Operating Leases

12 Months Ended

Dec. 31, 2018



Note 15 — Operating Leases

Cleco maintains operating leases in its ordinary course of business activities. For the years ended December 31, 2018, 2017, and 2016, operating lease expense of $6.6 million, $9.9 million, and $9.0 million, respectively, was recognized. 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,
2019	$	120	$	4,030	$	4,150
2020	—		3,890		3,890
2021	—		2,789		2,789
2022	—		1,239		1,239
2023	—		1,214		1,214
Thereafter	—		7,235		7,235
Total operating lease payments	$	120	$	20,397	$	20,517

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. One 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.

From September 2017 until April 2, 2018, Cleco Power had an operating lease that automatically renewed on a month-to-month basis for use of 42 barges and three towboats to transport petroleum coke and limestone to Madison Unit 3. On April 2, 2018, Cleco Power entered into new agreements for the use of the barges and towboats that expire in March 2033. The new agreement for the barges meets the accounting definition of a capital lease and the new agreement for the towboats meets the accounting definition of an operating lease. Cleco Power pays a fixed amount for the towboats that is adjusted annually. For more information about the capital lease, see Note 16 — “Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — Other Commitments — Fuel Transportation Agreement.”

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