Regulation and Rates

9 Months Ended

Sep. 30, 2023


Note 12 — Regulation and Rates

FRP

On June 16, 2021, the LPSC approved Cleco Power’s current FRP. Effective July 1, 2021, under the terms of the FRP, Cleco Power is allowed to earn a target ROE of 9.5%, while providing the opportunity to earn up to 10.0%. Additionally, 60.0% of retail earnings between 10.0% and 10.5%, and all retail earnings over 10.5%, are required to be refunded to customers. The amount of credits due to customers, if any, is determined by Cleco Power and the LPSC annually. On June 30, 2023, Cleco Power filed an application with the LPSC for a

new FRP, with anticipated new rates being effective July 1, 2024. Cleco Power has responded to its first set of LPSC data requests.

In September 2023, the LPSC approved Cleco Power’s monitoring report for the 12 months ended June 30, 2022, indicating no material refund was due. On October 31, 2023, Cleco Power filed its monitoring report for the 12 months ended June 30, 2023, indicating no refund was due.

TCJA

On June 16, 2021, the LPSC approved Cleco Power’s current retail rate plan which includes the settlement of the TCJA protected and unprotected excess ADIT. Effective July 1,

2021, all retail customers continued receiving bill credits resulting from the TCJA. The target retail portion of the unprotected excess ADIT is approximately $2.5 million monthly and will be credited over a period of three years concluding on June 30, 2024. The retail portion of the protected excess ADIT will be credited until the full amount of the protected excess ADIT has been returned to Cleco Power’s customers through bill credits. At September 30, 2023, Cleco Power had $222.3 million accrued for the excess ADIT, of which $31.2 million is reflected in current regulatory liabilities.

Teche Unit 3

In July 2022, Cleco Power filed an Attachment Y with MISO requesting retirement of Teche Unit 3, barring any violations of specific applicable reliability standards. On January 31, 2023, Cleco Power filed a notice with the LPSC to retire Teche Unit 3 in May 2023. However, in April 2023, Cleco Power filed notices with MISO and the LPSC to delay the retirement of Teche Unit 3. Management continues to monitor regulatory capacity requirements and customer needs to determine the appropriate timing of the retirement of Teche Unit 3.