Cleco Corp. (CNL) filed Quarterly Report for the period ended 2009-09-30.
Cleco Corporation holds investments in several subsidiaries including Utility Group Cleco Midstream Resources LLC and Utility Construction & Technology Solutions LLC. Utility Group incorporated on January 2 1935 under the laws of the State of Louisiana contains the LPSC jurisdictional generation transmission and distribution electric utility operations serving the Company's traditional retail and wholesale customers. Utility Group serves customers in communities and rural areas in the State of Louisiana. Cleco Corp. has a market cap of $1.5 billion; its shares were traded at around $24.75 with a P/E ratio of 17.07 and P/S ratio of 1.39. The dividend yield of Cleco Corp. stocks is 3.64%.
Highlight of Business Operations:
In July 2008, Cleco Power filed a rate plan to establish new rates to be effective upon commercial operation of Rodemacher Unit 3. As part of the new rate plan, Cleco Power requested a return on equity of 12.25%. Cleco Power s current base rates allow it the opportunity to earn a maximum regulated return on equity of 11.65%, which is based on a return on equity of 11.25%, with any regulated earnings between 11.25% and 12.25% shared between shareholders and customers in a 40/60 ratio. Cleco Power is currently recording AFUDC associated with construction of Rodemacher Unit 3. Once the unit begins commercial operation, Cleco Power will no longer record AFUDC related to Rodemacher Unit 3. Recovery of the Rodemacher Unit 3 investment is the largest component in Cleco Power s new rate plan. On October 14, 2009, the LPSC approved Cleco Power s new retail rate plan which includes a target return on equity of 10.7% with sharing occurring after 11.3%. The new rates will be effective upon commercial operation of Rodemacher Unit 3. The retail rate plan is expected to increase retail base revenues in the first twelve months of Rodemacher Unit 3 commercial operations by approximately $173.0 million with an anticipated net billing decrease for retail customers of approximately $40.0 million, or 5.0%, including a reduction of approximately $97.0 million resulting from the cessation of collection of and the refund of Rodemacher Unit 3 construction financing costs based on a five-year crediting period. For additional information, see “— Financial Condition — Liquidity and Capital Resources — Regulatory Matters — Retail Rates of Cleco Power” and — “Rodemacher Unit 3.”
October 2007 seeking long-term resources to fill the needs identified by the latest IRP. On February 26, 2009, Cleco Power announced that it had chosen the acquisition of 50% of the Acadia power station, or one of its two 580-MW units, as the lowest bid in its 2007 long-term RFP for capacity beginning in 2010. Cleco Power will own and operate one unit and operate the other 580-MW unit on behalf of Acadia or a future owner as described further below under “— Midstream.” Cleco Power and the parties have executed the definitive agreements. However, prior to closing the transaction, valued at approximately $300 million, Cleco Power must receive approvals from the LPSC and FERC. In a process that remains under the supervision of an independent monitor appointed by the LPSC, Cleco Power and Acadia plan to complete the transaction in the first quarter of 2010. Beginning in January 2010, the agreements provide that Acadia will operate the plant and serve Cleco Power under a tolling agreement covering 50% of the Acadia power station until the transaction is closed. This tolling agreement was approved by the LPSC in October 2009. The tolling agreement must also be approved by FERC.
On October 30, 2009, Acadia and Entergy Louisiana announced that definitive agreements have been executed whereby Entergy Louisiana will purchase 50% of the Acadia power station, or one of its two 580-MW units. The transaction is anticipated to be completed in late 2010 or early 2011. The agreements provide that, beginning in May 2010, Acadia will serve Entergy Louisiana under a tolling agreement covering 50% of the Acadia power station until the sale is completed. Both the asset sale and interim tolling agreement require regulatory approval. Cleco Power will operate both units at Acadia after the Entergy transaction is completed.
CNL is in the portfolios of John Keeley of Keeley Fund Management, Kenneth Fisher of Fisher Asset Management, LLC, Kenneth Fisher of Fisher Asset Management, LLC.
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