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Patronage Capital
12 Months Ended
Dec. 31, 2012
Patronage Capital [Abstract]  
Patronage Capital

 

(9)    Patronage Capital

 

Chugach has a Board approved capital credit retirement policy, which is contained in Chugach’s Financial For ecast.  This establishes, in general, a plan to return the capital credits of wholesale and retail customers based on the members’ proportionate contribution to Chugach’s assignable margins.  At December 31, 2012, Chugach had $153,832,674 of patronage capital (net of capital credits retired in 2012), which included $148,307,167 of patronage capital that had been assigned and $5,525,507 of patronage capital to be assigned to its members.  Approval of actual capital credit retirements is at the discretion of Chugach's Board.  Chugach records a liability when the retirements are approved by the Board.  During 2008, the Board approved the deferral of capital credit retirements after 2009, excluding discounted capital credits, due to the construction of new generation and the anticipated loss of wholesale load in 2014.  The Second Amended and Restated Indenture of Trust and the CoBank Amended and Restated Master Loan Agreement prohibit Chugach from making any distribution of patronage capital to Chugach’s customers if an event of default under the Second Amended and Restated Indenture of Trust or CoBank Amended and Restated Master Loan Agreement exists.  Otherwise, Chugach may make distributions to Chugach’s members in each year equal to the lesser of 5 percent of Chugach’s patronage capital or 50 percent of assignable margins for the prior fiscal year.  This restriction does not apply if, after the distribution, Chugach’s aggregate equities and margins as of the end of the immediately preceding fiscal quarter are equal to at least 30 percent of Chugach’s total liabilities and equities and margins. 

 

(9)    Patronage Capital (continued)

 

Chugach entered into an agreement with HEA to return all of its patronage capital within five years after expiration of its power sales agreement, which is January 1, 2014.  This patronage capital retirement was related to a settlement agreement associated with the 2005 Test Year General Rate Case (Docket U-06-134).  The RCA accepted the parties’ settlement agreement on August 9, 2007.  HEA’s patronage capital payable was $6.9 million and $6.6 million at December 31, 2012 and 2011, respectively.

 

Capital credits retired were $48,079,  $309,188, and $94,278 for the years ended December 31, 2012, 2011, and 2010, respectively.  There was no outstanding liability for capital credits authorized but not paid at December 31, 2012 and 2011, respectively.