SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXHANGE ACT OF 1934
For the quarterly period ended June 30, 2005
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Commission file number 33-42125
CHUGACH ELECTRIC ASSOCIATION, INC.
Incorporated pursuant to the Laws of Alaska State
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Internal Revenue Service - Employer Identification No. 92-0014224
5601 Electron Drive, Anchorage, AK 99518
(907) 563-7494
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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Act)
Yes No X
Indicate the number of shares outstanding of each of the issuer's class of
common stock, as of the latest practicable date.
CLASS OUTSTANDING AT AUGUST 1, 2005
NONE NONE
Page Number
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) 2
Balance Sheets, June 30, 2005 and December 31, 2004 3
Statements of Revenues, Expenses and Patronage Capital, Three and
Six Months Ended June 30, 2005 and 2004 5
Statements of Cash Flows, Six Months Ended June 30, 2005 and 2004 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition 1 1
Item 3. Quantitative and Qualitative Disclosures About Market Risk 1 8
Item 4. Controls and Procedures 2 0
PART II OTHER INFORMATION
Item 1. Legal Proceedings 2 0
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 2 2
Item 3. Defaults Upon Senior Securities 2 2
Item 4. Submission of Matters to a Vote of Security Holders 2 2
Item 5. Other Information 2 2
Item 6. Exhibits 2 3
Signatures 2 4
Exhibits 2 5
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
Statements in this report that do not relate to historical facts, including
statements relating to future plans, events or performance, are
forward-looking statements that involve risks and uncertainties. Actual
results, events or performance may differ materially. Readers are cautioned
not to place undue reliance on these forward-looking statements, that speak
only as of the date of this report and the accuracy of which is subject to
inherent uncertainty. Chugach Electric Association, Inc. (Chugach)
undertakes no obligation to publicly release any revisions to these
forward-looking statements to reflect events or circumstances that may
occur after the date of this report or the effect of those events or
circumstances on any of the forward-looking statements contained in this
report, except as required by law.
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
The unaudited financial statements and notes to financial statements of
Chugach as of and for the quarter ended June 30, 2005, follow:
CHUGACH ELECTRIC ASSOCIATION, INC.
Balance Sheets
(Unaudited)
Assets June 30, 2005 December 31, 2004
------ ------------- -----------------
Utility plant:
Electric plant in service $ 754,494,167 $ 748,484,527
Construction work in progress 29,994,000 25,278,388
---------- ----------
Total utility plant 784,488,167 773,762,915
Less accumulated depreciation (318,837,418) (305,932,001)
------------- -------------
Net utility plant 465,650,749 467,830,914
Other property and investments, at cost:
Nonutility property 24,461 24,461
Investments in associated organizations 11,769,054 11,768,457
---------- ----------
Total other property and investments 11,793,515 11,792,918
Current assets:
Cash and cash equivalents 14,583,902 10,465,004
Special deposits 217,191 217,191
Accounts receivable, net 19,735,142 23,740,383
Materials and supplies 23,800,836 23,691,509
Prepayments 1,041,900 805,670
Other current assets 184,412 260,115
------- -------
Total current assets 59,563,383 59,179,872
Deferred charges, net 20,269,404 20,550,883
---------- ----------
Total assets $ 557,277,051 $ 559,354,587
============= =============
CHUGACH ELECTRIC ASSOCIATION, INC.
Balance Sheets
(Continued)
(Unaudited)
Liabilities and Equities June 30, 2005 December 31, 2004
------------------------ ------------- -----------------
Equities and margins:
Memberships $ 1,224,068 $ 1,202,538
Patronage capital 136,091,073 130,750,269
Other 7,022,341 7,045,992
--------- ---------
Total equities and margins 144,337,482 138,998,799
Long-term obligations, excluding current installments:
2001 Series A Bond payable 150,000,000 150,000,000
2002 Series A Bond payable 120,000,000 120,000,000
2002 Series B Bond payable 41,000,000 46,200,000
National Bank for Cooperatives promissory notes payable 46,032,099 47,157,786
---------- ----------
Total long-term obligations 357,032,099 363,357,786
Current liabilities:
Current installments of long-term obligations 16,325,687 15,931,393
Accounts payable 6,448,730 7,890,172
Consumer deposits 1,950,438 1,947,511
Fuel cost over-recovery 1,580,160 2,714,345
Accrued interest 6,288,500 6,201,769
Salaries, wages and benefits 5,967,232 5,530,740
Fuel 13,382,509 12,919,623
Other current liabilities 1,604,064 1,416,400
--------- ---------
Total current liabilities 53,547,320 54,551,953
Deferred credits 2,360,150 2,446,049
--------- ---------
Total liabilities and equities $ 557,277,051 $ 559,354,587
============= =============
<FN>
See accompanying notes to financial statements.
</FN>
CHUGACH ELECTRIC ASSOCIATION, INC.
Statements of Revenues, Expenses and Patronage Capital
(Unaudited)
Three months ended June 30 Six months ended June 30
2005 2004 2005 2004
---- ---- ---- ----
Operating revenues $50,314,401 $46,388,411 $107,526,435 $98,033,352
Operating expenses:
Fuel 17,673,953 14,560,068 38,165,976 30,949,650
Power production 2,971,044 3,378,311 6,413,824 6,820,512
Purchased power 6,222,465 5,538,343 11,498,387 9,491,833
Transmission 1,326,796 1,432,161 2,928,936 3,172,722
Distribution 2,996,705 2,852,655 5,816,310 5,431,190
Consumer accounts 1,192,447 1,267,904 2,547,838 2,695,263
Administrative, general and other 4,764,653 5,325,992 9,630,214 10,858,262
Depreciation 7,160,655 7,085,627 14,282,515 14,132,319
--------- --------- ---------- ----------
Total operating expenses 44,308,718 41,441,061 91,284,000 83,551,751
Interest expense:
On long-term obligations 5,811,992 5,411,791 11,487,678 10,853,444
On short-term obligations 0 (48,179) 2,237 (48,179)
Charged to construction-credit (214,456) (109,520) (406,174) (198,952)
--------- --------- --------- ---------
Net interest expense 5,597,536 5,254,092 11,083,741 10,606,313
--------- --------- ---------- ----------
Net operating margins 408,147 (306,742) 5,158,694 3,875,288
Nonoperating margins:
Interest income 134,284 104,993 255,978 194,026
Capital credits, patronage dividends and other 32,658 17,795 68,099 42,696
------ ------ ------ ------
Total nonoperating margins 166,942 122,788 324,077 236,722
------- ------- ------- -------
Assignable margins 575,089 (183,954) 5,482,771 4,112,010
======= ========= ========= =========
Patronage capital at beginning of period 135,553,458 130,637,377 130,750,269 126,341,413
Retirement of capital credits and estate payments (37,474) (0) (141,967) (0)
-------- --- --------- ---
Patronage capital at end of period $ 136,091,073 $ 130,453,423 $136,091,073 $130,453,423
============= ============= ============ ============
<FN>
See accompanying notes to financial statements.
</FN>
CHUGACH ELECTRIC ASSOCIATION, INC.
Statements of Cash Flows
(Unaudited)
Six months ended June 30
2005 2004
---- ----
Cash flows from operating activities:
Assignable margins $5,482,771 $4,112,010
Adjustments to reconcile assignable margins to net cash provided by
operating activities:
Depreciation and amortization 15,328,628 15,929,027
Capitalization of interest (479,000) (231,159)
Other (597) (30)
Changes in assets and liabilities:
(Increase) decrease in assets:
Accounts receivable 4,005,241 1,642,824
Fuel cost under-recovery 0 2,032,730
Materials and supplies (109,327) (2,692,513)
Prepayments (236,230) 331,879
Other assets 75,703 11,239
Deferred charges (764,634) (1,873,975)
Increase (decrease) in liabilities:
Accounts payable (1,441,442) (3,343,926)
Provision for rate refund 0 (671,071)
Consumer deposits 2,927 65,254
Fuel cost over-recovery (1,134,185) 874,034
Accrued interest 86,731 8,042
Salaries, wages and benefits 436,492 434,121
Fuel 462,886 1,049,559
Other liabilities 187,664 52,042
Deferred credits (25,763) (920,669)
-------- ---------
Net cash provided by operating activities 21,877,865 16,809,418
Investing activities:
Extension and replacement of plant (11,623,350) (5,677,492)
Purchase of investments in associated organizations (0) (7,298)
--- -------
Net cash used in investing activities (11,623,350) (5,684,790)
Financing activities:
Net transfer of restricted construction funds 0 (2,604)
Repayments of long-term obligations (5,931,393) (5,545,000)
Memberships and donations received (2,121) 3,563
Retirement of patronage capital (141,967) 0
Net receipts (refunds) of consumer advances for construction (60,136) 414,330
-------- -------
Net cash used in financing activities (6,135,617) (5,129,711)
Net change in cash and cash equivalents 4,118,898 5,994,917
Cash and cash equivalents at beginning of period $10,465,004 $11,185,086
- ------------------------------------------------ ----------- -----------
Cash and cash equivalents at end of period $14,583,902 $17,180,003
- ------------------------------------------ =========== ===========
Supplemental disclosure of cash flow information - interest expense paid, excluding $10,518,010 $10,367,112
=========== ===========
amounts capitalized
<FN>
See accompanying notes to financial statements.
</FN>
CHUGACH ELECTRIC ASSOCIATION, INC.
Notes to Financial Statements
(Unaudited)
1. Presentation of Financial Information
During interim periods, Chugach Electric Association, Inc. (Chugach)
follows the accounting policies set forth in its audited financial
statements included in Form 10-K filed with the Securities and Exchange
Commission (SEC) unless otherwise noted. Users of interim financial
information are encouraged to refer to the footnotes contained in Chugach's
Form 10-K when reviewing interim financial results. The accompanying
unaudited interim financial statements reflect all adjustments of normal
and recurring nature, which are, in the opinion of management, necessary
for a fair statement of the results for the interim periods presented.
Certain reclassifications have been made to the 2004 financial statements
to conform to the 2005 presentation.
2. Lines of credit
Chugach maintains a $20 million line of credit with CoBank, ACB (CoBank).
On May 3, 2005, and approved by the Chugach Board of Directors on June 15,
2005, Chugach and CoBank renewed the line of credit and finalized a Master
Loan Agreement pursuant to the line of credit. The CoBank line of credit
expires October 31, 2005, subject to annual renewal at the discretion of
the parties. At June 30, 2005, there was no outstanding balance on this
line of credit and it was not utilized during the second quarter of 2005.
At June 30, 2005, the borrowing rate would have been 4.79% and at December
31, 2004, the borrowing rate would have been 3.80%. In addition, Chugach
has an annual line of credit of $50 million available at the National Rural
Utilities Cooperative Finance Corporation (NRUCFC). At June 30, 2005, there
was no outstanding balance on this line of credit and it was not utilized
during the second quarter of 2005. At June 30, 2005, the borrowing rate
would have been 4.95% and at December 31, 2004, the borrowing rate would
have been 4.05%. The NRUCFC line of credit expires October 15, 2007.
3. Legal Proceedings
Matanuska Electric Association, Inc., v. Chugach Electric Association,
Inc., Superior Court Case No. 3AN-99-8152 Civil
This action is a claim for a breach of the Power Sales Agreement between
Chugach and Matanuska Electric Association, Inc. (MEA) for a 25-year period
from 1989 through 2014. MEA asserted Chugach breached that contract by
failing to provide information, by failing to properly manage Chugach's
long-term debt, and by failing to bring Chugach's base rate action to a
Joint Committee before presenting it to the Regulatory Commission of Alaska
(RCA). All of MEA's claims were dismissed by the Superior Court. On April
29, 2002, MEA appealed the Superior Court's decisions relating to Chugach's
financial management and Chugach's failure to bring Chugach's base rate
action to the joint committee before filing with the RCA to the Alaska
Supreme Court. We cross-appealed the Superior Court's decision not to
dismiss the financial management claim on jurisdictional and res judicata
grounds. The Alaska Supreme Court, on October 8, 2004, ruled in Chugach's
favor supporting its right under the power sales agreement to file for
interim rate relief without first going to the Joint Committee. The Supreme
Court ruled against Chugach in its cross appeal. The Supreme Court also
overturned the Superior Court's decision that dismissed MEA's claim asking
for review of Chugach's use of rate locks instead of defeasing debt based
on the Prudent Utility Practice standard under our power sales agreement.
The Supreme Court remanded this issue to the Superior Court.
On January 24, 2005, Chugach filed a summary judgment motion based on
Chugach's claim that in the 2000 Test Year rate case the RCA has already
decided the underlying issues relating to the prudency of Chugach's use of
rate locks instead of defeasing debt. The court heard oral argument on this
motion on June 10, 2005. It took the matter under advisement and a decision
is expected within six months of the date of oral argument. Management is
uncertain of the outcome of the proceeding before the Superior Court. No
reserves have been established for this matter.
Matanuska Electric Association, Inc. v. Chugach Electric Association, Inc.
Superior Court Case No. 3AN-04-11776 Civil
On October 12, 2004, MEA filed suit in Superior Court alleging a breach of
the power sales agreement between the parties and violation of Chugach's
bylaws in connection with allocation of margins (capital credits) to MEA
for the years 1998 through 2003. Allocation of capital credits assigns a
share of the margins earned in a particular year to each customer. Capital
credits are repatriated to customers at the discretion of the board of
directors typically many years after the margins are earned.
The suit seeks a declaration by the Court that Chugach is in breach of its
bylaws and the power sales agreement based on its allocation of capital
credits to MEA as well as injunctive relief requiring Chugach to calculate
MEA's capital credit allocations based on MEA's patronage and in accordance
with generally accepted accounting practices for nonprofit cooperatives and
cooperative principles. The suit also seeks damages in an unspecified
amount to compensate MEA for the alleged breach of contract.
Management is vigorously defending against the claim. Management is
uncertain of the outcome of the suit. No reserves have been established for
this matter.
Other
Chugach received a demand letter from a third party offering a license to a
patent and implying that the patent may be infringed by certain services
provided by Chugach. The patent purportedly relates to intellectual
property rights over a system for automated electronic bill presentment and
payment. As of this date, no legal proceedings have been instituted against
us, but if the third party's patents are valid, enforceable and apply to
our business, we could be required to seek a license, discontinue certain
activities or be subject to a claim for past infringement. We are currently
considering this matter, but lack sufficient information to assess the
potential outcome at this time. No reserves have been established for this
matter.
Chugach has certain additional litigation matters and pending claims that
arise in the ordinary course of our business. In the opinion of management,
no individual matter or the matters in the aggregate are likely to have a
material adverse effect on our results of operations, financial condition
or liquidity.
4. Critical Accounting Policies
Chugach's accounting and reporting policies comply with accounting
principles generally accepted in the United States of America. The
preparation of financial statements in conformity with Generally Accepted
Accounting Principles (GAAP) requires that management apply accounting
policies and make estimates and assumptions that affect results of
operations and reported amounts of assets and liabilities in the financial
statements. Critical accounting policies are those policies that management
believes are the most important to the portrayal of Chugach's financial
condition and results of its operations, and require management's most
difficult, subjective, or complex judgments, often as a result of the need
to make estimates about matters that are inherently uncertain. Most
accounting policies are not considered by management to be critical
accounting policies. Several factors are considered in determining whether
or not a policy is critical in the preparation of financial statements.
These factors include, among other things, whether the estimates are
material to the financial statements, the nature of the estimates, the
ability to readily validate the estimates with other information including
third parties or available prices, and sensitivity of the estimates to
changes in economic conditions and whether alternative accounting methods
may be utilized under accounting principles generally accepted in the
United States of America. For all of these policies management cautions
that future events rarely develop exactly as forecast, and the best
estimates routinely require adjustment. Management has discussed the
development and the selection of critical accounting policies with the
Chugach Audit Committee.
The following policies are considered to be critical accounting policies
for the quarter ending June 30, 2005.
Electric Utility Regulation
Chugach is subject to regulation by the RCA. The RCA sets the rates Chugach
is permitted to charge customers based on allowable costs. As a result,
Chugach applies Financial Accounting Standards Board (FASB) Statement No.
71, Accounting for the Effects of Certain Types of Regulation. Through the
ratemaking process, the regulators may require the inclusion of costs or
revenues in periods different than when they would be recognized by a
non-regulated company. This treatment may result in the deferral of
expenses and the recording of related regulatory assets based on
anticipated future recovery through rates or the deferral of gains or
creation of liabilities and the recording of related regulatory
liabilities. The application of Statement No. 71 has a further effect on
Chugach's financial statements as a result of the estimates of allowable
costs used in the ratemaking process. These estimates may differ from those
actually incurred by the Company; therefore, the accounting estimates
inherent in specific costs such as depreciation and pension and
post-retirement benefits have less of a direct impact on Chugach's results
of operations than they would on a non-regulated company. Management
reviews the ultimate recoverability of these regulatory assets and
liabilities based on applicable regulatory guidelines. However, adverse
legislation and judicial or regulatory actions could materially impact the
amounts of such regulatory assets and liabilities and could adversely
impact Chugach's financial statements.
Financial Instruments and Hedging
Chugach used U.S. Treasury forward rate lock agreements to hedge expected
interest rates on the February 2002 debt re-financings. We accounted for
the agreements under Statement of Financial Accounting Standards (SFAS)
133. For rate-making purposes, Chugach did not adjust rates for gains and
losses prior to settlement, and the loss on settlement will be an
adjustment to rates over the lives of the associated debt. This rate-making
treatment was approved by the RCA in Order U-01-108(26). Accordingly, the
unrealized gain or loss was not recorded and was treated as a regulatory
asset upon settlement.
Critical estimates also include provision for rate refunds and allowance
for doubtful accounts. Actual results could differ from those estimates.
5. New Accounting Standards
SFAS 154 "Accounting Changes and Error Corrections"
This statement replaces Accounting Principles Board (APB) Opinion No. 20,
"Accounting Changes" and FASB Statement No. 3, "Reporting Changes in
Interim Financial Statements," and establishes, unless impracticable,
retrospective application as the required method for reporting a change in
accounting principle in the absence of explicit transition requirements
specific to the newly adopted accounting principle. It applies to all
voluntary changes in accounting principle, and to changes required by an
accounting pronouncement in the unusual instance that the pronouncement
does not include specific transition provisions. When a pronouncement
includes specific transition provisions, those provisions should be
followed. This Statement is effective for accounting changes and
corrections of errors made in fiscal years beginning after December 15,
2005. Chugach will implement the Statement effective January 1, 2006.
SFAS 153 "Exchanges of Nonmonetary Assets"
This Statement addresses the measurement of exchanges of nonmonetary
assets. It eliminates the exception from fair value measurement for
nonmonetary exchanges of similar productive assets in APB Opinion No. 29,
"Accounting for Nonmonetary Transactions," and replaces it with an
exception for exchanges that do not have commercial substance. This
Statement specifies that a nonmonetary exchange has commercial substance if
the future cash flows of the entity are expected to change significantly as
a result of the exchange. The provisions of this Statement are effective
for nonmonetary asset exchanges occurring in fiscal periods beginning after
June 15, 2005. Chugach will implement the statement effective July 1, 2005.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Reference is made to the information contained under the caption "CAUTION
REGARDING FORWARD-LOOKING STATEMENTS" at the beginning of this Report.
Regulatory Matters
Depreciation Rates Review Proceeding
In 2004, we implemented new depreciation rates based on an update of the
Depreciation Study utilizing Electric Plant in Service balances as of
December 31, 2002. The depreciation study resulted in a net impact on the
2004 financial statements of approximately $200,000, which, in aggregate,
was not material to the financial statements. The depreciation study was
submitted to the RCA for approval on November 19, 2004, however, the new
rates were implemented and in effect for all of 2004. We did not request a
change in electric rates charged to our customers based on the proposed
revisions to depreciation rates.
On March 9, 2005, the RCA ruled that depreciation rates may not be
implemented without prior approval of the RCA. The RCA is expected to issue
a final order in the fourth quarter of 2005. We expect to make any required
adjustments on a prospective basis.
Management is uncertain of the outcome of the RCA depreciation study review
process.
Results Of Operations
Current Year Quarter Versus Prior Year Quarter
Assignable margins increased by $759.0 thousand for the quarter ended June
30, 2005, over the same quarter in 2004 due to a decrease in power
production and administrative, general and other expense. These decreases
were slightly offset by an increase in net interest expense.
Operating revenues, which include sales of electric energy to retail,
wholesale and economy energy customers and other miscellaneous revenues,
increased by $3.9 million, or 8.5%, for the quarter ended June 30, 2005,
over the same quarter in 2004. The increase in revenues was due to an
increase in revenue collected through the fuel surcharge mechanism due to
higher fuel prices, as well as increased kWh sales to wholesale customers
and an increase in economy energy sales to Golden Valley Electric
Association (GVEA). With regard to retail sales, the Municipality of
Anchorage, our primary service area, experienced average economic growth in
the second quarter of 2005, compared to the same period in 2004, however,
that was offset by a 1.5% increase in distribution line losses in 2005.
With regard to wholesale revenues, actual sales increased due to increased
job growth and continued state and federal spending, which generated
additional economic activity. Based on the results of fixed and variable
cost recovery established in Chugach's last rate case, wholesale sales to
Matanuska Electric Association, Inc. (MEA), Homer Electric Association,
Inc. (HEA) and Seward Electric System (SES) contributed approximately $5.5
and $5.4 million to Chugach's fixed costs for the quarter ended June 30,
2005 and 2004, respectively. The following table shows the base rate sales
revenue and fuel and purchased power revenue by customer class that is
included in revenue for the quarters ending June 30, 2005, and 2004.
Base Rate Sales Revenue1 Fuel and Purchased Power Revenue Total Revenue
2005 2004 % Variance 2005 2004 % Variance 2005 2004 % Variance
Retail
Residential $10,378,661 $10,598,015 -2.1% $4,622,540 $4,154,910 11.3% $15,001,201 $14,752,925 1.7%
Small Commercial $1,886,907 $1,794,716 5.1% $973,955 $858,374 13.5% $2,860,862 $2,653,090 7.8%
Large Commercial $6,869,705 $6,859,507 0.1% $4,727,043 $4,086,294 15.7% $11,596,748 $10,945,801 5.9%
Lighting $339,518 $339,553 0.0% $14,481 $14,486 0.0% $353,999 $354,039 0.0%
Total Retail $19,474,791 $19,591,791 -0.6% $10,338,019 $9,114,064 13.4% $29,812,810 $28,705,855 3.9%
Wholesale
HEA $2,548,334 $2,542,837 0.2% $4,135,721 $3,742,873 10.5% $6,684,055 $6,285,710 6.3%
MEA $3,790,004 $3,732,397 1.5% $5,354,094 $4,695,701 14.0% $9,144,098 $8,428,098 8.5%
SES $249,236 $243,409 2.4% $542,339 $461,282 17.6% $791,575 $704,691 12.3%
Total Wholesale $6,587,574 $6,518,643 1.1% $10,032,155 $8,899,856 12.7% $16,619,728 $15,418,499 7.8%
Economy Sales $3,198,957 $1,711,662 86.9% $0 $0 - $3,198,957 $1,711,662 86.9%
Miscellaneous $682,906 $552,395 23.6% $0 $0 - $682,906 $552,395 23.6%
Total Revenue $29,944,228 $28,374,491 5.5% $20,370,174 $18,013,920 13.1% $50,314,401 $46,388,411 8.5%
<FN>
1 Customer and demand charge and non-fuel energy
</FN>
The following table represents kWh sales for the quarter ended June 30:
2005 2004
---- ----
Custome kWh kWh
Retail 271,856,959 274,343,704
Wholesale 284,351,528 276,596,824
Economy Ener 69,174,940 39,417,482
---------- ----------
Total 625,383,427 590,358,010
================== =================
Demand and energy rates charged to retail and HEA, MEA and SES did not
change in the second quarter of 2005 compared to the second quarter of
2004.
Fuel expense increased by $3.1 million, or 21.4%, for the quarter ended
June 30, 2005, compared to the same period in 2004 primarily due primarily
to higher fuel prices. For the quarter ended June 30, 2005, Chugach used
5,159,919 MCF of fuel at an average effective price of $3.43 per MCF,
compared to 4,965,163 MCF of fuel used for the same period in 2004, at an
average effective price of $2.93 per MCF. Fuel expense is collected through
the fuel surcharge mechanism. Power production expense decreased $407.3
thousand, or 12.1%, for the same period due to the timing of generation
maintenance projects. Maintenance projects started later in 2005 compared
to 2004. Purchased power also increased $684.1 thousand, or 12.4%, due to
higher fuel prices and higher Bradley Lake purchased power payments and is
also collected through the fuel surcharge mechanism. These increases were
offset by a decrease in quantity purchased. In the second quarter of 2005,
Chugach purchased 137,147 MWH of energy at an average effective price of
$4.35 cents per kWh. For the same period in 2004, Chugach purchased 140,203
MWH of energy at an average effective price of $3.78 cents per kWh.
Transmission expense decreased by $105.4 thousand, or 7.4%, and
distribution expense increased by $144.1 thousand, or 5.0%, due primarily
to the timing of distribution maintenance being performed in the second
quarter of 2005 while transmission maintenance was performed in the second
quarter of 2004. Administrative, general and other expense decreased by
$561.3 thousand, or 10.5%, caused by a $94.8 thousand decrease due to fully
amortized software and lower information services support on administrative
and general projects, a $286.7 thousand decrease in legal and corporate
planning professional services, a $67.6 thousand decrease in property
insurance and a $116.7 thousand decrease in miscellaneous general expense
due to the timing of our National Rural Electric Cooperative Association
(NRECA) dues accrual. These decreases were offset by a $146.5 increase in
labor due to merit increases. Consumer accounts expense and depreciation
and amortization expense did not materially change for the three-month
period ended June 30, 2005.
Interest on long-term debt increased by $400.2 thousand, or 7.4%, due to
higher interest rates on our 2002 Series B bonds and our CoBank promissory
notes. Interest charged to construction increased by $104.9 thousand in the
second quarter of 2005 compared to the same period in 2004 due to the
continued construction of the South Anchorage Substation and the 138 kV
International Generating Terminal (IGT) to South Anchorage Substation
projects. Other interest expense increased by $48.2 thousand, or 100%, from
the second quarter of 2004 due to an adjustment to interest associated with
the provision for rate refunds that was made in 2004.
Other nonoperating margins increased $44.2 thousand, or 36.0%, for the
three-month period ended June 30, 2005, compared to the same period in 2004
due to an increase in interest income caused by higher interest rates and
higher Allowance for Funds Used During Construction (AFUDC) due to the
continued construction of the aforementioned projects.
Current Year to Date Versus Prior Year to Date
Assignable margins increased by $1.4 million in the first six months of
2005, over the same period in 2004 due to a decrease in power production
and administrative, general and other expense. These decreases were
slightly offset by an increase in net interest expense.
Operating revenues increased $9.5 million, or 9.7%, due to an increase in
revenue collected through the fuel surcharge mechanism due to higher fuel
prices and an increase in economy energy sales to GVEA. With regard to
retail sales, in the first six months of 2005, we experienced a decrease in
kWh sales due to a mild winter, compared to the same period in 2004, as
well as the impact of a 1.5% increase in distribution line losses in 2005.
With regard to wholesale revenues, actual sales increased in the first six
months of 2005 over the same period in 2004 due to the same economic
activity in the aforementioned current year quarter versus prior year
quarter discussion. Based on the results of fixed and variable cost
recovery established in Chugach's last rate case, wholesale sales
contributed approximately $12.2 and $11.9 million to Chugach's fixed costs
for the year ended June 30, 2005 and 2004, respectively.
The following table shows the base rate sales revenue and fuel and
purchased power revenue by customer class that is included in revenue at
June 30, 2005, and 2004.
Base Rate Sales Revenue1 Fuel and Purchased Power Revenue Total Revenue
2005 2004 % Variance 2005 2004 % Variance 2005 2004 % Variance
Retail
Residential $23,707,337 $24,217,905 -2.1% $10,024,740 $8,707,522 15.1% $33,732,077 $32,925,427 2.4%
Small Commercial $4,157,992 $4,085,549 1.8% $2,041,869 $1,744,922 17.0% $6,199,861 $5,830,471 6.3%
Large Commercial $14,026,475 $13,966,781 0.4% $9,098,041 $7,657,545 18.8% $23,124,516 $21,624,326 6.9%
Lighting $661,082 $661,167 0.0% $46,750 $45,963 1.7% $707,832 $707,130 0.1%
Total Retail $42,552,886 $42,931,402 -0.9% $21,211,400 $18,155,952 16.8% $63,764,286 $61,087,354 4.4%
Wholesale
HEA $5,173,486 $5,075,257 1.9% $8,176,853 $6,932,266 18.0% $13,350,339 $12,007,523 11.2%
MEA $8,931,425 $8,596,549 3.9% $11,202,060 $9,438,079 18.7% $20,133,485 $18,034,628 11.6%
SES $501,850 $495,688 1.2% $1,052,371 $873,400 20.5% $1,554,221 $1,369,088 13.5%
Total Wholesale $14,606,761 $14,167,494 3.1% $20,431,284 $17,243,745 18.5% $35,038,045 $31,411,239 11.5%
Economy Sales $7,435,058 $4,341,339 71.3% $0 $0 - $7,435,058 $4,341,339 71.3%
Miscellaneous $1,289,046 $1,193,420 8.0% $0 $0 - $1,289,046 $1,193,420 8.0%
Total Revenue $65,883,751 $62,633,655 5.2% $41,642,684 $35,399,697 17.6% $107,526,435 $98,033,352 9.7%
<FN>
1 Customer and demand charge and non-fuel energy
</FN>
The following table represents kWh sales for the six months ended June 30:
2005 2004
---- ----
Customer kWh kWh
Retail 601,231,626 607,297,828
Wholesale 611,986,352 587,363,615
Economy Energy 165,000,790 31,262,141
----------- ----------
Total 1,378,218,768 1,225,923,584
================== ==================
Fuel expense increased by $7.2 million, or 23.3%, for the first six months
of 2005, compared to the same period in 2004 due primarily to higher fuel
prices. In the first six months of 2005, Chugach used 11,762,829 MCF of
fuel at an average effective price of $3.24 per MCF, compared to 10,870,532
MCF of fuel used for the same period in 2004, at an average effective price
of $2.85 per MCF. Fuel expense is collected through the fuel surcharge
mechanism. Power production expense decreased by $406.7 thousand, or 6.0%,
due to the timing of generation projects. Purchased power expense increased
by $2.0 million, or 21.1%, due to higher fuel prices and higher Bradley
Lake purchased power payments, which is also collected through the fuel
surcharge mechanism. These increases were offset by a decrease in quantity
purchased. In the first six months of 2005, Chugach purchased 277,244 MWH
of energy at an average effective price of $3.95 cents per kWh. For the
same period in 2004, Chugach purchased 279,785 MWH of energy at an average
effective price of $3.19 cents per kWh. Transmission expense decreased
$243.8 thousand, or 7.7%, and distribution expense increased $385.1
thousand, or 7.1%, due primarily to the timing of distribution maintenance
being performed in the first half of 2005 while transmission maintenance
was performed in the first half of 2004. Administrative, general and other
expense decreased by $1.2 million, or 11.3%, caused by a $247.8 thousand
decrease due to fully amortized software and lower information services
support on administrative and general projects, a $397.7 thousand decrease
in legal, corporate planning, corporate services and power production
professional services and a $158.3 thousand decrease in labor due to
several vacant positions. The decrease was also due to a $106.3 thousand
decrease in property insurance and a $155.3 thousand decrease in
miscellaneous general expense due to the timing of our Alaska Power
Association (APA) and NRECA dues accrual. Consumer accounts expense and
depreciation and amortization expense did not materially change for the
six-month period ended June 30, 2005, compared to the same period in 2004.
Interest on long-term debt increased by $634.2 thousand, or 5.8%, due to
higher interest rates on our 2002 Series B bonds and our CoBank promissory
notes. Interest charged to construction increased by $207.2 thousand, or
104.2%, in the first six months of 2005 compared to the same period in
2004, due to the continued construction of the South Anchorage Substation
and the 138 kV International Generating Terminal (IGT) to South Anchorage
Substation projects. Other interest expense increased by $50.4 thousand, or
104.6%, during the same period in 2005 compared to the same period in 2004,
due primarily to an adjustment to interest associated with our provision
for rate refunds that were made in 2004.
Other non-operating margins increased by $87.4 thousand, or 36.9%, for the
six-month period ended June 30, 2005, compared to the same period in 2004,
due to an increase in interest income caused by higher interest rates and
higher Allowance for Funds Used During Construction (AFUDC) due to the
continued construction of the aforementioned transmission projects.
Financial Condition
Total assets decreased $2.1 million, or 0.4%, from December 31, 2004, to
June 30, 2005. The decrease was due to a $2.2 million, or 0.5%, decrease in
net plant. This was primarily due to depreciation expense, which was
offset by an increase in electric plant in service caused by the closeout
of routine distribution projects and an increase in construction work
in progress caused by the continued construction of the South Anchorage
Substation and the 138 kV International Generating Terminal (IGT) to South
Anchorage Substation projects.
The decrease in total assets was also due to a $4.0 million decrease in
accounts receivable caused by the collection on receivables that were
accrued but not paid at December 31, 2004, and due to less energy sold at
June 30, 2005, compared to December 31, 2004. This decrease was offset by a
$4.1 million, or 39.4%, increase in cash and cash equivalents caused by the
collection of accounts receivable outstanding at December 31, 2004.
Notable changes to total liabilities and equities include a $6.3 million,
or 1.7%, decrease in long-term obligations due to the reclassification of
the 2006 installment payment on the 2002 Series B bond and the
reclassification of the 2006 installment payments on the CoBank 3 and 4
promissory notes. Fuel cost over-recovery also decreased $1.1 million, or
41.8%, due to the collection of the previous quarter's fuel and purchased
power cost through the fuel surcharge mechanism. Accounts payable also
decreased $1.4 million, or 18.3%, as a result of the payment of invoices
that were accrued but not paid at December 31, 2004, and a delay in
receiving invoices from the start of the 2005 construction season.
These decreases were offset by a $5.3 million, or 3.8%, increase in
patronage capital due to the margins generated in the first and second
quarter of 2005, as well as a $394.3 thousand, or 2.8%, increase in current
installments of long-term obligations caused by the reclassification of the
aforementioned installment payments on the 2002 Series B bond and the
CoBank 3 and 4 promissory notes. The decreases were also offset by a $436.5
thousand, or 7.9%, increase in salaries, wages and benefits due to merit
increases, as well as a $462.9 thousand, or 3.6%, increase in fuel payable
caused by higher fuel prices and a $187.7 thousand, or 13.3% increase in
other current liabilities caused by a new state and municipal underground
compliance charge on retail revenue.
Liquidity and Capital Resources
Chugach has satisfied its operational and capital cash requirements
primarily through internally-generated funds, an annual $20 million line of
credit with CoBank which expires October 31, 2005, subject to annual
renewal at the discretion of the parties and a $50 million line of credit
from NRUCFC which expires October 15, 2007. At June 30, 2005, there was no
outstanding balance with NRUCFC or CoBank and neither line of credit was
utilized during the second quarter of 2005.
Chugach also has a term loan facility with CoBank. Loans made under this
facility are evidenced by promissory notes governed by the Master Loan
Agreement, which became effective on January 22, 2003. At June 30, 2005,
Chugach had the following promissory notes outstanding under this facility:
Interest rate at June Principal Payment
Promissory Note Principal balance 30, 2005 Maturity Date Dates
--------------- ----------------- -------- ------------- -----
CoBank 2 $10,000,000 7.76% 2005 2005
CoBank 3 $20,142,053 4.67% 2022 2003 - 2022
CoBank 4 $22,015,733 4.67% 2022 2003 - 2022
CoBank 5 $5,000,000 4.67% 2007 2007
Total $57,157,786
On August 31, 2005, Chugach anticipates refinancing its $10 million
promissory note with CoBank, however an agreement has not been finalized.
On January 22, 2003, Chugach and CoBank finalized a new Master Loan
Agreement pursuant to which the CoBank term loan facility was converted
from secured to unsecured debt and the obligations represented by the
outstanding bonds then held by CoBank were converted into promissory notes
governed by the new Master Loan Agreement. Chugach's mortgage indenture was
replaced in its entirety by an Amended and Restated Indenture dated April
1, 2001. All liens and security interests imposed under the indenture were
terminated and all outstanding Chugach bonds (including new bonds of 2001
Series A, 2002 Series A and 2002 Series B) became unsecured obligations
governed by the terms of the Amended and Restated Indenture.
Capital construction in 2005 is estimated at $29.7 million. At June 30,
2005, approximately $11.6 million had been expended. Capital improvement
expenditures are expected to increase in the third quarter of 2005 as the
construction season extends into October.
Chugach management continues to expect that cash flows from operations and
external funding sources will be sufficient to cover operational and
capital funding requirements in 2005 and thereafter.
Outlook
Effective January 31, 2005, Chugach reorganized its operations into more
distinct business units - Office of the Chief Executive Officer (CEO),
Generation and Transmission (G&T) Division, Distribution Division and
Corporate Services Division. This reorganization was accomplished to more
fully recognize the diversity of Chugach operations and clearly determine
the financial and operational performance of each unit.
The Office of the Chief Executive Officer is responsible for all corporate
level activities including board of director functions, human resources,
risk management, legal matters, labor relations and employee relations,
legislative affairs and all financing activities Chugach may undertake. The
CEO's direct staff is the Chief Financial Officer, Vice President, Human
Resources, General Counsel and Government and External Affairs Manager. The
General Managers of the G&T Division, Distribution Division and Corporate
Services Division also report to the CEO.
G&T operations include all power supply functions, transmission functions,
system control and administrative requirements associated with generation
and transmission. The G&T sector is led by Bradley Evans, General Manager.
Distribution functions include consumer services, public relations,
distribution engineering, line operation and maintenance and consumer
information and services areas. The Distribution area is led by Lee
Thibert, General Manager.
Corporate Services is comprised of Administrative Services (Environmental
Engineering and Hazardous Materials, Fleet Services, Contracting, Safety,
Security, and Purchasing), Information Services, Regulatory Affairs and
Accounting. It is responsible for providing services to all divisions of
Chugach. Corporate Services is led by William Stewart, General Manager,
Corporate Services Division. On May 20, 2005, The Board of Directors and
Chugach's CEO, Joe Griffith, announced that Joe Griffith will be stepping
down from his position of CEO on September 2, 2005. On July 27, 2005, the
Board of Directors retained National Rural Electric Cooperatives
Association, Inc. (NRECA) to provide CEO search services. In a special
meeting of the Board of Directors on August 10, 2005, William R. Stewart,
General Manager, Corporate Services Division was appointed interim CEO
effective September 3, 2005. Mr. Stewart has over 36 years of electric
utility experience at Chugach.
Environmental Matters
Compliance with Environmental Standards
Chugach's operations are subject to certain federal, state and local
environmental laws. The costs associated with environmental compliance are
included as a component of both the operating and capital budget processes.
Chugach accrues for costs associated with environmental remediation
obligations when such costs are probable and reasonably estimable.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Chugach is exposed to a variety of risks, including changes in interest
rates and changes in commodity prices due to repricing mechanisms inherent
in gas supply contracts. In the normal course of our business, we manage
our exposure to these risks as described below. Chugach does not engage in
trading market risk-sensitive instruments for speculative purposes.
Interest Rate Risk
The following table provides information regarding auction dates and rates
in 2005 on the 2002 Series B bonds. The maximum rate on the 2002 Series B
bonds is 15%.
Auction Date Interest Rate
January 26, 2005 2.50%
February 23, 2005 2.62%
March 23, 2005 3.00%
April 20, 2005 3.05%
May 18, 2005 3.09%
June 15, 2005 3.22%
July 13, 2005 3.38%
August 10, 2005 3.56%
Chugach is exposed to market risk from changes in interest rates. A 100
basis-point change (up or down) would increase or decrease our interest
expense by approximately $933,578 based on $93,357,786 of variable rate
debt outstanding at June 30, 2005.
The following table provides information regarding cash flows for principal
payments on total debt by maturity date (dollars in thousands) as of June
30, 2005.
Fair
Total Debt* 2005 2006 2007 2008 2009 Thereafter Total Value
- ----------- ---- ---- ---- ---- ---- ---------- ----- -----
Fixed rate debt $10,000 $0 $0 $0 $0 $270,000 $280,000 $308,866
Average
interest rate 7.76% - - - - 6.39% 6.44%
Variable rate debt $0 $6,326 $11,729 $7,241 $7,763 $60,299 $93,358 $93,358
Average
interest rate - 3.83% 4.32% 3.83% 3.83% 4.44% 4.29%
<FN>
* Includes current portion
</FN>
Commodity Price Risk
Chugach's gas contracts provide for adjustments to gas costs based on
fluctuations of certain commodity prices and indices. Because fuel and
purchased power costs are passed directly to our wholesale and retail
customers through a fuel surcharge rate, fluctuations in the price paid for
gas pursuant to long-term gas supply contracts do not normally impact
margins. The fuel surcharge mechanism mitigates the commodity price risk of
market fluctuations in the price of fuel and purchased power.
Item 4. Controls and Procedures
As of the end of the period covered by this report, we evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures. Our principal executive officer (CEO) and principal financial
officer (CFO) supervised and participated in this evaluation. Based on this
evaluation, our CEO and CFO each concluded that our disclosure controls and
procedures are effective and timely in alerting them to material
information required to be included in our periodic reports to the
Securities and Exchange Commission. The design of any system of controls is
based in part upon various assumptions about the likelihood of future
events and there can be no assurance that any of our plans, products,
services or procedures will succeed in achieving their intended goals under
future conditions. In addition, there have been no changes in our internal
controls or in other factors known to management that could significantly
affect our internal controls subsequent to our most recent evaluation.
We are in the process of implementing the requirements of Section 404 of
the Sarbanes-Oxley Act of 2002, which requires our management to assess the
effectiveness of our internal controls over financial reporting and include
an assertion in our annual report as to the effectiveness of our controls.
Subsequently, our independent registered public accounting firm, KPMG LLP,
will be required to attest to whether our assessment of the effectiveness
of our internal controls over financial reporting is fairly stated in all
material respects and separately report on whether it believes we
maintained, in all material respects, effective internal controls over
financial reporting as of December 31, 2006. We are in the process of
performing the system and process documentation, evaluation and testing
required for management to make this assessment and for KPMG LLP to provide
its attestation report. This process will continue to require significant
amounts of management time and resources. In the course of evaluation and
testing, management may identify deficiencies that will need to be
addressed and remediated.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
Matanuska Electric Association, Inc., v. Chugach Electric Association,
Inc., Superior Court Case No. 3AN-99-8152 Civil
This action is a claim for a breach of the Power Sales Agreement between
Chugach and Matanuska Electric Association, Inc. (MEA) for a 25-year period
from 1989 through 2014. MEA asserted Chugach breached that contract by
failing to provide information, by failing to properly manage Chugach's
long-term debt, and by failing to bring Chugach's base rate action to a
Joint Committee before presenting it to the Regulatory Commission of Alaska
(RCA). All of MEA's claims were dismissed by the Superior Court. On April
29, 2002, MEA appealed the Superior Court's decisions relating to Chugach's
financial management and Chugach's failure to bring Chugach's base rate
action to the joint committee before filing with the RCA to the Alaska
Supreme Court. We cross-appealed the Superior Court's decision not to
dismiss the financial management claim on jurisdictional and res judicata
grounds.
The Alaska Supreme Court, on October 8, 2004, ruled in Chugach's favor
supporting its right under the power sales agreement to file for interim
rate relief without first going to the Joint Committee. The Supreme Court
ruled against Chugach in its cross appeal. The Supreme Court also
overturned the Superior Court's decision that dismissed MEA's claim asking
for review of Chugach's use of rate locks instead of defeasing debt based
on the Prudent Utility Practice standard under our power sales agreement.
The Supreme Court remanded this issue to the Superior Court.
On January 24, 2005, Chugach filed a summary judgment motion based on
Chugach's claim that in the 2000 Test Year rate case the RCA has already
decided the underlying issues relating to the prudency of Chugach's use of
rate locks instead of defeasing debt. The court heard oral argument on this
motion on June 10, 2005. It took the matter under advisement and a decision
is expected within six months of the date of oral argument. Management is
uncertain of the outcome of the proceeding before the Superior Court. No
reserves have been established for this matter.
Matanuska Electric Association, Inc. v. Chugach Electric Association, Inc.
Superior Court Case No. 3AN-04-11776 Civil
On October 12, 2004, MEA filed suit in Superior Court alleging a breach of
the power sales agreement between the parties and violation of Chugach's
bylaws in connection with allocation of margins (capital credits) to MEA
for the years 1998 through 2003. Allocation of capital credits assigns a
share of the margins earned in a particular year to each customer. Capital
credits are repatriated to customers at the discretion of the board of
directors typically many years after the margins are earned.
The suit seeks a declaration by the Court that Chugach is in breach of its
bylaws and the power sales agreement based on its allocation of capital
credits to MEA as well as injunctive relief requiring Chugach to calculate
MEA's capital credit allocations based on MEA's patronage and in accordance
with generally accepted accounting practices for nonprofit cooperatives and
cooperative principles. The suit also seeks damages in an unspecified
amount to compensate MEA for the alleged breach of contract.
Management is vigorously defending against the claim. Management is
uncertain of the outcome of the suit. No reserves have been established for
this matter.
Other
Chugach received a demand letter from a third party offering a license to a
patent and implying that the patent may be infringed by certain services
provided by Chugach. The patent purportedly relates to intellectual
property rights over a system for automated electronic bill presentment and
payment. As of this date, no legal proceedings have been instituted against
us, but if the third party's patents are valid, enforceable and apply to
our business, we could be required to seek a license, discontinue certain
activities or be subject to a claim for past infringement. We are currently
considering this matter, but lack sufficient information to assess the
potential outcome at this time. No reserves have been established for this
matter.
Chugach has certain additional litigation matters and pending claims that
arise in the ordinary course of our business. In the opinion of management,
no individual matter or the matters in the aggregate are likely to have a
material adverse effect on our results of operations, financial condition
or liquidity.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Not applicable
Item 3. Defaults Upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable
Item 5. Other Information
On July 27, 2005, the Chugach Board of Directors voted unanimously to
authorized the Chief Executive Officer (CEO) or his designee to join the
Alaska Railbelt Energy Authority (AREA), a regionally owned joint action
agency (JAA), and stated its intention to withdraw if prior to January 31,
2006, either the AREA is unsuccessful in obtaining authority to issue tax
exempt debt or Chugach's exposure to administrative costs exceeds $100,000.
Other members include GVEA and Anchorage Municipal Light & Power (AML&P).
The JAA provides a structure by which the members might jointly acquire,
own and operate certain generation and transmission facilities. At its
first meeting on August 1, 2005, the JAA members elected GVEA's Rick
Schikora as chairman, Jeff Lipscomb of Chugach as vice chairperson and
AML&P's Jim Posey as secretary/treasurer.
Item 6. Exhibits
Exhibits:
Certification of Principal Executive Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
Certification of Principal Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
Certification of Principal Executive Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
Certification of Principal Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
Promissory Note and Consolidating Committed Revolving Credit
Supplement between the Registrant and CoBank, ACB dated May 3,
2005
Master Loan Agreement between the Registrant and CoBank, ACB
dated May 3, 2005
First Amended and Restated Joint Action Agency Agreement
Relating To The Alaska Railbelt Energy Authority among the
Registrant, Anchorage Municipal Light & Power (AML&P) and
Golden Valley Electric Association, Inc. (GVEA) dated August
1, 2005
Signatures
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
CHUGACH ELECTRIC ASSOCIATION, INC.
By: /s/ Evan J. Griffith
Evan J. Griffith
Chief Executive Officer
Date: August 12, 2005
By: /s/ Michael R. Cunningham
Michael R. Cunningham
Chief Financial Officer
Date: August 12, 2005
By: /s/ William R. Stewart
William R. Stewart
General Manager, Corporate Services Division
Date: August 12, 2005
EXHIBITS
Listed below are the exhibits, which are filed as part of this Report:
Exhibit Number Description
31.1 Certification of Principal Executive Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002
31.2 Certification of Principal Financial Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002
32.1 Certification of Principal Executive Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
32.2 Certification of Principal Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
10.44.7 Promissory Note and Consolidating Committed Revolving Credit
Supplement between the Registrant and CoBank, ACB dated
May 3, 2005
10.45.2 Master Loan Agreement between the Registrant and CoBank, ACB
dated May 3, 2005
10.42 First Amended and Restated Joint Action Agency Agreement Relating
To The Alaska Railbelt Energy Authority among the Registrant,
Anchorage Municipal Light & Power (AML&P) and Golden Valley
Electric Association, Inc. (GVEA) dated August 1, 2005