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Exhibit 10.39.4

AMENDMENT NUMBER THREE
TO THE
NIKISKI COGENERATION PLANT SYSTEM USE AND DISPATCH AGREEMENT

This AMENDMENT NUMBER THREE is entered into by Homer Electric Association, Inc.
(“HEA”) and Chugach Electric Association, Inc. (“Chugach”) on this 31st day of
July, 2008.

WHEREAS, HEA and Chugach are currently operating under the February 9, 1999,
Nikiski Cogeneration Plant System Use and Dispatch Agreement and the two
amendments thereto (hereinafter collectively referred to as “Dispatch
Agreement”) entered into by Alaska Electric Generation & Transmission, Inc.
(“AEG&T”) and Chugach;

WHEREAS, on or about June 30, 2003, AEG&T transferred to Alaska Electric &
Energy Cooperative, Inc. (“AEEC”), a single member cooperative of which HEA is
the sole member, a substantial portion of AEG&T’s assets including the Nikiski
Cogeneration Plant;

WHEREAS, on or about June 30, 2003, AEEC assumed AEG&T’s obligations under
paragraphs 7.8 (c), 7.9(a), 7.9(b), 7.10 and 9.2(b) of the Dispatch Agreement;

WHEREAS, on or about June 30, 2003, AEG&T assigned all of its rights, interest,
and duties in the Dispatch Agreement to HEA, except as provided above;
 
WHEREAS, the Dispatch Agreement contains an “all requirements” provision which
obligates HEA to purchase its residual energy requirements exclusively from
Chugach;

WHEREAS, in response to considerable member interest in sustainable natural
alternative energy, HEA is in the process of developing and seeking approval
from the Regulatory Commission of Alaska (“Commission”) for a Sustainable
Natural Alternative Power (“SNAP”) Program;
 
WHEREAS, HEA’s SNAP Program will connect members who have developed alternative
energy generation sources with individuals or entities who voluntarily
contribute to the development of alternative energy sources;
 
WHEREAS, under the SNAP Program, HEA will purchase energy generated by “SNAP
Projects” which are member-owned projects producing energy from facilities using
wind, solar, geothermal, biomass, or water resources, with a capacity of 25 kW
or less, and located with HEA’s service territory;
 
 
Amendment Number Three to Dispatch Agreement
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WHEREAS, the “all requirements” provision in Section 7.10 of the Dispatch
Agreement may currently prevent HEA from purchasing energy generated by SNAP
Projects; and
 
WHEREAS, Chugach does not want the Dispatch Agreement to prevent HEA from
proceeding with its SNAP program.
 
NOW THEREFORE, for good and valuable consideration, which is hereby expressly
acknowledged by the parties, Chugach and HEA hereby amend Section 7.10 of the
Dispatch Agreement to read:
 
7.10
Purchase of Power:   In addition to its 350,000 MWh purchase obligation under
the Chugach Wholesale Power Agreement, AEG&T will purchase from Chugach in each
calendar year after the Date of Commercial Operation a quantity of energy (MWh)
equal to HEA’s residual energy (MWh) requirements less the quantity of energy
(MWh) received by AEG&T as HEA’s allocated share under the Bradley Lake
Hydroelectric Project Agreement for the Sale and Purchase of Electric Power and
less the quantity of energy (MWh) generated for AEG&T Use; provided, that the
quantity of energy which AEG&T shall be committed to purchase pursuant to this
provision for its residual energy requirements shall not exceed 320,000 MWh per
year.  AEG&T’s purchase obligation under this provision shall commence on the
Date of Commercial Operation.  Residual energy is that energy used by HEA which
is above the 350,000 MWh purchase obligation under the Chugach Wholesale Power
Agreement but does not include any energy supplied from capacity used to supply
demand in excess of 73 MW on the Chugach system or energy purchased by HEA from
not more than one (1) MW of installed capacity pursuant to its Sustainable
Natural Alternative Power (SNAP) Program.  All other rights and obligations of
the parties under the Chugach Wholesale Power Agreement remain in force,
including the sale and purchase obligation described in Section 3.4 of this
Agreement.

 
IN WITNESS WHEREOF, the parties have executed this Amendment Number Three on the
day and year first written above.
 

CHUGACH ELECTRIC COOPERATIVE, INC.

/s/ Lee D. Thibert (For)
Bradley Evans
CEO

HOMER ELECTRIC ASSOCIATION, INC.

/s/ Bradley P. Janorschke
Bradley P. Janorschke
General Manager
 
 
Amendment Number Three to Dispatch Agreement
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