Fair Value Accounting (Tables)

12 Months Ended

Dec. 31, 2018

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



Cleco
	AT DEC. 31,
	2018				2017
(THOUSANDS)	CARRYING VALUE*		FAIR VALUE		CARRYING VALUE*		FAIR VALUE
Long-term debt	$	2,889,631	$	2,859,924	$	2,866,955	$	2,921,325

* The carrying value of long-term debt does not include deferred issuance costs of $10.3 million in 2018 and $11.6 million in 2017.

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 on a recurring basis:



Cleco
	FAIR VALUE MEASUREMENTS AT REPORTING DATE
(THOUSANDS)	AT DEC. 31, 2018		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		AT DEC. 31, 2017		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	$	133,722	$	—	$	133,722	$	—	$	144,302	$	—	$	144,302	$	—
FTRs	23,355		—		—		23,355		7,396		—		—		7,396
Total assets	$	157,077	$	—	$	133,722	$	23,355	$	151,698	$	—	$	144,302	$	7,396
Liability Description
FTRs	$	468	$	—	$	—	$	468	$	352	$	—	$	—	$	352
Total liabilities	$	468	$	—	$	—	$	468	$	352	$	—	$	—	$	352

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

The following table summarizes the net changes in the net fair value of FTR assets and liabilities classified as Level 3 in the fair value hierarchy for Cleco and Cleco Power:



	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2018			2017
Beginning balance	$	7,044		$	7,683
Unrealized gains (losses)*	11,865			(1,392		)
Purchases	28,185			23,941
Settlements	(24,207		)	(23,188		)
Ending balance	$	22,887		$	7,044
* Unrealized gains (losses) are reported through Accumulated deferred fuel on Cleco and Cleco Power's Consolidated Balance Sheets.

Fair Value Measurement Inputs and Valuation Techniques

he following table quantifies the significant unobservable inputs used in developing the fair value of Level 3 positions for Cleco and Cleco Power as of December 31, 2018:



	FAIR VALUE				VALUATION TECHNIQUE	SIGNIFICANT UNOBSERVABLE INPUTS	FORWARD PRICE RANGE
(THOUSANDS, EXCEPT DOLLAR PER MWh)	Assets		Liabilities				Low			High
FTRs at December 31, 2018	$	23,355	$	468	RTO auction pricing	FTR price - per MWh	$	(4.40	)	$	15.10
FTRs at December 31, 2017	$	7,396	$	352	RTO auction pricing	FTR price - per MWh	$	(2.95	)	$	6.33

Derivatives Not Designated as Hedging Instrument

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 Consolidated Balance Sheets at December 31, 2018, and 2017:



	DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
(THOUSANDS)	BALANCE SHEET LINE ITEM	AT DEC. 31, 2018		AT DEC. 31, 2017
Commodity-related contracts
FTRs:
Current	Energy risk management assets	$	23,355	$	7,396
Current	Energy risk management liabilities	468		352
Commodity-related contracts, net		$	22,887	$	7,044

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 Consolidated Statements of Income for the years December 31, 2018, 2017, and 2016:



Cleco
	AMOUNT OF GAIN/(LOSS) RECOGNIZED IN INCOME ON DERIVATIVES
		SUCCESSOR									PREDECESSOR
(THOUSANDS)	DERIVATIVES LINE ITEM	FOR THE YEAR ENDED DEC. 31, 2018			FOR THE YEAR ENDED DEC. 31, 2017			APR. 13, 2016 - DEC. 31, 2016			JAN. 1, 2016 - APR. 12, 2016
Commodity contracts
FTRs⁽¹⁾	Electric operations	$	39,659		$	23,826		$	17,506		$	3,012
FTRs⁽¹⁾	Power purchased for utility customers	(4,566		)	(5,509		)	(2,112		)	(582		)
Total		$	35,093		$	18,317		$	15,394		$	2,430

⁽¹⁾ For the years ended December 31, 2018 and 2017, unrealized gains (losses) associated with FTRs of $11.9 million and $(1.4) million, respectively, were reported through Accumulated deferred fuel on the balance sheet. For the predecessor period January 1, 2016 - April 12, 2016, and the successor period April 13, 2016 - December 31, 2016, unrealized (losses) gains associated with FTRs of $(1.0) million and $3.1 million, respectively, were reported through Accumulated deferred fuel on the balance sheet.



Cleco Power
		AMOUNT OF GAIN/(LOSS) RECOGNIZED IN INCOME ON DERIVATIVES
		FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	DERIVATIVES LINE ITEM	2018			2017			2016
Commodity contracts
FTRs⁽¹⁾	Electric operations	$	39,659		$	23,826		$	20,518
FTRs⁽¹⁾	Power purchased for utility customers	(4,566		)	(5,509		)	(2,694		)
Total		$	35,093		$	18,317		$	17,824

CLECO POWER

Fair Value [Line Items]

Fair Value By Balance Sheet Grouping



Cleco Power
	AT DEC. 31,
	2018				2017
(THOUSANDS)	CARRYING VALUE*		FAIR VALUE		CARRYING VALUE*		FAIR VALUE
Long-term debt	$	1,400,930	$	1,517,152	$	1,369,810	$	1,535,234

* The carrying value of long-term debt does not include deferred issuance costs of $8.3 million in 2018 and $9.1 million in 2017.

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



Cleco Power
	FAIR VALUE MEASUREMENTS AT REPORTING DATE:
(THOUSANDS)	AT DEC. 31, 2018		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		AT DEC. 31, 2017		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	$	55,900	$	—	$	55,900	$	—	$	95,681	$	—	$	95,681	$	—
FTRs	23,355		—		—		23,355		7,396		—		—		7,396
Total assets	$	79,255	$	—	$	55,900	$	23,355	$	103,077	$	—	$	95,681	$	7,396
Liability Description
FTRs	$	468	$	—	$	—	$	468	$	352	$	—	$	—	$	352
Total liabilities	$	468	$	—	$	—	$	468	$	352	$	—	$	—	$	352

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

The following table summarizes the net changes in the net fair value of FTR assets and liabilities classified as Level 3 in the fair value hierarchy for Cleco and Cleco Power:



	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2018			2017
Beginning balance	$	7,044		$	7,683
Unrealized gains (losses)*	11,865			(1,392		)
Purchases	28,185			23,941
Settlements	(24,207		)	(23,188		)
Ending balance	$	22,887		$	7,044
* Unrealized gains (losses) are reported through Accumulated deferred fuel on Cleco and Cleco Power's Consolidated Balance Sheets.

CLECO POWER | Derivatives Not Designated as Hedging Instrument

Fair Value [Line Items]

Effect of Derivatives On Consolidated Statements of Income



Cleco Power
		AMOUNT OF GAIN/(LOSS) RECOGNIZED IN INCOME ON DERIVATIVES
		FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	DERIVATIVES LINE ITEM	2018			2017			2016
Commodity contracts
FTRs⁽¹⁾	Electric operations	$	39,659		$	23,826		$	20,518
FTRs⁽¹⁾	Power purchased for utility customers	(4,566		)	(5,509		)	(2,694		)
Total		$	35,093		$	18,317		$	17,824

⁽¹⁾ For the years ended December 31, 2018, 2017, and 2016, unrealized gains (losses) associated with FTRs of $11.9 million, $(1.4) million, and $2.1 million, respectively, were reported through Accumulated deferred fuel on the balance sheet.