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Summary of Significant Accounting Policies
 3 Months Ended
Mar. 31, 2021
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
Note 1 — Summary of Significant Accounting Policies
COVID-19 Impacts
In March 2020, WHO declared the outbreak of COVID-19 to be a global pandemic, and the U.S. declared a national emergency. In response to these declarations and the rapid spread of COVID-19, federal, state and local governments imposed varying degrees of restrictions on business and social activities to contain COVID-19, including quarantine and “stay-at-home” orders and directives in Cleco’s service territory. State and local authorities also subsequently implemented multistep policies to reopen various sectors of the economy such as retail establishments, health and personal care businesses, and restaurants, among others. Due to the reduction in new COVID-19 cases and hospitalizations and the availability of COVID-19 vaccines, effective March 31, 2021, the governor of the state of Louisiana issued orders reducing some of the restrictions that were in effect and easing capacity limits on businesses as well as social gatherings. Effective April 28, 2021, the governor of the state of Louisiana further reduced restrictions by revoking the mandatory, state-wide mask mandate.
The COVID-19 pandemic may worsen in the U.S. during the upcoming months, which may cause federal, state, and local governments to reconsider restrictions on business and social activities. In the event governments increase restrictions, the reopening of the economy may be further curtailed.
Cleco has modified some of its business operations, as these restrictions have significantly impacted many sectors of the economy. Impacts include record levels of unemployment, with businesses, nonprofit organizations, and governmental entities modifying, curtailing, or ceasing normal operations. Cleco has also modified and continues to adjust certain business practices to conform to government restrictions and best practices encouraged by the CDC, WHO, and other governmental and regulatory authorities.
Cleco cannot predict the full impact that COVID-19, or the significant disruption and volatility currently being experienced
in the markets, will have on its business, cash flows, liquidity, financial condition, and results of operations at this time, due to numerous uncertainties. The ultimate impacts will depend on future developments, including, among others, the ultimate geographic spread of COVID-19, the consequences of governmental and other measures designed to prevent the spread of COVID-19, the availability and timely distribution of effective treatments and vaccines, the duration of the pandemic, actions taken by governmental authorities, customers, suppliers and other third parties, workforce availability, and the timing and extent to which normal economic and operating conditions resume.
Principles of Consolidation
The accompanying condensed consolidated financial statements of Cleco include the accounts of Cleco and its majority-owned subsidiaries after elimination of intercompany accounts and transactions.
Basis of Presentation
The condensed consolidated financial statements of Cleco and Cleco Power have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these condensed consolidated financial statements do not include all of the information and notes required by GAAP for annual financial statements. The year-end condensed consolidated balance sheet data was derived from audited financial statements. Because the interim condensed consolidated financial statements and the accompanying notes do not include all of the information and notes required by GAAP for annual financial statements, the condensed consolidated financial statements and other information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
These condensed consolidated financial statements, in the opinion of management, reflect all normal recurring
adjustments that are necessary to fairly state the financial position and results of operations of Cleco and Cleco Power. Amounts reported in Cleco and Cleco Power’s interim financial statements are not necessarily indicative of amounts expected for the annual periods due to the effects of seasonal temperature variations on energy consumption, regulatory rulings, the timing of maintenance on electric generating units, changes in mark-to-market valuations, changing commodity prices, discrete income tax items, and other factors.
In preparing financial statements that conform to GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses, and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. For information on recent authoritative guidance and its effect on financial results, see Note 2 — “Recent Authoritative Guidance.”
Restricted Cash and Cash Equivalents
Various agreements to which Cleco is subject contain covenants that restrict its use of cash. As certain provisions under these agreements are met, cash is transferred out of related escrow accounts and becomes available for its intended purposes and/or general corporate purposes.
Cleco and Cleco Power’s restricted cash and cash equivalents consisted of the following:

Cleco
(THOUSANDS)AT MAR. 31, 2021AT DEC. 31, 2020
Current
Cleco Katrina/Rita’s storm recovery bonds$2,626 $2,626 
Cleco Power’s charitable contributions1,603 1,718 
Cleco Power’s rate credit escrow201 201 
Total current4,430 4,545 
Non-current
Diversified Lands’ mitigation escrow22 22 
Cleco Cajun’s defense fund
722 722 
Total non-current744 744 
Total restricted cash and cash equivalents$5,174 $5,289 

Cleco Power
(THOUSANDS)AT MAR. 31, 2021AT DEC. 31, 2020
Current
Cleco Katrina/Rita’s storm recovery bonds$2,626 $2,626 
Charitable contributions1,603 1,718 
Rate credit escrow201 201 
Total restricted cash and cash equivalents$4,430 $4,545 

Prior to the repayment of the storm recovery bonds in March 2020, Cleco Katrina/Rita had the right to bill and collect storm restoration costs from Cleco Power’s customers. As cash was collected, it was restricted for payment of administration fees, interest, and principal on the storm recovery bonds. The remaining $2.6 million of restricted cash at March 31, 2021, was used in April 2021 for final administrative and winding up activities of Cleco Katrina/Rita. Refunds to Cleco Power customers for amounts remaining after all other costs and expenses of Cleco Katrina/Rita are expected to be paid with the completion of Cleco Power’s current LPSC base rate case.
Reserves for Credit Losses
Customer accounts receivable are recorded at the invoiced amount and do not bear interest. Customer accounts receivables are generally considered to become past due 20 days after the billing date. Cleco recognizes write-offs within the allowance for credit losses once all recovery methods have been exhausted. It is the policy of management to review accounts receivable and unbilled revenue monthly using a reserve matrix based on historical bad debt write-offs as well as current and forecasted economic conditions to establish a credit loss estimate. Management’s historical credit loss analysis included periods of economic recessions, natural disasters, and temporary changes to collection policies. Due to the critical necessity of electricity, none of these past events have significantly impacted Cleco’s credit loss rates.
Although Cleco’s service territory experienced a recent decline in the economy in 2020 and 2021 primarily related to the COVID-19 pandemic and weather-related events, the economic outlook at March 31, 2021, was still within range of its historical credit loss analysis.
The table below presents the changes in the allowance for credit losses by receivable for Cleco and Cleco Power:

Cleco
(THOUSANDS)ACCOUNTS
RECEIVABLE
OTHER*
TOTAL
Balances, Dec. 31, 2020$2,758 $1,638 $4,396 
Current period provision1,874 — 1,874 
Charge-offs(2,859)— (2,859)
Recovery267 — 267 
Balances, Mar. 31, 2021$2,040 $1,638 $3,678 
* Loan held at Diversified Lands that was fully reserved for at March 31, 2021.

(THOUSANDS)ACCOUNTS
RECEIVABLE
OTHER*
TOTAL
Balances, Dec. 31, 2019$3,005 $1,250 $4,255 
CECL adoption71 — 71 
Current period provision2,498 388 2,886 
Charge-offs(4,092)— (4,092)
Recovery641 — 641 
Balances, Mar. 31, 2020$2,123 $1,638 $3,761 
* Loan held at Diversified Lands that was fully reserved for at March 31, 2020.
Cleco Power
(THOUSANDS)ACCOUNTS
RECEIVABLE
Balances, Dec. 31, 2020$2,758 
Current period provision1,874 
Charge-offs(2,859)
Recovery267 
Balances, Mar. 31, 2021$2,040