Sierra Pacific has contracts for a significant amount of energy produced from geothermal sources. SO2 is the key ingredient in acid rain. These energy measures also reduce emissions of carbon dioxide, considered the chief global warming gas, and nitrogen oxides, another ingredient in the formation of acid rain. The EPA has worked out a formula, providing utilities with regular allowances, which represent the amount of emissions they are permitted on an annual basis. The effort is designed to ensure that nationwide SO2 emissions will be cut in half by the year 2010.
Utilities can either bank or sell their bonus allowances.
Sierra Pacific Power has earned 3,430 allowances from the EPA under the Bonus Allowance Program since its inception in 1993.