The Utilities enter into several purchase commitments for electric power, coal, natural gas and transportation, as well as, long-term service agreements, capital project commitments and operating leases. Detailed below are estimates of future commitments under these arrangements (dollars in millions):

		NVE
	2012		2013		2014		2015		2016		Thereafter		Total
Purchased Power	$	492	$	427	$	416	$	425	$	433	$	3,081	$	5,274
Purchased Power - not commercially operable		75		119		204		239		247		5,360		6,244
Coal & Natural Gas		376		187		58		55		39		119		834
Transportation		168		217		218		155		146		1,779		2,683
Long-Term Service Agreements		49		21		21		20		17		71		199
Capital Projects		129		59		-		-		-		-		188
Operating Leases		18		17		16		11		6		74		142
Total Commitments	$	1,307	$	1,047	$	933	$	905	$	888	$	10,484	$	15,564

		NPC
	2012		2013		2014		2015		2016		Thereafter		Total
Purchased Power	$	385	$	318	$	297	$	302	$	305	$	2,152	$	3,759
Purchased Power - Not Commercially Operable		75		119		204		239		247		5,360		6,244
Coal & Natural Gas		261		127		39		39		39		119		624
Transportation		85		138		158		111		111		1,601		2,204
Long-Term Service Agreements		41		16		16		15		12		55		155
Capital Projects		87		54		-		-		-		-		141
Operating Leases		10		9		9		6		5		41		80
Total Commitments	$	944	$	781	$	723	$	712	$	719	$	9,328	$	13,207

		SPPC
	2012		2013		2014		2015		2016		Thereafter		Total
Purchased Power	$	177	$	126	$	119	$	123	$	128	$	929	$	1,602
Coal & Natural Gas		115		60		19		16		-		-		210
Transportation		83		78		59		44		35		178		477
Long-Term Service Agreements		8		5		5		5		5		16		44
Capital Projects		42		5		-		-		-		-		47
Operating Leases		6		5		4		3		2		33		53
Total Commitments	$	431	$	279	$	206	$	191	$	170	$	1,156	$	2,433

The Utilities have several contracts for long-term purchase of electric energy; the expiration of these contracts range from 2012 to 2039. While the Utilities are not required to make payment if power is not delivered under these contracts, estimated future payments are included in the tables above. Related party purchase power agreements have been eliminated from the NVE totals for the year 2012 and a portion of 2013.

The Utilities entered into several contracts for long-term purchase of electric energy in which the facility remains under development. This represents the estimated payments under renewable energy power purchase contracts, which have been approved by the PUCN and are contingent upon the developers obtaining commercial operation and their ability to deliver power.

The Utilities have several long-term contracts for the purchase of coal and natural gas; the expiration of these contracts range from 2012 to 2019.

The Utilities have several long-term contracts for the transport of coal and natural gas. Also included in the transportation obligations is the TUA with GBT, of which NPC will be responsible for 95% and SPPC 5%. The TUA remains contingent upon final construction costs, and reaching commercial operation. The expiration of these transportation contracts range from 2012 to 2054.

The Utilities have long term service agreements for the performance of maintenance on generation units. Obligation amounts are based on estimated usage.

Capital projects at NPC NV Energize and NPC's requirement to purchase the CDWR's share of the undepreciated cost of capital of Reid Gardner Generating Station Unit No. 4 in 2013 (see Note 5, Jointly Owned Properties), at which time NPC will be required to assume all associated operating and maintenance costs for the Unit. Capital projects at SPPC include NV Energize. Additionally, the Utilities have obligations regarding the construction of ON Line, of which NPC will be responsible for 95% and SPPC 5%.

The Utilities have entered into various non-cancelable operating leases primarily for building, land and equipment. Contract expiration dates range from 2012 to 2048. NVE's rent payments meeting the above described criteria for 2011 were $2.4 million. Prior to 2011, NVE did not have non-cancelable operating leases that were material. NPC's rent payments meeting the above described criteria for 2011, 2010 and 2009 were $11.5 million, $13.6 million and $13.8 million respectively. SPPC's rent payments meeting the above described criteria for 2011, 2010 and 2009 were $7.4 million, $14.0 million and $13.9 million respectively.

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.

On October 4, 2011, NPC received a request for information from the EPA-Region 9 under Section 114 of the Federal Clean Air Act requesting current and historical operations and capital project information for NPC's Reid Gardner Generating Station located near Moapa, Nevada. NPC operates the facility and owns Units 1-3. Unit 4 of the facility is co-owned with the California Department of Water Resources. The EPA's Section 114 information request does not allege any incidents of non-compliance at the plant. A first response was provided back to the EPA in December 2011, and subsequent information will continue to be provided during the first quarter of 2012. At this time, NPC cannot predict the impact, if any, associated with this information request.

On June 22, 2009, SPPC received a request for information from the EPA-Region 9 under Section 114 of the federal Clean Air Act requesting current and historical operations and capital project information for SPPC's Valmy Generating Station located in Valmy, Nevada. SPPC co-owns and operates this coal-fired plant. Idaho Power Company owns the remaining 50%. The EPA's Section 114 information request does not allege any incidents of non-compliance at the plant, and there have been no other new enforcement-related proceedings that have been initiated by the EPA relating to the plant. SPPC completed its response to the EPA in December 2009 and will continue to monitor developments relating to this Section 114 request. At this time, SPPC cannot predict the impact, if any, associated with this information requested.

NPC owns an 11% interest in the Navajo Generating Station which is located in Northern Arizona and is operated by Salt River. Other participants in the Navajo Generating Station are Arizona Public Service Company, Los Angeles Department of Water and Power and Tucson Electric Power Company (together with Salt River and NPC, the “Navajo Joint Owners”). NPC also owns a 14% interest in the Mohave Generating Station which is located in Laughlin, Nevada and was operated by Southern California Edison (SCE) prior to the time it became non-operational on December 31, 2005.

In October 2004, the Navajo Generating Station's coal supplier, Peabody Western Coal Company (Peabody WC), filed a complaint against the Navajo Joint Owners in Missouri State Court in St. Louis, alleging, among other things, a declaration that the Navajo Joint Owners are obligated to reimburse Peabody WC for any royalty, tax or other obligations arising out of a lawsuit that the Navajo Nation filed against Salt River, several Peabody Coal Company entities (including Peabody WC and collectively referred to as “Peabody”) and SCE in June 1999 in the U.S. District Court for the District of Columbia (DC Lawsuit).

The Navajo Joint Owners were first served in the Missouri lawsuit in January 2005. The operating agent for the Navajo Generating Station, Salt River, defended the suit on behalf of the Navajo Joint Owners. In July 2008, the Court dismissed all counts against NPC, two without prejudice to their possible refiling at a later date. NPC is unable to predict whether any liability may arise from any of these matters, including from the ultimate outcome of the DC Lawsuit.

NPC is not a party to the DC Lawsuit although, as noted above, it is a participant in both the Navajo Generating Station and the Mohave Generating Station. The DC Lawsuit consists of various claims relating to the renegotiations of coal royalty and lease agreements and alleges, among other things, that the defendants obtained a favorable coal royalty rate for the lease agreements under which Peabody mines coal for both the Navajo Generating Station and the Mohave Generating Station by improperly influencing the outcome of a federal administrative process pursuant to which the royalty rate was to be adjusted. Initially, the DC Lawsuit sought $600 million in damages, treble damages and punitive damages of not less than $1 billion, and the ejection of defendants from all possessory interests and Navajo Tribal lands arising out of the primary coal lease. In July 2001, the U.S. District Court dismissed all claims against Salt River. In April 2010, the Navajo Nation amended their complaint; it no longer seeks treble damages. Factual discovery was completed in October 2010, after which the parties engaged in settlement discussions. In April 2011, SCE indicated that it reached a settlement in the DC Lawsuit in principle. On August 1, 2011, the Navajo Nation, Peabody, Salt River and SCE executed a written settlement agreement in return for dismissal of all claims by the Navajo Nation. Salt River has asked that the Navajo Joint Owners, including NPC, contribute towards the settlement based on its 11% ownership stake in the Navajo Generating Station. NPC has paid Salt River the requested contribution, which did not have a material impact on the financial statements. SCE has asked that the Mohave Joint Owners, including NPC, contribute towards the settlement based upon their ownership stake in the Mohave Generating Station. NPC has not agreed to pay SCE the requested contribution. Management is currently negotiating a settlement with SCE; but, does not believe the impact of such settlement will be material to NPC at this time.

SPPC sold four hydro generating units (10.3 MW total capacity) located in Nevada and California, for $8 million to TMWA in June 2001. The Farad Hydro (2.8 MW), has been out of service since the summer of 1996 due to a collapsed flume. The current estimate to rebuild the diversion dam, if management decides to proceed, is approximately $20 million. Under the terms of the contract with TMWA, SPPC is not entitled to receive the proceeds of sale relating to Farad unless and until it has reconstructed the Farad facility in a manner reasonably acceptable to TMWA or, alternatively SPPC assigns its casualty loss claim to TMWA and TMWA is reasonably satisfied regarding its rights with respect to such claim.

SPPC filed a claim with the insurers Hartford Steam Boiler Inspection and Insurance Company and Zurich-American Insurance Company (collectively, the “Insurers”) for the Farad flume and Farad 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 for Farad Dam. The case went to trial before the Court in April 2008. On September 30, 2008, the Court ruled that SPPC was not time barred from reconstructing Farad Dam, and has coverage for the full rebuild costs, subject to coverage sub-limits set forth in the insurance policies. The Court further ruled that SPPC is entitled to recover $4 million for costs incurred to date on Farad Dam and that SPPC shall have three years to rebuild the dam from the date of the Court's decision. In the event Farad Dam is not rebuilt, the Court determined SPPC would be entitled to actual cash value of approximately $1.3 million. SPPC has requested the court to reconsider the cash value to reflect rebuild costs and the Insurers opposed. The Insurers time to file an appeal on the Court's decision had been suspended pending the Court's determination on the cash value reconsideration. On July 10, 2009, the District Court declined SPPC's request to reconsider the cash value and further ordered that the three-year period to replace the dam commences as of July 10, 2009. In early August 2009, SPPC appealed the District Court's $1.3 million cash value determination with the Ninth Circuit. Subsequently, in August 2009, the Insurers appealed the District Court's insurance coverage decision with the Ninth Circuit. The Ninth Circuit heard arguments on the appeal in November 2010 and further asked that the parties consider mediation settlement proceedings. In January 2011, the parties, including TMWA, agreed to engage in mediation settlement discussions. Mediation was not successful, and the case was returned to the active docket for decision by the Ninth Circuit. At this time, SPPC filed a motion with the District Court to stay or toll the three-year replacement period. On June 15, 2011, the parties filed supplemental briefs concerning the cash value determination and the replacement cost of the dam. On January 5, 2012, the Ninth Circuit referred questions concerning policy exclusions and related cost recovery to the California Supreme Court prior to rendering its decision, and stayed all other proceedings in the interim. Following the Supreme Court's decisions, and subsequently the Ninth Circuit decision, the District Court is expected to decide on the motion concerning the replacement period. Management cannot assess or predict the outcome of the impact of the court decisions at this time.

NVE 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.

During the second quarter of 2011, NVE began to construct ON Line, which is Phase 1 of a joint project between the Utilities and GBT-South. Construction of ON Line consists of a 500 kV interconnection between the Robinson Summit substation on the SPPC system and the Harry Allen Generating Station on the NPC system by late 2012. The Utilities will own a 25% interest in ON Line and have entered into a TUA with GBT-South for its 75% interest in ON Line. Under the terms of the TUA, NVE's future lease payments are adjusted for construction costs, including cost overruns; therefore, for accounting purposes NVE is treated as the owner of the construction project in accordance with Lease Accounting, The Effect of Lessee Involvement in Asset Construction of the FASC. As a result, NVE has capitalized construction costs, incurred as of December 31, 2011, associated with GBT's 75% interest of approximately $152.3 million, or $144.1 and $8.2 million at NPC and SPPC, respectively, in CWIP with a corresponding credit to other deferred liabilities. Total construction costs for Phase 1 of ON Line is estimated to be $556 million, including AFUDC.