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Intangible Assets and Liabilities
 9 Months Ended
Sep. 30, 2020
Intangible Assets And Liabilities Disclosure [Abstract]  
Intangible Assets and Liabilities
Note 16 — Intangible Assets and Liabilities
During 2008, Cleco Katrina/Rita acquired a $177.5 million intangible asset which includes $176.0 million for the right to bill and collect storm recovery charges from customers of Cleco Power and $1.5 million of financing costs. This intangible asset was fully amortized in March 2020 and had no residual value at the end of its life.
As a result of the 2016 Merger, fair value adjustments were recorded on Cleco’s Condensed Consolidated Balance Sheet for the valuation of the Cleco trade name and long-term wholesale power supply agreements. At the end of their lives, these intangible assets will have no residual value. The trade name intangible asset is being amortized over its estimated economic useful life of 20 years. The intangible assets related to the power supply agreements are amortized over the estimated life of each applicable contract ranging between 7 and 19 years, and the amortization is included in Electric operations on Cleco’s Condensed Consolidated Statements of Income.
As a result of the Cleco Cajun Transaction, fair value adjustments were recorded on Cleco’s Condensed Consolidated Balance Sheet for the difference between the contract and market price of acquired long-term wholesale power agreements. The fair value of intangible assets of $98.9 million and intangible liabilities of $14.2 million was reflected in the purchase price allocation. At the end of their lives, these intangible assets and liabilities will have no residual value. These intangibles are amortized over the estimated life of each applicable contract ranging between 2 and 8 years. The amortization is included in Electric operations on Cleco’s Condensed Consolidated Statements of Income.
As part of the Cleco Cajun Transaction, Cleco assumed an LTSA for maintenance services related to the Cottonwood Plant. An intangible liability of $24.1 million was reflected in the purchase price allocation and is being amortized using the straight-line method over the estimated life of the LTSA of seven years. The amortization is included as a reduction to the LTSA prepayments on Cleco’s Condensed Consolidated Balance Sheet. For more information on the fair value adjustments of intangible assets and liabilities related to the Cleco Cajun Transaction, see Note 2 — “Business Combinations.”
The following tables present Cleco and Cleco Power’s amortization of intangible assets and liabilities:
Cleco
 FOR THE THREE MONTHS ENDED SEPT. 30,FOR THE NINE MONTHS
ENDED SEPT. 30,
(THOUSANDS)2020201920202019
Intangible assets
Cleco Katrina/Rita right to bill and collect storm recovery charges
$— $5,660 $517 $15,702 
Trade name$64 $64 $191 $191 
Power supply agreements
$6,400 $6,474 $19,200 $17,873 
Intangible liabilities
LTSA
$882 $871 $2,646 $2,323 
Power supply agreements
$871 $882 $2,613 $2,352 
Cleco Power
 FOR THE THREE MONTHS ENDED SEPT. 30,FOR THE NINE MONTHS
ENDED SEPT. 30,
(THOUSANDS)2020201920202019
Cleco Katrina/Rita right to bill and collect storm recovery charges
$— $5,660 $517 $15,702 

The following tables summarize the balances for intangible assets and liabilities subject to amortization for Cleco and Cleco Power:
Cleco
(THOUSANDS)AT SEPT. 30, 2020AT DEC. 31, 2019
Intangible assets
Cleco Katrina/Rita right to bill and collect storm recovery charges
$70,594 $70,594 
Trade name5,100 5,100 
Power supply agreements184,004 184,004 
Total intangible assets carrying amount259,698 259,698 
Intangible liabilities
LTSA
24,100 24,100 
Power supply agreements
14,200 14,200 
Total intangible liability carrying amount38,300 38,300 
Net intangible assets carrying amount221,398 221,398 
Accumulated amortization(129,815)(115,167)
Net intangible assets subject to amortization$91,583 $106,231 
Cleco Power
(THOUSANDS)AT SEPT. 30, 2020AT DEC. 31, 2019
Cleco Katrina/Rita right to bill and collect storm recovery charges
$177,537 $177,537 
Accumulated amortization(177,537)(177,020)
Net intangible assets subject to amortization$— $517 

Goodwill
On April 13, 2016, in connection with the completion of the 2016 Merger, Cleco recognized goodwill of $1.49 billion. Management assigned the recognized goodwill to the Cleco Power reporting unit. Goodwill is required to be tested for impairment at the reporting segment level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Application of the goodwill impairment test requires significant judgments,
including the identification of reporting units, assignments of assets and liabilities to reporting units, assignment of goodwill to reporting units, and the determination of the fair value of the reporting units.
Cleco conducted its 2020 annual impairment test using an August 1, 2020, measurement date. The fair value of the Cleco Power reporting unit was estimated using a weighted combination of the income approach, which estimates fair value based on discounted cash flows, and the market approach, which estimates fair value based on market comparables within the utility and energy industries. Significant assumptions used in these fair value estimates include estimation of future cash flows related to capital expenditures, long-term rate of growth, and weighted-average cost of capital or discount rate. Changes in these assumptions could materially affect the determination of fair value and goodwill impairment at Cleco Power. Based on the tests performed, management has determined that the fair value of the Cleco Power reporting unit exceeds the carrying value resulting in no impairment of Cleco Power’s goodwill as of August 1, 2020.