Cleco Corporation (NYSE:CNL) announced the transfer of Coughlin Power Station to its regulated utility, Cleco Power LLC, from its unregulated subsidiary, Cleco Midstream LLC. Cleco Power assumed ownership of the natural gas-fired unit Saturday, March 15.
"This transaction significantly strengthens the position of our utility as we look for future growth opportunities," said Bruce Williamson, president and CEO of Cleco Corporation. "The unit adds value to our regulated generating facilities by further diversifying the fuels we use to operate our plants. The Coughlin plant produces clean, reliable power that will be attractive to business and economic development and allows Cleco Power to serve wholesale needs within the region."
This transaction will add 775-megawatts of nameplate capacity to Cleco Power's regulated fleet. As part of the utility's generation units, the Coughlin facility is a key component of providing capacity, energy and services to Dixie Electric Membership Corporation (DEMCO). This contract is to begin on April 1, 2014, and will grow the utility's total customer load by more than 20 percent. DEMCO serves the growing suburban Baton Rouge market and is one of the largest cooperatives in Louisiana.
In April 2013, Cleco Power filed for Louisiana Public Service Commission (LPSC) approval of its selection of Coughlin as the winning resource in its 2012 Long-Term Request for Proposals and for approval to transfer Coughlin from Cleco Midstream. Staff and consultants from the LPSC along with an Independent Monitor oversaw the proposal since an affiliate bid into the process. The utility received state regulatory approval for the transfer in December 2013 and Federal Energy Regulatory Commission approval earlier in 2013.
Cleco Power expects to finalize the rate treatment of Coughlin as part of its formula rate plan extension, which is expected to be complete in the second quarter of 2014.
This news release contains forward-looking statements about future results and circumstances. There are many risks and uncertainties with respect to such forward-looking statements, including the weather and other natural phenomena, state and federal legislative and regulatory initiatives, the timing and extent of changes in commodity prices and interest rates, the operating performance of Cleco Power's facilities, the impact of the global economic environment, and other risks and uncertainties more fully described in the company's latest Annual Report on Form 10-K. Actual results may differ materially from those indicated in such forward-looking statements.