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Variable Interest Entities
 6 Months Ended
Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Variable Interest Entities
Note 13 — Variable Interest Entities

Cleco Securitization I
Cleco Securitization I is a special-purpose, wholly owned subsidiary of Cleco Power that was formed for the purpose of issuing storm recovery bonds to finance the securitization of Storm Recovery Property at Cleco Power. On June 22, 2022, the securitized financing was complete. Cleco Securitization I’s
assets cannot be used to settle Cleco Power’s obligations and the holders of the storm recovery bonds have no recourse against Cleco Power.
Because Cleco Securitization I’s equity at risk is less than 1% of its total assets, it is considered to be a variable interest entity. Through its equity ownership interest and role as servicer, Cleco Power has the power to direct the most significant financial and operating activities of Cleco Securitization I, including billing, collections, and remittance of retail customer cash receipts to enable Cleco Securitization I to pay the principal and interest payments on the storm recovery bonds. Cleco Power also has the obligation to absorb losses up to its equity investment and rights to receive returns from Cleco Securitization I. Therefore, management has determined that Cleco Power is the primary beneficiary of Cleco Securitization I, and as a result, Cleco Securitization I is included in the consolidated financial statements of Cleco Power. No gain or loss was recognized upon initial consolidation.
The following table summarizes the impact of Cleco Securitization I on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets:

(THOUSANDS)AT JUNE 30, 2023AT DEC. 31, 2022
Restricted cash - current$13,032 $14,139 
Accounts receivable - affiliate3,475 3,348 
Intangible asset - securitization407,571 413,123 
Total assets$424,078 $430,610 
Long-term debt due within one year$14,214 $9,574 
Accounts payable - affiliate146 165 
Interest accrued6,276 9,953 
Long-term debt, net401,284 408,741 
Member’s equity2,158 2,177 
Total liabilities and member’s equity$424,078 $430,610 

The following table summarizes the impact of Cleco Securitization I on Cleco’s and Cleco Power’s Condensed Consolidated Statements of Income:

 FOR THE THREE MONTHS ENDED JUNE 30,FOR THE SIX MONTHS
 ENDED JUNE 30,
(THOUSANDS)2023202220232022
Operating revenue$6,206 $— $15,383 $— 
Operating expenses1,399 — 5,753 — 
Interest income85 — 242 — 
Interest charges, net4,867 — 9,823 — 
Income before taxes$25 $— $49 $— 

Oxbow
Cleco and Cleco Power apply the equity method of accounting to report the investment in Oxbow in the consolidated financial statements. Under the equity method, the assets and liabilities of this entity are reported as Equity investment in investee on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets. The revenue and expenses (excluding income taxes) of this entity are netted and reported as equity income or loss from investees on Cleco’s and Cleco Power’s Condensed Consolidated Statements of Income.
Oxbow is owned 50% by Cleco Power and 50% by SWEPCO. Cleco Power is not the primary beneficiary because it shares the power to control Oxbow’s significant activities with SWEPCO. Cleco Power’s current assessment of its maximum
exposure to loss related to Oxbow at June 30, 2023, consisted of its equity investment of $2.1 million.
The following table presents the components of Cleco Power’s equity investment in Oxbow:

INCEPTION TO DATE (THOUSANDS)AT JUNE 30, 2023AT DEC. 31, 2022
Purchase price$12,873 $12,873 
Cash contributions6,399 6,399 
Distributions(17,200)(17,200)
Total equity investment in investee$2,072 $2,072 

The following table compares the carrying amount of Oxbow’s assets and liabilities with Cleco Power’s maximum exposure to loss related to its investment in Oxbow:

(THOUSANDS)AT JUNE 30, 2023AT DEC. 31, 2022
Oxbow’s net assets/liabilities$4,145 $4,145 
Cleco Power’s 50% equity
$2,072 $2,072 
Cleco Power’s maximum exposure to loss$2,072 $2,072 

The following table contains summarized financial information for Oxbow:

 FOR THE THREE MONTHS ENDED JUNE 30,FOR THE SIX MONTHS ENDED JUNE 30,
(THOUSANDS)2023202220232022
Operating revenue$108 $85 $233 $151 
Operating expenses(108)(85)(233)(151)
Income before taxes$— $— $— $— 

Prior to June 30, 2020, DHLC mined lignite reserves at Oxbow through the Amended Lignite Mining Agreement. The lignite reserves were intended to be used to provide fuel to the Dolet Hills Power Station. Under the Amended Lignite Mining Agreement, DHLC billed Cleco Power its proportionate share of incurred lignite extraction and associated mining-related costs. Oxbow billed Cleco Power its proportionate share of incurred costs related to mineral rights and land leases. On October 6, 2020, Cleco Power and SWEPCO made a joint filing with the LPSC seeking authorization to close the Oxbow mine. At December 31, 2021, the Dolet Hills Power Station was retired, and all of Cleco Power’s proportionate share of lignite-related costs had been billed by DHLC and Oxbow. For more information on DHLC and the Oxbow mine, see Note 14 — “Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — Risks and Uncertainties.”
Oxbow has no third-party agreements, guarantees, or other third-party commitments that contain obligations affecting Cleco Power’s investment in Oxbow.