Regulatory Matters	12 Months Ended
Dec. 31, 2012
Regulatory Matters [Abstract]
Regulatory Matters	(5) Regulatory Matters Modification to Certificate of Public Convenience and Necessity On May 29, 2012, Chugach submitted a request to amend its service area contained within its certificate of public convenience and necessity to include Fire Island and the City of Whittier, and to adjust the service area boundary between Chugach and the City of Seward, d/b/a Seward Electric System in the Moose Pass area where both utilities are currently authorized to provide electric service. Chugach also requested that its service area be modified to include the areas of expansion in which electric service is currently being provided but are not described in Chugach’s certificate, and to include other service areas where potential future customer requests for electric service can be reasonably expected. Chugach also proposed that several sections of its certificate be removed as these areas are well outside of any reasonable likelihood of service requests. On July 9, 2012, the City of Seward submitted comments in support of resolving the boundary area overlap between Chugach and Seward. Seward did not oppose the service area changes proposed by Chugach. A hearing was held on September 4, 2012, in which Chugach made a presentation on the proposed modifications to its service territory and responded to questions from the RCA. On January 25, 2013, the RCA approved Chugach’s request. Petition to Establish Depreciation Rates for SPP Chugach submitted proposed depreciation rates for SPP on February 22, 2012, with a recommended 35 year life for the project. The filing also included depreciation rates for transmission plant specific to the project with a recommended life consistent with the depreciation rates of Chugach’s existing transmission assets. The RCA opened Docket U-12-009 on March 2, 2012, to adjudicate the case. Petitions to intervene were received from the Attorney General (AG), HEA and MEA. No responsive testimony was received from any of the parties. A hearing was held on July 2, 2012. On August 31, 2012, the RCA issued an order in the case, approving depreciation rates for SPP with an effective date equal to its in-service date, requested filing requirements and closed the docket. Seward Power Sales Agreement Effective March 1, 2012, the RCA approved Amendment No. 2 to the 2006 Agreement for the Sale and Purchase of Electric Power and Energy between Chugach and the City of Seward (2006 Agreement). Amendment No. 2 allows Seward to accept power from Small Power Projects on terms that are financially neutral to both Chugach and Seward for wholesale power service provided to Seward, without changing Seward’s status under the 2006 Agreement as a partially interruptible requirements customer of Chugach. In addition, Amendment No. 2 facilitates Seward offering net metering service from eligible on-site generation sources to its retail customers without attendant compensation to Chugach. Chugach and Seward have structured the net metering conditions to be consistent with the net metering regulations adopted by the RCA. (5) Regulatory Matters (continued) Fire Island Wind Project On October 10, 2011, the RCA issued an order approving Chugach’s request for assurance of cost recovery associated with a new power purchase agreement (PPA) between Chugach and Fire Island Wind, LLC (FIW), a special purpose entity wholly-owned by Cook Inlet Region, Inc. The PPA is a 25-year agreement whereby Chugach purchases the output of the facility commencing January 1, 2013. The Fire Island Wind project is comprised of eleven 1.6- megawatt wind turbine generators with a total nameplate capacity of 17.6 megawatts which are expected to generate approximately 50,000 megawatt hours (MWh) per year. The generators are located on the southern part of Fire Island, three miles west of Anchorage, Alaska. Chugach began receiving power from the project on August 17, 2012. An affiliate of FIW is responsible for the construction of the interconnection between the project and Chugach’s transmission system. Chugach is the recipient of a grant in the amount of approximately $25.0 million appropriated from the State of Alaska. The grant was used to offset construction of the transmission line. Construction expenditures applied against the grant were $20.3 million in 2012 and $3.2 million in 2011. Chugach is not expected to incur any unreimbursed capital costs associated with this line and will acquire the line once construction is successfully completed. Chugach submitted a specific rate recovery plan in compliance with U-11-100(5) on April 2, 2012, and project status reports on June 30, 2012 and October 31, 2012. The rate recovery plan addressed customer intergenerational impacts resulting from purchases made under the PPA’s fixed pricing structure. The RCA held a hearing on June 5, 2012, for Chugach to supplement its filing with an oral presentation explaining the rate impacts and equities to ratepayers. As a result of the hearing, Chugach submitted an updated rate recovery proposal on July 31, 2012, requesting that purchases made under the PPA be recovered on a direct cost basis for recovery through the fuel and purchased power surcharge process. Chugach withdrew its April 2, 2012, compliance filing. On September 28, 2012, the RCA opened Docket U-12-134 and issued an order granting Chugach interim approval of its cost disclosure and rate recovery proposals relating to the Fire Island wind project and invited participation from the Attorney General (AG). Chugach and the AG stipulated on key matters of the filing and requested RCA approval in a stipulation submitted to the RCA on November 15, 2012. The RCA held a hearing on January 17, 2013, to review the stipulation, with participation from both Chugach and the AG. On February 12, 2013, the RCA issued Order No. 3 of Docket U-12-134 accepting the stipulation. (5) Regulatory Matters (continued) Regulatory Assets Storm Expenditures On November 8, 2012, Chugach submitted a petition to the RCA requesting authorization to create a regulatory asset for deferred recovery of expenditures associated with extensive storm damage that occurred in September of 2012. Repeated windstorms were followed by considerable amounts of rain, resulting in outages and flooding, primarily caused by falling and uprooted trees. Chugach requested approval to recover in future electric rates over a twelve month period approximately $1.8 million of costs. On November 19, 2012, the RCA opened Docket U-12-144, designated a commission panel and appointed an administrative law judge. The AG submitted comments on December 14, 2012, opposing Chugach’s request. The RCA held a hearing on January 14, 2013. On January 30, 2013, the RCA issued Order No. 3 of Docket U-12-144 and did not accept Chugach’s request, however, the RCA provided Chugach the opportunity to augment the record and re-submit its petition at a later time. Chugach is evaluating the option of supplementing the record and re-submitting its request. Interest and Financing Costs On January 11, 2012, Chugach issued $75.0 million of First Mortgage Bonds (2012 Series A, Tranche A) at an interest rate of 4.01 percent, $125.0 million of First Mortgage Bonds (2012 Series A, Tranche B) at an interest rate of 4.41 percent and $50.0 million of First Mortgage Bonds (2012 Series A, Tranche C) at an interest rate of 4.78 percent. The proceeds of the 2012 Series A Bonds were used to repay outstanding commercial paper and to finance SPP construction. On March 12, 2012, Chugach submitted a petition to the RCA requesting authorization to create a regulatory asset for deferred recovery of interim interest expense associated with SPP financing and also requested approval to recover the financing transaction costs in future electric rates over the life of the 2012 Series A Bonds. Chugach’s request included the approval to defer the interest expense on the portion of the proceeds not immediately expended on SPP and recover it in future electric rates over the life of the bonds, or between 20 and 30 years. The deferral of interest for the portion of the 2012 bonds not immediately expended totaled approximately $1.1 million. The RCA opened Docket U-12-015 on March 21, 2012. On May 22, 2012, Chugach and the AG of the State of Alaska submitted a stipulation whereby the AG did not oppose the regulatory and accounting treatment requested by Chugach. On June 19, 2012, the RCA issued Order No. 2 accepting the stipulation and closing the docket. (5) Regulatory Matters (continued) 2012 General Rate Case In anticipation of commercial operation of SPP, on December 21, 2012, Chugach submitted a general rate case with the RCA to increase system base rate revenues by $30.0 million, or approximately 26 percent on total base rate revenues of $115.0 million. Chugach requested that the proposed rates become effective on an interim and refundable basis beginning in February of 2013. In addition to the base rate increases, the filing requests approval to update and expand Chugach’s operating tariff to include both firm and non-firm transmission wheeling service and attendant ancillary services in support of third-party transactions on the Chugach system. The expansion of the tariff was made, in part, to accommodate wheeling services in anticipation of the expiration of the HEA and MEA wholesale customer contracts in 2014. Because of efficiency improvements associated with the commercial operation of SPP, Chugach also submitted a request in a separate filing to the RCA to adjust its fuel rates effective at the same time as the requested base rate increases contained in the general rate case filing. This allows the interim base rate increases to be synchronized with expected reductions in fuel costs reflected in Chugach’s fuel rates. On February 1, 2013, Chugach submitted a supplemental filing to the RCA removing the impacts associated with a one-year amortization of distribution storm-related costs (see discussion on Storm Expenditures above) from its retail revenue requirement. On February 6, 2013, the Commission opened Docket U-13-007 and issued Order No. 1 approving Chugach’s supplemental filing for rates effective February 6, 2013 on an interim and refundable basis. In addition, the Commission also approved Chugach’s request to assess transmission wheeling charges on economy energy transactions that originate from the Chugach system. In total, when factoring both base rate increases and reductions in fuel costs, the net increase to Chugach retail end-users is approximately 6 percent, while the net increase to retail end-users of Chugach’s wholesale customers is approximately 4 percent to 7 percent. Removal of Margin Cap on Economy Energy Sales On October 31, 2012, Chugach submitted a request to the RCA for approval to remove the current eight mill margin cap on economy energy transactions but retain the requirement that such transactions must fall between Chugach’s incremental and the purchasing utility’s decremental cost of generation. The RCA approved the filing on January 24, 2013. The expected impact of the approval, in combination with the Chugach-GVEA sales arrangement, is additional system margin contributions in excess of $2 million over the upcoming year. Recovery of Qualified Facility Purchases and the Establishment of a Balancing Account On October 31, 2012, Chugach submitted a filing to the RCA requesting approval to include a new cost element in Chugach’s purchased power cost recovery process to recover non-firm energy purchases from Qualified Facilities, and to create a balancing account for use in the development of quarterly buyback rates associated with purchases from Qualified Facilities. On January 30, 2013, the RCA issued a letter order approving the filing. (5) Regulatory Matters (continued) Recovery of Natural Gas Compression Costs Chugach submitted a filing to the RCA on October 31, 2012, requesting approval to add a new cost element in Chugach’s fuel adjustment mechanism to recover charges associated with natural gas compression on the Kenai Nikiski Pipeline needed to allow bidirectional flows on the Cook Inlet Gas Gathering System. The new cost element includes operations and maintenance charges, facility rental charges, fuel and control service charges. On December 7, 2012, the Regulatory Affairs and Public Advocacy Section of the Office of the Attorney General submitted comments opposing Chugach’s request to recover compression costs through the fuel rate adjustment process. Chugach submitted a response on December 13, 2012. The RCA issued a letter order on January 14, 2013, approving Chugach’s request for purchases through July 31, 2013. After July 31, 2013, a separate tariffed rate is expected to be developed by Hilcorp. June 30, 2012 Test Year Simplified Rate Filing On September 28, 2012, Chugach submitted a SRF to the RCA and requested a system demand and energy rate decrease of 1.7 percent, or approximately $1.9 million on an annual basis. The filing was based on the June 30, 2012 test year for proposed rate adjustments effective in November 2012. On a customer class basis, Chugach requested demand and energy rate decreases of 1.7 percent to Chugach retail customers and decreases of 2.1 percent and 1.9 percent to its wholesale customers HEA and MEA, respectively, and a 1.6 percent increase to Seward. The RCA issued a letter order on November 6, 2012, approving the filing. The updated rates were effective on and after November 12, 2012. December 31, 2011 Test Year Simplified Rate Filing On March 30, 2012, Chugach submitted a SRF to the RCA and requested a system demand and energy rate decrease of 0.1 percent, or approximately $0.8 million on an annual basis. The filing was based on the December 31, 2011 test year for proposed rate adjustments effective in May 2012. On a customer class basis, Chugach requested demand and energy rate increases of 1.3 percent to Chugach retail customers and decreases of 2.9 percent to its wholesale classes. The RCA issued a letter order on May 10, 2012, approving the filing. The updated rates were effective on and after May 14, 2012. Economy Energy Sales and Transmission Wheeling Service On April 23, 2012, Chugach submitted a filing to the RCA requesting approval to update its economy energy and transmission wheeling services tariffs to reflect current costs and operating conditions associated with transactions at the bulk power supply level. After public comments and meetings Chugach withdrew the filing and will file updated rates for transmission and related ancillary services in conjunction with its 2012 general rate case.

(5) Regulatory Matters

Modification to Certificate of Public Convenience and Necessity

On May 29, 2012, Chugach submitted a request to amend its service area contained within its certificate of public convenience and necessity to include Fire Island and the City of Whittier, and to adjust the service area boundary between Chugach and the City of Seward, d/b/a Seward Electric

System in the Moose Pass area where both utilities are currently authorized to provide electric service. Chugach also requested that its service area be modified to include the areas of expansion in which electric service is currently being provided but are not described in Chugach’s certificate, and to include other service areas where potential future customer requests for electric service can be reasonably expected. Chugach also proposed that several sections of its certificate be removed as these areas are well outside of any reasonable likelihood of service requests. On July 9, 2012, the City of Seward submitted comments in support of resolving the boundary area overlap between Chugach and Seward. Seward did not oppose the service area changes proposed by Chugach. A hearing was held on September 4, 2012, in which Chugach made a presentation on the proposed modifications to its service territory and responded to questions from the RCA. On January 25, 2013, the RCA approved Chugach’s request.

Petition to Establish Depreciation Rates for SPP

Chugach submitted proposed depreciation rates for SPP on February 22, 2012, with a recommended 35 year life for the project. The filing also included depreciation rates for transmission plant specific to the project with a recommended life consistent with the depreciation rates of Chugach’s existing transmission assets. The RCA opened Docket U-12-009 on March 2, 2012, to adjudicate the case. Petitions to intervene were received from the Attorney General (AG), HEA and MEA. No responsive testimony was received from any of the parties. A hearing was held on July 2, 2012. On August 31, 2012, the RCA issued an order in the case, approving depreciation rates for SPP with an effective date equal to its in-service date, requested filing requirements and closed the docket.

Seward Power Sales Agreement

Effective March 1, 2012, the RCA approved Amendment No. 2 to the 2006 Agreement for the Sale and Purchase of Electric Power and Energy between Chugach and the City of Seward (2006 Agreement). Amendment No. 2 allows Seward to accept power from Small Power Projects on terms that are financially neutral to both Chugach and Seward for wholesale power service provided to Seward, without changing Seward’s status under the 2006 Agreement as a partially interruptible requirements customer of Chugach. In addition, Amendment No. 2 facilitates Seward offering net metering service from eligible on-site generation sources to its retail customers without attendant compensation to Chugach. Chugach and Seward have structured the net metering conditions to be consistent with the net metering regulations adopted by the RCA.

(5) Regulatory Matters (continued)

Fire Island Wind Project

On October 10, 2011, the RCA issued an order approving Chugach’s request for assurance of cost recovery associated with a new power purchase agreement (PPA) between Chugach and Fire Island Wind, LLC (FIW), a special purpose entity wholly-owned by Cook Inlet Region, Inc. The PPA is a 25-year agreement whereby Chugach purchases the output of the facility commencing January 1, 2013. The Fire Island Wind project is comprised of eleven 1.6- megawatt wind turbine generators with a total nameplate capacity of 17.6 megawatts which are expected to generate approximately 50,000 megawatt hours (MWh) per year. The generators are located on the southern part of Fire Island, three miles west of Anchorage, Alaska. Chugach began receiving power from the project on August 17, 2012. An affiliate of FIW is responsible for the construction of the interconnection between the project and Chugach’s transmission system. Chugach is the recipient of a grant in the amount of approximately $25.0 million appropriated from the State of Alaska. The grant was used to offset construction of the transmission line. Construction expenditures applied against the grant were $20.3 million in 2012 and $3.2 million in 2011. Chugach is not expected to incur any unreimbursed capital costs associated with this line and will acquire the line once construction is successfully completed.

Chugach submitted a specific rate recovery plan in compliance with U-11-100(5) on April 2, 2012, and project status reports on June 30, 2012 and October 31, 2012. The rate recovery plan addressed customer intergenerational impacts resulting from purchases made under the PPA’s fixed pricing structure. The RCA held a hearing on June 5, 2012, for Chugach to supplement its filing with an oral presentation explaining the rate impacts and equities to ratepayers. As a result of the hearing, Chugach submitted an updated rate recovery proposal on July 31, 2012, requesting that purchases made under the PPA be recovered on a direct cost basis for recovery through the fuel and purchased power surcharge process. Chugach withdrew its April 2, 2012, compliance filing.

On September 28, 2012, the RCA opened Docket U-12-134 and issued an order granting Chugach interim approval of its cost disclosure and rate recovery proposals relating to the Fire Island wind project and invited participation from the Attorney General (AG). Chugach and the AG stipulated on key matters of the filing and requested RCA approval in a stipulation submitted to the RCA on November 15, 2012. The RCA held a hearing on January 17, 2013, to review the stipulation, with participation from both Chugach and the AG. On February 12, 2013, the RCA issued Order No. 3 of Docket U-12-134 accepting the stipulation.

(5) Regulatory Matters (continued)

Regulatory Assets

Storm Expenditures

On November 8, 2012, Chugach submitted a petition to the RCA requesting authorization to create a regulatory asset for deferred recovery of expenditures associated with extensive storm damage that occurred in September of 2012. Repeated windstorms were followed by considerable amounts of rain, resulting in outages and flooding, primarily caused by falling and uprooted trees. Chugach requested approval to recover in future electric rates over a twelve month period approximately $1.8 million of costs. On November 19, 2012, the RCA opened Docket U-12-144, designated a commission panel and appointed an administrative law judge. The AG submitted comments on December 14, 2012, opposing Chugach’s request. The RCA held a hearing on January 14, 2013. On January 30, 2013, the RCA issued Order No. 3 of Docket U-12-144 and did not accept Chugach’s request, however, the RCA provided Chugach the opportunity to augment the record and re-submit its petition at a later time. Chugach is evaluating the option of supplementing the record and re-submitting its request.

Interest and Financing Costs

On January 11, 2012, Chugach issued $75.0 million of First Mortgage Bonds (2012 Series A, Tranche A) at an interest rate of 4.01 percent, $125.0 million of First Mortgage Bonds (2012 Series A, Tranche B) at an interest rate of 4.41 percent and $50.0 million of First Mortgage Bonds (2012

Series A, Tranche C) at an interest rate of 4.78 percent. The proceeds of the 2012 Series A Bonds were used to repay outstanding commercial paper and to finance SPP construction.

On March 12, 2012, Chugach submitted a petition to the RCA requesting authorization to create a regulatory asset for deferred recovery of interim interest expense associated with SPP financing and also requested approval to recover the financing transaction costs in future electric rates over the life of the 2012 Series A Bonds. Chugach’s request included the approval to defer the interest expense on the portion of the proceeds not immediately expended on SPP and recover it in future electric rates over the life of the bonds, or between 20 and 30 years. The deferral of interest for the portion of the 2012 bonds not immediately expended totaled approximately $1.1 million. The RCA opened Docket U-12-015 on March 21, 2012. On May 22, 2012, Chugach and the AG of the State of Alaska submitted a stipulation whereby the AG did not oppose the regulatory and accounting treatment requested by Chugach. On June 19, 2012, the RCA issued Order No. 2 accepting the stipulation and closing the docket.

(5) Regulatory Matters (continued)

2012 General Rate Case

In anticipation of commercial operation of SPP, on December 21, 2012, Chugach submitted a general rate case with the RCA to increase system base rate revenues by $30.0 million, or approximately 26 percent on total base rate revenues of $115.0 million. Chugach requested that the proposed rates become effective on an interim and refundable basis beginning in February of 2013. In addition to the base rate increases, the filing requests approval to update and expand Chugach’s operating tariff to include both firm and non-firm transmission wheeling service and attendant ancillary services in support of third-party transactions on the Chugach system. The expansion of the tariff was made, in part, to accommodate wheeling services in anticipation of the expiration of the HEA and MEA wholesale customer contracts in 2014. Because of efficiency improvements associated with the commercial operation of SPP, Chugach also submitted a request in a separate filing to the RCA to adjust its fuel rates effective at the same time as the requested base rate increases contained in the general rate case filing. This allows the interim base rate increases to be synchronized with expected reductions in fuel costs reflected in Chugach’s fuel rates.

On February 1, 2013, Chugach submitted a supplemental filing to the RCA removing the impacts associated with a one-year amortization of distribution storm-related costs (see discussion on Storm Expenditures above) from its retail revenue requirement. On February 6, 2013, the Commission opened Docket U-13-007 and issued Order No. 1 approving Chugach’s supplemental filing for rates effective February 6, 2013 on an interim and refundable basis. In addition, the Commission also approved Chugach’s request to assess transmission wheeling charges on economy energy transactions that originate from the Chugach system.

In total, when factoring both base rate increases and reductions in fuel costs, the net increase to Chugach retail end-users is approximately 6 percent, while the net increase to retail end-users of Chugach’s wholesale customers is approximately 4 percent to 7 percent.

Removal of Margin Cap on Economy Energy Sales

On October 31, 2012, Chugach submitted a request to the RCA for approval to remove the current eight mill margin cap on economy energy transactions but retain the requirement that such transactions must fall between Chugach’s incremental and the purchasing utility’s decremental cost of generation. The RCA approved the filing on January 24, 2013. The expected impact of the approval, in combination with the Chugach-GVEA sales arrangement, is additional system margin contributions in excess of $2 million over the upcoming year.

Recovery of Qualified Facility Purchases and the Establishment of a Balancing Account

On October 31, 2012, Chugach submitted a filing to the RCA requesting approval to include a new cost element in Chugach’s purchased power cost recovery process to recover non-firm energy purchases from Qualified Facilities, and to create a balancing account for use in the development of quarterly buyback rates associated with purchases from Qualified Facilities. On January 30, 2013, the RCA issued a letter order approving the filing.

(5) Regulatory Matters (continued)

Recovery of Natural Gas Compression Costs

Chugach submitted a filing to the RCA on October 31, 2012, requesting approval to add a new cost element in Chugach’s fuel adjustment mechanism to recover charges associated with natural gas compression on the Kenai Nikiski Pipeline needed to allow bidirectional flows on the Cook Inlet Gas Gathering System. The new cost element includes operations and maintenance charges, facility rental charges, fuel and control service charges.

On December 7, 2012, the Regulatory Affairs and Public Advocacy Section of the Office of the Attorney General submitted comments opposing Chugach’s request to recover compression costs through the fuel rate adjustment process. Chugach submitted a response on December 13, 2012. The RCA issued a letter order on January 14, 2013, approving Chugach’s request for purchases through July 31, 2013. After July 31, 2013, a separate tariffed rate is expected to be developed by Hilcorp.

June 30, 2012 Test Year Simplified Rate Filing

On September 28, 2012, Chugach submitted a SRF to the RCA and requested a system demand and energy rate decrease of 1.7 percent, or approximately $1.9 million on an annual basis. The filing was based on the June 30, 2012 test year for proposed rate adjustments effective in November 2012. On a customer class basis, Chugach requested demand and energy rate decreases of 1.7 percent to

Chugach retail customers and decreases of 2.1 percent and 1.9 percent to its wholesale customers HEA and MEA, respectively, and a 1.6 percent increase to Seward. The RCA issued a letter order on November 6, 2012, approving the filing. The updated rates were effective on and after November 12, 2012.

December 31, 2011 Test Year Simplified Rate Filing

On March 30, 2012, Chugach submitted a SRF to the RCA and requested a system demand and energy rate decrease of 0.1 percent, or approximately $0.8 million on an annual basis. The filing was based on the December 31, 2011 test year for proposed rate adjustments effective in May 2012. On a customer class basis, Chugach requested demand and energy rate increases of 1.3 percent to Chugach retail customers and decreases of 2.9 percent to its wholesale classes. The RCA issued a letter order on May 10, 2012, approving the filing. The updated rates were effective on and after May 14, 2012.

Economy Energy Sales and Transmission Wheeling Service

On April 23, 2012, Chugach submitted a filing to the RCA requesting approval to update its economy energy and transmission wheeling services tariffs to reflect current costs and operating conditions associated with transactions at the bulk power supply level. After public comments and meetings Chugach withdrew the filing and will file updated rates for transmission and related ancillary services in conjunction with its 2012 general rate case.