Derivative Instruments

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

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.

Cleco has not elected to designate any of its current instruments as an accounting hedge. At September 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. 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 September 30, 2023, and at December 31, 2022:


Cleco
	DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
		AT SEPT. 30, 2023		AT DEC. 31, 2022
						GROSS AMOUNTS OFFSET ON THE BALANCE SHEET				GROSS AMOUNTS NOT OFFSET ON THE BALANCE SHEET (1)
(THOUSANDS)	BALANCE SHEET LINE ITEM	NET ASSET (LIABILITY) ON THE BALANCE SHEET		GROSS ASSET (LIABILITY)		CASH COLLATERAL		NET ASSET (LIABILITY) ON THE BALANCE SHEET		COLLATERAL		NET AMOUNT
Commodity-related contracts
FTRs
Current	Energy risk management assets	$	4,814	$	2,570	$	—	$	2,570	$	—	$	2,570
Current	Energy risk management liabilities	(671)		(294)		—		(294)		—		(294)
Natural gas derivatives
Current	Energy risk management assets	22,293		53,251		(6,500)		46,751		(32,578)		14,173
Non-current	Energy risk management assets	10,086		58,895		—		58,895		(20,422)		38,473
Current	Energy risk management liabilities	(4,550)		(6,980)		—		(6,980)		—		(6,980)
Commodity-related contracts, net		$	31,972	$	107,442	$	(6,500)	$	100,942	$	(53,000)	$	47,942

(1) Represents letters of credit by counterparties.


Cleco Power
	DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
(THOUSANDS)	BALANCE SHEET LINE ITEM	AT SEPT. 30, 2023		AT DEC. 31, 2022
Commodity-related contracts
FTRs
Current	Energy risk management assets	$	4,814	$	2,570
Current	Energy risk management liabilities	(671)		(294)
Natural gas derivatives
Current	Energy risk management assets	85		—
Non-current	Energy risk management assets	81		—
Current	Energy risk management liabilities	(3,938)		(4,570)
Commodity-related contracts, net		$	371	$	(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 nine months ended September 30, 2023, and 2022:


Cleco
	AMOUNT OF GAIN(LOSS) ON DERIVATIVES RECOGNIZED IN INCOME
		FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	INCOME STATEMENT LINE ITEM	2023		2022		2023		2022
Commodity-related contracts
FTRs(1)	Electric operations	$	2,227	$	5,297	$	4,920	$	12,960
FTRs(1)	Purchased power	(1,690)		(2,575)		(3,786)		(5,658)
Natural gas derivatives(2) (3)	Fuel used for electric generation	(10,250)		84,377		(110,506)		250,264
Total		$	(9,713)	$	87,099	$	(109,372)	$	257,566

(1) For the three and nine months ended September 30, 2023, unrealized gains (losses) associated with FTRs of $0.1 million and $(0.2) million, respectively, were reported through Accumulated deferred fuel on the balance sheet. For the three and nine months ended September 30, 2022, unrealized (losses) gains associated with FTRs of $(1.4) million and $0.2 million, respectively, were reported through Accumulated deferred fuel on the balance sheet.

(2) For the three and nine months ended September 30, 2023, unrealized (losses) gains associated with natural gas derivatives for Cleco Power of $(4.0) million and $0.8 million, respectively, were reported through Accumulated deferred fuel on the balance sheet. For the three and nine months ended September 30, 2022, unrealized losses associated with natural gas derivatives for Cleco Power of less than $0.1 million were reported through Accumulated deferred fuel on the balance sheet.

(3) For the three and nine months ended September 30, 2023, realized losses associated with natural gas derivatives for Cleco Power of $(0.3) million were reported through Accumulated deferred fuel on the balance sheet. For the three and nine months ended September 30, 2022, Cleco Power had no realized gains (losses) associated with natural gas derivatives reported through Accumulated deferred fuel on the balance sheet.


Cleco Power
	AMOUNT OF GAIN(LOSS) ON DERIVATIVES RECOGNIZED IN INCOME
		FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	INCOME STATEMENT LINE ITEM	2023		2022		2023		2022
Commodity-related contracts
FTRs(1)	Electric operations	$	2,227	$	5,297	$	4,920	$	12,960
FTRs(1)	Purchased power	(1,690)		(2,575)		(3,786)		(5,658)
Natural gas derivatives(2) (3)	Fuel used for electric generation	(2,053)		—		(19,876)		—
Total		$	(1,516)	$	2,722	$	(18,742)	$	7,302

(2) For the three and nine months ended September 30, 2023, unrealized (losses) gains associated with natural gas derivatives of $(4.0) million and $0.8 million, respectively, were reported through Accumulated deferred fuel on the balance sheet. For the three and nine months ended September 30, 2022, unrealized losses associated with natural gas derivatives of less than $0.1 million were reported through Accumulated deferred fuel on the balance sheet.

(3) For the three and nine months ended September 30, 2023, realized losses associated with natural gas derivatives of $(0.3) million were reported through Accumulated deferred fuel on the balance sheet. For the three and nine months ended September 30, 2022, Cleco Power had no realized gains (losses) associated with natural gas derivatives reported through Accumulated deferred fuel on the balance sheet.

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

Cleco

UNIT OF MEASURE

TOTAL VOLUME OUTSTANDING

(THOUSAND)

AT SEPT. 30, 2023

AT DEC. 31, 2022

Commodity-related contracts

FTRs

MWh

15,326

9,085

Natural gas derivatives

MMBtus

71,935

85,350

Cleco Power