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Revenue Recognition
6 Months Ended
Jun. 30, 2019
Revenue from Contract with Customer [Abstract]  
Revenue Recognition
Note 5 — Revenue Recognition

Revenue from Contracts with Customers

Retail Utility Revenue
Cleco’s revenue from contracts with customers is generated primarily from Cleco Power’s regulated revenue from retail residential, commercial, and industrial customers. Cleco recognizes retail revenue from these contracts as a series, and progress towards satisfaction of the performance obligation is measured using an output method based on kWh delivered. Accordingly, revenue from electricity sales is recognized as energy is delivered to the customer. Cleco bills retail customers, based on rates regulated by the LPSC, on a monthly basis with payments generally due within 20 days of the invoice date.
Included in Cleco’s retail revenue is unbilled electric revenue, which represents the amount customers will be billed for services rendered from the last meter reading to the end of the respective accounting period. Cleco uses actual customer energy consumption data available from AMI to calculate unbilled revenue. Also included in Cleco’s retail revenue is electric customer credits, which primarily represents the accrued estimated refunds to Cleco Power’s retail customers for the tax related benefits of the TCJA.

Wholesale Revenue
Wholesale revenue is generated primarily through the sale of energy and capacity to cooperatives, municipalities, and the MISO transmission provider. Cleco also enters into transactions through MISO for spot energy sales which are transacted in the Day-Ahead Energy and Operating Reserves Market and the Real-Time Energy and Operating Reserves Market. The electricity revenue performance obligations, representing both energy and capacity, are satisfied as a series of performance obligations, and progress towards satisfaction of the performance obligations are measured using an output method. The energy performance obligation measure of progress is based on kWh delivered. The capacity performance obligation measure of progress is based on time elapsed and will be recognized each month as Cleco’s generating units stand ready to deliver electricity to the customer. Cleco recognizes wholesale revenue, inclusive of both performance obligations, under the invoice practical expedient for the amount Cleco has the right to invoice. Cleco charges its wholesale customers market based rates that are subject to FERC’s triennial market power analysis.

Transmission Revenue
Cleco earns transmission revenues pursuant to MISO’s FERC filed tariff. The performance obligation of transmission service is satisfied as service is provided. Revenue is recognized upon delivery of the transmission service. Cleco Power’s revenue from the transmission of electricity is recorded based on a FERC-approved annual formula rate mechanism. This mechanism provides for an annual filing of revenue requirements with rates effective June 1 of each year. Cleco Cajun charges transmission rates based on its cost to provide transmission services.

Other Revenue
Other revenue from contracts with customers, which is not a significant source of Cleco’s revenue, includes Cleco Power’s Teche Unit 3 SSR revenue and miscellaneous fees. The performance obligation under these contracts is satisfied and revenue is recognized as control of the products is delivered or services are rendered.

Revenue Unrelated to Contracts with Customers
Cleco’s energy-related transactions with the following characteristics, qualify as derivative contracts and are recorded pursuant to derivatives and hedging accounting guidance: a) their value is based on the notional amount or payment provisions of an underlying asset; b) they require no or a diminutive initial net investment; and c) their terms require or permit net settlement.
Cleco Cajun’s other revenue includes fixed lease payments and certain variable payments for costs paid by NRG Energy on behalf of Cleco. For more information on the Cottonwood lease agreement, see Note 4 — “Leases — Lessor AgreementsCottonwood Sale Leaseback Agreement.”

Disaggregated Revenue
Upon the completion of the Cleco Cajun Transaction on February 4, 2019, Cleco Cajun became a new reportable segment. For more information on the transaction, see Note 2 — “Business Combination.”
Operating revenue, net for the three and six months ended June 30, 2019, and 2018, was as follows:
 
FOR THE THREE MONTHS ENDED JUNE 30, 2019
 
(THOUSANDS)
CLECO POWER

 
CLECO CAJUN

 
OTHER

 
ELIMINATIONS

 
TOTAL

Revenue from contracts with customers
 
 
 
 
 
 
 
 
 
Retail revenue
 
 
 
 
 
 
 
 
 
Residential (1)
$
97,927

 
$

 
$

 
$

 
$
97,927

Commercial (1)
68,013

 

 

 

 
68,013

Industrial (1)
34,845

 

 

 

 
34,845

Other retail (1)
3,476

 

 

 

 
3,476

Surcharge
2,201

 

 

 

 
2,201

Electric customer credits
(8,693
)
 

 

 

 
(8,693
)
Total retail revenue
197,769

 

 

 

 
197,769

Wholesale, net
54,529

(1) 
100,702

 
(2,420
)
(2) 

 
152,811

Transmission
12,067

 
12,462

 

 
(2,954
)
 
21,575

Other
3,337

(3) 
(38
)
 

 

 
3,299

Affiliate (4)
337

 

 
23,012

 
(23,349
)
 

Total revenue from contracts with customers
268,039

 
113,126

 
20,592

 
(26,303
)
 
375,454

Revenue unrelated to contracts with customers
 
 
 
 
 
 
 
 
 
Other
4,933

(5) 
17,486

(6) 

 

 
22,419

Total revenue unrelated to contracts with customers
4,933

 
17,486

 

 

 
22,419

Operating revenue, net
$
272,972

 
$
130,612

 
$
20,592

 
$
(26,303
)
 
$
397,873

(1) Includes fuel recovery revenue.
(2) Amortization of intangible assets related to Cleco Power’s wholesale power supply agreements.
(3) Includes $2.5 million of other miscellaneous fee revenue and $0.8 million of Teche Unit 3 SSR revenue at Cleco Power.
(4) Includes interdepartmental rents and support services. This revenue is eliminated upon consolidation.
(5) Includes realized gains associated with FTRs of $4.9 million.
(6) Includes $15.1 million in lease revenue related to the Cottonwood Sale Leaseback and $2.4 million of deferred lease revenue amortization.
 
FOR THE THREE MONTHS ENDED JUNE 30, 2018
 
(THOUSANDS)
CLECO POWER

 
OTHER

 
ELIMINATIONS

 
TOTAL

Revenue from contracts with customers
 
 
 
 
 
 
 
Retail revenue
 
 
 
 
 
 
 
Residential (1)
$
107,805

 
$

 
$

 
$
107,805

Commercial (1)
71,865

 

 

 
71,865

Industrial (1)
40,679

 

 

 
40,679

Other retail (1)
3,793

 

 

 
3,793

Surcharge
6,193

 

 

 
6,193

Electric customer credits
(13,637
)
 

 

 
(13,637
)
Total retail revenue
216,698

 

 

 
216,698

Wholesale, net (1)
54,662

 
(2,420
)
(2) 

 
52,242

Transmission
11,943

 

 

 
11,943

Other (3)
6,742

 

 

 
6,742

Affiliate
220

 
17,273

 
(17,493
)
 

Total revenue from contracts with customers
290,265

 
14,853

 
(17,493
)
 
287,625

Revenue unrelated to contracts with customers
 
 
 
 
 
 
 
Other
11,636

 

 

 
11,636

Total revenue unrelated to contracts with customers
11,636

 

 

 
11,636

Operating revenue, net
$
301,901

 
$
14,853

 
$
(17,493
)
 
$
299,261

(1) Includes fuel recovery revenue.
(2) Amortization of intangible assets related to Cleco Power’s wholesale power supply agreements.
(3) Other revenue from contracts with customers includes $4.1 million of other miscellaneous fee revenue and $2.6 million of Teche Unit 3 SSR revenue, net of $0.3 million of reserves for capital expenditures.
 
 
FOR THE SIX MONTHS ENDED JUNE 30, 2019
 
(THOUSANDS)
CLECO POWER

 
CLECO CAJUN

 
OTHER

 
ELIMINATIONS

 
TOTAL

Revenue from contracts with customers
 
 
 
 
 
 
 
 
 
Retail revenue
 
 
 
 
 
 
 
 
 
Residential (1)
$
185,075

 
$

 
$

 
$

 
$
185,075

Commercial (1)
133,393

 

 

 

 
133,393

Industrial (1)
72,715

 

 

 

 
72,715

Other retail (1)
7,157

 

 

 

 
7,157

Surcharge
7,522

 

 

 

 
7,522

Electric customer credits
(16,853
)
 

 

 

 
(16,853
)
Total retail revenue
389,009

 

 

 

 
389,009

Wholesale, net
110,075

(1) 
158,893

 
(4,840
)
(2) 

 
264,128

Transmission
24,645

 
21,190

 
2

 
(2,954
)
 
42,883

Other
10,189

(3) 
(64
)
 

 

 
10,125

Affiliate (4)
637

 

 
49,547

 
(50,184
)
 

Total revenue from contracts with customers
534,555

 
180,019

 
44,709

 
(53,138
)
 
706,145

Revenue unrelated to contracts with customers
 
 
 
 
 
 
 
 
 
Other
7,162

(5) 
28,753

(6) 

 

 
35,915

Total revenue unrelated to contracts with customers
7,162

 
28,753

 

 

 
35,915

Operating revenue, net
$
541,717

 
$
208,772

 
$
44,709

 
$
(53,138
)
 
$
742,060

(1) Includes fuel recovery revenue.
(2) Amortization of intangible assets related to Cleco Power’s wholesale power supply agreements.
(3) Includes $6.9 million of other miscellaneous fee revenue and $3.2 million of Teche Unit 3 SSR revenue at Cleco Power.
(4) Includes interdepartmental rents and support services. This revenue is eliminated upon consolidation.
(5) Includes realized gains associated with FTRs of $9.8 million and the reversal of the Lost Contribution to Fixed Cost revenue of $(2.6) million.
(6) Includes $24.9 million in lease revenue related to the Cottonwood Sale Leaseback and $3.8 million of deferred lease revenue amortization.
 
FOR THE SIX MONTHS ENDED JUNE 30, 2018
 
(THOUSANDS)
CLECO POWER

 
OTHER

 
ELIMINATIONS

 
TOTAL

Revenue from contracts with customers
 
 
 
 
 
 
 
Retail revenue
 
 
 
 
 
 
 
Residential (1)
$
199,195

 
$

 
$

 
$
199,195

Commercial (1)
138,560

 

 

 
138,560

Industrial (1)
78,065

 

 

 
78,065

Other retail (1)
7,594

 

 

 
7,594

Surcharge
11,431

 

 

 
11,431

Electric customer credits
(21,284
)
 

 

 
(21,284
)
Total retail revenue
413,561





 
413,561

Wholesale, net (1)
101,631

 
(4,840
)
(2) 

 
96,791

Transmission
26,448

 

 

 
26,448

Other (3)
14,432

 
1

 

 
14,433

Affiliate
428

 
32,942

 
(33,370
)
 

Total revenue from contracts with customers
556,500

 
28,103

 
(33,370
)
 
551,233

Revenue unrelated to contracts with customers
 
 
 
 
 
 
 
Other
24,788

 

 

 
24,788

Total revenue unrelated to contracts with customers
24,788

 

 

 
24,788

Operating revenue, net
$
581,288

 
$
28,103

 
$
(33,370
)
 
$
576,021

(1) Includes fuel recovery revenue.
(2) Amortization of intangible assets related to Cleco Power’s wholesale power supply agreements.
(3) Other revenue from contracts with customers includes $8.6 million of other miscellaneous fee revenue and $5.8 million of Teche Unit 3 SSR revenue, net of $2.2 million of reserves for capital expenditures.
 
Cleco has unsatisfied performance obligations with durations ranging between one and fifteen years that primarily relate to stand-ready obligations as part of fixed capacity minimums. Cleco has elected to not disclose the value of unsatisfied performance obligations as part of its application of the right to invoice practical expedient.