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Chugach files new gas supply contract

Chugach Electric Association is seeking regulatory approval of a newly negotiated contract for natural gas to help the utility meet a portion of its fuel needs in the coming years.

Chugach reached agreement with Marathon Oil Co. on terms for up to 42.3 billion cubic feet of gas over a 2-4 year period of time. The contract calls for two years of firm supply from April 1, 2011 through March 31, 2013, with the potential to extend the contract through the end of 2013 or 2014. The new Marathon contract could help Chugach meet about half its projected gas requirement in some years.

Chugach uses natural gas from the Cook Inlet Basin to generate about 90 percent of the kilowatt-hours it sells annually. In 2009, Chugach purchased 26 BCF of gas. In addition to generating power for its own retail customers, Chugach is the wholesale power provider for Matanuska Electric Association, Homer Electric Association and the City of Seward. Chugach also sells large amounts of power each year to Golden Valley Electric Association in Fairbanks.

Chugach filed its new contract with the Regulatory Commission of Alaska on April 2, 2010. Chugach requested a ruling from the RCA by Oct. 2, 2010.

For the past 20 years Chugach has purchased natural gas from four separate suppliers. Chugach expects to use the last of that gas early in 2011. Last year the RCA approved a new gas supply contract Chugach negotiated with ConocoPhillips that will meet a portion of the utility's requirement until 2016. If the Marathon contract is approved, it and the ConocoPhillips contract will meet Chugach's fuel supply requirements through at least 2013.

Documents relating to the filing are available at the RCA's Web site.

Chugach is the largest electric utility in Alaska, providing power for Alaskans throughout the Railbelt through retail, wholesale and economy energy sales.

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