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CHUGACH ELECTRIC REFORMS IN PROGRESS AND NEEDED!

Chugach Consumers
Mar. 23, 2006

March 13, 2006
Continue the Reform
Dave Ausman & Ray Kreig
for Chugach Electric Board of Directors
Independent, Non-Special interest candidates

Issues Statement Release #2

Chugach Consumers is an organization of fiscally concerned ratepayers that supports safe, reliable, LOW COST power for South Central Alaska. We believe that board members must be independent of special interest groups and support running the utilities in a business like manner. Over the past ten years, we have worked on voter education, issue analysis and endorsement of candidates who promote safe and reliable power with greater efficiency, at a cost no higher than necessary.

Last year Chugach Consumers endorsed three reform candidates, Alan Christopherson, Uwe Kalenka and Liz Vazquez, who each won positions on the Chugach Board. This reform minded Board is moving down the right track. Help continue the positive changes begun by the new Reform Board: Re-elect Ray Kreig and replace Jeff Lipscomb with a real reformer, Dave Ausman.

How can the Chugach Electric Association Board lower costs?

Chugach Consumers recognizes that the Board cannot control increasing fuel costs in the short term. However, there are four primary areas that the Reform Board can and has begun in its first six months1 to act on, Operating Expenses, Capital Construction Costs, Energy Conservation and wise Future Planning.

Operating Expenses:
Every controllable dollar spent at CEA must be scrutinized to ensure the organization is not over spending and is always acting in the ratepayer's best interest. The Board must look at long-term future expenditures as well as the day-to-day operations.

Big dollars:
Negotiating Contracts - Under previous Board leadership, contract extensions without negotiation were the norm. The Reform Board changed labor attorneys and will not extend contracts without negotiations. Potential savings from removing wasteful featherbedding and modernizing these contracts are in the $multimillion range. Budget Reduction - For the first time in years, the new Reform Board cut a CEA budget. The 2005 budget was reduced by $1.5 million, which met stiff resistance from Board member Jeff Lipscomb. The 2006 budget was set $2.5 million below that level. Neither reduction affects safety and reliability standards. Decisions saving $4,000,000 in just the first six months of the Reform Board! And the Reform Board is convinced more savings can be found!

And little dollars:
Travel Freeze - Previous Boards authorized Board members and employees to travel without question even to foreign countries. Under the Reformers, only essential travel is permitted. Lavish Board Meals Eliminated - Under previous Board leadership, Board members fed on lavish spreads of "theme of the month" gourmet meals with decorated walls. Under the reformers, Board members now eat soup and sandwiches without the Sombreros. Plus staff can attend to more important matters than ensuring Board food does not get cold. Leadership starts at the top and the Reform Board is setting a new tone, leading by example. Reform minded directors, led by Chairman Alan Christopherson, are putting their money where their mouth is. This is just the start, but finally the Board is awake and taking action.

Capital Construction Costs:
A healthy infrastructure is crucial to power reliability, but building without accountability will not help ratepayers lower their costs.
Joining Efforts with Neighboring Utilities - A healthy working relationship with all Alaskan utilities is critical. Joint efforts save time, people and dollars resulting in lower cost, safe and reliable power. In its first six months, the Reform Board has decisively broken through these barriers to reduce institutional animosity. Already there is unprecedented cooperation gaining notice and recognition in Juneau. Is it sensible ever to wage war on your biggest customers? Or do you talk to them? The Reform Board says let's talk and then take responsible action!

Future Generation:
The Reform Board will not lose sight of the future needs of our growing community. In this age of uncertainty, responses to emergencies from a terror attack to natural disasters must be evaluated. Technology has allowed for highly efficient generators that create power with less fuel and for innovation that allows longer service periods before maintenance. With limited dollars the Board is deciding what actions will result in cost savings not just feel good politics. New Fuel Supply - Recently South-central Alaskans have heard fears that Cook Inlet gas supplies will run out and power brownouts could occur. Your Reform Board will not let that happen! Working with staff, fuel supply is being stabilized and new fuel supply options are being considered. The Reform Board does not plan to allow CEA to become hostage to limited energy supply in an energy rich state.

Renewable Energy Sources:
A thorough evaluation of wind, tidal, geothermal, coal, and hydro energy sources is necessary to ensure they provide low cost alternatives to natural gas power generation. The Reform Board understands that the answer may require more than one or combinations of alternative energy solutions and timing with technology advances. The Board is currently working with staff to evaluate the economic viability of wind generation, and they will do the same for other alternatives. The Reformers have pledged not to take any action until the full financial impact to Chugach Electric ratepayers is understood. Energy Conservation

As fuel costs increase, the new Reform Board strongly feels that Chugach should extend better outreach with energy conservation information and programs to help consumers lower their overall costs without sacrificing their comfort or standard of living. Previous Board leadership did nothing to help. Recent achievements under the Reform Board:

Revamped and enhanced energy conservation website completed with the assistance of local experts:
www.chugachelectric.com/energy.html
Monthly Energy Saving Tips in the Outlet newsletter with your bill.
Future Planning

A culture change on how money is spent at the co-op combined with a new approach to wise future planning by an energized staff will realize big savings at Chugach for you!

CONTINUE THE POSITIVE CHANGES BEGUN BY THE NEW REFORM BOARD

To get elected, it's traditional for those who undermine and resist reforms at Chugach Electric to claim to be "Independent" and "Not Beholden to any Special Interest".

How do you know who is the real deal, a genuine reformer?

In the ballot pamphlet candidate statements look for the well known smiling light bulb logo of Chugach Consumers. Also look for: ENDORSED BY CHUGACH CONSUMERS


MORE INFORMATION

Do something for yourself and your family's financial future. Let your friends, neighbors, and coworkers know how important the Chugach elections are. Vote your Chugach ballot when it arrives March 27! Chugach Electric Association is owned by you--please protect your investment and participate. Do not wait for others to look after your best interests. Take part and vote your mailed ballot. Visit www.ChugachConsumers.org for more information.

NOTE 1 - The Reform Board has had a majority only after the 7/27/05 appointment of Ray Kreig. Before then the Board was deadlocked at 3-3.

Chugach Consumers is a grassroots group of fiscally-concerned Chugach Electric ratepayers that supports safe, reliable, LOW COST power for South Central Alaska.

Please send comments or questions to Chugach Consumers

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