-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O0SGtEiPuOr0rB+Zag3DCurCce+ZVpEDH5mOqYIknwPOmWx2wGIyyW0g4ZuuCgjD SnyF5QGwjfj5IJwfK3iGcQ== 0001047469-08-001615.txt : 20080222 0001047469-08-001615.hdr.sgml : 20080222 20080222135731 ACCESSION NUMBER: 0001047469-08-001615 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 11 FILED AS OF DATE: 20080222 DATE AS OF CHANGE: 20080222 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CLECO POWER LLC CENTRAL INDEX KEY: 0000018672 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 720244480 STATE OF INCORPORATION: LA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-147122 FILM NUMBER: 08635802 BUSINESS ADDRESS: STREET 1: 2030 DONAHUE FERRY ROAD CITY: PINEVILLE STATE: LA ZIP: 71360-5226 BUSINESS PHONE: 3184847400 MAIL ADDRESS: STREET 1: 2030 DONAHUE FERRY ROAD CITY: PINEVILLE STATE: LA ZIP: 71360-5226 FORMER COMPANY: FORMER CONFORMED NAME: CLECO UTILITY GROUP INC DATE OF NAME CHANGE: 19990708 FORMER COMPANY: FORMER CONFORMED NAME: CENTRAL LOUISIANA ELECTRIC CO INC DATE OF NAME CHANGE: 19920703 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Cleco Katrina/Rita Hurricane Recovery Funding LLC CENTRAL INDEX KEY: 0001417129 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 000000000 STATE OF INCORPORATION: LA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-147122-01 FILM NUMBER: 08635803 BUSINESS ADDRESS: STREET 1: 2605 HIGHWAY 28 EAST STREET 2: OFFICE #12 CITY: PINEVILLE STATE: LA ZIP: 71360 BUSINESS PHONE: (318) 484-7400 MAIL ADDRESS: STREET 1: 2605 HIGHWAY 28 EAST STREET 2: OFFICE #12 CITY: PINEVILLE STATE: LA ZIP: 71360 S-3/A 1 a2182800zs-3a.htm S-3/A

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TABLE OF CONTENTS
TABLE OF CONTENTS PROSPECTUS

As filed with the Securities and Exchange Commission on February 22, 2008

Registration Nos. 333-147122
and 333-147122-01

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

CLECO POWER LLC (Exact name of Registrant and Sponsor as specified in its charter)		CLECO KATRINA/RITA HURRICANE RECOVERY FUNDING LLC (Exact name of Registrant and Issuing Entity as specified in its charter)
Louisiana (State or other jurisdiction of incorporation or organization)		Louisiana (State or other jurisdiction of incorporation or organization)
72-0244480 (I.R.S. Employer Identification No.)		26-1338431 (I.R.S. Employer Identification No.)
2030 Donahue Ferry Road Pineville, Louisiana 71360-5226 (318) 484-7400 (Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices)		2605 Hwy. 28 East Office Number 12 Pineville, LA 71360-5226 (318) 484-4180 (Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices)
Wade A. Hoefling Senior Vice President, General Counsel and Director of Regulatory Compliance 2030 Donahue Ferry Road Pineville, Louisiana 71360-5226 (318) 484-7400 (Name, address, including zip code, and telephone number, including area code, of agent for service)

With copies to:
Timothy S. Taylor Jackie M. Ramos Baker Botts L.L.P. 910 Louisiana One Shell Plaza Houston, Texas 77002-4995 (713) 229-1234		Eric Tashman, Esq. Sidley Austin LLP 555 California Street San Francisco, California 94104 (415) 772-1214

Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement as determined by market conditions.

If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. o

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. ý

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. o

If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. o

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered	Amount to be registered	Proposed maximum offering price per unit(1)	Proposed maximum aggregate offering price(1)	Amount of registration fee(2)


Storm Recovery Bonds	$181,000,000	100%	$181,000,000	$7,105

(1): Estimated pursuant to Rule 457 under the Securities Act solely for the purpose of calculating the registration fee.
(2): $30.70 of the registration fee was paid with the initial filing of the Registration Statement on November 2, 2007.

The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus supplement and the accompanying prospectus is not complete and may be changed. The storm recovery bonds may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus supplement and the accompanying prospectus are not an offer to sell these securities and they are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion, dated , 2008.

PRELIMINARY PROSPECTUS SUPPLEMENT

(To Prospectus dated , 2008)

$180,600,000

Cleco Katrina/Rita Hurricane Recovery Funding LLC
Issuing Entity

Cleco Power LLC
Seller, Initial Servicer and Sponsor

2008 Senior Secured Storm Recovery Bonds

Tranche		Initial Principal Balance			Interest Rate		Price to Public		Underwriting Discounts and Commissions		Proceeds to the Issuing Entity		Scheduled Final Payment Date		Final Maturity Date
A-1		$	112,000,000										3/1/2017		3/1/2020
A-2		$	68,600,000										3/1/2020		3/1/2023

The total price to the public is $ . The total amount of the underwriting discounts and commissions is $ . The total amount of proceeds to the issuing entity after underwriting discounts and commissions and before deduction of expenses (estimated to be approximately $ ) is $ .

Each 2008 Senior Secured Storm Recovery Bonds, or the "Bonds," will be entitled to interest on March 1 and September 1 of each year. The first scheduled payment date is March 1, 2009.

Investing in the 2008 Senior Secured Storm Recovery Bonds involves risks. Please read "Risk Factors" on page 15 of the accompanying prospectus.

Cleco Katrina/Rita Hurricane Recovery Funding LLC, a Louisiana limited liability company and wholly owned subsidiary of Cleco Power LLC, is issuing up to $180,600,000 aggregate principal amount of Bonds in multiple tranches. Cleco Power LLC is the seller, initial servicer and sponsor with regard to the Bonds. The Bonds are senior secured obligations of the issuing entity and will be secured by the storm recovery property, which includes the right to a special, irrevocable nonbypassable charge, known as a storm recovery charge, paid by all existing and future Louisiana Public Service Commission jurisdictional customers of Cleco Power LLC as discussed herein. Storm recovery charges are required to be adjusted semi-annually, and more frequently as necessary, to ensure the projected recovery of amounts sufficient to provide timely payment of the scheduled principal, interest and other required amounts in connection with the Bonds during the subsequent 12-month period. Credit enhancement for the Bonds will be provided by such statutory true-up mechanism, as well as by general, excess funds and capital subaccounts held under the indenture.

The Bonds represent obligations only of the issuing entity, Cleco Katrina/Rita Hurricane Recovery Funding LLC, and are secured only by the assets of the issuing entity, consisting principally of the storm recovery property and related assets to support its obligations under the storm recovery bonds. Please read "The Bonds—The Collateral," "—The Storm Recovery Property" and "Credit Enhancement" in this prospectus supplement. The storm recovery property includes the right to charge, bill, collect and receive from Cleco Power LLC's customers amounts sufficient to make payments on the Bonds, as described further in this prospectus supplement and the accompanying prospectus. Cleco Power LLC and its affiliates, other than the issuing entity, are not liable for any payments on the Bonds. The Bonds are not a debt or general obligation of the State of Louisiana, the Louisiana Public Service Commission or any other governmental agency or instrumentality and are not a charge on the full faith and credit or the taxing power of the State of Louisiana or any governmental agency or instrumentality.

All matters relating to the structuring and pricing of the Bonds have been considered jointly by Cleco Power LLC and the Louisiana Public Service Commission, acting through its financial advisor. The financial advisor to the Louisiana Public Service Commission is

Pathfinder Capital Advisors, LLC

Additional information is contained in the accompanying prospectus. You should read this prospectus supplement and the accompanying prospectus carefully before you decide to invest in the Bonds. This prospectus supplement may not be used to offer or sell the Bonds unless accompanied by the prospectus.

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement and the accompanying prospectus are truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the Bonds through the book-entry facilities of The Depository Trust Company against payment in New York, New York on March , 2008. There currently is no secondary market for the Bonds, and we cannot assure you that one will develop.

Credit Suisse
Sole Bookrunner

Wachovia Securities

DEPFA First Albany Securities LLC

The date of this prospectus supplement is February , 2008.

TABLE OF CONTENTS

PROSPECTUS SUPPLEMENT

ABOUT THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS		S-1
SUMMARY OF TERMS		S-2
THE BONDS		S-12
The Collateral		S-12
The Storm Recovery Property		S-12
The Financing Order		S-14
Payment and Record Dates and Payment Sources		S-14
Principal Payments		S-15
Weighted Average Life Sensitivity		S-17
Fees and Expenses		S-19
Distribution Following Acceleration		S-19
Interest Payments		S-20
Optional Redemption		S-20
THE TRUSTEE		S-21
CREDIT ENHANCEMENT		S-21
True-Up Mechanism for Payment of Scheduled Principal and Interest		S-21
Collection Account and Subaccounts		S-22
How Funds in the Collection Account Will Be Allocated		S-23
THE STORM RECOVERY CHARGES		S-25
UNDERWRITING THE BONDS		S-26
The Underwriters' Sales Price for the Bonds		S-26
No Assurance as to Resale Price or Resale Liquidity for the Bonds		S-26
Various Types of Underwriter Transactions That May Affect the Price of the Bonds		S-26
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES		S-27
MATERIAL LOUISIANA STATE TAX CONSEQUENCES		S-27
RISK WEIGHTING OF THE BONDS UNDER CERTAIN INTERNATIONAL CAPITAL GUIDELINES		S-27
RATINGS FOR THE BONDS		S-28
LEGAL PROCEEDINGS		S-28
WHERE YOU CAN FIND MORE INFORMATION		S-28
LEGAL MATTERS		S-29
OFFERING RESTRICTIONS IN CERTAIN JURISDICTIONS		S-29

ABOUT THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS

This prospectus supplement and the accompanying prospectus provide information about us, the Bonds and Cleco Power LLC, as seller, initial servicer and sponsor. This prospectus supplement describes the specific terms of the Bonds, while the accompanying prospectus describes more general terms of the Bonds.

References in this prospectus supplement and the accompanying prospectus to the terms "we," "us," "our" or "the issuing entity" mean Cleco Katrina/Rita Hurricane Recovery Funding LLC. References to "Cleco Power," "the sponsor," "the initial servicer" or "the seller" mean Cleco Power LLC. References to "Cleco Corporation" mean Cleco Corporation, the parent company of Cleco Power LLC. References to the "Bonds" or, unless the context otherwise requires, the "storm recovery bonds" mean our 2008 Senior Secured Storm Recovery Bonds offered pursuant to this prospectus supplement and the accompanying prospectus. References to "the servicer" refer to Cleco Power and any successor servicer under the servicing agreement referred to in this prospectus supplement and the accompanying prospectus. References to the "Securitization Act" mean Act 64 of 2006, established by the Louisiana Legislature, providing for a financing mechanism through which electric utilities can use securitization financing for storm recovery costs, including the financing of a storm recovery reserve, by issuing "storm recovery bonds." The Securitization Act is codified at La. R.S. 45:1226-1236. Unless the context otherwise requires, the term "customer" means any existing or future LPSC-jurisdictional customer who remains attached to Cleco Power's (or its successors) electric transmission or distribution lines, and who, via such lines, receive any type of service from Cleco Power (or its successors) under rate schedules or special contracts approved by the Louisiana commission. We also refer to the Louisiana Public Service Commission as the "Louisiana commission" or the "LPSC." You can find a glossary of some of the other defined terms we use in this prospectus supplement and the accompanying prospectus on page 110 of the accompanying prospectus.

We have included cross-references to sections in this prospectus supplement and the accompanying prospectus where you can find further related discussions. You can also find references to key topics in the table of contents on the previous page and in the table of contents on page (i) of the accompanying prospectus.

You should rely only on the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus. Neither we nor any underwriter, agent, dealer, salesperson, the Louisiana commission or Cleco Power has authorized anyone else to provide you with any different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not offering to sell the Bonds in any jurisdiction where the offer or sale is not permitted. The information in this prospectus supplement is current only as of the date of this prospectus supplement.

S-1

SUMMARY OF TERMS

The following section is only a summary of selected information and does not provide you with all the information you will need to make your investment decision. There is more detailed information in this prospectus supplement and in the accompanying prospectus. To understand all of the terms of the offering of the Bonds, carefully read this entire document and the accompanying prospectus.

		Name		Age		Background
		Dilek Samil		51		President of the Issuing Entity; President and Chief Operating Officer of Cleco Power since May 2005. Executive Vice President and Chief Financial Officer of Cleco Power and Cleco Corporation from April 2004 to May 2005. Senior Vice President Finance and Chief Financial Officer of Cleco Power and Cleco Corporation from October 2001 to April 2004. Joined Cleco Corporation in 2001.

S-2

Keith D. Crump	46	Vice President of the Issuing Entity; Vice President-Regulatory, Retail Operations & Resource Planning of Cleco Power since March 2007. Treasurer of Cleco Corporation and Cleco Power from May 2005 to March 2007. Manager of Forecasting and Analytics, Budgeting of Cleco Power from December 2004 to May 2005. Manager of Forecasting and Analytics of Cleco Power from October 2002 to December 2004. Manager of Technical Support Cleco Midstream Resources LLC, an affiliate of Cleco Power from July 1998 to October 2002. Joined Cleco Corporation in 1989.
Terry L. Taylor	52	Secretary of the Issuing Entity; Assistant Controller of Cleco Power and Cleco Corporation since August 2006. Director of Accounting Services and Affiliate Compliance of Cleco Power and Cleco Corporation from January 2004 to August 2006. Manager Systems Support and Inter-Affiliate Compliance from October 2002 to January 2004. Director of Inter-Affiliate Compliance from March 2002 to October 2002. Joined Cleco Corporation in 2000.
K. Michael Sawrie	57	Treasurer of the Issuing Entity; Manager Finance, Treasury and Shareholder Services of Cleco Power and Cleco Corporation since February 2002. Director of Treasury Services of Cleco Power and Cleco Corporation from May 1998 to February 2002. Joined Cleco Corporation in 1987.

Required ratings:

Aaa/AAA/AAA by Moody's, S&P and Fitch, respectively. Please read "Ratings for the Bonds" in this prospectus supplement.

S-3

Seller, sponsor and initial servicer of the storm recovery property:		Cleco Power is an integrated electric utility that conducts generation, purchase, transmission, distribution and sale operations subject to the jurisdiction of the Louisiana commission and the Federal Energy Regulatory Commission, or FERC, among other regulators, which also engages in energy management activities. Cleco Power is a Louisiana limited liability company and a wholly owned subsidiary of Cleco Corporation, a regional energy services holding company. Cleco Power, acting as the initial servicer, and any successor servicer, referred to in this prospectus supplement and the accompanying prospectus as the "servicer," will service the storm recovery property securing the Bonds under a servicing agreement with us. Please read "The Seller, Initial Servicer and Sponsor" in the accompanying prospectus. Neither Cleco Power nor Cleco Corporation nor any other affiliate (other than us) is an obligor on the Bonds.
Cleco Power's address:		2030 Donahue Ferry Road, Pineville, Louisiana 71360-5226
Cleco Power's telephone number:		(318) 484-7400
Use of proceeds:		Upon the issuance and sale of the Bonds, we will use the net proceeds to pay to Cleco Power the purchase price of Cleco Power's rights under the financing order, which are storm recovery property.
		The net proceeds from the sale of the storm recovery property (after payment of upfront financing costs) will be used by Cleco Power as follows: Cleco Power will use approximately $50 million to fund storm recovery reserves to be held in a segregated restricted account. Cleco Power will use the remaining portion of the proceeds (approximately $131 million as of December 31, 2007), which is reimbursement for storm recovery costs previously expended by Cleco Power from internally-generated funds, for working capital and other general corporate purposes. Please read "Use of Proceeds" in the accompanying prospectus.
Bond structure:		Sinking fund bond, two tranches; tranches A-1, expected average life 5.00 years, A-2, expected average life 10.58 years, are scheduled to pay principal semi-annually and sequentially. Please read the Expected Amortization Schedule in this prospectus supplement.
Louisiana commission financial advisor:		Pathfinder Capital Advisors, LLC
Indenture trustee:		U.S. Bank National Association, a national banking association organized and existing under the laws of the United States of America.

S-4

S-5

		The Bonds are secured only by our assets, consisting principally of the storm recovery property relating to the Bonds and funds on deposit in the collection account for the Bonds and related subaccounts. The subaccounts consist of a capital subaccount, which will be funded at closing in the amount of 0.5% of the initial aggregate principal amount of the Bonds, a general subaccount, into which the servicer will deposit all storm recovery charge remittances, and an excess funds subaccount, into which we will transfer any excess amounts collected and remaining on a payment date after all payments to bondholders and other parties have been made. Amounts on deposit in each of these subaccounts will be available to make payments on the Bonds on each payment date. Please read "Credit Enhancement—Collection Account and Subaccounts" and "Credit Enhancement—How Funds in the Collection Account Will Be Allocated" in this prospectus supplement.
State pledge:		The State of Louisiana has pledged in the Securitization Act that it will not alter the provisions of the part of the Securitization Act which authorizes the Louisiana commission to create a contract right by the issuance of a financing order, to create storm recovery property, and to make the storm recovery charges imposed by a financing order irrevocable, binding and nonbypassable charges, take or permit any action that impairs or would impair the value of the storm recovery property, or, except for adjustments discussed in "Cleco Power's Financing Order—True-ups" and "The Servicing Agreement—Storm Recovery Charge Adjustment Process" in the accompanying prospectus, reduce, alter or impair the storm recovery charges to be imposed, collected and remitted to storm recovery bondholders until the principal, interest and premium, if any, and any other charges incurred and contracts to be performed in connection with the Bonds have been paid and performed in full. However, nothing will preclude limitation or alteration if and when full compensation is made for the full protection of the storm recovery charges collected pursuant to the financing order and the full protection of the bondholders and any assignee or financing party. Please read "Risk Factors—Risks Associated with Potential Judicial, Legislative or Regulatory Actions" and "The Securitization Act—Cleco Power and Other Utilities May Securitize Storm Recovery Costs and Related Financing and Ongoing Costs" in the accompanying prospectus.

S-6

Louisiana commission pledge:		The Louisiana commission has jurisdiction over Cleco Power pursuant to Article 4, Section 21, of the Louisiana Constitution. The Louisiana commission has pledged in the financing order that (i) the financing order is irrevocable until the indefeasible (i.e., not voidable) payment in full of the Bonds and (ii) except in connection with a refinancing or refunding, it may not amend, modify or rescind the financing order by any subsequent action or reduce, impair, postpone, terminate, or otherwise adjust storm recovery charges approved in the financing order, provided that nothing in clause (ii) shall preclude limitation or alteration if and when full compensation is made for the full protection of the storm recovery charges collected pursuant to the financing order and the full protection of the bondholders and any assignee or financing party. Please read "Risk Factors—Risks Associated with Potential Judicial, Legislative or Regulatory Actions" and "Cleco Power's Financing Order—Louisiana Commission Pledge" in the accompanying prospectus.
True-up mechanism for payment of scheduled principal, interest and other required amounts:		Storm recovery charges are required to be adjusted semi-annually to:

		•		correct, over a period of up to 12 months covering the next two succeeding payment dates, any under-collections or over-collections, for any reason, during the preceding six months, and
		•		ensure the projected recovery of amounts sufficient to provide timely payment of the scheduled principal, interest and other required amounts in connection with the Bonds during the subsequent 12-month period.
		The servicer may also make interim true-up adjustments more frequently under certain circumstances.
		Any delinquencies or under-collections in one customer class will be taken into account in the true-up mechanism to adjust the storm recovery charge for all customers of Cleco Power, not just the class of customers from which the delinquency or under-collection arose.
		The financing order provides that the true-up mechanism and all other obligations of the State of Louisiana and the Louisiana commission set forth in the financing order are direct, explicit, irrevocable and unconditional upon issuance of the Bonds, and are legally enforceable against the State of Louisiana and the Louisiana commission. Please read "The Storm Recovery Charges" in this prospectus supplement and "Cleco Power's Financing Order" and "The Servicing Agreement—Storm Recovery Charge Adjustment Process" in the accompanying prospectus.

S-7

Nonbypassable storm recovery charges:		The nonbypassable storm recovery charges are applied to all existing and future Louisiana commission-jurisdictional customers who remain attached to Cleco Power's (or its successor's) electric transmission or distribution lines, and who, via such lines, receive any type of service from Cleco Power (or its successor) under rate schedules or special contracts approved by the Louisiana commission. Any customer who self-generates or co-generates electricity will be assessed storm recovery charges based upon the total firm and standby load served by Cleco Power. Any customer who completely severs interconnection with Cleco Power may become exempt from continued payment of the storm recovery charges. In the financing order, the Louisiana commission committed to ensure that such obligations are undertaken and performed by Cleco Power or any other entity providing electric transmission and distribution services, or in the event that transmission and distribution services are not provided by a single entity, any entity providing transmission or distribution services to Cleco Power's Louisiana commission-jurisdictional customers. Please read "The Storm Recovery Charges" in this prospectus supplement and "Cleco Power's Financing Order" and "The Servicing Agreement—Storm Recovery Charge Adjustment Process" in the accompanying prospectus.
Priority of Distributions:		On each payment date, the trustee will allocate or pay all amounts on deposit in the general subaccount of the collection account for the Bonds in the following order of priority:

		1.		payment of a pro rata portion of the trustee's fees, plus expenses and any outstanding indemnity amounts not to exceed $50,000 in any 12-month period,
		2.		payment of a pro rata portion of the servicing fee relating to the Bonds, plus any unpaid servicing fees relating to the Bonds from prior payment dates,
		3.		payment of a pro rata portion of the administration fee and a pro rata portion of the fees of our independent manager, which will be in an amount specified in an agreement between us and our independent manager,
		4.		payment of all of our other ordinary periodic operating expenses relating to the Bonds, such as accounting and audit fees, rating agency fees, legal fees and certain reimbursable costs of the servicer under the servicing agreement,
		5.		payment of the interest then due on the Bonds, including any past-due interest,

S-8

		6.		payment of the principal then required to be paid on the Bonds at final maturity or upon acceleration upon an event of default,
		7.		payment of the principal then scheduled to be paid on the Bonds in accordance with the expected sinking fund schedule, including any previously unpaid scheduled principal,
		8.		payment of any of our remaining unpaid operating expenses and any remaining amounts owed pursuant to the basic documents relating to the Bonds, including all remaining amounts owed to the trustee,
		9.		replenishment of any amounts drawn from the capital subaccount (other than distributed investment earnings on the capital subaccount), plus any deficiency in the amount of investment earnings on the capital subaccount allowed under the financing order that have not previously been distributed to us
		10.		if the balance in the capital subaccount is greater than the initial balance of the capital subaccount after making the foregoing allocations, an amount of investment earnings on the capital subaccount not to exceed [ . ]% per annum shall be paid to us; provided that no event of default has occurred and is continuing,
		11.		allocation of the remainder, if any, to the excess funds subaccount, and
		12.		after the Bonds have been paid in full and discharged, the balance, together with all amounts in the capital subaccount and the excess funds subaccount, released to us free and clear of the lien of the indenture.

		The annual servicing fee in clause 2 may not exceed 0.05% of the original principal amount of the Bonds (for so long as Cleco Power is the servicer) and the annual administration fee in clause 3 may not exceed $100,000.
Initial storm recovery charge as a percentage of customer's total electricity bill:		The initial storm recovery charge would represent approximately 1% of the total bill received by a 1,283 kWh residential customer of Cleco Power as of December 31, 2007.
Prohibition from issuing more than one series of storm recovery bonds:		The indenture will prohibit us from issuing any storm recovery bonds (as such term is defined in the Securitization Act) other than the Bonds.

S-9

20% international risk weighting:		Under the standardized approach provided in the framework established by "International Convergence of Capital Management and Capital Standards: A Revised Framework" (as amended, "Basel II"), the Bonds may attract a risk weighting of 20% on the basis that the Bonds are rated in the highest category by a major rating agency. In the alternative, under the framework established by Basel II, the Bonds may attract the same risk weighting if the Bonds are considered to be "guaranteed" by a non governmental public sector entity.
		If held by financial institutions subject to regulation in countries (other than the United States) that have adopted and continue to use or permit the use of the 1988 International Convergence of Capital Measurement and Capital Standards of the Basel Committee on Banking Supervision (as amended, the "Basel Accord") for risk weighting, the Bonds may attract the same risk weighting as "claims on" or "claims guaranteed by" non-central government bodies within the United States, which are accorded a 20% risk weighting. We note, however, that the analysis under the Basel Accord may be different than that under Basel II.
		However, we cannot assure you that the Bonds will attract a 20% risk weighting treatment under any national law, regulation or policy implementing Basel II, the Basel Accord or any transitional regime. Investors should consult their regulators before making any investment in the Bonds. Please read "Risk Weighting of the Bonds Under Certain International Capital Guidelines" in this prospectus supplement and "Risk Weighting Under Certain International Capital Guidelines" in the accompanying prospectus.
Continuing disclosure:		The indenture under which the Bonds will be issued requires all of the periodic reports that we file with the SEC, the principal transaction documents and other information concerning the storm recovery charges and the security relating to the Bonds to be posted on the website associated with our parent company, located at www.cleco.com.
Tax treatment:		The Bonds will be treated as debt for U.S. federal income tax purposes. Please read "Material Federal Income Tax Consequences for the Storm Recovery Bondholders" in the accompanying prospectus.
ERISA eligible:		Yes; please read "ERISA Considerations" in the accompanying prospectus.
Payment dates and interest accrual:		Interest payable semi-annually, March 1 and September 1. Interest will be calculated on a 30/360 basis. The first scheduled interest and principal payment date is March 1, 2009.

S-10

		Interest is due on each payment date and principal is due upon the final maturity date for each tranche.
Expected settlement:		March , 2008, settling flat. DTC, Clearstream and Euroclear.
*Risk factors*:		You should consider carefully the risk factors beginning on page 15 of the accompanying prospectus before you invest in the Bonds.

S-11

THE BONDS

We will issue the Bonds and secure their payment under an indenture that we will enter into with U.S. Bank National Association, as trustee, referred to in this prospectus supplement and the accompanying prospectus as the "trustee." We will issue the Bonds in minimum denominations of $100,000, or in integral multiples of $1,000 in excess thereof, except that we may issue one bond in each tranche in a smaller denomination. The expected average life in years, initial principal balance, scheduled final payment date, final maturity date and interest rate for each tranche of the Bonds are stated in the table below.

Tranche	Expected Average Life (Years)	Initial Principal Balance		Scheduled Final Payment Date	Final Maturity Date
A-1	5.00	$	112,000,000	3/1/2017	3/1/2020
A-2	10.58	$	68,600,000	3/1/2020	3/1/2023

The scheduled final payment date for each tranche of the Bonds is the date when the outstanding principal balance of that tranche will be reduced to zero if we make payments according to the expected sinking fund schedule for that tranche. The final maturity date for each tranche of the Bonds is the date when we are required to pay the entire remaining unpaid principal balance, if any, of all outstanding Bonds of that tranche. The failure to pay principal of any tranche of Bonds by the final maturity date for that tranche is an event of default under the indenture, but the failure to pay principal of any tranche of Bonds by the respective scheduled final payment date will not be an event of default under the indenture. Please read "The Storm Recovery Bonds—Payments of Interest and Principal on the Storm Recovery Bonds" and "—What Constitutes an Event of Default on the Storm Recovery Bonds" in the accompanying prospectus.

The Collateral

The Bonds will be secured under the indenture by the indenture's trust estate. The principal asset of the indenture's trust estate for the Bonds is the storm recovery property relating to the Bonds, which is a present contract right created under the Securitization Act and the financing order issued by the Louisiana commission on September 17, 2007, referred to in this prospectus supplement as the "financing order." The indenture's trust estate also consists of:

•: our rights under the sale agreement pursuant to which we will acquire the storm recovery property relating to the Bonds, under the administration agreement and under all bills of sale delivered by Cleco Power pursuant to the sale agreement,
•: our rights under the servicing agreement and any subservicing, agency or collection agreements executed in connection with the servicing agreement,
•: the collection account for the Bonds and all subaccounts of the collection account,
•: all of our other property related to the Bonds, other than any cash released to us by the trustee on any payment date to be distributed to Cleco Power as a return of its invested capital in us,
•: all present and future claims, demands, causes and choses in action in respect of any or all of the foregoing, and
•: all payments on or under and all proceeds in respect of any or all of the foregoing.

The Storm Recovery Property

In general terms, the portion of all of the rights and interests of Cleco Power that relate to the Bonds under the financing order, upon transfer to us pursuant to the sale agreement, are referred to in

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this prospectus supplement as the "storm recovery property." The storm recovery property includes the right to impose, collect and receive, the applicable storm recovery charges payable by all of Cleco Power's customers, in an amount sufficient to pay principal and interest and to make other required amounts and charges in connection with the Bonds, to obtain periodic adjustments to such charges as provided in the financing order and all revenues, collections, claims, rights to payments, payments, money or proceeds arising from the foregoing rights and interests. The storm recovery property does not include the rights of Cleco Power to earn and receive a rate of return on its invested capital in us, to receive administration and servicer fees, to withdraw funds from its restricted storm recovery reserve funded by the proceeds from the sale of the storm recovery property, or to use Cleco Power's remaining portion of those proceeds.

We will purchase the storm recovery property from Cleco Power to support the issuance of the Bonds. Storm recovery charges authorized in the financing order that relate to the Bonds are irrevocable and not subject to reduction, impairment, or adjustment by further action of the Louisiana commission, except for semi-annual and interim true-up adjustments to correct over-collections or under-collections and to provide for the expected recovery of amounts sufficient to timely provide all payments of debt service and other required amounts and charges in connection with the Bonds. Please read "Credit Enhancement—True-Up Mechanism for Payment of Scheduled Principal and Interest" in this prospectus supplement. All revenues and collections resulting from storm recovery charges provided for in the financing order that relate to the Bonds are part of the storm recovery property. Cleco Power is authorized in the financing order to securitize and to cause the issuance of storm recovery bonds with an aggregate principal amount of approximately $187 million, equal to the sum of:

•: Cleco Power's costs incurred in connection with restoring service to its customers who experienced electric power outages as a result of Hurricanes Katrina and Rita (approximately $132 million, after crediting revenues from an interim storm surcharge, and excluding income tax benefits associated with such costs), plus
•: a storm recovery reserve in the amount of approximately $50 million, and
•: the upfront and ongoing costs of issuing, supporting and servicing the Bonds.

The storm recovery property relating to the Bonds is described in more detail under "The Sale Agreement—Cleco Power's Sale and Assignment of the Storm Recovery Property" in the accompanying prospectus.

Cleco Power, as servicer, will bill and collect storm recovery charges allocable to the Bonds from Cleco Power customers, and will remit the collections to the trustee. Cleco Power will include the storm recovery charges in its bills to its customers and is required to show the storm recovery charges as a separate line item or footnote. Additionally, the servicer is required to send a written statement at least annually to all customers that we are the owner of the rights to the storm recovery property and that the servicer is merely our collection agent. During the twelve months ended December 31, 2007 approximately 33% of Cleco Power's total deliveries (based on MWh) were to industrial customers, approximately 27% were to commercial customers and approximately 39% were to residential customers.

Cleco Power will be required to remit the storm recovery charges to the trustee daily each business day based on estimated daily collections, using a weighted average balance of days outstanding on Cleco Power's retail bills. Until Cleco Power remits the storm recovery charges to the trustee, the storm recovery charges may be commingled with Cleco Power's other funds. Please read "Risk Factors—Risks Associated with Potential Bankruptcy Proceedings of the Seller or the Servicer," and "How a Bankruptcy May Affect Your Investment—Bankruptcy of Cleco Power" in the accompanying prospectus.

Because the amount of storm recovery charge collections will depend largely on the amount of electricity consumed by Cleco Power's customers, the amount of collections may vary substantially from

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month to month. Please read "The Seller, Initial Servicer and Sponsor" in the accompanying prospectus.

Under the Securitization Act and the indenture, the trustee or the holders of the Bonds have the right to foreclose or otherwise enforce the lien on the storm recovery property. However, in the event of foreclosure, there is likely to be a limited market, if any, for the storm recovery property. Therefore, foreclosure might not be a realistic or practical remedy. Please read "Risk Factors—Risks Associated with the Unusual Nature of the Storm Recovery Property" in the accompanying prospectus.

The Financing Order

On September 17, 2007, the Louisiana commission issued its financing order applicable to Cleco Power authorizing the issuance of storm recovery bonds with an aggregate principal amount of approximately $187 million, consisting of: (a) approximately $132 million of remaining unamortized storm recovery costs pursuant to a separate order of the Louisiana commission, plus (b) the costs of funding storm recovery reserves in the amount of approximately $50 million to create a restricted storm recovery reserve in a segregated restricted account, plus (c) upfront financing costs, which are estimated (for purposes of calculating the aggregate principal amount) at $4.6 million, but will be reviewed in accordance with the financing order to determine that they were prudently and actually incurred costs, plus or minus (d) any adjustment, pursuant to the issuance advice letter, to reflect the cost of any approved swap or hedge or credit enhancement or any change necessary to account for Cleco Power's collection of interim storm recovery surcharge revenues through the date of pricing of the Bonds in accordance with the financing order. The financing order also authorized (1) Cleco Power's proposed financing structure; (2) creation of the storm recovery property, including the right to impose and collect storm recovery charges sufficient to pay principal, interest and other amounts related to the Bonds and associated financing costs; (3) a tariff to implement the storm recovery charges; and (4) a tariff to implement a surcredit to provide customers the benefit of all non-ratepayer recoveries and to address ancillary cost recovery relating to the storm recovery cost process. The financing order became final and non-appealable on October 3, 2007.

The financing order requires Cleco Power to submit to the Louisiana commission within 60 days after the filing of the issuance advice letter a final accounting of the upfront financing costs which will be reviewed and reconciled by the staff of the Louisiana commission with prudently and actually incurred costs.

Pursuant to the provisions of the Securitization Act, the financing order is irrevocable and is not subject to reduction, impairment or adjustment by further action of the Louisiana commission, except as contemplated by the periodic true-up adjustments. The financing order provides that the true-up mechanism and all other obligations of the State of Louisiana and the Louisiana commission set forth in the financing order are direct, explicit, irrevocable and unconditional upon issuance of the Bonds, and are legally enforceable against the State of Louisiana and the Louisiana commission. Please read "Cleco Power's Financing Order" in the accompanying prospectus.

Payment and Record Dates and Payment Sources

Beginning March 1, 2009, we will make payments of interest on the Bonds semi-annually on March 1st and September 1st of each year, or, if that day is not a business day, the following business day (each, a "payment date"). So long as the Bonds are in book-entry form, on each payment date, we will make interest and principal payments to the persons who are the holders of record as of the business day immediately prior to that payment date, which is referred to as the "record date." If we issue certificated storm recovery bonds to beneficial owners of the Bonds as described in "The Storm Recovery Bonds—Definitive Certificated Storm Recovery Bonds" in the accompanying prospectus, the record date will be the last business day of the calendar month immediately preceding the payment date. On each payment date, we will pay amounts on outstanding Bonds from amounts available in the collection account and the related subaccounts held by the trustee in the priority set forth under

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"Credit Enhancement—How Funds in the Collection Account Will Be Allocated" in this prospectus supplement. These available amounts, which will include amounts collected by the servicer for us with respect to the storm recovery charges, are described in greater detail under "The Storm Recovery Bonds—The Collection Account for the Storm Recovery Bonds" in the accompanying prospectus.

Principal Payments

On each payment date, we will pay principal of the Bonds to the bondholders equal to the sum, without duplication, of:

•: the unpaid principal amount of any Bond whose final maturity date is on that payment date, plus
•: the unpaid principal amount of any Bond upon acceleration following an event of default relating to the Bonds, plus
•: any overdue payments of principal, plus
•: any unpaid and previously scheduled payments of principal, plus
•: the principal scheduled to be paid on any Bond on that payment date,

but only to the extent funds are available in the collection account (including all applicable subaccounts) after payment of certain of our fees and expenses and after payment of interest as described below under "—Interest Payments." To the extent funds are so available, we will make scheduled payments of principal of the Bonds in the following order:

1.: to the holders of the tranche A-1 Bonds, until the principal balance of that tranche has been reduced to zero, and
2.: then to the holders of the tranche A-2 Bonds, until the principal balance of that tranche has been reduced to zero.

However, we will not pay principal of any tranche of Bonds on any payment date if making the payment would reduce the principal balance of that tranche to an amount lower than the amount specified in the expected amortization schedule below for that tranche on that payment date. Any excess funds remaining in the collection account after payment of principal, interest, applicable fees and expenses and payments to the applicable subaccounts of the collection account will be retained in the excess funds subaccount until applied on a subsequent payment date. The entire unpaid principal balance of each tranche of the Bonds will be due and payable on the final maturity date for the tranche.

If an event of default under the indenture has occurred and is continuing, the trustee or the holders of a majority in principal amount of the Bonds then outstanding may declare the unpaid principal balance of the Bonds, together with accrued interest thereon, to be due and payable. However, the nature of our business will result in payment of principal upon an acceleration of the Bonds being made as funds become available. Please read "Risk Factors—Risks Associated With the Unusual Nature of the Storm Recovery Property" and "—You may experience material payment delays or incur a loss on your investment in the storm recovery bonds because the source of funds for payment is limited" in the accompanying prospectus. If there is a shortfall in the amounts available to make principal payments on the Bonds that are due and payable, including upon an acceleration following an event of default under the indenture, the trustee will distribute principal from the collection account pro rata to each tranche of the Bonds based on the principal amount then due and payable on the payment date; and if there is a shortfall in the remaining amounts available to make principal payments on the Bonds that are scheduled to be paid, the trustee will distribute principal from the collection account pro rata to each tranche of the Bonds based on the principal amount then scheduled to be paid on the payment date.

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The expected amortization schedule below sets forth the principal balance that is scheduled to remain outstanding on each payment date for each tranche of the Bonds from the issuance date to the scheduled final payment date. Similarly, the expected sinking fund schedule below sets forth the corresponding principal payment that is scheduled to be made on each payment date for each tranche of the Bonds from the issuance date to the scheduled final payment date. In establishing these schedules, we have made the assumptions specified in the bullet points under the weighted average life sensitivity table below under "—Weighted Average Life Sensitivity," among other assumptions.

Expected Amortization Schedule

Outstanding Principal Balance Per Tranche

Payment Date	Tranche A-1 Balance		Tranche A-2 Balance
Initial Principal Balance	$	112,000,000	$	68,600,000
3/1/2009	$	103,645,665	$	68,600,000
9/1/2009	$	98,517,521	$	68,600,000
3/1/2010	$	92,682,706	$	68,600,000
9/1/2010	$	87,154,068	$	68,600,000
3/1/2011	$	80,918,672	$	68,600,000
9/1/2011	$	74,979,833	$	68,600,000
3/1/2012	$	68,318,557	$	68,600,000
9/1/2012	$	61,942,991	$	68,600,000
3/1/2013	$	54,837,098	$	68,600,000
9/1/2013	$	48,020,293	$	68,600,000
3/1/2014	$	40,448,536	$	68,600,000
9/1/2014	$	33,161,529	$	68,600,000
3/1/2015	$	25,102,427	$	68,600,000
9/1/2015	$	17,323,143	$	68,600,000
3/1/2016	$	8,754,216	$	68,600,000
9/1/2016	$	459,605	$	68,600,000
3/1/2017		—	$	59,957,279
9/1/2017		—	$	51,070,493
3/1/2018		—	$	41,301,956
9/1/2018		—	$	31,732,970
3/1/2019		—	$	21,256,187
9/1/2019		—	$	10,964,530
3/1/2020		—		—

On each payment date, the trustee will make principal payments to the extent the principal balance of each tranche of the Bonds exceeds the amount indicated for that payment date in the table above and to the extent of funds available in the collection account after payment of certain of our fees and expenses and after payment of interest. If sufficient funds are available on each payment date, principal payments will be in the amounts indicated for each payment date in the expected sinking fund schedule below.

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Expected Sinking Fund Schedule

Date	Tranche A-1		Tranche A-2
3/1/2009	$	8,354,335		—
9/1/2009	$	5,128,144		—
3/1/2010	$	5,834,816		—
9/1/2010	$	5,528,638		—
3/1/2011	$	6,235,396		—
9/1/2011	$	5,938,839		—
3/1/2012	$	6,661,277		—
9/1/2012	$	6,375,566		—
3/1/2013	$	7,105,894		—
9/1/2013	$	6,816,804		—
3/1/2014	$	7,571,757		—
9/1/2014	$	7,287,007		—
3/1/2015	$	8,059,102		—
9/1/2015	$	7,779,284		—
3/1/2016	$	8,568,927		—
9/1/2016	$	8,294,611		—
3/1/2017	$	459,605	$	8,642,721
9/1/2017		—	$	8,886,786
3/1/2018		—	$	9,768,537
9/1/2018		—	$	9,568,986
3/1/2019		—	$	10,476,784
9/1/2019		—	$	10,291,656
3/1/2020		—	$	10,964,530

Total Payments*	$	112,000,000	$	68,600,000

*: Total payments may not be exact due to rounding.

We cannot assure you that principal payments will be made or that the principal balance of any tranche of the Bonds will be reduced at the rates indicated in the schedules above. Principal payments and the actual reduction in tranche principal balances may occur more slowly. Principal payments and the actual reduction in tranche principal balances will not occur more quickly than indicated in the above schedules, except that the total outstanding principal balance of and interest accrued on the Bonds may be accelerated upon an event of default under the indenture. The Bonds will not be in default if principal is not paid as specified in the schedules above unless the principal of any tranche is not paid in full on or before the final maturity date of that tranche.

Weighted Average Life Sensitivity

Weighted average life refers to the average amount of time from the date of issuance of a security until each dollar of principal of the security has been repaid to the investor. The rate of principal payments on each tranche of Bonds, the aggregate amount of each interest payment on each tranche of Bonds and the actual final payment date of each tranche of Bonds will depend on the timing of the servicer's receipt of storm recovery charges from Cleco Power's customers. See "Weighted Average Life and Yield Considerations for the Storm Recovery Bonds" in the accompanying prospectus for further information. Changes in the expected weighted average lives of the tranches of the Bonds in relation to variances in actual energy consumption levels (retail electric sales) from forecast levels are shown below. Severe stress cases on electricity consumption result in very minor changes (approximately 2 months), if any, in the weighted average lives of each tranche.

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Weighted Average Life Sensitivity

For the purposes of preparing the above table, we have assumed, among other things, that:

•: the forecast error stays constant over the life of the Bonds and is equal to an overestimate of electricity consumption of 5% (1.78 standard deviations from mean) or 15% (5.15 standard deviations from mean) as stated in the chart above;
•: the servicer makes timely and accurate filings to true-up the storm recovery charges semi-annually in years one through thirteen;
•: Cleco Power customers remit all storm recovery charges 19 days after such charges are billed; and
•: Ongoing expenses are $275,300 per annum.

There can be no assurance that the weighted average lives of the various tranches of the Bonds will be as shown in the above table.

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Fees and Expenses

As set forth in the table below, we are obligated to pay fees to Cleco Power as the initial servicer, the trustee, our independent manager and Cleco Power as administrator. The following table illustrates this arrangement.

Recipient	Source of Payment	Fees and Expenses Payable
Servicer	Storm recovery charge collections and investment earnings on collection account.	0.05% of initial principal amount of Bonds issued per annum, as long as Cleco Power or an affiliate is the servicer, plus external accounting costs and certain other costs to the extent permitted by the financing order
Trustee	Storm recovery charge collections and investment earnings on collection account.	$1,000 per annum, plus expenses and indemnity amounts, if any
Independent manager	Storm recovery charge collections and investment earnings on collection account.	$3,500 per annum, plus expenses
Administrator	Storm recovery charge collections and investment earnings on collection account.	$100,000 per annum
Other operating expenses (accounting, rating agency, legal fees, etc.)	Storm recovery charge collections and investment earnings on collection account.	$70,000 per annum (estimated)
Sponsor	Storm recovery charge collections and investment earnings on collection account.	Investment earnings on the capital subaccount not to exceed [_._]% per annum

In accordance with the terms of the financing order and subject to the approval of the trustee, the Louisiana commission may permit a successor servicer to Cleco Power to recover a higher servicer fee if Cleco Power ceases to serve as the servicer and ceases to service the storm recovery property. The annual servicing fee payable to any other servicer not affiliated with Cleco Power shall not at any time exceed 0.6% of the original principal amount of the Bonds unless such higher rate is approved by the Louisiana commission.

Distribution Following Acceleration

Upon an acceleration of the maturity of the Bonds, the total outstanding principal balance of and interest accrued on the Bonds will be payable without priority of interest over principal or principal over interest and without regard to tranche. Although principal will be due and payable upon acceleration, the nature of our business will result in principal being paid as funds become available. Please read "Risk Factors—Risks Associated with the Unusual Nature of the Storm Recovery Property" and "—You may experience material payment delays or incur a loss on your investment in the storm recovery bonds because the source of funds for payment is limited" in the accompanying prospectus. Please read "The Securitization Act—Cleco Power and Other Utilities May Securitize Storm Recovery Costs and Related Financing and Ongoing Costs—State and Louisiana Commission Pledges" and "—Constitutional Matters" in the accompanying prospectus.

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Interest Payments

Holders of storm recovery bonds of each tranche of Bonds will receive interest at the rate for that tranche as set forth in the table on page S-12.

Interest on each tranche of Bonds will accrue from and including the date of issuance to but excluding the first payment date, and thereafter from and including the previous payment date to but excluding the applicable payment date until the Bonds have been paid in full, at the interest rate indicated in the table on page S-12. Each of those periods is referred to as an "interest accrual period." On each payment date, we will pay interest on each tranche of the Bonds equal to the following amounts:

•: any interest payable but unpaid on any prior payment date, together with interest on such unpaid interest, if any, and
•: accrued interest on the principal balance of each tranche of the Bonds as of the close of business on the preceding payment date, or the date of the original issuance of the Bonds, after giving effect to all payments of principal made on the preceding payment date, if any.

We will pay interest on the Bonds before we pay principal on the Bonds. Please read "The Storm Recovery Bonds—Payments of Interest and Principal on the Storm Recovery Bonds" in the accompanying prospectus. If there is a shortfall in the amounts available in the collection account to make interest payments on the Bonds, the trustee will distribute interest pro rata to each tranche of Bonds based on the amount of interest payable on each such outstanding tranche. Please read "Credit Enhancement—Collection Account and Subaccounts" in this prospectus supplement. We will calculate interest on tranches of the Bonds on the basis of a 360-day year consisting of twelve 30-day months.

Optional Redemption

We may not voluntarily redeem any tranche of the Bonds prior to the scheduled final payment date for such tranche.

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THE TRUSTEE

U.S. Bank National Association ("U.S. Bank") will act as indenture trustee. U.S. Bank is a national banking association and a wholly-owned subsidiary of U.S. Bancorp, which is currently ranked as the sixth largest bank holding company in the United States with total assets exceeding $238 billion as of December 31, 2007. As of December 31, 2007, U.S. Bancorp served approximately 14.2 million customers, operated 2,518 branch offices in 24 states and had over 50,000 employees. A network of specialized U.S. Bancorp offices across the nation, inside and outside its 24-state footprint, provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses, governments and institutions.

U.S. Bank has one of the largest corporate trust businesses in the country with offices in 46 U.S. cities. The indenture will be administered from U.S. Bank's corporate trust office located at 209 South LaSalle Street, Chicago, Illinois 60604.

U.S. Bank has provided corporate trust services since 1924. As of December 31, 2007, U.S. Bank was acting as trustee with respect to over 85,000 issuances of securities with an aggregate outstanding principal balance of over $2.4 trillion. This portfolio includes corporate and municipal bonds, mortgage-backed and asset-backed securities and collateralized debt obligations.

The indenture trustee shall make each semi-annual servicer's certificate available to the holders via the indenture trustee's internet website at http://www.usbank.com/abs. Holders with questions may direct them to the indenture trustee's bondholder services group at (800) 934-6802.

U.S. Bank serves or has served as indenture trustee, registrar and paying agent on several issues of rate-payer backed securities.

Please read "The Storm Recovery Bonds," "The Sale Agreement" and "The Servicing Agreement" in the accompanying prospectus for further information.

CREDIT ENHANCEMENT

Credit enhancement for the Bonds is intended to protect you against losses or delays in scheduled payments on your Bonds. Please read "Risk Factors—You may experience material payment delays or incur a loss on your investment in the storm recovery bonds because the source of funds for payment is limited" in the accompanying prospectus.

True-Up Mechanism for Payment of Scheduled Principal and Interest

The financing order provides that storm recovery charges will be reviewed and adjusted semi-annually to:

•: correct, over a period of up to 12 months covering the next two succeeding payment dates, any under-collections or over-collections, for any reason, during the preceding six months, and
•: ensure the projected recovery of amounts sufficient to provide timely payment of the scheduled principal of and interest on the Bonds and all other required amounts in connection with the Bonds during the subsequent 12-month period.

To the extent any Bonds remain outstanding after the scheduled final payment date of the tranche A-2 Bonds, mandatory true-up adjustments will be made quarterly until all Bonds and associated costs are paid in full. In addition, the servicer may also make interim true-up adjustments more frequently at any time during the term of the Bonds:

•: if the servicer forecasts that storm recovery charge collections will be insufficient to make all scheduled payments of interest and other financing costs in respect of the Bonds during the

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current or next succeeding payment period or to bring all principal payments on schedule over the next two succeeding payment dates, and/or

•: to replenish any draws upon the capital subaccount.

Any delinquencies or under-collections in one customer class will be taken into account in the true-up mechanism to adjust the storm recovery charge for all customers of Cleco Power, not just the class of customers from which the delinquency or under-collection arose.

The financing order requires the servicer to request Louisiana commission approval of an amendment to the true-up mechanism that it deems necessary or appropriate to address any material deviations between storm recovery charge collections and the periodic revenue requirement. No such change shall cause any of the then-current credit ratings of the Bonds to be suspended, withdrawn or downgraded.

The financing order provides that the true-up mechanism and all other obligations of the State of Louisiana and the Louisiana commission set forth in the financing order are direct, explicit, irrevocable and unconditional upon issuance of the Bonds, and are legally enforceable against the State of Louisiana and the Louisiana commission. Please read "The Storm Recovery Charges" below and "Cleco Power's Financing Order" and "The Servicing Agreement—Storm Recovery Charge Adjustment Process" in the accompanying prospectus.

Collection Account and Subaccounts

The trustee will establish a collection account for the Bonds to hold the capital contribution from Cleco Power and collected storm recovery charges periodically remitted to the trustee by the servicer. The collection account will consist of various subaccounts, including the following:

•: the general subaccount,
•: the excess funds subaccount,
•: the capital subaccount, and
•: other subaccounts, if necessary.

Withdrawals from and deposits to these subaccounts will be made as described below in this prospectus supplement and under "The Storm Recovery Bonds—The Collection Account for the Storm Recovery Bonds" and "—How Funds in the Collection Account Will Be Allocated" in the accompanying prospectus.

The General Subaccount. The trustee will deposit collected storm recovery charges remitted to it by the servicer with respect to the Bonds into the general subaccount. On each payment date, the trustee will allocate amounts in the general subaccount as described under "—How Funds in the Collection Account Will Be Allocated" below.

The Excess Funds Subaccount. The excess funds subaccount will be funded on any payment date with collected storm recovery charges and earnings on amounts in the collection account, other than earnings on amounts allocated to the capital subaccount up to the per annum return allowed under the financing order, in excess of the amount necessary to pay:

•: fees and expenses, including any indemnity payments, of the trustee, our independent manager, the servicer and the administrator and other fees, expenses, costs and charges,
•: principal and interest payments on the Bonds required to be paid or scheduled to be paid on that payment date, and

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•: any amount required to replenish any amounts drawn from the capital subaccount, plus any deficiency in the amount of investment earnings on the capital subaccount allowed under the financing order that has not previously been distributed to us.

On each payment date, any excess investment earnings on the capital subaccount above the return allowed under the financing order shall be allocated to the excess funds subaccount.

The periodic adjustments of the storm recovery charges will be calculated to eliminate any amounts held in the excess funds subaccount. These adjustments generally will occur semi-annually. Under limited circumstances, these adjustments may occur more frequently.

If amounts available in the general subaccount are not sufficient to pay the fees and expenses due on any payment date, to make required or scheduled payments to the bondholders, and to replenish any amounts drawn from the capital subaccount (plus any deficiency in the amount of investment earnings on the capital subaccount allowed under the financing order that has not previously been distributed to us), the trustee will first draw on any amounts in the excess funds subaccount to make those payments.

The Capital Subaccount. On the date we issue the Bonds, Cleco Power will deposit $[903,000] into the capital subaccount as a capital contribution to us, which is equal to 0.5% of the initial outstanding principal balance of the Bonds. The capital contribution has been set at a level sufficient to obtain the ratings on the Bonds described below under "Ratings for the Bonds." If amounts available in the general subaccount and the excess funds subaccount are not sufficient to make required or scheduled payments to the bondholders and to pay the fees and expenses specified in the indenture due on any payment date, the trustee will draw on amounts in the capital subaccount to make those payments. Under the financing order, Cleco Power is permitted to earn a rate of return on its capital contribution equal to the rate of interest payable on the tranche A-2 Bonds, which amounts will be paid by means of periodic distributions from us funded solely by the income earned thereon through investment by the trustee in eligible investments and by any deficiency being collected through the true-up adjustments. On each payment date, any excess investment earnings on the capital subaccount above the rate of interest payable on the tranche A-2 Bonds shall be allocated to the excess funds subaccount.

Other Subaccounts. Other credit enhancements in the form of subaccounts may be utilized for the transaction provided such enhancements are required to obtain the ratings on the Bonds described below under "Ratings for the Bonds," or to provide benefits greater than their tangible and intangible costs and are approved pursuant to the issuance advice letter process described under "Cleco Power's Financing Order—Issuance Advice Letter" in the accompanying prospectus.

How Funds in the Collection Account Will Be Allocated

Amounts remitted by the servicer to the trustee with respect to the Bonds, including any indemnity amounts and all investment earnings on amounts in the general subaccount of the collection account, will be deposited into the general subaccount. Investment earnings on amounts in the capital subaccount (other than excess investment earnings that are allocated to the excess funds subaccount) and the excess funds subaccount will be deposited into the capital subaccount and the excess funds subaccount, respectively.

On each payment date, the trustee will allocate or pay all amounts on deposit in the general subaccount of the collection account for the Bonds in the following priority:

1.: payment of a pro rata portion of the trustee's fees, plus expenses and any outstanding indemnity amounts not to exceed $50,000 in any 12-month period,

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2.: payment of a pro rata portion of the servicing fee relating to the Bonds, plus any unpaid servicing fees relating to the Bonds from prior payment dates,
3.: payment of a pro rata portion of the administration fee and a pro rata portion of the fees of our independent manager, which will be in an amount specified in an agreement between us and our independent manager,
4.: payment of all of our other ordinary periodic operating expenses relating to the Bonds, such as accounting and audit fees, rating agency fees, legal fees and certain reimbursable costs of the servicer under the servicing agreement,
5.: payment of the interest then due on the Bonds, including any past due interest,
6.: payment of the principal then required to be paid on the Bonds at final maturity or acceleration,
7.: payment of the principal then scheduled to be paid on the Bonds in accordance with the expected sinking fund schedule, including any previously unpaid scheduled principal,
8.: payment of any of our remaining unpaid operating expenses and any remaining amounts owed pursuant to the basic documents relating to the Bonds, including all remaining amounts owed to the trustee,
9.: replenishment of any amounts drawn from the capital subaccount (other than distributed investment earnings on the capital subaccount), plus any deficiency in the amount of investment earnings on the capital subaccount allowed under the financing order that have not previously been distributed to us,
10.: if the balance in the capital subaccount is greater than the initial balance of the capital subaccount after making the foregoing allocations, an amount of investment earnings on the capital subaccount not to exceed [ . ]% per annum shall be paid to us; provided that no event of default has occurred and is continuing,
11.: allocation of the remainder, if any, to the excess funds subaccount, and
12.: after the Bonds have been paid in full and discharged, the balance, together with all amounts in the capital subaccount and the excess funds subaccount, released to us free and clear of the lien of the indenture.

The annual servicing fee in clause 2 may not exceed 0.05% of the original principal amount of the Bonds (for so long as Cleco Power is the servicer) and the annual administration fee in clause 3 may not exceed $100,000.

If, on any payment date, funds in the general subaccount are insufficient to make the allocations or payments contemplated by clauses 1 through 9 of the first paragraph of this subsection, the trustee will draw from amounts on deposit in the following subaccounts in the following order up to the amount of the shortfall:

1.: from the excess funds subaccount for allocations and payments contemplated in clauses 1 through 9, and
2.: from the capital subaccount for allocations and payments contemplated by clauses 1 through 8.

If, on any payment date, available collections of storm recovery charges allocable to the Bonds, together with available amounts in the related subaccounts, are not sufficient to pay interest due on all outstanding Bonds on that payment date, amounts available will be allocated pro rata based on the amount of interest payable on each tranche of the Bonds. If, on any payment date, remaining

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collections of storm recovery charges allocable to the Bonds, together with available amounts in the subaccounts, are not sufficient to pay principal due and payable on all outstanding Bonds on that payment date, amounts available will be allocated pro rata based on the principal amount of each tranche then due and payable. If, on any payment date, remaining collections of storm recovery charges allocable to the Bonds, together with available amounts in the subaccounts, are not sufficient to pay principal scheduled to be paid on all outstanding Bonds, amounts available will be allocated sequentially to each tranche then scheduled to be paid on the payment date. If the trustee uses amounts on deposit in the capital subaccount to pay those amounts or make those transfers, as the case may be, subsequent adjustments to the related storm recovery charges will take into account, among other things, the need to replenish those amounts (plus any deficiency in the amount of investment earnings on the capital subaccount allowed by the financing order).

THE STORM RECOVERY CHARGES

Cleco Power will be the initial servicer of the Bonds. Beginning on the date we issue the Bonds, the initial storm recovery charges listed in the table below will be imposed on Cleco Power's customers in each storm recovery charge customer class at the applicable rate for the class determined pursuant to the financing order. These storm recovery charges may be adjusted semi-annually, or more frequently under certain circumstances, by the servicer in accordance with its filings with the Louisiana commission. Please read "Cleco Power's Financing Order" in the accompanying prospectus.

Initial Storm Recovery Charges

Storm Recovery Charge Customer Class		Initial Storm Recovery Charge Rate
Residential		$
General Non-demand		$
General Secondary		$
General Primary		$
General Municipal		$
Large Power		$
OLS (Outdoor Lighting Service)		$

During the twelve months ended December 31, 2007, approximately 33% of Cleco Power's total deliveries (based on MWh) were to industrial customers (includes General Non-demand, General Secondary, General Primary and Large Power customer classes noted above), approximately 27% were to commercial customers (includes General Non-demand, General Secondary, General Primary and OLS customer classes noted above) and approximately 39% were to residential customers.

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UNDERWRITING THE BONDS

Subject to the terms and conditions in the underwriting agreement among us, Cleco Power and the underwriters, for whom Credit Suisse Securities (USA) LLC is acting as representative, we have agreed to sell to the underwriters, and the underwriters have severally agreed to purchase, the principal amount of the Bonds listed opposite each underwriter's name below:

Underwriter		Tranche A-1		Tranche A-2
Credit Suisse Securities (USA) LLC
Wachovia Capital Markets, LLC
DEPFA First Albany Securities LLC

Under the underwriting agreement, the underwriters will take and pay for all of the Bonds we offer, if any are taken. If an underwriter defaults, the underwriting agreement provides that the purchase commitments of the non-defaulting underwriters may be increased or the underwriting agreement may be terminated.

The Underwriters' Sales Price for the Bonds

The Bonds sold by the underwriters to the public will be initially offered at the prices to the public set forth on the cover of this prospectus supplement. The underwriters propose initially to offer the Bonds to dealers at such prices, less a selling concession not to exceed the percentage listed below for each tranche. The underwriters may allow, and dealers may reallow, a discount not to exceed the percentage listed below for each tranche.

		Selling Concession		Reallowance Discount
Tranche A-1
Tranche A-2

After the initial public offering, the public offering prices, selling concessions and reallowance discounts may change.

No Assurance as to Resale Price or Resale Liquidity for the Bonds

The Bonds are a new issue of securities with no established trading market. They will not be listed on any securities exchange. The underwriters have advised us that they intend to make a market in the Bonds, but they are not obligated to do so and may discontinue market making at any time without notice. We cannot assure you that a liquid trading market will develop for the Bonds.

Various Types of Underwriter Transactions That May Affect the Price of the Bonds

The underwriters may engage in overallotment transactions, stabilizing transactions, syndicate covering transactions and penalty bids with respect to the Bonds in accordance with Regulation M under the Securities Exchange Act of 1934. Overallotment transactions involve syndicate sales in excess of the offering size, which create a syndicate short position. Stabilizing transactions are bids to purchase the Bonds, which are permitted, so long as the stabilizing bids do not exceed a specific maximum price. Syndicate covering transactions involve purchases of the Bonds in the open market after the distribution has been completed in order to cover syndicate short positions. Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the Bonds originally sold by the syndicate member are purchased in a syndicate covering transaction. These overallotment transactions, stabilizing transactions, syndicate covering transactions and penalty bids may cause the prices of the Bonds to be higher than they would otherwise be. Neither we, Cleco Power, the trustee,

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our managers nor any of the underwriters represent that the underwriters will engage in any of these transactions or that these transactions, if commenced, will not be discontinued without notice at any time.

Certain of the underwriters and their affiliates have in the past provided, and may in the future from time to time provide, investment banking and general financing and banking services to Cleco Power and its affiliates for which they have in the past received, and in the future may receive, customary fees. In addition, each underwriter may from time to time take positions in the Bonds.

We estimate that the total expenses of the offering will be approximately $3.8 million.

We and Cleco Power have agreed to indemnify the underwriters against some liabilities, including liabilities under the Securities Act of 1933, or to contribute to payments the underwriters may be required to make in respect of those liabilities.

The underwriters are offering the Bonds, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters, including the validity of the Bonds and other conditions contained in the underwriting agreement, such as receipt of ratings confirmations, officers' certificates and legal opinions. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject offers in whole or in part.

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES

In the opinion of Phelps Dunbar, L.L.P., counsel to us and to Cleco Power, interest paid on the Bonds generally will be taxable to a U.S. bondholder as ordinary interest income at the time it accrues or is received in accordance with the U.S. bondholder's method of accounting for U.S. federal income tax purposes. Phelps Dunbar, L.L.P. has also issued an opinion that, for federal income tax purposes (1) we will not be treated as a taxable entity separate and apart from Cleco Power, our sole member, and (2) based on Revenue Procedure 2005-62, the Bonds will constitute indebtedness of Cleco Power. Each beneficial owner of a Bond, by acquiring a beneficial interest, agrees to treat such Bond as indebtedness of our sole member secured by the collateral for federal (and, to the extent applicable, state) income tax purposes unless otherwise required by appropriate taxing authorities. Please read "Material Federal Income Tax Consequences for the Storm Recovery Bondholders" in the accompanying prospectus.

MATERIAL LOUISIANA STATE TAX CONSEQUENCES

In the opinion of Phelps Dunbar, L.L.P., counsel to us and to Cleco Power, interest paid on the storm recovery bonds generally will be taxed for Louisiana income tax purposes consistently with its taxation for U.S. federal income tax purposes and such interest received by a person who is not otherwise subject to corporate or personal income tax in the state of Louisiana will not be subject to tax in Louisiana. Phelps Dunbar, L.L.P. has also issued an opinion, based upon the treatment of such issues for federal income tax purposes, that for Louisiana income tax purposes (1) we will not be treated as a taxable entity separate and apart from Cleco Power, our sole member, and (2) the storm recovery bonds will constitute indebtedness of Cleco Power. Please read "Material U.S. Federal Income Tax Consequences" and "Material Louisiana State Tax Consequences" in the accompanying prospectus.

RISK WEIGHTING OF THE BONDS UNDER CERTAIN INTERNATIONAL CAPITAL GUIDELINES

Under the standardized approach under the framework established by Basel II, the Bonds may attract a risk weighting of 20% on the basis that the Bonds are rated in the highest category by a major rating agency. It is a condition of issuance of the Bonds that the Bonds be rated "Aaa" by Moody's, "AAA" by S&P, and "AAA" by Fitch. In the alternative, under the framework established by Basel II,

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the Bonds may attract the same risk weighting if the Bonds are considered to be "guaranteed" by a non-governmental public sector entity.

If held by financial institutions subject to regulation in countries (other than the United States) that have adopted and continue to use or permit the use of the Basel Accord for risk weighting, the Bonds may attract the same risk weighting as "claims on" or "claims guaranteed by" non-central government bodies within the United States, which are accorded a 20% risk weighting. Please read "Cleco Power's Financing Order—True-Ups" in the accompanying prospectus. We note, however, that the analysis may be different than that under Basel II.

We note that the timetable for, and scope of, the implementation of Basel II differs from country to country and it may not always be clear which regime—Basel Accord or Basel II, or any transitional regime—may be applicable at any particular time.

Before acquiring any Bonds, prospective investors that are banks or bank holding companies, particularly those that are organized under the laws of any country other than the United States or of any state, territory or other political subdivision of the United States, and prospective investors that are U.S. branches and agencies of foreign banks, should consult all applicable laws, regulations and policies, as well as appropriate regulatory bodies and legal counsel, to confirm that an investment in the Bonds is permissible and in compliance with any applicable investment or other limits. We cannot assure you that the Bonds will attract a 20% risk weighting treatment under any national law, regulation or policy implementing Basel II, the Basel Accord or any transitional regime.

RATINGS FOR THE BONDS

It is a condition of any underwriter's obligation to purchase the Bonds that each tranche of the Bonds be rated "AAA" by S&P, "AAA" by Fitch and "Aaa" by Moody's.

A rating on a security is not a recommendation to buy, sell or hold securities and may be revised or withdrawn at any time by the rating agency. Each rating should be evaluated independently of any other rating. No person is obligated to maintain its rating on the Bonds, and accordingly, we cannot assure you that a rating assigned to any tranche of the Bonds upon initial issuance will not be revised or withdrawn by a rating agency at any time thereafter. If a rating of any tranche of the Bonds is revised or withdrawn, the liquidity of that tranche may be adversely affected. In general, ratings address credit risk and do not represent any assessment of the likelihood of any particular level of principal payments on the Bonds other than payment in full of each tranche of the Bonds by the applicable final maturity date, as well as the timely payment of interest.

LEGAL PROCEEDINGS

There are no legal or governmental proceedings pending against us, the sponsor, seller, trustee or servicer, or of which any property of the foregoing is subject, that is material to the holders of the Bonds.

WHERE YOU CAN FIND MORE INFORMATION

To the extent that we are required to file such reports and information with the Securities and Exchange Commission, we will file annual and current reports and other information with the Securities and Exchange Commission, or the SEC. We are incorporating by reference any future filings which we (file no. 333-147122) or Cleco Power, but solely in its capacity as our sponsor, make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until we sell all the Bonds, excluding any information that is furnished to, and not filed with, the SEC. These reports will be filed under our own name as issuing entity. Please also read "Where You Can Find More Information" in the accompanying prospectus.

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LEGAL MATTERS

Certain legal matters relating to us and the issuance of the Bonds will be passed upon for Cleco Power and for us by Baker Botts L.L.P., Houston, Texas and Phelps Dunbar, L.L.P., New Orleans, Louisiana, and for the underwriters by Sidley Austin LLP, San Francisco, California. Certain legal matters relating to the federal and state income tax consequences of the issuance of the Bonds will be passed upon for us by Phelps Dunbar, L.L.P.

OFFERING RESTRICTIONS IN CERTAIN JURISDICTIONS

NOTICE TO RESIDENTS OF SINGAPORE

EACH UNDERWRITER ACKNOWLEDGES THAT THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS HAVE NOT BEEN REGISTERED AS A PROSPECTUS WITH THE MONETARY AUTHORITY OF SINGAPORE. ACCORDINGLY, EACH UNDERWRITER REPRESENTS, WARRANTS AND AGREES THAT IT HAS NOT OFFERED OR SOLD ANY BONDS OR CAUSED THE BONDS TO BE MADE THE SUBJECT OF AN INVITATION FOR SUBSCRIPTION OR PURCHASE, AND WILL NOT OFFER OR SELL ANY BONDS OR CAUSE THE BONDS TO BE MADE THE SUBJECT OF AN INVITATION FOR SUBSCRIPTION OR PURCHASE, AND HAS NOT CIRCULATED OR DISTRIBUTED, NOR WILL IT CIRCULATE OR DISTRIBUTE THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS OR ANY OTHER DOCUMENT OR MATERIAL IN CONNECTION WITH THE OFFER OR SALE, OR INVITATION FOR SUBSCRIPTION OR PURCHASE, OF BONDS, WHETHER DIRECTLY OR INDIRECTLY, TO PERSONS IN SINGAPORE OTHER THAN (I) TO AN INSTITUTIONAL INVESTOR UNDER SECTION 274 OF THE SECURITIES AND FUTURES ACT, CHAPTER 289 OF SINGAPORE (THE "SFA"), OR ANY PERSON PURSUANT TO SECTION 275(1A), AND IN ACCORDANCE WITH THE CONDITIONS SPECIFIED IN SECTION 275 OF THE SFA OR (II) TO A RELEVANT PERSON PURSUANT TO SECTION 275(1) OR ANY PERSON PURSUANT TO SECTION 275(1A) OF THE SFA, AND IN ACCORDANCE WITH THE CONDITIONS SPECIFIED IN SECTION 275 OF THE SFA OR (III) OTHERWISE PURSUANT TO, AND IN ACCORDANCE WITH THE CONDITIONS OF, ANY OTHER APPLICABLE PROVISION OF THE SFA.

WHERE THE BONDS ARE SUBSCRIBED OR PURCHASED UNDER SECTION 275 BY A RELEVANT PERSON WHICH IS:

(A) A CORPORATION (WHICH IS NOT AN ACCREDITED INVESTOR (AS DEFINED IN SECTION 4A OF THE SFA)) THE SOLE BUSINESS OF WHICH IS TO HOLD INVESTMENTS AND THE ENTIRE SHARE CAPITAL OF WHICH IS OWNED BY ONE OR MORE INDIVIDUALS, EACH OF WHOM IS AN ACCREDITED INVESTOR; OR

(B) A TRUST (WHERE THE TRUSTEE IS NOT AN ACCREDITED INVESTOR) WHOSE SOLE PURPOSE IS TO HOLD INVESTMENTS AND EACH BENEFICIARY OF THE TRUST IS AN INDIVIDUAL WHO IS AN ACCREDITED INVESTOR,

SHARES, DEBENTURES AND UNITS OF SHARES AND DEBENTURES OF THAT CORPORATION OR THE BENEFICIARIES' RIGHTS AND INTEREST (HOWSOEVER DESCRIBED) IN THAT TRUST SHALL NOT BE TRANSFERRED WITHIN 6 MONTHS AFTER THAT CORPORATION OR THAT TRUST HAS ACQUIRED THE BONDS PURSUANT TO AN OFFER MADE UNDER SECTION 275 EXCEPT:

(1) TO AN INSTITUTIONAL INVESTOR (FOR CORPORATIONS, UNDER SECTION 274 OF THE SFA) OR TO A RELEVANT PERSON DEFINED IN SECTION 275(2) OF THE SFA, OR TO ANY PERSON PURSUANT TO AN OFFER THAT IS MADE ON TERMS THAT SUCH RIGHTS OR INTEREST ARE ACQUIRED AT A CONSIDERATION

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OF NOT LESS THAN $200,000 (OR ITS EQUIVALENT IN A FOREIGN CURRENCY) FOR EACH TRANSACTION, WHETHER SUCH AMOUNT IS TO BE PAID FOR IN CASH OR BY EXCHANGE OF SECURITIES OR OTHER ASSETS, AND FURTHER FOR CORPORATIONS, IN ACCORDANCE WITH THE CONDITIONS SPECIFIED IN SECTION 275 OF THE SFA;

(2) WHERE NO CONSIDERATION IS OR WILL BE GIVEN FOR THE TRANSFER; OR

(3) WHERE THE TRANSFER IS BY OPERATION OF LAW. THE PROSPECTUS RELATING TO THE BONDS ("PROSPECTUS") WILL, PRIOR TO ANY SALE OF SECURITIES PURSUANT TO THE PROVISIONS OF SECTION 106D OF THE COMPANIES ACT (CAP.50), BE LODGED, PURSUANT TO SAID SECTION 106D, WITH THE REGISTRAR OF COMPANIES IN SINGAPORE, WHICH WILL TAKE NO RESPONSIBILITY FOR ITS CONTENTS. HOWEVER, NEITHER THIS PROSPECTUS SUPPLEMENT NOR THE PROSPECTUS HAS BEEN AND NOR WILL THEY BE REGISTERED AS A PROSPECTUS WITH THE REGISTRAR OF COMPANIES IN SINGAPORE. ACCORDINGLY, THE BONDS MAY NOT BE OFFERED, AND NEITHER THIS PROSPECTUS SUPPLEMENT NOR ANY OTHER OFFERING DOCUMENT OR MATERIAL RELATING TO THE BONDS MAY BE CIRCULATED OR DISTRIBUTED, DIRECTLY OR INDIRECTLY, TO THE PUBLIC OR ANY MEMBER OF THE PUBLIC IN SINGAPORE OTHER THAN TO INSTITUTIONAL INVESTORS OR OTHER PERSONS OF THE KIND SPECIFIED IN SECTION 106C AND SECTION 106D OF THE COMPANIES ACT OR ANY OTHER APPLICABLE EXEMPTION INVOKED UNDER DIVISION 5A OF PART IV OF THE COMPANIES ACT. THE FIRST SALE OF SECURITIES ACQUIRED UNDER A SECTION 106C OR SECTION 106D EXEMPTION IS SUBJECT TO THE PROVISIONS OF SECTION 106E OF THE COMPANIES ACT.

NOTICE TO RESIDENTS OF THE PEOPLE'S REPUBLIC OF CHINA

THE BONDS HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES LAW OF THE PEOPLE'S REPUBLIC OF CHINA (AS THE SAME MAY BE AMENDED FROM TIME TO TIME) AND ARE NOT TO BE OFFERED OR SOLD TO PERSONS WITHIN THE PEOPLE'S REPUBLIC OF CHINA (EXCLUDING THE HONG KONG AND MACAU SPECIAL ADMINISTRATIVE REGIONS).

NOTICE TO RESIDENTS OF JAPAN

THE BONDS HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES AND EXCHANGE LAW OF JAPAN (THE "SEL"), AND MAY NOT BE OFFERED OR SOLD IN JAPAN OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY RESIDENT OF JAPAN OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY RESIDENT OF JAPAN OR TO OTHERS FOR RE-OFFERING OR RESALE, DIRECTLY OR INDIRECTLY, IN JAPAN OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY RESIDENT OF JAPAN, EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF, AND OTHERWISE IN COMPLIANCE WITH, THE SEL, AND IN COMPLIANCE WITH THE OTHER RELEVANT LAWS AND REGULATIONS OF JAPAN. AS USED IN THIS PARAGRAPH, "RESIDENT OF JAPAN" MEANS ANY PERSON RESIDENT IN JAPAN, INCLUDING ANY CORPORATION OR OTHER ENTITY ORGANIZED UNDER THE LAWS OF JAPAN.

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NOTICE TO RESIDENTS OF HONG KONG

EACH UNDERWRITER HAS REPRESENTED AND AGREED THAT:

IT HAS NOT OFFERED OR SOLD AND WILL NOT OFFER OR SELL IN HONG KONG, BY MEANS OF ANY DOCUMENT, ANY BONDS OTHER THAN (A) TO PERSONS WHOSE ORDINARY BUSINESS IS TO BUY OR SELL SHARES OR DEBENTURES (WHETHER AS PRINCIPAL OR AGENT); OR (B) TO PROFESSIONAL INVESTORS WITHIN THE MEANING OF THE SECURITIES AND FUTURES ORDINANCE (CAP. 571) OF THE LAWS OF HONG KONG AND ANY RULES MADE THEREUNDER; OR (C) IN CIRCUMSTANCES THAT DO NOT RESULT IN THE DOCUMENT BEING A "PROSPECTUS" AS DEFINED IN THE COMPANIES ORDINANCE (CAP. 32) OF THE LAWS OF HONG KONG OR THAT DO NOT CONSTITUTE AN OFFER TO THE PUBLIC WITHIN THE MEANING OF THAT ORDINANCE; AND

IT HAS NOT ISSUED OR HAD IN ITS POSSESSION FOR THE PURPOSE OF ISSUE, AND WILL NOT ISSUE OR HAVE IN ITS POSSESSION FOR THE PURPOSE OF ISSUE, WHETHER IN HONG KONG OR ELSEWHERE ANY ADVERTISEMENT, INVITATION OR DOCUMENT RELATING TO THE BONDS, WHICH IS DIRECTED AT, OR THE CONTENTS OF WHICH ARE LIKELY TO BE ACCESSED OR READ BY, THE PUBLIC OF HONG KONG (EXCEPT IF PERMITTED TO DO SO UNDER THE SECURITIES LAWS OF HONG KONG) OTHER THAN WITH RESPECT TO BONDS THAT ARE INTENDED TO BE DISPOSED OF ONLY TO PERSONS OUTSIDE HONG KONG OR ONLY TO "PROFESSIONAL INVESTORS" AS DEFINED UNDER THE SECURITIES AND FUTURES ORDINANCE (CAP. 571) OF THE LAWS OF HONG KONG AND ANY RULES MADE UNDER THAT ORDINANCE.

NOTICE TO RESIDENTS OF THE EUROPEAN ECONOMIC AREA

IN RELATION TO EACH MEMBER STATE OF THE EUROPEAN ECONOMIC AREA WHICH HAS IMPLEMENTED THE PROSPECTUS DIRECTIVE (EACH, A "RELEVANT MEMBER STATE"), THE UNDERWRITER HAS REPRESENTED AND AGREED THAT WITH EFFECT FROM AND INCLUDING THE DATE ON WHICH THE PROSPECTUS DIRECTIVE IS IMPLEMENTED IN THAT RELEVANT MEMBER STATE (THE "RELEVANT IMPLEMENTATION DATE") IT HAS NOT MADE AND WILL NOT MAKE AN OFFER OF BONDS TO THE PUBLIC IN THAT RELEVANT MEMBER STATE PRIOR TO THE PUBLICATION OF A PROSPECTUS IN RELATION TO THE BONDS WHICH HAS BEEN APPROVED BY THE COMPETENT AUTHORITY IN THAT RELEVANT MEMBER STATE OR, WHERE APPROPRIATE, APPROVED IN ANOTHER RELEVANT MEMBER STATE AND NOTIFIED TO THE COMPETENT AUTHORITY IN THAT RELEVANT MEMBER STATE, ALL IN ACCORDANCE WITH THE PROSPECTUS DIRECTIVE, EXCEPT THAT IT MAY, WITH EFFECT FROM AND INCLUDING THE RELEVANT IMPLEMENTATION DATE, MAKE AN OFFER OF BONDS TO THE PUBLIC IN THAT RELEVANT MEMBER STATE AT ANY TIME:

(A) TO LEGAL ENTITIES WHICH ARE AUTHORIZED OR REGULATED TO OPERATE IN THE FINANCIAL MARKETS OR, IF NOT SO AUTHORIZED OR REGULATED, WHOSE CORPORATE PURPOSE IS SOLELY TO INVEST IN SECURITIES;

(B) TO ANY LEGAL ENTITY WHICH HAS TWO OR MORE OF (1) AN AVERAGE OF AT LEAST 250 EMPLOYEES DURING THE LAST FINANCIAL YEAR; (2) A TOTAL BALANCE SHEET OF MORE THAN €43,000,000 AND (3) AN ANNUAL NET TURNOVER OF MORE THAN €50,000,000, AS SHOWN IN ITS LAST ANNUAL OR CONSOLIDATED ACCOUNTS;

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(C) TO FEWER THAN 100 NATURAL OR LEGAL PERSONS (OTHER THAN QUALIFIED INVESTORS AS DEFINED IN THE PROSPECTUS DIRECTIVE) SUBJECT TO OBTAINING THE PRIOR CONSENT OF THE LEAD UNDERWRITER(S) NOMINATED BY THE ISSUING ENTITY FOR ANY SUCH OFFICER;

(D) IF THE DENOMINATION PER NOTE BEING OFFERED AMOUNT TO AT LEAST €50,000; OR

(E) IN ANY OTHER CIRCUMSTANCES WHICH DO NOT REQUIRE THE PUBLICATION BY THE ISSUING ENTITY OF A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE PROSPECTUS DIRECTIVE.

FOR THE PURPOSES OF THIS PROVISION, THE EXPRESSION AN "OFFER OF BONDS TO THE PUBLIC" IN RELATION TO ANY BONDS IN ANY RELEVANT MEMBER STATE MEANS THE COMMUNICATION IN ANY FORM AND BY ANY MEANS OF SUFFICIENT INFORMATION ON THE TERMS OF THE OFFER AND THE BONDS TO BE OFFERED SO AS TO ENABLE AN INVESTOR TO DECIDE TO PURCHASE OR SUBSCRIBE THE BONDS, AS THE SAME MAY BE VARIED IN THAT MEMBER STATE BY ANY MEASURE IMPLEMENTING THE PROSPECTUS DIRECTIVE IN THAT MEMBER STATE AND THE EXPRESSION "PROSPECTUS DIRECTIVE" MEANS DIRECTIVE 2003/71/EC AND INCLUDES ANY RELEVANT IMPLEMENTING MEASURE IN EACH RELEVANT MEMBER STATE.

NOTICE TO RESIDENTS OF THE UNITED KINGDOM

THE UNDERWRITER HAS REPRESENTED AND AGREED THAT:

(A) IT HAS ONLY COMMUNICATED OR CAUSED TO BE COMMUNICATED AND WILL ONLY COMMUNICATE OR CAUSE TO BE COMMUNICATED AN INVITATION OR INDUCEMENT TO ENGAGE IN INVESTMENT ACTIVITY (WITHIN THE MEANING OF SECTION 21 OF THE FINANCIAL SERVICES AND MARKETS ACT (THE "FSMA")) RECEIVED BY IT IN CONNECTION WITH THE ISSUE OR SALE OF THE BONDS IN CIRCUMSTANCES IN WHICH SECTION 21(1) OF THE FSMA DOES NOT APPLY TO THE ISSUING ENTITY; AND

(B) IT HAS COMPLIED AND WILL COMPLY WITH ALL APPLICABLE PROVISIONS OF THE FSMA WITH RESPECT TO ANYTHING DONE BY IT IN RELATION TO THE BONDS IN, FROM OR OTHERWISE INVOLVING THE UNITED KINGDOM.

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The information in this prospectus is not complete and may be changed. The storm recovery bonds may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to completion, dated , 2008.

PROSPECTUS

Cleco Katrina/Rita Hurricane Recovery Funding LLC
Issuing Entity

SENIOR SECURED STORM RECOVERY BONDS
Issuable in Series

Cleco Power LLC
Seller, Initial Servicer and Sponsor

You should carefully consider the risk factors beginning on page 15 of this prospectus before you invest in the storm recovery bonds.

We, the issuing entity, may issue from time to time one or more series of the storm recovery bonds as described in this prospectus. Each series of storm recovery bonds may have one or more tranches. The storm recovery bonds represent only our obligations and are backed only by our assets. Cleco Power LLC and its affiliates, other than us, are not liable for any payments on the storm recovery bonds. The storm recovery bonds are not a debt or general obligation of the State of Louisiana, the Louisiana Public Service Commission or any other governmental agency or instrumentality and are not a charge on the full faith and credit or the taxing power of the State of Louisiana or any governmental agency or instrumentality.

We are a special purpose entity and own no property other than the collateral described in this prospectus. The collateral is the sole source of payment for the storm recovery bonds.

There currently is no secondary market for the storm recovery bonds, and we cannot assure you that one will develop.

We may offer and sell the storm recovery bonds by use of this prospectus. We will provide the specific terms of any offerings in one or more supplements to this prospectus. You should read this prospectus and the related prospectus supplement carefully before you invest in the storm recovery bonds. This prospectus may not be used to offer and sell the storm recovery bonds unless accompanied by a prospectus supplement.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is , 2008.

TABLE OF CONTENTS

PROSPECTUS

ABOUT THIS PROSPECTUS		1
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION		2
PROSPECTUS SUMMARY		3
Summary of the Storm Recovery Bonds		3
Parties to Transactions and Responsibilities		6
Flow of Funds		6
The Collateral		7
The Storm Recovery Property		7
Interest Payments		8
Principal Payments and Record Dates and Payment Sources		8
Priority of Distributions		9
Floating Rate Storm Recovery Bonds		10
Credit Enhancement		10
Master Trust Structure; Issuance of Additional Series		11
Allocations as Between Series		12
State Pledge		12
Louisiana Commission Pledge		12
Optional Redemption		12
Payment and Record Dates		13
Scheduled Final Payment Dates and Final Maturity Dates		13
Ratings for the Storm Recovery Bonds		13
Reports to Storm Recovery Bondholders		13
Servicing Compensation		13
Federal Income Tax Status		13
Louisiana State Income Tax Status		14
ERISA Considerations		14
RISK FACTORS		15
Risks Associated with Potential Judicial, Legislative or Regulatory Actions		15
Servicing Risks		18
Storm-Related Risks		20
Risks Associated with the Unusual Nature of the Storm Recovery Property		20
Risks Associated with Potential Bankruptcy Proceedings of the Seller or the Servicer		20
Other Risks Associated With an Investment in the Storm Recovery Bonds		24
THE SECURITIZATION ACT		26
Overview		26
Cleco Power and Other Utilities May Securitize Storm Recovery Costs and Related Financing and Ongoing Costs		26
Constitutional Matters		28
The Louisiana Commission May Adjust Storm Recovery Charges		29
Storm Recovery Charges Are Nonbypassable		30
The Securitization Act Protects the Bondholders' Security Interest on Storm Recovery Property		30
The Securitization Act Characterizes the Transfer of Storm Recovery Property as a True Sale		30
CLECO POWER'S FINANCING ORDER		31
THE SELLER, INITIAL SERVICER AND SPONSOR		35
About Cleco Power		35
Cleco Power's Customer Base and Electric Energy Consumption		35
Percentage Concentration Within Cleco Power's Large Industrial Customers		36

Forecasting Electricity Consumption		36
Credit Policy; Billing Process; Collections Process; Termination of Service		37
Write-off and Delinquency Experience		39
Delinquencies		40
Average Days Sales Outstanding		40
CLECO KATRINA/RITA HURRICANE RECOVERY FUNDING LLC, THE ISSUING ENTITY		41
General		41
Our Purpose		41
Our Relationship With Cleco Power		42
Our Managers		42
Manager Fees and Limitation on Liabilities		42
We Are a Separate and Distinct Legal Entity from Cleco Power		43
Administration Agreement		43
USE OF PROCEEDS		43
THE STORM RECOVERY BONDS		44
General Terms of the Storm Recovery Bonds		44
Payments of Interest and Principal on the Storm Recovery Bonds		45
Floating Rate Storm Recovery Bonds		47
Redemption of the Storm Recovery Bonds		48
Storm Recovery Bonds Will Be Issued in Book-Entry Form		48
Definitive Certificated Storm Recovery Bonds		51
Registration and Transfer of the Storm Recovery Bonds		52
The Storm Recovery Bonds May Be Issued in Various Series or Tranches		52
The Security for the Storm Recovery Bonds		53
The Collection Account for the Storm Recovery Bonds		54
How Funds in the Collection Account Will Be Allocated		58
Reports to Holders of the Storm Recovery Bonds		60
Website		60
We and the Trustee May Modify the Indenture		61
What Constitutes an Event of Default on the Storm Recovery Bonds		64
Our Covenants		68
Access to the List of Storm Recovery Bondholders		69
We Must File an Annual Compliance Statement		70
The Trustee Must Provide an Annual Report to All Storm Recovery Bondholders		70
What Will Trigger Satisfaction and Discharge of the Indenture		70
Our Legal Defeasance and Covenant Defeasance Options		71
The Trustee		72
Governing Law		73
WEIGHTED AVERAGE LIFE AND YIELD CONSIDERATIONS FOR THE STORM RECOVERY BONDS		74
THE SALE AGREEMENT		75
Cleco Power's Sale and Assignment of the Storm Recovery Property		75
Cleco Power's Representations and Warranties		76
Cleco Power's Covenants		81
Cleco Power's Obligation to Indemnify Us and the Trustee and to Take Legal Action		84
Successors to Cleco Power		84
Amendment		85
THE SERVICING AGREEMENT		86
Servicing Procedures		86
Storm Recovery Charge Adjustment Process		88

Servicer Compensation		89
Cleco Power's Representations and Warranties as Servicer		89
The Servicer Will Indemnify Us, Other Entities and the Louisiana Commission in Limited Circumstances		90
The Servicer Will Provide Statements to Us, the Louisiana Commission and the Trustee		91
The Servicer Will Provide Compliance Reports Concerning the Servicing Agreement		92
Matters Regarding Cleco Power as the Servicer		92
Events Constituting a Default by the Servicer		94
The Trustee's Rights if the Servicer Defaults		94
The Obligations of a Successor Servicer		95
Amendment		95
HOW A BANKRUPTCY MAY AFFECT YOUR INVESTMENT		96
MATERIAL FEDERAL INCOME TAX CONSEQUENCES FOR THE STORM RECOVERY BONDHOLDERS		100
General		100
Income Tax Status of the Storm Recovery Bonds and the Issuing Entity		100
Taxation of Storm Recovery Bondholders		100
Definition of United States Person		100
Tax Consequences to U.S. Holders		101
Tax Consequences to Non-U.S. Holders		102
Material Louisiana State Tax Consequences		103
ERISA CONSIDERATIONS		104
Plan Asset Issues for an Investment in the Storm Recovery Bonds		104
Prohibited Transaction Exemptions		105
General Investment Considerations for Prospective Plan Investors in the Storm Recovery Bonds		106
PLAN OF DISTRIBUTION FOR THE STORM RECOVERY BONDS		106
Distribution		106
Compensation to Underwriters		107
Other Distribution Matters		107
RISK WEIGHTING UNDER CERTAIN INTERNATIONAL CAPITAL GUIDELINES		107
RATINGS FOR THE STORM RECOVERY BONDS		108
WHERE YOU CAN FIND MORE INFORMATION		108
LEGAL MATTERS		109
GLOSSARY OF DEFINED TERMS		110

iii

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement we have filed with the Securities and Exchange Commission, or the SEC. This prospectus provides you with a general description of the storm recovery bonds we may offer. When we offer storm recovery bonds, we will provide a supplement to this prospectus. The prospectus supplement will describe the specific terms of the offering. The prospectus supplement may also contain information that supplements the information contained in this prospectus. Please carefully read this prospectus, the prospectus supplement and the information, if any, contained in the documents we refer to in this prospectus under the heading "Where You Can Find More Information."

References in this prospectus and the prospectus supplement to the terms "we," "us," "our" or "the issuing entity" mean Cleco Katrina/Rita Hurricane Recovery Funding LLC. References to "Cleco Power," "the sponsor," "the initial servicer" or "the seller" mean Cleco Power LLC. References to "Cleco Corporation" mean Cleco Corporation, the parent company of Cleco Power LLC. References to the "Bonds" or, unless the context otherwise requires, the "storm recovery bonds" mean the storm recovery bonds offered pursuant to the prospectus supplement. References to "the servicer" refer to Cleco Power and any successor servicer under the servicing agreement referred to in this prospectus and the prospectus supplement. References to the "Securitization Act" mean Act 64 of 2006, established by the Louisiana Legislature, providing for a financing mechanism through which electric utilities can use securitization financing for storm recovery costs, including the financing of a storm recovery reserve, by issuing "storm recovery bonds." The Securitization Act is codified at La. R.S. 45:1226-1236. Unless the context otherwise requires, the term customer means any existing or future LPSC-jurisdictional customer who remains attached to Cleco Power's (or its successors) electric transmission or distribution lines, and who, via such lines, receive any type of service from Cleco Power (or its successors) under rate schedules or special contracts approved by the Louisiana commission. We also refer to the Louisiana Public Service Commission as the "Louisiana commission" or the "LPSC." You can find a glossary of some of the other defined terms we use in this prospectus and the prospectus supplement on page 110 of this prospectus.

We have included cross-references to sections in this prospectus where you can find further related discussions. You can also find references to key topics in the table of contents on the previous page and in the table of contents on page (i) of the accompanying prospectus supplement.

You should rely only on the information contained or incorporated by reference in this prospectus and the prospectus supplement. Neither we nor any underwriter, agent, dealer, salesperson, the Louisiana commission or Cleco Power has authorized anyone else to provide you with any different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not offering to sell the storm recovery bonds in any jurisdiction where the offer or sale is not permitted. The information in this prospectus is current only as of the date of this prospectus.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Some statements contained in this prospectus and the prospectus supplement concerning expectations, beliefs, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are not historical facts, including statements in the documents that are incorporated by reference as discussed in this prospectus under the heading "Where You Can Find More Information," are forward-looking statements within the meaning of the federal securities laws. Actual results may differ materially from those expressed or implied by these statements. In some cases, you can identify our forward-looking statements by the words "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "goal," "intend," "may," "objective," "plan," "potential," "predict," "projection," "should," "will," or other similar words.

We have based our forward-looking statements on our management's beliefs, expectations and assumptions based on information available to our management at the time the statements are made. We caution you that assumptions, beliefs, expectations, intentions and projections about future events may and often do vary materially from actual results. Therefore, we cannot assure you that actual results will not differ materially from those expressed or implied by our forward-looking statements.

The following are some of the factors that could cause actual results to differ from those expressed or implied by our forward-looking statements:

•: state and federal legislative and regulatory actions or developments, changes in or application of laws or regulations applicable to various aspects of Cleco Power's business;
•: non-payment of storm recovery charges by Cleco Power's customers;
•: the accuracy of the servicer's forecast of electrical consumption or the payment of storm recovery charges;
•: changes in market demand and demographic patterns;
•: weather variations and other natural phenomena, including, without limitation, hurricanes, affecting Cleco Power's customers' energy usage;
•: the operating performance of Cleco Power's facilities;
•: the reliability of the systems, procedures and other infrastructure necessary to operate Cleco Power's business;
•: national or regional economic conditions affecting Cleco Power's customers' energy usage;
•: acts of war or terrorism or other catastrophic events affecting Cleco Power's customers' energy usage; and
•: other factors we discuss in this prospectus, any prospectus supplement and our other SEC filings.

You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to update or revise any forward-looking statement.

PROSPECTUS SUMMARY

This summary contains a brief description of the storm recovery bonds and applies to all series of storm recovery bonds we may offer by use of this prospectus. You may find information relating to a specific series of our storm recovery bonds in the prospectus supplement relating to that series. You will find a more detailed description of the terms of the offering of the storm recovery bonds following this summary.

You should carefully consider the risk factors beginning on page 15 of this prospectus before you invest in the storm recovery bonds.

Summary of the Storm Recovery Bonds

The issuing entity:		Cleco Katrina/Rita Hurricane Recovery Funding LLC is a direct, wholly owned subsidiary of Cleco Power and a limited liability company formed under Louisiana law. We were formed solely to purchase and own storm recovery property, to issue storm recovery bonds and to perform activities incidental thereto. Please read "Cleco Katrina/Rita Hurricane Recovery Funding LLC, The Issuing Entity."
		Subsequent financing orders relating to additional series of storm recovery bonds may impose additional or different requirements. Please read "Cleco Power's Financing Order."
Our address:		2605 Hwy. 28 East, Office Number 12, Pineville, Louisiana 71360
Our telephone number:		(318) 484-4180
The seller, initial servicer and sponsor of the storm recovery property:		Cleco Power
Cleco Power's address:		2030 Donahue Ferry Road, Pineville, Louisiana 71360-5226
Cleco Power's telephone number:		(318) 484-7400
The servicer of the storm recovery property:		Cleco Power is an integrated electric utility that conducts generation, purchase, transmission, distribution and sale operations subject to the jurisdiction of the Louisiana commission and the Federal Energy Regulatory Commission, or FERC, among other regulators, which also engages in energy management activities. Cleco Power is a Louisiana limited liability company and a wholly owned subsidiary of Cleco Corporation, a regional energy services holding company.
		Cleco Power, acting as the initial servicer, and any successor servicer, referred to in this prospectus supplement and the accompanying prospectus as the "servicer," will service the storm recovery property securing the storm recovery bonds under a servicing agreement with us. Please read "The Seller, Initial Servicer and Sponsor." Neither Cleco Power nor Cleco Corporation nor any other affiliate (other than us) is an obligor on the storm recovery bonds.

The trustee:		The trustee for each series of storm recovery bonds will be named in the applicable prospectus supplement.
Transaction overview:		In August and September 2005, Cleco Power was struck by the two worst natural disasters ever to strike its system, Hurricanes Katrina and Rita. The Securitization Act permits electric utilities to recover certain losses sustained as a result of these hurricanes through the issuance of storm recovery bonds pursuant to and supported by an irrevocable financing order issued by the Louisiana commission. The Securitization Act also permits the Louisiana commission to impose an irrevocable nonbypassable storm recovery charge on all of an electric utility's customers that are subject to the Louisiana commission's jurisdiction, for payment of the storm recovery charges. The amount and terms for collections of these storm recovery charges are governed by one or more financing orders issued to an electric utility by the Louisiana commission. The Securitization Act permits an electric utility to transfer its rights and interests under a financing order, including the right to impose, collect and receive storm recovery charges, to a special purpose entity formed by the electric utility to issue debt securities secured by the right to receive revenues arising from the storm recovery charges. Under the Securitization Act, as of the effective date of a financing order, there is created and established for Cleco Power storm recovery property, which is a present contract right in favor of Cleco Power, its transferees and other financing parties. Unless the context infers otherwise, references in this prospectus to the "financing order" are to the financing order issued by the Louisiana commission on September 17, 2007, which is further described below. Any subsequent financing order relating to a separate series of storm recovery bonds will be described in the applicable prospectus supplement.

		On September 17, 2007, the Louisiana commission issued a financing order determining that Cleco Power is entitled, pursuant to the Securitization Act, to finance, through the issuance of storm recovery bonds in the aggregate principal amount of up to approximately $187 million, Cleco Power's storm recovery costs (including storm recovery reserves and upfront financing costs associated with the issuance of storm recovery bonds) as determined by separate order of the Louisiana commission. The financing order also authorized (1) Cleco Power's proposed financing structure and issuance of the storm recovery bonds; (2) creation of the storm recovery property, including the right to impose and collect storm recovery charges sufficient to pay the storm recovery bonds and associated financing costs; (3) a tariff to implement the storm recovery charges; and (4) a tariff to implement a surcredit to provide Cleco Power customers the benefit of all non-ratepayer recoveries and to address ancillary cost recovery relating to the storm recovery cost process.
		The primary transactions underlying the offering of each series of storm recovery bonds are as follows:
		•		Cleco Power will transfer and sell the storm recovery property to us in exchange for the net proceeds from the sale of a series of storm recovery bonds,
		•		we will sell the series of storm recovery bonds, which will be secured primarily by the related storm recovery property, to the underwriters named in the prospectus supplement and
		•		Cleco Power will act as the initial servicer of the storm recovery property.
		The storm recovery bonds are not obligations of the trustee, our managers, Cleco Power, Cleco Corporation or of any of their affiliates other than us. The storm recovery bonds are also not obligations of the State of Louisiana, the Louisiana commission or any other governmental agency, authority or instrumentality of the State of Louisiana.

Parties to Transactions and Responsibilities

The following chart represents a general summary of the parties to the transactions underlying the offering of a series of storm recovery bonds, their roles and their various relationships to the other parties:

Flow of Funds

The following chart represents a general summary of the flow of funds:

The Collateral

Each series of storm recovery bonds will be secured under the indenture by the indenture's trust estate relating to that series. The principal asset of the trust estate will be storm recovery property. Under the Securitization Act, as of the effective date of a financing order, there is created and established for Cleco Power storm recovery property, which is a present contract right in favor of Cleco Power, its transferees and other financing parties, to impose, collect and receive storm recovery charges from Cleco Power's customers, to obtain periodic adjustments to such charges as provided in the financing order and all revenues, collections, claims, rights to payments, payments, money or proceeds arising from the foregoing rights and interests. The indenture's trust estate will also consist of:

•: our rights under a sale agreement pursuant to which we will acquire the related storm recovery property, under an administration agreement and under all bills of sale delivered by Cleco Power pursuant to such sale agreement,
•: our rights under a servicing agreement and any subservicing, agency, intercreditor or collection agreements executed in connection with such servicing agreement,
•: the collection account for the particular series of storm recovery bonds and all subaccounts of the collection account,
•: our rights under any interest rate swap agreement or hedging agreement entered into with respect to the issuance of a floating rate tranche of a particular series of storm recovery bonds,
•: all of our other property related to the series of storm recovery bonds, other than any cash released to us by the trustee on any payment to be distributed to Cleco Power as a return of its invested capital in us,
•: all present and future claims, demands, causes and choses in action in respect of any or all of the foregoing, and
•: all payments on or under and all proceeds in respect of any or all of the foregoing.

The collateral for each series of storm recovery bonds will be separate from the collateral for any other series, and holders of one series of storm recovery bonds will have no recourse to collateral for a different series. Please read "The Storm Recovery Bonds—The Security for the Storm Recovery Bonds" in this prospectus.

The Storm Recovery Property

In general terms, all of the rights and interests of Cleco Power that are transferred to us pursuant to a sale agreement are referred to in this prospectus and the prospectus supplement as "storm recovery property." Storm recovery property includes, the right to impose, collect and receive storm recovery charges in amounts sufficient to pay principal and interest and to make other deposits in connection with the related series of storm recovery bonds, to obtain periodic adjustments to such charges as provided in the financing order and all revenues, collections, claims, rights to payments, payments, money or proceeds arising from the foregoing rights and interests. The storm recovery property does not include the rights of Cleco Power to earn and receive a rate of return on its invested capital in us, to receive administration and servicer fees, to withdraw funds from its restricted storm recovery reserve funded by the proceeds from the sale of the storm recovery property, or to use Cleco Power's remaining portion of those proceeds. Storm recovery charges are payable by Cleco Power's customers. During the twelve months ended December 31, 2007, approximately 33% of Cleco Power's total deliveries (based on MWh) were to industrial customers, approximately 27% were to commercial customers and approximately 39% were to residential customers.

The storm recovery property is the principal collateral securing a series of storm recovery bonds. Storm recovery charges authorized in a financing order are irrevocable and not subject to reduction, impairment, or adjustment by further action of the Louisiana commission, except for semi-annual and interim true-up adjustments to correct over-collections or under-collections and to provide for the expected recovery of amounts sufficient to timely provide payments of scheduled debt service and other required amounts and charges in connection with a series of storm recovery bonds. See "Cleco Power's Financing Order—True-Ups." All revenues and collections resulting from storm recovery charges are part of the storm recovery property with respect to a particular series of storm recovery bonds.

We will purchase storm recovery property from Cleco Power to support the issuance of the related series of storm recovery bonds. Cleco Power as servicer will bill and collect the storm recovery charges from its customers. Cleco Power will include the storm recovery charges in its bills to its customers and is required to show the storm recovery charges as a separate line item or footnote. The servicer is also required to send a written statement at least annually to all customers that we are the owner of the rights to the storm recovery property and that the servicer is merely our collection agent.

Interest Payments

Interest on each tranche or series of storm recovery bonds will accrue from the date we issue the tranche or series of storm recovery bonds at the interest rate stated in the related prospectus supplement. On each payment date, we will pay interest on each tranche or series of storm recovery bonds equal to the following amounts:

•: if there has been a payment default, any interest payable but unpaid on any prior payment dates, together with interest on such unpaid interest, if any, and
•: accrued interest on the principal balance of each tranche or series of storm recovery bonds as of the close of business on the preceding payment date, or the date of the original issuance of each tranche or series of storm recovery bonds, as applicable, after giving effect to all payments of principal made on the preceding payment date, if any.

We will pay interest on each tranche or series of storm recovery bonds before we pay the principal of each tranche or series of storm recovery bonds. Please read "The Storm Recovery Bonds—Payments of Interest and Principal on the Storm Recovery Bonds" in this prospectus. If there is a shortfall in the amounts available in the applicable collection account to make interest payments, the trustee will distribute interest pro rata to each series and tranche of storm recovery bonds based on the amount of interest payable on each outstanding series and tranche. Unless otherwise specified in the prospectus supplement, we will calculate interest on the basis of a 360-day year of twelve 30-day months.

Principal Payments and Record Dates and Payment Sources

On each payment date specified in the prospectus supplement for each series of storm recovery bonds, referred to in this prospectus as a "payment date," we will pay amounts then due or scheduled to be paid on outstanding series of the storm recovery bonds from amounts available in the collection account and the related subaccounts for that series held by the trustee. We will make these payments to the holders of record of the storm recovery bonds on each record date specified in the prospectus supplement, referred to in this prospectus as a "record date." These available amounts, which will include the applicable storm recovery charges collected by the servicer for us since the last payment date, are described in greater detail under "The Storm Recovery Bonds—The Collection Account for the Storm Recovery Bonds." The trustee will pay the principal of each tranche of storm recovery bonds in the amounts and on the payment dates specified in the expected amortization schedule described in the related prospectus supplement, but only to the extent storm recovery charge collections received from the servicer and amounts available from trust accounts held by the trustee are sufficient to make

principal payments after payment of amounts having a higher priority of payment. Please read "The Storm Recovery Bonds—How Funds in the Collection Account Will Be Allocated."

Priority of Distributions

Unless otherwise specified in a prospectus supplement, on each payment date for a series of storm recovery bonds, the trustee will allocate or pay all amounts on deposit in the general subaccount of the collection account for that series in the following order of priority:

1.: payment of a pro rata portion of the trustee's fees, plus expenses and any outstanding indemnity amounts relating to that series of storm recovery bonds not to exceed a specified amount in any 12-month period, which amount will be fixed in the indenture or the supplemental indenture governing that series of storm recovery bonds,
2.: payment of a pro rata portion of the servicing fee relating to that series of storm recovery bonds, which will be a fixed amount specified in the servicing agreement for that series of storm recovery bonds, plus any unpaid servicing fees relating to that series of storm recovery bonds from prior payment dates,
3.: payment of a pro rata portion of the administration fee, which will be a fixed amount specified in the administration agreement between us and Cleco Power, and a pro rata portion of the fees of our independent manager, which will be in an amount specified in an agreement between us and our independent manager,
4.: payment of all of our other ordinary periodic operating expenses relating to that series of storm recovery bonds, such as accounting and audit fees, rating agency fees, legal fees and certain reimbursable costs of the servicer under the applicable servicing agreement,
5.: payment of the interest then due on that series of storm recovery bonds,
6.: payment of the principal then required to be paid on that series of storm recovery bonds at final maturity or upon redemption or acceleration upon an event of default,
7.: payment of the principal then scheduled to be paid on that series of storm recovery bonds, including any previously unpaid scheduled principal,
8.: payment of any amounts payable to any other credit enhancement providers with respect to that series of storm recovery bonds,
9.: payment of any of our remaining unpaid operating expenses and any remaining amounts owed pursuant to the basic documents relating to that series, including all remaining amounts owed to the trustee,
10.: replenishment of any amounts drawn from the capital subaccount for that series of storm recovery bonds (other than distributed investment earnings on the capital subaccount for such series), plus any deficiency in the amount of investment earnings on the capital subaccount of such series allowed under the financing order that has not previously been distributed to us,
11.: if the balance in the capital subaccount for that series of storm recovery bonds is greater than the initial balance of the capital subaccount for that series of storm recovery bonds after making the foregoing allocations, an amount of investment earnings on the capital subaccount not to exceed a percentage per annum set forth in the prospectus supplement for such series shall be paid to us; provided that no event of default has occurred and is continuing and that the balance of the capital subaccount for that series of storm recovery bonds is not reduced below the initial balance of the capital subaccount for such series,

12.: allocation of the remainder, if any, to the excess funds subaccount for that series of storm recovery bonds, and
13.: after that series of storm recovery bonds have been paid in full and discharged, the balance, together with all amounts in the capital subaccount and the excess funds account for that series of storm recovery bonds, released to us free and clear of the lien of the indenture.

The amount of the servicer's fee referred to in clause 2 above and the amount of the administration fee referred to in clause 3 will be described in the prospectus supplement for the related series of storm recovery bonds. The priority of distributions for the collected storm recovery charges, as well as available amounts in the subaccounts, are described in more detail under "The Storm Recovery Bonds—How Funds in the Collection Account Will Be Allocated," as well as in the prospectus supplement for each series of the storm recovery bonds.

Floating Rate Storm Recovery Bonds

If, in connection with the issuance of any tranche of storm recovery bonds paying interest at a floating rate, referred to as a floating rate tranche, we arrange for any interest rate swap transactions, the material terms of those transactions will be described in the related prospectus supplement.

Credit Enhancement

Unless otherwise specified in the prospectus supplement, credit enhancement for the storm recovery bonds will be as follows:

•

The Louisiana commission will approve adjustments to the storm recovery charges, but only upon petition of the servicer, to make up for any shortfall or reduce any excess in collected storm recovery charges. We sometimes refer to these adjustments as "true-up adjustments" or the "true-up mechanism." Storm recovery charges are required to be adjusted semi-annually to:

•: correct, over a period of up to 12 months covering the next two succeeding payment dates, any under-collections or over-collections, for any reason, during the preceding six months, and
•: ensure the projected recovery of amounts sufficient to provide timely payment of the scheduled principal, interest and other required amounts in connection with the storm recovery bonds during the subsequent 12-month period.

The servicer may also make interim true-up adjustments more frequently under certain circumstances. Please read "Cleco Power's Financing Order—True-Ups."

•

Collection Account—Under the indenture, the trustee will hold a collection account for each series of storm recovery bonds, divided into various subaccounts. The primary subaccounts for credit enhancement purposes are:

•: the general subaccount—the trustee will deposit into the general subaccount all storm recovery charge collections remitted to it by the servicer with respect to that series of storm recovery bonds and investment earnings on amounts in the general subaccount;
•: the capital subaccount—Cleco Power will deposit an amount specified in the prospectus supplement into the capital subaccount for that series of storm recovery bonds on the date of issuance of such series of storm recovery bonds; and
•: the excess funds subaccount—any excess amount of collected storm recovery charges and investment earnings on amounts in the excess funds subaccount for that series of storm recovery bonds will be held in the excess funds subaccount.

Each of these subaccounts for each series of storm recovery bonds will be available to make payments on the storm recovery bonds of such series on each payment date. Interest rate swaps and other hedging arrangements may be used to fix synthetically the interest on floating rate storm recovery bonds. Tranche subaccounts for related floating rate storm recovery bonds may also be established in the event interest rate swaps or other hedging arrangements are utilized.

Additional credit enhancement for any series of storm recovery bonds may include other surety bonds or letters of credit or other forms of credit enhancement. Any additional forms of credit enhancement for a series of storm recovery bonds will be specified in the related prospectus supplement. Credit enhancement for a series of storm recovery bonds is intended to protect you against losses or delays in scheduled payments on such series of storm recovery bonds. We do not anticipate obtaining additional credit enhancement for any series of storm recovery bonds.

Master Trust Structure; Issuance of Additional Series

Unless otherwise provided in the accompanying prospectus supplement, the indenture will be structured as the functional equivalent, in certain respects, of a master trust in that we may, subject to the terms of the financing order or any subsequent financing order but without your prior review or approval, acquire additional storm recovery property and issue one or more additional series of storm recovery bonds which are backed by such storm recovery property, all of which storm recovery bonds will be paid through collections of additional storm recovery charges from the same group of Cleco Power customers. In addition, Cleco Power may also sell storm recovery property to one or more entities other than us in connection with the issuance of a new series of storm recovery bonds without your prior review or approval. The trustee will authenticate and deliver a new series of storm recovery bonds issued by us, only if, among other conditions, the aggregate amount of the storm recovery bonds outstanding does not exceed the amounts approved under all applicable financing orders and the rating agency condition (described below) has been satisfied. Please read "The Storm Recovery Bonds—The Storm Recovery Bonds May Be Issued in Various Series or Tranches." In certain respects this structure differs from "master trust" structures that may be used in connection with other securities issued by other issuers. In particular, each series of storm recovery bonds will be secured by its own storm recovery property, which will include, the right to impose, collect and receive storm recovery charges calculated in respect of that series, and the right to impose interim and semi-annual true-up adjustments to correct over-collections or under-collections in respect of that series and all revenues, collections, claims, rights to payments, payments, money or proceeds arising from the foregoing rights and interests. Each series will also have its own collection account, including any related subaccounts, into which collections of the storm recovery charges relating to that series will be deposited and from which amounts will be withdrawn to pay the related series of storm recovery bonds. The collateral for each series of storm recovery bonds will be separate from the collateral for any other series, and holders of one series of storm recovery bonds will have no recourse to collateral for a different series. Accordingly, no series will be subordinated to any other series except that any tranche of a particular series may be subordinated to other tranches of such series if and to the extent set forth in the applicable prospectus supplement. In the event that more than one series of storm recovery bonds is issued, the administration fees, independent manager fees and other operating expenses payable by us on any payment date will be assessed to each series on a pro rata basis, based upon the respective outstanding amounts of each series. Please read "The Storm Recovery Bonds—The Security for the Storm Recovery Bonds", "—The Collection Account for the Storm Recovery Bonds" and "—How Funds in the Collection Account Will Be Allocated" in this prospectus.

Allocations as Between Series

Although each series of storm recovery bonds will have its own storm recovery property, storm recovery charges relating to any series of storm recovery bonds and storm recovery charges relating to

any other series of storm recovery bonds will be collected from the same Cleco Power customers. In the event a Cleco Power customer does not pay in full all amounts owed under any bill including storm recovery charges, the amount remitted will be applied to all charges on the bill based, as to a bill with charges covering more than one month, on the chronological order of billing, and, as to those charges with the same billing date, pro rata. In addition, if more than one series of storm recovery bonds have been issued by us or another subsidiary of Cleco Power, any such partial collections will be allocated among such series of storm recovery bonds, pro rata based upon the amounts billed with respect to each series of storm recovery bonds, provided that late fees and charges may be allocated to the servicer as provided in the applicable tariff. Please read "The Storm Recovery Bonds—Allocations as Between Series" and "The Servicing Agreements—Servicing Procedures—Remittances to the Trustee" in this prospectus.

State Pledge

The State of Louisiana has pledged in the Securitization Act that it will not alter the provisions of the part of the Securitization Act which authorizes the Louisiana commission to create a contract right by the issuance of a financing order, to create storm recovery property, and to make the storm recovery charges imposed by a financing order irrevocable, binding and nonbypassable charges, take or permit any action that would impair the value of the storm recovery property, or, except for adjustments discussed in "Cleco Power's Financing Order—True-ups" and "The Servicing Agreement—Storm Recovery Charge Adjustment Process," reduce, alter or impair the storm recovery charges to be imposed, collected and remitted to storm recovery bondholders until the principal, interest and premium, if any, and any other charges incurred and contracts to be performed in connection with any series of storm recovery bonds have been paid and performed in full. However, nothing will preclude limitation or alteration if and when full compensation is made for the full protection of the storm recovery charges collected pursuant to the financing order and the full protection of the bondholders and any assignee or financing party. Please read "Risk Factors—Risks Associated with Potential Judicial, Legislative or Regulatory Actions" in this prospectus.

Louisiana Commission Pledge

The Louisiana commission has jurisdiction over Cleco Power pursuant to Article 4, Section 21, of the Louisiana Constitution. The Louisiana commission has pledged in the financing order that (i) the financing order is irrevocable until the indefeasible (i.e., not voidable) payment in full of the storm recovery bonds and (ii) it may not amend, modify or rescind the financing order by any subsequent action or reduce, impair, postpone, terminate, or otherwise adjust storm recovery charges approved in the financing order, provided that nothing in clause (ii) shall preclude limitation or alteration if and when full compensation is made for the full protection of the storm recovery charges collected pursuant to the financing order and the full protection of the bondholders and any assignee or financing party. Please read "Risk Factors—Risks Associated with Potential Judicial, Legislative or Regulatory Actions."

Optional Redemption

The prospectus supplement may provide for redemption of a series of the storm recovery bonds at our option at a redemption price not less than the outstanding principal of and accrued interest on that series of the storm recovery bonds.

Payment and Record Dates

The payment and record dates for each series of storm recovery bonds will be specified in the related prospectus supplement.

Scheduled Final Payment Dates and Final Maturity Dates

Failure to pay a scheduled principal payment on any payment date or the entire outstanding amount of the storm recovery bonds of any tranche or series by the scheduled final payment date will not result in a default with respect to that tranche or series. The failure to pay the entire outstanding principal balance of the storm recovery bonds of any tranche or series will result in a default only if such payment has not been made by the final maturity date for the tranche or series, or on any date set for redemption of the series. We will specify the scheduled final payment date and the final maturity date of each series and tranche of storm recovery bonds in the related prospectus supplement.

Ratings for the Storm Recovery Bonds

It will be a condition of issuance for each series of storm recovery bonds that the series be rated "Aaa" by Moody's Investors Service, Inc., "AAA" by Standard and Poor's Ratings Services, a Division of The McGraw-Hill Companies, Inc. and "AAA" by Fitch, Inc. See "Ratings for the Storm Recovery Bonds" in this prospectus.

Reports to Storm Recovery Bondholders

Pursuant to the indenture, the trustee will provide to the holders of record of the storm recovery bonds regular reports prepared by the servicer containing information concerning, among other things, us and the collateral for the storm recovery bonds. Unless and until the storm recovery bonds are issued in definitive certificated form, the reports for the storm recovery bonds will be provided to The Depository Trust Company. The reports will be available to beneficial owners of the storm recovery bonds upon written request to the trustee or the servicer. These reports will not be examined and reported upon by an independent public accountant. In addition, no independent public accountant will provide an opinion thereon. Please read "The Storm Recovery Bonds—The Trustee Must Provide an Annual Report to All Storm Recovery Bondholders."

Servicing Compensation

We will pay the servicer on each payment date the servicing fee with respect to all series of the storm recovery bonds. As long as Cleco Power or any affiliated entity acts as servicer, this fee will be 0.05% of the initial principal balance of the storm recovery bonds on an annualized basis. If a successor servicer is appointed, the servicing fee will be negotiated by the successor servicer and the trustee, but will not, unless the Louisiana commission consents, exceed 0.60% of the initial principal balance of the storm recovery bonds on an annualized basis. In no event will the trustee be liable for any servicing fee in its individual capacity.

Federal Income Tax Status

In the opinion of Phelps Dunbar, L.L.P., counsel to us and to Cleco Power, interest paid on the storm recovery bonds generally will be taxable to a U.S. bondholder as ordinary interest income at the time it accrues or is received in accordance with the U.S. bondholder's method of accounting for U.S. federal income tax purposes. Phelps Dunbar, L.L.P. has also issued an opinion, that, for federal income tax purposes (1) we will not be treated as a taxable entity separate and apart from Cleco Power, our sole member, and (2) based on Revenue Procedure 2005-62, the storm recovery bonds will constitute indebtedness of Cleco Power. Each beneficial owner of a storm recovery bond, by acquiring a beneficial interest, agrees to treat such storm recovery bond as indebtedness of our sole member secured by the collateral for federal (and, to the extent applicable, state) income tax purposes unless otherwise required by appropriate taxing authorities. Please read "Material Federal Income Tax Consequences for the Storm Recovery Bondholders" in this prospectus.

Louisiana State Income Tax Status

In the opinion of Phelps Dunbar, L.L.P., counsel to us and to Cleco Power, interest paid on the storm recovery bonds generally will be taxed for Louisiana income tax purposes consistently with its taxation for U.S. federal income tax purposes and such interest received by a person who is not otherwise subject to corporate or personal income tax in the state of Louisiana will not be subject to tax in Louisiana. Phelps Dunbar, L.L.P. has also issued an opinion, based upon the treatment of such issues for federal income tax purposes, that for Louisiana income tax purposes (1) we will not be treated as a taxable entity separate and apart from Cleco Power, our sole member, and (2) the storm recovery bonds will constitute indebtedness of Cleco Power. Please read "Material Federal Income Tax Consequences for the Storm Recovery Bondholders" in this prospectus.

ERISA Considerations

Pension plans and other investors subject to the Employee Retirement Income Security Act of 1974, as amended (ERISA), may acquire the storm recovery bonds subject to specified conditions. The acquisition and holding of the storm recovery bonds could be treated as an indirect prohibited transaction under ERISA. Accordingly, by purchasing the storm recovery bonds, each investor purchasing on behalf of a pension plan, or other investor subject to ERISA, will be deemed to certify that the purchase and subsequent holding of the storm recovery bonds would be exempt from the prohibited transaction rules of ERISA. For further information regarding the application of ERISA, please read "ERISA Considerations."

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RISK FACTORS

Please carefully consider all the information we have included or incorporated by reference in this prospectus and the related prospectus supplement, including the risks described below and in "Cautionary Statement Regarding Forward-Looking Information," before deciding whether to invest in the storm recovery bonds. We will describe material risks of investing in any tranches of floating rate storm recovery bonds in the applicable prospectus supplement.

You may experience material payment delays or incur a loss on your investment in the storm recovery bonds because the source of funds for payment is limited.

The only source of funds for payment of a series of storm recovery bonds will be our assets relating to such series, which consist of:

•: the storm recovery property securing that series of storm recovery bonds, including the right to impose, bill, charge, collect and receive related storm recovery charges;
•: the funds on deposit in the accounts held by the trustee;
•: our rights under various contracts we describe in this prospectus; and
•: any credit enhancement as set forth in the related prospectus supplement.

The storm recovery bonds are not a charge on the full faith and credit or taxing power of the State of Louisiana or any governmental agency or instrumentality, nor will the storm recovery bonds be insured or guaranteed by Cleco Power, including in its capacity as the servicer, or by its parent, Cleco Corporation, any of their respective affiliates (other than us), the trustee or any other person or entity. Thus, you must rely for payment of a series of storm recovery bonds solely upon the collections of the storm recovery charges relating to such series, funds on deposit in the related accounts held by the trustee relating to such series and any other credit enhancement relating to such series described in the prospectus supplement. Our organizational documents restrict our right to acquire other assets unrelated to the transactions described in this prospectus. Please read "Cleco Katrina/Rita Hurricane Recovery Funding LLC, The Issuing Entity" in this prospectus.

Risks Associated with Potential Judicial, Legislative or Regulatory Actions

We are not obligated to indemnify you for changes in law.

Neither we nor Cleco Power, nor any affiliate, successor or assignee, will indemnify you for any changes in the law, including any federal preemption or repeal or amendment of the Securitization Act, that might affect the value of your storm recovery bonds. Cleco Power will agree in each sale agreement to institute any legal or administrative action or proceeding as may be reasonably necessary to block or overturn any attempts to cause a repeal, modification or amendment of the Securitization Act that would be materially adverse to us, the trustee or storm recovery bondholders. However, we cannot assure you that Cleco Power would be able to take this action or that any such action would be successful. Please read "The Sale Agreement—Cleco Power's Covenants" in this prospectus.

Future judicial action could reduce the value of your investment in the storm recovery bonds.

The storm recovery property is the creation of the Securitization Act and one or more financing orders that have been or may be issued by the Louisiana commission to Cleco Power pursuant to the Securitization Act. The Securitization Act was enacted in May 2006. There is uncertainty associated with investing in bonds payable from an asset that depends for its existence on legislation because there is limited judicial or regulatory experience implementing and interpreting the legislation. The Securitization Act or any financing order or any provisions thereof might be directly contested in courts or otherwise become the subject of litigation. Because the storm recovery property is a creation of the

Securitization Act and a financing order, any judicial determination affecting the validity of or interpreting the Securitization Act or a financing order, the storm recovery property or our ability to make payments on the storm recovery bonds might have an adverse effect on the value of the storm recovery bonds or cause a delay in the recovery of your investment. Please read "The Securitization Act—Constitutional Matters" in this prospectus.

Other states have passed laws with financing provisions similar to some provisions of the Securitization Act, and some of these laws have been challenged by judicial actions. To date, none of these challenges has succeeded, but future judicial challenges might be made. An unfavorable decision regarding another state's law would not automatically invalidate the Securitization Act or the financing order, but it might provoke a challenge to the Securitization Act or a financing order, establish a legal precedent for a successful challenge to the Securitization Act or a financing order or heighten awareness of the political and other risks of the storm recovery bonds, and in that way may limit the liquidity and value of the storm recovery bonds. Therefore, legal activity in other states may indirectly affect the value of your investment in the storm recovery bonds.

The federal government might preempt the Securitization Act without full compensation.

Congress could pass a law or adopt a rule or regulation negating the existence of or reducing the value of the storm recovery property. If federal legislation preempting the Securitization Act or the financing order is enacted, there is no assurance that the courts would consider it a "taking" under the United States Constitution for which the government would be required to pay just compensation or, if it is considered a "taking," that any amount provided as compensation would be sufficient to pay the full amount of principal of and interest on the storm recovery bonds or to pay these amounts on a timely basis.

Future state action could reduce the value of your investment in the storm recovery bonds.

Despite their pledges in the Securitization Act and financing order, respectively, not to take or permit certain actions that would impair the value of the storm recovery property or the storm recovery charges, the Louisiana legislature might attempt to repeal or amend the Securitization Act in a manner that limits or alters the storm recovery property so as to reduce its value. For a description of the State's pledge, please read "The Securitization Act—Cleco Power and Other Utilities May Securitize Storm Recovery Costs and Related Financing and Ongoing Costs" in this prospectus. As of the date of this prospectus, we are not aware of any pending legislation in the Louisiana legislature that would affect any provisions of the Securitization Act.

It might be possible for the Louisiana legislature to repeal or amend the Securitization Act notwithstanding the State's pledge if the legislature acts in order to serve a significant and legitimate public purpose, such as protecting the public health and safety, or responding to a national or regional catastrophe affecting Cleco Power's service territory, or if such action or inaction otherwise is in the valid exercise of the State's police power. Similarly, it might be possible for the Louisiana commission to repeal or amend the financing order notwithstanding the Louisiana commission's pledge, if it acts in order to serve a significant and legitimate public purpose. Any such action, as well as the costly and time-consuming litigation that likely would ensue, might adversely affect the price and liquidity, the dates of payment of interest and principal and the weighted average lives of the storm recovery bonds. Moreover, the outcome of any litigation cannot be predicted. Accordingly, you might incur a loss on or delay in recovery of your investment in the storm recovery bonds.

If an action of the Louisiana legislature or the Louisiana commission adversely affecting the storm recovery property or the ability to collect storm recovery charges were considered a "taking" under the United States or Louisiana Constitutions, the State of Louisiana might be obligated to pay compensation in an amount equal to the estimated value of the storm recovery property at the time of

the taking. However, even in that event, there is no assurance that any amount provided as compensation would be sufficient for you to recover fully your investment in the storm recovery bonds or to offset interest lost pending such recovery.

Nothing in the State's or Louisiana commission's pledge precludes any limitation or alteration of the Securitization Act or a financing order if full compensation is made by law for the full protection of the storm recovery charges collected pursuant to a financing order and of the holders of the related series of storm recovery bonds. It is unclear what "full compensation" and "full protection" would be afforded to the holders of storm recovery bonds by the State of Louisiana or the Louisiana commission if such limitation or alteration were attempted.

Unlike the citizens of some other states, the citizens of the State of Louisiana currently do not have the constitutional right to adopt or revise state laws by initiative or referendum. Thus, absent an amendment to the Louisiana Constitution, the Securitization Act cannot be amended or repealed by direct action of the electorate of the State of Louisiana.

The enforcement of any rights against the State of Louisiana or the Louisiana commission under their respective pledges may be subject to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against state and local governmental entities in Louisiana. These limitations might include, for example, the necessity to exhaust administrative remedies prior to bringing suit in a court, or limitations on type and locations of courts in which the State of Louisiana or the Louisiana commission may be sued.

The Louisiana commission might attempt to take actions that could reduce the value of your investment in the storm recovery bonds.

The Securitization Act provides that for a financing order issued to create storm recovery property, the financing order must provide that the financing order is irrevocable and that the Louisiana commission may not directly or indirectly, by any subsequent action, rescind or amend a financing order or reduce, alter or impair the storm recovery charges authorized under a financing order, except for the true-up adjustments to the storm recovery charges. In addition, pursuant to its constitutional plenary authority and the Securitization Act, the Louisiana commission had pledged in the financing order that it will not amend, modify, or rescind the financing order by any subsequent action or reduce, impair, postpone, terminate, or otherwise adjust the storm recovery charges. However, the Louisiana commission retains the power to adopt, revise or rescind rules or regulations affecting Cleco Power or a successor utility. The Louisiana commission also retains the power to interpret the financing order granted to Cleco Power, and in that capacity might be called upon to rule on the meanings of provisions of the order that might need further elaboration. Any new or amended regulations or orders from the Louisiana commission might adversely affect the ability of the servicer to collect the storm recovery charges in full and on a timely basis, the rating of the related storm recovery bonds or their price and, accordingly, the amortization of such storm recovery bonds and their weighted average lives.

The servicer is required to file with the Louisiana commission, on our behalf, certain periodic true-up adjustments of the storm recovery charges. The Louisiana commission is obligated under the financing order to administratively approve the requested adjustment (including, if applicable, the correction of any mathematical error in such calculations) within 15 days of the date of the request for adjustment. Please read "Cleco Power's Financing Order—True-Ups" and "—Adjustments to Allocation of Storm Recovery Charges" in this prospectus. True-up adjustment procedures may be challenged in the future. Challenges to or delays in the true-up process might adversely affect the market perception and valuation of the storm recovery bonds. Also, any litigation might materially delay storm recovery charge collections due to delayed implementation of true-up adjustments and might result in missing payments or payment delays and lengthened weighted average life of the related storm recovery bonds.

A municipal entity may seek to acquire portions of Cleco Power's electric distribution facilities and avoid payment of the storm recovery charges.

Louisiana law authorizes municipalities to seek to acquire portions of an electric utility's electric distribution facilities through voluntary transactions or the power of expropriation for use as part of municipally-owned utility systems. There can be no assurance that one or more municipalities will not seek to acquire some or all of Cleco Power's electric distribution facilities while any series of storm recovery bonds remain outstanding. The Securitization Act specifies that storm recovery charges approved by a financing order shall be collected by an electric utility as well as its "successors or assignees." In the servicing agreement, Cleco Power has covenanted to assert in an appropriate forum that any municipality that acquires any portion of Cleco Power's electric distribution facilities by expropriation, including upon the expiration of any franchise agreement, must be treated as a successor to Cleco Power under the Securitization Act and the financing order and that customers in such municipalities remain responsible for payment of storm recovery charges. However, the involved municipality might assert that it should not be treated as a successor to Cleco Power for these purposes and that its distribution customers are not responsible for payment of storm recovery charges. In any case, we cannot assure you that the storm recovery charges will be collected from customers of municipally-owned utilities who were formerly customers of Cleco Power and that such an occurrence might not affect the timing or receipt of payments with respect to your storm recovery bonds.

Servicing Risks

Your investment in the storm recovery bonds depends on Cleco Power or its successor or assignee, acting as servicer of the storm recovery property.

Cleco Power, as servicer, will be responsible for, among other things, calculating, billing and collecting the storm recovery charges from its customers, submitting requests to the Louisiana commission to adjust these charges, monitoring the collateral for a series of storm recovery bonds and taking certain actions in the event of non-payment by a customer. The trustee's receipt of collections in respect of the storm recovery charges, which will be used to make payments on the related series of storm recovery bonds, will depend in part on the skill and diligence of the servicer in performing these functions. If the servicer fails to make collections for any reason, then the servicer's payments to the trustee in respect of the storm recovery charges might be delayed or reduced. In that event, our payments on the storm recovery bonds might be delayed or reduced.

Inaccurate forecasting of electricity consumption or unanticipated delinquencies or charge-offs might reduce scheduled payments on the storm recovery bonds.

The storm recovery charges are generally assessed based on forecasted customer usage, i.e., kilowatt-hours of electricity consumed by customers. The amount and the rate of storm recovery charge collections will depend in part on actual electricity usage and the amount of collections and charge-offs. If the servicer of these storm recovery bonds inaccurately forecasts electricity consumption or uses inaccurate customer delinquency or charge-off data when setting or adjusting the storm recovery charges, or if the effectiveness of the adjustments is delayed for any reason, there could be a shortfall or material delay in storm recovery charge collections, which might result in missed or delayed payments of principal and interest and lengthened weighted average life of the storm recovery bonds. Please read "Cleco Power's Financing Order—True-Ups" and "—Adjustments to Allocation of Storm Recovery Charges" in this prospectus.

Inaccurate forecasting of electricity consumption by the servicer might result from, among other things, unanticipated weather or economic conditions, resulting in less electricity consumption than forecast; general economic conditions being worse than expected, causing customers to leave Cleco Power or reduce their electricity consumption; the occurrence of a natural disaster, such as a hurricane,

or an act of terrorism or other catastrophic event; changes in the market structure of the electric industry; customers consuming less electricity than anticipated because of increased energy prices, increased conservation efforts or unanticipated increases in electric usage efficiency; or customers switching to alternative sources of energy, including self-generation of electric power.

The servicer's use of inaccurate delinquency or charge-off rates might result also from, among other things, unexpected deterioration of the economy or the occurrence of a natural disaster, an act of terrorism or other catastrophic event or the unanticipated declaration of a moratorium on terminating electric service to customers in the event of extreme weather, any of which would cause greater delinquencies or charge-offs than expected or force Cleco Power to grant additional payment relief to more customers, or any other change in law that makes it more difficult for Cleco Power to terminate service to nonpaying customers or that requires Cleco Power to apply more lenient credit standards in accepting customers.

If we have to replace Cleco Power as the servicer, we may experience difficulties finding and using a replacement servicer.

If Cleco Power ceases to service the storm recovery property related to a series of storm recovery bonds, it might be difficult to find a successor servicer. Under the financing order, the annual servicing fee payable to a successor servicer is capped and the payment of compensation in excess of the cap is dependent upon Louisiana commission approval. Also, any successor servicer might have less experience and ability than Cleco Power and might experience difficulties in collecting storm recovery charges and determining appropriate adjustments to the storm recovery charges and billing and/or payment arrangements may change, resulting in delays or disruptions in collections. A successor servicer might charge fees that, while permitted under the financing order, are substantially higher than the fees paid to Cleco Power as servicer. In the event of the commencement of a case by or against the servicer under the United States Bankruptcy Code or similar laws, we and the trustee might be prevented from effecting a transfer of servicing due to operation of the bankruptcy code. Any of these factors and others might delay the timing of payments and may reduce the value of your investment. Please read "The Servicing Agreement" in this prospectus.

Changes to billing and collection practices might reduce the value of your investment in the storm recovery bonds.

The financing order specifies the methodology for determining the amount of the storm recovery charges we may impose. The servicer may not change this methodology without approval from the Louisiana commission. However, the servicer may set its own billing and collection arrangements with its customers, provided that these arrangements comply with the Louisiana commission's customer safeguards. For example, to recover part of an outstanding bill, the servicer may agree to extend a customer's payment schedule or to charge-off the remaining unpaid portion of the bill, including the storm recovery charges. Also, the servicer may change billing and collection practices, which might adversely impact the timing and amount of customer payments and might reduce storm recovery charge collections, thereby limiting our ability to make scheduled payments on the storm recovery bonds. Separately, the Louisiana commission might require changes to these practices. Any changes in billing and collection practices regulations might make it more difficult for the servicer to collect the storm recovery charges and adversely affect the value of your investment in the storm recovery bonds. Please read "The Seller, Initial Servicer and Sponsor—Forecasting Electricity Consumption" in this prospectus.

Limits on rights to terminate service might make it more difficult to collect the storm recovery charges.

If Cleco Power, as the servicer, is billing customers for storm recovery charges, it may terminate service to the customer for non-payment of storm recovery charges pursuant to the applicable rules of

the Louisiana commission. Nonetheless, the rules and regulations of the Louisiana commission, which may change from time to time, regulate and control the right to disconnect service. For example, electric utilities generally may not terminate service to a customer (i) on a holiday or weekend day or (ii) during certain extreme weather conditions. To the extent these customers do not pay for their electric service, Cleco Power will not be able to collect storm recovery charges from these customers.

Storm-Related Risks

Storm damage to the service territory could impair payment of the storm recovery bonds.

Cleco Power's service territory was impacted by two severe hurricanes in 2005, disrupting Cleco Power's operations, depleting its storm recovery reserve and (with storm damage to other utilities) leading the Louisiana legislature to enact the Securitization Act. Future storms could have similar effects. Transmission, distribution and usage of electricity could be interrupted temporarily, reducing the collections of storm recovery charges. There could be longer-lasting weather-related adverse effects on residential and commercial development and economic activity in Cleco Power's service territory, which could cause the per-kWh storm recovery charge to be greater than expected. Legislative action adverse to the related bondholders might be taken in response, and such legislation, if challenged as violative of the State of Louisiana's or the Louisiana commission's pledge, might be defended on the basis of public necessity. Please read "The Securitization Act—Cleco Power and Other Utilities May Securitize Storm Recovery Costs and Related Financing and Ongoing Costs—State and Louisiana Commission Pledges" and "Risk Factors—Risks Associated with Potential Judicial, Legislative or Regulatory Actions—Future State Action Could Reduce the Value of Your Investment in the Storm Recovery Bonds" in this prospectus.

Risks Associated with the Unusual Nature of the Storm Recovery Property

Foreclosure of the trustee's lien on the storm recovery property for a series of storm recovery bonds might not be practical, and acceleration of the storm recovery bonds of such series before maturity might have little practical effect.

Under the Securitization Act and the indenture, the trustee or the storm recovery bondholders have the right to foreclose or otherwise enforce the lien on the storm recovery property securing a series of storm recovery bonds. However, in the event of foreclosure, there is likely to be a limited market, if any, for the storm recovery property. Therefore, foreclosure might not be a realistic or practical remedy. Moreover, although principal of such series of storm recovery bonds will be due and payable upon acceleration of such series of storm recovery bonds before maturity, storm recovery charges relating to such series likely would not be accelerated and the nature of our business will result in the principal of such series of storm recovery bonds being paid as funds become available. If there is an acceleration of a series of storm recovery bonds, all tranches of such series of storm recovery bonds will be paid pro rata; therefore, some tranches might be paid earlier than expected and some tranches might be paid later than expected.

Risks Associated with Potential Bankruptcy Proceedings of the Seller or the Servicer

For a detailed discussion of the following bankruptcy risks, please read "How a Bankruptcy May Affect Your Investment" in this prospectus.

The servicer will commingle the storm recovery charges with other revenues it collects, which might obstruct access to the storm recovery charges in case of the servicer's bankruptcy and reduce the value of your investment in the storm recovery bonds.

The servicer will be required to remit collections to us or the trustee each business day based on estimated daily collections, using a weighted average balance of days outstanding on Cleco Power's

retail bills. The servicer will not segregate the storm recovery charges from the other funds it collects from customers or its general funds. The storm recovery charges will be segregated only when the servicer pays them to the trustee.

Despite this requirement, the servicer might fail to remit the full amount of the storm recovery charges to the trustee or might fail to do so on a timely basis. This failure, whether voluntary or involuntary, might materially reduce the amount of storm recovery charge collections available to make payments on the storm recovery bonds.

The Securitization Act provides that the priority of a security interest perfected in storm recovery property is not impaired by the commingling of the funds arising from storm recovery charges with any other funds of the servicer. In a bankruptcy of the servicer, however, a bankruptcy court might rule that federal bankruptcy law does not recognize our right to collections of the storm recovery charges that are commingled with other funds of the servicer as of the date of bankruptcy. If so, the collections of the storm recovery charges held by the servicer as of the date of bankruptcy would not be available to pay amounts owing on the storm recovery bonds. In this case, we would have only a general unsecured claim against the servicer for those amounts. This decision could cause material delays in payments of principal or interest, or losses, on your storm recovery bonds and could materially reduce the value of your investment in the storm recovery bonds. Please read to "How a Bankruptcy May Affect Your Investment" in this prospectus.

The bankruptcy of Cleco Power or any successor seller might result in losses or delays in payments on the storm recovery bonds.

The Securitization Act and the financing order provide that as a matter of Louisiana state law:

•: the rights and interests of a selling utility under a financing order, including the right to impose, collect and receive storm recovery charges, are contract rights of the seller,
•: the seller may make a present transfer of its rights under a financing order, including the right to impose, collect and receive future storm recovery charges that customers do not yet owe,
•: the storm recovery property constitutes a present contract right, even though the imposition and collection of storm recovery charges depend on further acts that have not yet occurred, and
•: a transfer of the storm recovery property from the seller, or its affiliate, to us, under an agreement that expressly states the transfer is a sale or other absolute transfer, is a true sale of the storm recovery property and not a pledge of the storm recovery property to secure a financing by the seller.

Please read "The Securitization Act" in this prospectus. These provisions are important to maintaining payments on a series of storm recovery bonds in accordance with their terms during any bankruptcy of Cleco Power. In addition, the transaction has been structured with the objective of keeping us legally separate from Cleco Power and its affiliates in the event of a bankruptcy of Cleco Power or any such affiliates.

A bankruptcy court generally follows state property law on issues such as those addressed by the state law provisions described above. However, a bankruptcy court does not follow state law if it determines that the state law is contrary to a paramount federal bankruptcy policy or interest. If a bankruptcy court in a Cleco Power bankruptcy refused to enforce one or more of the state property law provisions described above, the effect of this decision on you as a beneficial owner of the storm recovery bonds might be similar to the treatment you would receive in a Cleco Power bankruptcy if the storm recovery bonds had been issued directly by Cleco Power. A decision by the bankruptcy court that, despite our separateness from Cleco Power, our assets and liabilities and those of Cleco Power should be consolidated would have a similar effect on you as a bondholder.

We have taken steps together with Cleco Power, as the seller, to reduce the risk that in the event the seller or an affiliate of the seller were to become the debtor in a bankruptcy case, a court would order that our assets and liabilities be substantively consolidated with those of Cleco Power or an affiliate. Nonetheless, these steps might not be completely effective, and thus if Cleco Power or an affiliate of the seller were to become a debtor in a bankruptcy case, a court might order that our assets and liabilities be consolidated with those of Cleco Power or an affiliate of the seller. This might cause material delays in payment of, or losses on, your storm recovery bonds and might materially reduce the value of your investment in the storm recovery bonds. For example:

•: without permission from the bankruptcy court, the trustee might be prevented from taking actions against Cleco Power or recovering or using funds on your behalf or replacing Cleco Power as the servicer;
•: the bankruptcy court might order the trustee to exchange the storm recovery property for other property, of lower value;
•: tax or other government liens on Cleco Power's property might have priority over the trustee's lien and might be paid from collected storm recovery charges before payments on the related series of storm recovery bonds;
•: the trustee's lien might not be properly perfected in the collected storm recovery property collections prior to or as of the date of Cleco Power's bankruptcy, with the result that the storm recovery bonds would represent only general unsecured claims against Cleco Power;
•: the bankruptcy court might rule that neither our property interest nor the trustee's lien extends to storm recovery charges in respect of electricity consumed after the commencement of Cleco Power's bankruptcy case, with the result that the related series of storm recovery bonds would represent only general unsecured claims against Cleco Power;
•: we and Cleco Power might be relieved of any obligation to make any payments on the storm recovery bonds during the pendency of the bankruptcy case and might be relieved of any obligation to pay interest accruing after the commencement of the bankruptcy case;
•: Cleco Power might be able to alter the terms of each series of storm recovery bonds as part of its plan of reorganization;
•: the bankruptcy court might rule that the storm recovery charges should be used to pay, or that we should be charged for, a portion of the cost of providing electric service;
•: the bankruptcy court might rule that the remedy provisions of the applicable sale agreement are unenforceable, leaving us with an unsecured claim for actual damages against Cleco Power that may be difficult to prove or, if proven, to collect in full;
•: if the servicer defaults or enters bankruptcy proceedings, it might be difficult to find a successor servicer and payments on your bonds might be suspended;
•: the mere fact of a servicer or seller bankruptcy proceeding might have an adverse effect on the resale market for the storm recovery bonds and on the value of the storm recovery bonds;
•: the servicer will commingle the storm recovery charges with other revenues it collects, which might obstruct access to the storm recovery charges in case of the bankruptcy of the servicer and reduce the value of your investment in the storm recovery bonds; or
•: bondholders of another series of storm recovery bonds might attempt to obtain access to the collateral for your series of storm recovery bonds, resulting in losses or a delay in payment on your storm recovery bonds.

Please read "How a Bankruptcy May Affect Your Investment."

The sale of the storm recovery property might be construed as a financing and not a sale in a case of Cleco Power's bankruptcy which might delay or limit payments on the storm recovery bonds.

The Securitization Act provides that the characterization of a transfer of storm recovery property as a sale or other absolute transfer will not be affected or impaired by treatment of the transfer as a financing for federal or state tax purposes or financial reporting purposes. We and Cleco Power will treat the transaction as a sale under applicable law, although for financial reporting and federal and state purposes the transaction is intended to be treated as a financing. In the event of a bankruptcy of Cleco Power, a party in interest in the bankruptcy might assert that the sale of the storm recovery property to us was a financing transaction and not a "sale or other absolute transfer" and that the treatment of the transaction for financial reporting and tax purposes as a financing and not a sale lends weight to that position. If a court were to characterize the transaction as a financing, we expect that we would, on behalf of ourselves and the trustee, be treated as a secured creditor of Cleco Power in the bankruptcy proceedings, although a court might determine that we only have an unsecured claim against Cleco Power. See "—The servicer will commingle the storm recovery charges with other revenues it collects, which might obstruct access to the storm recovery charges in case of the servicer's bankruptcy and reduce the value of your investment in the storm recovery bonds" above. Even if we had a security interest in the storm recovery property, we would not likely have access to the related storm recovery charge collections during the bankruptcy and would be subject to the risks of a secured creditor in a bankruptcy case, including the possible bankruptcy risks described in the immediately preceding risk factor. As a result, repayment of a series of storm recovery bonds might be significantly delayed and a plan of reorganization in the bankruptcy might permanently modify the amount and timing of payments to us of the related storm recovery charge collections and therefore the amount and timing of funds available to us to pay storm recovery bondholders.

If the servicer enters bankruptcy proceedings, the collections of the storm recovery charges held by the servicer as of the date of bankruptcy might constitute preferences, which means these funds might be unavailable to pay amounts owing on the storm recovery bonds.

In the event of a bankruptcy of the servicer, a party in interest might take the position that the remittance of funds prior to bankruptcy of the servicer, pursuant to the servicing agreement, constitutes a preference under bankruptcy law if the remittance of those funds was deemed to be paid on account of a preexisting debt. If a court were to hold that the remittance of funds constitutes a preference, any such remittance within 90 days of the filing of the bankruptcy petition could be avoidable, and the funds could be required to be returned to the bankruptcy estate of the servicer. To the extent that storm recovery charges have been commingled with the general funds of the servicer, the risk that a court would hold that a remittance of funds was a preference would increase. Also, if we are considered to be an "insider" of the servicer, any such remittance made within one year of the filing of the bankruptcy petition could be avoidable as well if the court were to hold that such remittance constitutes a preference. In either case, we or the trustee would merely be an unsecured creditor of the servicer. If any funds were required to be returned to the bankruptcy estate of the servicer, we would expect that the amount of any future storm recovery charges would be increased through the true-up mechanism to recover such amount.

Claims against Cleco Power or any successor seller might be limited in the event of a bankruptcy of the seller.

If the seller were to become a debtor in a bankruptcy case, claims, including indemnity claims, by us against the seller under the sale agreement and the other documents executed in connection with the sale agreement would be unsecured claims and would be disposed of in the bankruptcy case. In addition, the bankruptcy court might estimate any contingent claims that we have against the seller and, if it determines that the contingency giving rise to these claims is unlikely to occur, estimate the claims at a lower amount. A party in interest in the bankruptcy of the seller might challenge the enforceability

of the indemnity provisions in a sale agreement. If a court were to hold that the indemnity provisions were unenforceable, we would be left with a claim for actual damages against the seller based on breach of contract principles, which would be subject to estimation and/or calculation by the court. We cannot give any assurance as to the result if any of the above-described actions or claims were made. Furthermore, we cannot give any assurance as to what percentage of their claims, if any, unsecured creditors would receive in any bankruptcy proceeding involving the seller.

The bankruptcy of Cleco Power or any successor seller might limit the remedies available to the trustee.

Upon an event of default for a series of storm recovery bonds under the indenture, the Securitization Act permits the trustee to enforce the security interest in the related storm recovery property in accordance with the terms of the indenture. In this capacity, the trustee is permitted to request the 19th Judicial District Court of Louisiana to order the sequestration and payment to bondholders of such series of all revenues arising with respect to the related storm recovery property. There can be no assurance, however, that the 19th Judicial District Court of Louisiana would issue this order after a Cleco Power bankruptcy in light of the automatic stay provisions of Section 362 of the United States Bankruptcy Code. In that event, the trustee would be required to seek an order from the bankruptcy court lifting the automatic stay to permit this action by the Louisiana court, and an order requiring an accounting and segregation of the revenues arising from the storm recovery property. There can be no assurance that a court would grant either order.

Other Risks Associated With an Investment in the Storm Recovery Bonds

Cleco Power's indemnification obligations under the sale and servicing agreements are limited and might not be sufficient to protect your investment in the storm recovery bonds.

Cleco Power is obligated under each sale agreement to indemnify us and the trustee, for itself and on behalf of the storm recovery bondholders, only in specified circumstances and will not be obligated to repurchase any storm recovery property in the event of a breach of any of its representations, warranties or covenants regarding the storm recovery property. Similarly, Cleco Power is obligated under each servicing agreement to indemnify us, the trustee, for itself and on behalf of the storm recovery bondholders only in specified circumstances. Please read "The Sale Agreement" and "The Servicing Agreement" in this prospectus.

Neither the trustee nor the storm recovery bondholders will have the right to accelerate payments on a series of storm recovery bonds as a result of a breach under the related sale agreement or servicing agreement, absent an event of default under the indenture relating to such series of storm recovery bonds as described in "The Storm Recovery Bonds—What Constitutes an Event of Default on the Storm Recovery Bonds." Furthermore, Cleco Power might not have sufficient funds available to satisfy its indemnification obligations under these agreements, and the amount of any indemnification paid by Cleco Power might not be sufficient for you to recover all of your investment in the storm recovery bonds. In addition, if Cleco Power becomes obligated to indemnify storm recovery bondholders, the ratings on the storm recovery bonds will likely be downgraded as a result of the circumstances causing the breach and the fact that storm recovery bondholders will be unsecured creditors of Cleco Power with respect to any of these indemnification amounts.

Alternatives to purchasing electricity through Cleco Power's distribution facilities may be more widely utilized by customers in the future.

Broader use of distributed generation by Cleco Power's customers may result from customers' changing perceptions of the merits of utilizing existing generation technology or from technological developments resulting in smaller-scale, more fuel efficient, more environmentally friendly and/or more cost effective distributed generation. Storm recovery charges, which generally are consumption-based,

are applied to all existing and future Louisiana commission-jurisdictional customers who remain attached to Cleco Power's (or its successors) electric transmission or distribution lines, and who, via such lines, receive any type service from Cleco Power (or its successors) under rate schedules or special contracts approved by the Louisiana commission. Storm recovery charges will not be imposed on customers who receive no transmission or distribution service from Cleco Power. Any customer who self-generates or co-generates electricity will be assessed storm recovery charges based upon the total firm and standby load served by Cleco. Technological developments and/or more widespread use of distributed generation might allow greater numbers of customers to reduce or eliminate their payment of storm recovery charges.

Cleco Power's credit ratings might affect the market value of the storm recovery bonds.

Although Cleco Power is not an obligor on the storm recovery bonds, a downgrading of the credit ratings on the debt of Cleco Power might have an adverse effect on the market value of your storm recovery bonds. Credit ratings may change at any time. A rating agency has the authority to revise or withdraw its rating based solely upon its own judgment.

The credit ratings are no indication of the expected rate of payment of principal on the storm recovery bonds.

Each tranche of storm recovery bonds of each series will be rated by one or more established rating agencies. A rating is not a recommendation to buy, sell or hold storm recovery bonds. The ratings merely analyze the probability that we will repay the total principal amount of each tranche of a series of storm recovery bonds at its final maturity date (which is later than the scheduled final payment date) and will make timely interest payments. The ratings are not an indication that the rating agencies believe that principal payments are likely to be paid on time according to the expected sinking fund schedule.

The absence of a secondary market for a series of storm recovery bonds might limit your ability to resell your storm recovery bonds of such series.

The underwriters for a series of storm recovery bonds might assist in resales of the storm recovery bonds of such series, but they are not required to do so. A secondary market for a series of storm recovery bonds might not develop. If a secondary market does develop, it might not continue or it might not be sufficiently liquid to allow you to resell any of your storm recovery bonds of such series. We do not anticipate that any storm recovery bonds will be listed on any securities exchange. Please read "Plan of Distribution for the Storm Recovery Bonds" in this prospectus.

You might receive principal payments for a series of storm recovery bonds later than you expect.

The amount and the rate of collection of the storm recovery charges for a series of storm recovery bonds, together with the related storm recovery charge adjustments, will generally determine whether there is a delay in the scheduled repayments of storm recovery bond principal for such series. If the servicer collects the storm recovery charges at a slower rate than expected, it might have to request adjustments of the storm recovery charges. If those adjustments are not timely and accurate, you might experience a delay in payments of principal and interest and a decrease in the value of your investment in such series of storm recovery bonds. Please read "The Storm Recovery Bonds" in this prospectus.

We may issue additional series of storm recovery bonds.

Unless otherwise provided in the accompanying prospectus supplement, we may issue one or more additional series of storm recovery bonds under the financing order or under a subsequent financing order, and Cleco Power may also sell storm recovery property to one or more entities other than us in connection with the issuance of a new series of storm recovery bonds, in any such case without your prior review or approval. Any new series may include terms and provisions that would be unique to that particular series. We may not issue additional storm recovery bonds if the issuance would result in the credit ratings on any outstanding series of storm recovery bonds being reduced or withdrawn. However, we cannot assure you that a new series would not cause reductions or delays in payments on your storm recovery bonds. In addition, some matters relating to the storm recovery bonds issued by us require the vote of the holders of all series and tranches of storm recovery bonds issued by us. Your interests in these votes may conflict with the interests of the beneficial owners of storm recovery bonds of another series or of another tranche. Thus, these votes could result in an outcome that is materially unfavorable to you.

THE SECURITIZATION ACT

Overview

In August and September 2005, Cleco Power was struck by the two worst natural disasters ever to strike its system, Hurricanes Katrina and Rita. Cleco Power has already funded and paid the storm recovery costs relating to these storms. In May 2006, the Louisiana Legislature established Act 64 of 2006, providing for a financing mechanism though which electric utilities can use securitization financing for storm recovery costs, including the financing of a storm recovery reserve, by issuing "storm recovery bonds." Storm recovery bonds must be approved in a financing order issued by the Louisiana commission. This new provision of Louisiana law, the Securitization Act, is codified at La. R.S. 45:1226-1236. A Louisiana electric utility subject to the jurisdiction of the Louisiana commission must apply to the Louisiana commission for a financing order under the Securitization Act to authorize the issuance of storm recovery bonds. Cleco Power applied for a financing order under the Securitization Act, which was issued by the Louisiana commission on September 17, 2007.

Under the Securitization Act and the financing order, Cleco Power's customers will pay storm recovery charges, which are nonbypassable charges included in their monthly charges for electric service. Storm recovery charges will fund payments of principal and interest on the storm recovery bonds, together with related financing costs. Storm recovery charges will be collected by Cleco Power, as initial servicer, or its successor, as provided for in the financing order. Storm recovery charges are required to be adjusted semi-annually, and more frequently as necessary, to ensure the projected recovery of amounts sufficient to provide timely payment of the scheduled principal, interest and other required amounts in connection with the related series of storm recovery bonds during the subsequent 12-month period.

Cleco Power and Other Utilities May Securitize Storm Recovery Costs and Related Financing and Ongoing Costs

We May Issue Storm Recovery Bonds to Recover Cleco Power's Storm Recovery Costs.

Under the Securitization Act and the plenary power granted to the Louisiana commission under the Louisiana Constitution, the Louisiana commission may issue financing orders approving the issuance of storm recovery bonds in series, such as the storm recovery bonds issued by us, to recover certain costs of an electric utility, including storm recovery costs, costs associated with the issuance of storm recovery bonds and the cost of funding a storm recovery reserve. Multiple series of storm recovery bonds may be issued under one financing order, and each series of storm recovery bonds will relate to only one financing order. A utility, its successors or a third-party assignee of a utility may issue storm recovery bonds. The Securitization Act requires the proceeds of the storm recovery bonds to be used for the purposes of recovering or financing storm recovery costs, financing costs and costs to replenish or fund a storm recovery reserve, solely as determined by the Louisiana commission. The storm recovery bonds are secured by and payable from storm recovery property, which includes the right to impose, collect and receive storm recovery charges, to obtain periodic adjustments to such charges as provided in the Financing Orders and all revenues, collections, claims, rights to payments, payments, money or proceeds arising from the foregoing rights and interests. The storm recovery property does not include the rights of Cleco Power to earn and receive a rate of return on its invested capital in us, to receive administration and servicer fees, to withdraw funds from its restricted storm recovery reserve funded by the proceeds from the sale of the storm recovery property, or to use Cleco Power's remaining portion of those proceeds. Under the financing order, storm recovery bonds may have a legal maximum maturity of 16 years. Under Cleco Power's September 17, 2007 revenue requirement order, storm recovery costs generally are to be functionalized and allocated to customers in the same manner as the corresponding facilities and related expenses are functionalized and

allocated in Cleco Power's base rates. Storm recovery charges can be imposed only when and to the extent that storm recovery bonds are issued.

The Securitization Act contains a number of provisions designed to facilitate the securitization of storm recovery costs and related upfront and ongoing financing costs.

Creation of Storm Recovery Property.

As authorized by the Securitization Act, and provided by the financing order, as of the effective date of the financing order, there was created and established for Cleco Power storm recovery property, which is a present contract right in favor of Cleco Power, its transferees and other financing parties, to impose, collect and receive storm recovery charges from Cleco Power's customers.

A Financing Order is Irrevocable.

A financing order, once effective, together with the storm recovery charges authorized in the financing order, is irrevocable and not subject to amendment or modification by the Louisiana commission, except for adjustments pursuant to the Securitization Act in order to correct over-collections or under-collections and to ensure the projected recovery of amounts sufficient to provide timely payment of debt service and all other upfront and ongoing financing costs in connection with the related series of storm recovery bonds. Although a financing order is irrevocable, the Securitization Act allows for applicants to apply for one or more new financing orders to provide for retiring and refunding storm recovery bonds if such retirement or refunding would result in lower storm recovery charges.

State and Louisiana Commission Pledges.

The State of Louisiana has pledged in the Securitization Act that it will not alter the provisions of the part of the Securitization Act which authorizes the Louisiana commission to create a contract right by the issuance of a financing order, to create storm recovery property, and to make the storm recovery charges imposed by a financing order irrevocable, binding and nonbypassable charges, take or permit any action that would impair the value of the storm recovery property, or, except for adjustments discussed in "Cleco Power's Financing Order—True-ups" and "The Servicing Agreement—Storm Recovery Charge Adjustment Process," reduce, impair, postpone, terminate or otherwise adjust the storm recovery charges to be imposed, collected and remitted to storm recovery bondholders until the principal, interest and premium, if any, and any other charges incurred and contracts to be performed in connection with any series of storm recovery bonds have been paid and performed in full. However, nothing will preclude limitation or alteration if and when full compensation is made for the full protection of the storm recovery charges collected pursuant to the financing order and the full protection of the bondholders and any assignee or financing party. Please read "Risk Factors—Risks Associated with Potential Judicial, Legislative or Regulatory Actions."

The Louisiana commission has jurisdiction over Cleco Power pursuant to Article 4, Section 21, of the Louisiana Constitution. The plenary powers granted to the Louisiana commission under the Louisiana Constitution means that the Louisiana commission has power independent of the State legislature. Accordingly, independent from and in addition to the pledge contained in the Securitization Act, the Louisiana commission has pledged in the financing order that (i) the financing order is irrevocable until the indefeasible (i.e., not voidable) payment in full of the storm recovery bonds and the related financing costs, and (ii) it may not amend, modify or rescind the financing order by any subsequent action or reduce, impair, postpone, terminate, or otherwise adjust storm recovery charges approved in the financing order, provided that nothing in clause (ii) shall preclude limitation or alteration if and when full compensation is made for the full protection of the storm recovery charges collected pursuant to the financing order and the full protection of the bondholders and any assignee

or financing party. Please read "Risk Factors—Risks Associated with Potential Judicial, Legislative or Regulatory Actions."

Constitutional Matters

To date, no federal or Louisiana cases addressing the repeal or amendment of securitization provisions analogous to those contained in the Securitization Act have been decided. There have been cases in which federal courts have applied the Contract Clause of the United States Constitution and Louisiana courts have applied the Contract Clause of the Louisiana Constitution to strike down legislation regarding similar matters, such as legislation reducing or eliminating taxes, public charges or other sources of revenues servicing other types of bonds issued by public instrumentalities or private issuers, or otherwise substantially impairing or eliminating the security for bonds or other indebtedness. Based upon this case law, Phelps Dunbar, L.L.P., counsel to Cleco Power and us, expects to deliver an opinion, prior to the closing of an offering of a series of storm recovery bonds described in a prospectus supplement accompanying this prospectus, to the effect that the State Pledge described above unambiguously indicates the State's intent to be bound with the bondholders and, subject to all of the qualifications, limitations and assumptions set forth in its opinion, supports the conclusion that the State Pledge constitutes a binding contractual relationship between the State and the bondholders for purposes of both the Federal Contract Clause and Louisiana Contract Clause. Subject to all of the qualifications, limitations and assumptions set forth in its opinion, including that any impairment of the contract be "substantial," Phelps Dunbar, L.L.P.'s opinion is expected to state that a reviewing court of competent jurisdiction would hold that the State of Louisiana could not constitutionally repeal or amend the Securitization Act or take any other action contravening the State Pledge and creating an impairment (without, as the Securitization Act requires, providing full compensation for the full protection of the storm recovery charges to be collected pursuant to the financing order and full protection of the bondholders), unless such court would determine that such impairment clearly is a reasonable exercise of the State of Louisiana's sovereign powers based upon reasonable conditions and of a character reasonable and appropriate to the emergency or other significant and legitimate public purpose justifying such action.

Phelps Dunbar, L.L.P., subject to all of the qualifications, limitations and assumptions (including the assumption that any impairment would be "substantial") is expected to set forth in its opinion, that a Louisiana state court reviewing an appeal of Louisiana commission action of a legislative character would conclude that the Louisiana commission pledge (i) creates a binding contractual obligation of the State of Louisiana for purposes of the Federal Contract Clause and the Louisiana Contract Clause and (ii) provides a basis upon which the bondholders could challenge successfully on appeal any such action by the Louisiana commission of a legislative character, including the rescission or amendment of the financing order, that such court determines violates the Louisiana commission pledge in a manner that substantially reduces, limits or impairs the value of the storm recovery property or the storm recovery charges, prior to the time that the bonds are fully paid and discharged, unless there is a judicial finding that the Louisiana commission action clearly is exercised for a public end and is reasonably necessary to the accomplishment of that public end so as not to be arbitrary, capricious or an abuse of authority.

In addition, any action of the Louisiana legislature adversely affecting the storm recovery property or the ability to collect storm recovery charges may be considered a "taking" under the United States or Louisiana Constitutions. Phelps Dunbar, L.L.P. has advised us that it is not aware of any federal or Louisiana court cases addressing the applicability of the Takings Clause of the United States or Louisiana Constitution in a situation analogous to that which would be involved in an amendment or repeal of the Securitization Act. It is possible that a court would decline even to apply a Takings Clause analysis to a claim based on an amendment or repeal of the Securitization Act, since, for example, a court might determine that a Contract Clause analysis rather than a Takings Clause analysis should be applied. Assuming a Takings Clause analysis were applied under the United States Constitution or the

Louisiana Constitution, Phelps Dunbar, L.L.P. expects to render an opinion, prior to the closing of an offering of a series of storm recovery bonds described in a prospectus supplement accompanying this prospectus, to the effect that under existing case law, a reviewing court of competent jurisdiction would hold, subject to all of the qualifications, limitations and assumptions set forth in its opinion, if it concludes that the storm recovery property is protected by the Takings Clause of the United States Constitution and Takings Clause of the Louisiana Constitution, that the State would be required to pay just compensation to bondholders, as determined by such court, if the State Legislature repealed or amended the Securitization Act or took any other action contravening the State Pledge, if the court determines doing so constituted a permanent appropriation of a substantial property interest of the bondholders in the storm recovery property and deprived the bondholders of their reasonable expectations arising from their investments in the bonds. In examining whether action of the Louisiana legislature amounts to a regulatory taking, both federal and state courts will consider the character of the governmental action and whether such action substantially advances the State's legitimate governmental interests, the economic impact of the governmental action on the bondholders, and the extent to which the governmental action interferes with distinct investment-backed expectations. There is no assurance, however, that, even if a court were to award just compensation, it would be sufficient for you to recover fully your investment in the storm recovery bonds.

In connection with the foregoing, Phelps Dunbar, L.L.P. has advised us that issues relating to the Contract and Takings Clauses of the United States and Louisiana Constitutions are essentially decided on a case-by-case basis and that the courts' determinations, in most cases, appear to be strongly influenced by the facts and circumstances of the particular case, and has further advised us that there are no reported controlling judicial precedents that are directly on point. The opinions described above will be subject to the qualifications included in them. The degree of impairment necessary to meet the standards for relief under a Takings Clause analysis or Contract Clause analysis could be substantially in excess of what a storm recovery bondholder would consider material.

In addition, Phelps Dunbar, L.L.P. expects to render an opinion, prior to the closing of an offering of a series of storm recovery bonds described in a prospectus supplement accompanying this prospectus, to the effect that under existing case law, a reviewing court of competent jurisdiction would hold that the Securitization Act is constitutional in all material respects under the United States Constitution and, subject to all of the qualifications, limitations and assumptions set forth in its opinion, that the State Pledge is not an impermissible attempt to "contract away" the police power of the State of Louisiana, and will not be disregarded under the reserved powers doctrine, and that the Securitization Act is constitutional in all material respects under the Louisiana Constitution.

We and Cleco Power will file a copy of the Phelps Dunbar, L.L.P. opinion as an exhibit to an amendment to the registration statement of which this prospectus is a part, or to one of our periodic filings with the SEC.

For a discussion of risks associated with potential judicial, legislation or regulatory actions, please read "Risk Factors—Risks Associated with Potential Judicial, Legislative or Regulatory Actions."

The Louisiana Commission May Adjust Storm Recovery Charges

The Securitization Act authorizes the Louisiana commission to provide, and the Louisiana commission has provided, in the financing order, that storm recovery charges be adjusted at least semi-annually. The purposes of these adjustments are:

•: to correct any over-collections or under-collections during the preceding six months, and
•: to ensure the projected recovery of amounts sufficient to provide timely payment of debt service and all other financing costs during the subsequent 12-month period in connection with the related series of storm recovery bonds.

Storm Recovery Charges Are Nonbypassable

The Securitization Act provides that the storm recovery charges are nonbypassable subject to the terms of the financing order. Under the financing order, "nonbypassable" means Cleco Power and any other entity providing electric transmission or distribution services are required to collect and must remit, consistent with the financing order, the nonbypassable storm recovery charges that are applied to all existing and future LPSC-jurisdictional customers who remain attached to Cleco Power's (or its successor's) electric transmission or distribution lines, and who, via such lines, receive any type service from Cleco Power (or its successor) under rate schedules or special contracts approved by the Louisiana commission. Any customer who self-generates or co-generates electricity will be assessed storm recovery charges based upon the total firm and standby load served by Cleco Power. Any customer who completely severs interconnection with Cleco Power may become exempt from continued payment of the storm recovery charges. The Louisiana commission will ensure that such obligations are undertaken and performed by Cleco Power or any other entity providing electric transmission and distribution services, or in the event that transmission and distribution services are not provided by a single entity, any entity providing transmission or distribution services to Cleco Power's LPSC-jurisdictional customer. If the retail sale and distribution of electricity in Louisiana becomes restructured so that customers may elect to receive their supply service from another provider, such selection of another provider will not allow such customers to bypass the storm recovery charge, so long as they continue to be attached to Cleco Power's transmission or distribution lines. In the event of such restructuring, those customers who choose another provider for partial or full requirements supply, but remain attached to Cleco Power transmission or distribution lines, would be assessed storm recovery charges at the highest peak demand imposed on the Cleco system by demand metered customers and the highest peak consumption level of customers who are not demand metered, in each case during the twelve months immediately preceding the switch.

The Securitization Act Protects the Bondholders' Security Interest on Storm Recovery Property

The Securitization Act provides that a valid and enforceable security interest in storm recovery property will attach only after the issuance of a financing order, the execution and delivery of a security agreement in connection with issuance of each series of storm recovery bonds and the receipt of value for the storm recovery bonds. The security interest attaches automatically at the time when all of the foregoing conditions have been met.

Upon perfection by filing a financing statement, under Section 1231(D) of the Securitization Act and otherwise in accordance with the Louisiana Uniform Commercial Code, the security interest will be a perfected security interest in the storm recovery property and all proceeds of the property, whether accrued or not, and will have priority in the order of perfection and take precedence over any subsequent lien creditor. The servicer pledges in the servicing agreement to file all necessary continuation statements.

The Securitization Act provides that priority of transfers of and security interests in storm recovery property will not be impaired by:

•: commingling of funds arising from storm recovery charges with other funds, or
•: modifications to the financing order.

Please read "Risk Factors—Risks Associated with the Unusual Nature of the Storm Recovery Property."

The Securitization Act Characterizes the Transfer of Storm Recovery Property as a True Sale

The Securitization Act provides that an electric utility's or an assignee's transfer of storm recovery property is a "true sale" under Louisiana law and is not a secured transaction, and that the transferor's right, title, and interest in, to, and under the storm recovery property passes to the transferee, if the agreement governing that transfer expressly states that the transfer is a sale or other absolute transfer. Please read "The Sale Agreement" and "Risk Factors—Risks Associated with Potential Bankruptcy Proceedings of the Seller or the Servicer."

CLECO POWER'S FINANCING ORDER

Background. In August and September 2005, Cleco Power was struck by the two worst natural disasters ever to strike its system, Hurricanes Katrina and Rita. Cleco Power has already funded and paid the storm recovery costs relating to these storms. In November 2006, Cleco Power applied to the Louisiana commission for an order authorizing Cleco Power to securitize its storm recovery costs, including the financing of a storm recovery reserve. On September 17, 2007, the Louisiana commission issued its final order determining that Cleco Power is entitled, pursuant to the Securitization Act, to finance, through the issuance of storm recovery bonds in the amount of up to $187 million, equal to the sum of: (a) up to $132 million of remaining unamortized storm recovery costs, plus (b) the costs of funding storm recovery reserves in the amount of approximately $50 million to create a restricted storm recovery reserve in a segregated restricted account, plus (c) upfront financing costs, which are estimated at $4.6 million, and are subject to further review by the Louisiana commission plus or minus (d) any adjustment, pursuant to the issuance advice letter, to reflect the cost of any approved swap or hedge or credit enhancement or any change necessary to account for Cleco Power's collection of interim storm recovery surcharge revenues through the date of pricing of the storm recovery bonds in accordance with the financing order. Cleco Power's storm recovery costs (including storm recovery reserves and upfront financing costs associated with the issuance of storm recovery bonds) were determined by separate revenue requirement order of the Louisiana commission. The financing order also authorized: (1) Cleco Power's proposed financing structure and issuance of the storm recovery bonds; (2) creation of the storm recovery property, including the right to impose and collect storm recovery charges sufficient to pay the storm recovery bonds and associated financing costs; (3) a tariff to implement the storm recovery charges; and (4) a tariff to implement a surcredit to provide customers the benefit of all non-ratepayer recoveries and to address ancillary cost recovery relating to the storm recovery cost process. The financing order became final and nonappealable on October 3, 2007 and the revenue requirement order became final and nonappealable on November 2, 2007.

We have filed the financing order with the SEC as an exhibit to the registration statement of which this prospectus forms a part. The following summary does not purport to be complete and is subject to and qualified by reference to the provisions of the financing order.

The financing order provides that the true-up mechanism and all other obligations of the State of Louisiana and the Louisiana commission set forth in the financing order that relate to a series of storm recovery bonds are direct, explicit, irrevocable and unconditional upon issuance of such series of storm recovery bonds, and are legally enforceable against the State of Louisiana and the Louisiana commission.

Issuance of Storm Recovery Bonds. The financing order authorizes Cleco Power to cause us to issue storm recovery bonds in an aggregate principal amount of up to $187 million, including upfront financing costs, which are estimated at $4.6 million.

Collection of Storm Recovery Charges. The financing order authorizes Cleco Power to collect storm recovery charges from its customers in an amount sufficient at all times to provide for recovery of Cleco Power's remaining unamortized storm recovery costs and upfront and ongoing financing costs, which include principal and interest and certain ongoing fees and expenses associated with the storm recovery bonds.

There is no "cap" on the level of storm recovery charges that may be imposed on customers to pay on a timely basis scheduled principal and interest on the storm recovery bonds. There is also no limit on how long storm recovery charges may be imposed; pursuant to the financing order, the charges will be imposed until the storm recovery bonds and all related financing costs have been paid in full.

Issuance Advice Letter. Within twenty-four hours following the determination of the final terms of a series of storm recovery bonds and prior to their issuance, Cleco Power is required to file with the Louisiana commission an issuance advice letter, which will:

•: demonstrate compliance with the standards of the financing order,
•: evidence the actual financial terms on which such series of storm recovery bonds will be issued,
•: show the actual dollar amount of the initial storm recovery charges for each customer rate class relating to such series of storm recovery bonds,
•: identify us,
•: certify that, based on information reasonably available, the structuring and pricing of such series of storm recovery bonds will result in the lowest storm recovery bond charges consistent with market conditions at the time of pricing and the terms of the financing order, and
•: provide an updated analysis of the net present value benefit to customers, and lower customer bills, each as compared to traditional methods of finance.

Both the issuance advice letter and the accompanying compliance tariff become effective on the date of issuance of a series of storm recovery bonds. A designee of the Louisiana commission's review of the issuance advice letter will be limited to determining that (i) the final structure, terms and pricing of the storm recovery bonds in the issuance advice letter are consistent with the criteria established in the financing order and (ii) the mathematical calculations are accurate.

Tariff. We are required, prior to the issuance of any storm recovery charges, to complete and file a tariff in the form attached to the financing order. The tariff establishes the initial storm recovery charges. It also implements the procedures for periodic adjustments to the storm recovery charges.

True-Ups. The financing order provides that storm recovery charges will be reviewed and adjusted semi-annually to:

•: correct, over a period of up to 12 months covering the next two succeeding payment dates, any under-collections or over-collections, for any reason, during the preceding six months, and
•: ensure the projected recovery of amounts sufficient to provide timely payment of the scheduled principal of and interest on the storm recovery bonds and all other required amounts in connection with the storm recovery bonds during the subsequent 12-month period.

To the extent any storm recovery bonds remain outstanding after the scheduled final payment date of the storm recovery bonds, mandatory true-up adjustments will be made quarterly until all storm recovery bonds and associated costs are paid in full. In addition, the servicer may also make interim true-up adjustments more frequently at any time during the term of the storm recovery bonds:

•: if the servicer forecasts that storm recovery charge collections will be insufficient to make all scheduled payments of interest and other financing costs in respect of the storm recovery bonds during the current or next succeeding payment period or bring all principal payments on schedule over the next two succeeding payment dates, and/or
•: to replenish any draws upon the capital subaccount.

change shall cause any of the then-current credit ratings of the storm recovery bonds to be suspended, withdrawn or downgraded.

For more discussion of the true-up mechanism, see "The Servicing Agreement—Storm Recovery Charge Adjustment Process" in this prospectus.

Louisiana Commission Pledge. The State of Louisiana has pledged in the financing order that (i) the financing order is irrevocable until the indefeasible (i.e., not voidable) payment in full of the storm recovery bonds and (ii) it may not amend, modify or rescind the financing order by any subsequent action or reduce, impair, postpone, terminate, or otherwise adjust storm recovery charges approved in the financing order, provided that nothing in clause (ii) shall preclude limitation or alteration if and when full compensation is made for the full protection of the storm recovery charges collected pursuant to the financing order and the full protection of the bondholders and any assignee or financing party.

State Pledge and True-Up Mechanism—Credit Risk. The State of Louisiana has pledged in the Securitization Act that it will not alter the provisions of the part of the Securitization Act which authorizes the Louisiana commission to create a contract right by the issuance of a financing order, to create storm recovery property, and to make the storm recovery charges imposed by a financing order irrevocable, binding and nonbypassable charges, take or permit any action that would impair the value of the storm recovery property, or, except for adjustments discussed in "—True-ups" and "The Servicing Agreement—Storm Recovery Charge Adjustment Process," reduce, alter or impair the storm recovery charges to be imposed, collected and remitted to storm recovery bondholders until the principal, interest and premium, if any, and any other charges incurred and contracts to be performed in connection with any series of storm recovery bonds have been paid and performed in full. However, nothing will preclude limitation or alteration if and when full compensation is made for the full protection of the storm recovery charges collected pursuant to the financing order and the full protection of the bondholders and any assignee or financing party. Please read "Risk Factors—Risks Associated with Potential Judicial, Legislative or Regulatory Actions."

The financing order provides that the broad-based nature of the true-up mechanism and the pledges of the State of Louisiana and the Louisiana commission, along with the bankruptcy remoteness of the issuing entity and the collection account, will serve to minimize, if not effectively eliminate, for all practical purposes and circumstances, any credit risk associated with the storm recovery bonds (i.e., that sufficient funds will be available and paid to discharge all principal and interest on the storm recovery bonds as and when legally due). With respect to the foregoing, interest is due on each payment date and principal is due upon the final maturity date for each tranche. Please consider, however, the risk factors discussed in "Risk Factors" generally, including, among others, "Risk Factors—Risks Associated with Potential Judicial, Legislative or Regulatory Actions", "—Servicing Risks—Inaccurate forecasting of electricity consumption or unanticipated delinquencies or charge-offs might reduce scheduled payments on the storm recovery bonds" and "—Risks Associated with Potential Bankruptcy Proceedings of the Seller or the Servicer," and please read "The Securitization Act—Cleco Power and Other Utilities May Securitize Storm Recovery Costs and Related Financing and Ongoing Costs," "Cleco Power's Financing Order—True- Ups," and "Cautionary Statement Regarding Forward-Looking Information" in this prospectus.

Adjustments to Allocation of Storm Recovery Charges. The financing order provides that the allocation factors are reset annually for each customer rate class, in accordance with Cleco Power's

most recent annual base revenue forecast, for the distribution of the periodic billing requirement to each customer rate class. The allocators will be reset in proportion to each customer class' allocation percentage from the most recent base revenue forecast. The last utilized allocations will be used if no new allocations have been determined at a particular time. Adjustments to the allocation of the storm recovery charges will take place at the same time as one of the semi-annual true-up adjustments described above.

Servicing Agreement. In the financing order, the Louisiana commission authorized Cleco Power, as the servicer, to enter into a servicing agreement described under "The Servicing Agreement" in this prospectus.

Binding on Successors. The financing order, along with the storm recovery charges authorized in the financing order, is binding on:

•: Cleco Power,
•: any successor to Cleco Power that provides transmission or distribution service to Cleco Power's LPSC-jurisdictional customers,
•: if Cleco Power or its successor no longer owns and operates both the transmission and distribution systems, then any entity that provides transmission or distribution service to Cleco Power's LPSC-jurisdictional customers.

Subsequent Financing Orders. We may issue additional series of storm recovery bonds secured by separate storm recovery property under a subsequent financing order of the Louisiana commission. We will describe the material terms of any such financing order in the related prospectus supplement.

THE SELLER, INITIAL SERVICER AND SPONSOR

About Cleco Power

Background Information. Cleco Power is an integrated electric utility that conducts generation, transmission and distribution operations subject to the jurisdiction of the Louisiana commission and the Federal Energy Regulatory Commission, among other regulators, and that also engages in energy management activities. Cleco Power is a Louisiana limited liability company and a wholly owned subsidiary of Cleco Corporation, a regional energy services holding company.

Municipalization. Louisiana law authorizes municipalities to seek to acquire portions of an electric utility's electric distribution facilities through voluntary transactions or the power of expropriation for use as part of municipally-owned utility systems. The Securitization Act specifies that storm recovery charges approved by a financing order shall be collected by an electric utility as well as its "successors or assignees." In the servicing agreement, Cleco Power has covenanted to assert in an appropriate forum that any municipality that acquires any portion of Cleco Power's electric distribution facilities by expropriation, including upon the expiration of any franchise agreement, must be treated as a successor to Cleco Power under the Securitization Act and the financing order and that customers in such municipalities remain responsible for payment of storm recovery charges. However, the involved municipality might assert that it should not be treated as a successor to Cleco Power for these purposes and that its distribution customers are not responsible for payment of storm recovery charges. Please read "Risk Factors—Risks Associated with Potential Judicial, Legislative or Regulatory Actions—A municipal entity may seek to acquire portions of Cleco Power's electric distribution facilities and avoid payment of the storm recovery charges" in this prospectus.

Service Territory. Cleco Power provides integrated electric utility services, including generation, transmission, distribution and sale of electricity, to approximately 273,000 customers in 104 communities in central and southeastern Louisiana.

Executive Offices. Cleco Power's principal executive offices are located at 2030 Donahue Ferry Road, Pineville, Louisiana 71360-5226. The phone number at this address is (318) 484-7400.

Where to Find Information About Cleco Power. Cleco Power, together with Cleco Corporation, a public utility holding company that wholly owns Cleco Power, files periodic reports with the SEC as required by the Exchange Act. Reports filed with the SEC are available for inspection without charge at the public reference room maintained by the SEC at 100 F Street, N.E., Washington, DC 20549. Copies of periodic reports and exhibits thereto may be obtained at the above location at prescribed rates. Information as to the operation of the public reference facilities is available by calling the SEC at 1 800-SEC 0330. Information filed with the SEC can also be inspected at the SEC site on the World Wide Web at http://www.sec.gov. You may access a copy of Cleco Power's filings at www.cleco.com. Except as provided in any related prospectus supplement, no other information contained on that website constitutes part of this prospectus or any prospectus supplement related to the storm recovery bonds.

Cleco Power's Customer Base and Electric Energy Consumption

The following tables show electric billed revenue, average retail customers and sales of electricity for each of Cleco Power's customer classes for the six preceding years (other than with respect to 2007 electric billed revenue which is shown for the nine-month period ended September 30, 2007). There can be no assurances that the electric billed revenue, average number of retail customers and retail electricity sales, or the composition of any of the foregoing, will remain at or near the levels reflected in the following tables.

Billed Revenue by Customer Class
($000)

		As of December 31,
		As of December 31,										Nine months ended September 30, 2007
		2002		2003		2004		2005		2006		Nine months ended September 30, 2007
Residential		$	247,876	$	279,548	$	297,955	$	354,783	$	382,028	$	310,600
Commercial		$	116,214	$	135,429	$	146,007	$	175,055	$	213,645	$	196,244
Industrial		$	128,296	$	150,676	$	164,520	$	206,544	$	226,649	$	171,557
Other		$	39,839	$	45,360	$	47,360	$	58,013	$	42,408	$	11,161

	Total	$	532,225	$	611,013	$	655,842	$	794,395	$	864,730	$	689,562

Retail Customers by Customer Class

		As of December 31,
		As of December 31,										Nine months ended September 30, 2007
		2002		2003		2004		2005		2006		Nine months ended September 30, 2007
Residential			222,766		225,223		225,949		227,799		229,457		233,566
Commercial			31,406		32,405		31,936		32,161		33,424		35,749
Industrial			747		732		692		674		659		651
Other			6,205		6,254		6,268		6,396		4,818		2,828

	Total		261,124		264,614		264,845		267,030		268,358		272,794

Retail Sales by Customer Class
GWh

		As of December 31,
		As of December 31,										Nine months ended September 30, 2007
		2002		2003		2004		2005		2006		Nine months ended September 30, 2007
Residential			3,400		3,429		3,507		3,516		3,552		2,789
Commercial			2,192		2,252		2,324		2,308		2,367		1,869
Industrial			2,756		2,786		2,902		2,861		2,963		2,254
Other			123		125		127		140		154		102

	Total		8,471		8,592		8,860		8,825		9,036		7,014

Percentage Concentration Within Cleco Power's Large Industrial Customers

For the year ended December 31, 2007, Cleco Power's ten largest customers based on sales represented approximately 10% of Cleco Power's retail electricity sales. All ten customers are industrial class accounts. There are no material concentrations in the residential and commercial classes.

Forecasting Electricity Consumption

For all classes, excluding residential and small commercial, Cleco Power forecasts electricity consumption based on trend and reasonable expectations of future growth. Past data for lighting and municipal customers is reviewed for any trends or patterns. Once a reasonable pattern becomes apparent, Cleco Power will assume this growth remains constant through the five forecast years. For Cleco Power's larger industrial customers, Cleco Power will use three-year historical data and forecast these customers individually. Each individual customer's historical data is reviewed to determine the most reasonable level to set growth in sales and demand by month.

Electricity consumption of Cleco Power's residential and small commercial classes are forecasted using econometric models. The basic process to forecast electricity consumption of the residential and small commercial classes is to first derive a customer forecast. Use-per-consumer is estimated factoring in weather data and historical usage, and it is these two forecasts that calculate sales for the residential and small commercial class.

Economic drivers for the econometric models are obtained from Woods and Poole Economics, Washington, D.C., an independent firm that specializes in long-term county economic and demographic projections. The data includes both economic and demographic data for the State of Louisiana, as well as national data for a wide variety of economic variables. Weather data is obtained from the National Oceanographic and Atmospheric Administration (NOAA) and often is obtained in the form of cooling degree days and heating degree days. Normal degree days used in forecasts are defined by NOAA and are 30 year averages updated every decade.

Once per year (typically in the fourth quarter), Cleco Power completes a five-year sales forecast where the econometric models are completely re-estimated and where individual customers are evaluated. The output of this exercise is the sales forecast that underlies Cleco Power's annual five-year business plan. This forecast is typically the first step in a multi-stage planning process that determines the hourly demand, generation mix, and fuel cost assumptions in the business plan.

Annual Forecast Variance For Ultimate Electric Consumption (GWh)*

	2001		2002		2003		2004		2005		2006		2007
Total
Forecast	8,496		8,459		8,423		8,519		8,786		9,026		9,294
Actual	8,077		8,471		8,592		8,860		8,825		9,036		9,217
Variance	-4.9	%	0.1	%	2.0	%	4.0	%	0.4	%	0.1	%	-0.8	%
Residential
Forecast	3,300		3,325		3,342		3,385		3,476		3,570		3,620
Actual	3,201		3,400		3,429		3,507		3,516		3,552		3,595
Variance	-3.0	%	2.3	%	2.6	%	3.6	%	1.2	%	-0.5	%	-0.7	%
Commercial
Forecast	2,224		2,183		2,181		2,250		2,294		2,274		2,329
Actual	2,095		2,192		2,252		2,324		2,308		2,367		2,478
Variance	-5.8	%	0.4	%	3.3	%	3.3	%	0.6	%	4.1	%	6.4	%
Industrial
Forecast	2,825		2,830		2,767		2,742		2,869		3,032		3,213
Actual	2,640		2,756		2,786		2,902		2,861		2,963		3,008
Variance	-6.5	%	-2.6	%	0.7	%	5.8	%	-0.3	%	-2.3	%	-6.4	%
Other
Forecast	146		121		133		141		148		149		132
Actual	141		123		125		127		140		154		135
Variance	-3.4	%	1.7	%	-6.0	%	-9.9	%	-5.4	%	3.4	%	2.3	%

Credit Policy; Billing Process; Collections Process; Termination of Service

Cleco Power bills its customers directly, and its current credit policies, billing process, and termination of service policies are described below. All information below pertains only to Cleco Power's customers.

Credit Policy

Cleco Power is required to provide electric utility service to applicants within its designated service territory once outstanding debts are cleared and any deposit requirements are met. Using information provided by the Customer Information System (CORS, Cleco Power's Customer Order Request System), Cleco Power determines whether Cleco Power has previously provided service to an applicant. Certain accounts are secured with deposits or guarantees as a precautionary measure. The amount of the deposit for residential customers is $100.00 if property is owned by the customer and $150.00 for rental property and can be up to 2 times the maximum monthly bill. Cleco Power does not accept third party guarantors for commercial accounts. Cleco Power's current business practices require industrial and commercial customers to provide deposits equal to two times the average monthly bill based on the location history.

Louisiana commission rules require Cleco Power to pay simple interest at a rate determined annually, at a rate of 5.00% for any cash deposits held by Cleco Power on a customer's account. Cash deposits are accounted for as an obligation, but are not required to be escrowed, and are available in working capital.

Billing Process

Cleco Power bills its customers, on average, every 30 days. For the year ended December 31, 2007, Cleco Power mailed an average of 12,000 bills on each business day to its customers. For accounts with potential billing error exceptions, reports are generated for manual review. This review examines accounts that have abnormally high or low bills, potential meter reading errors, possible meter malfunctions and/or unbilled accounts. Louisiana commission rules require that each bill provided to customers shall include a payment due date that shall not be less than 20 days after issuance.

Collection, Termination of Service and Write-Off Policy.

In 2007, Cleco Power received approximately 41% of payments by mail, 40% from walk-in payments, and 6% electronically, either bank draft or electronic funds transfer. Walk-in payments are handled by a third party, and payment centers are located in each town in Cleco Power's service territory.

Customers are sent a bill, which is due and payable upon receipt and is considered past due if not paid within 30 calendar days from the mail date. If the bill is not paid on the last day to pay indicated on the statement, and the customer's payment history makes the past-due amount eligible for collection activity, a disconnect notice is mailed on the 30th calendar day after the past due date to ensure that consideration is given to any payment that may be en route by mail on the last day to pay. The disconnect notice gives the customer an additional 10 calendar days to pay the bill. On the last day to pay indicated on the disconnect notice, a courtesy call may be attempted by the Customer Service Office. If the bill is not paid or if the customer has not called for extended payment arrangements, a disconnect order will be generated on the next business day. Once the disconnect order has been generated, payment in full is required to stop the termination. If the customer is disconnected, payment in full is required prior to restoration of service. In addition, the customer may be subject to an additional deposit and/or a collection or reconnection fee.

The rules and regulations of the Louisiana commission, which may change from time to time, regulate and control the right to disconnect service. For example, electric utilities generally may not terminate service to a customer (i) on a holiday or weekend day or (ii) during certain extreme weather conditions.

Cleco Power provides several payment options to help consumers manage their electric usage and payments. Cleco Power customer service representatives as well as an automated Voice Response Unit

(VRU) are available 24 hours a day, 365 days a year to assist customers with payment arrangements. Most customers can receive an extension on their scheduled disconnect date through the VRU or by talking with a customer service representative. Extensions are denied in some cases based on the payment history of the account. Programs such as Budget Pay allow customers to pay an average bill each month while spreading the difference over the remaining months, are available to most residential customers. Automated draw draft and internet billing and payments are also available.

Unpaid final bills are written off after 60 days. Cleco Power does mail a final bill to all customers. If not paid in 45 days, an in-house collection letter is mailed. Once the account is written off, it is turned over to a third-party collection agency on a contingency basis.

Write-off and Delinquency Experience

The following table shows gross write-offs for electricity and gross write-offs as a percentage of total electric billed revenue for the past five years and the nine-month period ended September 30, 2007 for Cleco Power's customers.

Gross Write-Offs as a Percentage of Revenues*

	As of December 31,															Nine Month Period Ended September 30,
	2002			2003			2004			2005			2006			2007
Billed Electric Revenues ($000)	$	540,653,363		$	613,524,248		$	658,874,348		$	798,097,262		$	888,480,907		$	708,930,402
Gross Charge-Offs ($000)	$	2,037,881		$	2,366,664		$	2,559,644		$	3,217,077		$	4,651,649		$	2,427,386
Percentage of Billed Revenue		0.377	%		0.386	%		0.389	%		0.403	%		0.524	%		0.342	%

*: Numbers not exact due to rounding.

The following table shows, for its service territory, total Cleco Power net write-offs for electricity and total net write-offs as a percentage of total electric billed revenue for the past five years and the nine-month period ended September 30, 2007. Net write-offs include amounts recovered by Cleco Power from deposits, bankruptcy proceedings and payments received after an account has been either written-off by Cleco Power or transferred to one of its external collection agencies.

Net Write-Offs as a Percentage of Revenues*

	As of December 31,															Nine Month Period Ended September 30,
	2002			2003			2004			2005			2006			2007
Billed Electric Revenues ($000)	$	540,653,363		$	613,524,248		$	658,874,348		$	798,097,262		$	888,480,907		$	708,930,402
Net Charge-Offs ($000)	$	1,071,077		$	1,667,305		$	1,758,670		$	2,434,370		$	3,353,566		$	1,472,865
Percentage of Billed Revenue		0.198	%		0.272	%		0.267	%		0.305	%		0.377	%		0.208	%

*: Numbers not exact due to rounding.

Delinquencies

The following table sets forth information relating to the delinquency experience of Cleco Power for residential, commercial, industrial and governmental customers on December 31 of each of the five preceding years:

Customer Delinquency Data*

		Dec. 2003		Dec. 2004		Dec. 2005		Dec. 2006		Sep. 2007
Commercial, Industrial, Governmental & Residential
Percent of Billed Revenue Not Collected Within:
	31-60 days	8.7	%	9.6	%	9.8	%	10.1	%	11.8	%
	61-90 days	1.1	%	1.1	%	2.2	%	0.9	%	1.0	%
	91 days or more	1.4	%	1.0	%	2.9	%	0.9	%	0.7	%

*: Data shows statistics for electric revenues for open accounts for each respective month and is calculated based upon the past due amounts included in current month billings as a percentage of the prior month's billed revenue. Data is not available for earlier periods.

Cleco Power does not believe that the delinquency experience with respect to storm recovery charge collections will differ substantially from the approximate rates indicated above.

Average Days Sales Outstanding

The following table sets forth information relating to Cleco Power's average days sales outstanding for all electric consumers in its service territory for the past six years. Days sales outstanding is a measure of the average number of days that Cleco Power takes to collect its revenue. The average number of days for the collection of storm recovery charges relating to the storm recovery bonds is expected to be similar to Cleco Power's revenue collection experience. The days sales outstanding numbers in the following table were generally calculated using the following formula which we calculated as follows: total amount billed as of December 31 (or as of September 30 in the case of 2007) divided by the total revenues for the related calendar year (or nine-month period) times the number of days in the related calendar year (or nine-month period).

Average Days Sales Outstanding
Twelve Months Ended December 2001 Through 2007

YEAR		Average Days Sales Outstanding
2001		19.19
2002		19.19
2003		19.67
2004		19.78
2005		20.19
2006		19.39
2007 (through September 30, 2007)		18.94

*: Numbers not exact due to rounding.

CLECO KATRINA/RITA HURRICANE RECOVERY FUNDING LLC, THE ISSUING ENTITY

General

We are a special purpose limited liability company formed under the Louisiana Limited Liability Company Act pursuant to the limited liability company operating agreement executed by our sole member or owner, Cleco Power, and the filing of articles of organization with the Secretary of State of the State of Louisiana. We have filed our limited liability company operating agreement with the SEC as an exhibit to the registration statement of which this prospectus forms a part. We have summarized selected provisions of our limited liability company operating agreement below.

As of the date of this prospectus, we have not carried on any business activities and have no operating history. Our fiscal year is the calendar year. Immediately following our issuance of the initial series of storm recovery bonds, our assets will include:

•: the related storm recovery property,
•: our rights under the applicable sale agreement, under the administration agreement and under all bills of sale delivered by Cleco Power pursuant to such sale agreement,
•: our rights under the applicable servicing agreement and any subservicing, agency, administration, intercreditor or collection agreements executed in connection with such servicing agreement,
•: the applicable collection account and all subaccounts of such collection account,
•: our rights under any interest rate swap agreement or hedging agreement entered into with respect to the issuance of a tranche of floating rate storm recovery bonds within such series,
•: all present and future claims, demands, causes and choses in action in respect of any or all of the foregoing, and
•: all payments on or under and all proceeds in respect of any or all of the foregoing.

Following the issuance of subsequent series of storm recovery bonds our assets will include similar property related to each such series. The indenture provides that the storm recovery property, as well as our other assets, other than any cash released to us by the trustee semi-annually from earnings on the capital subaccount, will be pledged by us to the trustee. Pursuant to the indenture, the collected storm recovery charges remitted to the trustee by the servicer must be used to pay principal and interest on the related series of storm recovery bonds and our other obligations specified in the indenture.

Our Purpose

We were created for the specific purposes of:

•: purchasing and owning storm recovery property and other storm recovery bond collateral,
•: issuing and registering one or more series of storm recovery bonds,
•: pledging our interest in storm recovery property and other storm recovery bond collateral to the trustee pursuant to the terms of the indenture in order to secure the related series of storm recovery bonds,
•: making payments on the storm recovery bonds,
•: distributing amounts released to us, and
•: performing other activities that are necessary, suitable or convenient to accomplish these purposes.

Our limited liability company operating agreement does not permit us to engage in any activities not directly related to these purposes, including issuing securities (other than the storm recovery bonds), borrowing money or making loans to other persons. The list of permitted activities set forth in our limited liability company operating agreement may not be altered, amended or repealed without the affirmative vote of a majority of our managers, which vote must include the affirmative vote of our member and our independent manager.

Our Relationship With Cleco Power

On the issue date for each series of the storm recovery bonds, Cleco Power will sell storm recovery property to us pursuant to a sale agreement between us and Cleco Power. Pursuant to a servicing agreement between us and Cleco Power, Cleco Power will serve as the initial servicer of the storm recovery property. We will pay Cleco Power fixed fees for performing these services. Pursuant to an administration agreement between us and Cleco Power, Cleco Power will provide administrative services to us.

Our Managers

Pursuant to our limited liability company operating agreement, our affairs will be managed by managers, whom we refer to in this prospectus and the prospectus supplement as our "managers." Cleco Power will appoint our managers from time to time or, in the event Cleco Power transfers its interest in us, the new owner or owners will appoint our managers. Prior to the initial issuance of the initial series of storm recovery bonds, and thereafter at all times we will have at least one independent manager who, among other things, is not and has not been for at least five years prior to the date of his or her appointment:

•: a direct or indirect legal or beneficial owner of us, Cleco Power, any of our affiliates or any of Cleco Power's affiliates,
•: a relative, supplier, employee, officer, director or manager (other than as an independent director or manager of us), contractor or material creditor of us, Cleco Power or any of its affiliates, or
•: a person who controls Cleco Power or any of its affiliates (whether directly, indirectly or otherwise) or any creditor, employee, officer, director, manager or material supplier or contractor of Cleco Power or its affiliates (other than as an independent director or manager of any other bankruptcy-remote subsidiary of Cleco or its affiliates); provided, that the indirect or beneficial ownership of stock of Cleco Power or its affiliates through a mutual fund or similar diversified investment vehicle with respect to which the owner does not have discretion or control over the investments held by such diversified investment vehicle shall not preclude such owner from being an independent manager.

The managers (other than the independent manager) will be employees or officers of Cleco Power. The managers will devote the time necessary to conduct our affairs. Cleco Power, as our sole member, will appoint one independent manager prior to the issuance of the initial series of storm recovery bonds.

None of our managers has been involved in any legal proceedings which are specified in Item 401(f) of the SEC's Regulation S-K.

Manager Fees and Limitation on Liabilities

As of the date of this prospectus, we have not paid any compensation to any manager since the date we were formed. We will not compensate our managers, other than our independent manager, for their services performed on our behalf. The independent manager will be paid a manager's fee from our assets.

Our limited liability company operating agreement provides that to the extent permitted by law, our managers will not be liable for our debts, obligations or liabilities.

Under our limited liability company operating agreement, we indemnify our managers to the fullest extent permitted by law against expenses incurred by them in connection with an action, suit or proceeding if they acted in good faith and in a manner in which they reasonably believed to be in or not opposed to our best interests, except for such judgments, penalties, fines or other expenses that were directly caused by their fraud, gross negligence or willful misconduct.

We Are a Separate and Distinct Legal Entity from Cleco Power

Under our limited liability company operating agreement, we may not file a voluntary petition for relief under the bankruptcy code without a unanimous vote of our managers (including our independent manager). Cleco Power has agreed that it will not cause us to file a voluntary petition for relief under the bankruptcy code. Our limited liability company operating agreement, except for financing reporting purposes and for federal and state income tax purposes, requires us to:

•: take all reasonable steps to continue our identity as a separate legal entity,
•: make it apparent to third persons that we are an entity with assets and liabilities distinct from those of Cleco Power, other affiliates of Cleco Power, our managers or any other person, and
•: make it apparent to third persons that we are not a division of Cleco Power or any of its affiliates or any other person.

Our principal place of business is 2605 Hwy. 28 East, Office Number 12, Pineville, Louisiana 71360, and our telephone number at such address is (318) 484-4180.

Administration Agreement

Cleco Power will, pursuant to an administration agreement between Cleco Power and us, provide administrative services to us, including services relating to the preparation of financial statements, required filings with the SEC, any tax returns we might be required to file under applicable law, qualifications to do business, and minutes of our managers' meetings. We will pay Cleco Power a fixed fee of $100,000 per annum, payable in installments of $50,000 on each payment date for performing these services.

USE OF PROCEEDS

Upon the issuance of storm recovery bonds, we will use the net proceeds from the sale of the bonds (after payment of upfront financing costs) to pay to Cleco Power the purchase price of Cleco Power's rights under the financing order, which are storm recovery property.

Cleco Power will use approximately $50 million of the net proceeds from its sale of the storm recovery property to fund a storm recovery reserve, which will be kept in a segregated restricted account. The remaining proceeds (after payment of upfront financing costs payable by Cleco Power) of approximately $132 million (as of December 31, 2007) are reimbursement to Cleco Power for storm recovery costs Cleco Power has already incurred and paid, and will be used by Cleco Power for working capital and other general corporate purposes.

THE STORM RECOVERY BONDS

We will issue the storm recovery bonds under an indenture between us and the trustee to be named in the applicable prospectus supplement. We have filed the form of the indenture with the SEC as an exhibit to the registration statement of which this prospectus forms a part. The particular terms of each series of the storm recovery bonds will be provided in the indenture and a related supplemental indenture. We have summarized selected provisions of the indenture and the storm recovery bonds below. This summary does not purport to be complete and is subject to and qualified by reference to the provisions of the indenture. We will describe the particular terms of each series of the storm recovery bonds in a supplement to this prospectus. You should carefully read the summary below, the applicable prospectus supplement and the terms and provisions of the indenture that may be important to you before investing in the storm recovery bonds. Please read "Where You Can Find More Information" in this prospectus.

General Terms of the Storm Recovery Bonds

Storm recovery bonds may be issued under the indenture from time to time to finance the purchase by us of storm recovery property. The aggregate principal amount of the storm recovery bonds that may be authenticated and delivered under the indenture and the financing order issued by the Louisiana commission on September 17, 2007 may not exceed $132 million plus (a) the costs of funding storm recovery bonds in one or more series in an aggregate principal of approximately $50 million to create a storm recovery reserve in a segregated restricted account, plus (b) upfront financing costs, which are estimated to be approximately $4.6 million. Any series of the storm recovery bonds may include one or more tranches which differ, among other things, as to interest rate and amortization of principal. The terms of all storm recovery bonds of the same series will be identical, unless a series includes more than one tranche, in which case the terms of all storm recovery bonds of the same tranche will be identical. The particular terms of the storm recovery bonds of any series and, if applicable, tranches thereof, will be set forth in the supplemental indenture for that series. The terms of a series of storm recovery bonds, and any tranches thereof, will not be subject to consent of the storm recovery bondholders of any previously issued series. Please read "Risk Factors—Other Risks Associated with an Investment in the Storm Recovery Bonds" in this prospectus. Each series of storm recovery bonds may include one or more tranches that accrue interest at a variable rate, and one or more interest rate swap agreements may be entered into in connection with the issuance of any such variable rate storm recovery bonds. Please read "—Floating Rate Storm Recovery Bonds" below.

The prospectus supplement for a series of storm recovery bonds will describe the following terms of that series of storm recovery bonds and, if applicable, the tranches of that series:

•: the designation of the series and, if applicable, the tranches of that series,
•: the principal amount of the series and, if applicable, the tranches of that series,
•: the annual rate at which interest accrues or the method or methods of determining such annual rate,
•: the payment dates,
•: the scheduled final payment date and the final maturity date of the series and, if applicable, the tranches of that series,
•: the issuance date of the series,
•: the collateral for the series,
•: the place or places for payments with respect to the series or tranche,
•: the authorized denominations,

•: any provisions for optional redemption of the series or tranche,
•: restrictions, if any, on issuing multiple series or tranches,
•: whether the storm recovery bonds of the series are to be book-entry storm recovery bonds, and whether the series will be listed on any securities exchange
•: the expected amortization schedule for principal of the series and, if applicable, the tranches of that series,
•: the required capital amount with respect to the series,
•: the calculation dates and adjustment dates for the series,
•: the subaccounts in the collection account for the series,
•: the credit enhancement, if any, applicable to the series or tranche,
•: any other material terms of the tranche that are not inconsistent with the provisions of the indenture and that will not result in any rating agency's reducing or withdrawing its rating of any outstanding tranche of storm recovery bonds,
•: the identity of the trustee, and
•: only if a series includes floating rate storm recovery bonds, the terms of any interest rate swap agreement or other hedging agreement and the identity of any counterparty thereto.

The storm recovery bonds are not a debt, liability or other obligation of the State of Louisiana, the Louisiana commission or of any other political subdivision, agency or instrumentality of the State and do not represent an interest in or legal obligation of Cleco Corporation, Cleco Power or any of their affiliates, other than us. None of Cleco Corporation, Cleco Power or any of their affiliates will guarantee or insure the storm recovery bonds. A financing order authorizing the issuance of storm recovery bonds does not constitute a pledge of the full faith and credit of the State of Louisiana, the Louisiana commission or of any other political subdivision of the State. The issuance of the storm recovery bonds under the Securitization Act will not directly, indirectly or contingently obligate the State of Louisiana, the Louisiana commission or any other political subdivision of the State to levy or to pledge any form of taxation for the storm recovery bonds or to make any appropriation for their payment.

Payments of Interest and Principal on the Storm Recovery Bonds

Interest will accrue on the principal balance of a series of storm recovery bonds at the interest rate specified in or determined in the manner specified in the related prospectus supplement. Interest will be payable to the storm recovery bondholders on each payment date, commencing on the payment date specified in the related prospectus supplement. Interest payments for each series will be made from collections of related storm recovery charges, including amounts available in the excess funds subaccount and, if necessary, the amounts available in the capital subaccount for each series.

On any payment date with respect to any series, we generally will pay principal of storm recovery bonds only until the outstanding principal balance has been reduced to the principal balance specified for that payment date in the expected amortization schedule for that series, but only to the extent funds are available for that series as described in this prospectus. Accordingly, principal of the series of storm recovery bonds may be paid later, but generally not sooner, than reflected in the expected amortization schedule for such series, except in the case of an applicable optional redemption or acceleration. Please read "Risk Factors—Other Risks Associated With an Investment in the Storm Recovery Bonds" and "Weighted Average Life and Yield Considerations for the Storm Recovery Bonds" in this prospectus.

The trustee will retain in the excess funds subaccount for that series for payment on later payment dates any collections of storm recovery charges in excess of amounts payable as:

•: fees and expenses of the servicer (including the servicing fee), the independent manager and the trustee,
•: payments of interest and principal on the storm recovery bonds for that series,
•: allocations to the capital subaccount for that series, and
•: investment earnings on amounts in the capital subaccount released to us.

If the trustee receives insufficient collections of storm recovery charges for a series of storm recovery bonds for any payment date, and amounts in the collection account for that series (and the applicable subaccounts of that collection account) are not sufficient to make up the shortfall, principal of that series of storm recovery bonds may be paid later than expected, as described in this prospectus. The failure to make a scheduled payment of principal on the storm recovery bonds of a series because there are not sufficient funds in the collection account for that series does not constitute a default or an event of default with respect to such series under the indenture, except for the failure to make the scheduled payment of principal due upon the final maturity of the storm recovery bonds.

The trustee will pay on each payment date to the storm recovery bondholders of a particular series to the extent of available funds in the related collection account all payments of principal and interest then due on such storm recovery bonds (other than special payments as defined in the indenture). The trustee will make each such payment to the storm recovery bondholders, other than the final payment, on the applicable record date. If the storm recovery bonds are ever issued in definitive certificated form, however, the final payment with respect to the storm recovery bonds will be made only upon presentation and surrender of such storm recovery bond at the office or agency of the trustee specified in the notice given by the trustee with respect to such final payment. The trustee will mail notice of the final payment to the storm recovery bondholders no later than five days prior to the final payment date, specifying the date set for the final payment and the amount of the payment.

The storm recovery bonds will originally be issued in book-entry form, and we do not expect that the storm recovery bonds will be issued in definitive certificated form. At the time, if any, we issue the storm recovery bonds of any series in the form of definitive storm recovery bonds and not to The Depository Trust Company ("DTC") or its nominee, the trustee will make payments with respect to that tranche as described below under "—Definitive Certificated Storm Recovery Bonds." Upon application by a holder of any tranche of storm recovery bonds in the principal amount of $10,000,000 or more to the trustee not later than the applicable record date, the trustee will make payments by wire transfer to an account maintained by the payee in New York, New York.

On each payment date, the amount to be paid as principal on the storm recovery bonds of each series will equal without duplication:

•: the unpaid principal amount of each series due on the final maturity date of that series, plus
•: the unpaid principal amount of each series upon acceleration following an event of default, plus
•: the unpaid principal amount of any storm recovery bonds of each series called for redemption, plus
•: the overdue payments of principal, plus
•: the unpaid and previously scheduled payments of principal, plus
•: the principal scheduled to be paid on each series on that payment date.

Except as otherwise specified in a prospectus supplement with respect to floating rate storm recovery bonds, the failure to pay accrued interest on a series of storm recovery bonds on any payment

date (even if the failure is caused by a shortfall in storm recovery charges received) will result in an event of default for that series of storm recovery bonds unless such failure is cured within five business days. If interest is not paid within that five-day period, the issuing entity will pay such defaulted interest (plus interest on such defaulted interest at the applicable interest rate to the extent lawful) to the persons who are storm recovery bondholders on a special record date (as defined in the indenture). The special record date will be at least fifteen business days prior to the date on which the trustee is to make a special payment (a special payment date). The issuing entity will fix any special record date and special payment date and, at least 10 days before such special record date, the issuing entity will mail to each affected storm recovery bondholder a notice that states the special record date, the special payment date and the amount of defaulted interest (plus interest on such defaulted interest) to be paid. An event of default under one series of storm recovery bonds will not automatically trigger an event of default under other outstanding series of storm recovery bonds. See "—What Constitutes an Event of Default on the Storm Recovery Bonds" below.

The entire unpaid principal amount of a series of storm recovery bonds will be due and payable:

•: on the final maturity date of that series,
•: on the date of redemption, if any, and
•: if an event of default under the indenture occurs and is continuing and the trustee or the holders of a majority in principal amount of that series of storm recovery bonds have declared that series of storm recovery bonds to be immediately due and payable.

However, the nature of our business will result in payment of principal upon an acceleration of a series of storm recovery bonds being made as funds become available. Please read "Risk Factors— Risks Associated with the Unusual Nature of the Storm Recovery Property" and "—You may experience material payment delays or incur a loss on your investment in the storm recovery bonds because the source of funds for payment is limited."

If any special payment date or other date specified herein for distribution of any payments to storm recovery bondholders is not a business day, payments scheduled to be made on such special payment date or other date may be made on the next succeeding business day, and no interest will accrue upon such payment during the intervening period. "Business day" means any day other than a Saturday, a Sunday or a day on which banking institutions in New York, New York or New Orleans, Louisiana, are required or authorized by law or executive order to remain closed.

Neither we nor Cleco Power makes any representation or warranty that any amounts actually collected arising from storm recovery charges will in fact be sufficient to meet payment obligations on related series of storm recovery bonds or that assumptions made in calculating storm recovery charges will in fact be realized.

Floating Rate Storm Recovery Bonds

If we issue any tranche of floating rate storm recovery bonds, we may enter into or arrange for one or more interest rate swap transactions. Generally, a swap agreement, on each payment date, will obligate us to pay to the swap counterparty, solely from payments of storm recovery charges, an amount equal to the fixed interest due under the swap agreement on the payment date. The swap agreement will obligate the swap counterparty to pay to us an amount equal to the product of (1) a floating rate comparable to the rate accruing on the floating rate storm recovery bonds and (2) the principal balance of the floating rate storm recovery bonds as of the close of business on the preceding payment date, after giving effect to all payments of principal made to the floating rate storm recovery bondholders on the preceding payment date.

The related prospectus supplement will include a description of:

•: the material terms of any interest rate swap transaction,
•: the identity of any interest rate swap counterparty,
•: any payments due to be paid by or to us or the trustee under any interest rate swap transaction,
•: scheduled deposits in and withdrawals from any tranche subaccount of the collection account with respect to any interest rate swap transaction,
•: the formula for calculating the floating rate of interest of any floating rate tranche, and
•: the rights of storm recovery bondholders with respect to any interest rate swap transaction, including any right of termination of or amendment to the interest rate swap agreement.

Redemption of the Storm Recovery Bonds

We will specify the redemption provisions, if any, for any series of the storm recovery bonds in the related prospectus supplement, including the premiums, if any, payable upon redemption. Unless the context requires otherwise, all references in this prospectus to principal of the storm recovery bonds of a series as it relates to redemption include any premium that might be payable on the storm recovery bonds if the storm recovery bonds of the series are redeemed. The trustee will give notice of redemption of any series of the storm recovery bonds to each registered holder of a storm recovery bond of such series by first-class mail, postage prepaid, mailed not less than five days nor more than 45 days prior to the date of redemption or in another manner or at another time as we may specify in the related prospectus supplement. The redemption price will, in each case, include accrued interest to, but excluding, the date of redemption. All storm recovery bonds called for redemption will cease to bear interest on the specified redemption date, provided the redemption price is on deposit with the trustee at that time, and will no longer be considered "outstanding" under the indenture. The storm recovery bondholders will have no further rights to storm recovery bonds called for redemption after the specified redemption date, except to receive from the trustee payment of the redemption price of such storm recovery bonds and unpaid interest accrued to the date fixed for redemption.

Storm Recovery Bonds Will Be Issued in Book-Entry Form

Unless we specify otherwise in the related prospectus supplement, the storm recovery bonds will be available to investors only in the form of book-entry storm recovery bonds. You may hold your bonds through DTC in the United States, Clearstream Banking, Luxembourg, S.A., referred to as Clearstream, or Euroclear in Europe or in any other manner we describe in the related prospectus supplement. You may hold your storm recovery bonds directly with one of these systems if you are a participant in the system or indirectly through organizations that are participants.

The Role of DTC, Clearstream and Euroclear. Cede & Co., as nominee for DTC, will hold the global bond or bonds representing the storm recovery bonds. Clearstream and Euroclear will hold omnibus positions on behalf of the Clearstream customers and Euroclear participants, respectively, through customers' securities accounts in Clearstream's and Euroclear's names on the books of their respective depositaries. These depositaries will, in turn, hold these positions in customers' securities accounts in the depositaries' names on the books of DTC.

The Function of DTC. DTC is a limited purpose trust company organized under the laws of the State of New York and is a member of the Federal Reserve System. DTC is a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered pursuant to Section 17A of the Exchange Act. DTC was created to hold securities for its participants and to facilitate the clearance and settlement of securities transactions between participants through electronic book-entries, thereby eliminating the need for physical movement of bonds. Direct

participants of DTC include securities brokers and dealers, banks, trust companies and clearing corporations and may include other organizations. Indirect access to the DTC system also is available to others, including banks, brokers, dealers and trust companies, as indirect participants, that clear through or maintain a custodial relationship with a participant, either directly or indirectly.

The Function of Clearstream. Clearstream is incorporated under the laws of Luxembourg. Clearstream holds securities for its customers and facilitates the clearance and settlement of securities transactions between Clearstream customers through electronic book-entry changes in accounts of Clearstream customers, thereby eliminating the need for physical movement of securities. Transactions may be settled by Clearstream in any of various currencies, including U.S. dollars. Clearstream provides to its customers, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Clearstream also deals with domestic securities markets in various countries through established depositary and custodial relationships. Clearstream is registered as a bank in Luxembourg and therefore is subject to regulation by the Commission de Surveillance du Secteur Financier, which supervises Luxembourg banks. Clearstream's customers are world-wide financial institutions including underwriters, securities brokers and dealers, banks, trust companies and clearing corporations, among others, and may include the underwriters of any series of storm recovery bonds. Clearstream's U.S. customers are limited to securities brokers and dealers and banks. Clearstream has customers located in various countries. Indirect access to Clearstream is also available to other institutions that clear through or maintain a custodial relationship with an account holder of Clearstream. Clearstream has established an electronic bridge with Euroclear Bank S.A./N.V. as the operator of the Euroclear System in Brussels to facilitate settlement of trades between Clearstream and Euroclear.

The Function of Euroclear. Euroclear was created in 1968 to hold securities for Euroclear participants and to clear and settle transactions between Euroclear participants through simultaneous electronic book-entry delivery against payment, thereby eliminating the need for physical movement of securities and any risk from lack of simultaneous transfers of securities and cash. Such transactions may be settled in any of various currencies, including U.S. dollars. The Euroclear System includes various other services, including securities lending and borrowing and interfaces with domestic markets in several countries generally similar to the arrangements for cross-market transfers with DTC described below. The Euroclear System is operated by Euroclear Bank S.A./N.V. as the Euroclear operator. All operations are conducted by the Euroclear operator, and all Euroclear securities clearance accounts and Euroclear cash accounts are accounts with the Euroclear operator. Euroclear participants include central banks and other banks, securities brokers and dealers and other professional financial intermediaries and may include the underwriters of any series of storm recovery bonds. Indirect access to the Euroclear System is also available to other firms that clear through or maintain a custodial relationship with a Euroclear participant, either directly or indirectly.

Terms and Conditions of Euroclear. Securities clearance accounts and cash accounts with the Euroclear operator are governed by the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear System. These terms and conditions govern transfers of securities and cash within the Euroclear System, withdrawals of securities and cash from the Euroclear System and receipts of payments with respect to securities in the Euroclear System. All securities in Euroclear are held on a fungible basis without attribution of specific securities to specific securities clearance accounts. The Euroclear operator acts under these rules and laws only on behalf of Euroclear participants and has no record of or relationship with persons holding through Euroclear participants.

The Rules for Transfers Among DTC, Clearstream or Euroclear Participants. Transfers between DTC participants will occur in accordance with DTC rules. Transfers between Clearstream customers or Euroclear participants will occur in the ordinary way in accordance with their respective rules and operating procedures.

Cross-market transfers between persons holding directly or indirectly through DTC, on the one hand, and directly or indirectly through Clearstream customers or Euroclear participants, on the other, will be effected through DTC in accordance with DTC rules on behalf of the relevant European international clearing system by its depositary; however, those cross-market transactions will require delivery of instructions to the relevant European international clearing system by the counterparty in that system in accordance with its rules and procedures and within its established deadlines, which will be based on European time. The relevant European international clearing system will, if the transaction meets its settlement requirements, deliver instructions to its depositary to take action to effect final settlement on its behalf by delivering or receiving storm recovery bonds in DTC and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Clearstream customers and Euroclear participants may not deliver instructions directly to Clearstream's and Euroclear's depositaries.

Because of time-zone differences, credits of securities in Clearstream or Euroclear as a result of a transaction with a participant will be made during the subsequent securities settlement processing, dated the business day following the DTC settlement date, and those credits or any transactions in those securities settled during that processing will be reported to the relevant Clearstream customer or Euroclear participant on that business day. Cash received in Clearstream or Euroclear as a result of sales of securities by or through a Clearstream customer or a Euroclear participant to a DTC participant will be received with value on the DTC settlement date but will be available in the relevant Clearstream or Euroclear cash account only as of the business day following settlement in DTC.

DTC Will Be the Holder of the Storm Recovery Bonds. Storm recovery bondholders that are not participants or indirect participants but desire to purchase, sell or otherwise transfer ownership of, or other interest in, storm recovery bonds may do so only through participants and indirect participants. In addition, storm recovery bondholders will receive all distributions of principal of and interest on the storm recovery bonds from the trustee through the participants, who in turn will receive them from DTC. Under a book-entry format, storm recovery bondholders may experience some delay in their receipt of payments because payments will be forwarded by the trustee to Cede & Co., as nominee for DTC. DTC will forward those payments to its participants, who thereafter will forward them to indirect participants or storm recovery bondholders. It is anticipated that the only "bondholder" will be Cede & Co., as nominee of DTC. The trustee will not recognize storm recovery bondholders as bondholders, as that term is used in the indenture, and storm recovery bondholders will be permitted to exercise the rights of bondholders only indirectly through the participants, who in turn will exercise the rights of storm recovery bondholders through DTC.

Under the rules, regulations and procedures creating and affecting DTC and its operations, DTC is required to make book-entry transfers among participants on whose behalf it acts with respect to the storm recovery bonds and is required to receive and transmit distributions of principal and interest on the storm recovery bonds. Participants and indirect participants with whom storm recovery bondholders have accounts with respect to the storm recovery bonds similarly are required to make book-entry transfers and receive and transmit those payments on behalf of their respective storm recovery bondholders. Accordingly, although storm recovery bondholders will not possess storm recovery bonds, storm recovery bondholders will receive payments and will be able to transfer their interests.

Because DTC can act only on behalf of participants, who in turn act on behalf of indirect participants and certain banks, the ability of a storm recovery bondholder to pledge storm recovery bonds to persons or entities that do not participate in the DTC system, or otherwise take actions in respect of those bonds, may be limited due to the lack of a physical certificate for those storm recovery bonds.

DTC has advised us that it will take any action permitted to be taken by a storm recovery bondholder under the indenture only at the direction of one or more participants to whose account with DTC the storm recovery bonds are credited. Additionally, DTC has advised us that it will take

those actions with respect to specified percentages of the collateral amount only at the direction of and on behalf of participants whose holdings include interests that satisfy those specified percentages. DTC may take conflicting actions with respect to other interests to the extent that those actions are taken on behalf of participants whose holdings include those interests.

How Storm Recovery Bond Payments Will Be Credited by Clearstream and Euroclear. Distributions with respect to storm recovery bonds held through Clearstream or Euroclear will be credited to the cash accounts of Clearstream customers or Euroclear participants in accordance with the relevant system's rules and procedures, to the extent received by its depositary. Those distributions will be subject to tax reporting in accordance with relevant U.S. tax laws and regulations. Please read "Material Federal Income Tax Consequences for the Storm Recovery Bondholders" in this prospectus. Clearstream or the Euroclear operator, as the case may be, will take any other action permitted to be taken by a storm recovery bondholder under the indenture on behalf of a Clearstream customer or Euroclear participant only in accordance with its relevant rules and procedures and subject to its depositary's ability to effect those actions on its behalf through DTC.

Although DTC, Clearstream and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of the storm recovery bonds among participants of DTC, Clearstream and Euroclear, they are under no obligation to perform or continue to perform those procedures, and those procedures may be discontinued at any time.

Definitive Certificated Storm Recovery Bonds

The Circumstances That Will Result in the Issuance of Definitive Certificated Storm Recovery Bonds. Unless we specify otherwise in the related prospectus supplement, each tranche of the storm recovery bonds will be issued in fully registered, certificated form to beneficial owners of storm recovery bonds or other intermediaries, rather than to DTC or its nominee, only if:

•: DTC or we advise the trustee in writing that DTC is no longer willing or able to discharge properly its responsibilities as nominee and depository with respect to the book-entry certificates for the storm recovery bonds and we are unable to locate a qualified successor,
•: we advise the trustee in writing that we elect to discontinue use of book-entry-only transfers through DTC and deliver certificated storm recovery bonds to DTC, or
•: after the occurrence of an event of default under the indenture, storm recovery bondholders representing at least a majority of the outstanding principal balance of the storm recovery bonds of all affected series advise us, the trustee and DTC through the financial intermediaries and the DTC participants in writing that the continuation of a book-entry system through DTC, or a successor to DTC, is no longer in the storm recovery bondholders' best interest.

The Delivery of Definitive Certificated Storm Recovery Bonds. Upon the occurrence of any event described in the immediately preceding paragraph (unless otherwise specified), the trustee will be required to notify all affected beneficial owners of storm recovery bonds of the occurrence of the event and the availability through DTC of definitive certificated storm recovery bonds. Upon surrender by DTC of the global bond or bonds in the possession of DTC that had represented the applicable storm recovery bonds and receipt of instructions for re-registration, the trustee will authenticate and deliver definitive certificated storm recovery bonds to the beneficial owners, and the trustee will recognize the holders of the definitive certificate storm recovery bonds as bondholders under the indenture.

The Payment Mechanism for Definitive Certificated Storm Recovery Bonds. Payments of principal of, and interest on, definitive certificated storm recovery bonds will be made by the trustee, as paying agent, in accordance with the procedures set forth in the indenture. These payments will be made directly to holders of definitive certificated storm recovery bonds in whose names the definitive certificated storm recovery bonds were registered at the close of business on the related record date

specified in each prospectus supplement. These payments will be made by check mailed to the address of the holder as it appears on the register maintained by the trustee or, in certain cases, by wire transfer.

The Transfer or Exchange of Definitive Certificated Storm Recovery Bonds. Definitive certificated storm recovery bonds will be transferable and exchangeable at the offices of the transfer agent and registrar, which will initially be the trustee. No service charge will be imposed for any registration of transfer or exchange, but we and the transfer agent and registrar may require payment of a sum sufficient to cover any tax or other governmental charge imposed in connection with the transfer or exchange.

Final Payments on Definitive Certificated Storm Recovery Bonds. The final payment on any storm recovery bond, however—whether a definitive certificated bond or a bond registered in the name of Cede & Co.—will be made only upon presentation and surrender of the storm recovery bond at the office or agency specified in the notice of final payment to storm recovery bondholders. The trustee will be required to mail that notice to registered bondholders not later than the fifth day of the month of the final payment.

Registration and Transfer of the Storm Recovery Bonds

If specified in the related prospectus supplement, we may issue one or more tranches of storm recovery bonds in definitive form, which will be transferable and exchangeable as described above under "—Definitive Certificated Storm Recovery Bonds." Unless we specify otherwise in the related prospectus supplement, there will be no service charge for any registration or transfer of the storm recovery bonds, but the trustee may require the owner to pay a sum sufficient to cover any tax or other governmental charge.

We will issue each tranche of storm recovery bonds in the minimum initial denominations set forth in the related prospectus supplement and, except as otherwise provided in the related prospectus supplement, in integral multiples thereof.

The trustee will make payments of interest and principal on each payment date to the bondholders in whose names the storm recovery bonds were registered on the applicable record date.

The Storm Recovery Bonds May Be Issued in Various Series or Tranches

Under the indenture, the trustee will authenticate and deliver an additional series of the storm recovery bonds only on the satisfaction of specified conditions, including the following:

•

all parties required to do so by the terms of the relevant documents must have authorized, executed and delivered appropriate documentation required by the indenture and our limited liability company agreement, as amended or restated,

•

the seller must have irrevocably assigned all of its right, title and interest in the applicable storm recovery property to us and made the filing required by Section 1230 of the Securitization Act with respect to the assignment,

•

the trustee must have received written confirmation from each rating agency that the new series of storm recovery bonds will be rated as set forth in the related prospectus supplement,

•

the seller must receive and deliver to us and the trustee:

•: an opinion of outside tax counsel (as selected by the seller, and in form and substance reasonably satisfactory to us and the trustee) to the effect that we will not be subject to U.S. federal income tax as an entity separate from Cleco Corporation and that the new series of storm recovery bonds will be treated as debt of Cleco Corporation for U.S. federal income tax purposes,

•: an opinion of outside tax counsel (as selected by the seller, and in form and substance reasonably satisfactory to us and the trustee) or, if the seller so chooses, a ruling from the IRS, in either case to the effect that, for U.S. federal income tax purposes, the issuance of the new series of storm recovery bonds will not result in gross income to the seller, and
•: an opinion of outside tax counsel (as selected by the seller, and in form and substance reasonably satisfactory to us and the trustee) to the effect that such issuance of the additional series of storm recovery bonds will not adversely affect the characterization of any then outstanding storm recovery bonds as obligations of Cleco Corporation.

•: the opinion of outside tax counsel described above may, if the seller so chooses, be conditioned on the receipt by the seller of one or more letter rulings from the IRS and in rendering such opinion outside tax counsel shall be entitled to rely on the rulings contained in such letter rulings and to rely on the representations made, and information supplied, to the IRS in connection with such letter rulings, and
•: we must deliver certain certificates and opinions specified in the indenture to the trustee and, in certain instances, to the Louisiana commission.

The accompanying prospectus supplement may prohibit us from issuing more than one series of storm recovery bonds or place restrictions on any such issuance.

The Security for the Storm Recovery Bonds

To secure the payment of principal, premium, if any, and interest on, and any other amounts owing in respect of, the storm recovery bonds of each series pursuant to the indenture, we will grant to the trustee for the benefit of the storm recovery bondholders of each series a security interest in all of our right, title and interest, whether now owned or later acquired, in and to the following collateral with respect to that series, which collectively constitutes the trust estate under the indenture:

•: the storm recovery property related to that series,
•: our rights under the applicable sale agreement,
•: all bills of sale delivered by Cleco Power pursuant to the applicable sale agreement,
•: our rights under the applicable servicing agreement and any subservicing, agency, intercreditor or collection agreements executed in connection with the servicing agreement,
•: our rights under the administration agreement,
•: our rights in the applicable collection account and all subaccounts of the collection account, including the general subaccount, the capital subaccount and the excess funds subaccount and all cash, securities, instruments, investment property or other assets credited to or deposited in the collection account or any subaccount of the collection account from time to time or purchased with funds from the collection account, and all financial assets and securities entitlements carried therein or credited thereto,
•: our rights under any interest rate swap agreement or hedging agreement entered into with respect to the issuance of a floating rate tranche of a particular series of storm recovery bonds,
•: all of our other property related to the series of storm recovery bonds, other than any cash released to us by the trustee semi-annually from earnings on the capital subaccount,
•: all present and future claims, demands, causes and choses in action in respect of any or all of the foregoing, and

•: all payments on or under and all proceeds in respect of any or all of the foregoing, including all proceeds of the conversion, voluntary or involuntary, into cash or other liquid property of any or all of the foregoing, all cash proceeds, accounts, accounts receivable, general intangibles, notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance proceeds, condemnation awards, payment intangibles, letter-of-credit rights, investment property, commercial tort claims, documents, rights to payment of any and every kind, and other forms of obligations and receivables, instruments and other property which at any time constitute all or part of or are included in the proceeds of any of the foregoing.

The security interest does not extend to:

•: amounts representing investment earnings on the capital subaccount released to us,
•: amounts deposited in the capital subaccount for that series that have been released to us or as we direct following retirement of that series of storm recovery bonds,
•: amounts deposited with us on any series issuance date for payment of costs of issuance with respect to the related series of storm recovery bonds (together with any interest earnings thereon), and
•: amounts in the segregated trust account held for the benefit of the trustee to pay certain expenses of the trustee.

The collateral for each series of storm recovery bonds will be separate from the collateral for any other series, and holders of one series of storm recovery bonds will have no recourse to collateral for a different series. Please read "—How Funds in the Collection Account Will Be Allocated."

Section 1231 of the Securitization Act provides that a valid and enforceable security interest in storm recovery property will attach and be perfected by the means set forth in Section 1231. Specifically, Section 1231 provides that a valid and enforceable security interest in storm recovery property may be created only after the issuance of a financing order, the execution and delivery of a security agreement in connection with issuance of financing instruments such as the storm recovery bonds and the receipt of value for the instruments. The security interest attaches automatically when all of the foregoing conditions are met. Upon perfection by filing a financing statement under Section 1231 of the Securitization Act and otherwise in accordance with the Louisiana UCC, the security interest will be a continuously perfected security interest in the storm recovery property and all proceeds of the property, whether accrued or not, and will have priority in the order of time of perfection and take precedence over any subsequent lien creditor.

The Collection Account for the Storm Recovery Bonds

Under the indenture, we will establish a collection account with the trustee or at another eligible institution for each series of storm recovery bonds. The collection account will be under the sole dominion and exclusive control of the trustee. Funds received from collections of the applicable storm recovery charges will be deposited into the collection account. The collection account for each series of storm recovery bonds will be divided into the following subaccounts, which need not be separate bank accounts:

•: the general subaccount,
•: the capital subaccount,
•: the excess funds subaccount, and
•: one or more tranche subaccounts with respect to floating rate storm recovery bonds, if any.

Unless otherwise provided in the indenture, amounts in the collection account for each series of storm recovery bonds not allocated to any other subaccount by the servicer will be allocated to the general subaccount. Unless the context indicates otherwise, references in this prospectus and the prospectus supplement to the collection account for any series of storm recovery bonds include all of the subaccounts contained therein. All monies deposited from time to time in the collection account, all deposits therein pursuant to the indenture, and all investments made in eligible investments with these monies will be held by the trustee in the collection account as part of the collateral. The following institutions are eligible institutions for the establishment of the collection account:

•

the corporate trust department of the trustee so long as any of the securities of the trustee are rated investment grade by each rating agency specified in the indenture, or

•

the trust department of a depository institution organized under the laws of the United States of America or any state or domestic branch of a foreign bank:

•

whose deposits insured by the Federal Deposit Insurance Corporation, and has either:

•: with respect to specified investments having a maturity of greater than one month, a long-term unsecured debt rating of "AA-" by S&P and "A2" by Moody's and, if applicable, the equivalent of the lower of those two ratings by Fitch, or
•: with respect to specified investments having a maturity of one month or less, a certificate of deposit rating of "A-1+" by S&P and "P-1" by Moody's and, if applicable, the equivalent of the lower of those two ratings by Fitch, or any other long-term, short-term or certificate of deposit rating acceptable to the rating agencies.

Appropriate Investments for Funds in the Collection Account. So long as no default or event of default has occurred and is continuing, all or a portion of the funds in the collection account for each series of storm recovery bonds must be invested by the trustee in accordance with the written direction of the servicer in any of the following, each of which is referred to as an eligible investment:

1.: direct obligations of, and obligations fully and unconditionally guaranteed as to timely payment by, the United States of America,
2.: demand deposits, time deposits or certificates of deposit of any depository institution or trust company incorporated under the laws of the United States of America or any state thereof, or any domestic branch of a foreign bank, and subject to supervision and examination by federal or state banking or depository institution authorities; provided, however, that at the time of the investment or contractual commitment to invest therein, the commercial paper or other short-term unsecured debt obligations, other than any obligations thereof where the rating is based on the credit of a person other than such depository institution or trust company, shall have either (A) a long-term unsecured debt rating from Moody's, S&P and, if Fitch provides a rating thereon, Fitch of at least "Aa3", "AA" and "AA", respectively, or (B) a certificate of deposit rating by Moody's and S&P of at least "P-1" and "A-1+", respectively, and, if Fitch provides a rating thereon, "F-1+" by Fitch,
3.: commercial paper or other short-term obligations of any corporation (other than Cleco Power, Cleco Corporation or any of their affiliates), whose ratings, at the time of the investment or contractual commitment to invest therein, from Moody's and S&P of at least "P-1" and "A-1+", respectively and, if Fitch provides a rating thereon, "F-1+" by Fitch,
4.: investments in money market funds having a rating from Moody's, S&P and if Fitch provides a rating thereon, Fitch, of "Aaa", "AAA" and "AAA", respectively, including funds for which the trustee or any of its affiliates act as investment manager or advisor,

5.

bankers' acceptances issued by any depository institution or trust company referred to in clause 2 above,

6.

repurchase obligations with respect to any security that is a direct obligation of, or fully guaranteed by, the United States of America or any agency or instrumentality thereof the obligations of which are backed by the full faith and credit of the United States of America, in either case entered into with a depository institution or trust company, acting as principal, described in clause 2 above,

7.

repurchase obligations with respect to any security or whole loan entered into with:

a.: a depository institution or trust company, acting as principal, described in clause 2 above,
b.: a broker/ dealer, acting as principal, registered as a broker or dealer under Section 15 of the Securities Exchange Act of 1934 the unsecured short-term debt obligations of which are rated at least "P-1" by Moody's, "A-1+" by S&P and, if Fitch provides a rating thereon, "F-1+" by Fitch at the time of entering into this repurchase obligation, or
c.: an unrated broker/ dealer, acting as principal, that is a wholly owned subsidiary of a nonbank or bank holding company the unsecured short-term debt obligations of which are rated at least "P-1" by Moody's and at least "A-1+" by S&P and, if Fitch provides a rating thereon, "F-1+" by Fitch at the time of purchase so long as the obligations of such unrated broker/dealer are unconditionally guaranteed by such non-bank or bank holding company, or

8.

any other investment permitted by each of the rating agencies;

provided, however, that:

a.: any book-entry security, instrument or security having a maturity of one month or less that would be an eligible investment but for its failure, or the failure of the obligor thereon, to have the rating specified above shall be an eligible investment if such book-entry security, instrument or security, or the obligor thereon, has an unsecured short-term debt rating of at least "P-1" by Moody's, at least "A-1+" by S&P and, if Fitch provides a rating thereon, "F-1+" by Fitch, and
b.: any book-entry security, instrument or security having a maturity of greater than one month that would be an eligible investment but for its failure, or the failure of the obligor thereon, to have the rating specified above shall be an eligible investment if such book-entry security, instrument or security, or the obligor thereon, has an unsecured long-term debt rating of at least "AA-" by S&P or "Aa3" by Moody's (and, if Fitch provides a rating thereon, "AA-" by Fitch and an unsecured short-term debt rating of at least "P-1" by Moody's or the equivalent thereof by S&P (and Fitch, if Fitch provides a rating thereon),

provided, that unless otherwise permitted by the applicable rating agencies, upon the failure of any Eligible Institution to maintain any applicable rating set forth in this definition or the definition of Eligible Institution, the related investments at that institution shall be reinvested in Eligible Investments at a successor Eligible Institution within 10 days.

These eligible investments may not:

•: mature later than the next payment date, or
•: be sold, liquidated or otherwise disposed of at a loss prior to the maturity thereof.

No moneys held in the collection account may be invested, and no investment held in the collection account may be sold, unless the security interest granted and perfected in the collection

account will continue to be perfected in the investment or the proceeds of the sale in either case without any further action by any person.

Remittances to the Collection Account. On each remittance date, the servicer will remit all collected storm recovery charges, any indemnity amounts and any other proceeds of the trust estate securing that series to the trustee for deposit in the related collection account. Indemnity amount means any amount paid by the servicer or Cleco Power to the trustee, for the trustee or on behalf of the storm recovery bondholders, in respect of indemnification obligations pursuant to the applicable servicing agreement or sale agreement. Please read "The Servicing Agreement" and "The Sale Agreement" in this prospectus. To the extent that the combined amounts remitted by a Cleco Power customer are insufficient to satisfy amounts owed in respect of storm recovery charges relating to the storm recovery bonds or any other bonds being serviced by the servicer or for electricity service (other than late fees), the remitted amounts will be allocated pro rata among such storm recovery charges and electricity charges.

General Subaccount. Collected storm recovery charges and any indemnity amounts remitted to the trustee will be deposited into the general subaccount. On each payment date, the trustee will allocate amounts in the general subaccount among the other subaccounts as described under "—How Funds in the Collection Account Will Be Allocated." Amounts in the general subaccount will be invested in the eligible investments described above.

Capital Subaccount. Upon the issuance of each series of the storm recovery bonds, Cleco Power will make a capital contribution to us in an amount stated in the prospectus supplement. We will pay this amount to the trustee for deposit into the capital subaccount which will be invested in eligible investments by the trustee in accordance with the written direction of the servicer. The trustee will draw on amounts in the capital subaccount to the extent that, in allocating funds in accordance with clauses 1 through 9 in "—How Funds in the Collection Account Will Be Allocated," below, amounts on deposit in the general subaccount and, the excess funds subaccount are insufficient to make scheduled payments on the storm recovery bonds and payments of fees and expenses specified in clauses 1 through 9. The trustee will allocate collected storm recovery charges available on any payment date that are not necessary to pay amounts described in clauses 1 through 9 in "—How Funds in the Collection Account Will Be Allocated," below, to the capital subaccount in an amount sufficient to replenish any amounts drawn from the capital subaccount (other than distributed investment earnings on the capital subaccount) and any shortfall of investment earnings on the capital subaccount. On each payment date, any excess investment earnings on the capital subaccount above the allowed rate of return shall be allocated to the excess funds subaccount. If any series of the storm recovery bonds has been retired as of any payment date, the amounts on deposit in the capital subaccount allocable to that series will be released to us, free of the lien of the indenture.

Excess Funds Subaccount. The trustee will allocate collected storm recovery charges available on any payment date that are not necessary to pay clauses 1 through 10 in "—How Funds in the Collection Account Will Be Allocated," below, to the excess funds subaccount. The trustee will invest amounts in the excess funds subaccount in eligible investments in accordance with the written direction of the servicer. On each payment date, the trustee will draw on the excess funds subaccount in allocating funds in accordance with clauses 1 through 10 in "—How Funds in the Collection Account Will Be Allocated," below, to the extent that amounts on deposit in the general subaccount are insufficient to make scheduled payments on the storm recovery bonds and payments of fees and expenses specified in clauses 1 through 10.

Tranche Subaccount. If specified in the prospectus supplement, upon the issuance of a specified tranche of floating rate storm recovery bonds, a tranche subaccount will be established with respect to that tranche. On or before each payment date, a fixed amount specified in the prospectus supplement will be allocated to that tranche subaccount from the general subaccount and payments to and from

any swap counterparty pursuant to the related interest rate swap agreement will be made from or allocated to, as applicable, that tranche subaccount or (in the case of termination payments) from another subaccount as described in the prospectus supplement. On or before each payment date, amounts on deposit in the tranche subaccount will be applied to make payments with respect to the related tranche, as specified in the prospectus supplement.

How Funds in the Collection Account Will Be Allocated

Amounts remitted by the servicer to the trustee with respect to a series of storm recovery bonds, including any amounts received by us relating to the indemnification obligations payable by the seller pursuant to the sale agreement or the servicer pursuant to the servicing agreement and all investment earnings on amounts in the general subaccount of the collection account will be deposited into the general subaccount. Investment earnings on amounts in the capital subaccount (other than excess investment earnings that are allocated to the excess funds subaccount) and the excess funds subaccount will be deposited into the capital subaccount and the excess funds subaccount, respectively. Unless otherwise specified in the prospectus supplement, on each payment date or other date specified in the prospectus supplement with respect to a particular tranche or series, the trustee will allocate or pay all amounts on deposit in the general subaccount of the collection account for that series in the following priority:

1.: payment of a pro rata portion of the trustee's fees, plus expenses and any outstanding indemnity amounts relating to that series of storm recovery bonds not to exceed a specified amount in any 12-month period, which amount will be fixed in the indenture or the supplemental indenture governing that series of storm recovery bonds,
2.: payment of a pro rata portion of the servicing fee relating to that series of storm recovery bonds, which will be a fixed amount specified in the servicing agreement for that series of storm recovery bonds, plus any unpaid servicing fees relating to that series of storm recovery bonds from prior payment dates,
3.: payment of a pro rata portion of the administration fee, which will be a fixed amount specified in the administration agreement between us and Cleco Power, and a pro rata portion of the fees of our independent manager, which will be in an amount specified in an agreement between us and our independent manager,
4.: payment of all of our other ordinary periodic operating expenses relating to that series of storm recovery bonds, such as accounting and audit fees, rating agency fees, legal fees, certain reimbursable costs of the servicer under the applicable servicing agreement,
5.: payment of the interest then due on that series of storm recovery bonds, and payment of amounts, if any, specified in the prospectus supplement that are payable in respect of interest to the swap counterparty under any interest rate swap agreement,
6.: payment of the principal then required to be paid on that series of storm recovery bonds at final maturity or upon redemption or acceleration upon an event of default,
7.: payment of the principal then scheduled to be paid on that series of storm recovery bonds, including any previously unpaid scheduled principal,
8.: payment of any amounts payable to any other credit enhancement providers with respect to that series of storm recovery bonds,
9.: payment of any of our remaining unpaid operating expenses and any remaining amounts owed pursuant to the basic documents relating to that series of storm recovery bonds, including all remaining amounts owed to the trustee,

10.: replenishment of any amounts drawn from the capital subaccount for that series of storm recovery bonds (other than distributed investment earnings on the capital subaccount for such series), plus any deficiency in the amount of investment earnings on the capital subaccount of such series allowed under the financing order that have not previously been distributed to us,
11.: if the balance in the capital subaccount for that series of storm recovery bonds is greater than the initial balance of the capital subaccount for that series of storm recovery bonds after making the foregoing allocations, an amount of investment earnings on the capital subaccount not to exceed a percentage per annum set forth in the prospectus supplement for such series shall be paid to us; provided that no event of default has occurred and is continuing and that the balance of the capital subaccount for that series of storm recovery bonds is not reduced below the initial balance of the capital subaccount for such series,
12.: allocation of the remainder, if any, to the excess funds subaccount for that series of storm recovery bonds, and
13.: after that series of storm recovery bonds have been paid in full and discharged, the balance, together with all amounts in the capital subaccount and the excess funds subaccount for that series of storm recovery bonds, released to us free and clear of the lien of the indenture.

Interest means, for any payment date for any series or tranche of the storm recovery bonds, the sum, without duplication, of:

•: an amount equal to the interest accrued on that series or tranche at the applicable interest rate from the prior payment date or, with respect to the first payment date, the amount of interest accrued since the issuance date, with respect to that series or tranche,
•: any unpaid interest plus, to the fullest extent permitted by law, any interest accrued on this unpaid interest,
•: if the storm recovery bonds have been declared due and payable, all accrued and unpaid interest thereon, and
•: with respect to a series or tranche to be redeemed prior to the next payment date, the amount of interest that will be payable as interest on such series or tranche upon such redemption.

Principal means, with respect to any payment date and any series or tranche of the storm recovery bonds, the sum, without duplication, of:

•: the amount of principal due as a result of the occurrence and continuance of an event of default and acceleration of the storm recovery bonds,
•: the amount of principal due on the final maturity date of any series or tranche,
•: the amount of principal and premium, if any, due as a result of a redemption of the storm recovery bonds prior to such payment date pursuant to the indenture,
•: any unpaid and previously scheduled payments of principal and overdue payments of principal, and
•: the amount of principal scheduled to be paid on such payment date in accordance with the expected sinking fund schedule.

If on any payment date funds in the general subaccount are insufficient to make the allocations or payments contemplated by clauses 1 through 10 of the first paragraph of this subsection with respect to

a series of storm recovery bonds, the trustee will draw from amounts on deposit in the following subaccounts in the following order up to the amount of the shortfall:

1.: from the excess funds subaccount for allocations and payments contemplated in clauses 1 through 10, and
2.: from the capital subaccount for allocations and payments contemplated by clauses 1 through 9.

If, on any payment date, available collections of storm recovery charges allocable to a series of storm recovery bonds, together with available amounts in the related subaccounts, are not sufficient to pay interest due on all outstanding storm recovery bonds of that series on that payment date, amounts available will be allocated pro rata based on the amount of interest payable on each tranche in that series. If, on any payment date, remaining collections of storm recovery charges allocable to a series of storm recovery bonds, together with available amounts in the subaccounts, are not sufficient to pay principal due and payable on all outstanding storm recovery bonds of that series on that payment date, amounts available will be allocated pro rata based on the principal amount of each tranche then due and payable. If, on any payment date, remaining collections of storm recovery charges allocable to a series of storm recovery bonds, together with available amounts in the subaccounts, are not sufficient to pay principal scheduled to be paid on all outstanding storm recovery bonds of that series, amounts available will be allocated pro rata based on the principal amounts of each tranche then scheduled to be paid on the payment date. If the trustee uses amounts on deposit in the capital subaccount to pay those amounts or make those transfers, as the case may be, subsequent adjustments to the storm recovery charges related to that series or tranche will take into account, among other things, the need to replenish those amounts (plus any deficiency in the amount of investment earnings on the capital subaccount allowed by the financing order).

Reports to Holders of the Storm Recovery Bonds

With respect to each series of the storm recovery bonds, on each payment date, the trustee shall make the semiannual servicer's certificate available to each storm recovery bondholder on its website www.usbank.com/abs and will deliver such semiannual servicer's certificate to the Louisiana commission and to the rating agencies. This certificate will include, to the extent applicable, the following information, as well as any other information so specified in the applicable supplemental indenture, as to the storm recovery bonds of that series with respect to that payment date or the period since the previous payment date, as applicable:

•: the amount to be paid to storm recovery bondholders of that series and the related tranches in respect of principal,
•: the amount to be paid to storm recovery bondholders of that series and the related tranches in respect of interest,
•: the storm recovery bond balance and the projected storm recovery bond balance of that series and the related tranches as of that payment date,
•: the amount on deposit in the capital subaccount for that series as of that payment date,
•: the amount, if any, on deposit in the excess funds subaccount for that series as of that payment date,
•: the amount to be paid to the trustee relating to that series on that payment date,
•: the amount to be paid to the servicer relating to that series on that payment date, and
•: any other transfers and payments relating to that series made pursuant to the indenture.

Website

We will, to the extent permitted by and consistent with the issuing entity's obligations under applicable law, cause to be posted on the website associated with Cleco Power:

•: the final prospectus for the storm recovery bonds,

•: a statement of storm recovery charge remittances made to the trustee during the prior interest payment period,
•: a statement reporting the balances in the collection account and in each subaccount of the collection account as of the most recent interest payment date,
•: a statement showing the balance of outstanding storm recovery bonds that reflects the actual periodic payments made on the storm recovery bonds versus the expected periodic payments,
•: the semi-annual servicer's certificate delivered for the storm recovery bonds pursuant to the servicing agreement,
•: any reports and other information that we are required to file with the SEC under the Securities Exchange Act of 1934, and
•: a current organization chart for the Issuer and the Servicer (unless the Servicer is not related to the Issuer, in which case the Servicer shall post two separate organization charts), in each case disclosing the parent company and material subsidiaries of the Issuer and the Servicer.

We and the Trustee May Modify the Indenture

Modifications of the Indenture That Do Not Require Consent of Storm Recovery Bondholders. Without the consent of any of the holders of the outstanding storm recovery bonds but with prior notice to the rating agencies and, with respect to amendments that would increase ongoing financing costs, with the consent or deemed consent of the Louisiana commission (other than with respect to the supplemental indenture establishing the initial series of storm recovery bonds), we and the trustee may execute a supplemental indenture for any of the following purposes:

•

to correct or amplify the description of the collateral, or to better assure, convey and confirm unto the trustee the collateral, or to subject additional property to the lien of the indenture,

•

to evidence the succession, in compliance with the applicable provisions of the indenture, of another entity to us, and the assumption by any applicable successor of our covenants contained in the indenture and in the storm recovery bonds,

•

to add to our covenants, for the benefit of the holders of the storm recovery bonds, or to surrender any right or power therein conferred upon us,

•

to convey, transfer, assign, mortgage or pledge any property to the trustee, for the benefit of the holders of the storm recovery bonds and the trustee,

•

to cure any ambiguity, to correct or supplement any provision of the indenture or in any supplemental indenture which may be inconsistent with any other provision of the indenture or in any supplemental indenture, to make any other provisions with respect to matters or questions arising under the indenture or in any supplemental indenture, to change in any manner or eliminate any provisions of the indenture or to modify in any manner the rights of the storm recovery bondholders under the indenture; provided, however, that:

•: this action shall not adversely affect in any material respect the interests of any storm recovery bondholder, and
•: the rating agency condition shall have been satisfied with respect thereto,

•

to evidence and provide for the acceptance of the appointment under the indenture by a successor trustee with respect to the storm recovery bonds and to add to or change any of the provisions of the indenture as shall be necessary to facilitate the administration of the trust estate under the indenture by more than one trustee, pursuant to the requirements specified in the indenture,

•

to qualify the storm recovery bonds for registration with a clearing agency,

•: to modify, eliminate or add to the provisions of the indenture to the extent necessary to effect the qualification of the indenture under the Trust Indenture Act or under any similar federal statute hereafter enacted and to add to the indenture any other provisions as may be expressly required by the Trust Indenture Act,
•: to set forth the terms of any series that has not theretofore been authorized by a supplemental indenture, or
•: to satisfy any rating agency requirements.

Additional Modifications to the Indenture That Do Not Require the Consent of Storm Recovery Bondholders. We may also, without the consent of any of the storm recovery bondholders but, with respect to amendments that would increase ongoing financing costs, with the consent or deemed consent of the Louisiana commission, execute one or more other agreements supplemental to the indenture as long as:

•: the supplemental agreement does not adversely affect in any material respect the interests of any storm recovery bondholder, and
•: the rating agency condition shall have been satisfied with respect thereto.

Modifications to the Indenture That Require the Approval of the Storm Recovery Bondholders. We and the trustee also may, with the consent of the holders of not less than a majority of the outstanding amount of the storm recovery bonds of each series or tranche to be affected by the supplemental indenture and, with respect to amendments that would increase ongoing financing costs, with the consent or deemed consent of the Louisiana commission, execute a supplemental indenture to add any provisions to, or change in any manner or eliminate any of the provisions of, the indenture or modify in any manner the rights of the storm recovery bondholders under the indenture. However, the supplemental indenture may not, without the consent of the holder of each outstanding storm recovery bond of each series or tranche affected thereby:

•: change the date of payment of any installment of principal of or premium, if any, or interest on any storm recovery bond of such series or tranche, or reduce the principal amount thereof, the bond rate or interest rate thereon or the redemption price or the premium, if any, with respect thereto,
•: change the provisions of the indenture and the related applicable supplemental indenture relating to the application of collections on, or the proceeds of the sale of, the collateral to payment of principal of or premium, if any, or interest on the storm recovery bonds of such series or tranche, or change the coin or currency in which any storm recovery bond or any interest thereon is payable,
•: impair the right to institute suit for the enforcement of those provisions of the indenture specified therein regarding payment, reduce the percentage of the aggregate amount of the outstanding storm recovery bonds, or of a series or tranche thereof, the consent of the storm recovery bondholders of which is required for any supplemental indenture, or the consent of the storm recovery bondholders of which is required for any waiver of compliance with those provisions of the indenture specified therein or of defaults specified therein and their consequences provided for in the indenture or modify or alter the provisions of the proviso to the definition of the term "outstanding,"
•: reduce the percentage of the outstanding amount of the storm recovery bonds of such series or tranche required to direct the trustee to direct us to sell or liquidate the collateral,
•: modify any provision of the section of the indenture relating to the consent of storm recovery bondholders of such series or tranche with respect to supplemental indentures, except to increase any percentage specified therein or to provide that those provisions of the indenture or

the basic documents specified in the indenture cannot be modified or waived without the consent of each outstanding storm recovery bondholder affected thereby,

•: modify any of the provisions of the indenture in a manner so as to affect the amount of any payment of interest, principal or premium, if any, payable on any storm recovery bond of such series or tranche on any payment date, expected amortization schedules, series final maturity dates or tranche final maturity dates of any storm recovery bonds of such series or tranche,
•: decrease the required capital amount with respect to such series, modify or alter the provisions of the indenture regarding the voting of the storm recovery bonds held by us, Cleco Power, an affiliate of either of them or any obligor on the storm recovery bonds of such series,
•: decrease the percentage of the aggregate principal amount of the storm recovery bonds of such series or tranche required to amend the sections of the indenture which specify the applicable percentage of the aggregate principal amount of the storm recovery bonds necessary to amend the indenture or other related agreements specified therein, or
•: permit the creation of any lien ranking prior to or on a parity with the lien of the indenture with respect to any of the collateral for the storm recovery bonds of such series or tranche or, except as otherwise permitted or contemplated in the indenture, terminate the lien of the indenture on any property at any time subject thereto or deprive the holder of any storm recovery bond of the security provided by the lien of the indenture.

Enforcement of the Sale Agreement, the Administration Agreement and the Servicing Agreement. The indenture provides that we will take all lawful actions to enforce our rights under the sale agreement, the administration agreement and the servicing agreement applicable to each series of storm recovery bonds. The indenture also provides that we will take all lawful actions to compel or secure the performance and observance by Cleco Power, the administrator and the servicer of their respective obligations to us under or in connection with the sale agreement, the administration agreement and the servicing agreement applicable to each series of storm recovery bonds. So long as no event of default occurs and is continuing, we may exercise any and all rights, remedies, powers and privileges lawfully available to us under or in connection with the sale agreement, the administration agreement and the servicing agreement applicable to each series of storm recovery bonds; provided that such action shall not adversely affect the interests of the storm recovery bondholders in any material respect. However, if we or the servicer propose to amend, modify, waive, supplement, terminate or surrender in any material respect, or agree to any material amendment, modification, supplement, termination, waiver or surrender of, the process for adjusting the storm recovery charges, we must notify the trustee and the Louisiana commission in writing and the trustee must notify the storm recovery bondholders of this proposal. In addition, the trustee may consent to this proposal only with the written consent of the holders of a majority of the principal amount of the outstanding storm recovery bonds of the series or tranches materially and adversely affected thereby and only if the rating agency condition is satisfied. In addition, any proposed amendment of the indenture, the sale agreement or the servicing agreement that would increase ongoing financing costs requires the prior written consent or deemed consent of the Louisiana commission.

If an event of default occurs and is continuing, the trustee may, and, at the written direction of the holders of a majority of the outstanding amount of the storm recovery bonds of all affected series shall, exercise all of our rights, remedies, powers, privileges and claims against Cleco Power, the administrator and servicer, under or in connection with the related sale agreements, administration agreements and servicing agreements, and any right of ours to take this action shall be suspended.

Modifications to the Sale Agreement, the Administration Agreement and the Servicing Agreement. With the prior written consent of the trustee, the sale agreement, the administration agreement and the servicing agreement, in each case relating to a particular series of storm recovery bonds, may be amended, so long as the rating agency condition is satisfied in connection therewith, at any time and

from time to time, without the consent of the storm recovery bondholders of the related series but, with respect to amendments that would increase ongoing financing costs, with the consent or deemed consent of the Louisiana commission. However, any such amendment may not adversely affect the interest of any storm recovery bondholder in any material respect without the consent of the holders of a majority of the outstanding principal amount of the storm recovery bonds of the affected series.

Notification of the Rating Agencies, the Louisiana commission, the Trustee and the Storm Recovery Bondholders of any Modification.

If we, Cleco Power or the servicer or any other party to the applicable agreement:

•: proposes to amend, modify, waive, supplement, terminate or surrender, or agree to any other amendment, modification, waiver, supplement, termination or surrender of, the terms of the sale agreement or the servicing agreement, or
•: waives timely performance or observance by Cleco Power or the servicer under the sale agreement or the servicing agreement,

in each case in a way which would materially and adversely affect the interests of storm recovery bondholders, we must first notify the rating agencies of the proposed action. Upon receiving notification that the rating agency condition has been satisfied, we must thereafter notify the trustee, the paying agent, the storm recovery bond registrar and the Louisiana commission in writing and the trustee shall notify the storm recovery bondholders of the proposed action and whether the rating agency condition has been satisfied with respect thereto. The trustee will consent to this proposed amendment, modification, supplement or waiver only with the written consent of the holders of a majority of the outstanding principal amount of the storm recovery bonds of the series or tranches materially and adversely affected thereby and, if such action would increase ongoing financing costs, the consent of the Louisiana commission.

What Constitutes an Event of Default on the Storm Recovery Bonds

An event of default with respect to a series of storm recovery bonds is defined in the indenture as being:

1.: a default in the payment of any interest on any storm recovery bond of that series when the same becomes due and payable and the continuation of this default for five business days,
2.: a default in the payment of the then unpaid principal of any storm recovery bond of that series on the final maturity date for that series or, if applicable, any tranche on the final maturity date for that tranche,
3.: a default in the payment of the redemption price for any storm recovery bond of that series on the redemption date therefor,
4.: a default in the observance or performance of any of our covenants or agreements made in the indenture, other than those specifically dealt with in clause 1, 2 or 3 above, or any of our covenants or agreements made in any credit enhancement agreement permitted under the indenture or any supplemental indenture or any of our representations or warranties made in the indenture or any supplemental indenture or in any certificate or other writing delivered pursuant to the indenture or in connection with the indenture proving to have been incorrect in any material respect as of the time when made (other than a covenant, agreement or representation or warranty expressly included in the indenture or in any supplemental indenture solely for the benefit of a different series of storm recovery bonds), and this default continues or is not cured for a period of 30 days after the earlier of (a) written notice of the default is given to us by the trustee or to us and the trustee by the holders of at least 25% of the outstanding principal amount of the storm recovery bonds of the affected series or (b) the date we have actual notice of the default,

5.: the filing of a decree or order for relief by a court having jurisdiction in respect of us or any substantial part of the collateral securing that series in an involuntary case or proceeding under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of us or our property or for any substantial part of the collateral securing that series, or ordering the winding-up or liquidation of our affairs, and such decree or order remains unstayed and in effect for a period of 90 consecutive days,
6.: the commencement by us of a voluntary case or proceeding under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by us to the entry of an order for relief in an involuntary case under any such law, or the consent by us to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of us or our property for any substantial part of the collateral securing that series, or the making by us of any general assignment for the benefit of creditors, or the failure by us generally to pay our debts as such debts become due, or the taking of action by us in furtherance of any of the foregoing,
7.: any act or failure to act by the State of Louisiana or any of its agencies (including the Louisiana commission), officers or employees that violates or is not in accordance with the pledge of the State of Louisiana in Section 1234 of the Securitization Act or the pledge of the Louisiana commission in the financing order including, without limitation, the failure of the Louisiana commission to implement the true-up mechanism, or
8.: any other event designated as an event of default in the related series supplement.

Remedies Available Following an Event of Default. If an event of default with respect to a series of storm recovery bonds, other than event number 7 above, occurs and is continuing, the trustee or holders holding not less than a majority in principal amount of the storm recovery bonds of that series may declare the unpaid principal balance of that series of storm recovery bonds, together with accrued interest, to be immediately due and payable. This declaration may, under the circumstances specified therein, be rescinded by the holders of a majority in principal amount of that series of the storm recovery bonds. The nature of our business will result in payment of principal upon such a declaration being made as funds become available. Please read "Risk Factors—Risks Associated with the Unusual Nature of the Storm Recovery Property— Foreclosure of the secured parties' lien on the storm recovery property for a series of storm recovery bonds might not be practical, and acceleration of the storm recovery bonds of such series before maturity might have little practical effect" and "—You may experience material payment delays or incur a loss on your investment in the storm recovery bonds because the source of funds for payment is limited."

In addition to acceleration of the storm recovery bonds described above, the trustee may, and upon the written direction of the holders of a majority in principal amount of the storm recovery bonds of the series with respect to which a default has occurred, shall, exercise one or more of the following remedies upon an event of default (other than event number 7 above):

•: the trustee may institute proceedings in its own name and as trustee of an express trust for the collection of all amounts then payable on the storm recovery bonds or under the indenture with respect to the storm recovery bonds, whether by declaration or otherwise, enforce any judgment obtained, and collect from us or the servicer moneys adjudged due,
•: the trustee may institute proceedings from time to time for the complete or partial foreclosure of the indenture with respect to the collateral securing that series,
•: the trustee may exercise any remedies of a secured party under the Uniform Commercial Code or the Securitization Act or any other applicable law and take any other appropriate action to protect and enforce the rights and remedies of the trustee and the storm recovery bondholders,

•: the trustee may sell the collateral securing that series or any portion thereof or rights or interest therein, at one or more public or private sales called and conducted in any manner permitted by law provided that certain conditions set forth in the indenture are met, and
•: the trustee may exercise all of our rights, remedies, powers, privileges and claims against the seller, administrator and the servicer under or in connection with the administration agreement or the applicable sale agreement or servicing agreement.

If event of default number 7 above occurs, the trustee may to the extent allowed by law institute or participate in proceedings reasonably necessary to compel performance of or to enforce the pledge of either the State of Louisiana or the Louisiana commission and to collect any monetary damages incurred by the storm recovery bondholders or the trustee as a result of such event of default. This is the only remedy the trustee may exercise if this event of default has occurred.

When the Trustee Can Sell the Collateral. If a series of storm recovery bonds has been declared to be due and payable following an event of default, the trustee may, at the written direction of the holders of a majority in principal amount of the storm recovery bonds of such affected series, either:

•: subject to the paragraph immediately below, sell the collateral securing such series,
•: elect to have us maintain possession of the collateral securing such series, or
•: take such other remedial action as the trustee, at the written direction of the holders of a majority in principal amount of the storm recovery bonds of such series then outstanding and declared to have been due and payable, may direct and continue to apply distributions on the collateral securing such series as if there had been no declaration of acceleration.

The trustee is prohibited from selling the collateral securing such series of storm recovery bonds following an event of default unless the final payment date of the storm recovery bonds of such series has occurred or the storm recovery bonds have been declared due and payable and:

•: the holders of 100% of the principal amount of such series of the storm recovery bonds consent to the sale,
•: the proceeds of the sale or liquidation are sufficient to pay in full the principal of and premium, if any, and accrued interest on the outstanding storm recovery bonds of such series, or
•: the trustee determines that funds provided by the collateral securing such series would not be sufficient on an ongoing basis to make all payments on the storm recovery bonds of such series as these payments would have become due if the storm recovery bonds of such series had not been declared due and payable, and the trustee obtains the written consent of the holders of 66²/3% of the aggregate outstanding principal amount of the storm recovery bonds of such series.

Right of Storm Recovery Bondholders to Direct Proceedings. Subject to the provisions for indemnification and the limitations contained in the indenture, the holders of a majority in principal amount of the outstanding storm recovery bonds of the affected series, tranche or tranches will have the right to direct the time, method and place of conducting any proceeding or any remedy available to the trustee or exercising any trust or power conferred on the trustee; provided that, among other things:

•: this direction does not conflict with any rule of law or with the indenture,
•: any direction to the trustee to sell or liquidate the collateral shall be by the holders of the storm recovery bonds representing not less than 100% of the outstanding storm recovery bonds,
•: so long as the conditions specified in the indenture have been satisfied and the trustee elects to retain the collateral securing the affected series pursuant to the indenture and elects not to sell or liquidate that collateral, any direction to the trustee to sell or liquidate the collateral securing

the affected series by the holders representing not less than 100% of the outstanding amount of the storm recovery bonds of all series, shall be of no force and effect, and

•: the trustee may take any other action deemed proper by the trustee that is not inconsistent with this direction.

However, in case an event of default occurs and is continuing, the trustee will be under no obligation to exercise any of the rights or powers under the indenture at the request or direction of any of the holders of the storm recovery bonds of any series if:

•: it reasonably believes it will not be indemnified to its reasonable satisfaction against the costs, expenses and liabilities which might be incurred by it in complying with this request, or
•: it determines that this action might materially adversely affect the rights of any storm recovery bondholder not consenting to the action.

Waiver of Default. Prior to acceleration of the maturity of the storm recovery bonds or any tranche thereof, the holders of a majority in principal amount of the storm recovery bonds of a series or affected tranche may, subject to certain conditions specified in the indenture, waive any default with respect to the storm recovery bonds or such affected tranche. However, they may not waive a default in the payment of principal of or premium, if any, or interest on any of the storm recovery bonds or a default in respect of a covenant or provision of the indenture that cannot be modified without the waiver or consent of all of the holders of the outstanding storm recovery bonds of all affected series and tranches.

Limitation of Proceedings. Under the indenture, no storm recovery bondholder of any series will have the right to institute any proceeding, judicial or otherwise, or to avail itself of the right to foreclose on the storm recovery property or otherwise enforce the lien in the storm recovery property pursuant to Section 1231 of the Securitization Act, unless:

•: the holder previously has given to the trustee written notice of a continuing event of default,
•: the holders of not less than a majority in principal amount of the outstanding storm recovery bonds of the affected series have made written request of the trustee to institute the proceeding in its own name as trustee,
•: the holder or holders have offered the trustee security or indemnity reasonably satisfactory to the trustee against the costs, expenses and liabilities to be incurred in complying with the request,
•: the trustee for 60 days after its receipt of the notice, request and offer of indemnity has failed to institute the proceeding, and
•: no direction inconsistent with this written request has been given to the trustee during the 60-day period referred to above by the holders of a majority in principal amount of the outstanding storm recovery bonds of the affected series.

In addition, each of the trustee, the storm recovery bondholders and the servicer will covenant that it will not, prior to the date that is one year and one day after the termination of the indenture, acquiesce, petition or otherwise invoke or cause us or any manager to invoke against us or against our managers or our member or members any bankruptcy, reorganization or other proceeding under any federal or state bankruptcy or similar law. By purchasing storm recovery bonds, each storm recovery bondholder will be deemed to have made this covenant.

Our Covenants

Consolidation, Merger or Sale of Assets. We will keep in effect our existence, rights and franchises as a limited liability company under Louisiana law, provided that we may consolidate with, merge into or convert into another entity or sell substantially all of our assets to another entity if:

•

the entity formed by or surviving the consolidation, merger or conversion or to whom substantially all of our assets are sold is organized under the laws of the United States or any state thereof and expressly assumes by a supplemental indenture the due and punctual payment of the principal of and premium, if any, and interest on all outstanding storm recovery bonds and the performance of our obligations under the indenture,

•

the entity formed by or surviving the consolidation, merger or conversion or to whom substantially all of our assets are sold expressly assumes all obligations and succeeds to all of our rights under the sale agreement, the administration agreement, the servicing agreement and any other basic document specified in the indenture to which we are a party (or under which we have rights) pursuant to an assignment and assumption agreement executed and delivered to the trustee,

•

no default or event of default will have occurred and be continuing immediately after giving effect to the merger, consolidation, conversion or sale,

•

prior notice will have been given to the rating agencies and the rating agency condition will have been satisfied with respect to the merger, consolidation, conversion or sale,

•

we have received an opinion of independent counsel to the effect that the merger, consolidation, conversion or sale:

•: will have no material adverse tax consequence to us or any storm recovery bondholder,
•: complies with the indenture and all conditions precedent therein provided relating to the merger, consolidation, conversion or sale, and
•: will result in the trustee maintaining a continuing valid first priority perfected security interest in the collateral,

•

none of the storm recovery property, the financing order or our rights under the Securitization Act or the financing order are impaired thereby, and

•

any action that is necessary to maintain the lien and security interest created by the indenture has been taken.

Additional Covenants. We will from time to time execute and deliver all documents, make all filings and take any other action necessary or advisable to, among other things, maintain and preserve the lien of the indenture and the priority thereof. We will not, among other things:

•: permit the validity or effectiveness of the indenture to be impaired or the lien to be amended, hypothecated, subordinated, terminated or discharged,
•: permit any person to be released from any covenants or obligations with respect to the storm recovery bonds except as expressly permitted by the indenture,
•: permit any lien, charge, claim, security interest, mortgage or other encumbrance, other than the lien of the indenture, to be created on or extend to or otherwise arise upon or burden the collateral or any part thereof or any interest therein or the proceeds thereof,
•: permit the lien of the indenture not to constitute a continuing valid first priority security interest in the collateral,

•: except as expressly permitted by the indenture, any supplemental indenture, the sale agreement or the servicing agreement, sell, transfer, exchange or otherwise dispose of any of the collateral unless directed to do so by the trustee in accordance with the indenture,
•: claim any credit on, or make any deduction from the principal or premium, if any, or interest payable in respect of, the storm recovery bonds, other than amounts properly withheld from such payments under the Internal Revenue Code of 1986, or assert any claim against any present or former storm recovery bondholder because of the payment of taxes levied or assessed upon us or any part of the collateral,
•: except as contemplated by the indenture, any supplemental indenture, any sale agreement, or any servicing agreement, enter into any swap, hedge or other financial arrangement or sell, transfer, exchange or otherwise dispose of any of the collateral unless directed to do so by the trustee in accordance with the indenture,
•: terminate our existence, dissolve or liquidate in whole or in part, except as otherwise permitted by the indenture,
•: take any action which is the subject of a rating agency condition if such action would result in a downgrade, or
•: elect to be classified as an association taxable as a corporation for federal income tax purposes or otherwise take any action inconsistent with our treatment for federal income tax purposes as a disregarded entity not separate from our sole owner.

We may not engage in any business other than purchasing and owning storm recovery property, issuing storm recovery bonds from time to time, pledging our interest in the collateral to the trustee under the indenture in order to secure the storm recovery bonds, and performing activities that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto.

We may not issue, incur, assume, guarantee or otherwise become liable, directly or indirectly, for any indebtedness except for the storm recovery bonds and any obligations under any credit enhancement for any series of the storm recovery bonds. Also, we may not guarantee or otherwise become contingently liable in connection with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire, or agree contingently to acquire, any stock, obligations, assets or securities of, or any other interest in, or make any capital contribution to, any other person, other than the eligible investments. We may not, except as contemplated by the indenture, the sale agreement, the servicing agreement and related documents, including our limited liability company operating agreement, make any loan or advance or credit to any person. We will not make any expenditure for capital assets or lease any capital asset other than the storm recovery property purchased from Cleco Power pursuant to, and in accordance with, any sale agreement. We may not make any payments, distributions or dividends to any member in respect of its membership interest except in accordance with the indenture.

The servicer will deliver to the trustee the annual accountant's report, compliance certificates and reports regarding distributions and other statements required by the servicing agreement. Please read "The Servicing Agreement" in this prospectus.

Access to the List of Storm Recovery Bondholders

Any storm recovery bondholder who has owned a storm recovery bond for at least six months may, by written request to the trustee, obtain access to the list of all storm recovery bondholders maintained by the trustee for the purpose of communicating with other storm recovery bondholders with respect to their rights under the indenture or the storm recovery bonds. In addition, a group of storm recovery bondholders each of whom has owned a storm recovery bond for at least six months may also obtain access to the list of all storm recovery bondholders for the same purpose. The trustee may elect not to afford the requesting storm recovery bondholders access to the list of storm recovery bondholders if it agrees to mail the desired communication or proxy, on behalf and at the expense of the requesting storm recovery bondholders, to all storm recovery bondholders.

We Must File an Annual Compliance Statement

We will deliver to the trustee, within 120 days after the end of each fiscal year, an officer's certificate (a copy of which we will deliver to each rating agency and the Louisiana commission) stating, as to the manager signing such officer's certificate, that:

(a) a review of the our activities during such year (or relevant portion thereof) and of performance under the indenture has been made under such manager's supervision; and

(b) to the best of such manager's knowledge, based on such review, we have complied with all conditions and covenants under the indenture throughout such fiscal year (or relevant portion thereof), or, if there has been a default in compliance with any such condition or covenant, describing each such default known to the manager and the nature and status thereof.

The Trustee Must Provide an Annual Report to All Storm Recovery Bondholders

If required by the Trust Indenture Act, the trustee will be required to mail each year to all storm recovery bondholders a brief report. This report may state, in accordance with the requirements of the Trust Indenture Act, among other items:

•: the trustee's eligibility and qualification to continue as the trustee under the indenture,
•: any amounts advanced by it under the indenture,
•: the amount, interest rate and maturity date of specific indebtedness owing by us to the trustee in the trustee's individual capacity,
•: the property and funds physically held by the trustee,
•: any additional issue of a series of the storm recovery bonds not previously reported, and
•: any action taken by it that materially affects the storm recovery bonds of any series and that has not been previously reported.

What Will Trigger Satisfaction and Discharge of the Indenture

The storm recovery bonds of any series, all moneys payable with respect to the storm recovery bonds of that series and the indenture as it applies to that series will cease to be of further effect and the lien of the indenture will be released with respect to that series, interest will cease to accrue on the storm recovery bonds of that series and the trustee, on our written demand and at our expense, will execute instruments acknowledging satisfaction and discharge of the indenture with respect to the storm recovery bonds of that series, when:

•: either all storm recovery bonds of that series which have already been authenticated or delivered, with certain exceptions set forth in the indenture, have been delivered to the trustee for cancellation or we have irrevocably deposited with the trustee cash, in trust for this purpose, in an amount sufficient to make payments of principal of and premium, if any, and interest on the storm recovery bonds of that series and to pay and discharge the entire indebtedness on those storm recovery bonds not previously delivered to the trustee,
•: we have paid or caused to be paid all other sums payable by us under the indenture with respect to the storm recovery bonds of that series, and
•: we have delivered to the trustee an officer's certificate, an opinion of counsel, and if required by the Trust Indenture Act or the trustee, a certificate from a firm of independent certified public accountants, each stating that there has been compliance with the conditions precedent in the indenture or relating to the satisfaction and discharge of the indenture with respect to the storm recovery bonds of that series.

Our Legal Defeasance and Covenant Defeasance Options

We may, at any time, terminate:

•: all of our obligations under the indenture with respect to the storm recovery bonds of any series, or
•: our obligations to comply with some of the covenants in the indenture, including some of the covenants described under "—Our Covenants."

The legal defeasance option is our right to terminate at any time our obligations under the indenture with respect to the storm recovery bonds of any series. The covenant defeasance option is our right at any time to terminate our obligations to comply with some of the covenants in the indenture. We may exercise the legal defeasance option with respect to any series of the storm recovery bonds notwithstanding our prior exercise of the covenant defeasance option with respect to that series. If we exercise the legal defeasance option with respect to any series, that series will be entitled to payment only from the funds or other obligations set aside under the indenture for payment thereof on the scheduled final payment date or redemption date therefor as described below. That series will not be subject to payment through redemption or acceleration prior to the scheduled final payment date or redemption date, as applicable. If we exercise the covenant defeasance option with respect to any series, the final payment of the storm recovery bonds of that series may not be accelerated because of an event of default relating to a default in the observance or performance of our covenants or as described in "—What Constitutes an Event of Default on the Storm Recovery Bonds" above.

We may exercise the legal defeasance option or the covenant defeasance option with respect to any series of the storm recovery bonds only if:

•

we irrevocably deposit or cause to be deposited in trust with the trustee cash or U.S. government obligations specified in the indenture for the payment of principal of and premium, if any, and interest on the storm recovery bonds of that series to the scheduled final payment date or redemption date therefor, as applicable, and all other amounts due and payable under the indenture, such deposit to be made in the defeasance subaccount for that series,

•

the deposit in the defeasance subaccount pursuant to the item above constitutes proceeds from a refunding of the storm recovery bonds;

•

we deliver to the trustee a certificate from a nationally recognized firm of independent accountants expressing its opinion that the payments of principal and interest on the U.S. government obligations when due and without reinvestment plus any cash deposited in the defeasance subaccount will provide cash at times and in sufficient amounts to pay in respect of the storm recovery bonds of that series:

•: principal in accordance with the expected sinking fund schedule therefor, and/or if that series is to be redeemed, the redemption price on the redemption date therefor, and
•: interest when due,

•

in the case of the legal defeasance option, 95 days pass after the deposit is made and during the 95-day period no default relating to events of our bankruptcy, insolvency, receivership or liquidation occurs and is continuing at the end of the period,

•

no default has occurred and is continuing on the day of this deposit and after giving effect thereto,

•

in the case of the legal defeasance option, we deliver to the trustee an opinion of counsel stating that:

•: we have received from, or there has been published by, the Internal Revenue Service a ruling, or
•: since the date of execution of the indenture, there has been a change in the applicable federal income tax law, and in either case confirming that the holders of the storm recovery bonds of that series will not recognize income, gain or loss for federal income tax purposes as a result of the exercise of the legal defeasance option and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the legal defeasance had not occurred,

•

in the case of the covenant defeasance option, we deliver to the trustee an opinion of counsel to the effect that the holders of the storm recovery bonds of that series will not recognize income, gain or loss for federal income tax purposes as a result of the exercise of the covenant defeasance option and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the covenant defeasance had not occurred,

•

we deliver to the trustee a certificate of one of our managers and an opinion of counsel, each stating that all conditions precedent to the legal defeasance option or the covenant defeasance option, as applicable, have been complied with as required by the indenture,

•

we deliver to the trustee an opinion of counsel to the effect that (a) in a case under the bankruptcy code in which Cleco Power (or any of its affiliates, other than us) is the debtor, the court would hold that the deposited cash or U.S. government obligations would not be in the bankruptcy estate of Cleco Power (or any of its affiliates, other than us, that deposited the cash or U.S. government obligations); and (b) in the event Cleco Power (or any of its affiliates, other than us, that deposited the cash or U.S. government obligations), were to be a debtor in a case under the bankruptcy code, the court would not disregard the separate legal existence of Cleco Power (or any of its affiliates, other than us, that deposited the cash or U.S. government obligations) and us so as to order substantive consolidation under the bankruptcy code of our assets and liabilities with the assets and liabilities of Cleco Power (or any of its affiliates, other than us, that deposited the cash or U.S. government obligations), and

•

each rating agency has notified us and the trustee that the exercise of the proposed defeasance option will not result in a downgrade or withdrawal of the then current rating of any then outstanding storm recovery bonds.

The Trustee

The trustee for each series of the storm recovery bonds will be named in the prospectus supplement. You will also find information relating to the Trustee's form of organization and a description of its prior experience as a trustee in the prospectus supplement. The trustee may resign at any time upon 30 days' notice by so notifying us. The holders of a majority in principal amount of the storm recovery bonds of all series then outstanding may remove the trustee by so notifying the trustee and us in writing and may appoint a successor trustee. We will remove the trustee by written notice if the trustee ceases to be eligible to continue in this capacity under the indenture, the trustee becomes a debtor in a bankruptcy proceeding or is adjudged insolvent, a receiver, administrator or other public officer takes charge of the trustee or its property or the trustee becomes incapable of acting. If the trustee resigns or is removed or a vacancy exists in the office of trustee for any reason, we will be obligated promptly to appoint a successor trustee eligible under the indenture. We are responsible, initially, for payment of the expenses associated with any such removal or resignation, but any such

expenses will be treated as an operating expense and paid out of the general subaccount on a payment date in accordance with the priority of payments set forth in "—How Funds in the Collection Account Will Be Allocated" in this prospectus. No resignation or removal of the trustee will become effective until acceptance of the appointment by a successor trustee. The trustee shall at all times satisfy the requirements of certain provisions of the Trust Indenture Act, as amended, and the Investment Company Act of 1940, as amended, and have a combined capital and surplus of at least $50 million and a long-term debt rating of "Baa3" or better by Moody's, BBB- or better by S&P and, if applicable, BBB- or better by Fitch. If the trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business or assets to, another entity, the resulting, surviving or transferee entity shall without any further action be the successor trustee. We and our affiliates may, from time to time, maintain various banking, investment banking and trust relationships with the trustee and its affiliates. Please read "The Sale Agreement" and "The Servicing Agreement" in this prospectus for further information.

The trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided that its conduct does not constitute willful misconduct, negligence or bad faith. We have agreed to indemnify the trustee and its officers, directors, employees and agents against any and all loss, liability or expense (including reasonable attorney's fees and expenses) incurred by it in connection with the administration of the trust and the performance of its duties under the indenture, provided that we are not required to pay any expense or indemnify against any loss, liability or expense incurred by the trustee through the trustee's own willful misconduct, negligence or bad faith. Please read "Prospectus Summary—Priority of Distributions" and "—How Funds in the Collection Account Will Be Allocated" in this prospectus for further information.

Governing Law

The indenture will be governed by the laws of the State of Louisiana, except for the trustee's obligations thereunder which will be governed under the laws of the State of New York.

WEIGHTED AVERAGE LIFE AND YIELD CONSIDERATIONS FOR THE STORM RECOVERY BONDS

The rate of principal payments, the amount of each interest payment and the actual final payment date of each series or tranche of the storm recovery bonds and the weighted average life thereof will depend primarily on the timing of receipt of collected storm recovery charges by the trustee and the true-up mechanism. The aggregate amount of collected storm recovery charges and the rate of principal amortization on the storm recovery bonds will depend, in part, on actual energy usage and energy demands, and the rate of delinquencies and write-offs. The storm recovery charges are required to be adjusted from time to time based in part on the actual rate of collected storm recovery charges. However, we can give no assurance that the servicer will be able to forecast accurately actual electricity usage and the rate of delinquencies and write-offs or implement adjustments to the storm recovery charges that will cause collected storm recovery charges to be received at any particular rate. Please read "Risk Factors—Servicing Risks," "—Other Risks Associated With an Investment in the Storm Recovery Bonds" and "Cleco Power's Financing Order—True-Ups" in this prospectus.

If the servicer receives storm recovery charges at a slower rate than expected, the storm recovery bonds may be retired later than expected. Except in the event of a redemption or the acceleration of the final payment date of the storm recovery bonds after an event of default, however, the storm recovery bonds will not be paid at a rate faster than that contemplated in the expected amortization schedule for each series or tranche of the storm recovery bonds even if the receipt of collected storm recovery charges is accelerated. Instead, receipts in excess of the amounts necessary to amortize the storm recovery bonds in accordance with the applicable expected amortization schedules, to pay interest and related fees and expenses and to fund subaccounts of the collection account will be allocated to the excess funds subaccount. Redemption of any tranche or series of the storm recovery bonds and acceleration of the final maturity date after an event of default in accordance with the terms thereof will result in payment of principal earlier than the related scheduled final payment dates. A payment on a date that is earlier than forecast might result in a shorter weighted average life, and a payment on a date that is later than forecast might result in a longer weighted average life. In addition, if a larger portion of the delayed payments on the storm recovery bonds is received in later years, the storm recovery bonds may have a longer weighted average life.

THE SALE AGREEMENT

The following summary describes particular material terms and provisions of each sale agreement pursuant to which we will purchase storm recovery property from Cleco Power. We have filed the form of the sale agreement with the SEC as an exhibit to the registration statement of which this prospectus forms a part. This summary does not purport to be complete and is subject to and qualified by reference to the provisions of the applicable sale agreement.

Cleco Power's Sale and Assignment of the Storm Recovery Property

In connection with the issuance of the storm recovery bonds, the seller will offer and sell the storm recovery property to us pursuant to the terms and conditions of the sale agreement. The sale of the storm recovery property to us by Cleco Power will be financed through the corresponding issuance of a series of storm recovery bonds. Pursuant to a sale agreement, Cleco Power will on each transfer date sell and assign to us, without recourse, except as expressly provided therein, its rights and interests in and to the series of storm recovery bonds to be issued and sold, which became storm recovery property as of the effective date of the financing order pursuant to the Securitization Act. The storm recovery property will represent all rights and interests of Cleco Power under the applicable financing order that are sold and transferred to us pursuant to the sale agreement and the related bill of sale, including the right to impose, collect and receive the storm recovery charges authorized in the financing order with respect to the related series of the storm recovery bonds, to obtain periodic adjustments to such charges as provided in the financing order and all revenues, collections, claims, rights to payments, payments, money or proceeds arising from the foregoing rights and interests. The storm recovery property does not include the rights of Cleco Power to earn and receive a rate of return on its invested capital in us, to receive administration and servicer fees, to withdraw funds from its restricted storm recovery reserve funded by the proceeds from the sale of the storm recovery property, or to use Cleco Power's remaining portion of those proceeds. We will apply the net proceeds that we receive from the sale of each series of storm recovery bonds to the purchase of the storm recovery property acquired on that date.

As provided by the Securitization Act, our purchase of storm recovery property from Cleco Power pursuant to a sale agreement, which will expressly provide that such transfer is a sale, will be a true sale, and all title and ownership to the storm recovery property will pass to us. Under the Securitization Act, such sale will constitute a true sale under state law whether or not:

•: we have any recourse against Cleco Power (except that any such recourse cannot arise from the inability or failure of one or more of Cleco Power's customers to timely pay all or a portion of the storm recovery charge),
•: Cleco Power retains any equity interest in the storm recovery property under state law,
•: Cleco Power acts as a collector of storm recovery charges relating to the storm recovery property, or
•: Cleco Power treats the transfer as a financing for tax, financial reporting or other purposes.

Under the Securitization Act, as of the effective date of a financing order, there is created and established for Cleco Power storm recovery property, which constitutes an existing, present, vested contract right constituting an individualized, separate incorporeal movable susceptible of ownership, sale, assignment, transfer, and security interest.

Upon the issuance of a financing order, the execution and delivery of the related sale agreement and bill of sale and the filing of a financing statement under the Securitization Act, our purchase of the applicable storm recovery property from Cleco Power will be perfected as against all third persons, including subsequent judicial or other lien creditors.

The records and computer systems of Cleco Power and Cleco Corporation will reflect each sale and assignment of Cleco Power's rights and interests under a financing order to us. However, we expect that each series of storm recovery bonds will be reflected as debt on Cleco Power's financial statements. In addition, we anticipate that each series of storm recovery bonds will be treated as debt of Cleco Power for federal income tax purposes. Please read "Material Federal Income Tax Consequences for the Storm Recovery Bondholders."

Cleco Power's Representations and Warranties

In each sale agreement, Cleco Power will make representations and warranties to us, as of the applicable transfer date, to the effect, among other things, that:

1.	subject to clause 9 below (assumptions used in calculating the storm recovery charges as of the applicable transfer date), all written information, as amended or supplemented from time to time, provided by Cleco Power to us with respect to the transferred storm recovery property (including the applicable financing order and the issuance advice letter) is correct in all material respects;
2.	it is the intention of the parties to each sale agreement that, other than for specified tax purposes, each sale, transfer, assignment, setting over and conveyance in the transferred storm recovery property contemplated by the sale agreement constitutes a sale or other absolute transfer of all right, title and interest of Cleco Power in and to the storm recovery property transferred to us; upon execution and delivery of the sale agreement and the related bill of sale and payment of the purchase price, Cleco Power will have no right, title or interest in, to or under the transferred storm recovery property; and that such transferred storm recovery property would not be a part of the estate of Cleco Power, as debtor, in the event of the filing of a bankruptcy petition by or against Cleco Power under any bankruptcy law;
3.	a.	Cleco Power is the sole owner of the rights and interests under the financing order being sold to us on the applicable transfer date,
	b.	on the applicable transfer date, immediately upon the sale under the sale agreement, the transferred storm recovery property will have been validly sold, assigned, transferred set over and conveyed to us free and clear of all liens (except for any lien created by us under the basic documents in favor of the storm recovery bondholders and in accordance with the Securitization Act), and
	c.	all actions or filings (including filings with the Louisiana UCC filing officer in accordance with the rules prescribed under the Securitization Act and the Uniform Commercial Code) necessary in any jurisdiction to give us a perfected ownership interest (subject to any lien created by us under the basic documents in favor of the storm recovery bondholders and in accordance with the Securitization Act) in the transferred storm recovery property and to grant to the trustee a first priority perfected security interest in the transferred storm recovery property, free and clear of all liens of Cleco Power or anyone else (except for any lien created by us under the basic documents in favor of the storm recovery bondholders and in accordance with the Securitization Act) have been taken or made;
4.	the applicable financing order has been issued by the Louisiana commission in accordance with the Securitization Act, the applicable financing order and the process by which it was issued comply with all applicable laws, rules and regulations of the State of Louisiana and the federal laws of the United States, and the applicable financing order is final, non-appealable and in full force and effect;

5.	as of the date of issuance of the applicable storm recovery bonds, those storm recovery bonds will be entitled to the protections provided by the Securitization Act and the applicable financing order, the issuance advice letter and the storm recovery charges authorized therein will have become irrevocable and not subject to reduction, impairment or adjustment by further action of the Louisiana commission, except as permitted by Section 1228(c)(4) of the Securitization Act. The issuance advice letter and the tariff have been filed in accordance with the applicable financing order and an officer of the seller has provided the certification to the Louisiana commission required by the issuance advice letter. The initial storm recovery charges and the final terms of the storm recovery bonds set forth in the issuance advice letter have become effective. No other approval, authorization, consent, order or other action of, or filing with any Governmental Authority is required in connection with the creation of the storm recovery property transferred on such date, except those that have been obtained or made;
6.	a.	under the Securitization Act, the State of Louisiana has pledged that it will not alter the provisions of the part of the Securitization Act which authorizes the Louisiana commission to create a contract right by the issuance of a financing order, to create storm recovery property, and to make the storm recovery charges imposed by a financing order irrevocable, binding and nonbypassable charges, take or permit any action that would impair the value of the storm recovery property transferred under the applicable sale agreement or, except as permitted by §1228(c)(5) of the Securitization Act, reduce, alter or impair the related storm recovery charges until the principal, interest and premium, and any other charges incurred and contracts to be performed in connection with the related storm recovery bonds, have been paid and performed in full,
	b.	under the laws of the State of Louisiana and the federal laws of the United States, a reviewing court of competent jurisdiction would hold that (x) the State of Louisiana could not constitutionally take any action of a legislative character, including the repeal or amendment of the Securitization Act, which would substantially limit, alter or impair the storm recovery property or other rights vested in the storm recovery bondholders pursuant to the applicable financing order, or substantially limit, alter, impair or reduce the value or amount of the storm recovery property, unless that action is a reasonable and necessary exercise of the State of Louisiana's sovereign powers based on reasonable conditions and of a character reasonable and appropriate to the emergency or other significant and legitimate public purpose justifying that action, and, (y) under the takings clauses of the Louisiana and United States Constitutions, if the court concludes that the storm recovery property is protected by the takings clauses, the State of Louisiana could not repeal or amend the Securitization Act or take any other action in contravention of its pledge referred to in subsection (a) above without paying just compensation to the related storm recovery bondholders, as determined by a court of competent jurisdiction, if doing so would constitute a permanent appropriation of a substantial property interest of those storm recovery bondholders in the storm recovery property and deprive those storm recovery bondholders of their reasonable expectations arising from their investments in the storm recovery bonds or substantially reduce, limit or impair the value of the storm recovery property or the storm recovery charges, prior to the time that the bonds are fully paid and discharged; however, there is no assurance that, even if a court were to award just compensation, it would be sufficient to pay the full amount of principal and interest on those storm recovery bonds, and

	c.	under the laws of the State of Louisiana and the United States Constitution, a Louisiana state court reviewing an appeal of Louisiana commission action of a legislative character would conclude that the Louisiana commission pledge (i) creates a binding contractual obligation of the State of Louisiana for purposes of the contract clauses of the United States and Louisiana Constitutions, and (ii) the LPSC could not take any action of a legislative character, including the rescission or amendment of the financing order, which violates the Louisiana commission pledge in a manner that substantially reduces, limits or impairs the value of the storm recovery property or the storm recovery charges, prior to the time that the storm recovery bonds are paid in full and discharged, unless the LPSC action clearly is exercised for a public end and is reasonably necessary to the accomplishment of that public end so as not to be arbitrary, capricious or an abuse of authority. There is no assurance, however, that even if a court were to award just compensation it would be sufficient to pay the full amount of principal and interest on the storm recovery bonds;
7.	there is no order by any court providing for the revocation, alteration, limitation or other impairment of the Securitization Act, the applicable financing order or issuance advice letter, the transferred storm recovery property or the related storm recovery charges or any rights arising under any of them or that seeks to enjoin the performance of any obligations under the applicable financing order;
8.	under the laws of the State of Louisiana and the federal laws of the United States in effect on the applicable transfer date, no other approval, authorization, consent, order or other action of, or filing with any court, federal or state regulatory body, administrative agency or other governmental instrumentality is required in connection with the creation or transfer of Cleco Power's rights and interests related to the applicable series of storm recovery bonds under the applicable financing order and our purchase of the storm recovery property from Cleco Power, except those that have been obtained or made;
9.	based on information available to Cleco Power on the applicable transfer date, the assumptions used in calculating the storm recovery charges in the applicable issuance advice letter are reasonable and made in good faith; however, notwithstanding the foregoing, Cleco Power makes no representation or warranty, express or implied, that billed storm recovery charges will be actually collected from customers, or that amounts actually collected arising from those storm recovery charges will in fact be sufficient to meet the payment obligations on the related storm recovery bonds or that the assumptions used in calculating such storm recovery charges will in fact be realized;
10.	a.	upon the effectiveness of the applicable financing order, the transfer of Cleco Power's rights and interests related to the applicable series of storm recovery bonds under the related financing order and our purchase of the storm recovery property from Cleco Power pursuant to the applicable sale agreement, the transferred storm recovery property will constitute a present contract right vested in us,
	b.	upon the effectiveness of the applicable financing order, the applicable issuance advice letter and tariff, the transfer of Cleco Power's rights and interests under the applicable financing order that relate to the series of storm recovery bonds to be issued and sold and our purchase of the storm recovery property from Cleco Power pursuant to the applicable sale agreement, the transferred storm recovery property will include, without limitation:
		(1)	the right to impose, bill, charge, collect and receive the storm recovery charges, including the right to receive storm recovery charges in amounts and at times sufficient to pay principal and interest on the storm recovery bonds,

		(2)	all rights and interest of Cleco Power under the applicable financing order, except the rights of Cleco Power to earn and receive a rate of return on its invested capital in us, to receive administration and servicer fees, to withdraw funds from its restricted storm recovery reserve funded by the proceeds from the sale of the transferred storm recovery property, or to use Cleco Power's remaining portion of those proceeds,
		(3)	the rights to file for periodic adjustments of the storm recovery charges as provided in the applicable financing order, and
		(4)	all revenues, collections, claims, rights to payments, payments, money, or proceeds arising from the rights and interests resulting from the storm recovery charges.
	c.	upon the effectiveness of the applicable issuance advice letter and the tariff, the transfer of Cleco Power's rights and interests under the applicable financing order that relate to such series of storm recovery bonds and our purchase of the storm recovery property from Cleco Power on such transfer date pursuant to such sale agreement, the transferred storm recovery property will not be subject to any lien created by a previous indenture;
11.	Cleco Power is a limited liability company duly organized and in good standing under the laws of the State of Louisiana, with limited liability company power and authority to own its properties and conduct its business as currently owned or conducted;
12.	Cleco Power has the power and authority to obtain the applicable financing order and to execute and deliver the applicable sale agreement and to carry out its terms, to own the transferred storm recovery property under the applicable financing order related to the applicable series of storm recovery bonds, and to sell and assign the transferred storm recovery property under the applicable financing order to us, and the execution, delivery and performance of the applicable sale agreement have been duly authorized by Cleco Power by all necessary limited liability company action;
13.	the applicable sale agreement constitutes a legal, valid and binding obligation of Cleco Power, enforceable against Cleco Power in accordance with its terms, subject to customary exceptions relating to bankruptcy, creditors' rights and equitable principles;
14.	the consummation of the transactions contemplated by the applicable sale agreement and the fulfillment of the terms thereof do not (a) conflict with or result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the articles of organization or limited liability company operating agreement of Cleco Power, or any indenture, mortgage, credit agreement or other agreement or instrument to which Cleco Power is a party or by which it or its properties is bound; (b) result in the creation or imposition of any lien upon any of Cleco Power's properties pursuant to the terms of any such indenture or agreement or other instrument (except for any lien created by us under the basic documents in favor of the storm recovery bondholders and in accordance with the Securitization Act) or (c) violate any existing law or any existing order, rule or regulation applicable to Cleco Power of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over Cleco Power or its properties;
15.	except for continuation filings under the Uniform Commercial Code and other filings under the Securitization Act and the Uniform Commercial Code, no approval, authorization, consent, order or other action of, or filing with, any court, federal or state regulatory body, administrative agency or other governmental instrumentality is required under any applicable law, rule or regulation in connection with the execution and delivery by Cleco Power of the applicable sale agreement, the performance by Cleco Power of the transactions contemplated by such sale agreement or the fulfillment by Cleco Power of the terms of such sale agreement, except those that have previously been obtained or made and those that Cleco Power, in its capacity as servicer under the related servicing agreement, is required to make in the future pursuant to that servicing agreement;

16.	except as disclosed in this prospectus or a prospectus supplement, there are no proceedings pending, and to Cleco Power's knowledge, (a) there are no proceedings threatened and (b) there are no investigations pending or threatened before any court, federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over Cleco Power or its properties involving or related to Cleco Power or us or, to Cleco Power's knowledge, to any other person:
	a.	asserting the invalidity of the applicable sale agreement, any of the other basic documents, the related series of storm recovery bonds, the Securitization Act or the applicable financing order,
	b.	seeking to prevent the issuance of the related series of storm recovery bonds or the consummation of the transactions contemplated by the applicable sale agreement or any of the other basic documents,
	c.	seeking any determination or ruling that could reasonably be expected to materially and adversely affect the performance by Cleco Power of its obligations under, or the validity or enforceability of, the applicable sale agreement or any of the other basic documents or the related series of storm recovery bonds, or
	d.	challenging Cleco Power's treatment of the related series of storm recovery bonds as debt of Cleco Corporation for federal or state income, gross receipts or franchise tax purposes;
17.	after giving effect to the sale of any transferred storm recovery property under the applicable sale agreement, Cleco Power:
	a.	is solvent and expects to remain solvent,
	b.	is adequately capitalized to conduct its business and affairs considering its size and the nature of its business and intended purposes,
	c.	is not engaged and does not expect to engage in a business for which its remaining property represents an unreasonably small portion of its capital,
	d.	reasonably believes that it will be able to pay its debts as they become due, and
	e.	is able to pay its debts as they become due and does not intend to incur, or believes that it will incur, indebtedness that it will not be able to repay at its maturity; and
18.	Cleco Power is duly qualified to do business as a foreign limited liability company in good standing, and has obtained all necessary licenses and approvals, in all jurisdictions in which the ownership or lease of property or the conduct of its business requires such qualifications, licenses or approvals (except where the failure to so qualify or obtain such licenses and approvals would not be reasonably likely to have a material adverse effect on Cleco Power's business, operations, assets, revenues or properties).

The representations and warranties made by Cleco Power survive the sale of the transferred storm recovery property to us and the pledge thereof on the applicable transfer date to the trustee. Any change in the law occurring after the applicable transfer date that renders any of the representations and warranties untrue does not constitute a breach under the related sale agreement.

Cleco Power makes no representation or warranty, express or implied, as to the solvency of any customer on any applicable transfer date or as to the future solvency of any customer. Further, we waive any right to rescind any sale agreement or any conveyance pursuant to such sale agreement in case of insolvency of any customer, regardless of any actual or implied knowledge by Cleco Power at any time of the insolvency of any customer. Additionally, we agree that any sale agreement is not subject to a suspensive condition under Louisiana Civil Code Article 2450, notwithstanding that the imposition and collection of storm recovery charges depends upon future acts such as the servicer performing its servicing functions relating to the collection of storm recovery charges, the future provision of electric service to customers, and the future consumption by customers of electricity.

Cleco Power's Covenants

In each sale agreement, Cleco Power will make the following covenants:

1.	subject to its rights to assign its rights and obligations under the sale agreement, so long as the storm recovery bonds of any series are outstanding, Cleco Power will (i) keep in full force and effect its existence and remain in good standing under the laws of the state of its organization, and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or will be necessary to protect the validity and enforceability of the applicable sale agreement and each other instrument or agreement to which Cleco Power is a party necessary to the proper administration of such sale agreement and the transactions contemplated by such sale agreement and (ii) continue to operate its system to provide transmission and distribution delivery service to its customers; and, to the extent that any interest in the storm recovery property is assigned, sold or transferred to another assignee, Cleco Power shall enter into a contract with that assignee that requires Cleco Power to continue to operate its transmission and distribution delivery system to provide service to Cleco Power's Louisiana commission-jurisdictional customers; and further (in each case) Cleco Power will undertake to collect, account and remit amounts in respect of the storm recovery charges for the benefit and account of such assignee (or its financing party); provided, however, that this provision shall not prohibit Cleco Power from selling, assigning, or otherwise divesting its transmission system or distribution system (or any portions thereof) providing service to Cleco Power's Louisiana commission-jurisdictional customers, by any method whatsoever, including those specified in the applicable financing order pursuant to which an entity becomes a successor, so long as the entities acquiring either such system or portion thereof agree to continue operating such facilities to provide service to Louisiana commission-jurisdictional customers;
2.	except for the conveyances under the applicable sale agreement or any lien under the basic documents pursuant to Section 1231 of the Securitization Act for our benefit, the storm recovery bondholders and the trustee, Cleco Power may not sell, pledge, assign or transfer to any other person, or grant, create, incur, assume or suffer to exist any lien on, any of the applicable transferred storm recovery property, whether then existing or thereafter created, or any interest therein. Cleco Power may not at any time assert any lien against or with respect to the applicable transferred storm recovery property, and Cleco Power shall defend the right, title and interest of us and of the trustee, as our assignee, in, to and under the transferred storm recovery property against all claims of third parties claiming through or under Cleco Power;
3.	in the event that Cleco Power receives collections in respect of the storm recovery charges or the proceeds thereof other than in its capacity as the servicer, Cleco Power agrees to pay to the servicer, on our behalf, all payments received by it in respect thereof as soon as practicable after receipt thereof;
4.	Cleco Power will notify us and the trustee promptly after becoming aware of any lien on any of the transferred storm recovery property, other than the conveyances under the applicable sale agreement, any lien created in favor of the storm recovery bondholders or any lien created by us under the indenture;
5.	Cleco Power agrees to comply with its organizational or governing documents and all laws, treaties, rules, regulations and determinations of any court or federal or state regulatory body, administrative agency or governmental instrumentality applicable to it, except to the extent that failure to so comply would not materially adversely affect our or the trustee's interests in the applicable transferred storm recovery property or under the basic documents or Cleco Power's performance of its obligations under the applicable sale agreement or under any of the other basic documents;
6.	so long as any storm recovery bonds of the applicable series are outstanding, Cleco Power:
	a.	will treat the storm recovery bonds as our debt and not debt of Cleco Power, except for financial reporting or tax purposes;

	b.	will disclose in its financial statements that it is not the owner of the applicable transferred storm recovery property and that our assets are not available to pay creditors of Cleco Power or its affiliates (other than us);
	c.	will not own or purchase any storm recovery bonds; and
	d.	will disclose the effects of all transactions between us and Cleco Power in accordance with generally accepted accounting principles;
7.	so long as any storm recovery bonds of the applicable series are outstanding:
	a.	in all proceedings relating directly or indirectly to the applicable transferred storm recovery property, Cleco Power will affirmatively certify and confirm that it has sold all of its rights and interests in and to the storm recovery property to us (other than for financial reporting or tax purposes), and will not make any statement or reference in respect of such transferred storm recovery property that is inconsistent with our ownership interest (other than for financial reporting or tax purposes),
	b.	Cleco Power will not take any action in respect of the applicable transferred storm recovery property except solely in its capacity as servicer thereof pursuant to the related servicing agreement or as contemplated by the basic documents, and
	c.	neither we nor Cleco Power will take any action, file any tax return, or make any election inconsistent with the treatment of us, for purposes of federal taxes and, to the extent consistent with applicable state, local and other tax law, for purposes of state, local and other taxes, as a disregarded entity that is not separate from Cleco Power (or, if relevant, from another sole owner of us)
8.	Cleco Power agrees that, upon the sale by Cleco Power of all of its rights and interests related to the applicable series of storm recovery bonds to us pursuant to the applicable sale agreement to the fullest extent permitted by law, including applicable Louisiana commission regulations and the Securitization Act, we shall have all of the rights originally held by Cleco Power with respect to the transferred storm recovery property, including the right (subject to the terms of the applicable servicing agreement) to exercise any and all rights and remedies to collect any amounts payable by any customer in respect of the transferred storm recovery property, notwithstanding any objection or direction to the contrary by Cleco Power (and Cleco Power agrees not to make any such objection or to take any such contrary action) and any payment to the servicer by any person responsible for remitting storm recovery charges to the servicer under the terms of the applicable financing order or the Securitization Act or applicable tariff shall discharge such person's obligations in respect of such transferred storm recovery property to the extent of such payment, notwithstanding any objection or direction to the contrary by Cleco Power;
9.	Cleco Power will execute and file such filings, and cause to be executed and filed such filings in such manner and in such places as may be required by law fully to preserve, maintain and protect our and the trustee's interests in the transferred storm recovery property, including all filings required under the Securitization Act and the Uniform Commercial Code relating to the transfer of the ownership of the rights and interests related to the applicable series of storm recovery bonds under the applicable financing order by Cleco Power to us and the pledge of the transferred storm recovery property by us to the trustee. Cleco Power will deliver (or cause to be delivered) to us and the trustee file-stamped copies of, or filing receipts for, any document filed as provided above, as soon as available following such filing;

10.	Cleco Power will institute any action or proceeding reasonably necessary to compel performance by the Louisiana commission or the State of Louisiana of any of their obligations or duties under the Securitization Act, the applicable financing order or the issuance advice letter relating to the transfer of the rights and interests under the applicable financing order by Cleco Power to us that relate to such series of storm recovery bonds by Cleco Power to us, and shall notify the trustee of the institution of such action. Cleco Power agrees to take such legal or administrative actions, including defending against or instituting and pursuing legal actions and appearing or testifying at hearings or similar proceedings, in each case as may be reasonably necessary:
	a.	to protect us and the storm recovery bondholders from claims, state actions or other actions or proceedings of third parties which, if successfully pursued, would result in a breach of any representation described above under the caption "—Cleco Power's Representations and Warranties"; or
	b.	so long as Cleco Power is also the servicer, to block or overturn any attempts to cause a repeal of, modification of or supplement to the Securitization Act, the applicable financing order, the applicable issuance advice letter or the rights of storm recovery bondholders by legislative enactment (including any action of the Louisiana commission of a legislative character) or constitutional amendment that would be materially adverse to us, the trustee or the storm recovery bondholders. The costs of any such actions or proceedings would be reimbursed by us to Cleco Power from amounts on deposit in the collection account as an operating expense in accordance with the terms of the indenture. Cleco Power's obligations pursuant to this covenant survive and continue notwithstanding that the payment of operating expenses pursuant to the indenture may be delayed.
11.	so long as any storm recovery bonds of the applicable series are outstanding, Cleco Power will pay all material taxes, assessments and governmental charges imposed upon it or any of its properties or assets or with respect to any of its franchises, businesses, income or property before any penalty accrues thereon if the failure to pay any such taxes, assessments and governmental charges would, after any applicable grace periods, notices or other similar requirements, result in a lien on the applicable transferred storm recovery property; provided that no such tax need be paid if Cleco Power or any of its affiliates is contesting the same in good faith by appropriate proceedings promptly instituted and diligently conducted and if Cleco Power or such affiliate has established appropriate reserves as shall be required in conformity with generally accepted accounting principles;
12.	Cleco Power will comply with all filing requirements imposed upon it in its capacity as seller of the transferred storm recovery property under the applicable financing order, including making any post-closing filings;
13.	even if the applicable sale agreement or the indenture providing for the related series of storm recovery bonds is terminated, Cleco Power will not, prior to the date that is one year and one day after the termination of the indenture, petition or otherwise make or cause us to invoke the process of any court or federal or state regulatory body, administrative agency or governmental instrumentality for the purpose of commencing or sustaining a case against us under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of ours, or any substantial property of ours or ordering the winding up or liquidation of our affairs. We will also agree in each sale agreement not to petition or otherwise induce or cause Cleco Power to invoke such a process for the same period of time;
14.	Cleco Power agrees not to withdraw the filing of any issuance advice letter with the Louisiana commission;
15.	Cleco Power agrees to make all reasonable efforts to keep each tariff in full force and effect at all times;

	16.	Promptly after obtaining knowledge thereof, in the event of a breach in any material respect (without regard to any materiality qualifier contained in such representation, warranty or covenant) of any of Cleco Power's representations, warranties or covenants contained in a sale agreement, Cleco Power shall promptly notify us, the trustee and the rating agencies of such breach. For the avoidance of doubt, any breach which would adversely affect scheduled payments on the storm recovery bonds will be deemed to be a material breach;
	17.	Cleco Power shall use the proceeds of the sale of the storm recovery property in accordance with the applicable financing order and the Securitization Act;
	18.	Upon the reasonable request of the issuing entity, Cleco Power shall execute and deliver such further instruments and do such further acts as may be reasonably necessary to carry out more effectually the provisions and purposes of the sale agreement; and

Cleco Power's Obligation to Indemnify Us and the Trustee and to Take Legal Action

Under each sale agreement, Cleco Power is obligated to indemnify us and the trustee, for itself and on behalf of the storm recovery bondholders and related parties specified therein, against:

	1.	any and all taxes, other than any taxes imposed on storm recovery bondholders of the related series solely as a result of their ownership of storm recovery bonds, that may at any time be imposed on or asserted against any of those persons under existing law as of the applicable transfer date as a result of the sale and assignment of Cleco Power's rights and interests under the applicable financing order that relates to such series of storm recovery bonds by Cleco Power to us, the acquisition or holding of the applicable transferred storm recovery property by us or the issuance and sale by us of the related series of storm recovery bonds, including any sales, gross receipts, tangible personal property, privilege, franchise or license taxes, but excluding any taxes imposed as a result of a failure of that person to properly withhold or remit taxes imposed with respect to payments on any storm recovery bond of the related series, in the event and to the extent such taxes are not recoverable as financing costs, it being understood that the storm recovery bondholders of the related series will be entitled to enforce their rights against Cleco Power solely through a cause of action brought for their benefit by the trustee in accordance with the terms of the indenture; and
	2.	any and all liabilities, obligations, claims, actions, suits or payments of any kind whatsoever that may be imposed on or asserted against any such person, which may include, without limitation, an amount equal to principal and interest on the storm recovery bonds of the related series as a measure of Cleco Power's indemnification obligations, together with any reasonable costs and expenses incurred by that person, in each case as a result of Cleco Power's breach of any of its representations, warranties or covenants contained in the applicable sale agreement.

However, Cleco Power is not required to indemnify the trustee or related parties against any loss incurred by them through their own willful misconduct, negligence or bad faith. Cleco Power is not required to indemnify a party for any amount paid or payable by such party in the settlement of any action, proceeding or investigation without the prior written consent of Cleco Power which consent shall not be unreasonably withheld.

These indemnification obligations will rank equally in right of payment with other general unsecured obligations of Cleco Power. The indemnities described above will survive the resignation or removal of the trustee and the termination of the applicable sale agreement and include reasonable fees and expenses of investigation and litigation (including reasonable attorneys' fees and expenses). The representations and warranties described above under the caption "—Cleco Power's Representations and Warranties" are made under existing law as in effect as of the date of issuance of the related series of storm recovery bonds. Cleco Power will not indemnify any party for any changes of law after the issuance of the related series of storm recovery bonds or for any liability resulting solely from a downgrade in the ratings on such series of storm recovery bonds.

Cleco Power's Limited Obligation to Undertake Legal Action. As described in clause 10 above under "—Cleco Power's Covenants," each sale agreement will require Cleco Power to institute any action or proceeding reasonably necessary to compel performance by the Louisiana commission or the State of Louisiana of any of their obligations or duties under the Securitization Act, the applicable financing order or any related issuance advice letter with respect to the transferred storm recovery property. Except for the foregoing and subject to Cleco Power's further covenant to fully preserve, maintain and protect our interests in the storm recovery property, Cleco Power will not be under any obligation to appear in, prosecute or defend any legal action that is not incidental to its obligations under the applicable sale agreement and that in its opinion may involve it in any expense or liability.

Successors to Cleco Power

Each sale agreement will provide that any person which succeeds by merger, consolidation, sale or other similar transaction to all or substantially all of the electric transmission and distribution systems of Cleco Power (or, if the transmission and distribution business is split, any person which the Louisiana commission designates in connection with an order relating to such split) will be the successor to Cleco Power with respect to Cleco Power's ongoing obligations under the sale agreement without the execution or filing of any document or any further act by any of the parties to the sale agreement. Each sale agreement will further require that:

•: immediately after giving effect to any transaction referred to in this paragraph, no representation, warranty or covenant made in the sale agreement will have been breached in any material respect, and no servicer default, and no event that, after notice or lapse of time, or both, would become a servicer default will have occurred and be continuing,
•: the rating agencies specified in the sale agreement will have received prior written notice of the transaction, and
•: officers' certificates and opinions of counsel specified in the sale agreement will have been delivered to us and the trustee.

Amendment

Each sale agreement may be amended in writing by the parties thereto, if notice of the amendment is provided by us to each rating agency and the rating agency condition has been satisfied, with the consent of the trustee and, with respect to amendments that would increase ongoing financing costs, the consent or deemed consent of the Louisiana commission.

THE SERVICING AGREEMENT

The following summary describes the material terms and provisions of each servicing agreement pursuant to which the servicer will undertake to service the storm recovery property. This summary does not purport to be complete and is qualified by reference to the provisions of the applicable servicing agreement. We have filed the form of the servicing agreement with the SEC as an exhibit to the registration statement of which this prospectus forms a part.

Servicing Procedures

General. The servicer, as our agent, will manage, service, administer and make collections in respect of the related storm recovery property. The servicer's duties will include:

•: calculating and billing the related storm recovery charges,
•: obtaining meter reads,
•: collecting and remitting to the trustee the storm recovery charges,
•: responding to inquiries from customers, the Louisiana commission or any federal, local or other state governmental authority with respect to the related storm recovery property and related storm recovery charges,
•: accounting for collected storm recovery charges and late-payment penalties, investigating and resolving delinquencies (and furnishing reports with respect to such delinquencies to us), processing and depositing collections, making periodic remittances to the trustee and furnishing periodic reports to us, the trustee, the Louisiana commission and the rating agencies,
•: monitoring customer payments of storm recovery charges,
•: notifying each customer of any defaults in its payment obligations and other obligations (including its credit standards), and shall follow such collection procedures as it follows with respect to comparable assets that it services for itself or others,
•: making all filings with the Louisiana commission and taking all other actions necessary to perfect our ownership interests in and the trustee's first priority lien on the storm recovery property,
•: selling, as our agent, defaulted or written-off accounts in accordance with the servicer's usual and customary practices,
•: taking action in connection with true-up adjustments to the related storm recovery charges and allocation of the charges among various classes of customers as described below,
•: any other duties specified for a servicer under the financing order or applicable law, and
•: reconciling, within 30 calendar days after bank statement cutoff date or such later time as is consistent with the servicer's usual and customary practices that does not materially impair the ability of the servicer to correct errors, all bank account debits and credits for bank accounts that are held in our name or the name of the servicer (as servicer under the servicing agreement) that relate to the collateral or the storm recovery bonds.

Please read "Cleco Power's Financing Order" in this prospectus. Upon acquiring actual knowledge in the course of its performance of duties under the servicing agreement, the servicer is required to notify us, the trustee, the Louisiana commission and the rating agencies in writing of any laws, orders, directions or Louisiana commission regulations promulgated after the execution of the applicable servicing agreement or Louisiana commission proceedings hereinafter initiated related to the financing order that have or, in the case of Louisiana Commission proceedings may, have a material adverse effect on the servicer's ability to perform its duties under that servicing agreement. The servicer is also

authorized to execute and deliver documents and to make filings and participate in proceedings on our behalf.

In each servicing agreement, the servicer will agree, among other things, that, in servicing the related storm recovery property, except where the failure to comply with any of the following would not materially adversely affect our or the trustee's respective interests in the related storm recovery property:

•: it will manage, service, administer and make collections in respect of the related storm recovery property with reasonable care and in material compliance with applicable laws and regulations, including all applicable Louisiana commission regulations and guidelines, using the same degree of care and diligence that the servicer exercises with respect to similar assets for its own account,
•: it will follow standards, policies and practices in performing its duties as servicer that are customary in the electric transmission and distribution industry or that the Louisiana commission has mandated and that are consistent with the terms and provisions of the applicable financing order, tariffs and existing law,
•: it will use all reasonable efforts, consistent with the policies and practices as it follows with respect to comparable assets that it services for itself or others, to enforce and maintain the trustee's and our rights in respect of the related storm recovery property,
•: it will calculate the related storm recovery charges and the allocation of storm recovery charges among customer classes in compliance with the Securitization Act, the applicable financing order, any Louisiana commission order related to storm recovery charge allocation and any applicable tariffs,
•: it will use all reasonable efforts consistent with the policies and practices as it follows with respect to comparable assets that it services for itself or others, to collect all amounts owed in respect of the related storm recovery property as they become due,
•: it will make all filings required under the applicable Uniform Commercial Code or the Securitization Act to maintain the perfected security interest of the trustee in the collateral and use all reasonable efforts to otherwise enforce and maintain the trustee's rights in respect of the related storm recovery property and the collateral,
•: it will petition the Louisiana commission for adjustments to the related storm recovery charges that the servicer determines to be necessary in accordance with the applicable financing order, and
•: it will keep on file, in accordance with customary procedures, all documents pertaining to the related storm recovery property and will maintain accurate and complete accounts, records and computer systems pertaining to the related storm recovery property.

The duties of the servicer set forth in each servicing agreement are qualified by any Louisiana commission regulations or orders in effect at the time those duties are to be performed.

Servicer Obligation to Undertake Legal Action. The servicer is required, subject to applicable law, to institute any action or proceeding reasonably necessary to compel performance by the Louisiana commission or the State of Louisiana of any of their respective obligations or duties under the Securitization Act or the applicable financing order, as the case may be, with respect to the storm recovery charge adjustments. The costs of any such actions or proceedings would be reimbursed by us to the servicer from amounts on deposit in the collection account as an operating expense in accordance with the terms of the indenture. The servicer's obligations pursuant to this covenant survive and continue notwithstanding that the payment of operating expenses pursuant to the indenture may be delayed.

Remittances to the Trustee. The servicer will remit storm recovery charges to the trustee each business day based on estimated daily collections, using a weighted average balance of days outstanding on Cleco Power's retail bills. The summation of those individual charges on a daily basis will be remitted to the trustee on each business day, net of considerations of the timing lag between billing and collection, and as further adjusted for uncollectible amounts. For example, if Cleco Power's retail bills are outstanding, on a weighted average basis for a period of 37 days, then the servicer will remit to us the storm recovery charges billed on a particular date, less an assumed write-off rate, 37 days thereafter. As set forth in the servicing agreement, the servicer would include in this remittance an allowance for the estimated charged-off amount based on the prior annual period.

Storm Recovery Charge Adjustment Process

Semi-Annual True-Ups. Among other things, each servicing agreement will require the servicer to file true-up adjustment requests at least semi-annually to correct any under-collections or over-collections during the preceding six months and to ensure the expected recovery of amounts sufficient to provide timely payment of principal and interest on the related series of storm recovery bonds and all other financing costs. For more information on the true-up process, please read "Cleco Power's Financing Order—True-Ups." These adjustment requests are to be based on actual collected storm recovery charges and updated assumptions by the servicer as to projected future usage during the next period, expected delinquencies and write-offs and future payments and expenses relating to the applicable storm recovery property and the related series of storm recovery bonds. The servicer agrees to calculate these adjustments to:

•: correct, over a period of up to 12 months covering the next two succeeding payment dates as provided in the financing order, any under-collections or over-collections, for any reason, during the preceding six months; and
•: to ensure the projected recovery of amounts sufficient to provide timely payment of the scheduled principal of and interest on the storm recovery bonds and all other financing costs during the subsequent 12-month period, consistent with the methodology described in the financing order.

In each servicing agreement, the servicer will agree to file adjustment requests on each calculation date for us as specified in the servicing agreement. In accordance with the applicable financing order, the Louisiana commission has 15 days to approve the adjustments. Any adjustment to the allocation of storm recovery charges must be filed with the Louisiana commission at least 15 days before the date the proposed adjustment will become effective. The Louisiana commission must enter a final order by the proposed adjustment date stated in the filing. The adjustments to the storm recovery charges are expected to occur on each adjustment date. Adjustments to the storm recovery charges will cease with respect to each series of storm recovery bonds on the final adjustment date specified in the prospectus supplement for that series.

Interim True-Ups. The servicer may also make interim true-up adjustments more frequently at any time during the term of the storm recovery bonds: (i) if the servicer forecasts that storm recovery charge collections will be insufficient to make all scheduled payments of interest and other financing costs in respect of the storm recovery bonds during the current or next succeeding payment period or bring all principal payments on schedule over the next two succeeding payment dates and/or (ii) to replenish any draws upon the capital subaccount.

In addition to the semi-annual true-up adjustment, the servicer may file for a non-standard true-up adjustment (under such procedures as shall be proposed by the servicer and approved by the Louisiana commission at the time) that it deems necessary or appropriate to address any material deviations between storm recovery charge collections and the periodic revenue requirement. No such

change shall cause any of the then-current credit ratings of the storm recovery bonds to be suspended, withdrawn or downgraded.

Servicer Compensation

The servicer will be entitled to receive an aggregate annual servicing fee for all series outstanding in an amount equal to:

•: 0.05% of the aggregate initial principal amount of all outstanding storm recovery bonds, for so long as the servicer remains Cleco Power or any of its permitted successors or assigns or an affiliate, prorated based on the fraction of a calendar year during which the servicer provides any of the services set forth in the servicing agreement, or
•: an amount agreed upon by the successor servicer and the trustee, but, unless the Louisiana commission consents, not more than 0.60% of the aggregate initial principal amount of all outstanding storm recovery bonds if Cleco Power, any permitted successor or assign or an affiliate is not the servicer, prorated based on the fraction of a calendar year during which the successor servicer provides any of the services set forth in the servicing agreement.

The servicing fee for each series of storm recovery bonds, together with any portion of the servicing fee that remains unpaid from prior payment dates, will be paid solely to the extent funds are available therefor as described under "The Storm Recovery Bonds—How Funds in the Collection Account Will Be Allocated" in this prospectus. The servicing fee for each series of storm recovery bonds will be paid prior to the payment of or provision for any amounts in respect of interest on and principal of that series of storm recovery bonds. As long as Cleco Power is the servicer, the Louisiana commission may adjust Cleco Power's rates to take into account the extent, if any, by which its servicing fees exceed its actual incremental costs in servicing the storm recovery bonds.

Cleco Power's Representations and Warranties as Servicer

In each servicing agreement, the servicer will represent and warrant to us and the Louisiana commission (for the benefit of customers), as of the sale date of the related series of bonds, among other things, that:

•: the servicer is duly organized, validly existing and in good standing under the laws of the state of its organization (which is Louisiana, when Cleco Power is the servicer), with the limited liability company or corporate, as the case may be, power and authority to conduct its business as presently conducted and to execute, deliver and carry out the terms of the servicing agreement and had at all relevant times and has the requisite power, authority and legal right to service the storm recovery property and to hold the storm recovery property records as custodian,
•: the servicer is duly qualified to do business and is in good standing and has obtained all necessary licenses and approvals in all jurisdictions in which it is required to do so (except where such failure would not be reasonably likely to have a material adverse effect on its business, operations or properties or adversely affect the servicing of the storm recovery property),
•: the servicer's execution, delivery and performance of the servicing agreement have been duly authorized by the servicer by all necessary limited liability company or corporate, as the case may be, action,
•: the servicing agreement constitutes a legal, valid and binding obligation of the servicer, enforceable against the servicer in accordance with its terms, subject to customary exceptions relating to bankruptcy, receivership, insolvency, reorganization, moratorium and equitable principles (regardless of whether considered in a proceeding in equity or at law),
•: the consummation of the transactions contemplated by the servicing agreement will not conflict with, or result in any breach of, the terms and provisions of nor constitute a default under the

servicer's limited liability company operating agreement or articles of organization, by-laws, or any material indenture as the case may be, or any material agreement to which the servicer is a party or by which it or any of its property is bound or result in the creation or imposition of any lien upon the servicer's properties (other than any lien that may be granted under the basic documents pursuant to Section 1231 of the Securitization Act) or violate any law or any existing order, rule or regulation applicable to the servicer,

•: except for the issuance advice letter and filings with the Louisiana commission for adjusting the amount and allocation of the related storm recovery charges and filings under the Uniform Commercial Code and under the Securitization Act, no governmental approvals, authorizations, consents, orders or other actions or filings are required for the servicer to execute, deliver and perform its obligations under the servicing agreement, except those that have previously been obtained or made,
•: except as disclosed in this prospectus or the prospectus supplement, there are no proceedings pending and, to the servicer's knowledge, there are no proceedings threatened before any court, federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the servicer or its properties:


	•	asserting the invalidity of the servicing agreement or any other underlying agreement,
	•	seeking any determination or ruling that might materially and adversely affect the performance by the servicer of its obligations under, or the validity or enforceability against the servicer of, the servicing agreement,
	•	relating to the servicer and that might materially and adversely affect the federal or state income, gross receipts or franchise tax attributes of the related series of storm recovery bonds, or
	•	seeking to prevent the issuance of the related series of storm recovery bonds or the consummation of any of the transactions contemplated by the servicing agreement or any other underlying agreement,

•: each report and certificate delivered in connection with any filing made with the Louisiana commission by the servicer on our behalf with respect to related storm recovery charges or periodic adjustments will constitute a representation and warranty by the servicer that such report or certificate, as the case may be, is true and correct in all material respects; to the extent that such report is based upon or contains assumptions, forecasts or other predictions of future events, the representation and warranty of the servicer with respect thereto will be limited to the representation and warranty that such assumptions, forecasts or other predictions of future events are reasonable based upon historical performance and the facts known to the servicer on the date such report or certificate is delivered.

The servicer is not responsible for any ruling, action or delay of the Louisiana commission, except those caused by the servicer's failure to file required applications in a timely and correct manner or other breach of its duties under such servicing agreement. The servicer also is not liable for the calculation of the storm recovery charges and adjustments, including any inaccuracy in the assumptions made in the calculation, so long as the servicer has acted in good faith and has not acted in a grossly negligent manner.

The Servicer Will Indemnify Us, Other Entities and the Louisiana Commission in Limited Circumstances

Under each servicing agreement, the servicer will agree to indemnify, defend and hold harmless us, the trustee, for itself and on behalf of the storm recovery bondholders of the related series, and related parties specified in the servicing agreement, including our managers, against any reasonable costs, reasonable expenses, obligations, payments, claims, losses, damages and liabilities of any kind

whatsoever that may be imposed upon, incurred by or asserted against any of those persons as a result of:

•: the servicer's willful misconduct, bad faith or negligence in the performance of, or reckless disregard of, its duties or observance of its covenants under the servicing agreement,
•: the servicer's breach of any of its representations or warranties under the servicing agreement, and
•: litigation and related expenses relating to its status and obligations as servicer (other than any proceedings the servicer is required to institute under the servicing agreement).

The servicer will not be liable to any such party, however, for any reasonable costs, reasonable expenses, obligations, payments, claims, losses, damages and liabilities of any kind whatsoever, resulting from the willful misconduct, bad faith or negligence of the party seeking indemnification.

In addition, the servicer will agree to indemnify the Louisiana commission (on behalf of customers), us, the trustee, for itself and on behalf of the storm recovery bondholders of the related series, and related parties specified in the servicing agreement, including our managers, in connection with any increase in servicing fees as described under "—Servicer Compensation" if that increase is the result of a servicer default arising out of the servicer's misconduct, negligence or termination for cause of Cleco Power or an affiliate servicer in performance of its duties or observance of its covenants under the applicable servicing agreement. Any such indemnity payments (on behalf of customers) will be remitted to the trustee promptly for deposit in the applicable collection account. The servicer's obligation to indemnify the Louisiana commission (on behalf of customers) will survive the termination of the servicing agreement.

In each servicing agreement, the servicer will release us, our managers and the trustee from any and all claims whatsoever relating to the applicable storm recovery property or the servicer's servicing activities with respect thereto, other than actions, claims, and demands arising from bad faith, willful misconduct or negligence of the parties.

The Louisiana commission will enforce the servicer's obligations imposed by the financing order, the Louisiana commission's applicable substantive rules, and applicable statutory provisions.

The Servicer Will Provide Statements to Us, the Louisiana Commission and the Trustee

For each calculation date for a series of storm recovery bonds, the servicer will provide to us, the Louisiana commission and the trustee a statement indicating:

•: the storm recovery bond balance and the projected storm recovery bond balance for that series as of the immediately preceding payment date,
•: the amount on deposit in the capital subaccount for that series and the amount required to be on deposit in the capital subaccount for that series as of the immediately preceding payment date,
•: the amount on deposit in the excess funds subaccount for that series as of the immediately preceding payment date,
•: the projected storm recovery bond balance for that series on the calculation date and the servicer's projection of the storm recovery bond balance for that series on the payment date immediately preceding the next succeeding adjustment date,
•: the required capital subaccount balance for that series and the servicer's projection of the amount on deposit in the capital subaccount for that series for the payment date immediately preceding the next succeeding adjustment date, and

•: the servicer's projection of the amount on deposit in the excess funds subaccount for that series for the payment date immediately preceding the next succeeding adjustment date.

The Servicer Will Provide Compliance Reports Concerning the Servicing Agreement

The servicing agreement will provide that the servicer will furnish annually to us, the Louisiana commission, the trustee and the rating agencies, on or before March 31 of each year, beginning March 31, 2009 or, if earlier, on the date on which Cleco Power's annual report on Form 10—K is required to be filed, a report on its assessment of compliance with specified servicing criteria as required by Item 1122(a) of Regulation AB of the SEC, during the preceding 12 months ended December 31 (or preceding period since the closing date of the issuance of the storm recovery bonds in the case of the first statement), together with a certificate by an officer of the servicer certifying the statements set forth therein

Each servicing agreement will provide that a firm of independent certified public accountants will furnish to us, the Louisiana commission, the trustee and the rating agencies, on or before March 31st of each year, beginning March 31, 2009, or, if earlier, on the date on which Cleco Power's annual report on Form 10-K is required to be filed, a statement as to compliance by the servicer during the preceding twelve months ended December 31, or the relevant portion thereof, with procedures relating to the servicing of applicable storm recovery property. This report, which is referred to in this prospectus as the "annual accountant's report," will state that the accounting firm has performed has performed certain procedures, agreed between the servicer and such accountants, in connection with the servicer's compliance with its obligations under this agreement during the preceding calendar year, identifying the results of the procedures and including any exceptions to the procedures relating to the servicing of the storm recovery property noted. The annual accountant's report will also indicate that the accounting firm providing the report is independent of the servicer within the meaning of the Code of Professional Ethics of the American Institute of Certified Public Accountants and of the Rules of the Public Company Accounting Oversight Board. Each servicing agreement also will provide for delivery to us, the Louisiana commission and the trustee, on or before March 31st of each year, a certificate signed by an officer of the servicer. This certificate will state that to the best of such officer's knowledge, the servicer has fulfilled its obligations under the servicing agreement for the preceding calendar year, or the relevant portion thereof, or, if there has been a default in the fulfillment of any relevant obligation, stating that there has been a default and describing each default. The servicer has agreed to give us, each rating agency and the trustee written notice of any servicer default under the servicing agreement.

Copies of the above reports will be filed with the Louisiana commission. You may also obtain copies of the above statements and certificates by sending a written request addressed to the trustee.

Matters Regarding Cleco Power as the Servicer

Each servicing agreement will provide that Cleco Power may not resign from the obligations and duties imposed on it as servicer unless Cleco Power delivers an opinion of independent legal counsel that the performance of its duties under the servicing agreement shall no longer be permissible under applicable law. Written notice of any such determination will be communicated to us, the trustee, the Louisiana commission and each rating agency at the earliest practicable time and shall be evidenced by an opinion of counsel. A resignation by Cleco Power as servicer will not become effective until a successor servicer has assumed the servicing obligations and duties of Cleco Power under the servicing agreement.

Except as expressly provided in each servicing agreement, neither the servicer, nor any of its directors, officers, employees and agents will be liable to us, our managers, the trustee, you or any other person for any action taken or for refraining from taking any action pursuant to the servicing agreement or for errors in judgment. However, the servicer, its directors, officers, employees, and

agents will be liable to the extent this liability is imposed by reason of their willful misconduct, bad faith or negligence in the performance of their duties. The servicer and any of its directors, officers, employees or agents may rely in good faith on the advice of counsel or on any document, prima facie properly executed and submitted by any person respecting any matters under the servicing agreement. In addition, each servicing agreement will provide that the servicer is under no obligation to appear in, prosecute, or defend any legal action, except as provided in the servicing agreement.

Under each servicing agreement, any person:

•: into which the servicer may be merged, converted or consolidated and which succeeds to all or substantially all of the electric transmission and distribution business of the servicer (or, if the transmission and distribution business is split, any person which the Louisiana commission designates in connection with an order relating to such split),
•: which results from the division of the servicer into two or more persons and which succeeds to all or substantially all of the electric transmission and distribution business of the servicer (or, if the transmission and distribution business is split, any person which the Louisiana commission designates in connection with an order relating to such split),
•: which may result from any merger, conversion or consolidation to which the servicer shall be a party and which succeeds to all or substantially all of the electric transmission and distribution business of the servicer (or, if the transmission and distribution business is split, any person which the Louisiana commission designates in connection with an order relating to such split),
•: which may purchase or otherwise succeed to the properties and assets of the servicer substantially as a whole and which purchases or otherwise succeeds to all or substantially all of the electric transmission and distribution business of the servicer (or, if the transmission and distribution business is split, any person which the Louisiana commission designates in connection with an order relating to such split), or
•: which may otherwise purchase or succeed to all or substantially all of the electric transmission and distribution business of the servicer (or, if the transmission and distribution business is split, any person which the Louisiana commission designates in connection with an order relating to such split),

will be the successor of the servicer under the servicing agreement.

Each servicing agreement will further require that:

•: immediately after giving effect to any transaction referred to above, the representations and warranties made by the servicer in the servicing agreement will be true and correct and no servicer default, and no event which, after notice of, lapse of time or both, would become a servicer default, will have occurred and be continuing,
•: the successor to the servicer must execute an agreement of assumption to perform every obligation of the servicer under the servicing agreement,
•: officers' certificates and opinions of counsel will have been delivered to us, the Louisiana commission and the trustee stating that the transaction referred to above complies with the servicing agreement and all conditions to transfer under the servicing agreement,
•: the servicer shall have delivered to us, the Louisiana commission and the trustee an opinion of counsel either (i) stating that, in the opinion of such counsel, all filings to be made by the servicer, including filings with the Louisiana commission pursuant to the Securitization Act and the Louisiana UCC filing officer, that are necessary fully to preserve and protect the interests of each of us and the Trustee in the storm recovery property and the proceedings have been executed and filed and are in full force and effect, and reciting the details of such filings or

(ii) stating that, in the opinion of such counsel, no such action is necessary to preserve and protect such interests

•: prior written notice will have been received by the rating agencies, and
•: the servicer has delivered to the issuing entity, the Louisiana commission, the trustee and the rating agencies a no material adverse tax change opinion of independent tax counsel regarding such transfer.

So long as the conditions of any such assumptions are met, then the prior servicer will automatically be released from its obligations under the servicing agreement. Each servicing agreement will permit the servicer to appoint any person to perform any or all of its obligations under the servicing agreement. However, unless the appointed person is an affiliate of Cleco Power, the appointment must satisfy the rating agency condition. In all cases where an agent is appointed, the servicer will remain obligated and liable under the servicing agreement.

Events Constituting a Default by the Servicer

Servicer defaults under each servicing agreement will include, among other things:

•: any failure by the servicer to remit to the trustee, on our behalf, any remittance required to be remitted pursuant to the servicing agreement that continues unremedied for five business days after written notice is received by the servicer and the Louisiana commission from us or from the trustee,
•: any failure by the servicer to duly observe or perform in any material respect its obligations to make storm recovery charge adjustment filings in the time and manner set forth in the servicing agreement, which failure continues unremedied for a period of five business days,
•: any failure by the servicer to duly observe or perform, in any material respect, any other covenant or agreement of the servicer set forth in the servicing agreement or any other basic document to which it is a party, which failure materially and adversely affects the applicable storm recovery property or the timely collection of the storm recovery charges or the rights of the related bondholders and which continues unremedied for 60 days after written notice of this failure has been given to the servicer by us, the Louisiana commission or the trustee or after discovery of this failure by an officer of the servicer, as the case may be,
•: any representation or warranty made by the servicer in the servicing agreement proves to have been incorrect when made, which has a material adverse effect on us or the bondholders and which continues unremedied for 60 days after written notice of this failure has been given to the servicer by us or the trustee or after discovery of this failure by an officer of the servicer, as the case may be, or
•: certain events of bankruptcy, insolvency or liquidation of the servicer.

The trustee, with the written consent of the holders of the majority of the outstanding principal amount of the storm recovery bonds of all affected series, may waive in whole or in part any default by the servicer, except a default in making any required remittances to the trustee.

The Trustee's Rights if the Servicer Defaults

In the event of a servicer default under the servicing agreement remains unremedied, the trustee may, and upon the instruction of the holders of a majority of the outstanding principal amount of the storm recovery bonds of an affected series, must, by written notice to the servicer, terminate all the rights and obligations of the servicer under that servicing agreement, other than the servicer's indemnification obligation and obligation to continue performing its functions as servicer until a successor servicer is appointed. Under each servicing agreement, the servicer's indemnity obligations will survive its replacement as servicer. After the termination of the responsibilities and rights of the

predecessor servicer as described above, the trustee will appoint a successor servicer who will succeed to all the rights and duties of the servicer under the applicable servicing agreement and will be entitled to similar compensation arrangements. The predecessor servicer shall, on an ongoing basis, cooperate with us and successor servicer and provide whatever information is, and take whatever actions are, reasonably necessary to assist the successor servicer in performing its obligations hereunder.

In addition, when a servicer defaults, the bondholders of the related series of storm recovery bonds (subject to the provisions of the indenture) and the trustee as beneficiary of any lien permitted by the Securitization Act will be entitled to (i) apply to the 19th Judicial District Court for the Parish of East Baton Rouge, Louisiana for sequestration and payment of revenues arising from the applicable storm recovery property, (ii) foreclose on or otherwise enforce the lien on and security interests in, any applicable storm recovery property and (iii) apply to the Louisiana commission for an order that amounts arising from the related storm recovery charges be transferred to a separate account for the benefit of the storm recovery bondholders of such series. Upon a servicer default based upon the commencement of a case by or against the servicer under the bankruptcy or insolvency laws, the trustee may be prevented from effecting a transfer of servicing. Please read "Risk Factors—Risks Associated with Potential Bankruptcy Proceedings of the Seller or the Servicer" and "How a Bankruptcy May Affect Your Investment" in this prospectus. The trustee may appoint, or petition a court of competent jurisdiction for the appointment of, a successor servicer which satisfies criteria specified by the rating agencies rating the storm recovery bonds of such series.

The Obligations of a Successor Servicer

Pursuant to the provisions of the servicing agreement, if for any reason a third party assumes or succeeds to the role of the servicer under the servicing agreement, the servicing agreement will require the predecessor servicer to cooperate with us, the trustee and the successor servicer in terminating the predecessor servicer's rights and responsibilities under the servicing agreement, including the transfer to the successor servicer of all documentation pertaining to the storm recovery property and all cash amounts then held by the predecessor servicer for remittance or subsequently acquired by the predecessor servicer. Each servicing agreement will provide that the predecessor servicer will be liable for all reasonable costs and expenses incurred in transferring servicing responsibilities to the successor servicer in the event the successor servicer is appointed as a result of a servicer default. In all other cases, those costs and expenses will be paid by the party incurring them. A successor servicer may resign only if it is prohibited from servicing by applicable law. The predecessor servicer is obligated, on an ongoing basis, to cooperate with us and the successor servicer and provide whatever information is, and take whatever actions are, reasonably necessary to assist the successor servicer in performing its obligations under the servicing agreement.

Amendment

Each servicing agreement may be amended by the parties thereto, if the rating agency condition has been satisfied, with the prior written consent of the trustee and, with respect to amendments that would increase ongoing financing costs, the prior approval of the Louisiana commission. An amendment is subject to the objection of the Louisiana commission within the time periods and subject to the conditions set forth in the servicing agreement. We will notify the rating agencies promptly after the execution of any such amendment.

HOW A BANKRUPTCY MAY AFFECT YOUR INVESTMENT

Challenge to True Sale Treatment. Cleco Power will represent and warrant that the transfer of the storm recovery property in accordance with the applicable sale agreement constitutes a true and valid sale and assignment of that storm recovery property by Cleco Power to us. It will be a condition of closing for the sale of storm recovery property pursuant to a sale agreement that Cleco Power will take the appropriate actions under the Securitization Act, including filing a notice of transfer of an interest in the storm recovery property, to perfect this sale. The Securitization Act provides that a transfer of storm recovery property by an electric utility to an assignee which the parties have in the governing documentation expressly stated to be a sale or other absolute transfer, in a transaction approved in a financing order, shall be treated as an absolute transfer of all the transferor's right, title and interest, as in a "true sale" under applicable creditors' rights principles, and not as a pledge or other financing, of the relevant storm recovery property. We and Cleco Power will treat such a transaction as a sale under applicable law. However, we expect that storm recovery bonds will be reflected as debt on Cleco Corporation's consolidated financial statements. In addition, we anticipate that the storm recovery bonds will be treated as debt of Cleco Corporation for federal income tax purposes. See "The Securitization Act—Cleco Power and Other Utilities May Securitize Storm Recovery Costs and Related Financing and Ongoing Costs" and "Material Federal Income Tax Consequences for the Storm Recovery Bondholders." In the event of a bankruptcy of a party to a sale agreement, if a party in interest in the bankruptcy were to take the position that the transfer of the storm recovery property to us pursuant to that sale agreement was a financing transaction and not a true sale under applicable creditors' rights principles, there can be no assurance that a court would not adopt this position. Even if a court did not ultimately recharacterize the transaction as a financing transaction, the mere commencement of a bankruptcy of Cleco Power and the attendant possible uncertainty surrounding the treatment of the transaction could result in delays in payments on the storm recovery bonds.

In that regard, we note that the bankruptcy court in In re: LTV Steel Company, Inc., et al., 274 B.R. 278 (Bankr. N. D. Oh. 2001) issued an interim order that observed that a debtor, LTV Steel Company, which had previously entered into securitization arrangements with respect both to its inventory and its accounts receivable may have "at least some equitable interest in the inventory and receivables, and that this interest is property of the Debtor's estate… sufficient to support the entry of" an interim order permitting the debtor to use proceeds of the property sold in the securitization. 274 B.R. at 285. The court based its decision in large part on its view of the equities of the case.

LTV and the securitization investors subsequently settled their dispute over the terms of the interim order and the bankruptcy court entered a final order in which the parties admitted and the court found that the pre-petition transactions constituted "true sales." The court did not otherwise overrule its earlier ruling. The LTV memorandum opinion serves as an example of the pervasive equity powers of bankruptcy courts and the importance that such courts may ascribe to the goal of reorganization, particularly where the assets sold are integral to the ongoing operation of the debtor's business.

We and Cleco Power have attempted to mitigate the impact of a possible recharacterization of a sale of storm recovery property as a financing transaction under applicable creditors' rights principles. This does not, however, eliminate the risk of payment delays or reductions and other adverse effects caused by a Cleco Power bankruptcy. Further, if, for any reason, a storm recovery property notice is not filed under the Securitization Act or we fail to otherwise perfect our interest in the storm recovery property, and the transfer is thereafter deemed not to constitute a true sale, we would be a creditor of Cleco Power and our claim may be secured or unsecured.

The Securitization Act provides that the creation, granting, perfection and enforcement of liens and security interests in storm recovery property are governed by the Securitization Act and not by the Louisiana Uniform Commercial Code. Under the Securitization Act, a valid and enforceable lien and

security interest in storm recovery property may be created only by a financing order issued under the Securitization Act and the execution and delivery of a security agreement with a holder of storm recovery bonds or a trustee or agent for the holder. The security interest attaches automatically from the time value is received for the storm recovery bonds. Upon perfection through the filing of notice with a Louisiana UCC filing officer pursuant to rules established by the Secretary of State of Louisiana, the security interest shall be a continuously perfected lien and security interest in the storm recovery property, with priority in the order of filing and take precedence over any subsequent judicial or other lien creditor. The security interest will be perfected as of the date of filing.

None of this, however, mitigates the risk of payment delays and other adverse effects caused by a Cleco Power bankruptcy. Further, if, for any reason, a storm recovery property notice is not filed under the Securitization Act or we fail to otherwise perfect our interest in the storm recovery property sold pursuant to a sale agreement, and the transfer is thereafter deemed not to constitute a true sale, we would be an unsecured creditor of Cleco Power.

Consolidation of the Issuing Entity and Cleco Power. If Cleco Power were to become a debtor in a bankruptcy case, a party in interest might attempt to substantively consolidate the assets and liabilities of Cleco Power and us. We and Cleco Power have taken steps to attempt to minimize this risk. Please read "Cleco Katrina/Rita Hurricane Recovery Funding LLC, The Issuing Entity" in this prospectus. However, no assurance can be given that if Cleco Power were to become a debtor in a bankruptcy case, a court would not order that our assets and liabilities be substantively consolidated with those of Cleco Power. Substantive consolidation would result in payment of the claims of the beneficial owners of the storm recovery bonds to be subject to substantial delay and to adjustment in timing and amount under a plan of reorganization in the bankruptcy case.

Status of Storm Recovery Property as Current Property. Cleco Power will represent in each sale agreement, and the Securitization Act provides, that the storm recovery property sold pursuant to such sale agreement constitutes a present contract right. Nevertheless, no assurance can be given that, in the event of a bankruptcy of Cleco Power, a court would not rule that the applicable storm recovery property comes into existence only as Cleco Power's customers use electricity.

If a court were to accept the argument that the applicable storm recovery property comes into existence only as Cleco Power's customers use electricity, no assurance can be given that a security interest in favor of the bondholders of the related series of storm recovery bonds would attach to the related storm recovery charges in respect of electricity consumed after the commencement of the bankruptcy case or that the applicable storm recovery property has been sold to us. If it were determined that the applicable storm recovery property had not been sold to us, and the security interest in favor of the storm recovery bondholders of the related series did not attach to the applicable storm recovery charges in respect of electricity consumed after the commencement of the bankruptcy case, then we would have an unsecured claim against Cleco Power. If so, there would be delays and/or reductions in payments on the storm recovery bonds of such series. Whether or not a court determined that storm recovery property had been sold to us pursuant to a sale agreement, no assurances can be given that a court would not rule that any storm recovery charges relating to electricity consumed after the commencement of the bankruptcy could not be transferred to us or the trustee.

In addition, in the event of a bankruptcy of Cleco Power, a party in interest in the bankruptcy could assert that we should pay, or that we should be charged for, a portion of Cleco Power's costs associated with the electricity, consumption of which gave rise to the storm recovery charge receipts used to make payments on the storm recovery bonds.

Regardless of whether Cleco Power is the debtor in a bankruptcy case, if a court were to accept the argument that storm recovery property sold pursuant to the applicable sale agreement comes into existence only as customers use electricity, a tax or government lien or other nonconsensual lien on property of Cleco Power arising before that storm recovery property came into existence could have

priority over our interest in that storm recovery property. Adjustments to the storm recovery charges may be available to mitigate this exposure, although there may be delays in implementing these adjustments.

Estimation of Claims; Challenges to Indemnity Claims. If Cleco Power were to become a debtor in a bankruptcy case, claims, including indemnity claims, by us or the trustee against Cleco Power as seller under the applicable sale agreement and the other documents executed in connection therewith would be unsecured claims and would be subject to being discharged in the bankruptcy case. In addition, a party in interest in the bankruptcy may request that the bankruptcy court estimate any contingent claims that we or the trustee have against Cleco Power. That party may then take the position that these claims should be estimated at zero or at a low amount because the contingency giving rise to these claims is unlikely to occur. If a court were to hold that the indemnity provisions were unenforceable, we would be left with a claim for actual damages against Cleco Power based on breach of contract principles. The actual amount of these damages would be subject to estimation and/or calculation by the court.

No assurances can be given as to the result of any of the above-described actions or claims. Furthermore, no assurance can be given as to what percentage of their claims, if any, unsecured creditors would receive in any bankruptcy proceeding involving Cleco Power.

Enforcement of Rights by the Trustee. Upon an event of default under the indenture, the Securitization Act permits the trustee to enforce the security interest in the storm recovery property sold pursuant to the applicable sale agreement in accordance with the terms of the indenture. In this capacity, the trustee is permitted to request the Louisiana commission or the 19th Judicial District Court for the Parish of East Baton Rouge, Louisiana to order the sequestration and payment to holders of storm recovery bonds of all revenues arising from the applicable storm recovery charges. There can be no assurance, however, that the Louisiana commission or a district court judge would issue this order after a seller bankruptcy in light of the automatic stay provisions of Section 362 of the United States Bankruptcy Code. In that event, the trustee may under the indenture seek an order from the bankruptcy court lifting the automatic stay with respect to this action by the Louisiana commission or a district court judge and an order requiring an accounting and segregation of the revenues arising from the storm recovery property sold pursuant to the applicable sale agreement. There can be no assurance that a court would grant either order.

Bankruptcy of the Servicer. The servicer is entitled to commingle the storm recovery charges that it receives with its own funds until each date on which the servicer is required to remit funds to the trustee as specified in the applicable servicing agreement. The Securitization Act provides that the relative priority of a lien created under the Securitization Act is not defeated or adversely affected by the commingling of storm recovery charges arising with respect to the related storm recovery property with funds of the electric utility. In the event of a bankruptcy of the servicer, a party in interest in the bankruptcy might assert, and a court might rule, that the storm recovery charges commingled by the servicer with its own funds and held by the servicer, prior to and as of the date of bankruptcy were property of the servicer as of that date, and are therefore property of the servicer's bankruptcy estate, rather than our property. If the court so rules, then the court would likely rule that the trustee has only a general unsecured claim against the servicer for the amount of commingled storm recovery charges held as of that date and could not recover the commingled storm recovery charges held as of the date of the bankruptcy.

However the court rules on the ownership of the commingled storm recovery charges, the automatic stay arising upon the bankruptcy of the servicer could delay the trustee from receiving the commingled storm recovery charges held by the servicer as of the date of the bankruptcy until the court grants relief from the stay. A court ruling on any request for relief from the stay could be

delayed pending the court's resolution of whether the commingled storm recovery charges are our property or are property of the servicer, including resolution of any tracing of proceeds issues.

Each servicing agreement will provide that the trustee, as our assignee, together with the other persons specified therein, may vote to appoint a successor servicer that satisfies the rating agency condition. Each servicing agreement will also provide that the trustee, together with the other persons specified therein, may petition the Louisiana commission or a court of competent jurisdiction to appoint a successor servicer that meets this criterion. However, the automatic stay in effect during a servicer bankruptcy might delay or prevent a successor servicer's replacement of the servicer. Even if a successor servicer may be appointed and may replace the servicer, a successor may be difficult to obtain and may not be capable of performing all of the duties that Cleco Power as servicer was capable of performing. Furthermore, should the servicer enter into bankruptcy, it may be permitted to stop acting as servicer.

Bankruptcy of Cleco Power. Cleco Power is not required to segregate the storm recovery charges it collects from its general funds. The Securitization Act provides that our rights to storm recovery property are not affected by the commingling of these funds with other funds. In a bankruptcy of Cleco Power, however, a bankruptcy court might rule that federal bankruptcy law takes precedence over the Securitization Act and does not recognize our right to receive the collected storm recovery charges that are commingled with other funds of Cleco Power prior to or as of the date of bankruptcy, including storm recovery charges associated with other series of storm recovery bonds. If so, the collected storm recovery charges held by Cleco Power as of the date of bankruptcy would not be available to us to pay amounts owing on the storm recovery bonds. In this case, we would have only a general unsecured claim against Cleco Power for those amounts.

In addition, the bankruptcy of Cleco Power may cause a delay in or prohibition of enforcement of various rights against Cleco Power, including rights to require payments by Cleco Power, rights to retain preferential payments made by Cleco Power prior to bankruptcy, rights to require Cleco Power to comply with financial provisions of the Securitization Act or other state laws, rights to terminate contracts with Cleco Power and rights that are conditioned on the bankruptcy, insolvency or financial condition of Cleco Power.

Other risks relating to bankruptcy may be found in "Risk Factors—Risks Associated with Potential Bankruptcy Proceedings of the Seller or the Servicer."

MATERIAL FEDERAL INCOME TAX CONSEQUENCES FOR THE STORM RECOVERY BONDHOLDERS

General

The following is a summary of the material federal income tax consequences to storm recovery bondholders and is based on the opinion of Phelps Dunbar, L.L.P., special federal income tax counsel to us and to Cleco Power, referred to in this prospectus as special tax counsel. Special tax counsel is of the opinion that the description of material federal income tax consequences in this summary is accurate in all material respects. The opinion of special tax counsel is based on some assumptions and is limited by some qualifications stated in this discussion or in the opinion. This discussion is based on current provisions of the Internal Revenue Code, currently applicable Treasury Regulations and judicial and administrative rulings and decisions. Legislative, judicial or administrative changes could alter or modify the statements and conclusions in this discussion. Any legislative, judicial or administrative changes or new interpretations may be retroactive and could affect tax consequences to storm recovery bondholders.

This discussion applies to storm recovery bondholders who acquire storm recovery bonds at original issue for cash equal to the issue price of those bonds and hold the bonds as capital assets. This discussion does not address all of the tax consequences relevant to a particular storm recovery bondholder in light of that holder's circumstances, and some storm recovery bondholders may be subject to special tax rules and limitations not discussed below (e.g., life insurance companies, tax-exempt organizations, financial institutions, dealers in securities, S corporations, taxpayers subject to the alternative minimum tax provisions of the Internal Revenue Code, broker-dealers and persons who hold the storm recovery bonds as part of a hedge, straddle, "synthetic security" or other integrated investment, risk reduction or constructive sale transaction). Except as described below, this discussion also does not address the tax consequences to nonresident aliens, foreign corporations, foreign partnerships or foreign trusts that are subject to U.S. federal income tax on a net basis on income with respect to the storm recovery bonds because that income is effectively connected with the conduct of a U.S. trade or business. In addition, except as described below, this discussion does not address any tax consequences under state, local or foreign tax laws. Consequently, you should consult your tax adviser to determine the federal, state, local and foreign income and any other tax consequences of the purchase, ownership and disposition of the storm recovery bonds.

Income Tax Status of the Storm Recovery Bonds and the Issuing Entity

Based upon guidance from the IRS and certain representations from us, including a representation by us that we will not make, or allow there to be made, any election to the contrary, special tax counsel has rendered its opinion that for U.S. federal income tax purposes we will not be considered an entity separate from Cleco Power and the storm recovery bonds will be treated as debt obligations of Cleco Power.

Taxation of Storm Recovery Bondholders

Based on the assumptions and subject to the qualifications stated herein, it is the opinion of special tax counsel that the material federal income tax consequences to storm recovery bondholders are as follows:

Definition of United States Person

For purposes of the discussion below, a United States person is:

•: an individual who is a citizen or resident of the United States for U.S. federal income tax purposes,
•: a corporation, including an entity treated as a corporation, created or organized in or under the laws of the United States, or any state, including the District of Columbia, or any political subdivision thereof,

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•: an estate, the net income of which is subject to United States federal income taxation regardless of its source, or
•: a trust, if a court within the United States is able to exercise primary supervision over the administration of such trust and one or more United States persons have the authority to control all substantial decisions of such trust or if the trust has a valid election in effect under applicable Treasury regulations to be treated as a United States person.

A U.S. holder means a storm recovery bondholder that is a United States person. Except in the case of a partnership, a non-U.S. holder means a storm recovery bondholder other than a U.S. holder. In the case of a storm recovery bondholder that is a partnership (including for this purpose any entity treated as a partnership for U.S. federal income tax purposes), the tax consequences will generally affect the partners rather than the partnership, but special considerations not set forth herein may apply.

Tax Consequences to U.S. Holders

Payments of Interest. Interest on the storm recovery bonds will be taxable as ordinary income when received or accrued by U.S. holders, depending upon their method of accounting. Generally, interest on the storm recovery bonds will constitute "investment income" for purposes of Internal Revenue Code limitations on the deductibility of investment interest expense.

Original Issue Discount. This discussion assumes that the storm recovery bonds will not be considered to be issued with original issue discount ("OID"). OID is generally defined as any excess of the stated price the U.S. holder will receive upon redemption of the bond at the bond's maturity, less the price the U.S. holder pays to purchase the bond, if this difference is equal to or greater than a de minimis amount (such de minimis amount being defined as 0.25% of a bond's stated redemption price at maturity multiplied by the number of complete years until the bond's maturity date multiplied by a fraction, the numerator of which is the amount of the payment and the denominator of which is the debt instrument's stated redemption price at maturity). If the storm recovery bonds are issued with OID, U.S. holders generally will be subject to the special tax accounting rules for OID obligations provided under the applicable Internal Revenue Code and Treasury Regulations provisions. U.S. holders of storm recovery bonds issued with OID should be aware that they generally must include OID in income for U.S. federal income tax purposes as it accrues economically, on a day-by-day basis, even if the U.S. holders do not actually receive cash distributions related to that income until a later date. If any series or portion of storm recovery bonds is issued with OID, prospective U.S. holders will be so informed in the related prospectus supplement, and should thereafter consult their tax adviser to determine the federal, state, local and foreign income and any other tax consequences

Sale or Other Taxable Disposition of the Storm Recovery Bonds. If there is a sale, exchange, redemption, retirement or other taxable disposition of a storm recovery bond, a U.S. holder generally will recognize gain or loss equal to the difference between (a) the amount of cash and the fair market value of any other property received (other than amounts attributable to, and taxable as, accrued stated interest) and (b) the holder's adjusted tax basis in the storm recovery bond. The adjusted tax basis in the storm recovery bond generally will equal its cost, reduced by any payments reflecting principal previously received with respect to the bond. Gain or loss generally will be capital gain or loss if the storm recovery bond is held as a capital asset.

Backup Withholding. Payments made on and proceeds from the sale of a storm recovery bond may be subject to backup withholding unless a U.S. holder complies with certain identification requirements. Any amounts withheld from a payment to a U.S. holder will be allowed as a credit against such U.S. holder's federal income tax liability, provided that the required information is timely furnished to the IRS.

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Tax Consequences to Non-U.S. Holders

Withholding. Under present U.S. federal income tax law, and subject to the discussion below concerning backup withholding, payments of principal, premium (if any) and interest on a storm recovery bond by us or any paying agent to any non-U.S. holder, and gain realized on the sale or exchange of a storm recovery bond by a non-U.S. holder, will be exempt from U.S. federal income or withholding tax, provided that:

•: such non-U.S. holder does not own, actually or constructively, 10% or more of the total combined voting power of all classes of voting stock of Cleco Corporation, is not a controlled foreign corporation related, directly or indirectly, to Cleco Corporation, through stock ownership and is not a bank receiving interest pursuant to a loan agreement entered into in the ordinary course of its trade or business,
•: the statement requirement described below has been fulfilled with respect to the beneficial owner,
•: such non-U.S. holder is not an individual who is present in the U.S. for 183 days or more in the taxable year of disposition, or such individual does not have a "tax home" (as defined in the Internal Revenue Code) or an office or other fixed place of business in the U.S. and such holder is not subject to the rules under the Internal Revenue Code applicable to expatriates, and
•: such payments and gain are not effectively connected with the conduct by such non-U.S. holder of a trade or business in the U.S..

The statement requirement referred to in the preceding discussion will be fulfilled if the beneficial owner of a storm recovery bond certifies on an appropriate form (generally IRS Form W-8BEN), under penalties of perjury, that it is not a U.S. person and provides its name and address, and (a) the beneficial owner files that form with the withholding agent or (b) a securities clearing organization, bank or other financial institution holding customers' securities in the ordinary course of its trade or business holds the storm recovery bond on behalf of the beneficial owner, files with the withholding agent a statement that it has received that form from the beneficial owner and furnishes the withholding agent with a copy thereof. With respect to any storm recovery bond held by a foreign partnership, under current law, this certification may be provided by the foreign partnership. However, unless a foreign partnership has entered into a withholding agreement with the IRS, each partner that is a non-U.S. holder will be required to supply this certification in order to avoid withholding with respect to such partner's share of interest paid to the foreign partnership. Prospective investors, including foreign partnerships and their partners, should consult their tax advisers regarding possible additional reporting requirements.

If a non-U.S. holder of a storm recovery bond is engaged in a trade or business in the U.S., and if interest on the storm recovery bond is effectively connected with the conduct of such trade or business, the non-U.S. holder, although exempt from the withholding tax discussed in the preceding paragraphs, will generally be subject to regular U.S. federal income tax on interest and on any gain realized on the sale or exchange of the storm recovery bond in the same manner as if it were a U.S. holder. In lieu of the certificate described in the preceding paragraph, such a non-U.S. holder will be required to provide to the withholding agent an appropriate form (generally IRS Form W-8ECI), executed under penalties of perjury, in order to claim an exemption from withholding tax. In addition, if such a non-U.S. holder is a foreign corporation, it may be subject to a branch profits tax equal to 30% (or such lower rate provided by an applicable treaty) of its effectively connected earnings and profits for the taxable year, subject to certain adjustments.

Estate Tax. A storm recovery bond held by an individual who is not a citizen or resident of the U.S. at the time of his death generally will not be subject to U.S. federal estate tax as a result of such individual's death, provided that at the time of death:

•: the individual did not own, actually or constructively, 10% or more of the total combined voting power of all classes of Cleco Corporation's voting stock, and

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•: payments with respect to a storm recovery bond would not have been effectively connected with the conduct by such individual of a trade or business in the U.S..

Backup Withholding and Information Reporting. Payments on a storm recovery bond may be subject to information reporting. Backup withholding will not apply to payments made on or proceeds from the sale of a storm recovery bond if the statement requirement described above is met, provided in each case that the payor does not have actual knowledge or reason to know that the payee is a U.S. person. Any amounts withheld from a payment to a non-U.S. holder under the backup withholding rules will be allowed as a credit against such non-U.S. holder's U.S. federal income tax liability and may entitle such non-U.S. holder to a refund, provided that the required information is furnished to the IRS. Non-U.S. holders of a storm recovery bond should consult their tax advisers regarding the application of information reporting and backup withholding in their particular situations, the availability of an exemption therefrom and the procedure for obtaining such an exemption, if available.

Material Louisiana State Tax Consequences

The discussion below is based upon Louisiana tax statutes and regulations in effect as of the date hereof. Administrative or legislative action taken, or administrative interpretations or rulings or judicial decisions promulgated or issued, subsequent to the date of this prospectus may result in tax consequences different than those described below.

Louisiana imposes a personal income tax on resident individuals and/or nonresident individuals with taxable income derived from sources in the state. Louisiana also imposes a corporate net income tax on corporations and a business franchise tax on corporations doing business or owning property in the state.

Assuming that the storm recovery bonds will be treated as debt obligations of Cleco Power for U.S. federal income tax purposes, it is the opinion of Phelps Dunbar, L.L.P. that interest on the storm recovery bonds received by a person who is not otherwise subject to corporate or personal income tax in the state of Louisiana will not be subject to tax in Louisiana. Further, it is the opinion of Phelps Dunbar, L.L.P. that for Louisiana income tax purposes (1) we will not be treated as a taxable entity separate and apart from Cleco Power, and (2) the storm recovery bonds will be considered indebtedness of Cleco Power, assuming, in each case, that such treatment applies for U.S. federal income tax purposes. These opinions are not binding on any taxing authority or any court, and there can be no assurance that contrary positions may not be taken by any taxing authority.

The discussion under "Material Louisiana State Tax Consequences" is for general information only and may not be applicable depending upon a bondholder's particular situation. It is recommended that prospective bondholders consult their own tax advisors with respect to the tax consequences to them of the acquisition, ownership and disposition of the bonds, including the tax consequences under federal, state, local, non-U.S. and other tax laws and the effects of changes in such laws.

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ERISA CONSIDERATIONS

ERISA and Section 4975 of the Internal Revenue Code, as amended ("Code"), impose restrictions on:

•: employee benefit plans, as defined in Section 3(3) of ERISA, that are subject to Title I of ERISA;
•: plans, as defined in Section 4975(e)(1) of the Code, that are subject to Section 4975 of the Code, including, but not limited to, individual retirement accounts and certain types of Keogh plans;
•: any entities whose underlying assets include plan assets by reason of that plan's investment in those entities, each of the entities described in the first three bullet points being referred to as a "plan;" and
•: persons who, based on their specific relationship to a plan, are "parties in interest" under Section 3(14) of ERISA or "disqualified persons" under Section 4975(e)(2) of the Code (collectively referred to as "parties in interest"). Parties in interest with respect to a plan include, but are not limited to, fiduciaries, persons providing services to the plan, employers any of whose employees are covered by the plan, and employee organizations any of whose members are covered by the plan.

Moreover, based on the reasoning of the United States Supreme Court in John Hancock Mutual Life Insurance Co. v. Harris Trust and Savings Bank, 510 U.S. 86 (1993), an insurance company's general account may be deemed to include assets of the plans investing in the general account, such as through the purchase of an annuity contract. ERISA also imposes specific duties on persons who are fiduciaries of plans subject to ERISA, and ERISA and Section 4975 of the Code prohibit specified transactions between a plan and parties in interest with respect to the plan. Violations of these rules may result in the imposition of excise taxes and other penalties and liabilities under ERISA and Section 4975 of the Code.

Plan Asset Issues for an Investment in the Storm Recovery Bonds

Pursuant to Department of Labor Regulation Section 2510.3-101, as modified by the Pension Protection Act of 2006 (the "plan asset regulation"), in general, when a plan acquires an equity interest in an entity such as a trust, corporation, partnership or other specified entity, and such interest does not represent a "publicly offered security" or a security issued by an investment company registered under the Investment Company Act of 1940, as amended, the plan's assets include both the equity interest and an undivided interest in each of the underlying assets of the entity, unless it is established either that the entity is an "operating company" or that equity participation in the entity by "benefit plan investors" is not "significant." In general, an "equity interest" is defined under the plan asset regulation as any interest in an entity other than an instrument which is treated as indebtedness under applicable local law and which has no substantial equity features. Although there is little statutory or regulatory guidance on this subject, and there can be no assurances in this regard, it appears that the storm recovery bonds should not be treated as an equity interest for purposes of the plan asset regulation. Accordingly, our assets should not be treated as the assets of plans investing in the storm recovery bonds.

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If the storm recovery bonds were deemed to be equity interests in us and none of the exceptions contained in Section 2510.3-101 of the regulations were applicable, then our assets would be considered to be assets of any plans that purchase the storm recovery bonds. The extent to which the storm recovery bonds are owned by benefit plan investors will not be monitored. If our assets were deemed to constitute "plan assets" pursuant to Section 2510.3-101 of the regulations, as modified by Section 3(42) of ERISA, transactions we might enter into, or may have entered into in the ordinary course of business, might constitute non-exempt prohibited transactions under ERISA and or Section 4975 of the Internal Revenue Code.

In addition, the acquisition or holding of the storm recovery bonds by or on behalf of a plan could give rise to a prohibited transaction if we or the trustee, Cleco Power, any underwriter or certain of their affiliates has, or acquires, a relationship to an investing plan. Each purchaser of the storm recovery bonds will be deemed to have represented and warranted that its purchase and holding of the storm recovery bonds will not result in a prohibited transaction.

Prohibited Transaction Exemptions

It should be noted, however, that without regard to the treatment of the storm recovery bonds as equity interests under the plan asset regulation, Cleco Power, the underwriters and/or their affiliates, as providers of services to plans or otherwise, may be deemed to be parties in interest with respect to many plans. The purchase and holding of the storm recovery bonds by or on behalf of one or more of these plans could result in a prohibited transaction within the meaning of Section 406 of ERISA or Section 4975 of the Code. However, the purchase and holding of the storm recovery bonds may be subject to one or more administrative class exemptions from the prohibited transaction rules of ERISA and Section 4975 of the Code.

Examples of Prohibited Transaction Class Exemptions. Potentially applicable prohibited transaction class exemptions ("PTCEs"), issued by the Department of Labor, include the following:

•: PTCE 84-14, which exempts certain transactions effected on behalf of a Plan by a "qualified professional asset manager" ("QPAM"), with such exemption referred to as the "QPAM exemption;"
•: PTCE 90-1, which exempts certain transactions between insurance company pooled separate accounts and parties in interest;
•: PTCE 91-38, which exempts certain transactions between bank collective investment funds and parties in interest;
•: PTCE 95-60, which exempts certain transactions between insurance company general accounts and parties in interest; and
•: PTCE 96-23, which exempts certain transactions effected on behalf of a plan by an "in-house asset manager."

It should be noted, however, that even if the conditions specified in one or more of these exemptions are met, the scope of relief provided by these exemptions may not necessarily cover all acts that might be construed as prohibited transactions.

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Prior to making an investment in the storm recovery bonds of any series, each fiduciary causing the storm recovery bonds to be purchased by, on behalf of, or using plan assets of a plan that is subject to the prohibited transaction rules of ERISA or Section 4975 of the Code, including without limitation, an insurance company general account, shall be deemed to have represented and warranted that, a class exemption from the prohibited transaction rules applies, so that the use of plan assets of the plan to purchase and hold the storm recovery bonds does not and will not constitute or otherwise result in a nonexempt prohibited transaction in violation of Section 406 of ERISA or Section 4975 of the Code.

General Investment Considerations for Prospective Plan Investors in the Storm Recovery Bonds

Prior to making an investment in the storm recovery bonds, prospective plan investors should consult with their legal advisors concerning the impact of ERISA and the Code and the potential consequences of this investment with respect to their specific circumstances. Moreover, each plan fiduciary should take into account, among other considerations:

•: whether the fiduciary has the authority to make the investment,
•: whether the investment constitutes a direct or indirect transaction with a party in interest,
•: the composition of the plan's portfolio with respect to diversification by type of asset,
•: the plan's funding objectives,
•: the tax effects of the investment, and
•: whether, under the general fiduciary standards of investment prudence and diversification, an investment in the storm recovery bonds is appropriate for the plan, taking into account the overall investment policy of the plan and the composition of the plan's investment portfolio.

Governmental plans and some church plans are generally not subject to the fiduciary responsibility provisions of ERISA or the provisions of Section 4975 of the Code. However, these plans may be subject to substantially similar rules under state or other federal law and may also be subject to the prohibited transaction rules of Section 503 of the Code.

The sale of the storm recovery bonds to a plan shall not be deemed a representation by Cleco Power, the underwriters, or us that this investment meets all relevant legal requirements with respect to plans generally or any particular plan.

PLAN OF DISTRIBUTION FOR THE STORM RECOVERY BONDS

Distribution

The storm recovery bonds of each series may be sold to or through the underwriters by a negotiated firm commitment underwriting and public reoffering by the underwriters. The storm recovery bonds may also be sold to or through any other underwriting arrangement as may be specified in the related prospectus supplement or may be offered or placed either directly or through agents. We intend that the storm recovery bonds may be offered through various methods from time to time. We also intend that offerings may be made concurrently through more than one of these methods or that an offering of a particular series of the storm recovery bonds may be made through a combination of these methods.

The distribution of the storm recovery bonds may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed, or at market prices prevailing at the time of sale, at prices related to the prevailing market prices or in negotiated transactions or otherwise at varying prices to be determined at the time of sale.

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The storm recovery bonds may be offered through one or more different methods, including offerings through underwriters. It is not anticipated that storm recovery bonds bearing interest at a fixed rate will be listed on any securities exchange. Storm recovery bonds bearing interest at a floating rate may be listed on a securities exchange. Information regarding any such listing will be provided in the applicable prospectus supplement. The underwriters may, from time to time, buy and sell storm recovery bonds, but there can be no assurance that a secondary market for any series of the storm recovery bonds will develop or, if one does develop, that it will continue.

Compensation to Underwriters

In connection with the sale of any series of storm recovery bonds, underwriters or agents may receive compensation in the form of discounts, concessions or commissions. Underwriters may sell storm recovery bonds to particular dealers at prices less a concession. Underwriters may allow, and these dealers may reallow, a concession to other dealers. Underwriters, dealers and agents that participate in the distribution of the storm recovery bonds of a series may be deemed to be underwriters. Any discounts or commissions received by the underwriters from us and any profit on the resale of the storm recovery bonds by them may be deemed to be underwriting discounts and commissions under the Securities Act of 1933. These underwriters or agents will be identified, and any compensation received from us will be described, in the related prospectus supplement.

Other Distribution Matters

Under agreements which may be entered into by Cleco Power, us and the trustee, underwriters and agents who participate in the distribution of storm recovery bonds may be entitled to indemnification by Cleco Power and us against liabilities specified therein, including under the Securities Act of 1933.

RISK WEIGHTING UNDER CERTAIN INTERNATIONAL CAPITAL GUIDELINES

Under the standardized approach under the framework established by Basel II, the storm recovery bonds may attract a risk weighting of 20% on the basis that the storm recovery bonds are rated in the highest category by a major rating agency. It is a condition of issuance of a series of storm recovery bonds that the bonds be rated "Aaa" by Moody's, "AAA" by S&P, and "AAA" by Fitch. In the alternative, under the framework established by Basel II, a series of storm recovery bonds may attract the same risk weighting if such series are considered to be "guaranteed" by a non-governmental public sector entity.

If held by financial institutions subject to regulation in countries (other than the United States) that have adopted and continue to use or permit the use of the Basel Accord for risk weighting, the storm recovery bonds may attract the same risk weighting as "claims on" or "claims guaranteed by" non-central government bodies within the United States, which are accorded a 20% risk weighting. We note, however, that the analysis may be different than that under Basel II.

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Before acquiring any storm recovery bonds, prospective investors that are banks or bank holding companies, particularly those that are organized under the laws of any country other than the United States or of any state, territory or other political subdivision of the United States, and prospective investors that are U.S. branches and agencies of foreign banks, should consult all applicable laws, regulations and policies, as well as appropriate regulatory bodies and legal counsel, to confirm that an investment in such series of storm recovery bonds is permissible and in compliance with any applicable investment or other limits. We cannot assure you that any series of storm recovery bonds will attract a 20% risk weighting treatment under any national law, regulation or policy implementing Basel II, the Basel Accord or any transitional regime.

RATINGS FOR THE STORM RECOVERY BONDS

It is a condition to issuance of the storm recovery bonds that each series or tranche be rated in the highest rating category by each of Standard & Poor's, a division of The McGraw-Hill Companies, Inc., Moody's Investors Service Inc. and Fitch, Inc.

Limitations of Security Ratings. A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating. No person is obligated to maintain the rating on any series or tranche of storm recovery bonds and, accordingly, we can give no assurance that the ratings assigned to any series or tranche of the storm recovery bonds upon initial issuance will not be lowered or withdrawn by a rating agency at any time thereafter. If a rating of any series or tranche of storm recovery bonds is revised or withdrawn, the liquidity of this series or tranche may be adversely affected. In general, ratings address credit risk and do not represent any assessment of any particular rate of principal payments on the storm recovery bonds other than the payment in full of each series or tranche of storm recovery bonds by the applicable series final maturity date or tranche final maturity date, as well as the timely payment of interest.

WHERE YOU CAN FIND MORE INFORMATION

This prospectus is part of a registration statement we and Cleco Power have filed with the SEC relating to the storm recovery bonds. This prospectus and each prospectus supplement describe the material terms of some of the documents we have filed as exhibits to the registration statement. However, this prospectus and each prospectus supplement do not contain all of the information contained in the registration statement and the exhibits. Any statements contained in this prospectus or any prospectus supplement concerning the provisions of any document filed as an exhibit to the registration statement or otherwise filed with the SEC are not necessarily complete. Each statement concerning those provisions is qualified in its entirety by reference to the respective exhibit. Information filed with the SEC can be inspected at the SEC's Internet site located at http://www.sec.gov. You may also read and copy the registration statement, the exhibits and any other documents we file with the SEC at the SEC's Public Reference Room located at 100F Street, N.E, Washington, D.C. 20549. You may obtain further information regarding the operation of the SEC's Public Reference Room by calling the SEC at 1-800-SEC-0330. You may also obtain a copy of our filings with the SEC at no cost, by writing to or telephoning us at the following address:

Cleco Katrina/Rita Hurricane Recovery Funding LLC
2605 Hwy. 28 East, Office Number 12
Pineville, Louisiana 71360
(318) 484-4180

We or Cleco Power as sponsor will also file with the SEC all of the periodic reports we are required to file under the Securities Exchange Act of 1934 and the rules, regulations or orders of the SEC thereunder.

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The SEC allows us to "incorporate by reference" into this prospectus information we file with the SEC. This means we can disclose important information to you by referring you to the documents containing the information. The information we incorporate by reference is considered to be part of this prospectus, unless we update or supersede that information by the information contained in a prospectus supplement or information that we file subsequently that is incorporated by reference into this prospectus. We are incorporating into this prospectus any future filings, which we or Cleco Power, but solely in its capacity as our sponsor, make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until the offering of the storm recovery bonds is completed, excluding any information that is furnished to, and not filed with, the SEC. These reports will be filed under our own name as issuing entity. Any statement contained in this prospectus, in any prospectus supplement or in a document incorporated or deemed to be incorporated by reference in this prospectus or any prospectus supplement will be deemed to be modified or superseded for purposes of this prospectus and any prospectus supplement to the extent that a statement contained in this prospectus, any prospectus supplement or in any separately filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes that statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute part of this prospectus or the prospectus supplement.

LEGAL MATTERS

Certain legal matters relating to us and the issuance of storm recovery bonds will be passed upon for Cleco Power and for us by Baker Botts L.L.P., Houston, Texas and Phelps Dunbar, L.L.P., New Orleans, Louisiana. Certain legal matters relating to the U.S. federal income tax consequences of the issuance of the storm recovery bonds will be passed upon for us by Phelps Dunbar, L.L.P.. Underwriters will be advised about certain legal matters relating to the issuance of storm recovery bonds by counsel named in the applicable prospectus supplement.

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GLOSSARY OF DEFINED TERMS

The following definitions are used in this prospectus and in any accompanying prospectus supplement:

Adjustment request with regard to the storm recovery charges means a request filed by the servicer with the Louisiana commission requesting modifications to the storm recovery charges.

Bankruptcy Code means Title 11 of the United States Code, as amended.

Basel Accord means the 1988 International Convergence of Capital Measurement and Capital Standards of the Basel Committee on Banking Supervision, as amended.

Basic documents means, with respect to any series of storm recovery bonds, the administration agreement, sale agreement, servicing agreement, indenture and any supplements thereto or bills of sale given by the seller and the notes evidencing the storm recovery bonds.

Business day means any day other than a Saturday, a Sunday or a day on which banking institutions in New Orleans, Louisiana or New York, New York are, or DTC is, authorized or obligated by law, regulation or executive order to remain closed.

Capital subaccount means that subaccount of the collection account into which the seller will contribute capital in an amount equal to 0.50% of the principal amount of such series of storm recovery bonds issued by us.

Clearstream means Clearstream Banking, Luxembourg, S.A.

Collection account means the segregated trust account relating to a series of storm recovery bonds designated the collection account for that series and held by the trustee under the indenture. The collection account for each series shall initially be divided into subaccounts, which need not be separate accounts: a General Subaccount, a Capital Subaccount, an Excess Funds Subaccount and one or more class subaccounts for any tranche of any series of storm recovery bonds as specified in any Series Supplement.

Customers means any existing or future LPSC-jurisdictional customer who remain attached to Cleco Power's (or its successors) electric transmission or distribution lines, and who, via such lines, receive any type of service from Cleco Power (or its successors) under rate schedules or special contracts approved by the Louisiana commission..

DTC means The Depository Trust Company, New York, New York, and its nominee holder, Cede & Co.

ERISA means the Employee Retirement Income Security Act of 1974, as amended.

Euroclear means the Euroclear System.

Excess funds subaccount means that subaccount of the collection account into which funds collected by the servicer in excess of amounts necessary to make the payments specified on a given payment date.

Financing order, as used in this prospectus, means an order issued by the Louisiana commission to Cleco Power which, among other things, governs the amount of storm recovery bonds that may be issued and terms for collections of related storm recovery charges.

Fitch means Fitch, Inc.

General subaccount means that subaccount that will hold funds held in the collection account that are not held in the other subaccounts of the collection account.

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Indenture means the indenture to be entered into between the issuing entity and the trustee, providing for the issuance of storm recovery bonds, as the same may be amended and supplemented from time to time by one or more indentures supplemental thereto.

Internal Revenue Code means the Internal Revenue Code of 1986, as amended.

IRS means the Internal Revenue Service of the United States.

Issuing Entity means Cleco Katrina/Rita Hurricane Recovery Funding LLC.

kWh means kilowatt-hour.

Louisiana commission, or LPSC, means the Louisiana Public Service Commission.

Louisiana UCC filing officer means the recorder of mortgages of Orleans Parish (or any successor by law) or the clerk of court of any other parish in Louisiana.

Moody's means Moody's Investors Service, Inc.

MWh means megawatt-hour.

Nonbypassable refers to the right of the servicer to collect the storm recovery charges from all existing and future customers of Cleco Power, subject to certain limitations specified in the financing order.

Payment date means the date or dates on which interest and principal are to be payable on a series of storm recovery bonds.

Rating agencies means Moody's, S&P and Fitch.

Rating agency condition means, with respect to any action, the notification in writing to each rating agency of such action and the confirmation by S&P to the trustee and Cleco Katrina/Rita Hurricane Recovery Funding LLC that such action will not result in a reduction or withdrawal of the then rating by such rating agency of any outstanding series or tranche of storm recovery bonds.

Record date means the date or dates with respect to each payment date on which it is determined the person in whose name each storm recovery bond is registered will be paid on the respective payment date.

Regulation AB means the rules of the SEC promulgated under Subpart 229.1100—Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123, as such may be amended from time to time.

S&P means Standard and Poor's, a Division of The McGraw-Hill Companies.

Sale agreement means a sale agreement to be entered into between the issuing entity and Cleco Power, pursuant to which Cleco Power sells and the issuing entity buys storm recovery property.

SEC means the U.S. Securities and Exchange Commission.

Securitization Act means Act 64 of 2006, codified at La. R.S. 45:1226-1236, the Louisiana legislation adopted in May 2006, providing for a financing mechanism through which electric utilities can use securitization financing for storm recovery costs.

Servicer means Cleco Power, acting as the initial servicer, and any successor or assignee servicer, which will service the applicable storm recovery property under a servicing agreement with the issuing entity.

Servicing agreement means a servicing agreement to be entered into between the issuing entity and Cleco Power, as the same may be amended and supplemented from time to time, pursuant to which Cleco Power, as the initial servicer, undertakes to service storm recovery property.

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Storm recovery charges means, with regard to Cleco Power, the amounts authorized to be imposed on all customers and collected, through a nonbypassable mechanism, by the servicer, to recover qualified costs pursuant to a financing order.

Storm recovery costs means the costs of an electric utility recoverable through the issuance of storm recovery bonds, the costs of issuing, supporting and servicing the storm recovery bonds.

Storm recovery property means all of Cleco Power's rights and interest under the Financing Order (including, without limitation, rights to impose, collect and receive the "storm recovery charges" (as defined in the Securitization Act) approved in such Financing Order) issued by the Louisiana Commission on September 17, 2007 (Docket No. U-29157-A) pursuant to the Securitization Act, except the rights of Cleco Power to earn and receive a rate of return on its invested capital in the issuing entity, to receive administration and servicer fees, to withdraw funds from its restricted storm recovery reserve funded by the proceeds from the sale of the storm recovery property, or to use Cleco Power's remaining portion of those proceeds.

Treasury Regulations means proposed or issued regulations promulgated from time to time under the Internal Revenue Code.

True-up provision means a mechanism required by the financing order whereby the servicer will apply to the Louisiana commission for adjustments to the applicable storm recovery charges based on actual collected storm recovery charges and updated assumptions by the servicer as to future collections of storm recovery charges. The Louisiana commission will approve properly filed adjustments. Any corrections for mathematical errors will be reflected in the next true-up.

Trust Indenture Act means the Trust Indenture Act of 1939, as amended.

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PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution.*

The following is an itemized list of the estimated expenses to be incurred in connection with the offering of the securities being offered hereunder other than underwriting discounts and commissions:

Registration Fee		$	7,105
Financial advisory fees		$	800,000
Trustee's fees and expenses		$	25,000
Legal fees and expenses		$	2,000,000
Independent accountant's fees and expenses		$	125,000
Printing and engraving expenses		$	35,000
Rating agency fees		$	350,000
LPSC application and related fees (including fees of its financial advisor)		$	250,000
Miscellaneous expenses		$	207,895

	Total	$	3,800,000

*: All amounts, other than the Registration Fee, are estimates of expenses to be incurred in connection with the issuance and distribution of a series of securities in an aggregate principal amount assumed for these purposes to be equal to $181,000,000 of securities registered by this Registration Statement.

Item 15. Indemnification of Directors and Officers.

Cleco Power LLC

Article IV of Cleco Power's Articles of Organization and Section 7 of its Operating Agreement provide that the management of Cleco Power is vested in its managers.

Section 1315A of the Louisiana Limited Liability Company Law ("LLLCL") provides that, subject to specified limitations, the articles of organization or a written operating agreement of a limited liability company ("LLC") may eliminate or limit the personal liability of a member or members, if management is reserved to the members, or a manager or managers, if management is vested in one or more managers, for monetary damages for breach of any duty provided for in Section 1314 of the LLLCL. Section 1314 of the LLLCL provides that a member, if management is reserved to the members, or a manager, if management is vested in one or more managers, shall be deemed to stand in a fiduciary relationship to the LLC and its members and shall discharge his duties in good faith, with the diligence, care, judgment and skill that an ordinary prudent person in a like position would exercise under similar circumstances. Section 1314 also provides that such a member or manager:

•: is protected in discharging his duties in relying in good faith upon specified records, opinions and other information, unless he has knowledge that makes such reliance unwarranted;
•: will not be liable for any action taken on behalf of the LLC if he performed the duties of his office in compliance with Section 1314;
•: will not be personally liable to the LLC or its members for monetary damages unless he engaged in grossly negligent conduct or conduct that demonstrates a greater disregard of the duty of care than gross negligence;

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•: in making business judgments, fulfills his duty by making such judgments in good faith, if he does not have a conflict of interest with respect to the business judgment, is informed with respect to the subject of the business judgment to the extent the member or manager reasonably believes to be appropriate under the circumstances and rationally believes that the judgment is in the best interests of the LLC and its members; and
•: Section 1314 further provides that a person alleging a breach of the duty owed by a member or manager to an LLC has the burden of proving the alleged breach of duty, including the inapplicability of specified provisions of Section 1314 as to the fulfillment of the duty, and, in a damage action, the burden of proving that the breach was the legal cause of damage suffered by the LLC.

Article V of Cleco Power's Articles of Organization provides that no member or manager will be personally liable for any monetary damages for breach of any duty provided for in Section 1314 of the LLLCL, except as otherwise provided in Section 1315B of the LLLCL. Under Section 1315B, no provision of an LLC's articles of organization or operating agreement limiting or eliminating liability may limit or eliminate the liability of a member or manager for the amount of a financial benefit received by a member or manager to which he is not entitled or for an intentional violation of criminal law. Article V of Cleco Power's Articles of Organization also provides that if the LLLCL is amended to authorize any further elimination or limitation of the personal liability of our member or any manager, the liability of such member or managers will be eliminated or limited to the fullest extent provided by the LLLCL, as amended. Article V further provides that any repeal or modification of Article V will not adversely affect any right or protection of any member or any manager with respect to any events occurring prior to the time of the repeal or modification.

Section 1315A of the LLLCL allows the articles of organization or a written operating agreement of an LLC to provide for the indemnification of a member or members, or a manager or managers, for judgments, settlements, penalties, fines or expenses incurred because he is or was a member or manager. Section 1315B provides that the indemnification provisions of Section 1315A may not limit or eliminate the liability of a member or manager for the amount of a financial benefit received by a member or manager to which he is not entitled or for an intentional violation of criminal law.

Section 13 of Cleco Power's Operating Agreement provides that Cleco Power will indemnify any person who was or is, or is threatened to be made, a party to or otherwise involved in any pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or other proceeding, whether civil, criminal, administrative or investigative (any such threatened, pending or completed proceeding is referred herein as a "Proceeding") by reason of the fact that he is or was one of Cleco Power's managers, officers, employees or agents or is or was serving at Cleco Power's request as a director, manager, officer, employee or agent of another business, foreign or nonprofit corporation, partnership, joint venture, trust, employee benefit plan or other enterprise (whether the basis of his involvement in such Proceeding is alleged action in an official capacity or in any other capacity while serving as such), to the fullest extent permitted by applicable law in effect from time to time, and to such greater extent as applicable law may from time to time permit, from and against expenses, including attorney's fees, judgments, fines, amounts paid or to be paid in settlement, liability and loss, ERISA excise taxes, actually and reasonably incurred by him or on his behalf or suffered in connection with such Proceeding or any claim, issue or matter therein. However, subject to certain exceptions set forth in Section 13, Cleco Power will indemnify any such person claiming indemnity in connection with a Proceeding initiated by such person only if such Proceeding was authorized by Cleco Power's board of managers.

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Section 13 of Cleco Power's Operating Agreement further provides that:

•: Cleco Power will from time to time pay, in advance of final disposition, all Expenses (as defined in Section 13) incurred by or on behalf of any person claiming indemnity thereunder in respect of any Proceeding;
•: the right to indemnification provided therein is a contract right and no amendment, alteration or repeal of Section 13 will restrict the indemnification rights granted by Section 13 as to any person claiming indemnification with respect to acts, events and circumstances that occurred, in whole or in part, before such amendment, alteration or repeal;
•: any such indemnification may continue as to any person who has ceased to be a manager, officer, employee or agent and will inure to the benefit of the heirs, executors and legal representative of such person; and
•: the rights to indemnification and to receive advancement of Expenses contemplated by Section 13 are not exclusive of any other rights to which any person may at any time be otherwise entitled, provided that such other indemnification may not apply to a person's willful or intentional misconduct.

Section 13 also sets forth certain procedural and evidentiary standards applicable to the enforcement of a claim thereunder.

Section 13 also provides that Cleco Power:

•: may procure or maintain insurance or other similar arrangement, at our expense, to protect ourselves and any manager, officer, employee or agent of ours or any other corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss asserted against or incurred by such person, whether or not we would have the power to indemnify such person against such expense or liability; and
•: shall indemnify our managers and officers to the extent they are not covered by the insurance, whether or not such persons would otherwise be entitled to indemnification under Section 13, to the extent (i) of deductibles payable under such policies, (ii) of amounts exceeding payments required to be made by an insurer or (iii) that prior policies of manager's and officer's liability insurance would have provided for payment to such officer or manager (but no person will be entitled to indemnification for willful or intentional misconduct).

Cleco Katrina/Rita Hurricane Recovery Funding LLC

Article IV of the issuing entity's Articles of Organization and Article VII of its Operating Agreement provide that the management of the issuing entity is vested in its managers.

Article V of the issuing entity's Articles of Organization provides that except as otherwise provided by the LLLCL and except as otherwise characterized for tax and financing reporting purposes, the debts, obligations and liabilities of the issuing entity, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the issuing entity, and no member or manager shall be obligated personally for any such debt, obligation or liability of the issuing entity solely by reason of being a member or a manager. Under Section 1315B of the LLLCL, no provision of an LLC's articles of organization or operating agreement limiting or eliminating liability may limit or eliminate the liability of a member or manager for the amount of a financial benefit received by a member or manager to which he is not entitled or for an intentional violation of criminal law. Article V of the issuing entity's Articles of Organization also provides that if the LLLCL is amended to authorize any further elimination or limitation of the personal liability of our member or any manager, the liability of such member or managers will be eliminated or limited to the fullest extent provided by the LLLCL, as amended. Article V further provides that any repeal or modification of Article V will not adversely

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affect any right or protection of any member or any manager with respect to any events occurring prior to the time of the repeal or modification.

Article X of the issuing entity's operating agreement provides that, subject to the determination described below, to the fullest extent permitted by law, the issuing entity shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the issuing entity, by reason of the fact that such person is or was a manager, member, officer, controlling person, employee, legal representative or agent of the issuing entity, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with the action, suit or proceeding if such person acted in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the issuing entity, and, with respect to a criminal action or proceeding, had no reasonable cause to believe such person's conduct was unlawful; but such person shall not be entitled to indemnification if such judgment, penalty, fine or other expense was directly caused by such person's fraud, gross negligence or willful misconduct.

Article X of the issuing entity's operating agreement provides that, subject to the determination described below, to the fullest extent permitted by law, the issuing entity shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the issuing entity to procure a judgment in its favor by reason of the fact that such person is or was a member, manager, officer, controlling person, employee, legal representative or agent of the issuing entity, against expenses, including amounts paid in settlement and attorneys' fees actually and reasonably incurred by such person in connection with the defense or settlement of the actions or suit if such person acted in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the issuing entity; but such person shall not be entitled to indemnification if such judgment, penalty, fine or other expense was directly caused by such person's fraud, gross negligence or willful misconduct. Indemnification may not be made for any claim, issue or matter as to which such person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the issuing entity or for amounts paid in settlement to the issuing entity, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.

Article X of the issuing entity's operating agreement provides that the issuing entity shall indemnify any person who is or was a manager, member, officer, controlling person, employee, legal representative or agent of the issuing entity, against expenses, including attorneys' fees, actually and reasonably incurred by him or her in connection with the defense of any action, suit or proceeding referred to above or in defense of any claim, issue or matter therein, to the extent that such person has been successful on the merits.

Article X of the issuing entity's operating agreement provides that any indemnification, as well as the advance payment of expenses described below, unless ordered by a court or advanced, must be made by the issuing entity only as authorized in the specific case upon a determination that indemnification of the manager, member, officer, controlling person, employee, legal representative or agent is proper in the circumstances. The determination must be made:

•: by the member if the member was not a party to the act, suit or proceeding; or
•: if the member was a party to the act, suit or proceeding, then by independent legal counsel in a written opinion.

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Article X of the issuing entity's operating agreement provides that the expenses of each person who is or was a manager, member, officer, controlling person, employee, legal representative or agent, incurred in defending a civil or criminal action, suit or proceeding may be paid by the issuing entity as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of such person to repay the amount if it is ultimately determined by a court of competent jurisdiction that such person is not entitled to be indemnified by the issuing entity. This shall not affect any rights to advancement of expenses to which personnel other than the member or the managers (other than the Independent Managers, as defined in the operating agreement) may be entitled under any contract or otherwise by law.

The indemnification and advancement of expenses authorized in or ordered by a court pursuant to the issuing entity's operating agreement:

•: does not exclude any other rights to which a person seeking indemnification or advancement of expenses may be entitled under any agreement, decision of the member or otherwise, for either an action of any person who is or was a manager, member, officer, controlling person, employee, legal representative or agent, in the official capacity of such person or an action in another capacity while holding such position, except that indemnification and advancement, unless ordered by a court pursuant to Section 10.05 of the operating agreement, may not be made to or on behalf of such person if a final adjudication established that its acts or omissions involved intentional misconduct, fraud or a knowing violation of the law and were material to the cause of action; and
•: continues for a person who has ceased to be a member, manager, officer, employee, legal representative or agent and inures to the benefit of the successors, heirs, executors and administrators of such a person.

Item 16. Exhibits.

See Index to Exhibits at page II-11.

Item 17. Undertakings.

•: As to Rule 415:

Each undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made of the securities registered hereby, a post-effective amendment to this Registration Statement:

(i) to include any prospectus required by section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act");

(ii) to reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission (the "Commission") pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective Registration Statement; and

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(iii) to include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement;

provided, however, that the undertakings set forth in clauses (1)(i), (1)(ii) and (1)(iii) above do not apply if the information required to be included in a post-effective amendment by those clauses is contained in periodic reports filed by the Registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are incorporated by reference in this Registration Statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of this Registration Statement; and provided further, however, that the undertakings set forth in clauses (1)(i) and (1)(ii) above do not apply if the information required to be included in a post-effective amendment by those clauses is provided pursuant to Item 1100(c) of Regulation AB.

(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) That, for the purpose of determining liability under the Securities Act to any purchaser, if the Registrants are relying on Rule 430B:

(i) Each prospectus filed by the Registrants pursuant to Rule 424(b)(3) shall be deemed to be part of this Registration Statement as of the date the filed prospectus was deemed part of and included in this Registration Statement; and

(ii) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by section 10(a) of the Securities Act shall be deemed to be part of and included in this Registration Statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuing entity and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to the purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.

(5) That, for the purpose of determining liability of the Registrants under the Securities Act to any purchaser in the initial distribution of the securities, each Registrant undertakes that in a primary offering of securities of such Registrant pursuant to this Registration Statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered

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or sold to such purchaser by means of any of the following communications, the Registrants will be sellers to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any preliminary prospectus or prospectus of the undersigned Registrants relating to the offering required to be filed pursuant to Rule 424;

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the Registrants or used or referred to by the Registrants;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the Registrants or the securities provided by or on behalf of the Registrants; and

(iv) Any other communication that is an offer in the offering made by the Registrants to the purchaser.

As to documents subsequently filed that are incorporated by reference:

The Registrants hereby undertake that, for purposes of determining any liability under the Securities Act, each filing of the Registrants' annual report pursuant to section 13(a) or section 15(d) of the Exchange Act that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

As to indemnification:

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of each Registrant pursuant to the provisions described under Item 15 above, or otherwise, each Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by a Registrant of expenses incurred or paid by a director, officer or controlling person of such Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, each Registrant will, unless in the opinion of its respective counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

As to qualification of trust indentures:

The Registrants hereby undertake to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Trust Indenture Act.

As to incorporating by reference subsequent Exchange Act documents by third parties:

The Registrants hereby undertake that, for purposes of determining any liability under the Securities Act, each filing of an annual report pursuant to section 13(a) or section 15(d) of the Exchange Act of a third party that is incorporated by reference in this Registration Statement in accordance with Item 1100(c)(1) of Regulation AB shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-7

As to providing certain information through an Internet Web site:

The Registrants hereby undertake that, except as otherwise provided by Item 1105 of Regulation AB, information provided in response to that Item pursuant to Rule 312 of Regulation S-T through the specified Internet address in the prospectus is deemed to be a part of the prospectus included in this Registration Statement. In addition, the Registrants hereby undertake to provide to any person without charge, upon request, a copy of the information provided in response to Item 1105 of Regulation AB pursuant to Rule 312 of Regulation S-T through the specified Internet address as of the date of the prospectus included in this Registration Statement if a subsequent update or change is made to the information.

II-8

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Pineville, State of Louisiana, on the 22nd day of February, 2008.

		CLECO POWER LLC (Registrant)
		By:	/s/ Kathleen F. Nolen Kathleen F. Nolen Senior Vice President, Chief Financial Officer & Treasurer

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons on the 22nd day of February, 2008 in the capacities indicated.

Signature		Title

* Michael H. Madison		Chief Executive Officer and Manager (Principal Executive Officer and Manager)
/s/ Kathleen F. Nolen Kathleen F. Nolen		Senior Vice President, Chief Financial Officer & Treasurer (Principal Financial Officer)
/s/ R. Russell Davis R. Russell Davis		Vice President and Chief Accounting Officer (Principal Accounting Officer)
* Sherian G. Cadoria		Manager
* Richard B. Crowell		Manager
* J. Patrick Garrett		Manager
* F. Ben James, Jr.		Manager
* Elton R. King		Manager
* William L. Marks		Manager
* Robert T. Ratcliff, Sr.		Manager
* William H. Walker, Jr.		Manager
* W. Larry Westbrook		Manager

*By:		/s/ Kathleen F. Nolen
Attorney-in-Fact

II-9

SIGNATURES

		CLECO KATRINA/RITA HURRICANE RECOVERY FUNDING LLC (Registrant)
		By:	/s/ Keith D. Crump Keith D. Crump Manager

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons on the 22nd day of February, 2008 in the capacities indicated.

Signature		Title

/s/ Dilek Samil Dilek Samil		President and Manager (Principal Executive Officer and Manager)
/s/ Keith D. Crump Keith D. Crump		Vice President and Manager
/s/ Terry L. Taylor Terry L. Taylor		Secretary and Manager (Principal Accounting Officer)
/s/ K. Michael Sawrie K. Michael Sawrie		Treasurer and Manager (Principal Financial Officer)

II-10

INDEX TO EXHIBITS

Exhibit Number		Document Description
1.1*		Form of Underwriting Agreement
2.1**		Joint Agreement of Merger of Cleco Utility Group Inc. with and into Cleco Power LLC, dated December 15, 2000 (Exhibit 2 to Pre-Effective Amendment No. 1 to Registration Statement on Form S-3 filed with the SEC on January 26, 2001 (Registration Number 333-52540))
3.1**		Articles of Organization and Initial Report of Cleco Power LLC, dated December 11, 2000 (Exhibit 3(a) to Pre-Effective Amendment No. 1 to Registration Statement on Form S-3 filed with the SEC on January 26, 2001 (Registration Number 333-52540))
3.2**		Operating Agreement of Cleco Power LLC, revised effective October 24, 2003 (Exhibit 3(b) to Quarterly Report on Form 10-Q for the quarter ended September 30, 2003, filed with the SEC on November 6, 2003 (SEC File No. 1-5663))
3.3†		Articles of Organization of Cleco Katrina/Rita Hurricane Recovery Funding LLC
3.4†		Limited Liability Company Operating Agreement of Cleco Katrina/Rita Hurricane Recovery Funding LLC
4.1		Form of Indenture
4.2*		Form of the Storm Recovery Bonds (included in Exhibit 4.3)
4.3*		Form of Supplemental Indenture relating to the issuance of a series of storm recovery bonds
5.1		Opinion of Phelps Dunbar, L.L.P. relating to legality of the storm recovery bonds
8.1		Opinion of Phelps Dunbar, L.L.P. with respect to federal tax matters
23.1		Consent of Phelps Dunbar, L.L.P. (included in Exhibits 5.1 and 8.1)
24.1†		Power of Attorney (Cleco Power LLC)
24.2†		Power of Attorney (Cleco Katrina/Rita Hurricane Recovery Funding LLC)
25.1		Statement of Eligibility Under the Trust Indenture Act on Form T-1 of Trustee
99.1†		Financing Order
99.2*		Opinion of Phelps Dunbar, L.L.P. with respect to the constitutionality of certain matters
99.3		Form of Storm Recovery Property Sale Agreement
99.4		Form of Storm Recovery Property Servicing Agreement
99.5		Form of Administration Agreement

*: To be filed by amendment or as an exhibit to a Current Report on Form 8-K pursuant to Item 601(b)(1) of Regulation S-K.
**: Incorporated by reference herein as indicated.
†: Previously filed.

II-11

EX-4.1 2 a2182800zex-4_1.htm EXHIBIT 4.1

Use these links to rapidly review the document
TABLE OF CONTENTS 4

Exhibit 4.1

CLECO KATRINA/RITA HURRICANE RECOVERY FUNDING LLC

Issuer

and

U.S. BANK NATIONAL ASSOCIATION

Trustee

INDENTURE

Dated as of , 2008

Securing Storm Recovery Bonds

Issuable in Series

Table of Contents

ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE
	SECTION 1.01.	DEFINITIONS
	SECTION 1.02.	INCORPORATION BY REFERENCE OF THE TRUST INDENTURE ACT
	SECTION 1.03.	RULES OF CONSTRUCTION
ARTICLE II THE STORM RECOVERY BONDS
	SECTION 2.01.	FORM
	SECTION 2.02.	EXECUTION, AUTHENTICATION AND DELIVERY
	SECTION 2.03.	DENOMINATIONS; STORM RECOVERY BONDS ISSUABLE IN SERIES
	SECTION 2.04.	TEMPORARY STORM RECOVERY BONDS
	SECTION 2.05.	REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE
	SECTION 2.06.	MUTILATED, DESTROYED, LOST OR STOLEN STORM RECOVERY BONDS
	SECTION 2.07.	PERSONS DEEMED OWNER
	SECTION 2.08.	PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST; INTEREST ON OVERDUE PRINCIPAL AND PREMIUM, IF ANY; PRINCIPAL, PREMIUM AND INTEREST RIGHTS PRESERVED
	SECTION 2.09.	CANCELLATION
	SECTION 2.10.	AMOUNT; AUTHENTICATION AND DELIVERY OF STORM RECOVERY BONDS
	SECTION 2.11.	BOOK-ENTRY STORM RECOVERY BONDS
	SECTION 2.12.	NOTICES TO CLEARING AGENCY
	SECTION 2.13.	DEFINITIVE STORM RECOVERY BONDS
ARTICLE III COVENANTS
	SECTION 3.01.	PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST
	SECTION 3.02.	MAINTENANCE OF OFFICE OR AGENCY
	SECTION 3.03.	MONEY FOR PAYMENTS TO BE HELD IN TRUST
	SECTION 3.04.	EXISTENCE
	SECTION 3.05.	PROTECTION OF TRUST ESTATE
	SECTION 3.06.	OPINIONS AS TO TRUST ESTATE
	SECTION 3.07.	PERFORMANCE OF OBLIGATIONS; COMMISSION FILINGS
	SECTION 3.08.	NEGATIVE COVENANTS
	SECTION 3.09.	ANNUAL STATEMENT AS TO COMPLIANCE
	SECTION 3.10.	ISSUER MAY CONSOLIDATE, ETC
	SECTION 3.11.	SUCCESSOR OR TRANSFEREE
	SECTION 3.12.	NO OTHER BUSINESS
	SECTION 3.13.	NO BORROWING
	SECTION 3.14.	GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES
	SECTION 3.15.	CAPITAL EXPENDITURES
	SECTION 3.16.	RESTRICTED PAYMENTS
	SECTION 3.17.	NOTICE OF EVENTS OF DEFAULT
	SECTION 3.18.	INTENTIONALLY OMITTED
	SECTION 3.19.	INSPECTION
	SECTION 3.20.	SALE AGREEMENT, ADMINISTRATION AGREEMENT AND SERVICING AGREEMENT COVENANTS
	SECTION 3.21.	TAXES

ARTICLE IV SATISFACTION AND DISCHARGE; DEFEASANCE
	SECTION 4.01.	SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE
	SECTION 4.02.	CONDITIONS TO DEFEASANCE
	SECTION 4.03.	APPLICATION OF TRUST MONEY
	SECTION 4.04.	REPAYMENT OF MONEYS HELD BY PAYING AGENT
ARTICLE V REMEDIES
	SECTION 5.01.	EVENTS OF DEFAULT
	SECTION 5.02.	ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT
	SECTION 5.03.	COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE
	SECTION 5.04.	REMEDIES; PRIORITIES
	SECTION 5.05.	OPTIONAL PRESERVATION OF THE TRUST ESTATE
	SECTION 5.06.	LIMITATION OF PROCEEDINGS
	SECTION 5.07.	UNCONDITIONAL RIGHTS OF STORM RECOVERY BONDHOLDERS TO RECEIVE PRINCIPAL, PREMIUM, IF ANY, AND INTEREST
	SECTION 5.08.	RESTORATION OF RIGHTS AND REMEDIES
	SECTION 5.09.	RIGHTS AND REMEDIES CUMULATIVE
	SECTION 5.10.	DELAY OR OMISSION NOT A WAIVER
	SECTION 5.11.	CONTROL BY STORM RECOVERY BONDHOLDERS
	SECTION 5.12.	WAIVER OF PAST DEFAULTS
	SECTION 5.13.	UNDERTAKING FOR COSTS
	SECTION 5.14.	WAIVER OF STAY OR EXTENSION LAWS
	SECTION 5.15.	ACTION ON STORM RECOVERY BONDS
ARTICLE VI THE TRUSTEE
	SECTION 6.01.	DUTIES AND LIABILITIES OF TRUSTEE
	SECTION 6.02.	RIGHTS OF TRUSTEE
	SECTION 6.03.	INDIVIDUAL RIGHTS OF TRUSTEE
	SECTION 6.04.	TRUSTEE'S DISCLAIMER
	SECTION 6.05.	NOTICE OF DEFAULTS
	SECTION 6.06.	REPORTS BY TRUSTEE TO HOLDERS
	SECTION 6.07.	COMPENSATION AND INDEMNITY
	SECTION 6.08.	REPLACEMENT OF TRUSTEE
	SECTION 6.09.	SUCCESSOR TRUSTEE BY MERGER
	SECTION 6.10.	APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE
	SECTION 6.11.	ELIGIBILITY; DISQUALIFICATION
	SECTION 6.12.	PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER
	SECTION 6.13.	REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE
	SECTION 6.14.	RIGHTS OF THE AUTHENTICATING AGENT, STORM RECOVERY BOND REGISTRAR AND PAYING AGENT.
	SECTION 6.15.	COMPLIANCE WITH APPLICABLE ANTI-TERRORISM AND MONEY LAUNDERING REGULATIONS
ARTICLE VII STORM RECOVERY BONDHOLDERS' LISTS AND REPORTS
	SECTION 7.01.	ISSUER TO FURNISH TRUSTEE NAMES AND ADDRESSES OF STORM RECOVERY BONDHOLDERS
	SECTION 7.02.	PRESERVATION OF INFORMATION; COMMUNICATIONS TO STORM RECOVERY BONDHOLDERS
	SECTION 7.03.	REPORTS BY ISSUER
	SECTION 7.04.	REPORTS BY TRUSTEE
	SECTION 7.05.	PROVISION OF SERVICER REPORTS

ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES
	SECTION 8.01.	COLLECTION OF MONEY
	SECTION 8.02.	COLLECTION ACCOUNT
	SECTION 8.03.	RELEASE OF TRUST ESTATE
	SECTION 8.04.	ISSUER OPINION OF COUNSEL
	SECTION 8.05.	REPORTS BY INDEPENDENT ACCOUNTANTS
ARTICLE IX SUPPLEMENTAL INDENTURES
	SECTION 9.01.	SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF STORM RECOVERY BONDHOLDERS
	SECTION 9.02.	SUPPLEMENTAL INDENTURES WITH CONSENT OF STORM RECOVERY BONDHOLDERS
	SECTION 9.03.	EXECUTION OF SUPPLEMENTAL INDENTURES
	SECTION 9.04.	EFFECT OF SUPPLEMENTAL INDENTURE
	SECTION 9.05.	CONFORMITY WITH TRUST INDENTURE ACT
	SECTION 9.06.	REFERENCE IN STORM RECOVERY BONDS TO SUPPLEMENTAL INDENTURES
	SECTION 9.07.	LPSC CONSENT
ARTICLE X REDEMPTION OF STORM RECOVERY BONDS
	SECTION 10.01.	MANDATORY REDEMPTION BY ISSUER
	SECTION 10.02.	FORM OF REDEMPTION NOTICE
	SECTION 10.03.	PAYMENT OF REDEMPTION PRICE
ARTICLE XI MISCELLANEOUS
	SECTION 11.01.	COMPLIANCE CERTIFICATES AND OPINIONS, ETC
	SECTION 11.02.	FORM OF DOCUMENTS DELIVERED TO TRUSTEE
	SECTION 11.03.	ACTS OF STORM RECOVERY BONDHOLDERS
	SECTION 11.04.	NOTICES, ETC
	SECTION 11.05.	NOTICES TO STORM RECOVERY BONDHOLDERS; WAIVER
	SECTION 11.06.	ALTERNATE PAYMENT AND NOTICE PROVISIONS
	SECTION 11.07.	NOTICES TO LUXEMBOURG STOCK EXCHANGE
	SECTION 11.08.	CONFLICT WITH TRUST INDENTURE ACT
	SECTION 11.09.	EFFECT OF HEADINGS AND TABLE OF CONTENTS
	SECTION 11.10.	SUCCESSORS AND ASSIGNS
	SECTION 11.11.	SEPARABILITY
	SECTION 11.12.	BENEFITS OF INDENTURE
	SECTION 11.13.	LEGAL HOLIDAYS
	SECTION 11.14.	GOVERNING LAW
	SECTION 11.15.	COUNTERPARTS
	SECTION 11.16.	ISSUER OBLIGATION
	SECTION 11.17.	NO PETITION
	SECTION 11.18.	STORM RECOVERY BONDS NOT PUBLIC DEBT
SCHEDULE 1. FORM OF SEMIANNUAL SERVICER'S CERTIFICATE
SCHEDULE 2a. STATUTORY TRUE-SALE OPINION
SCHEDULE 2b. STATE LAW SECURITY INTEREST OPINION
SCHEDULE 2c. UCC OPINION
EXHIBIT A SERVICING CRITERIA TO BE ADDRESSED BY INDENTURE TRUSTEE IN ASSESSMENT OF COMPLIANCE
APPENDIX A. MASTER DEFINITIONS

iii

CERTAIN SECTIONS OF THIS INDENTURE RELATING TO SECTIONS 310 THROUGH 318, INCLUSIVE, OF THE TRUST INDENTURE ACT OF 1939:

TRUST INDENTURE ACT SECTION		INDENTURE SECTION(S)
Section 310(a)(1)		6.11
Section 310(a)(2)		6.11
Section 310(a)(3)		6.10(b)
Section 310(a)(4)		Not Applicable
Section 310(a)(5)		6.11
Section 310(b)		6.08, 6.11
Section 311(a)		6.12
Section 311(b)		6.12
Section 311(c)		Not Applicable
Section 312(a)		7.01, 7.02
Section 312(b)		7.02
Section 312(c)		7.02
Section 313(a)		7.04
Section 313(b)		7.04
Section 313(c)		7.04
Section 313(d)		7.04
Section 314(a)		3.09, 7.03
Section 314(b)		3.07
Section 314(b)(1)		Not Addressed
Section 314(b)(2)		3.06
Section 314(c)(1)		11.01
Section 314(c)(2)		11.01
Section 314(c)(3)		11.02
Section 314(d)		8.03, 8.04, 9.02
Section 314(e)		11.01
Section 315(a)		6.01. 6.02
Section 315(b)		6.05
Section 315(c)		6.01
Section 315(d)		6.01
Section 315(e)		5.13
Section 316(a)		5.11, 5.12
Section 316(a)(1)(A)		5.11
Section 316(a)(1)(B)		5.12
Section 316(a)(2)		Not Applicable
Section 316(b)		5.07
Section 316(c)		Not Addressed
Section 317(a)(1)		5.03
Section 317(a)(2)		5.03
Section 317(b)		3.03
Section 318(a)		11.08

NOTE: This reconciliation and tie sheet shall not, for any purpose, be deemed to be a part of the Indenture.

INDENTURE dated as of , 2008, by and among Cleco Katrina/Rita Hurricane Recovery Funding LLC, a Louisiana limited liability company (the "Issuer"), and U.S. Bank National Association, a national banking association, in its capacity as trustee (the "Trustee").

The Issuer has duly authorized the execution and delivery of this Indenture to provide for one or more Series of Storm Recovery Bonds, issuable as provided in this Indenture. Each Series of Storm Recovery Bonds will be issued only under a separate Series Supplement to this Indenture, duly executed and delivered by the Issuer and the Trustee. The Issuer is entering into this Indenture, and the Trustee is accepting the trusts created hereby, each for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and each intending to be legally bound hereby.

The Storm Recovery Bonds of each Series shall be non-recourse obligations and shall be secured by and payable solely out of the Storm Recovery Property and the other Trust Estate securing such Series of Storm Recovery Bonds. If and to the extent such Storm Recovery Property and the other Trust Estate are insufficient to pay all amounts owing with respect to the Storm Recovery Bonds secured thereby, then, except as otherwise expressly provided herein, the Holders shall have no claim in respect of such insufficiency against the Issuer or any other Person, and the Holders, by their acceptance of such Storm Recovery Bonds, waive any such claim.

All things necessary to (a) make the Storm Recovery Bonds, when executed and duly issued by the Issuer and authenticated and delivered by the Trustee hereunder, valid obligations, and (b) make this Indenture a valid agreement of the Issuer, in each case, in accordance with their respective terms, have been done.

In consideration of the foregoing, the Issuer and the Trustee agree as follows:

That under one or more Series Supplements, the Issuer will Grant to the Trustee a Lien on and trust interest in the property described therein (such property with respect to a particular Series being the "Series Trust Estate" and all such property, collectively, the "Trust Estate"). Each Series Trust Estate shall secure the obligations of the Issuer as more particularly described in the applicable Series Supplement.

AND IT IS HEREBY COVENANTED, DECLARED AND AGREED between the parties hereto that all Storm Recovery Bonds are to be issued, countersigned, registered and delivered and the Trust Estate is to be held and applied, subject to the further covenants, conditions, releases, uses and trusts hereinafter set forth, and the Issuer, for itself and any successor, does hereby covenant and agree to and with the Trustee and its successors in said trust, for the benefit of the Holders, as follows:

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01. DEFINITIONS. Capitalized terms used but not otherwise defined in this Indenture have the respective meanings set forth in Appendix A hereto unless the context otherwise requires.

SECTION 1.02. INCORPORATION BY REFERENCE OF THE TRUST INDENTURE ACT. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. Each of the following TIA terms used in this Indenture has the following meaning:

"Commission" means the Securities and Exchange Commission.

"indenture securities" means the Storm Recovery Bonds.

"indenture security holder" means a Holder.

"indenture to be qualified" means this Indenture.

"indenture trustee" or "institutional trustee" means the Trustee.

"obligor" on the indenture securities means the Issuer and any other obligor on the indenture securities.

All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by Commission rule have the meaning assigned to them by such definitions.

SECTION 1.03. RULES OF CONSTRUCTION.

(i) An accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles as in effect from time to time;

(ii) "including" means including without limitation;

(iii) with respect to terms defined in Appendix A hereto, the meanings shall be equally applicable to both the singular and plural forms of such terms and shall refer to either gender as may be appropriate;

(iv) unless otherwise specified, references herein to Sections or Articles are to Sections or Articles of this Indenture; and

(v) the words "herein," "hereof," "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

ARTICLE II

THE STORM RECOVERY BONDS

SECTION 2.01. FORM. The Storm Recovery Bonds and the Trustee's certificate of authentication shall be in substantially the forms set forth in the related Series Supplement, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture or by the related Series Supplement and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistently herewith, be determined by the Managers of the Issuer executing such Storm Recovery Bonds, as evidenced by their execution of such Storm Recovery Bonds. Any portion of the text of any Storm Recovery Bond may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Storm Recovery Bond. Each Storm Recovery Bond shall be dated the date of its authentication.

The Storm Recovery Bonds shall be typewritten, printed, lithographed or engraved or produced by any combination of these methods (with or without steel engraved borders), all as determined by the Managers of the Issuer executing such Storm Recovery Bonds, as evidenced by their execution of such Storm Recovery Bonds.

Each Storm Recovery Bond shall bear upon its face the designation so selected for the Series and Tranche, if any, to which it belongs. The terms of all Storm Recovery Bonds of the same Series shall be the same, unless such Series is comprised of one or more Tranches, in which case the terms of all Storm Recovery Bonds of the same Tranche shall be the same.

Each Storm Recovery Bond shall state that the Securitization Act provides that the State of Louisiana pledges "to and agrees with bondholders, the owners of storm recovery property, and other financing parties that the state will not:

(1) Alter the provisions of this Part [the Securitization Act] which authorize the commission to create a contract right by the issuance of a financing order, to create storm recovery property, and to make the storm recovery charges imposed by a financing order irrevocable, binding, and nonbypassable charges;

(2) Take or permit any action that impairs or would impair the value of the storm recovery property; or

(3) Except as allowed under this Section and except for adjustments under any true-up mechanism established by the commission, reduce, alter, or impair storm recovery charges that are to be imposed, collected, and remitted for the benefit of the bondholders and other financing parties until any and all principal, interest, premium, financing costs and other fees, expenses, or charges incurred, and any contracts to be performed, in connection with the related storm recovery bonds have been paid and performed in full. Nothing in this Paragraph shall preclude limitation or alteration if and when full compensation is made by law for the full protection of the storm recovery charges collected pursuant to a financing order and full protection of the holders of storm recovery bonds and any assignee or financing party."

In addition, each Storm Recovery Bond shall state that the Financing Order provides that the LPSC "covenants, pledges and agrees it thereafter shall not amend, modify, or rescind the Financing Order by any subsequent action, or reduce, impair, postpone, terminate, or otherwise adjust the storm recovery charges approved in the Financing Order, or in any way reduce or impair the value of the storm recovery property created by the Financing Order, except as may be contemplated by a refinancing authorized in strict accordance with the Securitization Act by a subsequent order of the Commission or by the periodic true up adjustments authorized by the Financing Order, until the indefeasible payment in full of the storm recovery bonds and the related financing costs."

SECTION 2.02. EXECUTION, AUTHENTICATION AND DELIVERY. The Storm Recovery Bonds shall be executed on behalf of the Issuer by a Manager. The signature of any such Manager on the Storm Recovery Bonds may be manual or facsimile.

Storm Recovery Bonds bearing the manual or facsimile signature of individuals who were at any time Managers shall bind the Issuer, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Storm Recovery Bonds.

The Trustee hereby appoints U.S. Bank National Association as authenticating agent to authenticate the Storm Recovery Bonds whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. The Trustee shall not be liable for any act or any failure of the authenticating agent to perform any duty either required herein or authorized herein to be performed by such person in accordance with this Indenture.

At any time and from time to time after the execution and delivery of this Indenture, the Issuer may deliver Storm Recovery Bonds executed on behalf of the Issuer to the Trustee pursuant to an Issuer Order for authentication; and the Trustee shall authenticate and deliver such Storm Recovery Bonds as in this Indenture provided and not otherwise.

No Storm Recovery Bond shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Storm Recovery Bond a certificate of authentication substantially in the form provided for herein executed by the Trustee by the manual signature of one of its authorized signatories, and such certificate upon any Storm Recovery Bond shall be conclusive evidence, and the only evidence, that such Storm Recovery Bond has been duly authenticated and delivered hereunder.

If and for so long as any Series of Storm Recovery Bonds is listed on the Luxembourg Stock Exchange and the rules and regulations of such exchange so require, a transfer or other agent appointed pursuant to Section 3.02 shall be authorized on behalf of the Trustee to execute and deliver such certificate of authentication.

SECTION 2.03. DENOMINATIONS; STORM RECOVERY BONDS ISSUABLE IN SERIES. The Storm Recovery Bonds of each Series shall be issuable as registered Storm Recovery Bonds in Authorized Denominations.

The Storm Recovery Bonds may, at the election of and as authorized by a Manager and set forth in a Series Supplement, be issued in one or more Series (each of which may be comprised of one or more Tranches), and shall be designated generally as the "Storm Recovery Bonds" of the Issuer, with such further particular designations added or incorporated in such title for the Storm Recovery Bonds of any particular Series or Tranche as a Manager of the Issuer may determine and as set forth in the Series Supplement therefor.

Each Series of Storm Recovery Bonds shall be created by a Series Supplement authorized by a Manager and establishing the terms and provisions of such Series and, if applicable, any Tranches thereof. The several Series and Tranches thereof may differ as between Series and Tranches, in respect of any of the following matters:

(a) designation of the Series and, if applicable, the Tranches thereof;

(b) the aggregate initial principal amount of the Storm Recovery Bonds of the Series and, if applicable, each Tranche thereof;

(c) the Bond Rate of the Series and, if applicable, each Tranche thereof or the formula, if any, used to calculate the applicable Bond Rate or Bond Rates for the Series and each Tranche thereof;

(d) the Payment Dates for the Series and, if applicable, each Tranche thereof;

(e) the Expected Final Payment Date of the Series, and, if applicable, each Tranche thereof;

(f) the Series Final Maturity Date for the Series and, if applicable, the Tranche Final Maturity Date for each Tranche thereof;

(g) the Series Issuance Date for the Series;

(h) the Series Trust Estate;

(i) the place or places for payments with respect to the Series and, if applicable, each Tranche thereof;

(j) the Authorized Denominations for the Series and, if applicable, each Tranche thereof;

(k) the provisions, if any, for redemption of the Series by the Issuer and, if applicable, each Tranche thereof;

(l) restrictions, if any, on issuing multiple Series or Tranches;

(m) whether the Storm Recovery Bonds of the Series are to be Book-Entry Storm Recovery Bonds and the extent to which Section 2.11 will apply, and whether the Storm Recovery Bonds of that Series will be listed on the Luxemborg Stock Exchange or any other securities exchange;

(n) the Expected Amortization Schedule for the Series and, if applicable, each Tranche thereof;

(o) the Required Capital Amount with respect to the Series;

(p) the Calculation Dates and Adjustment Dates for the Series;

(q) the subaccounts in the Collection Account for the Series;

(r) the credit enhancement, if any, applicable to the Series and each Tranche thereof; and

(s) any other terms of the Series or Tranche that are not inconsistent with the provisions of this Indenture and that will not result in any Rating Agency reducing or withdrawing its rating of any Outstanding Series or Tranche of Storm Recovery Bonds.

SECTION 2.04. TEMPORARY STORM RECOVERY BONDS. Pending the preparation of definitive Storm Recovery Bonds pursuant to Section 2.13, or by agreement of the purchasers of all Storm Recovery Bonds or, in the case of Storm Recovery Bonds held in a book-entry only system by a Clearing Agency, a Manager on behalf of the Issuer may execute, and upon receipt of an Issuer Order, the Trustee shall authenticate and deliver temporary Storm Recovery Bonds which are printed, lithographed, typewritten, mimeographed or otherwise produced of the tenor of the definitive Storm Recovery Bonds in lieu of which they are issued and with such variations not inconsistent with the terms of this Indenture as a Manager executing such Storm Recovery Bonds may determine, as evidenced by its execution of such Storm Recovery Bonds.

If temporary Storm Recovery Bonds are issued, the Issuer will cause definitive Storm Recovery Bonds to be prepared without unreasonable delay except where temporary Storm Recovery Bonds are held by a Clearing Agency. After the preparation of definitive Storm Recovery Bonds, the temporary Storm Recovery Bonds shall be exchangeable for definitive Storm Recovery Bonds upon surrender of the temporary Storm Recovery Bonds at the office or agency of the Issuer to be maintained as provided in Section 3.02, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Storm Recovery Bonds, a Manager on behalf of the Issuer shall execute and the Trustee shall authenticate and deliver in exchange therefor a like Series (and, if applicable, Tranche) and initial principal amount of definitive Storm Recovery Bonds in Authorized Denominations. Until so exchanged, the temporary Storm Recovery Bonds shall in all respects be entitled to the same benefits under this Indenture as definitive Storm Recovery Bonds.

SECTION 2.05. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE. The Issuer shall cause to be kept a register (the "Storm Recovery Bond Register") in which, subject to such reasonable regulations as it may prescribe, the Storm Recovery Bond Registrar shall provide for the registration of Storm Recovery Bonds and the registration of transfers of Storm Recovery Bonds. U.S. Bank National Association shall be Storm Recovery Bond Registrar for the purpose of registering Storm Recovery Bonds and transfers of Storm Recovery Bonds as herein provided. Upon any resignation of any Storm Recovery Bond Registrar, the Issuer shall promptly appoint a successor or, if it elects not to make such an appointment, assume the duties of Storm Recovery Bond Registrar.

If a Person other than the Trustee is appointed by the Issuer as Storm Recovery Bond Registrar, the Issuer shall give the Trustee and any transfer, paying, or listing agent of the Issuer prompt written notice of the appointment of such Storm Recovery Bond Registrar and of the location, and any change in the location, of the Storm Recovery Bond Register, and the Trustee and any such agent shall have the right to inspect the Storm Recovery Bond Register at all reasonable times and to obtain copies thereof, and the Trustee shall have the right to rely conclusively upon a certificate executed on behalf of the Storm Recovery Bond Registrar by a duly authorized officer thereof as to the names and addresses of the Holders of the Storm Recovery Bonds and the principal amounts and number of such Storm Recovery Bonds.

Upon surrender for registration of transfer of any Storm Recovery Bond at the office or agency of the Issuer to be maintained as provided in Section 3.02, a Manager on behalf of the Issuer shall execute, and the Trustee shall authenticate and the Storm Recovery Bondholder shall obtain from the Trustee, in the name of the designated transferee or transferees, one or more new Storm Recovery Bonds in any Authorized Denominations of a like Series (and, if applicable, Tranche) and aggregate outstanding principal amount.

At the option of the Holder, Storm Recovery Bonds may be exchanged for other Storm Recovery Bonds of a like Series (and, if applicable, Tranche) and aggregate outstanding principal amount in Authorized Denominations upon surrender of the Storm Recovery Bonds to be exchanged at such office or agency. Whenever any Storm Recovery Bonds are so surrendered for exchange, a Manager on behalf of the Issuer shall execute, and the Trustee shall authenticate, and the Storm Recovery

Bondholder shall obtain from the Trustee the Storm Recovery Bonds which the Storm Recovery Bondholder making the exchange is entitled to receive.

All Storm Recovery Bonds issued upon any registration of transfer or exchange of Storm Recovery Bonds shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Storm Recovery Bonds surrendered upon such registration of transfer or exchange.

Every Storm Recovery Bond presented or surrendered for registration of transfer or exchange shall be duly endorsed by, or be accompanied by a written instrument of transfer in the form set forth in the applicable Series Supplement or such other form as is satisfactory to the Trustee duly executed by, the Holder thereof or such Holder's attorney duly authorized in writing, with such signature guaranteed by an Eligible Guarantor Institution in the form set forth in such Storm Recovery Bond.

No service charge shall be made to a Holder for any registration of transfer or exchange of Storm Recovery Bonds (except as may be required by the rules and regulations of the Luxembourg Stock Exchange with respect to any Storm Recovery Bonds listed thereon), but, other than in respect of exchanges pursuant to Section 2.04 or 9.06 not involving any transfer, the Issuer or the Trustee may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Storm Recovery Bonds.

The preceding provisions of this Section notwithstanding, except to the extent otherwise required by the rules and regulations of the Luxembourg Stock Exchange with respect to any Storm Recovery Bonds listed thereon, the Issuer shall not be required to make, and the Storm Recovery Bond Registrar need not register, transfers or exchanges of Storm Recovery Bonds selected for redemption or transfers or exchanges of any Storm Recovery Bond for a period of 15 days preceding the Final Maturity Date with respect to such Storm Recovery Bond.

SECTION 2.06. MUTILATED, DESTROYED, LOST OR STOLEN STORM RECOVERY BONDS. If (i) any mutilated Storm Recovery Bond is surrendered to the Trustee, or the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Storm Recovery Bond, and (ii) there is delivered to the Trustee such security or indemnity as may be required by it to hold the Issuer and the Trustee harmless, then, in the absence of written notice to the Issuer, the Storm Recovery Bond Registrar or the Trustee that such Storm Recovery Bond has been acquired by a bona fide purchaser, a Manager on behalf of the Issuer shall execute, and upon a Manager's written request the Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Storm Recovery Bond, a replacement Storm Recovery Bond of like Series (and, if applicable, Tranche), tenor and initial principal amount in Authorized Denominations, bearing a number not contemporaneously outstanding; provided, however, that if any such destroyed, lost or stolen Storm Recovery Bond, but not a mutilated Storm Recovery Bond, shall have become or within seven days shall be due and payable, or shall have been called for redemption, instead of issuing a replacement Storm Recovery Bond, the Issuer may pay such destroyed, lost or stolen Storm Recovery Bond when so due or payable or upon the Redemption Date without surrender thereof. If, after the delivery of such replacement Storm Recovery Bond or payment of a destroyed, lost or stolen Storm Recovery Bond pursuant to the proviso to the preceding sentence, a bona fide purchaser of the original Storm Recovery Bond in lieu of which such replacement Storm Recovery Bond was issued, or in respect of which such payment was made, presents for payment such original Storm Recovery Bond, the Issuer and the Trustee shall be entitled to recover such replacement Storm Recovery Bond (or such payment) from the Person to whom it was delivered or any Person taking such replacement Storm Recovery Bond from such Person to whom such replacement Storm Recovery Bond was delivered or any assignee of such Person, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Issuer or the Trustee in connection therewith.

Upon the issuance of any replacement Storm Recovery Bond under this Section, the Issuer or the Trustee may require the payment by the Holder of such Storm Recovery Bond of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the fees and expenses of the Trustee and its counsel) connected therewith.

Every replacement Storm Recovery Bond issued pursuant to this Section in replacement of any mutilated, destroyed, lost or stolen Storm Recovery Bond shall constitute an original additional contractual obligation of the Issuer, whether or not the mutilated, destroyed, lost or stolen Storm Recovery Bond shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Storm Recovery Bonds duly issued hereunder.

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Storm Recovery Bonds.

SECTION 2.07. PERSONS DEEMED OWNER. Prior to due presentment for registration of transfer of any Storm Recovery Bond, the Issuer, the Trustee, the Storm Recovery Bond Registrar and any agent of the Issuer, the Storm Recovery Bond Registrar or the Trustee may treat the Person in whose name any Storm Recovery Bond is registered (as of the day of determination) as the owner of such Storm Recovery Bond for the purpose of receiving payments of Principal of and premium, if any, and Interest on such Storm Recovery Bond and for all other purposes whatsoever, whether or not such Storm Recovery Bond be overdue, and neither the Issuer, the Trustee, the Storm Recovery Bond Registrar nor any agent of the Issuer, the Storm Recovery Bond Registrar or the Trustee shall be affected by notice to the contrary.

SECTION 2.08. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST; INTEREST ON OVERDUE PRINCIPAL AND PREMIUM, IF ANY; PRINCIPAL, PREMIUM AND INTEREST RIGHTS PRESERVED.

(a) The Storm Recovery Bonds of each Series shall accrue Interest as provided in the related Series Supplement, at the applicable Bond Rate specified therein, and such Interest shall be payable on each Payment Date as specified therein. Any installment of Interest, principal or premium, if any, payable on any Storm Recovery Bond which is punctually paid or duly provided for by the Issuer on the applicable Payment Date shall be paid to the Person in whose name such Storm Recovery Bond (or one or more Predecessor Storm Recovery Bonds) is registered on the Record Date for such Payment Date, by check mailed first-class, postage prepaid, to such Person's address as it appears on the Storm Recovery Bond Register on such Record Date, or in such other manner as may be provided in the related Series Supplement, except that (i) upon application to the Trustee by any Holder owning Storm Recovery Bonds of any Series or Tranche in the principal amount of $10,000,000 or more not later than the applicable Record Date payment will be made by wire transfer to an account maintained and specified by such Holder and (ii) with respect to Book-Entry Storm Recovery Bonds, payments will be made by wire transfer in immediately available funds to the account designated by the Holder of the applicable global Storm Recovery Bond unless and until such global Storm Recovery Bond is exchanged for definitive Storm Recovery Bonds (in which event payments shall be made as provided above) and except for the final installment of principal and premium, if any, payable with respect to such Storm Recovery Bond on a Payment Date which shall be payable as provided in Section 2.08(b). The funds represented by any such checks returned undelivered shall be held in accordance with Section 3.03.

(b) The principal of each Storm Recovery Bond of each Series (and, if applicable, Tranche) shall be payable in installments on each Payment Date specified in the Expected Amortization Schedule included in the form of Storm Recovery Bond attached to the Series Supplement for such Storm Recovery Bonds, but only to the extent that moneys are available for such payment pursuant to

Section 8.02; provided that installments of principal not paid when scheduled to be paid shall be paid upon receipt of moneys available for such purpose, in the manner set forth in the applicable Expected Amortization Schedule. Failure to pay principal of each Storm Recovery Bond of a Series in accordance with such Expected Amortization Schedule because moneys are not available pursuant to Section 8.02 to make such payments shall not constitute a Default or Event of Default under this Indenture with respect to that Series. Notwithstanding the foregoing, the entire unpaid principal amount of the Storm Recovery Bonds of any Series or Tranche shall be due and payable, if not previously paid (i) on the Series Final Maturity Date (or, if applicable, Tranche Final Maturity Date) therefor, (ii) on the date on which the Storm Recovery Bonds of all Series have been declared immediately due and payable in accordance with Section 5.02 or (iii) on the Redemption Date, if any, therefor. The Trustee shall notify the Person in whose name a Storm Recovery Bond is registered at the close of business on the Record Date preceding the Payment Date on which the Issuer expects that the final installment of principal of and premium, if any, and Interest on such Storm Recovery Bond will be paid. Such notice shall be mailed no later than five days prior to such Expected Final Payment Date and shall specify that such final installment of principal and premium, if any, will be payable only upon presentation and surrender of such Storm Recovery Bond and shall specify the place where such Storm Recovery Bond may be presented and surrendered for payment of such installment, which, so long as any Storm Recovery Bonds are listed on the Luxembourg Stock Exchange, shall include the office of the paying agent in Luxembourg appointed pursuant to Section 3.02. Notices in connection with redemptions of Storm Recovery Bonds shall be mailed to Storm Recovery Bondholders as provided in Section 10.02.

(c) If the Issuer defaults in a payment of Interest on the Storm Recovery Bonds of any Series, the Issuer shall pay defaulted Interest (plus Interest on such defaulted Interest at the applicable Bond Rate to the extent lawful) in any lawful manner. The Issuer may pay such defaulted Interest to the Persons who are Storm Recovery Bondholders on a subsequent special record date, which date shall be at least fifteen Business Days prior to the special payment date. The Issuer shall fix or cause to be fixed any such special record date and payment date, and, at least 10 days before any such special record date, the Issuer shall mail to each affected Storm Recovery Bondholder a notice that states the special record date, the payment date and the amount of defaulted Interest to be paid.

SECTION 2.09. CANCELLATION. All Storm Recovery Bonds surrendered for payment, registration of transfer, exchange or redemption shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly canceled by the Trustee. The Issuer may at any time deliver to the Trustee for cancellation any Storm Recovery Bonds previously authenticated and delivered hereunder which the Issuer may have acquired in any manner whatsoever, and all Storm Recovery Bonds so delivered shall be promptly canceled by the Trustee. No Storm Recovery Bonds shall be authenticated in lieu of or in exchange for any Storm Recovery Bonds canceled as provided in this Section, except as expressly permitted by this Indenture. All canceled Storm Recovery Bonds may be held or disposed of by the Trustee in accordance with its standard retention or disposal policy as in effect at the time unless the Issuer shall direct by an Issuer Order that they be destroyed or returned to it; provided that such Issuer Order is timely and the Storm Recovery Bonds have not been previously disposed of by the Trustee.

SECTION 2.10. AMOUNT; AUTHENTICATION AND DELIVERY OF STORM RECOVERY BONDS. The aggregate principal amount of Storm Recovery Bonds that may be authenticated and delivered under this Indenture shall not exceed $[180,600,000].

Storm Recovery Bonds of each Series created and established by a Series Supplement shall be executed by a Manager on behalf of the Issuer and delivered to the Trustee for authentication and thereupon the same shall be authenticated and delivered by the Trustee upon Issuer Request and upon delivery to the Trustee at the Issuer's expense of the following; provided, however, that except with respect to items (1), (4)(a)(i) and (4)(a)(vi) below, compliance with the following conditions and

delivery of the following documents shall be required only in connection with the original issuance of a Storm Recovery Bond or Bonds of such Series:

(1) Issuer Action. An Issuer Order authorizing and directing the execution, authentication and delivery of the Storm Recovery Bonds by the Trustee or the authenticating agent and specifying the principal amount of Storm Recovery Bonds to be authenticated.

(2) Authorizing Certificate. A certified resolution of the Managers authorizing the execution and delivery of the Series Supplement for the Storm Recovery Bonds applied for and the execution, authentication and delivery of such Storm Recovery Bonds.

(3) Series Supplement. A Series Supplement in form satisfactory to the Trustee for the Series of Storm Recovery Bonds being issued, which shall set forth the provisions and form of the Storm Recovery Bonds of such Series (and, if applicable, each Tranche thereof).

(4) Certificates of the Issuer and the Seller.

(a) An Issuer Officer's Certificate dated as of the Series Issuance Date, stating:

(i) that no Default has occurred and is continuing under this Indenture and that the issuance of the Storm Recovery Bonds being issued will not result in any Default;

(ii) that the Issuer has not assigned any interest or participation in the Series Trust Estate, except for the Grant contained in the applicable Series Supplement; that the Issuer has the power and authority to Grant the Series Trust Estate, and to Grant a security interest in and a Lien upon the Series Trust Estate, to the Trustee, free and clear of any other security interest, Liens, adverse claims and options; and that such security interest is a perfected security interest in all right, title and interest in and to the Series Trust Estate free and clear of any Lien, except the Lien of this Indenture;

(iii) that the Issuer has appointed an Independent registered public accounting firm contemplated in Section 8.05 and identifying such firm;

(iv) that attached thereto are duly executed, true and complete copies of the applicable Sale Agreement, Servicing Agreement and Administration Agreement;

(v) that all filings with the LPSC pursuant to the Securitization Act and the Financing Order and all filings required under the Securitization Act and all UCC financing statements with respect to the Series Trust Estate for that Series of Storm Recovery Bonds that are required to be filed by the terms of the Financing Order, the Securitization Act, the applicable Sale Agreement, the applicable Servicing Agreement or this Indenture have been filed as required; and

(vi) that all conditions precedent provided in the Basic Documents relating to the authentication and delivery of the Storm Recovery Bonds have been complied with.

(b) An Officer's Certificate from the Seller, dated as of the Series Issuance Date, to the effect that:

(i) in the case of the Storm Recovery Property to be transferred to the Issuer on such date, immediately prior to the conveyance thereof to the Issuer pursuant to the applicable Sale Agreement, the Seller was the sole owner of the rights and interests under the Financing Order that comprises such Storm Recovery Property and such ownership interest was perfected; such Storm Recovery Property has been validly transferred and sold to the Issuer free and clear of all Liens (other than Liens created by the Issuer pursuant to this Indenture) and such transfer is absolute, irrevocable and has been perfected; the Seller has the power and authority to own, sell and assign the rights and

interests under the Financing Order that comprises such Storm Recovery Property; and the Seller has duly authorized such sale and assignment to the Issuer; and

(ii) the Financing Order creating such Storm Recovery Property attached to such certificate is in full force and effect and the copy of the Financing Order attached thereto is true and complete.

(5) Issuer Opinion of Counsel. An Issuer Opinion of Counsel, portions of which may be delivered by counsel for the Issuer and portions of which may be delivered by counsel for the Seller and/or the Servicer, dated as of the Series Issuance Date subject to customary qualifications, acceptable to the Trustee, to the collective effect that (or, in the case of subsections (d), (e) and (f) below, in the form of):

(a) regarding the Financing Order, that (i) such Financing Order is final and non-appealable and in full force and effect and (ii) the Storm Recovery Bonds being issued are authorized to be issued under the Financing Order;

(b) regarding the Issuer:

(i) the Issuer has the limited liability power and authority to execute and deliver the Series Supplement and this Indenture and to issue the Storm Recovery Bonds being issued, each of the Series Supplement and this Indenture and such Storm Recovery Bonds have been duly authorized, executed and delivered, and the Issuer is duly organized and is validly existing in good standing under the laws of the jurisdiction of its organization;

(ii) no authorization, approval or consent of any governmental body is required for the valid issuance, authentication or delivery of such Storm Recovery Bonds, except for any such authorization, approval or consent as already has been obtained and such registrations as are required under the Blue Sky and securities laws of any State;

(iii) the Storm Recovery Bonds being issued, when executed and authenticated in accordance with the provisions of the Indenture and delivered, will constitute valid and binding obligations of the Issuer except as such enforceability may be subject to bankruptcy, insolvency, reorganization or other laws relating to or affecting creditors' rights generally and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) entitled to the benefits of the Indenture and the related Series Supplement;

(iv) this Indenture (including the related Series Supplement), the applicable Sale Agreement, the applicable Administration Agreement and the applicable Servicing Agreement are valid and binding agreements of the Issuer, enforceable against the Issuer in accordance with their respective terms, except as such enforceability may be subject to bankruptcy, insolvency, reorganization or other laws relating to or affecting creditors' rights generally and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law);

(c) regarding the Seller, the Servicer, Cleco Power and the Administrator: the applicable Sale Agreement, the applicable Servicing Agreement and the applicable Administration Agreement are valid and binding agreements of the Seller, the Servicer, Cleco Power and the Administrator, respectively (as to which any such Person is a party), enforceable against the Seller, the Servicer, Cleco Power and the Administrator, respectively (as to which any such Person is a party), in accordance with their terms except as such enforceability may be subject to bankruptcy, insolvency, reorganization or other laws relating to or affecting creditors' rights generally and to general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law);

(d) Schedule 2a attached hereto with respect to the sale and transfer of the Storm Recovery Property from the Seller to the Issuer;

(e) Schedule 2b attached hereto with respect to the Grant of a security interest under the Securitization Act in such Series Trust Estate to the Trustee for the benefit of the Storm Recovery Bondholders;

(f) Schedule 2c attached hereto with respect to the Grant of a security interest under the UCC in such Series Trust Estate to the Trustee for the benefit of the Storm Recovery Bondholders;

(g) the Indenture has been duly qualified under the Trust Indenture Act;

(h) all instruments furnished to the Trustee conform to the requirements of this Indenture and constitute all the documents required to be delivered hereunder for the Trustee to authenticate and deliver the Storm Recovery Bonds applied for and all conditions precedent provided for in this Indenture relating to the authentication and delivery of such Storm Recovery Bonds (unless waived in writing by the Trustee) have been complied with;

(i) either (A) the registration statement covering the Storm Recovery Bonds is effective under the Securities Act and, to the best of such counsel's knowledge and information, no stop order suspending the effectiveness of such registration statement has been issued under the Securities Act nor have proceedings therefor been instituted by the Commission or (B) the Storm Recovery Bonds are exempt from the registration requirements under the Securities Act;

(j) the applicable Sale Agreement, the applicable Servicing Agreement, and the applicable Administration Agreement have been duly authorized, executed and delivered by the Seller, the Servicer, the Issuer and the Administrator, respectively (as to which any such Person is a party); and

(k) the Issuer is not now and, following the issuance of the Storm Recovery Bonds will not be, required to be registered under the Investment Company Act of 1940, as amended.

(6) Reserved.

(7) Rating Agency Condition. The Trustee shall receive written confirmation from each Rating Agency that such Series of Storm Recovery Bonds will be rated as set forth in the applicable Series Supplement.

(8) Required Capital Amount. Evidence satisfactory to the Trustee that the Required Capital Amount for such Series has been credited to the Capital Subaccount.

SECTION 2.11. BOOK-ENTRY STORM RECOVERY BONDS. Unless otherwise specified in the related Series Supplement, each Series of Storm Recovery Bonds, upon original issuance, will be issued in the form of a typewritten Storm Recovery Bond or Storm Recovery Bonds representing the Book-Entry Storm Recovery Bonds, to be delivered to DTC, as the initial Clearing Agency, by, or on behalf of, the Issuer. Such Storm Recovery Bond shall initially be registered on the Storm Recovery Bond Register in the name of Cede & Co., the nominee of the initial Clearing Agency, and no Storm Recovery Bond Owner will receive a definitive Storm Recovery Bond representing such Storm Recovery Bond Owner's interest in such Storm Recovery Bond, except as provided in Section 2.13. Unless and until definitive, fully registered Storm Recovery Bonds of any Series (the "Definitive Storm Recovery Bonds") replacing the Book-Entry Storm Recovery Bonds have been issued to Storm Recovery Bondholders of that Series pursuant to Section 2.13 or pursuant to any applicable Series Supplement relating thereto:

(a) the provisions of this Section shall be in full force and effect;

(b) the Storm Recovery Bond Registrar and the Trustee shall be entitled to deal with the Clearing Agency for all purposes of this Indenture (including the payment of Principal of and premium, if any, and Interest on the Storm Recovery Bonds and the giving of instructions or directions hereunder) as the sole Holder of the Storm Recovery Bonds, and shall have no obligation to the Storm Recovery Bond Owners;

(c) to the extent that the provisions of this Section conflict with any other provisions of this Indenture, the provisions of this Section shall control;

(d) the rights of Storm Recovery Bond Owners shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such Storm Recovery Bond Owners and the Clearing Agency or the Clearing Agency Participants. Pursuant to the DTC Agreement, unless and until Definitive Storm Recovery Bonds are issued pursuant to Section 2.13, the initial Clearing Agency will make book-entry transfers among the Clearing Agency Participants and receive and transmit payments of Principal of and premium, if any, and Interest on the Storm Recovery Bonds to such Clearing Agency Participants; and

(e) whenever this Indenture requires or permits actions to be taken based upon instructions or directions of Holders of Storm Recovery Bonds evidencing a specified percentage of the Outstanding Amount of the Storm Recovery Bonds or a Series or Tranche thereof, the Clearing Agency shall be deemed to represent such percentage only to the extent that it has received instructions to such effect from Storm Recovery Bond Owners or Clearing Agency Participants owning or representing, respectively, such required percentage of the beneficial interest in the Storm Recovery Bonds or such Series or Tranche and has delivered such instructions to the Trustee.

SECTION 2.12. NOTICES TO CLEARING AGENCY. Whenever a notice or other communication to the Storm Recovery Bondholders is required under this Indenture, unless and until Definitive Storm Recovery Bonds shall have been issued to Storm Recovery Bond Owners pursuant to Section 2.13 and the applicable Series Supplement, the Trustee, the Servicer and the Paying Agent shall give all such notices and communications specified herein to be given to Storm Recovery Bondholders to the Clearing Agency, and shall have no obligation to the Storm Recovery Bond Owners.

SECTION 2.13. DEFINITIVE STORM RECOVERY BONDS. If (i) the Clearing Agency or the Issuer advises the Trustee in writing that the Clearing Agency is no longer willing or able to properly discharge its responsibilities as nominee and depository with respect to any Book-Entry Series or Tranche of Storm Recovery Bonds and the Issuer is unable to locate a qualified successor, (ii) the Issuer advises the Trustee in writing that it elects to discontinue use of the book-entry-only transfers through the Clearing Agency with respect to any Series or Tranche of Storm Recovery Bonds and to

deliver certificated Storm Recovery Bonds to the Clearing Agency or (iii) after the occurrence of an Event of Default, Storm Recovery Bond Owners representing beneficial interests aggregating at least a majority of the Outstanding Amount of the Storm Recovery Bonds of all Series maintained as Book-Entry Storm Recovery Bonds advise the Issuer and, through the Clearing Agency, the Trustee in writing that the continuation of a book-entry system through the Clearing Agency is no longer in the best interests of the Storm Recovery Bond Owners of such Series, then the Trustee shall notify all affected Storm Recovery Bond Owners and the Issuer of the occurrence of any such event and of the availability of Definitive Storm Recovery Bonds to affected Storm Recovery Bond Owners requesting the same. Upon surrender by the Clearing Agency to the Trustee of the typewritten Storm Recovery Bond or Storm Recovery Bonds representing the Book-Entry Storm Recovery Bonds of that Series, accompanied by registration instructions, a Manager on behalf of the Issuer shall execute and the Trustee shall authenticate the Definitive Storm Recovery Bonds in accordance with the instructions of the Clearing Agency. None of the Issuer, the Storm Recovery Bond Registrar or the Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions. Upon the issuance of Definitive Storm Recovery Bonds, the Trustee shall recognize the Holders of the Definitive Storm Recovery Bonds as Storm Recovery Bondholders.

Definitive Storm Recovery Bonds will be transferable and exchangeable at the offices of the Storm Recovery Bond Registrar or, with respect to any Storm Recovery Bonds listed on the Luxembourg Stock Exchange, at the offices of the transfer agent appointed pursuant to the second paragraph of Section 3.02. With respect to any transfer of such listed Storm Recovery Bonds, the new Definitive Storm Recovery Bonds registered in the names specified by the transferee and the original transferor shall be available at the offices of such transfer agent.

ARTICLE III

COVENANTS

SECTION 3.01. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST. The Issuer will duly and punctually pay the Principal of and premium, if any, and Interest on the Storm Recovery Bonds in accordance with the terms of the Storm Recovery Bonds, this Indenture and the applicable Series Supplement; provided that except on the Series Final Maturity Date, the Tranche Final Maturity Date or the Redemption Date for a Series or Tranche of Storm Recovery Bonds or upon the acceleration of the Storm Recovery Bonds following the occurrence of an Event of Default, the Issuer shall only be obligated to pay the Principal of such Storm Recovery Bonds on each Payment Date therefor to the extent moneys are available for such payment pursuant to Section 8.02. Amounts properly withheld under the Code or other applicable tax laws by any Person from a payment to any Storm Recovery Bondholder of Interest or Principal or premium, if any, shall be considered as having been paid by the Issuer to such Storm Recovery Bondholder for all purposes of this Indenture.

SECTION 3.02. MAINTENANCE OF OFFICE OR AGENCY. The Issuer will maintain in the Borough of Manhattan, the City of New York or in St. Paul, Minnesota, an office or agency where Storm Recovery Bonds may be surrendered for registration of transfer or exchange, and where notices and demands to or upon the Issuer in respect of the Storm Recovery Bonds and this Indenture may be served. The Issuer hereby initially appoints the office of the Trustee at 60 Livingston Avenue, Mailcode EP MN WS3D, St. Paul, Minnesota 55107 to serve as its agent for the foregoing purposes. The Issuer will give prompt written notice to the Holders and the Trustee of the location, and of any change in the location, of any such office or agency. If at any time the Issuer shall fail to maintain any such office or agency or shall fail to furnish such agent with the address thereof, such surrenders, notices and demands may be made or served at the Corporate Trust Office, and the Issuer hereby appoints U.S. Bank National Association as its agent to receive all such surrenders, notices and demands.

To the extent any of the Storm Recovery Bonds are listed on the Luxembourg Stock Exchange and the rules of such exchange so require, (i) the Issuer will maintain in Luxembourg (A) an office and a transfer agent where Storm Recovery Bonds may be surrendered for registration of transfer or exchange, (B) an office and a listing agent where notices and demands to or upon the Issuer in respect of the Storm Recovery Bonds and this Indenture may be served, and (C) an office and a paying agent where payments in respect of the Storm Recovery Bonds may be made and (ii) any reference in this Indenture to the office or agency of the Issuer referred to in this Section 3.02 shall also refer to such offices, and the transfer, listing and paying agents, of the Issuer in Luxembourg, as applicable. The Issuer shall give the Trustee and any other agent appointed under this Section 3.02 written notice of the location and identity, and of any change in the location or identity, of any such office or agency.

SECTION 3.03. MONEY FOR PAYMENTS TO BE HELD IN TRUST. As provided in Section 8.02(a), all payments of Principal of, or premium and Interest on, the Storm Recovery Bonds that are to be made from amounts withdrawn from the Collection Account pursuant to Section 8.02(d) or (e) or Section 4.03 shall be made on behalf of the Issuer by the Trustee or by another Paying Agent, and no amounts so withdrawn from the Collection Account for payments of Storm Recovery Bonds shall be paid over to the Issuer except as provided in this Section and in Section 8.02.

The Issuer hereby appoints U.S. Bank National Association as the Paying Agent hereunder and, in connection therewith the Paying Agent agrees that it will (and the Issuer shall cause any other Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee (and during such time as the Trustee acts as Paying Agent, it hereby so agrees that it will)), subject to the provisions of this Section:

(a) hold all sums held by it for the payment of Principal of, or premium or Interest on, the Storm Recovery Bonds in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided;

(b) give the Trustee written notice of any Default by the Issuer (or any other obligor upon the Storm Recovery Bonds) of which the Paying Agent has actual knowledge in the making of any payment required to be made with respect to the Storm Recovery Bonds;

(c) at any time during the continuance of any such Default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent;

(d) immediately resign as a Paying Agent and forthwith pay to the Trustee all sums held by the Paying Agent in trust for the payment of Storm Recovery Bonds if at any time the Paying Agent ceases to meet the standards required of Paying Agents at the time of its appointment; and

(e) comply with all requirements of the Code and other applicable tax laws with respect to the withholding from any payments made by it on any Storm Recovery Bonds of any applicable withholding taxes imposed thereon and with respect to any applicable reporting requirements in connection therewith.

The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, by Issuer Order direct any Paying Agent to pay to the Trustee all sums held in trust by such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which the sums were held by such Paying Agent; and upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.

Subject to applicable laws with respect to escheat of funds, any money held by the Trustee or any Paying Agent in trust for the payment of any amount of Principal of, premium, if any, or Interest on any Storm Recovery Bond and remaining unclaimed for two years after such amount has become due

and payable shall be discharged from such trust and be paid to the Issuer upon delivery by the Issuer of an Issuer Order; and the Holder of such Storm Recovery Bond shall thereafter, as an unsecured general creditor, look only to the Issuer for payment thereof (but only to the extent of the amounts so paid to the Issuer), and all liability of the Trustee or such Paying Agent with respect to such trust money shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Issuer cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in the City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Issuer. The Trustee may also adopt and employ, at the expense of the Issuer, any other reasonable means of notification of such repayment (including mailing notice of such repayment to Holders whose Storm Recovery Bonds have been called but have not been surrendered for redemption or whose right to or interest in moneys due and payable but not claimed is determinable from the records of the Trustee or of any Paying Agent, at the last address of record for each such Holder).

SECTION 3.04. EXISTENCE. Subject to Section 3.10, the Issuer shall keep in full effect its existence, rights and franchises as a statutory limited liability company under the laws of the State of Louisiana (unless it becomes, or any successor Issuer hereunder is or becomes, organized under the laws of any other State or of the United States of America, in which case the Issuer will keep in full effect its existence, rights and franchises under the laws of such other jurisdiction) and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the Storm Recovery Bonds, the Trust Estate and each other instrument or agreement included in the Trust Estate.

SECTION 3.05. PROTECTION OF TRUST ESTATE. The Issuer shall from time to time execute and deliver, and file if required, all such supplements and amendments hereto and all such filings (including filings with the LPSC pursuant to the Securitization Act), financing statements, continuation statements, instruments of further assurance and other instruments, and shall take such other action reasonably necessary to:

(a) maintain and preserve the Grant, Lien and security interest (and the priority thereof) of this Indenture or carry out more effectively the purposes hereof;

(b) perfect, publish notice of or protect the validity of any Grant made or to be made by this Indenture, including all Series Supplements;

(d) preserve and defend title to the Trust Estate and the rights of the Trustee and the Storm Recovery Bondholders in the Trust Estate against the claims of all Persons and parties; or

(e) pay any and all taxes levied or assessed upon all or any part of the Trust Estate.

The Issuer hereby authorizes the Trustee to execute upon written direction any filing with the LPSC, financing statement, continuation statement or other instrument required to be filed pursuant to this Section.

SECTION 3.06. OPINIONS AS TO TRUST ESTATE. (a) On or before March 31 in each calendar year, while any Series is outstanding, beginning on March 31, 2009, the Issuer shall furnish to the Trustee an Issuer Opinion of Counsel stating that, in the opinion of such counsel, either (i) all actions or filings (including filings and re-filings with the Louisiana Filing Officer in accordance with the rules prescribed under the Securitization Act and the UCC) necessary to maintain perfection of the Lien and security interest created by this Indenture have been taken or made, and reciting the details of such actions and filings or (ii) no such actions or filings are necessary to maintain such Lien and

security interest. Such Issuer Opinion of Counsel shall also describe the recording, filing, re-recording and re-filing of this Indenture, any Supplemental Indentures and any other requisite documents, and the execution and filing of any filings pursuant to the Securitization Act, the Financing Order or the UCC, financing statements and continuation statements that will, in the opinion of such counsel, be required to maintain the Grant, Lien and security interest of this Indenture until March 31 in the following calendar year.

(b) Prior to the effectiveness of any amendment to any Sale Agreement or Servicing Agreement, the Issuer shall furnish to the Trustee an Issuer Opinion of Counsel either (i) stating that, in the opinion of such counsel, all actions or filings (including filings and re-filings with the Louisiana Filing Officer in accordance with the rules prescribed under the Securitization Act and the UCC) necessary to preserve and protect the interest of the Issuer and the Trustee in the Storm Recovery Property and the proceeds thereof have been taken or made, and reciting the details of such actions and filings or referring to prior Opinions of Counsel in which such details are given, or (ii) stating that, in the opinion of such counsel, no such actions or filings shall be necessary to preserve and protect such interest.

SECTION 3.07. PERFORMANCE OF OBLIGATIONS; COMMISSION FILINGS.

(a) The Issuer (i) shall diligently pursue any and all actions to enforce its rights under the Basic Documents and each other instrument or agreement included in the Trust Estate and (ii) shall not take any action and will use its best efforts not to permit any action to be taken by others that would release any Person from any of such Person's covenants or obligations under any such Basic Document, instrument or agreement or that would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any such Basic Document, instrument or agreement, except, in each case, as expressly provided in such Basic Document or such other instrument or agreement.

(b) The Issuer may contract with other Persons to assist it in performing its duties under this Indenture, and any performance of such duties by a Person identified to the Trustee in an Issuer Officer's Certificate shall be deemed to be action taken by the Issuer. Initially, the Issuer has contracted with the Administrator to assist the Issuer in performing its duties under this Indenture.

(c) The Issuer shall punctually perform and observe all of its obligations and agreements contained in the Basic Documents and in all other instruments and agreements included in the Trust Estate.

(d) The Issuer shall file with the Commission such periodic reports, if any, as are required (without regard to the number of Holders of Bonds to the extent permitted by and consistent with the Issuer's obligations under applicable law) from time to time under Section 13 or Section 15(d) of the Exchange Act so long as any Storm Recovery Bonds remain Outstanding. The Issuer shall also, to the extent permitted by and consistent with the Issuer's obligations under applicable law, post on its website or furnish or file in the periodic reports and other reports to be filed with the Commission pursuant to the Exchange Act, as described below, the following information in respect of each series of Outstanding Storm Recovery Bonds to the extent such information is reasonably available to the Issuer:

(i) a statement of Storm Recovery Charge remittances to the Trustee (to be included in a Form 10-D or Form 10-K filed subsequent to the respective report);

(ii) a statement reporting the balance in the Collection Account and the balance in each subaccount of the Collection Account as of the end of each quarter or the most recent date available (to be included in a Form 10-D or Form 10-K);

(iii) a statement showing the balance of Outstanding Storm Recovery Bonds that reflects the actual periodic payments made on the Storm Recovery Bonds (to be included in the next Form 10-D or Form 10-K);

(iv) the Semiannual Servicer's Certificate which is required to be submitted pursuant to the applicable Servicing Agreement (to be filed with a Form 10-D, Form 10-K or Form 8-K);

(v) the text (or a link to the website where a reader can find the text) of each true-up filing in respect of the Outstanding Series of Storm Recovery Bonds and the results of each true-up filing;

(vi) any change in the long-term or short-term credit ratings of the Servicer assigned by the Rating Agencies (to be filed or furnished in a Form 8-K);

(vii) material legislative or regulatory developments directly relevant to the Outstanding Storm Recovery Bonds (to be filed or furnished in a Form 8-K).

In addition, the Issuer shall, to the extent permitted by and consistent with the Issuer's obligations under applicable law, cause to be posted on the website associated with the Issuer's parent's website:

A. the final prospectus (as filed with the Commission under Rule 424 of the Securities Act) for each series of Outstanding Storm Recovery Bonds;

B. the Semiannual Servicer's Certificate delivered for each Series of Storm Recovery Bonds pursuant to each Servicing Agreement;

C. the periodic reports described above in this subsection (d); and

D. a current organization chart for the Issuer and the Servicer (unless the Servicer is not related to the Issuer, in which case the Servicer shall post two separate organization charts), in each case disclosing the parents and material subsidiaries of the Issuer and the Servicer.

(e) The Issuer shall make all filings required under the Securitization Act relating to the transfer of the ownership or security interest in the Storm Recovery Property other than those required to be made by the Seller or any Servicer pursuant to the Basic Documents.

SECTION 3.08. NEGATIVE COVENANTS. So long as any Storm Recovery Bonds are Outstanding, the Issuer shall not:

(i) except as expressly permitted by this Indenture, any Supplemental Indenture, any Sale Agreement or any Servicing Agreement, sell, transfer, exchange or otherwise dispose of any of the assets of the Issuer or the Trust Estate, unless directed to do so by the Trustee in accordance with Article V;

(ii) terminate its existence, dissolve or liquidate in whole or in part, except as Section 3.10 permits;

(iii) claim any credit on, or make any deduction from the Principal or premium, if any, or Interest payable in respect of, the Storm Recovery Bonds (other than amounts properly withheld from such payments under the Code) or assert any claim against any present or former Storm Recovery Bondholder by reason of the payment of taxes levied or assessed upon the Issuer or any part of the Trust Estate;

(iv) (A) permit the validity or effectiveness of this Indenture to be impaired, or permit the Lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations with respect to the Storm Recovery Bonds under this Indenture except as may be expressly permitted hereby, (B) permit any Lien (other than the Lien created by this Indenture) to be created on or extend to or otherwise

arise upon or burden the Trust Estate or any part thereof or any interest therein or the proceeds thereof or (C) permit the Lien of this Indenture not to constitute a continuing valid first priority security interest in the Trust Estate;

(v) except as contemplated by this Indenture, any Supplemental Indenture, any Sale Agreement, or any Servicing Agreement, enter into any swap, hedge or other similar financial arrangement or sell, transfer, exchange or otherwise dispose of any of the Trust Estate unless directed to do so by the Trustee in accordance with this Indenture;

(vi) elect to be classified as an association taxable as a corporation for federal income tax purposes or otherwise take any action, file any tax return or make any election inconsistent with the treatment of the Issuer, for purposes of federal taxes and, to the extent consistent with applicable state tax law, state income and franchise tax purposes, as a disregarded entity that is not separate from the sole owner of the Issuer; or

(vii) take any action that is the subject of a Rating Agency Condition if such action would result in a reduction or withdrawal of the then-current rating on any Outstanding Series or Tranche of Storm Recovery Bonds.

SECTION 3.09. ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will deliver to the Trustee, within 120 days after the end of each fiscal year of the Issuer (which, as of the date hereof, is the calendar year) commencing with the fiscal year 2008, an Issuer Officer's Certificate (a copy of which the Issuer will deliver to each Rating Agency and the LPSC) stating, as to the Manager signing such Issuer Officer's Certificate, that

(i) a review of the activities of the Issuer during such year (or relevant portion thereof) and of performance under this Indenture has been made under such Manager's supervision; and

(ii) to the best of such Manager's knowledge, based on such review, the Issuer has complied with all conditions and covenants under this Indenture throughout such fiscal year (or relevant portion thereof), or, if there has been a default in compliance with any such condition or covenant, describing each such default known to the Manager and the nature and status thereof.

SECTION 3.10. ISSUER MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. The Issuer shall not consolidate or merge with or into or convert into any other Person or sell substantially all of its assets to any other Person, unless:

(i) the Person (if other than the Issuer) formed by or surviving such consolidation, merger or conversion or to whom substantially all of such assets are sold shall be a Person organized and existing under the laws of the United States of America or any State and shall expressly assume by a Supplemental Indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the Principal of and premium, if any, and Interest on all Outstanding Storm Recovery Bonds and the performance or observance of every agreement and covenant of this Indenture on the part of the Issuer to be performed or observed, all as provided herein and in the applicable Series Supplement or any other Supplemental Indenture;

(ii) the Person (if other than the Issuer) formed by or surviving such consolidation, merger or conversion or to whom substantially all of such assets are sold shall expressly assume all obligations and succeed to all rights of the Issuer under the Basic Documents to which the Issuer is a party (or under which the Issuer has rights) pursuant to an assignment and assumption agreement executed and delivered to the Trustee, in form satisfactory to the Trustee;

(iii) immediately after giving effect to such consolidation, merger, conversion or sale, no Default or Event of Default shall have occurred and be continuing;

(iv) prior notice to the Rating Agencies shall have been provided and the Rating Agency Condition shall have been satisfied with respect to such consolidation, merger, conversion or sale;

(v) the Issuer shall have received an opinion of Independent counsel (and shall have delivered copies thereof to the Trustee) to the effect that such consolidation, merger, conversion or sale (a) will not have any material adverse tax consequence to the Issuer or any Storm Recovery Bondholder, (b) complies with this Indenture and all of the conditions precedent herein relating to such transaction and (c) will result in the Trustee maintaining a continuing valid first priority perfected security interest in the Trust Estate;

(vi) none of the Storm Recovery Property, any Financing Order or the Issuer's rights under the Securitization Act or the Financing Order shall be impaired thereby; and

(vii) any action as is necessary to maintain the Lien created by this Indenture shall have been taken.

SECTION 3.11. SUCCESSOR OR TRANSFEREE.

(a) Upon any consolidation, merger or conversion of the Issuer in accordance with Section 3.10, the Person formed by or surviving such consolidation, merger or conversion (if other than the Issuer) shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture with the same effect as if such Person had been named as the Issuer herein.

(b) Except for such obligations set forth in Section 6.07, upon any sale by the Issuer of substantially all of its assets in a sale which complies with Section 3.10, immediately upon the delivery of written notice to the Trustee from the Person acquiring such assets stating that the Issuer is to be so released, the Issuer will be released from every covenant and agreement of this Indenture to be observed or performed on the part of the Issuer with respect to the Storm Recovery Bonds and from every covenant and agreement of the Basic Documents to be observed or performed on the part of the Issuer.

SECTION 3.12. NO OTHER BUSINESS. The Issuer shall not engage in any business other than purchasing and owning the Storm Recovery Property provided for in Financing Orders issued by the LPSC from time to time, issuing Storm Recovery Bonds from time to time, pledging its interest in the Trust Estate to the Trustee under this Indenture in order to secure the Issuer's obligations as set forth in the Series Supplements, entering into and performing under the Basic Documents relating to the Storm Recovery Bonds, and performing activities that are necessary, suitable or convenient to accomplish these purposes or are incidental thereto.

SECTION 3.13. NO BORROWING. The Issuer shall not issue, incur, assume, guarantee or otherwise become liable, directly or indirectly, for any indebtedness except for the Storm Recovery Bonds and any obligations under any credit enhancement for any Series of Storm Recovery Bonds and except as contemplated by the Basic Documents.

SECTION 3.14. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. Except as contemplated by the Basic Documents, the Issuer shall not make any loan or advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuring another's payment or performance on any obligation or capability of so doing or otherwise), endorse or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations, assets or securities of, or any other interest in, or make any capital contribution to, any other Person other than any Eligible Investments.

SECTION 3.15. CAPITAL EXPENDITURES. The Issuer shall not make any expenditure (by long-term or operating lease or otherwise) for capital assets (either realty or personalty) other than the

Storm Recovery Property purchased from the Seller pursuant to, and in accordance with, any Sale Agreement.

SECTION 3.16. RESTRICTED PAYMENTS. The Issuer shall not, directly or indirectly, (i) pay any dividend or make any distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, to any owner of a beneficial interest in the Issuer or otherwise with respect to any ownership or equity interest in, or ownership security of, the Issuer, (ii) redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or security or (iii) set aside or otherwise segregate any amounts for any such purpose; provided, however, that if no Event of Default shall have occurred and be continuing, the Issuer may make, or cause to be made, any such distributions to any owner of a beneficial interest in the Issuer or otherwise with respect to any ownership or equity interest or security in or of the Issuer using funds distributed to the Issuer pursuant to Section 8.02(d) or which are not otherwise subject to the Lien of this Indenture to the extent that such distributions would not cause the book value of the remaining equity in the Issuer to decline below 0.5% of the original principal amount of all Series of Storm Recovery Bonds which remain outstanding. The Issuer will not, directly or indirectly, make payments to or distributions from the Collection Account except in accordance with the Basic Documents.

SECTION 3.17. NOTICE OF EVENTS OF DEFAULT. The Issuer agrees to deliver to the Trustee, the LPSC, the Rating Agencies and, to the extent the rules and regulations of the Luxembourg Stock Exchange so require, any agent in Luxembourg appointed pursuant to the second paragraph of Section 3.02 written notice in the form of an Issuer Officer's Certificate of any Default or Event of Default hereunder or under any of the Basic Documents, its status and what action the Issuer is taking or proposes to take with respect thereto within five Business Days after the occurrence thereof.

SECTION 3.18. INTENTIONALLY OMITTED.

SECTION 3.19. INSPECTION. The Issuer agrees that, on reasonable prior notice, it will permit any representative of the Trustee, during the Issuer's normal business hours, to examine all the books of account, records, reports, and other papers of the Issuer, to make copies and extracts therefrom, to cause such books to be audited annually by an Independent registered public accounting firm, and to discuss the Issuer's affairs, finances and accounts with the Issuer's officers, employees and an Independent registered public accounting firm, all at such reasonable times and as often as may be reasonably requested. The Trustee shall hold and shall cause its representatives to hold, in confidence all such information except to the extent disclosure may be required by law (and all reasonable applications for confidential treatment are unavailing) and except to the extent that the Trustee may reasonably determine that such disclosure is consistent with its obligations hereunder.

SECTION 3.20. SALE AGREEMENT, ADMINISTRATION AGREEMENT AND SERVICING AGREEMENT COVENANTS.

(a) The Issuer agrees to take all such lawful actions to enforce its rights under any Sale Agreement, the Administration Agreement and any Servicing Agreement and to compel or secure the performance and observance by the Seller, the Administrator, the Servicer and Cleco Power of each of their respective obligations to the Issuer under or in connection with any Sale Agreement, the Administration Agreement and any Servicing Agreement in accordance with the terms thereof. So long as no Event of Default occurs and is continuing, but subject to Section 3.20(f), the Issuer may exercise any and all rights, remedies, powers and privileges lawfully available to the Issuer under or in connection with any Sale Agreement, the Administration Agreement and any Servicing Agreement; provided that such action shall not adversely affect the interests of the Holders in any material respect.

(b) If an Event of Default occurs and is continuing, the Trustee may, and at the direction (which direction shall be in writing) of the holders of a majority of the Outstanding Amount of Storm Recovery Bonds of all Series or Tranches affected thereby shall, exercise all rights, remedies, powers,

privileges and claims of the Issuer against the Administrator, the Seller and the Servicer, as the case may be, under or in connection with the Administration Agreement and the applicable Sale Agreement and Servicing Agreement, including the right or power to take any action to compel or secure performance or observance by the Administrator, the Seller or the Servicer of each of their obligations to the Issuer thereunder and to give any consent, request, notice, direction, approval, extension or waiver under the Administration Agreement and the applicable Sale Agreement and Servicing Agreement, and any right of the Issuer to take such action shall be suspended.

(c) Except as set forth in Section 3.20(e) of this Indenture, with the prior written consent of the Trustee and the consent of the LPSC pursuant to Section 9.07 if the amendment increases ongoing Financing Costs, the Administration Agreement, any Sale Agreement and Servicing Agreement may be amended in accordance with the provisions thereof, so long as the Rating Agency Condition is satisfied in connection therewith, at any time and from time to time, without the consent of the Storm Recovery Bondholders of the related Series; provided that such amendment shall not adversely affect the interest of any Storm Recovery Bondholder of that Series in any material respect as evidenced by an Issuer Opinion of Counsel delivered to the Trustee. The Trustee shall also be entitled to receive an Opinion of Counsel pursuant to Section 9.01(c).

(d) Except as set forth in Section 3.20(e) of this Indenture, if the Issuer, the Seller, Cleco Power, the Administrator, the Servicer or any other party to the respective agreement proposes to amend, modify, waive, supplement, terminate or surrender, or agree to any amendment, modification, waiver, supplement, termination or surrender of, the terms of the Administration Agreement or any Sale Agreement or Servicing Agreement, or waive timely performance or observance by the Administrator, the Seller, Cleco Power or the Servicer under the Administration Agreement or any Sale Agreement or Servicing Agreement, in each case in such a way as would materially and adversely affect the interests of Storm Recovery Bondholders of any Series, the Issuer shall first notify the Rating Agencies of the proposed amendment, modification, waiver, supplement, termination or surrender and, upon receipt of notification regarding whether the Rating Agency Condition has been satisfied, shall notify the Trustee, the Paying Agent, the Storm Recovery Bond Registrar and the LPSC in writing and the Trustee shall notify the Storm Recovery Bondholders of such Series of the proposed amendment, modification, waiver, supplement, termination or surrender and whether the Rating Agency Condition has been satisfied with respect thereto. The Trustee shall consent to such proposed amendment, modification, waiver, supplement, termination or surrender only with the prior written consent of the holders of a majority of the Outstanding Amount of Storm Recovery Bonds of the Series or Tranches materially and adversely affected thereby and, if the proposed amendment, modification, waiver, supplement, termination or surrender would increase ongoing Financing Costs, the consent of the LPSC pursuant to Section 9.07. If any such amendment, modification, waiver, supplement, termination or surrender shall be so consented to by the Trustee or such Holders, the Issuer agrees to execute and deliver, in its own name and at its own expense, such agreements, instruments, consents and other documents as shall be necessary or appropriate in the circumstances. For so long as any of the Storm Recovery Bonds are listed on the Luxembourg Stock Exchange and the rules of that exchange so require, notice of such proposed action will be published by an agent to be appointed by the Issuer in accordance with such rules promptly following its effectiveness.

(e) If the Issuer or the Servicer proposes to amend, modify, waive, supplement, terminate or surrender, or to agree to any amendment, modification, supplement, termination, waiver or surrender of, the Storm Recovery Charge Adjustment Process, the Issuer shall notify the LPSC, the Trustee, the Paying Agent and the Storm Recovery Bond Registrar in writing and the Trustee shall notify the Storm Recovery Bondholders of such proposal and the Trustee shall consent thereto only with the consent of the LPSC pursuant to Section 9.07 and the prior written consent of the holders of a majority of the Outstanding Amount of Storm Recovery Bonds of the Series or Tranches materially and adversely affected thereby and only if the Rating Agency Condition has been satisfied with respect thereto.

(f) Promptly following a default by the Seller under any Sale Agreement, by the Administrator under the Administration Agreement, or the occurrence of a Servicer Default under any Servicing Agreement, and at the Issuer's expense, the Issuer agrees to take all such lawful actions as the Trustee may request in writing to compel or secure the performance and observance by each of the Seller, Cleco Power, the Administrator or the Servicer of their obligations under and in accordance with that Sale Agreement, Administration Agreement or Servicing Agreement, as the case may be, in accordance with the terms thereof, and to exercise any and all rights, remedies, powers and privileges lawfully available to the Issuer under or in connection with such agreements to the extent and in the manner directed by the Trustee, including the transmission of notices of any default by the Seller, Cleco Power, the Administrator or the Servicer, respectively, thereunder and the institution of legal or administrative actions or Proceedings to compel or secure performance of their obligations under that Sale Agreement, Administration Agreement or Servicing Agreement, as applicable.

(g) If the Issuer shall have knowledge of the occurrence of a Servicer Default under any Servicing Agreement, the Issuer shall (i) promptly give written notice thereof to the Trustee, the LPSC, the Paying Agent, the Storm Recovery Bond Registrar and the Rating Agencies, (ii) specify in such notice the action, if any, the Issuer is taking with respect to such default and (iii) take such reasonable steps as are available to it to remedy such defaults or shall take such actions as shall have been directed by the Trustee, as the case may be, provided that, notwithstanding the foregoing, the Issuer shall not take any action to terminate the Servicer's rights and powers under that Servicing Agreement unless a Servicer Default shall have occurred and be continuing, and the Trustee shall not direct the Issuer to take such action unless a Servicer Default shall have occurred and be continuing.

(h) As promptly as possible after the giving of notice of termination to the Servicer, the LPSC and the Rating Agencies of the Servicer's rights and powers pursuant to that Servicing Agreement, the Trustee upon the written direction of the majority of the Outstanding Amount of Storm Recovery Bonds of the related Series shall appoint a successor Servicer (the "Successor Servicer"), and such Successor Servicer shall accept its appointment by a written assumption in a form acceptable to the Issuer and the Trustee. A person shall qualify as a Successor Servicer only if such Person satisfies the requirements set forth in that Servicing Agreement. If within 30 days after the delivery of the notice referred to above, a Successor Servicer shall not have been appointed and accepted its appointment as such, the Trustee may petition the LPSC or a court of competent jurisdiction to appoint a Successor Servicer. In connection with any such appointment, the Issuer may make such arrangements for the compensation of such Successor Servicer as it and such Successor Servicer shall agree, subject to the limitations set forth below and in that Servicing Agreement, and in accordance with that Servicing Agreement, the Issuer shall enter into an agreement with such Successor Servicer for the servicing of the Storm Recovery Property related to that Series (such agreement to be in form and substance satisfactory to the Trustee).

(i) Upon termination of the Servicer's rights and powers pursuant to any Servicing Agreement, the Trustee shall promptly notify the Issuer, the LPSC, the Storm Recovery Bondholders of the related Series and the Rating Agencies in writing of such termination. As soon as a Successor Servicer is appointed, the Issuer shall notify the Trustee, the LPSC, the Storm Recovery Bondholders of the related Series, the Paying Agent, the Storm Recovery Bond Registrar and the Rating Agencies of such appointment, specifying in such notice the name and address of such Successor Servicer.

SECTION 3.21. TAXES. So long as any of the Storm Recovery Bonds are outstanding, the Issuer shall pay all taxes, assessments and governmental charges imposed upon it or any of its properties or assets or with respect to any of its franchises, business, income or property before any penalty accrues thereon if the failure to pay any such taxes, assessments and governmental charges would, after any applicable grace periods, notices or other similar requirements, result in a Lien on the Trust Estate.

ARTICLE IV

SATISFACTION AND DISCHARGE; DEFEASANCE

SECTION 4.01. SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE.

(a) The Storm Recovery Bonds of any Series, all moneys payable with respect thereto and this Indenture as it applies to such Series shall cease to be of further effect and the Lien hereunder shall be released with respect to such Series, Interest shall cease to accrue on the Storm Recovery Bonds of such Series and the Trustee, on written demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to the Storm Recovery Bonds of such Series, when

(A) either

(1) all Storm Recovery Bonds of such Series theretofore authenticated and delivered (other than (i) Storm Recovery Bonds that have been destroyed, lost or stolen and that have been replaced or paid as provided in Section 2.06 and (ii) Storm Recovery Bonds for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust, as provided in Section 3.03) have been delivered to the Trustee for cancellation; or

(2) the Issuer has irrevocably deposited or caused to be irrevocably deposited with the Trustee cash, in trust for such purpose, in an amount sufficient to make payments of Principal of and, premium, if any, and Interest on the Storm Recovery Bonds of such Series and to pay and discharge the entire indebtedness on such Storm Recovery Bonds not theretofore delivered to the Trustee;

(B) the Issuer has paid or caused to be paid all other sums payable hereunder by the Issuer with respect to such Series; and

(C) the Issuer has delivered to the Trustee an Issuer Officer's Certificate, an Issuer Opinion of Counsel and (if required by the TIA or the Trustee) an Independent Certificate from an Independent registered public accounting firm, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture with respect to Storm Recovery Bonds of such Series have been complied with.

(b) Subject to Sections 4.01(c) and 4.02, the Issuer at any time may terminate (i) all its obligations under this Indenture with respect to the Storm Recovery Bonds of any Series ("Legal Defeasance Option") or (ii) its obligations under Sections 3.05, 3.06 (other than with respect to the Defeasance Subaccounts and all funds and U.S. Government Obligations therein), 3.07(a), (b) and (c), 3.08, 3.10, 3.16 and 3.19 and the operation of Section 5.01(iv) (other than with respect to the Defeasance Subaccount and U.S. Government Obligations therein) ("Covenant Defeasance Option") with respect to any Series of Storm Recovery Bonds. The Issuer may exercise the Legal Defeasance Option with respect to any Series of Storm Recovery Bonds notwithstanding its prior exercise of the Covenant Defeasance Option with respect to such Series.

If the Issuer exercises the Legal Defeasance Option with respect to any Series, the maturity of the Storm Recovery Bonds of such Series may not be (a) accelerated because of an Event of Default or (b) except as provided in Section 4.02, redeemed. If the Issuer exercises the Covenant Defeasance Option with respect to any Series, the maturity of the Storm Recovery Bonds of such Series may not be accelerated because of an Event of Default specified in Section 5.01(iv).

Upon satisfaction of the conditions set forth herein to the exercise of the Legal Defeasance Option or the Covenant Defeasance Option with respect to any Series of Storm Recovery Bonds, the Trustee,

on written demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of the obligations that are terminated pursuant to such exercise.

(c) Notwithstanding Sections 4.01(a) and (b) above, (i) rights of registration of transfer and exchange, (ii) rights of substitution of mutilated, destroyed, lost or stolen Storm Recovery Bonds, (iii) rights of Storm Recovery Bondholders to receive payments of Principal, premium, if any, and Interest, but only from the amounts deposited with the Trustee for such payments, (iv) Sections 4.03 and 4.04, (v) the rights, obligations and immunities of the Trustee hereunder (including the rights of the Trustee under Section 6.07 and the obligations of the Trustee under Section 4.03) and (vi) the rights of Storm Recovery Bondholders under this Indenture with respect to the property deposited with the Trustee payable to all or any of them, shall survive until the Storm Recovery Bonds of the Series as to which this Indenture or certain obligations hereunder have been satisfied and discharged pursuant to Section 4.01(a) or 4.01(b) and have been paid in full. Thereafter, the obligations in Sections 6.07 and 4.04 with respect to such Series shall survive.

SECTION 4.02. CONDITIONS TO DEFEASANCE. The Issuer may exercise the Legal Defeasance Option or the Covenant Defeasance Option with respect to any Series of Storm Recovery Bonds only if:

(a) the Issuer irrevocably deposits or causes to be deposited in trust with the Trustee cash or U.S. Government Obligations for the payment of Principal of and premium, if any, and Interest on such Series of Storm Recovery Bonds to the Expected Final Payment Date or Redemption Date therefor, as applicable, and all other amounts due and payable hereunder, such deposit to be made in the Defeasance Subaccount for such Series of Storm Recovery Bonds;

(b) the deposit in the Defeasance Subaccount pursuant to subsection (a) of this Section 4.02 constitutes proceeds from a refunding of the Storm Recovery Bonds;

(c) the Issuer delivers to the Trustee a certificate from a nationally recognized Independent registered public accounting firm expressing its opinion that the payments of Principal and Interest when due and without reinvestment on the deposited U.S. Government Obligations plus any deposited cash without investment will provide cash at such times and in such amounts (but, in the case of the Legal Defeasance Option only, not more than such amounts) as will be sufficient to pay in respect of the Storm Recovery Bonds of such Series (i) subject to clause (ii), Principal in accordance with the Expected Amortization Schedule therefor, (ii) if such Series is to be redeemed, the redemption price therefor on the Redemption Date therefor and (iii) Interest when due;

(d) in the case of the Legal Defeasance Option, the expiration of 95 days after the deposit is made and during such 95-day period no Default specified in Section 5.01(v) or (vi) shall have occurred and be continuing at the end of the period; provided, however, that in determining whether a default under Section 5.01(v) has occurred, the requirement that the decree or order shall remain unstayed and in effect for 90 days shall be disregarded;

(e) no Default has occurred and is continuing on the day of such deposit and after giving effect thereto;

(f) in the case of the Legal Defeasance Option, the Issuer delivers to the Trustee an Issuer Opinion of Counsel stating that (i) the Issuer has received from, or there has been published by, the Internal Revenue Service a ruling, or (ii) since the date of execution of this Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion shall confirm that, the Holders of the Storm Recovery Bonds of such Series will not recognize income, gain or loss for federal income tax purposes as a result of the exercise of such legal defeasance Option and will be subject to federal income tax on the same

amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

(g) in the case of the Covenant Defeasance Option, the Issuer delivers to the Trustee an Issuer Opinion of Counsel to the effect that the Holders of the Storm Recovery Bonds of such Series will not recognize income, gain or loss for federal income tax purposes as a result of the exercise of such Covenant Defeasance Option and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred;

(h) the Issuer delivers to the Trustee an Issuer Officer's Certificate and an Issuer Opinion of Counsel, each stating that all conditions precedent to the satisfaction and discharge of the Storm Recovery Bonds of such Series to the extent contemplated by this Article IV have been complied with;

(i) the Issuer delivers to the Trustee an Opinion of Counsel to the effect that (i) in a case under the Bankruptcy Code in which Cleco Power (or any of its Affiliates, other than the Issuer) is the debtor, the court would hold that the deposited cash or U.S. Government Obligations would not be in the bankruptcy estate of Cleco Power (or any of its Affiliates, other than the Issuer, that deposited the cash or U.S. Government Obligations); and (ii) in the event Cleco Power (or any of its Affiliates, other than the Issuer, that deposited the cash or U.S. Government Obligations), were to be a debtor in a case under the Bankruptcy Code, the court would not disregard the separate legal existence of Cleco Power (or any of its Affiliates, other than the Issuer, that deposited the cash or U.S. Government Obligations) and the Issuer so as to order substantive consolidation under the Bankruptcy Code of the Issuer's assets and liabilities with the assets and liabilities of Cleco Power (or any of its Affiliates, other than the Issuer, that deposited the cash or U.S. Government Obligations), and

(j) the Rating Agency Condition shall have been satisfied with respect to the exercise of any Legal Defeasance Option or Covenant Defeasance Option.

Notwithstanding any other provision of this Section 4.02 to the contrary, no delivery of cash or U.S. Government Obligations to the Trustee under this Section shall terminate any obligations of the Issuer under this Indenture with respect to any Storm Recovery Bonds which are to be redeemed prior to the Expected Final Payment Date therefor until such Storm Recovery Bonds shall have been irrevocably called or designated for redemption on a date thereafter on which such Storm Recovery Bonds may be redeemed in accordance with the provisions of this Indenture and proper notice of such redemption shall have been given in accordance with the provisions of this Indenture or the Issuer shall have given the Trustee, in form satisfactory to the Trustee, irrevocable written instructions to give, in the manner and at the times prescribed herein, notice of redemption of such Series.

SECTION 4.03. APPLICATION OF TRUST MONEY. All moneys or U.S. Government Obligations deposited with the Trustee pursuant to Section 4.01 or 4.02 hereof with respect to any Series of Storm Recovery Bonds shall be held in trust in the Defeasance Subaccount for such Series and applied by it, in accordance with the provisions of the Storm Recovery Bonds and this Indenture, to the payment, either directly or through any Paying Agent, as the Trustee may determine, to the Holders of the particular Storm Recovery Bonds for the payment or redemption of which such moneys have been deposited with the Trustee, of all sums due and to become due thereon for Principal, premium, if any, and Interest. Such moneys shall be segregated and held apart solely for paying such Storm Recovery Bonds and such Storm Recovery Bonds shall not be entitled to any amounts on deposit in the Collection Account other than amounts on deposit in the Defeasance Subaccount for such Storm Recovery Bonds.

SECTION 4.04. REPAYMENT OF MONEYS HELD BY PAYING AGENT. In connection with the satisfaction and discharge of this Indenture or the Covenant Defeasance Option or Legal Defeasance Option with respect to the Storm Recovery Bonds of any Series, all moneys then held by any Paying Agent other than the Trustee under the provisions of this Indenture with respect to such Storm Recovery Bonds shall, upon written demand of the Issuer, be paid to the Trustee to be held and applied according to Section 4.03 and thereupon such Paying Agent shall be released from all further liability with respect to such moneys.

ARTICLE V

REMEDIES

SECTION 5.01. EVENTS OF DEFAULT. "Event of Default" with respect to any Series, wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(i) default in the payment of any Interest on any Storm Recovery Bond of such Series when the same becomes due and payable and the continuation of such default for five Business Days;

(ii) default in the payment of the then unpaid Principal of any Storm Recovery Bond of such Series on the Series Final Maturity Date for such Series or, if applicable, any Tranche of such Series on the Tranche Final Maturity Date for such Tranche;

(iii) default in the payment of the redemption price for any Storm Recovery Bond on the Redemption Date therefor;

(iv) default in the observance or performance of any covenant or agreement of the Issuer made in this Indenture (other than a covenant or agreement, a default in the observance or performance of which is specifically dealt with in clause (i), (ii) or (iii) above), any covenant or agreement of the Issuer made in any credit enhancement agreement permitted under Section 3.13 hereof and any Series Supplement, or any representation or warranty of the Issuer made herein or therein or in any certificate or other writing delivered pursuant hereto or in connection herewith proving to have been incorrect in any material respect as of the time when made (other than a covenant, agreement or representation or warranty expressly included herein or in a Series Supplement solely for the benefit of a different Series of Storm Recovery Bonds), and any such default shall continue or not be cured, for a period of 30 days after the earlier of (A) there shall have been given, by registered or certified mail, to the Issuer by the Trustee or to the Issuer and the Trustee by the Holders of at least 25% of the Outstanding Amount of Storm Recovery Bonds of such Series, a written notice specifying such default or incorrect representation or warranty and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder or (B) the date the Issuer has knowledge of the default;

(v) the filing of a decree or order for relief by a court having jurisdiction in respect of the Issuer or any substantial part of the Trust Estate securing such Series in an involuntary case or Proceeding under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the Issuer or its property or for any substantial part of the Series Trust Estate securing such Series, or ordering the winding-up or liquidation of the Issuer's affairs, and such decree or order shall remain unstayed and in effect for a period of 90 consecutive days;

(vi) the commencement by the Issuer of a voluntary case or Proceeding under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by the Issuer to the entry of an order for relief in an involuntary case under any such law,

or the consent by the Issuer to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the Series Trust Estate securing such Series, or the making by the Issuer of any general assignment for the benefit of creditors, or the failure by the Issuer generally to pay its debts as such debts become due, or the taking of action by the Issuer in furtherance of any of the foregoing;

(vii) any act or failure to act by the State of Louisiana or any of its agencies (including the LPSC), officers or employees that violates or is not in accordance with the pledge of the State of Louisiana in Section 1234 of the Securitization Act or the Commission Pledge in the Financing Order, including, without limitation, the failure of the LPSC to implement the statutorily guaranteed true-up mechanism in accordance with the Financing Order; or

(viii) any other event designated as an Event of Default in the related Series Supplement.

SECTION 5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an Event of Default other than an Event of Default under Section 5.01(vii) occurs and is continuing, then and in every such case either the Trustee or the Holders holding not less than a majority of the Outstanding Amount of Storm Recovery Bonds of the Series with respect to which an Event of Default has occurred, voting as a class, may, but need not, declare all the Storm Recovery Bonds of such Series to be immediately due and payable, by a notice in writing to the Issuer (and to the Trustee if given by Storm Recovery Bondholders), and upon any such declaration the unpaid principal amount of the Storm Recovery Bonds of such Series, together with accrued and unpaid interest thereon through the date of acceleration, shall become immediately due and payable.

At any time after such declaration of acceleration of maturity has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article V provided, the Holders holding not less than a majority of the Outstanding Amount of Storm Recovery Bonds of such Series, by written notice to the Issuer and the Trustee, may rescind and annul such declaration and its consequences if:

(i) the Issuer has paid or deposited with the Trustee, for deposit in the General Subaccount of the Collection Account of such Series, a sum sufficient to pay

(A) all payments of Principal of and premium, if any, and Interest on all Storm Recovery Bonds of such Series due and owing at such time as if such Event of Default had not occurred and was not continuing and all other amounts that would then be due hereunder or upon such Storm Recovery Bonds as if the Event of Default giving rise to such acceleration had not occurred and was not continuing; and

(B) all sums paid or advanced by the Trustee hereunder with respect to such Series and the reasonable compensation, expenses, disbursements and advances of the Trustee and its agents and counsel with respect to such Series; and

(ii) all Events of Default other than the nonpayment of the Principal of the Storm Recovery Bonds of the Series that has become due solely by such acceleration have been cured or waived as provided in Section 5.12.

No such rescission shall affect any subsequent Default or impair any right consequent thereto.

SECTION 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.

(a) The Issuer covenants that if (i) Default is made in the payment of any Interest on any Storm Recovery Bond when such Interest becomes due and payable and such Default continues for five Business Days, (ii) Default is made in the payment of the then unpaid Principal of any Storm Recovery Bond on the Series Final Maturity Date or Tranche Final Maturity Date, as applicable, therefor, or (iii) Default is made in the payment of the redemption price for any Storm Recovery Bond on the Redemption Date therefor, the Issuer shall, upon demand of the Trustee, pay to it, for the benefit of the Holders of the Storm Recovery Bonds of such Series, such amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee and its agents and counsel and the whole amount then due and payable on such Storm Recovery Bonds for Principal, premium, if any, and Interest, with interest upon the overdue Principal and premium, if any, and, to the extent payment at such rate of interest shall be legally enforceable, upon overdue installments of Interest, at the respective Bond Rate of such Series or the applicable Tranche of such Series.

(b) In case the Issuer shall fail forthwith to pay the amounts specified in Section 5.03(a) upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a Proceeding for the collection of the sums so due and unpaid, and may prosecute such Proceeding to judgment or final decree, and may enforce the same against the Issuer or other obligor upon such Storm Recovery Bonds and collect in the manner provided by law out of the Series Trust Estate and the proceeds thereof, the whole amount then due and payable on the Storm Recovery Bonds of such Series for Principal, premium, if any, and Interest, with interest upon the overdue Principal and premium, if any, and, to the extent payment at such rate of interest shall be legally enforceable, upon overdue installments of Interest, at the respective rate borne by the Storm Recovery Bonds of such Series or the applicable Tranche of such Series and in addition thereto such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee and its agents and counsel.

(c) If an Event of Default other than the Event of Default described in Section 5.01(vii) occurs and is continuing, the Trustee may, as more particularly provided in Section 5.04, proceed to protect and enforce its rights and the rights of the Storm Recovery Bondholders of all materially and adversely affected Series by such appropriate Proceedings as the Trustee shall deem most effective to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or equitable right vested in the Trustee by this Indenture or by law, including foreclosing or otherwise enforcing the Lien on the Series Trust Estate securing those Series of Storm Recovery Bonds or applying to the LPSC or a court of competent jurisdiction for sequestration of revenues arising with respect to such Storm Recovery Property.

(d) In case there shall be pending, relative to the Issuer or any other obligor upon any Series of Storm Recovery Bonds or any Person having or claiming an ownership interest in the Series Trust Estate securing that Series, Proceedings under Title 11 of the United States Code or any other applicable federal or State bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Issuer or its property or such other obligor or Person, or in case of any other comparable judicial Proceedings relative to the Issuer or other obligor upon that Series of Storm Recovery Bonds, or to the creditors or property of the Issuer or such other obligor, the Trustee, irrespective of whether the principal of that Series of Storm Recovery Bonds shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee

shall have made any demand pursuant to the provisions of this Section, shall be entitled and empowered to the extent permitted by applicable law, by intervention in such Proceedings or otherwise:

(i) to file and prove a claim or claims for the whole amount of Principal, premium, if any, and Interest owing and unpaid in respect of the Storm Recovery Bonds and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation to the Trustee and each predecessor Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee, except as a result of negligence or bad faith) and of the Storm Recovery Bondholders allowed in such Proceedings;

(ii) unless prohibited by applicable law and regulations, to vote on behalf of the Holders of Storm Recovery Bonds in any election of a trustee, a standby trustee or Person performing similar functions in any such Proceedings;

(iii) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute all amounts received with respect to the claims of the Storm Recovery Bondholders and of the Trustee on their behalf;

(iv) to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee or the Holders of Storm Recovery Bonds allowed in any judicial Proceedings relative to the Issuer, its creditors and its property; and

(v) to participate as a member, voting or otherwise, of any official committee of creditors appointed in such matter,

and any trustee, receiver, liquidator, custodian or other similar official in any such Proceeding is hereby authorized by each of such Storm Recovery Bondholders to make payments to the Trustee, and, in the event that the Trustee shall consent to the making of payments directly to such Storm Recovery Bondholders, to pay to the Trustee such amounts as shall be sufficient to cover reasonable compensation to the Trustee, each predecessor Trustee and their respective agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee except as a result of negligence or bad faith.

(e) Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Storm Recovery Bondholder any plan of reorganization, arrangement, adjustment or composition affecting the Storm Recovery Bonds or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Storm Recovery Bondholder in any such Proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar Person.

(f) All rights of action and of asserting claims under this Indenture, or under any Series of Storm Recovery Bonds, may be enforced by the Trustee without the possession of any of those Storm Recovery Bonds or the production thereof in any trial or other Proceedings relative thereto, and any such action or Proceedings instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Trustee, each predecessor Trustee and their respective agents and attorneys, shall be for the ratable benefit of the Holders of those Storm Recovery Bonds.

(g) In any Proceedings brought by the Trustee (and also any Proceedings involving the interpretation of any provision of this Indenture to which the Trustee shall be a party), the Trustee shall be held to represent all the Holders of the Storm Recovery Bonds, and it shall not be necessary to make any Storm Recovery Bondholder a party to any such Proceedings.

SECTION 5.04. REMEDIES; PRIORITIES. (a) If an Event of Default other than the Event of Default described in Section 5.01(vii) occurs and is continuing, the Trustee shall do one or more of the

following at the written direction of the holders of a majority of the Outstanding Amount of Storm Recovery Bonds of such Series affected thereby or may do one or more of the following in reliance upon Sections 6.01 and 6.02 of this Indenture (subject, in either event, to Section 5.05):

(i) institute Proceedings in its own name and as trustee of an express trust for the collection of all amounts then payable on the Storm Recovery Bonds or under this Indenture with respect thereto, whether by declaration or otherwise, enforce any judgment obtained and collect from the Issuer or the Servicer moneys adjudged due;

(ii) institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Series Trust Estate securing such Series;

(iii) exercise any remedies of a secured party under the UCC or Section 1231 of the Securitization Act or any other applicable law and take any other appropriate action to protect and enforce the rights and remedies of the Trustee and the Holders of the Storm Recovery Bonds of such Series;

(iv) sell the Series Trust Estate securing such Series or any portion thereof or rights or interest therein, at one or more public or private sales called and conducted in any manner permitted by law; and

(v) exercise all rights, remedies, powers, privileges and claims of the Issuer against the Administrator, the Seller, Cleco Power and the Servicer under or in connection with, and pursuant to the terms of, the Administration Agreement or any applicable Sale Agreement or Servicing Agreement;

provided, however, that the Trustee may not sell or otherwise liquidate any portion of the Series Trust Estate securing such Series following an Event of Default, unless the Final Payment Date of the Storm Recovery Bonds of such Series has occurred or the Storm Recovery Bonds have been declared due and payable and (A) the Holders of 100% of the Outstanding Amount of the Storm Recovery Bonds of all Series consent thereto, (B) the proceeds of such sale or liquidation distributable to the Storm Recovery Bondholders of such Series are sufficient to discharge in full all amounts then due and unpaid upon such Storm Recovery Bonds for Principal, premium, if any, and Interest on all Outstanding Storm Recovery Bonds or (C) the Trustee determines that the Series Trust Estate securing such Series will not continue to provide sufficient funds for all payments on the Storm Recovery Bonds of such Series as they would have become due if the Storm Recovery Bonds had not been declared due and payable, and the Trustee obtains the written consent of Holders of 66²/3% of the Outstanding Amount of the Storm Recovery Bonds of such Series. In determining such sufficiency or insufficiency with respect to clause (B) and (C), the Trustee may, but need not, obtain and conclusively rely upon an opinion of an Independent investment banking firm or Independent registered public accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Series Trust Estate for such purpose.

If an Event of Default occurs and is continuing, the amounts on deposit in the Collection Account shall continue to be distributed in accordance with Sections 8.02(d) and (e).

(b) If an Event of Default under Section 5.01(vii) occurs and is continuing, the Trustee, for the benefit of the Storm Recovery Bondholders, shall be entitled and empowered to the extent permitted by applicable law to institute or participate in Proceedings reasonably necessary to compel performance of or to enforce the pledge of the State of Louisiana in Section 1234 of the Securitization Act or the Commission Pledge in the Financing Order and to collect any monetary damages incurred by the Storm Recovery Bondholders or the Trustee as a result of any such Event of Default, and may prosecute any such Proceeding to final judgment or decree. Such remedy shall be the only remedy that the Trustee may exercise if the only Event of Default that has occurred and is continuing is an Event of Default under Section 5.01(vii).

(c) If the Trustee collects any money pursuant to this Article V, it shall pay out such money in accordance with the priorities set forth in Section 8.02(d) and (e).

SECTION 5.05. OPTIONAL PRESERVATION OF THE TRUST ESTATE. If the Storm Recovery Bonds of a Series have been declared to be due and payable under Section 5.02 following an Event of Default and such declaration and its consequences have not been rescinded and annulled, the Trustee may, but need not, elect, as provided in Section 5.11(iii), to maintain possession of the Series Trust Estate securing that Series in accordance with Section 5.04(a). It is the desire of the parties hereto and the Storm Recovery Bondholders that there be at all times sufficient funds for the payment of Principal of and premium, if any, and Interest on the Storm Recovery Bonds of any Series, and the Trustee shall take such desire into account when determining whether or not to maintain possession of the Series Trust Estate securing that Series or sell or liquidate the same. In determining whether to maintain possession of the Series Trust Estate or sell or liquidate the same, the Trustee may, but need not, obtain and conclusively rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Series Trust Estate for such purpose.

SECTION 5.06. LIMITATION OF PROCEEDINGS. No Holder of any Storm Recovery Bond of any Series shall have any right to institute any Proceeding, judicial or otherwise, or to avail itself of the remedies provided in 1231 of the Securitization Act, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

(i) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the affected Series;

(ii) the Holders of not less than a majority of the Outstanding Amount of the Storm Recovery Bonds of such Series have made written request to the Trustee to institute such Proceeding in respect of such Event of Default in its own name as Trustee hereunder;

(iii) such Holder or Holders have offered to the Trustee security or indemnity reasonably satisfactory to the Trustee against the costs, expenses and liabilities to be incurred in complying with such request;

(iv) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute such Proceedings; and

(v) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority of the Outstanding Amount of the Storm Recovery Bonds of such Series,

it being understood and intended that no one or more Holders of Storm Recovery Bonds shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders of Storm Recovery Bonds or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided.

In the event the Trustee shall receive conflicting or inconsistent requests and indemnity from two or more groups of Holders of Storm Recovery Bonds, each representing less than a majority of the Outstanding Amount of the Storm Recovery Bonds of all Series, the Trustee may determine what action, if any, shall be taken, notwithstanding any other provisions of this Indenture.

SECTION 5.07. UNCONDITIONAL RIGHTS OF STORM RECOVERY BONDHOLDERS TO RECEIVE PRINCIPAL, PREMIUM, IF ANY, AND INTEREST. Notwithstanding any other provisions in this Indenture, the Holder of any Storm Recovery Bond shall have the right, which is absolute and unconditional, and shall not be impaired without the consent of each such Holder, (a) to receive payment of (i) the Interest, if any, on such Storm Recovery Bond on or after the due dates thereof

expressed in such Storm Recovery Bond or in this Indenture, (ii) the unpaid Principal, if any, of such Storm Recovery Bonds on or after the Final Maturity Date therefor or (iii) in the case of redemption, the unpaid Principal, if any, of and premium, if any, and Interest, if any, on such Storm Recovery Bond on or after the Redemption Date therefor and (b) to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder.

SECTION 5.08. RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or any Storm Recovery Bondholder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason or has been determined adversely to the Trustee or to such Storm Recovery Bondholder, then and in every such case the Issuer, the Trustee and the Storm Recovery Bondholders shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Trustee and the Storm Recovery Bondholders shall continue as though no such Proceeding had been instituted.

SECTION 5.09. RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein conferred upon or reserved to the Trustee or to the Storm Recovery Bondholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

SECTION 5.10. DELAY OR OMISSION NOT A WAIVER. No delay or omission by the Trustee or any Storm Recovery Bondholder to exercise any right or remedy accruing upon any Default or Event of Default shall impair any such right or remedy or constitute a waiver of any such Default or Event of Default or an acquiescence therein. Every right and remedy given by this Article V or by law to the Trustee or to the Storm Recovery Bondholders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Storm Recovery Bondholders, as the case may be.

SECTION 5.11. CONTROL BY STORM RECOVERY BONDHOLDERS. The Majority Holders (or, if less than all Series or Tranches are affected, the Holders of a majority of the Outstanding Amount of the Storm Recovery Bonds of the affected Series or Tranche or Tranches) shall have the right to direct the time, method and place of conducting any Proceeding for any remedy available to the Trustee with respect to the Storm Recovery Bonds (or the Storm Recovery Bonds of such affected Series or Tranche or Tranches) or exercising any trust or power conferred on the Trustee with respect to the Storm Recovery Bonds (or the Storm Recovery Bonds of such affected Series or Tranche or Tranches); provided that

(i) such direction shall not be in conflict with any rule of law or with this Indenture;

(ii) any direction to the Trustee to sell or liquidate the Trust Estate shall be by the Holders of Storm Recovery Bonds representing not less than 100% of the Outstanding Amount of the Storm Recovery Bonds of all Series;

(iii) if the conditions set forth in Section 5.05 have been satisfied and the Trustee elects to retain the Series Trust Estate securing such Series pursuant to such Section and elects not to sell or liquidate the same, then any direction to the Trustee by Holders of Storm Recovery Bonds representing less than 100% of the Outstanding Amount of the Storm Recovery Bonds of all affected Series to sell or liquidate such Series Trust Estate shall be of no force and effect; and

(iv) the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction;

provided, however, that, subject to Section 6.01, the Trustee need not take any action that it determines might involve it in liability for which it reasonably believes it will not be indemnified to its reasonable satisfaction against the costs, expenses and liabilities which might be incurred by it in complying with this request. The Trustee also need not take any action that it determines might materially and adversely affect the rights of any Storm Recovery Bondholders not consenting to such action.

SECTION 5.12. WAIVER OF PAST DEFAULTS. Prior to the declaration of the acceleration of the maturity of the Storm Recovery Bonds of a Series affected as provided in Section 5.02, the Holders of a majority of the Outstanding Amount of Storm Recovery Bonds of such Series or Tranche affected thereby, by written notice to the Trustee, may waive any past Default or Event of Default and its consequences except a Default (i) in payment of Principal of or premium, if any, or Interest on any of the Storm Recovery Bonds or (ii) in respect of a covenant or provision hereof which cannot be modified or amended without the consent of the Holder of each Storm Recovery Bond of such Series or Tranche affected. In the case of any such waiver, the Issuer, the Trustee and the Holders of the Storm Recovery Bonds shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereto.

Upon any such waiver, such Default shall cease to exist and be deemed to have been cured and not to have occurred, and any Event of Default arising therefrom shall be deemed to have been cured and not to have occurred, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereto.

SECTION 5.13. UNDERTAKING FOR COSTS. All parties to this Indenture agree, and each Holder of any Storm Recovery Bond by such Holder's acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to (a) any suit instituted by the Trustee, (b) any suit instituted by any Storm Recovery Bondholder, or group of Storm Recovery Bondholders, in each case holding in the aggregate more than 10% of the Outstanding Amount of the Storm Recovery Bonds of a Series or (c) any suit instituted by any Storm Recovery Bondholder for the enforcement of the payment of (i) Interest on any Storm Recovery Bond on or after the due dates expressed in such Storm Recovery Bond and in this Indenture, (ii) the unpaid Principal, if any, of any Storm Recovery Bond on or after the Series Final Maturity Date or Tranche Final Maturity Date, if applicable, therefor or (iii) in the case of redemption, the unpaid Principal of and premium, if any, and Interest on any Storm Recovery Bond on or after the Redemption Date therefor.

SECTION 5.14. WAIVER OF STAY OR EXTENSION LAWS. The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead or in any manner whatsoever, claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

SECTION 5.15. ACTION ON STORM RECOVERY BONDS. The Trustee's right to seek and recover judgment on the Storm Recovery Bonds or under this Indenture shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this Indenture. Neither the Lien of this Indenture nor any rights or remedies of the Trustee or the Storm Recovery Bondholders shall be impaired by the recovery of any judgment by the Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Trust Estate or upon any of the other assets of the Issuer.

ARTICLE VI

THE TRUSTEE

SECTION 6.01. DUTIES AND LIABILITIES OF TRUSTEE.

(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent Person would exercise or use under the circumstances in the conduct of such Person's own affairs.

(b) Except during the continuance of an Event of Default:

(i) the Trustee is hereby authorized and undertakes to execute, deliver and perform the Basic Documents to the extent called for by such documents and otherwise to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture.

(c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

(i) this subsection (c) does not limit the effect of subsection (b) of this Section 6.01;

(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

(iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it hereunder.

(d) Every provision of this Indenture that in any way relates to the Trustee is subject to subsections (a), (b) and (c) of this Section 6.01.

(e) The Trustee shall not be liable for interest on any money received by it except as provided in this Indenture.

(f) Money held in trust by the Trustee need not be segregated from other funds held by the Trustee except to the extent required by law or the terms of this Indenture, the Administration Agreement or the applicable Sale Agreement or Servicing Agreement.

(g) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any liability, financial or otherwise, in the performance of any of its duties hereunder or in the exercise of any of its rights or powers if it shall have reasonable grounds to believe that repayments of such funds or indemnity reasonably satisfactory to it against such risk or liability is not reasonably assured to it.

(h) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 6.01 and to the provisions of the TIA.

(i) Under no circumstances shall the Trustee be liable for any indebtedness of the Issuer, the Seller, the Administrator or the Servicer evidenced by or arising under the Storm Recovery Bonds or any Basic Document.

(j) On or before March 15^th of each fiscal year ending December 31, with respect to which the Issuer is obligated to file reports with the Commission pursuant to the Exchange Act, the Trustee shall (i) deliver, at the expense of the Issuer, to the Issuer a report (addressed to the Issuer and signed by an authorized officer of the Trustee) regarding the Trustee's assessment of compliance, during the immediately preceding fiscal year ending December 31, with each of the applicable servicing criteria specified on Exhibit A hereto as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB, together with such backup certification as to compliance within the knowledge or under the control of the Trustee as the Servicer may reasonably request and (ii) deliver to the Issuer a report of an Independent registered public accounting firm that attests to and reports on, in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the Exchange Act, the assessment of compliance made by the Trustee and delivered pursuant to clause (i) of this subsection 6.01(j).

SECTION 6.02. RIGHTS OF TRUSTEE.

(a) The Trustee may rely conclusively and shall be fully protected in acting or refraining from acting in accordance with any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document.

(b) Before the Trustee acts or refrains from acting, it may require an Issuer Officer's Certificate or an Issuer Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on an Issuer Officer's Certificate or an Issuer Opinion of Counsel.

(c) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys or a custodian or nominee, and the Trustee shall not be responsible for any misconduct or negligence on the part of, or for the supervision of, any such agent, attorney, custodian or nominee appointed with due care by it thereunder.

(d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided, however, that the Trustee's conduct does not constitute willful misconduct, negligence or bad faith.

(e) The Trustee may consult with counsel, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Storm Recovery Bonds shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

(f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by or pursuant to this Indenture at the request, order or direction of any of the Holders unless such Holders shall have offered to the Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities that might be incurred by it in compliance with such request, order or direction.

(g) In the event that the Trustee is also acting in the capacity of Paying Agent or Storm Recovery Bond Registrar hereunder, the rights, protections, immunities and indemnities afforded to the Trustee pursuant to this Article VI shall also be afforded to the Trustee in its capacity as Paying Agent or Storm Recovery Bond Registrar.

SECTION 6.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its individual or any other capacity may become the owner or pledgee of Storm Recovery Bonds and may otherwise deal with the Issuer or its affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Storm Recovery Bond Registrar, co-registrar or co-paying agent may do the same with like rights. However, the Trustee must comply with Sections 6.11 and 6.12.

SECTION 6.04. TRUSTEE'S DISCLAIMER. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Storm Recovery Bonds. The Trustee shall not be accountable for the Issuer's use of the proceeds from the Storm Recovery Bonds, and the Trustee shall not be responsible for any statement of the Issuer in the Indenture or in any document issued in connection with the sale of the Storm Recovery Bonds or in the Storm Recovery Bonds other than the Trustee's certificate of authentication. The Trustee shall not be responsible for the form, character, genuineness, sufficiency, value or validity of any of the Trust Estate, or for or in respect of the validity or sufficiency of the Storm Recovery Bonds (other than the certificate of authentication for the Storm Recovery Bonds) or the Basic Documents and the Trustee shall in no event assume or incur any liability, duty or obligation to any Holder of a Storm Recovery Bond, other than as expressly provided for in this Indenture. The Trustee shall not be liable for the default or misconduct of the Issuer, the Seller, the Administrator, the Servicer or any Manager under any Basic Document or otherwise and the Trustee shall have no obligation or liability to perform the obligations of the Issuer.

SECTION 6.05. NOTICE OF DEFAULTS. If a Default occurs and is continuing with respect to any Tranche or Series and if it is actually known to a Responsible Officer of the Trustee, the Trustee shall mail to the LPSC, each Rating Agency and to each Holder of Storm Recovery Bonds of all Tranches or Series affected thereby notice of the Default within 10 Business Days after it is actually known to a Responsible Officer of the Trustee. Except in the case of a Default in payment of Principal of or premium, if any, or Interest on any Storm Recovery Bond, the Trustee may withhold the notice if and so long as a Responsible Officer of the Trustee in good faith determines that withholding the notice is in the interests of Storm Recovery Bondholders.

SECTION 6.06. REPORTS BY TRUSTEE TO HOLDERS.

(a) If applicable and so long as Storm Recovery Bonds are Outstanding, within the prescribed period of time for tax reporting purposes after the end of each calendar year, the Storm Recovery Bond Registrar or, in its absence or failure the Paying Agent, shall deliver to each relevant current or former Holder of Storm Recovery Bonds such information as may be required to enable such Holder to prepare its federal and State income tax returns.

(b) With respect to each Series and Tranche of Storm Recovery Bonds, on each Payment Date therefor, upon receipt by the Trustee from the Servicer of the "Semiannual Servicer's Certificate," the form of which is attached hereto as Schedule 1, the Storm Recovery Bond Registrar or, in its absence or failure the Paying Agent, shall make such Semiannual Servicer's Certificate available to each Holder (and beneficial owner) of Storm Recovery Bonds on its website www.usbank.com/abs and will deliver such Semiannual Servicer's Certificate to the LPSC and to each Rating Agency which will include (to the extent applicable) the following information (and any other information so specified in the Series Supplement for such Series) as to the Storm Recovery Bonds of such Series and Tranche with respect to such Payment Date or the period since the previous Payment Date, as applicable:

(i) the amount to be paid to Holders of the Storm Recovery Bonds of such Series and Tranche in respect of Principal, such amount also to be expressed as a dollar amount per thousand;

(ii) the amount to be paid to Holders of the Storm Recovery Bonds of such Series and Tranche in respect of Interest, such amount also to be expressed as a dollar amount per thousand;

(iii) the Storm Recovery Bond Balance, after giving effect to the payments to be made on such Payment Date, and the Projected Storm Recovery Bond Balance, in each case for such Series and Tranche and as of such Payment Date;

(iv) the amount on deposit in the Capital Subaccount for such Series as of such Payment Date;

(v) the amount, if any, on deposit in the Excess Funds Subaccount for such Series as of such Payment Date;

(vi) the amount to be paid to the Trustee relating to that Series on such Payment Date;

(vii) the amount to be paid to the Servicer relating to that Series on such Payment Date; and

(viii) any other transfers and payments relating to that Series made pursuant to this Indenture.

(c) If any Storm Recovery Bonds are listed on the Luxembourg Stock Exchange and rules of such exchange so require, the Issuer's listing agent shall arrange for publication in accordance with such rules a notice that such certificate shall be available with the Issuer's listing agent in Luxembourg appointed pursuant to the second paragraph of Section 3.02.

(d) The Storm Recovery Bond Registrar's or Paying Agent's responsibility for distributing the information described in subsection (b) above to Holders of a Series of Storm Recovery Bonds is limited to the availability, timeliness and accuracy of the information provided by the Servicer pursuant to Sections 3 and 4 and Annex 1 of the applicable Servicing Agreement.

SECTION 6.07. COMPENSATION AND INDEMNITY. Subject in all respects to the provisions of Article VIII hereof, the Issuer shall pay to the Trustee from time to time reasonable compensation for its services as set forth in the fee schedule between the Trustee and Cleco Power dated , 200 . To the extent permitted by law, the Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall reimburse the Trustee for all reasonable out-of-pocket expenses, disbursements and advances incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee's agents, counsel, accountants and experts. The Issuer shall indemnify and hold harmless the Trustee and its officers, directors, employees and agents from and against any and all Losses or other amounts whatsoever (including reasonable counsel fees and expenses) directly or indirectly incurred by the Trustee in connection with the administration of this trust, the enforcement of this trust and all of the Trustee's rights, powers and duties under this Indenture (including this Section 6.07) and the performance by the Trustee of the duties and obligations of the Trustee under or pursuant to this Indenture, the Administration Agreement and any Sale Agreement or Servicing Agreement; provided, however, that notwithstanding the foregoing, the failure to pay to the Trustee by the Issuer (including without limitation from Collections deposited into the Collection Account or through the Storm Recovery Charge Adjustment Process) any amounts in respect of indemnification hereunder in excess of an aggregate amount equal to any Indemnity Amounts payable to the Trustee in accordance with Section 8.02(d) of this Indenture shall not constitute a Default or Event of Default under Section 5.01 of this Indenture. The Trustee shall notify the Issuer promptly of any claim for which it may seek indemnity. Failure by the Trustee so to notify the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer shall defend the claim and the Trustee may have separate counsel and the Issuer shall pay the reasonable fees and expenses of such counsel. Notwithstanding the foregoing, the Issuer need not reimburse any expense or indemnify against any Loss incurred by the Trustee (i) through the Trustee's own willful misconduct, negligence or bad faith or (ii) to the extent the Trustee was reimbursed for or indemnified against any such Loss by the Seller or the Servicer pursuant to the Administration Agreement or any Sale Agreement or Servicing Agreement. The obligations of the Issuer under this Section shall survive the termination of this Agreement and the earlier resignation or removal of the Trustee.

When the Trustee incurs expenses after the occurrence of a Default specified in Section 5.01(v) or (vi) with respect to the Issuer, the expenses are intended to constitute expenses of administration under Title 11 of the United States Code or any other applicable federal or State bankruptcy, insolvency or similar law.

SECTION 6.08. REPLACEMENT OF TRUSTEE. The Trustee may resign at any time upon 30 days' written notice to the Issuer. The Issuer shall remove the Trustee by written notice if:

(i) the Trustee fails to comply with Section 6.11;

(ii) the Trustee is adjudged a bankrupt or insolvent;

(iii) a receiver or other public officer takes charge of the Trustee or its property;

(iv) the Trustee otherwise becomes incapable of acting; or

(v) the Trustee fails to provide to the Issuer any information reasonably requested by the Issuer pertaining to the Trustee and necessary for the Issuer or Cleco Power or its parent entity to comply with its reporting obligations under the Exchange Act and Regulation AB and such failure is not resolved to the Issuer's and the Trustee's mutual satisfaction within a reasonable period of time.

If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the "Retiring Trustee"), the Issuer shall promptly appoint a successor Trustee.

In addition, the Majority Holders may remove the Trustee by so notifying the Issuer and the Trustee in writing and such Holders may appoint a successor Trustee.

A successor Trustee shall deliver a written acceptance of its appointment to the Retiring Trustee and to the Issuer. Thereupon the resignation or removal of the Retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. No resignation or removal of the Trustee will become effective until the acceptance of the appointment by a successor Trustee. The successor Trustee shall mail a notice of its succession to the Storm Recovery Bondholders. The Retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee.

If a successor Trustee does not take office within 60 days after the Retiring Trustee resigns or is removed, the Retiring Trustee at the expense of the Issuer, the Issuer or the Majority Holders may petition any court of competent jurisdiction for the appointment of a successor Trustee.

If the Trustee fails to comply with Section 6.11, any Storm Recovery Bondholder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

Notwithstanding the replacement of the Trustee pursuant to this Section 6.08, the Issuer's obligations under Section 6.07 shall continue for the benefit of the Retiring Trustee.

SECTION 6.09. SUCCESSOR TRUSTEE BY MERGER. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation or banking association shall, without any further act, be the successor Trustee. Notice of any such event shall be promptly given to the LPSC and to each Rating Agency by the successor Trustee and any agent in Luxembourg appointed pursuant to the second paragraph of Section 3.02.

In case at the time such successor or successors by merger, conversion, consolidation or transfer shall succeed to the trusts created by this Indenture any of the Storm Recovery Bonds shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of

authentication of any Retiring Trustee, and deliver such Storm Recovery Bonds so authenticated; and in case at that time any of the Storm Recovery Bonds shall not have been authenticated, any successor to the Trustee may authenticate such Storm Recovery Bonds either in the name of any Retiring Trustee hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force and effect granted by the Storm Recovery Bonds or by this Indenture and this force and effect shall be equal to any certificate issued by the Trustee.

SECTION 6.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.

(a) Notwithstanding any other provisions of this Indenture, at any time, for the purpose of meeting any legal requirement of any jurisdiction in which any part of the Trust Estate may at the time be located, the Trustee shall have the power and may execute and deliver all instruments to appoint one or more Persons to act as a co-trustee or co-trustees, or separate trustee or separate trustees, of all or any part of the Trust Estate, and to vest in such Person or Persons, in such capacity and for the benefit of the Storm Recovery Bondholders, such title to the Trust Estate, or any part hereof, and, subject to the other provisions of this Section 6.10, such powers, duties, obligations, rights and trusts as the Trustee may consider necessary or desirable. No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 6.11 and no notice to Storm Recovery Bondholders of the appointment of any co-trustee or separate trustee shall be required under Section 6.08 hereof. Notice of any such appointment shall be promptly given to each Rating Agency and the LPSC by the Trustee.

(b) Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:

(i) all rights, powers, duties and obligations conferred or imposed upon the Trustee shall be conferred or imposed upon and exercised or performed by the Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed, the Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Trust Estate or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Trustee;

(ii) no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder; and

(iii) the Trustee may at any time accept the resignation of or remove any separate trustee or co-trustee.

(c) Any notice, request or other writing given to the Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Indenture and the conditions of this Article VI. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Trustee or separately, as may be provided therein, subject to all the provisions of this Indenture, specifically including every provision of this Indenture relating to the conduct of, affecting the liability of, or affording protection to the Trustee. Every such instrument shall be filed with the Trustee.

(d) Any separate trustee or co-trustee may at any time constitute the Trustee, its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Agreement on its behalf and in its name. If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties,

rights, remedies and trusts shall vest in and be exercised by the Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.

SECTION 6.11. ELIGIBILITY; DISQUALIFICATION. The Trustee and any co-trustee shall at all times satisfy the requirements of TIA Section 310(a)(1) and (a)(5) and Section 26(a)(1) of the Investment Company Act of 1940, as amended. In addition, the Trustee and any co-trustee shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition and it shall have a long term debt rating of "Baa3" or better by Moody's, "BBB-" or better by S&P and, if Fitch provides a rating thereon, "BBB-" or better by Fitch. The Trustee and any co-trustee shall comply with TIA Section 310(b), including the optional provision permitted by the second sentence of TIA Section 310(b), including the optional provision permitted by the second sentence of TIA Section 310(b)(9); provided, however, that there shall be excluded from the operation of TIA Section 310(b)(1) any indenture or indentures under which other securities of the Issuer are outstanding if the requirements for such exclusion set forth in TIA Section 310(b)(1) are met.

SECTION 6.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER. The Trustee shall comply with TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated.

SECTION 6.13. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE. The Trustee hereby represents and warrants that:

(a) the Trustee is a national banking association validly existing in good standing under the laws of the United States of America; and

(b) the Trustee has full power, authority and legal right to execute, deliver and perform this Indenture and all the Basic Documents to which the Trustee is a party and has taken all necessary action to authorize the execution, delivery and performance by it of this Indenture and such Basic Documents.

SECTION 6.14. RIGHTS OF THE AUTHENTICATING AGENT, STORM RECOVERY BOND REGISTRAR AND PAYING AGENT.

(a) Each of the authenticating agent, Storm Recovery Bond Registrar and Paying Agent undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. The authenticating agent, Storm Recovery Bond Registrar and Paying Agent shall not have any duties or responsibilities except those expressly set forth in this Indenture or be a trustee for or have any fiduciary obligation to any party hereto.

(b) In the absence of bad faith on the part of the authenticating agent, Storm Recovery Bond Registrar or Paying Agent, respectively, such party may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to such party that conform to the requirements of this Indenture.

(c) None of the authenticating agent, Storm Recovery Bond Registrar and Paying Agent shall be liable for any error of judgment made in good faith by an officer or officers of that party, unless it shall be conclusively determined by a court of competent jurisdiction that such party was negligent.

(d) None of the authenticating agent, Storm Recovery Bond Registrar or Paying Agent shall be liable with respect to any action taken or omitted to be taken by that party in good faith in accordance with any direction of the Issuer or the Trustee given under this Indenture.

(e) None of the provisions of this Indenture shall require any of the authenticating agent, Storm Recovery Bond Registrar or Paying Agent to expend or risk its own funds or otherwise to incur any liability, financial or otherwise, in the performance of any of its duties hereunder, or in the exercise of

any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability is not assured to it.

(f) Each of the authenticating agent, Storm Recovery Bond Registrar and Paying Agent may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties.

(g) Each of the authenticating agent, Storm Recovery Bond Registrar and Paying Agent may consult with counsel and the advice or any opinion of counsel shall be full and complete authorization and protection in respect of any action taken or omitted by that party hereunder in good faith and in accordance with such advice or opinion of counsel.

(h) None of the authenticating agent, Storm Recovery Bond Registrar or Paying Agent shall be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, entitlement order, approval or other paper or document.

(i) None of the authenticating agent, Storm Recovery Bond Registrar or Paying Agent shall have any obligation to invest and reinvest any cash held in the accounts in the absence of timely and specific written investment direction from the Issuer. In no event shall any of the authenticating agent, Storm Recovery Bond Registrar or Paying Agent be liable for the selection of investments or for investment losses incurred thereon. None of the authenticating agent, Storm Recovery Bond Registrar or Paying Agent shall have any liability in respect of losses incurred as a result of the liquidation of any investment prior to its stated maturity or the failure of the Issuer to provide timely written investment direction.

(j) Each of the authenticating agent, Storm Recovery Bond Registrar and Paying Agent may at any time resign by giving 30 days' written notice of resignation to the Issuer and the Trustee. Upon receiving such notice of resignation, the Issuer shall promptly appoint a successor and, upon the acceptance by the successor of such appointment, release the resigning party from its obligations hereunder by written instrument, a copy of which instrument shall be delivered to the Issuer, the Trustee, the resigning party and the successor. If no successor shall have been so appointed and have accepted appointment within 45 days after the giving of such notice of resignation, the resigning party may petition any court of competent jurisdiction for the appointment of a successor.

(k) Any corporation into which any of the authenticating agent, Storm Recovery Bond Registrar or Paying Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the authenticating agent, Storm Recovery Bond Registrar or Paying Agent, respectively, shall be a party, or any corporation succeeding to the business of the authenticating agent, Storm Recovery Bond Registrar or Paying Agent, respectively, shall be the successor of the authenticating agent, Storm Recovery Bond Registrar or Paying Agent, respectively, hereunder without the execution or filing of any paper with any party hereto or any further act on the part of any of the parties hereto except where an instrument of transfer or assignment is required by law to effect such succession, anything herein to the contrary notwithstanding.

(l) The Issuer shall indemnify and hold harmless each of the authenticating agent, Storm Recovery Bond Registrar and Paying Agent and its respective officers, directors, employees and agents, from and against any and all Losses or other amounts whatsoever (including reasonable counsel fees and expenses) directly or indirectly incurred by such party in connection with the performance by such party of its duties and obligations under or pursuant to this Indenture. Each such party shall notify the Issuer promptly of any claim for which it may seek indemnity. Failure by such party so to notify the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer shall defend the claim and

such party may have separate counsel and the Issuer shall pay the reasonable fees and expenses of such counsel. Notwithstanding the foregoing, the Issuer need not reimburse any expense or indemnify against any Loss incurred by such party (i) through such party's own willful misconduct, negligence or bad faith or (ii) to the extent such party was reimbursed for or indemnified against any such Loss by the Seller or the Servicer pursuant to the Administration Agreement or any Sale Agreement or Servicing Agreement. The obligations of the Issuer under this Section 6.14(l) shall survive the termination of this Agreement and the earlier resignation or removal of such party.

SECTION 6.15. COMPLIANCE WITH APPLICABLE ANTI-TERRORISM AND MONEY LAUNDERING REGULATIONS. In order to comply with the laws, rules, regulations and executive orders in effect from time to time applicable to banking institutions, including those relating to the funding of terrorist activities and money laundering ("Applicable Law"), the Trustee is required to obtain, verify and record certain information relating to individuals and entities which maintain a business relationship with the Trustee. Accordingly, the Issuer agrees to provide to the Trustee, upon its reasonable request from time to time such identifying information and documentation as may be available to it in order to enable the Trustee to comply with Applicable Law.

ARTICLE VII

STORM RECOVERY BONDHOLDERS' LISTS AND REPORTS

SECTION 7.01. ISSUER TO FURNISH TRUSTEE NAMES AND ADDRESSES OF STORM RECOVERY BONDHOLDERS. The Issuer shall furnish or cause to be furnished to the Trustee (a) not more than five days after the earlier of (i) each Record Date with respect to each Series and (ii) six months after the last Record Date with respect to each Series, a list, in such form as the Trustee may reasonably require, of the names and in the event the Trustee is acting as the Storm Recovery Bond Registrar the addresses of the Holders of Storm Recovery Bonds of such Series as of such Record Date, and (b) at such other times as the Trustee may request in writing, within 30 days after receipt by the Issuer of any such request, a list of similar form and content as of a date not more than 10 days prior to the time such list is furnished; provided, however, that so long as the Trustee is the Storm Recovery Bond Registrar, no such list shall be required to be furnished. In addition, the Issuer shall furnish such list to any listing, transfer or paying agent appointed under the second paragraph of Section 3.02 to the extent such information is required by the rules and regulations of the Luxembourg Stock Exchange.

SECTION 7.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO STORM RECOVERY BONDHOLDERS.

(a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of the Holders of Storm Recovery Bonds contained in the most recent list furnished to the Trustee as provided in Section 7.01 and the names and addresses of Holders of Storm Recovery Bonds received by the Trustee in its capacity as Storm Recovery Bond Registrar. The Trustee may destroy any list furnished to it as provided in such Section 7.01 upon receipt of a new list so furnished.

(b) Storm Recovery Bondholders may communicate with other Storm Recovery Bondholders pursuant to Section 312(b) of the TIA, with respect to their rights under this Indenture or under the Storm Recovery Bonds. In addition, upon the written request of any Holder or group of Holders of Storm Recovery Bonds, each of whom has held its Storm Recovery Bonds for at least six months, the Trustee shall afford the Holder or Holders making such request a copy of a current list of Holders of the Storm Recovery Bonds, for purposes of communicating with other Holders with respect to their rights hereunder. The Trustee may elect not to afford the requesting Holders access to the list of Holders of the Storm Recovery Bonds if it agrees to mail the desired communication or proxy, on behalf and at the expense of the requesting Holders, to all Holders of the Storm Recovery Bonds.

(c) The Issuer, the Trustee and the Storm Recovery Bond Registrar shall have the protection of Section 312(c) of the TIA.

SECTION 7.03. REPORTS BY ISSUER.

(a) The Issuer shall:

(i) so long as the Issuer is required to file such documents with the Commission, provide to the Trustee and, so long as any Storm Recovery Bonds are listed on the Luxembourg Stock Exchange and its rules so require, with the listing agent of the Issuer in Luxembourg appointed pursuant to the second paragraph of Section 3.02, within 15 days after the Issuer is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Issuer may be required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act;

(ii) provide to the Trustee, file with the Commission and, so long as any Storm Recovery Bonds are listed on the Luxembourg Stock Exchange and its rules so require, provide to the listing agent of the Issuer in Luxembourg appointed pursuant to the second paragraph of Section 3.02, in accordance with rules and regulations prescribed from time to time by the Commission or the Luxembourg Stock Exchange, respectively, such additional information, documents and reports with respect to compliance by the Issuer with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations;

(iii) supply to the Trustee (and the Trustee shall transmit by mail to all Storm Recovery Bondholders described in TIA Section 313(c)) and, so long as any Storm Recovery Bonds are listed on the Luxembourg Stock Exchange and its rules so require, to the listing agent of the Issuer in Luxembourg appointed pursuant to the second paragraph of Section 3.02, such summaries of any information, documents and reports required to be filed by the Issuer pursuant to clauses (i) and (ii) of this Section 7.03(a) as may be required by rules and regulations prescribed from time to time by the Commission; and

(iv) file a Form 15 (or applicable successor form) suspending its obligations to file reports with the Commission pursuant to the Exchange Act as soon as legally permissible.

(b) Unless the Issuer otherwise determines, the fiscal year of the Issuer shall end on December 31 of each year.

SECTION 7.04. REPORTS BY TRUSTEE. If required by TIA Section 313(a), within 60 days after the end of each fiscal year of the Issuer, commencing with the year after the issuance of the Storm Recovery Bonds of any Series, the Trustee shall mail to each Holder of Storm Recovery Bonds of such Series as required by TIA Section 313(c) a brief report dated as of such date that complies with TIA Section 313(a). The Trustee also shall comply with TIA Section 313(b); provided, however, that the initial report so issued shall be delivered not more than 12 months after the initial issuance of each Series.

A copy of each report at the time of its mailing to Storm Recovery Bondholders shall be filed by the Trustee with the Commission and each stock exchange, if any, on which the Storm Recovery Bonds are listed (to the extent required by the rules of such exchange). The Issuer shall notify the Trustee if and when the Storm Recovery Bonds are listed on any stock exchange.

SECTION 7.05. PROVISION OF SERVICER REPORTS. Upon the written request of any Storm Recovery Bondholder, the LPSC or any Rating Agency to the Trustee addressed to the Corporate Trust Office, the Storm Recovery Bond Registrar, or in its absence or failure the Paying Agent, shall provide such requesting party, the Trustee and the Paying Agent or Storm Recovery Bond Registrar, as applicable, with a copy of any Semiannual Servicer's Certificate, Annual Accountant's Report and any other report of the Servicer referred to in the applicable Servicing Agreement. If any Storm Recovery Bonds are listed on the Luxembourg Stock Exchange and its rules so require, the Storm Recovery Bond Registrar, or in its absence or failure the Paying Agent, at the written direction of the Issuer shall also arrange for publication in accordance with such rules of a notice that a copy of such Semiannual Servicer's Certificate, Annual Accountant's Report or other report shall be available with the Issuer's listing agent in Luxembourg appointed pursuant to the second paragraph of Section 3.02.

ARTICLE VIII

ACCOUNTS, DISBURSEMENTS AND RELEASES

SECTION 8.01. COLLECTION OF MONEY. Except as otherwise expressly provided herein, the Trustee may demand payment or delivery of, and shall receive and collect, directly and without intervention or assistance of any fiscal agent or other intermediary, all money and other property payable to or receivable by the Trustee pursuant to this Indenture. The Trustee shall apply all such money received by it as provided in this Indenture. Except as otherwise expressly provided in this Indenture, if any default occurs in the making of any payment or performance under any agreement or instrument that is part of the Trust Estate, the Trustee may take such action as may be appropriate to enforce such payment or performance, including the institution and prosecution of appropriate Proceedings. Any such action shall be without prejudice to any right to claim a Default or Event of Default under this Indenture and any right to proceed thereafter as provided in Article V.

SECTION 8.02. COLLECTION ACCOUNT.

(a) (i) On or prior to the Series Issuance Date for each Series issued hereunder, the Issuer shall open, at the Paying Agent's Corporate Trust Office, or at another Eligible Institution, one or more segregated non-interest-bearing trust accounts in the Trustee's name for the deposit of Collections for that Series of Storm Recovery Bonds and all other amounts received with respect to the Series Trust Estate securing that Series (each a "Collection Account" and collectively, the "Collection Accounts"). The Collection Account for each Series shall initially be divided into subaccounts, which need not be separate accounts: a general subaccount (the "General Subaccount"), a capital subaccount (the "Capital Subaccount"), an excess funds subaccount (the "Excess Funds Subaccount") and one or more class subaccounts for any Tranche of any Series of Storm Recovery Bonds as specified in any Series Supplement (each, a "Tranche Subaccount"). On or prior to the Series Issuance Date for any Series of Storm Recovery Bonds, the Member shall deposit into the Capital Subaccount for that Series an amount equal to the Required Capital Amount for that Series. Unless otherwise provided herein, all amounts in the Collection Account for any Series not allocated to any other subaccount shall be allocated to the General Subaccount for that Series. Unless otherwise provided herein, prior to the initial Payment Date for a Series, all amounts in the Collection Account for that Series (other than funds deposited into the Capital Subaccount) shall be allocated to the General Subaccount for that Series. Prior to depositing funds or U.S. Government Obligations in the Collection Account pursuant to Section 4.01 or 4.02, the Issuer shall establish defeasance subaccounts (each a "Defeasance Subaccount") for each Series for which funds shall be deposited, as subaccounts of the Collection Account. All references to the Collection Account shall be deemed to include reference to all subaccounts contained therein. Withdrawals from and deposits to each of the foregoing subaccounts of any Collection Account shall be made as set forth in Section 4.03 and Section 8.02(d) and (e). Each Collection Account shall at all times be maintained as an Eligible Securities Account and only the

Trustee shall have access to that Collection Account for the purpose of making deposits in and withdrawals from that Collection Account in accordance with this Indenture. Funds in a Collection Account shall not be commingled with any other moneys, including moneys in any other Collection Account. All moneys deposited from time to time in a Collection Account, all deposits therein pursuant to this Indenture, and all investments made in Eligible Investments with such moneys, including all income or other gain from such investments, shall be held by the Trustee in that Collection Account as part of the Series Trust Estate securing that Series as herein provided.

(ii) The Trustee also agrees that (A) each of the Collection Accounts is, or on the date of its creation will be, and shall at all times be maintained by the Trustee as, a "securities account" (within the meaning of Section 8-501 of the New York UCC), (B) the "securities intermediary's jurisdiction" (within the meaning of Article 8 of the New York UCC) of the Trustee is the State of New York, (C) all cash and other property in each of the Accounts shall be treated by the Trustee as a "financial asset" (as defined in Section 8-102(a)(9) of the New York UCC), (E) the "entitlement holder" (as such term is defined in Section 8-102(a)(7) of the New York UCC or, with respect to Book-Entry Securities, in the applicable Federal Book-Entry Regulations) shall be the Trustee for the benefit of the Storm Recovery Bondholders, (E) any financial asset in registered form or payable to, or to the order of, a Person, and credited to any of the Accounts shall be registered in the name of, payable to the order of, or specially indorsed to, the Trustee or in blank, or credited to another securities account maintained in the name of the Trustee, and in no case will any financial assets credited to any of the Accounts be registered in the name of, payable to or to the order of, or specially indorsed to the Issuer or the Trustee, except to the extent the foregoing have been specially indorsed by the Issuer or the Trustee, as applicable, to the Trustee or in blank, (F) the Trustee shall not change the entitlement holder, and (G) the Trustee shall at all times act as a "securities intermediary" (within the meaning of Section 8-102(a)(14) of the New York UCC or, with respect to Book-Entry Securities, in the applicable Federal Book-Entry Regulations) and shall credit to each of the Accounts each financial asset to be held in or credited to each of the Accounts pursuant to this Indenture.

(iii) Each of the Accounts shall remain at all times with a securities intermediary (within the meaning of Section 8-102(a)(14) of the New York UCC or, with respect to Book-Entry Securities, in the applicable Federal Book-Entry Regulations) having a combined capital and surplus of at least $50,000,000 and having a long-term debt rating of at least "A2" by Moody's and at least "AA-" by S&P.

(iv) The Trustee shall have sole dominion and exclusive control over all property in each Collection Account. The Trustee at the written direction of the Servicer shall also pay from the Collection Account any amounts requested to be paid by or to the Servicer pursuant to of the applicable Servicing Agreement.

(v) Collections shall be deposited in the applicable General Subaccount as provided in the applicable Servicing Agreement. All deposits to and withdrawals from a Collection Account, all allocations to the subaccounts of such Collection Account and any amounts to be paid to the applicable Servicer under Section 8.02(d) shall be made by the Trustee in accordance with the written instructions provided by such Servicer in the Semiannual Servicer's Certificate or upon other written notice provided by such Servicer pursuant to such Servicing Agreement, as applicable.

(vi) There are no other agreements entered into between the Trustee and the Issuer with respect to the Accounts, other than this Indenture. In the event of any conflict between this Section 8.02 (or any portion thereof), any other provision of this Indenture or any other agreement now existing or hereafter entered into, the terms of this Section 8.02 shall prevail.

(b) So long as no Default or Event of Default has occurred and is continuing, the Trustee upon written direction of the Servicer will invest and reinvest all or a portion of the funds in the Collection Account (other than as set forth in Section 8.06) for each Series in Eligible Investments; provided, however, that (i) such Eligible Investments shall not mature later than the next Payment Date for such Series (except as otherwise provided in any Series Supplement), (ii) such Eligible Investments shall not be sold, liquidated or otherwise disposed of at a loss prior to the maturity thereof, and (iii) no funds in the Defeasance Subaccount for any Series of Storm Recovery Bonds shall be invested in Eligible Investments or otherwise, except that U.S. Government Obligations deposited by the Issuer with the Trustee pursuant to Sections 4.01 or 4.02 shall remain as such. All income or other gain from investments of moneys deposited in the Collection Account for that Series shall be deposited by the Trustee in the Collection Account for that Series, and any loss resulting from such investments shall be charged to that Collection Account. The Servicer shall not direct the Trustee to make any investment of any funds or to sell any investment held in the Collection Account for a Series unless the security interest granted and perfected in such account will continue to be perfected in such investment or the proceeds of such sale, in either case without any further action by any Person, and, in connection with any direction to the Trustee to make any such investment or sale, if requested by the Trustee, the Issuer shall deliver to the Trustee an Issuer Opinion of Counsel, acceptable to the Trustee, to such effect. Subject to Section 6.01(c), the Trustee shall not in any way be held liable for the selection of Eligible Investments or for investment Losses incurred thereon except for Losses attributable to the Trustee's failure to make payments on such Eligible Investments issued by the Trustee, in its commercial capacity as principal obligor and not as Trustee, in accordance with their terms. The Trustee shall have no liability in respect of Losses incurred as a result of the liquidation of any Eligible Investment prior to its stated maturity or the failure of the Issuer to provide timely and specific written investment direction. The Trustee shall have no obligation to invest or reinvest any amounts held hereunder in the absence of written investment direction of the Servicer.

(c) Any Collections remitted by the Servicer to the Trustee with respect to a Series of Storm Recovery Bonds, any amounts received by the Issuer relating to the indemnification obligations payable by the Seller pursuant to the Sale Agreement or the Servicer pursuant to the Servicing Agreement with respect to that Series remitted to the Trustee, any other amount otherwise received by the Trustee or the Issuer related to that Series, and any other proceeds of Series Trust Estate securing that Series received by the Servicer, the Issuer or the Trustee shall be deposited in the General Subaccount for that Series, except that the Trustee shall deposit in the Capital Subaccount for that Series the Required Capital Amount. All investment earnings on amounts in the General Subaccount, the Capital Subaccount (other than released investment earnings on amounts in the Capital Subaccount pursuant to clause (d)(x) below) and the Excess Funds Subaccount of a Series will be deposited into the General Subaccount, the Capital Subaccount and the Excess Funds Subaccount of that Series, respectively; provided, however, that if on any Payment Date after making allocations pursuant to clauses (d)(i)-(xi) below, any excess investment earnings on amounts in the Capital Subaccount for that Series above the per annum limit set forth in the Series Supplement related to that Series remain in such Capital Subaccount, then such excess amount shall be allocated to the Excess Funds Subaccount on such Payment Date.

(d) On each Payment Date for a particular Series or other date specified in the Series Supplement with respect to that Series, the Paying Agent pursuant to the written direction provided in the Semiannual Servicer's Certificate shall allocate or apply all amounts on deposit in the General Subaccount of the Collection Account for that Series in the following priority unless otherwise set forth in any Series Supplement herein (provided, that no Series Supplement may modify the Pro Rata payment of amounts described herein as being paid Pro Rata):

(i) fees and expenses (including reasonable legal fees and expenses) and Indemnity Amounts owed to the Trustee for such Payment Date shall be paid to the Trustee and, to the extent those amounts are not separately identified by the Trustee as being payable with respect to a Series,

allocated among all Series of Storm Recovery Bonds Outstanding on a Pro Rata basis; provided that the amount with respect to that Series paid to the Trustee for expenses and Indemnity Amounts during any calendar year pursuant to this clause (i) may not exceed the amount fixed therefor in the applicable Series Supplement;

(ii) a pro rata portion of the Servicing Fee for the current year, which will be a fixed percentage of the initial principal amount of that Series of Storm Recovery Bonds specified in the related Servicing Agreement, and all unpaid Servicing Fees from prior Payment Dates shall be paid to the Servicer;

(iii) a pro rata portion of the administration fee payable under the Administration Agreement for the current year shall be paid to the Administrator and a pro rata portion of the fees of the Issuer's independent manager for the current year in connection with his or her acting as a manager under the Issuer LLC Agreement shall be paid to such independent manager;

(iv) all ordinary periodic Operating Expenses (such as accounting and audit fees, rating agency fees, legal fees and Servicer expenses under Sections 3.10 and 5.05 or equivalent provisions of the applicable Servicing Agreement) other than those referred to in clauses (i), (ii) and (iii) above shall be paid to the Persons entitled thereto;

(v) an amount equal to the Interest payable on such Series of Storm Recovery Bonds on such Payment Date;

(vi) an amount equal to any Principal of that Series or Tranche of Storm Recovery Bonds payable as a result of acceleration pursuant to Section 5.02 shall be allocated to that Series or Tranche and, if there are insufficient funds to make that allocation in full, on a Pro Rata basis, and an amount equal to any Principal of that Series or Tranche payable on a Series Final Maturity Date or Tranche Final Maturity Date for that Series or Tranche and any Principal of and premium, if any, on that Series or Tranche of Storm Recovery Bonds payable on a Redemption Date shall be allocated to that Series or Tranche and, if there are insufficient funds to make that allocation in full, on a Pro Rata basis;

(vii) an amount equal to Principal scheduled to be paid on a Tranche of that Series of Storm Recovery Bonds on such Payment Date according to the Expected Amortization Schedule shall be allocated to the corresponding Tranche and if there are insufficient funds to make that allocation in full, on a Pro Rata basis;

(viii) all remaining unpaid Operating Expenses and any other amounts due and owing pursuant to the Basic Documents (including any remaining amounts owed to the Trustee) shall be paid to the Persons entitled thereto without duplication of any other payment from any other source;

(ix) any amount necessary to replenish amounts drawn from the Capital Subaccount for that Series (other than released investment earnings on amounts in the Capital Subaccount pursuant to clause (d)(x) below), plus any amount equal to the deficiency in the amount of investment earnings on amounts in the Capital Subaccount for that Series allowed under the Financing Order that have not previously been released to the Issuer pursuant to clause (d)(x) below, shall be allocated to the Capital Subaccount;

(x) if the balance in the Capital Subaccount for that Series is greater than the Required Capital Amount for that Series after making allocations pursuant to clauses (d)(i)-(ix) above, an amount equal to investment earnings on amounts in the Capital Subaccount for that Series, subject to any limits set forth in a Series Supplement, shall be released to the Issuer; and

(xi) the balance, if any, shall be allocated to the Excess Funds Subaccount for that Series.

Following repayment of all Storm Recovery Bonds of a Series, the balance, if any, shall be released to the Issuer free from the Lien of the Indenture.

"Pro Rata" means with respect to any Series or Tranche of Storm Recovery Bonds a ratio:

(1) in the case of clause (d)(v) above, the numerator of which is the aggregate amount of Interest payable with respect to such Series or Tranche on such Payment Date and the denominator of which is the sum of the aggregate amounts of Interest payable with respect to all Outstanding Series or Tranches on such Payment Date; and

(2) in the case of all other clauses in (d) above, the numerator of which is the aggregate amount of Principal to be paid or payable pursuant to each such clause with respect to such Series or Tranche on such Payment Date and the denominator of which is the sum of the aggregate amounts of Principal to be paid or payable pursuant to each such clause with respect to all Outstanding Series or Tranches on such Payment Date, unless and to the extent, with respect to either clause (1) or (2) of this definition, in the case of a Series comprised of two or more Tranches, the Series Supplement for such Series provides otherwise.

If, on any Payment Date for a Series of Storm Recovery Bonds, funds on deposit in the General Subaccount for that Series are insufficient to make the payments or transfers contemplated by clauses (i) through (ix) above, the Paying Agent shall draw from amounts on deposit in the following subaccounts in the following order up to the amount of such shortfall, in order to make such payments and transfers:

(i) from the Excess Funds Subaccount for such Series for allocations and payments contemplated by clauses (i) through (ix); and

(ii) from the Capital Subaccount for such Series for allocations and payments contemplated by clauses (i) through (viii).

(e) Upon an acceleration of the maturity of any Series of Storm Recovery Bonds pursuant to Section 5.02, the aggregate amount of Principal of and Interest accrued on each Storm Recovery Bond of that Series shall be payable, without priority of interest over principal or of principal over interest and without regard to Tranche.

SECTION 8.03. RELEASE OF TRUST ESTATE.

(a) All money and other property withdrawn from a Collection Account by the Paying Agent for payment to the Issuer as provided in this Indenture in accordance with Section 8.02 hereof shall be deemed released from the Indenture when so withdrawn and applied in accordance with the provisions of Article VIII, without further notice to, or release or consent by, the Trustee.

(b) Other than as provided for in Section 8.03(a), the Trustee or the Paying Agent, as applicable, shall release property from the Lien of this Indenture only as and to the extent permitted by the Basic Documents and only upon receipt of an Issuer Request accompanied by an Issuer Officer's Certificate, an Issuer Opinion of Counsel and Independent Certificates in accordance with TIA Sections 314(c) and 314(d)(1) or an Issuer Opinion of Counsel in lieu of such Independent Certificates to the effect that the TIA does not require any such Independent Certificate.

(c) Subject to the payment of its fees and expenses pursuant to Section 6.07, the Trustee may, and when required by the provisions of this Indenture shall, execute instruments to release property from the Lien of this Indenture, or convey the Trustee's interest in the same, in a manner and under circumstances that are not inconsistent with the provisions of this Indenture. No party relying upon an instrument executed by the Trustee as provided in this Article VIII shall be bound to ascertain the Trustee's authority, inquire into the satisfaction of any conditions precedent or see to the application of any moneys.

(d) Subject to Section 8.03(b), the Trustee shall, at such time as there are no Storm Recovery Bonds of a Series Outstanding and all sums due the Trustee with respect to that Series pursuant to Section 6.07 have been paid, release any remaining portion of the Series Trust Estate that secured that

Series of Storm Recovery Bonds from the Lien of this Indenture and release to the Issuer or any other Person entitled thereto any funds or investments then on deposit in or credited to the Collection Account for that Series of Storm Recovery Bonds.

SECTION 8.04. ISSUER OPINION OF COUNSEL. The Trustee shall receive at least five days' notice when requested by the Issuer to take any action pursuant to Section 8.03, accompanied by copies of any instruments involved, and the Trustee may also require, as a condition to such action, an Issuer Opinion of Counsel, in form and substance satisfactory to the Trustee, stating the legal effect of any such action, outlining the steps required to complete the same, and concluding that all conditions precedent to the taking of such action have been complied with and such action will not materially and adversely impair the security for the Storm Recovery Bonds or the rights of the Storm Recovery Bondholders in contravention of the provisions of this Indenture; provided, however, that such Issuer Opinion of Counsel shall not be required to express an opinion as to the fair value of the Trust Estate. Counsel rendering any such opinion may rely, without independent investigation, on the accuracy and validity of any certificate or other instrument delivered to the Trustee in connection with any such action.

SECTION 8.05. REPORTS BY INDEPENDENT ACCOUNTANTS. The Issuer shall appoint a firm of Independent certified public accountants of recognized national reputation for purposes of preparing and delivering the reports or certificates of such accountants required by this Indenture and the related Series Supplements and the applicable Servicing Agreement. Upon any resignation by such firm, the Issuer shall promptly appoint a successor thereto that shall also be a firm of Independent certified public accountants of recognized national reputation. If the Issuer shall fail to appoint a successor to a firm of Independent certified public accountants that has resigned within 15 days after such resignation, the Trustee shall promptly notify the Issuer of such failure in writing. If the Issuer shall not have appointed a successor within 10 days thereafter, the Trustee shall promptly appoint a successor firm of Independent certified public accountants of recognized national reputation. The fees of such firm of Independent certified public accountants and its successor shall be payable by the Issuer.

ARTICLE IX

SUPPLEMENTAL INDENTURES

SECTION 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF STORM RECOVERY BONDHOLDERS.

(a) Without the consent of the Holders of any Storm Recovery Bonds but with prior notice to the Rating Agencies, the Issuer and the Trustee, when authorized by an Issuer Order, with the consent of the LPSC pursuant to Section 9.07 if such supplemental indenture increases Financing Costs as defined in the Financing Order (which consent shall not be required with regard to the first Series Supplement), at any time and from time to time, may enter into one or more indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as in force at the date of the execution thereof), in form satisfactory to the Trustee, for any of the following purposes:

(i) to correct or amplify the description of any Series Trust Estate, or to better assure, convey and confirm unto the Trustee any Series Trust Estate, or to subject additional property to the Lien of this Indenture;

(ii) to evidence the succession, in compliance with the applicable provisions hereof, of another Person to the Issuer, and the assumption by any applicable successor of the covenants of the Issuer contained herein and in the Storm Recovery Bonds;

(iii) to add to the covenants of the Issuer, for the benefit of the Storm Recovery Bondholders, or to surrender any right or power herein conferred upon the Issuer;

(iv) to convey, transfer, assign, mortgage or pledge any property to the Trustee for the benefit of the Holders and the Trustee;

(v) to cure any ambiguity, to correct or supplement any provision herein or in any Supplemental Indenture which may be inconsistent with any other provision herein or in any Supplemental Indenture, to make any other provisions with respect to matters or questions arising under this Indenture or in any Supplemental Indenture, to change in any manner or eliminate any provisions of this Indenture or to modify in any manner the rights of the Storm Recovery Bondholders under this Indenture; provided, however, that (i) such action shall not, as evidenced by an Issuers' Opinion of Counsel, adversely affect in any material respect the interests of any Storm Recovery Bondholder and (ii) the Rating Agency Condition shall have been satisfied with respect thereto;

(vi) to evidence and provide for the acceptance of the appointment hereunder by a successor Trustee with respect to the Storm Recovery Bonds and to add to or change any of the provisions of this Indenture as shall be necessary to facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Article VI;

(vii) to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualification of this Indenture under the TIA or under any similar federal statute hereafter enacted and to add to this Indenture such other provisions as may be expressly required by the TIA;

(viii) to set forth the terms of any Series that has not theretofore been authorized by a Series Supplement;

(ix) to qualify the Storm Recovery Bonds for registration with a Clearing Agency; or

(x) to satisfy any Rating Agency requirements.

The Trustee is hereby authorized to join in the execution of any such Supplemental Indenture and to make any further appropriate agreements and stipulations that may be therein contained.

(b) The Issuer and the Trustee, when authorized by an Issuer Order, may, also without the consent of any of the Holders of the Storm Recovery Bonds, with the consent of the LPSC pursuant to Section 9.07 if such indenture or supplemental indenture increases Financing Costs as defined in the Financing Order, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Storm Recovery Bonds under this Indenture; provided, however, that (i) as evidenced by an Issuer's Opinion of Counsel, such action shall not adversely affect in any material respect the interests of any Storm Recovery Bondholder and (ii) the Rating Agency Condition shall have been satisfied with respect thereto;

(c) The Trustee shall not be required to enter into any indenture supplemental hereto or to consent to or enter into any amendment of the Basic Documents unless it shall have received an Opinion of Counsel, addressed to the Trustee, satisfactory to it, that such supplement or amendment is authorized or permitted by this Article IX.

SECTION 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF STORM RECOVERY BONDHOLDERS. The Issuer and the Trustee, when authorized by an Issuer Order, also may, with the consent of the LPSC pursuant to Section 9.07 if the indenture or supplemental indenture increases Financing Costs as defined in the Financing Order, prior notice to the Rating Agencies and the consent of the Holders of not less than a majority of the Outstanding Amount of the Storm Recovery Bonds of the Series or Tranches to be affected, by Act of such Holders delivered to the Issuer and the Trustee, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in

any manner the rights of the Holders of the Storm Recovery Bonds under this Indenture; provided, however, that no such Supplemental Indenture shall, without the consent of the Holder of each Outstanding Storm Recovery Bond of the Series or Tranches affected thereby:

(i) change the date of payment of any installment of Principal of or premium, if any, or Interest on any Storm Recovery Bond, or reduce the principal amount thereof, the Bond Rate thereon or the redemption price or the premium, if any, with respect thereto, change the provisions of this Indenture and the related applicable Series Supplement relating to the application of collections on, or the proceeds of the sale of, the Trust Estate to payment of Principal of or premium, if any, or Interest on the Storm Recovery Bonds, or change the currency in which any Storm Recovery Bond or the Interest thereon is payable;

(ii) impair the right to institute suit for the enforcement of the provisions of this Indenture requiring the application of funds available therefor, as provided in Article V, to the payment of any such amount due on the Storm Recovery Bonds on or after the respective due dates thereof (or, in the case of redemption, on or after the Redemption Date);

(iii) reduce the percentage of the Outstanding Amount of the Storm Recovery Bonds or of a Series or Tranche thereof, the consent of the Holders of which is required for any such Supplemental Indenture, or the consent of the Holders of which is required for any waiver of compliance with provisions of this Indenture or defaults hereunder and their consequences provided for in this Indenture or modify or alter the provisions of the proviso to the definition of the term "Outstanding";

(iv) reduce the percentage of the Outstanding Amount of Storm Recovery Bonds of affected Series required to direct the Trustee to direct the Issuer to sell or liquidate the Series Trust Estate securing such Series pursuant to Section 5.04 or to preserve the Series Trust Estate related to such Series pursuant to Section 5.05;

(v) modify any provision of this Section 9.02 except to increase any percentage specified herein or to provide that those provisions of this Indenture or the other Basic Documents referenced in this Section cannot be modified or waived without the consent of the Holder of each Outstanding Storm Recovery Bond affected thereby;

(vi) modify any of the provisions of this Indenture in such manner so as to affect the amount of any payment of Interest, Principal or premium, if any, payable on any Storm Recovery Bond on any Payment Date or change the Redemption Dates, Expected Amortization Schedules or Series Final Maturity Dates or Tranche Final Maturity Dates of any Storm Recovery Bonds;

(vii) decrease the Required Capital Amount with respect to any Series;

(viii) modify or alter the provisions of this Indenture regarding the voting of Storm Recovery Bonds held by the Issuer, Cleco Power, an Affiliate of either of them or any obligor on the Storm Recovery Bonds;

(ix) decrease the percentage of the aggregate principal amount of Storm Recovery Bonds required to amend the sections of this Indenture which specify the applicable percentage of the aggregate principal amount of the Storm Recovery Bonds necessary to amend any Basic Document; or

(x) permit the creation of any Lien ranking prior to or on a parity with the Lien of this Indenture with respect to any part of the Trust Estate or, except as otherwise permitted or contemplated herein, terminate the Lien of this Indenture on any property at any time subject hereto or deprive the Holder of any Storm Recovery Bond of the security provided by the Lien of this Indenture.

It shall not be necessary for the LPSC or any Act of Storm Recovery Bondholders under this Section 9.02 to approve the particular form of any proposed Supplemental Indenture, but it shall be sufficient if the LPSC or such Act of Storm Recovery Bondholders shall approve the substance thereof.

Promptly after the execution by the Issuer and the Trustee of any Supplemental Indenture pursuant to this Section 9.02, the Trustee shall mail to the LPSC and the Holders of the Storm Recovery Bonds to which such amendment or Supplemental Indenture relates a notice setting forth in general terms the substance of such Supplemental Indenture. Any failure of the Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such Supplemental Indenture. If any Storm Recovery Bonds are listed on the Luxembourg Stock Exchange and the rules of such exchange so require, the Issuer's listing agent shall arrange for publication in accordance with such rules of a notice that the notice regarding the Supplemental Indenture shall be available with the Issuer's listing agent in Luxembourg appointed pursuant to the second paragraph of Section 3.02.

SECTION 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or permitting the additional trusts created by any Supplemental Indenture permitted by this Article IX or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and subject to Sections 6.01 and 6.02, shall be fully protected in relying upon, an Issuer Opinion of Counsel stating that the execution of such Supplemental Indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such Supplemental Indenture that affects the Trustee's own rights, duties, liabilities or immunities under this Indenture or otherwise.

SECTION 9.04. EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of any Supplemental Indenture pursuant to the provisions hereof, this Indenture shall be deemed to be modified and amended in accordance therewith with respect to each Series or Tranche of Storm Recovery Bonds affected thereby, and the respective rights, limitations of rights, obligations, duties, liabilities and immunities under this Indenture of the Trustee, the Issuer and the Holders of the Storm Recovery Bonds shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such Supplemental Indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

SECTION 9.05. CONFORMITY WITH TRUST INDENTURE ACT. Every amendment of this Indenture and every Supplemental Indenture executed pursuant to this Article IX shall conform to the requirements of the TIA as then in effect so long as this Indenture shall then be qualified under the TIA.

SECTION 9.06. REFERENCE IN STORM RECOVERY BONDS TO SUPPLEMENTAL INDENTURES. Storm Recovery Bonds authenticated and delivered after the execution of any Supplemental Indenture pursuant to this Article IX may, and if required by the Trustee shall, bear a notation in form approved by the Trustee as to any matter provided for in such Supplemental Indenture. If the Issuer or the Trustee shall so determine, new Storm Recovery Bonds so modified as to conform, in the opinion of the Trustee and the Issuer, to any such Supplemental Indenture may be prepared and executed by the Issuer and authenticated and delivered by the Trustee in exchange for Outstanding Storm Recovery Bonds.

SECTION 9.07. LPSC CONSENT. To the extent the consent of the LPSC is required to effect any amendment to, modification of, or supplemental indenture to this Indenture or any provision of this Indenture,

(a) The Issuer may submit the amendment, modification or supplemental indenture to the LPSC by delivering to the LPSC's executive counsel a written request for such consent, which request shall contain:

(i) a reference to Docket No. U-29157 and a statement as to the possible effect of the amendment, modification or supplemental indenture on ongoing Financing Costs as defined in the Financing Order;

(ii) an Officer's Certificate stating that the proposed amendment, modification or supplemental indenture, as the case may be, has been approved by all parties to this Indenture; and

(iii) a statement identifying the person to whom the LPSC or its staff is to address its consent to the proposed amendment, modification or supplemental indenture or request additional time.

(b) Any amendment, modification or supplemental indenture requiring the consent of the LPSC as provided in this Section 9.07 shall become effective on the later of:

(i) the date proposed by the parties to the amendment, modification or supplemental indenture, or

(ii) 31 days after such submission of the amendment, modification or supplemental indenture to the LPSC unless the LPSC issues an order disapproving the amendment within a 30-day period.

ARTICLE X

REDEMPTION OF STORM RECOVERY BONDS

SECTION 10.01. MANDATORY REDEMPTION BY ISSUER. The Issuer shall redeem all Storm Recovery Bonds of a Series that have been called for redemption pursuant to this Indenture on the Redemption Date or Dates, if any, in the amounts required, if any, and at the redemption price specified in the Series Supplement for such Series, which in any case shall be not less than the outstanding Principal amount of the Bonds to be redeemed, plus accrued Interest thereon to, but excluding, such Redemption Date. If the Issuer is required to redeem the Storm Recovery Bonds of a Series pursuant to this Section 10.01, it shall furnish written notice of such requirement to the Trustee not later than 25 days prior to the Redemption Date for such redemption and shall deposit with the Trustee the redemption price of the Storm Recovery Bonds to be redeemed plus all other amounts due and payable hereunder whereupon all such Storm Recovery Bonds shall be due and payable on the Redemption Date upon the furnishing of a notice complying with Section 10.02 hereof to each Holder of the Storm Recovery Bonds of such Series pursuant to this Section 10.01.

SECTION 10.02. FORM OF REDEMPTION NOTICE. Unless otherwise specified in the Series Supplement relating to a Series of Storm Recovery Bonds, notice of redemption under Section 10.01 hereof shall be given by the Trustee by first-class mail, postage prepaid, mailed not less than five days nor more than 45 days prior to the applicable Redemption Date to each Holder of Storm Recovery Bonds to be redeemed, as of the close of business on the Record Date preceding the applicable Redemption Date at such Holder's address appearing in the Storm Recovery Bond Register.

All notices of redemption shall state:

(1) the Redemption Date;

(2) if less than all Outstanding Storm Recovery Bonds of any Series are to be redeemed, the identification (and in the case of partial redemption of any Storm Recovery Bonds, the principal amounts) of the particular Storm Recovery Bonds to be redeemed;

(3) the redemption price;

(4) the place where such Storm Recovery Bonds are to be surrendered for payment of the redemption price and accrued interest (which shall be the office or agency of the Issuer to be maintained as provided in the first paragraph of Section 3.02 hereof);

(5) the CUSIP number, if applicable; and

(6) the principal amount of Storm Recovery Bonds to be redeemed.

Notice of redemption of the Storm Recovery Bonds to be redeemed shall be given by the Trustee in the name and at the expense of the Issuer. For so long as any Storm Recovery Bonds are listed on the Luxembourg Stock Exchange and the rules of such exchange so require, the Issuer's listing agent shall arrange that such notice will also be given by publication pursuant to such rules at least ten (10) days prior to the Redemption Date. Failure to give notice of redemption, or any defect therein, to any Holder of any Storm Recovery Bond selected for redemption shall not impair or affect the validity of the redemption of any other Storm Recovery Bond. Notice of optional redemption shall be irrevocable once given.

SECTION 10.03. PAYMENT OF REDEMPTION PRICE. If notice of redemption has been duly mailed, or duly waived by the Holders of all Storm Recovery Bonds called for redemption, and the redemption moneys have been duly deposited with the Trustee, then the Storm Recovery Bonds called for redemption shall be payable on the applicable Redemption Date at the applicable redemption price. No further Interest will accrue on the principal amount of any Storm Recovery Bonds called for redemption after the Redemption Date for such redemption if payment of the redemption price thereof has been duly provided for, and the Holder of such Storm Recovery Bonds will have no rights with respect thereto, except to receive payment of the redemption price thereof and unpaid accrued Interest to the Redemption Date. Payment of the redemption price together with accrued Interest shall be made by the Trustee to or upon the order of the Holders of the Storm Recovery Bonds called for redemption upon surrender of such Storm Recovery Bonds, and the Storm Recovery Bonds so redeemed shall cease to be of further effect and the Lien of this Indenture shall be released with respect to such Storm Recovery Bonds.

ARTICLE XI

MISCELLANEOUS

SECTION 11.01. COMPLIANCE CERTIFICATES AND OPINIONS, ETC. Upon any application or request by the Issuer to the Trustee to take any action under any provision of this Indenture, the Issuer shall furnish to the Trustee (i) an Issuer Officer's Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with, (ii) an Issuer Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with and (iii) (if required by the TIA) an Independent Certificate from a firm of certified public accountants meeting the applicable requirements of this Section 11.01, except that, in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture, no additional certificate or opinion need be furnished.

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

(i) a statement that each signatory of such certificate or opinion has read or has caused to be read such covenant or condition and the definitions herein relating thereto;

(ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(iii) a statement that, in the opinion of each such signatory, such signatory has made such examination or investigation as is necessary to enable such signatory to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(iv) a statement as to whether, in the opinion of each such signatory, such condition or covenant has been complied with.

SECTION 11.02. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of the Issuer may be based, insofar as it relates to legal matters, upon, in the absence of bad faith, an Opinion of Counsel.

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

Whenever in this Indenture, in connection with any application or certificate or report to the Trustee, it is provided that the Issuer shall deliver any document as a condition of the granting of such application, or as evidence of the Issuer's compliance with any term hereof, it is intended that the truth and accuracy, at the time of the granting of such application or at the effective date of such certificate or report (as the case may be), of the facts and opinions stated in such document shall in such case be conditions precedent to the right of the Issuer to have such application granted or to the sufficiency of such certificate or report. The foregoing shall not, however, be construed to affect the Trustee's right to rely conclusively upon the truth and accuracy of any statement or opinion contained in any such document as provided in Article VI.

SECTION 11.03. ACTS OF STORM RECOVERY BONDHOLDERS.

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Storm Recovery Bondholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Storm Recovery Bondholders in person or by agents duly appointed in writing; and except as herein otherwise expressly provided such action shall become effective when such instrument or instruments are delivered to the Trustee, and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Storm Recovery Bondholders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.01) conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Section.

(b) The fact and date of the execution by any Person of any such instrument or writing may be proved in any manner that the Trustee deems sufficient.

(d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Storm Recovery Bonds shall bind the Holder of every Storm Recovery Bond issued upon the registration thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted

or suffered to be done by the Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Storm Recovery Bond.

SECTION 11.04. NOTICES, ETC., TO TRUSTEE, PAYING AGENT, STORM RECOVERY BOND REGISTRAR, ISSUER, LPSC AND RATING AGENCIES. Any request, demand, authorization, direction, notice, consent, waiver or Act of Storm Recovery Bondholders or other documents provided or permitted by this Indenture to be made upon, given or furnished to or filed with:

(a) the Trustee, the Paying Agent or the Storm Recovery Bond Registrar by any Storm Recovery Bondholder or by the Issuer shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing, delivered personally, via facsimile transmission, by reputable overnight courier or by first-class mail, postage prepaid, to the Trustee, the Paying Agent or the Storm Recovery Bond Registrar, as applicable, at its Corporate Trust Office, or

(b) the Issuer by the Trustee, the Paying Agent, the Storm Recovery Bond Registrar or any Storm Recovery Bondholder shall be sufficient for every purpose hereunder if in writing, delivered personally, via facsimile transmission, by reputable overnight courier or by first-class mail, postage prepaid, to the Issuer addressed to: Cleco Katrina/Rita Hurricane Recovery Funding LLC, 2605 Hwy. 28 East, Office Number 12, Pineville, Louisiana 71360-5226, Attention: Manager, or at any other address previously furnished in writing to the Trustee by the Issuer. The Issuer shall promptly transmit any notice received by it from the Storm Recovery Bondholders to the Trustee, the Paying Agent and the Storm Recovery Bond Registrar.

Notices required to be given to the Rating Agencies by the Issuer, the Trustee, the Paying Agent, the Storm Recovery Bond Registrar or a Manager shall be in writing, delivered personally, via facsimile transmission, by reputable overnight courier or by first-class mail, postage prepaid, to: (i) in the case of Moody's: Moody's Investors Service, Inc., Attention: ABS Monitoring Department, 99 Church Street, New York, New York 10007; (ii) in the case of Standard & Poor's: Standard & Poor's, a division of The McGraw-Hill Companies, 55 Water Street New York, NY 10041, Attention: Asset Backed Surveillance Department; and (iii) in the case of Fitch: Fitch, Inc., 1 State Street Plaza, New York, New York 10004, Attention: ABS Surveillance or, if the foregoing addresses shall change at their current address.

Notices required to be given to the LPSC shall be in writing, delivered personally, via facsimile transmission, by reputable overnight courier or by first-class mail, postage prepaid, to Louisiana Public Service Commission, Galvez Building, 12th Floor, 602 North Fifth Street, Baton Rouge, Louisiana 70821-9154, Attention: Executive Counsel.

SECTION 11.05. NOTICES TO STORM RECOVERY BONDHOLDERS; WAIVER. Where this Indenture provides for notice to Storm Recovery Bondholders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and delivered by first-class mail, postage prepaid, to each Storm Recovery Bondholder affected by such event, at the address of such Storm Recovery Bondholder as it appears on the Storm Recovery Bond Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Storm Recovery Bondholders is given by mail, neither the failure to mail such notice nor any defect in any notice so mailed to any particular Storm Recovery Bondholder shall affect the sufficiency of such notice with respect to other Storm Recovery Bondholders, and any notice that is mailed in the manner herein provided shall conclusively be presumed to have been duly given.

Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Storm Recovery Bondholders shall be filed with the Trustee but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such a waiver.

In case it shall be impractical to deliver notice in accordance with the first paragraph of this Section 11.05 to the Holders of Storm Recovery Bonds when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Trustee shall be deemed to be a sufficient giving of such notice.

Where this Indenture provides for notice to the Rating Agencies, failure to give such notice shall not affect any other rights or obligations created hereunder, and shall not under any circumstance constitute a Default or Event of Default.

SECTION 11.06. ALTERNATE PAYMENT AND NOTICE PROVISIONS. Notwithstanding any provision of this Indenture or any of the Storm Recovery Bonds to the contrary, the Issuer may enter into any agreement with any Holder of a Storm Recovery Bond providing for a method of payment, or notice by the Trustee or any Paying Agent to such Holder, that is different from the methods provided for in this Indenture for such payments or notices. The Issuer will furnish to the Trustee a copy of each such agreement and the Trustee will cause payments to be made and notices to be given in accordance with such agreements.

SECTION 11.07. NOTICES TO LUXEMBOURG STOCK EXCHANGE.

(a) For so long as any Storm Recovery Bonds are listed on the Luxembourg Stock Exchange and to the extent the rules of such exchange so require, the Issuer shall notify the Luxembourg Stock Exchange and any agent appointed pursuant to the second paragraph of Section 3.02 if any rating assigned to such Storm Recovery Bonds is reduced or withdrawn and shall arrange for such notice to be published pursuant to the rules of such exchange.

(b) For so long as any Storm Recovery Bonds are listed on the Luxembourg Stock Exchange and the rules of such exchange so require, the Trustee shall make available to the Holders of such Storm Recovery Bonds and shall deposit in accordance with the written direction of the Issuer on file with the Issuer's listing agent in Luxembourg appointed pursuant to the second paragraph of Section 3.02 copies of any documents executed in connection with this Indenture reasonably requested by the Issuer's listing agent and the reports of Independent certified public accountants obtained with respect to the Issuer pursuant to this Indenture.

SECTION 11.08. CONFLICT WITH TRUST INDENTURE ACT. If any provision hereof limits, qualifies or conflicts with another provision hereof that is required to be included in this Indenture by any of the provisions of the TIA, such required provision shall control.

The provisions of TIA Sections 310 through 317 that impose duties on any Person (including the provisions automatically deemed included herein unless expressly excluded by this Indenture) are a part of and govern this Indenture, whether or not physically contained herein.

SECTION 11.09. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

SECTION 11.10. SUCCESSORS AND ASSIGNS. All covenants and agreements in this Indenture and the Storm Recovery Bonds by the Issuer shall bind its successors and permitted assigns, whether so expressed or not.

All agreements of the Trustee in this Indenture shall bind its successors.

The Trustee shall provide written notice to the Rating Agencies of any assignment of its obligations under this Agreement.

SECTION 11.11. SEPARABILITY. In case any provision in this Indenture or in the Storm Recovery Bonds shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 11.12. BENEFITS OF INDENTURE. Nothing in this Indenture or in the Storm Recovery Bonds, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, and the Storm Recovery Bondholders, and any other party secured hereunder, and any other Person with an ownership interest in any part of the Trust Estate, any benefit or any legal or equitable right, remedy or claim under this Indenture.

SECTION 11.13. LEGAL HOLIDAYS. In any case where the date on which any payment is due shall not be a Business Day, then (notwithstanding any other provision of the Storm Recovery Bonds or this Indenture) payment need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date on which nominally due, and no interest shall accrue for the period from and after any such nominal date.

SECTION 11.14. GOVERNING LAW. THIS INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF LOUISIANA AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS EXCEPT THAT THE OBLIGATIONS OF THE TRUSTEE HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

SECTION 11.15. COUNTERPARTS. This Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

SECTION 11.16. ISSUER OBLIGATION. No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer or the Trustee on the Storm Recovery Bonds or under this Indenture or any certificate or other writing delivered in connection herewith or therewith, against (i) the Member or any Manager, employee or agent of the Issuer or (ii) any stockholder, officer, director, employee or agent of the Trustee (it being understood that none of the Trustee's obligations are in its individual capacity).

SECTION 11.17. NO PETITION. The Trustee, by entering into this Indenture, and each Holder, by accepting a Storm Recovery Bond (or interest therein) issued hereunder, hereby covenant and agree that they shall not, prior to the date that is one year and one day after the termination of this Indenture, acquiesce, petition or otherwise invoke or cause the Issuer or any Manager to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Issuer under any insolvency law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or any substantial part of its respective property, or ordering the dissolution, winding up or liquidation of the affairs of the Issuer. Nothing in this Section 11.17 shall preclude, or be deemed to estop, such Holder (A) from taking or omitting to take any action prior to such date in (i) any case or proceeding voluntarily filed or commenced by or on behalf of the Issuer under or pursuant to any such law or (ii) any involuntary case or proceeding pertaining to the Issuer that is filed or commenced by or on behalf of a person other than such Holder and is not joined in by such Holder (or any person to which such Holder shall have assigned, transferred or otherwise conveyed any part of the obligations of the Issuer hereunder) under or pursuant to any such law, or (B) from commencing or prosecuting any legal action that is not an involuntary case or proceeding under or pursuant to any such law against the Issuer or any of its properties.

SECTION 11.18. STORM RECOVERY BONDS NOT PUBLIC DEBT. Each Storm Recovery Bond shall contain on the face thereof a statement to the following effect: "Neither the full faith and credit nor the taxing power of the State of Louisiana is pledged to the payment of the principal of, or interest on, this Storm Recovery Bond."

IN WITNESS WHEREOF, the Issuer and the Trustee have caused this Indenture to be duly executed by their respective managers or officers thereunto duly authorized, all as of the day and year first above written.

		CLECO KATRINA/RITA HURRICANE RECOVERY FUNDING LLC
		By:

		Name:

		Title:

		U.S. BANK NATIONAL ASSOCIATION, as Trustee
		By:

		Name:

		Title:

U.S. BANK NATIONAL ASSOCIATION
hereby agrees to act as Paying Agent, Storm Recovery Bond Registrar, authenticating agent and agent under Section 3.02 hereof, all as set forth in this Indenture.

By:

Name:

Title:

SCHEDULE 1
SEMIANNUAL SERVICER'S CERTIFICATE
[INTENTIONALLY OMITTED]

SCHEDULE 2a
STATUTORY TRUE-SALE OPINION
[INTENTIONALLY OMITTED]

SCHEDULE 2b
STATE LAW SECURITY INTEREST OPINION
[INTENTIONALLY OMITTED]

SCHEDULE 2c
UCC OPINION
[INTENTIONALLY OMITTED]

EXHIBIT A

SERVICING CRITERIA TO BE ADDRESSED BY INDENTURE TRUSTEE IN
ASSESSMENT OF COMPLIANCE

Reg AB Reference	Servicing Criteria	Applicable Trustee Responsibility

	General Servicing Considerations
1122(d)(1)(i)	Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements.
1122(d)(1)(ii)	If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party's performance and compliance with such servicing activities.
1122(d)(1)(iii)	Any requirements in the transaction agreements to maintain a back-up servicer for the pool assets are maintained.
1122(d)(1)(iv)	A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements.
	Cash Collection and Administration
1122(d)(2)(i)	Payments on pool assets are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two (2) business days of receipt, or such other number of days specified in the transaction agreements.	X
1122(d)(2)(ii)	Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.	X
1122(d)(2)(iii)	Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements.
1122(d)(2)(iv)	The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements.	X

1122(d)(2)(v)	Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, "federally insured depository institution" with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Exchange Act.
1122(d)(2)(vi)	Unissued checks are safeguarded so as to prevent unauthorized access.
1122(d)(2)(vii)	Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations are (A) mathematically accurate; (B) prepared within thirty (30) calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within ninety (90) calendar days of their original identification, or such other number of days specified in the transaction agreements.
	Investor Remittances and Reporting
1122(d)(3)(i)	Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors' or the trustee's records as to the total unpaid principal balance and number of pool assets serviced by the Servicer.
1122(d)(3)(ii)	Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.	X
1122(d)(3)(iii)	Disbursements made to an investor are posted within two (2) business days to the Servicer's investor records, or such other number of days specified in the transaction agreements.	X
1122(d)(3)(iv)	Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.	X

		Pool Asset Administration
1122(d)(4)(i)		Collateral or security on pool assets is maintained as required by the transaction agreements or related pool asset documents.
1122(d)(4)(ii)		Pool assets and related documents are safeguarded as required by the transaction agreements.
1122(d)(4)(iii)		Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements.
1122(d)(4)(iv)		Payments on pool assets, including any payoffs, made in accordance with the related pool asset documents are posted to the Servicer's obligor records maintained no more than two (2) business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related pool asset documents.
1122(d)(4)(v)		The Servicer's records regarding the pool assets agree with the Servicer's records with respect to an obligor's unpaid principal balance.
1122(d)(4)(vi)		Changes with respect to the terms or status of an obligor's pool assets (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents.
1122(d)(4)(vii)		Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements.
1122(d)(4)(viii)		Records documenting collection efforts are maintained during the period a pool asset is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity's activities in monitoring delinquent pool assets including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).
1122(d)(4)(ix)		Adjustments to interest rates or rates of return for pool assets with variable rates are computed based on the related pool asset documents.

1122(d)(4)(x)		Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor's pool asset documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable pool asset documents and state laws; and (C) such funds are returned to the obligor within thirty (30) calendar days of full repayment of the related pool assets, or such other number of days specified in the transaction agreements.
1122(d)(4)(xi)		Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the Servicer at least thirty (30) calendar days prior to these dates, or such other number of days specified in the transaction agreements.
1122(d)(4)(xii)		Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the Servicer's funds and not charged to the obligor, unless the late payment was due to the obligor's error or omission.
1122(d)(4)(xiii)		Disbursements made on behalf of an obligor are posted within two (2) business days to the obligor's records maintained by the Servicer, or such other number of days specified in the transaction agreements.
1122(d)(4)(xiv)		Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements.
1122(d)(4)(xv)		Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements.

*: With respect to its custodial functions relating to the Collection Account.

APPENDIX A

MASTER DEFINITIONS

The definitions contained in this Appendix A are applicable to the singular as well as the plural forms of such terms.

"Accounts" means, collectively, the Collection Account (and each sub-account thereof, including, without limitation, the General Subaccount, the Capital Subaccount, the Defeasance Subaccount, the Excess Funds Subaccount and each Tranche Subaccount).

"Act" has the meaning specified in Section 11.03 of the Indenture.

"Addition Notice" means, with respect to the transfer of Subsequent Storm Recovery Property to the Issuer, notice, which shall be given by the Seller to the Issuer, the LPSC and the Rating Agencies not later than 10 days prior to the related Subsequent Transfer Date, specifying the Subsequent Transfer Date for such Subsequent Storm Recovery Property.

"Adjustment Date" has the meaning specified in the applicable Servicing Agreement.

"Administration Agreement" means the Administration Agreement dated as of , 2008, between Cleco Power, as Administrator, and the Issuer, as the same may be amended and supplemented from time to time.

"Administrator" means Cleco Power as administrator under the Administration Agreement and each successor to or assignee of Cleco Power in the same capacity.

"Affiliate" means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, control, when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms controlling and controlled have meanings correlative to the foregoing.

"Annual Accountant's Report" has the meaning assigned to that term in the applicable Servicing Agreement.

"Applicable Law" has the meaning specified in Section 6.15 of the Indenture.

"Authorized Denominations" means, with respect to any Series or Tranche of Storm Recovery Bonds, $1,000 and integral multiples thereof, or such other denominations as may be specified in the Series Supplement therefor.

"Authorized Officer" means (i) with respect to any Person that is a corporation or a limited liability company, any manager, the Chairman of the Board, the Chief Executive Officer, the President, any Vice Chairman, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or any Assistant Treasurer, the Secretary or any Assistant Secretary of such Person, (ii) with respect to any Person that is a partnership, the President, any Vice President, Treasurer or Secretary (or Assistant Secretary) of a general partner or managing partner of such Person; provided that in respect of the Issuer, Authorized Officer means any Manager or the Member and, with respect to the Member, any officer who is authorized to act for the Member in matters relating to the Issuer and who is identified on the list of Authorized Officers delivered by the Member to the Trustee as of the date hereof (as such list may be modified or supplemented from time to time thereafter).

"Bankruptcy Code" means Title 11 of the United States Code (11 U.S.C. Section 101 et seq.), as amended from time to time.

"Basic Documents" means the Issuer LLC Agreement, the Issuer Articles of Organization, each Sale Agreement, each Servicing Agreement, the Administration Agreement, the Indenture, any Supplemental Indentures, each DTC Agreement, each Underwriting Agreement and any Bills of Sale.

"Bill of Sale" means any bill of sale issued by the Seller to the Issuer pursuant to any Sale Agreement evidencing the sale of Storm Recovery Property by the Seller to the Issuer.

"Bond Rate" means, with respect to each Series or, if applicable, each Tranche of Storm Recovery Bonds, the rate at which interest accrues on the principal balance of Storm Recovery Bonds of such Series or Tranche, as specified in the Series Supplement therefor.

"Book-Entry Security" means a security maintained in the form of entries (including, without limitation, the security entitlements in, and the financial assets based on, such security) in the commercial book-entry system of the Federal Reserve System.

"Book-Entry Storm Recovery Bonds" means beneficial interests in the Storm Recovery Bonds, ownership and transfers of which shall be made through book entries by a Clearing Agency as described in Section 2.11 of the Indenture.

"Business Day" means any day other than a Saturday or Sunday or a day on which banking institutions in the City of New Orleans, Louisiana, in the City of St. Paul, Minnesota, in the City of Chicago, Illinois, or in the City of New York, New York, are required or authorized by law or executive order to remain closed.

"Calculation Date" means, with respect to each Series of Storm Recovery Bonds, the date on which the calculations and filings set forth in Annex 1 to the applicable Servicing Agreement will be made each year.

"Capital Subaccount" has the meaning specified in Section 8.02(a) of the Indenture.

"Clearing Agency" means an organization registered as a "clearing agency" pursuant to Section 17A of the Exchange Act.

"Clearing Agency Participant" means a broker, dealer, bank, other financial institution or other Person for whom from time to time a Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency.

"Cleco Power" means Cleco Power LLC, a Louisiana limited liability company, or its successors.

"Code" means the Internal Revenue Code of 1986, as amended from time to time, and the Treasury Regulations promulgated thereunder.

"Collection Account" has the meaning specified in Section 8.02(a) of the Indenture.

"Collections" means amounts collected in respect of Storm Recovery Charges.

"Commission" means the U.S. Securities and Exchange Commission, and any successor thereof.

"Commission Pledge" means the pledge and covenants of the LPSC contained in Section VI(G) (Ordering Paragraphs 50 - 54) of the Financing Order issued by the LPSC on September 17, 2007, in Docket No. U-29157.

"Corporate Trust Office" means, as the context requires, either (1) the office of the Trustee at which at any particular time this Indenture shall be administered, which office as of the date of the execution of this Indenture is located at 209 South LaSalle Street, Mail Code MK-IL-RY3B, Chicago, Illinois 60604-1219, Attn: Corporate Trust Administration, Ref: Cleco Katrina/Rita Hurricane Recovery Funding LLC, or at such other address as the Trustee may designate from time to time by notice to the Storm Recovery Bondholders and the Issuer, or the principal corporate trust office of any successor Trustee (the address of which the successor Trustee will provide to the Storm Recovery Bondholders

and the Issuer) or (2) the office of the Paying Agent or Storm Recovery Bond Registrar at which at any particular time this Indenture shall be administered, each of which offices as of the date of the execution of this Indenture is located at 209 South LaSalle Street, Mail Code MK-IL-RY3B, Chicago, Illinois 60604-1219, or at such other address as the Paying Agent or Storm Recovery Bond Registrar respectively may designate from time to time by notice to the Storm Recovery Bondholders and the Issuer, or the principal corporate trust office of any successor Paying Agent or Storm Recovery Bond Registrar (the address of which the successor will provide to the Storm Recovery Bondholders, the Trustee and the Issuer).

"Covenant Defeasance Option" has the meaning specified in Section 4.01(b) of the Indenture.

"Default" means any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default.

"Defeasance Subaccount" has the meaning specified in Section 8.02(a) of the Indenture.

"Definitive Storm Recovery Bonds" has the meaning specified in Section 2.11 of the Indenture.

"DTC" means The Depository Trust Company.

"DTC Agreement" means any applicable Letter of Representations among the Issuer, the Storm Recovery Bond Registrar and DTC or other applicable Clearing Agency, relating to the Clearing Agency's rights and obligations (in its capacity as Clearing Agency) with respect to any Book-Entry Storm Recovery Bonds, as the same may be amended and supplemented from time to time.

"Eligible Guarantor Institution" means a firm or other entity identified in Rule 17Ad-15 under the Exchange Act as "an eligible guarantor institution," including (as such terms are defined therein):

(a) a bank;

(b) a broker, dealer, municipal securities broker or dealer or government securities broker or dealer;

(d) a national securities exchange, registered securities association or clearing agency; or

(e) a savings association that is a participant in a securities transfer association.

"Eligible Institution" means:

(a) the corporate trust department of the Trustee, so long as any of the securities of the Trustee have a credit rating from each Rating Agency in one of its generic rating categories which signifies investment grade, or

(b) the trust department of a depository institution organized under the laws of the United States of America or any State (or any domestic branch of a foreign bank), which

(i) has either

(A) with respect to any Eligible Investment having a maturity of greater than one month, a long-term unsecured debt rating of "AA-" by Standard & Poor's, "A2" by Moody's and, if Fitch provides a rating thereon, the equivalent of the lower of those two ratings by Fitch or

(B) with respect to any Eligible Investment having a maturity of one month or less, a certificate of deposit rating of "A-1+" by Standard & Poor's, "P-1" by Moody's and, if Fitch provides a rating thereon, "F-1+" by Fitch, or any other long-term, short-term or certificate of deposit rating acceptable to the Rating Agencies, and

(ii) whose deposits are insured by the FDIC.

"Eligible Investments" mean Book-Entry Securities, negotiable instruments or securities represented by instruments in bearer or registered form which evidence and may include investments for which the Trustee and/or its Affiliates acts as an investment manager or advisor:

(a) direct obligations of, and obligations fully and unconditionally guaranteed as to timely payment by, the United States of America;

(b) demand deposits, time deposits or certificates of deposit of any depository institution or trust company incorporated under the laws of the United States of America or any State thereof (or any domestic branch of a foreign bank) and subject to supervision and examination by federal or State banking or depository institution authorities; provided, however, that at the time of the investment or contractual commitment to invest therein, the commercial paper or other short-term unsecured debt obligations (other than such obligations the rating of which is based on the credit of a Person other than such depository institution or trust company) thereof shall have either (i) a long-term unsecured debt rating from Moody's, Standard & Poor's and, if Fitch provides a rating thereon, Fitch of at least "Aa3," "AA" and "AA," respectively, or (ii) a certificate of deposit rating from Moody's and Standard & Poor's of at least "P-1" and "A-1+," respectively, and, if Fitch provides a rating thereon, "F-1+" by Fitch;

(c) commercial paper or other short term obligations of any Person organized under the laws of any State (other than Cleco Power, Reliant Energy, Inc. or any of their affiliates) whose ratings, at the time of the investment or contractual commitment to invest therein, from Moody's and Standard & Poor's shall be at least "P-1" and "A-1+," respectively and, if Fitch provides a rating thereon, "F-1+" by Fitch;

(d) investments in money market funds having a rating from Moody's, Standard & Poor's and, if Fitch provides a rating thereon, Fitch of "Aaa," "AAA" and "AAA," respectively (including funds for which the Trustee or any of its Affiliates act as investment manager or advisor);

(e) bankers' acceptances issued by any depository institution or trust company referred to in clause (b) above;

(f) repurchase obligations with respect to any security that is a direct obligation of, or fully guaranteed by, the United States of America or any agency or instrumentality thereof the obligations of which are backed by the full faith and credit of the United States of America, in either case entered into with a depository institution or trust company (acting as principal) described in clause (b) above;

(g) repurchase obligations with respect to any security or whole loan entered into with

(i) a depository institution or trust company (acting as principal) described in clause (b) above (any depository institution or trust company being referred to in this definition as a "financial institution"),

(ii) a broker/dealer (acting as principal) registered as a broker or dealer under Section 15 of the Exchange Act (any broker/dealer being referred to in this definition as a "broker/dealer"), the unsecured short-term debt obligations of which are rated at least "P-1" by Moody's, "A-1+" by Standard & Poor's and, if Fitch provides a rating thereon, "F-1+" by Fitch at the time of entering into this repurchase obligation, or

(iii) an unrated broker/dealer, acting as principal, that is a wholly-owned subsidiary of a non-bank or bank holding company the unsecured short-term debt obligations of which are rated at least "P-1" by Moody's, "A-1+" by Standard & Poor's and, if Fitch provides a rating

thereon, "F-1+" by Fitch at the time of purchase so long as the obligations of such unrated broker/dealer are unconditionally guaranteed by such non-bank or bank holding company; or

(h) any other investment permitted by each of the Rating Agencies;

provided, that (a) any Book-Entry Security, instrument or security having a maturity of one month or less that would be an Eligible Investment but for its failure, or the failure of the obligor thereon, to have the rating specified above shall be an eligible investment if such Book-Entry Security, instrument or security, or the obligor thereon, has a short-term unsecured debt rating of at least "P-1" by Moody's, "A-1+" by S&P and, if Fitch provides a rating thereon, "F-1+" by Fitch, and (b) any Book-Entry Security, instrument or security having a maturity of greater than one month that would be an eligible investment but for its failure, or the failure of the obligor thereon, to have the rating specified above shall be an eligible investment if such Book-Entry Security, instrument or security, or the obligor thereon, has a long-term unsecured debt rating of at least "AA-" by S&P or "Aa3" by Moody's (and, if Fitch provides a rating thereon, "AA-" by Fitch) and a short-term unsecured debt rating of at least "P-1" by Moody's or the equivalent thereof by S&P (and Fitch, if Fitch provides a rating thereon);

provided, further, that unless otherwise permitted by the applicable Rating Agencies, upon the failure of any Eligible Institution to maintain any applicable rating set forth in this definition or the definition of Eligible Institution, the related investments at that institution shall be reinvested in Eligible Investments at a successor Eligible Institution within 10 days.

"Eligible Securities Account" means either:

(a) a segregated non-interest-bearing trust account with an Eligible Institution or

(b) a segregated non-interest-bearing trust account with the corporate trust department of a depository institution organized under the laws of the United States of America or any State (or any domestic branch of a foreign bank), having corporate trust powers and acting as trustee for funds deposited in such account, so long as any of the unsecured securities of such depository institution shall have a credit rating from each Rating Agency in one of its generic rating categories which signifies investment grade.

"Event of Default" has the meaning specified in Section 5.01 of the Indenture.

"Excess Funds Subaccount" has the meaning specified in Section 8.02(a) of the Indenture.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Expected Amortization Schedule" means, with respect to each Series or, if applicable, each Tranche of Storm Recovery Bonds, the expected amortization schedule for principal thereof, as specified in the Series Supplement therefor.

"Expected Final Payment Date" means, with respect to each Series or, if applicable, each Tranche of Storm Recovery Bonds, the date when all interest and principal is scheduled to be paid for that Series or Tranche in accordance with the Expected Amortization Schedule, as specified in the Series Supplement therefor.

"FDIC" means the Federal Deposit Insurance Corporation or any successor.

"Federal Book-Entry Regulations" means (a) the federal regulations contained in Subpart B ("Treasury/Reserve Automated Debt Entry System (TRADES)") governing Book-Entry Securities consisting of U.S. Treasury bonds, notes and bills, and Subpart D ("Additional Provisions") of 31 C.F.R. part 357, Section 357.10 through Section 357.14 and Section 357.41 through Section 357.44 (including related defined terms in 31 C.F.R. Section 357.2); and (b) to the extent substantially identical to the federal regulations referred to in clause (a) above (as in effect from time to time), the federal regulations governing other Book-Entry Securities.

"Final Maturity Date" means, for each Series or, if applicable, each Tranche of Storm Recovery Bonds, the date by which all Principal and Interest on that Series or Tranche is required to be paid, as specified in the Series Supplement therefor.

"Financing Costs" has the meaning assigned to that term in the Securitization Act and the Financing Order.

"Financing Order" means Financing Order No. U-29157-B issued by the LPSC on September 17, 2007, in Docket No. U-29157 and any subsequent financing order issued by the LPSC to Cleco Power pursuant to which Cleco Power transfers its rights and interests thereunder to the Issuer in connection with the issuance of a separate Series of Storm Recovery Bonds.

"Fitch" means Fitch, Inc., or any successor thereto.

"General Subaccount" has the meaning specified in Section 8.02(a) of the Indenture.

"Grant" means mortgage, pledge, bargain, sell, warrant, alienate, remise, release, convey, assign, transfer, deliver, create and grant a lien upon and a security interest in and right of set-off against, deposit, set over and confirm pursuant to this Indenture. A Grant of the Trust Estate or of any other agreement or instrument shall include all rights, powers and options (but none of the obligations) of the Granting party thereunder, including the immediate and continuing right to claim for, collect, receive and give receipt for principal, interest and other payments in respect of the Trust Estate and all other moneys payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the Granting party or otherwise and generally to do and receive anything that the Granting party is or may be entitled to do or receive thereunder or with respect thereto.

"Holder" or "Storm Recovery Bondholder" means the Person in whose name a Storm Recovery Bond of any Series or Tranche is registered on the Storm Recovery Bond Register.

"Indemnity Amounts" means any indemnification obligations payable by the Issuer pursuant to Section 6.07 of the Indenture.

"Indenture" means this Indenture dated as of , 2008, among the Issuer and the Trustee, as the same may be amended and supplemented from time to time by one or more Series Supplements or Supplemental Indentures, and shall include the forms and terms of the Storm Recovery Bonds established thereunder.

"Independent" means, when used with respect to any specified Person, that the Person

(a) is in fact independent of the Issuer, any other obligor upon the Storm Recovery Bonds, Cleco Power and any Affiliate of any of the foregoing Persons,

(b) does not have any direct financial interest or any material indirect financial interest in the Issuer, any such other obligor, Cleco Power or any Affiliate of any of the foregoing Persons and

(c) is not connected with the Issuer, any such other obligor, Cleco Power or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions.

"Independent Certificate" means a certificate or opinion to be delivered to the Trustee made by an Independent appraiser from a nationally reputable appraisal firm or other expert appointed by an Issuer Order in the exercise of reasonable care, and such opinion or certificate shall state that the signer has read the definition of "Independent" in this Appendix A and that the signer is Independent within the meaning thereof.

"Initial Transfer Date" means the Series Issuance Date for the first Series of Storm Recovery Bonds.

"Interest" means, for any Payment Date for any Series or Tranche of Storm Recovery Bonds, the sum, without duplication, of:

(a) an amount equal to the amount of interest accrued at the applicable interest rates from the prior Payment Date or, with respect to the first Payment Date, the amount of interest accrued since the Initial Transfer Date, with respect to that Series or Tranche;

(b) any unpaid interest plus, to the extent permitted by law, any interest accrued on this unpaid interest at the applicable interest rate;

(d) with respect to a Series or Tranche to be redeemed prior to the next Payment Date, the amount of interest that will be payable as interest on such Series or Tranche upon such redemption.

"Issuer" means Cleco Katrina/Rita Hurricane Recovery Funding LLC, a Louisiana limited liability company, or any successor thereto pursuant to Section 3.11 of the Indenture.

"Issuer Articles of Organization" means the Articles of Organization of the Issuer dated October 29, 2007 that was filed with the Louisiana Secretary of State on October 30, 2007, as the same may be amended and restated from time to time.

"Issuer LLC Agreement" means the Limited Liability Company Operating Agreement between the Issuer and Cleco Power, as sole Member, dated and effective as of October 29, 2007, as the same may be amended and supplemented from time to time.

"Issuer Opinion of Counsel" means one or more written opinions of counsel who may, except as otherwise expressly provided in the Indenture, be employees of or counsel to the Issuer and who shall be satisfactory to the Trustee and the LPSC, and which opinion or opinions shall be addressed to the Trustee, as Trustee, and shall be in a form reasonably satisfactory to the Trustee.

"Issuer Officer's Certificate" means a certificate on behalf of the Issuer signed by any Authorized Officer of the Issuer and delivered to the Trustee.

"Issuer Order" or "Issuer Request" means a written order or request signed in the name of the Issuer by any one of its Authorized Officers and delivered to the Trustee.

"Legal Defeasance Option" has the meaning specified in Section 4.01(b) of the Indenture.

"Lien" means a security interest, lien, charge, pledge, equity or encumbrance of any kind.

"Losses" means collectively, any and all liabilities, obligations, losses, damages, payments, costs or expenses of any kind whatsoever.

"LPSC" means the Louisiana Public Service Commission or any successor entity thereto.

"Majority Holders" means the Holders of a majority of the Outstanding Amount of the Storm Recovery Bonds of all Series.

"Manager" means any manager of the Issuer.

"Member" means Cleco Power, as the sole member of the Issuer, or any successor thereto.

"Moody's" means Moody's Investors Service, Inc., or any successor thereto.

"Officer's Certificate" means, in respect of any Person, an officer's certificate signed by an Authorized Officer of such Person; provided that unless otherwise specified, any reference in the Indenture to an Officer's Certificate shall be to an Officer's Certificate of any Authorized Officer of the Issuer.

"Operating Expenses" means, with respect to the Issuer, all fees, costs and expenses owed by the Issuer with respect to a Series of Storm Recovery Bonds, including all amounts owed by the Issuer to the Trustee relating to that Series, the Servicing Fee relating to that Series (but excluding costs and expenses incurred by the Servicer except as specifically set forth in Sections 6.08 and 6.10 of the Servicing Agreement relating to that Series), the fees relating to that Series payable by the Issuer to the Administrator under the Administration Agreement, the fees and expenses relating to that Series payable by the Issuer to the independent managers of the Issuer, legal fees and expenses of the Servicer pursuant to the applicable Servicing Agreement relating to that Series, the costs and expenses incurred by the Seller in connection with the performance of the Seller's obligations under Section 4.07 of the Sale Agreement and payable by the Issuer, and legal and accounting fees, costs and expenses of the Issuer relating to that Series.

"Opinion of Counsel" means one or more written opinions of counsel who may be an employee of or counsel to Cleco Power or the Issuer, which counsel shall be reasonably acceptable to the Trustee, the LPSC, the Issuer or the Rating Agencies and which shall be in form reasonably satisfactory to the Trustee or the LPSC, if applicable.

"Outstanding" or "outstanding" with respect to Storm Recovery Bonds means, as of the date of determination, all Storm Recovery Bonds theretofore authenticated and delivered under the Indenture except:

(a) Storm Recovery Bonds theretofore canceled by the Storm Recovery Bond Registrar or delivered to the Storm Recovery Bond Registrar for cancellation;

(b) Storm Recovery Bonds or portions thereof the payment for which money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent in trust for the Holders of such Storm Recovery Bonds; provided, however, that if such Storm Recovery Bonds are to be redeemed, notice of such redemption has been duly given pursuant to the Indenture or provision therefor, satisfactory to the Trustee; and

(c) Storm Recovery Bonds in exchange for or in lieu of other Storm Recovery Bonds which have been authenticated and delivered pursuant to the Indenture unless proof satisfactory to the Trustee is presented that any such Storm Recovery Bonds are held by a bona fide purchaser;

provided that in determining whether the Holders of the requisite Outstanding Amount of the Storm Recovery Bonds or any Series or Tranche thereof have given any request, demand, authorization, direction, notice, consent or waiver hereunder or under any Basic Document, Storm Recovery Bonds owned by the Issuer, any other obligor upon the Storm Recovery Bonds, Cleco Power or any Affiliate of any of the foregoing Persons shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be fully protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Storm Recovery Bonds that a Responsible Officer of the Trustee knows to be so owned shall be so disregarded. Storm Recovery Bonds so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Storm Recovery Bonds and that the

pledgee is not the Issuer, any other obligor upon the Storm Recovery Bonds, the Servicer or any Affiliate of any of the foregoing Persons.

"Outstanding Amount" means the aggregate principal amount of all Outstanding Storm Recovery Bonds or, if the context requires, all Outstanding Storm Recovery Bonds of a Series or Tranche Outstanding at the date of determination.

"Paying Agent" means the entity so designated in Section 3.03 of the Indenture or any other Person that meets the eligibility standards for the Trustee specified in Section 6.11 of the Indenture and is authorized by the Issuer to make the payments of Principal of or premium, if any, or Interest on the Storm Recovery Bonds on behalf of the Issuer.

"Payment Date" means, with respect to each Series or, if applicable, each Tranche of Storm Recovery Bonds, each date or dates specified as Payment Dates for such Series or Tranche in the Series Supplement therefor, provided that if any such date is not a Business Day, the Payment Date shall be the Business Day immediately succeeding such date.

"Person" means any individual, corporation, estate, partnership, joint venture, association, joint stock company, trust (including any beneficiary thereof), business trust, limited liability company, unincorporated organization or government or any agency or political subdivision thereof.

"Predecessor Storm Recovery Bond" means, with respect to any particular Storm Recovery Bond, every previous Storm Recovery Bond evidencing all or a portion of the same debt as that evidenced by such particular Storm Recovery Bond; and, for the purpose of this definition, any Storm Recovery Bond authenticated and delivered under Section 2.06 of the Indenture in lieu of a mutilated, lost, destroyed or stolen Storm Recovery Bond shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Storm Recovery Bond.

"Principal" means, with respect to any Payment Date and each Series or, if applicable, each Tranche of Storm Recovery Bonds the sum, without duplication, of:

(a) the amount of principal scheduled to be paid on such Payment Date in accordance with the Expected Amortization Schedule;

(b) the amount of principal due on the Final Maturity Date of any Series or Tranche if such Payment Date is the Final Maturity Date;

(c) the amount of principal due as a result of the occurrence and continuance of an Event of Default and acceleration of the Storm Recovery Bonds;

(d) the amount of principal and premium, if any, due as a result of a redemption of Storm Recovery Bonds prior to such Payment Date; and

(e) any unpaid and previously scheduled payments of principal and overdue payments of principal.

"Pro Rata" has the meaning specified for such term in Section 8.02(d) of the Indenture.

"Proceeding" means any suit in equity, action at law or other judicial or administrative proceeding.

"Projected Storm Recovery Bond Balance" means, as of any date, the anticipated Outstanding Amount of Storm Recovery Bonds after giving effect to payment of the sum of the amounts provided for in the Expected Amortization Schedules for each outstanding Series of Storm Recovery Bonds to be paid on or before such date.

"Rating Agency" means any rating agency rating the Storm Recovery Bonds of any Tranche or Series at the time of issuance thereof at the request of the Issuer, which initially shall be Moody's, Fitch and S&P. If no such organization or successor is any longer in existence, "Rating Agency" shall be a nationally recognized statistical rating organization or other comparable Person designated by the Issuer, written notice of which designation shall be given to the Trustee, the LPSC and the Servicer.

"Rating Agency Condition," with respect to the issuance of a new Series of Storm Recovery Bonds, has the meaning set forth in Section 2.10(7) of the Indenture and, with respect to any other action, means the notification in writing to each Rating Agency of such action, and confirmation from S&P to the Trustee and the Issuer that such action will not result in a reduction or withdrawal of the then current rating by such Rating Agency of any outstanding Series or Tranche of Storm Recovery Bonds.

"Record Date" means, with respect to any Payment Date for a Series or Tranche, the date set forth as such in the Series Supplement therefor.

"Redemption Date" means, with respect to each Series or, if applicable, each Tranche of Storm Recovery Bonds, the date for the redemption of the Storm Recovery Bonds of such Series or Tranche pursuant to Section 10.01 of the Indenture or the Series Supplement for such Series or Tranche, which in each case shall be a Payment Date.

"Regulation AB" means the rules of the SEC promulgated under Subpart 229.1100—Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123, as such may be amended from time to time.

"Required Capital Amount" means a capital contribution in an amount equal to the amount specified in the related Series Supplement, representing a capital contribution from Cleco Power.

"Responsible Officer" means, with respect to the Trustee, any officer within the Corporate Trust Office of the Trustee, including any Vice President, Director, Managing Officer, associate, Assistant Vice President, Secretary, Assistant Secretary, or any other officer of the Trustee having direct responsibility for the administration of this Indenture and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer's knowledge of and familiarity with the particular subject.

"Retiring Trustee" means a Trustee that resigns or vacates the office of Trustee for any reason.

"Sale Agreement" means the Storm Recovery Property Sale Agreement for the related Storm Recovery Property, in each case, between the Seller and the Issuer, as the same may be amended and supplemented from time to time.

"Securities Act" means the Securities Act of 1933, as amended.

"Securitization Act" means Act No. 64 of the Louisiana Regular Session of 2006, the "Louisiana Electric Utility Storm Recovery Securitization Act," codified at La. R.S. 45:1226-1236.

"Seller" means Cleco Power, or its successor, in its capacity as seller of the Storm Recovery Property to the Issuer pursuant to any Sale Agreement.

"Semiannual Servicer's Certificate" means the statement prepared by the Servicer and delivered to the Trustee with respect to each Series of Storm Recovery Bonds on or prior to each Payment Date therefor, the form of which is attached hereto as Schedule 1.

"Series" means any series of Storm Recovery Bonds issued by the Issuer and authenticated by the Trustee pursuant to the Indenture, as specified in the Series Supplement therefor.

"Series Final Maturity Date" means the Final Maturity Date for a Series.

"Series Issuance Date" means, with respect to any Series, the date on which the Storm Recovery Bonds of such Series are to be originally issued in accordance with Section 2.10 of the Indenture and the Series Supplement for such Series.

"Series Supplement" means a Supplemental Indenture that authorizes a particular Series of Storm Recovery Bonds.

"Series Trust Estate" has the meaning specified in a Series Supplement for a particular Series of Storm Recovery Bonds.

"Servicer" means Cleco Power and each successor to or assignee of Cleco Power, in its capacity as Servicer under the applicable Servicing Agreement for a Series of Storm Recovery Bonds.

"Servicer Default" means the occurrence and continuation of one of the events specified in the applicable Servicing Agreement.

"Servicing Agreement" means any Storm Recovery Property Servicing Agreement between the Issuer and the Servicer for the related Storm Recovery Property and acknowledged by the Trustee, as the same may be amended and supplemented from time to time.

"Servicing Fee" means the fee payable by the Issuer to the Servicer on each Payment Date with respect to each Series of Storm Recovery Bonds in the amount to be specified in the applicable Servicing Agreement.

"Standard & Poor's" or "S&P" means Standard & Poor's, a division of The McGraw-Hill Companies, or any successor thereto.

"State" means any one of the 50 states of the United States of America or the District of Columbia.

"Storm Recovery Bond" or "Bond" means any of the "storm recovery bonds" (as defined in the Securitization Act) issued by the Issuer pursuant to the Indenture and one or more Series Supplements authorizing such Series.

"Storm Recovery Bond Balance" means, as of any date, the aggregate Outstanding Amount of all Series of Storm Recovery Bonds on such date.

"Storm Recovery Bond Owner" means, with respect to a Book-Entry Storm Recovery Bond, the Person who is the beneficial owner of such Book-Entry Storm Recovery Bond, as reflected on the books of the Clearing Agency, or on the books of a Person maintaining an account with such Clearing Agency (directly as a Clearing Agency Participant or as an indirect participant, in each case in accordance with the rules of such Clearing Agency).

"Storm Recovery Bond Register" has the meaning specified in Section 2.05 of the Indenture.

"Storm Recovery Bond Registrar" means U.S. Bank National Association, in its capacity as keeper of the Storm Recovery Bond Register, or any other Person appointed to act in such capacity by the Issuer pursuant to Section 2.05 of the Indenture.

"Storm Recovery Charge Adjustment Process" means the process by which Storm Recovery Charges are adjusted pursuant to the applicable Servicing Agreement, the Financing Order and the Securitization Act.

"Storm Recovery Charges" means the nonbypassable amounts to be charged for the use or availability of electric services, approved by the LPSC in the Financing Order to recover Financing Costs, that may be collected by Cleco Power, its successors, assignees or other collection agents as provided for in the Financing Order.

"Storm Recovery Property" means all of Seller's rights and interest under the Financing Order (including, without limitation, rights to impose, collect and receive the "storm recovery charges" (as defined in the Securitization Act) approved in such Financing Order) issued by the Louisiana Commission on September 17, 2007 (Docket No. U-29157) pursuant to the Securitization Act, except the rights of Seller to earn and receive a rate of return on its invested capital in the Issuer, to receive administration and servicer fees, to withdraw funds from its restricted storm recovery reserve funded by the proceeds from the sale of the Storm Recovery Property, or to use the Seller's remaining portion of those proceeds.

"Subsequent Sale" means the sale of Storm Recovery Property after the date hereof, subject to the satisfaction of the conditions specified in any Sale Agreement and the Indenture.

"Subsequent Transfer Date" means any date on which a Subsequent Sale will be effective, specified in an Addition Notice.

"Subsequent Storm Recovery Property" means Storm Recovery Property (identified in the related Bill of Sale) sold by the Seller to the Issuer as of a Subsequent Transfer Date pursuant to a Sale Agreement.

"Successor Servicer" has the meaning specified in the Servicing Agreement.

"Supplemental Indenture" means a supplemental indenture entered into by the Issuer and the Trustee pursuant to Article IX of the Indenture.

"Tranche" means, with respect to any Series, any one of the classes of Storm Recovery Bonds of that Series, as specified in the Series Supplement for that Series.

"Tranche Final Maturity Date" means the Final Maturity Date of a Tranche, as specified in the Series Supplement for the related Series.

"Tranche Subaccount" has the meaning specified in Section 8.02(a) of the Indenture.

"Trust Estate" means all Series Trust Estate securing all Storm Recovery Bonds issued under the Indenture.

"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as amended, as in force on the date hereof, unless otherwise specifically provided.

"Trustee" means U.S. Bank National Association, as trustee, or its successor or any successor Trustee under the Indenture.

"UCC" means, unless the context otherwise requires, the Uniform Commercial Code, as in effect in the relevant jurisdiction, as amended from time to time.

"Underwriting Agreement" means any underwriting agreement entered into by the Issuer, Cleco Power and the underwriters parties thereto in connection with the issuance of a separate Series of Storm Recovery Bonds in accordance with a Financing Order.

"U.S. Government Obligations" means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable at the issuer's option.

EX-5.1 3 a2182800zex-5_1.htm EXHIBIT 5.1
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Exhibit 5.1

[LETTERHEAD OF PHELPS DUNBAR, L.L.P.]

February 22, 2008

Cleco Katrina/Rita Hurricane Recovery Funding LLC 12922-152
2605 Highway 28 East
Office Number 12
Pinevile, LA 71360-5226

Cleco Power LLC
2030 Donahue Ferry Road
Pineville, LA 71360-5226

Re:: Cleco Katrina/Rita Hurricane Recovery Funding LLC:
Exhibit 5.1 (Legality)

Ladies and Gentlemen:

We have acted as counsel to Cleco Katrina/Rita Hurricane Recovery Funding LLC, a Louisiana limited liability company (the "Issuer"), in connection with the issuance by the Issuer of the Storm Recovery Bonds, referred to below, and the related transaction described below. The Issuer and Cleco Power LLC, a Louisiana limited liability company ("Cleco Power"), in its capacity as sponsor for the Issuer, each filed with the Securities and Exchange Commission a registration statement on Form S-3 on November 2, 2007 (Registration Nos. 333-147122 and 333-147122-01), as amended by Amendment No. 1 thereto dated February 22, 2008, including a prospectus and a form of preliminary prospectus supplement, both subject to completion, (collectively, the "Registration Statement"), relating to the proposed issuance of up to $181,000,000.00 in aggregate principal amount of storm recovery bonds (the "Storm Recovery Bonds") of the Issuer. At your request, this opinion is being furnished to you for filing as Exhibit 5.1 to the Registration Statement.

DOCUMENTS EXAMINED

For purposes of giving the opinions hereinafter set forth, our examination of documents has been limited to the examination of the following:

(a) The Articles of Organization of the Issuer, dated October 29, 2007, (the "Articles") as filed in the office of the Secretary of State of the State of Louisiana on October 30, 2007;

(b) The Limited Liability Company Operating Agreement of the Issuer, dated as of October 29, 2007 (the "LLC Agreement"), by Cleco Power LLC, as the sole member (the "Member") and the Issuer;

(c) A Certificate of Good Standing for the Issuer, dated February 22, 2008, obtained from the Louisiana Secretary of State;

(d) Forms of an Indenture and a First Supplemental Indenture (as so supplemented, the "Indenture") to be entered into between the Issuer and U.S. Bank National Association, as trustee, attached as an Exhibit to the Registration Statement, pursuant to which the Storm Recovery Bonds are to be issued;

(e) The Registration Statement; and

(f) The Financing Order No. U-29157-B approved by the Louisiana Public Service Commission on September 12, 2007, issued on September 17, 2007, pertaining to the Issuer and Cleco Power in Docket No. U-29157 (the "Financing Order").

Capitalized terms used herein and not otherwise defined are used as defined in the Prospectus.

For purposes of this opinion, we have not reviewed any document (other than the documents listed in paragraphs (a) through (f) above) that is referred to in or incorporated by reference into any document reviewed by us.

RELIANCE AND ASSUMPTIONS

In our examination, we have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, and the conformity to original documents of all documents submitted to us as certified or photostatic copies or by facsimile or email, and the authenticity of the originals of such latter documents.

For purposes of this opinion, we have assumed (i) except to the extent provided in paragraph 1 below, that each of the parties to the documents examined by us has been duly organized or formed, as the case may be, and is validly existing in good standing under the laws of the jurisdiction governing its organization or formation, (ii) that there are no proceedings pending or contemplated for the merger, consolidation, conversion, dissolution, liquidation or termination of the Issuer, (iii) except to the extent provided in paragraph 2 below, that each of the parties to such documents has the requisite power and authority, corporate or other, to enter into and perform its obligations under such documents, and (iv) except to the extent provided in paragraph 3 below, that each of the parties to such documents has duly authorized, executed and delivered such documents. We have further assumed that there are no documents or agreements between or among the parties to the documents reviewed by us which alter or are inconsistent with the provisions of such documents and which would have an effect on the opinions expressed in this opinion letter.

The opinions expressed below are based on the following assumptions:

(a) the Registration Statement will become effective;

(b) the proposed transaction is consummated as contemplated in the Registration Statement;

(i) all necessary orders, approvals and authorization for the Issuer's purchase of the storm recovery property (as such term is used in the Prospectus Supplement and the Prospectus) from Cleco Power in exchange for the net proceeds of the Storm Recovery Bonds will have been obtained by the Issuer;

(ii) the Indenture will have been executed and delivered by the Issuer's authorized representative and by U.S. Bank National Association, as trustee;

(iii) the maturity dates, the bond rates, the redemption provisions and the other terms of the Storm Recovery Bonds being offered will be fixed in accordance with the terms of the Indenture;

(iv) the Sale Agreement between the Issuer and Cleco Power, as Seller, will have been executed and delivered;

(v) the Servicing Agreement between the Issuer and Cleco Power, as Servicer, will have been executed and delivered;

(vi) the Underwriting Agreement among the Issuer, Cleco Power and the underwriters of the Storm Recovery Bonds (the "Underwriting Agreement") will have been executed and delivered; and

(vii) the Managers of the Issuer have will taken all necessary action to approve and establish the terms of the Storm Recovery Bonds and the issuance thereof and to approve the terms of the offering of the Storm Recovery Bonds and related matters;

(d) the Indenture will be qualified in accordance with the provisions of the Trust Indenture Act of 1939, as amended; and

(e) the LLC Agreement constitutes the entire agreement among the parties thereto with respect to the subject matter thereof, including with respect to the admission of members to, and the creation, operation, dissolution and termination of, the Issuer, and that the LLC Agreement and the Articles are in full force and effect and have not been amended and no amendment of the LLC Agreement or the Articles is pending or has been proposed.

We have examined and relied upon originals, or copies of originals, certified or otherwise identified to our satisfaction as such records of the Issuer and such agreements, certificates of public officials, certificates of officers, managers or other representatives of the Issuer and other instruments as we deemed advisable, and examined such questions of law and satisfied ourselves to such matters of fact as we deemed relevant or necessary as a basis for this letter. As to any facts material to the opinions expressed herein which we have not independently established or verified, we have relied upon statements and representations of officers and other representatives of the Issuer or others.

OPINIONS

Based upon the foregoing assumptions and subject to the other limitations, assumptions and qualifications set forth below, we are of the opinion that:

1. The Issuer has been duly organized and is validly existing in good standing as a limited liability company under the laws of the State of Louisiana.

2. Under the Louisiana Limited Liability Issuer Law (La. R.S. 12:1301, et seq.) (the "LLC Law"), and the LLC Agreement, the Issuer has the limited liability company power and authority to execute and deliver the Indenture and to issue the Storm Recovery Bonds, and to perform its obligations under the Indenture and the Storm Recovery Bonds.

3. The execution and delivery by the Issuer of the Indenture and the Storm Recovery Bonds, and the performance by the Issuer of its obligations thereunder, have been duly authorized by all necessary limited liability company action on the part of the Issuer.

4. When properly executed, authenticated and issued in accordance with the Indenture and delivered against payment of the purchase price provided for in the Underwriting Agreement, and upon satisfaction of all other conditions contained in the Indenture and the Underwriting Agreement, the Storm Recovery Bonds will constitute legal, valid and binding obligations of the Issuer and the Storm Recovery Bonds will be enforceable against the Issuer in accordance with their terms, except to the extent enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other laws of general applicability relating to or affecting the rights of creditors generally and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law), including (without limitation) concepts of materiality, reasonableness, good faith and fair dealing which among other effects may limit the availability of certain remedies, such as injunctive relief and specific performance.

EXCEPTIONS AND QUALIFICATIONS

This opinion is limited to the laws of the State of Louisiana (excluding the securities and blue sky laws of the State of Louisiana), and we have not considered and express no opinion on the laws of any other jurisdiction, including federal laws (including federal bankruptcy law) and rules and regulations relating thereto or the laws of any other state or any foreign jurisdiction or any matters of municipal or other local law. Our opinions are rendered only with respect to Louisiana laws and rules, regulations and orders thereunder that are currently in effect. In rendering the opinions set forth herein, we

express no opinion concerning (i) the creation, attachment, perfection or priority of any security interest, lien or other encumbrance, or (ii) the nature or validity of title to any property.

The opinions contained herein are given only as of the date of this opinion letter. No opinion is expressed herein as to the effect of any future acts of the parties or changes in existing law. We undertake no responsibility and disclaim any obligation to supplement this opinion or otherwise advise you or any other person of any change after the date hereof in the law (whether constitutional, statutory or judicial) or the facts presently in effect, even though such change may alter the scope or substance of the opinions herein expressed or affect the legal or factual statements or assumptions herein. We shall have no obligation to revise or reissue this opinion with respect to any transaction which occurs after the date hereof and we undertake no responsibility or obligation to consider this opinion's applicability or correctness to any person other than its addressees. This letter expresses our legal opinion as to the foregoing matters based on our professional judgment at this time; it is not, however, to be construed as a guaranty, nor is it a warranty that a court considering such matters would not rule in a manner contrary to the opinions set forth above.

We are furnishing this opinion to you solely in connection with the issuance of the Storm Recovery Bonds described above, and this opinion may be relied upon only by you, and is not to be used, relied on, circulated, quoted or otherwise referred to for any other purpose. However, we hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the references to this Firm in the Prospectus and the Prospectus Supplement under the section captioned "Legal Matters." In giving such consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act, or the rules and regulations of the Commission thereunder.

		Yours very truly,
		/s/ Phelps Dunbar, L.L.P.

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Exhibit 5.1

EX-8.1 4 a2182800zex-8_1.htm EXHIBIT 8.1
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Exhibit 8.1

[Letterhead of Phelps Dunbar LLP]

February 22, 2008

Cleco Power LLC
2030 Donahue Ferry Road
Pineville, Louisiana 71360-5226

Cleco Katrina/Rita Hurricane Recovery Funding LLC
2605 Highway 28 East
Office Number 12
Pineville, Louisiana 71360-5226

Re:: Cleco Katrina/Rita Hurricane Recovery 12922-152
Funding LLC: Exhibit 8-1 "Tax Matters"

Ladies and Gentlemen:

We have acted as counsel to Cleco Power LLC ("Cleco Power") and Cleco Katrina/Rita Hurricane Recovery Funding LLC (the "Issuer"), each a Louisiana limited liability company, in connection with the preparation of the Registration Statement filed November 2, 2007, with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Securities Act") on Form S-3 (Registration Numbers 333-147122 and 333-147122-01) and Amendment No. 1 thereto filed February 22, 2008, with the Commission (collectively, the "Registration Statement") relating to the proposed issuance of up to $181,000,000.00 of storm recovery bonds (the "Storm Recovery Bonds") of the Issuer to be offered in such manner as described in the form of the prospectus (the "Prospectus") and the form of the preliminary prospectus supplement (the "Prospectus Supplement"), both subject to completion, filed as part of Amendment No. 1 to the Registration Statement. The Storm Recovery Bonds are to be issued under an Indenture (the "Indenture") between the Issuer and U.S. Bank National Association, as indenture trustee (the "Indenture Trustee"). At your request, this opinion is being furnished to you for filing as Exhibit 8.1 to the Registration Statement.

We are familiar with the proceedings taken and proposed to be taken by the Issuer in connection with the proposed authorization, issuance and sale of the Storm Recovery Bonds. We have examined and relied upon originals, or copies of originals, certified or otherwise identified to our satisfaction as such records of the Issuer and such agreements, certificates of public officials, certificates of officers, managers or other representatives of the Issuer and other instruments as we deemed advisable, and examined such questions of law and satisfied ourselves to such matters of fact as we deemed relevant or necessary as a basis for this letter. In our examination, we have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, and the conformity to original documents of all documents submitted to us as certified or photostatic copies or by facsimile or email, and the authenticity of the originals of such latter documents. As to any facts material to the opinions expressed herein which we have not independently established or verified, we have relied upon statements and representations of officers and other representatives of the Issuer or others.

OPINIONS

Based on the foregoing and the assumptions and representations set forth in the Prospectus and the Prospectus Supplement and subject to the exceptions and qualifications set forth below, we are of the opinion that for federal income tax purposes:

a.: Cleco Power will not be treated as recognizing gross income upon the issuance of the Storm Recovery Bonds;
b.: the Storm Recovery Bonds will constitute the indebtedness of Cleco Power; and
c.: the Issuer will not be considered an entity separate from Cleco Power (its sole member).

Further, the statements set forth in the Prospectus under the sections captioned "Prospectus Summary—Federal Income Tax Status" and "—Louisiana State Income Tax Status" and "Material Federal Income Tax Consequences for the Storm Recovery Bondholders," and in the Prospectus Supplement in the section captioned "Material U.S. Federal Income Tax Consequences", to the extent they constitute matters of federal or Louisiana tax law or legal conclusions with respect thereto, have been prepared or reviewed by us and provide a fair summary and are correct in all material respects.

EXCEPTIONS AND QUALIFICATIONS

Our opinion is limited to the United States federal and Louisiana tax matters specifically covered hereby and we have not been asked to address, nor have we addressed, any other tax consequences regarding the transaction referred to above or any other transaction. This opinion is rendered as of the date hereof based on the current provisions of the Internal Revenue Code and the Treasury Regulations issued or proposed thereunder, revenue rulings, revenue procedures and other published releases of the Internal Revenue Service, the Louisiana Revised Statutes and Louisiana Department of Revenue Regulations promulgated or proposed pursuant thereto and current case law, any of which can change at any time. Any change in existing law or authority could apply retroactively and modify the legal conclusions upon which our opinions are based.

We are furnishing this opinion to you solely in connection with the issuance of the Storm Recovery Bonds described above, and this opinion is not to be relied on, circulated, quoted or otherwise referred to for any other purpose. However, we hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the references to this Firm in the Prospectus under the section captioned "Prospectus Summary—Federal Income Tax Status" and "Prospectus Summary—Louisiana State Income Tax Status," the Prospectus under the section captioned "Material Federal Income Tax Consequences for the Storm Recovery Bondholders," the Prospectus under the section captioned "Legal Matters," and the Prospectus Supplement under the section captioned "Material U.S. Federal Income Tax Consequences." In giving such consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act, or the rules and regulations of the Commission thereunder.

		Very truly yours,
		/s/ Phelps Dunbar, L.L.P.
		Phelps Dunbar LLP

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Exhibit 8.1

EX-25.1 5 a2182800zex-25_1.htm EXHIBIT 25.1
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Exhibit 25.1

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY UNDER
THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility of
a Trustee Pursuant to Section 305(b)(2)

U.S. BANK NATIONAL ASSOCIATION
(Exact name of Trustee as specified in its charter)

31-0841368
I.R.S. Employer Identification No.

800 Nicollet Mall
Minneapolis, Minnesota		55402
(Address of principal executive offices)		(Zip Code)

Melissa A. Rosal
U.S. Bank National Association
209 S. LaSalle Street, Suite 300
Chicago, Illinois 60604
(312) 325-8904
(Name, address and telephone number of agent for service)

Cleco Katrina/Rita Hurricane Recovery Funding LLC
(Issuer with respect to the Securities)

Louisiana		26-1338431
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
2605 Hwy. 28 East Office Number 12
Pineville, Louisiana		71360-5226
(Address of Principal Executive Offices)		(Zip Code)

2008 Senior Secured Storm Recovery Bonds
(Title of the Indenture Securities)

FORM T-1

Item 1. GENERAL INFORMATION. Furnish the following information as to the Trustee.

a): Name and address of each examining or supervising authority to which it is subject.

Comptroller of the Currency
Washington, D.C.

b): Whether it is authorized to exercise corporate trust powers.

Yes

Item 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the Trustee, describe each such affiliation.

None

Items 3-15 Items 3-15 are not applicable because to the best of the Trustee's knowledge, the obligor is not in default under any Indenture for which the Trustee acts as Trustee.

Item 16. LIST OF EXHIBITS: List below all exhibits filed as a part of this statement of eligibility and qualification.

1.: A copy of the Articles of Association of the Trustee.*
2.: A copy of the certificate of authority of the Trustee to commence business.*
3.: A copy of the certificate of authority of the Trustee to exercise corporate trust powers.*
4.: A copy of the existing bylaws of the Trustee.**
5.: A copy of each Indenture referred to in Item 4. Not applicable.
6.: The consent of the Trustee required by Section 321(b) of the Trust Indenture Act of 1939, attached as Exhibit 6.
7.: Report of Condition of the Trustee as of September 30, 2007 published pursuant to law or the requirements of its supervising or examining authority, attached as Exhibit 7.

*: Incorporated by reference to Exhibit 25.1 to Amendment No. 2 to registration statement on S-4, Registration Number 333-128217 filed on November 15, 2005.
**: Incorporated by reference to Exhibit 25.1 to registration statement on S-4, Registration Number 333-145601 filed on August 21, 2007.

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the Trustee, U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Chicago, State of Illinois on the 15th of February, 2008.

			By:	/s/ Melissa A. Rosal Melissa A. Rosal Vice President
By:	/s/ Nancie J. Arvin Nancie J. Arvin Vice President

Exhibit 6

CONSENT

In accordance with Section 321(b) of the Trust Indenture Act of 1939, the undersigned, U.S. BANK NATIONAL ASSOCIATION hereby consents that reports of examination of the undersigned by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor.

Dated: Februay 15, 2008

			By:	/s/ Melissa A. Rosal Melissa A. Rosal Vice President
By:	/s/ Nancie J. Arvin Nancie J. Arvin Vice President

Exhibit 7
U.S. Bank National Association
Statement of Financial Condition
As of 9/30/2007

($000's)

			9/30/2007
Assets
	Cash and Due From Depository Institutions		$	6,710,248
	Securities			39,854,938
	Federal Funds			3,917,791
	Loans & Lease Financing Receivables			147,446,753
	Fixed Assets			2,385,656
	Intangible Assets			11,966,716
	Other Assets			13,693,927

	Total Assets		$	225,976,029
Liabilities
	Deposits		$	133,188,625
	Fed Funds			12,571,367
	Treasury Demand Notes			0
	Trading Liabilities			234,272
	Other Borrowed Money			41,979,138
	Acceptances			0
	Subordinated Notes and Debentures			7,697,466
	Other Liabilities			8,035,934

	Total Liabilities		$	203,706,802
Equity
	Minority Interest in Subsidiaries		$	1,542,042
	Common and Preferred Stock			18,200
	Surplus			12,057,531
	Undivided Profits			8,651,454

		Total Equity Capital	$	22,269,227
Total Liabilities and Equity Capital			$	225,976,029

To the best of the undersigned's determination, as of the date hereof, the above financial information is true and correct.

U.S. Bank National Association

By:

/s/ Melissa A. Rosal

Vice President

Date: February 15, 2008

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Exhibit 25.1

EX-99.3 6 a2182800zex-99_3.htm EXHIBIT 99.3

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TABLE OF CONTENTS

Exhibit 99.3

STORM RECOVERY PROPERTY SALE AGREEMENT

between

CLECO KATRINA/RITA HURRICANE RECOVERY FUNDING LLC

Issuer

and

CLECO POWER, LLC

Seller

Dated as of , 2008

TABLE OF CONTENTS

ARTICLE I DEFINITIONS
	Section 1.01	Definitions
	Section 1.02	Other Definitional Provisions
ARTICLE II CONVEYANCE OF THE STORM RECOVERY PROPERTY
	Section 2.01	Conveyance of the Storm Recovery Property
	Section 2.02	Conditions to Conveyance of the Storm Recovery Property
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER
	Section 3.01	Organization and Good Standing
	Section 3.02	Due Qualification
	Section 3.03	Power and Authority
	Section 3.04	Binding Obligation
	Section 3.05	No Violation
	Section 3.06	No Proceedings
	Section 3.07	Approvals
	Section 3.08	The Storm Recovery Property
	Section 3.09	Solvency
	Section 3.10	The Financing Order
	Section 3.11	State Action
	Section 3.12	No Court Order
	Section 3.13	Approvals Concerning the Storm Recovery Property
	Section 3.14	Assumptions
	Section 3.15	Creation of the Storm Recovery Property
	Section 3.16	Prospectus
	Section 3.17	Nature of Representations and Warranties
ARTICLE IV COVENANTS OF THE SELLER
	Section 4.01	Seller's Existence
	Section 4.02	No Liens or Conveyances
	Section 4.03	Delivery of Collections
	Section 4.04	Notice of Liens
	Section 4.05	Compliance With Law
	Section 4.06	Covenants Related to the Storm Recovery Property
	Section 4.07	Protection of Title
	Section 4.08	Taxes
	Section 4.09	Filings Pursuant to Financing Order
ARTICLE V ADDITIONAL UNDERTAKINGS OF SELLER
	Section 5.01	Liability of the Seller; Indemnities
	Section 5.02	Merger or Consolidation of, or Assumption of the Obligations of, the Seller
	Section 5.03	Limitation on Liability of the Seller and Others
ARTICLE VI MISCELLANEOUS PROVISIONS
	Section 6.01	Amendment
	Section 6.02	Notices
	Section 6.03	Assignment by the Seller
	Section 6.04	Assignment to the Indenture Trustee
	Section 6.05	Limitations on Rights of Others
	Section 6.06	Severability
	Section 6.07	Separate Counterparts

	Section 6.08	Headings
	Section 6.09	Governing Law
	Section 6.10	Nonpetition Covenants
APPENDIX A		DEFINITIONS
SCHEDULE 1

STORM RECOVERY PROPERTY SALE AGREEMENT (this "Agreement") dated as of , 2008, between CLECO KATRINA/RITA HURRICANE RECOVERY FUNDING LLC, a Louisiana limited liability company (the "Issuer"), and CLECO POWER, LLC, a Louisiana limited liability company, as seller (the "Seller").

WHEREAS, the Issuer desires to purchase the Storm Recovery Property created pursuant to the Securitization Act and the Financing Order;

WHEREAS, the Seller is willing to sell its rights and interests in and to the Storm Recovery Property to the Issuer;

WHEREAS, the Issuer, in order to finance the purchase of the Storm Recovery Property, will issue the Storm Recovery Bonds under the Indenture; and

WHEREAS, the Issuer, to secure its obligations under the Storm Recovery Bonds and the Indenture, will pledge its right, title and interest in the Storm Recovery Property and this Agreement to the Indenture Trustee for the benefit of the Storm Recovery Bondholders.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained and intending to be legally bound hereby, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01 Definitions. Capitalized terms used herein and not otherwise defined herein have the meanings assigned to them in Appendix A to this Agreement.

Section 1.02 Other Definitional Provisions.

(a) "Agreement" means this Storm Recovery Property Sale Agreement, as the same may be amended and supplemented from time to time.

(b) Non-capitalized terms used herein which are defined in the Securitization Act, as the context requires, have the meanings assigned to such terms in the Securitization Act, but without giving effect to amendments to the Securitization Act after the date hereof which have a material adverse effect on the Issuer or the Storm Recovery Bondholders.

(c) All terms defined in this Agreement shall have such defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.

(d) The words "hereof," "herein," "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; Section, Schedule and Exhibit references contained in this Agreement are references to Sections, Schedules and Exhibits in or to this Agreement unless otherwise specified; and the term "including" shall mean "including without limitation."

(e) The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms.

ARTICLE II

CONVEYANCE OF THE STORM RECOVERY PROPERTY

Section 2.01 Conveyance of the Storm Recovery Property.

(a) In consideration of the Issuer's payment to or upon the order of the Seller of $[ ] (the "Purchase Price"), subject to the satisfaction or waiver of the conditions specified in Section 2.02, the Seller does hereby irrevocably sell, transfer, assign, set over and otherwise convey

to the Issuer, without recourse (subject, for the avoidance of doubt, to the express obligations of the Seller herein) or warranty, except as set forth herein, all right, title and interest of the Seller in and to the Storm Recovery Property as identified in the Bill of Sale delivered pursuant to Section 2.02(i) on or prior to the Transfer Date (such sale, transfer, assignment, setting over and conveyance of the Storm Recovery Property to include, to the fullest extent permitted by the Securitization Act, the right to impose, collect and receive the Storm Recovery Charges, as the same may be adjusted from time to time). Such sale, transfer, assignment, setting over and conveyance of the Storm Recovery Property is hereby expressly stated to be a sale or other absolute transfer and, pursuant to Section 1230(1) of the Securitization Act and other applicable law, is a true sale and is not a secured transaction and title and ownership has passed to the Issuer. The preceding sentence is the statement referred to in Section 1230 of the Securitization Act. The Seller agrees and confirms that upon payment of the Purchase Price and the execution and delivery of this Agreement and the Bill of Sale, the sale, transfer and assignment hereunder shall be effective and the Seller shall have no right, title or interest in, to or under the Storm Recovery Property.

(b) Subject to the satisfaction or waiver of conditions specified in Section 2.02, the Issuer does hereby purchase the Storm Recovery Property from the Seller for the consideration set forth in Section 2.01(a).

(c) The Seller and the Issuer each acknowledge and agree that the purchase price for the Storm Recovery Property sold pursuant to this Agreement is equal to its fair market value at the time of sale.

Section 2.02 Conditions to Conveyance of the Storm Recovery Property. The obligation of the Seller to sell, and the obligation of the Issuer to purchase the Storm Recovery Property on the Transfer Date shall be subject to and conditioned upon the satisfaction or waiver of each of the following conditions:

(i) on or prior to the Transfer Date, the Seller shall deliver to the Issuer a duly executed Bill of Sale identifying the Storm Recovery Property, substantially in the form of Exhibit A hereto;

(ii) as of the Transfer Date, the representations and warranties of the Seller in this Agreement shall be true and correct in all material respects and no material breach by the Seller of its covenants in this Agreement shall exist and the Seller shall have delivered to the Issuer and the Indenture Trustee an Officer's Certificate to such effect and no Servicer Default shall have occurred and be continuing;

(iii) as of the Transfer Date:

(A) the Issuer shall have sufficient funds available to pay the Purchase Price, and

(B) all conditions set forth in the Indenture to the issuance of the Storm Recovery Bonds intended to provide such funds shall have been satisfied or waived.

(iv) on or prior to the Transfer Date, the Seller shall have taken all actions required under the Securitization Act, the Financing Order and other applicable law for the Issuer to have ownership of the Storm Recovery Property, free and clear of all Liens other than Liens created by the Issuer pursuant to the Indenture; and the Issuer, or the Servicer on behalf of the Issuer, shall have taken any action required for the Issuer to grant the Indenture Trustee a first priority perfected security interest in the Trust Estate and maintain such security interest as of such date (including all actions required under the Securitization Act, the Financing Order and the Uniform Commercial Code as enacted in the State of Louisiana and each other applicable jurisdiction (the "UCC"));

(v) the Seller shall have delivered to each Rating Agency and to the Issuer any Opinions of Counsel requested by the Rating Agencies;

(vi) the Seller shall have delivered to the Indenture Trustee and the Issuer an Officer's Certificate confirming the satisfaction of each relevant condition precedent specified in this Section 2.02; and

(vii) the Seller shall have received the Purchase Price in funds immediately available on the Transfer Date.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

As of the Transfer Date, the Seller makes the following representations and warranties on which the Issuer has relied and will rely in acquiring the Storm Recovery Property. The following representations and warranties are made under existing law as in effect as of the Transfer Date. The Seller shall not be in breach of any representation or warranty herein as a result of a change in law occurring after the Transfer Date, including by means of legislative enactment, constitutional amendment or voter initiative. The representations and warranties shall survive the sale of the Storm Recovery Property to the Issuer and the pledge thereof on the Transfer Date to the Indenture Trustee pursuant to the Indenture.

Section 3.01 Organization and Good Standing. The Seller is a limited liability company duly organized and in good standing under the laws of the State of Louisiana, with limited liability company power and authority to own its properties and to conduct its business as currently owned or conducted.

Section 3.02 Due Qualification. The Seller is duly qualified to do business as a foreign limited liability company in good standing, and has obtained all necessary licenses and approvals, in all jurisdictions in which the ownership or lease of property or the conduct of its business requires such qualifications, licenses or approvals (except where the failure to so qualify or obtain such licenses and approvals would not be reasonably likely to have a material adverse effect on the Seller's business, operations, assets, revenues or properties).

Section 3.03 Power and Authority. The Seller has the limited liability company power and authority to obtain the Financing Order and to execute and deliver this Agreement and to carry out its terms; the Seller has the limited liability company power and authority to own the rights and interests under the Financing Order, and to sell and assign the rights and interests under the Financing Order and in the Storm Recovery Property to the Issuer; and the execution, delivery and performance of this Agreement have been duly authorized by the Seller by all necessary limited liability company action.

Section 3.04 Binding Obligation. This Agreement constitutes a legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, subject to bankruptcy, receivership, insolvency, reorganization, moratorium, fraudulent transfer and other laws relating to or affecting creditors' or secured parties' rights generally from time to time in effect and to general principles of equity (including concepts of materiality, reasonableness, good faith and fair dealing), regardless of whether considered in a proceeding in equity or at law.

Section 3.05 No Violation. The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof do not: (i) conflict with or result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the articles of organization or limited liability company operating agreement of the Seller, or any indenture, mortgage, credit agreement or other agreement or instrument to which the Seller is a party or by which it or its properties is bound; (ii) result in the creation or imposition of any Lien upon any of the Seller's properties pursuant to the terms of any such indenture, agreement or other

instrument (except for any Lien created by the Issuer under the Basic Documents in favor of the Storm Recovery Bondholders and in accordance with Section 1231 of the Securitization Act); or (iii) violate any existing law or any existing order, rule or regulation applicable to the Seller of any Governmental Authority having jurisdiction over the Seller or its properties.

Section 3.06 No Proceedings. Except as disclosed in the Issuer's prospectus dated , 2008 and the related prospectus supplement dated , 2008 relating to the Storm Recovery Bonds (together, the "Prospectus"), there are no proceedings pending and, to the Seller's knowledge, (x) there are no proceedings threatened and (y) there are no investigations pending or threatened before any Governmental Authority having jurisdiction over the Seller or its properties involving or relating to the Seller or the Issuer or, to the Seller's knowledge, any other Person:

(i) asserting the invalidity of this Agreement, any of the other Basic Documents, the Storm Recovery Bonds, the Securitization Act or the Financing Order;

(ii) seeking to prevent the issuance of the Storm Recovery Bonds or the consummation of any of the transactions contemplated by this Agreement or any of the other Basic Documents;

(iii) seeking any determination or ruling that could reasonably be expected to materially and adversely affect the performance by the Seller of its obligations under, or the validity or enforceability of, this Agreement, any of the other Basic Documents or the Storm Recovery Bonds; or

(iv) challenging the Seller's treatment of the Storm Recovery Bonds as debt of the Seller for federal or state income, gross receipts or franchise tax purposes.

Section 3.07 Approvals. Except for continuation filings under the UCC and the Securitization Act, no approval, authorization, consent, order or other action of, or filing with, any Governmental Authority is required under an applicable law, rule or regulation in connection with the execution and delivery by the Seller of this Agreement, the performance by the Seller of the transactions contemplated hereby or the fulfillment by the Seller of the terms hereof, except those that have been obtained or made and those that the Seller, in its capacity as Servicer under the Servicing Agreement, is required to make in the future pursuant to the Servicing Agreement.

Section 3.08 The Storm Recovery Property.

(a) Information. Subject to Section 3.14, all written information, as amended or supplemented from time to time prior to the date this representation is made, provided by the Seller to the Issuer with respect to the Storm Recovery Property (including the Financing Order and the Issuance Advice Letter) is correct in all material respects.

(b) Effect of Transfer. It is the intention of the parties hereto that (other than for United States federal income tax purposes and, to the extent consistent with applicable state tax laws, state income and franchise tax purposes) the sale, transfer, assignment, setting over and conveyance herein contemplated constitutes a sale or other absolute transfer of all right, title and interest of the Seller in and to the Storm Recover Property from the Seller to the Issuer. Upon execution and delivery of this Agreement and the Bill of Sale and payment of the Purchase Price, the Seller will have no right, title or interest in, to or under the Storm Recovery Property; and that such Storm Recovery Property would not be a part of the estate of the Seller as debtor in the event of the filing of a bankruptcy petition by or against the Seller under any bankruptcy law.

(i) The Seller is the sole owner of all the rights and interests under the Financing Order to be sold to the Issuer on the Transfer Date.

(ii) On the Transfer Date, immediately upon the sale hereunder, the Storm Recovery Property will have been validly sold, assigned, transferred, set over and conveyed to the Issuer free and clear of all Liens (except for any Lien created by the Issuer under the Basic Documents in favor of the Storm Recovery Bondholders and in accordance with Section 1231 of the Securitization Act).

(iii) All actions or filings (including filings with the Louisiana UCC Filing Officer in accordance with the rules prescribed under the Securitization Act and the UCC) necessary in any jurisdiction to give the Issuer a perfected ownership interest (subject to any Lien created by the Issuer under the Basic Documents in favor of the Storm Recovery Bondholders and in accordance with Section 1231 of the Securitization Act) in the Storm Recovery Property and to grant to the Indenture Trustee a first priority perfected security interest in the Storm Recovery Property, free and clear of all Liens of the Seller or anyone else (except for any Lien created by the Issuer under the Basic Documents in favor of the Storm Recovery Bondholders and in accordance with Section 1231 of the Securitization Act), have been taken or made.

Section 3.09 Solvency. After giving effect to the sale of the Storm Recovery Property hereunder, the Seller:

(i) is solvent and expects to remain solvent,

(ii) is adequately capitalized to conduct its business and affairs considering its size and the nature of its business and intended purposes,

(iii) is not engaged and does not expect to engage in a business for which its remaining property represents an unreasonably small portion of its capital,

(iv) reasonably believes that it will be able to pay its debts as they come due, and

(v) is able to pay its debts as they come due and does not intend to incur, or believes that it will incur, indebtedness that it will not be able to repay at its maturity.

Section 3.10 The Financing Order.

(a) The Financing Order was issued by the Louisiana Commission on September 17, 2007 in accordance with the Securitization Act; the Financing Order and the process by which it was issued comply with all applicable laws, rules and regulations of the State of Louisiana and the federal laws of the United States, and the Financing Order is final, non-appealable and in full force and effect.

(b) As of the date of issuance of the Storm Recovery Bonds, the Storm Recovery Bonds will be entitled to the protections provided by the Securitization Act and the Financing Order, the Issuance Advice Letter and the Storm Recovery Charges authorized therein will have become irrevocable and not subject to reduction, impairment or adjustment by further action of the Louisiana Commission, except as permitted by Section 1228(c)(4) of the Securitization Act, and the Issuance Advice Letter has been filed in accordance with the Financing Order. The Issuance Advice Letter and the Tariff have been filed in accordance with the Financing Order and an officer of the Seller has provided the certification to the Louisiana Commission required by the Issuance Advice Letter. The initial Storm Recovery Charges and the final terms of the Storm Recovery Bonds set forth in the Issuance Advice Letter have become effective. No other approval, authorization, consent, order or other action of, or filing with any Governmental Authority is required in connection with the creation of the Storm Recovery Property transferred on such date, except those that have been obtained or made.

Section 3.11 State Action.

(a) Under the Securitization Act, the State of Louisiana has pledged that it will not take or permit any action that would impair the value of the Storm Recovery Property or, except as permitted in Section 1228(c)(4) of the Securitization Act, reduce, alter or impair the Storm Recovery Charges until the principal, interest and premium, if any, and any other charges incurred and contracts to be performed in connection with the Storm Recovery Bonds, have been paid and performed in full.

(b) Under the laws of the State of Louisiana and the federal laws of the United States, a reviewing court of competent jurisdiction would hold that (x) the State of Louisiana could not constitutionally take any action of a legislative character, including the repeal or amendment of the Securitization Act, which would substantially limit, alter or impair the Storm Recovery Property or other rights vested in the Storm Recovery Bondholders pursuant to the Financing Order, or substantially limit, alter, impair or reduce the value or amount of the Storm Recovery Property, unless such action is a reasonable and necessary exercise of the State of Louisiana's sovereign powers based on reasonable conditions and of a character reasonable and appropriate to the emergency or other significant and legitimate public purpose justifying such action, and, (y) under the takings clauses of the State of Louisiana and United States Constitutions, if the court concludes that the Storm Recovery Property is protected by the takings clauses, the State of Louisiana could not repeal or amend the Securitization Act or take any other action in contravention of its pledge referred to in subsection (a) above without paying just compensation to the Storm Recovery Bondholders, as determined by a court of competent jurisdiction, if doing so

would constitute a permanent appropriation of a substantial property interest of the Storm Recovery Bondholders in the Storm Recovery Property and deprive the Storm Recovery Bondholders of their reasonable expectations arising from their investments in the Storm Recovery Bonds; however, there is no assurance that, even if a court were to award just compensation, it would be sufficient to pay the full amount of principal of and interest on the Storm Recovery Bonds.

(c) Under the laws of the State of Louisiana and the United States Constitution, a Louisiana state court reviewing an appeal of Louisiana Commission action of a legislative character would conclude that the Louisiana Commission Pledge (i) creates a binding contractual obligation of the State of Louisiana for purposes of the contract clauses of the United States and Louisiana Constitutions, and (ii) provides a basis upon which the Storm Recovery Bondholders could challenge successfully any action of the Louisiana Commission of a legislative character, including the rescission or amendment of the Financing Order, that such court determines violates the Louisiana Commission Pledge in a manner that substantially reduces, limits or impairs the value of the Storm Recovery Property or the Storm Recovery Charges, prior to the time that the Storm Recovery Bonds are paid in full and discharged, unless there is a judicial finding that the Louisiana Commission action clearly is exercised for a public end and is reasonably necessary to the accomplishment of that public end so as not to be arbitrary, capricious or an abuse of authority. There is no assurance, however, that, even if a court were to award just compensation it would be sufficient to pay the full amount of principal and interest on the Storm Recovery Bonds.

Section 3.12 No Court Order. There is no order by any court providing for the revocation, alteration, limitation or other impairment of the Securitization Act, the Financing Order, the Issuance Advice Letter, the Storm Recovery Property or the Storm Recovery Charges or any rights arising under any of them or that seeks to enjoin the performance of any obligations under the Financing Order.

Section 3.13 Approvals Concerning the Storm Recovery Property. Under the laws of the State of Louisiana and the federal laws of the United States, no other approval, authorization, consent, order or other action of, or filing with any Governmental Authority is required in connection with the creation or transfer of the Seller's rights and interests under the Financing Order and the Issuer's purchase of the Storm Recovery Property from the Seller, except those that have been obtained or made.

Section 3.14 Assumptions. Based on information available to the Seller on the date hereof, the assumptions used in calculating the Storm Recovery Charges in the Issuance Advice Letter are reasonable and made in good faith; however, notwithstanding the foregoing, THE SELLER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, THAT BILLED STORM RECOVERY CHARGES WILL BE ACTUALLY COLLECTED FROM CUSTOMERS, OR THAT AMOUNTS ACTUALLY COLLECTED ARISING FROM THE STORM RECOVERY CHARGES WILL IN FACT BE SUFFICIENT TO MEET THE PAYMENT OBLIGATIONS ON THE STORM RECOVERY BONDS OR THAT THE ASSUMPTIONS USED IN CALCULATING SUCH STORM RECOVERY CHARGES WILL IN FACT BE REALIZED.

Section 3.15 Creation of the Storm Recovery Property.

(a) Upon the effectiveness of the Financing Order, the transfer of the Seller's rights and interests under the Financing Order related to the Storm Recovery Bonds and the Issuer's purchase of the Storm Recovery Property from the Seller pursuant to this Agreement, the Storm Recovery Property will constitute a present contract right vested in the Issuer.

(b) Upon the effectiveness of the Financing Order, the Issuance Advice Letter and the Tariff, the transfer of the Seller's rights and interests under the Financing Order and the Issuer's

purchase of the Storm Recovery Property from the Seller pursuant to this Agreement, the Storm Recovery Property includes:

(1): the right to impose, bill, charge, collect and receive the Storm Recovery Charges, including the right to receive Storm Recovery Charges in amounts and at times sufficient to pay principal and interest on the Storm Recovery Bonds,
(2): all rights and interest of the Seller under the Financing Order, except the rights of Seller to earn and receive a rate of return on its invested capital in the Issuer, to receive administration and servicer fees, to withdraw funds from its restricted storm recovery reserve funded by the proceeds from the sale of the Storm Recovery Property, or to use the Seller's remaining portion of those proceeds,
(3): the rights to file for periodic adjustments of the Storm Recovery Charges as provided in the Financing Order, and
(4): all revenues, collections, claims, rights to payments, payments, money, or proceeds arising from the rights and interests resulting from the Storm Recovery Charges.

(c) Upon the effectiveness of the Issuance Advice Letter and the Tariff, the transfer of the Seller's rights and interests under the Financing Order and the Issuer's purchase of the Storm Recovery Property from the Seller on the Transfer Date pursuant to this Agreement, the Storm Recovery Property will not be subject to any Lien created by a previous indenture.

Section 3.16 Prospectus. As of the date hereof, the information describing the Seller under the caption "The Seller, Initial Servicer and Sponsor" in the Prospectus is true and correct in all material respects.

Section 3.17 Nature of Representations and Warranties. The representations and warranties set forth in Section 3.08 and Section 3.10 through Section 3.16, insofar as they involve conclusions of law, are made not on the basis that the Seller purports to be a legal expert or to be rendering legal advice, but rather to reflect the parties' good faith understanding of the legal basis on which the parties are entering into this Agreement and the other Basic Documents and the basis on which the Storm Recovery Bondholders are purchasing the Storm Recovery Bonds, and to reflect the parties' agreement that, if such understanding turns out to be incorrect or inaccurate, the Seller will be obligated to indemnify the Issuer and its permitted assigns (to the extent required by and in accordance with Section 5.01), and that the Issuer and its permitted assigns will be entitled to enforce any rights and remedies under the Basic Documents on account of such inaccuracy to the same extent as if the Seller had breached any other representations or warranties hereunder.

Section 3.18 Waivers of Legal Warranties. The Seller makes no representation or warranty, express or implied, as to the solvency of any Customer on the Transfer Date or as to the future solvency of any Customer. Further, the Issuer waives any right to rescind this Agreement or any conveyance pursuant to this Agreement in case of insolvency of any Customer, regardless of any actual or implied knowledge by Seller at any time of the insolvency of any Customer. Additionally, the Issuer agrees that this Agreement is not subject to a suspensive condition under Louisiana Civil Code Article 2450, notwithstanding that the imposition and collection of Storm Recovery Charges depends upon future acts such as the Servicer performing its servicing functions relating to the collection of Storm Recovery Charges, the future provision of electric service to Customers, and the future consumption by Customers of electricity.

ARTICLE IV

COVENANTS OF THE SELLER

Section 4.01 Seller's Existence. Subject to Section 5.02, so long as any of the Storm Recovery Bonds are outstanding, the Seller (i) shall keep in full force and effect its existence and remain in good

standing under the laws of the state of its organization, and shall obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or will be necessary to protect the validity and enforceability of this Agreement and each other instrument or agreement to which the Seller is a party necessary to the proper administration of this Agreement and the transactions contemplated hereby and (ii) hereby agrees to continue to operate its system to provide transmission and distribution delivery service to its customers; and, to the extent that any interest in Storm Recovery Property created by this Financing Order is assigned, sold or transferred to another assignee, the Seller shall enter into a contract with that assignee that requires the Seller to continue to operate its transmission and distribution delivery system to provide service to the Seller's Louisiana Commission-jurisdictional customers; and further (in each case) the Seller will undertake to collect, account and remit amounts in respect of the Storm Recovery Charges for the benefit and account of such assignee (or its financing party); provided, however, that this provision shall not prohibit the Seller from selling, assigning, or otherwise divesting its transmission system or distribution system (or any portions thereof) providing service to the Seller's Louisiana Commission-jurisdictional customers, by any method whatsoever, including those specified in the Financing Order pursuant to which an entity becomes a successor, so long as the entities acquiring either such system or portion thereof agree to continue operating such facilities to provide service to Louisiana Commission-jurisdictional customers.

Section 4.02 No Liens or Conveyances. Except for the conveyances hereunder or any Lien under the Basic Documents pursuant to Section 1231 of the Securitization Act for the benefit of the Indenture Trustee and the Storm Recovery Bondholders, the Seller shall not sell, pledge, assign or transfer to any other Person, or grant, create, incur, assume or suffer to exist any Lien on, any of the Storm Recovery Property, whether now existing or hereafter created, or any interest therein. The Seller shall not at any time assert any Lien against or with respect to the Storm Recovery Property, and shall defend the right, title and interest of the Issuer and the Indenture Trustee, as assignee of the Issuer, in, to and under the Storm Recovery Property against all claims of third parties claiming through or under the Seller.

Section 4.03 Delivery of Collections In the event that the Seller receives collections in respect of the Storm Recovery Charges or the proceeds thereof other than in its capacity as the Servicer, the Seller agrees to pay to the Servicer, on behalf of the Issuer, all payments received by it in respect thereof as soon as practicable after receipt thereof. Prior to such remittance to the Servicer by the Seller, the Seller agrees that such amounts are held by it in trust for the Issuer and the Indenture Trustee. If the Seller becomes a party to any future trade receivables purchase and sale arrangement or similar arrangement under which it sells all or any portion of its accounts receivables, the Seller and the other parties to such arrangement shall enter into an intercreditor agreement in connection therewith and the terms of the documentation evidencing such trade receivables purchase and sale arrangement or similar arrangement shall expressly exclude Storm Recovery Charges from any receivables or other assets pledged or sold under such arrangement.

Section 4.04 Notice of Liens. The Seller shall notify the Issuer and the Indenture Trustee promptly after becoming aware of any Lien on the Storm Recovery Property, other than the conveyance hereunder, any Lien created in favor of the Storm Recovery Bondholders or any Lien created by the Issuer under the Indenture.

Section 4.05 Compliance With Law. The Seller shall comply with its organizational or governing documents and all laws, treaties, rules, regulations and determinations of any Governmental Authority applicable to the Seller, except to the extent that failure to so comply would not materially adversely affect the Issuer's or the Indenture Trustee's interests in the Storm Recovery Property or under any of the Basic Documents or the Seller's performance of its obligations hereunder or under any of the other Basic Documents.

Section 4.06 Covenants Related to the Storm Recovery Property.

(a) So long as any of the Storm Recovery Bonds are outstanding, the Seller shall:

(i) treat the Storm Recovery Bonds as debt of the Issuer and not of the Seller, except for financial reporting or tax purposes;

(ii) disclose in its financial statements that the Issuer is, and the Seller is not, the owner of the Storm Recovery Property and that the assets of the Issuer are not available to pay creditors of the Seller or any of its Affiliates (other than the Issuer),

(iii) disclose the effects of all transactions between the Seller and the Issuer in accordance with generally accepted accounting principles, and

(iv) not own or purchase any Storm Recovery Bonds.

(b) So long as any of the Storm Recovery Bonds are outstanding,

(i) in all proceedings relating directly or indirectly to the Storm Recovery Property, the Seller shall: (A) affirmatively certify and confirm that it has sold all of its rights and interests in and to the Storm Recovery Property to the Issuer (other than for financial reporting or tax purposes), and (B) not make any statement or reference in respect of the Storm Recovery Property that is inconsistent with the ownership thereof by the Issuer (other than for financial reporting or tax purposes);

(ii) the Seller shall not take any action in respect of the Storm Recovery Property except solely in its capacity as the Servicer thereof pursuant to the Servicing Agreement or as contemplated by the Basic Documents; and

(iii) neither the Seller nor the Issuer shall take any action, file any tax return, or make any election inconsistent with the treatment of the Issuer, for purposes of federal taxes and, to the extent consistent with applicable state, local and other tax law, for purposes of state, local and other taxes, as a disregarded entity that is not separate from the Seller (or, if relevant, from another sole owner of the Issuer).

(c) The Seller agrees that upon the sale by the Seller of all of its rights and interests in and to the Storm Recovery Property to the Issuer pursuant to this Agreement, to the fullest extent permitted by law, including applicable Louisiana Commission regulations and the Securitization Act, the Issuer shall have all of the rights originally held by the Seller with respect to the transferred Storm Recovery Property, including the right (subject to the terms of the Servicing Agreement) to exercise any and all rights and remedies to collect any amounts payable by any customer in respect of the transferred Storm Recovery Property, notwithstanding any objection or direction to the contrary by the Seller (and the Seller agrees not to make any such objection or to take any such contrary action), and any payment to the Servicer by any Person responsible for remitting Storm Recovery Charges to the Servicer under the terms of the Financing Order or the Securitization Act or the Tariff shall discharge such Person's obligations in respect of the Storm Recovery Property to the extent of such payment, notwithstanding any objection or direction to the contrary by the Seller.

Section 4.07 Protection of Title. The Seller shall execute and file such filings, and cause to be executed and filed such filings, in such manner and in such places as may be required by law fully to preserve, maintain and protect the interests of the Issuer and the Indenture Trustee in the Storm Recovery Property, including all filings required under the Securitization Act and the UCC relating to the transfer of the ownership of the rights and interests under the Financing Order by the Seller to the Issuer and the pledge of the Storm Recovery Property by the Issuer to the Indenture Trustee. The Seller shall deliver (or cause to be delivered) to the Issuer and the Indenture Trustee file-stamped copies of, or filing receipts for, any document filed as provided above, as soon as available following

such filing. The Seller shall institute any action or proceeding reasonably necessary to compel performance by the Louisiana Commission or the State of Louisiana of any of their obligations or duties under the Securitization Act, the Financing Order or the Issuance Advice Letter relating to the transfer of the rights and interests under the Financing Order by the Seller to the Issuer and shall notify the Indenture Trustee of the institution of any such action. The Seller agrees to take such legal or administrative actions, including defending against or instituting and pursuing legal actions and appearing or testifying at hearings or similar proceedings, in each case as may be reasonably necessary:

(a) to protect the Issuer and the Storm Recovery Bondholders from claims, state actions or other actions or proceedings of third parties which, if successfully pursued, would result in a breach of any representation set forth in Article III; or

(b) so long as the Seller is also the Servicer, to block or overturn any attempts to cause a repeal of, modification of or supplement to the Securitization Act, the Financing Order, the Issuance Advice Letter or the rights of Storm Recovery Bondholders by legislative enactment (including any action of the Louisiana Commission of a legislative character) or constitutional amendment that would be materially adverse to the Issuer, the Indenture Trustee or the Storm Recovery Bondholders.

The costs of any such actions or proceedings shall be reimbursed by the Issuer to the Seller from amounts on deposit in the Collection Account as an Operating Expense (as such terms are defined in the Indenture) in accordance with the terms of the Indenture. The Seller's obligations pursuant to this Section 4.07 shall survive and continue notwithstanding that the payment of Operating Expenses pursuant to the Indenture may be delayed (it being understood that the Seller may be required to advance its own funds to satisfy its obligation hereunder). The Seller designates the Issuer as its agent and attorney-in-fact to execute any filings of financing statements, continuation statements or other instruments required of the Seller pursuant to this Section 4.07, it being understood that the Issuer shall have no obligation to execute any such instruments.

Section 4.08 Taxes. So long as any of the Storm Recovery Bonds are outstanding, the Seller shall pay all material taxes, assessments and governmental charges imposed upon it or any of its properties or assets or with respect to any of its franchises, businesses, income or property before any penalty accrues thereon if the failure to pay any such taxes, assessments and governmental charges would, after any applicable grace periods, notices or other similar requirements, result in a Lien on the Storm Recovery Property; provided that no such tax need be paid if the Seller or any of its Affiliates is contesting the same in good faith by appropriate proceedings promptly instituted and diligently conducted and if the Seller or such Affiliate has established appropriate reserves as shall be required in conformity with generally accepted accounting principles.

Section 4.09 Filings Pursuant to Financing Order. The Seller shall comply with all filing requirements imposed upon the Seller in its capacity as such by the Financing Order, including making any such post-closing filings.

Section 4.10 Issuance Advice Letter. The Seller hereby agrees not to withdraw the filing of the Issuance Advice Letter with the Louisiana Commission.

Section 4.11 Tariff. The Seller hereby agrees to make all reasonable efforts to keep the Tariff in full force and effect at all times.

Section 4.12 Notice of Breach to Rating Agencies, Etc.. Promptly after obtaining knowledge thereof, in the event of a breach in any material respect (without regard to any materiality qualifier contained in such representation, warranty or covenant) of any of the Seller's representations, warranties or covenants contained herein, the Seller shall promptly notify the Issuer, the Indenture Trustee and the Rating Agencies of such breach. For the avoidance of doubt, any breach which would adversely affect scheduled payments on the Storm Recovery Bonds will be deemed to be a material breach for purposes of this Section 4.12.

Section 4.13 Use of Proceeds. The Seller shall use the proceeds of the sale of the Storm Recovery Property in accordance with the Financing Order and the Securitization Act.

Section 4.14 Further Assurances. Upon the reasonable request of the Issuer, the Seller shall execute and deliver such further instruments and do such further acts as may be reasonably necessary to carry out more effectually the provisions and purposes of this Agreement.

ARTICLE V

ADDITIONAL UNDERTAKINGS OF SELLER

The Seller hereby undertakes the obligations contained in this Article V and acknowledges that the Issuer shall have the right to assign its rights with respect to such obligations to the Indenture Trustee for the benefit of the Storm Recovery Bondholders.

SECTION 5.01 LIABILITY OF THE SELLER; INDEMNITIES.

(a) THE SELLER SHALL BE LIABLE IN ACCORDANCE HEREWITH ONLY TO THE EXTENT OF THE OBLIGATIONS SPECIFICALLY UNDERTAKEN BY THE SELLER UNDER THIS AGREEMENT.

(b) THE SELLER SHALL INDEMNIFY THE ISSUER AND THE INDENTURE TRUSTEE, FOR ITSELF AND ON BEHALF OF THE STORM RECOVERY BONDHOLDERS, AND EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS, MANAGERS, EMPLOYEES AND AGENTS FOR, AND DEFEND AND HOLD HARMLESS EACH SUCH PERSON FROM AND AGAINST, ANY AND ALL TAXES (OTHER THAN ANY TAXES IMPOSED ON STORM RECOVERY BONDHOLDERS SOLELY AS A RESULT OF THEIR OWNERSHIP OF STORM RECOVERY BONDS) THAT MAY AT ANY TIME BE IMPOSED ON OR ASSERTED AGAINST ANY SUCH PERSON UNDER EXISTING LAW AS OF THE TRANSFER DATE AS A RESULT OF THE SALE AND ASSIGNMENT OF THE SELLER'S RIGHTS AND INTERESTS UNDER THE FINANCING ORDER BY THE SELLER TO THE ISSUER, THE ACQUISITION OR HOLDING OF THE STORM RECOVERY PROPERTY BY THE ISSUER OR THE ISSUANCE AND SALE BY THE ISSUER OF THE STORM RECOVERY BONDS, INCLUDING ANY SALES, GROSS RECEIPTS, TANGIBLE PERSONAL PROPERTY, PRIVILEGE, FRANCHISE OR LICENSE TAXES, BUT EXCLUDING ANY TAXES IMPOSED AS A RESULT OF A FAILURE OF SUCH PERSON TO PROPERLY WITHHOLD OR REMIT TAXES IMPOSED WITH RESPECT TO PAYMENTS ON ANY STORM RECOVERY BOND, IN THE EVENT AND TO THE EXTENT SUCH TAXES ARE NOT RECOVERABLE AS FINANCING COSTS, IT BEING UNDERSTOOD THAT THE STORM RECOVERY BONDHOLDERS SHALL BE ENTITLED TO ENFORCE THEIR RIGHTS AGAINST THE SELLER UNDER THIS SECTION 5.01(B) SOLELY THROUGH A CAUSE OF ACTION BROUGHT FOR THEIR BENEFIT BY THE INDENTURE TRUSTEE IN ACCORDANCE WITH THE TERMS OF THE INDENTURE.

(c) THE SELLER SHALL INDEMNIFY THE ISSUER AND THE INDENTURE TRUSTEE, FOR ITSELF AND ON BEHALF OF THE STORM RECOVERY BONDHOLDERS, AND EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS, MANAGERS, EMPLOYEES AND AGENTS FOR, AND DEFEND AND HOLD HARMLESS EACH SUCH PERSON FROM AND AGAINST, ANY AND ALL LIABILITIES, OBLIGATIONS, CLAIMS, ACTIONS, SUITS OR PAYMENTS OF ANY KIND WHATSOEVER THAT MAY BE IMPOSED ON OR ASSERTED AGAINST ANY SUCH PERSON (WHICH MAY INCLUDE, WITHOUT LIMITATION, AN AMOUNT EQUAL TO PRINCIPAL AND INTEREST ON THE STORM RECOVERY BONDS AS A MEASURE OF SELLER'S INDEMNIFICATION OBLIGATIONS UNDER THIS SECTION 5.01) TOGETHER WITH ANY REASONABLE COSTS AND EXPENSES INCURRED BY SUCH PERSON, IN EACH CASE AS A RESULT OF THE SELLER'S BREACH OF ANY OF ITS REPRESENTATIONS, WARRANTIES OR COVENANTS CONTAINED IN THIS AGREEMENT.

(d) THE INDEMNIFICATION OBLIGATIONS OF THE SELLER UNDER THIS SECTION 5.01 SHALL RANK PARI PASSU WITH ALL OTHER GENERAL UNSECURED OBLIGATIONS OF THE SELLER.

(e) INDEMNIFICATION UNDER THIS SECTION 5.01 SHALL SURVIVE THE RESIGNATION OR REMOVAL OF THE INDENTURE TRUSTEE AND THE TERMINATION OF THIS AGREEMENT AND SHALL INCLUDE REASONABLE FEES AND EXPENSES OF INVESTIGATION AND LITIGATION (INCLUDING REASONABLE ATTORNEYS' FEES AND EXPENSES). THE SELLER SHALL NOT INDEMNIFY ANY PARTY UNDER THIS SECTION 5.01 FOR ANY CHANGES IN LAW AFTER THE TRANSFER DATE, INCLUDING BY MEANS OF LEGISLATIVE ENACTMENT, CONSTITUTIONAL AMENDMENT OR VOTER INITIATIVE, OR FOR ANY LIABILITY

RESULTING SOLELY FROM A DOWNGRADE IN ANY RATING OF THE STORM RECOVERY BONDS BY ANY RATING AGENCY. THE SELLER SHALL NOT INDEMNIFY THE INDENTURE TRUSTEE OR ITS OFFICERS, DIRECTORS, MANAGERS, EMPLOYEES OR AGENTS UNDER THIS SECTION 5.01 AGAINST ANY LIABILITY, OBLIGATION, CLAIM, ACTION, SUIT OR PAYMENT OF ANY KIND ARISING OUT OF THE WILLFUL MISCONDUCT, NEGLIGENCE OR BAD FAITH OF ANY SUCH PERSON.

(f) THE SELLER SHALL NOT BE REQUIRED TO INDEMNIFY A PARTY UNDER THIS SECTION 5.01 FOR ANY AMOUNT PAID OR PAYABLE BY SUCH PARTY IN THE SETTLEMENT OF ANY ACTION, PROCEEDING OR INVESTIGATION WITHOUT THE PRIOR WRITTEN CONSENT OF THE SELLER WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD.

(g) PROMPTLY AFTER RECEIPT BY A PARTY OF NOTICE OF THE COMMENCEMENT OF ANY ACTION, PROCEEDING OR INVESTIGATION, SUCH PARTY SHALL, IF A CLAIM IN RESPECT THEREOF IS TO BE MADE AGAINST THE SELLER UNDER THIS SECTION 5.01, NOTIFY THE SELLER IN WRITING OF THE COMMENCEMENT THEREOF. FAILURE BY A PARTY TO SO NOTIFY THE SELLER SHALL RELIEVE THE SELLER FROM THE OBLIGATION TO INDEMNIFY AND HOLD HARMLESS SUCH INDEMNIFIED PARTY UNDER THIS SECTION 5.01 ONLY TO THE EXTENT THAT THE SELLER SUFFERS ACTUAL PREJUDICE AS A RESULT OF SUCH FAILURE.

(h) WITH RESPECT TO ANY ACTION, PROCEEDING OR INVESTIGATION BROUGHT BY A THIRD PARTY FOR WHICH INDEMNIFICATION MAY BE SOUGHT UNDER SECTION 5.01(C), THE SELLER SHALL BE ENTITLED TO CONDUCT AND CONTROL, AT ITS EXPENSE AND WITH COUNSEL OF ITS CHOOSING THAT IS REASONABLY SATISFACTORY TO SUCH INDEMNIFIED PARTY, THE DEFENSE OF ANY SUCH ACTION, PROCEEDING OR INVESTIGATION (IN WHICH CASE THE SELLER SHALL NOT THEREAFTER BE RESPONSIBLE FOR THE FEES AND EXPENSES OF ANY SEPARATE COUNSEL RETAINED BY THE INDEMNIFIED PARTY EXCEPT AS SET FORTH BELOW); PROVIDED THAT THE INDEMNIFIED PARTY SHALL HAVE THE RIGHT TO PARTICIPATE IN SUCH ACTION, PROCEEDING OR INVESTIGATION THROUGH COUNSEL CHOSEN BY IT AND AT ITS OWN EXPENSE. NOTWITHSTANDING THE SELLER'S ELECTION TO ASSUME THE DEFENSE OF ANY ACTION, PROCEEDING OR INVESTIGATION, THE INDEMNIFIED PARTY SHALL HAVE THE RIGHT TO EMPLOY SEPARATE COUNSEL (INCLUDING LOCAL COUNSEL), AND THE SELLER SHALL BEAR THE REASONABLE FEES, COSTS AND EXPENSES OF SUCH SEPARATE COUNSEL IF (I) THE DEFENDANTS IN ANY SUCH ACTION INCLUDE BOTH THE INDEMNIFIED PARTY AND THE SELLER AND THE INDEMNIFIED PARTY SHALL HAVE REASONABLY CONCLUDED THAT THERE MAY BE LEGAL DEFENSES AVAILABLE TO IT THAT ARE DIFFERENT FROM OR ADDITIONAL TO THOSE AVAILABLE TO THE SELLER, (II) THE SELLER SHALL NOT HAVE EMPLOYED COUNSEL REASONABLY SATISFACTORY TO THE INDEMNIFIED PARTY TO REPRESENT THE INDEMNIFIED PARTY WITHIN A REASONABLE TIME AFTER NOTICE OF THE INSTITUTION OF SUCH ACTION, (III) THE SELLER SHALL AUTHORIZE THE INDEMNIFIED PARTY TO EMPLOY SEPARATE COUNSEL AT THE EXPENSE OF THE SELLER OR (IV) IN THE CASE OF THE INDENTURE TRUSTEE, SUCH ACTION EXPOSES THE INDENTURE TRUSTEE TO A MATERIAL RISK OF CRIMINAL LIABILITY OR FORFEITURE OR A SERVICER DEFAULT HAS OCCURRED AND IS CONTINUING. NOTWITHSTANDING THE FOREGOING, THE SELLER SHALL NOT BE OBLIGATED TO PAY FOR THE FEES, COSTS AND EXPENSES OF MORE THAN ONE SEPARATE COUNSEL FOR THE INDEMNIFIED PARTIES OTHER THAN ONE LOCAL COUNSEL, IF APPROPRIATE.

NOTWITHSTANDING THE FOREGOING, IN NO EVENT SHALL ANY SUCH FOREGOING INDEMNITY EXTEND TO THE COLLECTIBILITY OF THE STORM RECOVERY CHARGES FROM ANY PERSON RESPONSIBLE FOR REMITTING STORM RECOVERY CHARGES TO THE SERVICER UNDER THE TERMS OF THE FINANCING ORDER, THE SECURITIZATION ACT OR AN APPLICABLE TARIFF, OR THE CREDITWORTHINESS OF ANY SUCH PERSON OR THE INABILITY OR FAILURE OF SUCH PERSON TO TIMELY PAY ALL OR A PORTION OF THE STORM RECOVERY CHARGES. THE REMEDIES PROVIDED IN THIS AGREEMENT ARE THE SOLE AND EXCLUSIVE REMEDIES AGAINST THE SELLER FOR BREACH OF ITS REPRESENTATIONS, WARRANTIES OR COVENANTS IN THIS AGREEMENT.

Section 5.02 Merger or Consolidation of, or Assumption of the Obligations of, the Seller.

Any Person:

(a) into which the Seller may be merged, converted or consolidated and which succeeds to all or substantially all of the electric transmission and distribution business of the Seller (or, if the transmission and distribution business is split, any person which the Louisiana Commission designates in connection with an order relating to such split),

(b) which results from the division of the Seller into two or more Persons and which succeeds to all or substantially all of the electric transmission and distribution business of the Seller (or, if the transmission and distribution business is split, any person which the Louisiana Commission designates in connection with an order relating to such split),

(c) which may result from any merger, conversion or consolidation to which the Seller shall be a party and which succeeds to all or substantially all of the electric transmission and distribution business of the Seller (or, if the transmission and distribution business is split, any person which the Louisiana Commission designates in connection with an order relating to such split),

(d) which may purchase or otherwise succeed to the properties and assets of the Seller substantially as a whole and which purchases or otherwise succeeds to all or substantially all of the electric transmission and distribution business of the Seller (or, if the transmission and distribution business is split, any person which the Louisiana Commission designates in connection with an order relating to such split), or

(e) which may otherwise purchase or succeed to all or substantially all of the electric transmission and distribution business of the Seller (or, if the transmission and distribution business is split, any person which the Louisiana Commission designates in connection with an order relating to such split),

which Person in any of the foregoing cases executes an agreement of assumption to perform every obligation of the Seller under this Agreement, shall be the successor to the Seller hereunder without the execution or filing of any document or any further act by any of the parties to this Agreement; provided, however, that

(i) immediately after giving effect to such transaction, no representation, warranty or covenant made pursuant to Article III or Article IV shall have been breached in any material respect and no Servicer Default, and no event that, after notice or lapse of time, or both, would become a Servicer Default, shall have occurred and be continuing,

(ii) the Rating Agencies shall have received prior written notice of such transaction,

(iii) the Seller shall have delivered to the Issuer and the Indenture Trustee an Officer's Certificate and an Opinion of Counsel each stating that such consolidation, conversion, merger, division or succession and such agreement of assumption comply with this Section 5.02 and that all conditions precedent, if any, provided for in this Agreement relating to such transaction have been complied with,

(iv) the Seller shall have delivered to the Issuer and the Indenture Trustee an Opinion of Counsel either

(A) stating that, in the opinion of such counsel, all filings to be made by the Seller, including filings with the Louisiana Commission pursuant to the Securitization Act and the UCC, that are necessary fully to preserve and protect the respective interests of the Issuer and the Indenture Trustee in the Storm Recovery Property have been executed and filed, and reciting the details of such filings, or

(B) stating that, in the opinion of such counsel, no such action is necessary to preserve and protect such interests, and

(v) the Seller shall have delivered to the Issuer, the Indenture Trustee and the Rating Agencies an opinion of independent tax counsel (as selected by, and in form and substance satisfactory to the Seller, and which may be based on a ruling from the Internal Revenue Service) to the effect that, for federal income tax purposes, such transaction will not result in a material adverse federal income tax consequence to the Issuer, the Indenture Trustee or the Storm Recovery Bondholders.

The Seller shall not consummate any transaction referred to in clauses (a), (b), (c), (d) or (e) above except upon execution of the above described agreement of assumption and compliance with clauses (i), (ii), (iii), (iv) and (v) above. When any Person acquires the properties and assets of the Seller substantially as a whole and succeeds to all or substantially all of the electric transmission and distribution business of the Seller (or, if the transmission and distribution business is split, any person which the Louisiana Commission designates in connection with an order relating to such split), or otherwise becomes the successor to the Seller in accordance with the terms of this Section 5.02, then upon the satisfaction of all of the other conditions of this Section 5.02, the Seller shall automatically and without further notice be released from its obligations hereunder.

Section 5.03 Limitation on Liability of the Seller and Others. The Seller and any manager, officer, employee or agent of the Seller may rely in good faith on the advice of counsel or on any document of any kind, prima facie properly executed and submitted by any Person, respecting any matters arising hereunder. Subject to Section 4.07, the Seller shall not be under any obligation to appear in, prosecute or defend any legal action that is not incidental to its obligations under this Agreement, and that in its opinion may involve it in any expense or liability.

ARTICLE VI

MISCELLANEOUS PROVISIONS

Section 6.01 Amendment.

(a) This Agreement may be amended in writing by the Seller and the Issuer, provided that (i) the Rating Agency Condition has been satisfied in connection therewith, (ii) the Indenture Trustee has consented thereto and (iii) in the case of any amendment that increases ongoing financing costs as defined in the Financing Order, the Louisiana Commission has consented thereto or shall be conclusively deemed to have consented thereto. Promptly after the execution of any such amendment or consent, the Issuer shall furnish written notification of the substance of such amendment or consent to each of the Rating Agencies. With respect to the Louisiana Commission's consent to any amendment to this Agreement,

(i) the Seller may submit the amendment to the Louisiana Commission by delivering to the Louisiana Commission's executive counsel a written request for such consent, which request shall contain:

(A) a reference to Docket No. U-29157 and a statement as to the possible effect of the amendment on ongoing financing costs;

(B) an Officer's Certificate stating that the proposed amendment has been approved by all relevant parties to this Agreement; and

(C) a statement identifying the person to whom the Louisiana Commission or its staff is to address its consent to the proposed amendment or request additional time;

(ii) Any amendment requiring the consent of the LPSC as provided in this Section 6.01(a) shall become effective on the later of:

(A) the date proposed by the parties to the amendment, or

(B) 31 days after such submission of the amendment to the LPSC unless the LPSC issues an order disapproving the amendment within a 30-day period.

(b) Prior to the execution of any amendment to this Agreement, the Issuer and the Indenture Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement. The Issuer and the Indenture Trustee may, but shall not be obligated to, enter into any such amendment that affects their own rights, duties or immunities under this Agreement or otherwise. Following delivery of a notice to the Louisiana Commission by the Seller under Section 6.01(a) above, the Seller and Issuer may at any time withdraw from the Louisiana Commission further consideration of any notification of a proposed amendment.

Section 6.02 Notices. Unless otherwise specifically provided herein, all demands, notices and communications upon or to the Seller, the Issuer, the Indenture Trustee, the Louisiana Commission or the Rating Agencies under this Agreement shall be in writing, delivered personally, via facsimile, reputable overnight courier or by certified mail, return-receipt requested, and shall be deemed to have been duly given upon receipt

(a) in the case of the Seller, to Cleco Power, LLC, 2030 Donahue Ferry Road, Pineville, Louisiana 71360-5226, Attention: Treasurer,

(b) in the case of the Issuer, to Cleco Katrina/Rita Hurricane Recovery Funding LLC, 2605 Hwy. 28 East Office Number 12, Pineville, Louisiana 71360-5226, Attention: Manager,

(c) in the case of Moody's, to Moody's Investors Service, Inc., ABS Monitoring Department, 99 Church Street, New York, New York 10007,

(d) in the case of Standard & Poor's, to Standard & Poor's, a Division of the McGraw-Hill Companies, 55 Water Street, New York, New York 10041, Attention: Asset Backed Surveillance Department,

(e) in the case of Fitch, to Fitch, Inc., 1 State Street Plaza, New York, New York 10004, Attention: ABS Surveillance,

(f) in the case the Indenture Trustee, at the address provided for notices or communications to the Indenture Trustee in the Indenture, and

(g) in the case of the Louisiana Commission, to Galvez Building, 12th Floor, 602 North Fifth Street, Baton Rouge, Louisiana 70821-9154, Attention: Executive Counsel;

or, as to each of the foregoing, at such other address as shall be designated by written notice to the other parties.

Section 6.03 Assignment by the Seller. Notwithstanding anything to the contrary contained herein, except as provided in Section 5.02, this Agreement may not be assigned by the Seller.

Section 6.04 Assignment to the Indenture Trustee. The Seller hereby acknowledges and consents to any pledge, assignment and grant of a security interest by the Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of the Storm Recovery Bondholders of all right, title and interest of the Issuer in, to and under the Storm Recovery Property and the proceeds thereof and the assignment of any or all of the Issuer's rights hereunder to the Indenture Trustee. Notwithstanding such assignment, in no event shall the Indenture Trustee have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer.

Section 6.05 Limitations on Rights of Others. The provisions of this Agreement are solely for the benefit of the Seller, the Issuer and the Indenture Trustee, on behalf of itself and the Storm Recovery Bondholders, and nothing in this Agreement, whether express or implied, shall be construed to give to

any other Person any legal or equitable right, remedy or claim in the Trust Estate or under or in respect of this Agreement or any covenants, conditions or provisions contained herein.

Section 6.06 Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

Section 6.07 Separate Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

Section 6.08 Headings. The headings of the various Articles and Sections herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.

Section 6.09 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF LOUISIANA, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Section 6.10 Nonpetition Covenants. (a) Notwithstanding any prior termination of this Agreement or the Indenture, the Seller shall not, prior to the date which is one year and one day after the termination of the Indenture, petition or otherwise invoke or cause the Issuer to invoke the process of any Governmental Authority for the purpose of commencing or sustaining a case against the Issuer under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or any substantial part of the property of the Issuer, or ordering the winding-up or liquidation of the affairs of the Issuer.

(b) Notwithstanding any prior termination of this Agreement or the Indenture, the Issuer shall not, prior to the date which is one year and one day after the termination of the Indenture, petition or otherwise invoke or cause the Seller to invoke the process of any Governmental Authority for the purpose of commencing or sustaining a case against the Seller under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Seller or any substantial part of the property of the Seller, or ordering the winding-up or liquidation of the affairs of the Seller.

[Rest of page intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written.

		CLECO KATRINA/RITA HURRICANE RECOVERY FUNDING LLC, as Issuer,
		By:

				Name:
				Title:
		CLECO POWER LLC, as Seller,
		By:

				Name:
				Title:

APPENDIX A—DEFINITIONS

The definitions contained in this Appendix A are applicable to the singular as well as the plural forms of such terms.

"Administration Agreement" means the Administration Agreement, dated as of , 2008, between the Issuer and the Seller, as the same may be amended and supplemented from time to time.

"Affiliate" means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, control, when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms controlling and controlled have meanings correlative to the foregoing.

"Agreement" or the "Sale Agreement" means this Storm Recovery Property Sale Agreement, as the same may be amended and supplemented from time to time.

"Basic Documents" means the Articles of Organization of the Issuer which was filed with the Secretary of State of the State of Louisiana on October 30, 2007, the limited liability company operating agreement of the Issuer, the Sale Agreement, the Bill of Sale, the Servicing Agreement, the Administration Agreement, the Indenture and the Series Supplement.

"Bill of Sale" means the Bill of Sale, dated as of , 2008, issued by the Seller to the Issuer pursuant to the Sale Agreement evidencing the sale of the Storm Recovery Property by the Seller to the Issuer.

"Cleco Power" means Cleco Power, LLC, a Louisiana limited liability company, or its successor.

"Financing Order" means Financing Order No. U-29157-B issued by the Louisiana Commission on September 17, 2007 in Docket No. U-29157 pursuant to the Securitization Act.

"Fitch" means Fitch, Inc., or its successor.

"Governmental Authority" means any court or any federal or state regulatory body, administrative agency or governmental instrumentality.

"Indenture" means the Indenture, dated as of , 2008, among the Issuer and the Indenture Trustee, and the Series Supplement (including the forms and terms of the Storm Recovery Bonds), as the same may be amended and supplemented with respect to the Storm Recovery Bonds from time to time.

"Indenture Trustee" means U.S. Bank National Association, or its successor or any successor Indenture Trustee under the Indenture.

"Issuance Advice Letter" means the issuance advice letter submitted to the Louisiana Commission on , 2008 by the Seller pursuant to the Financing Order in connection with the issuance of the Storm Recovery Bonds.

"Issuer" means Cleco Katrina/Rita Hurricane Recovery Funding LLC, a Louisiana limited liability company, or its successor under the Indenture.

"Lien" means a security interest, lien, charge, pledge, equity or encumbrance of any kind.

"Louisiana Commission" means the Louisiana Public Service Commission or any successor.

"Louisiana Commission Pledge" means the pledge of the Louisiana Commission found in Part VI(G) of the Financing Order.

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"Louisiana UCC Filing Officer" has the meaning ascribed to such term in the Servicing Agreement.

"Moody's" means Moody's Investors Service, Inc., or any successor thereto.

"Officer's Certificate" means a certificate signed, in the case of the Seller, by any manager, the chairman of the board, the chief executive officer, the president, any vice chairman, any executive vice president, senior vice president or vice president, the treasurer, assistant treasurer, the secretary or any assistant secretary of the Seller.

"Opinion of Counsel" means one or more written opinions of counsel who may be an employee of or counsel to the Issuer or the Seller, which counsel shall be reasonably acceptable to the Indenture Trustee, the LPSC, the Issuer or the Rating Agencies, as applicable, and which shall be in form reasonably satisfactory to the Indenture Trustee or the LPSC, if applicable.

"Person" means any individual, corporation, estate, partnership, joint venture, association, joint stock company, trust (including any beneficiary thereof), business trust, limited liability company, unincorporated organization or government or any agency or political subdivision thereof.

"proceeding" means any suit in equity, action at law or other judicial or administrative proceeding.

"Prospectus" has the meaning specified in Section 3.06 hereof.

"Purchase Price" has the meaning specified in Section 2.01(a) hereof.

"Rating Agency" means any rating agency rating the Storm Recovery Bonds at the time of issuance thereof at the request of the Issuer, which initially shall be Moody's, Fitch and S&P. If no such organization or successor is any longer in existence, "Rating Agency" shall be a nationally recognized statistical rating organization or other comparable Person designated by the Issuer, written notice of which designation shall be given to the Indenture Trustee, the Louisiana Commission and the Servicer.

"Rating Agency Condition" means, with respect to any action, the notification in writing to each Rating Agency of such action, and confirmation from S&P to the Indenture Trustee and the Issuer that such action will not result in a reduction or withdrawal of the then current rating by such Rating Agency of any outstanding class or tranche of Storm Recovery Bonds.

"Securitization Act" means Act No. 64 of the Louisiana Regular Session of 2006, the "Louisiana Electric Utility Storm Recovery Securitization Act," codified at La. R.S. 45:1226-1236.

"Seller" means Cleco Power, or its successor, in its capacity as seller of the Storm Recovery Property to the Issuer pursuant to the Sale Agreement.

"Series Supplement" means the First Supplemental Indenture dated as of , 2008, among the Issuer and the Indenture Trustee, which specifies the terms of the Storm Recovery Bonds.

"Servicer" means Cleco Power, in its capacity as the servicer under the Servicing Agreement, and each successor to or assignee of Cleco Power (in the same capacity) pursuant to the relevant sections of the Servicing Agreement.

"Servicer Default" means the occurrence and continuation of one of the events specified in Section 7.01 of the Servicing Agreement.

"Servicing Agreement" means the Storm Recovery Property Servicing Agreement, dated as of , 2008, between the Issuer and the Servicer and acknowledged by the Indenture Trustee, as the same may be amended and supplemented from time to time.

"Standard & Poor's" or "S&P," means Standard & Poor's, a division of The McGraw-Hill Companies, or its successor.

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"Storm Recovery Bond" means any of the 2008 Senior Secured Storm Recovery Bonds issued by the Issuer pursuant to the Indenture and the Series Supplement.

"Storm Recovery Bondholder" means a Person in whose name a Storm Recovery Bond is registered on the Storm Recovery Bond Register.

"Storm Recovery Bond Register" has the meaning specified in Section 2.05 of the Indenture.

"Storm Recovery Charges" means the nonbypassable amounts to be charged for the use or availability of electric services, approved by the Louisiana Commission in the Financing Order that may be collected by the Seller, its successors, assignees or other collection agents as provided for in the Financing Order.

"Storm Recovery Property" means all of Seller's rights and interest under the Financing Order (including, without limitation, rights to impose, collect and receive the "storm recovery charges" (as defined in the Securitization Act) approved in such Financing Order) issued by the Louisiana Commission on September 17, 2007 (Docket No. U-29157) pursuant to the Securitization Act, except the rights of Seller to earn and receive a rate of return on its invested capital in the Issuer, to receive administration and servicer fees, to withdraw funds from its restricted storm recovery reserve funded by the proceeds from the sale of the Storm Recovery Property, or to use the Seller's remaining portion of those proceeds.

"Tariff" means means Rider SRCA and Rider SCSA filed by the Seller pursuant to ordering paragraph 10 of the Financing Order..

"Transfer Date" means the date on which the Storm Recovery Bonds are to be originally issued in accordance with Section 2.10 of the Indenture.

"Trust Estate" means the "Series Trust Estate" as such term is defined in the Series Supplement.

"UCC" has the meaning specified in Section 2.02(iv) hereof.

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EXHIBIT A

BILL OF SALE

1. This Bill of Sale is being delivered pursuant to the Storm Recovery Property Sale Agreement, dated as of , 2008 (the "Sale Agreement"), between Cleco Power LLC (the "Seller") and Cleco Katrina/Rita Hurricane Recovery Funding LLC (the "Issuer"). All capitalized terms used but not defined herein have the respective meanings ascribed thereto in the Sale Agreement.

2. In consideration of the Issuer's payment to the Seller of $[ ], receipt of which is hereby acknowledged, the Seller does hereby irrevocably sell, transfer, assign, set over and otherwise convey to the Issuer, without recourse or warranty, except as set forth in the Sale Agreement, all right, title and interest of the Seller in, to and under the Storm Recovery Property identified on Schedule 1 hereto (such sale, transfer, assignment, setting over and conveyance of the Storm Recovery Property includes, to the fullest extent permitted by the Securitization Act, the right to impose, collect and receive the Storm Recovery Charges related to the Storm Recovery Property, as the same may be adjusted from time to time). Such sale, transfer, assignment, setting over and conveyance is hereby expressly stated to be a sale or other absolute transfer and, pursuant to Section 1230(1) of the Securitization Act and other applicable law, is a true sale and is not a secured transaction and title and ownership has passed to the Issuer. The preceding sentence is the statement referred to in Section 1230 of the Securitization Act. The Seller agrees and confirms that, after giving effect to the sale evidenced by this Bill of Sale, the Seller has no right, title or interest in, to or under the Storm Recovery Property.

3. The Issuer does hereby purchase the Storm Recovery Property identified on Schedule 1 hereto from the Seller for the consideration set forth in paragraph 2 above.

4. The Seller and the Issuer each acknowledge and agree that the purchase price for the Storm Recovery Property sold pursuant to this Bill of Sale and the Sale Agreement is equal to its fair market value on the date hereof.

5. The Seller confirms that each of the representations and warranties on the part of the Seller contained in the Sale Agreement are true and correct in all respects on the date hereof as if made on the date hereof.

6. This Bill of Sale may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

7. THIS BILL OF SALE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF LOUISIANA, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Exhibit A-1

IN WITNESS WHEREOF, the Seller and the Issuer have duly executed this Bill of Sale as of the day of 2008.

		CLECO KATRINA/RITA HURRICANE RECOVERY FUNDING LLC, as Issuer,
		By:
			Name: Title:
		CLECO POWER LLC, as Seller,
		By:
			Name: Title:

Exhibit A-2

SCHEDULE 1
to
BILL OF SALE

Storm Recovery Property

All of Seller's rights and interest under the Financing Order (including, without limitation, rights to impose, collect and receive the "storm recovery charges" (as defined in the Securitization Act) approved in such Financing Order) issued by the Louisiana Commission on September 17, 2007 (Docket No. U-29157) pursuant to the Securitization Act, except the rights of Seller to earn and receive a rate of return on its invested capital in the Issuer, to receive administration and servicer fees, to withdraw funds from its restricted storm recovery reserve funded by the proceeds from the sale of the Storm Recovery Property, or to use the Seller's remaining portion of those proceeds.

EX-99.4 7 a2182800zex-99_4.htm EXHIBIT 99.4

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TABLE OF CONTENTS 8

Exhibit 99.4

STORM RECOVERY PROPERTY SERVICING AGREEMENT

between

CLECO KATRINA/RITA HURRICANE RECOVERY FUNDING LLC

Issuer

and

CLECO POWER LLC

Servicer

Dated as of March [ ], 2008

Table of Contents

ARTICLE I DEFINITIONS
	SECTION 1.01. DEFINITIONS
	SECTION 1.02. OTHER DEFINITIONAL PROVISIONS
ARTICLE II APPOINTMENT AND AUTHORIZATION OF SERVICER
	SECTION 2.01. APPOINTMENT OF THE SERVICER; ACCEPTANCE OF APPOINTMENT
	SECTION 2.02. AUTHORIZATION
	SECTION 2.03. DOMINION AND CONTROL OVER STORM RECOVERY PROPERTY
ARTICLE III BILLING AND OTHER SERVICES
	SECTION 3.01. DUTIES OF THE SERVICER
	SECTION 3.02. SERVICING AND MAINTENANCE STANDARDS
	SECTION 3.03. ANNUAL REPORTS ON COMPLIANCE WITH REGULATION AB
	SECTION 3.04. ANNUAL REGISTERED INDEPENDENT PUBLIC ACCOUNTING FIRM REPORT
	SECTION 3.05. MONITORING OF THIRD-PARTY COLLECTORS
ARTICLE IV SERVICES RELATED TO STORM RECOVERY CHARGE ADJUSTMENTS AND ALLOCATION ADJUSTMENTS
	SECTION 4.01. STORM RECOVERY CHARGE ADJUSTMENTS
	SECTION 4.02. LIMITATION OF LIABILITY
ARTICLE V THE STORM RECOVERY PROPERTY
	SECTION 5.01. CUSTODY OF STORM RECOVERY PROPERTY RECORDS
	SECTION 5.02. DUTIES OF SERVICER AS CUSTODIAN
	SECTION 5.03. CUSTODIAN'S INDEMNIFICATION
	SECTION 5.04. EFFECTIVE PERIOD AND TERMINATION
ARTICLE VI THE SERVICER
	SECTION 6.01. REPRESENTATIONS AND WARRANTIES OF THE SERVICER
	SECTION 6.02. INDEMNITIES OF THE SERVICER; RELEASE OF CLAIMS
	SECTION 6.03. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS OF, THE SERVICER
	SECTION 6.04. ASSIGNMENT OF THE SERVICER'S OBLIGATIONS
	SECTION 6.05. NONBYPASSIBILITY
	SECTION 6.06. LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS
	SECTION 6.07. CLECO POWER NOT TO RESIGN AS SERVICER
	SECTION 6.08. SERVICING FEE
	SECTION 6.09. COMPLIANCE WITH APPLICABLE LAW
	SECTION 6.10. SERVICER EXPENSES
	SECTION 6.11. APPOINTMENTS
	SECTION 6.12. NO SERVICER ADVANCES
	SECTION 6.13. REMITTANCES
	SECTION 6.14. SERVICER'S CERTIFICATE
	SECTION 6.15. PROTECTION OF TITLE
	SECTION 6.16. MAINTENANCE OF OPERATIONS

ARTICLE VII SERVICER DEFAULT
	SECTION 7.01. SERVICER DEFAULT
	SECTION 7.02. NOTICE OF SERVICER DEFAULT
	SECTION 7.03. WAIVER OF PAST DEFAULTS
	SECTION 7.04. APPOINTMENT OF SUCCESSOR
	SECTION 7.05. COOPERATION WITH SUCCESSOR
ARTICLE VIII MISCELLANEOUS PROVISIONS
	SECTION 8.01. AMENDMENT
	SECTION 8.02. NOTICES
	SECTION 8.03. ASSIGNMENT
	SECTION 8.04. LIMITATIONS ON RIGHTS OF OTHERS
	SECTION 8.05. SEVERABILITY
	SECTION 8.06. SEPARATE COUNTERPARTS
	SECTION 8.07. HEADINGS
	SECTION 8.08. GOVERNING LAW
	SECTION 8.09. ASSIGNMENT TO THE TRUSTEE
	SECTION 8.10. NONPETITION COVENANTS
	SECTION 8.11. TERMINATION
	SECTION 8.12. LPSC CONSENT
	SECTION 8.13. LIMITATION OF LIABILITY
SCHEDULE A TO SERVICING AGREEMENT
EXHIBIT A SERVICER'S CERTIFICATE
ANNEX 1 TO SERVICING AGREEMENT
APPENDIX A MASTER DEFINITIONS

STORM RECOVERY PROPERTY SERVICING AGREEMENT dated as of March [ ], 2008 (this "Agreement") between CLECO KATRINA/RITA HURRICANE RECOVERY FUNDING LLC, a Louisiana limited liability company (the "Issuer"), and CLECO POWER LLC, a Louisiana limited liability company ("Cleco Power"), as the servicer of the Storm Recovery Property hereunder (together with each successor to Cleco Power in such capacity pursuant to Section 6.03 or 7.04, the "Servicer").

WHEREAS, pursuant to the Securitization Act and the Financing Order, the Seller and the Issuer are concurrently entering into the Sale Agreement dated as of the date hereof pursuant to which the Seller is selling and the Issuer is purchasing the Storm Recovery Property created pursuant to the Securitization Act and the Financing Order;

WHEREAS the Servicer is willing to service the Storm Recovery Property purchased from the Seller by the Issuer;

WHEREAS the Issuer, in connection with ownership of the Storm Recovery Property, desires to engage the Servicer to carry out the functions described herein;

WHEREAS, the Storm Recovery Charges will be itemized on Customers' bills and the SRC Collections initially will be commingled with other funds collected from Customers;

WHEREAS, the Financing Order calls for the Servicer to execute a servicing agreement with the Issuer pursuant to which the Servicer will be required, among other things, to impose and collect applicable Storm Recovery Charges for the benefit and account of the Issuer, to make periodic Storm Recovery Charge Adjustments required or allowed by the Financing Order, and to account for and remit the applicable Storm Recovery Charges to the Trustee on behalf and for the account of the Issuer in accordance with the remittance procedures contained hereunder without any deduction or surcharge of any kind; and

WHEREAS, the Financing Order provides that the LPSC will enforce the obligations imposed by the Financing Order, the LPSC's applicable substantive rules, and applicable statutory provisions.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained and intending to be legally bound hereby, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. DEFINITIONS. Capitalized terms used but not otherwise defined in this Agreement have the respective meanings set forth in Appendix A hereto.

SECTION 1.02. OTHER DEFINITIONAL PROVISIONS.

(a) The words "hereof," "herein," "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; Section, Appendix, Annex, Exhibit and Schedule references contained in this Agreement are references to Sections, Appendices, Annexes, Exhibits and Schedules in or to this Agreement unless otherwise specified; and the term "including" shall mean "including without limitation."

(b) The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms.

(c) All terms defined in this Agreement have the same defined meanings when used in any certificate or other document made or delivered pursuant to this Agreement unless otherwise defined therein.

ARTICLE II

APPOINTMENT AND AUTHORIZATION OF SERVICER

SECTION 2.01. APPOINTMENT OF THE SERVICER; ACCEPTANCE OF APPOINTMENT. The Issuer hereby appoints the Servicer, and the Servicer hereby accepts such appointment, to perform the Servicer's obligations pursuant to this Agreement on behalf of and for the benefit of the Issuer or any assignee thereof in accordance with the terms of this Agreement and applicable law. This appointment and the Servicer's acceptance thereof may not be revoked except in accordance with the express terms of this Agreement.

SECTION 2.02. AUTHORIZATION. With respect to all or any portion of the Storm Recovery Property, the Servicer shall be, and hereby is, authorized and empowered by the Issuer to:

(a) execute and deliver, on behalf of itself or the Issuer, as the case may be, any and all instruments, documents or notices, and

(b) on behalf of itself or the Issuer, as the case may be, make any filing and participate in Proceedings related to the duties of the Servicer hereunder with any governmental authorities, including with the LPSC.

The Issuer shall furnish the Servicer with all executed documents as have been prepared by the Servicer for execution by the Issuer, and with such other documents as may be in the Issuer's possession, as necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties hereunder. Upon the written request of the Servicer, the Issuer shall furnish the Servicer with any powers of attorney or other documents necessary or appropriate to enable the Servicer to carry out its duties hereunder.

SECTION 2.03. DOMINION AND CONTROL OVER STORM RECOVERY PROPERTY. Notwithstanding any other provision contained herein, the Servicer and the Issuer agree that the Issuer shall have dominion and control over the Storm Recovery Property, and the Servicer, in accordance with the terms hereof, is acting solely as the servicing agent of and custodian for the Issuer with respect to the Storm Recovery Property and Storm Recovery Property Documentation. The Servicer hereby agrees that it shall not take any action that is not authorized by this Agreement, the Securitization Act or the Financing Order, that is not consistent with its customary procedures and practices, or that shall impair the rights of the Issuer with respect to the Storm Recovery Property, in each case unless such action is required by law or court or regulatory order.

ARTICLE III

BILLING AND OTHER SERVICES

SECTION 3.01. DUTIES OF THE SERVICER. The Servicer, as agent for the Issuer (to the extent provided herein), shall have the following duties:

(a) Duties of Servicer Generally. The Servicer shall manage, service, administer and make collections in respect of the Storm Recovery Property. The Servicer's duties will include:

(i) calculating and billing the Storm Recovery Charges;

(ii) obtaining meter reads;

(iii) accounting for collected Storm Recovery Charges and late-payment penalties;

(iv) investigating and resolving delinquencies (and furnishing reports with respect to such delinquencies to the Issuer);

(v) processing and depositing collections and making periodic remittances;

(vi) furnishing periodic reports to the Issuer, the Trustee, the LPSC and the Rating Agencies;

(vii) monitoring customer payments of Storm Recovery Charges;

(viii) notifying each customer of any defaults in its payment obligations and other obligations (including its credit standards), and following such collection procedures as it follows with respect to comparable assets that it services for itself or others;

(ix) collecting payments of Storm Recovery Charges and payments with respect to Storm Recovery Property from all persons or entities responsible for remitting Storm Recovery Charges and other payments with respect to Storm Recovery Property to the Servicer under the Financing Order, the Securitization Act, LPSC Regulations or applicable tariffs and remitting these collections to the Trustee;

(x) responding to inquiries by Customers, the LPSC or any other Governmental Authority with respect to the Storm Recovery Property and the Storm Recovery Charges;

(xi) making all filings with the LPSC and taking such other action as may be necessary to perfect the Issuer's ownership interests in and the Trustee's first priority Lien on the Storm Recovery Property and the other portions of the Series Trust Estate under the Indenture;

(xii) selling, as the agent for the Issuer, as its interest may appear, defaulted or written-off accounts in accordance with the Servicer's usual and customary practices;

(xiii) taking action in connection with Storm Recovery Charge Adjustments and allocation of the charges among various classes of customers as is set forth herein;

(xiv) any other duties specified for a servicer under the Financing Order or other applicable law; and

(xv) reconciling, within 30 calendar days after bank statement cutoff date or such later time as is consistent with the Servicer's usual and customary practices that does not materially impair the ability of the Servicer to correct errors, all bank account debits and credits for bank accounts that are held in the name of the Servicer (as Servicer hereunder) or of the Issuer that relate to the Series Trust Estate or the Storm Recovery Bonds.

Anything to the contrary notwithstanding, the duties of the Servicer set forth in this Agreement shall be qualified in their entirety by, and the Servicer shall at all times comply with, the Financing Order, the Securitization Act and any LPSC Regulations, and the federal securities laws and the rules and regulations promulgated thereunder, including Regulation AB, as in effect at the time such duties are to be performed. Without limiting the generality of this Section 3.01(a), in furtherance of the foregoing, the Servicer hereby agrees that it shall also have, and shall comply with, the duties and responsibilities relating to data acquisition, usage and bill calculation, billing, customer service functions, collections, payment processing and remittance set forth in the Issuer Annex hereto, as it may be amended from time to time. For the avoidance of doubt, the term "usage" when used herein refers to both kilowatt hour consumption and kilowatt demand.

(b) Reporting Functions.

(i) Notification of Laws and Regulations. Upon acquiring actual knowledge thereof in the course of its performance of duties in accordance with the terms hereof, the Servicer shall immediately notify the Issuer, the LPSC, the Trustee and each Rating Agency in writing of any laws or LPSC Regulations, orders or directions hereafter promulgated or LPSC proceedings hereafter initiated related to the Financing Order that have, or in the case of LPSC proceedings, may have a material adverse effect on the Servicer's ability to perform its duties under this Agreement.

(ii) Other Information. Upon the reasonable request of the Issuer, the Trustee, the LPSC or any Rating Agency, the Servicer shall provide to the Issuer, the Trustee, the LPSC or such Rating Agency, as the case may be, any public financial information in respect of the Servicer, or any material information regarding the Storm Recovery Property to the extent it is reasonably available to the Servicer, that may be reasonably necessary and permitted by law for the Issuer, the Trustee, the LPSC or such Rating Agency to monitor the performance by the Servicer hereunder. In addition, so long as any of the Storm Recovery Bonds are Outstanding, the Servicer shall provide to the Issuer, to the LPSC and to the Trustee, within a reasonable time after written request therefor, any information available to the Servicer or reasonably obtainable by it that is necessary to calculate the Storm Recovery Charges applicable to each Customer Class.

(iii) Preparation of Reports. The Servicer shall prepare and deliver such additional reports as required under this Agreement, including a copy of each Semi-Annual Servicer's Certificate described in Section 6.13, the annual Servicer's Regulation AB Compliance Certificate and Certificate of Compliance described in Section 3.03, and the Annual Accountant's Report described in Section 3.04. In addition, the Servicer shall prepare, procure, deliver and/or file, or cause to be prepared, procured, delivered or filed, any reports, attestations, exhibits, certificates or other documents required to be delivered or filed with the SEC (and/or any other Governmental Authority) by the Issuer or the Sponsor under the federal securities or other applicable laws or in accordance with the Basic Documents, including, but without limiting the generality of foregoing, filing with the SEC, if applicable, a copy or copies of (i) the Semi-Annual Servicer's Certificates described in Section 6.13 (under Form 10-D or any other applicable form), (iii) the annual statements of compliance, attestation reports and other certificates described in Section 3.03, and (iv) the Annual Accountant's Report (and any attestation required under Regulation AB) described in Section 3.04. In addition, the appropriate officer or officers of the Servicer shall (in its separate capacity as Servicer) sign the Sponsor's annual report on Form 10-K (and any other applicable SEC or other reports, attestations, certifications and other documents), to the extent that the Servicer's signature is required by, and consistent with, the federal securities law and/or any other applicable law.

The Servicer shall deliver to the Issuer, to the LPSC and to the Trustee:

(i) promptly after the execution and delivery of this Agreement and of each amendment hereto, an Opinion of Counsel either:

(A) all actions or filings (including filings with the Louisiana UCC Filing Officer in accordance with the rules prescribed under the Securitization Act and the UCC) necessary to maintain perfection of the Lien and security interest created by the Indenture have been taken or made, and reciting the details of such actions and filings, or

(B) no such actions or filings are necessary to maintain such Lien and security interest.

(ii) on or before March 31 in each calendar year beginning with the first calendar year beginning more than three months after the Sale Date, an Opinion of Counsel, dated as of a date during such calendar year, either:

(A) all actions or filings (including filings and refilings with the Louisiana UCC Filing Officer in accordance with the rules prescribed under the Securitization Act and the UCC) necessary to maintain perfection of the Lien and security interest created by

the Indenture have been taken or made, and reciting the details of such actions and filings, or

(B) no such actions or filings are necessary to maintain such Lien and security interest.

Each Opinion of Counsel referred to in clause (i) or (ii) above shall specify any action necessary (as of the date of such opinion) to be taken in the following year to preserve and protect such Lien and security interests.

SECTION 3.02. SERVICING AND MAINTENANCE STANDARDS. The Servicer shall, on behalf of the Issuer:

(a) manage, service, administer and make collections in respect of the Storm Recovery Property with reasonable care and in material compliance with applicable law and regulations, including all applicable LPSC Regulations and guidelines, using the same degree of care and diligence that the Servicer exercises with respect to similar assets for its own account;

(b) follow standards, policies and practices in performing its duties as Servicer that are customary in the electric transmission and distribution industry or that the LPSC has mandated and that are consistent with the terms and provisions of the Financing Order, tariffs and existing law;

(c) use all reasonable efforts, consistent with the Servicer's Policies and Practices, to enforce and maintain the Issuer's and the Trustee's rights in respect of the Storm Recovery Property;

(d) calculate Storm Recovery Charges and the allocation of Storm Recovery Charges among customer classes in compliance with the Securitization Act, the Financing Order, any LPSC order related to the Storm Recovery Charge allocation and any applicable tariffs;

(e) use all reasonable efforts consistent with the Servicer's Policies and Practices to collect all amounts owed in respect of the Storm Recovery Property as they become due;

(f) make all filings required under the Securitization Act or the applicable UCC to maintain the perfected security interest of the Trustee in the Storm Recovery Property and the other portions of the Series Trust Estate under the Indenture and use all reasonable efforts to otherwise enforce and maintain the Trustee's rights in respect of the Storm Recovery Property and the other portions of the Series Trust Estate under the Indenture;

(g) petition the LPSC for adjustments to the Storm Recovery Charges that the Servicer determines to be necessary in accordance with the Financing Order; and

(h) keep on file, in accordance with customary procedures, all documents pertaining to the Storm Recovery Property and maintain accurate and complete accounts, records and computer systems pertaining to the related Storm Recovery Property

except where the failure to comply with any of the foregoing would not materially and adversely affect the Issuer's or the Trustee's respective interests in the Storm Recovery Property. The Servicer shall follow such customary and usual practices and procedures as it shall deem necessary or advisable in its servicing of all or any portion of the Storm Recovery Property, which, in the Servicer's judgment, may include the taking of legal action pursuant to Section 5.02(d) or 5.02(e) hereof or otherwise.

SECTION 3.03. ANNUAL REPORTS ON COMPLIANCE WITH REGULATION AB.

(a) The Servicer shall deliver to the Issuer, the Trustee and the Rating Agencies, on or before the earlier of (i) March 31 of each year or (ii) with respect to each calendar year during which Cleco Power's annual report on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and regulations thereunder, the date on which the annual report on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and regulations thereunder, certificates from a Responsible Officer of the Servicer (A) containing, and certifying as to, the statements of compliance required by Item 1123 (or any successor or similar items or rule) of Regulation AB, as then in effect (the "Regulation AB Compliance Certificate"), and (B) containing, and certifying as to, the statements and assessment of compliance required by Item 1122(a) (or any successor or similar items or rule) of Regulation AB, as then in effect (the "Certificate of Compliance"). These certificates may be in the form of, or shall include the forms attached hereto as Exhibit B-1 and Exhibit B-2 hereto, with, in the case of Exhibit B-1, such changes as may be required to conform to applicable securities law.

(b) The Servicer shall use commercially reasonable efforts to obtain from each other party participating in the servicing function any additional certifications as to the statements and assessment required under Item 1122 or Item 1123 of Regulation AB to the extent required in connection with the filing of the annual report on Form 10-K referred to above; provided, however, that a failure to obtain such certifications shall not be a breach of the Servicer's duties hereunder. The parties acknowledge that the Trustee's certifications shall be limited to the Item 1122 certifications described in Exhibit A of the Indenture.

SECTION 3.04. ANNUAL REGISTERED INDEPENDENT PUBLIC ACCOUNTING FIRM REPORT.

(a) The Servicer shall cause a registered independent public accounting firm (which may also provide other services to the Servicer or the Seller) to prepare annually, and the Servicer shall deliver annually to the Issuer, the LPSC, the Trustee and each Rating Agency, on or before the earlier of (a) March 31 of each year, beginning March 31, 2009, to and including the March 31 succeeding the retirement of all Storm Recovery Bonds or (b) with respect to each calendar year during which the Sponsor's annual report on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and regulations thereunder, the date on which the annual report on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and regulations thereunder, a report addressed to the Servicer (the "Annual Accountant's Report"), which may be included as part of the Servicer's customary auditing activities, to the effect that such firm has performed certain procedures, agreed between the Servicer and such accountants, in connection with the Servicer's compliance with its obligations under this Agreement during the preceding calendar year ended December 31 (or, in the case of the first Annual Accountant's Report, the period of time from the Sale Date through December 31, 2008), identifying the results of such procedures and including any exceptions noted. In the event such accounting firm requires the Trustee or the Issuer to agree or consent to the procedures performed by such firm, the Issuer shall direct the Trustee in writing to so agree; it being understood and agreed that the Trustee shall

deliver such letter of agreement or consent in conclusive reliance upon the direction of the Issuer, and the Trustee shall not make any independent inquiry or investigation as to, and shall have no obligation or liability in respect of, the sufficiency, validity or correctness of such procedures.

(b) The Annual Accountant's Report shall also indicate that the accounting firm providing such report is independent of the Servicer in accordance with the Rules of the Public Company Accounting Oversight Board, and shall include the attestation report required under Item 1122(b) of Regulation AB (or any successor or similar items or rule), as then in effect. The Annual Accountant's Report shall also indicate that the accounting firm providing such report is independent of the Servicer within the meaning of the Code of Professional Ethics of the American Institute of Certified Public Accountants.

SECTION 3.05. MONITORING OF THIRD-PARTY COLLECTORS. If a Third-Party Collector bills or collects Storm Recovery Charges on behalf of the Issuer, then, from time to time, until the retirement of the Storm Recovery Bonds, the Servicer shall, in accordance with the Servicing Standard, take all actions with respect to such Third-Party Collectors required to be taken by the Servicer as set forth, if applicable, in any agreement with the Third-Party Collector, the Tariff, other tariffs and any other LPSC Regulations in effect from time to time and implement such additional procedures and policies as are necessary to ensure that the obligations of all Third-Party Collectors in connection with Storm Recovery Charges are properly enforced in accordance with, if applicable, the terms of any agreement with the Third-Party Collector, the Tariff, other tariffs and any other LPSC Regulations in effect from time to time. Such procedures and policies shall include the following:

(a) Maintenance of Records and Information. In addition to any actions required by the Tariff, LPSC Regulations or other applicable law, the Servicer shall:

(i): maintain adequate records for promptly identifying and contacting each Third-Party Collector;
(ii): maintain records of end-user Customers which are billed by Third-Party Collectors to permit prompt transfer of billing responsibilities in the event of default by such Third-Party Collectors;
(iii): maintain adequate records for enforcing compliance by all Third-Party Collectors with their obligations with respect to Storm Recovery Charges; and
(iv): provide to each Third-Party Collector such information necessary for such Third-Party Collector to confirm the Servicer's calculation of Storm Recovery Charges and remittances, including, if applicable, charge-off amounts.

The Servicer shall update the records described above no less frequently than quarterly.

(b) Credit and Collection Policies. The Servicer shall, to the fullest extent permitted under the Financing Order, use all reasonable efforts consistent with the Servicer's Policies and Practices to collect all Billed SRC's from Customers and any Third-Party Collectors as and when the same become due. The Servicer shall, in accordance with and to the extent permitted by applicable LPSC Regulations and the terms of the Financing Order, include and impose the above-described terms in all tariffs filed with the LPSC which would allow Third-Party Collectors or other utilities to issue single bills which include Storm Recovery Charges to Cleco Power's Customers. The Servicer shall periodically review the need for modified or additional terms based upon, among other things, (i) the relative amount of SRC Collections received through Third-Party Collectors relative to the Periodic Billing Requirement, (ii) the historical payment and default experience of each Third-Party Collector and (iii) such other credit and collection policies to which the Third-Party Collectors are subject, and if permitted by applicable law, will set out any such modified or additional terms in a supplemental tariff filed with the LPSC.

(c) Monitoring of Performance and Payment by Third-Party Collectors. In addition to any actions required by the Tariff, LPSC Regulations or other applicable law, the Servicer shall undertake to do the following:

(i): The Servicer shall require each Third-Party Collector to remit all Storm Recovery Charges (less any applicable charge-off allowances) that such Third-Party Collector is obligated to pay in accordance with the provisions of the Tariff, other applicable tariffs and LPSC Regulations (whether or not disputed). The Servicer shall monitor compliance by each Third-Party Collector and take prompt action to enforce such requirements.
(ii): Where a Third-Party Collector is responsible for billing the Customers, the Servicer shall, consistent with its customary billing practices, bill each Third-Party Collector no less frequently than the billing cycle otherwise applicable to such Customers.
(iii): The Servicer shall work with Third-Party Collectors to resolve any disputes using the dispute resolution procedures established in the Tariff, other applicable tariffs and any LPSC Regulations, in accordance with the Servicing Standard.

(d) Enforcement of Third-Party Collector Obligations. The Servicer shall, in accordance with the terms of the Tariff, applicable agreements with Third-Party Collectors and other applicable tariffs, ensure that each Third-Party Collector remits all SRC Collections which it is obligated to remit to the Servicer. In the event of any default by any Third-Party Collector, the Servicer shall enforce all rights set forth in and take all other steps permitted by, if applicable, the Applicable Financing Orders, Tariff, other applicable tariffs and any other LPSC Regulations as it determines, in accordance with the Servicing Standard, are reasonably necessary to ensure the prompt payment of SRC Collections by such Third-Party Collector and to preserve the rights of the Holders with respect thereto, including, where appropriate, terminating the right of any Third-Party Collector to bill and collect Storm Recovery Charges or petitioning the LPSC to impose such other remedies or penalties as may be available under the circumstances. Any agreement entered into between the Servicer and a defaulted Third-Party Collector will be consistent with and limited by the terms of this Agreement and will satisfy the Rating Agency Condition. In the event the Servicer has actual knowledge that a Third-Party Collector is in default, including due to the downgrade by the Rating Agencies of any party providing credit support for such Third-Party Collector, the Servicer shall promptly notify a Responsible Officer of the Trustee in writing of the same and, shall, if applicable, instruct the Trustee either to:

(i): withdraw from such Third-Party Collector's Third-Party Collector Deposit Account and deposit into the applicable Collection Accounts the lesser of (x) the amount of cash on deposit in such Third-Party Collector Deposit Account and allocable to the Storm Recovery Property at such time and (y) the amount of any Storm Recovery Charges then due and payable by such Third-Party Collector; or
(ii): make demand under any letter of credit, guarantee or other credit support up to the lesser of (x) the amount of such letter of credit, guarantee or other credit support and (y) the amount of any Storm Recovery Charges then due and payable by such Third-Party Collector, and forward the amounts received, if any, as a result of such demand to the applicable Collection Accounts.

The Trustee shall, within two (2) Business Days of receipt of such written notice, withdraw such funds from the Third-Party Collector Deposit Account or make demand under such credit support, as applicable, and deposit such funds withdrawn or received, as applicable, into the applicable Collection Accounts.

(e) Maintenance of Third-Party Collector Deposit Accounts. If any Third-Party Collectors collect Storm Recovery Charges then the Servicer shall cause the entity acting as Trustee to

maintain an account for the Third-Party Collector to hold any of (A) a cash deposit to the Trustee, (B) a surety bond or Affiliate guarantee or (C) a letter of credit (a "Third-Party Collector Deposit Account") that the Third-Party Collector may be required to provide under the Tariff, any applicable agreements with such Third-Party Collectors and other applicable tariffs or applicable LPSC Regulation. The Servicer shall provide written direction to the Trustee regarding the allocation and release of funds on deposit in the Third-Party Collector Deposit Accounts, as permitted or required by the Indenture, this Agreement or any agreement with the Third-Party Collector, applicable Tariff, other applicable tariffs or LPSC Regulations. The Trustee shall be entitled to conclusively rely on any such written directions from the Servicer. The Servicer will seek and use reasonable best efforts to obtain, from any Third-Party Collector which wishes to satisfy its credit support requirements by making a deposit to a Third-Party Collector Deposit Account, a written security agreement stating that (i) by making such deposit the Third-Party Collector has granted a security interest in such deposit in favor of the Trustee, and (ii) the Trustee, in holding such deposit as collateral, will have the rights and remedies of a secured party under Article 9 of the UCC with respect to such collateral, and the Servicer will promptly forward any such agreement to the Trustee.

(f) Affiliated Third Party Collectors. In performing its obligations under this Section 3.05, the Servicer shall deal with any Third-Party Collectors which are Affiliates of the Servicer on terms which are no more favorable in the aggregate to such Affiliated Third-Party Collector than those used by the Servicer in its dealings with any Third-Party Collectors that are not Affiliates of the Servicer.

ARTICLE IV

SERVICES RELATED TO STORM RECOVERY CHARGE ADJUSTMENTS AND
ALLOCATION ADJUSTMENTS

SECTION 4.01. STORM RECOVERY CHARGE ADJUSTMENTS. From time to time, but at least semi-annually, until the retirement of the Storm Recovery Bonds, the Servicer shall identify the need for Storm Recovery Charge Adjustments and shall take reasonable action to obtain and implement such Storm Recovery Charge Adjustments, all in accordance with the following:

(a) Expected Amortization Schedule. The Expected Amortization Schedule for the Storm Recovery Bonds is provided in the Supplement.

(b) Semi-Annual Storm Recovery Charge Adjustments. The Servicer will calculate and make semi-annual Storm Recovery Charge Adjustments as of each Adjustment Date commencing with the first Adjustment Date as follows:

(i): subtract the preceding period's Storm Recovery Charge revenues collected and remitted from the preceding period's Periodic Payment Requirement to calculate the under-collection or over-collection from the preceding period;
(ii): calculate the amount of the Storm Recovery Charge Adjustment, by (i) correcting any under-collection or over-collection calculated in step (i) over a period of up to 12 months covering the next two succeeding payment dates (in order to mitigate the size and impact of the adjustment), using the rules that (x) principal payments on the Storm Recovery Bonds will be brought on schedule over the next two succeeding payment dates, but (y) the resulting periodic billing requirement always must be sufficient to cover operating expenses and interest on the Storm Recovery Bonds on a timely basis, (ii) adding any amount carried forward from the previous Storm Recovery Charge Adjustment by the operation of step (i) above during the preceding Storm Recovery Charge Adjustment calculation;

(iii): add the amount calculated in step (ii) to the upcoming period's trued-up Periodic Billing Requirement to determine an adjusted Periodic Billing Requirement for the upcoming period;
(iv): add the amount, if a positive number, equal to the difference of the return on Cleco Power's invested capital in the Issuer for the preceding period minus the actual investment earnings thereon from the Trustee's eligible investments for the preceding period;
(v): allocate the result from step (iv) using the allocation factors approved by the LPSC in the Financing Order and develop customer class specific Storm Recovery Charge rates based on those allocated dollar amounts; and
(vi): file those adjusted storm recovery charge rates with the LPSC not less than 15 days prior to the first billing cycle of the month in which the revised Storm Recovery Charges will be in effect.

(c) Interim Storm Recovery Charge Adjustment Request. The Servicer may also make interim Storm Recovery Charge Adjustments more frequently at any time during the term of the Storm Recovery Bonds: (i) if the Servicer forecasts that SRC Collections will be insufficient to make all scheduled payments of interest and other financing costs in respect of the Storm Recovery Bonds during the current or next succeeding payment period or bring all principal payments on schedule over the next two succeeding payment dates and/or (ii) to replenish any draws upon the capital subaccount.

(d) Non-Standard Storm Recovery Charge Adjustment. The Servicer shall request LPSC approval of an amendment to the Storm Recovery Charge Adjustment mechanism, a non-standard Storm Recovery Charge Adjustment (under such procedures as shall be proposed by the Servicer and approved by the LPSC at the time) that it deems necessary or appropriate to address any material deviations between SRC Collections and the periodic revenue requirement. No such change shall cause any of the then-current credit ratings of the Storm Recovery Bonds to be suspended, withdrawn or downgraded.

(e) Notification of Adjustment Requests. Whenever the Servicer files a Storm Recovery Charge Adjustment request with the LPSC, the Servicer shall send a copy of such filing to the Issuer, each Trustee and the Rating Agencies concurrently therewith and such other persons as are entitled to notice under the Financing Order. If any Storm Recovery Charge Adjustment request does not become effective on the applicable date as provided in such filing and in accordance with the Financing Order, the Servicer shall notify the Issuer, each Trustee and the Rating Agencies by the end of the second Business Day after such applicable date.

(f) Reports.

(i) Servicer's Certificate. For each Calculation Date, the Servicer shall provide to the Issuer, the LPSC, the Trustee and the Rating Agencies a statement indicating:

(A) the Storm Recovery Bond Balance and the Projected Storm Recovery Bond Balance as of the immediately preceding Payment Date,

(B) the amount on deposit in the Capital Subaccount and the amount required to be on deposit in the Capital Subaccount as of the immediately preceding Payment Date,

(D) the Projected Storm Recovery Bond Balance on the Calculation Date and the Servicer's projection of the Storm Recovery Bond Balance on the Payment Date immediately preceding the next succeeding Adjustment Date,

(E) the required Capital Subaccount balance and the Servicer's projection of the amount on deposit in the Capital Subaccount for the Payment Date immediately preceding the next succeeding Adjustment Date, and

(F) the Servicer's projection of the amount on deposit in the Excess Funds Subaccount for the Payment Date immediately preceding the next succeeding Adjustment Date.

(ii) Reports to Customers.

(A) After each revised Storm Recovery Charge has gone into effect pursuant to a Storm Recovery Charge Adjustment, the Servicer shall, to the extent and in the manner and time frame required by applicable LPSC Regulations, if any, cause to be prepared and delivered to Customers any required notices announcing such revised Storm Recovery Charges.

(B) The Servicer shall comply with the requirements of the Financing Order and Tariff with respect to the identification of Storm Recovery Charges on Bills. In addition, at least once each year, the Servicer shall cause to be prepared and delivered to such Customers a notice stating, in effect, that the Storm Recovery Property and the Storm Recovery Charges are owned by the Issuer and not the Seller. Such notice shall be included as an insert to or in the text of the Bills delivered to such Customers.

(C) The Servicing Fee includes all costs of preparation and delivery incurred in connection with clauses (A) and (B) above, including printing and postage costs.

SECTION 4.02. LIMITATION OF LIABILITY

(a) The Issuer and the Servicer expressly agree and acknowledge that:

(i): In connection with any Storm Recovery Charge Adjustment, the Servicer is acting solely in its capacity as the servicing agent of the Issuer hereunder.
(ii): Neither the Servicer nor the Issuer shall be responsible in any manner for, and shall have no liability whatsoever as a result of, any action, decision, ruling or other determination made or not made, or any delay (other than any delay resulting from the Servicer's failure to file the requests required by Section 4.01 in a timely and correct manner or other breach by the Servicer of its duties under this Agreement that materially and adversely affects the Storm Recovery Charge Adjustments), by the LPSC in any way related to the Storm Recovery Property or in connection with any Storm Recovery Charge Adjustment.
(iii): Except only to the extent that the Servicer is liable under Section 6.02, (A) the Servicer shall have no liability whatsoever relating to the calculation of the Storm-Recovery Charges and the adjustments thereto, including as a result of any inaccuracy of any of the assumptions made in such calculation regarding expected electric energy or demand usage volumes, the rate of charge-offs and estimated expenses and fees of the Issuer, so long as the Servicer has not acted in bad faith or in a grossly negligent manner in connection therewith, and (B) the Servicer shall have no liability whatsoever as a result of any Person, including the Holders, not receiving any payment, amount or return anticipated or expected in respect of any Storm Recovery Bond generally.

(b) Notwithstanding the foregoing, this Section 4.02 shall not relieve the Servicer of any liability under Section 6.02 for any misrepresentation by the Servicer under Section 6.01 or for any breach by the Servicer of its obligations under this Agreement.

ARTICLE V

THE STORM RECOVERY PROPERTY

SECTION 5.01. CUSTODY OF STORM RECOVERY PROPERTY RECORDS. To assure uniform quality in servicing the Storm Recovery Property and to reduce administrative costs, the Issuer hereby revocably appoints the Servicer, and the Servicer hereby accepts such appointment, to act as the agent of the Issuer as custodian of any and all documents and records relating to the Storm Recovery Property, which are hereby constructively delivered to the Trustee, as pledgee of the Issuer, with respect to all Storm Recovery Property.

SECTION 5.02. DUTIES OF SERVICER AS CUSTODIAN.

(a) Safekeeping. The Servicer shall hold the Storm Recovery Property and the Storm Recovery Property Documentation on behalf of the Issuer and maintain such accurate and complete accounts, records and computer systems pertaining to the Storm Recovery Property and Storm Recovery Property Documentation in accordance with its standard accounting procedures and in sufficient detail to permit reconciliation between payments or recoveries on (or with respect to) Storm Recovery Charges and the SRC Collections from time to time remitted to the Trustee pursuant to this Agreement and as shall enable the Issuer and the Trustee, as applicable, to comply with this Agreement, the Sale Agreement and the Indenture. In performing its duties as custodian, the Servicer shall act with reasonable care, using that degree of care and diligence that the Servicer exercises with respect to comparable assets that the Servicer services for itself or, if applicable, for others. The Servicer shall conduct, or cause to be conducted, periodic audits of the Storm Recovery Property Documentation held by it under this Agreement and of the related accounts, records and computer systems, in such a manner as shall enable the Issuer and the Trustee, as pledgee of the Issuer, to verify the accuracy of the Servicer's record keeping. The Servicer shall promptly report to the Issuer, the Trustee and the Rating Agencies any failure on its part to hold the Storm Recovery Property Documentation and maintain its accounts, records and computer systems as herein provided and promptly take appropriate action to remedy any such failure. Nothing herein shall be deemed to require an initial review or any periodic review by the Issuer or the Trustee of the Storm Recovery Property Documentation. The Servicer's duties to hold the Storm Recovery Property Documentation set forth in this Section 5.02, to the extent such Storm Recovery Property Documentation has not been previously transferred to a successor Servicer, shall terminate one year and one day after the earlier of the date on which (i) the Servicer is succeeded by a successor pursuant to the provisions of the Agreement and (ii) no Storm Recovery Bonds are Outstanding.

(b) Maintenance and Access to Records. The Servicer shall maintain the Storm Recovery Property Documentation at 2030 Donahue Ferry Road, Pineville, Louisiana or at such other office as shall be specified to the Issuer, to the LPSC and to the Trustee by written notice at least thirty (30) days prior to any change in location. The Servicer shall make available, as is reasonably required for the Trustee to perform its duties and obligations under the Indenture and the other Basic Documents, for inspection, audit and copying to the Issuer and the Trustee or their respective duly authorized representatives, attorneys or auditors the Servicer's records regarding the Storm Recovery Property, the Storm Recovery Charges and the Storm Recovery Property Documentation at such times during normal business hours as the Issuer or the Trustee shall reasonably request and which do not unreasonably interfere with the Servicer's normal operations. Nothing in this Section 5.02(b) shall affect the obligation of the Servicer to observe any applicable law (including any LSPC Regulation) prohibiting disclosure of information regarding the Customers, and the failure of the Servicer to provide access to such information as a result of such obligation shall not constitute a breach of this Section 5.02(b).

(c) Release of Documents. Upon instruction from the Trustee in accordance with the Indenture, the Servicer shall release any Storm Recovery Property Documentation to the Trustee, the Trustee's agent or the Trustee's designee, as the case may be, at such place or places as the Trustee may designate, as soon as practicable.

(d) Litigation to Defend Storm Recovery Property. The Servicer is required to institute any action or proceeding reasonably necessary to compel performance by the LPSC or the State of Louisiana of any of their respective obligations or duties under the Securitization Act or the Financing Order, as the case may be, with respect to the Storm Recovery Charge Adjustment, provided, however, that in circumstances in which the servicing procedures set out in Annex I apply, the provisions of this undertaking do not require the Servicer to act in a manner different from the manner that the servicing procedures require. The costs of any such actions or proceedings would be reimbursed by the Issuer to the Servicer from amounts on deposit in the Collection Account as an Operating Expense and shall not be deemed to constitute a portion of the Servicing Fee in accordance with the terms of Section 8.02(d) of the Indenture. The amount of any recoveries received by the Servicer as a result of any such action or procedures shall be forwarded to the Trustee for deposit in the Collection Account. The Servicer's obligations pursuant to this Section 5.02(d) survive and continue notwithstanding that the payment of Operating Expenses pursuant to the Indenture may be delayed.

SECTION 5.03. CUSTODIAN'S INDEMNIFICATION. THE SERVICER AS CUSTODIAN SHALL INDEMNIFY THE ISSUER, THE INDEPENDENT MANAGERS AND THE TRUSTEE (FOR ITSELF AND FOR THE BENEFIT OF THE STORM RECOVERY BONDHOLDERS) AND EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS FOR, AND DEFEND AND HOLD HARMLESS EACH SUCH PERSON FROM AND AGAINST, ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PAYMENTS AND CLAIMS, AND REASONABLE COSTS OR EXPENSES, OF ANY KIND WHATSOEVER (COLLECTIVELY, "LOSSES") THAT MAY BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST EACH SUCH PERSON AS THE RESULT OF ANY NEGLIGENT ACT OR OMISSION IN ANY WAY RELATING TO THE MAINTENANCE AND CUSTODY BY THE SERVICER, AS CUSTODIAN, OF THE STORM RECOVERY PROPERTY DOCUMENTATION; PROVIDED, HOWEVER, THAT THE SERVICER SHALL NOT BE LIABLE FOR ANY PORTION OF ANY SUCH AMOUNT RESULTING FROM THE WILLFUL MISCONDUCT, BAD FAITH OR NEGLIGENCE OF THE ISSUER, THE INDEPENDENT MANAGERS OR THE TRUSTEE, AS THE CASE MAY BE.

INDEMNIFICATION UNDER THIS SECTION 5.03 SHALL SURVIVE RESIGNATION OR REMOVAL OF THE TRUSTEE OR ANY INDEPENDENT MANAGER AND SHALL INCLUDE REASONABLE OUT-OF-POCKET FEES AND EXPENSES OF INVESTIGATION AND LITIGATION (INCLUDING REASONABLE ATTORNEY'S FEES AND EXPENSES).

SECTION 5.04. EFFECTIVE PERIOD AND TERMINATION. The Servicer's appointment as custodian shall become effective as of the Sale Date and shall continue in full force and effect until terminated pursuant to this Section 5.04. If the Servicer shall resign as Servicer in accordance with the provisions of this Agreement or if all of the rights and obligations of the Servicer shall have been terminated under Section 7.01, the appointment of the Servicer as custodian shall be terminated effective as of the date on which the termination or resignation of the Servicer is effective. Additionally, if not sooner terminated as provided above, the Servicer's obligations as custodian shall terminate one year and one day after the date on which no Storm Recovery Bonds are Outstanding.

ARTICLE VI

THE SERVICER

SECTION 6.01. REPRESENTATIONS AND WARRANTIES OF THE SERVICER. The Servicer makes the following representations and warranties as of the Sale Date, on which the Issuer has relied in acquiring the Storm Recovery Property. The representations and warranties shall survive the execution and delivery of this Agreement, the sale of any of the Storm Recovery Property to the Issuer and the pledge thereof to the Trustee pursuant to the Indenture.

(a) Organization and Good Standing. The Servicer is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Louisiana, with the limited liability company power and authority to conduct its business as such business is presently conducted and to execute, deliver and carry out the terms of this Agreement and had at all relevant times and has the requisite power, authority and legal right to service the Storm Recovery Property and to hold the Storm Recovery Property Documentation as custodian.

(b) Due Qualification. The Servicer is duly qualified to do business and is in good standing, and has obtained all necessary licenses and approvals, in all jurisdictions in which it is required to do so (except where the failure to so qualify would not be reasonably likely to have a material adverse effect on the Servicer's business, operations, assets, revenues or properties or adversely affect the servicing of the Storm Recovery Property).

(c) Power and Authority. The Servicer has the limited liability company power and authority to execute and deliver this Agreement and to carry out the terms thereof; and the execution, delivery and performance of this Agreement have been duly authorized by the Servicer by all necessary limited liability company action.

(d) Binding Obligation. This Agreement constitutes a legal, valid and binding obligation of the Servicer enforceable against the Servicer in accordance with its terms subject to applicable bankruptcy, receivership, insolvency, reorganization, moratorium and equitable principles, regardless of whether considered in a Proceeding in equity or at law.

(e) No Violation. The consummation of the transactions contemplated by this Agreement (to the extent applicable to the Servicer's responsibilities thereunder) and the fulfillment of the terms will not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the articles of organization, by-laws or any material indenture or any material agreement to which the Servicer is a party or by which it or any of its property is bound or result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such agreement (other than any Lien that may be granted under the Basic Documents pursuant to Section 1231 of the Securitization Act); or violate any existing law or any existing order, rule or regulation applicable to the Servicer.

(f) Approvals. No approval, authorization, consent, order or other action of, or filing with, any Governmental Authority is required under an applicable law, rule or regulation in connection with the execution and delivery by the Servicer of this Agreement, the performance by the Servicer of the transactions contemplated hereby or the fulfillment by the Servicer of the terms of the Agreement, except those that have been obtained or made or that are required by this Agreement to be made in the future by the Servicer, including the Issuance Advice Letter, filings with the LPSC for adjusting Storm Recovery Charges and allocation of storm recovery charge adjustments pursuant to Section 4.01 and filings with the Louisiana UCC Filing Officer under the Securitization Act and the UCC.

(g) No Proceedings. Except as disclosed by the Servicer on Schedule A hereto, there are no Proceedings pending or, to the Servicer's knowledge, threatened before any Governmental Authority having jurisdiction over the Servicer or its properties:

(i): asserting the invalidity of this Agreement or any of the other Basic Documents;
(ii): seeking any determination or ruling that might materially and adversely affect the performance by the Servicer of its obligations under, or the validity or enforceability against the Servicer of, this Agreement, any of the other Basic Documents or the Storm Recovery Bonds;
(iii): relating to the Servicer and which might materially and adversely affect the federal income tax or State income, gross receipts or franchise tax attributes of the Storm Recovery Bonds; or
(iv): seeking to prevent the issuance of the Storm Recovery Bonds or the consummation of any of the transactions contemplated by this Agreement or any of the other Basic Documents.

(h) Reports and Certificates. Each report and certificate delivered in connection with any filing made to the LPSC by the Servicer on behalf of the Issuer with respect to Storm Recovery Charges, Storm Recovery Charge Adjustments or allocation of storm recovery charges among customer classes will be true and correct in all material respects; provided, however, that to the extent any such report or certificate is based in part upon or contains assumptions, forecasts or other predictions of future events, the representation and warranty of the Servicer with respect thereto will be limited to the representation and warranty that such assumptions, forecasts or other predictions of future events are reasonable based upon historical performance and the facts known to the Servicer on the date such report or certificate is delivered.

SECTION 6.02. INDEMNITIES OF THE SERVICER; RELEASE OF CLAIMS.

(a) THE SERVICER SHALL BE LIABLE IN ACCORDANCE HEREWITH ONLY TO THE EXTENT OF THE OBLIGATIONS SPECIFICALLY UNDERTAKEN BY THE SERVICER UNDER THIS AGREEMENT.

(b) THE SERVICER SHALL INDEMNIFY THE ISSUER, THE TRUSTEE (FOR ITSELF AND ON BEHALF OF THE STORM RECOVERY BONDHOLDERS) AND THE INDEPENDENT MANAGER AND EACH OF THEIR RESPECTIVE TRUSTEES, MEMBERS, MANAGERS, OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS FOR, AND DEFEND AND HOLD HARMLESS EACH SUCH PERSON FROM AND AGAINST, ANY AND ALL LOSSES THAT MAY BE IMPOSED UPON, INCURRED BY OR ASSERTED AGAINST ANY SUCH PERSON AS A RESULT OF:

(i): THE SERVICER'S WILLFUL MISCONDUCT, BAD FAITH OR NEGLIGENCE IN THE PERFORMANCE OF ITS DUTIES OR OBSERVANCE OF ITS COVENANTS UNDER THIS AGREEMENT OR THE SERVICER'S RECKLESS DISREGARD OF ITS OBLIGATIONS AND DUTIES UNDER THIS AGREEMENT;
(ii): THE SERVICER'S BREACH OF ANY OF ITS REPRESENTATIONS OR WARRANTIES IN THIS AGREEMENT; OR
(iii): LITIGATION AND RELATED EXPENSES RELATING TO ITS STATUS AND OBLIGATIONS AS SERVICER (OTHER THAN ANY PROCEEDINGS THE SERVICER IS REQUIRED TO INSTITUTE UNDER THIS AGREEMENT);

PROVIDED, HOWEVER, THAT THE SERVICER SHALL NOT BE LIABLE FOR ANY LOSSES RESULTING FROM THE BAD FAITH, WILLFUL MISCONDUCT OR

NEGLIGENCE OF ANY PERSON INDEMNIFIED PURSUANT TO THIS SECTION 6.02 (EACH, AN "INDEMNIFIED PERSON") OR RESULTING FROM A BREACH OF A REPRESENTATION OR WARRANTY MADE BY SUCH INDEMNIFIED PERSON TO THE SERVICER IN ANY BASIC DOCUMENT THAT GIVES RISE TO THE SERVICER'S BREACH.

(c) PROMPTLY AFTER RECEIPT BY AN INDEMNIFIED PERSON OF WRITTEN NOTICE OF ITS INVOLVEMENT IN ANY ACTION, PROCEEDING OR INVESTIGATION, SUCH INDEMNIFIED PERSON SHALL, IF A CLAIM FOR INDEMNIFICATION IN RESPECT THEREOF IS TO BE MADE AGAINST THE SERVICER UNDER THIS SECTION 6.02, NOTIFY THE SERVICER IN WRITING OF SUCH INVOLVEMENT. FAILURE BY AN INDEMNIFIED PERSON TO SO NOTIFY THE SERVICER SHALL RELIEVE THE SERVICER FROM THE OBLIGATION TO INDEMNIFY AND HOLD HARMLESS SUCH INDEMNIFIED PERSON UNDER THIS SECTION 6.02 ONLY TO THE EXTENT THAT THE SERVICER SUFFERS ACTUAL PREJUDICE AS DETERMINED BY A COURT OF COMPETENT JURISDICTION AS A RESULT OF SUCH FAILURE. WITH RESPECT TO ANY ACTION, PROCEEDING OR INVESTIGATION BROUGHT BY A THIRD PARTY FOR WHICH INDEMNIFICATION MAY BE SOUGHT BY AN INDEMNIFIED PERSON UNDER THIS SECTION 6.02, THE SERVICER SHALL BE ENTITLED TO ASSUME THE DEFENSE OF ANY SUCH ACTION, PROCEEDING OR INVESTIGATION UNLESS (X) SUCH ACTION, PROCEEDING OR INVESTIGATION EXPOSES THE INDEMNIFIED PERSON TO A RISK OF CRIMINAL LIABILITY OR FORFEITURE, (Y) THE SERVICER AND SUCH INDEMNIFIED PERSON HAVE A CONFLICT OF INTEREST IN THEIR RESPECTIVE DEFENSES OF SUCH ACTION, PROCEEDING OR INVESTIGATION OR (Z) THERE EXISTS AT THE TIME THE SERVICER WOULD ASSUME SUCH DEFENSE AN ONGOING SERVICER DEFAULT. UPON ASSUMPTION BY THE SERVICER OF THE DEFENSE OF ANY SUCH ACTION, PROCEEDING OR INVESTIGATION, THE INDEMNIFIED PERSON SHALL HAVE THE RIGHT TO PARTICIPATE IN SUCH ACTION OR PROCEEDING AND TO RETAIN ITS OWN COUNSEL (INCLUDING LOCAL COUNSEL), AND THE SERVICER SHALL BEAR THE REASONABLE FEES, COSTS AND EXPENSES OF SUCH SEPARATE COUNSEL. THE INDEMNIFIED PERSON SHALL NOT SETTLE OR COMPROMISE OR CONSENT TO THE ENTRY OF ANY JUDGMENT WITH RESPECT TO ANY PENDING OR THREATENED CLAIM, ACTION, SUIT OR PROCEEDING IN RESPECT OF WHICH INDEMNIFICATION MAY BE SOUGHT UNDER THIS SECTION 6.02 (WHETHER OR NOT THE SERVICER IS AN ACTUAL OR POTENTIAL PARTY TO SUCH CLAIM OR ACTION) UNLESS THE SERVICER AGREES IN WRITING TO SUCH SETTLEMENT, COMPROMISE OR CONSENT AND SUCH SETTLEMENT, COMPROMISE OR CONSENT INCLUDES AN UNCONDITIONAL RELEASE OF THE SERVICER FROM ALL LIABILITY ARISING OUT OF SUCH CLAIM, ACTION, SUIT OR PROCEEDING.

(d) THE SERVICER SHALL INDEMNIFY THE TRUSTEE AND ITS RESPECTIVE TRUSTEES, OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS FOR, AND DEFEND AND HOLD HARMLESS EACH SUCH PERSON FROM AND AGAINST, ANY AND ALL LOSSES THAT MAY BE IMPOSED UPON, INCURRED BY OR ASSERTED AGAINST ANY SUCH PERSON AS A RESULT OF THE ACCEPTANCE OR PERFORMANCE OF THE TRUSTS AND DUTIES CONTAINED HEREIN AND IN THE INDENTURE, EXCEPT TO THE EXTENT THAT ANY SUCH LOSS (I) SHALL BE DUE TO THE WILLFUL MISCONDUCT, BAD FAITH OR NEGLIGENCE OF THE TRUSTEE OR (II) SHALL ARISE FROM THE TRUSTEE'S BREACH OF ANY OF ITS REPRESENTATIONS OR WARRANTIES SET FORTH IN THE INDENTURE; PROVIDED, HOWEVER, THAT THE FOREGOING INDEMNITY IS EXTENDED TO THE TRUSTEE SOLELY IN ITS INDIVIDUAL CAPACITY AND NOT FOR THE BENEFIT OF THE STORM RECOVERY BONDHOLDERS OR ANY OTHER PERSON. SUCH AMOUNTS WITH

RESPECT TO THE TRUSTEE SHALL BE DEPOSITED AND DISTRIBUTED IN ACCORDANCE WITH THE INDENTURE.

(e) THE SERVICER'S INDEMNIFICATION OBLIGATIONS UNDER SECTION 6.02(b) AND (d) FOR EVENTS OCCURRING PRIOR TO THE REMOVAL OR RESIGNATION OF THE TRUSTEE OR ANY INDEPENDENT MANAGER OR THE TERMINATION OF THIS AGREEMENT SHALL SURVIVE THE RESIGNATION OR REMOVAL OF THE TRUSTEE, ANY INDEPENDENT MANAGER OR THE TERMINATION OF THIS AGREEMENT AND SHALL INCLUDE REASONABLE COSTS, FEES AND EXPENSES OF INVESTIGATION AND LITIGATION (INCLUDING THE ISSUER'S AND THE TRUSTEE'S REASONABLE ATTORNEYS' FEES AND EXPENSES). INDEMNIFICATION UNDER THIS SECTION 6.02 SHALL SURVIVE ANY REPEAL OF, MODIFICATION OF, OR SUPPLEMENT TO, OR JUDICIAL INVALIDATION OF, THE SECURITIZATION ACT OR ANY FINANCING ORDER.

(f) EXCEPT TO THE EXTENT EXPRESSLY PROVIDED FOR IN THIS AGREEMENT, THE SALE AGREEMENT OR THE FORMATION DOCUMENTS (INCLUDING THE SERVICER'S CLAIMS WITH RESPECT TO THE SERVICING FEES AND EXPENSES REIMBURSEMENT AND THE SELLER'S CLAIM FOR PAYMENT OF THE PURCHASE PRICE OF STORM RECOVERY PROPERTY), THE SERVICER HEREBY RELEASES AND DISCHARGES THE ISSUER (INCLUDING ITS MEMBERS, MANAGERS, EMPLOYEES AND AGENTS, IF ANY), THE INDEPENDENT MANAGER, AND THE TRUSTEE (INCLUDING ITS RESPECTIVE OFFICERS, DIRECTORS AND AGENTS) (COLLECTIVELY, THE "RELEASED PARTIES") FROM ANY AND ALL CLAIMS WHATSOEVER, WHICH THE SERVICER, IN ITS CAPACITY AS SERVICER OR OTHERWISE, SHALL OR MAY HAVE AGAINST ANY SUCH PERSON RELATING TO THE STORM RECOVERY PROPERTY OR THE SERVICER'S ACTIVITIES WITH RESPECT THERETO OTHER THAN ANY ACTIONS, CLAIMS AND DEMANDS ARISING OUT OF THE WILLFUL MISCONDUCT, BAD FAITH OR NEGLIGENCE OF THE RELEASED PARTIES.

(g) THE SERVICER AND THE ISSUER HEREBY ACKNOWLEDGE THAT, NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE TRUSTEE IS A THIRD-PARTY BENEFICIARY OF THIS SECTION 6.02 AND IS ENTITLED TO THE BENEFITS OF THE INDEMNITY FROM THE SERVICER CONTAINED HEREIN AND TO BRING ANY ACTION TO ENFORCE SUCH INDEMNIFICATION DIRECTLY AGAINST THE SERVICER.

(h) THE SERVICER SHALL INDEMNIFY THE LPSC (FOR THE BENEFIT OF CUSTOMERS), THE ISSUER, THE TRUSTEE (FOR ITSELF AND ON BEHALF OF THE STORM RECOVERY BONDHOLDERS), AND EACH OF THEIR RESPECTIVE TRUSTEES, MEMBERS, MANAGERS, OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS FOR, AND DEFEND AND HOLD HARMLESS EACH SUCH PERSON FROM AND AGAINST, ANY AND ALL LOSSES THAT MAY BE IMPOSED UPON, INCURRED BY OR ASSERTED AGAINST ANY SUCH PERSON AS A RESULT OF ANY INCREASE IN THE SERVICING FEE THAT BECOMES PAYABLE PURSUANT TO SECTION 6.07(b) OF THIS AGREEMENT AS A RESULT OF A DEFAULT RESULTING FROM THE SERVICER'S MISCONDUCT, NEGLIGENCE IN PERFORMANCE OF ITS DUTIES OR OBSERVANCE OF ITS COVENANTS UNDER THIS AGREEMENT OR TERMINATION FOR CAUSE OF CLECO POWER OR AN AFFILIATE SERVICER. THE INDEMNIFICATION OBLIGATION SET FORTH IN THIS PARAGRAPH MAY BE ENFORCED BY THE LPSC BUT IS NOT ENFORCEABLE BY ANY THIRD-PARTY COLLECTOR OR ANY CUSTOMER. ANY INDEMNITY PAYMENTS UNDER THIS PARAGRAPH FOR THE BENEFIT OF CUSTOMERS SHALL BE REMITTED TO THE TRUSTEE PROMPTLY FOR DEPOSIT INTO THE COLLECTION ACCOUNT.

SECTION 6.03. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS OF, THE SERVICER. Any Person:

(a) into which the Servicer may be merged, converted or consolidated and which succeeds to all or substantially all of the electric transmission and distribution business of the servicer (or, if the transmission and distribution business is split, any person which the LPSC designates in connection with an order relating to such split),

(b) which results from the division of the Servicer into two or more persons and which succeeds to all or substantially all of the electric transmission and distribution business of the Servicer (or, if the transmission and distribution business is split, any person which the LPSC designates in connection with an order relating to such split),

(c) which may result from any merger, conversion or consolidation to which the Servicer shall be a party and which succeeds to all or substantially all of the electric transmission and distribution business of the Servicer (or, if the transmission and distribution business is split, any person which the LPSC designates in connection with an order relating to such split),

(d) which may purchase or otherwise succeed to the properties and assets of the Servicer substantially as a whole and which purchases or otherwise succeeds to all or substantially all of the electric transmission and distribution business of the Servicer (or, if the transmission and distribution business is split, any person which the LPSC designates in connection with an order relating to such split), or

(e) which may otherwise purchase or succeed to all or substantially all of the electric transmission and distribution business of the Servicer (or, if the transmission and distribution business is split, any person which the LPSC designates in connection with an order relating to such split),

which Person in any of the foregoing cases executes an agreement of assumption to perform every obligation of the Servicer under this Agreement, shall be the successor to the Servicer under this Agreement without the execution or filing of any document or any further act by any of the parties to this Agreement; provided, however, that:

(i): immediately after giving effect to such transaction, the representations and warranties made pursuant to Section 6.01 shall be true and correct and no Servicer Default, and no event that, after notice or lapse of time, or both, would become a Servicer Default, shall have occurred and be continuing;

(ii): the Servicer shall have delivered to the Issuer, the LPSC and the Trustee an Officers' Certificate and an Opinion of Counsel each stating that such consolidation, merger, conversion, division or succession and such agreement of assumption comply with this Section 6.03 and that all conditions precedent, if any, provided for in this Agreement relating to such transaction have been complied with;
(iii): the Servicer shall have delivered to the Issuer, the LPSC and the Trustee an Opinion of Counsel either

(A) stating that, in the opinion of such counsel, all filings to be made by the Servicer, including filings with the LPSC pursuant to the Securitization Act and the UCC, that are necessary fully to preserve and protect the interests of each of the Issuer and the Trustee in the Storm Recovery Property have been executed and filed and are in full force and effect, and reciting the details of such filings or

(B) stating that, in the opinion of such counsel, no such action is necessary to preserve and protect such interests;

(iv): the Rating Agencies shall have received prior written notice of such transaction and, if such Person is not an Affiliate of Cleco Power, the Rating Agency Condition shall be satisfied; and
(v): the Servicer shall have delivered to the Issuer, the LPSC, the Trustee and the Rating Agencies an opinion of independent tax counsel (as selected by, and in form and substance satisfactory to, the Servicer, and which may be based on a ruling from the Internal Revenue Service) to the effect that, for federal income tax purposes, such transaction will not result in a material adverse federal income tax consequence to the Issuer or the Storm Recovery Bondholders.

The Servicer shall not consummate any transaction referred to in clauses (a), (b), (c), (d) or (e) above except upon execution of the above-described agreement of assumption and compliance with clauses (i), (ii), (iii), (iv) and (v) above. When any Person acquires the properties and assets of the Servicer substantially as a whole or otherwise becomes the successor to the Servicer in accordance with the terms of this Section 6.03, then upon the satisfaction of all of the other conditions of this Section 6.03, the Servicer shall automatically and without further notice be released from its obligations hereunder.

SECTION 6.04. ASSIGNMENT OF THE SERVICER'S OBLIGATIONS. The Servicer will not voluntarily assign or outsource its obligations hereunder except with the LPSC's prior approval and upon a demonstration that the costs under an alternative arrangement will be no more than if the Servicer continued to perform such services itself, or the assignment or outsourcing is to another Affiliate that will provide such services at the same or lower cost than if the Servicer continued to perform such services itself, or the assignment or outsourcing is to a successor entity to the Servicer as the result of a merger or other restructuring that assumes the Servicer's responsibilities as the servicer and administrator.

SECTION 6.05. LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS. Neither the Servicer nor any of the managers, officers, employees or agents of the Servicer shall be liable to the Issuer, its managers, the Storm Recovery Bondholders, the Trustee or any other person, except as provided under this Agreement, for any action taken or for refraining from the taking of any action pursuant to this Agreement or for errors in judgment; provided, however, that this provision shall not protect the Servicer against any liability that would otherwise be imposed by reason of willful misconduct, bad faith or negligence in the performance of its duties under this Agreement. The Servicer and any manager or officer or employee or agent of the Servicer may rely in good faith on the

advice of counsel or on any document of any kind, prima facie properly executed and submitted by any Person respecting any matters arising under this Agreement.

Except as provided in this Agreement (including but not limited to Section 5.02(c) and 5.02(d) of this Agreement), the Servicer shall not be under any obligation to appear in, prosecute or defend any Proceeding that is not directly related to one of the Servicer's enumerated duties in this Agreement or related to its obligation to pay indemnification, and that in its reasonable opinion may cause it to incur any expense or liability; provided, however, that the Servicer may, in respect of any Proceeding, undertake any reasonable action that is not specifically identified in this Agreement as a duty of the Servicer but that the Servicer may deem necessary or desirable in respect of this Agreement and the rights and duties of the parties to this Agreement and the interests of the Storm Recovery Bondholders under this Agreement. The Servicer's costs and expenses incurred in connection with any such Proceeding shall be payable from the Collection Account as an Operating Expense (and shall not be deemed to constitute a portion of the Servicing Fee) in accordance with Section 8.02(d) of the Indenture. The Servicer's obligations pursuant to this Section 6.05 shall survive and continue notwithstanding the fact that the payment of Operating Expenses pursuant to the Indenture may be delayed (it being understood that the Servicer may be required initially to advance its own funds to satisfy its obligations hereunder).

SECTION 6.06. CLECO POWER NOT TO RESIGN AS SERVICER. Subject to the provisions of Sections 6.03 and 6.04, Cleco Power shall not resign from the obligations and duties imposed on it as Servicer under this Agreement unless the Servicer delivers to the Issuer, the Trustee, the LPSC and each Rating Agency written notice of such resignation at the earliest practicable time and, concurrently therewith or promptly thereafter, an opinion of Independent legal counsel that the Servicer's performance of its duties under this Agreement shall no longer be permissible under applicable law. No such resignation shall become effective until a Successor Servicer shall have assumed the servicing obligations and duties hereunder of the Servicer in accordance with Section 7.04.

SECTION 6.07. SERVICING FEE.

(a) The Issuer agrees to pay the Servicer on each Payment Date, solely to the extent amounts are available therefor in accordance with the Indenture, the Servicing Fee with respect to the Storm Recovery Bonds. For so long as:

(i): Cleco Power or one of its Affiliates is the Servicer,
(ii): a successor to Cleco Power or one of its Affiliates is the Servicer due to the operation of the provisions of Section 6.03, or
(iii): any Person is the Successor Servicer hereunder pursuant to the provisions of Section 6.03 if the predecessor Servicer was Cleco Power or one of its Affiliates,

the amount of the Servicing Fee paid to the Servicer annually shall equal 0.05% of the Storm Recovery Bond Balance on the Issuance Date and shall be prorated based on the fraction of a calendar year during which the Servicer provides any of the services set forth in this Agreement.

(b) In the event that a Successor Servicer not an Affiliate of Cleco Power is appointed in accordance with Section 7.04, the amount of Servicing Fee paid to the Servicer annually shall be agreed upon by the Successor Servicer and the Trustee but shall in no event exceed 0.60% of the Storm Recovery Bond Balance on the Issuance Date without the consent of the LPSC and shall be prorated based on the fraction of a calendar year during which the Successor Servicer provides any of the services set forth in this Agreement. The foregoing fees set forth in Section 6.07(a) and this Section 6.07(b) constitute a fair and reasonable price for the obligations to be performed by the Servicer. The Servicer shall have indemnification obligations for an increased Servicing Fee under certain circumstances, in accordance with Section 6.02(h).

(c) The Servicing Fee, together with any portion of the Servicing Fee that remains unpaid from prior Payment Dates, will be paid solely to the extent funds are available. The Servicing Fee will be paid prior to the payment of or provision for any amounts in respect of interest on and principal of the Storm Recovery Bonds.

SECTION 6.08. COMPLIANCE WITH APPLICABLE LAW. The Servicer covenants and agrees, in servicing the Storm Recovery Property, to comply in all material respects with all laws applicable to, and binding upon, the Servicer and relating to such Storm Recovery Property the noncompliance with which would have a material adverse effect on the value of the Storm Recovery Property; provided, however, that the foregoing is not intended to, and shall not, impose any liability on the Servicer for noncompliance with any Requirement of Law that the Servicer is contesting in good faith in accordance with its customary standards and procedures.

SECTION 6.09. SERVICER EXPENSES. Except as expressly provided elsewhere in this Agreement, the Servicer will not be reimbursed for any expenses incurred by it in connection with its activities hereunder, including taxes imposed on the Servicer and expenses incurred in connection with reports to Storm Recovery Bondholders, and external information technology costs, bank wire fees and legal fees related to this Agreement. The Servicer is entitled to receive reimbursement for its out-of-pocket costs for external accounting as well as for other items of costs that will be incurred annually to support and service the Storm Recovery Bonds after issuance, as provided in the Financing Order.

SECTION 6.10. APPOINTMENTS. The Servicer may at any time appoint a subservicer or agent to perform all or any portion of its obligations as Servicer hereunder; provided, however, that unless such Person is an Affiliate of Cleco Power, the Rating Agency Condition shall have been satisfied in connection therewith; provided further that the Servicer shall remain obligated and be liable to the Issuer for the servicing and administering of the Storm Recovery Property in accordance with the provisions hereof without diminution of such obligation and liability by virtue of the appointment of such subservicer or agent and to the same extent and under the same terms and conditions as if the Servicer alone were servicing and administering the Storm Recovery Property. The fees and expenses of the subservicer or agent shall be as agreed between the Servicer and its subservicer or agent from time to time, and none of the Issuer, the Trustee or the Storm Recovery Bondholders shall have any responsibility therefor. Any such appointment shall not constitute a Servicer resignation under Section 6.06. In the event any subservicer participates in the "servicing function" within the meaning of Item 1122 of Regulation AB, the Servicer shall be responsible for obtaining from each subservicer and delivering to the Issuer any assessment of compliance and attestation required to be delivered by the Servicer under Section 3.03.

SECTION 6.11. NO SERVICER ADVANCES. The Servicer shall not make any advances of interest on or principal of the Storm Recovery Bonds.

SECTION 6.12. REMITTANCES. The Servicer shall remit Storm Recovery Charges to the Trustee each Business Day based on estimated daily collections, using a weighted average balance of days outstanding on Cleco Power's retail bills (the "Daily Remittance"). The Servicer will track the amount billed for Storm Recovery Charges by customer. The summation of those individual charges on a daily basis will be remitted to the Trustee on each Business Day, net of considerations of the timing lag between billing and collection, and as further adjusted for uncollectible amounts. The Servicer will include in the calculation of this remittance an allowance for the estimated charged-off amount based on the prior annual period. Cleco Power will not be required to credit Customers or the Issuer with any earnings accruing to Cleco Power on transferred and untransferred daily collections of Storm Recovery Charges.

SECTION 6.13. SERVICER'S CERTIFICATE. Not later than two (2) Business Days prior to each Payment Date, the Servicer shall deliver a written report, for the Storm Recovery Bonds,

substantially in the form of Exhibit A hereto (the "Semi-Annual Servicer's Certificate") to the Issuer, the LPSC, the Trustee and the Rating Agencies setting forth the transfers and payments to be made in respect of such Payment Date pursuant to the Indenture and the amounts thereof and the amounts to be paid to Holders of Storm Recovery Bonds pursuant to the Indenture.

SECTION 6.14. PROTECTION OF TITLE. The Servicer shall execute and file all filings, including filings with the Louisiana UCC Filing Officer pursuant to the Securitization Act and the Louisiana UCC, and cause to be executed and filed all filings, all in such manner and in such places as may be required by law fully to preserve, maintain and protect the interests of the Issuer and the Trustee in the Storm Recovery Property, including all filings required under the Securitization Act and the Louisiana UCC relating to the transfer of the ownership or security interest in the Storm Recovery Property by the Seller to the Issuer or any security interest granted by the Issuer in the Storm Recovery Property. The Servicer shall deliver (or cause to be delivered) to the Issuer, the LPSC and the Trustee file-stamped copies of, or filing receipts for, any document filed as provided above, as soon as available following such filing.

SECTION 6.15. MAINTENANCE OF OPERATIONS. To the extent that any interest in the Storm Recovery Property is assigned, sold, or transferred to an assignee, Cleco Power shall enter into a contract with that assignee that requires Cleco Power to continue to operate its electric transmission and distribution system in order to provide electric services to Cleco Power's customers; provided, however, that this provision shall not prohibit Cleco Power from selling, assigning, or otherwise divesting its electric transmission and distribution systems or any part thereof so long as the entity or entities acquiring such system agree to continue operating the facilities to provide electric service to Cleco Power's LPSC's jurisdictional customers.

ARTICLE VII

SERVICER DEFAULT

SECTION 7.01. SERVICER DEFAULT. If any one of the following events (a "Servicer Default") occurs and is continuing:

(a) any failure by the Servicer to remit to the Trustee, on behalf of the Issuer, any required remittance by the date that such remittance must be made that continues unremedied for a period of five Business Days after the date on which written notice therof shall have been given to the Servicer and the LPSC by the Issuer or the Trustee;

(b) any failure by the Servicer to duly observe or perform in any material respect any other covenant or agreement of the Servicer set forth in this Agreement (other than as provided in Section 7.01(a) or (c)) or any other Basic Document to which it is a party in such capacity, which failure

(i): materially and adversely affects the Storm Recovery Property or the timely collection of the Storm Recovery Charges or the rights of the Storm Recovery Bondholders, and
(ii): continues unremedied for a period of 60 days after the date on which written notice thereof shall have been given to the Servicer by the Trustee, the LPSC or the Issuer or after discovery of such failure by an officer of the Servicer, as the case may be;

(c) any failure by the Servicer duly to perform its obligations under Section 4.01(b) of this Agreement in the time and manner set forth therein, which failure continues unremedied for a period of five Business Days;

(d) any representation or warranty made by the Servicer in this Agreement proves to have been incorrect when made, which has a material adverse effect on the Issuer or the Storm

Recovery Bondholders, and which material adverse effect continues unremedied for a period of 60 days after the date on which written notice thereof shall have been given to the Servicer by the Issuer or the Trustee or after discovery of such failure by an officer of the Servicer, as the case may be; or

(e) an Insolvency Event occurs with respect to the Servicer;

then, so long as the Servicer Default shall not have been remedied, the Trustee may, or shall upon the written instruction of the Majority Holders and with the Issuer's consent (which shall not be unreasonably withheld), terminate all the rights and obligations (other than the indemnification obligations set forth in Section 6.02 hereof and the obligation under Section 7.04 to continue performing its functions as Servicer until a Successor Servicer is appointed) of the Servicer under this Agreement by notice then given in writing to the Servicer (a "Termination Notice").

In addition, upon a Servicer Default, the Storm Recovery Bondholders and the Trustee shall be entitled to (i) apply to the 19th Judicial District Court for the Parish of East Baton Rouge, Louisiana, for sequestration and payment to the Trustee of revenues arising with respect to the Storm Recovery Property, (ii) foreclose on or otherwise enforce the Lien on and security interests in the Storm Recovery Property and (iii) apply to the LPSC for an order that amounts arising from the Storm Recovery Charges be transferred to a separate account for the benefit of the Storm Recovery Bondholders, in accordance with the Securitization Act.

On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Agreement, whether with respect to the Storm Recovery Property, the related Storm Recovery Charges or otherwise, shall, upon appointment of a Successor Servicer pursuant to Section 7.04, without further action, pass to and be vested in such Successor Servicer and, without limitation, the Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the Storm Recovery Property Documentation and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor Servicer, the Trustee and the Issuer in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Agreement, including the transfer to the Successor Servicer for administration by it of all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the Storm Recovery Property or the related Storm Recovery Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the Storm Recovery Property Documentation to the Successor Servicer. All reasonable costs and expenses (including attorneys' fees and expenses) incurred in connection with transferring the Storm Recovery Property Documentation to the Successor Servicer and amending this Agreement to reflect such succession as Servicer pursuant to this Section shall be paid by the predecessor Servicer upon presentation of documentation of such costs and expenses. All costs and expenses (including attorneys' fees and expenses) incurred in connection with transferring the Storm Recovery Property Documentation to the Successor Servicer and amending this Agreement to reflect the succession as Servicer other than pursuant to this Section shall be paid by the party incurring such costs and expenses. Termination of Cleco Power's rights as a Servicer shall not terminate Cleco Power's rights or obligations in its individual capacity under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder).

SECTION 7.02. NOTICE OF SERVICER DEFAULT. The Servicer shall deliver to the Issuer, to the Trustee, to the LPSC, and to each Rating Agency promptly after having obtained actual knowledge thereof, but in no event later than two Business Days thereafter, written notice in an Officers' Certificate of any event or circumstance which, with the giving of notice or the passage of time, would become a Servicer Default under Section 7.01.

SECTION 7.03. WAIVER OF PAST DEFAULTS. The Trustee, with the written consent of the Majority Holders, may waive in writing in whole or in part any default by the Servicer in the performance of its obligations hereunder and its consequences, except a default in making any required remittances to the Trustee of SRC Collections from Storm Recovery Property in accordance with Section 6.12 of this Agreement. Upon any such waiver of a past default, such default shall cease to exist, and any Servicer Default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement. No such waiver shall extend to any subsequent or other default or impair any right consequent thereto.

SECTION 7.04. APPOINTMENT OF SUCCESSOR.

(a) Upon the Servicer's receipt of a Termination Notice pursuant to Section 7.01 or the Servicer's resignation in accordance with the terms of this Agreement, the Servicer shall continue to perform its functions as Servicer under this Agreement and shall be entitled to receive the requisite portion of the Servicing Fee and expenses reimbursement, until a Successor Servicer shall have assumed in writing the obligations of the Servicer hereunder as described below. In the event of the Servicer's removal or resignation hereunder, the Trustee at the written direction and with the consent of the Majority Holders shall appoint a Successor Servicer with the Issuer's prior written consent thereto (which consent shall not be unreasonably withheld), and the Successor Servicer shall accept its appointment by a written assumption in form acceptable to the Issuer and the Trustee. In no event shall the Trustee be liable for its appointment of a Successor Servicer appointed at the written direction of the Majority Holders. If, within 30 days after the delivery of the Termination Notice, a new Servicer shall not have been appointed and accepted such appointment, the Trustee may petition the LPSC or a court of competent jurisdiction to appoint a Successor Servicer under this Agreement. A Person shall qualify as a Successor Servicer only if:

(i): such Person is permitted under LPSC Regulations to perform the duties of the Servicer pursuant to the Securitization Act, the Financing Order and this Agreement,
(ii): either (A) the LPSC has approved the appointment of the Successor Servicer or (B) 45 days have lapsed since the LPSC received notice of appointment of the Successor Servicer and the LPSC has neither approved nor disapproved that appointment,
(iii): the Rating Agency Condition shall have been satisfied, and
(iv): such Person enters into a servicing agreement with the Issuer having substantially the same provisions as this Agreement.

(b) Upon appointment, the Successor Servicer shall be the successor in all respects to the predecessor Servicer under this Agreement and shall be subject to all the responsibilities, duties and liabilities arising thereafter relating thereto placed on the predecessor Servicer and shall be entitled to the Servicing Fee and expenses reimbursement and all the rights granted to the predecessor Servicer by the terms and provisions of this Agreement.

SECTION 7.05. COOPERATION WITH SUCCESSOR. The predecessor Servicer covenants and agrees with the Issuer that it will, on an ongoing basis, cooperate with the Issuer and Successor Servicer and provide whatever information is, and take whatever actions are, reasonably necessary to assist the Successor Servicer in performing its obligations hereunder.

ARTICLE VIII

MISCELLANEOUS PROVISIONS

SECTION 8.01. AMENDMENT.

(a) This Agreement may be amended by the Servicer and the Issuer, with the prior written consent of the Trustee and the satisfaction of the Rating Agency Condition; provided, however, that no amendment that would increase the ongoing financing costs, as defined in the Financing Order, shall be permitted without the prior approval of the LPSC. Promptly after the execution of any such amendment or consent, the Issuer shall furnish written notification of the substance of such amendment or consent to each of the Rating Agencies.

(b) Notwithstanding Section 8.01(a) or anything to the contrary in this Agreement, the Servicer and the Issuer may amend the Issuer Annex in writing with prior written notice given to the Trustee and the Rating Agencies, but without the consent of the Trustee, any Rating Agency or any Holder, solely to address changes to the Servicer's method of calculating SRC Collections as a result of changes to the Servicer's current computerized customer information system; provided that any such amendment shall not have a material adverse effect on the Holders of then Outstanding Storm Recovery Bonds.

Prior to the execution of any amendment to this Agreement, the Issuer and the Trustee shall be entitled to receive and conclusively rely upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement and the Opinion of Counsel referred to in Section 3.01. The Issuer and the Trustee may, but shall not be obligated to, enter into any such amendment which affects their own rights, duties or immunities under this Agreement or otherwise. Notwithstanding Section 8.01(a) or anything to the contrary in this Agreement, this Agreement shall be amended automatically to comply with changes in law.

SECTION 8.02. NOTICES. All demands, notices and communications upon or to the Servicer, the Issuer, the LPSC, the Trustee or the Rating Agencies under this Agreement shall be in writing, delivered personally, via facsimile, by reputable overnight courier or by certified mail, return-receipt requested, and shall be deemed to have been duly given upon receipt

(a) in the case of the Servicer, to Cleco Power LLC, 2030 Donahue Ferry Road, Pineville, Louisiana 71360-5226, Attention: Treasurer;

(b) in the case of the Issuer, to Cleco Katrina/Rita Hurricane Recovery Funding LLC, 2605 Hwy. 28 East, Office Number 12, Pineville, Louisiana 71360-5226, Attention: Manager;

(d) in the case of Moody's, to Moody's Investors Service, Inc., ABS Monitoring Department, 7 World Trade Center at 250 Greenwich Street, New York, New York 10007;

(e) in the case of Standard & Poor's, to Standard & Poor's, a division of The McGraw-Hill Companies, 55 Water Street, New York, New York 10041, Attention: Asset Backed Surveillance Department; and

(f) in the case of Fitch, to Fitch, Inc., 1 State Street Plaza, New York, New York 10004, Attention: ABS Surveillance;

(g) in the case of the LPSC, to Galvez Building, 12th Floor, 602 North Fifth Street, Baton Rouge, Louisiana 70821-9154, Attention: Executive Counsel;

or, as to each of the foregoing, at such other address as shall be designated by written notice to the other parties.

SECTION 8.03. ASSIGNMENT. Notwithstanding anything to the contrary contained herein, except as provided in Sections 6.03 and 6.04 and as provided in the provisions of this Agreement concerning the resignation or termination of the Servicer, this Agreement may not be assigned by the Servicer. Any purported assignment not in compliance with this Agreement shall be void.

SECTION 8.04. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this Agreement are solely for the benefit of the Servicer, the Issuer and, to the extent provided herein or in the other Basic Documents, Customers and the other Persons expressly referred to herein and the Trustee, on behalf of itself and the Storm Recovery Bondholders, and nothing in this Agreement, whether express or implied, shall be construed to give to any other Person any legal or equitable right, remedy or claim in the Series Trust Estate or under or in respect of this Agreement or any covenants, conditions or provisions contained herein. Notwithstanding anything to the contrary contained herein, for the avoidance of doubt, any right, remedy or claim to which any Customer may be entitled pursuant to the Financing Order and this Agreement may be asserted or exercised only by the LPSC (or by the Attorney General of the State of Louisiana in the name of the LPSC) for the benefit of such Customer.

SECTION 8.05. SEVERABILITY. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

SECTION 8.06. SEPARATE COUNTERPARTS. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

SECTION 8.07. HEADINGS. The headings of the various Articles and Sections herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.

SECTION 8.08. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF LOUISIANA, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

SECTION 8.09. ASSIGNMENT TO THE TRUSTEE. The Servicer hereby acknowledges and consents to any pledge, assignment and grant of a security interest by the Issuer to the Trustee pursuant to the Indenture for the benefit of any Storm Recovery Bondholders of all right, title and interest of the Issuer in, to and under the Storm Recovery Property owned by the Issuer and the proceeds thereof and the assignment of any or all of the Issuer's rights hereunder to the Trustee. Notwithstanding such assignment, in no event shall the Trustee have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer, hereunder or in

any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer.

SECTION 8.10. NONPETITION COVENANTS. Notwithstanding any prior termination of this Agreement or the Indenture, but subject to a court's rights to order the sequestration and payment of revenues arising with respect to the Storm Recovery Property pursuant to Section 1229(F) of the Securitization Act, the Servicer shall not, prior to the date which is one year and one day after the termination of the Indenture, petition or otherwise invoke or cause the Issuer to invoke the process of any Governmental Authority for the purpose of commencing or sustaining a case against the Issuer under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or any substantial part of the property of the Issuer, or ordering the winding up or liquidation of the affairs of the Issuer.

SECTION 8.11. TERMINATION. This Agreement shall terminate when all Storm Recovery Bonds have been retired or redeemed in full.

SECTION 8.12. LPSC CONSENT. Except as specifically set forth in Section 7.04, to the extent the consent of the LPSC is required to effect any amendment to or modification of this Agreement or any provision of this Agreement,

(a) the Servicer may request the consent of the LPSC by delivering to the LPSC's executive director and general counsel a written request for such consent, which request shall contain:

(i) a reference to Docket No. U-29157 and a statement as to the possible effect of the amendment on ongoing financing costs;

(ii) an Officer's Certificate stating that the proposed amendment or modification has been approved by all parties to this Agreement; and

(iii) a statement identifying the person to whom the LPSC or its staff is to address its consent to the proposed amendment or modification or request additional time;

(b) The LPSC shall, within 30 days of receiving the request for consent complying with Section 8.12(a) above, either

(i) provide notice of its consent or its order denying consent to the person specified in Section 8.12(a)(iii) above, or

(ii) be conclusively deemed, on the 31st day after receiving the request for consent, to have consented to the proposed amendment or modification.

Any amendment or modification requiring the consent of the LPSC as provided in this Section 8.12 shall become effective on the later of (i) the date proposed by the parties to such amendment or modification and (ii) the first day after the expiration of the 30-day period provided for in Section 8.12(b)(ii).

Following the delivery of a notice to the LPSC by the Servicer under Section 8.12(a), the Servicer and the Issuer shall have the right at any time to withdraw from the LPSC further consideration of any notification of a proposed amendment. Such withdrawal shall be evidenced by the Servicer's giving prompt written notice thereof to the LPSC, the Issuer and the Trustee.

SECTION 8.13. LIMITATION OF LIABILITY

It is expressly understood and agreed by the parties hereto that this Agreement is executed and delivered by the Trustee, not individually or personally but solely as Trustee in the exercise of the powers and authority conferred and vested in it, and that the Trustee, in acting hereunder, is entitled to all rights, benefits, protections, immunities and indemnities accorded to it under the Indenture.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective officers as of the day and year first above written.

SCHEDULE A
TO
STORM RECOVERY PROPERTY SERVICING AGREEMENT

Proceedings pending or, to the Servicer's best knowledge, threatened before any court, federal or State regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Servicer or its properties seeking any determination or ruling that might materially and adversely affect the Storm Recovery Property or the performance by the Servicer of its obligations under, or the validity or enforceability against the Servicer of, this Agreement:

[None]

EXHIBIT A

FORM OF SEMI-ANNUAL SERVICER'S CERTIFICATE

Pursuant to Section 6.13 of the Storm Recovery Property Servicing Agreement, dated as of March [ ], 2008 (the "Servicing Agreement"), between CLECO POWER LLC, as servicer and CLECO KATRINA/RITA HURRICANE RECOVERY FUNDING LLC, the Servicer does hereby certify, for the , 20 Payment Date (the "Current Payment Date"), as follows:

(a) Capitalized terms used herein have their respective meanings as set forth in the Servicing Agreement or the Indenture. References herein to certain sections and subsections are references to the respective sections of the Servicing Agreement or the Indenture, as the context indicates.

(i) Allocation of remittances as of Current Payment Date allocable to principal and interest:

a. Principal

			Aggregate
i.	Tranche A-1
ii.	Tranche A-2
v.	Total:

b. Interest

			Aggregate
i.	Tranche A-1
ii.	Tranche A-2
v.	Total:

(b) Outstanding Amount of Bonds prior to, and after giving effect to the payment on the current Payment Date and the difference, if any, between the Outstanding Amount specified in the Expected Amortization Schedule (after giving effect to payments to be made on such Payment Date under 1a above) and the principal balance to be Outstanding (following payment on current Payment Date):

(i) Principal Balance Outstanding (as of the date of this certification):

i.	Tranche A-1
ii.	Tranche A-2
v.	Total:

(ii) Principal Balance to be Outstanding (following payment on current Payment Date):

i.	Tranche A-1
ii.	Tranche A-2
v.	Total:

(iii) Difference between (b) above and Outstanding Amount specified in Expected Amortization Schedule:

i.	Tranche A-1
ii.	Tranche A-2
v.	Total:

(c) All other transfers to be made on the current Payment Date, including amounts to be paid to the Trustee and to the Servicer:

(i) Operating Expenses

i.	Trustee Fees and Expenses:
ii.	Servicing Fee:
iii.	Administration Fee:
iv.	Other Operating Expenses:
v.	Total:

(ii) Other Payments

i.	Operating Expenses (payable pursuant to Section 8.02(d)(4) of the Indenture):
ii.	Funding of Capital Subaccount (to required amount):
iii.	Return on Capital Subaccount payable to Cleco Katrina/Rita Hurricane Recovery Funding LLC from investment earnings on the capital subaccount and, if necessary from amounts in the General and Excess Funds Subaccount in an aggregate amount equal to [ . ]% per annum
iv.	Operating Expenses and Indemnity Amounts payable pursuant to Section 8.02(d)(8) of the Indenture:
v.	Deposits to Excess Funds Subaccount (including the portion, if any, of investment earnings on the Capital Subaccount in excess of the amounts payable under (iii)):
vi.	Total:

(d) Estimated amounts on deposit in the Capital Subaccount and Excess Funds Subaccount after giving effect to the foregoing payments:

(i) Capital Subaccount

Total:

(ii) Excess Funds Subaccount

Total:

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Semi-Annual Servicer's Certificate this day of .

CLECO POWER LLC, as Servicer
By:
Name:
Title:

EXHIBIT B-1

FORM OF SERVICER'S REGULATION AB COMPLIANCE CERTIFICATE

The undersigned hereby certifies that he/she is the duly elected and acting [ ] of CLECO POWER LLC, as servicer (the "Servicer") under the Storm Recovery Property Servicing Agreement dated as of March [ ], 2008 (the "Servicing Agreement") between the Servicer and CLECO KATRINA/RITA HURRICANE RECOVERY FUNDING LLC (the "Issuer") and further that:

1. The undersigned is responsible for assessing the Servicer's compliance with the servicing criteria set forth in Item 1122(d) of Regulation AB (the "Servicing Criteria").

2. With respect to each of the Servicing Criteria, the undersigned has made the following assessment of the Servicing Criteria in accordance with Item 1122(d) of Regulation AB, with such discussion regarding the performance of such Servicing Criteria during the fiscal year ended , and covered by Cleco Power's annual report on Form 10-K (such fiscal year, the "Assessment Period"):

Regulation AB Reference	Servicing Criteria	Applicable Servicing Criteria
	General Servicing Considerations
1122(d)(1)(i)	Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements.	Applicable; assessment below.
1122(d)(1)(ii)	If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party's performance and compliance with such servicing activities.	Not applicable; no servicing activities were outsourced.
1122(d)(1)(iii)	Any requirements in the transaction agreements to maintain a back-up servicer for pool assets are maintained.	Not applicable; documents do not provide for a back-up servicer.
1122(d)(1)(iv)	A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements.	Not applicable; LPSC rules impose credit standards on retail electric providers who handle customer collections and govern performance requirements of utilities.
	Cash Collection and Administration
1122(d)(2)(i)	Payments on pool assets are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days of receipt, or such other number of days specified in the transaction agreements.	Applicable
1122(d)(2)(ii)	Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.	Applicable

1122(d)(2)(iii)	Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements.	Applicable, but no current assessment required; no advances by the Servicer are permitted under the transaction agreements.
1122(d)(2)(iv)	The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements.	Applicable, but no current assessment is required since transaction accounts are maintained by and in the name of the Trustee.
1122(d)(2)(v)	Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, "federally insured depository institution" with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Exchange Act.	Applicable, but no current assessment required; all "custodial accounts" are maintained by the Trustee.
1122(d)(2)(vi)	Unissued checks are safeguarded so as to prevent unauthorized access.	Not applicable; all transfers made by wire transfer.
1122(d)(2)(vii)	Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements.	Applicable; assessment below.

	Investor Remittances and Reporting
1122(d)(3)(i)	Reports to investors, including those to be filed with the LPSC, are maintained in accordance with the transaction agreements and applicable LPSC requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the LPSC as required by its rules and regulations; and (D) agree with investors' or the trustee's records as to the total unpaid principal balance and number of pool assets serviced by the Servicer.	Applicable; assessment below.
1122(d)(3)(ii)	Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.	Applicable; assessment below.
1122(d)(3)(iii)	Disbursements made to an investor are posted within two business days to the Servicer's investor records, or such other number of days specified in the transaction agreements.	Applicable
1122(d)(3)(iv)	Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.	Applicable; assessment below.
	Pool Asset Administration
1122(d)(4)(i)	Collateral or security on pool assets is maintained as required by the transaction agreements or related pool asset documents.	Applicable; assessment below.
1122(d)(4)(ii)	Pool assets and related documents are safeguarded as required by the transaction agreements.	Applicable; assessment below.
1122(d)(4)(iii)	Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements.	Not applicable; no removals or substitutions of Storm Recovery property are contemplated or allowed under the transaction documents.
1122(d)(4)(iv)	Payments on pool assets, including any payoffs, made in accordance with the related pool asset documents are posted to the Servicer's obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related pool asset documents.	Applicable; assessment below.

1122(d)(4)(v)	The Servicer's records regarding the pool assets agree with the Servicer's records with respect to an obligor's unpaid principal balance.	Not applicable; because underlying obligation (Storm Recovery charge) is not an interest bearing instrument
1122(d)(4)(vi)	Changes with respect to the terms or status of an obligor's pool asset (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents.	Applicable; assessment below
1122(d)(4)(vii)	Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements.	Applicable; assessment below.
1122(d)(4)(viii)	Records documenting collection efforts are maintained during the period pool asset is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity's activities in monitoring delinquent pool assets including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).	Applicable, but does not require assessment since no explicit documentation requirement with respect to delinquent accounts are imposed under the transactional documents due to availability of "true-up" mechanism.
1122(d)(4)(ix)	Adjustments to interest rates or rates of return for pool assets with variable rates are computed based on the related pool asset documents.	Not applicable; Storm Recovery charges are not interest bearing instruments.
1122(d)(4)(x)	Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor's pool asset documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable pool asset documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related pool assets, or such other number of days specified in the transaction agreements.	Not Applicable; Servicer does not maintain deposit accounts for obligors.

1122(d)(4)(xi)	Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the Servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements.	Not applicable; Servicer does not make payments on behalf of obligors.
1122(d)(4)(xii)	Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the Servicer's funds and not charged to the obligor, unless the late payment was due to the obligor's error or omission.	Not applicable; Servicer cannot make advances of its own funds on behalf of customers under the transaction documents.
1122(d)(4)(xiii)	Disbursements made on behalf of an obligor are posted within two business days to the obligor's records maintained by the Servicer, or such other number of days specified in the transaction agreements.	Not applicable; Servicer cannot make advances of its own funds on behalf of customers to pay principal or interest on the bonds.
1122(d)(4)(xiv)	Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements.	Applicable; assessment below.
1122(d)(4)(xv)	Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements.	Not applicable; no external enhancement is required under the transaction documents.

3. To the best of the undersigned's knowledge, based on such review, the Servicer is in compliance in all material respects with the applicable servicing criteria set forth above as of and for the period ending the end of the fiscal year ended , and covered by Cleco Power's annual report on Form 10-K. [If not true, include description of any material instance of noncompliance.]

4. A registered independent public accounting firm has issued to us an attestation report in accordance with Section 1122(b) of Regulation AB on its assessment of compliance with the applicable servicing criteria as of and for the period ending the end of the fiscal year ended , and covered by Cleco Power's annual report on Form 10-K.

Executed as of this day of , .

	CLECO POWER LLC
	By:
			Name:
			Title:

EXHIBIT B-2

FORM OF CERTIFICATE OF COMPLIANCE

The undersigned hereby certifies that he/she is the duly elected and acting [ ] of Cleco Power LLC as servicer (the "Servicer") under the Storm Recovery Property Servicing Agreement dated as of [ , 2007] (the "Servicing Agreement") between the Servicer and Cleco Katrina/Rita Hurricane Recovery Funding, LLC (the "Issuer") and further that:

1. A review of the activities of the Servicer and of its performance under the Servicing Agreement during the twelve months ended [ ], [ ] has been made under the supervision of the undersigned pursuant to Section 3.03 of the Servicing Agreement; and

2. To the best of the undersigned's knowledge, based on such review, the Servicer has fulfilled all of its obligations in all material respects under the Servicing Agreement throughout the twelve months ended [ ], [ ], except as set forth on Annex A hereto.

Executed as of this day of ,

		Cleco Power LLC
		By:
		Name: Title:

ANNEX A

to Certificate of Compliance

LIST OF SERVICER DEFAULTS

The following Servicer Defaults, or events which with the giving of notice, the lapse of time, or both, would become Servicer Defaults known to the undersigned occurred during the year ended [ ]:

Nature of Default		Status

ANNEX 1
TO
STORM RECOVERY PROPERTY SERVICING AGREEMENT

SERVICING PROCEDURES

1. Definitions.

a. Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Storm Recovery Property Servicing Agreement (the "Agreement").

b. Whenever used in this Annex I, the following words and phrases shall have the following meanings:

"Applicable MDMA" means with respect to each Customer, any meter data management agent providing meter reading services for that Customer's account.

"Billed SRCs" means the amounts of Storm Recovery Charges billed by the Servicer, whether billed directly to Customers by the Servicer or indirectly through Third-Party Collectors.

"Budget Billing Plan" means a payment plan made available by Cleco Power to Customers, who have had service for an established period of time and meet established rating standards, that uses averaged demand in calculating periodic obligations of the Customer.

"Days Sales Outstanding" means the average number of days Cleco Power's monthly bills to Customers in its service area (or, following the advent of customer choice, monthly bills to Third-Party Collectors) remain outstanding during the calendar year immediately preceding the calculation thereof pursuant to Section 4.01(b)(i) of the Agreement. The initial Days Sales Outstanding shall be 20 days until updated pursuant to Section 4.01(b)(i) of the Agreement.

2. Data Acquisition.

a. Installation and Maintenance of Meters. Except to the extent that a Third-Party Collector is responsible for such services, the Servicer shall cause to be installed, replaced and maintained meters in such places and in such condition as will enable the Servicer to obtain usage measurements for each Customer at least once every Billing Period. To the extent a Third-Party Collector is responsible for such services, but not performing such services, the Servicer shall take all reasonably necessary actions to obtain usage measurements for each Customer at least once every Billing Period.

b. Meter Reading. At least once each Billing Period, the Servicer shall obtain usage measurements for each Customer, either directly or if applicable, from the Applicable MDMA; provided, however, that the Servicer may estimate any Customer's usage determined in accordance with applicable LPSC Regulations.

c. Cost of Metering. The Issuer shall not be obligated to pay any costs associated with the routine metering duties set forth in this Section 2, including the costs of installing, replacing and maintaining meters, nor shall the Issuer be entitled to any credit against the Servicing Fee for any cost savings realized by the Servicer as a result of new metering and/or billing technologies.

3. Usage and Bill Calculation.

The Servicer (a) shall obtain a calculation of each Customer's usage (which may be based on data obtained from such Customer's meter read or on usage estimates determined in accordance with applicable LPSC Regulations) at least once each Billing Period; and (b) shall either (i) determine therefrom each Customer's individual Storm Recovery Charges to be included on Bills issued by it to such Customer or to the Third-Party Collector responsible for billing such Customer, or (ii) where the

Third-Party Collector is responsible for billing the Customers, allow the Third-Party Collector, rather than the Servicer, to determine such Customers' individual Storm Recovery Charges to be included on such Customers' Bills based on billing factors provided by the Servicer, and, in such case, the Servicer shall deliver to the Third-Party Collector such billing factors as are necessary for the Third-Party Collector to calculate such Customers' respective Storm Recovery Charges as such charges may change from time to time pursuant to the Storm Recovery Charge Adjustments.

4. Billing.

The Servicer shall implement the Storm Recovery Charges as of the closing date and shall thereafter bill each Customer or, with respect to Customers billed by a Third-Party Collector, the Third-Party Collector, for the respective Customer's outstanding current and past due Storm Recovery Charges accruing through the date on which such Storm Recovery Charges may no longer be billed under the Tariff, all in accordance with the following:

a. Frequency of Bills; Billing Practices. In accordance with the Servicer's then-existing policies and practices for its own charges, as such policies and practices may be modified from time to time, the Servicer shall generate and issue a Bill to each Customer, or, where a Third-Party Collector, if any, is responsible for billing the Customers, to the Third-Party Collector, for such Customers' Storm Recovery Charges once every applicable Billing Period, at the same time, with the same frequency and on the same Bill as that containing the Servicer's own charges to such Customers or Third-Party Collectors, as the case may be; In the event that the Servicer makes any material modification to these practices, it shall notify the Issuer, the Trustee, and the Rating Agencies prior to the effectiveness of any such modification; provided, however, that the Servicer may not make any modification that will materially adversely affect the Holders.

b. Format.

i. Each Bill issued by the Servicer shall contain the charge corresponding to the respective Storm Recovery Charges owed by such Customer for the applicable Billing Period. The Storm Recovery Charges shall be separately identified as required by and in accordance with the terms of the Financing Order and Tariff. The Servicer shall provide, and unless prohibited by applicable LPSC Regulations, shall cause any and each Third-Party Collector to provide, Customers with the annual notice required by Section 4.01(f)(ii)(B) of the Servicing Agreement.

ii. If a Third-Party Collector is responsible for billing the Customers, the Servicer shall deliver to the Third-Party Collector itemized charges for such Customer setting forth such Customers' Storm Recovery Charges.

iii. The Servicer shall conform to such requirements in respect of the format, structure and text of Bills delivered to Customers and any Third-Party Collectors in accordance with, if applicable, the Financing Order, Tariffs and any other LPSC Regulations and any agreement with the LPSC staff. To the extent that Bill format, structure and text are not prescribed by applicable LPSC Regulations, the Servicer shall, subject to clauses (i) and (ii) above, determine the format, structure and text of all Bills in accordance with its reasonable business judgment, its Servicer policies and practices with respect to its own charges and prevailing industry standards.

c. Delivery. The Servicer shall deliver all Bills issued by it (i) by United States mail in such class or classes as are consistent with the policies and practices followed by the Servicer with respect to its own charges to its customers or (ii) by any other means, whether electronic or otherwise, that the Servicer may from time to time use to present its own charges to its customers. If a Third-Party Collector is responsible for billing the Customers, the Servicer shall deliver all Bills to the Third-Party Collector by such means as are prescribed by applicable LPSC Regulations

or tariffs or the Servicer's Policies and Practices, or if not prescribed by applicable LPSC Regulations or tariffs or the Servicer's Policies and Practices, by such means as are mutually agreed upon by the Servicer and the Third-Party Collector and are consistent with LPSC Regulations and the Servicing Standard. The Servicer or any and each Third-Party Collector, as applicable, shall pay from its own funds all costs of issuance and delivery of all Bills, including but not limited to printing and postage costs as the same may increase or decrease from time to time.

5. Customer Service Functions.

The Servicer shall handle all Customer inquiries and other Customer service matters according to the same procedures it uses to service Customers with respect to its own charges.

6. Collections; Payment Processing; Remittance.

a. Collection Efforts, Policies, Procedures.

i. The Servicer shall use reasonable efforts to collect all Billed SRCs from Customers and any Third-Party Collectors as and when the same become due and shall follow such collection procedures as it follows with respect to comparable assets that it services for itself or others, including with respect to the following:

A. The Servicer shall prepare and deliver overdue notices to Customers and any Third-Party Collectors in accordance with applicable LPSC Regulations and Servicer Policies and Practices.

B. The Servicer shall apply late payment charges to outstanding Customer and Third-Party Collector balances in accordance with applicable LPSC Regulations and as required by the Financing Order.

C. In circumstances where the Servicer is allowed to bill Customers directly, the Servicer shall deliver verbal and written final notices of delinquency and possible disconnection in accordance with applicable LPSC Regulations and Servicer Policies and Practices.

D. The Servicer shall adhere to and carry out disconnection policies and termination of any future Third-Party Collector billing in accordance with the Financing Orders, applicable LPSC Regulations and Servicer Policies and Practices.

E. The Servicer may employ the assistance of collection agents to collect any past-due Storm Recovery Charges in accordance with Servicer Policies and Practices, applicable LPSC Regulations and applicable tariffs.

F. The Servicer shall apply Customer and any Third-Party Collector deposits to the payment of delinquent accounts in accordance with applicable LPSC Regulations and Servicer Policies and Practices and according to the priorities set forth in Sections 6(b)(ii), (iii), (iv) and (v) of this Annex I.

ii. The Servicer shall not waive any late payment charge or any other fee or charge relating to delinquent payments, if any, or waive, vary or modify any terms of payment of any amounts payable by a Customer, in each case unless such waiver or action: (A) would be in accordance with the Servicer's customary practices or those of any successor Servicer with respect to comparable assets that it services for itself and for others; (B) would not materially adversely affect the rights of the Holders; and (C) would comply with applicable law; provided, however, that notwithstanding anything in the Agreement or this Annex I to the contrary, the Servicer is authorized to write off any Billed SRCs, in accordance with Servicer Policies and Practices, that have remained outstanding for one hundred eighty (180) days or more.

iii. The Servicer shall accept payment from Customers in respect of Billed SRCs in such forms and methods and at such times and places as it accepts for payment of its own charges. The Servicer shall accept payment from any Third-Party Collectors in respect of Billed SRCs in such forms and methods and at such times and places as the Servicer and any and each Third-Party Collector shall mutually agree in accordance with, if applicable, the Financing Order, Tariff, other applicable tariffs, other LPSC Regulations and Servicer Policies and Practices.

b. Payment Processing; Allocation; Priority of Payments.

i. The Servicer shall post all payments received to Customer accounts as promptly as practicable, and, in any event, substantially all payments shall be posted no later than three (3) Business Days after receipt.

ii. If any Customer does not pay the full amount of any Bill to the Servicer, the amount paid by the Customer will be applied to all charges on the Bill, including without limitation electric service charges and all Storm Recovery Charges, based, as to a Bill with charges covering more than one month, on the chronological order of billing, and, as to those charges with the same billing date, pro-rata. If there is more than one owner of Storm Recovery Property, or if the sole or any owner of Storm Recovery Property (or pledgee or pledgees) has issued multiple series of storm recovery bonds, such partial collections representing Storm Recovery Charges shall be allocated among such owners (or pledgee or pledgees), and among such series of storm recovery bonds, pro-rata based upon the amounts billed with respect to each series of storm recovery bonds, provided that late fees and charges may be allocated to the Servicer as provided in the tariff.

iii. When and if the service area becomes subject to retail competition, the Servicer shall apply payments received to each Customer's or any and each Third-Party Collector's account in proportion to the charges contained on the outstanding Bill to such Customer or Third-Party Collector. Any amounts collected by the Servicer that represent partial payments of the total Bill to a Customer or any Third-Party Collector shall be allocated as follows: (A) first to amounts owed to the Issuer, Cleco Power and any other Affiliate of Cleco Power which is owed "Storm Recovery Charges" as defined in the Securitization Law (excluding any late fees and interest charges), regardless of age, pro rata in proportion to their respective percentages of the total amount of their combined outstanding charges on such Bill; then (B) all late charges shall be allocated to the Servicer; provided that penalty payments owed on late payments of Storm Recovery Charges shall be allocated to the Issuer in accordance with the terms of the Tariffs. If more than one series of Storm Recovery Bonds is outstanding, the Servicer shall allocate amounts owed to the Issuer ratably based on the total amount of Storm Recovery Charges on such bill which were billed in respect of each such series. It is understood that such allocations may be made on a delayed basis in accordance with the reconciliations described in Section 6(e) of this Annex I.

iv. The Servicer shall hold all over-payments for the benefit of the Issuer and Cleco Power and shall apply such funds to future Bill charges in accordance with clauses (ii) and (iii) (as applicable) as such charges become due.

v. For Customers on a Budget Billing Plan, the Servicer shall treat SRC Collections received from such Customers as if such Customers had been billed for their respective Storm Recovery Charges in the absence of the Budget Billing Plan; partial payment of a Budget Billing Plan payment shall be allocated according to clause (ii) or (iii) (as applicable) and overpayment of a Budget Billing Plan payment shall be allocated according to clause (iv).

c. Accounts; Records.

The Servicer shall maintain accounts and records as to the Storm Recovery Property accurately and in accordance with its standard accounting procedures and in sufficient detail (i) to permit reconciliation between payments or recoveries with respect to the Storm Recovery Property and the amounts from time to time remitted to the Collection Accounts in respect of the Storm Recovery Property and (ii) to permit the SRC Collections held by the Servicer to be accounted for separately from the funds with which they may be commingled, so that the dollar amounts of SRC Collections commingled with the Servicer's funds may be properly identified and traced.

d. Investment of SRC Collections Received.

Prior to each Daily Remittance, the Servicer may invest SRC Collections received at its own risk and (except as required by applicable LPSC Regulations) for its own benefit. So long as the Servicer complies with its obligations under Section 6(c) of this Annex I, neither such investments nor such funds shall be required to be segregated from the other investment and funds of the Servicer.

e. Calculation of Daily Remittance.

i. For purposes of calculating the Daily Remittance, (i) all Billed SRCs shall be estimated to be collected the same number of days after billing as is equal to the Days Sales Outstanding then in effect (or on the next Business Day) and (ii) the Servicer will, on each Business Day, remit to the Trustee for deposit in the applicable Collection Account an amount equal to the product of the applicable Billed SRCs multiplied by one hundred percent less the system wide write-off percentage (or if available in the ordinary course of business, gross write-off percentage for each revenue class) used by the Servicer to calculate the most recent Periodic Billing Requirement. Such product shall constitute the amount of estimated SRC Collections for such Business Day. As part of each Storm Recovery Charge Adjustment, pursuant to Section 4.01 of the Agreement, the Servicer shall calculate the amount of actual SRC Collections for all completed Collection Periods during the Reconciliation Period as compared to the estimated SRC Collections forwarded to the applicable Collection Account in respect of such Reconciliation Period. If the actual SRC Collections exceed the estimated SRC Collections remitted to the Trustee for the period, the Servicer shall forward the excess to the Trustee for deposit into the Collection Account on the next Payment Date. If the estimated SRC Collection remitted to the Trustee for the period are greater than the actual SRC Collections for the period, the Excess Remittance shall be refunded to the Servicer at the next Payment Date provided however, that no Excess Remittance shall be withdrawn from the applicable Collection Account if such withdrawal would cause the amounts on deposit in the applicable General Subaccount or the applicable Excess Funds Subaccount to be insufficient for the payment of the next installment of interest or principal due at maturity on the next Payment Date or upon acceleration on or before the next Payment Date on the Storm Recovery Bonds and provided further that any amount not refunded to the Servicer as a result of the preceding proviso, shall be added to the Periodic Payment Requirement for the ensuing period and paid to the Servicer on the first Payment Date at which such refund can be made without violating the preceding proviso.

ii. On or before the beginning of the first billing cycle in April and January of each year (or, in the case of any subsequent series, the corresponding date relating to the Storm Recovery Charge Adjustment for such series) in accordance with Section 4.01(b) of the Agreement, the Servicer shall, in a timely manner so as to perform all required calculations under such Section 4.01(b), update the Days Sales Outstanding and the system-wide write-off percentage (or if available in the ordinary course of business, gross write-off percentage for each revenue class) in order to be able to calculate the Periodic Billing Requirement for the

next Storm Recovery Charge Adjustment and to calculate any change in the Daily Remittances for the next Calculation Period.

iii. The Servicer and the Issuer acknowledge that, as contemplated in Section 8.01(b) of the Agreement, the Servicer may make certain changes to its current computerized customer information system, which changes, when functional, would affect the Servicer's method of calculating the SRC Collections estimated to have been received by the Servicer during each Collection Period as set forth in this Annex I. Should these changes to the computerized customer information system become functional during the term of the Agreement, the Servicer and the Issuer agree that they shall review the procedures used to calculate the SRC Collections estimated to have been received in light of the capabilities of such new system and shall amend this Annex I in writing to make such modifications and/or substitutions to such procedures as may be appropriate in the interests of efficiency, accuracy, cost and/or system capabilities; provided, however, that the Servicer may not make any modification or substitution that will materially adversely affect the Holders. As soon as practicable, and in no event later than sixty (60) Business Days after the date on which all Customer accounts are being billed under such new system, the Servicer shall notify the Issuer, the Trustee and the Rating Agencies of the same.

iv. All calculations of collections, each update of the Days Sales Outstanding, the system-wide write-off percentage (or if available in the ordinary course of business, gross write-off percentage for each revenue class) and any changes in procedures used to calculate the estimated SRC Collections pursuant to this Section 6(e) shall be made in good faith, and in the case of any update pursuant to clause (ii) above or any change in procedures pursuant to clause (iii) above, in a manner reasonably intended to provide estimates and calculations that are at least as accurate as those that would be provided on the closing date utilizing the initial procedures.

f. Remittances.

i. The Issuer shall cause to be established the Collection Accounts in the name of the Trustee in accordance with the Indenture.

ii. The Servicer shall make remittances to the Collection Accounts in accordance with Section 6.13 of the Agreement.

iii. In the event of any change of account or change of institution affecting any Collection Account, the Issuer shall provide written notice thereof to the Servicer not later than five (5) Business Days from the effective date of such change.

APPENDIX A

DEFINITIONS

The definitions contained in this Appendix A are applicable to the singular as well as the plural forms of such terms.

"Adjustment Date" means the date other than an Interim Adjustment Date on which any Storm Recovery Charge Adjustment (other than an interim (non-semi-annual) Storm Recovery Charge Adjustment) and/or any adjustment to allocation of storm recovery charges among customer classes, as applicable, becomes effective. The first Adjustment Date will be on or about [ ], and all subsequent Adjustment Dates shall be on or about the same day of the sixth month after each prior adjustment date.

"Administration Agreement" means the administration agreement dated as of March [ ], 2008, between Cleco Power, as Administrator, and the Issuer, as the same may be amended and supplemented from time to time.

"Administrator" means Cleco Power as administrator under the Administration Agreement and each successor to or assignee of Cleco Power in the same capacity.

"Annual Accountant's Report" has the meaning assigned to that term in Section 3.04 of the Servicing Agreement.

"Articles of Organization" means the articles of organization of the Issuer that was filed with the Louisiana Secretary of State on October 30, 2007, as the same may be amended and restated from time to time.

"Basic Documents" means the Issuer LLC Agreement, the Articles of Organization, the Sale Agreement, the Servicing Agreement, the Administration Agreement, the Indenture, the Supplement, the Underwriting Agreement relating to the Storm Recovery Bonds and the Bill of Sale.

"Bill" means each of the regular monthly bills, summary bills, opening bills and closing bills issued to Customers or Third-Party Collectors by Cleco Power on its own behalf and in its capacity as Servicer.

"Bill of Sale" has the meaning assigned to that term in the Sale Agreement.

"Billing Period" means the period of approximately thirty (30) days for which the Servicer renders Bills.

"Business Day" means any day other than a Saturday or Sunday or a day on which banking institutions in the City of New Orleans, Louisiana, Chicago, Illinois, St. Paul, Minnesota or in the City of New York, New York, are required or authorized by law or executive order to remain closed.

"Calculation Date" means, with respect to the Storm Recovery Bonds, the date on which the calculations and filings set forth in the Issuer Annex will be made for each Storm Recovery Charge Adjustment. The first Calculation Date will be no later than [ ].

"Capital Subaccount" has the meaning specified in Section 8.02(a) of the Indenture.

"Cleco Power" means Cleco Power LLC, a Louisiana limited liability company, or its successor.

"Clearing Agency" means an organization registered as a "clearing agency" pursuant to Section 17A of the Exchange Act.

"Collection Account" has the meaning specified in Section 8.02(a) of the Indenture.

"Collection Period" means the period from and including the first day of a calendar month to but excluding the first day of the next calendar month.

"Corporate Trust Office" has the meaning specified in Appendix A to the Indenture.

"Customer Class" means each of the Storm Recovery Charge classes specified in the Rider SRCA Form of Storm Restoration Cost Adjustment Calculation Appendix B-1 to the Financing Order.

"Customers" means any existing or future LPSC-jurisdictional customer who remain attached to Cleco Power's (or its successors) electric transmission or distribution lines, and who, via such lines, receive any type of service from Cleco Power (or its successors) under rate schedules or special contracts approved by the Louisiana commission.

"Daily Remittance" has the meaning specified in Section 6.12.

"Default" means any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default.

"Event of Default" has the meaning specified in Section 5.01 of the Indenture.

"Excess Funds Subaccount" has the meaning specified in Section 8.02 of the Indenture.

"Excess Remittance" means the amount, if any, calculated for a particular Reconciliation Period, by which all estimated SRC Collections remitted to the Collection Account during such Reconciliation Period exceed actual SRC Collections received by the Servicer during such Reconciliation Period.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Expected Amortization Schedule" means, with respect to the Storm Recovery Bonds, or any Tranche thereof, the expected amortization schedule for principal thereof, as specified in the Supplement.

"Financing Order" means the Financing Order issued by the LPSC on September 17, 2007 in Docket No. U-29157 pursuant to the Securitization Act.

"Fitch" means Fitch, Inc., or any successor thereto.

"Formation Documents" means, collectively, the Articles of Organization, the Issuer LLC Agreement and any other document pursuant to which the Issuer is formed or governed, as the same may be amended and supplemented from time to time.

"General Subaccount" has the meaning specified in Section 8.02 of the Indenture.

"Governmental Authority" means any court or any federal or state regulatory body, administrative agency or governmental instrumentality.

"Holder" or "Storm Recovery Bondholder" means the Person in whose name a Storm Recovery Bond of any Tranche is registered on the Storm Recovery Bond Register.

"Indenture" means the indenture, dated as of March [ ], 2008, between the Issuer and the Trustee and the Supplement (including the forms and terms of the Storm Recovery Bonds established thereunder), as the same may be amended and supplemented with respect to the Storm Recovery Bonds, from time to time.

"Independent" means, when used with respect to any specified Person, that the Person:

(a) is in fact independent of the Issuer, any other obligor upon the Storm Recovery Bonds, the Servicer and any Affiliate of any of the foregoing Persons,

(b) does not have any direct financial interest or any material indirect financial interest in the Issuer, any such other obligor, the Servicer or any Affiliate of any of the foregoing Persons and

(c) is not connected with the Issuer, any such other obligor, the Servicer or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions.

"Insolvency Event" means, with respect to a specified Person,

(a) the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of such Person or any substantial part of its property in an involuntary case under any applicable federal or State bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or ordering the winding-up or liquidation of such Person's affairs, and such decree or order shall remain unstayed and in effect for a period of 90 consecutive days, or

(b) the commencement by such Person of a voluntary case under any applicable federal or State bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by such Person to the entry of an order for relief in an involuntary case under any such law, or the consent by such Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or the making by such Person of any general assignment for the benefit of creditors, or the failure by such Person generally to pay its debts as such debts become due, or the taking of action by such Person in furtherance of any of the foregoing.

"Interim Adjustment Date" means the effective date of any interim (non-semi-annual) Storm Recovery Charge Adjustment.

"Issuance Advice Letter" means the issuance advice letter submitted to the LPSC by Cleco Power pursuant to the Financing Order in connection with the issuance of the Storm Recovery Bonds.

"Issuance Date" means the date on which the Storm Recovery Bonds, are to be originally issued in accordance with the Indenture and the Supplement.

"Issuer" means Cleco Katrina/Rita Hurricane Recovery Funding LLC, a Louisiana limited liability company, or any successor thereto pursuant to the Indenture.

"Issuer Annex" means Annex 1 of the Servicing Agreement.

"Issuer LLC Agreement" means the Limited Liability Company Operating Agreement between the Issuer and Cleco Power, as sole member, effective as of October 29, 2007, as the same may be amended or supplemented from time to time.

"Lien" means a security interest, lien, charge, pledge, equity or encumbrance of any kind.

"Losses" means collectively, any and all liabilities, obligations, losses, damages, payments, costs or expenses of any kind whatsoever.

"Louisiana UCC Filing Officer" means the recorder of mortgages of Orleans Parish (or any successor by law) or the clerk of the court of any other parish in Louisiana.

"LPSC" means the Louisiana Public Service Commission or any successor entity thereto.

"LPSC Regulations" means any regulations, rules, orders or directives promulgated, issued or adopted by the LPSC.

"Majority Holders" means the Holders of a majority of the Outstanding Amount of the Storm Recovery Bonds.

"Moody's" means Moody's Investors Service Inc., or any successor thereto.

"Officers' Certificate" means a certificate signed, in the case of Cleco Power, by:

(a) any manager, the chairman of the board, the chief executive officer, the president, the vice chairman or any executive vice president, senior vice president or vice president; and

(b) the treasurer, any assistant treasurer, the secretary or any assistant secretary.

"Operating Expenses" means, with respect to the Issuer, all fees, costs and expenses owed by the Issuer with respect to the Storm Recovery Bonds, including all amounts owed by the Issuer to the Trustee, the Servicing Fee, the Administration Fee, the costs and expenses incurred by the Seller in connection with the performance of the Seller's obligations under Section 4.07 of the Sale Agreement, the fees relating to the Storm Recovery Bonds, payable by the Issuer to the independent manager of the Issuer, administrative expenses, including outside legal and accounting fees, and ratings maintenance fees and all other costs and expenses recoverable by the Issuer under the terms of the Financing Order.

"Opinion of Counsel" means one or more written opinions of counsel who may be an employee of or counsel to the Servicer or the Issuer, which counsel shall be reasonably acceptable to the Trustee, the LPSC, the Issuer or the Rating Agencies, as applicable, and which shall be in form reasonably satisfactory to the Trustee, if applicable.

"Outstanding" with respect to Storm Recovery Bonds means, as of the date of determination, all Storm Recovery Bonds theretofore authenticated and delivered under the Indenture except:

(a) Storm Recovery Bonds theretofore canceled by the Storm Recovery Bond Registrar or delivered to the Storm Recovery Bond Registrar for cancellation;

provided that in determining whether the Holders of the requisite Outstanding Amount of the Storm Recovery Bonds or any Tranche thereof have given any request, demand, authorization, direction, notice, consent or waiver hereunder or under any Basic Document, Storm Recovery Bonds owned by the Issuer, any other obligor upon the Storm Recovery Bonds, Cleco Power or any Affiliate of any of the foregoing Persons shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be fully protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Storm Recovery Bonds that a Responsible Officer of the Trustee knows to be so owned shall be so disregarded. Storm Recovery Bonds so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Storm Recovery Bonds and that the pledgee is not the Issuer, any other obligor upon the Storm Recovery Bonds, the Servicer or any Affiliate of any of the foregoing Persons.

"Outstanding Amount" means the aggregate principal amount of all Outstanding Storm Recovery Bonds, or, if the context requires, all Outstanding Storm Recovery Bonds of a Tranche of the Storm Recovery Bonds, Outstanding at the date of determination.

"Paying Agent" means the entity so designated in Section 3.03 if the Indenture or any other Person that meets the eligibility standards for the Trustee specified in Section 6.11 of the Indenture and is authorized by the Issuer to make the payments of Principal of or premium, if any, or Interest on the Storm Recovery Bonds on behalf of the Issuer.

"Payment Date" means, with respect to the Storm Recovery Bonds, or, if applicable, each Tranche thereof, the date or dates specified as Payment Dates for such Tranche in the Supplement, provided that if any such date is not a Business Day, the Payment Date shall be the Business Day immediately succeeding such date.

"Periodic Billing Requirement" means the aggregate dollar amount of Storm Recovery Charges that must be billed during a given period (i.e., semi-annually, or such other applicable period) so that the projected SRC Collections will be sufficient to meet the entire aggregate Periodic Payment Requirement for that period, given: (i) forecast usage data for the period; (ii) forecast uncollectibles for the period; and (iii) forecast lags in collection of billed Storm Recovery Charges for the period. In the Storm Recovery Charge Adjustment process, the over or under collection from any period will be added to or subtracted from, as the case may be, the Periodic Billing Requirement for the upcoming period.

"Periodic Payment Requirement" means the required periodic payment for a given period (i.e., semi-annually, or such other applicable period) due under (or otherwise payable with respect to) the Storm Recovery Bonds. Each periodic payment requirement includes: (a) the principal amortization of the Storm Recovery Bonds in accordance with the Expected Amortization Schedule (including deficiencies of previously scheduled principal for any reason); (b) periodic interest on the Storm Recovery Bonds (including any accrued and unpaid interest); (c) Operating Expenses and (d) Issuer's return on the capital investment made by Cleco Power in the Issuer, to the extent that earnings on investment in the Capital Subaccount are less than the return permitted under the Financing Order.

"Proceeding" means any suit in equity, action at law or other judicial or administrative proceeding.

"Projected Storm Recovery Bond Balance" means, as of any date, the anticipated Outstanding Amount of Storm Recovery Bonds, after giving effect to payment of the sum of the payment amounts provided for in the Expected Amortization Schedules for the Storm Recovery Bonds, to be paid on or before such date.

"Rating Agency" means any rating agency rating the Storm Recovery Bonds, at the time of issuance at the request of the Issuer, which initially shall be [Moody's, Fitch and Standard & Poor's]. If no such organization or successor is any longer in existence, "Rating Agency" shall be a nationally recognized statistical rating organization or other comparable Person designated by the Issuer, written notice of which designation shall be given to the Trustee, the LPSC and the Servicer.

"Rating Agency Condition" means, with respect to any action, the notification in writing to each Rating Agency of such action, and confirmation from S&P to the Trustee and the Issuer that such action will not result in a reduction or withdrawal of the then current rating by such Rating Agency of the Storm Recovery Bonds.

"Reconciliation Period" means, with respect to any Collection Period, the six-month period ending one month prior to each Adjustment Date.

"Regulation AB" means the rules of the SEC promulgated under Subpart 229.1100—Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123, as such may be amended from time to time.

"Released Parties" has the meaning specified in Section 6.02(f) of the Servicing Agreement.

"Requirement of Law" means any foreign, federal, state or local laws, statutes, regulations, rules, codes or ordinances enacted, adopted, issued or promulgated by any Governmental Authority or common law.

"Responsible Officer" means, with respect to the Trustee, any officer within the Corporate Trust Office of the Trustee, including any Vice President, Director, Managing Officer, associate, Assistant Vice President, Secretary, Assistant Secretary, or any other officer of the Trustee having direct responsibility for the administration of the Indenture and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer's knowledge of and familiarity with the particular subject.

"Sale Agreement" means the Storm Recovery Property Sale Agreement dated as of March [ ], 2008 relating to the Storm Recovery Property, between the Seller and the Issuer, as the same may be amended and supplemented from time to time.

"Sale Date" means the date on which the Seller sells, transfers, assigns and conveys the Storm Recovery Property to which this Agreement relates to the Issuer.

"SEC" means the U.S. Securities and Exchange Commission.

"Securitization Act" means Act No. 64 of the Louisiana Regular Session of 2006, the "Louisiana Electric Utility Storm Recovery Securitization Act," codified at La. R.S. 45:1226-1236.

"Seller" means Cleco Power, or its successor, in its capacity as seller of the Storm Recovery Property to the Issuer pursuant to the Sale Agreement.

"Semi-annual Servicer's Certificate" means the statement prepared by the Servicer and delivered to the Trustee with respect to the Storm Recovery Bonds, on or prior to each Payment Date therefor, the form of which is attached to the Indenture as Schedule 1.

"Series Trust Estate" has the meaning specified in the Supplement.

"Servicer" means Cleco Power, as the servicer of the Storm Recovery Property, and each successor to or assignee of Cleco Power (in the same capacity) pursuant to Section 6.03, 6.04, or 7.04 of the Servicing Agreement.

"Servicer Default" means the occurrence and continuation of one of the events specified in Section 7.01 of the Servicing Agreement.

"Servicer Policies and Practices" means, with respect to the Servicer's duties under this Agreement, including Annex I, the policies and practices of the Servicer applicable to such duties that the Servicer follows with respect to comparable assets that it services for itself and, if applicable, others.

"Servicing Agreement" or this "Agreement" means the Storm Recovery Property Servicing Agreement dated as of March [ ], 2008, between the Issuer and the Servicer, and acknowledged by the Trustee, relating to the Storm Recovery Property as the same may be amended and supplemented from time to time.

"Servicing Fee" means the fee payable by the Issuer to the Servicer on each Payment Date with respect to the Storm Recovery Bonds, in an amount specified in Section 6.08 of the Servicing Agreement.

"Servicing Standard" means the obligation of the Servicer to calculate, apply, remit and reconcile proceeds of the Storm Recovery Property, including SRC Collections, for the benefit of the Issuer and the Holders (i) with the same degree of care and diligence as the Servicer applies with respect to payments owed to it for its own account, (ii) in accordance with all applicable procedures and requirements established by the LPSC for collection of electric utility tariffs and (iii) in accordance with the other terms of the Servicing Agreement.

"Sponsor" means Cleco Power in its capacity as the Person who organizes and initiates an asset-backed securities transaction by selling or transferring assets, either directly or indirectly, to the Issuer.

"SRC Collections" means amounts constituting good funds collected by Servicer from any Person in respect of Storm Recovery Charges and Storm Recovery Property.

"Standard & Poor's" or "S&P" means Standard & Poor's, a division of The McGraw-Hill Companies, or any successor thereto.

"State" means any one of the 50 states of the United States of America or the District of Columbia.

"Storm Recovery Bond" means any of the Senior Secured Storm Recovery Bonds issued by the Issuer pursuant to the Indenture.

"Storm Recovery Bond Balance" means, as of any date, the aggregate Outstanding Amount of Storm Recovery Bonds on such date.

"Storm Recovery Bond Register" has the meaning specified in Section 2.05 of the Indenture.

"Storm Recovery Bond Registrar" means the Trustee, in its capacity as keeper of the Storm Recovery Bond Register, or any successor to the Trustee in such capacity.

"Storm Recovery Charge Adjustment" means each semi-annual adjustment to Storm Recovery Charges related to the Storm Recovery Property made in accordance with Section 4.01 of the Servicing Agreement and the Issuer Annex or in connection with the redemption or refunding by the Issuer of Storm Recovery Bonds.

"Storm Recovery Charges" means the nonbypassable amounts to be charged for the use or availability of electric services, approved by the LPSC in the Financing Order to recover Financing Costs, that shall be collected by Cleco Power, its successors, assignees or other collection agents as provided for in the Financing Order.

administration and servicer fees, to withdraw funds from its restricted storm recovery reserve funded by the proceeds from the sale of the Storm Recovery Property, or to use the Seller's remaining portion of those proceeds.

"Storm Recovery Property Documentation" means all documents relating to the Storm Recovery Property, including copies of the Financing Order and all documents filed with the LPSC in connection with any Storm Recovery Charge Adjustment.

"Successor Servicer" means (i) a successor to Cleco Power pursuant to Section 6.03 of the Servicing Agreement or (ii) a successor Servicer appointed by the Trustee pursuant to Section 7.04 of the Servicing Agreement which in each case will succeed to all the rights and duties of the Servicer under the Servicing Agreement.

"Supplement" means the First Supplemental Indenture dated of even date herewith to the Indenture that authorizes the Storm Recovery Bonds.

"Tariff" means Rider SRCA and Rider SCSA filed by the Seller pursuant to ordering paragraph 10 of the Financing Order.

"Termination Notice" has the meaning specified in Section 7.01 of the Servicing Agreement.

"Third-Party Collector" means each third party, which, pursuant to any tariffs filed with the LPSC, or any agreement with Cleco Power, is obligated to bill, collect or remit Storm Recovery Charges.

"Tranche" means any one of the tranches of Storm Recovery Bonds, as specified in the Supplement.

"Trustee" means U.S. Bank National Association, as trustee, or its successor or any successor Trustee under the Indenture.

"UCC" means, unless the context otherwise requires, the Uniform Commercial Code, as in effect in the relevant jurisdiction, as amended from time to time.

"Underwriting Agreement" has the meaning specified in the Indenture.

EX-99.5 8 a2182800zex-99_5.htm EXHIBIT 99.5
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Exhibit 99.5

ADMINISTRATION AGREEMENT

ADMINISTRATION AGREEMENT, dated as of , 2008 (this "Administration Agreement"), is by and between CLECO KATRINA/RITA HURRICANE RECOVERY FUNDING LLC, a Louisiana limited liability company, as Issuer (the "Issuer"), and CLECO POWER LLC, a Louisiana limited liability company ("Cleco Power"), as Administrator (in such capacity, the "Administrator"). Capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in Appendix A to the Indenture more fully described below.

W I T N E S S E T H:

WHEREAS, the Issuer is issuing Storm Recovery Bonds pursuant to the Indenture, dated as of the date hereof and a First Supplemental Indenture thereto, also dated as of the date hereof (the "First Supplement") (as amended, supplemented or otherwise modified and in effect from time to time, the "Indenture"), between the Issuer and U.S. Bank National Association, as the Trustee;

WHEREAS, the Issuer has entered into certain agreements in connection with the issuance of the Storm Recovery Bonds, including (i) the Indenture and the First Supplement, (ii) the Storm Recovery Property Servicing Agreement, dated as of the date hereof (the "Servicing Agreement"), between the Issuer and Cleco Power, as Servicer, (iii) the Storm Recovery Property Sale Agreement, dated as of the date hereof (the "Sale Agreement"), between the Issuer and Cleco Power, as Seller, and (iv) the Letter of Representations, dated as of , 2008 (the "Depository Agreement"), among the Issuer, the Trustee and The Depository Trust Company relating to the Storm Recovery Bonds (the Indenture, the First Supplement, the Servicing Agreement, the Sale Agreement and the Depository Agreement, as such agreements may be amended and supplemented from time to time, being referred to hereinafter collectively as the "Initial Related Agreements");

WHEREAS, pursuant to the Initial Related Agreements, the Issuer is required to perform certain duties in connection with the Initial Related Agreements, the Storm Recovery Bonds and the Trust Estate pledged to the Trustee pursuant to the Indenture;

WHEREAS, the Issuer may from time to time enter into and be required to perform certain duties under additional agreements similar to the Initial Related Agreements (together with the Initial Related Agreements, the "Related Agreements");

WHEREAS, the Issuer has no employees, other than its officers, and does not intend to hire any employees, and consequently desires to have the Administrator perform certain of the duties of the Issuer referred to in the preceding clauses and to provide such additional services consistent with the terms of this Administration Agreement and the Related Agreements as the Issuer may from time to time request; and

WHEREAS, the Administrator has the capacity to provide the services and the facilities required thereby and is willing to perform such services and provide such facilities for the Issuer on the terms set forth herein;

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. Duties of the Administrator: Management Services. The Administrator hereby agrees to provide the following corporate management services to the Issuer and to cause third parties to

provide professional services required for or contemplated by such services in accordance with the provisions of this Administration Agreement:

(i) furnish the Issuer with ordinary clerical, bookkeeping and other corporate administrative services necessary and appropriate for the Issuer, including, without limitation, the following services:

(A) maintain at the Premises (as defined below) general accounting records of the Issuer (the "Account Records"), subject to year-end audit, in accordance with generally accepted accounting principles, separate and apart from its own accounting records, prepare or cause to be prepared such quarterly and annual financial statements as may be necessary or appropriate and arrange for year-end audits of the Issuer's financial statements by the Issuer's independent accountants;

(B) prepare and, after execution by the Issuer, file with the Securities and Exchange Commission (the "Commission") and any applicable state agencies documents required to be filed with the Commission and any applicable state agencies, including, without limitation, periodic reports required to be filed under the Securities Exchange Act of 1934, as amended;

(C) prepare for execution by the Issuer and cause to be filed such income, franchise or other tax returns of the Issuer as shall be required to be filed by applicable law (the "Tax Returns") and cause to be paid on behalf of the Issuer from the Issuer's funds any taxes required to be paid by the Issuer under applicable law;

(D) prepare or cause to be prepared for execution by the Issuer's Managers minutes of the meetings of the Issuer's Managers and such other documents deemed appropriate by the Issuer to maintain the separate limited liability company existence and good standing of the Issuer (the "Company Minutes") or otherwise required under the Related Agreements (together with the Account Records, the Tax Returns, the Company Minutes, the Issuer LLC Agreement, and the Issuer Articles of Organization, the "Issuer Documents"); and any other documents deliverable by the Issuer thereunder or in connection therewith; and

(E) hold, maintain and preserve at the Premises (or such other place as shall be required by any of the Related Agreements) executed copies (to the extent applicable) of the Issuer Documents and other documents executed by the Issuer thereunder or in connection therewith;

(ii) take such actions on behalf of the Issuer, as are necessary or desirable for the Issuer to keep in full effect its existence, rights and franchises as a limited liability company under the laws of the state of Louisiana and obtain and preserve its qualification to do business in each jurisdiction in which it becomes necessary to be so qualified;

(iii) provide for the issuance and delivery of the Storm Recovery Bonds;

(iv) provide for the performance by the Issuer of its obligations under each of the Related Agreements, and prepare, or cause to be prepared, all documents, reports, filings, instruments, notices, certificates and opinions that it shall be the duty of the Issuer to prepare, file or deliver pursuant to the Related Agreements;

(v) enforce each of the rights of the Issuer under the Related Agreements, at the direction of the Trustee;

(vi) provide for the defense, at the direction of the Issuer's Managers, of any action, suit or proceeding brought against the Issuer or affecting the Issuer or any of its assets;

(vii) provide office space (the "Premises") for the Issuer and such reasonable ancillary services as are necessary to carry out the obligations of the Administrator hereunder, including telecopying, duplicating and word processing services;

(viii) undertake such other administrative services as may be appropriate, necessary or requested by the Issuer; and

(ix) provide such other services as are incidental to the foregoing or as the Issuer and the Administrator may agree.

In providing the services under this Section 1 and as otherwise provided under this Administration Agreement, the Administrator will not knowingly take any actions on behalf of the Issuer which (i) the Issuer is prohibited from taking under the Related Agreements, or (ii) would cause the Issuer to be in violation of any federal, state or local law or the Issuer LLC Agreement.

2. Compensation. As compensation for the performance of the Administrator's obligations under this Administration Agreement (including the compensation of Persons serving as Managers, other than the independent managers, and officers of the Issuer, but, for the avoidance of doubt, excluding the performance by Cleco Power of its obligations in its capacity as Servicer), the Administrator shall be entitled to $100,000 annually (the "Administration Fee"), payable by the Issuer in arrears proportionately on each Payment Date.

3. Third Party Services. Any services or fees required for or contemplated by the performance of the above-referenced services by the Administrator to be provided by unaffiliated third parties (including independent auditors' fees and counsel fees) may, if provided for or otherwise contemplated by any related financing order issued by the LPSC and if the Issuer deems it necessary or desirable, be arranged by the Issuer or by the Administrator at the direction (which may be general or specific) of the Issuer. Costs and expenses associated with the contracting for such third-party services may be paid directly by the Issuer or paid by the Administrator and reimbursed by the Issuer in accordance with Section 2, or otherwise as the Administrator and the Issuer may mutually arrange.

4. Additional Information to be Furnished to the Issuer. The Administrator shall furnish to the Issuer from time to time such additional information regarding the Trust Estate as the Issuer shall reasonably request.

5. Independence of the Administrator. For all purposes of this Administration Agreement, the Administrator shall be an independent contractor and shall not be subject to the supervision of the Issuer with respect to the manner in which it accomplishes the performance of its obligations hereunder. Unless expressly authorized by the Issuer, the Administrator shall have no authority, and shall not hold itself out as having the authority, to act for or represent the Issuer in any way and shall not otherwise be deemed an agent of the Issuer.

The work to be performed under this Administration Agreement is part of the Issuer's business and is an integral part of and is essential to the business and operations of the Issuer. For purposes of the Louisiana Worker's Compensation Act, the Issuer is deemed to be the statutory employer of the Administrator's employees who perform the services under this Administration Agreement. Although the Issuer is to be granted the protections that are afforded a statutory employer under Louisiana law, this provision is included for the sole purpose of establishing a statutory employer relationship between the Issuer and the Administrator's personnel within the meaning of La. R.S. 23:1061(A) and is not intended to create an employer / employee relationship as between the Issuer and the Administrator's personnel for any other purpose. The Administrator shall be and remain primarily responsible for the payment of workers' compensation benefits to the Administrator's personnel and shall not be entitled to seek contribution for any such payments from the Issuer, and the Administrator further shall indemnify and hold harmless the Issuer and at the Issuer's option defend the Issuer for any payment to

the Administrator's personnel of workers' compensation benefits or from any claim for such benefits or any other employee claim.

6. No Joint Venture. Nothing contained in this Administration Agreement (a) shall constitute the Administrator and the Issuer as partners or co-members of any partnership, joint venture, association, syndicate, unincorporated business or other separate entity, (b) shall be construed to impose any liability as such on either of them or (c) shall be deemed to confer on either of them any express, implied or apparent authority to incur any obligation or liability on behalf of the other.

7. Other Activities of Administrator. Nothing herein shall prevent the Administrator or any of its members, managers, officers, employees, subsidiaries or affiliates from engaging in other businesses or, in its sole discretion, from acting in a similar capacity as an Administrator for any other person or entity even though such person or entity may engage in business activities similar to those of the Issuer.

8. Term of Agreement; Resignation and Removal of Administrator. (a) This Administration Agreement shall continue in force until the payment in full of the Storm Recovery Bonds and any other amount which may become due and payable under the Indenture, upon which event this Administration Agreement shall automatically terminate.

(b) Subject to Sections 8(e) and 8(f), the Administrator may resign its duties hereunder by providing the Issuer with at least sixty (60) days' prior written notice.

(c) Subject to Sections 8(e) and 8(f), the Issuer may remove the Administrator without cause by providing the Administrator with at least sixty (60) days' prior written notice.

(d) Subject to Sections 8(e) and 8(f), at the sole option of the Issuer, the Administrator may be removed immediately upon written notice of termination from the Issuer to the Administrator if any of the following events shall occur:

(i) The Administrator shall default in the performance of any of its duties under this Administration Agreement and, after notice of such default, shall fail to cure such default within ten (10) days (or, if such default cannot be cured in such time, shall (A) fail to give within ten (10) days such assurance of cure as shall be reasonably satisfactory to the Issuer and (B) fail to cure such default within 30 days thereafter);

(ii) a court of competent jurisdiction shall enter a decree or order for relief, and such decree or order shall not have been vacated within sixty (60) days, in respect of the Administrator in any involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or such court shall appoint a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the Administrator or any substantial part of its property or order the winding-up or liquidation of its affairs; or

(iii) the Administrator shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, shall consent to the entry of an order for relief in an involuntary case under any such law, shall consent to the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator or similar official for the Administrator or any substantial part of its property, shall consent to the taking of possession by any such official of any substantial part of its property, shall make any general assignment for the benefit of creditors or shall fail generally to pay its debts as they become due.

The Administrator agrees that if any of the events specified in clauses (ii) or (iii) of this Section 8(d) shall occur, it shall give written notice thereof to the Issuer and the Trustee as soon as practicable but in any event within seven (7) days after the happening of such event.

(e) No resignation or removal of the Administrator pursuant to this Section 8(e) shall be effective until a successor Administrator has been appointed by the Issuer, and such successor Administrator has

agreed in writing to be bound by the terms of this Administration Agreement in the same manner as the Administrator is bound hereunder.

(f) The appointment of any successor Administrator shall be effective only after satisfaction of the Rating Agency Condition with respect to the proposed appointment.

9. Action upon Termination, Resignation or Removal. Promptly upon the effective date of termination of this Administration Agreement pursuant to Section 8(a), the resignation of the Administrator pursuant to Section 8(b) or the removal of the Administrator pursuant to Section 8(c) or 8(d), the Administrator shall be entitled to be paid a pro-rated portion of the annual fee described in Section 2 hereof through the date of termination. The Administrator shall forthwith upon such termination pursuant to Section 8(a) deliver to the Issuer all property and documents of or relating to the Trust Estate then in the custody of the Administrator. In the event of the resignation of the Administrator pursuant to Section 8(b) or the removal of the Administrator pursuant to Section 8(c) or 8(d), the Administrator shall cooperate with the Issuer and take all reasonable steps requested to assist the Issuer in making an orderly transfer of the duties of the Administrator.

10. Administrator's Liability. Except as otherwise provided herein, the Administrator assumes no liability other than to render or stand ready to render the services called for herein, and neither the Administrator nor any of its members, managers, officers, employees, subsidiaries or affiliates shall be responsible for any action of the Issuer or any of the members, managers, officers, employees, subsidiaries or affiliates of the Issuer (other than the Administrator itself). The Administrator shall not be liable for nor shall it have any obligation with regard to any of the liabilities, whether direct or indirect, absolute or contingent of the Issuer or any of the members, managers, officers, employees, subsidiaries or affiliates of the Issuer (other than the Administrator itself).

11. INDEMNITY.

(A) SUBJECT TO THE PRIORITY OF PAYMENTS SET FORTH IN THE INDENTURE, THE ISSUER SHALL INDEMNIFY THE ADMINISTRATOR, ITS MEMBERS, MANAGERS, OFFICERS, EMPLOYEES AND AFFILIATES AGAINST ALL LOSSES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, LIABILITIES AND EXPENSES (INCLUDING, WITHOUT LIMITATION, ALL EXPENSES OF LITIGATION OR PREPARATION THEREFOR WHETHER OR NOT THE ADMINISTRATOR IS A PARTY THERETO) WHICH ANY OF THEM MAY PAY OR INCUR ARISING OUT OF OR RELATING TO THIS ADMINISTRATION AGREEMENT AND THE SERVICES CALLED FOR HEREIN; PROVIDED, HOWEVER, THAT SUCH INDEMNITY SHALL NOT APPLY TO ANY SUCH LOSS, CLAIM, DAMAGE, PENALTY, JUDGMENT, LIABILITY OR EXPENSE RESULTING FROM THE ADMINISTRATOR'S NEGLIGENCE OR WILLFUL MISCONDUCT IN THE PERFORMANCE OF ITS OBLIGATIONS HEREUNDER.

(B) THE ADMINISTRATOR SHALL INDEMNIFY THE ISSUER, ITS MEMBERS, MANAGERS, OFFICERS AND EMPLOYEES AGAINST ALL LOSSES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, LIABILITIES AND EXPENSES (INCLUDING, WITHOUT LIMITATION, ALL EXPENSES OF LITIGATION OR PREPARATION THEREFOR WHETHER OR NOT THE ISSUER IS A PARTY THERETO) WHICH ANY OF THEM MAY INCUR AS A RESULT OF THE ADMINISTRATOR'S NEGLIGENCE OR WILLFUL MISCONDUCT IN THE PERFORMANCE OF ITS OBLIGATIONS HEREUNDER.

12. Notices. Any notice, report or other communication given hereunder shall be in writing and addressed as follows:

(a): if to the Issuer, to:

Cleco Katrina/Rita Hurricane Recovery Funding LLC
2605 Hwy. 28 East
Office Number 12,
Pineville, Louisiana 71360-5226
Attention: Manager

(b): if to the Administrator, to:

Cleco Power LLC
2030 Donahue Ferry Road,
Pineville, Louisiana 71360-5226
Attention: Treasurer

or to such other address as either party shall have provided to the other party in writing. Any notice required to be in writing hereunder shall be deemed given if such notice is mailed by certified mail, postage prepaid, or hand-delivered to the address of such party as provided above.

13. Amendments. This Administration Agreement may be amended from time to time by a written amendment duly executed and delivered by each of the Issuer and the Administrator, provided that (i) the Rating Agency Condition has been satisfied in connection therewith, (ii) the Trustee shall have consented and (iii) in the case of any amendment that increases ongoing financing costs as defined in the Financing Order, the LPSC shall have consented thereto or shall be conclusively deemed to have consented thereto. With respect to the LPSC's consent to any amendment to this Administration Agreement,

(a) the Administrator may submit the amendment to the LPSC by delivering to the LPSC's executive counsel a written request for such consent, which request shall contain:

(i) a reference to Docket No. U-29157 and a statement as to the possible effect of the amendment on ongoing financing costs;

(ii) an Officer's Certificate stating that the proposed amendment has been approved by all parties to this Administration Agreement; and

(iii) a statement identifying the person to whom the LPSC or its staff is to address its consent to the proposed amendment.

(b) Any amendment requiring the consent of the LPSC as provided in this Section 13 shall become effective on the later of:

(i) the date proposed by the parties to the amendment, or

(ii) 31 days after such submission of the amendment to the LPSC unless the LPSC issues an order disapproving the amendment within a 30-day period.

Following delivery of a notice to the LPSC by the Administrator under Section 13(a) above, the Administrator and Issuer may at any time withdraw from the LPSC further consideration of any notification of a proposed amendment.

14. Successors and Assigns. This Administration Agreement may not be assigned by the Administrator unless such assignment is previously consented to in writing by the Issuer and the Trustee and subject to the satisfaction of the Rating Agency Condition in connection therewith. Any assignment with such consent and satisfaction, if accepted by the assignee, shall bind the assignee hereunder in the same manner as the Administrator is bound hereunder. Notwithstanding the foregoing, this Administration Agreement may be assigned by the Administrator without the consent of the Issuer or the Trustee to a corporation or other organization that is a successor (by merger, consolidation or purchase of assets) to the Administrator; provided that such successor organization executes and delivers to the Issuer an Agreement in which such corporation or other organization agrees to be bound hereunder by the terms of said assignment in the same manner as the Administrator is bound hereunder. Subject to the foregoing, this Administration Agreement shall bind any successors or assigns of the parties hereto. Upon satisfaction of all of the conditions of this Section 14, the preceding Administrator shall automatically and without further notice be released from all of its obligations hereunder.

15. Governing Law. This Administration Agreement shall be construed in accordance with the laws of the State of Louisiana, without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.

16. Headings. The Section headings hereof have been inserted for convenience of reference only and shall not be construed to affect the meaning, construction or effect of this Administration Agreement.

17. Counterparts. This Administration Agreement may be executed in counterparts, each of which when so executed shall be an original, but all of which together shall constitute but one and the same Administration Agreement.

18. Severability. Any provision of this Administration Agreement that is prohibited or unenforceable in any jurisdiction shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

19. Nonpetition Covenant. Notwithstanding any prior termination of this Administration Agreement, the Administrator covenants that it shall not, prior to the date which is one year and one day after payment in full of the Storm Recovery Bonds, acquiesce, petition or otherwise invoke or cause the Issuer to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Issuer under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer.

IN WITNESS WHEREOF, the parties have caused this Administration Agreement to be duly executed and delivered as of the day and year first above written.

		CLECO KATRINA/RITA HURRICANE RECOVERY FUNDING LLC, as Issuer
		By:
			Name: Title:
		CLECO POWER LLC, as Administrator,
		By:
			Name: Title:

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Exhibit 99.5

ADMINISTRATION AGREEMENT
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Securities offered:

$180,600,000 2008 Senior Secured Storm Recovery Bonds

Issuing entity and capital structure:

Cleco Katrina/Rita Hurricane Recovery Funding LLC is a direct, wholly owned subsidiary of Cleco Power and a limited liability company formed under Louisiana law. We were formed solely to purchase and own storm recovery property, to issue storm recovery bonds and to perform activities incidental thereto. Please read "Cleco Katrina/Rita Hurricane Recovery Funding LLC, The Issuing Entity" in the accompanying prospectus.

In addition to the storm recovery property, the assets of the issuing entity will include a capital investment by Cleco Power in the amount of 0.5% of the Bonds' initial principal amount (to be held in the capital subaccount). We will also have an excess funds subaccount to retain, until the next payment date, any amounts collected and remaining after all payments on the Bonds have been timely made.

Our address:

2605 Hwy. 28 East, Office Number 12, Pineville, Louisiana 71360

Our telephone number:

(318) 484-4180

Our managers:

The following is a list of our managers as of the date of this prospectus supplement: