Derivative Instruments

6 Months Ended

Jun. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Note 7 — Derivative Instruments

In the normal course of business, Cleco utilizes derivative instruments, such as natural gas derivatives and FTRs, to mitigate volatility of overall fuel and purchased power costs. For Cleco Power, recovery of these costs is included in its FAC and reflected on customers’ bills as a component of the fuel charge.

Cleco has not elected to designate any of its current instruments as an accounting hedge. At June 30, 2023, there was no collateral posted with or received from counterparties that was netted on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets. At December 31, 2022, cash collateral received from counterparties by Cleco Cajun was $6.5 million, all of which is included in Assets held for sale on Cleco’s Condensed Consolidated Balance Sheet. The following table presents the fair values of derivative instruments and their respective line items as recorded on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets at June 30, 2023, and at December 31, 2022:

	DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
(THOUSANDS)	BALANCE SHEET LINE ITEM	AT JUNE 30, 2023		AT DEC. 31, 2022
Commodity-related contracts
FTRs
Current	Energy risk management assets	$	7,330	$	2,570
Current	Energy risk management liabilities	(871)		(294)
Natural gas derivatives
Current	Energy risk management assets	342		—
Non-current	Energy risk management assets	574		—
Current	Energy risk management liabilities	(648)		(4,570)
Commodity-related contracts, net		$	6,727	$	(2,294)

The following table presents the effect of derivatives not designated as hedging instruments on Cleco’s and Cleco Power’s Condensed Consolidated Statements of Income for the three and six months ended June 30, 2023, and 2022:

	AMOUNT OF GAIN(LOSS) ON DERIVATIVES RECOGNIZED IN INCOME
		FOR THE THREE MONTHS ENDED JUNE 30,				FOR THE SIX MONTHS ENDED JUNE 30,
(THOUSANDS)	INCOME STATEMENT LINE ITEM	2023		2022		2023		2022
Commodity-related contracts
FTRs(1)	Electric operations	$	1,835	$	6,080	$	2,694	$	7,663
FTRs(1)	Purchased power	(1,499)		(1,846)		(2,096)		(3,083)
Natural gas derivatives(2) (3)	Fuel used for electric generation	(11,284)		—		(17,823)		—
Total		$	(10,948)	$	4,234	$	(17,225)	$	4,580

(1) For the three and six months ended June 30, 2023, unrealized losses associated with FTRs of $0.2 million were reported through Accumulated deferred fuel on the balance sheet. For the three and six months ended June 30, 2022, unrealized gains associated with FTRs of $4.3 million were reported through Accumulated deferred fuel on the balance sheet.

(2) For the three and six months ended June 30, 2023, unrealized gains associated with natural gas derivatives of $8.2 million and $3.7 million, respectively, were reported through Accumulated deferred fuel on the balance sheet. Cleco Power had no natural gas derivatives during the six months ended June 30, 2022.

(3) For the three and six months ended June 30, 2023, realized losses associated with natural gas derivatives of $0.6 million were reported through Accumulated deferred fuel on the balance sheet. Cleco Power had no natural gas derivatives during the six months ended June 30, 2022.

The following table presents the volume of commodity-related derivative contracts outstanding at June 30, 2023, and December 31, 2022, for Cleco and Cleco Power:

		TOTAL VOLUME OUTSTANDING
(THOUSAND)	UNIT OF MEASURE	AT JUNE 30, 2023	AT DEC. 31, 2022
Commodity-related contracts
FTRs	MWh	20,554	9,085
Natural gas derivatives	MMBtus	31,615	4,840