Storm Restoration

9 Months Ended

Sep. 30, 2020

Unusual or Infrequent Items, or Both [Abstract]

Storm Restorations

Note 18 — Storm Restoration

In August and October 2020, Cleco Power’s distribution and transmission systems sustained substantial damage from three separate hurricanes.

On August 27, 2020, Hurricane Laura made landfall in southwest Louisiana as a Category 4 storm, causing catastrophic damage to portions of Cleco Power’s service territory and causing power outages for approximately 140,000 of Cleco Power’s electric customers located primarily in central and southwest Louisiana. By September 18, 2020, power was restored to 100% of customers who could receive power.

Cleco Power’s current estimate of the total storm restoration costs related to Hurricane Laura is between $185.0 million and $190.0 million. Cleco Power continues to work to restore the distribution and transmission systems to their pre-storm condition. The damage to equipment from the storm required replacement, as well as repair of existing assets. Therefore, the balance sheets of Cleco and Cleco Power reflect the capitalization of approximately 63% of the $180.9 million in restoration costs recorded at September 30, 2020, or approximately $113.8 million. Approximately $9.4 million of the repair-related restoration cost associated with Hurricane Laura was offset against Cleco Power’s existing storm damage reserve, and the remaining $57.7 million was recorded as a regulatory asset, as allowed by the LPSC on September 16, 2020.

On October 9, 2020, Hurricane Delta made landfall in southwest Louisiana as a Category 2 storm resulting in power outages for approximately 132,000 of Cleco Power’s electric customers located primarily in central and south Louisiana. By

October 16, 2020, power was restored to 100% of customers who could receive power. Cleco Power’s current estimate of total storm restoration costs related to Hurricane Delta is between $50.0 million and $55.0 million. Cleco Power anticipates the establishment of a regulatory asset for non-capital expenses incurred related to Hurricane Delta, subject to LPSC approval.

On October 28, 2020, Hurricane Zeta made landfall in southeast Louisiana as a Category 2 storm resulting in power outages for approximately 73,000 of Cleco Power’s electric customers located primarily in southeast Louisiana. By October 31, 2020, service was restored to 100% of customers who could receive power. Cleco Power’s current estimate of total storm restoration costs related to Hurricane Zeta is between $7.0 million and $8.0 million. Cleco Power anticipates the establishment of a regulatory asset for non-capital expenses incurred related to Hurricane Zeta, subject to LPSC approval.

Cleco Power anticipates making a filing with the LPSC in the fourth quarter of 2020 requesting an interim rate recovery for return on the storm restoration costs associated with Hurricanes Laura, Delta, and Zeta until such time securitization of such costs can be completed. Cleco Power, in line with other impacted utilities, will seek available funds from the U.S. government for relief of costs incurred from Hurricanes Laura, Delta, and Zeta. Cleco Power cannot predict the likelihood that any reimbursement from the U.S. government ultimately will be approved. In addition to securitization, other recovery options are being analyzed, including customer surcharge.