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        September 30, 1997
                               --------------------------------------

                                       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 NOVEMBER 1, 1997

     NONE                                                 NONE



<PAGE>



                       CHUGACH ELECTRIC ASSOCIATION, INC.

                                      INDEX



Part I. Financial Information                                       Page Number


Balance Sheets, September 30, 1997 (Unaudited) and December 31, 1996          3

Statements of Revenues, Expenses and Patronage Capital, Three-Months Ended
   September 30, 1997 and 1996 and Nine-Months Ended September 30, 1997 and
   1996 (Unaudited)                                                           5


Statements of Cash Flows, Nine-Months Ended September 30, 1997 and 1996
   (Unaudited)                                                                6

Notes to Financial Statements (Unaudited)                                     7

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


Part II.  Other Information

Item 1. Legal Proceedings                                                    11

Item 6. Exhibits and Reports on Form 8-K                                     12

Signatures                                                                   14

Exhibits - Index                                                             15

Exhibits                                                                     16


                                        2

<PAGE>



                       CHUGACH ELECTRIC ASSOCIATION, INC.
                                 Balance Sheets

                                     Assets

<TABLE>

                                               September 30, 1997 December 31, 1996
                                               ------------------ -----------------
                                                    (Unaudited)
<S>                                                  <C>            <C>  
Utility plant:

     Electric plant in service ...................   $621,958,299   $615,464,060

     Construction work in progress ...............     21,034,867     19,826,957
                                                     ------------   ------------

                                                      642,993,166    635,291,017

     Less accumulated depreciation ...............    227,130,101    215,411,223
                                                     ------------   ------------

                      Net utility plant ..........    415,863,065    419,879,794
                                                     ------------   ------------

Other property and investments, at cost:

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

     Investments in associated organizations .....      7,630,011      7,647,189

     Restricted cash - margins from economy
        energy sales, all repurchase agreements ..           --        1,599,239
                                                     ------------   ------------

                                                        7,633,561      9,249,978
                                                     ------------   ------------

Current assets:

     Cash and cash equivalents ...................      4,159,350      5,419,819

     Cash - restricted construction funds ........      1,058,698      1,371,386

     Special deposits ............................         89,232         89,232

     Accounts receivable, net ....................     13,928,261     15,369,883

     Materials and supplies, at average cost .....     15,726,693     16,187,592

     Prepayments .................................        947,374        694,257

     Other current assets ........................        314,814        294,380
                                                     ------------   ------------

                    Total current assets .........     36,224,422     39,426,549
                                                     ------------   ------------

Deferred charges .................................     14,916,008     13,932,109
                                                     ------------   ------------

                                                     $474,637,056   $482,488,430
                                                     ------------   ------------
</TABLE>




See accompanying notes to unaudited financial statements.




                                        3

<PAGE>



                       CHUGACH ELECTRIC ASSOCIATION, INC.
                                 Balance Sheets

                            Liabilities and Equities
<TABLE>

                                                     September 30, 1997 December 31, 1996
                                                     ------------------ -----------------
                                                         (Unaudited)
<S>                                                      <C>            <C> 
Equities and margins:

     Memberships .....................................   $    849,603   $    812,748

     Patronage capital ...............................    103,972,639    100,685,517

     Other ...........................................      2,898,152      2,979,677
                                                         ------------   ------------

                                                          107,720,394    104,477,942
                                                         ------------   ------------

Long-term obligations, excluding current installments:

     First mortgage bonds payable ....................    240,910,000    251,553,000

     CoBank bonds payable ............................     56,096,501     56,352,847
                                                         ------------   ------------

                                                          297,006,501    307,905,847
                                                         ------------   ------------

Current liabilities:

     Note(s) payable .................................     15,114,578      2,750,000

     Current installments of long-term debt and
        capital leases ...............................      5,916,760      5,971,752

     Accounts payable ................................      4,316,319      5,178,161

     Consumer deposits ...............................      1,010,853      1,066,906

     Accrued interest ................................      1,307,780      7,076,388

     Salaries, wages and benefits ....................      3,707,782      3,583,422

     Fuel ............................................      4,579,483      6,047,574

     Other ...........................................      2,821,558      5,012,191
                                                         ------------   ------------

                   Total current liabilities .........     38,775,113     36,686,394
                                                         ------------   ------------

Deferred credits .....................................     31,135,048     33,418,247
                                                         ------------   ------------

                                                         $474,637,056   $482,488,430
                                                         ------------   ------------

</TABLE>



See accompanying notes to unaudited financial statements.



                                        4

<PAGE>



                       CHUGACH ELECTRIC ASSOCIATION, INC.

             Statements of Revenues, Expenses and Patronage Capital


<TABLE>

                                                    Three-months                       Nine-months
                                                 ended September 30                 ended September 30

                                                1997             1996              1997            1996
                                                ----             ----              ----            ----

                                                    (Unaudited)                        (Unaudited)

<S>                                        <C>              <C>              <C>              <C>   
Operating revenues .....................   $  34,108,328    $  31,187,058    $ 103,730,273    $  97,529,513
                                           -------------    -------------    -------------    -------------

Operating expenses:

     Production ........................      12,393,918        9,642,575       33,442,580       26,340,626

     Purchased power ...................       3,189,539        2,671,658       10,506,279        7,590,852

     Transmission ......................         739,453          971,775        2,493,633        2,558,468

     Distribution ......................       2,140,995        1,957,063        6,289,128        6,788,497

     Consumer accounts .................       1,218,388        1,714,338        3,666,551        5,283,576

     Administrative, general and other .       3,206,901        3,073,386        9,831,506        9,746,665

     Depreciation and amortization .....       5,174,526        5,217,446       15,724,970       15,454,996
                                           -------------    -------------    -------------    -------------

             Total operating expenses ..      28,063,720       25,248,241       81,954,647       73,763,680
                                           -------------    -------------    -------------    -------------

Interest:

   On long-term debt ...................       6,170,693        5,998,474       18,671,360       18,685,241

   Other ...............................         292,655          376,545          615,493          877,380

   Charged to construction - credit ....        (150,914)        (153,418)        (433,389)        (391,513)
                                           -------------    -------------    -------------    -------------

             Net interest expense ......       6,312,434        6,221,601       18,853,464       19,171,108
                                           -------------    -------------    -------------    -------------

             Net operating margins .....        (267,826)        (282,784)       2,922,162        4,594,725
                                           -------------    -------------    -------------    -------------

Nonoperating margins:

     Interest income ...................         124,820          180,726          462,648          571,869

     Other .............................          39,492           89,546          134,228          144,037
                                           -------------    -------------    -------------    -------------

             Total non-operating margins         164,312          270,272          596,876          715,906
                                           -------------    -------------    -------------    -------------

             Assignable margins ........        (103,514)         (12,512)       3,519,038        5,310,631

Patronage capital at beginning of period     104,205,721      100,660,740      100,685,517       95,421,358

Retirement of capital credits and
   estate payments .....................        (129,568)         (49,030)        (231,916)        (132,791)
                                           -------------    -------------    -------------    -------------

Patronage capital at end of period .....   $ 103,972,639    $ 100,599,198    $ 103,972,639    $ 100,599,198
                                           -------------    -------------    -------------    -------------



</TABLE>


See accompanying notes to unaudited financial statements.





                                        5

<PAGE>



                       CHUGACH ELECTRIC ASSOCIATION, INC.
                            Statements of Cash Flows
<TABLE>
                                                                               Nine-months ended September 30

                                                                                       1997             1996
                                                                                       ----             ----


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

   Assignable margins ..........................................................   $  3,519,038    $  5,310,631
                                                                                   ------------    ------------

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

       Depreciation and amortization ...........................................     15,724,970      15,454,996

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

         Accounts receivable, net ..............................................      1,441,622       3,497,868

         Materials and supplies ................................................        460,899      (1,747,304)

         Deferred charges ......................................................       (983,898)        228,629

         Prepayments ...........................................................       (253,117)       (923,489)

         Other .................................................................      1,891,493          20,084

     Increase (decrease) in liabilities:
         Accounts payable ......................................................       (861,842)     (2,981,715)

         Accrued interest ......................................................     (5,768,607)     (6,756,232)

         Deferred credits ......................................................     (2,283,200)     (7,540,755)

         Consumer deposits, net ................................................        (56,052)        (54,501)

         Other .................................................................     (3,534,366)      4,266,957
                                                                                   ------------    ------------

                    Total adjustments ..........................................      5,777,902       3,464,538
                                                                                   ------------    ------------



                    Net cash provided by operating activities ..................      9,296,940       8,775,169
                                                                                   ------------    ------------

Cash flows from investing activities:

   Extension and replacement of plant ..........................................    (11,708,241)    (11,659,088)

   Investments in associated organizations .....................................         17,177          94,503
                                                                                   ------------    ------------

                    Net cash used in investing activities ......................    (11,691,064)    (11,564,585)
                                                                                   ------------    ------------

Cash flows from financing activities:

   Proceeds from long-term debt ................................................           --        23,500,000

   Repayments of long-term debt ................................................    (10,954,338)    (20,900,496)

   Retirement of patronage capital .............................................       (231,916)       (132,791)

   Short-term borrowings, net ..................................................     12,364,578      (2,500,000)

   Other .......................................................................        (44,669)        (43,647)
                                                                                   ------------    ------------

                    Net cash provided by (used) in financing activities ........      1,133,655         (76,934)
                                                                                   ------------    ------------

                    Net decrease in cash and cash equivalents ..................     (1,260,469)     (2,866,350)

Cash and cash equivalents at beginning of period ...............................      5,419,819       5,879,483
                                                                                   ------------    ------------

Cash and cash equivalents at end of period .....................................   $  4,159,350    $  3,013,133
                                                                                   ------------    ------------

</TABLE>


See accompanying notes to unaudited financial statements.


                                        6

<PAGE>



                       CHUGACH ELECTRIC ASSOCIATION, INC.

                          Notes to Financial Statements

                               September 30, 1997

                                   (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 that 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 1996 financial statements
     to conform to the 1997 presentation.

2.   Lines of Credit
     Chugach  maintains a line of credit of $35 million with CoBank.  The CoBank
     line of credit  expires  August 1, 1998 but contains an  automatic  renewal
     clause.  At September 30, 1997,  $15,114,578 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  September  30, 1997,  there was no  outstanding
     balance. The NRUCFC line of credit expires November 1, 2002.


                                        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 9.4%
for the quarter  ended  September  30, 1997 over the same  quarter in 1996.  The
increase in revenues is largely  attributable  to higher kWh sales to retail and
two of the three wholesale customer classes.

While fuel  surcharge  rates were higher in the third quarter of 1997 over those
in the same quarter of 1996,  revenues were also impacted by Chugach's  decision
to request a waiver from  passing  through  fuel cost  increases  under its fuel
surcharge  cost recovery  mechanism.  These  increases  would have been for fuel
surcharge  rates  effective  in the third and fourth  quarters of 1997.  Chugach
believes  that  these  increases  were the  result  of  unusual  and  transitory
occurrences  that have  resulted in higher  fuel  prices.  Furthermore,  Chugach
continues  to believe  that its  natural  gas prices  are  stabilizing  and will
decline from current  levels in 1998.  The APUC has  approved  Chugach's  waiver
request to leave  surcharge  rates at existing levels through the fourth quarter
1997.  The  decision  to forgo the  increases  was made in an effort to maintain
overall price stability. As a result, Chugach did not collect approximately $3.5
million,  which  would have been a component  of  revenues in 1997.  This amount
represented  cumulative  uncollected  fuel surcharge  amounts  through May 1997.
Chugach  anticipates  that its fuel  surcharge  rates  will  increase  effective
January  1998.  A  portion  of the fuel  surcharge  adjustments  continue  to be
recorded as a component of revenue at existing (i.e.  unadjusted) surcharge rate
levels.  Pending finalization of a plan to recover these fuel surcharge amounts,
Chugach has reserved a portion of the fuel surcharge  balancing  account and has
not recorded a portion of the  adjustments  as a component  of revenue.  Chugach
continues  to evaluate  the amount and timing of  recovery of these  uncollected
fuel  surcharge  amounts  and  intends to  recover a portion of such  amounts in
future periods.

Retail  demand and energy rates did not change from the third quarter of 1996 to
the same period in 1997. As previously reported, effective in February 1997, the
wholesale  rate classes were split into three  classes  compared to the previous
two. The classes are now MEA, Seward and Homer (previously,  Seward was combined
with  MEA).  Wholesale  demand and energy  rates  charged to MEA were  decreased
slightly  effective  February  1997. The impact of higher kWh sales and the fuel
surcharge  revenue  more than offset this  decrease in rates.  Demand and energy
rates to Homer and Seward did not change.

Pursuant to a Settlement  Agreement  between  Chugach and  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).  The  amount of this
potential refund is not known at this time.


                                        8

<PAGE>




Higher  fuel  consumption  due the  increase in kWh sales and higher fuel prices
were  again the major  cause for the  increase  in  production  expense  for the
quarter  ended  September  30,  1997  compared  to the same  period in 1996.  As
previously  reported,  Chugach has completed the transition into Period 2 of the
long-term fuel supply contracts. Fuel costs now result from market-based prices.
Purchased  power  expense was higher for the quarter  ended  September  30, 1997
compared to the same period in 1996. This variance was  substantially due to the
system operating scenario that existed during the third quarter of 1997. Chugach
purchased power from AEG&T's Soldotna 1 plant to ensure reliability on the Kenai
Peninsula.  Transmission  expense was lower for the quarter ended  September 30,
1997 from the same period in 1996.  The majority of this  decrease was caused by
lower overhead line  maintenance  expense related to  transmission  right-of-way
clearing  activities.  Consumer accounts expense decreased for the quarter ended
September  30, 1997.  The majority of this  decrease was due to a lower 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.

Current Year to Date Versus Prior Year to Date

Operating  revenues for the nine-month period ended September 30, 1997 increased
relative to the same period in 1996.  These higher revenues were essentially due
to the same reasons outlined in the quarter-to-date comparison section.

Production and purchased power increased and consumer accounts expense decreased
for the  nine-month  period ended  September 30, 1997 for  essentially  the same
reasons outlined in the quarter-to-date comparison section.

Other interest  expense  decreased for the nine-months  ended September 30, 1997
for the same reason  outlined  above in the  analysis of the  quarter-to-quarter
variance.

Financial Condition

Total assets  declined by 1.6% from December 31, 1996 to September 30, 1997. The
decrease is due primarily to the lower balance in net utility plant.  This lower
balance was caused by the higher accumulated depreciation reserve resulting from
the  implementation  of higher  depreciation  rates  (the  phase-in  of  updated
depreciation  rates was completed in 1996).  Restricted cash from economy energy
margins was returned to customers as an offset to the fuel  surcharge  mechanism
and the seasonal decline in accounts  receivable also contributed to the overall
decrease  in total  assets.  Notable  changes to total  liabilities  include the
decrease in First Mortgage  bonds payable  resulting from the March bond payment
and the  reacquisition  of another $5 million of the Series A 2022 bonds  during
the second  quarter.  Accrued  interest also decreased due to the September bond
payment.  In addition,  Chugach made a draw on the CoBank line of credit to make
the  September  semi-annual  bond  payment.  This  combined  with the $5 million
reacquisition  explains the increase in the notes  payable  balance at September
30, 1997.  Chugach  plans to refinance  $15 million of the balance on the CoBank
line of credit into a long-term bond under the Third Supplemental Indenture.


                                        9

<PAGE>




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
National Rural  Utilities  Cooperative  Finance  Corporation  (NRUCFC) and a $35
million line of credit with CoBank.  At  September  30, 1997,  Chugach had $15.1
million outstanding with CoBank,  which carried an interest rate of 6.65%. There
were no amounts outstanding on the NRUCFC line at September 30, 1997.

Capital  construction  in 1997 is estimated at $19.8  million.  At September 30,
1997 approximately $11.7 million has been expended.

Chugach has negotiated a supplemental indenture (Third Supplemental Indenture of
Trust) with  CoBank  which  previously  allowed up to $80 million in future bond
financing.  Recently  Chugach  finalized an amendment to the Third  Supplemental
Indenture of Trust (Seventh Supplemental Indenture of Trust) that eliminates the
maximum aggregate amount of bonds the company may issue under the agreement.  At
September 30, 1997, Chugach had bonds in the amount of $56.4 million outstanding
under this  financing  arrangement.  The balance is  comprised of a $1.4 million
bond (CoBank 1) that 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 6.75%  (repriced  periodically)  and a $23.5
million bond (CoBank 4) currently priced at 6.75% (also repriced  periodically).
Principal  payments on the CoBank 3 and 4 bonds  commence  in 2003 and  continue
through 2022. Chugach plans to convert $15 million of the balance outstanding on
the CoBank  line of credit to a bond  (CoBank 5) with terms  similar to CoBank 3
and 4  above.  Additionally,  Chugach  has  negotiated  a  similar  supplemental
indenture (Fifth  Supplemental  Indenture of Trust) with NRUCFC for $80 million.
At September  30, 1997 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
CoBank 5, or any further  reacquisitions  of its bonds (and any  similar  future
refinancings), Chugach does not anticipate issuance of additional long-term debt
in 1997.

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 1997 and thereafter.

Chugach's  current ratios (total current assets divided by current  liabilities)
at December 31, 1996 and September 30, 1997 were as follows:

                                                              Current Ratio

                  December 31, 1996                                1.07
                  September 30, 1997                                .93



                                       10

<PAGE>



As noted  above,  Chugach  plans to convert  $15  million of the  balance on the
CoBank  line of credit  into a  long-term  bond  under  the  Third  Supplemental
Indenture.  Reclassifying the $15 million from short-term liabilities results in
a current ratio of 1.52.

Outlook

The  competitive  marketplace  for the electric  utility  industry  continues to
evolve.  In  recognition of this,  Chugach is involved in national  benchmarking
studies to improve system operations,  has implemented  strategic alliances with
key suppliers and has made significant  progress in completing its new strategic
plan. Chugach is also involved in efforts to introduce competition at the retail
level in Anchorage. Several customers in another utility's service area formally
asked  Chugach to  provide  their  electric  power.  In  response,  Chugach  has
requested access over the other utility's  distribution and transmission  system
and has asked the APUC to enforce this request. It is not known at this time how
the APUC will rule on this filing.

In  addition,   Chugach  recently  commenced  negotiations  for  new  labor
agreements with its employees  represented by IBEW Local 1547.  Chugach hopes to
craft new agreements with the Union that are beneficial to all involved  parties
and ensure the organization's continued success in this increasingly competitive
marketplace. In the event that agreement is not reached on specific issues, they
will be decided through binding interest arbitration.

Environmental Matters

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


                           PART II. OTHER INFORMATION


Item 1. Legal Proceedings

Standard Steel Salvage Yard Site

As  previously  reported in the 10-Q for the period ending June 30, 1997, 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).

                                       11

<PAGE>




Although  the  Partial  Consent  Decree does not settle  Chugach's  or the other
private PRPs'  liability for Future Costs,  the Partial Consent Decree does bind
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 executed by the private PRPs and the United  States and
was lodged with the Federal  District Court on October 8, 1997. 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.  These  amounts are only  estimates,  however,  and the
actual,  full scope of the S/S  cleanup  at the Site will not be known,  and the
projected costs associated with the remedy cannot be refined, until EPA approves
remedial design documents.

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.

Based on the above estimates, the total amount that may be paid 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.  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 agreed under a reservation of rights
to pay, and currently are paying,  Chugach's  costs of defense for the Site. The
carriers have reserved  their rights  regarding  indemnification  of Chugach for
response costs.  Management believes that all past and future costs incurred for
response,  removal,  investigation  and  cleanup  of the  Site  would  be  fully
recoverable in rates or covered by insurance and therefore  would have no impact
on Chugach's financial condition or results of operations.


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Items 2, 3, 4 and 5

Not Applicable

Item 6. Exhibits and Reports on Form 8-K

     (a)   Exhibits:

           Seventh Supplemental Indenture of Trust by and among Chugach  
           Electric Association,Inc. and Seattle-First National Bank dated 
           June 1, 1997.

           National Bank for  Cooperatives  (CoBank) Credit Agreement dated June
           22, 1994.

           Amendment No. 1 to National Bank for Cooperatives (CoBank) Credit 
           Agreement dated June 1, 1997.

           Financial Data Schedule.

     (b)   Reports on Form 8-K:

           No reports on Form 8-K were filed for the quarter ended September 30,
           1997.


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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:     November 13, 1997



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


                           Date:     November 13, 1997


                                       14

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EXHIBITS

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


Exhibit
number                              Description                            Page 

4.8         Seventh Supplemental Indenture of Trust by and among Chugach
            Electric Association, Inc. and Seattle-First National Bank dated
            June 1, 1997.                                                    16

10.63       National Bank for Cooperatives (CoBank) Credit Agreement dated
            June 22, 1994.                                                   24

10.63.1     Amendment No. 1 to National Bank for Cooperatives (CoBank) Credit
            Agreement dated June 1, 1997.                                    27

27          Financial Data Schedule.                                         **




**  Filed Electronically



                                       15

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