AMENDMENT NO. 1
                                       TO
                 NATIONAL BANK FOR COOPERATIVES CREDIT AGREEMENT


         This Amendment No. 1 to National Bank for Cooperatives Credit Agreement
dated as of June 1, 1997, is by and between CHUGACH ELECTRIC ASSOCIATION,  INC.,
an Alaska electric cooperative (the "Company"),  and CoBank, ACB ("CoBank"). The
Company and CoBank (successor to the National Bank for Cooperatives by virtue of
merger) are parties to that  National  Bank for  Cooperatives  Credit  Agreement
dated as of June 22, 1994 (the "Credit Agreement"), pursuant to which CoBank (or
its  predecessor)  has made,  and intends to  continue to make,  advances to the
Company  in  consideration  of the  issuance  by the  Company  to  CoBank of the
Company's First Mortgage Bonds, CoBank Series ("CoBank Bonds"). The parties wish
to amend the Credit Agreement to eliminate the maximum principal amount that may
be advanced by CoBank to the Company thereunder.

         The Company and CoBank therefore agree as follows:

     A. Removal of Maximum Amount.  Section 1 of the Credit  Agreement is hereby
amended  by  deleting  the  phrase  "in  the  principal  amount  not  to  exceed
$80,000,000 (the "Maximum Amount") at any one time outstanding."

     B. Covenant to Disclose.  CoBank hereby covenants to Chugach that, prior to
its  negotiation  or other  transfer of any of the CoBank Bonds issued to CoBank
prior to the date hereof,  it shall notify the proposed  holder or transferee in
writing that,  notwithstanding  the statement on the reverse side of such CoBank
Bonds to the effect that the aggregate  principal  amount of the CoBank Bonds at
any time  outstanding is limited to $80,000,000,  such limitation on the maximum
aggregate  principal amount of the CoBank Bonds at any time outstanding has been
removed by this  Amendment  No. 1 and by the Seventh  Supplemental  Indenture of
Trust dated as of the date hereof.

     C.  Ratification.  Except as expressly amended by this Amendment No. 1, the
Credit  Agreement is in all respects  ratified and  confirmed and all the terms,
provisions  and  conditions  of the  Indenture  shall  remain in full  force and
effect,  and this  Amendment  No. 1 shall be deemed  to be a part of the  Credit
Agreement.

                                        1

<PAGE>



     D.  Counterparts.  This  Amendment  No. 1 may be  executed in any number of
counterparts,  each of such counterparts  shall for all purposes be deemed to be
an original, and all such counterparts shall together constitute but one and the
same instrument.


Company:                                    CHUGACH ELECTRIC ASSOCIATION, INC.,
                                            an Alaska electric cooperative


                                            By       /s/ Eugene N. Bjornstad
                                               Title: General Manager




CoBank:                                     CoBank, ACB,
                                            a _____________________________


                                            By       /s/ John B. McFarlane
                                                 Title:   Vice President


                                        2

<PAGE>