Description Of Business

3 Months Ended

Mar. 31, 2013

Description Of Business [Abstract]

Description Of Business

2.   DESCRIPTION OF BUSINESS

Chugach is the largest electric utility in Alaska.  Chugach is engaged in the generation, transmission and distribution of electricity to directly serve retail customers in the Anchorage and upper Kenai Peninsula areas.  Through an interconnected regional electrical system, Chugach’s power flows throughout Alaska’s Railbelt, a 400-mile-long area stretching from the coastline of the southern Kenai Peninsula to the interior of the state, including Alaska’s largest cities, Anchorage and Fairbanks.

Chugach also supplies much of the power requirements for three wholesale customers, Matanuska Electric Association, Inc. (MEA), Homer Electric Association, Inc. (HEA), and the City of Seward (Seward).  We sell available generation in excess of our own needs to produce electric energy for sale to Golden Valley Electric Association, Inc. (GVEA).  In addition, on a periodic basis, we provide electricity to Anchorage Municipal Light & Power (ML&P).  Chugach’s retail and wholesale members are the consumers of the electricity sold.

Chugach was organized as an Alaska electric cooperative in 1948 and operates on a not‑for‑profit basis and, accordingly, seeks only to generate revenues sufficient to pay operating and maintenance costs, the cost of purchased power, capital expenditures, depreciation, and principal and interest on all indebtedness and to provide for reserves.  Chugach is subject to the regulatory authority of the Regulatory Commission of Alaska (RCA).

Chugach has three Collective Bargaining Unit Agreements (CBA’s), representing approximately 70 percent of its workforce.  Chugach successfully reached agreement with all three International Brotherhood of Electrical Workers (IBEW) bargaining units renewing the CBA’s through June 30, 2017.  After employee ratification, two of the IBEW CBA’s were accepted by the Board of Directors (Board) on March 27, 2013.  A third IBEW CBA was ratified by employees and accepted by the Board on April 24, 2013.  The three CBA extensions provide for wage increases in all years and include health and welfare premium cost sharing provisions.