ARTICLES OF INCORPORATION
                                       of
                       CHUGACH ELECTRIC ASSOCIATION, INC.

KNOW ALL MEN BY THESE PRESENTS: That we, the undersigned,  being natural persons
of the age of  twenty-one  years or more and  citizens  of the United  States of
America  and  residents  of the  Territory  of Alaska,  have this day united and
associated  ourselves  for the  purpose  of  forming  a  non-profit  cooperative
association  under and by virtue of Article VII, Chapter XI of the Compiled Laws
of Alaska, 1933, and all laws mandatory,  thereof and supplemental  thereto, and
we do hereby make, sign and acknowledge, in quadruplicate the following articles
of incorporation:

                                    ARTICLE I

                     The name of this Corporation shall be:
                       CHUGACH ELECTRIC ASSOCIATION, INC.

                                   ARTICLE II

The purpose or purposes for which this Corporation is formed are:

(a) To generate, manufacture, purchase, acquire, and accumulate electric energy;
to transmit, distribute, furnish, sell, and dispose of such electric energy; and
to construct,  erect,  purchase,  lease as lessee, and in any manner to acquire,
own, hold, maintain,  operate, sell, dispose of, lease as lessor,  exchange, and
mortgage plants, buildings, works, machinery,  supplies,  apparatus,  equipment,
and  electric   transmission  and  distribution   lines  or  systems  necessary,
convenient,  or useful  for  carrying  out and  accomplishing  any or all of the
foregoing purposes;

(b)  To  carry  on  the  general   business  of  the  production   transmission,
distribution,  and sale of  steam or  superheated  water,  or other  by-products
created as a result of engaging in any other business  activity included in this
Article, for heating,  lighting,  and power purposes,  or any other purpose, and
for the  carrying  on of all  business  incident  thereto;  to  acquire,  build,
construct,  own,  maintain and  operate,  as  necessary  or  convenient,  lands,
buildings, structures, dams, machinery, pipes, and other devices; to acquire and
hold water and flowage rights; and to acquire, lease, hold, and occupy lands and
the use thereof,  or easements therein,  all to the extent that may be necessary
or desirable in carrying out the objects of this provision;

(c) To acquire, own, hold, use, exercise, sell, mortgage,  pledge,  hypothecate,
and in any manner dispose of franchises, rights, privileges, licenses, rights of
way, and easements necessary, useful, or appropriate to accomplish any or all of
the purposes of the Corporation;

(d) To purchase,  receive, lease as lessee, or in any other manner acquire, own,
hold, maintain, use, convey, sell, lease as lessor, exchange,  mortgage, pledge,
or otherwise dispose of any and all real and personal property, or any interest,
therein,  necessary,  useful,  or  appropriate  to  enable  the  Corporation  to
accomplish any or all of its purposes;


<PAGE>



(e) To assist its members to wire their premises and install therein  electrical
and plumbing appliances, fixtures, machinery, supplies, apparatus, and equipment
of any and all kinds and character  (including,  without limiting the generality
of the foregoing,  such as are applicable to water supply and sewage  disposal),
and, in connection therewith and for such purposes, to purchase, acquire, lease,
sell,  distribute,  install  and  repair  electrical  and  plumbing  appliances,
fixtures, machinery,  supplies, apparatus and equipment of any and all kinds and
character, (including, without limiting the generality of the foregoing, such as
are applicable to water supply and sewage  disposal),  and to receive,  acquire,
endorse, pledge, guarantee, hypothecate, transfer, or otherwise dispose of notes
and other evidences of indebtedness and all security therefor;

(f) To borrow  money,  to make and issue  bonds,  notes and other  evidences  of
indebtedness,  secured or  unsecured,  for moneys  borrowed,  or in payment  for
property  acquired,  or  for  any  of  the  other  objects  or  purposes  of the
Corporation;  to secure the payment of such bonds,  notes, or other evidences of
indebtedness  by mortgage or  mortgages,  or deed or deeds of trusts upon, or by
the  pledge  of or  other  lien  upon,  any  or all  of  the  property,  rights,
privileges, and permits of the Corporation, wheresoever situated, acquired or to
be acquired;

(g) To do and perform any and all acts and things,  and to have and exercise any
and all powers,  as may be necessary or convenient  to accomplish  any or all of
the  foregoing  purposes,  or as may be  permitted  by the Act  under  which the
Corporation is formed.

                                   ARTICLE III

Section  1. The  Corporation  is not  organized  for  profit  and shall not have
authority to issue capital stock.

Section  2. Any  person,  firm,  association,  corporation  or body  politic  or
subdivision thereof, may become a member in the Corporation by:

         (a)      filing a written application for membership therein;

         (b)      agreeing to purchase from the Corporation electric energy as
                  hereinafter specified;

         (c)      agreeing  to  comply  with  and be bound  by the  articles  of
                  incorporation of the Corporation and the bylaws and such rules
                  and  regulations  as may from time to time be  adopted  by the
                  board of directors; and

         (d)      paying the membership  fee  hereinafter  specified;  provided,
                  however,  that no person,  firm,  association,  corporation or
                  body  politic,  or  subdivision  thereof shall become a member
                  unless and until he or it has been accepted for  membership by
                  the board of directors or the members.

The by-laws may provide for appeal by an  applicant to a meeting of the members.
No person,  firm,  association,  corporation  or body  politic,  of  subdivision
thereof, may own more than one (1) membership in the Corporation.


<PAGE>



A husband and wife may jointly become a member and their application for a joint
membership may be accepted in accordance  with the foregoing  provisions of this
section  provided the husband and wife comply jointly with the provisions of the
above subdivisions (a), (b), and (d).

Section 3. The membership fee shall be five dollars ($5.00), but the by-laws may
provide  for  additional  fees to be paid by  members  requesting  more than one
service connection.

Section 4. Each  member  may, as soon as  electric  energy  shall be  available,
purchase from the corporation all electric energy used on the premises  referred
to in the  application  of such  members for  membership,  and shall pay therfor
monthly  rates which shall from time to time be fixed by resolution of the board
of directors;  provided, however, that the electric energy which the Corporation
shall  furnish  to any  member  may be limited to such an amount as the board of
directors  shall from time to time  determine  and that each member shall pay to
the Corporation  such minimum amount per month as shall be fixed by the board of
directors  from  time to time,  regardless  of the  amount  of  electric  energy
consumed. Each member shall also pay all obligations which may from time to time
become due and  payable by such member to the  Corporation  as and when the same
shall become due and payable.

Section 5. The  private  property  of the  members of the  Corporation  shall be
exempt from  execution for the debts of the  Corporation  and no member shall be
individually  liable  or  responsible  for  any  debts  or  liabilities  of  the
corporation.

                                   ARTICLE IV

The  principal  place of  business  of the  Corporation  shall be at  Anchorage,
Alaska.

                                    ARTICLE V

The Corporation shall have perpetual existence.

                                   ARTICLE VI

The number of  directors of this  corporation  shall be seven (7). The names and
post office addresses of the directors who shall manage the affairs and business
of the corporation for the first year, or until their successors shall have been
elected and shall have qualified, are as follows:

         Name                               Post Office Address

Leo H. Wilder                               Anchorage, Alaska
Arthur Dawe                                 Anchorage, Alaska
Merrill Chitty                              Anchorage, Alaska
Clarence D. Smith                           Anchorage, Alaska
C. P. Plumb                                 Anchorage, Alaska
Burl A. Tudor                               Anchorage, Alaska
Raymond M. Wilson                           Anchorage, Alaska


<PAGE>




                                   ARTICLE VII

The names and places of residence of the persons forming this Corporation are as
follows:

         Name                               Place of residence

         Leo H. Wilder                      Anchorage, Alaska
         Arthur Dawe                        Anchorage, Alaska
         Merrill Chitty                     Anchorage, Alaska
         Clarence D. Smith                  Anchorage, Alaska
         C. L. Plumb                        Anchorage, Alaska
         Burl A. Tudor                      Anchorage, Alaska
         Raymond M. Wilson                  Anchorage, Alaska

IN WITNESS WHEREOF,  we have hereunto set our hands and seals, in quadruplicate,
this 10th day of February, 1948.

                                            /s/ LEO H. WILDER (SEAL)
                                            /s/ ARTHUR DAWE  (SEAL)
                                            /s/ MERRILL CHITTY (SEAL)
                                            /s/ CLARENCE D. SMITH, JR.  (SEAL)
                                            /s/ C. L. PLUMB  (SEAL)
                                            /s/ BURL A. TUDOR  (SEAL)
                                            /s/ RAYMOND M. WILSON  (SEAL)


UNITED STATES OF AMERICA                    )
                                            ) ss
TERRITORY OF ALASKA                         )

I, J. L.  MCCARREY,  JR. A NOTARY PUBLIC in and for the Territory of Alaska,  do
hereby  certify that Leo H. Wilder,  Arthur Dawe,  Merrill  Chitty,  Clarence D.
Smith,  C. L. Plumb,  Burl A. Tudor and Raymond M.  Wilson,  who are  personally
known to me to be the  persons  whose names are signed to and who  executed  the
foregoing articles of incorporation of the Chugach Electric  Association,  Inc.,
appeared before me this day in person and severally acknowledged to me that they
signed,  sealed,  executed and delivered the said articles of incorporation,  in
quadruplicate, as their free voluntary act for the uses and purposes therein set
forth.

WITNESS my hand and notarial seal, in  quadruplicate,  at Anchorage,  Alaska, in
the Territory of Alaska, this 10th day of February, 1948.

                                            /s/  J. L. MCCARREY JR.
                                            Notary Public in and for Alaska
                                            My commission expires: 4-25-50


<PAGE>



ENDORSED
FILED in the District Court
Territory of Alaska, Third Division
         June 18, 1948
M.E.S. BRUNELLE, Clerk
by Virginia Olson, DEPUTY






<PAGE>