Operating Leases

12 Months Ended

Dec. 31, 2014

Leases [Abstract]

Operating Leases

Note 13 — Operating Leases

The following is a schedule of operating leases that Cleco maintains in the ordinary course of business activities. The majority of Cleco’s operating leases are for line construction and operating vehicles, railcars for coal deliveries, and towboats which push the barges that deliver solid fuels to the plant site. The remaining leases provide for office and operating facilities and office equipment for both Cleco and Cleco Power. These leases have various terms and expiration dates. The following table is a summary of expected operating lease payments for Cleco and Cleco Power for the years indicated:

			YEAR ENDING DEC. 31,
(THOUSANDS)	CLECO CORPORATION		CLECO POWER		TOTAL
2015	$	309	$	9,952	$	10,261
2016	307		9,339		9,646
2017	307		7,504		7,811
2018	305		3,577		3,882
2019	—		3,563		3,563
Thereafter	—		8,375		8,375
Total operating lease payments	$	1,228	$	42,310	$	43,538

Cleco Power has vehicle leases with two vendors. The leases with the first vendor have terms that vary from five to sixyears. The leases can be extended on a month-by-month basis at the end of the term. The lease payments are fixed amounts for the term of the lease. These leases include distribution line construction and maintenance vehicles. Under most of these leases, Cleco returns the vehicle to the vendor at the end of the lease with no further obligation (assuming certain turn-in provisions are met). However, five of the leases are TRAC (terminal rent adjustment clause) leases whereby the vendor is guaranteed a certain residual value at the end of the lease. For the years ended December 31, 2014, 2013, and 2012, lease expense of $0.4 million, $0.6 million, and $1.0 million was recognized, respectively.

The leases with the second vendor have terms that vary from five to seven years. The lease payments are fixed amounts for the term of the lease, based on a percentage of acquisition cost. These leases include distribution line construction and maintenance vehicles, as well as vehicles used throughout Cleco in the generation, distribution, and transmission areas. These leases are TRAC leases, with a specific residual value guaranteed to the vendor. For each of the years ended December 31, 2014, 2013, and 2012, operating lease expense of $0.4 million was recognized.

The operating leases for office and operating facilities and office equipment have lease terms from one to ten years. For the year ended December 31, 2014, operating lease expense of $0.3 million was recognized for Cleco Corporation. For each of the years ended December 31, 2013 and 2012, operating lease expense of less than $0.1 million was recognized for Cleco Corporation. For each of the years ended December 31, 2014, 2013, and 2012, operating lease expense of $0.3 million was recognized for Cleco Power.

The railcar leases are divided into two groups. The first group has 115 railcars and the lease expires on March 31, 2021. The second group has 116 railcars and the lease expires on March 31, 2017. Cleco Power pays a monthly rental fee per car. For the year ended December 31, 2014, operating lease expense of $1.0 million was recognized. For the years ended December 31, 2013 and 2012, operating lease expense of $1.0 million and $1.1 million was recognized, respectively. The railcar leases do not contain contingent rent payments.

The towboat lease expires on August 31, 2017. Cleco Power pays a fixed amount for the towboats that is escalated by 3% each year. For the year ended December 31, 2014, operating lease expense of $4.7 million was recognized. For the years ended December 31, 2013 and 2012, operating lease expense of $4.7 million and $5.6 million was recognized, respectively.