This annual report has been prepared to present the status of the Pinon Pine Power Project, a nominal 104 MWe (gross) integrated gasification combined-cycle (IGCC) power plant addition to Sierra Pacific Power Companys (SPPCo) system. This project will also serve as a demonstration project cost-shared by the US Department of Energy (DOE) and SPPCo under DOEs Clean Coal Technology (CCT) Program. The goal of the CCT Program is to demonstrate advanced coal utilization technologies that are energy efficient and reliable and that are able to achieve substantial reductions in emissions as compared with existing coal technologies. The Pinon Pine Power Project will demonstrate an IGCC system utilizing the Kellogg-Rust-Westinghouse (KRW) fluidized-bed gasification process operating in an air-blown mode with in-bed desulfurization and hot gas clean-up with a western bituminous coal. The Pinon Pine Power Project will be constructed and operated at SPPCo`s Tracy Power Station, an existing power generation facility located on a rural 724-acre plot approximately 17 miles east of Reno, NV.