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Variable Interest Entities
 3 Months Ended
Mar. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Variable Interest Entities
Note 12— 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 MAR. 31, 2024
AT DEC. 31, 2023
Restricted cash - current$7,684 $15,818 
Accounts receivable - affiliate2,472 3,492 
Intangible asset - securitization395,331 398,658 
Total assets$405,487 $417,968 
Long-term debt due within one year$14,790 $14,499 
Accounts payable15 — 
Accounts payable - affiliate62 176 
Interest accrued1,522 6,191 
Long-term debt, net386,965 394,944 
Total liabilities
403,354 415,810 
Member’s equity2,133 2,158 
Total liabilities and member’s equity$405,487 $417,968 

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 MAR. 31,
(THOUSANDS)20242023
Operating revenue$8,036 $9,177 
Operating expenses(3,466)(4,354)
Interest income228 158 
Interest charges, net(4,773)(4,956)
Income before taxes
$25 $25 

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 March 31, 2024, consisted of its equity investment of approximately $1.9 million.
The following table presents the components of Cleco Power’s equity investment in Oxbow:

INCEPTION TO DATE (THOUSANDS)AT MAR. 31, 2024AT DEC. 31, 2023
Purchase price$12,873 $12,873 
Cash contributions6,399 6,399 
Distributions(18,034)(17,280)
Equity income from investee
678 — 
Total equity investment in investee$1,916 $1,992 

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 MAR. 31, 2024AT DEC. 31, 2023
Oxbow’s net assets/liabilities$3,832 $3,985 
Cleco Power’s 50% equity
$1,916 $1,992 
Cleco Power’s maximum exposure to loss$1,916 $1,992 

The following table contains summarized financial information for Oxbow:

 FOR THE THREE MONTHS ENDED MAR. 31,
(THOUSANDS)20242023
Operating revenue$184 $124 
Operating expenses(87)(124)
Gain on sale of property
1,356 — 
Interest income
(97)— 
Income before taxes$1,356 $— 

Oxbow has no third-party agreements, guarantees, or other third-party commitments that contain obligations affecting Cleco Power’s investment in Oxbow.