FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

(Mark One)

   X     QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                           SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended            March 31, 1998
                               ----------------------------------

                                       OR

         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                           SECURITIES EXCHANGE ACT OF 1934

For the transition period from                                       to

Commission file number             33-42125

                       Chugach Electric Association, Inc.
             (Exact name of registrant as specified in its charter)

       Alaska                                                     92-0014224
 (State or other jurisdiction of                               (I.R.S. Employer
  incorporation or organization)                             Identification No.)

5601 Minnesota Drive         Anchorage, Alaska                       99518
(Address of principal executive offices)                          (Zip Code)

                           (907) 563-7494
         (Registrant's telephone number, including area code)

                                         None
(Former name,former address and former fiscal year,if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X . No .

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

                  CLASS                            OUTSTANDING AT MAY 1, 1998

                  NONE                                      NONE



<PAGE>



                       CHUGACH ELECTRIC ASSOCIATION, INC.

                                      INDEX



Part I. Financial Information                                       Page Number


Balance Sheets, March 31, 1998 (Unaudited) and December 31, 1997              3

Statements of Revenues, Expenses and Patronage Capital, Three Months Ended
   March 31, 1998 and 1997  (Unaudited)                                       5

Statements of Cash Flows, Three Months Ended March 31, 1998 and 1997
   (Unaudited)                                                                6

Notes to Financial Statements (Unaudited)                                     7

Management's Discussion and Analysis of Results of Operations and
  Financial Condition (Unaudited)                                             8


Part II.  Other Information                                                  11

Signatures                                                                   13

Exhibits                                                                     14





















                                        2

<PAGE>



                       CHUGACH ELECTRIC ASSOCIATION, INC.
                                 Balance Sheets

                                     Assets

<TABLE>

                                                   March 31, 1998  December 31, 1997
                                                   --------------  -----------------
                                                    (Unaudited)
<S>                                                  <C>            <C> 
Utility plant:

     Electric plant in service ...................   $609,527,484   $625,365,803

     Construction work in progress ...............     23,643,805     24,664,395
                                                     ------------   ------------

                                                      633,171,289    650,030,198

     Less accumulated depreciation ...............    218,693,938    232,136,950
                                                     ------------   ------------

                      Net utility plant ..........    414,477,351    417,893,248
                                                     ------------   ------------

Other property and investments, at cost:

     Nonutility property .........................          3,550          3,550

     Investments in associated organizations .....      8,003,723      7,864,271
                                                     ------------   ------------

                                                        8,007,273      7,867,821
                                                     ------------   ------------

Current assets:

     Cash and cash equivalents ...................      8,785,549      5,224,529

     Cash - restricted construction funds ........        409,954        364,778

     Special deposits ............................         90,264        151,703

     Accounts receivable, net ....................     17,367,447     23,999,138

     Materials and supplies, at average cost .....     15,598,374     15,619,085

     Prepayments .................................      1,519,948        558,371

     Other current assets ........................        410,641        305,415
                                                     ------------   ------------

                    Total current assets .........     44,182,177     46,223,019
                                                     ------------   ------------

Deferred charges .................................     14,674,980     13,583,211
                                                     ------------   ------------

                                                     $481,341,781   $485,567,299
                                                     ------------   ------------





</TABLE>


See accompanying notes to unaudited financial statements.





                                        3

<PAGE>




                       CHUGACH ELECTRIC ASSOCIATION, INC.
                                 Balance Sheets

                            Liabilities and Equities

<TABLE>

                                                          March 31, 1998  December 31, 1997
                                                          --------------   ------------
                                                            (Unaudited)
<S>                                                         <C>            <C> 
Equities and margins:

     Memberships .........................................  $    871,768   $    861,543

     Patronage capital ...................................   110,529,644    104,800,092

     Other ...............................................     3,454,032      3,458,062
                                                            ------------   ------------

                                                             114,855,444    109,119,697
                                                            ------------   ------------

Long-term obligations, excluding current installments:

     First mortgage bonds payable ........................   235,101,000    240,910,000

     National Bank for Cooperatives bonds
       payable ...........................................    70,959,662     71,096,501
                                                            ------------   ------------

                                                             306,060,662    312,006,501
                                                            ------------   ------------

Current liabilities:

     Notes payable .......................................     8,500,000           --

     Current installments of long-term debt and
       capital leases ....................................     6,078,952      5,913,512

     Accounts payable ....................................     4,774,742      7,038,234

     Consumer deposits ...................................       960,709      1,038,241

     Accrued interest ....................................     1,353,580      6,904,335

     Salaries, wages and benefits ........................     3,683,589      3,655,101

     Fuel ................................................     3,521,187      6,611,415

     Other ...............................................     1,907,882      3,300,310
                                                            ------------   ------------

                   Total current liabilities .............    30,780,641     34,461,148
                                                            ------------   ------------

Deferred credits .........................................    29,645,034     29,979,953
                                                            ------------   ------------

                                                            $481,341,781   $485,567,299
                                                            ------------   ------------

</TABLE>


See accompanying notes to unaudited financial statements.


                                        4

<PAGE>



                       CHUGACH ELECTRIC ASSOCIATION, INC.

             Statements of Revenues, Expenses and Patronage Capital

<TABLE>

                                                Three months ended March 31

                                                   1998             1997
                                              -------------    -------------

                                                       (Unaudited)
<S>                                           <C>              <C>  
Operating revenues ........................   $  39,024,214    $  38,510,339
                                              -------------    -------------

Operating expenses:

     Production ...........................      11,845,378        9,843,528

     Purchased power ......................       2,237,195        3,957,693

     Transmission .........................         620,854          929,679

     Distribution .........................       2,162,668        1,963,501

     Consumer accounts ....................       1,088,237        1,270,375

     Administrative, general and other ....       3,844,636        3,097,740

     Depreciation and amortization ........       5,722,186        5,271,803
                                              -------------    -------------

             Total operating expenses .....      27,521,154       26,334,319
                                              -------------    -------------

Interest:

     On long-term debt ....................       6,379,258        6,336,161

     Other ................................          26,447           60,988

     Charged to construction - credit .....        (179,765)        (172,039)
                                              -------------    -------------

             Net interest expense .........       6,225,940        6,225,110
                                              -------------    -------------

             Net operating margins ........       5,277,120        5,950,910
                                              -------------    -------------


Nonoperating margins:

     Interest income ......................         185,344          148,628

     Other ................................         299,005           78,599
                                              -------------    -------------

             Total nonoperating margins ...         484,349          227,227
                                              -------------    -------------

             Assignable margins ...........       5,761,469        6,178,137

Patronage capital at beginning of period ..     104,800,092      100,685,517

Retirement of capital credits and
   estate payments ........................         (31,917)         (77,323)
                                              -------------    -------------

Patronage capital at end of period ........   $ 110,529,644    $ 106,786,331
                                              -------------    -------------


</TABLE>


See accompanying notes to unaudited financial statements.


                                        5

<PAGE>




                       CHUGACH ELECTRIC ASSOCIATION, INC.
                            Statements of Cash Flows
<TABLE>

                                                                                   Three months ended March 31

                                                                                        1998            1997
                                                                                    -----------    ------------

                                                                                            (Unaudited)
<S>                                                                                 <C>            <C> 
Cash flows from operating activities:

   Assignable margins ...........................................................   $ 5,761,469    $  6,178,137
                                                                                    -----------    ------------

   Adjustments to reconcile  assignable  margins to net cash provided  (used) by
     operating activities:

       Depreciation and amortization ............................................     5,722,186       5,271,803

       Changes in assets and liabilities:
       (Increase) decrease in assets:

         Accounts receivable ....................................................     6,631,691      (1,025,850)

         Prepayments ............................................................      (961,577)       (749,262)

         Materials and supplies .................................................        20,711          79,261

         Deferred charges .......................................................    (1,091,769)       (237,676)

         Other ..................................................................       (88,962)        705,687

     Increase (decrease) in liabilities:
         Accounts payable .......................................................    (2,263,492)     (1,683,615)

         Consumer deposits ......................................................       (77,532)         (6,966)

         Accrued interest .......................................................    (5,550,755)     (5,740,375)

         Deferred credits .......................................................      (334,920)       (678,665)

         Other ..................................................................    (4,454,169)     (3,279,301)
                                                                                    -----------    ------------

               Total adjustments ................................................    (2,448,588)     (7,344,959)
                                                                                    -----------    ------------

               Net cash provided (used) by
                 operating activities ...........................................     3,312,881      (1,166,822)

Cash flows from investing activities:
   Extension and replacement of plant ...........................................    (2,306,289)     (2,953,950)

   Investments in associated organizations ......................................      (139,452)         20,913
                                                                                    -----------    ------------

               Net cash used in investing activities ............................    (2,445,741)     (2,933,037)
                                                                                    -----------    ------------

Cash flows from financing activities:

   Short-term borrowings, net ...................................................     8,500,000      14,529,600

   Repayments of long-term debt .................................................    (5,780,399)     (5,825,239)

   Retirement of patronage capital ..............................................       (31,917)        (77,323)

   Other ........................................................................         6,196         (64,603)
                                                                                    -----------    ------------

               Net cash provided by
                 financing activities ...........................................     2,693,880       8,562,435
                                                                                    -----------    ------------

               Net increase in cash and
                 cash equivalents ...............................................     3,561,020       4,462,576

Cash and cash equivalents at beginning of period ................................     5,224,529       5,419,819
                                                                                    -----------    ------------

Cash and cash equivalents at end of period ......................................   $ 8,785,549    $  9,882,395
                                                                                    -----------    ------------

</TABLE>


See accompanying notes to unaudited financial statements.

                                        6

<PAGE>




                       CHUGACH ELECTRIC ASSOCIATION, INC.

                          Notes to Financial Statements

                                 March 31, 1998

                                   (Unaudited)


1.   Presentation of Financial Information
     During  interim  periods,  Chugach  Electric  Association,  Inc.  (Chugach)
     follows  the  accounting  policies  set  forth  in  its  audited  financial
     statements  included in Form 10-K filed with the  Securities  and  Exchange
     Commission.  Users of interim financial information are encouraged to refer
     to  footnotes  contained  in Form 10-K  when  reviewing  interim  financial
     results.  Management  believes  that  the  accompanying  interim  financial
     statements reflect all adjustments which are necessary for a fair statement
     of the results of the interim period presented. All adjustments made in the
     accompanying interim financial statements are of a normal recurring nature.

     Certain  reclassifications  have been made to the 1997 financial statements
     to conform to the 1998 presentation.

2.   Lines of Credit
     Chugach  maintains a line of credit of $35 million with  National  Bank for
     Cooperatives (CoBank). The CoBank line of credit expires August 1, 1998 but
     carries an annual automatic renewal clause. At March 31, 1998, $8.5 million
     was outstanding at an interest rate of 6.65%. In addition,  the Association
     has an annual line of credit of $50 million available at the National Rural
     Utilities  Cooperative  Finance  Corporation  (NRUCFC).  At March 31, 1998,
     there was no outstanding balance on this line of credit. The NRUCFC line of
     credit expires October 14, 2002.

3.   Change in Accounting Policy
     Effective   January  1998,   Chugach  changed  its  accounting  policy  for
     depreciation of general plant (excluding buildings,  leasehold improvements
     and vehicles).  Under the new vintage group method the assets are amortized
     over  their  service  lives  and  retired  as a  group  at  the  end of the
     amortization period. The amortization periods were developed as part of the
     recent  depreciation  study update.  At January 1, 1998, the affected asset
     group  made up 2.8% of  Electric  Plant in  Service.  In  conjunction  with
     adoption  of  the  new   depreciation   methodology,   Chugach   wrote  off
     approximately  $19  million of plant  considered  to be fully  depreciated.
     Depreciation  expense for the  affected  asset  groups is  estimated  to be
     $700,000 lower annually.  Buildings,  leasehold  improvements  and vehicles
     will continue to be depreciated  over their estimated useful lives based on
     rates developed in periodic depreciation studies.





                                        7

<PAGE>



                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                   (Unaudited)


RESULTS OF OPERATIONS

Current Year Quarter Versus Prior Year Quarter

Operating revenues,  which include sales of electric energy to retail, wholesale
and economy energy customers and other miscellaneous revenues, increased by 1.3%
for the quarter ended March 31, 1998 over the same quarter in 1997. The increase
in revenues is largely attributable to higher kWh sales to retail and two of the
three wholesale customer classes.

As previously reported, in 1997 Chugach experienced higher than anticipated fuel
and purchased power costs. As a result,  in an effort to maintain  overall price
stability,  some fuel and purchased  power costs were not collected and the fuel
surcharge rate was not adjusted to reflect the higher costs.  Effective  January
1998,  routine  quarterly  adjustments  to the  fuel  surcharge  mechanism  have
resumed.  Additionally, the remaining undercollected amounts from 1997 are being
recovered  throughout 1998 under a plan approved by the APUC. At March 31, 1998,
fuel  prices  appear to have  stabilized  and are  expected  to decline  for the
remainder of 1998.

Retail  demand and energy rates did not change from the first quarter of 1997 to
the same period in 1998.  Wholesale  demand and energy rates charged to MEA were
decreased  slightly effective February 1997. The impact of higher kWh sales more
than offset this decrease in rates.  Demand and energy rates to Homer and Seward
did not change.

Pursuant to a Settlement Agreement with AEG&T/MEA/Homer, Chugach may be required
to grant a refund to  AEG&T/MEA/Homer  retroactive  to January 1, 1997 (based on
the  1996  test  year  filing).   A  provision  for  wholesale  rate  refund  of
approximately  $1 million was still  recorded  at March 31, 1998 to  accommodate
certain  rate  adjustment   clauses  contained  in  the  Settlement   Agreement.
Determination  of the final  refund  amount still awaits an APUC order in Docket
U-96-37.

Higher fuel prices  were again the major  cause for the  increase in  production
expense  for the  quarter  ended  March 31, 1998 versus the same period in 1997.
Additionally,  the rate  stabilization fund and the submarine cable reserve were
fully  amortized as offsets to fuel expense  during 1997.  There were no similar
offsets in 1998. As previously  reported,  Chugach has completed the  transition
into Period 2 under the long-term fuel supply  contracts.  Fuel costs now result
from  market-based  prices.  Purchased  power  expense was lower for the quarter
ended March 31, 1998  compared to the same  period in 1997.  This  variance  was
substantially due to the system-operating scenario that existed during the first
quarter of 1997. Chugach purchased power from AEG&T's Soldotna 1 plant to ensure
reliability  on the  Kenai  Peninsula.  In  addition,  purchases  were made from
Anchorage  Municipal  Light  &  Power  during  maintenance  on one of  Chugach's
transmission lines from the Beluga power plant. This

                                        8

<PAGE>



system-operating  scenario did not exist during the first  quarter of 1998 which
explains the decrease in purchased power expense. Transmission expense was lower
for the quarter  ended March 31, 1998 from the same period in 1997.  Conversely,
distribution expenses were higher in the first quarter of 1998 compared to 1997.
These variances were primarily attributed to overhead line and station equipment
maintenance  activities being focused on the transmission system in 1997 and the
distribution system in 1998. Consumer accounts expense decreased for the quarter
ended March 31, 1998.  The majority of this decrease was due to a lower level of
common  information  services  costs  being  allocated  to this  function.  This
decrease was offset  somewhat by the  addition of sales  expense to the consumer
accounts  expense  category  partially  reflecting the impact of Chugach's newly
formed  Marketing  Department.   Administrative,   general  and  other  expenses
increased  for the  three-month  period ended March 31, 1998.  This increase was
substantially due to a higher level of common  information  services costs being
allocated to this function.

Other  interest  expense  decreased in the current period due to a lower average
outstanding balance on the short-term line of credit.

Other  nonoperating  margins  were higher for the  quarter  ended March 31, 1998
compared to the same period in 1997. This difference was due mostly to patronage
capital credits received from CoBank.

Financial Condition

Total assets  declined by 0.9% from  December  31, 1997 to March 31,  1998.  The
decrease is due primarily to lower  balances in the electric plant  accounts.  A
decline in accounts  receivable also  contributed to the overall  decrease.  The
lower  balances in the electric  plant accounts were caused by the adoption of a
new method of  accounting  for  depreciation  of the general  plant asset class.
Beginning in January of 1998,  general  plant  assets were  amortized by account
classification  instead  of being  depreciated  on an  individual  asset  basis.
Adoption of this method resulted in the write-off (to accumulated  depreciation)
of  general  plant  assets  that were  acquired  prior to the  beginning  of the
amortization periods. The decline in accounts receivable was primarily caused by
paydowns   received   on  the   undercollected   fuel   surcharge   balance  and
reimbursements received related to the Standard Steel matter. Notable changes to
total liabilities include the decrease in First Mortgage bonds payable resulting
from the March bond  payment  and the $8.5  million  draw on the CoBank  line of
credit.  Accrued  interest  also  decreased  due to the March  semi-annual  bond
payment.

Liquidity and Capital Resources

Chugach has satisfied its  operational and capital cash  requirements  primarily
through  internally  generated  funds, an annual $50 million line of credit from
NRUCFC and a $35 million line of credit with CoBank. At March 31, 1998,  Chugach
had $8.5 million  outstanding  with CoBank,  which  carried an interest  rate of
6.65%. There were no amounts outstanding on the NRUCFC line at March 31, 1998.

Capital  construction  in 1998 is estimated  at $28  million.  At March 31, 1998
approximately $2.3 million has been expended.  Capital improvement  expenditures
are expected to increase

                                        9

<PAGE>



in the upcoming second and third quarters as the  construction  season begins in
April and extends into October.

Chugach has negotiated a supplemental indenture (Third Supplemental Indenture of
Trust)  with  CoBank  that  previously  allowed up to $80 million in future bond
financing. Chugach finalized an amendment to the Third Supplemental Indenture of
Trust  (Seventh  Supplemental  Indenture of Trust) that  eliminated  the maximum
aggregate  amount of bonds the company may issue under the  agreement.  At March
31, 1998,  Chugach had bonds in the amount of $71.2  million  outstanding  under
this  financing  arrangement.  The balance is  comprised  of a $1.2 million bond
(CoBank 1) which  carries an  interest  rate of 8.95%  maturing  in 2002,  a $10
million  bond  (CoBank  2)  priced at 7.76% due in 2005,  a $21.5  million  bond
(CoBank 3), currently priced at 6.65% (repriced  periodically),  a $23.5 million
bond (CoBank 4) currently  priced at 6.65% (also repriced  periodically),  and a
$15  million  bond  (CoBank  5)  currently   priced  at  6.65%  (also   repriced
periodically) due in 2002, 2007 and 2012. Principal payments on the CoBank 3 and
4 bonds commence in 2003 and continue  through 2022.  Additionally,  Chugach has
negotiated a similar  supplemental  indenture (Fifth  Supplemental  Indenture of
Trust)  with  NRUCFC for $80  million.  At March 31,  1998 there were no amounts
outstanding under this financing arrangement.

As previously  reported,  Chugach has  reacquired  $44.3 million of its Series A
2022  bonds.  This  strategy  has been in response  to the  favorable  long-term
interest   rate   environment.   Chugach  will   continue  to  explore   similar
reacquisition  transactions if market conditions warrant such action. Except for
any further  reacquisitions of its bonds (and any similar future  refinancings),
Chugach does not anticipate issuance of additional long-term debt in 1998.

Chugach  management  continues  to expect  that cash flows from  operations  and
external  funding  sources will be sufficient to cover  operational  and capital
funding requirements in 1998 and thereafter.

Environmental Matters

Refer to Part II,  Item 1 for an update  on the  status  of the  Standard  Steel
Salvage Yard Site litigation.



                                       10

<PAGE>



                           PART II. OTHER INFORMATION


Item 1.  Legal Proceedings

A cost recovery action was filed in Federal  District Court on December 27, 1991
by the United  States  against  Chugach  and six other  Potentially  Responsible
Parties (PRPs) seeking  reimbursement of removal and response action costs (Past
Response Costs) incurred by US EPA at the Standard Steel and Metals Salvage Yard
Superfund  Site in  Anchorage,  Alaska  (Site).  The six other PRPs named in the
action  are the  Alaska  Railroad,  Westinghouse  Electric  Corporation,  Sears,
Roebuck  and  Co.,  Montgomery  Ward  &  Co.,  J.C.  Penney  Company,  Inc.  and
Bridgestone/Firestone, Inc. In December, 1996, Chugach, the other named PRPs and
certain  federal  agency PRPs  (Federal  PRPs)  entered  into a Partial  Consent
Decree. Under the Partial Consent Decree,  Chugach and the other parties settled
claims for Past Response Costs as well as investigation and other costs incurred
with respect to the Site through  December  1996.  The Partial  Consent  Decree,
however,  did not settle  Chugach's  liability for future costs of designing and
performing the cleanup at the Site (Future Costs).

Although  the  Partial  Consent  Decree  did not settle  Chugach's  or the other
private PRPs'  liability for Future Costs,  the Partial Consent Decree binds the
Federal PRPs and the Alaska  Railroad to pay an aggregate share of 64% of Future
Costs.  Chugach  and the  five  other  private  PRPs  have  reached  a  separate
settlement to divide the remaining 36% of Future Costs among  themselves.  Under
that settlement,  Chugach's  percentage share of liability for Future Costs will
equal  14.89%.  The  private  PRPs'  agreement  to perform  remedial  design and
remedial  action  (RD/RA) at the Site is  memorialized  in a new Consent  Decree
(RD/RA  Decree) that was entered by the Federal  District Court in January 1998.
The RD/RA Decree  contains the scope of work for the RD/RA as well as settlement
terms,  including  EPA's  covenant not to sue Chugach and the other private PRPs
for Future Costs once the RD/RA is completed.

The estimate of Future Costs of RD/RA at the Site,  as  determined  by Chugach's
consultants  based on cost  estimates  contained  in the FS report,  ranges from
$5,231,200  to  $6,619,800.  The  RD/RA  Decree  contains  a cost  estimate,  as
determined by EPA and including a 50% cost overrun  contingency,  of $8,400,000.
Chugach's share of these estimated RD/RA expenses would range from approximately
$778,926 to $1,250,760.  Based on recent bid documents for the remedial  action,
it seems unlikely that the RD/RA will cost as much as EPA's  high-end  estimate.
These amounts are only  estimates,  however,  and cannot be  definitively  known
until the RD/RA work at the Site is completed in late 1998 or 1999.

Under the RD/RA Decree, Chugach and the other PRPs are required to reimburse the
United States for EPA oversight costs and DOJ enforcement  costs relating to the
RD/RA.   Those  costs  have  been  estimated  by  the  United  States  to  equal
approximately  $676,000.  Chugach's  share  of  these  estimated  oversight  and
enforcement  costs would equal $100,656.  In addition,  one of the private PRPs,
Montgomery  Ward,  recently filed for bankruptcy  protection and did not execute
the RD/RA Consent Decree. As a result,  Chugach will be paying an additional sum
equal to Chugach's  percentage share of Montgomery Ward's share of Future Costs.
This  additional  sum is estimated to be  approximately  $12,600  given  current
estimates of Future Costs, EPA oversight costs and DOJ enforcement costs.

                                       11

<PAGE>




Based on the above estimates, the total amount that may be owed by Chugach under
the RD/RA  Decree  ranges  from  approximately  $892,182  to  $1,364,016.  These
amounts,  particularly the projected EPA oversight costs, are only estimates and
are subject to change, although, in light of recent bid documents,  Chugach does
not anticipate that the costs will reach the high-end estimate. In addition, the
RD/RA  Decree  contains  reservation  of  rights  allowing  EPA to seek  further
response  actions  and  payments  from the  PRPs  under  certain  circumstances,
including for costs  associated with alleged natural resource  damages.  At this
time, no claims have been made  pertaining to alleged natural  resource  damages
and no prediction  can be made whether EPA will request  activities  through its
reservation of rights under the RD/RA Decree.

Four of Chugach's  insurance  carriers have been paying,  under a reservation of
rights,  Chugach's  costs of defense for the Site.  The carriers  reserved their
rights  regarding  indemnification  of Chugach for response  costs.  In February
1998,  Chugach  reached an  agreement  in  principle  with these four  insurance
carriers pursuant to which the carriers will pay the majority of Chugach's costs
relating to the Site,  including Past Costs,  Future Costs, and attorney's fees.
This settlement preserves Chugach's potential claim for natural resource damages
and is  anticipated  to result in Chugach  paying no more than  $500,000 for all
Site  costs.   Management  believes  that  the  latter  amount  would  be  fully
recoverable in rates and therefore  would have no impact on Chugach's  financial
condition or results of operations.

Items  2, 3, 4 and 5

Not applicable

Item 6. Exhibits and Reports on Form 8-K

   (a)   Exhibits:

         Eighth Supplemental Indenture of Trust dated as of February 4, 1998,by 
         and between Chugach Electric Association, Inc. and Security Pacific 
         Bank Washington, N.A.

         Amendment to Employment Agreement by and among Chugach Electric 
         Association, Inc. and Eugene N. Bjornstad dated February 25, 1998.

         Memorandum  of Agreement by and among  Chugach  Electric  Association,
         Inc. and Admiral Insurance Company Alaska,  Alaska National  Insurance
         Company, Nationwide Mutual Insurance Company and Providence Washington
         Insurance  Company  relating  to  Chugach's  PRP  obligations  at  the
         Standard Steel Superfund Site dated February 3, 1998.

         CERCLA  Remedial  Design  and  Remedial  Action  Consent  Decree in the
         Standard Steel Superfund Site matter dated January 24, 1998.

         Financial Data Schedule

   (b) Reports on Form 8-K:

         No reports on Form 8-K were filed for the quarter ended March 31, 1998.

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                                   SIGNATURES



Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                    CHUGACH ELECTRIC ASSOCIATION, INC.



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


                           Date:     May 15, 1998



                           By:      /s/ Evan J. Griffith, Jr.
                                    Evan J. Griffith, Jr.
                                    Executive Manager, Finance & Energy Supply


                           Date:     May 15, 1998



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EXHIBITS

Listed below are the exhibits which are filed as part of this Report:


Exhibit
number                         Description                                 Page


     4.9 Eighth Supplemental Indenture of Trust dated as of February 4,
         1998, by and between Chugach Electric Association, Inc. and
         Security Pacific Bank Washington, N.A.                              15

10.60.1  Amendment to Employment Agreement by and among Chugach
         Electric Association, Inc. and Eugene N. Bjornstad dated
         February 25, 1998.                                                  21

   19.3  Memorandum of Agreement by and among Chugach Electric
         Association, Inc. and Admiral Insurance Company Alaska, Alaska
         National Insurance Company, Nationwide Mutual Insurance
         Company and Providence Washington Insurance Company
         relating to Chugach's PRP obligations at the Standard Steel
         Superfund Site dated February 3, 1998.                              22

   19.4  CERCLA Remedial Design and Remedial Action Consent Decree
         in the Standard Steel Superfund Site matter dated January 24,
         1998.                                                               25

     27  Financial Data Schedule                                             **



**  Filed Electronically



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