omissions is related to the Contractor’s Design/Build scope of work, if any, or as otherwise specifically provided in the Contract Documents. The Contractor is not required to ascertain that the Contract Documents are in accordance with applicable laws, statutes, ordinances, building codes, and rules and regulations, but any nonconformity discovered by or made known to the Contractor shall be reported promptly to the Architect and the Owner.  The contractor is required to ascertain that any Design/Build contract documents, if any, are in accordance with governing laws, statutes, ordinances, building codes, rules and regulations.

§ 3.2.3 If the Contractor believes that additional cost or time is involved because of clarifications or instructions issued by the Owner or the Architect in response to the Contractor's notices or requests for information pursuant to Sections 3.2.1 and 3.2.2, the Contractor shall make Claims as provided in Sections 4.3.6 and 4.3.7. If the Contractor fails to perform the obligations of Sections 3.2.1 and 3.2.2, the Contractor shall pay such costs and damages to the Owner as would have been avoided if the Contractor had performed such obligations. The Contractor shall not be liable to the Owner or Architect for damages resulting from errors, inconsistencies or omissions in the Contract Documents or for differences between field measurements or conditions and the Contract Documents unless the Contractor recognized such error, inconsistency, omission or difference and knowingly failed to report it to the Architect and the Owner.

§ 3.3 SUPERVISION AND CONSTRUCTION PROCEDURES

§ 3.3.1 The Contractor shall supervise and direct the Work, using the Contractor's best skill and attention. The Contractor shall be solely responsible for and have control over construction means, methods, techniques, sequences and procedures and for coordinating all portions of the Work under the Contract, unless the Contract Documents give other specific instructions concerning these matters. If the Contract Documents give specific instructions concerning construction means, methods, techniques, sequences or procedures, the Contractor shall evaluate the jobsite safety thereof and, except as stated below, shall be fully and solely responsible for the jobsite safety of such means, methods, techniques, sequences or procedures. If the Contractor determines that such means, methods, techniques, sequences or procedures may not be safe, the Contractor shall give timely written notice to the Owner and Architect and shall not proceed with that portion of the Work without further written instructions from the Architect. If the Contractor is then instructed to proceed with the required means, methods, techniques, sequences or procedures without acceptance of changes proposed by the Contractor, the Owner shall be solely responsible for any resulting loss or damage.

§ 3.3.2 The Contractor shall be responsible to the Owner for acts and omissions of the Contractor's employees, Subcontractors and their agents and employees, and other persons or entities performing portions of the Work for or on behalf of the Contractor or any of its Subcontractors.

§ 3.3.3 The Contractor shall be responsible for inspection of portions of Work already performed to determine that such portions are in proper condition to receive subsequent Work.

§ 3.4 LABOR AND MATERIALS

§ 3.4.1 Unless otherwise provided in the Contract Documents, the Contractor shall provide and pay for labor, materials, equipment, tools, construction equipment and machinery, water, heat, utilities, transportation, and other facilities and services necessary for proper execution and completion of the Work, whether temporary or permanent and whether or not incorporated or to be incorporated in the Work.

§ 3.4.2 The Contractor may make substitutions only with the consent of the Owner, after evaluation by the Architect and Owner and in accordance with a Change Order.

§ 3.4.3 The Contractor shall enforce strict discipline and good order among the Contractor's employees and other persons carrying out the Contract. The Contractor shall not permit employment of unfit persons or persons not skilled in tasks assigned to them.

§ 3.5 WARRANTY

§ 3.5.1 The Contractor warrants to the Owner and Architect that materials and equipment furnished under the Contract will be of good quality and new unless otherwise required or permitted by the Contract Documents, that the Work will be free from defects not inherent in the quality required or permitted, and that the Work will conform to the requirements of the Contract Documents. Work not conforming to these requirements, including substitutions not properly approved and authorized, may be considered defective.  The Contractor's warranty excludes remedy for damage or defect caused by abuse, modifications not executed by the Contractor, improper or insufficient maintenance, improper operation, or normal wear and tear and normal usage. If required by the Architect, the Contractor shall furnish satisfactory evidence as to the kind and quality of materials and equipment.

§ 3.6 TAXES

§ 3.6.1 The Contractor shall pay sales, consumer, use and similar taxes for the Work provided by the Contractor which are legally enacted when bids are received or negotiations concluded, whether or not yet effective or merely scheduled to go into effect.

§ 3.7 PERMITS, FEES AND NOTICES

§ 3.7.1 Unless otherwise provided in the Contract Documents, the Contractor shall secure and pay for the building permit and other permits and governmental fees, licenses and inspections necessary for proper execution and completion of the Work which are customarily secured after execution of the Contract and which are legally required when bids are received or negotiations concluded.

§ 3.7.2 The Contractor shall comply with and give notices required by laws, ordinances, rules, regulations and lawful orders of public authorities applicable to performance of the Work.

§ 3.7.3 It is not the Contractor's responsibility to ascertain that the Contract Documents are in accordance with applicable laws, statutes, ordinances, building codes, and rules and regulations. However, if the Contractor observes that portions of the Contract Documents are at variance therewith, the Contractor shall promptly notify the Architect and Owner in writing, and necessary changes shall be accomplished by appropriate Modification.  It is the Contractor’s responsibility to ascertain that the Contract Documents for all Design/Build portions of the work, if any, are in accordance with all applicable building codes, statutes and ordinances.

§ 3.7.4 If the Contractor performs Work knowing it to be contrary to laws, statutes, ordinances, building codes, and rules and regulations without such notice to the Architect and Owner, the Contractor shall assume appropriate responsibility for such Work and shall bear the costs attributable to correction.

§ 3.8 ALLOWANCES

§ 3.8.1 The Contractor shall include in the Contract Sum all allowances stated in the Contract Documents. Items covered by allowances shall be supplied for such amounts and by such persons or entities as the Owner may direct, but the Contractor shall not be required to employ persons or entities to whom the Contractor has reasonable objection.

§ 3.8.2 Unless otherwise provided in the Contract Documents:

.1 allowances shall cover the cost to the Contractor of materials and equipment delivered at the site and all required taxes, less applicable trade discounts;

.2 Contractor's costs for unloading and handling at the site, labor, installation costs, overhead, profit and other expenses contemplated for stated allowance amounts shall be included in the Contract Sum and in the allowances;

.3 whenever costs are more than or less than allowances, the Contract Sum shall be adjusted accordingly by Change Order. The amount of the Change Order shall reflect (1) the difference between actual costs and the allowances under Section 3.8.2.1 and (2) changes in Contractor's costs under Section 3.8.2.2.

§ 3.8.3 Materials and equipment under an allowance shall be selected by the Owner in sufficient time to avoid delay in the Work.

§ 3.9 SUPERINTENDENT

§ 3.9.1 The Contractor shall employ a competent superintendent and necessary assistants who shall be in attendance at the Project site during performance of the Work. The superintendent shall represent the Contractor, and communications given to the superintendent shall be as binding as if given to the Contractor. Important communications shall be confirmed in writing. Other communications shall be similarly confirmed on written request in each case.

§ 3.10 CONTRACTOR'S CONSTRUCTION SCHEDULES

§ 3.10.1 The Contractor, promptly after being awarded the Contract, shall prepare and submit for the Owner's and Architect's information a Contractor's construction schedule for Phase 1 of the Work. The Contractor, promptly after its receipt of final Drawings and Specifications for each of Phase 2 and Phase 3, shall prepare and submit for the Owner’s and Architect’s information Contractor’s construction schedule for each such Phase of the Work.    Each schedule shall not exceed time limits current under the Contract Documents, shall be revised at appropriate intervals as required by the conditions of the Work and Project, shall be related to the entire applicable Phase of the Work to be completed at the Project to the extent required by the Contract Documents, and shall provide for expeditious and practicable execution of the Work.

§ 3.10.2 The Contractor shall prepare and keep current, for the Architect's approval, a schedule of submittals which is coordinated with the Contractor's applicable construction schedule and allows the Architect reasonable time to review submittals.

§ 3.10.3 The Contractor shall perform each Phase of the Work in general accordance with the most recent applicable schedules submitted to the Owner and Architect.

§ 3.11 DOCUMENTS AND SAMPLES AT THE SITE

§ 3.11.1 The Contractor shall maintain at the site for the Owner one record copy of the Drawings, Specifications, Addenda, Change Orders and other Modifications, in good order and marked currently to record field changes and selections made during construction, and one record copy of approved Shop Drawings, Product Data, Samples and similar required submittals. These shall be available to the Architect and shall be delivered to the Architect for submittal to the Owner upon completion of the Work.

§ 3.12 SHOP DRAWINGS, PRODUCT DATA AND SAMPLES

§ 3.12.1 Shop Drawings are drawings, diagrams, schedules and other data specially prepared for the Work by the Contractor or a Subcontractor, Sub-subcontractor, manufacturer, supplier or distributor to illustrate some portion of the Work.

§ 3.12.2 Product Data are illustrations, standard schedules, performance charts, instructions, brochures, diagrams and other information furnished by the Contractor to illustrate materials or equipment for some portion of the Work.

§ 3.12.3 Samples are physical examples which illustrate materials, equipment or workmanship and establish standards by which the Work will be judged.

§ 3.12.4 Shop Drawings, Product Data, Samples and similar submittals are not Contract Documents. The purpose of their submittal is to demonstrate for those portions of the Work for which submittals are required by the Contract Documents the way by which the Contractor proposes to conform to the information given and the design concept expressed in the Contract Documents. Review by the Architect is subject to the limitations of Section 4.2.7. Informational submittals upon which the Architect is not expected to take responsive action may be so identified in the Contract Documents. Submittals which are not required by the Contract Documents may be returned by the Architect without action.

§ 3.12.5 The Contractor shall review for compliance with the Contract Documents, approve and submit to the Architect Shop Drawings, Product Data, Samples and similar submittals required by the Contract Documents with reasonable promptness and in such sequence as to cause no delay in the Work or in the activities of the Owner or of separate contractors. Submittals which are not marked as reviewed for compliance with the Contract Documents and approved by the Contractor may be returned by the Architect without action.

§ 3.12.6 By approving and submitting Shop Drawings, Product Data, Samples and similar submittals, the Contractor represents that the Contractor has determined and verified materials, field measurements and field construction criteria related thereto, or will do so, and has checked and coordinated the information contained within such submittals with the requirements of the Work and of the Contract Documents.

§ 3.12.7 The Contractor shall perform no portion of the Work for which the Contract Documents require submittal and review of Shop Drawings, Product Data, Samples or similar submittals until the respective submittal has been approved by the Architect.

§ 3.12.8 The Work shall be in accordance with approved submittals except that the Contractor shall not be relieved of responsibility for deviations from requirements of the Contract Documents by the Architect's approval of Shop Drawings, Product Data, Samples or similar submittals unless the Contractor has specifically informed the Architect in writing of such deviation at the time of submittal and (1) the Architect has given written approval to the specific deviation as a minor change in the Work, or (2) a Change Order or Construction Change Directive has been issued authorizing the deviation. The Contractor shall not be relieved of responsibility for errors or omissions in Shop Drawings, Product Data, Samples or similar submittals by the Architect's approval thereof.

§ 3.12.9 The Contractor shall direct specific attention, in writing or on resubmitted Shop Drawings, Product Data, Samples or similar submittals, to revisions other than those requested by the Architect on previous submittals. In the absence of such written notice the Architect's approval of a resubmission shall not apply to such revisions.

§ 3.12.10 Except for the Design/Build portion of the work, if any, the Contractor shall not be required to provide professional services which constitute the practice of architecture or engineering unless such services are specifically required by the Contract Documents for a portion of the Work or unless the Contractor needs to provide such services in order to carry out the Contractor's responsibilities for construction means, methods, techniques, sequences and procedures. The Contractor shall not be required to provide professional services in violation of applicable law. If professional design services or certifications by a design professional related to systems, materials or equipment are specifically required of the Contractor by the Contract Documents, the Owner and the Architect will specify all performance and design criteria that such services must satisfy. The Contractor shall cause such services or certifications to be provided by a properly licensed design professional, whose signature and seal shall appear on all drawings, calculations, specifications, certifications, Shop Drawings and other submittals prepared by such professional. Shop Drawings and other submittals related to the Work designed or certified by such professional, if prepared by others, shall bear such professional's written approval when submitted to the Architect. The Owner and the Architect shall be entitled to rely upon the adequacy, accuracy and completeness of the services, certifications or approvals performed by such design professionals, provided the Owner and Architect have specified to the Contractor all performance and design criteria that such services must satisfy. Pursuant to this Section 3.12.10, the Architect will review, approve or take other appropriate action on submittals only for the limited purpose of checking for conformance with information given and the design concept expressed in the Contract Documents. The Contractor shall not be responsible for the adequacy of the performance or design criteria required by the Contract Documents.

§ 3.13 USE OF SITE

§ 3.13.1 The Contractor shall confine operations at the site to areas permitted by law, ordinances, permits and the Contract Documents and shall not unreasonably encumber the site with materials or equipment.

§ 3.14  CUTTING AND PATCHING

§ 3.14.1 The Contractor shall be responsible for cutting, fitting or patching required to complete the Work or to make its parts fit together properly.

§ 3.14.2 The Contractor shall not damage or endanger a portion of the Work or fully or partially completed construction of the Owner or separate contractors by cutting, patching or otherwise altering such construction, or by excavation. The Contractor shall not cut or otherwise alter such construction by the Owner or a separate contractor except with written consent of the Owner and of such separate contractor; such consent shall not be unreasonably withheld. The Contractor shall not unreasonably withhold from the Owner or a separate contractor the Contractor's consent to cutting or otherwise altering the Work.

§ 3.15 CLEANING UP

§ 3.15.1 The Contractor shall keep the premises and surrounding area free from accumulation of waste materials or rubbish caused by operations under the Contract. At completion of the Work, the Contractor shall remove from and about the Project waste materials, rubbish, the Contractor's tools, construction equipment, machinery and surplus materials.

§ 3.15.2 If the Contractor fails to clean up as provided in the Contract Documents, the Owner may do so and the cost thereof shall be charged to the Contractor.

§ 3.16 ACCESS TO WORK

§ 3.16.1 The Contractor shall provide the Owner and Architect access to the Work in preparation and progress wherever located.

§ 3.17 ROYALTIES, PATENTS AND COPYRIGHTS

§ 3.17.1 The Contractor shall pay all royalties and license fees. The Contractor shall defend suits or claims for infringement of copyrights and patent rights and shall hold the Owner and Architect harmless from loss on account thereof, but shall not be responsible for such defense or loss when a particular design, process or product of a particular manufacturer or manufacturers is required by the Contract Documents or where the copyright violations are contained in Drawings, Specifications or other documents prepared by the Owner or Architect. However, if the Contractor has reason to believe that the required design, process or product is an infringement of a copyright or a patent, the Contractor shall be responsible for such loss unless such information is promptly furnished to the Architect.

§ 3.18 INDEMNIFICATION

§ 3.18.1 To the fullest extent permitted by law and to the extent claims, damages, losses or expenses are not covered by Project Management Protective Liability insurance purchased by the Contractor in accordance with Section 11.3, the Contractor shall indemnify and hold harmless the Owner, Tenant, Architect, Architect's consultants, and agents and employees of any of them from and against claims, damages, losses and expenses, including but not limited to attorneys' fees, arising out of or resulting from performance of the Work, provided that such claim, damage, loss or expense is attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property (other than the Work itself), but only to the extent caused by the negligent acts or omissions of the Contractor, a Subcontractor, anyone directly or indirectly employed by them or anyone for whose acts they may be liable, regardless of whether or not such claim, damage, loss or expense is caused in part by a party indemnified hereunder. Such obligation shall not be construed to negate, abridge, or reduce other rights or obligations of indemnity which would otherwise exist as to a party or person described in this Section 3.18.

§ 3.18.2 In claims against any person or entity indemnified under this Section 3.18 by an employee of the Contractor, a Subcontractor, anyone directly or indirectly employed by them or anyone for whose acts they may be liable, the indemnification obligation under Section 3.18.1 shall not be limited by a limitation on amount or type of damages, compensation or benefits payable by or for the Contractor or a Subcontractor under workers' compensation acts, disability benefit acts or other employee benefit acts.

ARTICLE 4   ADMINISTRATION OF THE CONTRACT

§ 4.1 ARCHITECT

§ 4.1.1 The Architect is the person lawfully licensed to practice architecture or an entity lawfully practicing architecture identified as such in the Agreement and is referred to throughout the Contract Documents as if singular in number. The term "Architect" means the Architect or the Architect's authorized representative.

§ 4.1.2  Duties, responsibilities and limitations of authority of the Architect as set forth in the Contract Documents shall not be restricted, modified or extended without written consent of the Owner, Contractor and Architect. Consent shall not be unreasonably withheld.

§ 4.1.3  If the employment of the Architect is terminated, the  Tenant shall employ a new Architect against whom the Contractor has no reasonable objection and whose status under the Contract Documents shall be that of the former Architect.

§ 4.2 ARCHITECT'S ADMINISTRATION OF THE CONTRACT

§ 4.2.1 The Architect will provide administration of the Contract as described in the Contract Documents, and will be an Owner's representative (1) during construction, (2) until final payment is due and (3) with the Tenant's concurrence, from time to time during each  one-year period for correction of Work performed for a Phase described in Section 12.2. The Architect will have authority to act on behalf of the Owner only to the extent provided in the Contract Documents, unless otherwise modified in writing in accordance with other provisions of the Contract.

§ 4.2.2 The Architect, as a representative of the Owner, will attend regularly scheduled project meetings and visit the site at intervals appropriate to the stage of the Contractor's operations (1) to become generally familiar with and to keep the Owner informed about the progress and quality of the portion of the Work completed, (2) to endeavor to guard the Owner against defects and deficiencies in the Work, and (3) to determine in general if the Work is being performed in a manner indicating that the Work, when fully completed, will be in accordance with the Contract Documents. However, the Architect will not be required to make exhaustive or continuous on-site inspections to check the quality or quantity of the Work. The Architect will neither have control over or charge of, nor be responsible for, the construction means, methods, techniques, sequences or procedures, or for the safety precautions and programs in connection with the Work, since these are solely the Contractor's rights and responsibilities under the Contract Documents, except as provided in Section 3.3.1.

§ 4.2.3 The Architect will not be responsible for the Contractor's failure to perform the Work in accordance with the requirements of the Contract Documents. The Architect will not have control over or charge of and will not be responsible for acts or omissions of the Contractor, Subcontractors, or their agents or employees, or any other persons or entities performing portions of the Work.

§ 4.2.4 Communications Facilitating Contract Administration.  Except as otherwise provided in the Contract Documents or when direct communications have been specially authorized, the Owner and Contractor shall endeavor to communicate with each other through the Architect about matters arising out of or relating to the Contract. Communications by and with the Architect's consultants shall be through the Architect. Communications by and with Subcontractors and material suppliers shall be through the Contractor. Communications by and with separate contractors shall be through the Owner.

§ 4.2.5 Based on the Architect's  evaluations of the Contractor's Applications for Payment, the Architect will review and certify the amounts due the Contractor and will issue Certificates for Payment in such amounts.

§ 4.2.6 The Architect will have authority to reject Work that does not conform to the Contract Documents. Whenever the Architect considers it necessary or advisable, the Architect will have authority to require inspection or testing of the Work in accordance with Sections 13.5.2 and 13.5.3, whether or not such Work is fabricated, installed or completed. However, neither this authority of the Architect nor a decision made in good faith either to exercise or not to exercise such authority shall give rise to a duty or responsibility of the Architect to the Contractor, Subcontractors, material and equipment suppliers, their agents or employees, or other persons or entities performing portions of the Work.

§ 4.2.7 The Architect will review and approve or take other appropriate action upon the Contractor's submittals such as Shop Drawings, Product Data and Samples, but only for the limited purpose of checking for conformance with information given and the design concept expressed in the Contract Documents. The Architect's action will be taken with such reasonable promptness as to cause no delay in the Work or in the activities of the Owner, Contractor or separate contractors, while allowing sufficient time in the Architect's professional judgment to permit adequate review. Review of such submittals is not conducted for the purpose of determining the accuracy and completeness of other details such as dimensions and quantities, or for substantiating instructions for installation or performance of equipment or systems, all of which remain the responsibility of the Contractor as required by the Contract Documents. The Architect's review of the Contractor's submittals shall not relieve the Contractor of the obligations under Sections 3.3, 3.5 and 3.12. The Architect's review shall not constitute approval of safety precautions or, unless otherwise specifically stated by the Architect, of any construction means, methods, techniques, sequences or procedures. The Architect's approval of a specific item shall not indicate approval of an assembly of which the item is a component.

§ 4.2.8 The Architect will prepare Architects Supplemental Information (ASI) documents or Construction Change Directives, and may authorize minor changes in the Work as provided in Section 7.4 with the written approval of the Owner.

§ 4.2.9 The Architect will conduct inspections to determine the date or dates of Substantial Completion and the date of final completion for each Phase of the Work, will receive and forward to the Owner, for the Owner's review and records, written warranties and related documents required by the Contract and assembled by the Contractor, and will issue a final Certificate for Payment upon compliance with the requirements of the Contract Documents.

§ 4.2.10 If the Owner and Architect agree, the Architect will provide one or more project representatives to assist in carrying out the Architect's responsibilities at the site. The duties, responsibilities and limitations of authority of such project representatives shall be as set forth in an exhibit to be incorporated in the Contract Documents.

§ 4.2.11 The Architect will interpret and decide matters concerning performance under and requirements of, the Contract Documents on written request of either the Owner or Contractor. The Architect's response to such requests will be made in writing within any time limits agreed upon or otherwise with reasonable promptness..

§ 4.2.12 Interpretations and decisions of the Architect will be consistent with the intent of and reasonably inferable from the Contract Documents and will be in writing or in the form of drawings. When making such interpretations and initial decisions, the Architect will endeavor to secure faithful performance by both Owner and Contractor, will not show partiality to either and will not be liable for results of interpretations or decisions so rendered in good faith.

§ 4.2.13 The Architect's decisions on matters relating to aesthetic effect will be final if consistent with the intent expressed in the Contract Documents.

§ 4.3 CLAIMS AND DISPUTES

§ 4.3.1 Definition.  A Claim is a demand or assertion by one of the parties seeking, as a matter of right, adjustment or interpretation of Contract terms, payment of money, extension of time or other relief with respect to the terms of the Contract. The term "Claim" also includes other disputes and matters in question between the Owner and Contractor arising out of or relating to the Contract. Claims must be initiated by written notice. The responsibility to substantiate Claims shall rest with the party making the Claim.

§ 4.3.2 Time Limits on Claims. Claims by either party must be initiated within 21 days after occurrence of the event giving rise to such Claim or within 21 days after the claimant first recognizes the condition giving rise to the Claim, whichever is later. Claims must be initiated by written notice to the Architect and the other party.

§ 4.3.3 Continuing Contract Performance. Pending final resolution of a Claim except as otherwise agreed in writing or as provided in Section 9.7.1 and Article 14, the Contractor shall proceed diligently with performance of the Contract and the Owner shall continue to make payments in accordance with the Contract Documents.

§ 4.3.4 Claims for Concealed or Unknown Conditions. If conditions are encountered at the site which are (1) subsurface or otherwise concealed physical conditions which differ materially from those indicated in the Contract Documents or (2) unknown physical conditions of an unusual nature, which differ materially from those ordinarily found to exist and generally recognized as inherent in construction activities of the character provided for in the Contract Documents, then notice by the observing party shall be given to the other party promptly before conditions are disturbed and in no event later than 21 days after first observance of the conditions. The Architect will promptly investigate such conditions and, if they differ materially and cause an increase or decrease in the Contractor's cost of, or time required for, performance of any part of the Work, will recommend an equitable adjustment in the Contract Sum or applicable Contract Time, or both. If the Architect determines that the conditions at the site are not materially different from those indicated in the Contract Documents and that no change in the terms of the Contract is justified, the Architect shall so notify the Owner and Contractor in writing, stating the reasons. Claims by either party in opposition to such determination must be made within 21 days after the Architect has given notice of the decision. If the conditions encountered are materially different, the Contract Sum and applicable Contract Time shall be equitably adjusted, but if the Owner and Contractor cannot agree on an adjustment in the Contract Sum or applicable Contract Time, the adjustment shall be referred to the Architect for initial determination, subject to further proceedings pursuant to Section 4.4.

§ 4.3.5 Claims for Additional Cost.  If the Contractor wishes to make Claim for an increase in the Contract Sum, written notice as provided herein shall be given before proceeding to execute the Work. Prior notice is not required for Claims relating to an emergency endangering life or property arising under Section 10.6.

§ 4.3.6 If the Contractor believes additional cost is involved for reasons including but not limited to (1) a written interpretation from the Architect, (2) an order by the Owner to stop the Work where the Contractor was not at fault, (3) a written order for a minor change in the Work issued by the Architect, (4) failure of payment by the Owner, (5) termination of the Contract by the Owner, (6) Owner's suspension or (7) other reasonable grounds, Claim shall be filed in accordance with this Section 4.3.

§ 4.3.7 Claims for Additional Time

§ 4.3.7.1 If the Contractor wishes to make Claim for an increase in the applicable Contract Time, written notice as provided herein shall be given. The Contractor's Claim shall include an estimate of cost and of probable effect of delay on progress of the Work. In the case of a continuing delay only one Claim is necessary.

§ 4.3.7.2 If adverse weather conditions are the basis for a Claim for additional time, such Claim shall be documented by data substantiating that weather conditions were abnormal for the period of time, could not have been reasonably anticipated and had an adverse effect on the scheduled construction.

§ 4.3.8 Injury or Damage to Person or Property.  If either party to the Contract suffers injury or damage to person or property because of an act or omission of the other party, or of others for whose acts such party is legally responsible, written notice of such injury or damage, whether or not insured, shall be given to the other party within a reasonable time not exceeding 21 days after discovery. The notice shall provide sufficient detail to enable the other party to investigate the matter.

§ 4.3.9 If unit prices are stated in the Contract Documents or subsequently agreed upon, and if quantities originally contemplated are materially changed in a proposed Change Order or Construction Change Directive so that application of such unit prices to quantities of Work proposed will cause substantial inequity to the Owner or Contractor, the applicable unit prices shall be equitably adjusted.

§ 4.3.10 Claims for Consequential Damages.  The Contractor and Owner waive Claims against each other for consequential damages arising out of or relating to this Contract. This mutual waiver includes:

.1 damages incurred by the Owner for rental expenses, for losses of use, income, profit, financing, business and reputation, and for loss of management or employee productivity or of the services of such persons; and

.2 damages incurred by the Contractor for principal office expenses including the compensation of personnel stationed there, for losses of financing, business and reputation, and for loss of profit except anticipated profit arising directly from the Work.

This mutual waiver is applicable, without limitation, to all consequential damages due to either party's termination in accordance with Article 14. Nothing contained in this Section 4.3.10 shall be deemed to preclude an award of liquidated direct damages, when applicable, in accordance with the requirements of the Contract Documents.

§ 4.4 RESOLUTION OF CLAIMS AND DISPUTES

§ 4.4.1 Decision of Architect.  Claims, including those alleging an error or omission by the Architect but excluding those arising under Sections 10.3 through 10.5, shall be referred initially to the Architect for decision. An initial decision by the Architect shall be required as a condition precedent to mediation, arbitration or litigation of all Claims between the Contractor and Owner arising prior to the date final payment is due, unless 30 days have passed after the Claim has been referred to the Architect with no decision having been rendered by the Architect. The Architect will not decide disputes between the Contractor and persons or entities other than the Owner.

§ 4.4.2 The Architect will review Claims and within ten days of the receipt of the Claim take one or more of the following actions: (1) request additional supporting data from the claimant or a response with supporting data from the other party, (2) reject the Claim in whole or in part, (3) approve the Claim, (4) suggest a compromise, or (5) advise the parties that the Architect is unable to resolve the Claim if the Architect lacks sufficient information to evaluate the merits of the Claim or if the Architect concludes that, in the Architect's sole discretion, it would be inappropriate for the Architect to resolve the Claim.

§ 4.4.3 In evaluating Claims, the Architect may, but shall not be obligated to, consult with or seek information from either party or from persons with special knowledge or expertise who may assist the Architect in rendering a decision. The Architect may request the Owner to authorize retention of such persons at the Owner's expense.

§ 4.4.4 If the Architect requests a party to provide a response to a Claim or to furnish additional supporting data, such party shall respond, within ten days after receipt of such request, and shall either provide a response on the requested supporting data, advise the Architect when the response or supporting data will be furnished or advise the Architect that no supporting data will be furnished. Upon receipt of the response or supporting data, if any, the Architect will either reject or approve the Claim in whole or in part.

§ 4.4.5 The Architect will approve or reject Claims by written decision, which shall state the reasons therefor and which shall notify the parties of any change in the Contract Sum or applicable Contract Time or both. The approval or rejection of a Claim by the Architect shall be final and binding on the parties but subject to mediation and arbitration.

§ 4.4.6 When a written decision of the Architect states that (1) the decision is final but subject to mediation and arbitration and (2) a demand for arbitration of a Claim covered by such decision must be made within 30 days after the date on which the party making the demand receives the final written decision, then failure to demand arbitration within said 30 days' period shall result in the Architect's decision becoming final and binding upon the Owner and Contractor. If the Architect renders a decision after arbitration proceedings have been initiated, such decision may be entered as evidence, but shall not supersede arbitration proceedings unless the decision is acceptable to all parties concerned.

§ 4.4.7 Upon receipt of a Claim against the Contractor or at any time thereafter, the Architect or the Owner may, but is not obligated to, notify the surety, if any, of the nature and amount of the Claim. If the Claim relates to a possibility of a Contractor's default, the Architect or the Owner may, but is not obligated to, notify the surety and request the surety's assistance in resolving the controversy.

§ 4.4.8 If a Claim relates to or is the subject of a mechanic's lien, the party asserting such Claim may proceed in accordance with applicable law to comply with the lien notice or filing deadlines prior to resolution of the Claim by the Architect, by mediation or by arbitration.

§ 4.5 MEDIATION

See Mediation and Arbitration within Exhibit D, Special Provisions.

§ 4.6 ARBITRATION

See Mediation and Arbitration within Exhibit D, Special Provisions.

ARTICLE 5   SUBCONTRACTORS

§ 5.1 DEFINITIONS

§ 5.1.1 A Subcontractor is a person or entity who has a direct contract with the Contractor to perform a portion of the Work at the site. The term "Subcontractor" is referred to throughout the Contract Documents as if singular in number and means a Subcontractor or an authorized representative of the Subcontractor. The term "Subcontractor" does not include a separate contractor or subcontractors of a separate contractor.

§ 5.1.2 A Sub-subcontractor is a person or entity who has a direct or indirect contract with a Subcontractor to perform a portion of the Work at the site. The term "Sub-subcontractor" is referred to throughout the Contract Documents as if singular in number and means a Sub-subcontractor or an authorized representative of the Sub-subcontractor.

§ 5.2 AWARD OF SUBCONTRACTS AND OTHER CONTRACTS FOR PORTIONS OF THE WORK

§ 5.2.1 Unless otherwise stated in the Contract Documents or the bidding requirements, the Contractor, as soon as practicable after award of the Contract, shall furnish in writing to the Owner through the Architect the names of persons or entities (including those who are to furnish materials or equipment fabricated to a special design) proposed for each principal portion of the Work. The Architect will promptly reply to the Contractor in writing stating whether or not the Owner or the Architect, after due investigation, has reasonable objection to any such proposed person or entity. Failure of the Owner or Architect to reply promptly shall constitute notice of no reasonable objection.

§ 5.2.2 The Contractor shall not contract with a proposed person or entity to whom the Owner or Architect has made reasonable and timely objection. The Contractor shall not be required to contract with anyone to whom the Contractor has made reasonable objection.

§ 5.2.3 If the Owner or Architect has reasonable objection to a person or entity proposed by the Contractor, the Contractor shall propose another to whom the Owner or Architect has no reasonable objection. If the proposed but rejected Subcontractor was reasonably capable of performing the Work, the Contract Sum and applicable Contract Time shall be increased or decreased by the difference, if any, occasioned by such change, and an appropriate Change Order shall be issued before commencement of the substitute Subcontractor's Work. However, no increase in such Contract Sum or Contract Time shall be allowed for such change unless the Contractor has acted promptly and responsively in submitting names as required.

§ 5.2.4 The Contractor shall not change a Subcontractor, person or entity previously selected if the Owner or Architect makes reasonable objection to such substitute.

§ 5.3 SUBCONTRACTUAL RELATIONS

§ 5.3.1 By appropriate agreement, written where legally required for validity, the Contractor shall require each Subcontractor, to the extent of the Work to be performed by the Subcontractor, to be bound to the Contractor by terms of the Contract Documents, and to assume toward the Contractor all the obligations and responsibilities, including the responsibility for safety of the Subcontractor's Work, which the Contractor, by these Documents, assumes toward the Owner and Architect. Each subcontract agreement shall preserve and protect the rights of the Owner and Architect under the Contract Documents with respect to the Work to be performed by the Subcontractor so that subcontracting thereof will not prejudice such rights, and shall allow to the Subcontractor, unless specifically provided otherwise in the subcontract agreement, the benefit of all rights, remedies and redress against the Contractor that the Contractor, by the Contract Documents, has against the Owner. Where appropriate, the Contractor shall require each Subcontractor to enter into similar agreements with Sub-subcontractors. The Contractor shall make available to each proposed Subcontractor, prior to the execution of the subcontract agreement, copies of the Contract Documents to which the Subcontractor will be bound, and, upon written request of the Subcontractor, identify to the Subcontractor terms and conditions of the proposed subcontract agreement which may be at variance with the Contract Documents. Subcontractors will similarly make copies of applicable portions of such documents available to their respective proposed Sub-subcontractors.

§ 5.4 CONTINGENT ASSIGNMENT OF SUBCONTRACTS

§ 5.4.1 Each subcontract agreement for a portion of the Work is assigned by the Contractor to the Owner provided that:

.1 assignment is effective only after termination of the Contract by the Owner for cause pursuant to Section 14.2 and only for those subcontract agreements which the Owner accepts by notifying the Subcontractor and Contractor in writing; and

.2 assignment is subject to the prior rights of the surety, if any, obligated under bond relating to the Contract.

§ 5.4.2 Upon such assignment, if the Work has been suspended for more than 30 days, the Subcontractor's compensation shall be equitably adjusted for increases in cost resulting from the suspension.

ARTICLE 6   CONSTRUCTION BY OWNER, TENANT OR BY SEPARATE CONTRACTORS

§ 6.1 OWNER'S RIGHT TO PERFORM CONSTRUCTION AND TO AWARD SEPARATE CONTRACTS

§ 6.1.1 The Owner reserves the right to perform construction or operations related to the Project with the Owner's own forces, and to award separate contracts in connection with other portions of the Project or other construction or operations on the site under Conditions of the Contract identical or substantially similar to these including those portions related to insurance and waiver of subrogation. If the Contractor claims that delay or additional cost is involved because of such action by the Owner, the Contractor shall make such Claim as provided in Section 4.3.

§ 6.1.2 When separate contracts are awarded for different portions of the Project or other construction or operations on the site, the term "Contractor" in the Contract Documents in each case shall mean the Contractor who executes each separate Owner-Contractor Agreement.

§ 6.1.3 The Owner shall provide for coordination of the activities of the Owner's own forces and of each separate contractor with the Work of the Contractor, who shall cooperate with them. The Contractor shall participate with other separate contractors and the Owner in reviewing their construction schedules when directed to do so. The Contractor shall make any revisions to the construction schedule deemed necessary after a joint review and mutual agreement. The construction schedules shall then constitute the schedules to be used by the Contractor, separate contractors and the Owner until subsequently revised.

§ 6.1.4 Unless otherwise provided in the Contract Documents, when the Owner performs construction or operations related to the Project with the Owner's own forces, the Owner shall be deemed to be subject to the same obligations and to have the same rights which apply to the Contractor under the Conditions of the Contract, including, without excluding others, those stated in Article 3, this Article 6 and Articles 10, 11 and 12.

§ 6.2 MUTUAL RESPONSIBILITY

§ 6.2.1 The Contractor shall afford the Owner and separate contractors reasonable opportunity for introduction and storage of their materials and equipment and performance of their activities, and shall connect and coordinate the Contractor's construction and operations with theirs as required by the Contract Documents.

§ 6.2.2 If part of the Contractor's Work depends for proper execution or results upon construction or operations by the Owner or a separate contractor, the Contractor shall, prior to proceeding with that portion of the Work, promptly report to the Architect apparent discrepancies or defects in such other construction that would render it unsuitable for such proper execution and results. Failure of the Contractor so to report shall constitute an acknowledgment that the Owner's or separate contractor's completed or partially completed construction is fit and proper to receive the Contractor's Work, except as to defects not then reasonably discoverable.

§ 6.2.3 The Owner shall be reimbursed by the Contractor for costs incurred by the Owner which are payable to a separate contractor because of delays, improperly timed activities or defective construction of the Contractor. The Owner shall be responsible to the Contractor for costs incurred by the Contractor because of delays, improperly timed activities, damage to the Work or defective construction of a separate contractor.

§ 6.2.4 The Contractor shall promptly remedy damage wrongfully caused by the Contractor to completed or partially completed construction or to property of the Owner or separate contractors as provided in Section 10.2.5.

§ 6.2.5 The Owner and each separate contractor shall have the same responsibilities for cutting and patching as are described for the Contractor in Section 3.14.

§ 6.3 OWNER'S RIGHT TO CLEAN UP

§ 6.3.1 If a dispute arises among the Contractor, separate contractors and the Owner as to the responsibility under their respective contracts for maintaining the premises and surrounding area free from waste materials and rubbish, the Owner may clean up and the Architect will allocate the cost among those responsible.

§ 6.4 TENANT’S RIGHTS

§ 6.4.1 Independent of Owner, Tenant shall have each and all of the same rights and options (and any resulting related duties and obligations) that Owner has in this Article 6, the same as if Tenant were Owner.

ARTICLE 7   CHANGES IN THE WORK

§ 7.1 GENERAL

§ 7.1.1 Changes in the Work may be accomplished after execution of the Contract, and without invalidating the Contract, by Change Order, Construction Change Directive, Architects Supplemental Instruction or order for a minor change in the Work, subject to the limitations stated in this Article 7 and elsewhere in the Contract Documents.

§ 7.1.2 A Change Order shall be based upon agreement among the Owner, Contractor and Architect; a Construction Change Directive requires agreement by the Owner and Architect and may or may not be agreed to by the Contractor; an order for a minor change in the Work may be issued by the Architect alone.

§ 7.1.3 Changes in the Work shall be performed under applicable provisions of the Contract Documents, and the Contractor shall proceed promptly, unless otherwise provided in the Change Order, Construction Change Directive or order for a minor change in the Work.

§ 7.2 CHANGE ORDERS

§ 7.2.1 A Change Order is a written instrument prepared by the Architect and signed by the Owner and Contractor and Architect, stating their agreement upon all of the following:

.1 change in the Work;

.2 the amount of the adjustment, if any, in the Contract Sum; and

.3 the extent of the adjustment, if any, in the applicable Contract Time.

§ 7.2.2 Methods used in determining adjustments to the Contract Sum may include those listed in Section 7.3.3.

§ 7.3 CONSTRUCTION CHANGE DIRECTIVES

§ 7.3.1 A Construction Change Directive or Architects Supplemental Instruction is a written order prepared by the Architect and signed by the Owner and Architect, directing a change in the Work prior to agreement on adjustment, if any, in the Contract Sum or applicable Contract Time, or both. The Owner may by Construction Change Directive, without invalidating the Contract, order changes in the Work within the general scope of the Contract consisting of additions, deletions or other revisions, the Contract Sum and applicable Contract Time being adjusted accordingly.

§ 7.3.2 A Construction Change Directive shall be used in the absence of total agreement on the terms of a Change Order.

§ 7.3.3 If the Construction Change Directive provides for an adjustment to the Contract Sum, the adjustment shall be based on one of the following methods:

.1 mutual acceptance of a lump sum properly itemized and supported by sufficient substantiating data to permit evaluation;

.2 unit prices stated in the Contract Documents or subsequently agreed upon;

.3 cost to be determined in a manner agreed upon by the parties and a mutually acceptable fixed or percentage fee; or

.4 as provided in Section 7.3.6.

§ 7.3.4 Upon receipt of a Construction Change Directive, the Contractor shall promptly proceed with the change in the Work involved and advise the Architect of the Contractor's agreement or disagreement with the method, if any, provided in the Construction Change Directive for determining the proposed adjustment in the Contract Sum or applicable Contract Time.

§ 7.3.5 A Construction Change Directive signed by the Contractor indicates the agreement of the Contractor therewith, including adjustment in the Contract Sum and applicable Contract Time or the method for determining them. Such agreement shall be effective immediately and shall be recorded as a Change Order.

§ 7.3.6 If the Contractor does not respond promptly or disagrees with the method for adjustment in the Contract Sum, the method and the adjustment shall be determined by the Architect on the basis of reasonable expenditures and savings of those performing the Work attributable to the change, including, in case of an increase in the Contract Sum, a reasonable allowance for overhead and profit. In such case, and also under Section 7.3.3.3, the Contractor shall keep and present, in such form as the Architect may prescribe, an itemized accounting together with appropriate supporting data. Unless otherwise provided in the Contract Documents, costs for the purposes of this Section 7.3.6 shall be limited to the following:

.1 costs of labor, including social security, old age and unemployment insurance, fringe benefits required by agreement or custom, and workers' compensation insurance;

.2 costs of materials, supplies and equipment, including cost of transportation, whether incorporated or consumed;

.3 rental costs of machinery and equipment, exclusive of hand tools, whether rented from the Contractor or others;

.4 costs of premiums for all bonds and insurance, permit fees, and sales, use or similar taxes related to the Work; and

.5 additional costs of supervision and field office personnel directly attributable to the change.

§ 7.3.7 The amount of credit to be allowed by the Contractor to the Owner for a deletion or change which results in a net decrease in the Contract Sum shall be actual net cost as confirmed by the Architect. When both additions and credits covering related Work or substitutions are involved in a change, the allowance for overhead and profit shall be figured on the basis of net increase, if any, with respect to that change.

§ 7.3.8 Pending final determination of the total cost of a Construction Change Directive to the Owner, amounts not in dispute for such changes in the Work shall be included in Applications for Payment accompanied by a Change Order indicating the parties' agreement with part or all of such costs. For any portion of such cost that remains in dispute, the Architect will make an interim determination for purposes of monthly certification for payment for those costs. That determination of cost shall adjust the Contract Sum on the same basis as a Change Order, subject to the right of either party to disagree and assert a claim in accordance with Article 4.

§ 7.3.9 When the Owner and Contractor agree with the determination made by the Architect concerning the adjustments in the Contract Sum and applicable Contract Time, or otherwise reach agreement upon the adjustments, such agreement shall be effective immediately and shall be recorded by preparation and execution of an appropriate Change Order.

§ 7.4 MINOR CHANGES IN THE WORK

§ 7.4.1 The Architect will have authority to order minor changes in the Work not involving adjustment in the Contract Sum or extension of the applicable Contract Time and not inconsistent with the intent of the Contract Documents. Such changes shall be effected by written order and shall be binding on the Owner and Contractor. The Contractor shall carry out such written orders promptly.

ARTICLE 8   TIME

§ 8.1 DEFINITIONS

§ 8.1.1 Unless otherwise provided, Contract Time for the completion of a Phase of the Work is the period of time, including authorized adjustments, allotted in the Contract Documents for Substantial Completion of such Phase of the Work.

§ 8.1.2 The dates of commencement for the Phases of the of the Work are the dates established in the Agreement.

§ 8.1.3 The dates of Substantial Completion for the Phases of the Work are the dates certified by the Architect in accordance with Section 9.8.

§ 8.1.4 The term "day" as used in the Contract Documents shall mean calendar day unless otherwise specifically defined.

§ 8.2 PROGRESS AND COMPLETION

§ 8.2.1 Time limits stated in the Contract Documents are of the essence of the Contract. By executing the Agreement the Contractor confirms that the Contract Time for each Phase of the Work is a reasonable period for performing such portion of the Work.

§ 8.2.2 The Contractor shall not knowingly, except by agreement or instruction of the Owner in writing, prematurely commence operations on the site or elsewhere prior to the effective date of insurance required by Article 11 to be furnished by the Contractor and Owner. The date of commencement of Phase 1 of the Work shall not be changed by the effective date of such insurance. Unless the date of commencement for Phase 1 of the Work is established by the Contract Documents or a notice to proceed given by the Owner, the Contractor shall notify the Owner in writing not less than five days or other agreed period before commencing the Work to permit the timely filing of mortgages, mechanic's liens and other security interests.

§ 8.2.3 The Contractor shall proceed expeditiously with adequate forces and shall achieve Substantial Completion of the Work to be completed for a Phase within the applicable Contract Time.

§ 8.3 DELAYS AND EXTENSIONS OF TIME

§ 8.3.1 If the Contractor is delayed at any time in the commencement or progress of the Work by an act or neglect of the Owner or Architect, or of an employee of either, or of a separate contractor employed by the Owner, or by changes ordered in the Work, or by labor disputes, fire, unusual delay in deliveries, unavoidable casualties or other causes beyond the Contractor's control, or by delay authorized by the Owner pending mediation and arbitration, or by other causes which the Architect determines may justify delay, then the applicable Contract Time shall be extended by Change Order for such reasonable time as the Architect may determine.

§ 8.3.2 Claims relating to time shall be made in accordance with applicable provisions of Section 4.3.

§ 8.3.3 This Section 8.3 does not preclude recovery of damages for delay by either party under other provisions of the Contract Documents.

ARTICLE 9   PAYMENTS AND COMPLETION

§ 9.1 CONTRACT SUM

§ 9.1.1 The Contract Sum for each of (i) Phase 1 and 2, and (ii) Phase 3 is stated in the Agreement and, including authorized adjustments, is the total amount payable by the Owner to the Contractor for performance of the Work under the Contract Documents.

§ 9.2 SCHEDULE OF VALUES

§ 9.2.1 Before the first Application for Payment, the Contractor shall submit to the Architect a schedule of values allocated to various portions of the Work, prepared in such form and supported by such data to substantiate its accuracy as the Architect may require. This schedule, unless objected to by the Architect, shall be used as a basis for reviewing the Contractor's Applications for Payment.

§ 9.3 APPLICATIONS FOR PAYMENT

§ 9.3.1 At least  thirty (30) days before the date established for each progress payment, the Contractor shall submit to the Architect an itemized Application for Payment for operations completed in accordance with the schedule of values. Such application shall be notarized, if required, and supported by such data substantiating the Contractor's right to payment as the Owner or Architect may require, such as copies of requisitions from Subcontractors and material suppliers, and reflecting retainage if provided for in the Contract Documents.

§ 9.3.1.1 As provided in Section 7.3.8, such applications may include requests for payment on account of changes in the Work which have been properly authorized by Construction Change Directives, or by interim determinations of the Architect, but not yet included in Change Orders.

§ 9.3.1.2 Such applications may not include requests for payment for portions of the Work for which the Contractor does not intend to pay to a Subcontractor or material supplier, unless such Work has been performed by others whom the Contractor intends to pay.

§ 9.3.2 Unless otherwise provided in the Contract Documents, payments shall be made on account of materials and equipment delivered and suitably stored at the site for subsequent incorporation in the Work. If approved in advance by the Owner, payment may similarly be made for materials and equipment suitably stored off the site at a location agreed upon in writing. Payment for materials and equipment stored on or off the site shall be conditioned upon compliance by the Contractor with procedures satisfactory to the Owner to establish the Owner's title to such materials and equipment or otherwise protect the Owner's interest, and shall include the costs of applicable insurance, storage and transportation to the site for such materials and equipment stored off the site.

§ 9.3.3 The Contractor warrants that title to all Work covered by an Application for Payment will pass to the Owner no later than the time of payment. The Contractor further warrants that upon submittal of an Application for Payment all Work for which Certificates for Payment have been previously issued and payments received from the Owner shall, to the best of the Contractor's knowledge, information and belief, be free and clear of liens, claims, security interests or encumbrances in favor of the Contractor, Subcontractors, material suppliers, or other persons or entities making a claim by reason of having provided labor, materials and equipment relating to the Work.

§ 9.4 CERTIFICATES FOR PAYMENT

§ 9.4.1 The Architect will, within  ten days after receipt of the Contractor's Application for Payment, either issue to the Owner a Certificate for Payment, with a copy to the Contractor, for such amount as the Architect determines is properly due, or notify the Contractor and Owner in writing of the Architect's reasons for withholding certification in whole or in part as provided in Section 9.5.1.

§ 9.4.2 The issuance of a Certificate for Payment will constitute a representation by the Architect to the Owner, based on the Architect's evaluation of the Work and the data comprising the Application for Payment, that the Work has progressed to the point indicated and that, to the best of the Architect's knowledge, information and belief, the quality of the Work is in accordance with the Contract Documents. The foregoing representations are subject to an evaluation of the Work for conformance with the Contract Documents upon Substantial Completion, to results of subsequent tests and inspections, to correction of minor deviations from the Contract Documents prior to completion and to specific qualifications expressed by the Architect. The issuance of a Certificate for Payment will further constitute a representation that the Contractor is entitled to payment in the amount certified. However, the issuance of a Certificate for Payment will not be a representation that the Architect has (1) made exhaustive or continuous on-site inspections to check the quality or quantity of the Work, (2) reviewed construction means, methods, techniques, sequences or procedures, (3) reviewed copies of requisitions received from Subcontractors and material suppliers and other data requested by the Owner to substantiate the Contractor's right to payment, or (4) made examination to ascertain how or for what purpose the Contractor has used money previously paid on account of the Contract Sum.

§ 9.5 DECISIONS TO WITHHOLD CERTIFICATION

§ 9.5.1 The Architect may withhold a Certificate for Payment in whole or in part, to the extent reasonably necessary to protect the Owner, if in the Architect's opinion the representations to the Owner required by Section 9.4.2 cannot be made. If the Architect is unable to certify payment in the amount of the Application, the Architect will notify the Contractor and Owner as provided in Section 9.4.1. If the Contractor and Architect cannot agree on a revised amount, the Architect will promptly issue a Certificate for Payment for the amount for which the Architect is able to make such representations to the Owner. The Architect may also withhold a Certificate for Payment or, because of subsequently discovered evidence, may nullify the whole or a part of a Certificate for Payment previously issued, to such extent as may be necessary in the Architect's opinion to protect the Owner from loss for which the Contractor is responsible, including loss resulting from acts and omissions described in Section 3.3.2, because of:

.1 defective Work not remedied;

.2 third party claims filed or reasonable evidence indicating probable filing of such claims unless security acceptable to the Owner is provided by the Contractor;

.3 failure of the Contractor to make payments properly to Subcontractors or for labor, materials or equipment;

.4 reasonable evidence that the Work cannot be completed for the unpaid balance of the Contract Sum;

.5 damage to the Owner or another contractor;

.6 reasonable evidence that the Work will not be completed within the Contract Time, and that the unpaid balance would not be adequate to cover actual or liquidated damages for the anticipated delay; or

.7 persistent failure to carry out the Work in accordance with the Contract Documents.

§ 9.5.2 When the above reasons for withholding certification are removed, certification will be made for amounts previously withheld.

§ 9.6 PROGRESS PAYMENTS

§ 9.6.1 After the Architect has issued a Certificate for Payment, the Owner shall make payment in the manner and within the time provided in the Contract Documents, and shall so notify the Architect.

§ 9.6.2 The Contractor shall promptly pay each Subcontractor, upon receipt of payment from the Owner, out of the amount paid to the Contractor on account of such Subcontractor's portion of the Work, the amount to which said Subcontractor is entitled, reflecting percentages actually retained from payments to the Contractor on account of such Subcontractor's portion of the Work. The Contractor shall, by appropriate agreement with each Subcontractor, require each Subcontractor to make payments to Sub-subcontractors in a similar manner.

§ 9.6.3 The Architect will, on request, furnish to a Subcontractor, if practicable, information regarding percentages of completion or amounts applied for by the Contractor and action taken thereon by the Architect and Owner on account of portions of the Work done by such Subcontractor.

§ 9.6.4 Neither the Owner nor Architect shall have an obligation to pay or to see to the payment of money to a Subcontractor except as may otherwise be required by law.

§ 9.6.5 Payment to material suppliers shall be treated in a manner similar to that provided in Sections 9.6.2, 9.6.3 and 9.6.4.

§ 9.6.6 A Certificate for Payment, a progress payment, or partial or entire use or occupancy of the Project by the Owner shall not constitute acceptance of Work not in accordance with the Contract Documents.

§ 9.6.7 Unless the Contractor provides the Owner with a payment bond in the full penal sum of the Contract Sum, payments received by the Contractor for Work properly performed by Subcontractors and suppliers shall be held by the Contractor for those Subcontractors or suppliers who performed Work or furnished materials, or both, under contract with the Contractor for which payment was made by the Owner. Nothing contained herein shall require money to be placed in a separate account and not commingled with money of the Contractor, shall create any fiduciary liability or tort liability on the part of the Contractor for breach of trust or shall entitle any person or entity to an award of punitive damages against the Contractor for breach of the requirements of this provision.

§ 9.7 FAILURE OF PAYMENT

§ 9.7.1 If the Architect does not issue a Certificate for Payment, through no fault of the Contractor, within seven days after receipt of the Contractor's Application for Payment, or if the Owner does not pay the Contractor within seven days after the date established in the Contract Documents the amount certified by the Architect or awarded by arbitration, then the Contractor may, upon seven additional days' written notice to the Owner and Architect, stop the Work until payment of the amount owing has been received. The applicable Contract Time shall be extended appropriately and the Contract Sum shall be increased by the amount of the Contractor's reasonable costs of shut-down, delay and start-up, plus interest as provided for in the Contract Documents.

§ 9.8 SUBSTANTIAL COMPLETION

§ 9.8.1 Substantial Completion is the stage in the progress of the Work to be completed for a Phase when such Work or designated portion thereof is sufficiently complete in accordance with the Contract Documents so that the Owner can occupy or utilize such Work for its intended use.

§ 9.8.2 When the Contractor considers that the Work to be completed for a Phase, or a portion thereof which the Owner agrees to accept separately, is substantially complete, the Contractor shall prepare and submit to the Architect a comprehensive list of items to be completed or corrected prior to final payment for such Work. Failure to include an item on such list does not alter the responsibility of the Contractor to complete all Work to be completed for the applicable Phase in accordance with the Contract Documents.

§ 9.8.3 Upon receipt of the Contractor's list, the Architect will make an inspection to determine whether the Work to be completed for a Phase or designated portion thereof is substantially complete. If the Architect's inspection discloses any item, whether or not included on the Contractor's list, which is not sufficiently complete in accordance with the Contract Documents so that the Owner can occupy or utilize such Work or designated portion thereof for its intended use, the Contractor shall, before issuance of the Certificate of Substantial Completion, complete or correct such item upon notification by the Architect. In such case, the Contractor shall then submit a request for another inspection by the Architect to determine Substantial Completion.

§ 9.8.4 When the Work to be completed for a Phase or designated portion thereof is substantially complete, the Architect will prepare a Certificate of Substantial Completion for such Work which shall establish the date of Substantial Completion for such Work, shall establish responsibilities of the Owner and Contractor for security, maintenance, heat, utilities, damage to such Work and insurance, and shall fix the time within which the Contractor shall finish all items on the list accompanying the Certificate. Warranties required by the Contract Documents shall commence on the date of Substantial Completion of such  Work or designated portion thereof unless otherwise provided in the Certificate of Substantial Completion.

§ 9.8.5 The Certificate of Substantial Completion for each Phase of the Work shall be submitted to the Owner and Contractor for their written acceptance of responsibilities assigned to them in such Certificate. Upon such acceptance and consent of surety, if any, the Owner shall make payment of retainage applying to such Work or designated portion thereof. Such payment shall be adjusted for Work that is incomplete or not in accordance with the requirements of the Contract Documents.

§ 9.9 PARTIAL OCCUPANCY OR USE

§ 9.9.1 The Owner may occupy or use any completed or partially completed portion of the Work at any stage when such portion is designated by separate agreement with the Contractor, provided such occupancy or use is consented to by the insurer as required under Section 11.4.1.5 and authorized by public authorities having jurisdiction over the Work. Such partial occupancy or use may commence whether or not the portion is substantially complete, provided the Owner and Contractor have accepted in writing the responsibilities assigned to each of them for payments, retainage, if any, security, maintenance, heat, utilities, damage to such Work and insurance, and have agreed in writing concerning the period for correction of such  Work and commencement of warranties required by the Contract Documents. When the Contractor considers a portion substantially complete, the Contractor shall prepare and submit a list to the Architect as provided under Section 9.8.2. Consent of the Contractor to partial occupancy or use shall not be unreasonably withheld. The stage of the progress of the Work to be completed for a Phase shall be determined by written agreement between the Owner and Contractor or, if no agreement is reached, by decision of the Architect.

§ 9.9.2 Immediately prior to such partial occupancy or use, the Owner, Contractor and Architect shall jointly inspect the area to be occupied or portion of the Work to be used in order to determine and record the condition of the Work.

§ 9.9.3 Unless otherwise agreed upon, partial occupancy or use of a portion or portions of the Work to be completed for a Phase shall not constitute acceptance of Work not complying with the requirements of the Contract Documents.

§ 9.10 FINAL COMPLETION AND FINAL PAYMENT

§ 9.10.1 Upon receipt of written notice that the Work is ready for final inspection and acceptance and upon receipt of a final Application for Payment, the Architect will promptly make such inspection and, when the Architect finds the Work acceptable under the Contract Documents and the Contract fully performed, the Architect will promptly issue a final Certificate for Payment stating that to the best of the Architect's knowledge, information and belief, and on the basis of the Architect's on-site visits and inspections, the Work has been completed in accordance with terms and conditions of the Contract Documents and that the entire balance found to be due the Contractor and noted in the final Certificate is due and payable. The Architect's final Certificate for Payment will constitute a further representation that conditions listed in Section 9.10.2 as precedent to the Contractor's being entitled to final payment have been fulfilled.

§ 9.10.2 Neither final payment nor any remaining retained percentage shall become due until the Contractor submits to the Architect (1) an affidavit that payrolls, bills for materials and equipment, and other indebtedness connected with the Work for which the Owner or the Owner's property might be responsible or encumbered (less amounts withheld by Owner) have been paid or otherwise satisfied, (2) a certificate evidencing that insurance required by the Contract Documents to remain in force after final payment is currently in effect and will not be canceled or allowed to expire until at least 30 days' prior written notice has been given to the Owner, (3) a written statement that the Contractor knows of no substantial reason that the insurance will not be renewable to cover the period required by the Contract Documents, (4) consent of surety, if any, to final payment and (5), if required by the Owner or Tenant, other data establishing payment or satisfaction of obligations, such as receipts, releases and waivers of liens, claims, security interests or encumbrances arising out of the Contract, to the extent and in such form as may be designated by the Owner or Tenant. If a Subcontractor refuses to furnish a release or waiver required by the Owner or Tenant, the Contractor may furnish a bond satisfactory to each requesting and requiring party to indemnify Owner and Tenant against such lien or claim. If such lien or claim remains unsatisfied after payments are made, the Contractor shall refund to the Owner or Tenant all money that the Owner or Tenant may be compelled to pay in discharging such lien or claim, including all costs and reasonable attorneys' fees.

§ 9.10.3 If, after Substantial Completion of a Phase of the Work, final completion thereof is materially delayed through no fault of the Contractor or by issuance of Change Orders affecting final completion, and the Architect so confirms, the Owner shall, upon application by the Contractor and certification by the Architect, and without terminating the Contract, make payment of the balance due for that portion of such Phase of the Work fully completed and accepted. If the remaining balance for Work not fully completed or corrected is less than retainage stipulated in the Contract Documents, and if bonds have been furnished, the written consent of surety to payment of the balance due for that portion of the Work fully completed and accepted shall be submitted by the Contractor to the Architect prior to certification of such payment. Such payment shall be made under terms and conditions governing final payment, except that it shall not constitute a waiver of claims.

§ 9.10.4 The making of final payment shall constitute a waiver of Claims by the Owner except those arising from:

.1 liens, Claims, security interests or encumbrances arising out of the Contract and unsettled;

.2 failure of the Work to comply with the requirements of the Contract Documents; or

.3 terms of special warranties required by the Contract Documents.

§ 9.10.5 Acceptance of final payment by the Contractor, a Subcontractor or material supplier shall constitute a waiver of claims by that payee except those previously made in writing and identified by that payee as unsettled at the time of final Application for Payment.

ARTICLE 10   PROTECTION OF PERSONS AND PROPERTY

§ 10.1 SAFETY PRECAUTIONS AND PROGRAMS

§ 10.1.1 The Contractor shall be responsible for initiating, maintaining and supervising all safety precautions and programs in connection with the performance of the Contract.

§ 10.2 SAFETY OF PERSONS AND PROPERTY

§ 10.2.1 The Contractor shall take reasonable precautions for safety of, and shall provide reasonable protection to prevent damage, injury or loss to:

.1 employees on the Work and other persons who may be affected thereby;

.2 the Work and materials and equipment to be incorporated therein, whether in storage on or off the site, under care, custody or control of the Contractor or the Contractor's Subcontractors or Sub-subcontractors; and

.3 other property at the site or adjacent thereto, such as trees, shrubs, lawns, walks, pavements, roadways, structures and utilities not designated for removal, relocation or replacement in the course of construction.

§ 10.2.2 The Contractor shall give notices and comply with applicable laws, ordinances, rules, regulations and lawful orders of public authorities bearing on safety of persons or property or their protection from damage, injury or loss.

§ 10.2.3 The Contractor shall erect and maintain, as required by existing conditions and performance of the Contract, reasonable safeguards for safety and protection, including posting danger signs and other warnings against hazards, promulgating safety regulations and notifying owners and users of adjacent sites and utilities.

§ 10.2.4 When use or storage of explosives or other hazardous materials or equipment or unusual methods are necessary for execution of the Work, the Contractor shall exercise utmost care and carry on such activities under supervision of properly qualified personnel.

§ 10.2.5 The Contractor shall promptly remedy damage and loss (other than damage or loss insured under property insurance required by the Contract Documents) to property referred to in Sections 10.2.1.2 and 10.2.1.3 caused in whole or in part by the Contractor, a Subcontractor, a Sub-subcontractor, or anyone directly or indirectly employed by any of them, or by anyone for whose acts they may be liable and for which the Contractor is responsible under Sections 10.2.1.2 and 10.2.1.3, except damage or loss attributable to acts or omissions of the Owner or Architect or anyone directly or indirectly employed by either of them, or by anyone for whose acts either of them may be liable, and not attributable to the fault or negligence of the Contractor. The foregoing obligations of the Contractor are in addition to the Contractor's obligations under Section 3.18.

§ 10.2.6 The Contractor shall designate a responsible member of the Contractor's organization at the site whose duty shall be the prevention of accidents. This person shall be the Contractor's superintendent unless otherwise designated by the Contractor in writing to the Owner and Architect.

§ 10.2.7 The Contractor shall not load or permit any part of the construction or site to be loaded so as to endanger its safety.

§ 10.3 HAZARDOUS MATERIALS

§ 10.3.1 If reasonable precautions will be inadequate to prevent foreseeable bodily injury or death to persons resulting from a material or substance, including but not limited to asbestos or polychlorinated biphenyl (PCB), encountered on the site by the Contractor, the Contractor shall, upon recognizing the condition, immediately stop Work in the affected area and report the condition to the Owner and Architect in writing.

§ 10.3.2 The Owner shall obtain the services of a licensed laboratory to verify the presence or absence of the material or substance reported by the Contractor and, in the event such material or substance is found to be present, to verify that it has been rendered harmless. Unless otherwise required by the Contract Documents, the Owner shall furnish in writing to the Contractor and Architect the names and qualifications of persons or entities who are to perform tests verifying the presence or absence of such material or substance or who are to perform the task of removal or safe containment of such material or substance. The Contractor and the Architect will promptly reply to the Owner in writing stating whether or not either has reasonable objection to the persons or entities proposed by the Owner. If either the Contractor or Architect has an objection to a person or entity proposed by the Owner, the Owner shall propose another to whom the Contractor and the Architect have no reasonable objection. When the material or substance has been rendered harmless, Work in the affected area shall resume upon written agreement of the Owner and Contractor. The applicable Contract Time shall be extended appropriately and the Contract Sum shall be increased in the amount of the Contractor's reasonable additional costs of shut-down, delay and start-up, which adjustments shall be accomplished as provided in Article 7.

§ 10.3.3 To the fullest extent permitted by law, the Owner shall indemnify and hold harmless the Contractor, Subcontractors, Architect, Architect's consultants and agents and employees of any of them from and against claims, damages, losses and expenses, including but not limited to attorneys' fees, arising out of or resulting from performance of the Work in the affected area if in fact the material or substance presents the risk of bodily injury or death as described in Section 10.3.1 and has not been rendered harmless, provided that such claim, damage, loss or expense is attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property (other than the Work itself) and provided that such damage, loss or expense is not due to the sole negligence of a party seeking indemnity.

§ 10.4 The Owner shall not be responsible under Section 10.3 for materials and substances brought to the site by the Contractor unless such materials or substances were required by the Contract Documents.

§ 10.5 If, without negligence on the part of the Contractor, the Contractor is held liable for the cost of remediation of a hazardous material or substance solely by reason of performing Work as required by the Contract Documents, the Owner shall indemnify the Contractor for all cost and expense thereby incurred.

§ 10.6 EMERGENCIES

§ 10.6.1 In an emergency affecting safety of persons or property, the Contractor shall act, at the Contractor's discretion, to prevent threatened damage, injury or loss. Additional compensation or extension of time claimed by the Contractor on account of an emergency shall be determined as provided in Section 4.3 and Article 7.

ARTICLE 11   INSURANCE AND BONDS

§ 11.1 CONTRACTOR'S LIABILITY INSURANCE

§ 11.1.1 The Contractor shall purchase from and maintain in a company or companies lawfully authorized to do business in the jurisdiction in which the Project is located such insurance as will protect the Contractor from claims set forth below which may arise out of or result from the Contractor's operations under the Contract and for which the Contractor may be legally liable, whether such operations be by the Contractor or by a Subcontractor or by anyone directly or indirectly employed by any of them, or by anyone for whose acts any of them may be liable:

.1 claims under workers' compensation, disability benefit and other similar employee benefit acts which are applicable to the Work to be performed;

.2 claims for damages because of bodily injury, occupational sickness or disease, or death of the Contractor's employees;

.3 claims for damages because of bodily injury, sickness or disease, or death of any person other than the Contractor's employees;

.4 claims for damages insured by usual personal injury liability coverage;

.5 claims for damages, other than to the Work itself, because of injury to or destruction of tangible property, including loss of use resulting therefrom;

.6 claims for damages because of bodily injury, death of a person or property damage arising out of ownership, maintenance or use of a motor vehicle;

.7 claims for bodily injury or property damage arising out of completed operations; and

.8 claims involving contractual liability insurance applicable to the Contractor's obligations under Section 3.18.

§ 11.1.2 The insurance required by Section 11.1.1 shall be written for not less than limits of liability specified in the Contract Documents or required by law, whichever coverage is greater. Coverages, whether written on an occurrence or claims-made basis, shall be maintained without interruption from date of commencement of the Work until date of final payment and termination of any coverage required to be maintained after final payment.

§ 11.1.3 Certificates of insurance acceptable to the Owner shall be filed with the Owner prior to commencement of the Work. These certificates and the insurance policies required by this Section 11.1 shall contain a provision that coverages afforded under the policies will not be canceled or allowed to expire until at least 30 days' prior written notice has been given to the Owner. If any of the foregoing insurance coverages are required to remain in force after final payment and are reasonably available, an additional certificate evidencing continuation of such coverage shall be submitted with the final Application for Payment as required by Section 9.10.2. Information concerning reduction of coverage on account of revised limits or claims paid under the General Aggregate, or both, shall be furnished by the Contractor with reasonable promptness in accordance with the Contractor's information and belief.

§ 11.2 OWNER'S LIABILITY INSURANCE

§ 11.2.1 The Owner shall be responsible for purchasing and maintaining the Owner's usual liability insurance.

§ 11.3 PROJECT MANAGEMENT PROTECTIVE LIABILITY INSURANCE

§ 11.3.1 Optionally, the Owner may require the Contractor to purchase and maintain Project Management Protective Liability insurance from the Contractor's usual sources as primary coverage for the Owner's, Contractor's and Architect's vicarious liability for construction operations under the Contract. Unless otherwise required by the Contract Documents, the Owner shall reimburse the Contractor by increasing the Contract Sum to pay the cost of purchasing and maintaining such optional insurance coverage, and the Contractor shall not be responsible for purchasing any other liability insurance on behalf of the Owner. The minimum limits of liability purchased with such coverage shall be equal to the aggregate of the limits required for Contractor's Liability Insurance under Sections 11.1.1.2 through 11.1.1.5.

§ 11.3.2 To the extent damages are covered by Project Management Protective Liability insurance, the Owner, Contractor and Architect waive all rights against each other for damages, except such rights as they may have to the proceeds of such insurance. The policy shall provide for such waivers of subrogation by endorsement or otherwise.

§ 11.3.3 The Owner shall not require the Contractor to include the Owner, Architect or other persons or entities as additional insureds on the Contractor's Liability Insurance coverage under Section 11.1.

§ 11.4 PROPERTY INSURANCE

§ 11.4.1 Unless otherwise provided, the Owner shall purchase and maintain, in a company or companies lawfully authorized to do business in the jurisdiction in which the Project is located, property insurance written on a builder's risk "all-risk" or equivalent policy form in the amount of the initial Contract Sum, plus value of subsequent Contract modifications and cost of materials supplied or installed by others, comprising total value for the entire Project at the site on a replacement cost basis without optional deductibles. Such property insurance shall be maintained, unless otherwise provided in the Contract Documents or otherwise agreed in writing by all persons and entities who are beneficiaries of such insurance, until final payment has been made as provided in Section 9.10 or until no person or entity other than the Owner has an insurable interest in the property required by this Section 11.4 to be covered, whichever is later. This insurance shall include interests of the Owner, the Contractor, Subcontractors and Sub-subcontractors in the Project.

§ 11.4.1.1 Property insurance shall be on an "all-risk" or equivalent policy form and shall include, without limitation, insurance against the perils of fire (with extended coverage) and physical loss or damage including, without duplication of coverage, theft, vandalism, malicious mischief, collapse, earthquake, flood, windstorm, falsework, testing and startup, temporary buildings and debris removal including demolition occasioned by enforcement of any applicable legal requirements, and shall cover reasonable compensation for Architect's and Contractor's services and expenses required as a result of such insured loss.

§ 11.4.1.2 If the Owner does not intend to purchase such property insurance required by the Contract and with all of the coverages in the amount described above, the Owner shall so inform the Contractor in writing prior to commencement of the Work. The Contractor may then effect insurance which will protect the interests of the Contractor, Subcontractors and Sub-subcontractors in the Work, and by appropriate Change Order the cost thereof shall be charged to the Owner. If the Contractor is damaged by the failure or neglect of the Owner to purchase or maintain insurance as described above, without so notifying the Contractor in writing, then the Owner shall bear all reasonable costs properly attributable thereto.

§ 11.4.1.3 If the property insurance requires deductibles, the Owner shall pay costs not covered because of such deductibles.

§ 11.4.1.4 This property insurance shall cover portions of the Work stored off the site, and also portions of the Work in transit.

§ 11.4.1.5 Partial occupancy or use in accordance with Section 9.9 shall not commence until the insurance company or companies providing property insurance have consented to such partial occupancy or use by endorsement or otherwise. The Owner and the Contractor shall take reasonable steps to obtain consent of the insurance company or companies and shall, without mutual written consent, take no action with respect to partial occupancy or use that would cause cancellation, lapse or reduction of insurance.

§ 11.4.2 Boiler and Machinery Insurance. The Owner shall purchase and maintain boiler and machinery insurance required by the Contract Documents or by law, which shall specifically cover such insured objects during installation and until final acceptance by the Owner; this insurance shall include interests of the Owner, Contractor, Subcontractors and Sub-subcontractors in the Work, and the Owner and Contractor shall be named insureds.

§ 11.4.3 Loss of Use Insurance. The Owner, at the Owner's option, may purchase and maintain such insurance as will insure the Owner against loss of use of the Owner's property due to fire or other hazards, however caused. The Owner waives all rights of action against the Contractor for loss of use of the Owner's property, including consequential losses due to fire or other hazards however caused.

§ 11.4.4 If the Contractor requests in writing that insurance for risks other than those described herein or other special causes of loss be included in the property insurance policy, the Owner shall, if possible, include such insurance, and the cost thereof shall be charged to the Contractor by appropriate Change Order.

§ 11.4.5 If during the Project construction period the Owner insures properties, real or personal or both, at or adjacent to the site by property insurance under policies separate from those insuring the Project, or if after final payment property insurance is to be provided on the completed Project through a policy or policies other than those insuring the Project during the construction period, the Owner shall waive all rights in accordance with the terms of Section 11.4.7 for damages caused by fire or other causes of loss covered by this separate property insurance. All separate policies shall provide this waiver of subrogation by endorsement or otherwise.

§ 11.4.6 Before an exposure to loss may occur, the Owner shall file with the Contractor a copy of each policy that includes insurance coverages required by this Section 11.4. Each policy shall contain all generally applicable conditions, definitions, exclusions and endorsements related to this Project. Each policy shall contain a provision that the policy will not be canceled or allowed to expire, and that its limits will not be reduced, until at least 30 days' prior written notice has been given to the Contractor.

§ 11.4.7 Waivers of Subrogation.  The Owner and Contractor waive all rights against (1) each other and any of their subcontractors, sub-subcontractors, agents and employees, each of the other, and (2) the separate contractors described in Article 6, if any, and any of their subcontractors, sub-subcontractors, agents and employees, for damages caused by fire or other causes of loss to the extent covered by property insurance obtained pursuant to this Section 11.4 or other property insurance applicable to the Work, except such rights as they have to proceeds of such insurance held by the Owner as fiduciary. The Owner or Contractor, as appropriate, shall require of the separate contractors described in Article 6, if any, and the subcontractors, sub-subcontractors, agents and employees of any of them, by appropriate agreements, written where legally required for validity, similar waivers each in favor of other parties enumerated herein. The policies shall provide such waivers of subrogation by endorsement or otherwise. A waiver of subrogation shall be effective as to a person or entity even though that person or entity would otherwise have a duty of indemnification, contractual or otherwise, did not pay the insurance premium directly or indirectly, and whether or not the person or entity had an insurable interest in the property damaged.

§ 11.4.8 A loss insured under Owner's property insurance shall be adjusted by the Owner as fiduciary and made payable to the Owner as fiduciary for the insureds, as their interests may appear, subject to requirements of any applicable mortgagee clause and of Section 11.4.10. The Contractor shall pay Subcontractors their just shares of insurance proceeds received by the Contractor, and by appropriate agreements, written where legally required for validity, shall require Subcontractors to make payments to their Sub-subcontractors in similar manner.

§ 11.4.9 If required in writing by a party in interest, the Owner as fiduciary shall, upon occurrence of an insured loss, give bond for proper performance of the Owner's duties. The cost of required bonds shall be charged against proceeds received as fiduciary. The Owner shall deposit in a separate account proceeds so received, which the Owner shall distribute in accordance with such agreement as the parties in interest may reach, or in accordance with an arbitration award in which case the procedure shall be as provided in Section 4.6. If after such loss no other special agreement is made and unless the Owner terminates the Contract for convenience, replacement of damaged property shall be performed by the Contractor after notification of a Change in the Work in accordance with Article 7.

§ 11.4.10 The Owner as fiduciary shall have power to adjust and settle a loss with insurers unless one of the parties in interest shall object in writing within five days after occurrence of loss to the Owner's exercise of this power; if such objection is made, the dispute shall be resolved as provided in Sections 4.5 and 4.6. The Owner as fiduciary shall, in the case of arbitration, make settlement with insurers in accordance with directions of the arbitrators. If distribution of insurance proceeds by arbitration is required, the arbitrators will direct such distribution.

§ 11.5 PERFORMANCE BOND AND PAYMENT BOND

§ 11.5.1 The Owner shall have the right to require the Contractor to furnish bonds covering faithful performance of the Contract and payment of obligations arising thereunder as stipulated in bidding requirements or specifically required in the Contract Documents on the date of execution of the Contract.

§ 11.5.2 Upon the request of any person or entity appearing to be a potential beneficiary of bonds covering payment of obligations arising under the Contract, the Contractor shall promptly furnish a copy of the bonds or shall permit a copy to be made.

ARTICLE 12   UNCOVERING AND CORRECTION OF WORK

§ 12.1 UNCOVERING OF WORK

§ 12.1.1 If a portion of the Work is covered contrary to the Architect's request or to requirements specifically expressed in the Contract Documents, it must, if required in writing by the Architect, be uncovered for the Architect's examination and be replaced at the Contractor's expense without change in the applicable Contract Time.

§ 12.1.2 If a portion of the Work has been covered which the Architect has not specifically requested to examine prior to its being covered, the Architect may request to see such Work and it shall be uncovered by the Contractor. If such Work is in accordance with the Contract Documents, costs of uncovering and replacement shall, by appropriate Change Order, be at the Owner's expense. If such Work is not in accordance with the Contract Documents, correction shall be at the Contractor's expense unless the condition was caused by the Owner or a separate contractor in which event the Owner shall be responsible for payment of such costs.

§ 12.2 CORRECTION OF WORK

§ 12.2.1 BEFORE OR AFTER SUBSTANTIAL COMPLETION

§ 12.2.1.1 The Contractor shall promptly correct Work rejected by the Architect or failing to conform to the requirements of the Contract Documents, whether discovered before or after Substantial Completion and whether or not fabricated, installed or completed. Costs of correcting such rejected Work, including additional testing and inspections and compensation for the Architect's services and expenses made necessary thereby, shall be at the Contractor's expense.

§ 12.2.2 AFTER SUBSTANTIAL COMPLETION

§ 12.2.2.1 In addition to the Contractor's obligations under Section 3.5, if, within one year after the date of Substantial Completion of a Phase of the Work or designated portion thereof or after the date for commencement of warranties established under Section 9.9.1, or by terms of an applicable special warranty required by the Contract Documents, any of such  Work is found to be not in accordance with the requirements of the Contract Documents, the Contractor shall correct it promptly after receipt of written notice from the Owner to do so unless the Owner has previously given the Contractor a written acceptance of such condition. The Owner shall give such notice promptly after discovery of the condition. During the one-year period for correction of such Work, if the Owner fails to notify the Contractor and give the Contractor an opportunity to make the correction, the Owner waives the rights to require correction by the Contractor and to make a claim for breach of warranty. If the Contractor fails to correct nonconforming Work within a reasonable time during that period after receipt of notice from the Owner or Architect, the Owner may correct it in accordance with Section 2.4.

§ 12.2.2.2 The one-year period for correction of a Phase of the Work shall be extended with respect to portions of Work first performed after Substantial Completion of such Phase of the Work by the period of time between Substantial Completion of such Phase of the Work and the actual performance of such Phase of the Work.

§ 12.2.2.3 The one-year period for correction of a Phase of the Work shall not be extended by corrective Work performed by the Contractor pursuant to this Section 12.2.

§ 12.2.3 The Contractor shall remove from the site portions of the Work which are not in accordance with the requirements of the Contract Documents and are neither corrected by the Contractor nor accepted by the Owner.

§ 12.2.4 The Contractor shall bear the cost of correcting destroyed or damaged construction, whether completed or partially completed, of the Owner or separate contractors caused by the Contractor's correction or removal of Work which is not in accordance with the requirements of the Contract Documents.

§ 12.2.5 Nothing contained in this Section 12.2 shall be construed to establish a period of limitation with respect to other obligations which the Contractor might have under the Contract Documents. Establishment of the one-year period for correction of a Phase of the Work as described in Section 12.2.2 relates only to the specific obligation of the Contractor to correct such Work, and has no relationship to the time within which the obligation to comply with the Contract Documents may be sought to be enforced, nor to the time within which proceedings may be commenced to establish the Contractor's liability with respect to the Contractor's obligations other than specifically to correct such  Work.

§ 12.3 ACCEPTANCE OF NONCONFORMING WORK

§ 12.3.1 If the Owner prefers to accept Work which is not in accordance with the requirements of the Contract Documents, the Owner may do so instead of requiring its removal and correction, in which case the Contract Sum will be reduced as appropriate and equitable. Such adjustment shall be effected whether or not final payment has been made.

ARTICLE 13   MISCELLANEOUS PROVISIONS

§ 13.1 GOVERNING LAW

§ 13.1.1 The Contract shall be governed by the law of the place where the Project is located.

§ 13.2 SUCCESSORS AND ASSIGNS

§ 13.2.1 The Owner and Contractor respectively bind themselves, their partners, successors, assigns and legal representatives to the other party hereto and to partners, successors, assigns and legal representatives of such other party in respect to covenants, agreements and obligations contained in the Contract Documents. Except as provided in Section 13.2.2, neither party to the Contract shall assign the Contract as a whole without written consent of the other. If either party attempts to make such an assignment without such consent, that party shall nevertheless remain legally responsible for all obligations under the Contract.

§ 13.2.2 The Owner may, without consent of the Contractor, assign the Contract to an institutional lender providing construction financing for the Project. In such event, the lender shall assume the Owner's rights and obligations under the Contract Documents. The Contractor shall execute all consents reasonably required to facilitate such assignment.

§ 13.3 WRITTEN NOTICE

§ 13.3.1 Written notice shall be deemed to have been duly served if delivered in person to the individual or a member of the firm or entity or to an officer of the corporation for which it was intended, or if delivered at or sent by registered or certified mail to the last business address known to the party giving notice.

§ 13.4 RIGHTS AND REMEDIES

§ 13.4.1 Duties and obligations imposed by the Contract Documents and rights and remedies available thereunder shall be in addition to and not a limitation of duties, obligations, rights and remedies otherwise imposed or available by law.

§ 13.4.2 No action or failure to act by the Owner, Architect or Contractor shall constitute a waiver of a right or duty afforded them under the Contract, nor shall such action or failure to act constitute approval of or acquiescence in a breach thereunder, except as may be specifically agreed in writing.

§ 13.5 TESTS AND INSPECTIONS

§ 13.5.1 Tests, inspections and approvals of portions of the Work required by the Contract Documents or by laws, ordinances, rules, regulations or orders of public authorities having jurisdiction shall be made at an appropriate time. Unless otherwise provided, the Contractor shall make arrangements for such tests, inspections and approvals with an independent testing laboratory or entity acceptable to the Owner, or with the appropriate public authority, and shall bear all related costs of tests, inspections and approvals. The Contractor shall give the Architect timely notice of when and where tests and inspections are to be made so that the Architect may be present for such procedures. The Owner shall bear costs of tests, inspections or approvals which do not become requirements until after bids are received or negotiations concluded.

§ 13.5.2 If the Architect, Owner or public authorities having jurisdiction determine that portions of the Work require additional testing, inspection or approval not included under Section 13.5.1, the Architect will, upon written authorization from the Owner, instruct the Contractor to make arrangements for such additional testing, inspection or approval by an entity acceptable to the Owner, and the Contractor shall give timely notice to the Architect of when and where tests and inspections are to be made so that the Architect may be present for such procedures. Such costs, except as provided in Section 13.5.3, shall be at the Owner's expense.

§ 13.5.3 If such procedures for testing, inspection or approval under Sections 13.5.1 and 13.5.2 reveal failure of the portions of the Work to comply with requirements established by the Contract Documents, all costs made necessary by such failure including those of repeated procedures and compensation for the Architect's services and expenses shall be at the Contractor's expense.

§ 13.5.4 Required certificates of testing, inspection or approval shall, unless otherwise required by the Contract Documents, be secured by the Contractor and promptly delivered to the Architect.

§ 13.5.5 If the Architect is to observe tests, inspections or approvals required by the Contract Documents, the Architect will do so promptly and, where practicable, at the normal place of testing.

§ 13.5.6 Tests or inspections conducted pursuant to the Contract Documents shall be made promptly to avoid unreasonable delay in the Work.

§ 13.6 INTEREST

§ 13.6.1 Payments due and unpaid under the Contract Documents shall bear interest from the date payment is due at such rate as the parties may agree upon in writing or, in the absence thereof, at the legal rate prevailing from time to time at the place where the Project is located.

§ 13.7 COMMENCEMENT OF STATUTORY LIMITATION PERIOD

§ 13.7.1 As between the Owner and Contractor:

.1 Before Substantial Completion.  As to acts or failures to act occurring prior to the relevant date of Substantial Completion of a Phase of the Work, any applicable statute of limitations shall commence to run and any alleged cause of action shall be deemed to have accrued in any and all events not later than such date of Substantial Completion;

.2 Between Substantial Completion and Final Certificate for Payment.  As to acts or failures to act occurring subsequent to the relevant date of Substantial Completion of a Phase of the Work and prior to issuance of the final Certificate for Payment, any applicable statute of limitations shall commence to run and any alleged cause of action shall be deemed to have accrued in any and all events not later than the date of issuance of the final Certificate for Payment; and

.3 After Final Certificate for Payment.  As to acts or failures to act occurring after the relevant date of issuance of the final Certificate for Payment, any applicable statute of limitations shall commence to run and any alleged cause of action shall be deemed to have accrued in any and all events not later than the date of any act or failure to act by the Contractor pursuant to any Warranty provided under Section 3.5, the date of any correction of the Work or failure to correct the Work by the Contractor under Section 12.2, or the date of actual commission of any other act or failure to perform any duty or obligation by the Contractor or Owner, whichever occurs last.

ARTICLE 14   TERMINATION OR SUSPENSION OF THE CONTRACT

§ 14.1 TERMINATION BY THE CONTRACTOR

§ 14.1.1 The Contractor may terminate the Contract if the Work is stopped for a period of 30 consecutive days through no act or fault of the Contractor or a Subcontractor, Sub-subcontractor or their agents or employees or any other persons or entities performing portions of the Work under direct or indirect contract with the Contractor, for any of the following reasons:

.1 issuance of an order of a court or other public authority having jurisdiction which requires all Work to be stopped;

.2 an act of government, such as a declaration of national emergency which requires all Work to be stopped;

.3 because the Architect has not issued a Certificate for Payment and has not notified the Contractor of the reason for withholding certification as provided in Section 9.4.1, or because the Owner has not made payment on a Certificate for Payment within the time stated in the Contract Documents; or

.4 the Owner has failed to furnish to the Contractor promptly, upon the Contractor's request, reasonable evidence as required by Section 2.2.1.

§ 14.1.2 The Contractor may terminate the Contract if, through no act or fault of the Contractor or a Subcontractor, Sub-subcontractor or their agents or employees or any other persons or entities performing portions of the Work under direct or indirect contract with the Contractor, repeated suspensions, delays or interruptions of the entire Work by the Owner as described in Section 14.3 constitute in the aggregate more than 100 percent of the total number of days scheduled for completion, or 120 days in any 365-day period, whichever is less.

§ 14.1.3 If one of the reasons described in Section 14.1.1 or 14.1.2 exists, the Contractor may, upon seven days' written notice to the Owner and Architect, terminate the Contract and recover from the Owner payment for Work executed and for proven loss with respect to materials, equipment, tools, and construction equipment and machinery, including reasonable overhead, profit and damages.

§ 14.1.4 If the Work is stopped for a period of 60 consecutive days through no act or fault of the Contractor or a Subcontractor or their agents or employees or any other persons performing portions of the Work under contract with the Contractor because the Owner has persistently failed to fulfill the Owner's obligations under the Contract Documents with respect to matters important to the progress of the Work, the Contractor may, upon seven additional days' written notice to the Owner and the Architect, terminate the Contract and recover from the Owner as provided in Section 14.1.3.

§ 14.2 TERMINATION BY THE OWNER FOR CAUSE

§ 14.2.1 The Owner may terminate the Contract if the Contractor:

.1 persistently or repeatedly refuses or fails to supply enough properly skilled workers or proper materials;

.2 fails to make payment to Subcontractors for materials or labor in accordance with the respective agreements between the Contractor and the Subcontractors;

.3 persistently disregards laws, ordinances, or rules, regulations or orders of a public authority having jurisdiction; or

.4 otherwise is guilty of substantial breach of a provision of the Contract Documents.

§ 14.2.2 When any of the above reasons exist, the Owner, upon certification by the Architect that sufficient cause exists to justify such action, may without prejudice to any other rights or remedies of the Owner and after giving the Contractor and the Contractor's surety, if any, seven days' written notice, terminate employment of the Contractor and may, subject to any prior rights of the surety:

.1 take possession of the site and of all materials, equipment, tools, and construction equipment and machinery thereon owned by the Contractor;

.2 accept assignment of subcontracts pursuant to Section 5.4; and

.3 finish the Work by whatever reasonable method the Owner may deem expedient. Upon request of the Contractor, the Owner shall furnish to the Contractor a detailed accounting of the costs incurred by the Owner in finishing the Work.

§ 14.2.3 When the Owner terminates the Contract for one of the reasons stated in Section 14.2.1, the Contractor shall not be entitled to receive further payment until the Work is finished.

§ 14.2.4 If the unpaid balance of the Contract Sum exceeds costs of finishing the Work, including compensation for the Architect's services and expenses made necessary thereby, and other damages incurred by the Owner and not expressly waived, such excess shall be paid to the Contractor. If such costs and damages exceed the unpaid balance, the Contractor shall pay the difference to the Owner. The amount to be paid to the Contractor or Owner, as the case may be, shall be certified by the Architect, upon application, and this obligation for payment shall survive termination of the Contract.

§ 14.3 SUSPENSION BY THE OWNER FOR CONVENIENCE

§ 14.3.1 The Owner may, without cause, order the Contractor in writing to suspend, delay or interrupt the Work in whole or in part for such period of time as the Owner may determine.

§ 14.3.2 The Contract Sum and applicable Contract Times shall be adjusted for increases in the cost and time caused by suspension, delay or interruption as described in Section 14.3.1. Adjustment of the Contract Sum shall include profit. No adjustment shall be made to the extent:

.1 that performance is, was or would have been so suspended, delayed or interrupted by another cause for which the Contractor is responsible; or

.2 that an equitable adjustment is made or denied under another provision of the Contract.

§ 14.4 TERMINATION BY THE OWNER FOR CONVENIENCE

§ 14.4.1 The Owner may, at any time, terminate the Contract for the Owner's convenience and without cause.

§ 14.4.2 Upon receipt of written notice from the Owner of such termination for the Owner's convenience, the Contractor shall:

.1 cease operations as directed by the Owner in the notice;

.2 take actions necessary, or that the Owner may direct, for the protection and preservation of the Work; and

.3 except for Work directed to be performed prior to the effective date of termination stated in the notice, terminate all existing subcontracts and purchase orders and enter into no further subcontracts and purchase orders.

§ 14.4.3 In case of such termination for the Owner's convenience, the Contractor shall be entitled to receive payment for Work executed, and costs incurred by reason of such termination, along with reasonable overhead and profit on the Work not executed.

EXHIBIT “B”

COST OF THE WORK

        “Cost of the Work” shall mean those costs incurred and/or paid by Contractor in connection with the construction of the Project and the performance pursuant to this Agreement.  The Cost of the Work shall include, but not be limited to, the items set forth in the following Subparagraphs (1) through (27):

(1)           Wages paid for labor in the direct employ of Contractor in the performance of the Work under applicable collective bargaining agreements or under a salary or wage schedule and including such welfare or other benefits as may be actually payable with respect thereto.  Basic hourly wages, for purposes of this paragraph, shall include vacation pay, sick pay and any overtime pay, if applicable.

(2)             Salaries of Contractor’s personnel, while performing or supervising the Work.

(a)             Personnel engaged, at shops or on the road, in expediting the production or transportation of materials or equipment, shall be included for that portion of their time as is established by appropriate documentation as having been spent in connection with the Work.

(b)             Project Managers, Construction Managers, Project Executives, expeditors, accounting, and secretarial personnel whose part-time or full-time services are required for the Work, shall be included for such part of their time as may be devoted to the Work.

(c)             Employees of Contractor whose services are required in the preparation or analysis of schedules, material lists, Shop Drawings, working details, periodic cost studies and similar services necessary to define the Work and control its cost and progress shall be included for such part of their time as may be devoted to the Work.

(3)             Actual cost of contributions, assessments or taxes paid during the performance of the Work for such items as unemployment compensation, social security and fringe benefits in accordance with Contractor’s personnel policy insofar as such cost is based on wages, salaries or other remuneration paid to employees of Contractor and included in the cost of the work under Subparagraphs (1) and (2) above.

(4)             The travel and subsistence expenses of Contractor or its officers or employees incurred while traveling in discharge of duties connected with the Work.

(5)             Cost of all material, supplies and equipment incorporated in the Work, including costs of transportation thereof and excess material required to provide a reasonable allowance for waste.

(6)             Cost of Project General Conditions as described in the attached Exhibit “G”.

(7)             Cost of premiums for all payment bonds and performance bonds required by Owner or Contractor to be carried by Subcontractors attributable to the Work.  The cost thereof shall not be considered “Cost of the Work” for purposes of computing Contractor’s Fee.

(8)             Amounts due under all subcontracts made in accordance with the provisions of the Contract or any other document executed in connection therewith.

(9)             Cost, including transportation and maintenance, of all materials, supplies, equipment, temporary facilities and hand tools not owned by the workers, which are purchased and consumed in the performance of the Work, and cost less salvage value on such items used in the performance of the Work but not consumed which remain the property of Contractor.

(10)             All rental charges paid for machinery and equipment used at the site of the Work, whether rented from Contractor or others, including installation, minor repairs and replacements, dismantling, removal, transportation and delivery costs thereof.  To the extent items are rented from the Contractor or its affiliated Rental Company, the rates shall not exceed the prevailing rates in the area.

(a)             Owner reserves the right to direct Contractor to dispose of all materials, equipment, temporary structures, tools and supplies which have been purchased and charged to the job and are no longer needed.  The Cost of the Work shall be credited for the proceeds of the disposition thereof.  If the Owner desires to retain such items, title will be transferred to the Owner.

(b)             Contractor shall obtain Owner’s permission to purchase tools and equipment having a purchase price or fair market value in excess of $10,000.  If advance written approval is not obtained from an authorized Owner representative, Owner may at its discretion exclude the purchase price from costs to be reimbursed.

(11)             Cost of Consultants, if any, hired by Contractor in the prosecution of the Work.  The cost thereof shall not be considered “Cost of the Work” for purposes of computing Contractor’s Fee, except with the prior written consent of Owner pursuant to an approved Change Order.

(12)             Cost of premiums for all insurance carried by Contractor attributable exclusively to the Work, including the premium cost of insurance required to be carried under the provisions of Exhibit "C" to this Agreement (i) based upon the Contract Sum or payments paid or payable to Contractor pursuant to this Agreement or (ii) for insurance not carried by Contractor absent the requirements in Exhibit "C".  The premium cost of insurance required to be carried under the provisions of Exhibit "C" shall not be considered "Cost of the Work" for purposes of computing Contractor's Fee.

(13)             Sales, use or similar taxes related to the Work and for which Contractor is liable as imposed by any governmental authority.

(14)             Building and other permit fees, assessments, acreage fees, connection fees, and similar fees shall be paid directly by Owner and shall not constitute Cost of the Work.  Other licenses and inspections for work the Contractor is required to pay by the Contract Documents, royalties, damages for infringements of patents and costs of defending suits therefor, and deposits lost shall constitute a part of the Cost of the Work.

(15)             Fees for testing laboratories, including inspections, testing and reports unless excluded from Contractor responsibility by the Contract Documents.  The cost thereof (other than the cost of the QAA inspection required by Clark County, Nevada with respect to the Work) shall not be considered “Cost of the Work” for purposes of computing Contractor’s Fee, except with the prior written consent of Owner pursuant to an approved Change Order.

(16)             Intentionally omitted.

(17)             Minor expenses such as telegrams, long distance telephone calls, telephone service at the site, cellular telephone service, pager service, expressage, overnight delivery service, and similar petty cash items in connection with the Work.

(18)             Cost of removal of all debris.

(19)             Cost incurred by Contractor for plotting, blueprinting and other document reproduction.

(20)             Cost incurred due to any emergency affecting the safety of persons and property not covered by insurance proceeds.

(21)             Cost of providing information to, and cooperating with Owner in meeting requirements imposed by the City, or County, or any lender providing funds for the Project.

(22)             Cost of obtaining, maintaining and using all temporary services, including utilities, sanitary facilities, temporary offices, safety provisions, etc.

(23)             Cost of crossing or protecting any public utilities or rights-of-way as required.

(24)             Cost of protecting or repairing adjoining properties, if required.

(25)             Other cost reasonably incurred in the performance of the Work and in accordance with standard and customary construction industry practices and procedures.

(26)             Discounts:  Contractor shall take advantage of all available cash and trade discounts funded in advance by the Owner and the Cost of the Work shall be credited with same.  Any quantity discounts, rebates, refunds, etc. received for work performed on the Project will be credited to the Cost of the Work.

(27)             Owner’s and/or Tenant’s Right to Audit:  The Contractor’s records, which shall include but not be limited to accounting records, written policies and procedures, subcontractor files (including proposals of successful and unsuccessful bidders), original estimate, estimating work sheets, correspondence, change order files (including documentation covering negotiated settlements), and any other supporting evidence necessary to substantiate charges related to this Agreement (all foregoing hereinafter referred to as “records”) shall be open to inspection and subject to audit and/or reproduction, during normal working hours, by Owner’s and/or Tenant’s agent or its authorized representative to the extent necessary to adequately permit evaluation and verification of any invoices, payments or claims submitted by the Contractor or any of his payees pursuant to the execution of this Agreement.  Such records subject to examination shall also include, but not be limited to, those records necessary to evaluate and verify direct and indirect costs (including overhead allocations) as they may apply to costs associated with this Agreement.

(a)             For the purpose of such audits, inspections, examinations and evaluations, the Owner’s and/or Tenant’s agent or authorized representative shall have access to said records for the effective date of this Agreement for the duration of work and until three (3) years (or longer if required by law), after the date of final payment by Owner to Contractor pursuant to this Agreement.

(b)           Owner’s and/or Tenant’s agent or its authorized representative shall have access to Contractor’s facilities, shall have access to all necessary records and shall be provided adequate and appropriate work space, in order to conduct audits in compliance with this article.  Owner’s and/or Tenant’s agent or authorized representative shall give Contractor reasonable advance notice of intended audits.

EXHIBIT “C”

INSURANCE AND BONDS

I The Contractor’s insurance, required by the above, shall be written for not less than the following coverages and limits, or greater if required by law, and shall be maintained by insurance carriers reasonably acceptable to the Owner and Owner’s lender.

1.         Worker’s Compensation:

a)         State - Statutory

b)         Applicable Federal Laws - Statutory

c)         Employer’s Liability                                                             $1,000,000

2. Commercial General Liability (including Independent Contractors, Products and Completed Operation), with the following limits:

General Aggregate                                                                          $2,000,000.00

Products - Comp/OPS Aggregate                                                   $2,000,000.00

Personal and Advertising Injury                                                       $1,000,000.00

Each Occurrence                                                                            $1,000,000.00

Fire Damage (any one fire)                                                              $50,000.00

Medical Expense (any one person)                                                  $5,000.00

a) Products and Completed Operations shall be maintained for three (3) years after final payment for the Work with the total limits required herein.

b) Property Damage Liability Insurance shall provide X, C and U Coverage.

c) Broad Form Property Damage Coverage shall include Completed Operations.

d) This insurance as well as the Umbrella Excess Liability insurance shall include as Additional Insureds the following: (i) Owner, Owner’s employees, and Owner’s representatives; and (ii) with respect to claims asserted by third parties resulting from Contractor’s activities related to the Project, Tenant, Tenant’s employees and Tenant’s representatives.

e)         General aggregate limits on the above shall apply per project.

f) Contractor’s liability insurance shall be primary and non-contributory, except with respect to any claim resulting from the negligence or willful misconduct of Tenant and its employees, agents and contractors.

3.         Business Auto Liability (including owned, non-owned and hired vehicles):

a)         Bodily Injury                                                 $1,000,000.00  Each Person

                 $1,000,000.00  Each Occurrence

b)         Property Damage                                         $1,000,000.00  Each Occurrence

4.         Umbrella Excess Liability:                                       $4,000,000.00  Over primary insurance (minimum)

                                                                                $10,000.00  Retention for self-insured hazards each occurrence.

If the insurance is written on the Comprehensive General Liability policy form, the Certificates shall be AIA Document G705, Certificate of Insurance.  If the insurance is written on a Commercial General Liability policy form, ACORD form 25S will be acceptable.

If Contractor requests payment for material stored off-site or in transit, then the Contractor shall provide insurance coverage for that portion of the work stored off-site or in transit subject to Owner’s approval and based on the value established and agreed to in Owner’s approval.

II Tenant shall purchase and maintain, and/or self-insure builder’s risk insurance upon the entire Work at the site to the full insurable value thereof.  Such coverage includes only building materials and equipment that become a part of the Project and does not include Contractor’s personal property such as tools and equipment.  This insurance shall name the Contractor as an additional insured and shall include the interests of the Owner, Tenant, the Contractor, its Subcontractors and Sub-Subcontractors in the Work and shall cover “All Risks” of direct physical loss or damage to the property coverage, excluding, however, Flood, Earthquake and Theft of personal property left in the open.

Liability for any loss or damages for the interest of parties not covered as a result of the deductible on any claim through the date of substantial completion shall become a Cost of the Work per Exhibit “B” hereto, provided however, such costs shall not be considered “Cost of the Work” for purposes of computing Contractor’s Fee.

When a loss occurs, the Contractor shall notify Tenant (with a copy to Owner) within three (3) working days so that a report can be made to the insurance company.  A detailed written report of the loss shall be furnished to Tenant (with a copy to Owner) within ten (10) working days of the loss.

III Unless Tenant waives the requirement in writing prior to bond issuance, prior to commencement of Phase 1 or Phase 2 of the Work, Contractor shall furnish and deliver to Tenant a payment bond and performance bond, with Tenant as the obligee with the power to enforce the bonds, in a form mutually acceptable to Owner, Tenant and surety.  The bond amount of each bond for Phases 1 and 2 shall be the Phase 1 and 2 GMP, unless otherwise agreed by Tenant.  The collective premium cost (including the cost of any credit enhancement required by the surety as a condition to the bond issuance) of such bonds up to, but not in excess of, an amount equal to two percent (2%) of the Phase 1 and 2 GMP, shall be paid by Owner, with Contractor bearing any premium cost (including such credit enhancement costs) in excess of that amount.  Unless Tenant waives the requirement in writing prior to bond issuance, prior to commencement of Phase 3 of the Work, Contractor shall furnish and deliver to Tenant either a new payment bond and performance bond with Tenant as the obligee with the power to enforce the bonds, in a form mutually acceptable to Owner, Tenant and surety, or, at Owner’s option, amended payment and performance bonds for Phases 1 and 2 that includes the increased face amount to cover the Phase 3 GMP.  The bond amount of each such new bond shall be the Phase 3 GMP, unless otherwise agreed by Tenant.  The collective premium cost (including the cost of any credit enhancement required by the surety as a condition to bond issuance) of such bonds up to, but not in excess of, an amount equal to two percent (2%) of the Phase 3 GMP shall be paid by Owner, with Contractor bearing any premium cost (including such credit enhancement costs) in excess of that amount.  The cost of all such premiums, whether paid by Owner or Contractor, shall become a Cost of the Work per Exhibit “B” hereto, but such costs shall not be considered “Cost of the Work” for purposes of computing Contractor’s Fee.

EXHIBIT “D”

SPECIAL PROVISIONS

1.   Contractor shall arrange for all on-site testing and inspections and obtain only the required Building Permits.  The cost for these services is to be included in the Contract Sum.  The Owner shall pay all other required fees for the Project.

2.   The Contractor shall, as part of his pay request, provide his and his subcontractor’s and material supplier’s conditional lien waivers for each progress payment requested and unconditional lien waivers for the previous month’s progress payment.

3.   The fee for changes in the Work shall be 5% of the cost of the Work as defined in Exhibit “B”.

4.   Mediation and Binding Arbitration - All monetary disputes where the amount in dispute is $200,000 or less (not including recoverable costs as defined in any statute or case law, attorneys’ fees, expert witness fees, costs associated with arbitration including, but not limited to, the arbitrator’s fees, and prejudgment interest), arising out of or relating to this Agreement, shall be resolved by binding arbitration.  Judgment shall be entered upon the final award unless satisfied as set forth below.

4.1.   The parties may mutually agree to resolve any disputes by mediation, but mediation is not a prerequisite to arbitration.

4.2.   Commencement of Arbitration.  Arbitration shall be commenced by either party demanding arbitration in writing and sending the written demand by facsimile (if the facsimile number is known) and certified mail, return receipt requested, to the last known address of the respondent.

4.3.   Service.  All notices, pleadings, and papers shall be sent by facsimile after commencement of arbitration, unless otherwise agreed to in writing.

4.4.   Selection of the Arbitrator.  Within 10 days of a written demand for arbitration, the parties shall mutually select a retired state or federal court judge or appellate court justice to act as the arbitrator.  If the parties cannot agree on the selection of an arbitrator, the presiding judge of the state court closest to the construction project at issue shall select an arbitrator.

4.5.   Location of Arbitration.  The arbitration shall take place within 75 miles of the construction project at issue, at a place mutually selected by the parties.  If the parties cannot agree on a location for the arbitration, the arbitrator shall select the location.

4.6.   Arbitration Date.  The parties shall cooperate with the arbitrator in setting an arbitration date.  If the parties cannot agree on an arbitration date, the arbitrator shall have the power to unilaterally set the arbitration date.  The arbitration shall be completed within 150 days of the date of the commencement of arbitration, unless otherwise agreed to in writing, or upon a showing of good cause to the arbitrator.

4.7.   Application of Law.  The parties shall be bound by, and the arbitrator shall apply all the laws (without limitation) of the state in which the construction project at issue is located, as if the case were being tried in a state court.  The arbitrator shall have the power to enforce subpoenas, issue sanctions, and issue any other orders necessary to conduct the arbitration, as if the arbitrator were a superior court judge.  There are no orders the arbitrator makes which require trial court approval.

4.8.   Communication with Arbitrator.  There shall be no ex parte communication with the arbitrator, unless otherwise stated in this arbitration provision.

4.9.   Discovery.  Each party may propound the following (and only the following) discovery:  (1) three depositions (a deposition notice of a corporate entity shall be deemed only one deposition even if multiple people testify); (2) 35 interrogatories (either judicially approved form interrogatories or special interrogatories); (3) 35 requests for admission; (4) 35 document requests; and (5) unlimited subpoenas for documents, records, and evidence to non-parties which the arbitrator shall issue.  Each deposition shall last no longer than eight hours.  Depositions may be videotaped.  All discovery permitted by this arbitration provision shall be propounded and responded to in accordance with the applicable state law.  The arbitrator shall have the power to hear motions to compel discovery responses upon reasonable notice.

4.10.   Experts.  The parties may present expert testimony at arbitration only if the proposed expert submits a written report at least 20 days prior to the arbitration.  The expert’s testimony shall be limited to the subjects and opinions set forth in the written report.  Depositions of experts shall not be permitted.

4.11.   Summary Judgment/Adjudication.  The arbitrator shall have the power to grant summary judgment/partial summary judgment (adjudication) on reasonable notice.  The applicable state laws for summary judgment/partial summary judgment (adjudication) shall apply (except with regard to notice).

4.12.   Prevailing Party’s Right to Costs.  The prevailing party (as that term is defined in the applicable state law) shall recover all costs that the applicable state law permits, plus attorneys’ fees, expert witness fees, costs associated with arbitration including, but not limited to, the arbitrator’s fees, and prejudgment interest.

4.13.   Preliminary Hearing.  Prior to the arbitration, the arbitrator shall conduct a preliminary hearing and shall have the power to make orders and hear argument regarding the following:  estimation of the length of the hearing; the time required for presentation by each party; schedule and location of hearings; stipulations to uncontested facts; stipulations to the exchange and advance marking of exhibits; the exchange of witness lists and an outline of the witness’ testimony; the exchange of other relevant information, including expert reports; stipulations to any needed additional discovery; submission of pre-hearing briefs; provision for a court reporter; and potential site visits.

4.14.   Conduct of Arbitration.  The parties may be represented by counsel.  The arbitrator shall hear oral testimony and provide opportunity for cross-examination of witnesses.

4.15.   Ex Parte Award.  The arbitrator shall have the right to issue an ex parte award if a party refuses to participate or appear at a hearing.

4.16.   Written Opinion.  Within 30 days of completion of the arbitration, the arbitrator shall serve upon the parties a written opinion setting forth the arbitrator’s award and the reasons for the award.  The arbitrator shall make findings of fact, conclusions of law, and a clear calculation of the basis for each item of damages.  Upon service of the award, the arbitrator loses jurisdiction of the case (subject to awarding costs) unless, within 10 days, a party notifies the arbitrator he or she has made a material mistake of fact or law.  Upon receipt of such notice, the arbitrator shall have 10 days to amend the award.  If the arbitrator does not amend the award within the 10 day amendment period, the award shall be final.  If the arbitrator amends the award, the amended award shall be final.

4.17.   Award of Costs.  Within 30 days of service of the award, the prevailing party may submit a memorandum of costs and any accompanying motion to the arbitrator, who shall have jurisdiction to award costs, attorneys’ fees, expert witness fees, costs associated with arbitration including, but not limited to, the arbitrator’s fees, and prejudgment interest (collectively “Costs”), pursuant to the provisions of this arbitration agreement and applicable state law.  The opposing party shall have 15 days from service of the award to file any motion to tax the Costs.  The prevailing party shall have 15 days from service of the motion to tax the Costs to file any opposition to the motion.  Any reply brief to the motion to tax the Costs must be filed within five days from service of the opposition.  The arbitrator may award Costs without oral argument.  The arbitrator shall make any cost award within 15 days of final briefing regarding same.

4.18.   Final Award.  After ruling on the memorandum of Costs, the arbitrator shall issue a final award, including any Costs.  Within 10 days of the date of the final award, parties may notify the arbitrator, in writing, of any material mistakes of fact or law in the award of Costs in the final award.  Upon receipt of such notice, the arbitrator shall have 10 days to correct the award of Costs in the final award.  If the arbitrator does not amend the final award within the 10 day amendment period, the final award shall be final.

4.19.   Satisfaction of the Final Award.  Upon receipt of the final award, the losing party, if any, shall pay the award within 10 days, or the award shall be confirmed into a judgment, including Costs, upon motion, with no need for oral argument or a personal appearance.  The court will confirm the award into a judgment upon receipt of:  (1) a copy of the final award; (2) a declaration from counsel for the prevailing party, under penalty of perjury, that the award filed with the court was received from the arbitrator and has not been satisfied as set forth in this arbitration provision; and (3) a proposed judgment.  There is no right to appeal.

4.20.   Arbitration Costs and Fees.  Prior to a final judgment and award of Costs, the parties shall each pay half the costs of the arbitration, including the arbitrator’s fees.

4.21.   Punitive Damages.  Under no circumstances will the arbitrator have the power to award punitive damages to any party.

4.22.   Injunctive Relief.  Nothing in this arbitration provision shall preclude a party from seeking injunctive relief or any provisional remedy from the court.

5.   Owner and Contractor are entering into this Agreement for purposes of constructing “Tenant Improvements” as provided in the Lease between Owner, as Landlord, and Nevada Power Company, a Nevada corporation (“Tenant”), as Tenant, for leased premises consisting of Building 5 (the “Building”) on approximately 16.00 acres of land generally located at 7155 Lindell Road, Las Vegas, Nevada, together with approximately 15.94 acres of adjacent land (the “Additional Land”) (the “Lease”).  Contractor acknowledges and understands that Contractor is “Landlord’s Contractor,” and that this Agreement is the “Tenant Improvement Contract” as those terms are used in the Lease and defined in Article 14 of the Lease. Owner and Contractor acknowledge and agree that Tenant is an intended, third-party beneficiary of this Agreement and the other Contract Documents, with right and authority to enforce the provisions of this Agreement and to pursue remedies for breach of this Agreement.  Owner, Contractor, and Tenant acknowledge and agree that the Architect has been retained and paid by Tenant, for Tenant’s benefit, to provide the Drawings and Specifications, and to perform the services of the Architect provided for or contemplated in this Agreement.  No amendment, modification or supplement to this Agreement or any other Contract Document shall be effective without the written consent or written approval of either Tenant or Meyer (as defined in Section 6 below).

6.   A party serving as an Owner’s representative, acting in that capacity, shall have the right to  act for and on behalf of Owner, exercise all right and authority of Owner, and bind Owner with respect to this Agreement and the provisions of the Contract Documents as provided in Sections 6.1, 6.2, 6.3, 6.4 and 6.5 below.  Owner shall have two (2) Owner’s representatives.  One Owner’s representative shall be Marieka Meyer, Director of Administrative Services of Tenant, 6226 West Sahara Avenue, Las Vegas, Nevada 89146.  The other Owner’s representative shall be Rodman C. Martin (“Martin”).  Tenant, and not Owner, shall have the sole and exclusive right to remove Marieka Meyer as an Owner representative and/or to replace her (or any of her successors in that capacity) with another person.  Marieka Meyer, and each of her successor replacements as Owner representative, is hereinafter referred to in that capacity as “Meyer.”  Owner acknowledges and agrees that Meyer is being given the right and authority as Owner’s representative to protect the interests of Tenant with respect to the Project, and that Meyer shall have no express or implied duty, obligation or responsibility,  whether fiduciary or otherwise, to act to the detriment of Tenant or for the benefit of Owner in the exercise of her authority in that capacity.

6.1 Meyer, acting alone as Owner’s representative, shall have the sole and exclusive right and authority, in her sole discretion (and Owner hereby gives and grants to Meyer the sole and exclusive right and authority) to act for and on behalf of Owner, exercise all right and authority of Owner, and bind Owner in Owner’s capacity as “Owner” and/or “Obligee” in, under, and with respect to any payment bond and any performance bond (each, a “Bond” and together the “Bonds”) furnished and delivered to Tenant as provided in Section III of Exhibit “C”.  With respect to a performance Bond, such right and authority shall include, but shall not be limited to, the right and authority to (i) consider declaring a Contractor Default (as that term is used and defined in the Bond) under the Bond, (ii) give notice (a “CD Notice”) to Contractor and/or the Bond surety that Owner is considering declaring a Contractor Default and/or (iii) declare a Contractor Default.  With respect to a payment Bond, such right and authority shall include, but shall not be limited to, the right and authority to (1) give notice (a “Claim Notice”) to Contractor and/or the Bond surety of any claims, demands, liens or suits for the payment for labor, materials or equipment furnished for use in the performance of this Agreement and/or (2) tender defense of such claims, demands, liens or suits to the Contractor and the surety.   Further, upon, and at all times following the dispatch of any CD Notice or any Claim Notice, Meyer, acting alone as Owner’s representative, shall have the sole and exclusive right and authority, in her sole discretion, to act for and on behalf of Owner, exercise all right and authority of Owner, and bind Owner with respect to all Contract Documents, and all provisions thereof, save and except for those provisions in which such authority is expressly reserved to Architect.  Such right and authority of Meyer shall include the sole and exclusive right and authority to act for and on behalf of Owner, exercise all right and authority of Owner, and bind Owner with respect to all disputes and issues (and with respect to the resolution of all disputes and issues) arising under the Contract Documents, including disputes and issues that may have arisen at any time prior to dispatch of a CD Notice or Claim Notice, as well as those that may be related to, or that may arise after dispatch of a CD Notice or Claim Notice.  Each and all sureties of the Bonds are intended third-party beneficiaries of the provisions of this Section 6.1, which provisions are included in the Contract Documents with the intent that the sureties be able to rely thereon.  In the event of conflict between the foregoing provisions of this Section 6.1 and any other provision of any of the Contract Documents, including the subsequent provisions of this Section 6, the foregoing provisions shall govern and prevail.

6.2 In addition to the foregoing, Meyer, acting  alone as Owner’s representative, shall have the sole and exclusive right and authority, in her sole discretion, to act for and on behalf of Owner, exercise all right and authority of Owner, and bind Owner under and with respect to the following provisions of the Contract Documents except as to authority expressly reserved to Architect in those provisions:

This Agreement:	General Conditions:
Article 10	§1.1.2
§12.1.8	§1.6.2.1 (as added by Supplementary Conditions)

§12.2.5	§2.3
§13.2	§2.4
§13.4	§3.4.2 (as amended by Supplementary Conditions)
Section 4 of this Exhibit “D”	§4.2.1
	§4.2.8
	§5.2 (as amended by Supplementary Conditions)
	Article 7
	§9.8.2
	§11.5.1
	§12.2.2.1
	§12.2.2.4 (as added by Supplementary Conditions)
	§12.3.1
	§14.2
	§14.3

6.3 Except as provided in Section 6.1 above, either Owner’s representative, Meyer or Martin, acting alone as Owner’s representative, shall have the right and authority, in his or her sole discretion, to act for and on behalf of Owner, exercise all right and authority of Owner, and bind Owner under and with respect to the following provisions of the Contract Documents, except as to authority expressly reserved to Architect in those provisions:

This Agreement:   General Conditions:  

Article 11	§3.2 (as amended by Supplementary Conditions)
§12.1.7.2	§4.3 (as amended by Supplementary Conditions)
§12.1.9	§9.3.2
	§9.10.2
Section 11 of this Exhibit “D”	§13.5.2

6.4 Except as provided in Section 6.1 above, both Owner’s representatives, Meyer and Martin, must act jointly, as Owner’s representatives, to act for and on behalf of Owner, exercise all right and authority of Owner, and bind Owner under and with respect to the following provisions of the Contract Documents, except as to authority expressly reserved to Architect in those provisions:

This Agreement:	General Conditions:
§13.1	§1.7 (as added by Supplementary Conditions)
	§9.9.2
	§14.4

6.5 Except as provided in Section 6.1 above, Martin, acting alone as Owner’s representative, shall have the sole and exclusive right and authority, in his sole discretion, to act for and on behalf of Owner, exercise all right and authority of Owner, and bind Owner under and with respect to provisions of the Contract Documents not listed in 6.2, 6.3 or 6.4 above, except as to authority expressly reserved to Architect in those not-listed provisions.

7.   Owner shall provide a copy to Meyer on behalf of Tenant of each notice that Owner receives from Contractor or Architect pursuant to the Contract Documents.

8.   No progress payment, final payment nor any remaining retained percentage shall become due to Contractor until Meyer approves such payment.

9.   Contractor waives any right to stop work pursuant to Nevada Revised Statutes 108.2403.

10.   Contractor acknowledges that the Project is located on land owned by Clark County, Nevada.  Contractor agrees on behalf of itself, its Subcontractors, suppliers and consultants and their employees that there is no legal right to file a lien upon Clark County-owned property and will not file a mechanic’s lien or otherwise assert any claim against Clark County’s real estate or leasehold interest on account of any work done, labor performed or materials furnished under the Contract Documents.  Contractor agrees to indemnify, defend and hold Clark County and Owner harmless from any liens filed upon Clark County’s property or leasehold interest and shall promptly take all necessary legal action to ensure the removal of any such lien at Contractor’s sole expense.

11.   If the Project or any portion of the Project becomes encumbered by a notice of lien recorded under Nevada Revised Statutes 108.2212 or 108.246, inclusive, for work, materials or equipment constituting a portion of the Work, Contractor, at Contractor's cost and expense with no increase in the Guaranteed Maximum Price shall (i) defend Owner and Tenant in any action brought upon that lien and (ii) upon written request from Owner, promptly cause the discharge and release of the lien unless at the time of recording of the notice of lien, (a) the same work, materials or equipment are the subject of an Application for Payment that has remained unpaid for a period of thirty days or more following receipt by Architect of the Application for Payment and all items and materials requested by Architect thereafter with respect thereto and (b) either Architect has failed to respond to the Application for Payment within ten days of such receipt or Owner has failed to pay any resulting Certificate of Payment from Architect within twenty days of Owner's receipt of such Certificate of Payment.  Any costs incurred in connection with the foregoing shall become a Cost of the Work per Exhibit “B” hereto, provided however, such costs shall not be considered “Cost of the Work” for purposes of computing Contractor’s Fee and, as provided above, shall not result in an increase in the Guaranteed Maximum Price.

12.   The Work shall be performed in three phases (each a “Phase”).  Phase 1 of the Work shall consist of the construction of the Tenant Improvements for the Building, exclusive of the control room work.  Phase 2 of the Work shall consist of the construction of the construction of improvements to be located on the Additional Land.  Phase 3 of the Work shall consist of the construction of the control room at the Building.

13.   Whenever required by the context of the Contract Documents, the singular shall include the plural; the plural shall include the singular; and the masculine, feminine and neuter genders shall include the others.

EXHIBIT “E-1”

LIST OF PHASE 1 DOCUMENTS

Job Name                                Beltway Business Park Warehouse No. 2, Bldg 5. - Nevada Power T.I. Job No:  1914

I.   Supplementary Conditions  (Reference Article 15.1.3), which are appended to the end of the General Conditions of the Contract.

II.   Specifications  (Reference Article 15.1.4)

Not Applicable

III.   Drawings  (Reference Article 15.1.5)

See attached.

IV.   Addenda  (Reference Article 15.1.6)

Not Applicable

V.   the Project Manual - Nevada Power South District Operations Center - Tenant Improvements, dated January 22, 2007

TENANT IMPROVEMENT DRAWINGS

Architectural drawings prepared by SH Architecture, located at 7373 Peak Drive, Suite 250, Las Vegas, NV 89128.

	General Information
SHEET #	DESCRIPTION	REVISIONS	DATE
G0.00	COVER SHEET		1/22/07
G1.10	GENERAL INFORMATION		1/22/07
G2.10	1ST FLOOR CODE AND EXITING PLAN		1/22/07
G2.10A	1ST FLOOR CODE AND EXITING PLAN	A	7/09/07
G2.11	2ND FLOOR CODE AND EXITING PLAN		1/22/07
G2.11A	2ND FLOOR CODE AND EXITING PLAN	A	7/09/07
G3.10	FIRE RATED ASSEMBLIES		1/22/07
G3.11	FIRE STOP PENETRATIONS		1/22/07
G4.10	MASTER SITE PLAN		1/22/07
	Architectural Drawings
SHEET #	DESCRIPTION	REVISIONS	DATE
A1.10	SITE PLAN/OVERALL FLOOR PLAN LEVEL 1		1/22/07
A1.11	OVERALL FLOOR PLAN LEVEL 2		1/22/07
A2.10	PARTIAL FLOOR PLAN-LEVEL 1-AREA 1	2	4/04/07
A2.11	PARTIAL FLOOR PLAN-LEVEL 1-AREA 2	2	4/04/07
A2.12	PARTIAL FLOOR PLAN-LEVEL 1-AREA 3	2	4/04/07
A2.13	PARTIAL FLOOR PLAN-LEVEL 1-AREA 4	2	4/04/07
A2.14	PARTIAL FLOOR PLAN-LEVEL 1-AREA 5		1/22/07
A2.15	PARTIAL FLOOR PLAN-LEVEL 1-AREA 6		1/22/07
A2.16	PARTIAL FLOOR PLAN-LEVEL 1-AREA 7		1/22/07
A2.20	PARTIAL FLOOR PLAN-LEVEL 2-AREA 1		1/22/07
A2.21	PARTIAL FLOOR PLAN-LEVEL 2-AREA 2		1/22/07
A2.22	PARTIAL FLOOR PLAN-LEVEL 2-AREA 3		1/22/07
A2.23	PARTIAL FLOOR PLAN-LEVEL 2-AREA 4		1/22/07
A2.30	ENLARGED REST ROOM PLANS & INTERIOR ELEV.		1/22/07
A2.31	ENLARGED REST ROOM PLANS & INTERIOR ELEV.		1/22/07
A2.32	ENLARGED REST ROOM PLANS & INTERIOR ELEV.		1/22/07
A2.33	ENLARGED REST ROOM PLANS & INTERIOR ELEV.		1/22/07
A2.34	ENLARGED REST ROOM PLANS & INTERIOR ELEV.		1/22/07
A2.35	ENLARGED REST ROOM PLANS & INTERIOR ELEV.		1/22/07
A2.36	ENLARGED REST ROOM PLANS & INTERIOR ELEV.		1/22/07
A2.40	PARTITION TYPES		1/22/07
A3.10	REFLECTED CEILING PLAN LEVEL 1-AREA 1		1/22/07
A3.11	REFLECTED CEILING PLAN LEVEL 1-AREA 2		1/22/07
A3.12	REFLECTED CEILING PLAN LEVEL 1-AREA 3		1/22/07
A3.13	REFLECTED CEILING PLAN LEVEL 1-AREA 4		1/22/07
A3.14	REFLECTED CEILING PLAN LEVEL 1-AREA 5		1/22/07
A3.15	REFLECTED CEILING PLAN LEVEL 1-AREA 6		1/22/07
A3.16	REFLECTED CEILING PLAN LEVEL 1-AREA 7		1/22/07
A3.20	REFLECTED CEILING PLAN LEVEL 1-AREA 1		1/22/07
A3.21	REFLECTED CEILING PLAN LEVEL 2-AREA 2		1/22/07
A3.22	REFLECTED CEILING PLAN LEVEL 2-AREA 3		1/22/07
A3.23	REFLECTED CEILING PLAN LEVEL 2-AREA 4		1/22/07
A3.30	CEILING DETAILS		1/22/07
A4.10	ROOF PLAN		1/22/07
A5.10	EXTERIOR ELEVATIONS		1/22/07
A5.11	EXTERIOR ELEVATIONS		1/22/07
A6.10	BUILDING SECTIONS		1/22/07
A7.10	WALL SECTIONS		1/22/07
A7.11	WALL SECTIONS		1/22/07
A7.12	WALL SECTIONS		1/22/07
A8.10	STAIR PLANS AND SECTIONS		1/22/07
A8.11	STAIR PLANS AND SECTIONS		1/22/07
A8.20	ELEVATOR PLANS AND SECTIONS		1/22/07
A8.30	STAIR DETAILS		1/22/07
A9.10	INTERIOR ELEVATIONS		1/22/07
A9.11	INTERIOR ELEVATIONS		1/22/07
A9.12	INTERIOR ELEVATIONS		1/22/07
A10.10	FINISH PLAN LEVEL 1-AREA 1		1/22/07
A10.11	FINISH PLAN LEVEL 1-AREA 2		1/22/07
A10.12	FINISH PLAN LEVEL 1-AREA 3		1/22/07
A10.13	FINISH PLAN LEVEL 1-AREA 4		1/22/07
A10.14	FINISH PLAN LEVEL 1-AREA 5		1/22/07
A10.15	FINISH PLAN LEVEL 1-AREA 6		1/22/07
A10.16	FINISH PLAN LEVEL 1-AREA 7		1/22/07
A10.20	FINISH PLAN LEVEL 2-AREA 1		1/22/07
A10.21	FINISH PLAN LEVEL 2-AREA 2		1/22/07
A10.22	FINISH PLAN LEVEL 2-AREA 3		1/22/07
A10.23	FINISH PLAN LEVEL 2-AREA 4		1/22/07
A11.10	DOOR SCHEDULE AND TYPES		1/22/07
A11.20	DOOR DETAILS		1/22/07
A11.30	WINDOW TYPES		1/22/07
A12.10	CASEWORK		1/22/07

Structural drawings prepared by Mendenhall Smith Structural Engineers located at 3571 Red Rock Street, Suite A, Las Vegas, NV 89103.

	Structural Drawings
SHEET #	DESCRIPTION	REVISIONS	DATE
S1.01	GENERAL STRUCTURAL NOTES & INFORMATION	1	3/30/07
S1.02	SCHEDULES	1	3/30/07
S1.03	TYPICAL DETAILS	1	3/30/07
S1.04	TYPICAL DETAILS	1	3/30/07
S2.01	PARTIAL FOUNDATION PLAN	1	3/30/07
S2.02	PARTIAL FOUNDATION PLAN	1	3/30/07
S2.03	PARTIAL FOUNDATION PLAN	1	3/30/07
S2.04	PARTIAL FOUNDATION PLAN	1	3/30/07
S2.05	PARTIAL FOUNDATION PLAN	1	3/30/07
S2.06	PARTIAL FOUNDATION PLAN	1	3/30/07
S2.07	PARTIAL FOUNDATION PLAN	1	3/30/07
S3.01	PARTIAL FLOOR FRAMING PLAN	1	3/30/07
S3.02	PARTIAL FLOOR FRAMING PLAN	1	3/30/07
S3.03	PARTIAL FLOOR FRAMING PLAN	1	3/30/07
S3.04	PARTIAL FLOOR FRAMING PLAN	1	3/30/07
S3.05	PARTIAL FLOOR FRAMING PLAN	1	3/30/07
S3.06	PARTIAL FLOOR FRAMING PLAN	1	3/30/07
S3.07	PARTIAL FLOOR FRAMING PLAN	1	3/30/07
S4.01	PARTIAL INTERIOR ROOF FRAMING PLAN	1	3/30/07
S4.02	PARTIAL INTERIOR ROOF FRAMING PLAN	1	3/30/07
S4.03	PARTIAL INTERIOR ROOF FRAMING PLAN	1	3/30/07
S4.04	PARTIAL INTERIOR ROOF FRAMING PLAN	1	3/30/07
S5.01	FOUNDATION DETAILS	1	3/30/07
S6.01	FLOOR FRAMING DETAILS	1	3/30/07
S6.02	FLOOR FRAMING DETAILS	1	3/30/07

Mechanical drawings prepared by MSA Engineering Consultants located at 7115 Amigo Street, Suite 110, Las Vegas, NV 89119.

	Mechanical Drawings
SHEET #	DESCRIPTION	REVISIONS	DATE
M0.00	SYMBOL LIST, SPECIFICATIOS & DWG LIST	2	4/04/07
M0.01	MECHANICAL SCHEDULES	2	4/04/07
M0.02	MECHANICAL SCHEDULES	2	4/04/07
M0.05	MECHANICAL DETAILS	2	4/04/07
M0.06	MECHANICAL DETAILS	2	4/04/07
M0.07	MECHANICAL DETAILS	2	4/04/07
M0.08	MECHANICAL DETAILS	2	4/04/07
M0.10	CONTROL DIAGRAMS	2	4/04/07
M0.11	CONTROL DIAGRAMS	2	4/04/07
M0.15	IECC COMPLIANCE CERTIFICATE	2	4/04/07
M1.00	OVERALL MECHANICAL DEMOLITION PLAN	2	4/04/07
M2.10	PARTIAL MECHANICAL PLAN LEVEL 1 – AREA 1	2	4/04/07
M2.11	PARTIAL MECHANICAL PLAN LEVEL 1 – AREA 2	2	4/04/07
M2.12	PARTIAL MECHANICAL PLAN LEVEL 1 – AREA 3	2	4/04/07
M2.13	PARTIAL MECHANICAL PLAN LEVEL 1 – AREA 4	2	4/04/07
M2.14	PARTIAL MECHANICAL PLAN LEVEL 1 – AREA 5	2	4/04/07
M2.15	PARTIAL MECHANICAL PLAN LEVEL 1 – AREA 6	2	4/04/07
M2.16	PARTIAL MECHANICAL PLAN LEVEL 1 – AREA 7	2	4/04/07
M2.20	PARTIAL MECHANICAL PLAN LEVEL 2 – AREA 1	2	4/04/07
M2.21	PARTIAL MECHANICAL PLAN LEVEL 2 – AREA 2	2	4/04/07
M2.22	PARTIAL MECHANICAL PLAN LEVEL 2 – AREA 3	2	4/04/07
M2.23	PARTIAL MECHANICAL PLAN LEVEL 2 – AREA 4	2	4/04/07
M3.10	PARTIAL MECHANICAL PIPING LEVEL 1 – AREA 1	2	4/04/07
M3.11	PARTIAL MECHANICAL PIPING LEVEL 1 – AREA 2	2	4/04/07
M3.12	PARTIAL MECHANICAL PIPING LEVEL 1 – AREA 3	2	4/04/07
M3.13	PARTIAL MECHANICAL PIPING LEVEL 1 – AREA 4	2	4/04/07
M3.20	PARTIAL MECHANICAL PIPING LEVEL 2 – AREA 1	2	4/04/07
M3.21	PARTIAL MECHANICAL PIPING LEVEL 2 – AREA 2	2	4/04/07
M3.22	PARTIAL MECHANICAL PIPING LEVEL 2 – AREA 3	2	4/04/07
M3.23	PARTIAL MECHANICAL PIPING LEVEL 2 – AREA 4	2	4/04/07
M4.00	COOLING TOWER MECHANICAL PLAN	2	4/04/07

Plumbing drawings prepared by MSA Engineering Consultants located at 7115 Amigo Street, Suite 110, Las Vegas, NV 89119.

	Plumbing Drawings
SHEET #	DESCRIPTION	REVISIONS	DATE
P0.00	SYMBOL LIST, SPECIFICATIONS, & DWG INDEX	2	4/04/07
P0.01	PLUMBING SCHEDULES	2	4/04/07
P0.05	PLUMBING DETAILS	2	4/04/07
P0.06	PLUMBING DETAILS	2	4/04/07
P0.07	PLUMBING DETAILS	2	4/04/07
P0.10	GAS ISOMETRIC	2	4/04/07
P0.11	GAS ISOMETRIC	2	4/04/07
P1.00	OVERALL PLUMBING DEMOLITION PLAN	2	4/04/07
P2.10	PARTIAL PLUMBING PLAN LEVEL 1 – AREA 1	2	4/04/07
P2.11	PARTIAL PLUMBING PLAN LEVEL 1 – AREA 2	2	4/04/07
P2.12	PARTIAL PLUMBING PLAN LEVEL 1 – AREA 3	2	4/04/07
P2.13	PARTIAL PLUMBING PLAN LEVEL 1 – AREA 4	2	4/04/07
P2.14	PARTIAL PLUMBING PLAN LEVEL 1 – AREA 5	2	4/04/07
P2.15	PARTIAL PLUMBING PLAN LEVEL 1 – AREA 6	2	4/04/07
P2.16	PARTIAL PLUMBING PLAN LEVEL 1 – AREA 7	2	4/04/07
P2.17	PARTIAL PLUMBING PLAN LEVEL 1 – AREA 8	2	4/04/07
P2.20	PARTIAL PLUMBING PLAN LEVEL 2– AREA 1	2	4/04/07
P2.21	PARTIAL PLUMBING PLAN LEVEL 2– AREA 2	2	4/04/07
P2.22	PARTIAL PLUMBING PLAN LEVEL 2– AREA 3	2	4/04/07
P2.23	PARTIAL PLUMBING PLAN LEVEL 2– AREA 4	2	4/04/07
P5.00	ENLARGED PLUMBING PLANS	2	4/04/07
P5.01	ENLARGED PLUMBING PLANS	2	4/04/07
P5.02	ENLARGED PLUMBING PLANS	2	4/04/07
P5.03	ENLARGED PLUMBING PLANS	2	4/04/07
P5.04	ENLARGED PLUMBING PLANS	2	4/04/07
P5.05	ENLARGED PLUMBING PLANS	2	4/04/07
PFS4.0	FOOD SERVICE PLUMBING PLANS	2	4/04/07

Electrical Plans prepared by MSA Engineering Consultants located at 7115 Amigo Street, Suite 110, Las Vegas, NV 89119.

	Electrical Drawings
SHEET #	DESCRIPTION	REVISIONS	DATE
E0.00	SYMBOL LIST, SPECIFICATIONS & DWG INDEX	3	4/20/07
E0.01	SINGLE LINE DIAGRAM, NOTES & SCHEDULES	3	4/20/07
E0.02	SINGLE LINE DIAGRAM	3	4/20/07
E0.03	SINGLE LINE DIAGRAM	3	4/20/07
E0.04	SINGLE LINE DIAGRAM	3	4/20/07
E0.05	SINGLE LINE DIAGRAM	3	4/20/07
E0.06	PANEL SCHEDULES	3	4/20/07
E0.07	PANEL SCHEDULES	3	4/20/07
E0.08	PANEL SCHEDULES		1/22/07
E0.09	PANEL SCHEDULES	3	4/20/07
E0.10	PANEL SCHEDULES	3	4/20/07
E0.11	PANEL SCHEDULES	3	4/20/07
E0.20	ENLARGED ELECTRIC ROOM PLANS LEVEL 1	3	4/20/07
E0.21	ENLARGED ELECTRIC ROOM PLANS LEVEL 1		1/22/07
E0.22	ENLARGED ELECTRIC ROOM PLANS LEVEL 2		1/22/07
E0.30	LIGHTING FIXTURE SCHEDULE		1/22/07
E0.31	ELECTRICAL DETAILS	3	4/20/07
E0.32	LIGHTING COMPLIANCE CERTIFICATE		1/22/07
E1.10	SITE ELECTRICAL PLAN	2	4/04/07
E2.10	PARTIAL POWER & SIGNAL PLAN LEVEL 1 – AREA 1		1/22/07
E2.11	PARTIAL POWER & SIGNAL PLAN LEVEL 1 – AREA 2		1/22/07
E2.12	PARTIAL POWER & SIGNAL PLAN LEVEL 1 – AREA 3	3	4/20/07
E2.13	PARTIAL POWER & SIGNAL PLAN LEVEL 1 – AREA 4		1/22/07
E2.14	PARTIAL POWER & SIGNAL PLAN LEVEL 1 – AREA 5	3	4/20/07
E2.15	PARTIAL POWER & SIGNAL PLAN LEVEL 1 – AREA 6		1/22/07
E2.16	PARTIAL POWER & SIGNAL PLAN LEVEL 1 – AREA 7		1/22/07
E2.20	PARTIAL POWER & SIGNAL PLAN LEVEL 2 – AREA 1		1/22/07
E2.21	PARTIAL POWER & SIGNAL PLAN LEVEL 2 – AREA 2		1/22/07
E2.22	PARTIAL POWER & SIGNAL PLAN LEVEL 2 – AREA 3		1/22/07
E2.23	PARTIAL POWER & SIGNAL PLAN LEVEL 2 – AREA 4		1/22/07
E3.10	PARTIAL LIGHTING PLAN LEVEL 1 – AREA 1		1/22/07
E3.11	PARTIAL LIGHTING PLAN LEVEL 1 – AREA 2		1/22/07
E3.12	PARTIAL LIGHTING PLAN LEVEL 1 – AREA 3		1/22/07
E3.13	PARTIAL LIGHTING PLAN LEVEL 1 – AREA 4		1/22/07
E3.14	PARTIAL LIGHTING PLAN LEVEL 1 – AREA 5		1/22/07
E3.15	PARTIAL LIGHTING PLAN LEVEL 1 – AREA 6		1/22/07
E3.16	PARTIAL LIGHTING PLAN LEVEL 1 – AREA 7		1/22/07
E3.20	PARTIAL LIGHTING PLAN LEVEL 2 – AREA 1		1/22/07
E3.21	PARTIAL LIGHTING PLAN LEVEL 2 – AREA 2		1/22/07
E3.22	PARTIAL LIGHTING PLAN LEVEL 2 – AREA 3		1/22/07
E3.23	PARTIAL LIGHTING PLAN LEVEL 2 – AREA 4		1/22/07
EFS4.0	FOOD SERVICE ELECTRICAL PLANS		1/22/07

Food Service Plans prepared by The Design Market Inc., located at 3110 South Valley View Blvd., Suite 201, Las Vegas, NV 89102.

	Food Service Drawings
SHEET #	DESCRIPTION	REVISIONS	DATE
FS1.0	FOOD SERVICE EQUIPMENT FLOOR PLAN		11/14/06
FS2.0	FOOD SERVICE SCHEDULE PLAN		11/14/06
FS3.0	FOOD SERVICE ELECTRICAL FLOOR PLAN		11/14/06
FS4.0	FOOD SERVICE PLUMBING FLOOR PLAN		11/14/06
FS5.0	FOOD SERVICE MECH./REFRIGERATION PLAN		11/14/06
FS5.1	FOOD SERVICE MECHANICAL HOOD PLAN		11/14/06
FS6.0	FOOD SERVICE BUILDING FLOOR PLAN		11/14/06
FS7.1	FOOD SERVICE ELEVATIONS		11/14/06
FS7.2	FOOD SERVICE ELEVATIONS		11/14/06

EXHIBIT “E-2”

LIST OF PHASE 2 DOCUMENTS

Job Name                                Beltway Business Park Warehouse No. 2, Bldg 5. - Nevada Power South District Operations Center - Site Improvements Job No:  1914

I.           Supplementary Conditions  (Reference Article 15.1.3), which are appended to the end of the General Conditions of the Contract.

II.           Specifications  (Reference Article 15.1.4)

Not Applicable

III.           Drawings  (Reference Article 15.1.5)

See attached

IV.           Addenda  (Reference Article 15.1.6)

Not Applicable

V.           Project Manual - Nevada Power South District Operations Center - Site Improvements, dated May 25, 2007

General Drawings prepared by SH Architecture, located at 7373 Peak Drive, Suite 250, Las Vegas, NV 89128

GENERAL DRAWINGS
SHEET #	DESCRIPTION	▲	DATE

G0.00                                COVER SHEET                                                                                                                                                     5/25/07

G1.10                                GENERAL INFORMATION                                                                                                                                 5/25/07

G3.10                                FIRE RATED ASSEMBLIES                                                                                                                                 5/25/07

G4.10                                MASTER SITE PLAN                                                                                                                                           5/25/07

Civil drawings prepared by Lochsa Engineering, located at 6345 S. Jones Blvd. Suite 100

Las Vegas, NV

CIVIL DRAWINGS
SHEET #	DESCRIPTION	▲	DATE

C1.01                                COVER SHEET                                                                                                                                               5/24/07

C1.02                                GENERAL NOTES AND QUANTITIES                                                                                                        5/24/07

C2.00                                MASTER UTILITY AND FIRE ACCESS PLAN5/24/07

C2.01                                UTILITY PLAN SHEET 1 OF 3                                                                                                                     5/24/07

C2.02                                UTILITY PLAN SHEET 2 OF 3                                                                                                                     5/24/07

C2.03                                UTILITY PLAN SHEET 3 OF 3                                                                                                                     5/24/07

C3.00                                OVERALL SITE AND GRADING PLAN AND5/24/07

KEY MAP

C3.01                                GRADING PLAN SHEET 1 OF 7                                                                                                                  5/24/07

C3.02                                GRADING PLAN SHEET 2 OF 7                                                                                                                  5/24/07

C3.03                                GRADING PLAN SHEET 3 OF 7                                                                                                                  5/24/07

C3.04                                GRADING PLAN SHEET 4 OF 7                                                                                                                  5/24/07

C3.05                                GRADING PLAN SHEET 5 OF 7                                                                                                                  5/24/07

C3.06                                GRADING PLAN SHEET 6 OF 7                                                                                                                  5/24/07

C3.07                                GRADING PLAN SHEET 7 OF 7                                                                                                                  5/24/07

C4.01                                HORIZONTAL CONTROL PLAN SHEET 1 OF 85/24/07

C4.02                                HORIZONTAL CONTROL PLAN SHEET 2 OF 85/24/07

C4.03                                HORIZONTAL CONTROL PLAN SHEET 3 OF 85/24/07

C4.04                                HORIZONTAL CONTROL PLAN SHEET 4 OF 85/24/07

C4.05                                HORIZONTAL CONTROL PLAN SHEET 5 OF 85/24/07

C4.06                                HORIZONTAL CONTROL PLAN SHEET 6 OF 85/24/07

C4.07                                HORIZONTAL CONTROL PLAN SHEET 7 OF 85/24/07

C4.08                                HORIZONTAL CONTROL PLAN SHEET 8 OF 85/24/07

C5.01                                PLAN AND PROFILE WARM SPRINGS ROAD5/24/07

C5.02                                PLAN AND PROFILE WARM SPRINGS ROAD5/24/07

C5.03                                PLAN AND PROFILE WARM SPRINGS ROAD5/24/07

C5.04                                PLAN AND PROFILE WARM SPRINGS ROAD5/24/07

C5.05                                PLAN AND PROFILE WARM SPRINGS ROAD5/24/07

C5.06                                PLAN AND PROFILE LINDELL ROAD                                                                                                    5/24/07

C5.07                                PLAN AND PROFILE LINDELL ROAD                                                                                                    5/24/07

C5.08                                PLAN AND PROFILE WESTWIND ROAD                                                                                               5/24/07

CIVIL DRAWINGS
SHEET #	DESCRIPTION	▲	DATE

C5.09                                PLAN AND PROFILE STORM DRAIN LATERALS5/24/07

C6.01                                TRAFFIC CONTROL PLAN SHEET 1 OF 3                                                                                                        5/24/07

C6.02                                TRAFFIC CONTROL PLAN SHEET 2 OF 3                                                                                                        5/24/07

C6.03                                TRAFFIC CONTROL PLAN SHEET 3 OF 3                                                                                                        5/24/07

C7.01                                DETAILS SHEET 1 OF 4                                                                                                                                       5/24/07

C7.02                                DETAILS SHEET 2 OF 4                                                                                                                                       5/24/07

C7.03                                DETAILS SHEET 3 OF 4                                                                                                                                       5/24/07

C7.04                                DETAILS SHEET 4 OF 4                                                                                                                                       5/24/07

C8.01                                STRUCTURAL GENERAL NOTES                                                                                                                      5/24/07

C8.02                                STRUCTURAL TYPICAL DETAILS AND                                                                                                           5/24/07

SECTIONS

Landscape drawings prepared by Nuvis, located at 3151 Airway Ave., Suite J-3, Costa Mesa, CA

LANDSCAPE DRAWINGS
SHEET #	DESCRIPTION	▲	DATE

L1                      COVER SHEET                                                                                                                                                                     2/9/07

L2                      IRRIGATION PLAN – SHEET A                                                                                                                                          2/9/07

L3                      IRRIGATION PLAN – SHEET B                                                                                                                                          2/9/07

L4                      IRRIGATION PLAN –SHEET C                                                                                                                                           2/9/07

L5                      IRRIGATION LEGEND AND NOTES                                                                                                                                 2/9/07

L6                      IRRIGATION DETAILS                                                                                                                                                        2/9/07

L7                      TREE PLANTING PLAN –SHEET A                                                                                                                                   2/9/07

L8                      TREE PLANTING PLAN –SHEET B                                                                                                                                   2/9/07

L9                      TREE PLANTING PLAN –SHEET C                                                                                                                                   2/9/07

L10                      SHRUB PLANTING PLAN –SHEET A                                                                                                                             2/9/07

L11                      SHRUB PLANTING PLAN –SHEET B                                                                                                                             2/9/07

L12                      TREE PLANTING PLAN –SHEET C                                                                                                                                2/9/07

L13                      PLANTING LEGEND, NOTES AND ETAILS                                                                                                                  2/9/07

L14                      GENERAL SPECIFICATIONS                                                                                                                                          2/9/07

L15                      IRRIGATION SPECIFICATIONS                                                                                                                                     2/9/07

L16                      IRRIGATION SPECIFICATIONS                                                                                                                                     2/9/07

L17                      PLANTING SPECIFICATIONS                                                                                                                                        2/9/07

L18                      MAINTENANCE SPECIFICATIONS                                                                                                                               2/9/07

Architectural drawings by SH Architecture, located at 7373 Peak Drive, Suite 250, Las Vegas, NV 89128

ARCHITECTURAL DRAWINGS
SHEET #	DESCRIPTION	▲	DATE

A1.10                                SITE PLAN – LOT A                                                                                                                                5/25/07

A1.11                                SITE PLAN – LOT B                                                                                                                       5/25/07

A1.20                                CMU FENCING PLAN AND ELEVATIONS                                                                                                  5/25/07

A1.21                                ENLARGED FENCE PLANS                                                                                                                           5/25/07

A1.22                                SITE DETAILS AND ENLARGED CMU                                                                                                         5/25/07

ENCLOSURE PLAN

ARCHITECTURAL DRAWINGS
SHEET #	DESCRIPTION	▲	DATE

A1.30A                      CANOPY PLAN                                                                                                                                                          5/25/07

A1.30B                      CANOPY PLANS                                                                                                                                                        5/25/07

A1.31                                CANOPY ELEVATIONS AND SECTIONS5/25/07

A1.40                                GUARD HOUSE PLANS                                                                                                                                     5/25/07

A1.41                                GUARD HOUSE SECTIONS AND ELEVATIONS5/25/07

A1.42 GUARD HOUSE INTERIOR ELEVATIONS, DOOR 5/25/07

AND WINDOW SCHEDULE

A1.50                                ICE HOUSE PLANS AND ELEVATIONS5/25/07

A1.60                                METER TRANSFER BUILDING PLAN, ELEVATIONS5/25/07

 AND SECTION

A2.10                                FLEET FLOOR PLAN                                                                                                                                           5/25/07

A2.11                                FLEET ENLARGED FLOOR PLANS AND INTERIOR5/25/07

 ELEVATIONS

A2.12                                FLEET REFLECTED CEILING PLAN                                                                                                                  5/25/07

A2.13                                FLEET ROOF PLAN                                                                                                                                             5/25/07

A2.14                                FLEET EXTERIOR ELEVATIONS                                                                                                                       5/25/07

A2.15                                FLEET BUILDING SECTIONS                                                                                                                            5/25/07

A2.16                                FLEET WALL SECTIONS                                                                                                                                    5/25/07

A2.17                                FLEET DOOR AND WINDOW SCHEDULE                                                                                                       5/25/07

A3.10                                DETAILS                                                                                                       &# 160;                                                       5/25/07

A3.11                                DETAILS                                                                                                       &# 160;                                                       5/25/07

Structural drawings by Mendenhall Smith Structural Engineers, located at 3571 Red Rock Street, Suite A, Las Vegas, NV

STRUCTURAL DRAWINGS
SHEET #	DESCRIPTION	▲	DATE

S1.01                                GSN AND INFORMATION                                                                                                                                 6/1/07

S1.02                                SCHEDULES                                                                                                                                                          6/1/07

S1.03                                TYPICAL DETAILS                                                                                                                                              6/1/07

S1.04                                TYPICAL DETAILS                                                                                                                                              6/1/07

S2.10                                FOUNDATION PLAN –FLEET BUILDING                                                                                                        6/1/07

S3.10                                ROOF FRAMING PLAN – FLEET BUILDING6/1/07

SC2.10                                FOUNDATION PLAN – SMALL CANOPY                                                                                                    6/1/07

SC2.20                                FOUNDATION PLAN – LARGE CANOPY                                                                                                     6/1/07

SC3.10                                ROOF FRAMING PLAN – SMALL CANOPY                                                                                                                                                                        
60;                              6/1/07

SC3.20                                ROOF FRAMING PLAN – LARGE CANOPY                                                                                                6/1/07

SG2.10 FOUNDATION AND ROOF FRAMING PLAN – 6/1/07

ICE HOUSE, GUARD HOUSE

S5.01                                FOUNDATION DETAILS                                                                                                                                   6/1/07

S6.01                                FRAMING DETAILS                                                                                                                                           6/1/07

Mechanical drawings by MSA Engineering Consultants, located at 7115 Amigo Street, Suite 110,

Las Vegas, NV

MECHANICAL DRAWINGS
SHEET #	DESCRIPTION	▲	DATE

M0.00                                SYMBOL LIST, SPECIFICATIONS AND DRAWING                                                                                     5/25/07

INDEX

M0.01                                MECHANICAL SCHEDULES                                                                                                                            5/25/07

M0.05                                MECHANICAL DETAILS                                                                                                                                  5/25/07

M0.10                                IECC COMPLIANCE CERTIFICATE                                                                                                                5/25/07

M1.10                                MECHANICAL SITE PLAN                                                                                                                               5/25/07

M2.10                                FLEET BUILDING MECHANICAL PLAN5/25/07

M2.40                                MECHANICAL GUARD SHACK PLAN                                                                                                           5/25/07

Plumbing drawings by MSA Engineering Consultants, located at 7115 Amigo Street, Suite 110,

Las Vegas, NV

PLUMBING DRAWINGS
SHEET #	DESCRIPTION	▲	DATE

P0.00                                SYMBOL LIST, SPECIFICATIONS AND DRAWING                                                                                        5/25/07

INDEX

P0.01                                PLUMBING SCHEDULES                                                                                                                                    5/25/07

P0.05                                PLUMBING DETIALS                                                                                                                                          5/25/07

P0.06                                PLUMBING DETAILS                                                                                                                                          5/25/07

P1.10                                PLUMBING SITE PLAN                                                                                                                                      5/25/07

P1.40                                PLUMBING GUARD SHACK AND TYPICAL ICE                                                                                                                                                                                                                   5/25/07

HOUSE PLAN

P2.10                                PLUMBING PLAN                                                                                                                                               5/25/07

P4.10                                PLUMBING ROOF PLAN                                                                                                                                   5/25/07

P5.00                                ENLARGED PLUMBING PLAN                                                                                                                         5/25/07

Electrical drawings by MSA Engineering Consultants, located at 7115 Amigo Street, Suite 110,

Las Vegas, NV

ELECTRICAL DRAWINGS
SHEET #	DESCRIPTION	▲	DATE

E0.00                                SYMBOL LIST, SPECIFICATIONS AND DRAWING                                                                                      5/25/07

INDEX

E0.01                                SINGLE LINE DIAGRAM, NOTES AND FEEDER                                                                                                                                                                        
60;                                5/25/07

SCHEDULE

E0.02                                PANEL SCHEDULE                                                                                                                                            5/25/07

E0.03                                LIGHTING FIXTURES SCHEDULE AND                                                                                                         5/25/07

COMPLIANCE CERTIFICATION

E0.04                                SINGLE LINE DIAGRAMS AND PANELS                                                                                                       5/25/07

SCHEDULES

E1.10                                SITE ELECTRIC PLAN                                                                                                                                       5/25/07

E1.30A                      MOBILE SUBSTATION CANOPY ELECTRICITY                                                                                                  5/25/07

PLAN

ELECTRICAL DRAWINGS
SHEET #	DESCRIPTION	▲	DATE

E1.30B                      CANOPY ELECTRICAL PLAN                                                                                                                                   5/25/07

E1.40 ELECTRICAL PLAN 0GUARD SHACK AND 5/25/07

TYPICAL ICE HOUSE PLAN

E2.10                                POWER PLAN                                                                                                                                                     5/25/07

E3.10                                LIGHTING PLAN                                                                                                                                                5/25/07

E4.10                                ROOF ELECTRICAL PLAN                                                                                                                               5/25/07

LV2.10                      SIGNAL PLAN                                                                                                                                                           5/25/07

EXHIBIT “E-3”

LIST OF PHASE 3 DOCUMENTS

Job Name                                Job No:

I.           Supplementary Conditions  (Reference Article 15.1.3), which are appended to the end of the General Conditions of the Contract.

II.           Specifications  (Reference Article 15.1.4)

Not Applicable

III.           Drawings  (Reference Article 15.1.5)

By:

Sheet                                Title                                                                     Rev. Number                                 Date

ARCHITECTURAL

STRUCTURAL

By

Sheet                                Title                                                                     Rev. Number                                 Date

LANDSCAPING

IV.           Addenda  (Reference Article 15.1.6)

Not Applicable

V.             Project Manual - Nevada Power System Control Room dated October 30, 2006.

      

         TI Nevada Power – BBP Bldg. 5      

      

        Page  of 5 Job #1914      

      

                  DMWEST #6508805 v12              

    

EXHIBIT “F”

COST BREAKDOWN

Division Summary
SPEC.	DESCRIPTION	TOTAL
Division 01	General Requirements
01 2100	Allowances -    specifications
	Metal Storage Shelving (purchase and delivery)
	Manuf. Metal Casework (purchase and delivery)
	Bridge Cranes (purchase and delivery)
	Finish Hardware (purchase and delivery)
	Column Cladding
01 5000	Temporary Facilities and Controls    in GC's
01 5713	Temporary Erosion and Sediment Controls     in GC's
01 5721	Indoor Air Quality Controls
01 7419	Construction Waste Management and Disposal
01 7800	Closeout Submittals
01 7900	Demonstration and Training
01 9114	General Commissioning Requirements
	SUB	596,636
Division 03	Concrete
03 2000	Concrete Reinforcing
03 3000	Cast-in-Place Concrete
	Ashford Concrete Floor Sealer
	Concrete Demolition
	SUB	2,334,660
Division 04	Masonry
04 0511	Masonry Mortaring and Grouting
	SUB	3,161,971
Division 05	Metals
05 1200	Structural Steel Framing, Joists and Decking
05 5134	Aluminum Ladders
	SUB	3,290,059
Division 06	Wood, Plastics, and Composites
06 1054	Wood Blocking and Curbing
06 4100	Architectural Wood Casework
06 8205	Fiberglass Reinforced Plastic Panels
	SUB	208,786
Division 07	Thermal and Moisture Protection
07 1300	Sheet Waterproofing
07 2100	Thermal Insulation
07 5300	Elastomeric Membrane Roofing
07 6200	Sheet Metal Flashing and Trim
07 7234	Roof Hatches and Smoke Vents
07 8400	Firestopping
07 9005	Joint Sealers
	SUB	591,945
Division 08	Openings
08 1113	Hollow Metal Doors and Frames,Wood Doors
08 3100	Access Doors and Panels
	Cascade Coil Security Screen
08 6200	Unit Skylights
08 7100	Door Hardware in Div. 01
08 8000	Glazing
08 8010	Fire Rated Glazing         incld.
08 8300	Mirrors   in Toilet Access.
08 8420	Cellular Plastic Glazing   incld.
	SUB	533,995
Division 09	Finishes
09 2116	Gypsum Board Assemblies
09 5100	Acoustical Ceilings
09 6500	Resilient Flooring,Carpet, Ceramic and Tile
09 9000	Painting and Coating
	SUB	4,212,093
Division 10	Specialties
10 1101	Visual Display Boards
10 1200	Display Cases       incld.
10 1424	Interior Signage     incld.
10 1425	Exterior Signage
10 2113.19	Plastic Toilet Compartments
10 2800	Toilet, Bath, and Laundry Accessories
10 4400	Fire Protection Specialties (fire extinguishers & cabinets)
10 5100	Lockers
10 5613	Metal Storage Shelving          in div. 01
10 7500	Flagpoles
	SUB	306,052
Division 11	Equipment
11 400	Food Service
11 1100	Vehicle Service Equipment, Lifts & Bridge Crane
11 3100	Residential Appliances
11 5213	Projection Screens
	SUB	1,096,603
Division 12	Furnishings
12 3600	Countertops
12 4813	Entrance Floor Mats and Frames
	SUB	100,137
Division 14	Conveying Equipment
14 1200	Electric Dumbwaiters
14 2010	Passenger Elevator
14 2705	Custom Elevator Cabs and Hoistway Doors
	SUB	342,641
Division 21	Fire Suppression
21 1300	Fire Suppression Sprinkler System
	SUB	1,734,307
Division 22	Plumbing
	SUB	1,470,150
Division 23	Heating, Ventilating, and Air Conditioning (HVAC)
23 0593	Testing, Adjusting and Balancing      incld.
23 0900	HVAC Instrumentation and Controls   incld.
	HVAC Duct Cleaning
	SUB	6,703,884
Division 26	Electrical
26 0519	Low-Voltage Electrical Power Conductors and Cables   incld.
26 0536	Cable Trays for Electrical Systems    incld.
26 0539	Underfloor Raceways for Electrical Systems    incld.
26 0923	Lighting Control Devices    incld.
26 0933	Central Dimming Controls    incld.
26 2813	Fuses     incld.
26 3213	Engine Generators   incld.
	Photovotaic
	SUB	14,226,622
Division 27	Communications
	NO SPECIFICATION AVAILABLE    EXCLUDED
Division 28	Electronic Safety and Security
	NO SPECIFICATION AVAILABLE    EXCLUDED
	Fire Alarm Systems	-
	SUB	343,035
Division 31	Earthwork
31 2200	Grading
31 3116	Termite Control
	SUB	188,669
Division 32	Exterior Improvements
32 1216	Asphalt Paving
32 1313	Concrete Paving
32 1723.13	Painted Pavement Markings
32 3113	Chain Link Fences and Gates
	Landscaping & Irrigation
	Off site roadway concrete
	Plug
	Off site water
	Off site traffic
	Off site drainage
	Off site street lights
	SUB	3,975,330
Division 33	Utilities
33 1116	Site Water Utility Distribution Piping
33 3111	Site Sanitary Utility Sewerage Piping
33 5111	Site Natural Gas Distribution	-
	SUB	279,329
	General Conditions	1,098,557
	SUB TOTAL	46,795,460
	Contractors Fee @ 5 %	2,339,773
	SUB TOTAL	49,135,233
	Liab. Insurance    @ .0092 %	452,044
	TOTAL	49,587,277
	Contingency @ 3%	1,487,618
	Bond @ 2 %	1,021,479
	GRAND TOTAL	52,096,374
	Excludes:
	Fees and permits.
	All work in Systems Control Center (Phase 3 of the Work)

EXHIBIT “G”

PROJECT GENERAL CONDITIONS

Project General Conditions refer to costs paid or expenses incurred by Contractor in behalf of the project including, but not necessarily limited to, the following:

CONTRACTOR’S PERSONNEL AND JOB LABOR

Preconstruction Administration

Miscellaneous Preconstruction Expenses

Project Managers, Construction Managers, Project Executives, Executive Assistants,

expeditors, estimators, accounting and administrative personnel (for Project Time only)

General Superintendents

On-Site Assistant Project Manager

On-Site Project Engineer

On-Site Project Superintendent

On-Site Assistant Project Superintendent

On-Site Administrative Assistant

Miscellaneous On-Site Job Labor

On-Site Clean-Up Labor

On-Site Safety Foreman

On-Site Flagman

On-Site Watchmen - Security Guards

Payroll Taxes, Insurance and Benefits

Travel Expenses

Automobile and Truck Expenses

Closeout, Punch List and Warranties

TESTING, INSPECTIONS AND FIELD ENGINEERING

Concrete and Rebar Inspection and Testing

Masonry Inspection and Testing

Structural Steel and Decking Inspection and Testing

Welding Inspections

Roofing Inspections

Concrete Mix Designs

Safety Consultants

Grading and Compacting Inspection and Testing

Other Testing or Inspections as required for the proper execution of the work

County Inspector, including Benefits (if applicable)

Survey and Layout

Grade Staking

Footing and Foundation Inspection and Testing (if applicable)

As-Built Survey

EQUIPMENT AND CLEAN-UP

Miscellaneous Off-Loading Equipment (Fork Lift, etc.)

Dust Control Equipment (Water Truck, etc.)

Other Equipment as required for the proper execution of the work

Bins

Trash Chutes

Dump Chargers

Final Clean-Up

Window Cleaning (if applicable)

Cleaning Supplies

Miscellaneous Small Tools

TEMPORARY GENERAL EXPENSES FOR JOBSITE

Office Rental

Office Furniture Rental

Toilets

Complete Telephone Equipment and Monthly Cost

Complete Fax Machine System and Monthly Cost

Computer System and Associated Costs (but only those used at the site of the Work)

Data Line and Monthly Cost

Temporary Power and Monthly Cost

Temporary Water and Monthly Cost

Drinking Water

Temporary Roads and Detours

Barricades and Lights

Fencing

Project Signage

Progress Schedule

Intercom and Radios

Plan Reproduction

Safety Equipment, First Aid

Perimeter, Open Floor Protection (if applicable)

Temporary Stairs and Ladders (if applicable)

Miscellaneous Small Tools

Miscellaneous Supplies

Other Miscellaneous Expenses

Finished Work Protection

Office Supplies

Postage, Federal Express, UPS, etc.

Copy Machine Rental

Copy Paper and Service

Security Lighting and Fencing

The cost for the following work is not considered a part of General Conditions and is budgeted for in separate line item cost:

Plan Checking and Permit Fees

SUPPLEMENTARY CONDITIONS

1.   INTENT

1.01   These Supplementary Conditions amend and supplement the General Conditions attached as Exhibit “A” to the Agreement and other provisions of the Contract Documents as indicated, below.  All provisions which are not so amended or supplemented remain in full force and effect.

1.02   The terms used in these Supplementary Conditions which are defined in the General Conditions have the meanings assigned to them in the General Conditions.

2.   MODIFICATIONS TO AIA A201

2.01   ARTICLE 1.1 - BASIC DEFINITIONS

A.   Add the following sentence:

1.   1.1.1.  The Contract Documents executed in accordance with Subparagraph 1.5.1 shall prevail in case of inconsistency with subsequent versions made through manipulatable electronic operations involving computers.

2.02   ARTICLE 1.2. - CORRELATION AND INTENT OF THE CONTRACT DOCUMENTS

A.   Add the following clause:

1.   1.2.1.1:  In the event of conflicts or discrepancies among the Contract Documents, interpretations will be based on the following priorities:

a.   The Agreement.

b.   Addenda, with those of later date having precedence over those of earlier date.

c.   The Supplementary Conditions.

d.   The General Conditions of the Contract for Construction.

e.   Division 1 of the Specifications.

f.   Drawings and Division 2-16 of the Specifications (including all Project Manuals).

2.   1.2.1.2: In the case of conflicts or discrepancies between the Drawings and Divisions 2-16 of the or within either Document not clarified by Addendum, the Architect will determine which takes precedence in accordance with Subparagraph 4.2.11.

2.03   ARTICLE 1.6-OWNERSHIP AND USE OF DRAWINGS, SPECIFICATIONS AND OTHER INSTRUMENTS OF SERVICE

A.   Add the following subparagraph:

1.   1.6.2: Contractor’s Use of Instruments of Service in Electronic Form.

a.   1.6.2.1:  The Architect may, with the concurrence of the Owner, furnish to the Contractor versions of Instruments of Service in electronic form.  The Contract Documents executed or identified in accordance with Subparagraph 1.5.1 shall prevail in case of an inconsistency with subsequent versions made through manipulatable electronic means involving computers.

b.   1.6.2.2:  The Contractor shall not transfer or reuse Instruments of Service in electronic or machine readable form without the prior written consent of the Architect.

2.04   ARTICLE 1.7 - COOPERATION

A.   Add the following subparagraph:

1.   1.7:  Representatives of the Owner, Contractor and Architect shall meet periodically at mutually agreed-upon intervals for the purpose of establishing procedures to facilitate cooperation, communication and timely responses among the participants.  By participating in this arrangement, the parties do not intend to create additional contractual obligations or modify the legal relationships which may otherwise exist.

2.05   ARTICLE 2.2 - INFORMATION AND SERVICES REQUIRED OF THE OWNER

A.   Delete the subparagraph and substitute the following:

1.   2.2.5:  The Contractor will be furnished, free of charge, 10 copies of Drawings and Project Manuals.  Additional sets will be furnished at the cost of reproduction, postage and handling.

2.06   ARTICLE 3.2 - REVIEW OF CONTRACT DOCUMENTS AND FIELD CONDITIONS BY CONTRACTOR

A.   Add the following subparagraph:

1.   3.2.4:  The Owner shall be entitled to deduct from the Contract Sum amounts paid to the Architect for the Architect to evaluate and respond to the Contractor’s requests for information, where such information was available to the Contractor from a careful study and comparison of the Contract Documents, field conditions, other Owner-Provided information, Contractor-prepared coordination drawings, reference standards, prior Project correspondence or documentation.

2.07   ARTICLE 3.4 - LABOR AND MATERIALS

A.   Delete the subparagraph 3.4.2 and substitute the following:

1.   3.4.2:  After the Contract has been executed, the Owner and Architect will consider a formal request for the substitution of products in place of those specified only under the conditions set forth in the General Requirements (Division 1 of the Specifications).  Except in cases in which the original products are timely ordered but are unavailable, by making requests for substitution, the Contractor:

a.   .1  represents that the Contractor has personally investigated the proposed substitute product and determined that it is equal or superior in all respects to that specified;

b.   .2 represents that the Contractor will provide the same warranty for the substitution that the Contractor would for that specified;

c.   .3 certifies that the cost data presented is complete and includes all related costs under this Contract except the Architect’s redesign costs, and waives all claims for additional costs related to the substitution which subsequently become apparent; and

d.   .4 will coordinate the installation of the accepted substitute, making such changes as may be required for the Work to be complete in all respects.

2.08   ARTICLE 3.7 - PERMITS, FEES AND NOTICES

A.   Add the following sentence at the end of 3.7.1:

1.   3.7.1:  The Owner shall pay fees for public or private water, gas, electrical, and other utility extensions at the site.  The Contractor shall secure and arrange for all necessary utility connections.

2.09   ARTICLE 3.8 - ALLOWANCES

A.   Delete the semicolon at the end of the clause 3.8.22 and add the following:

1.   3.8.2.2:, except that if installation is included as part of an allowance in Division 1-16 of the Specifications, the installation and labor cost for greater or lesser quantities of Work shall be determined in accordance with Subparagraph 7.3.6;

2.10   ARTICLE 3.9 - SUPERINTENDENT

A.   Add the following subparagraph 3.9.2:

1.   3.9.2:  The Contractor shall employ a superintendent or an assistant to the superintendent who will perform as a coordinator for mechanical and electrical Work.  The coordinator shall be knowledgeable in mechanical and electrical systems and capable of reading, interpreting and coordinating Drawings, Specifications, and shop drawings pertaining to such systems.  The coordinator shall assist the Subcontractors in arranging space conditions to eliminate interference between the mechanical and electrical systems and other Work and shall supervise the preparation of coordination drawings documenting the spatial arrangements for such systems within restricted spaces.  The coordinator shall assist in planning and expediting the proper sequence of delivery of mechanical and electrical equipment to the site.

2.11   ARTICLE 4.3 - CLAIMS AND DISPUTES

A.   Add the following clauses:

1.   4.3.7.3:  Claims for Increase in the applicable Contract Time shall set forth in detail the circumstances that form the basis for the Claim, the date upon which each cause of delay began to affect the progress of the Work, the date upon which each cause of delay ceased to affect the progress of the Work and the number of days’ increase in the applicable Contract Time claimed as a consequence of each such cause of delay.  The Contractor shall provide such supporting documentation as the Owner may reasonably require including, where appropriate, a revised construction schedule indicating all the activities affected by the circumstances forming the basis of the Claim.

2.   4.3.7.4:  The Contractor shall not be entitled to a separate increase in the applicable Contract Time for each one of the number of causes of delay which may have concurrent or interrelated effects on the progress of the Work, or for concurrent delays due to the fault of the Contractor.

B.   Add the following sentence at the end of 4.3.10:

1.   4.3.10:  If before expiration of 30 days from the date of execution for this Agreement, the Owner obtains by separate agreement and furnishes to the Contractor a similar mutual waiver of all claims from the Architect against the Contractor for consequential damages which the Architect may incur as a result of any acts or omission of the Owner or Contractor, the waiver of consequential damages by the Owner and Contractor contained in this Subparagraph 4.3.10 shall be applicable to claims by the Contractor against the Architect.

2.12   ARTICLE 5.2 - AWARD OF SUBCONTRACTS AND OTHER CONTRACTS FOR PORTIONS OF THE WORK

A.   Add the following subparagraph:

1.   5.2.1.1:  Unless otherwise stated in the Contract Documents or the bidding requirements, the Contractor, as soon as practicable after award of Contract, shall furnish in writing to the Owner through the Architect the names of persons or entities proposed as manufacturers, fabricators or material suppliers for the products, equipment and systems identified in the General Requirements (Division 1 of the Specifications) and, where applicable, the name of the installing Subcontractor.

2.13   ARTICLE 8.2 - PROGRESS AND COMPLETION

A.   Add the following subparagraphs:

1.   8.2.4:  The Contractor shall perform the Work in accordance with the schedules as well as within the dates specified in the Contract for Substantial and Final Completion of each Phase of the Work.  The time limits set forth in the Contract for Substantial Completion must govern, and the schedules must be adjusted to meet these dates.

2.   8.2.5:  If the Work is not proceeding according to the applicable critical path schedule, the Contractor shall immediately notify the Owner in writing and prepare a Recovery Plan in accordance with the General Requirements (Division 1 of the Specifications).

3.   8.2.6:  If the Work is persistently and repeatedly behind schedule and the Owner does not believe the proposed Recovery Plan is adequate, the Owner will notify the Contractor in writing that the progress of the Work is deemed unsatisfactory and the Owner may require the Contractor to staff such additional resources as Owner reasonably determines necessary to bring the Work on schedule with no increase in the Guaranteed Maximum Price.

4.   8.2.7:  If the Contractor fails to take prompt and adequate corrective action within seven days upon receipt of Owner’s written notice under Paragraph 8.2.6 the Owner may terminate the Contract in accordance with Article 14.2.

2.14   ARTICLE 9.8 - SUBSTANTIAL COMPLETION

A.   Delete the second sentence and substitute the following:

1.   9.8.5:  Upon such acceptance and consent of surety, if any, the Owner shall make payment sufficient to increase the total payments to 100 percent of the Contract Sum, less such amounts as the Architect shall determine for incomplete Work and unsettled claims.

2.15   ARTICLE 10.2 - SAFETY OF PERSONS AND PROPERTY

A.   Add the following subparagraph:

1.   10.2.4.1:  When use or storage of explosives, or other hazardous materials, substances or equipment, or unusual methods are necessary for execution of the Work, the Contractor shall give the Owner reasonable advance notice.

2.16   ARTICLE 11.5 - PERFORMANCE BOND AND PAYMENT BOND

A.   Add the following clause:

1.   11.5.1.2:  The Contractor shall require the attorney-in-fact who executes the required, bonds on behalf of the surety to affix thereto a certified and current copy of the power of attorney.

2.17   ARTICLE 12.2 - CORRECTION OF WORK

A.   Add the following clause:

12.2.2.4: Upon request by the Owner and prior to the expiration of one year from the date of Substantial Completion, the Architect will conduct and the Contractor shall attend a meeting with the Owner to review the facility operations and performance.

EX-12.1

EX-12.2

Exhibit 12.2

NEVADA POWER COMPANY

RATIOS OF EARNINGS TO FIXED CHARGES

(Dollars in Thousands)

		Nine Months Ended September 30,						Year Ended December 31,
		2007			2006			2006			2005			2004			2003			2002
EARNINGS AS DEFINED:
	Income (Loss) From Continuing Operations After Interest Charges	$	161,280		$	236,273		$	224,540		$	132,734		$	104,312		$	19,277		$	(235,070	)
	Income Taxes		83,498			123,402			117,510			63,995			56,572			(614	)		(131,784	)
	Income (Loss) From Continuing Operations before Income Taxes		244,778			359,675			342,050			196,729			160,884			18,663			(366,854	)
	Fixed Charges		143,497			145,750			190,333			159,776			145,055			195,342			137,968
	Capitalized Interest (allowance for borrowed funds used during construction)		(9,189	)		(10,050	)		(11,614	)		(23,187	)		(5,738	)		(2,700	)		(3,412	)
	Total	$	379,086		$	495,375		$	520,769		$	333,318		$	300,201		$	211,305		$	(232,298	)
FIXED CHARGES AS DEFINED:
	Interest Expensed and Capitalized (1)	$	143,497		$	145,750		$	190,333		$	159,776		$	145,055		$	195,342		$	137,968
	Total	$	143,497		$	145,750		$	190,333		$	159,776		$	145,055		$	195,342		$	137,968
RATIO OF EARNINGS TO FIXED CHARGES			2.64			3.40			2.74			2.09			2.07			1.08			-
	DEFICIENCY	$	-		$	-		$	-		$	-		$	-		$	-		$	370,266
(1)	Includes amortization of premiums, discounts, and capitalized debt expense and interest component of
	rent expense.

For the purpose of calculating the ratios of earnings to fixed charges, “Fixed charges” represent the aggregate of interest charges on short-term and long-term debt (whether expensed or capitalized) and the portion of rental expense deemed attributable to interest. “Earnings” represents pre-tax income (or loss) from continuing operations before fixed charges (excluding capitalized interest).

EX-12.3

Exhibit 12.3

SIERRA PACIFIC POWER COMPANY

RATIOS OF EARNINGS TO FIXED CHARGES

(Dollars in Thousands)

		Nine Months Ended September 30,						Year ended December 31,
		2007			2006			2006			2005						2004			2003			2002
EARNINGS AS DEFINED:
	Income (Loss) From Continuing Operations After Interest Charges	$	57,528		$	42,299		$	57,709		$	52,074		$	18,577		$	(23,275	)	$	(13,968	)
	Income Taxes		24,468			22,249			27,829			28,379			325			(12,237	)		(4,491	)
	Income (Loss) From Continuing Operations before Income Taxes		81,996			64,548			85,538			80,453			18,902			(35,512	)		(18,459	)
	Fixed Charges		56,261			59,529			79,093			72,652			67,685			101,514			79,303
	Capitalized Interest (allowance for  borrowed funds used during construction)		(9,080	)		(2,819	)		(5,505	)		(1,504	)		(2,849	)		(3,276	)		(1,858	)
		$	129,177		$	121,258		$	159,126		$	151,601		$	83,738		$	62,726		$	58,986
	Total
FIXED CHARGES AS DEFINED:
	Interest Expensed and Capitalized (1)	$	56,261		$	59,529		$	79,093		$	72,652		$	67,685		$	101,514		$	79,303
	Total	$	56,261			59,529			79,093			72,652		$	67,685		$	101,514		$	79,303
RATIO OF EARNINGS TO FIXED CHARGES			2.30			2.04			2.01			2.09			1.24			-			-
	DEFICIENCY	$	-		$	-		$	-		$	-		$	-		$	38,788		$	20,317
(1)	Includes amortization of premiums, discounts, and capitalized debt expense and interest component of
	rent expense.

For the purpose of calculating the ratios of earnings to fixed charges, “Fixed charges” represent the aggregate of interest charges on short-term and long-term debt (whether expensed or capitalized) and the portion of rental expense deemed attributable to interest. “Earnings” represents pre-tax income (or loss) from continuing operations before pre-tax preferred stock dividend requirement and fixed charges (excluding capitalized interest).

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER REQUIRED BY

SECTION 302(A) OF THE SARBANES-OXLEY ACT OF 2002

SIERRA PACIFIC RESOURCES

(“Registrant”)

I, Michael W. Yackira, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Sierra Pacific Resources;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), and we have:

(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including their consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors:

(a)   All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 1, 2007

/s/ Michael W. Yackira

Michael W. Yackira

Chief Executive Officer

Sierra Pacific Resources

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER REQUIRED BY

SECTION 302(A) OF THE SARBANES-OXLEY ACT OF 2002

NEVADA POWER COMPANY

(“Registrant”)

I, Michael W. Yackira, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Nevada Power Company;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant, and we have:

(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including their consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   [Paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986];

(c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors:

(a)   All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 1, 2007

/s/ Michael W. Yackira

Michael W. Yackira

Chief Executive Officer

Nevada Power Company

EX-31.3

Exhibit 31.3

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER REQUIRED BY

SECTION 302(A) OF THE SARBANES-OXLEY ACT OF 2002

SIERRA PACIFIC POWER COMPANY

(“Registrant”)

I, Michael W. Yackira, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Sierra Pacific Power Company;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant, and we have:

(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including their consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   [Paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986];

(c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 1, 2007

/s/ Michael W. Yackira

Michael W. Yackira

Chief Executive Officer

Sierra Pacific Power Company

EX-31.4

Exhibit 31.4

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER REQUIRED BY

SECTION 302(A) OF THE SARBANES-OXLEY ACT OF 2002

SIERRA PACIFIC RESOURCES

(“Registrant”)

I, William D. Rogers, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Sierra Pacific Resources;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), and we have:

(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including their consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors:

(a)   All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 1, 2007

/s/ William D. Rogers

William D. Rogers

Chief Financial Officer

Sierra Pacific Resources

EX-31.5

Exhibit 31.5

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER REQUIRED BY

SECTION 302(A) OF THE SARBANES-OXLEY ACT OF 2002

NEVADA POWER COMPANY

(“Registrant”)

I, William D. Rogers, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Nevada Power Company;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant, and we have:

(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including their consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   [Paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986];

(c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors:

(a)   All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 1, 2007

/s/ William D. Rogers

William D. Rogers

Chief Financial Officer

Nevada Power Company

EX-31.6

Exhibit 31.6

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER REQUIRED BY

SECTION 302(A) OF THE SARBANES-OXLEY ACT OF 2002

SIERRA PACIFIC POWER COMPANY

(“Registrant”)

I, William D. Rogers, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Sierra Pacific Power Company;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant, and we have:

(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including their consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   [Paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986];

(c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors:

(a)   All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 1, 2007

/s/ William D. Rogers

William D. Rogers

Chief Financial Officer

Sierra Pacific Power Company

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

SIERRA PACIFIC RESOURCES

(“Registrant”)

In connection with this report of Sierra Pacific Resources on Form 10-Q for the quarter ended September 30, 2007 as filed with the Securities and Exchange Commission on the date hereof, I, Michael W. Yackira, Chief Executive Officer of registrant, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1.   this report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.   the information contained in this report fairly presents, in all material respects, the financial condition and results of operations of the registrant.

/s/ Michael W. Yackira

Michael W. Yackira

Chief Executive Officer

Sierra Pacific Resources

November 1, 2007

This Certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section.  Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent the registrant specifically incorporates it by reference.

A signed original of this written statement required by Section 906 has been provided to the registrant and will be retained by the registrant and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

NEVADA POWER COMPANY

(“Registrant”)

In connection with this report of Nevada Power Company on Form 10-Q for the quarter ended September 30, 2007 as filed with the Securities and Exchange Commission on the date hereof, I, Michael W. Yackira, Chief Executive Officer of registrant, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1.   this report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.   the information contained in this report fairly presents, in all material respects, the financial condition and results of operations of the registrant.

/s/ Michael W. Yackira

Michael W. Yackira

Chief Executive Officer

Nevada Power Company

November 1, 2007

This Certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section.  Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent the registrant specifically incorporates it by reference.

A signed original of this written statement required by Section 906 has been provided to the registrant and will be retained by the registrant and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.3

Exhibit 32.3

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

SIERRA PACIFIC POWER COMPANY

(“Registrant”)

In connection with this report of Sierra Pacific Power Company on Form 10-Q for the quarter ended September 30, 2007 as filed with the Securities and Exchange Commission on the date hereof, I, Michael W. Yackira, Chief Executive Officer of registrant, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1.   this report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.   the information contained in this report fairly presents, in all material respects, the financial condition and results of operations of the registrant.

/s/ Michael W. Yackira

Michael W. Yackira

Chief Executive Officer

Sierra Pacific Power Company

November 1, 2007

This Certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section.  Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent the registrant specifically incorporates it by reference.

A signed original of this written statement required by Section 906 has been provided to the registrant and will be retained by the registrant and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.4

Exhibit 32.4

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

SIERRA PACIFIC RESOURCES

(“Registrant”)

In connection with this report of Sierra Pacific Resources on Form 10-Q for the quarter ended September 30, 2007 as filed with the Securities and Exchange Commission on the date hereof, I, William D. Rogers, Chief Financial Officer of registrant, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1.   this report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.   the information contained in this report fairly presents, in all material respects, the financial condition and results of operations of the registrant.

/s/ William D. Rogers

William D. Rogers

Chief Financial Officer

Sierra Pacific Resources

November 1, 2007

This Certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section.  Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent the registrant specifically incorporates it by reference.

A signed original of this written statement required by Section 906 has been provided to the registrant and will be retained by the registrant and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.5

Exhibit 32.5

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

NEVADA POWER COMPANY

(“Registrant”)

In connection with this report of Nevada Power Company on Form 10-Q for the quarter ended September 30, 2007 as filed with the Securities and Exchange Commission on the date hereof, I, William D. Rogers, Chief Financial Officer of registrant, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1.   this report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.   the information contained in this report fairly presents, in all material respects, the financial condition and results of operations of the registrant.

/s/ William D. Rogers

William D. Rogers

Chief Financial Officer

Nevada Power Company

November 1, 2007

This Certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section.  Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent the registrant specifically incorporates it by reference.

A signed original of this written statement required by Section 906 has been provided to the registrant and will be retained by the registrant and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.6

Exhibit 32.6

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

SIERRA PACIFIC POWER COMPANY

(“Registrant”)

In connection with this report of Sierra Pacific Power Company on Form 10-Q for the quarter ended September 30, 2007 as filed with the Securities and Exchange Commission on the date hereof, I, William D. Rogers, Chief Financial Officer of registrant, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1.   this report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.   the information contained in this report fairly presents, in all material respects, the financial condition and results of operations of the registrant.

/s/ William D. Rogers

William D. Rogers

Chief Financial Officer

Sierra Pacific Power Company

November 1, 2007

This Certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section.  Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent the registrant specifically incorporates it by reference.

A signed original of this written statement required by Section 906 has been provided to the registrant and will be retained by the registrant and furnished to the Securities and Exchange Commission or its staff upon request.