The Alaska Power Administration (APA) will continue to encourage economic and industrial development in Alaska through implementing the sale of APA assets in a manner consistent with the authorizing legislation while balancing all the stakeholders' interests. Alaska Power Administration will provide their employees opportunities for successful career transitions and conduct an efficient transfer of assets and closeout of APA, while continuing to provide customers reliable, low-cost hydroelectric energy during the transition. The attached report presents the results of the independent certified public accounts' audit of the Alaska Power Administration's (APA) combined power system statements of assets; Federal investment and liabilities; and the related combined statements of revenues, expenses and accumulated net revenues, and cash flows. The auditors' reports on APA's internal control structure and compliance with laws and regulations disclosed no reportable conditions or instances of noncompliance. Based on the unqualified opinion of the independent public accounting firm of KPMG Peak Marwick LLP and review of their audit work, the authors believe the financial statements fairly present the financial condition and results of the operations of APA for the period under audit.