EXHIBIT (8)-1
Xxxxx, Day, Xxxxxx & Xxxxx
00 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
(000) 000-0000
September 4, 1998
Nevada Power Company
0000 Xxxx Xxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 00000
Re: Agreement and Plan of Merger Among Nevada
Power Company, Sierra Pacific Resources,
Desert Merger Sub, Inc. and Lake Merger Sub, Inc.
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Ladies and Gentlemen:
We have acted as special tax counsel to Nevada Power Company, a Nevada
corporation (the "COMPANY") in connection with the Agreement and Plan of
Merger, dated as of April 29, 1998 ("MERGER AGREEMENT"), among the Company,
Sierra Pacific Resources, a Nevada corporation ("SIERRA PACIFIC"), Desert Merger
Sub, Inc., a Nevada corporation and wholly owned subsidiary of Sierra Pacific
("DESERT MERGER SUB"), and Lake Merger Sub, Inc., a Nevada corporation and
wholly owned subsidiary of Sierra Pacific ("LAKE MERGER SUB"). Capitalized
terms used herein but not defined have the meanings assigned to them in the
Merger Agreement.
Pursuant to the Merger Agreement: (i) Lake Merger Sub will be merged
with and into Sierra Pacific with Sierra Pacific as the surviving corporation
(the "FIRST MERGER") and each issued and outstanding share of Sierra Pacific
Common Stock will be converted into either $37.55 in cash or 1.44 fully paid
and non-assessable shares of Sierra Pacific Common Stock, as stated in section
2.1(c) of the Merger Agreement; and (ii) the Company will be merged with and
into Desert Merger Sub with Desert Merger Sub as the surviving corporation (the
"SECOND MERGER") and each issued and outstanding share of the Company's common
stock ("NEVADA POWER COMMON STOCK") will be converted into either $26.00 in cash
or one (1) fully paid and non-assessable share of Sierra Pacific Common Stock,
as stated in section 2.2(c) of the Merger Agreement.
For purposes of this opinion, we have relied upon, and assumed the
completeness, truth, and accuracy of, the information contained in the Merger
Agreement and the Joint Proxy Statement/Prospectus filed by the Company and
Sierra Pacific relating to the First Merger and the Second Merger and have
assumed that the First Merger and the Second Merger will occur in accordance
with the terms of the Merger Agreement. In addition, we have relied upon
certain representations of the Company, Sierra Pacific, Desert Merger Sub and
Lake Merger Sub as to factual matters and have assumed, in connection
therewith, that any such representations that are qualified by reference to
the knowledge of the representor
(E.G., a representation that a statement is true "to the knowledge of"
management) are true without such qualification.
Based upon and subject to the foregoing, and provided that the Merger
Agreement and tax representations referred to above set forth all of the
material facts relating to the First Merger and the Second Merger fully and
accurately as of the date hereof, and will continue to set forth such facts
fully and accurately at all times to and including the Effective Time of the
First Merger and the Effective Time of the Second Merger, we are of the
opinion that: (i) the First Merger will be a tax-free transaction under the Code
to the extent that Sierra Pacific, Lake Merger Sub, and the stockholders of
Sierra Pacific exchange their shares solely for Sierra Pacific Common Stock,
in which case no gain or loss will be recognized for federal income tax
purposes as a result of the consummation of the First Merger; and (ii) the
Second Merger will be a tax-free reorganization under the Code to the extent
that the Company, Desert Merger Sub, and the stockholders of the Company
exchange their shares solely for Sierra Pacific Common Stock, in which case
no gain or loss will be recognized for federal income tax purposes as a
result of the consummation of the Second Merger.
This opinion relates solely to the federal income tax consequences of
the First Merger and the Second Merger, and no opinion is expressed as to
consequences under any foreign, state or local tax law. Further, and
notwithstanding anything in the foregoing to the contrary, no opinion is
expressed as to the effect upon the opinion set forth above of any provision
of law that may affect any particular person differently than any other
person, by reason of such first-mentioned person's special status,
characteristics or situation, including, but not limited to, (i) employees of
the Company or Sierra Pacific, and (ii) stockholders of the Company or Sierra
Pacific who are not U.S. persons (within the meaning of Section 7701(a)(30)
of the Internal Revenue Code of 1986, as amended (the "Code")). Except as
explicitly stated herein, no other opinion is expressed or implied. This
opinion is based upon the currently applicable provisions of the Code,
regulations thereunder, current published positions of the Internal Revenue
Service, and judicial authorities published to date, all of which are subject
to change by the Congress, the Treasury Department, the Internal Revenue
Service or the courts. Any such change may be retroactive with respect to
transactions entered into prior to the date of such change. No assurance can
be provided as to the effect upon our opinion of any such change. Finally,
this opinion is not binding upon the Internal Revenue Service or the courts,
and no assurance can be given that they will accept this opinion or agree
with the views expressed herein.
We hereby consent to the filing of this opinion as Exhibit (8)-1 to the
Joint Proxy Statement/Prospectus on Form S-4, and to the reference to us
under the caption "Legal Matters" in the Joint Proxy Statement/Prospectus.
Very truly yours,
/s/ Xxxxx, Day, Xxxxxx & Xxxxx
Xxxxx, Day, Xxxxxx & Xxxxx