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Summary of Significant Accounting Policies
 3 Months Ended
Mar. 31, 2022
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.
In response to the COVID-19 pandemic, in March 2020 the LPSC issued an executive order prohibiting the disconnection of utilities for nonpayment. At March 31, 2022, Cleco Power had a regulatory asset of $3.0 million recorded for expenses incurred related to the executive order, as allowed by the LPSC.
While most restrictions have now been lifted, Cleco continues to assess the COVID-19 situation and 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, due to numerous uncertainties. The ultimate impacts will depend on future developments, including, among others, the ultimate geographic spread of COVID-19, the potential surges in COVID-19 infections, the consequences of governmental and other measures designed to prevent the spread of COVID-19, the availability, timely distribution and acceptance of effective treatments and vaccines, the duration of the pandemic, actions taken by governmental authorities, customers, suppliers and other third parties, and workforce availability.
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, 2021.
These condensed consolidated financial statements, in the opinion of management, reflect all normal recurring adjustments that are necessary for a fair statement of 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, 2022AT DEC. 31, 2021
Current
Cleco Katrina/Rita storm recovery surcharge$1,675 $1,674 
Total current1,675 1,674 
Non-current
Diversified Lands’ mitigation escrow22 22 
Cleco Cajun’s defense fund
723 723 
Total non-current745 745 
Total restricted cash and cash equivalents$2,420 $2,419 

Cleco Power
(THOUSANDS)AT MAR. 31, 2022AT DEC. 31, 2021
Current
Cleco Katrina/Rita storm recovery surcharge$1,675 $1,674 
Total restricted cash and cash equivalents$1,675 $1,674 

In April 2021, after payments for all final administrative and winding up activities of Cleco Katrina/Rita were made, Cleco Katrina/Rita transferred its remaining restricted cash to Cleco Power to be used to benefit retail customers in a manner to be approved by the LPSC.
Reserves for Credit Losses
Customer accounts receivable are recorded at the invoiced amount and do not bear interest. Customer accounts receivable 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.
Cleco’s service territory experienced an economic decline during 2021, primarily related to the COVID-19 pandemic and weather-related events. Although inflation is currently at a 40-year historical high, Cleco’s economic outlook at March 31, 2022, was still within range of Cleco’s historical credit loss analysis.
The tables below present the changes in the allowance for credit losses by receivable for Cleco and Cleco Power:
Cleco
(THOUSANDS)ACCOUNTS
RECEIVABLE
OTHER*
TOTAL
Balances, Dec. 31, 2021$1,302 $1,638 $2,940 
Current period provision391 — 391 
Charge-offs(1,089)— (1,089)
Recovery398 — 398 
Balances, Mar. 31, 2022$1,002 $1,638 $2,640 
* Loan held at Diversified Lands that was fully reserved for at December 31, 2020.

(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 December 31, 2020.
Cleco Power
(THOUSANDS)ACCOUNTS RECEIVABLE
Balance, Dec. 31, 2021$1,302 
Current period provision391 
Charge-offs(1,089)
Recovery398 
Balance, Mar. 31, 2022$1,002