

Note 14 — Operating Leases

Cleco maintains operating leases in its ordinary course of business activities. For the years ended December 31, 2017, 2016, and 2015, operating lease expense of $9.9 million, $9.0 million, and $9.4 million was recognized, respectively. The following table is a summary of expected operating lease payments for Cleco and Cleco Power:



(THOUSANDS)	CLECO HOLDINGS		CLECO POWER		TOTAL
Year ending Dec. 31,
2018	$	413	$	3,317	$	3,730
2019	—		3,111		3,111
2020	—		2,830		2,830
2021	—		1,744		1,744
2022	—		237		237
Thereafter	—		3,104		3,104
Total operating lease payments	$	413	$	14,343	$	14,756

Cleco Power leases utility systems from two municipalities and one non-municipal public body. The first municipal lease has a term of 10 years and expires on August 11, 2021. The second municipal lease has a term of 10 years and expires on May 13, 2028. The non-municipal lease has a term of 27 years and expires on July 31, 2039. Each utility system lease contains provisions for extensions.

Cleco Power has leases for 200 railcars for coal transportation. One lease for 115 railcars expires on March 31, 2021. During 2017, Cleco Power renegotiated a railcar lease to replace the lease that expired on March 31, 2017. The new lease for 85 railcars expires on March 31, 2020. Cleco Power pays a monthly rental fee per car. The railcar leases do not contain contingent rent payments.

Cleco Power leases 42 barges to transport solid fuels to the plant site. Prior to September 1, 2017, the lease met the accounting definition of a capital lease. On August 31, 2017, the lease expired, and Cleco Power entered into an operating lease effective September 1, 2017. The operating lease agreement is on a month-to-month basis, until terminated by either party. Under the terms of the lease, Cleco Power pays a fixed amount for the barges. This amount is adjusted annually. Cleco Power pays various amounts for towing rate adjustments, depending on the type of solid fuel being transported. For more information about the capital lease, see Note 15 — “Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — Other Commitments — Fuel Transportation Agreement.”

Cleco Power leases three towboats to push the barges that deliver solid fuels to the plant site. The lease agreement for these towboats expired August 31, 2017. The lease agreement was amended to extend monthly, or until the execution of a new agreement, which is expected to be in the first quarter of 2018. Cleco Power pays a fixed amount for the towboats per the terms and conditions of the contract that adjusts annually.

Cleco and Cleco Power’s remaining leases provide for office and operating facilities, office equipment, and tower rentals.