Environmental Matters

6 Months Ended

Jun. 30, 2014

ENVIRONMENTAL MATTERS

The Clean Air Act and Environmental Protection Agency (EPA) regulations under the Clean Air Act establish ambient air quality standards and limit the emission of many air pollutants. New Clean Air Act regulations impacting electric utilities may result from future events or new regulatory programs. On June 2, 2014, the EPA released a proposed regulation aimed at reducing emissions of carbon dioxide (CO₂) from existing power plants that provide electricity for utility customers. In the draft rule, the EPA took the approach of making individual states responsible for the development and implementation of plans to reduce the rate of CO₂ emissions from the power sector. A final rule is expected in June 2015, with State plans due to the EPA in June 2016. Chugach is subject to this proposed regulation, in its current form, and does not expect it to have a material effect on its results of operations, financial position, and cash flows. While Chugach cannot predict the implementation of any additional new law or regulation, or the limitations thereof, it is possible that new laws or regulations could increase capital and operating costs. Chugach has obtained Clean Air Act permits currently required for the operation of generating facilities.

Chugach is subject to numerous other environmental statutes including the Clean Water Act, the Resource Conservation and Recovery Act, the Toxic Substances Control Act, the Endangered Species Act, and the Comprehensive Environmental Response, Compensation and Liability Act and to the regulations implementing these statutes. Chugach does not believe that compliance with these statutes and regulations to date has had a material impact on its financial condition, results of operation or cash flows. However, the implementation of any additional new law or regulation, or the limitations thereof, or changes in or new interpretations of laws or regulations could result in significant additional capital or operating expenses. Chugach follows proposed new regulations and existing regulation changes through industry associations and professional organizations.

- Definition

The entire disclosure for environmental loss contingencies, such as presence of hazardous waste, relevant information from reports issued by regulators, and estimated costs to achieve compliance with regulatory requirements. This element may be used for all of an entity's disclosures about environmental loss contingencies.

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