Walter Higgins, the former Navy submarine officer who kept Sierra Pacific Resources out of bankruptcy in the wake of the 2000-01 Western energy crisis, on Wednesday announced his retirement as CEO as the company nears completion of its financial recovery.
Michael Yackira, the No. 2 executive at Sierra Pacific Resources, will replace Higgins, effective Aug. 1. Higgins, 62, will remain as board chairman indefinitely.
Yackira, a former senior officer with electric utility company FPL Group of Florida, said he will continue to focus on the core business at subsidiaries Nevada Power Co. of Las Vegas and Sierra Pacific Power Co. of Reno.
“I see the role of the company is still with this back-to-basics strategy. I think the company is on the right path,” Yackira said. “I dare say we were one of the first (electric utility companies) to start down the path of back to basics in 2003.
“Everyone has the same goal in mind: balancing our customer needs and the needs of our investors. Our reliability is in the top decile of performance for the utility industry.”
Yackira, 55, faces the challenge of building a giant, $3.8 billion coal-fired power plant at Ely. The company says the Ely Energy Center will reduce its reliance on natural gas, which has caused rate increases when gas prices spiked in recent years. Also, the company wants to generate more of its own electricity to reduce its dependence on wholesale power which surged in price during the energy crisis.
“It’s a great opportunity for this state to commence the most major energy project the state has seen since the 1930s, when Hoover Dam was completed,” Yackira said.
Hoover Dam provides hydroelectric power to Nevada and surrounding states, but its percentage of total power has grown smaller as Nevada Power needs more and more energy to satisfy the explosive population growth in Southern Nevada.
Yackira earned a bachelor’s degree in accounting from City University of New York.
He worked for 11 years at FPL Group, an electric utility company in Florida. He served as senior vice president of finance and chief financial officer, and president of the FPL Energy, a renewable energy unit.
Yackira joined Sierra Pacific Resources in 2003 as executive vice president. He then received the additional title of chief financial officer. Yackira was promoted to president and chief operating officer in February.
Like the other senior officers at Sierra Pacific Resources, Yackira was hired by Higgins.
Higgins is a graduate of the Naval Academy who retired from the Naval Reserve as captain. Higgins will move to Reno after retiring from his CEO post at Sierra.
While Higgins served as both chairman and CEO, the board decided to name separate individuals to those positions in keeping with a corporate trend that advocates say advances corporate governance.
Higgins worked in the utility industry for 41 years. He spent most of the last 14 years as chairman and CEO at Sierra Pacific Resources.
Higgins left Sierra in 1998 and was serving as CEO of AGL Resources, a gas utility holding company, in Atlanta, when Nevada Power and Sierra merged.
He returned in 2000 on the eve of the Western energy crisis, which sent wholesale rates soaring. At the same time, Nevada lawmakers were rethinking their decision to deregulate the electric utility industry and the company under predecessor CEO Michael Niggli had agreed to the $3 billion acquisition of Portland, (Ore.), General Electric from Enron Corp. The agreement later was terminated.
In 2002, the Public Utilities Commission lambasted Nevada Power for imprudent power purchases and slashed a $922 million energy rate case to $486 million.
Rating agencies downgraded the utility’s ratings to junk-bond levels and then power suppliers terminated wholesale power supply contracts with Nevada Power.
Higgins averted bankruptcy for the company, however, re-established good relations with state regulators and changed energy purchasing procedures.
Since then, Higgins repeatedly has said his goal was to restore the company’s financial health and regain investment grade bond ratings.
Standard & Poor’s and Moody’s Investors Service have yet to return the utilities to investment grade, but Higgins is hopeful they will do so soon.