-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DnIDPmT7m3+A7u+Ecfr9esoe6Qo89mTCkxNGdj1QSmBZxCo5n12Ra7B7keNpRQEU KXv6VrWn6zuTxqYVCeOI4Q== 0000878004-96-000015.txt : 19960814 0000878004-96-000015.hdr.sgml : 19960814 ACCESSION NUMBER: 0000878004-96-000015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960813 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHUGACH ELECTRIC ASSOCIATION INC CENTRAL INDEX KEY: 0000878004 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 920014224 STATE OF INCORPORATION: AK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-42125 FILM NUMBER: 96610252 BUSINESS ADDRESS: STREET 1: 5601 MINNESOTA DR STREET 2: PO BOX 196300 CITY: ANCHORAGE STATE: AK ZIP: 99518 BUSINESS PHONE: 9075637494 10-Q 1 FORM 10-Q FOR CHUGACH ELECTRIC ASSOCIATION, INC. FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Mark One) X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 --------------------------------- OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 33-42125 Chugach Electric Association, Inc. (Exact name of registrant as specified in its charter) Alaska 92-0014224 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5601 Minnesota Drive Anchorage, Alaska 99518 (Address of principal executive offices) (Zip Code) (907) 563-7494 (Registrant's telephone number, including area code) None (Former name, former address and former fiscal year, if changed since last report) 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 . APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. CLASS OUTSTANDING AT AUGUST 1, 1996 NONE NONE CHUGACH ELECTRIC ASSOCIATION, INC. INDEX Part I. Financial Information Page Number Balance Sheets, June 30, 1996 (Unaudited) and December 31, 1995 3 Statements of Revenues, Expenses and Patronage Capital, Three Months Ended June 30, 1996 and 1995 and Six Months Ended June 30, 1996 and 1995 (Unaudited) 5 Statements of Cash Flows, Six Months Ended June 30, 1996 and 1995 (Unaudited) 6 Notes to Financial Statements (Unaudited) 7 Management's Discussion and Analysis of Results of Operations and Financial Condition (Unaudited) 8 Part II. Other Information Item 1. Legal Proceedings 12 Item 6. Exhibits and Reports on Form 8-K 13 Signatures 15 2 CHUGACH ELECTRIC ASSOCIATION, INC. Balance Sheets Assets June 30, 1996 December 31, 1995 ------------- ----------------- (Unaudited) Utility plant: Electric plant in service ................... $603,883,114 $587,877,992 Construction work in progress ............... 14,473,178 27,068,964 ------------ ------------ 618,356,292 614,946,956 Less accumulated depreciation ............... 205,806,594 196,677,723 ------------ ------------ Net utility plant .......... 412,549,698 418,269,233 ------------ ------------ Other property and investments, at cost: Nonutility property ......................... 3,550 3,550 Investments in associated organizations ..... 7,434,668 7,513,807 Restricted cash - margins from economy energy sales, all repurchase agreements .. 3,106,891 3,026,634 ------------ ------------ 10,545,109 10,543,991 ------------ ------------ Current assets: Cash and cash equivalents ................... 6,543,084 6,371,687 Cash - restricted construction funds ........ 150,218 -- Special deposits ........................... 88,098 97,789 Accounts receivable, net .................... 13,807,008 17,108,823 Materials and supplies, at average cost ..... 20,101,770 18,498,783 Prepayments ................................. 1,098,298 675,117 Other current assets ........................ 194,025 412,209 ------------ ------------ Total current assets ......... 41,982,501 43,164,408 ------------ ------------ Deferred charges ................................. 12,426,271 12,812,691 ------------ ------------ $477,503,579 $484,790,323 ------------ ------------
See accompanying notes to unaudited financial statements. 3 CHUGACH ELECTRIC ASSOCIATION, INC. Balance Sheets Liabilities and Equities June 30, 1996 December 31, 1995 ------------- ----------------- (Unaudited) Equities and margins: Memberships ..................................... $ 786,973 $ 765,123 Patronage capital ............................... 100,660,740 95,421,358 Other ........................................... 2,980,046 3,044,069 ------------ ------------ 104,427,759 99,230,550 ------------ ------------ Long-term obligations, excluding current installments: First mortgage bonds payable .................... 252,753,000 294,054,000 National Bank for Cooperatives (CoBank) bonds payable ................................... 54,972,845 11,587,703 Capital leases .................................. 37,971 -- ------------ ------------ 307,763,816 305,641,703 ------------ ------------ Current liabilities: Bank overdraft .................................. 1,307,886 492,204 Notes payable ................................... -- 8,000,000 Current installments of long-term debt and capital leases ............................... 5,992,503 5,665,749 Accounts payable ................................ 3,275,241 6,659,477 Consumer deposits ............................... 1,072,772 1,119,056 Accrued interest ................................ 7,213,877 8,052,786 Salaries, wages and benefits .................... 4,252,323 3,772,608 Fuel ............................................ 2,907,221 2,289,776 Other ........................................... 6,200,514 2,624,341 ------------ ------------ Total current liabilities ......... 32,222,337 38,675,997 ------------ ------------ Deferred credits ..................................... 33,089,667 41,242,073 ------------ ------------ $477,503,579 $484,790,323 ------------ ------------
See accompanying notes to unaudited financial statements. 4 CHUGACH ELECTRIC ASSOCIATION, INC. Statements of Revenues, Expenses and Patronage Capital Three months ended June 30 Six months ended June 30 -------------------------- ------------------------ 1996 1995 1996 1995 ---- ---- ---- ---- (Unaudited) (Unaudited) Operating revenues ..................... $ 31,244,744 $ 30,532,734 $ 66,342,456 $ 66,621,461 ------------- ------------ ------------- ------------ Operating expenses: Production ........................ 8,315,461 6,904,656 16,698,051 15,033,884 Purchased power ................... 2,589,753 3,153,558 4,919,195 5,221,425 Transmission ...................... 703,488 897,563 1,586,694 1,608,040 Distribution ...................... 2,387,555 2,455,807 4,831,435 5,067,165 Consumer accounts ................. 1,777,840 1,701,411 3,569,237 3,434,627 Administrative, general and other . 3,247,813 3,463,110 6,673,278 7,041,584 Depreciation and amortization ..... 5,202,482 4,787,554 10,237,550 9,500,332 ------------- ------------ ------------- ------------ Total operating expenses .. 24,224,392 23,363,659 48,515,440 46,907,057 ------------- ------------ ------------- ------------ Interest: On long-term debt ................. 5,382,523 6,369,342 12,686,767 12,831,860 Other ............................. 314,902 260,724 500,835 384,837 Charged to construction - credit .. (115,824) (290,449) (238,095) (585,011) ------------- ------------ ------------- ------------ Net interest expense ...... 5,581,601 6,339,617 12,949,507 12,631,686 ------------- ------------ ------------- ------------ Net operating margins ..... 1,438,751 829,458 4,877,509 7,082,718 ------------- ------------ ------------- ------------ Nonoperating margins: Interest income ................... 219,982 202,745 391,144 366,106 Other ............................. 37,944 (163,577) 54,490 (87,995) ------------- ------------ ------------- ------------ Total nonoperating margins 257,926 39,168 445,634 278,111 ------------- ------------ ------------- ------------ Assignable margins ........ 1,696,677 868,626 5,323,143 7,360,829 Patronage capital at beginning of period 99,013,147 97,532,205 95,421,358 91,079,686 Retirement of capital credits and estate payments ..................... (49,084) (15,327) (83,761) (55,011) ------------- ------------ ------------- ------------ Patronage capital at end of period ..... $ 100,660,740 $ 98,385,504 $ 100,660,740 $ 98,385,504 ------------- ------------ ------------- ------------
See accompanying notes to unaudited financial statements. 5 CHUGACH ELECTRIC ASSOCIATION, INC. Statement of Cash Flows Six months ended June 30 1996 1995 ---- ---- (Unaudited) Cash flows from operating activities: Assignable margins .......................................................... $ 5,323,143 $ 7,360,829 ------------ ------------ Adjustments to reconcile assignable margins to net cash used in operating activities: Depreciation and amortization ........................................... 10,237,550 9,500,332 Changes in assets and liabilities: (Increase) decrease in assets: Accounts receivable ................................................... 3,301,815 2,639,748 Prepayments ........................................................... (423,181) (576,962) Materials and supplies ................................................ (1,602,987) (877,622) Deferred charges ...................................................... 386,420 (1,355,874) Other ................................................................. (2,600) 47,302 Increase (decrease) in liabilities: Accounts payable ...................................................... (3,384,236) (1,753,708) Consumer deposits ..................................................... (46,284) (27,104) Accrued interest ...................................................... (838,909) (181,130) Deferred credits ...................................................... (8,152,406) (1,322,961) Other ................................................................. 4,673,332 (888,844) ------------ ------------ Total adjustments ............................................... 4,148,514 5,203,177 ------------ ------------ Net cash provided by operating activities ..................................................... 9,471,657 12,564,006 Cash flows from investing activities: Extension and replacement of plant .......................................... (4,518,014) (7,757,382) Investments in associated organizations ..................................... 79,139 128,728 ------------ ------------ Net cash used in investing activities ........................... (4,438,875) (7,628,654) ------------ ------------ Cash flows from financing activities: Net change in bank overdraft ................................................ 815,682 794,352 Short-term borrowings, net .................................................. 14,000,000 3,300,000 Proceeds from long-term debt ................................................ 21,500,000 -- Repayments of long-term debt ................................................ (41,051,134) (5,223,350) Retirement of patronage capital ............................................. (83,761) (55,011) Other ....................................................................... (42,172) (23,889) ------------ ------------ Net cash used by financing activities ........................... (4,861,385) (1,207,898) ------------ ------------ Net increase (decrease) in cash and cash equivalents .............................................. 171,397 3,727,454 Cash and cash equivalents at beginning of period ............................... 6,371,687 5,975,927 ------------ ------------ Cash and cash equivalents at end of period ..................................... $ 6,543,084 $ 9,703,381 ------------ ------------
See accompanying notes to unaudited financial statements. 6 CHUGACH ELECTRIC ASSOCIATION, INC. Notes to Financial Statements June 30, 1996 (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. Users of interim financial information are encouraged to refer to footnotes contained in Form 10-K when reviewing interim financial results. Management believes that the accompanying interim financial statements reflect all adjustments which are necessary for a fair statement of the results of the interim period presented. All adjustments made in the accompanying interim financial statements are of a normal recurring nature. 2. Lines of Credit Chugach maintains a line of credit of $35 million with National Bank for Cooperatives (CoBank). The CoBank line of credit expires August 1, 1997 but is expected to be renewed. At June 30, 1996, $22 million was outstanding at an interest rate of 6.30%. This balance is expected to be converted to a long-term bond by the 3rd quarter of 1996, using a credit facility currently in place. Thus, it is classified in long-term obligations at June 30, 1996. In addition, the Association has an annual line of credit of $50 million available at the National Rural Utilities Cooperative Finance Corporation (NRUCFC). At June 30, 1996, there was no outstanding balance. The NRUCFC line of credit expires February 19, 1998. 3. Restricted Cash Beginning in the first quarter of 1996, Chugach began receiving grant funds from the Alaska Industrial Development and Export Authority (AIDEA) to finance the siting study for the Southern Intertie. Under the terms of the grant agreement, Chugach agreed to deposit these funds in a separate interest bearing bank account at its main banking institution. Chugach reimburses itself from this account monthly for expenditures related to the siting study. The initial amount approved for the study was $900,000. At June 30, 1996 this account contained a balance of $150,218. 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Unaudited) RESULTS OF OPERATIONS Current Year Quarter Versus Prior Year Quarter Operating revenues, which include sales of electric energy to retail, wholesale and economy energy customers and other miscellaneous revenues, increased by 2.3% for the quarter ended June 30, 1996 over the same quarter in 1995. The increase in revenues is attributable to higher kWh sales to retail customers and one of the wholesale customer classes which more than offset overall decreases in demand and energy rates charged to both classes. Retail rates decreased by 4.9% in May of 1995 and remained constant through the quarter ended June 30, 1996. Rates charged to one wholesale customer class decreased by 5.7% in May of 1995, by 1.8% in November of 1995 and increased by 2.5% in May of 1996 (on an interim-refundable basis). Additionally, the combination of these impacts more than offset lower kWh sales and an overall demand and energy rate decrease to the other wholesale customer class. Rates to the other wholesale customer class decreased by 5.0% in May of 1995, by 4.8% in November of 1995 and increased by 5.3% in May of 1996 (again, on an interim-refundable basis (see below)). The Alaska Public Utilities Commission (APUC) approved Chugach's December 1995 test period Simplified Rate Filing on an interim-refundable basis pending investigation of several ratemaking issues. For the December 1995 test period, Chugach filed for a $1.15 million revenue requirement increase which resulted in proposed wholesale demand and energy rate increases of 2.5% to one of the wholesale customer classes and 5.3% to the other. A date certain has not been established for convening a hearing on the issues. It is not known how the APUC will rule in this proceeding. On August 7, 1996, the Chugach Board of Directors decided to request permission of the APUC to withdraw from the Simplified Rate Filing (SRF) method of setting its base rates. If permitted to withdraw, Chugach would continue to be regulated by the APUC in the establishment of rate levels and options. Production expense increased for the quarter ended June 30, 1996 over the same period in 1995. This increase was due primarily to higher fuel costs associated with the increase in kWh sales and entering Period 2 under the long-term fuel supply contracts. For several years prior to this, the price of fuel had been ramped upwards in order to smooth the transition into Period 2. Entering Period 2 completed the ramp from the inexpensive take-or-pay gas contracts (old Beluga gas) to the new market-based prices. Thus, future fuel costs are expected to be higher in comparison to prior periods. Purchased power expense was lower for the quarter ended June 30, 1996 compared to the same period in 1995. This variance was substantially due to the operating scenario that existed during the second quarter of 1995 whereby it was more economical for Chugach to purchase power from Alaska Electric Generation & Transmission 8 (AEG&T) on the Kenai Peninsula and from Anchorage Municipal Light & Power locally than to start one of its own generation units. This operating scenario did not exist to the same extent during the second quarter of 1996. Transmission expense was also lower for the quarter ended June 30, 1996 from the same period in 1995. The majority of this decrease was caused by lower substation and overhead line maintenance costs. Interest on long-term debt decreased for the quarter ended June 30, 1996 from the same period in 1995. This was primarily caused by the repurchase of Chugach's Series 1 2022 bonds. As previously reported, Chugach repurchased $15.595 million of the Series 1 2022 bonds during the first quarter of 1996. The net cost of these transactions was approximately $882,000 which was expensed. During the second quarter of 1996, Chugach determined that these costs were recoverable through rates and therefore established a regulatory asset. Thus, the net cost of the repurchase transaction was deferred and will be amortized to expense over the life of the replacement debt. In June of 1996, another $20 million of the bonds were repurchased. Combined with the previous repurchases, approximately $766,000 in net repurchase costs have been deferred. Additionally, the interest rates on the replacement debt were lower than the repurchased bonds which also contributed to the decrease. Other interest expense increased in the current period due to a higher average outstanding balance on the short-term line of credit. Interest charged to construction decreased for the quarter ended June 30, 1996 versus the same period in 1995 due to a decrease in the balance in construction work in progress during the period. Non-operating margins increased for the second quarter of 1996 because in 1995 the write-off of a failed submarine cable was recorded. There were no similar events in the second quarter of 1996. Current Year to Date Versus Prior Year to Date Operating revenues for the six-month period ended June 30, 1996 decreased by 0.4% from the same period in 1995. These lower revenues were due to decreases in average rates charged to retail customers and both of the wholesale rate classes. The rate decreases more than offset higher retail and wholesale kWh sales. Production expense increased for the six-month period ended June 30, 1996 for essentially the same reasons outlined in the quarter to date comparison section. The other operating expenses remained relatively constant when compared to the same period in 1995. Other interest expense increased and interest charged to construction decreased for the six-months ended June 30, 1996 for the same reasons outlined above in the analysis of the quarter to quarter variance. For the six-month period ended June 30, 1996, non-operating margins were higher than those for the same period in 1995. This is primarily due to the aforementioned failure of a submarine cable being recorded in 1995. No similar event occurred in 1996. Financial Condition Total assets declined by 1.5% from December 31, 1995 to June 30, 1996. The decrease is due 9 primarily to the lower balance in net utility plant. This lower balance was caused by the higher accumulated depreciation reserve resulting from higher depreciation rates which have been implemented over a three-year phase-in program. The seasonal decline in accounts receivable also contributed to the lower total asset balance. Notable changes to total liabilities include the decrease in First Mortgage bonds payable and the corresponding increase in CoBank long-term debt resulting from the repurchases of the Series 1 2022 bonds. The latest repurchase transaction ($20 million in June 1996) was financed (along with the associated transaction costs) with a $22 million draw on the short-term line of credit. This balance is expected to be refinanced into a long-term bond by the 3rd quarter of 1996 using a credit facility currently in place and thus has been classified as a long-term liability at June 30, 1996. This also explains the decrease in the short-term note payable balance. Other liabilities increased due to the reclassification of the current portions of both the rate stabilization fund and the submarine cable reserve that will be returned to customers in 1996 and early 1997. Liquidity and Capital Resources Chugach has satisfied its operational and capital cash requirements primarily through internally generated funds, an annual $50 million line of credit from National Rural Utilities Cooperative Finance Corporation (NRUCFC) and a $35 million line of credit with CoBank. At June 30, 1996, Chugach had $22 million outstanding with CoBank which carried an interest rate of 6.30%. As previously noted, this amount is classified as long-term debt at June 30, 1996. There were no amounts outstanding on the NRUCFC line at June 30, 1996. Capital construction in 1996 is estimated at $26 million. At June 30, 1996 approximately $4.5 million has been expended. Capital improvement expenditures are expected to increase in the third quarter as the construction season began in April and extends into October. Chugach has negotiated a supplemental indenture (Third Supplemental Indenture of Trust) with CoBank for up to $80 million in future bond financing. At June 30, 1996, Chugach had bonds in the amount of $33.2 million outstanding under this financing arrangement. The balance is comprised of a $1.7 million bond (CoBank 1) which carries an interest rate of 8.95% maturing in 2002, a $10 million bond (CoBank 2) priced at 7.76% due in 2005 and a $21.5 million bond (CoBank 3) priced at 6.30% (repriced monthly). Principal payments on the $21.5 million bond commence in 2003 and continue through 2022. Additionally, Chugach has negotiated a similar supplemental indenture (Fifth Supplemental Indenture of Trust) with NRUCFC also for $80 million. At June 30, 1996 there were no amounts outstanding under this financing arrangement. To date, Chugach has repurchased $38.095 million of its Series 1 2022 bonds. This strategy has been in response to the favorable long-term interest rate environment. Included in this total is the latest repurchase transaction for $20 million of the bonds which took place in June of 1996. Chugach will continue to explore similar repurchase transactions if market conditions warrant such action. Except for any further repurchases of its bonds (and any similar future refinancings), Chugach does not anticipate issuance of additional long-term debt in 1996. 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 1996. 10 Chugach's current ratios (total current assets divided by current liabilities) at December 31, 1995 and June 30, 1996 were as follows: Current Ratio December 31, 1995 1.12 June 30, 1996 1.30 Environmental Matters Regulatory initiatives arising out of recent amendments to state and federal environmental laws (including the Clean Air Act Amendments of 1990) may require significant capital expenditures in the future. These initiatives have not developed to the point where their financial impact on Chugach can be determined. Chugach is commenting on proposed revisions to the Alaska air quality protection rules. The Association has focused its efforts on minimizing the financial impact on Chugach of the new regulations, while meeting the requirements of State and Federal law. Other environmental compliance changes will require new substation designs to incorporate spill-containment features. The cost of incorporating these features has been considered in future construction work plan projects. Refer to Part II, Item 1 for an update on the status of the Standard Steel Salvage Yard Site litigation. 11 PART II. OTHER INFORMATION Item 1. Legal Proceedings As previously reported in the Form 10-Q for the period ended March 31, 1996, a cost-recovery action was filed in Federal District Court on December 27, 1991, by the United States against Chugach and six other Potentially Responsible Parties (PRPs) seeking reimbursement of removal and response action costs (Past Response Costs) incurred by U.S. EPA at the Standard Steel and Metals Salvage Yard Superfund Site in Anchorage, Alaska (Site). The six other PRPs named in the action are the Alaska Railroad, Westinghouse Electric Corporation, Sears, Roebuck and Co., Montgomery Ward & Co., J.C. Penney Company, Inc. and Bridgestone/Firestone, Inc. On September 23, 1992, Chugach entered into an Administrative Order on Consent (AOC) with the EPA to perform a remedial investigation and feasibility study (RI/FS) for the Site. Under a separate agreement, several federal agency PRPs are reimbursing Chugach for 75% of the costs of performing the RI/FS. Chugach's contractors have now completed the RI/FS for the Site and, based on the results of the RI/FS, EPA has selected a remedy for cleanup of the Site which has been documented in a Record of Decision. The preferred remedy for cleanup of the Site selected by EPA is soil treatment by means of stabilization and solidification. Although Chugach's contractors completed the RI/FS, EPA has required Chugach to perform additional work during 1996 pursuant to the AOC, including the removal from the Site of drums containing regulated materials. In addition, since the last report in the Form 10-Q, EPA has increased the principal amount of Past Response Costs. As reported in the Form 10-Q, all of the PRPs and the United States government, including EPA and the Department of Justice (DOJ), are negotiating a consent decree to settle both the cost recovery action and the PRPs' (including the federal PRPs') alleged liability for costs associated with the Site through completion of work under the AOC and entry of the consent decree. The consent decree reflects a settlement in which the United States has agreed to compromise some of its costs. The parties anticipate that the consent decree will be entered by the Federal District Court in the early Fall of 1996. The consent decree, which must be approved by the parties and the Court, will allocate to Chugach 14.37% of Past Response Costs, DOJ enforcement costs (through entry of the consent decree), RI/FS Costs, and EPA oversight costs (through completion of work under the AOC) incurred in connection with the Site. RI/FS Costs include scrap removal costs and expenses associated with drum removal work being conducted during the Summer of 1996. Also included are EPA oversight costs and all costs of overseeing work conducted under the AOC, including the 1996 drum removal work. Because Chugach is currently funding the RI/FS, the consent decree requires the other PRPs to reimburse Chugach and, in the event any PRP fails to make such reimbursement, the consent decree provides a credit to Chugach for the unreimbursed amounts. If applicable, this credit will be applied to reduce Chugach's obligation to pay EPA oversight costs so that the total amount paid by Chugach will not exceed 14.37% of the costs being settled under the consent decree. The total estimated cost of the settlement under the consent decree is approximately $6,720,000 12 for Past Response Costs (as recently adjusted by EPA and including interest from December 1991), RI/FS costs (including scrap and drum removal costs), DOJ enforcement costs (as compromised by the U.S.) and EPA oversight costs. This total cost is an estimate because costs (both RI/FS and Oversight) have not yet been incurred in connection with the drum removal and because interest will continue to accrue on Past Response Costs until paid by the PRPs. The consent decree does not settle Chugach's liability for future costs of designing and performing a remedy to cleanup the Site (Future Costs). Applying Chugach's percentage share under the consent decree (14.37%), the total Chugach will have to pay to settle all costs associated with the Site except Future Costs is approximately $965,664. Although the consent decree does not settle Chugach's or the other private PRPs' liability for Future Costs, the consent decree does bind the federal PRPs and the Alaska Railroad to pay an aggregate share of 64% of Future Costs. Chugach and the five other private PRPs will divide the remaining 36% of Future Costs among themselves in accordance with an allocation of shares to be negotiated. The current low and high estimates of the Future Costs of remedial design and remedial action at the Site are approximately $5,717,000 to $6,679,000. These cost estimates are based on the predicted scope of the stabilization and solidification remedy as contemplated in the FS report. Although EPA has selected stabilization and solidification as the cleanup remedy, the actual, full scope of the stabilization and solidification cleanup at the Site will not be known, and the projected costs associated with the remedy cannot be refined, until EPA approves remedial design documents. Based on currently available information, however; Chugach's share of future costs for remedial work at the Site will not exceed some percentage of 36% (as divided among the six private PRPs) of $6,679,000, or $2,404,440. Four of Chugach's insurance carriers have agreed under a reservation of rights to pay, and currently are paying, Chugach's costs of defense for the Site. The carriers have reserved their rights regarding indemnification of Chugach for response costs. Management believes that all past and future costs incurred for response, removal, investigation and cleanup of the Site would be fully recoverable in rates or covered by insurance and therefore would have no impact on Chugach's financial condition. Items 2, 3, 4 and 5 Not Applicable Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: Bylaws of the Registrant (as amended April 25, 1996). Closing documents dated April 30, 1996 First Mortgage Bond, CoBank Series (CoBank-3), due March 15, 2022 pursuant to the Third Supplemental Indenture of Trust. 13 Sixth Supplemental Indenture of Trust by and among Chugach Electric Association, Inc. and Seattle-First National Bank dated April 3, 1996. Financial Data Schedule. (b) Reports on Form 8-K: No reports on Form 8-K were filed for the quarter ended June 30, 1996. 14 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/ Eugene N. Bjornstad Eugene N. Bjornstad, General Manager Date: August 13, 1996 By: /s/ Evan J. Griffith, Jr. Evan J. Griffith, Jr. Executive Manager, Finance & Planning Date: August 13, 1996 15 EXHIBITS Listed below are the exhibits which are filed as part of this Report: Exhibit number Description Page 3.2 Bylaws of the Registrant (as amended April 25, 1996). N/A 4.4.3 Closing documents dated April 30, 1996 First Mortgage Bond, CoBank Series (CoBank-3), Due March 15, 2022 pursuant to the Third Supplemental Indenture of Trust. N/A 4.7 Sixth Supplemental Indenture of Trust by and among Chugach Electric Association, Inc. and Seattle-First National Bank dated April 3, 1996. N/A 27 Financial Data Schedule N/A 16 EX-3.2 2 BYLAWS OF THE REGISTRANT Chugach Electric Association, Inc. is a cooperative, owned by its more than 54,000 members. These bylaws are the framework of the organization. As a member, you are entitled to vote for the directors who oversee Chugach. Directors are elected each spring in conjunction with the cooperative's annual meeting. At the same time members vote on any proposed changes to these bylaws. Proposed bylaw amendments may be submitted to: Bylaws Committee c/o Chugach General Counsel P. O. Box 196300 5601 Minnesota Drive Anchorage, Alaska 99519-6300 CHUGACH ELECTRIC ASSOCIATION, INC. BYLAWS (As Amended April 25, 1996) CORRECTED AND REISSUED JUNE 7, 1996 TABLE OF CONTENTS ARTICLE I MEMBERSHIP Page Section 1 Requirements for Membership.....................1 Section 2 Membership Certificates.........................1 Section 3 Joint Membership................................1 Section 4 Conversion of Membership........................2 Section 5 Membership and Service Connection Fees..........2 Section 6 Purchase of Electric Energy.....................2 Section 7 Termination of Membership.......................3 ARTICLE II RIGHTS AND LIABILITIES OF MEMBERS Section 1 Property Interest of Members....................3 Section 2 Non-liability for Debts of the Association......4 ARTICLE III MEMBERS, MEETINGS AND ELECTIONS Section 1 Annual Meeting..................................4 Section 2 Special Meetings................................4 Section 3 Notice of Members' Meetings.....................4 Section 4 Waiver of Notice................................5 Section 5 Quorum..........................................5 Section 6 Voting..........................................5 Section 7 Order of Business...............................6 Section 8 Elections and Election Committee................6 ARTICLE IV DIRECTORS Section 1 General Powers................................. 9 Section 2 Election and Tenure of Office...................9 Section 3 Qualifications.................................10 Section 4 Nominations................................... 11 Section 5 General Manager and Financial Advisor..........11 Section 6 Policy, Rules and Regulations..................11 Section 7 Removal of Directors by Members................12 Section 8 Vacancies......................................12 Section 9 Compensation...................................12 ARTICLE V MEETINGS OF DIRECTORS Section 1 Regular Meeting ...............................13 Section 2 Special Meetings ..............................13 Section 3 Quorum ........................................14 Section 4 Director Attendance ...........................14 Section 5 Membership Attendance .........................14 Section 6 Minutes .......................................15 Section 7 Telephonic Board Meetings......................15 ARTICLE VI OFFICERS Section 1 Number ........................................15 Section 2 Election and Term of Office ...................15 Section 3 Removal of Officers and Agents by Directors..................................15 Section 4 President......................................16 Section 5 Vice-President ................................16 Section 6 Secretary .....................................16 Section 7 Treasurer .....................................17 Section 8 Delegation of Duties ..........................17 Section 9 Bonds of Officers..............................18 Section 10 Budget ........................................18 Section 11 Reports........................................18 ARTICLE VII PATRONAGE CAPITAL Section 1 Patronage Capital .............................18 ARTICLE VIII FISCAL MANAGEMENT AND ACCOUNTING Section 1 Revenues and Expenditures .....................20 Section 2 Accounting System and Reports .................20 Section 3 Disclosure ....................................20 ARTICLE IX DISPOSITION OF PROPERTY Section 1 Disposition of Property .......................20 ARTICLE X SEAL ..........................................21 ARTICLE XI FINANCIAL TRANSACTIONS Section 1 Contracts .....................................21 Section 2 Checks, Drafts, etc. ..........................21 Section 3 Deposits ......................................21 Section 4 Fiscal Year ...................................21 Section 5 Full and Open Competitive Bidding..............21 ARTICLE XII MISCELLANEOUS Section 1 Membership in Other Organizations..............22 Section 2 Waiver of Notice...............................22 Section 3 Interpretation.................................22 ARTICLE XIII AMENDMENTS Section 1 Notice.........................................22 Section 2 Bylaws Committee...............................23 ARTICLE XIV ADVISORY COUNCIL Section 1 Member Advisory Council........................23 Section 2 General Duties.................................23 ARTICLE XV STANDING AND AD HOC COMMITTEES Section 1 General........................................23 Section 2 Compensation...................................23 Section 3 Terms..........................................24 Section 4 Membership.....................................24 Section 5 Vacancy........................................24 ARTICLE XVI INDEMNIFICATION ...............................24 ARTICLE XVII MEMBER ACCESS TO INFORMATION Section 1 Access Rights..................................25 Section 2 Charges........................................26 Section 3 Policies and Procedures........................26 CHUGACH ELECTRIC ASSOCIATION, INC. BYLAWS ARTICLE I MEMBERSHIP SECTION 1. Requirements for Membership. Any person, firm, association, corporation, or body politic, or subdivision thereof, shall become a member of CHUGACH ELECTRIC ASSOCIATION, INC. by: (a) Making a written application for membership therein; (b) Agreeing to purchase from the Association electric energy as hereinafter specified; (c) Agreeing to comply with, and be bound by, the articles of incorporation and bylaws of the Association, and any rules and regulations adopted by its board of directors; and (d) Paying the membership fee hereinafter specified. No person may hold more than one membership in the Association, and no membership in the Association shall be transferable, except as provided in these bylaws. SECTION 2. Membership Certificates. Membership in the Association shall be evidenced by a membership certificate, which shall be in such form and shall contain such provisions as shall be determined by the board of directors. No membership certificate shall be issued for less than the membership fee fixed in these bylaws, nor until such membership fee has been paid. In case a certificate is lost, destroyed or mutilated, a new certificate may be issued therefore upon such uniform terms and indemnity to the Association as the board of directors may prescribe. SECTION 3. Joint Membership. A husband and wife may apply for a joint membership and, subject to the compliance with the requirements set forth in Section 1 of this Article, may be accepted for such membership. The term "member" as used in these bylaws shall be deemed to include a husband and wife holding a joint membership, and any provisions relating to the rights and liabilities of membership shall apply equally with respect to the holders of a joint membership. Without limiting the generality of the foregoing, the effect of the hereinafter specified actions by, or in respect to, the holders of a joint membership shall be as follows: (a) The presence at a meeting of either or both shall be regarded as the presence of one member and shall have the effect of constituting a joint waiver of notice of the meeting; (b) The vote of either separately, or both jointly, shall constitute one joint vote; (c) A waiver of notice signed by either or both shall constitute a joint waiver; (d) Notice to either shall constitute notice to both; (e) Expulsion of either shall terminate the joint membership; (f) Withdrawal of either shall terminate the joint membership; (g) Either, but not both, may be elected or appointed as an officer or director, provided that both meet the qualifications for such office. SECTION 4. Conversion of Membership. (a) A membership may be converted to a joint membership upon the written request of the holder thereof, and the agreement by such holder to comply with the articles of incorporation, bylaws, and rules and regulations adopted by the board of directors. The membership certificate shall be reissued by the Association in such manner as shall indicate the changed membership status. (b) Upon the death of a married member the surviving spouse shall succeed to the membership. The membership certificate shall be reissued in such manner as shall indicate the changed membership status; provided, however, that the estate of the deceased shall not be released from any debts due the Association. SECTION 5. Membership and Service Connection Fees. The non-refundable membership fee shall be five dollars. Payment of the membership fee and completion of a membership application are conditions of service. The board of directors may also, as a condition of service, require the payment of a consumer deposit or the furnishing of other acceptable security. SECTION 6. Purchase of Electric Energy. Each member shall, as soon as electric energy shall be available, purchase from the Association all electric energy purchased for use on the premises specified in his application for membership, unless the member is an electric public utility purchasing electric energy for resale. Each member shall pay monthly at rates which shall from time to time be fixed by the board of directors. The board of directors may limit the amount of electric energy which the Association shall be required to furnish to its member(s). Each member shall pay to the Association such minimum amount per month, regardless of the electric energy consumed, as shall be fixed by the board of directors from time to time. Each member shall also pay all amounts owed by him to the Association as and when the same shall become due and payable. Production or use of electric energy on such premises, regardless of the source thereof, by means of facilities which shall be interconnected with the Association's facilities, shall be subject to appropriate regulations as shall be fixed from time to time by the Association. SECTION 7. Termination of Membership. (a) Any member of the Association may withdraw from membership with written notice. Additionally, the board, by at least a two-thirds vote of all members of the board, may expel any member who fails to comply with Association regulations. Members subject to expulsion will be contacted in writing by the Association and will have ten (10) days to comply with Association regulations. An expelled member may be reinstated by a majority vote of the board or by a vote of the members at any annual or special meeting. The board may also cancel membership if the member: 1) has not purchased electric energy for six (6) months; 2) has had a disconnect order active for thirty (30) days without signing a reconnect order; or 3) has been disconnected because of nonpayment of electric energy debts to the Association provided that this delinquency has continued for at least thirty (30) days after termination of service. (b) Upon the withdrawal, death, cessation of existence or expulsion of a member, the membership of such member shall thereupon terminate, except as provided in Article 1, Section 4. Termination of membership in any manner shall not release a member or his estate from any debts due the Association. ARTICLE II RIGHTS AND LIABILITIES OF MEMBERS SECTION 1. Property Interest of Members. Upon dissolution, after paying, or discharging, or adequately providing for the payment or discharge of all its debts, obligations and liabilities, other than those to patrons arising by reason of their patronage, the Association shall distribute any remaining sums, first to patrons for the pro rata return of all amounts standing to their credit by reason of their patronage, and second, to members for the pro rata repayment of membership fees. Any sums then remaining shall be distributed among its members and former members in proportion to their patronage, except as participation in such distribution may have been legally waived. In the event of the lawful liquidation, through transfer or sale of all the property and assets of the Association, the proceeds of such liquidation, transfer or sale shall be distributed in the same manner as hereinabove provided for in the case of dissolution. SECTION 2. Non-liability for Debts of the Association. The private property of the members shall be exempt from execution or other liability for the debts of the Association, and no members shall be liable or responsible for any debts or liabilities of the Association. ARTICLE III MEMBERS, MEETINGS AND ELECTIONS SECTION 1. Annual Meeting. The annual meeting of the members shall be held on such convenient date, on or after the 1st day of April, and on or before the 1st day of May of each year, at such place or building in the Municipality of Anchorage, State of Alaska, as shall be designated by the board of directors in the notice of meeting, for the purpose of electing directors, passing upon reports for the previous fiscal year, and transacting such other business as may come before the meeting. Failure to hold the annual meeting at the designated time shall not work a forfeiture or dissolution of the Association. SECTION 2. Special Meetings. Special meetings of the members may be called by resolution of the board of directors, or upon a written request signed by any four directors to the president, or by a written request made to the president and signed by not less than ten percent (10%) of the members and it shall thereupon be the duty of the secretary to cause notice of such meeting to be given as hereinafter provided. Special meetings of the members may be held at any place within the Municipality of Anchorage specified in the notice of the special meeting. SECTION 3. Notice of Members' Meetings. Written notice stating the place, day and hour and agenda of the annual meeting shall be delivered by mail to each member not less than thirty (30) or more than sixty (60) days before the date of the meeting. Notice of a special meeting of the members, including but not limited to a meeting where a merger or dissolution of the Association, or sale, transfer or other disposal of all or a substantial portion of the assets of the Association is to be voted on, shall be delivered, together with notice of the purpose for which the meeting is called, not less than ninety (90) or more than 120 days before the date of the meeting, with notice of a public hearing on the proposed action to be held not less than sixty (60) days before the meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the member at his address as it appears on the records of the Association, with postage thereon prepaid. The failure of any member to receive notice of an annual or special meeting of the members shall not invalidate any action which may be taken by the members at any such meeting. SECTION 4. Waiver of Notice. Repealed April 23, 1986. SECTION 5. Quorum. Fifty (50) members present in person shall constitute a quorum for a regular or special meeting of the members. No business shall be conducted at a regular or special meeting of the members lacking a quorum, except for counting marked ballots as specified in this Article III, Section 8(d) and announcing the results thereof. If less than a quorum is present at any meeting of the members, a majority of those present may adjourn the meeting to another date and time no later than 90 days after the adjourned meeting at a place within the Municipality of Anchorage, provided that the Secretary shall notify all members of the date, time and place of such adjourned meeting by delivering notice thereof no later than ten days in advance of such meeting. SECTION 6. Voting. (a) Each member shall be entitled to only one vote upon each matter submitted to a vote at a meeting of the members. All questions shall be decided by a vote of a majority of the members voting thereon in person, except as otherwise provided by law, the articles of incorporation, or these bylaws. (b) A non-natural member may designate an individual to vote on its behalf, in accordance with the member's own procedures. The election committee may require the designated individual to submit satisfactory written proof of his designation, prior to his voting. (c) Members may vote by a mailed official ballot on the election of directors, the amendment of bylaws, the merger or dissolution of the Association, and the sale, transfer or disposal of all or a substantial portion of the Association's assets. (d) A minimum of five hundred valid ballots must be cast by mail or in person to constitute a valid election of directors (except for filling of vacancies under Article IV, Section 8) or to approve amendments to the bylaws. Directors shall be elected by the plurality vote of the members. A minimum of five hundred ballots must be cast in person to constitute a valid removal of a director or directors. See Article IV, Sections 7 and 8. (e) An affirmative vote by ballot of at least 10 percent of the number of members as of the date of the notice of the election is required to authorize disposition of all or a substantial portion of the Association's property to another cooperative, pursuant to Article IX, Section (1)(b). (f) A merger of the Association must be approved by a majority of those members voting, but in no event can the affirmative vote be less than 10 percent of the number of members, as of the date of notice of the election. (g) An affirmative vote by ballot of not less than the majority of the number of members as of the date of the notice of the election is required to authorize the Association to sell, lease, or otherwise dispose of all or a substantial portion of the Association's property, as provided in Article IX, Section 1(b). SECTION 7. Order of Business. (a) The order of business at the annual meeting of the members and, insofar as possible, at all other meetings of the members, shall be essentially as follows: 1) Report on the number of members present in person in order to determine the existence of a quorum. 2) Reading of the notice of the meeting and proof of the due publication or mailing thereof. 3) Reading of unapproved minutes of previous meetings of the members, making technical changes only to the minutes, and approval thereof. 4) Presentation and consideration of reports of officers, directors and committees. 5) Election of directors. 6) Unfinished business. 7) New business. 8) Adjournment. (b) Proposed amendments to the bylaws upon which voting is being conducted by ballot may be discussed at the annual meeting, but shall not be treated as being before the annual meeting for action, other than passage or defeat of the proposed amendments. They may not be further amended or tabled by action of the annual meeting. SECTION 8. Elections and Election Committee. (a) At the beginning of each calendar year, and not less than ninety (90) days prior to the annual meeting, the board of directors shall appoint an election committee, as provided for in Article XV of these bylaws. The committee shall consist of the master election judge, who shall chair the committee, and not more than twelve election judges. This committee shall have the responsibility for conducting all voting by secret ballot during the calendar year. The election committee shall devise such procedures, and adopt such rules and regulations, subject to the approval of the board of directors, as may be reasonably necessary or convenient to the discharge of the election committee's responsibilities. These responsibilities shall include, but are not limited to (1) the registration of members at the annual or special meeting, and (2) the obligation of insuring the fairness, impartiality, confidentiality, and integrity of the voting process. The master election judge and election judges shall be selected from the Association membership, with consideration for geographical representation. In case of a vacancy, the board of directors shall appoint an Association member to complete the unexpired term of the committee member. (b) The election committee shall cause the preparation of an official ballot containing the names of the candidates for the office of director and the proposed bylaw amendments. The ballot shall be designed with the position of names of the candidates changed as many times as there are candidates. As nearly as possible, an equal number of ballots shall be printed after each change. In making the changes of position, the name of the candidate shall be taken and placed at the bottom and the column moved up so that the name that before was second is first after the change. After the ballots are printed, they shall be placed in separate stacks, one stack for each change of position. The ballots shall then be gathered by taking one from each stack, the intention being that every other ballot in the accumulated stack of ballots shall have the names of the candidates in a different position. The ballot shall also include a brief description concerning the number of offices to be filled at the election and the time, place, and method of voting. At least thirty (30) days prior to the meeting, an official ballot shall be mailed by the secretary to each member with 1) a statement of the number of directors' seats to be filled, 2) the candidates' names and election statements, 3) an explanation of any other matters to be voted on by mail, the proposed changes to the bylaws, with the Bylaws Committee's comments and 4) a report covering the calendar year immediately preceding the annual meeting prepared by the General Manager setting forth the attendance record of directors at regular and special board meetings, together with a summary setting forth the agenda business items voted and the vote of each director. The candidates' statements: 1) Shall specify whether the candidate was nominated by the Nominating Committee or by petition. 2) Shall specify whether the candidate is: (i) A member, officer, director, or employee of any union local currently acting as a bargaining agent for Association employees. (ii) A person who has within the last two years had a financial interest in a bid, proposal, project, or contract with Chugach. (iii) A spouse, child, brother, sister, parent, stepparent, stepchild or stepsibling of: a) any person included in subparagraph (i) or (ii) above or b)an employee of the Association. 3) May include a photograph of the candidate, and a statement not to exceed 200 words. The election committee shall procure a post office box where all ballots shall be received. (c) Mailed ballots, to be valid, must be received in the designated post office box by 12:00 Noon three (3) calendar days prior to the annual meeting or special meeting. In lieu of casting a ballot by mail, a member may register a vote by special ballot at the meeting. (d) The election committee shall make proper arrangements to secure all ballots before, during, and following the election. Marked ballots shall be counted as soon after the close of balloting as may be reasonable under the circumstances. The results thereof will be announced as soon as the count is completed. Marked ballots will be retained and secured for a period of ninety (90) days following the election, after which time they may be destroyed. (e) The election committee may employ such additional election clerks as may be required to register members at the annual or special meeting, to assist in the counting of the ballots and otherwise to ensure the efficient management of the meeting and balloting. Each candidate for the office of director may have a representative present during all times that ballots are being counted. The decision of a majority of the election committee shall be conclusive with respect to the eligibility of any person to vote and the validity of any ballot cast. (f) A recount of votes cast for a director's seat may only be requested by a candidate in that election. A request for a recount must be made in writing and received by the Election Committee within 10 days of the close of balloting. The recount will be done in the same manner as and by the same entity that performed the original vote count. If the recount indicates that the candidate requesting the recount has lost the election by more than 1 percent of the total votes cast, then the cost of the recount shall be borne by the candidate. If the recount indicates that the candidate requesting the recount has either won a seat or lost by a margin of 1 percent or less, then the cost of the recount shall be borne by the Association. A group of 10 or more members who voted in that election may request a recount of the ballots for a bylaws change or ballot question. A request for a recount must be made in writing and received by the Election Committee within 10 days of the close of balloting. The same provision for payment of the costs as provided above shall prevail, with the voters who requested the recount paying for the recount if the margin is greater than 1 percent, and the Association bearing the expense if the margin is 1 percent or less. (g) In the event of a tie for an election of a director, a bylaws change or a ballot question, a recount of the ballots shall be done. The Association shall bear the cost of recounts in the event of a tie. If the recount confirms the existence of a tie, then a run-off election shall be conducted by mail within 60 days of the date the results of the recount are certified. The form and content of the ballots shall comply with this Article III, Section 8(b). The run-off election shall be conducted by the Election Committee. The provisions of this Article III, Section 8(d), (e) and (f) shall apply. ARTICLE IV DIRECTORS SECTION 1. General Powers. The management of the business and the affairs of the Association shall be vested in a board of seven directors who shall exercise all of the powers of the Association, except such as are by law, the articles of incorporation, or by these bylaws conferred upon or reserved to the members. SECTION 2. Election and Tenure of Office. The persons named as directors in the articles of incorporation shall compose the board of directors until their successors shall have been elected and shall have qualified. Directors shall be elected by secret ballot either mailed or cast in person at annual or special meetings of the membership, by and from the members, to serve for a three-year term, not to exceed three consecutive three year terms, until their successors shall have been elected and qualify, provided that the directors elected to fill vacancies as provided in Article IV, Section 8 of these bylaws, shall serve only for the unexpired portion of the term vacated. Where the terms to be filled are of different lengths, the longest term shall be given to the director receiving the most votes. If the size of the board is subsequently increased, the initial terms of the directors to fill the newly created seat or seats shall be scheduled so that, as nearly as possible, an equal number of terms expire each year. At each annual or special meeting, members shall be elected to fill the seats on the board which become vacant as contemplated by Article IV, Section 8 of these bylaws. SECTION 3. Qualifications. (a) A person shall be eligible to serve as a director, who: 1) Has been a member of the Association for 12 continuous months before the notice of the election; 2) Is not in any way employed by a competing enterprise; 3) Does not have a financial interest in a competing enterprise; 4) Is not a supplier, contractor, consultant, or other entity which does business with the Association or a person with more than a 10% ownership interest in a supplier, contractor, consultant, or other entity which does business with the Association, except for providers whose annual business with the Association does not exceed $25,000; 5) Is not an employee of the Association nor a member, officer, director, nor employee of any union local currently acting as a bargaining agent for Association employees; 6) Is not a person living in the same household with and financially interdependent upon any person included in paragraphs 2, 3, 4, and 5, above; and 7) Maintains his or her membership throughout his or her term of office. (b) An individual who is the authorized representative of a non-natural entity (corporation, association or partnership, for example) which itself is qualified under subsection (a) may become or remain a director if he is qualified under subsections (a)(2), (3), (4), (5), and (6). If the individual or the non-natural member fails to meet the prescribed qualifications, or if the non-natural member changes its authorized representative, the individual shall become subject to removal under subsection (c), and the director's position shall become vacant, without power of appointment by the non-natural member. (c) Upon establishment of the fact that a director is holding office in violation of any of the foregoing provisions including the disclosure provisions of Article III, Section 8(b), subsection (2), the board of directors shall remove such director from office unless the basis for disqualification is remedied within thirty (30) days of notice of disqualification by the board of directors. (d) Directors are ineligible for employment by the Association for a period of two (2) years after their term has expired. Nothing contained in this section shall affect in any manner whatsoever the validity of any action taken at any meeting of the board of directors. SECTION 4. Nominations. (a) Nominating Committee. It shall be the duty of the board of directors to appoint, not less than one hundred and twenty days before the dates of a meeting of the members at which directors are to be elected, a committee on nominations, as provided for in Article XV of these bylaws. The committee shall consist of not less than five nor more than seven members, who shall be selected from different sections of the service area of the Association as to insure equitable representation. No member of the board of directors may serve on such committee. The committee shall seek qualified candidates, as well as screen potential nominees. Public notice for nominations shall be given ninety days prior to the meeting. The committee, keeping in mind the principle of geographical representation, shall approve, prepare and post at the principal office of the Association, at least seventy days before the meeting, a list of nominations for directors, which may include a greater number of candidates than are to be elected. (b) Petition. Any fifty or more members, acting together, may make other nominations by petition not less than sixty days prior to the election, and the secretary shall post such nominations at the same place where the list of nominations made by the committee is posted. SECTION 5. General Manager and Financial Advisor. The board of directors may appoint the following: (a) General Manager. The general manager may be but shall not be required to be a member of the Association. The general manager, together with such other staff, agents and employees as he may select shall perform such duties and shall exercise such authority as the board of directors may from time to time vest in him. (b)Financial Advisor. The Board, at its sole discretion, may engage the services of a financial advisor, which may be used to advise on any and all fiscal matters. The financial advisor shall report to the board. SECTION 6. Policy, Rules and Regulations. The board of directors shall have the power to make, adopt and enforce such policy, rules and regulations, not inconsistent with law, the articles of incorporation, or these bylaws, as it may deem advisable for the management of the affairs and business of the Association, for the protection of its investment, and for the interest and welfare of the members thereof. Such policy statements, rules and regulations shall be in writing and shall be made available for review by the members. SECTION 7. Removal of Directors by Members. Any member may bring charges against a director and, by filing with the secretary such charges in writing, together with a petition signed by at least 300 members, request the removal of such director by reason thereof, provided, however, that the signatures of members shall be acceptable only when affixed to a sheet on which the petition therein is fully set forth; and, provided further, that the person who solicited the signatures affixed to such petition shall acknowledge thereon before a person authorized to take acknowledgments of deeds that he had read the petition and the said charges against such director to each of the members prior to the latter subscribing their names thereto. Such director shall be informed in writing of the charges at least ten days prior to the meeting of the members at which the charges are to be considered, and shall have an opportunity at the meeting to be heard in person, or by counsel, and to present evidence in respect to the charges; and the person or persons bringing the charges against him shall have the same opportunity. The question of the removal of such director shall be considered and voted upon at the meeting of the members. A minimum of five hundred valid ballots must be cast in person with a majority in favor of removal for such removal to be effective. SECTION 8. Vacancies. (a) Vacancies caused by the removal of directors by the members shall be filled for the remainder of the removed director('s) term by vote of the members at such meeting as removal has occurred without compliance with Article IV, Section 4, but subject, however, to the provisions of Article IV, Section 2 and 3, except that the number of valid ballots cast equal to or greater than a quorum as required by Article III, Section 5, shall be sufficient for such election. (b) Any other vacancy occurring in the board shall be filled by the affirmative vote of the majority of the remaining directors, and the member so elected to the board shall serve until his successor has been elected. At such election following the existence of such vacancy, the members shall elect one of their number to serve as director during the unexpired portion of the term vacated, subject, however to provisions of Article IV, Section 2, 3 and 4 of these bylaws. SECTION 9. Compensation. (a) Directors shall not receive any salary for their services as directors, except that, by resolution of the board of directors, a fixed fee and expenses of attendance, if any, may be allowed for attendance at each meeting of the board of directors, or a meeting of a committee thereof, or when a director is otherwise representing the Association in an official capacity. No attendance other than regular or special board meetings shall be reimbursed unless authorized in advance by the majority vote of the board. The fixed fee shall not exceed $100.00 per meeting, and a director may not be compensated for more than two regular board meetings per month, and an additional 12 special board meetings per year. The total compensated meetings shall not exceed 70 meetings per year for a director, and 85 meetings per year for the president. The Association may not provide health insurance for directors or their families, or insurance for risks except those incurred in their capacity as directors. (b) Directors' expense reimbursement requests shall be reviewed and approved by the majority vote of the board. Directors may not receive salaries for their services as directors, and, except in emergencies, shall not receive salaries for their services in any other capacity without the approval of the members. ARTICLE V MEETINGS OF DIRECTORS SECTION 1. Regular Meeting. A regular meeting of the board of directors shall be held without notice immediately after, and at the same place as, the annual meeting of the members. A regular meeting of the board of directors shall also be held monthly at such time and place in the Municipality of Anchorage, State of Alaska, as the board of directors may provide by resolution. Such regular monthly meetings may be held without notice other than such resolution fixing the time and place thereof except that the board shall cause notice of the selection of the time and place of the regular meetings to be given to the members promptly after it is selected. SECTION 2. Special Meetings. Special Meetings of the board of directors may be called by the president, or by any three directors, and it shall thereupon be the duty of the secretary to cause notice of such meetings to be given as hereinafter provided. The president of the directors calling the meeting shall fix the time and place, which shall be in the Municipality of Anchorage, State of Alaska, for the holding of the meeting. Written notice of the time, place and purpose of any special meetings of the board of directors shall be delivered to each director not less than three days previous thereto, either personally or by mail, by or at the direction of the secretary, or upon default in duty by the secretary, by the president or the directors calling the meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the director at his address as it appears on the records of the Association, with postage thereon prepaid. SECTION 3. Quorum. A majority of the board of directors shall constitute a quorum; provided, that if less than a majority of the directors are present at said meeting, a majority of the directors present may adjourn the meeting from time to time; and provided further, that the secretary shall notify any absent directors of the time and place of such adjourned meeting. The act of the majority of the directors present at the meeting at which a quorum is present shall be the act of the board of directors. Each director present shall vote or abstain on each motion. Each director shall disclose any financial interest of the director or of a member of the director's immediate family in a matter before the board. SECTION 4. Director Attendance. If a director is absent from three or all regular board meetings in a sixty (60) day period, or from 25% of all meetings, including regular and special meetings, board workshops, and committee meetings, in a six month period, he shall be deemed to have resigned from the board of directors, and the vacancy thereby resulting will be filled as provided in Article IV, Section 8, of these bylaws. A director who is absent on Association business, including reasonable travel time to and from such business, shall not be counted absent, provided such travel and absence was approved in advance by the board. For purposes of this Section, an absence shall not be counted if it is excused by a vote of a majority of the members of the board not requesting the excuse at the next regular or special board meeting. However, no more than three absences per director may be excused by the board in any 12-month period. SECTION 5. Membership Attendance. (a) Regular meetings, special meetings and work sessions shall be open to all Association members. The notice of such meeting and an agenda shall be posted in a conspicuous place in the public places of business of the Association not later than three days prior to the meeting. The board of directors shall adopt a policy establishing additional means of providing public notice of meetings. (b) No closed or executive sessions shall be held except to discuss: 1) Matters the immediate knowledge of which would clearly have an adverse effect on the Association's finances; 2) Subjects that tend to prejudice the reputation and character of a person; however, that person may request a public discussion; 3) Matters discussed with an attorney for the Association, the immediate knowledge of which could have an adverse effect on the Association's legal position. SECTION 6. Minutes. Minutes will be kept for all regular and special meetings and shall include each director's vote on each matter voted upon by the board of directors. Copies of the minutes shall promptly be given to Association members upon request. The board of directors may prescribe a reasonable fee for such copies provided such fee shall not exceed the actual labor and material costs of reproduction. An electronic recording of all regular and special meetings shall also be made and kept for at least one year; Association members may request a transcription of the tape upon payment of the cost of transcription by a court reporter service; members shall also be permitted to listen to such tapes at the headquarters building. SECTION 7. Telephonic Board Meetings. For the purpose of the holding of any regular or special meeting, the Board of Directors can validly conduct such meeting by communicating with each other by means of conference telephones or similar communications equipment as allowed by law; not to exceed teleconference attendance at 25% of the meetings by any one director for any twelve month period. ARTICLE VI OFFICERS SECTION 1. Number. The officers of the Association shall be a president, vice-president, secretary and treasurer, and such other officers as may be determined by the board of directors from time to time. The offices of secretary and treasurer may be held by the same person. SECTION 2. Election and Term of Office. The officers shall be elected annually by ballot, by and from the board of directors, at the meeting of the board of directors held immediately after the annual meeting of the members. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently may be. Each officer shall hold office until the first meeting of the board of directors following the next succeeding annual meeting of the members, or until his successor shall have been elected and shall have qualified. A vacancy in any office shall be filled by the board of directors for the unexpired portion of the term. SECTION 3. Removal of Officers and Agents by Directors. Any officer or agent elected or appointed by the board of directors may be removed by the board of directors whenever in its judgement the best interests of the Association will be served thereby. In addition, any member of the Association may bring charges against an officer and, by filing with the secretary such charges in writing, together with a petition signed by at least a sufficient number of members to constitute a quorum as defined in Section 5, Article III, may request the removal of such officer by reason thereof; provided, however, that the signatures of the members shall be acceptable only when affixed to a sheet on which petition therein is fully set forth; and provided further, that the person who solicited the signature affixed to such petition shall acknowledge thereon before a person authorized to take acknowledgments of deeds that he had read the petition and the said charges against such officer to each of the members prior to the latter subscribing their names thereto. The officer against whom such charges have been brought shall be informed in writing of the charges at least ten days prior to the board meeting at which the charges are to be considered and shall have an opportunity at the meeting to be heard in person, or by counsel, and to present evidence in respect of the charges; and the person or persons bringing the charges against him shall have the same opportunity. In the event the board does not remove the officer, the question of his removal shall be considered and voted upon at the next meeting of the members. SECTION 4. President. The president shall: (a) Be the principal executive officer of the Association and, unless otherwise determined by the members or the board of directors, shall preside at all meetings of the members and the board of directors; (b) Sign any deeds, mortgages, deeds of trust, notes, bonds, contracts or other instruments authorized by the board of directors to be executed, except in cases in which the signing and execution thereof shall be expressly delegated by the board of directors or these bylaws to some other officer or agent of the Association, or shall be required by law to be otherwise signed or executed; and (c) In general, perform all duties incident to the office of president and such other duties as may be prescribed by the board of directors from time to time. SECTION 5. Vice-President. In the absence of the president, or in the event of his inability or refusal to act, the vice-president shall perform the duties of the president, and when so acting, shall have all the powers of, and be subject to all the restrictions upon, the president. The vice-president shall also perform such duties as from time to time may be assigned to him by the board of directors. SECTION 6. Secretary. The secretary shall be responsible for: (a) Keeping the minutes of the meetings of the members and of the board of directors; (b) Seeing that all notices are given in accordance with these bylaws, or as required by law; (c) The safekeeping of the corporate records and seal of the Association, and affixing the seal of the Association to all documents, the execution of which on behalf of the Association under its seal is duly authorized in accordance with the provisions of these bylaws; (d) Keeping a register of the names and post office addresses of all members; (e) Keeping on file at all times a complete copy of the articles of incorporation and bylaws of the Association containing all amendments thereto, which copy shall always be open to the inspection of any members, and at the expense of the Association, forwarding a copy of the bylaws and of all amendments thereto to each member on request; and (f) In general, performing all duties incident to the office of secretary, and such other duties as from time to time may be assigned by the board of directors. SECTION 7. Treasurer. The treasurer shall be responsible for: (a) Custody of all funds and securities of the Association; (b) The receipt of, and the issuance of receipts for, all moneys due and payable to the Association, and for the deposit of all such moneys in the name of the Association in such bank or banks as shall be selected in accordance with the provisions of these bylaws; and (c) In general, performing all the duties incident to the office of treasurer and such other duties as from time to time may be assigned by the board of directors. SECTION 8. Delegation of Duties. In the absence of an officer, or in the event of his inability or refusal to act, the board of directors will appoint one of their number to perform the duties of his office; provided that the offices of president and vice-president may not be combined with any other office; and, provided further, nothing herein shall limit the right and duty of the vice-president to perform the duties of the president in the event that the president is absent, is unable to act, or refuses to act. The board of directors may provide for the delegation of one or more of the duties of the secretary and treasurer. SECTION 9. Bonds of Officers. The treasurer, and any other officer or agent of the Association charged with responsibility for the custody of any of its funds or property, shall give bond in such sum, and with such surety, as the board of directors shall determine. The board of directors, in its discretion, may also require any other officer, agent or employee of the Association to give bond in such amount and with such surety as it shall determine. SECTION 10. Budget. The Board of Directors shall review, revise and approve an annual operating budget prior to each fiscal year. SECTION 11. Reports. The officers of the Association shall submit, at each annual meeting of the members, reports covering the business of the Association for the previous fiscal year. Such reports shall set forth the condition of the Association at the close of such fiscal year. ARTICLE VII PATRONAGE CAPITAL SECTION 1. Patronage Capital. The Association shall at all times be operated on a cooperative, nonprofit basis for the mutual benefit of its patrons. The Association's operations shall be so conducted that all patrons, members and non-members alike, will through their patronage furnish capital for the Association, subject to the provisions for sinking funds and reserves as provided by Article VIII of these bylaws. In order to induce patronage and to assure that the Association will operate on a nonprofit basis, the Association is obliged to account on a patronage basis to all its patrons, members and non-members alike, for all amounts received from the furnishing of electric energy in excess of operating costs and expenses properly chargeable against the furnishing of electric energy. All such amounts in excess of operating costs and expenses are received with the understanding that they are furnished by the patrons, members and non-members alike, as capital. The Association is obligated to pay all such amounts in excess of operating costs and expenses to the patrons by credits to a capital account for each patron. The books and records of the Association shall be set up and kept in such a manner that at the end of each fiscal year the amount of capital, if any, so furnished by each patron, is clearly reflected and credited in an appropriate record to the capital account of each patron, and the Association shall within a reasonable time after the close of the fiscal year notify each patron of the amount of capital so credited to his account. All such amounts credited to the capital account of any patron shall have the same status as though they had been paid to the patron in cash in pursuance of a legal obligation to do so, and the patron had then furnished the Association corresponding amounts for capital. In the event of dissolution or liquidation of the Association, after all outstanding indebtedness of the Association shall have been paid, outstanding capital credits shall be retired without priority on a pro rata basis before any payments are made on account of property rights of members. If, at any time prior to dissolution or liquidation, the board of directors shall determine that the financial condition of the Association will not be impaired thereby, the capital then credited to patrons' accounts may be retired in full or in part, according to policies adopted by the board. Capital credited to the account of each patron shall be assignable only on the books of the Association pursuant to written instructions from the assignor, and only to successors in interest or successors in occupancy in all or a part of such patron's premises served by the Association, unless the board of directors, acting under policies of general application, shall determine otherwise. All other amounts received by the Association from its operations in excess of costs and expenses shall, insofar as permitted by law, be: (a) Used to offset any losses incurred during the current or any prior fiscal year; and (b) To the extent not needed for that purpose, allocated to its patrons on a patronage basis, and any amount so allocated shall be included as part of the capital credited to the accounts of patrons, as herein provided. Notwithstanding any other provisions of these bylaws, the board of directors, at its discretion, shall have the power at any time, upon the death of any patron, if the legal representative of his estate shall request in writing that the capital credited to any such patron be retired prior to the time such capital would otherwise be retired under the provisions of these bylaws, to retire capital credited to any such patron immediately upon such terms and conditions as the board of directors, acting under policies of general application, and the legal representative of such patron's estate shall agree upon, provided, however, that the financial condition of the Association will not be impaired thereby. ARTICLE VIII FISCAL MANAGEMENT AND ACCOUNTING SECTION 1. Revenues and Expenditures. The board of directors shall adopt and maintain a system of accounting for receipts and expenditures in conformance with the laws of the United States and of the State of Alaska applicable to cooperative associations and corporations, which system shall at all times provide the proper reserves for payments of interest and principal on outstanding indebtedness, reserves for taxes, insurance, depreciation, replacement of capital plant and facilities, and such other reserves and accounts as the board of directors shall deem proper. SECTION 2. Accounting System and Reports. The accounting system adopted and maintained by the board of directors shall conform to such rules and regulations applicable to accounting systems, their establishment and operation, and which may be established by any applicable laws, rules and regulations of the United States, the State of Alaska, or any regulatory agency thereof of competent jurisdiction. The board of directors shall also, after the close of each fiscal year, cause to be made a full, complete and independent audit of the accounts, books, and financial conditions of the Association as of the end of each fiscal year. A reasonably comprehensive and easily understood summary of the audit report shall be submitted to the members prior to each annual meeting. SECTION 3. Disclosure. Repealed April 25, 1996. ARTICLE IX DISPOSITION OF PROPERTY SECTION 1. Disposition of Property. (a) The board of directors shall have full power and authority to authorize the execution and delivery of a mortgage or mortgages, or a deed or deeds of trust, of any and all of the property, rights, privileges, licenses, franchises and permits of the Association, whether acquired or to be acquired, and wherever situated, as well as the revenues therefrom, all upon such terms and conditions as the board of directors shall determine, to secure any indebtedness of the Association. (b) The Association may not sell, lease, or otherwise dispose of all or a substantial portion of the Association's property unless such sale, lease, or other disposition is authorized by the affirmative vote of not less than the majority of all the members of the cooperative. However, the board of directors may sell, lease, or otherwise dispose of all or a substantial portion of its property to another cooperative, if authorized by a majority of those members of the Association voting, but in no event can the affirmative vote be less than 10% of the members as of the date of notice of the election. ARTICLE X SEAL The corporate seal of the Association shall be in the form of a circle and shall have inscribed thereon the name of the Association and the words "Corporate Seal, State of Alaska." ARTICLE XI FINANCIAL TRANSACTIONS SECTION 1. Contracts. Except as otherwise provided in these bylaws, the board of directors may authorize any officer or officers, agent or agents, to enter into any contract, or execute and deliver any instrument, in the name and on behalf of the Association, and such authority may be general or confined to specific instances. SECTION 2. Checks, Drafts, etc. All checks, drafts or other orders for the payment of money, and all notes, bonds or other evidences of indebtedness issued in the name of the Association, shall be signed by such officer or officers, agent or agents, employee or employees of the Association, and in such manner, as shall from time to time be determined by resolution of the board of directors. SECTION 3. Deposits. All funds of the Association shall be deposited from time to time to the credit of the Association in such bank or banks as the board of directors may select. SECTION 4. Fiscal Year. The fiscal year of the Association shall begin on the first day of January of each year and shall end on the thirty-first day of December of the same year. SECTION 5. Full and Open Competitive Bidding. It is deemed to be in the best interest of the Association: to encourage and require full and open competitive bidding of contracts; to take affirmative steps to insure that the Association selects the lowest responsible bidder for its requirements from among the broadest range of suppliers qualified by expertise and resources; and to insure that responsible bidders are not excluded. These requirements shall not apply in emergency matters, to professional service contracts, or (in the discretion of the Association) to contracts reasonably expected to be less than $50,000. The Directors shall require a review of the Association's bidding procedures and qualifications and shall take such actions as may be in the best interests of the Association as determined herein. Within thirty (30) months of the passage of this Section 5, the Board of Directors shall have fully implemented the provisions of this Section 5. ARTICLE XII MISCELLANEOUS SECTION 1. Membership in Other Organizations. The Association may, with the approval of the Board of Directors, become a member or stockholder in non-profit organizations which promote rural electrification, cooperatives, civic or professional purposes, and any other corporation for the purpose of acquiring electric facilities. The Association may become a member or stockholder of other organizations upon approval of the members. SECTION 2. Waiver of Notice. Any member or director may waive in writing any notice of a meeting required to be given by these bylaws. The attendance of a member or director at any meeting shall constitute a waiver of notice of the meeting, unless the person participates in the meeting solely for the express purpose of objecting to the transaction of any business on the ground that the meeting has not been lawfully called or convened. SECTION 3. Interpretation. Wherever the masculine gender is used in these bylaws it shall be construed also to refer to the feminine. ARTICLE XIII AMENDMENTS SECTION 1. Notice. These bylaws may be altered, amended or repealed by the members at any regular or special meeting, or by ballot as provided for in Article III, Section 8, provided the notice of such meeting shall have contained a copy of the proposed alteration, amendment or repeal. Notice to the membership shall be given ninety days prior to the annual meeting election for submission of recommended bylaw changes. SECTION 2. Bylaws Committee. It shall be the duty of the board of directors to appoint, not later than December 15th of each year, members to a committee on bylaws, as provided in Article XV of these bylaws. The committee shall consist of not less than five nor more than seven members, who shall be selected from different sections of the service area of the Association so as to insure equitable representation. No member of the board of directors may serve on such a committee. The committee shall review the bylaws of the Association, consider any recommendations for revisions thereof which may be made by the board of directors or any member, and report their recommendations concerning the bylaws to the annual membership meeting. Nothing herein shall be interpreted to limit the authority of the board of directors to propose changes in the bylaws, or the right of the members to call a special meeting for any proper purpose pursuant to Article III, Section 2, herein. ARTICLE XIV ADVISORY COUNCIL SECTION 1. Member Advisory Council. The board of directors shall create and establish a Member Advisory Council to advise the board. SECTION 2. General Duties. It shall be the duty of the board of directors to appoint members to the advisory council, as provided in Article XV. Members shall be selected from different sections of the service area to the Association so as to insure equitable representation. ARTICLE XV STANDING AND AD HOC COMMITTEES SECTION 1. General. This section shall apply to standing and ad hoc committees which may from time to time be appointed by the board. Standing committees include: the Election Committee, as provided for in Article III, Section 8; the Nominating Committee, as provided for in Article IV, Section 4; the Bylaws Committee, as provided for in Article XIII, Section 2; and the Member Advisory Council, as provided for in Article XIV. SECTION 2. Compensation. Members of standing and ad hoc committees shall receive no compensation or gratuity for their participation in the affairs of the Association. SECTION 3. Terms. The terms of standing committee members shall be for no more than three (3) years and be staggered so that, as nearly as possible, one-third shall expire each year. Members may not serve consecutive terms on the same committee. SECTION 4. Membership. In order to be fairly representative of the Association's diverse membership, it is preferable that standing and ad hoc committees be comprised of members who reflect that diversity. Toward that end, the selection process shall include consideration of the member's occupation, education, experience, geographical area in which service is provided by the Association, and type of service provided by the Association. A person is eligible to serve on such committees provided that such person is not: (a) an employee or director of the Association; (b) a director, officer or employee of any union local currently acting as a bargaining agent for Association employees; (c) a person employed by a competing enterprise; (d) a person having a financial interest in a competing enterprise; (e) a supplier, contractor, consultant or other entity which does business with the Association or a person with more than a 20% ownership interest in a supplier, contractor, consultant or other entity which does business with the Association except for providers whose actual business with the Association does not exceed $50,000; or (f) a person living in the same household with and financially interdependent upon any of the persons listed in (a) through (e),above. SECTION 5. Vacancy. In the case of a vacancy, the board of directors shall appoint an Association member in accordance with the provisions of this Article to complete the unexpired term of a committee member. ARTICLE XVI INDEMNIFICATION The Association shall indemnify and defend directors, officers, employees or agents of the Association who are, or are threatened to be made, parties to civil, criminal or administrative proceedings, for expenses (including attorneys' fees), judgments, fines and settlements, actually and reasonably incurred, if the acts complained of were performed within the scope of the director's, officer's, employee's or agent's duties, and the director, officer, employee or agent acted in good faith and in a manner he reasonably believed should be in, or not opposed to, the best interests of the Association, and, with respect to a criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The Association may purchase and maintain insurance to provide for such indemnification and defense. ARTICLE XVII MEMBER ACCESS TO INFORMATION SECTION 1. Access Rights. The rights of the members to examine and make copies of the books and records of the Association at a reasonable time and for a proper purpose in accordance with Alaska Statutes shall not be infringed. The following information is deemed to be requested for a proper purpose without any showing whatsoever and shall be made available to members on request of a member. (a) Names and mailing addresses of Association members when requested by a candidate running for election to the Association Board; (b) Salary, title, job classification and position description, benefits, leave accrued and cashed-in, and hours worked, but not employee name, for each employee position in the Association; (c) Collective bargaining agreements of any kind to which the Association is a party; (d) Published information which shall include: 1) Documents provided to any regulatory authority including, but not limited to Alaska Public Utilities Commission (APUC), Federal Energy Regulatory Commission (FERC) and Securities and Exchange Commission (SEC) filings, 2) Documents provided in open session to the Board of Directors or Association committees, including but not limited to budget documents, feasibility studies, audits or cost effectiveness studies, correspondence between the Association and third parties and minutes of Board of Directors or Association committee meetings. SECTION 2. Charges. The Association may charge no more than the actual incremental cost of producing the above information. SECTION 3. Policies and Procedures. Nothing in this Article XVII prevents the Association from allowing for additional disclosure of Association information or from developing other rules for disclosure and payment therefor by policy or procedure provided that the policy or procedure shall in no way restrict the disclosure required in this Article XVII. EX-4.4.3 3 COBANK - 3 CLOSING DOCUMENTS First Trust Washington, as Trustee April 30, 1996 Page 1 April 30, 1996 First Trust Washington, as Trustee P. O. Box 24425 Seattle, Washington 98124-0425 Attention: Michael Jones, Trust Officer Re: Opinion of Counsel and Title Evidence in connection with issuance of First Mortgage Bond, CoBank Series Ladies and Gentlemen: This letter constitutes the opinion of General Counsel for Chugach Electric Association, Inc. ("Chugach") pursuant to Sections 5.01C, 5.01E, 5.02(6) and 5.02(7) of the Indenture of Trust dated as of September 15, 1991 between Chugach and Seattle-First National Bank, as Trustee (the "Trustee") (as amended by the First, Second, Third, Fourth, Fifth and Sixth Supplemental Indentures thereto, dated March 17, 1993, May 19, 1994, June 29, 1994, March 1, 1995, September 6, 1995, and April 3, 1996 respectively, the "Indenture of Trust") and the terms used in this opinion shall have the meanings established therein. I have based my opinion on my review of the following records and documents associated with the issuance of a First Mortgage Bond, CoBank Series in the original principal amount of $21,500,000 Dollars (the "Bond") pursuant to the Third Supplemental Indenture of Trust dated June 29, 1994 (the "Third Supplemental Indenture"), which review is in my opinion sufficient to enable me to express an informed opinion on the matters discussed in this letter. Indenture of Trust; Loan Agreement between Chugach and CoBank dated June 22, 1994; Board Resolution dated April 3, 1996, authorizing the issuance of a First Mortgage Bond to CoBank pursuant to the Third Supplemental Indenture; Officers' Certificate dated April 30, 1996, signed by the General Manager and the Executive Manager, Finance and Planning; Available Margins Certificate dated April 30, 1996; First Trust Washington, as Trustee April 30, 1996 Page 2 Certificate as to Bondable Additions No. 3 dated April 30, 1996; The articles of incorporation of Chugach (including all amendments thereto); and The bylaws of Chugach as in effect on the date hereof. Based on my review of the above records and my knowledge of Chugach as General Counsel, I am of the opinion that: (1) no tax, recording or filing law requirements apply to the issuance of the Bond; (2) no authorization, approval or consent by any Federal, state or other governmental regulatory agency is required for the issuance of the Bond; (3) all conditions precedent provided for in the Indenture of Trust relating to the authentication and delivery of the Bond to CoBank have been complied with; (4) the Bond, when executed by Chugach and authenticated and delivered by the Trustee and when issued by Chugach will be the legal, valid and binding obligation of Chugach enforceable in accordance with its terms and the terms of the Indenture of Trust (subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of general applicability relating to or affecting creditors' rights and to general equity principles) and entitled to the benefits of and secured by the lien of the Indenture of Trust equally and ratably with all other Outstanding Secured Bonds; (5) none of the Trust Estate is subject to any Prior Lien other than Prior Liens permitted by Section 14.06 of the Indenture of Trust; (6) no instruments, other than the Indenture of Trust, are necessary to vest in the Trustee as a part of the Trust Estate all right, title and interest of Chugach in and to all Property Additions to which the Certificate as to Bondable Additions refers; (7) with respect to all Property Additions to which the Certificate as to Bondable Additions refers that are located or constructed on, over or under public highways, rivers, waters or other public property, Chugach has the lawful right under permits or franchises granted by a governmental body having jurisdiction in the premises or by law to maintain and operate such Property Additions for an unlimited, indeterminate or indefinite period of time or for the period, if any, specified in such permit, franchise or law, and to remove such property at the expiration of the period covered by such permit, franchise or law, or the terms of such permit, franchise or law require any public authority having the right to take over such property to pay fair consideration therefor. First Trust Washington, as Trustee April 30, 1996 Page 3 (8) Chugach has corporate power to own and operate all Property Additions to which the Certificate as to Bondable Additions refers; (9) the Indenture of Trust is a lien upon all Property Additions described in the Certificate as to Bondable Additions (except such as have been Retired) free and clear of any Prior Liens except to the extent otherwise provided in Section 6.02D(2); (10) the documents which have been or are herewith delivered to the Trustee conform to the requirements of the Indenture of Trust for an Application for the authentication and delivery of the Bond and, upon the basis of the Application, all conditions precedent provided for in the Indenture of Trust relating to authentication and delivery of the Bond have been complied with; and (11) Chugach has title to the Property Additions described in the Certificate as to Bondable Additions (except as have been Retired), free and clear of any Prior Liens (except to the extent otherwise permitted by the proviso to Section 6.02D(2) and except for Permitted Encumbrances), and Chugach has duly obtained any easements or rights-of-way which are described in the Certificate as to Bondable Additions, subject only to Permitted Encumbrances. Pursuant to the definition of "Title Evidence" contained in Section 1.01 of the Indenture of Trust, each of the foregoing opinions to the effect that Chugach has title to any portion of the Trust Estate shall be deemed to be an opinion only that Chugach has such title as in my opinion is satisfactory for the use thereof in connection with its operations and is qualified by and subject to any irregularity or deficiency in the record evidence of title which, in my opinion, can be cured by proceedings within the power of Chugach or does not substantially impair the usefulness of such property for the purposes of Chugach. This opinion is limited to the federal laws of the United States of America and the laws of the State of Alaska, and I disclaim any opinion as to the laws of any other jurisdiction. This opinion is rendered to you in connection with the issuance of the Bond and is solely for your benefit. This opinion may not be relied upon by any other person, firm, corporation or other entity without my prior written consent. I disclaim any obligation to advise you of any change of law that occurs, or any facts of which I become aware, after the date of this opinion. Sincerely, CHUGACH ELECTRIC ASSOCIATION, INC. /s/ Donald W. Edwards Donald W. Edwards General Counsel 96 04 02 Chugach Electric Association, Inc. Anchorage, Alaska RESOLUTION WHEREAS, the Board of Directors has previously approved and Chugach Electric Association, Inc. ("Chugach") has entered into a Third Supplemental Indenture of Trust dated as of June 29, 1994 between Chugach and Seattle-First National Bank ("Third Supplemental Indenture") amending and supplementing that Indenture of Trust dated as of September 15, 1991 (as heretofore amended, the "Indenture") and establishing a new series of bonds to be designated First Mortgage Bonds, CoBank Series to be issued to Cobank pursuant to a Credit Agreement dated June 29, 1994 from time to time to secure advances made by CoBank; WHEREAS, it is in the best interest of Chugach for the Board of Directors to authorize the issuance of a bond to the National Bank for Cooperatives ("CoBank") under the Third Supplemental Indenture for the purpose of securing indebtedness for $21,500,000.00. NOW THEREFORE BE IT RESOLVED, that the Board of Directors hereby requests the authentication and delivery of a First Mortgage Bond, CoBank Series (designated CoBank 3), in the principal amount of $21,500,000.00, under Section 5.02 of the Indenture; BE IT FURTHER RESOLVED, that the President, Vice President, Treasurer, Secretary, General Manager and Executive Managers of Chugach, or any of them (the "Officers and Managers") are and each of them hereby is, authorized, empowered and directed, for and on behalf of Chugach, to execute and deliver, 1) the First Mortgage Bond, CoBank Series in the amount of $21,500,000.00, to bear interest at the CoBank Fixed Rate Option in substantially the form attached hereto, and 2) any Company Request, Application, Company Order or other document or instrument that such person deems necessary or desirable in connection with the issuance of such bond; BE IT FURTHER RESOLVED, that the execution by such Officers and Managers of the said Bond, instrument or other document and the doing by them of any act in connection with the foregoing matters shall conclusively establish their authority therefor from Chugach. CERTIFICATION I, Patricia Jasper, do hereby certify that I am Secretary of Chugach Electric Association, Inc., and electric non-profit cooperative membership corporation organized and existing under the laws of the State of Alaska; that the foregoing is a complete and correct copy of a resolution adopted at a meeting of the Board of Directors of the corporation, duly and properly called and held on the 3rd day of April, 1996; that a quorum was present at the meeting; that the resolution is set forth in the minutes of the meeting and has not been rescinded or modified. IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the seal of this corporation this 3rd day of April, 1996. (Seal) /s/ Patricia B. Jasper Secretary THIS FIRST MORTGAGE BOND, CoBANK SERIES, HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, OFFERED FOR SALE OR OTHERWISE TRANSFERRED WITHOUT REGISTRATION UNDER SUCH ACT OR IN RELIANCE UPON AN APPLICABLE EXEMPTION FROM REGISTRATION UNDER SUCH ACT. Chugach Electric Association, Inc. First Mortgage Bond, CoBank Series, Due 2022 No. CoBank-3 $21,500,000.00 Chugach Electric Association, Inc., an Alaska electric cooperative (herein called the "Company", which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to CoBank (the "Lender"), or registered assigns, (1) the principal sum of $21,500,000.00 Dollars, (2) interest (computed on the basis of a 360 day year) thereon, from the date of issuance, at the rate or rates hereafter provided for, which interest shall be payable on each Regular Interest Payment Date with respect to the principal balance Outstanding from time to time during the calendar month most recently ended prior to such Regular Interest Payment Date, and (3) a Redemption Premium in the amounts (if any) hereinafter provided. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture described on the reverse hereof, be paid to the Person in whose name this Bond (or one or more predecessor Bonds) is registered at the close of business on the Regular Record Date (as defined below) for such interest. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may be paid to the Person in whose name this Bond (or one or more Predecessor Bonds) is registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to Holders of Bonds of this series not less than 10 days prior to such Special Record Date. Payments of the principal of (and premium, if any) and interest on this Bond shall be made to the Holder hereof by wire transfer of immediately available funds. Wire transfers will be made to ABA #30-70-88754 for advice to and credit of CoBank (or to such other account as the Holder hereof may designate by notice) and shall be in time to be received prior to 1:00 p.m., Alaska time, on the date each payment is due. This Bond will mature on the date stated above. Interest only shall be due until the first Principal Payment Date. The principal amount of this Bond shall be repaid in accordance with the following amortization schedule: Date 03/15/03 Principal Amount Due $ 413,670 Date 03/15/04 Principal Amount Due $ 451,500 Date 03/15/05 Principal Amount Due $ 492,777 Date 03/15/06 Principal Amount Due $ 537 828 Date 03/15/07 Principal Amount Due $ 586,983 Date 03/15/08 Principal Amount Due $ 640,569 Date 03/15/09 Principal Amount Due $ 699,160 Date 03/15/10 Principal Amount Due $ 763,086 Date 03/15/11 Principal Amount Due $ 832,838 Date 03/15/12 Principal Amount Due $ 908,908 Date 03/15/13 Principal Amount Due $ 992,036 Date 03/15/14 Principal Amount Due $1,082,714 Date 03/15/15 Principal Amount Due $1,181,597 Date 03/15/16 Principal Amount Due $1,289,672 Date 03/15/17 Principal Amount Due $1,407,511 Date 03/15/18 Principal Amount Due $1,536,183 Date 03/15/19 Principal Amount Due $1,676,590 Date 03/15/20 Principal Amount Due $1,829,798 Date 03/15/21 Principal Amount Due $1,997,038 Date 03/15/22 Principal Amount Due $2,179,542 Reference is hereby made to the further provisions of this Bond set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Bond shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this Bond to be duly executed. Dated: April 30, 1996 CHUGACH ELECTRIC ASSOCIATION, INC. Attest: /s/ Mary Minder By: /s/ Eugene N. Bjornstad Secretary Authorized Officer This Bond is one of a duly authorized issue of Bonds of the Company designated as its "First Mortgage Bonds" (herein called the "Bonds"), issued and to be issued in one or more series under, all equally and ratably secured by, an Indenture of Trust, dated as of September 15, 1991, (herein together with the First Supplemental Indenture of Trust, dated as of March 17, 1993, the Second Supplemental Indenture of Trust dated as of May 19, 1994, the Third Supplemental Indenture of Trust dated as of June 29, 1994, the Fourth Supplemental Indenture of Trust dated as of March 1, 1995, the Fifth Supplemental Indenture of Trust dated as of September 6, 1995, and the Sixth Supplemental Indenture of Trust dated as of April 3, 1996, called the "Indenture"), between the Company and Seattle-First National Bank (successor-in-interest to Security Pacific Bank Washington, N.A.), as trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture reference is hereby made for a statement of the description of the properties thereby mortgaged, pledged and assigned, the nature and extent of the security and the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Bonds and of the terms upon which the Bonds are, and are to be, authenticated and delivered. This Bond is one of the series and maturity designated on the face hereof, limited in aggregate principal amount to the Maximum Amount (as defined below) at any one time outstanding. This Bond is subject to redemption at any time, upon at least twenty (20) Business Days (as hereinafter defined) notice to the Holder hereof, as a whole or in part in multiples of $1,000, at the election of the Company, at a Redemption Price equal to 100% of the principal amount being redeemed plus the Redemption Premium (as defined below), if any, with respect to the principal amount hereof being redeemed, together with accrued interest to the Redemption Date on the principal amount being redeemed, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holder of this Bond, or one or more Predecessor Bonds, of record at the close of business on the relevant Record Dates. The Company has selected the Fixed Rate Option set forth in (B) below for an initial period of 30 days at an interest rate of 6.30000 % per annum: (A) Variable Rate Option. Except as provided below, the unpaid principal balance of this CoBank Bond shall bear interest at a rate per annum equal at all times to the National Variable Rate (as hereinafter defined) plus 25 basis points. For purposes hereof, the National Variable Rate shall mean the rate of interest established by CoBank from time to time as its National Variable Rate. The National Variable Rate is intended by CoBank to be a reference rate, and CoBank may charge other borrowers rates at, above, or below that rate. Any change in the National Variable Rate shall take effect on the date established by CoBank as the effective date of such change, and CoBank agrees to notify the Company promptly after any change in the rate. (B) Fixed Rate Option. From time to time at the request of the Company, the rate of interest charged on this CoBank Bond may be fixed at a rate to be quoted by CoBank in its sole and absolute discretion. Under this option, individual amounts may be fixed for periods ranging from thirty (30) days to the life of the CoBank Bond, and the minimum aggregate principal amount of CoBank Bonds on which the interest rate may be fixed at any one time shall be $100,000. However, rates may only be fixed for periods which expire on a Business Day, and shall take into account repayments of principal in accordance with the amortization schedule. Upon the expiration of any fixed rate period, interest shall automatically accrue at the rate set forth in (A) above, unless the amount fixed is repaid or the Company fixes the rate for an additional period. Until the principal hereof is completely repaid whether by reason of maturity or redemption, interest on this Bond not theretofore paid shall be payable, in arrears, on each Interest Payment Date with respect to the principal balance outstanding from time to time during the Interest Period to which such Interest Payment date relates. Interest shall be calculated on the actual number of days this Bond is outstanding on the basis of a year consisting of 360 days. In calculating interest, the first day of each period for which interest is calculated shall be included and the day on which interest is paid shall be excluded. If prior to maturity of this Bond the Company fails to make any payment required to be made hereunder or under the terms of the Credit Agreement, then at the Holder's option in each instance, such payment shall bear interest from the date due to the date such amount is paid in full at the Default Rate (as hereafter defined). After maturity, whether by reason of acceleration or otherwise, the entire indebtedness under this Bond shall automatically bear interest at the Default Rate. All interest provided for in this provision shall be payable on demand. If an Event of Default with respect to the Bonds shall occur and be continuing, the principal of the Bonds may be declared due and payable in the manner and with the effect provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of Bonds under the Indenture at any time by the Company with the consent of the Holders of a majority in aggregate principal amount of Bonds of all series at the time outstanding affected by such modification. The Indenture also contains provisions permitting the Holders of a majority in principal amount of Bonds at the time Outstanding, on behalf of the Holders of all Bonds to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Bond shall be conclusive and binding upon such Holder and upon all future Holders of this Bond and of any bond issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Bond. No reference herein to the Indenture and no provisions of this Bond or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Bond at the times, places and rates, and in the coin or currency, herein provided. Pursuant to Section 34.20.160 of the Alaska Statutes, notice is hereby given that the Company is personally obligated and fully liable for the amount due under this Bond and the Holder of this Bond has the right to sue on this Bond and obtain a personal judgment against the Company for satisfaction of the amount due hereunder either before or after a judicial foreclosure of the lien of the Indenture under Sections 09.45.170 through 09.45.220 of Alaska Statutes. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Bond is registrable in the Bond Register. Upon surrender of this Bond for registration of transfer at the office or agency of the company in Anchorage, Alaska, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Bond Registrar duly executed by the Holder hereof or the Holder's attorney duly authorized in writing, one or more new Bonds of this series, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Bonds of this series are issuable only in registered form without coupons in denomination of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Bonds of this series are exchangeable for a like aggregate principal amount of Bonds of this series of a different authorized denomination, but of the same maturity and interest rate or interest rate formula, as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Bond for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Bond is registered as the owner hereof for all purposes, whether or not this Bond is overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. As used herein, the term: "Business Day" means any day on which CoBank and the Trustee are open for business. "CoBank" means CoBank, ACB (as successor to National Bank for Cooperatives by virtue of merger). "CoBank Bond" means a First Mortgage Bond, CoBank Series. "Credit Agreement" means that Credit Agreement secured hereby dated as of June 22, 1994, between CoBank and the Company, as the same may be amended from time to time, or such other Credit Agreement as may hereafter exist between CoBank and the Company relating to the issuance of CoBank Bonds. "Default Rate" means 4% per annum in excess of the rate or rates that would otherwise be in effect. "Interest Payment Date" with respect to any CoBank Bond means a Regular Interest Payment Date with respect to such Bond. "Interest Period" means a calendar month. "Maturity Date" with respect to this CoBank Bond means the due date set forth on the face hereof. "Maximum Amount" of CoBank Bonds means Eighty Million Dollars ($80,000,000). "National Variable Rate" shall mean the rate of interest established by CoBank from time to time as its National Variable Rate. The National Variable Rate is intended by CoBank to be a reference rate, and CoBank may charge other borrowers rates at, above, or below that rate. "Principal Payment Date" with respect to this CoBank Bond means each date on which a payment of principal is required to be made on this CoBank Bond pursuant to the amortization schedule set forth on the face hereof. "Redemption Premium" with respect to this CoBank Bond means the premium due upon the redemption or repricing of any portion of this CoBank Bond then subject to a fixed rate of interest calculated by CoBank in accordance with its methodology and equal to the present value of the difference between: (A) the amount of interest which would have accrued on such portion during the remainder of the applicable fixed rate period; less (B) the amount of interest that CoBank would earn if such portion were reinvested for the remaining fixed rate period in U.S. Treasury obligations having a weighted average life approximately equal to the remaining fixed rate period. For the purpose of calculating present value, the discount rate will be the rate of interest accruing on the U.S. Treasury obligations selected in (B) above. "Regular Interest Payment Date" with respect to this CoBank Bond means the 20th day of each calendar month. "Regular Record Date" for the payment of interest on this CoBank Bond payable, and punctually paid or duly provided for, on any Interest Payment Date means the last day (whether or not a Business Day) of the calendar month next preceding such Interest Payment Date. All other capitalized terms used in this Bond shall have the meanings assigned to them in the Indenture. TRUSTEE'S CERTIFICATE OF AUTHENTICATION FOR CoBANK BONDS This is one of the Bonds of the series designated therein referred to in the within-mentioned Indenture. FIRST TRUST WASHINGTON; a national banking association, as Trustee By: /s/ Michael A. Jones Authorized Signatory CERTIFICATE AS TO BONDABLE ADDITIONS NO. 3 (Re Application for Authentication and Delivery of Bond CoBank-3) Pursuant to Section 5.02 of the Indenture of Trust dated as of September 15, 1991 from Chugach Electric Association, Inc. (the "Company") to Security Pacific Bank Washington, N.A., as trustee, as modified and supplemented by Supplemental Indentures No. 1, 2, 3, 4 and 5 thereto dated March 17, 1993, May 19, 1994, June 29, 1994, March 1, 1995, September 6, 1995 and April 4, 1996 respectively (the "Indenture"), and in connection with the Company's request for authentication and delivery of an additional Bond No. CoBank-3, the undersigned hereby make this Certificate of Bondable Additions. Capitalized terms not otherwise defined herein have the meanings assigned to them in the Indenture. (a) The balance of Bondable Additions stated in item 9 of the most recent (August 31, 1995) Summary of Certificate as to Bondable Additions heretofore filed with the Trustee as the balance of Bondable Additions to remain after the action then applied for, is $54,081,666 (item 1 in the Summary of Certificate as to Bondable Additions set forth below (the "Summary")). (b) The Amount (item 2 in the Summary) of Property Additions, not described in any previous Certificate as to Bondable Additions, acquired during the period from July 1, 1995 through December 31, 1995, is $16,851,737. Such Property Additions are described in reasonable detail on Attachment 1 hereto, and: i) have not been included in any previous Certificate as to Bondable Additions; ii) do not include Acquired Facilities or assets acquired and paid for in whole or in part through the transfer or delivery of securities or other property; and iii) are listed in Attachment 1 at Cost, which in the opinion of the undersigned is equal to their Fair Value to the Company. (c) The aggregate amount (item 3 in the Summary) of all Retirements during the period from July 1, 1995, through December 31, 1995, is $10,735,782. (d) There are no credits (item 4 of the Summary) against Retirements. (e) The excess (item 6 in the Summary) of the Amount of Property Additions shown in (b) above (item 2 of the Summary) over the net amount of Retirements (item 5 of the Summary) is $6,115,955, which is the amount of the net Bondable Additions now being certified. (f) The sum (item 7 of the Summary) of the amount shown pursuant to clause (a) above (item 1) and the net amount of Bondable Additions now being certified shown in clause (e) (item 6) above is $60,197,621. (g) The total amount (item 8 in the Summary) of Bondable Additions being used in connection with authentication and delivery of the additional Bond whose authentication and delivery are now being applied for under Section 5.02 of the Indenture is 110% x $3,405,000 = $3,745,500. (h) The balance (item 9 in the Summary) of the Bondable Additions that will remain after the granting of the Application now being made is $56,452,121. (i) With respect to the Property Additions described in this Certificate: i) such Property Additions are desirable in the conduct of the business of the Company; ii) the allocation of the Cost to the Company of such Property Additions to each account is, in the opinion of the undersigned, proper; and iii) the balance of the Bondable Additions to remain after the action applied for plus the Cost to the Company or the Fair Value to the Company, whichever is less, of uncertified Property Additions is at least equal to the aggregate amount of uncertified Retirements. (j) The allowances or charges (if any) for interest, taxes, engineering, legal expenses, superintendence, insurance, casualties and other items during construction (or in connection with the acquisition of Property Additions) which are included in the Cost to the Company of such of the Property Additions described in this Certificate as were constructed or acquired by or for the Company have been charged and are properly chargeable to fixed plant accounts in accordance with Accounting Requirements and are, in the opinion of the signers, proper in respect of the Property Additions specified; (k) No portion of the Cost to the Company of the Property Additions described in this Certificate should properly have been charged to maintenance or repairs and no expenditures are included in this Certificate which under Accounting Requirements are not properly chargeable to fixed plant accounts. (l) The terms used in this Certificate which are defined in the Indenture are used as defined in the Indenture. Summary of Certificate as to Bondable Additions No. 3 The undersigned certify the following to be a true summary of this Certificate: Start with: 1. The balance of Bondable Additions remaining after the action applied for in the previous Certificate (Certificate No. 2).................................................. $54,081,666. Then take the new gross Property Additions as shown in item 2 below: 2. Amount of additional Property Additions now certified, being the Amount of all or some Property Additions in the period from July 1, 1995 thorough December 31, 1995 (none of which has been certified in any previous Certificate as to Bondable Additions).................................................$16,851,737. Then determine the deductions for Retirements by deducting item 4 below from item 3 below to produce item 5: 3. The aggregate amount of all Retirements ..................$10,735,782 4. The sum of the credits against Retirements................................................$ 0. 5. The net amount of Retirements to be deducted...................................................$10,735,782. Then determine the net Bondable Additions now being certified by deducting item 5 from item 2 to produce item 6: 6. Net Bondable Additions now being certified..................................................$ 6,115,955. Then add item 1 and item 6 to produce item 7: 7. Total Bondable additions available for the action applied for.....................................$60,197,621. Deduct item 8 from item 7 to produce item 9: 8. Bondable Additions now being used..........................$ 3,745,500. 9. Balance of Bondable Additions to remain after the action applied for...............................$56,452,121. Dated April 30, 1996 /s/ Michael R. Cunningham Michael R. Cunningham Title: Principal Accounting Officer (Accountant) /s/ Evan J. Griffith, Jr. Evan J. Griffith, Jr. Title: Principal Financial Officer /s/ Eugene N. Bjornstad Eugene N. Bjornstad Title: General Manager (Engineer) CHUGACH ELECTRIC ASSOCIATION, INC. ATTACHMENT 1 TO CERTIFICATE AS TO BONDABLE ADDITIONS NO. 3 NET CHANGES TO ELECTRIC PLANT FOR THE PERIOD JUNE, 1995 THROUGH DECEMBER, 1995 6/30/95 - 6/30/95 - BALANCE 12/31/95 12/31/95 BALANCE ACCOUNT DESCRIPTION 6/30/95 ADDITIONS RETIREMENTS 12/31/95 - ------------------------------------------------------------------------------------------------------------------------- PRODUCTION PLANT 31100 626 00 2101 STM - STRC & IMPR/BELUGA./OTHR/G&A. 6,824,566 524,647 0 7,349,213 31200 626 00 2101 STM - BLR PLT EQP/BELUGA./OTHR/G&A. 20,700,773 4,619,024 (469,093) 24,850,704 31400 626 00 2101 STM - TURBOGENR../BELUGA./OTHR/G&A. 26,044,673 (5,123,854) (204,673) 20,716,146 31500 626 00 2101 STM - ACC ELEC EQ/BELUGA./OTHR/G&A. 6,796,027 136,751 0 6,932,778 31600 626 00 2101 STM -MISC PWR PLT/BELUGA./OTHR/G&A. 567,710 (23,681) 0 544,029 33100 000 00 2101 HYD - STRC & IMPR/GENERAL/OTHR/G&A. 822,725 (132,685) 0 690,040 33200 000 00 2101 HYD - RESV-DM-WW./GENERAL/OTHR/G&A. 5,632,731 50,587 (16,718) 5,666,600 33300 000 00 2101 HYD - WTWL-TR-GN./GENERAL/OTHR/G&A. 947,920 99,482 0 1,047,402 33400 000 00 2101 HYD - ACC ELEC EQ/GENERAL/OTHR/G&A. 688,955 (317,041) 0 371,914 33500 000 00 2101 HYD - MISC PW PLT/GENERAL/OTHR/G&A. 69,530 50,692 (22,516) 97,706 33600 000 00 2101 HYD - RESV-DM-WW./GENERAL/OTHR/G&A. 893,099 0 0 893,099 34000 626 00 2101 OTH - LAND&RIGHTS/BELUGA./OTHR/G&A. 422,664 0 0 422,664 34100 622 00 2101 OTH - STRC & IMPR/INTNATL/OTHR/G&A. 438,868 (35,459) (59,511) 343,898 34100 624 00 2101 OTH - STRC & IMPR/BERNLKE/OTHR/G&A. 1,339,440 439,312 0 1,778,752 34100 626 00 2101 OTH - STRC & IMPR/BELUGA./OTHR/G&A. 21,325,980 (349,048) (139,638) 20,837,294 34200 622 00 2101 OTH - FL HLDR-PRS/INTNATL/OTHR/G&A. 541,096 58,570 (446,798) 152,868 34200 624 00 2101 OTH - FL HLDR-PRS/BERNLKE/OTHR/G&A. 364,153 107,697 0 471,850 34200 626 00 2101 OTH - FL HLDR-PRS/BELUGA./OTHR/G&A. 2,821,550 218,708 0 3,040,258 34300 622 00 2101 OTH - PRIME MOVER/INTNATL/OTHR/G&A. 3,719,794 (61,085) 0 3,658,709 34300 624 00 2101 OTH - PRIME MOVER/BERNLKE/OTHR/G&A. 10,237,381 (468,363) (906,359) 8,862,659 34300 626 00 2101 OTH - PRIME MOVER/BELUGA./OTHR/G&A. 45,972,618 7,334,751 (4,827,865) 48,479,504 34400 622 00 2101 OTH - GENERATORS./INTNATL/OTHR/G&A. 779,742 0 0 779,742 34400 624 00 2101 OTH - GENERATORS./BERNLKE/OTHR/G&A. 2,643,926 0 (27) 2,643,899 34400 626 00 2101 OTH - GENERATORS./BELUGA./OTHR/G&A. 8,966,979 0 (25,236) 8,941,743 34500 622 00 2101 OTH - ACC ELEC EQ/INTNATL/OTHR/G&A. 427,651 61,534 (9,625) 479,560 34500 624 00 2101 OTH - ACC ELEC EQ/BERNLKE/OTHR/G&A. 963,806 (127,103) (52,129) 784,574 34500 626 00 2101 OTH - ACC ELEC EQ/BELUGA./OTHR/G&A. 4,633,322 (972,993) 0 3,660,329 34600 622 00 2101 OTH -MISC PWR PLT/INTNATL/OTHR/G&A. 55,928 (36,463) 0 19,465 34600 624 00 2101 OTH -MISC PWR PLT/BERNLKE/OTHR/G&A. 189,422 (6,532) (181,351) 1,539 34600 626 00 2101 OTH -MISC PWR PLT/BELUGA./OTHR/G&A. 2,045,582 (174,003) (8,764) 1,862,815 ROUNDING 2 (2) 0 0 =========================================================== TOTAL PRODUCTION PLANT 177,878,613 5,873,443 (7,370,303) 176,381,753 =========================================================== TRANSMISSION PLANT 35000 000 00 2101 TRN - LD & LDRITS/GENERAL/OTHR/G&A. 316,165 0 0 316,165 35000 327 00 2101 TRN - LD & LDRITS/SUBTRANS/OTHR/G&A. 0 138,818 0 138,818 35200 000 00 2101 TRN - STRC & IMPR/GENERAL/OTHR/G&A. 692,856 0 0 692,856 35200 626 00 2101 TRN - STRC & IMPR/BELUGA./OTHR/G&A. 428,664 0 0 428,664 35300 000 00 2101 TRN - STATION EQP/GENERAL/OTHR/G&A. 29,464,597 2,399,496 (365,040) 31,499,053 35300 304 00 2101 TRN - STATION EQP/LDSRVMT/OTHR/G&A. 196,977 0 0 196,977 35300 626 00 2101 TRN - STATION EQP/BELUGA./OTHR/G&A. 38,514,764 138,112 (3,847) 38,649,029 35400 000 00 2101 TRN - TWR & FXTRS/GENERAL/OTHR/G&A. 5,378,824 0 0 5,378,824 35400 626 00 2101 TRN - TWR & FXTRS/BELUGA./OTHR/G&A. 26,890,112 0 0 26,890,112 35500 000 00 2101 TRN - POLES & FIX/GENERAL/OTHR/G&A. 8,717,566 73,699 (25,469) 8,765,796 35500 327 00 2101 TRN - POLES & FIX/SUBTRANS/OTHR/G&A. 0 32,060 0 32,060 35500 626 00 2101 TRN - POLES & FIX/BELUGA./OTHR/G&A. 1,074,661 0 0 1,074,661 35600 000 00 2101 TRN -OH CND & DVS/GENERAL/OTHR/G&A. 6,441,826 50,577 (29,858) 6,462,545 35600 327 00 2101 TRN -OH CND & DVS/SUBTRANS/OTHR/G&A. 0 15,750 0 15,750 35600 626 00 2101 TRN -OH CND & DVS/BELUGA./OTHR/G&A. 7,836,678 0 0 7,836,678 35700 000 00 2101 TRN - UG CONDUIT./GENERAL/OTHR/G&A. 562,221 0 0 562,221 35700 327 00 2101 TRN - UG CONDUIT./SUBTRANS/OTHR/G&A. 0 834,898 0 834,898 35700 626 00 2101 TRN - UG CONDUIT./BELUGA./OTHR/G&A. 0 0 0 0 35800 000 00 2101 TRN - UG CND & DV/GENERAL/OTHR/G&A. 3,553,187 0 0 3,553,187 35800 327 00 2101 TRN - UG CND & DV/SUBTRANS/OTHR/G&A. 0 1,464,557 0 1,464,557 35800 626 00 2101 TRN - UG CND & DV/BELUGA./OTHR/G&A. 55,920,512 0 (924,820) 54,995,692 35900 626 00 2101 TRN-RDS & TRL-BLG/BELUGA./OTHR/G&A. 4,000 0 0 4,000 ROUNDING 1 0 0 1 =========================================================== TOTAL TRANSMISSION PLANT 185,993,611 5,147,967 (1,349,034) 189,792,544 =========================================================== DISTRIBUTION PLANT 36000 000 00 2101 DIS - LD & LDRITS/GENERAL/OTHR/G&A. 805,759 0 0 805,759 36100 000 00 2101 DIS - STRUC & IMP/GENERAL/OTHR/G&A. 1,817,354 0 0 1,817,354 36200 000 00 2101 DIS - STATION EQP/GENERAL/OTHR/G&A. 19,035,309 12,391 0 19,047,700 36400 000 00 2101 DIS - POLES-TW&FX/GENERAL/OTHR/G&A. 14,350,648 219,198 (99,860) 14,469,986 36500 000 00 2101 DIS - OH CND & DV/GENERAL/OTHR/G&A. 8,824,734 358,781 (94,731) 9,088,784 36600 000 00 2101 DIS - UG CONDUIT./GENERAL/OTHR/G&A. 5,753,141 1,588,905 (12,932) 7,329,114 36700 000 00 2101 DIS - UG CND & DV/GENERAL/OTHR/G&A. 33,325,539 (1,035,725) (156,578) 32,133,236 36800 000 00 2101 DIS - LINE TRNSFR/GENERAL/OTHR/G&A. 18,344,630 (39,814) (94,483) 18,210,333 36900 000 00 2101 DIS - SERVICES.../GENERAL/OTHR/G&A. 17,826,072 1,385,320 (61,049) 19,150,343 37000 000 00 2101 DIS - METERS...../GENERAL/OTHR/G&A. 5,616,402 1,385,592 (219,365) 6,782,629 37100 000 00 2101 DIS-INSTL CUS PRM/GENERAL/OTHR/G&A. 331,356 0 0 331,356 37300 000 00 2101 DIS-ST LTS & SIGN/GENERAL/OTHR/G&A. 7,970,329 747,016 (650,590) 8,066,755 ROUNDING (2) 2 0 0 =========================================================== TOTAL DISTRIBUTION PLANT 134,001,271 4,621,666 (1,389,588) 137,233,349 =========================================================== GENERAL PLANT 38900 000 00 2101 GEN - LD & LDRITS/GENERAL/OTHR/G&A. 122,063 0 0 122,063 38910 000 00 2101 GEN - LD IMPROVMT/GENERAL/OTHR/G&A. 65,097 0 0 65,097 39000 000 00 2101 GEN - STRC & IMPR/GENERAL/OTHR/G&A. 19,662,641 120,990 (607,977) 19,175,654 39000 310 00 2101 GEN - STRC & IMPR/LSHLDIM/OTHR/G&A. 198,601 0 0 198,601 39000 311 00 2101 GEN - STRC & IMPR/S&VSTRU/OTHR/G&A. 96,438 0 0 96,438 39100 000 00 2101 GEN-OFC FURN & EQ/GENERAL/OTHR/G&A. 1,831,206 27,363 0 1,858,569 39100 321 00 2101 GEN-OFC FURN & EQ/DPEQUIP/OTHR/G&A. 3,728,279 121,146 (18,880) 3,830,545 39200 000 00 2101 GEN - TRANSP EQMT/GENERAL/OTHR/G&A. 4,879,222 121,586 0 5,000,808 39300 000 00 2101 GEN - STORES EQMT/GENERAL/OTHR/G&A. 1,192,579 6,266 0 1,198,845 39400 000 00 2101 GEN -TL-SHP & GAR/GENERAL/OTHR/G&A. 1,222,494 69,461 0 1,291,955 39500 000 00 2101 GEN - LAB EQUIPMT/GENERAL/OTHR/G&A. 1,932,221 69,036 0 2,001,257 39600 000 00 2101 GEN - PWR OP EQMT/GENERAL/OTHR/G&A. 1,280,020 5,965 (35,190) 1,250,795 39600 323 00 2101 GEN - PWR OP EQMT/GENTRAN/OTHR/G&A. 752,114 8,519 0 760,633 39800 000 00 2101 GEN - MISC EQUIPT/GENERAL/OTHR/G&A. 579,479 470,439 (40,382) 1,009,536 39800 340 00 2101 GEN - MISC EQUIPT/BARGE../OTHR/G&A. 0 0 0 0 ROUNDING 1 (1) 0 0 =========================================================== TOTAL GENERAL PLANT 37,542,455 1,020,770 (702,429) 37,860,796 =========================================================== COMMUNICATION PLANT 39700 000 00 2101 GEN - COMM EQUIPT/GENERAL/OTHR/G&A. 2,719,811 12,798 0 2,732,609 39700 330 00 2101 GEN - COMM EQUIPT/MICROWV/OTHR/G&A. 5,758,959 781,602 0 6,540,561 39700 331 00 2101 GEN - COMM EQUIPT/SCADA../OTHR/G&A. 3,012,280 0 0 3,012,280 39700 333 00 2101 GEN - COMM EQUIPT/TELESYS/OTHR/G&A. 305,416 0 0 305,416 39700 338 00 2101 GEN - COMM EQUIPT/ORSCADA/OTHR/G&A. 8,875,262 0 0 8,875,262 ROUNDING (1) 0 0 (1) =========================================================== TOTAL COMMUNICATION PLANT 20,671,727 794,400 0 21,466,127 =========================================================== TOTAL PLANT 556,087,677 17,458,246 (10,811,354) 562,734,569 =========================================================== LESS EXCLUDABLE PLANT 39200 000 00 2101 GEN - TRANSP EQMT/GENERAL/OTHR/G&A. 4,879,223 121,586 0 5,000,809 39600 000 00 2101 GEN - PWR OP EQMT/GENERAL/OTHR/G&A. 1,280,020 5,965 (35,190) 1,250,795 39600 323 00 2101 GEN - PWR OP EQMT/GENTRAN/OTHR/G&A. 752,114 8,519 0 760,633 39800 000 00 2101 GEN - MISC EQUIPT/GENERAL/OTHR/G&A. 579,478 470,439 (40,382) 1,009,535 39800 340 00 2101 GEN - MISC EQUIPT/BARGE../OTHR/G&A. 0 0 0 0 ROUNDING 0 0 0 0 =========================================================== TOTAL EXCLUDABLE PLANT 7,490,835 606,509 (75,572) 8,021,772 =========================================================== TOTAL INCLUDABLE PLANT 548,596,842 16,851,737 (10,735,782) 554,712,797 ===========================================================
Chugach Electric Association, Inc. Available Margins Certificate Eugene N. Bjornstad, General Manager; Evan J. Griffith, Jr., Executive Manager, Finance and Planning (Principal Financial Officer); and Michael R. Cunningham, Controller (Principal Accounting Officer) of Chugach Electric Association, Inc. each hereby certifies that (1) the Margins for Interest for any 12 consecutive calendar months during the period of 18 calendar months immediately preceding the first day of the calendar month in which this application for authentication and delivery of Additional Bonds under Section 5.02 of the Indenture described below is made are not less than 1.20 times the Interest Charges during such 12-month period; (2) the sum of (i) Margins for Interest for any 12 consecutive calendar months during the period of 18 calendar months immediately preceding the first day of the calendar month in which this Application for authentication and delivery of additional Bonds under Section 5.02 is made and (ii) Incremental Interest with respect to such 12- month period, is not less than 1.20 times the sum of Interest Charges during such 12-month period plus Incremental Interest with respect to such 12-month period; and (3) the Margins for Interest have been calculated in accordance with the definition contained in Section 1.01 of that Indenture of Trust dated September 15, 1991 (as heretofore amended by the First, Second, Third, Fourth, Fifth and Sixth Supplemental Indentures, thereto dated March 17, 1993, May 19, 1994, June 29, 1994 and March 1, 1995, September 6, 1995 and April 4, 1996 respectively (the "Indenture") and such calculations are set forth in the Attachment 1 hereto. Capitalized terms used herein shall have the meanings assigned to them in the Indenture. IN WITNESS WHEREOF, we have hereunto signed our names. Dated: April 30, 1996 /s/ Eugene N. Bjornstad /s/ Michael R. Cunningham Eugene N. Bjornstad Michael R. Cunningham Title: General Manager Title: Controller /s/ Evan J. Griffith, Jr. Evan J. Griffith, Jr. Title: Executive Manager, Finance and Planning Principal Financial Officer Long-Term Short-Term Total Margins For Interest 12 Month Month Ending Margins Interest Expense Interest Expense Interest Expense By Interest MFI/I ------------ ------- ---------------- ---------------- ---------------- ----------- ----- September, 1994 467,071 2,152,804 24,593 2,177,397 1.2145 October, 1994 921,985 2,147,613 49,131 2,196,744 1.4197 November, 1994 1,604,449 2,153,394 49,345 2,202,739 1.7284 December, 1994 875,537 2,152,924 47,201 2,200,125 1.3979 January, 1995 2,753,024 2,154,951 43,380 2,198,331 2.2523 February, 1995 2,081,124 2,170,265 20,364 2,190,629 1.9500 March, 1995 1,658,056 2,137,301 60,369 2,197,670 1.7545 April, 1995 969,717 2,124,949 99,714 2,224,663 1.4359 May, 1995 608,466 2,119,671 91,275 2,210,946 1.2752 June, 1995 (709,557) 2,124,722 69,735 2,194,457 0.6767 July, 1995 (432,272) 2,119,441 58,490 2,177,931 0.8015 August, 1995 (343,437) 2,121,479 54,489 2,175,968 0.8422 1.3968 September, 1995 (106,783) 2,188,637 22,082 2,210,719 0.9517 1.3745 October, 1995 629,101 2,185,136 32,438 2,217,574 1.2837 1.3631 November, 1995 1,003,392 2,188,054 26,301 2,214,355 1.4531 1.3402 December, 1995 895,363 1,925,118 33,736 1,958,854 1.4571 1.3441 January, 1996 2,068,780 2,230,499 42,036 2,272,535 1.9103 1.3171 February, 1996 968,678 1,930,124 19,475 1,949,599 1.4969 1.2772 March, 1996 589,008 693,932 124,422 818,354 1.7197 1.2493
Chugach Electric Association, Inc. Officers' Certificate Eugene N. Bjornstad, General Manager, and Evan J. Griffith, Jr., Executive Manager, Finance and Planning of Chugach Electric Association, Inc. ("Chugach") each hereby certifies that: 1) he has read the conditions and covenants and definitions related thereto in the Indenture of Trust dated as of September 15, 1991 (as heretofore amended, the "Trust Indenture"); 2) the below opinions are based on the above review and on his knowledge of Chugach in the above capacity; 3) he has, in his opinion, made such examination or investigation as is necessary to enable him to express an informed opinion as to the opinions expressed below; and 4) in accordance with Section 5.01 B of the Trust Indenture: (i) No Event of Default (as defined in the Trust Indenture) exists; (ii) None of the Trust Estate (as defined in the Trust Indenture) is subject to any Prior Lien other than Prior Liens permitted by Section 14.06 of the Trust Indenture; (iii) In his opinion, all conditions precedent provided for in the Trust Indenture relating to the authentication and delivery of the First Mortgage Bond, CoBank Series No. CoBank-3 (CoBank-3 Bond) in the principal amount of $21,500,000.00, have been complied with; (iv) Pursuant to the Trust Indenture Section 5.03 B., in lieu of delivering Bonds to the Trustee, Chugach has conveyed evidence by facsimiles dated January 19, February 20 and March 11, 1996 of repurchase of Bonds heretofore authenticated and delivered under this Indenture and in transferable form in an aggregate principal amount equal to $18,095,000 (Repurchased Bonds) and has demonstrated thereby that these Repurchased Bonds have been redeemed, retired and have ceased to be outstanding. (v) The Repurchased Bonds being made the basis, in part, for the authentication and delivery of the CoBank-3 Bond do not include: (a) any Bonds which shall have theretofore been made, or are currently being otherwise made, the basis for the authentication and delivery of bonds or the withdrawal or application of Deposited Cash or Trust Moneys; or (b) any Bonds (1) whose payment, redemption or other retirement, or provision therefor, has been effected through the operation of any sinking, amortization, improvement or other analogous fund and (ii) whose use under this Article is at the time precluded by any provision of this Indenture; or Page 1 of 2 (c) any Bond which has been surrendered upon any exchange or transfer or any Bond in lieu of which another Bond has been authenticated and delivered under Section 3.08; or (d) any Bond which, in accordance with the last paragraph of Section 5.01,is treated as though it had never been Outstanding; (vi) at no time after the authentication and delivery of any of the Repurchased Bonds being made the basis for the authentication and delivery of CoBank-3 Bond, has there been filed with the Trustee an Available Margins Certificate in which the annual interest charges on such Bonds were not included. (vii) no Bonds applied for bear interest at a rate greater than any of the Bonds which are being made the basis for the authentication and delivery of CoBank-3 Bond and. IN WITNESS WHEREOF, we have hereunto signed our names. Dated: April 30, 1996 /s/ Eugene N. Bjornstad Eugene N. Bjornstad Title: General Manager /s/ Evan J. Griffith, Jr. Evan J. Griffith, Jr. Title: Executive Manager Finance and Planning Principal Financial Officer Page 2 of 2 EX-4.7 4 SIXTH SUPPLEMENTAL INDENTURE OF TRUST After Recording Return To: Chugach Electric Association, Inc. 5601 Minnesota Drive Post Office Box 196300 Anchorage, Alaska 99519-6300 Attention, Mr. Don Edwards, General Counsel SIXTH SUPPLEMENTAL INDENTURE OF TRUST (Adding Legal Description of Additional Real Property Acquired by the Company to Exhibit A of the Indenture) THIS SIXTH SUPPLEMENTAL INDENTURE OF TRUST, dated as of April 3, 1996, is amendatory and supplemental to that certain Indenture of Trust dated September 15, 1991 (the "Original Indenture"), by and between CHUGACH ELECTRIC ASSOCIATION, INC., an Alaska electric cooperative (the "Company"), and SECURITY PACIFIC BANK WASHINGTON, N.A., a national banking association, recorded September 25, 1991, under the following recording numbers: Recording District Recording Number, Book and Page - ------------------ ------------------------------- Anchorage 91-040327 (Book 2195, Page 178) Kenai 91-7151 (Book 389, Page 637) Palmer 91-011276 (Book 663, Page 167) Seward 91-1051 (Book 62, Page 251) Valdez 91-0738 (Book 114, Page 233) The Original Indenture was amended by that First Supplemental Indenture of Trust dated as of March 17, 1993 ("First Supplemental Indenture"), which was recorded in districts of Anchorage, Kenai, Palmer, Seward and Valdez, Alaska on dates shown under the following recording numbers: Chugach Electric Association, Inc. Page No. 1 Recording Recording Number, Recording District Book and Page Date - -------- ------------- ---- Anchorage 93-014587 (Book 2394, Page 638) March 30, 1993 Kenai 94-3630 (Book 441, Page 841) April 27, 1994 Palmer 94-6629 (Book 763, Page 279) April 26, 1994 Seward 94-562 (Book 72, Page 239) April 29, 1994 Valdez 94-0604 (Book 122, Page 677) April 27, 1994 The purposes of the First Supplemental Indenture were to confirm the Company's intention that certain real property acquired by the Company after the date of the Original Indenture be subjected to the lien of the Indenture, and to confirm the substitution of Seattle-First National Bank (successor by merger to the original Trustee, Security Pacific Bank Washington, N.A.) as Trustee under the Indenture. The Original Indenture was amended by the Second Supplemental Indenture of Trust dated as of May 19, 1994 (the "Second Supplemental Indenture"), which was recorded in districts of Anchorage, Kenai, Palmer, Seward and Valdez, Alaska on dates shown under the following recording numbers: Recording Recording Number, Recording District Book and Page Date - -------- ------------- ---- Anchorage 94-036094 (Book 2656, Page 313) May 23, 1994 Kenai 94-4844 (Book 444, Page 348) May 31, 1994 Palmer 94-008794 (Book 768, Page 219) May 27, 1994 Seward 94-0832 (Book 72, Page 786) June 2, 1994 Valdez 94-0767 (Book 122, Page 967) May 31, 1994 The Second Supplemental Indenture amended Exhibit A to the Original Indenture to include additional real property of the Company not specifically described in the Original Indenture. The Original Indenture was amended by the Third Supplemental Indenture of Trust dated as of June 29, 1994 (the "Third Supplemental Indenture"), which was recorded in districts of Anchorage, Kenai, Palmer, Seward and Valdez, Alaska on dates shown under the following recording numbers: Chugach Electric Association, Inc. Page No. 2 Recording Recording Number, Recording District Book and Page Date - -------- ------------- ---- Anchorage 94-046579 (Book 2678, Page 629) July 11, 1994 Kenai 94-6354 (Book 447, Page 238) July 11, 1994 Palmer 94-011249 (Book 773, Page 460) July 11, 1994 Seward 94-1091 (Book 73, Page 283) July 12, 1994 Valdez 94-0971 (Book 123, Page 269) July 11, 1994 The purpose of the Third Supplemental Indenture was to provide for the creation of a new series of Bonds designated First Mortgage Bonds, CoBank Series and specify the form and provisions of the Bonds of such series. The Original Indenture was amended by the Fourth Supplemental Indenture of Trust dated as of March 1, 1995 (the "Fourth Supplemental Indenture"), which was recorded in districts of Anchorage, Kenai, Palmer, Seward and Valdez, Alaska on dates shown under the following recording numbers: Recording Recording Number, Recording District Book and Page Date - -------- ------------- ---- Anchorage 95-015010 (Book 2772, Page 604) Mar 31, 1995 Kenai 95-0383 (Book 461, Page 299) Apr 10, 1995 Palmer 95-003739 (Book 0800, Page 693) Apr 4, 1995 Seward 95-0392 (Book 76, Page 575) Apr 4, 1995 Valdez 95-0383 (Book 126, Page 214) Apr 10, 1995 The Fourth Supplemental Indenture amended Exhibit A to the Original Indenture to include additional real property of the Company not specifically described in the Original Indenture. The Original Indenture was amended by the Fifth Supplemental Indenture of Trust dated as of September 6, 1995 (the "Fifth Supplemental Indenture"), which was recorded in districts of Anchorage, Kenai, Palmer, Seward and Valdez, Alaska on dates shown under the following recording numbers: Chugach Electric Association, Inc. Page No. 3 Recording Recording Number, Recording District Book and Page Date - -------- ------------- ---- Anchorage 96-006182 (Book 2886, Page 853) Feb 12, 1996 Kenai 96-1826 (Book 480, Page 485) Mar 12, 1996 Palmer 96-003374 (Book 0840, Page 390) Mar 12, 1996 Seward 96-0301 (Book 80, Page 589) Feb 29, 1996 Valdez 96-0158 (Book 128, Page 435) Feb 28, 1996 The purpose of the Fifth Supplemental Indenture was to provide for the creation of a new series of Bonds designated First Mortgage Bonds, Series CFC and specify the form and provisions of the Bonds of such series. The Original Indenture, as amended by the First, Second, Third, Fourth and Fifth Supplemental Indentures, is referred to herein as the "Indenture." The Indenture secures payment of the principal of (and premium, if any) and interest on the Outstanding Secured Bonds (as defined in the Indenture) and the performance of the covenants contained in such Outstanding Secured Bonds and the Indenture. Pursuant to the Indenture, the Company did grant, bargain, sell, alien, remise, release, convey, assign, transfer, mortgage, hypothecate, pledge, set over and confirm to Security Pacific Bank Washington, N.A., as Trustee, all property, rights, privileges and franchises of the Company of every kind and description, real, personal or mixed, tangible and intangible, whether then owned or thereafter acquired by the Company, except any Excepted Property (as defined in the Indenture), and granted a security interest therein for the purposes therein expressed. On June 30, 1995 and December 13, 1995, the Company acquired additional interests in two parcels of real property which real property was not specifically described in Exhibit A to the Indenture, but which interest was intended to be subjected to the lien of the Indenture from and after the date of the Company's acquisition thereof. The purpose of this Sixth Supplemental Indenture is to confirm that the Company's interest in the real property described in Exhibit A attached hereto, including the Company's interest in all Chugach Electric Association, Inc. Page No. 4 improvements thereon and appurtenances thereto, is in all respects subject to the lien of the Indenture in the same manner and to the same extent as if legally described in Exhibit A to the Indenture, and Exhibit A to the Indenture is hereby amended to add the Company's interest in the real property described in Exhibit A attached to this Sixth Supplemental Indenture. CHUGACH ELECTRIC ASSOCIATION, INC., an Alaska electric cooperative By /s/ Eugene N. Bjornstad ----------------------- Title: General Manager SEATTLE-FIRST NATIONAL BANK, a national banking association By /s/ Michael A. Jones -------------------- Title: Assistant Vice President Chugach Electric Association, Inc. Page No. 5 STATE OF ALASKA ) ) ss. THIRD JUDICIAL DISTRICT ) The foregoing instrument was acknowledged before me this 3rd day of April, 1996, by Eugene N. Bjornstad, the General Manager of CHUGACH ELECTRIC ASSOCIATION, INC., an Alaska electric cooperative, on behalf of the cooperative. (Seal) /s/ Dianne Hillemeyer ----------------------------------- Notary Public in and for Alaska My commission expires May 13, 1996 STATE OF WASHINGTON ) ) ss. COUNTY OF KING ) I certify that I know or have satisfactory evidence that Michael A. Jones, is the person who appeared before me, and on oath stated that He was authorized to execute this instrument, and acknowledged it as the Assistant Vice President of FIRST TRUST WASHINGTON, to be a free and voluntary act and deed of said national banking association, for the uses and purposes therein mentioned. Given under my hand and official seal this 22nd day of May, 1996. (Seal) /s/ Linda E. Houston ----------------------------------- NOTARY PUBLIC in and for the State of Washington, residing at King County Washington My appointment expires September 26, 1998 Chugach Electric Association, Inc. Page No. 6 EXHIBIT A (Sixth Supplement Indenture) Lot Twenty (20), Block Three (3), TOWNSITE OF GIRDWOOD, U.S. SURVEY NO. 1177, according to the official plat thereof, filed with the Bureau of Land Management, located in the records of the Anchorage Recording District, Third Judicial District, State of Alaska. and: Lots Twenty-One (21), and Twenty-Two (22), Block Three (3), TOWNSITE OF GIRDWOOD, ALASKA, located in U.S. Survey 1177, records of the Anchorage Recording District, Third Judicial District, State of Alaska. Chugach Electric Association, Inc. Page No. 7 EX-27 5 FDS -- 6/30/96 10-Q CHUGACH ELECTRIC ASSOCIATION
5 6-MOS DEC-31-1996 JAN-1-1996 JUN-30-1996 6,693,302 0 14,257,372 (450,364) 20,101,770 41,982,501 618,356,292 (205,806,594) 477,503,579 32,222,337 307,725,845 0 0 0 104,427,759 477,503,579 $66,342,456 $66,342,456 0 48,515,440 0 0 12,949,507 5,323,143 0 5,323,143 0 0 0 5,323,143 0 0
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