Fair Value Accounting (Tables)

3 Months Ended

Mar. 31, 2019

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Carrying Value and Estimated Fair Value

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 Condensed Consolidated Balance Sheets:

Cleco
	AT MAR. 31, 2019				AT DEC. 31, 2018
(THOUSANDS)	CARRYING VALUE*		FAIR VALUE		CARRYING VALUE*		FAIR VALUE
Long-term debt	$	3,277,216	$	3,327,937	$	2,889,631	$	2,859,924

* The carrying value of long-term debt does not include deferred issuance costs of $13.5 million at March 31, 2019, and $10.3 million at December 31, 2018.

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
	CLECO CONSOLIDATED FAIR VALUE MEASUREMENTS AT REPORTING DATE
(THOUSANDS)	AT MAR. 31, 2019		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		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)
Asset description
Institutional money market funds	$	109,848	$	—	$	109,848	$	—	$	133,722	$	—	$	133,722	$	—
FTRs	9,171		—		—		9,171		23,355		—		—		23,355
Total assets	$	119,019	$	—	$	109,848	$	9,171	$	157,077	$	—	$	133,722	$	23,355
Liability description
FTRs	$	1,361	$	—	$	—	$	1,361	$	468	$	—	$	—	$	468
Total liabilities	$	1,361	$	—	$	—	$	1,361	$	468	$	—	$	—	$	468

Net Changes in Net Fair Value of FTR Assets and Liabilities Classified as Level 3

The following tables summarize 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:

Cleco
	FOR THE THREE MONTHS ENDED MAR. 31,
(THOUSANDS)	2019			2018
Beginning balance	$	22,887		$	7,044
Unrealized (losses) gains*	(1,917		)	1,617
Purchases	5,237			371
Settlements	(18,397		)	(4,749		)
Ending balance	$	7,810		$	4,283
* Unrealized (losses) gains are reported through Accumulated deferred fuel on the condensed consolidated balance sheet for Cleco Power and through Fuel used for electric generation on the condensed income statement for Cleco Cajun.

Significant Unobservable Inputs Used in Developing Fair Value of Level 3 Positions

The following tables quantify the significant unobservable inputs used in developing the fair value of Level 3 positions as of March 31, 2019, and December 31, 2018:

Cleco
	FAIR VALUE				VALUATION TECHNIQUE	SIGNIFICANT UNOBSERVABLE INPUTS	FORWARD PRICE RANGE
(THOUSANDS, EXCEPT FORWARD PRICE RANGE)	ASSETS		LIABILITIES				LOW			HIGH
FTRs at Mar. 31, 2019	$	9,171	$	1,361	RTO auction pricing	FTR price - per MWh	$	(3.31	)	$	8.00
FTRs at Dec. 31, 2018	$	23,355	$	468	RTO auction pricing	FTR price - per MWh	$	(4.40	)	$	15.10

Fair Value of Derivative Instruments as Recorded in Condensed Consolidated Balance Sheets

The following tables present 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, 2019, and December 31, 2018:

Cleco
	DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
(THOUSANDS)	BALANCE SHEET LINE ITEM	AT MAR. 31, 2019		AT DEC. 31, 2018
Commodity-related contracts
FTRs:
Current	Energy risk management assets	$	9,171	$	23,355
Current	Energy risk management liabilities	1,361		468
Commodity-related contracts, net		$	7,810	$	22,887

Amount of Gain (Loss) Recognized in Income on Derivatives

The following tables present 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, 2019, and 2018:

Cleco
	AMOUNT OF GAIN(LOSS) RECOGNIZED IN INCOME ON DERIVATIVES
		FOR THE THREE MONTHS  ENDED MAR. 31,
(THOUSANDS)	DERIVATIVES LINE ITEM	2019			2018
Commodity contracts
FTRs(1)	Electric operations	$	5,209		$	13,099
FTRs(1)	Power purchased for utility customers	(3,324		)	(513		)
Total		$	1,885		$	12,586

⁽¹⁾ For the three months ended March 31, 2019, unrealized losses associated with FTRs for Cleco Power of $2.9 million were reported through Accumulated deferred fuel on the balance sheet. For the three months ended March 31, 2018, unrealized gains associated with FTRs of $1.6 million were reported through Accumulated deferred fuel on the balance sheet.

CLECO POWER

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Carrying Value and Estimated Fair Value

Cleco Power
	AT MAR. 31, 2019				AT DEC. 31, 2018
(THOUSANDS)	CARRYING VALUE*		FAIR VALUE		CARRYING VALUE*		FAIR VALUE
Long-term debt	$	1,390,627	$	1,539,270	$	1,400,930	$	1,517,152

* The carrying value of long-term debt does not include deferred issuance costs of $8.1 million at March 31, 2019, and $8.3 million at December 31, 2018.

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

Cleco Power
	CLECO POWER FAIR VALUE MEASUREMENTS AT REPORTING DATE
(THOUSANDS)	AT MAR. 31, 2019		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		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)
Asset description
Institutional money market funds	$	43,918	$	—	$	43,918	$	—	$	55,900	$	—	$	55,900	$	—
FTRs	5,684		—		—		5,684		23,355		—		—		23,355
Total assets	$	49,602	$	—	$	43,918	$	5,684	$	79,255	$	—	$	55,900	$	23,355
Liability description
FTRs	$	872	$	—	$	—	$	872	$	468	$	—	$	—	$	468
Total liabilities	$	872	$	—	$	—	$	872	$	468	$	—	$	—	$	468

Net Changes in Net Fair Value of FTR Assets and Liabilities Classified as Level 3

Cleco Power
	FOR THE THREE MONTHS ENDED MAR. 31,
(THOUSANDS)	2019			2018
Beginning balance	$	22,887		$	7,044
Unrealized (losses) gains*	(2,939		)	1,617
Purchases	1,286			371
Settlements	(16,422		)	(4,749		)
Ending balance	$	4,812		$	4,283
* Unrealized (losses) gains are reported through Accumulated deferred fuel on Cleco Power’s Condensed Consolidated Balance Sheet.

Significant Unobservable Inputs Used in Developing Fair Value of Level 3 Positions

Cleco Power
	FAIR VALUE				VALUATION TECHNIQUE	SIGNIFICANT UNOBSERVABLE INPUTS	FORWARD PRICE RANGE
(THOUSANDS, EXCEPT FORWARD PRICE RANGE)	ASSETS		LIABILITIES				LOW			HIGH
FTRs at Mar. 31, 2019	$	5,684	$	872	RTO auction pricing	FTR price - per MWh	$	(3.31	)	$	8.00
FTRs at Dec. 31, 2018	$	23,355	$	468	RTO auction pricing	FTR price - per MWh	$	(4.40	)	$	15.10

Fair Value of Derivative Instruments as Recorded in Condensed Consolidated Balance Sheets

Cleco Power
	DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
(THOUSANDS)	BALANCE SHEET LINE ITEM	AT MAR. 31, 2019		AT DEC. 31, 2018
Commodity-related contracts
FTRs:
Current	Energy risk management assets	$	5,684	$	23,355
Current	Energy risk management liabilities	872		468
Commodity-related contracts, net		$	4,812	$	22,887

Amount of Gain (Loss) Recognized in Income on Derivatives

Cleco Power
	AMOUNT OF GAIN(LOSS) RECOGNIZED IN INCOME ON DERIVATIVES
		FOR THE THREE MONTHS  ENDED MAR. 31,
(THOUSANDS)	DERIVATIVES LINE ITEM	2019			2018
Commodity contracts
FTRs(1)	Electric operations	$	5,206		$	13,099
FTRs(1)	Power purchased for utility customers	(1,983		)	(513		)
Total		$	3,223		$	12,586

⁽¹⁾ For the three months ended March 31, 2019, unrealized losses associated with FTRs of $2.9 million were reported through Accumulated deferred fuel on the balance sheet. For the three months ended March 31, 2018, unrealized gains associated with FTRs of $1.6 million were reported through Accumulated deferred fuel on the balance sheet.