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Cleco Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 1, 2010 07:13AM
Cleco Corp. (CNL) filed Quarterly Report for the period ended 2010-09-30.
Highlight of Business Operations:
cost of the project is $250.0 million. Cleco Power s portion of the cost is approximately $150.0 million, including AFUDC. At September 30, 2010, Cleco Power had spent $37.8 million on the project and expects to incur an additional $15.9 million by the end of 2010. Upgrading the interconnected transmission system is expected to increase capacity, reduce transmission constraints, and improve electric service for customers served by all three utilities. The project is expected to be completed in 2012.
In May 2010, Cleco Power accepted the terms of a $20.0 million grant from the DOE under the DOE s small-grant process to implement smart-grid technology for all of Cleco Power s customers. Cleco Power estimates the project will cost $73.0 million, with the DOE grant providing $20.0 million toward the project and Cleco Power providing the remaining $53.0 million. The grant program is a part of the American Recovery and Reinvestment Act of 2009, an economic stimulus package passed by Congress in February 2009. Smart-grid technology includes the installation of “smart electric meters” that enable two-way communication capabilities between a home or business and a utility company. In April 2010, Cleco Power received board approval for the project conditioned upon approval by the LPSC. Cleco Power filed an application with the LPSC in June 2010 and requested expedited approval of the project prior to the end of 2010. A July 2010 status conference established a procedural schedule for the docket. On October 15, 2010, Cleco Power, the LPSC Staff, and the interveners in the docket executed a Proposed Uncontested Stipulated Settlement, which was filed with the LPSC. An uncontested stipulation hearing was conducted on October 25, 2010 before the Administrative Law Judge, during which the Proposed Uncontested Stipulated Settlement, as well as Cleco Power s and the LPSC Staff s respective testimony, were made part of the docket s evidentiary record. Cleco Power anticipates that the matter will receive full LPSC consideration at the LPSC s November 10, 2010 Business and Executive Session. If the AMI project receives approval from the LPSC, Cleco Power expects to complete the project by the first quarter of 2013. If Cleco Power does not receive LPSC approval, the project will be re-evaluated at that time.
In January 2009, Cleco Power filed an application with the LPSC to improve its blackstart process by purchasing a 33-MW gas turbine to be sited at Teche Power Station and designated as Teche Unit 4. The purpose of the project is to allow Cleco Power to return its generation system to service more efficiently than is currently possible in the event of a total system shutdown. The LDEQ issued an air permit in November 2009 and the LPSC application was approved in December 2009. Cleco Power estimates the project will cost $31.0 million, which includes the necessary upgrades to allow the purchased unit to also function as a generation resource suitable for peaking capacity. At September 30, 2010, Cleco Power had spent $15.7 million on the project and expects to incur an additional $9.5 million by the end of 2010. The project is expected to be completed in the second quarter of 2011.
Federal and state income taxes increased $25.2 million, or 505.2%, during the third quarter of 2010 compared to the third quarter of 2009. Federal and state income taxes increased $12.3 million for the change in pre-tax income excluding equity AFUDC, $11.1 million to record tax expense at the annual projected effective tax rate, and $1.8 million for miscellaneous items. For additional information, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 7 — Income Taxes.”