Fair Value Accounting (Tables)

3 Months Ended

Mar. 31, 2014

Fair Value [Line Items]

Fair Value By Balance Sheet Grouping

Note 4 — Fair Value Accounting

The amounts reflected in Cleco and Cleco Power’s Condensed Consolidated Balance Sheets at March 31, 2014 and December 31, 2013, for cash equivalents, restricted cash equivalents, accounts receivable, other accounts receivable, accounts payable, and short-term debt approximate fair value because of their short-term nature. 

The following tables summarize the carrying value and estimated market value of Cleco and Cleco Power’s financial instruments not measured at fair value in Cleco and Cleco Power’s Condensed Consolidated Balance Sheets.

Cleco
	AT MAR. 31, 2014				AT DEC. 31, 2013
(THOUSANDS)	CARRYING VALUE		ESTIMATED FAIR VALUE		CARRYING VALUE		ESTIMATED FAIR VALUE
Financial instruments not marked-to-market:
Cash equivalents	$	12,176	$	12,176	$	22,204	$	22,204
Restricted cash equivalents	$	18,362	$	18,362	$	14,019	$	14,019
Long-term debt, excluding debt issuance costs	$	1,313,649	$	1,473,263	$	1,331,230	$	1,420,048

Fair Value of Financial Assets and Liabilities Measured On A Recurring Basis

The following tables disclose for Cleco and Cleco Power the fair value of financial assets and liabilities measured or disclosed on a recurring basis and within the scope of the authoritative guidance for fair value measurements and disclosures.

Cleco
	CLECO CONSOLIDATED FAIR VALUE MEASUREMENTS AT REPORTING DATE USING:
(THOUSANDS)	AT MAR. 31, 2014		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		AT DEC. 31, 2013		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)
Asset Description
Institutional money market funds	$	30,538	$	—	$	30,538	$	—	$	36,100	$	—	$	36,100	$	—
Commercial paper	—		—		—		—		1,483		—		1,483		—
Municipal bonds	—		—		—		—		9,831		—		9,831		—
Corporate bonds	—		—		—		—		515		—		515		—
Federal agency mortgage-backed securities	—		—		—		—		1,000		—		1,000		—
FTRs	3,972		—		—		3,972		9,020		—		—		9,020
Total assets	$	34,510	$	—	$	30,538	$	3,972	$	57,949	$	—	$	48,929	$	9,020
Liability Description
Long-term debt	1,473,263		—		1,473,263		—		1,420,048		—		1,420,048		—
FTRs	64		—		—		64		382		—		—		382
Total liabilities	$	1,473,327	$	—	$	1,473,263	$	64	$	1,420,430	$	—	$	1,420,048	$	382

Effect of Derivatives On Consolidated Statements of Income

The following table presents the effect of derivatives designated as hedging instruments on Cleco and Cleco Power’s Condensed Consolidated Statements of Income for the three months ended March 31, 2014 and 2013.

	FOR THE THREE MONTHS ENDED MAR. 31,
	2014					2013
(THOUSANDS)	AMOUNT OF GAIN RECOGNIZED IN OCI		AMOUNT OF LOSS RECLASSIFIED FROM ACCUMULATED OCI INTO INCOME (EFFECTIVE PORTION)			AMOUNT OF GAIN RECOGNIZED IN OCI		AMOUNT OF LOSS RECLASSIFIED FROM ACCUMULATED OCI INTO INCOME (EFFECTIVE PORTION)
Interest rate   derivatives (1)	$	—	$	(86	)*	$	1,762	$	(20	)*

* The loss reclassified from accumulated OCI into income (effective portion) is reflected in interest charges.

⁽¹⁾ During the three months ended March 31, 2013, Cleco recorded ineffectiveness and losses related to the interest rate derivatives as a regulatory asset of $0.4 million.

Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation

The following table summarizes the changes in the fair value of FTR assets and liabilities classified as Level 3 in the fair value hierarchy as of March 31, 2014:

(THOUSANDS)
Beginning balance at January 1, 2014	$	8,638
Realized losses	(747		)	*
Unrealized losses	(1,060		)	*
Purchases	(85		)
Sales	(321		)
Settlements	(2,517		)
Ending balance at March 31, 2014	$	3,908
* Unrealized gains and losses are reported in Accumulated deferred fuel on the balance sheet. As gains and losses are realized in future periods, they will be recorded as Electric operations or Power purchased for utility customers on the income statement.

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques

The following table quantifies the significant unobservable inputs used in developing the fair value of Level 3 positions at March 31, 2014 and December 31, 2013:

	FAIR VALUE				VALUATION TECHNIQUE	SIGNIFICANT UNOBSERVABLE INPUTS	FORWARD PRICE RANGE
(THOUSANDS, EXCEPT FORWARD PRICE RANGE)	Assets		Liabilities				Low			High
FTRs at Mar. 31, 2014	$	3,972	$	64	Discounted cash flow	Estimated auction price	$	(5.24	)	$	6.95
FTRs at Dec. 31, 2013	$	9,020	$	382	Discounted cash flow	Estimated auction price	$	(4.88	)	$	33.75

Cleco Power [Member]

Fair Value [Line Items]

Fair Value By Balance Sheet Grouping

Cleco Power
	AT MAR. 31, 2014				AT DEC. 31, 2013
(THOUSANDS)	CARRYING VALUE		ESTIMATED FAIR VALUE		CARRYING VALUE		ESTIMATED FAIR VALUE
Financial instruments not marked-to-market:
Cash equivalents	$	5,900	$	5,900	$	14,900	$	14,900
Restricted cash equivalents	$	18,341	$	18,341	$	13,998	$	13,998
Long-term debt, excluding debt issuance costs	$	1,298,649	$	1,458,263	$	1,326,230	$	1,415,048

Schedule of Available-for-sale Securities Reconciliation

The following table provides a reconciliation of Cleco Power’s available-for-sale debt securities from amortized cost to fair value at December 31, 2013:

	AT DEC. 31, 2013
(THOUSANDS)	AMORTIZED COST		TOTAL UNREALIZED GAINS (1)		TOTAL UNREALIZED LOSSES (1)		FAIR VALUE
Municipal bonds	$	9,838	$	8	$	15	$	9,831
Corporate bonds	513		2		—		515
Federal agency mortgage-backed securities	1,000		—		—		1,000
Commercial paper	1,483		—		—		1,483
Total available-for-sale debt securities	$	12,834	$	10	$	15	$	12,829
(1)  Unrealized gains and losses are recorded to the restricted storm reserve.

Fair Value of Financial Assets and Liabilities Measured On A Recurring Basis

Cleco Power
	CLECO POWER FAIR VALUE MEASUREMENTS AT REPORTING DATE USING:
(THOUSANDS)	AT MAR. 31, 2014		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		AT DEC. 31, 2013		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)
Asset Description
Institutional money market funds	$	24,241	$	—	$	24,241	$	—	$	28,775	$	—	$	28,775	$	—
Commercial paper	—		—		—		—		1,483		—		1,483		—
Municipal bonds	—		—		—		—		9,831		—		9,831		—
Corporate bonds	—		—		—		—		515		—		515		—
Federal agency mortgage-backed securities	—		$	—	—		—		1,000		—		1,000		—
FTRs	3,972		$	—	—		3,972		9,020		—		—		9,020
Total assets	$	28,213	$	—	$	24,241	$	3,972	$	50,624	$	—	$	41,604	$	9,020
Liability Description
Long-term debt	1,458,263		—		1,458,263		—		1,415,048		—		1,415,048		—
FTRs	64		—		—		64		382		—		—		382
Total liabilities	$	1,458,327	$	—	$	1,458,263	$	64	$	1,415,430	$	—	$	1,415,048	$	382

Not Designated as Hedging Instrument [Member]

Fair Value [Line Items]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The following table presents the fair values of derivative instruments and their respective line items as recorded on Cleco and Cleco Power’s Condensed Consolidated Balance Sheets at March 31, 2014 and December 31, 2013:

	DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
(THOUSANDS)	BALANCE SHEET LINE ITEM	AT MAR. 31, 2014		AT DEC. 31, 2013
Commodity contracts
FTRs:
Current	Energy risk management assets	$	3,972	$	9,020
Current	Energy risk management liabilities	64		382
Total		$	3,908	$	8,638

Effect of Derivatives On Consolidated Statements of Income

The following table presents the effect of derivatives not designated as hedging instruments on Cleco and Cleco Power’s Condensed Consolidated Statements of Income for the three months ended March 31, 2014:

	FOR THE THREE MONTHS ENDED MAR. 31,
		2014
(THOUSANDS)	DERIVATIVES LINE ITEM	AMOUNT OF GAIN/(LOSS) RECOGNIZED IN INCOME ON DERIVATIVES
Commodity contracts
FTRs	Electric operations	$	3,965
FTRs	Power purchased for utility customers	(1,115		)
Total		$	2,850