CONFIRMATION FOR U.S. DOLLAR TREASURY RATE-LOCK TRANSACTION TO BE
                 SUBJECT TO 1992 MASTER AGREEMENT  

TO:               Chugach Electric Association, Inc.
                  5601 Minnesota Drive
                  Anchorage, AK 99519-6300

ATTN:             Evan J. Griffith, Jr.
FAX:              (907) 762-4514

FROM:             Lehman Brothers Financial Products Inc.
                  (the "Treasury Rate-Lock Provider")
 
DATE:             March 17, 1999

Our Reference No. _________________

The purpose of this letter  agreement is to confirm the terms and  conditions 
of the treasury rate lock transaction  ("Treasury  Rate Lock  Transaction")  
entered  into  between us on the Trade  Date  specified below.  
This letter  agreement  constitutes a  "Confirmation"  as referred to in the 
1992 Master Agreement specified below.

1.       The  definitions  and  provisions  contained  in the 1991 ISDA  
Definitions  as  published by the  International  Swaps and Derivatives  
Association,  Inc. (the  "Definitions")  are incorporated  into this
Confirmation.  In the event of any  inconsistency  between the  Definitions  
and this  Confirmation,  this Confirmation  will  govern.  Each  party  
represents  and  warrants  to the  other  that  (i)  it is  duly authorized to 
enter into this  Treasury Rate Lock  Transaction  and to perform its  
obligations  hereunderand (ii) the person executing this Confirmation is duly 
authorized to execute and deliver it.

2.       This  Confirmation  supplements,  forms  part of, and is subject  to, 
the 1992  Master  Agreement dated as of March 17, 1999 (including the related 
Schedule thereto (the "Schedule")) as amended and supplemented  from  time  to  
time  (the  "Agreement"),   between  Chugach  Electric   Association,   Inc.
("Counterparty")  and the  undersigned  Treasury  Rate-Lock  Provider.  
All  provisions  contained  in the Agreement shall govern this Confirmation 
except as expressly modified below.

The terms of the Treasury Rate-Lock Transaction to which this Confirmation 
relates are as follows:


Notional Amount:           10 year U.S. Treasury: $196,000,000
                           30 year U.S. Treasury: $18,700,000

Trade Date:                March 17, 1999

Relavant Time:             If the Transaction terminates on February 13, 2002, 
                           the "Relevant Time" will be 1:00 PM New York Time.

Base Treasury
Securities:                As of the  Determination  Date,  the  then  current  
                           10 year  and 30 year  U.S.Treasury Bond

Base Treasury
Rates:                     For each Base  Treasury  Security:  the yield to 
                           maturity of such Base Treasury Security  on the  
                           Determination  Date  (at the  Relevant  Time) as 
                           shown on the Bloomberg  Yield  Analysis page 
                           (street  convention)  If this page is no longer
                           available,  then the Telerate 500 (offer price) on 
                           the  Determination  Date and at the Relevant Time 
                           shall be used.

Dollar Value of
an .01:
("DVBP")                   As of the  Determination  Date,  the  change  in the 
                           U.S.  dollar  price of one million  dollars of the 
                           Base Treasury  Securities  underlying the Treasury 
                           Lock Transaction  given a one basis point (.01%) 
                           change in their  respective  yields to  maturity,  
                           determined  separately  for each  Base  Treasury 
                           Security.  The dollar amount per one million face 
                           value will be determined by multiplying  the relevant
                           Dollar  Value  of  an  .01  field  on  Bloomberg  
                           Financial  Market's Government Yield Analysis Page on
                           the  Determination  Date at the Relevant Time
                           by 10,000.  If no Dollar Value of an .01 for the Base
                           Treasury  Securities  is available on the Bloomberg  
                           Financial  Market's  Government Yield Analysis Page
                           (for  either  (or both)  Base  Treasury  Securities),
                           the  Treasury  Rate-Lock Provider  shall  determine  
                           the Dollar  Value of an .01 for the  affected  Base
                           Treasury Security (ies) on the  Determination  Date 
                           and at the Relevant Time on a basis  consistent  with
                           the  manner in which it would  determine  the  Dollar
                           Value of an .01 for a transaction in which it held no
                           financial interest.

Determination
Date:                      On or before (as  determined by Chugach  Electric  
                           Association,  Inc.) February 13, 2002.

Locked-In Treasury
Rates:                     10 year: 5.653%
                           30 year:  5.838%


Early
Termination:               This  agreement  shall be subject  to early  
                           termination  (other  than upon the occurrence  of an 
                           Early  Termination  Date under  Section 6 of the ISDA
                           Master Agreement) only at the option of Chugach  
                           Electric  Association,  Inc., upon at least one New 
                           York Banking Day's notice.  Any notice of termination
                           sent after 5:00 PM New York Time shall be deemed to 
                           have been sent on the next  succeeding New York
                           Banking Day.

New York
Banking Day:               Any day other than a Saturday,  a Sunday or a day on 
                           which  commercial banks in New York City are required
                           or authorized to be closed.

Payment Date:              The first New York Banking Day 30 days after the 
                           Determination  Date (or, if an Early  Termination  
                           Event occurs,  the date provided in Section 6(d)(ii) 
                           of the Agreement).

Adjustment
Amount:                    If the  Determination  Date is February 13, 2002, the
                           Adjustment Amount will be determined as follows:

                           1)  multiply (a) the DVBP for 10 year Treasury  
                               Bonds,  times (b) the Notional Amount  applicable
                               to 10 year  Treasury  Bonds  (expressed  in 
                               millions of dollars),  times (c) the  difference 
                               in basis points of yield  between the relevant 
                               Base Treasury  Rate and  Locked-In  Treasury Rate
                               (expressed as a positive  number if the relevant 
                               Base  Treasury  Rate exceeds the relevant
                               Locked-In Treasury Rate and as a negative number 
                               otherwise);

                           2)  multiply (a) the DVBP for 30 year Treasury  
                               Bonds,  times (b) the Notional Amount  applicable
                               to 30 year  Treasury  Bonds  (expressed  in 
                               millions of dollars),  times (c) the  difference 
                               in basis points of yield  between the relevant 
                               Base Treasury  Rate and  Locked-In  Treasury Rate
                               (expressed as a positive  number if the relevant 
                               Base  Treasury  Rate exceeds the relevant
                               Locked-In Treasury Rate and as a negative number 
                               otherwise); and
 
                           3)   add the results of the preceding calculations.

                           If the total is a negative  number,  the  absolute  
                           value of that number is the Adjustment  Amount,  and 
                           shall be paid by Chugach to the  Counterparty.  If 
                           the total is a positive number,  that number is the
                           Adjustment Amount, and shall be paid by the  
                           Counterparty  to  Chugach.  If the total is zero, 
                           then no payment shall be made by or to any party.

                           If the Determination  Date is any date before 
                           February 13, 2002 (for any reason whatsoever),  the 
                           Adjustment Amount shall be determined in accordance 
                           with Part 4(d) of the Schedule.

Payment of Adjustment
Amount:                    Payment of the Adjustment Amount will be made on the 
                           Payment Date.

Assignment:                No assignment  without the prior  written  consent of
                           the other party except as permitted by Section 7 of 
                           the ISDA Master  Agreement  and except as provided in
                           the Schedule under the heading "Credit Assignment
                           Event".

Governing Law:             New York.


Payment Instructions:

         Chugach Electric Association, Inc.:as from time to time provided in 
                                       writing by Chugach Electric
                                       Association, Inc.

         Treasury Rate-Lock Provider:       as from time to time provided in 
                                            writing by the Treasury Rate-
                                            Lock Provider.

Placement Fee:             Each of Chugach Electric Association, Inc. and the
                           Treasury Rate-Lock Provider acknowledges that the
                           Treasury Rate-Lock Provider is paying Feld Winters a 
                           fee of $1,386,116.00 in connection with the parties'
                           entry into the Treasury Rate-Lock Transaction
 
Each of the parties represents to the other as follows:

      Its entry  into the  Treasury  Rate-Lock  Transaction  has been  duly  
      authorized  by all  necessary corporate  action and does not  violate any
      law  applicable  to it or the terms of any  agreement to which it is a
      party;

      It is not  relying on the other party in  connection  with its  decision 
      to enter into the  Treasury Rate-Lock  Transaction;  and the other  party
      is not  acting as an advisor  to or  fiduciary  of such party in 
      connection with the Treasury  Rate-Lock  Transaction,  regardless of 
      whether the other party has  provided,  or provides,  it with market 
      information  or the other party's views with respect to any aspect of the 
      Treasury Rate-Lock Transaction;

      It understands  the risks of the Treasury  Rate-Lock  Transaction  and any
      legal,  regulatory,  tax, accounting and economic consequences resulting 
      therefrom;

      It has  determined,  based upon its own judgment and upon any advice 
      received  from such of its own professional  advisors  as it has  deemed  
      necessary  to  consult  in  connection  with the  Treasury Rate-Lock  
      Transaction,  that entering into the Treasury Rate-Lock  Transaction is 
      appropriate for it in light of its financial capabilities and objectives; 
     and

      This  Confirmation,  when executed and delivered by such party,  will 
      constitute a legal,  valid and binding  obligation of such party,  
      enforceable in accordance  with its terms,  subject to applicable
      bankruptcy,  reorganization,  insolvency,  moratorium  or similar laws  
      affecting  creditors'  rights generally  and  subject,  as to  
      enforceability,  to  equitable  principles  of  general  application
      (regardless of whether enforcement is sought in a proceeding in equity or 
      at law).

 
Please  confirm that the foregoing  correctly  sets forth the terms and  
conditions  of our agreement by responding  within three (3) Business  Days by  
returning  via  telecopier  an executed  copy of this  Confirmation  to the  
attention of Sean Largotta.

Failure to respond within such period shall not affect the validity or 
enforceability  of this letter agreement,  and shall be deemed to be an 
affirmation of the terms and conditions contained herein, absent manifest error.

Yours Sincerely,


LEHMAN BROTHERS FINANCIAL PRODUCTS INC.

By: /s/Sherri Venokur

Authorized Signatory

Confirmed as of the date first written above:


CHUGACH ELECTRIC ASSOCIATION, INC.


By:/s/ Evan J. Griffith, Jr.                                
         Evan J. Griffith, Jr.
         Authorized Signatory