UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

    ☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

Or

    ☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-15759

CLECO CORPORATE HOLDINGS LLC

(Exact name of registrant as specified in its charter)

Louisiana	72-1445282
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2030 Donahue Ferry Road, Pineville, Louisiana    71360-5226

     (Address of principal executive offices)                         (Zip Code)

Registrant’s telephone number, including area code: (318) 484-7400

Commission file number 1-05663

CLECO POWER LLC

(Exact name of registrant as specified in its charter)

Louisiana	72-0244480
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2030 Donahue Ferry Road, Pineville, Louisiana    71360-5226

     (Address of principal executive offices)                         (Zip Code)

Registrant’s telephone number, including area code: (318) 484-7400

Securities registered pursuant to Section 12(b) of the Act:
Cleco Corporate Holdings LLC: None	Cleco Power LLC: None

Indicate by check mark whether the Registrants: (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrants were required to file such reports) and (2) have been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the Registrants have submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrants were required to submit such files). Yes ☒ No ☐

Indicate by check mark whether Cleco Corporate Holdings LLC is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.  (Check one): Large accelerated filer ☐     Accelerated filer ☐     Non-accelerated filer ☒ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether Cleco Power LLC is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.  (Check one): Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act)  Yes ☐ No ☒

Cleco Corporate Holdings LLC has no common stock outstanding. All of the outstanding equity of Cleco Corporate Holdings LLC is held by Cleco Group LLC, a wholly owned subsidiary of Cleco Partners L.P.

Cleco Power LLC, a wholly owned subsidiary of Cleco Corporate Holdings LLC, meets the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q and is therefore filing this Form 10-Q with the reduced disclosure format.

CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

This Combined Quarterly Report on Form 10-Q (this “Quarterly Report on Form 10-Q”) is separately filed by Cleco Corporate Holdings LLC and Cleco Power LLC. Information in this filing relating to Cleco Power LLC is filed by Cleco Corporate Holdings LLC and separately by Cleco Power LLC on its own behalf. Cleco Power LLC makes no representation as to information relating to Cleco Corporate Holdings LLC (except as it may relate to Cleco Power LLC) or any other affiliate or subsidiary of Cleco Corporate Holdings LLC.

This Quarterly Report on Form 10-Q should be read in its entirety as it pertains to each respective Registrant. The Notes to the Unaudited Condensed Consolidated Financial Statements for the Registrants and certain other sections of this Quarterly Report on Form 10-Q are combined.

TABLE OF CONTENTS
		PAGE
GLOSSARY OF TERMS		3
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		5
PART I	Financial Information
ITEM 1.	Cleco — Condensed Consolidated Financial Statements (Unaudited)	7
	Cleco Power — Condensed Consolidated Financial Statements (Unaudited)	17
	Notes to the Unaudited Condensed Consolidated Financial Statements	26
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	51
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	63
ITEM 4.	Controls and Procedures	65
PART II	Other Information
ITEM 1.	Legal Proceedings	66
ITEM 1A.	Risk Factors	66
ITEM 5.	Other Information	66
ITEM 6.	Exhibits	66
	Signatures	67

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CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

GLOSSARY OF TERMS

Abbreviations or acronyms used in this filing, including all items in Parts I and II, are defined below.

ABBREVIATION OR ACRONYM	DEFINITION
2016 Merger	Merger of Merger Sub with and into Cleco Corporation pursuant to the terms of the Merger Agreement, which was completed on April 13, 2016
2016 Merger Commitments	Cleco Partners’, Cleco Group’s, Cleco Holdings’, and Cleco Power’s 77 commitments to the LPSC as defined in Docket No. U-33434
401(k) Plan	Cleco Power 401(k) Savings and Investment Plan
ABR	Alternate Base Rate which is the greater of the prime rate, the federal funds effective rate plus 0.50%, or SOFR plus 1.0%
Acadia	Acadia Power Partners, LLC, previously a wholly owned subsidiary of Midstream. Acadia Power Partners, LLC was dissolved effective August 29, 2014
Acadia Unit 1	Cleco Power’s 580-MW, natural gas-fired, combined cycle power plant located at the Acadia Power Station in Eunice, Louisiana
Acadia Unit 2	Entergy Louisiana’s 580-MW, natural gas-fired, combined cycle power plant located at the Acadia Power Station in Eunice, Louisiana, which is operated by Cleco Power
ADIT	Accumulated Deferred Income Tax
AFUDC	Allowance for Funds Used During Construction
ALJ	Administrative Law Judge
Amended Lignite Mining Agreement	Amended and restated lignite mining agreement effective December 29, 2009
AMI	Advanced Metering Infrastructure
AOCI	Accumulated Other Comprehensive Income (Loss)
ARO	Asset Retirement Obligation
CCR	Coal combustion by-products or residual
CEO	Chief Executive Officer
CFO	Chief Financial Officer
CIP	Critical Infrastructure Protection
Cleco	Cleco Holdings and its subsidiaries
Cleco Cajun	Cleco Cajun LLC, a wholly owned subsidiary of Cleco Holdings, and its subsidiaries
Cleco Cajun Acquisition	The transaction between Cleco Cajun and NRG Energy in which Cleco Cajun acquired all the membership interest in South Central Generating, which closed on February 4, 2019, pursuant to the Cleco Cajun Acquisition Purchase and Sale Agreement
Cleco Cajun Acquisition Purchase and Sale Agreement	Purchase and Sale Agreement, dated as of February 6, 2018, by and among NRG Energy, South Central Generating, and Cleco Cajun
Cleco Cajun Divestiture	The sale of the Cleco Cajun Sale Group to the Cleco Cajun Purchasers on June 1, 2024, in accordance with the Cleco Cajun Divestiture Purchase and Sale Agreement
Cleco Cajun Divestiture Purchase and Sale Agreement	Purchase and Sale Agreement, dated as of November 22, 2023, by and among the Cleco Cajun Purchasers and the Cleco Cajun Sellers
Cleco Cajun Purchasers	Big Pelican LLC and Pelican South Central LLC, affiliates of Atlas Capital Resources IV LP
Cleco Cajun Sale Group	Cleco Cajun’s unregulated utility business for which the Cleco Cajun Sellers entered into the Cleco Cajun Divestiture Purchase and Sale Agreement with the Cleco Cajun Purchasers
Cleco Cajun Sellers	Cleco Cajun and South Central Generating
Cleco Corporation	Pre-2016 Merger entity that was converted to a limited liability company and changed its name to Cleco Corporate Holdings LLC on April 13, 2016
Cleco Group	Cleco Group LLC, a wholly owned subsidiary of Cleco Partners
Cleco Holdings	Cleco Corporate Holdings LLC, a wholly owned subsidiary of Cleco Group
Cleco Partners	Cleco Partners L.P., a Delaware limited partnership that is owned by a consortium of investors, including funds or investment vehicles managed by Macquarie Asset Management, British Columbia Investment Management Corporation, John Hancock Financial, and other infrastructure investors
Cleco Power	Cleco Power LLC, a wholly owned subsidiary of Cleco Holdings, and its subsidiaries
Cleco Securitization I	Cleco Securitization I LLC, a special-purpose, wholly owned subsidiary of Cleco Power
Coughlin	Cleco Power’s 775-MW, natural gas-fired, combined cycle power plant located in St. Landry, Louisiana
COVID-19	Coronavirus disease 2019, including any variant thereof, and the related global outbreak that was subsequently declared a pandemic by the World Health Organization in March 2020
DHLC	Dolet Hills Lignite Company, LLC, a wholly owned subsidiary of SWEPCO
Diversified Lands	Diversified Lands LLC, a wholly owned subsidiary of Cleco Holdings
Dolet Hills	A facility consisting of Dolet Hills Power Station, the Dolet Hills mine, and the Oxbow mine
Dolet Hills Power Station	A 650-MW lignite-fired, steam generating unit at Cleco Power’s plant site in Mansfield, Louisiana. Cleco Power has a 50% ownership interest in the capacity of the Dolet Hills Power Station. The Dolet Hills Power Station was retired on December 31, 2021
EAC	Environmental Adjustment Clause
EBITDA	Earnings before interest, income taxes, depreciation, and amortization
Entergy Gulf States	Entergy Gulf States Louisiana, LLC

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CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

ABBREVIATION OR ACRONYM	DEFINITION
Entergy Louisiana	Entergy Louisiana, LLC
EPA	U.S. Environmental Protection Agency
ESG	Environmental, Social, and Governance
FAC	Fuel Adjustment Clause
FASB	Financial Accounting Standards Board
FEED	Front End Engineering Design
FERC	Federal Energy Regulatory Commission
Fitch	Fitch Ratings, a credit rating agency
FTR	Financial Transmission Right
FRP	Formula Rate Plan
GAAP	Generally Accepted Accounting Principles in the U.S.
GHG	Greenhouse gas
IRA of 2022	Federal tax legislation commonly referred to as the Inflation Reduction Act of 2022
IRS	Internal Revenue Service
kWh	Kilowatt-hour(s)
LPSC	Louisiana Public Service Commission
Madison Unit 3	A 641-MW petroleum coke/coal-fired, steam generating unit at Cleco Power’s plant site in Boyce, Louisiana
MATS	Mercury and Air Toxics Standards
Merger Agreement	Agreement and Plan of Merger, dated as of October 17, 2014, by and among Cleco Partners, Merger Sub, and Cleco Corporation relating to the 2016 Merger
Merger Sub	Cleco MergerSub Inc., previously an indirect wholly owned subsidiary of Cleco Partners that was merged with and into Cleco Corporation, with Cleco Corporation surviving the 2016 Merger, and Cleco Corporation converting to a limited liability company and changing its name to Cleco Holdings
Midstream	Cleco Midstream Resources LLC, a wholly owned subsidiary of Cleco Holdings
MISO	Midcontinent Independent System Operator, Inc.
MMBtu	One million British thermal units
Moody’s	Moody’s Investors Service, a credit rating agency
MW	Megawatt(s)
MWh	Megawatt-hour(s)
NERC	North American Electric Reliability Corporation
Not Meaningful	A percentage comparison of these items is not statistically meaningful because the percentage difference is greater than 1,000%
NRG Energy	NRG Energy, Inc.
Other Benefits	Includes medical, dental, vision, and life insurance for Cleco’s retirees
Oxbow	Oxbow Lignite Company, LLC, 50% owned by Cleco Power and 50% owned by SWEPCO
Perryville	Perryville Energy Partners, L.L.C., a wholly owned subsidiary of Cleco Holdings. Perryville Energy Partners, L.L.C. was dissolved effective September 8, 2021
Project Diamond Vault	Cleco Power’s proposed project to reduce up to 95% of carbon dioxide emissions from Madison Unit 3 through various possible carbon capture and sequestration technologies
Registrant(s)	Cleco Holdings and/or Cleco Power
Rodemacher Unit 2	A 523-MW coal-fired, steam generating unit at Cleco Power’s plant site in Boyce, Louisiana. Cleco Power has a 30% ownership interest in the capacity of Rodemacher Unit 2
ROE	Return on Equity
RTO	Regional Transmission Organization
S&P	S&P Global Ratings, a division of S&P Global Inc, a credit rating agency
SEC	U.S. Securities and Exchange Commission
SERP	Supplemental Executive Retirement Plan
SOFR	Secured Overnight Financing Rate as administered by the Federal Reserve Bank of New York
South Central Generating	South Central Generating LLC, formerly NRG South Central Generating LLC, a wholly owned subsidiary of Cleco Cajun
St. Mary Clean Energy Center	A 47-MW waste-heat steam generating unit located in Franklin, Louisiana
Storm Recovery Property	Storm Recovery Property as defined in the financing order issued by the LPSC in April 2022, which includes the right to impose, bill, charge, collect, and receive unamortized storm recovery costs from Cleco Power’s retail customers
Support Group	Cleco Support Group LLC, a wholly owned subsidiary of Cleco Holdings
SWEPCO	Southwestern Electric Power Company, an electric utility subsidiary of American Electric Power Company, Inc.
TCJA	Federal tax legislation commonly referred to as the Tax Cuts and Jobs Act of 2017
Teche Unit 3	A 359-MW natural gas-fired, steam generating unit at Cleco Power’s plant site in Baldwin, Louisiana. Teche Unit 3 was retired on June 1, 2024

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CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes forward-looking statements. All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q are forward-looking statements, including, without limitation, future capital expenditures; business strategies; goals, plans, and objectives; competitive strengths; market developments; development and operation of facilities; growth in sales volume; meeting capacity requirements; expansion of service to existing customers and service to new customers; future environmental regulations and remediation liabilities; electric customer credits; and the anticipated outcome of various regulatory and legal proceedings. Although the Registrants believe that the expectations reflected in such forward-looking statements are reasonable, such forward-looking statements are based on numerous assumptions (some of which may prove to be incorrect) and are subject to risks and uncertainties that could cause the actual results to differ materially from the Registrants’ expectations. In addition to any assumptions and other factors referred to specifically in connection with these forward-looking statements in this Quarterly Report on Form 10-Q, the following list identifies some of the factors that could cause the Registrants’ actual results to differ materially from those contemplated in any of the Registrants’ forward-looking statements:

•resolution of future rate cases, formula rate proceedings, and any negotiations, litigation, or delays in cost recovery related to these proceedings,

•changes in environmental laws, regulations, decisions and policies, including present and potential environmental remediation costs, restrictions on GHG emissions, possible effects on Cleco’s generation resources, or prohibitions or restrictions on new or existing services, and Cleco’s compliance with these matters,

•state and federal regulatory decisions or related judicial decisions disallowing or delaying recovery of capital investments, operating costs, commodity costs, and the ordering of refunds to customers and discretion over allowed return on investment,

•the loss of regulatory accounting treatment, which could result in the write-off of regulatory assets and the loss of regulatory deferral and recovery mechanisms,

•economic, regulatory, or workforce impacts related to pandemics, epidemics, or other outbreaks,

•economic impacts related to conflicts and hostilities, including the current armed conflicts in Ukraine and the Middle East,

•the possibility of stranded costs with respect to assets that may be retired as a result of new climate legislation or regulations, technological advances, a shift in demand, or legal action, and Cleco Power’s ability to recover stranded costs associated with these events,

•changes in climate and weather conditions, including natural disasters such as wind and ice storms, hurricanes, floods, droughts, and wildfires, and Cleco Power’s ability to recover restoration and stranded costs associated with these events,

•increased late or uncollectible customer payments due to costs related to volatile fuel prices, severe weather cost

recoveries, or the costs of other events that are passed through to Cleco Power’s customers,

•economic conditions in Cleco’s service areas, including inflation and the economy’s effects on customer demand for and payment of utility services,

•mechanical breakdowns or other incidents that could impair assets and disrupt operations of any of Cleco’s generation facilities, transmission and distribution systems, or other operations and may require Cleco to purchase replacement power or incur costs to repair the facilities,

•growth or decline of Cleco’s customer base, or decline in existing services, including the loss of key suppliers for fuel, materials, or services, or other disruptions to the supply chain,

•wholesale and retail competition, including alternative energy sources, growth in customer-owned power resource technologies that displace utility-supplied energy or that may be sold back to the utility, and alternative energy suppliers and delivery arrangements,

•blackouts or disruptions of interconnected transmission systems (the regional power grid),

•terrorist attacks, cyberattacks, or other malicious acts that may damage or disrupt operating or information technology systems, including emerging artificial intelligence technologies that may be used to develop new hacking tools, exploit vulnerabilities, obscure malicious activities, and increase the difficulty in detecting threats,

•changes in technology costs that impede Cleco’s ability to effectively implement new information systems or to operate and maintain current production technology,

•changes in Cleco’s strategic business plans and/or key initiatives, which could be affected by any of the factors discussed herein,

•the impact of Cleco’s credit ratings, changes in interest rates, other capital market conditions, and global market conditions on financing through the issuance of debt and/or equity securities,

•the ability of Cleco to raise capital or secure funding, such as debt financing, private equity investment, tax credits, U.S. Department of Energy grants or loans, or partnerships, to execute its renewables and electrification initiatives,

•changes to federal income tax laws, regulations, and interpretive guidance, including the IRA of 2022,

•failure to meet expectations and report progress on ESG initiatives and GHG targets, as well as the increased focus on and activism related to ESG, which could limit Cleco’s access to capital and/or financing,

•declining energy demand related to customer energy efficiency, conservation measures, technological advancements, increased distributed generation, or changes in customers’ operating or business models,

•industry and geographic concentrations of Cleco’s counterparties, suppliers, and customers,

•volatility or illiquidity in wholesale energy markets,

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CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

•default or nonperformance on the part of any parties from whom Cleco purchases and/or sells capacity, energy, or fuel, or with whom Cleco enters into derivative contracts,

•Cleco Holdings’ and Cleco Power’s ability to remain in compliance with their respective debt covenants,

•the outcome of legal and regulatory proceedings, other contingencies, and settlements,

•changes in actuarial assumptions, interest rates, and the actual return on plan assets for Cleco’s pension and other postretirement benefit plans,

•insufficient insurance coverage, more restrictive coverage terms, increasing insurance costs, and Cleco’s ability to obtain insurance,

•Cleco’s ability to remain in compliance with the commitments made to the LPSC in connection with the 2016 Merger,

•Cleco Holdings’ dependence on the earnings, dividends, or distributions from its subsidiaries to meet its debt obligations, and

•workforce factors, changes in key members of management, availability of workers in a variety of skill areas, and Cleco’s ability to attract, recruit, and retain qualified employees.

For more discussion of these factors and other factors that could cause actual results to differ materially from those contemplated in the Registrants’ forward-looking statements, see Part I, Item 1A, “Risk Factors” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

All subsequent written and oral forward-looking statements attributable to the Registrants, or persons acting on their behalf, are expressly qualified in their entirety by the factors identified above.

Any forward-looking statement is considered only as of the date of this Quarterly Report on Form 10-Q and, except as required by law, the Registrants undertake no obligation to update any forward-looking statements, whether as a result of changes in actual results, changes in assumptions, or other factors affecting such statements.

6

CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

PART I — FINANCIAL INFORMATION

ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Cleco

These unaudited condensed consolidated financial statements should be read in conjunction with Cleco’s Consolidated Financial Statements and Notes included in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2023. For more information on the basis of presentation, see “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 1 — Summary of Significant Accounting Policies — Basis of Presentation.”

7

CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

CLECO
Condensed Consolidated Statements of Income (Unaudited)
	FOR THE THREE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024		2023
Operating revenue
Electric operations	$	312,397	$	361,838
Other operations	28,784		31,984
Gross operating revenue	341,181		393,822
Electric customer credits	(1,046)		24
Operating revenue, net	340,135		393,846
Operating expenses
Fuel used for electric generation	69,792		125,372
Purchased power	28,083		44,803
Other operations and maintenance	60,365		62,985
Depreciation and amortization	50,293		50,055
Taxes other than income taxes	15,633		16,746
Total operating expenses	224,166		299,961
Operating income	115,969		93,885
Interest income	6,366		1,283
Allowance for equity funds used during construction	977		1,617
Other income (expense), net	1,331		(2,404)
Interest charges
Interest charges, net	37,941		42,212
Allowance for borrowed funds used during construction	(505)		(178)
Total interest charges	37,436		42,034
Income from continuing operations before income taxes	87,207		52,347
Federal and state income tax benefit	(6,643)		(246,494)
Income from continuing operations, net of income taxes	93,850		298,841
Income (loss) from discontinued operations, net of income taxes	742		(142,729)
Net income	$	94,592	$	156,112
The accompanying notes are an integral part of the condensed consolidated financial statements.

8

CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

CLECO
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
	FOR THE THREE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024		2023
Net income	$	94,592	$	156,112
Other comprehensive loss, net of income tax
Postretirement benefits loss (net of tax benefit of $111 in 2024 and $156 in 2023)	(300)		(422)
Total other comprehensive loss, net of income tax	(300)		(422)
Comprehensive income, net of tax	$	94,292	$	155,690
The accompanying notes are an integral part of the condensed consolidated financial statements.

9

CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

CLECO
Condensed Consolidated Statements of Income (Unaudited)
	FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024		2023
Operating revenue
Electric operations	$	793,038	$	916,554
Other operations	79,565		84,030
Gross operating revenue	872,603		1,000,584
Electric customer credits	(3,441)		(1,362)
Operating revenue, net	869,162		999,222
Operating expenses
Fuel used for electric generation	187,891		389,216
Purchased power	93,958		126,086
Other operations and maintenance	182,343		181,260
Depreciation and amortization	195,160		148,612
Taxes other than income taxes	45,949		48,782
Total operating expenses	705,301		893,956
Operating income	163,861		105,266
Interest income	10,427		3,223
Allowance for equity funds used during construction	1,758		4,423
Equity income from investees, before tax	672		—
Other expense, net	(9,290)		(2,656)
Interest charges
Interest charges, net	122,019		123,533
Allowance for borrowed funds used during construction	(2,899)		(1,244)
Total interest charges	119,120		122,289
Income (loss) from continuing operations before income taxes	48,308		(12,033)
Federal and state income tax benefit	(4,928)		(121,160)
Income from continuing operations, net of income taxes	53,236		109,127
Income (loss) from discontinued operations, net of income taxes	45,415		(9,707)
Net income	$	98,651	$	99,420
The accompanying notes are an integral part of the condensed consolidated financial statements.

10

CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

CLECO
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
	FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024		2023
Net income	$	98,651	$	99,420
Other comprehensive loss, net of tax
Postretirement benefits loss (net of tax benefit of $273 in 2024 and $466 in 2023)	(743)		(1,267)
Total other comprehensive loss, net of tax	(743)		(1,267)
Comprehensive income, net of tax	$	97,908	$	98,153
The accompanying notes are an integral part of the condensed consolidated financial statements.

11

CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

CLECO
Condensed Consolidated Balance Sheets (Unaudited)
(THOUSANDS)	AT SEPT. 30, 2024		AT DEC. 31, 2023
Assets
Current assets
Cash and cash equivalents	$	248,912	$	122,576
Restricted cash and cash equivalents	7,537		15,818
Customer accounts receivable (less allowance for credit losses of $1,132 in 2024 and $3,012 in 2023)	55,337		48,949
Accounts receivable - affiliate	34,543		24,216
Other accounts receivable	37,616		30,518
Taxes receivable	3,738		—
Unbilled revenue	48,193		42,856
Fuel inventory, at average cost	87,768		68,387
Materials and supplies, at average cost	156,436		141,688
Energy risk management assets	10,578		8,129
Accumulated deferred fuel	4,974		11,627
Cash surrender value of company-/trust-owned life insurance policies	63,015		56,922
Prepayments	22,820		24,269
Regulatory assets	289,463		34,280
Assets held for sale - discontinued operations	—		159,514
Other current assets	10,859		918
Total current assets	1,081,789		790,667
Property, plant, and equipment
Property, plant, and equipment	4,929,018		4,838,994
Accumulated depreciation	(1,008,411)		(924,624)
Net property, plant, and equipment	3,920,607		3,914,370
Construction work in progress	126,709		119,572
Total property, plant, and equipment, net	4,047,316		4,033,942
Goodwill	1,490,797		1,490,797
Operating lease right of use assets	18,430		20,070
Restricted cash and cash equivalents	118,134		113,573
Note receivable	10,659		11,990
Regulatory assets - deferred taxes, net	64,897		43,866
Regulatory assets	312,525		615,495
Intangible asset - securitization	388,135		398,658
Intangible assets - other	7,938		10,633
Assets held for sale - discontinued operations	—		546,218
Receivable - Cleco Cajun Divestiture	95,736		—
Other deferred charges	18,252		24,484
Total assets	$	7,654,608	$	8,100,393
The accompanying notes are an integral part of the condensed consolidated financial statements.
(Continued on next page)

12

CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

CLECO
Condensed Consolidated Balance Sheets (Unaudited)
(THOUSANDS)	AT SEPT. 30, 2024		AT DEC. 31, 2023
Liabilities and member’s equity
Liabilities
Current liabilities
Short-term debt	$	—	$	110,000
Long-term debt and finance leases due within one year	240,892		256,811
Accounts payable	121,631		119,801
Accounts payable - affiliate	20,006		10,683
Customer deposits	57,730		56,982
Provision for rate refund	22,358		60,768
Taxes payable	84,317		19,963
Interest accrued	39,790		22,209
Energy risk management liabilities	369		15,786
Regulatory liabilities	7,733		21,939
Deferred compensation	16,585		14,277
Post retirement benefit obligations	22,422		35,520
Liabilities held for sale - discontinued operations	—		39,019
Other current liabilities	30,808		24,378
Total current liabilities	664,641		808,136
Long-term liabilities and deferred credits
Accumulated deferred federal and state income taxes, net	806,270		801,397
Postretirement benefit obligations	182,301		196,321
Regulatory liabilities	2,250		—
Storm reserves	81,227		111,509
Asset retirement obligations	10,885		13,723
Operating lease liabilities	15,613		17,276
Provision for rate refund	19,897		—
Customer advances for construction	31,087		26,815
Credit deposits	14,750		7,000
Liabilities held for sale - discontinued operations	—		75,933
Other deferred credits	30,045		27,186
Total long-term liabilities and deferred credits	1,194,325		1,277,160
Long-term debt and finance leases, net	2,907,066		3,141,924
Total liabilities	4,766,032		5,227,220
Commitments and contingencies (Note 14)
Member’s equity	2,888,576		2,873,173
Total liabilities and member’s equity	$	7,654,608	$	8,100,393
The accompanying notes are an integral part of the condensed consolidated financial statements.

13

CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

CLECO
Condensed Consolidated Statements of Cash Flows (Unaudited)
	FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024			2023
Operating activities
Net income	$	98,651		$	99,420
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	207,819			181,672
Provision for credit losses	911			3,243
Electric customer credits	1,300			—
Unearned compensation expense	5,875			6,676
Allowance for equity funds used during construction	(1,758)			(4,423)
Loss on energy risk management assets and liabilities, net	5,276			76,748
Loss on discontinued operations	43,715			154,000
Deferred lease revenue	—			(2,301)
Deferred income taxes	(25,967)			(51,894)
Cash surrender value of company-/trust-owned life insurance	(3,908)			690
Derecognition of previously deferred Project Diamond Vault costs	10,336			—
Changes in assets and liabilities
Accounts receivable	1,612			1,045
Accounts receivable, affiliate	(9,457)			(7,693)
Unbilled revenue	(5,337)			2,398
Fuel inventory and materials and supplies	(58,006)			(86,598)
Prepayments	(4,159)			(12,805)
Accounts payable	(30,560)			(40,162)
Accounts payable - affiliate	9,323			7,834
Customer deposits	5,768			3,607
Postretirement benefit obligations	(28,133)			(1,607)
Regulatory assets and liabilities, net	5,432			4,677
Asset retirement obligation	(3,107)			(6,115)
Deferred fuel recoveries	(4,008)			34,801
Other deferred accounts	(10,824)			516
Taxes accrued	60,424			(45,700)
Interest accrued	17,580			14,666
Energy risk management assets and liabilities, net	(10,978)			(6,500)
Other operating	(12,684)			(5,022)
Net cash provided by operating activities	265,136			321,173
Investing activities
Additions to property, plant, and equipment	(172,513)			(165,750)
Proceeds from sale of discontinued operations (net of transaction fees of $10.8 million)	463,769			—
Other investing	2,035			2,068
Net cash provided by (used in) investing activities	293,291			(163,682)
Financing activities
Draws on revolving credit facilities	22,000			107,000
Payments on revolving credit facilities	(132,000)			(111,000)
Issuances of long-term debt	16,599			—
Repayment of long-term debt	(262,798)			(9,574)
Distributions to member	(82,505)			(30,000)
Other financing	(1,207)			(1,116)
Net cash used in financing activities	(439,911)			(44,690)
Net increase in cash, cash equivalents, restricted cash, and restricted cash equivalents	118,516			112,801
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period	256,067		(1)	191,572
Cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period	$	374,583	(2)	$	304,373
(1) Includes cash and cash equivalents of $122,576, current restricted cash and cash equivalents of $15,818, and non-current restricted cash and cash equivalents of $113,573. Also includes cash, cash equivalents, and restricted cash equivalents in assets held for sale of $4,100. (2) Includes cash and cash equivalents of $248,912, current restricted cash and cash equivalents of $7,537, and non-current restricted cash and cash equivalents of $118,134. Also includes cash, cash equivalents, and restricted cash equivalents in assets held for sale of $0.
The accompanying notes are an integral part of the condensed consolidated financial statements.
(Continued on next page)

14

CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

CLECO
Condensed Consolidated Statements of Cash Flows (Unaudited)
	FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024		2023
Supplementary cash flow information
Interest paid, net of amount capitalized	$	100,393	$	109,997
Income taxes paid, net	$	8,338	$	2,162
Supplementary non-cash investing and financing activities
Accrued additions to property, plant, and equipment	$	4,488	$	3,506
The accompanying notes are an integral part of the condensed consolidated financial statements.

15

CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

CLECO
Condensed Consolidated Statements of Changes in Member’s Equity (Unaudited)
	FOR THE THREE MONTHS ENDED SEPT. 30, 2024								FOR THE NINE MONTHS ENDED SEPT. 30, 2024
(THOUSANDS)	MEMBERSHIP INTEREST		RETAINED EARNINGS		AOCI		TOTAL MEMBERS EQUITY		MEMBERSHIP INTEREST		RETAINED EARNINGS		AOCI		TOTAL MEMBERS EQUITY
Balances, beginning of period	$	2,454,276	$	408,068	$	(5,555)	$	2,856,789	$	2,454,276	$	424,009	$	(5,112)	$	2,873,173
Net income	—		94,592		—		94,592		—		98,651		—		98,651
Distributions to member	—		(62,505)		—		(62,505)		—		(82,505)		—		(82,505)
Other comprehensive loss, net of tax	—		—		(300)		(300)		—		—		(743)		(743)
Balances, end of period	$	2,454,276	$	440,155	$	(5,855)	$	2,888,576	$	2,454,276	$	440,155	$	(5,855)	$	2,888,576

	FOR THE THREE MONTHS ENDED SEPT. 30, 2023								FOR THE NINE MONTHS ENDED SEPT. 30, 2023
(THOUSANDS)	MEMBERSHIP INTEREST		RETAINED EARNINGS		AOCI		TOTAL MEMBERS EQUITY		MEMBERSHIP INTEREST		RETAINED EARNINGS		AOCI		TOTAL MEMBERS EQUITY
Balances, beginning of period	$	2,454,276	$	436,040	$	(786)	$	2,889,530	$	2,454,276	$	492,732	$	59	$	2,947,067
Net income	—		156,112		—		156,112		—		99,420		—		99,420
Distributions to member	—		(30,000)		—		(30,000)		—		(30,000)		—		(30,000)
Other comprehensive loss, net of tax	—		—		(422)		(422)		—		—		(1,267)		(1,267)
Balances, end of period	$	2,454,276	$	562,152	$	(1,208)	$	3,015,220	$	2,454,276	$	562,152	$	(1,208)	$	3,015,220
The accompanying notes are an integral part of the condensed consolidated financial statements.

16

CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Cleco Power

These unaudited condensed consolidated financial statements should be read in conjunction with Cleco Power’s Consolidated Financial Statements and Notes included in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2023. For more information on the basis of presentation, see “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 1 — Summary of Significant Accounting Policies — Basis of Presentation.”

17

CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

CLECO POWER
Condensed Consolidated Statements of Income (Unaudited)
	FOR THE THREE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024		2023
Operating revenue
Electric operations	$	312,583	$	364,161
Other operations	24,433		31,984
Affiliate revenue	1,397		1,645
Gross operating revenue	338,413		397,790
Electric customer credits	(1,046)		24
Operating revenue, net	337,367		397,814
Operating expenses
Fuel used for electric generation	69,792		117,175
Purchased power	28,083		44,803
Other operations and maintenance	60,387		59,452
Depreciation and amortization	48,213		48,012
Taxes other than income taxes	14,590		15,818
Total operating expenses	221,065		285,260
Operating income	116,302		112,554
Interest income	1,065		1,215
Allowance for equity funds used during construction	977		1,617
Other expense, net	(262)		(103)
Interest charges
Interest charges, net	25,519		25,099
Allowance for borrowed funds used during construction	(505)		(178)
Total interest charges	25,014		24,921
Income before income taxes	93,068		90,362
Federal and state income tax expense (benefit)	9,396		(552)
Net income	$	83,672	$	90,914
The accompanying notes are an integral part of the condensed consolidated financial statements.

18

CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

CLECO POWER
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
	FOR THE THREE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024		2023
Net income	$	83,672	$	90,914
Other comprehensive income, net of income tax
Postretirement benefits gain (net of tax expense of $71 in 2024 and $35 in 2023)	192		97
Amortization of interest rate derivatives to earnings (net of tax expense of $23 in 2024 and 2023)	63		62
Total other comprehensive income, net of income tax	255		159
Comprehensive income, net of tax	$	83,927	$	91,073
The accompanying notes are an integral part of the condensed consolidated financial statements.

19

CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

CLECO POWER
Condensed Consolidated Statements of Income (Unaudited)
	FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024		2023
Operating revenue
Electric operations	$	795,733	$	923,685
Other operations	74,032		84,028
Affiliate revenue	11,788		4,967
Gross operating revenue	881,553		1,012,680
Electric customer credits	(3,441)		(1,362)
Operating revenue, net	878,112		1,011,318
Operating expenses
Fuel used for electric generation	181,372		298,586
Purchased power	93,958		126,086
Other operations and maintenance	176,817		170,827
Depreciation and amortization	188,970		142,467
Taxes other than income taxes	43,711		46,155
Total operating expenses	684,828		784,121
Operating income	193,284		227,197
Interest income	3,257		2,979
Allowance for equity funds used during construction	1,758		4,423
Equity income from investee before income tax	672		—
Other (expense) income, net	(11,039)		198
Interest charges
Interest charges, net	76,513		74,686
Allowance for borrowed funds used during construction	(2,899)		(1,244)
Total interest charges	73,614		73,442
Income before income taxes	114,318		161,355
Federal and state income tax expense	10,508		4,185
Net income	$	103,810	$	157,170
The accompanying notes are an integral part of the condensed consolidated financial statements.

20

CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

CLECO POWER
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
	FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024		2023
Net income	$	103,810	$	157,170
Other comprehensive income, net of tax
Postretirement benefits gain (net of tax expense of $200 in 2024 and $106 in 2023)	543		289
Amortization of interest rate derivatives to earnings (net of tax expense of $69 in 2024 and 2023)	189		188
Total other comprehensive income, net of tax	732		477
Comprehensive income, net of tax	$	104,542	$	157,647
The accompanying notes are an integral part of the condensed consolidated financial statements.

21

CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

CLECO POWER
Condensed Consolidated Balance Sheets (Unaudited)
(THOUSANDS)	AT SEPT. 30, 2024		AT DEC. 31, 2023
Assets
Utility plant and equipment
Property, plant, and equipment	$	6,050,720	$	5,969,355
Accumulated depreciation	(2,308,401)		(2,244,217)
Net property, plant, and equipment	3,742,319		3,725,138
Construction work in progress	125,132		118,249
Total utility plant and equipment, net	3,867,451		3,843,387
Current assets
Cash and cash equivalents	49,587		49,211
Restricted cash and cash equivalents	7,537		15,818
Customer accounts receivable (less allowance for credit losses of $1,132 in 2024 and $3,012 in 2023)	55,337		48,949
Accounts receivable - affiliate	3,991		4,543
Other accounts receivable	34,194		27,768
Unbilled revenue	48,193		42,856
Fuel inventory, at average cost	87,768		68,387
Materials and supplies, at average cost	156,436		141,688
Energy risk management assets	10,578		3,087
Accumulated deferred fuel	4,974		11,627
Cash surrender value of company-owned life insurance policies	10,039		9,792
Prepayments	18,883		17,375
Regulatory assets	281,727		26,545
Other current assets	6,497		918
Total current assets	775,741		468,564
Operating lease right of use assets	18,430		20,070
Restricted cash and cash equivalents	118,110		113,549
Note receivable	10,659		11,990
Regulatory assets - deferred taxes, net	64,897		43,866
Regulatory assets	210,203		505,623
Intangible asset - securitization	388,135		398,658
Other deferred charges	17,323		23,835
Total assets	$	5,470,949	$	5,429,542
The accompanying notes are an integral part of the condensed consolidated financial statements.
(Continued on next page)

22

CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

CLECO POWER
Condensed Consolidated Balance Sheets (Unaudited)
(THOUSANDS)	AT SEPT. 30, 2024		AT DEC. 31, 2023
Liabilities and member’s equity
Member’s equity	$	2,097,779	$	2,063,237
Long-term debt and finance leases, net	1,632,148		1,697,152
Total capitalization	3,729,927		3,760,389
Current liabilities
Long-term debt and finance leases due within one year	240,892		190,314
Accounts payable	109,931		95,565
Accounts payable - affiliate	29,616		13,200
Customer deposits	57,730		56,982
Provision for rate refund	22,358		60,768
Taxes payable	48,355		23,709
Interest accrued	23,744		11,752
Energy risk management liabilities	369		15,112
Regulatory liabilities	7,733		21,939
Post retirement benefit obligations	17,687		30,777
Other current liabilities	19,677		14,617
Total current liabilities	578,092		534,735
Commitments and contingencies (Note 14)
Long-term liabilities and deferred credits
Accumulated deferred federal and state income taxes, net	844,484		806,560
Postretirement benefit obligations	119,277		132,321
Regulatory liabilities	2,250		—
Storm reserves	81,227		111,509
Asset retirement obligations	10,885		13,598
Operating lease liabilities	15,613		17,276
Provision for rate refund	19,897		—
Customer advances for construction	31,087		26,815
Credit deposits	14,750		7,000
Other deferred credits	23,460		19,339
Total long-term liabilities and deferred credits	1,162,930		1,134,418
Total liabilities and member’s equity	$	5,470,949	$	5,429,542
The accompanying notes are an integral part of the condensed consolidated financial statements.

23

CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

CLECO POWER
Condensed Consolidated Statements of Cash Flows (Unaudited)
	FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024			2023
Operating activities
Net income	$	103,810		$	157,170
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	193,188			146,703
Provision for credit losses	911			3,243
Electric customer credits	1,300			—
Unearned compensation expense	1,236			1,059
Allowance for equity funds used during construction	(1,758)			(4,423)
Deferred income taxes	6,194			(3,117)
Derecognition of previously deferred Project Diamond Vault costs	10,336			—
Changes in assets and liabilities
Accounts receivable	(17,405)			396
Accounts receivable - affiliate	1,943			3,056
Unbilled revenue	(5,337)			2,398
Fuel inventory and materials and supplies	(34,127)			(24,115)
Accounts payable	(20,575)			(27,286)
Accounts payable - affiliate	15,995			9,076
Customer deposits	5,768			3,607
Postretirement benefit obligations	(26,783)			(1,080)
Regulatory assets and liabilities, net	3,941			3,187
Asset retirement obligation	(3,103)			(5,923)
Deferred fuel recoveries	(4,008)			34,801
Other deferred accounts	(5,128)			6,291
Taxes accrued	23,473			33,824
Interest accrued	11,992			7,636
Energy risk management assets and liabilities, net	(10,978)			—
Other operating	(2,030)			(4,570)
Net cash provided by operating activities	248,855			341,933
Investing activities
Additions to property, plant, and equipment	(168,528)			(159,947)
Other investing	2,035			1,971
Net cash used in investing activities	(166,493)			(157,976)
Financing activities
Draws on revolving credit facility	—			25,000
Payments on revolving credit facility	—			(70,000)
Issuances of long-term debt	16,599			—
Repayment of long-term debt	(31,098)			(9,574)
Payment of financing costs	—			—
Distributions to member	(70,000)			(50,000)
Other financing	(1,207)			(715)
Net cash used in financing activities	(85,706)			(105,289)
Net (decrease) increase in cash, cash equivalents, restricted cash, and restricted cash equivalents	(3,344)			78,668
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period	178,578		(1)	147,644
Cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period	$	175,234	(2)	$	226,312
Supplementary cash flow information
Interest paid, net of amount capitalized	$	60,611		$	63,204
Supplementary non-cash investing and financing activities
Accrued additions to property, plant, and equipment	$	4,486		$	2,825
(1) Includes cash and cash equivalents of $49,211, current restricted cash and cash equivalents of $15,818, and non-current restricted cash and cash equivalents of $113,549. (2) Includes cash and cash equivalents of $49,587, current restricted cash and cash equivalents of $7,537, and non-current restricted cash and cash equivalents of $118,110.
The accompanying notes are an integral part of the condensed consolidated financial statements.

24

CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

CLECO POWER
Condensed Consolidated Statements of Changes in Member’s Equity (Unaudited)
	FOR THE THREE MONTHS ENDED SEPT. 30, 2024						FOR THE NINE MONTHS ENDED SEPT. 30, 2024
(THOUSANDS)	MEMBERSHIP INTEREST		AOCI		TOTAL MEMBERS EQUITY		MEMBERSHIP INTEREST		AOCI		TOTAL MEMBERS EQUITY
Balances, beginning of period	$	2,053,726	$	(9,874)	$	2,043,852	$	2,073,588	$	(10,351)	$	2,063,237
Net income	83,672		—		83,672		103,810		—		103,810
Distributions to member	(30,000)		—		(30,000)		(70,000)		—		(70,000)
Other comprehensive income, net of tax	—		255		255		—		732		732
Balances, end of period	$	2,107,398	$	(9,619)	$	2,097,779	$	2,107,398	$	(9,619)	$	2,097,779

	FOR THE THREE MONTHS ENDED SEPT. 30, 2023						FOR THE NINE MONTHS ENDED SEPT. 30, 2023
(THOUSANDS)	MEMBERSHIP INTEREST		AOCI		TOTAL MEMBERS EQUITY		MEMBERSHIP INTEREST		AOCI		TOTAL MEMBERS EQUITY
Balances, beginning of period	$	2,072,533	$	(8,047)	$	2,064,486	$	2,031,277	$	(8,365)	$	2,022,912
Net income	90,914		—		90,914		157,170		—		157,170
Distributions to member	(25,000)		—		(25,000)		(50,000)		—		(50,000)
Other comprehensive income, net of tax	—		159		159		—		477		477
Balances, end of period	$	2,138,447	$	(7,888)	$	2,130,559	$	2,138,447	$	(7,888)	$	2,130,559
The accompanying notes are an integral part of the condensed consolidated financial statements.

25

CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

Index to Applicable Notes to the Unaudited Condensed Consolidated Financial Statements of Registrants
Note 1	Summary of Significant Accounting Policies	Cleco and Cleco Power
Note 2	Recent Authoritative Guidance	Cleco and Cleco Power
Note 3	Discontinued Operations	Cleco
Note 4	Revenue Recognition	Cleco and Cleco Power
Note 5	Regulatory Assets and Liabilities	Cleco and Cleco Power
Note 6	Fair Value Accounting Instruments	Cleco and Cleco Power
Note 7	Derivative Instruments	Cleco and Cleco Power
Note 8	Debt	Cleco and Cleco Power
Note 9	Pension Plan and Employee Benefits	Cleco and Cleco Power
Note 10	Income Taxes	Cleco and Cleco Power
Note 11	Segment Disclosures	Cleco
Note 12	Regulation and Rates	Cleco and Cleco Power
Note 13	Variable Interest Entities	Cleco and Cleco Power
Note 14	Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees	Cleco and Cleco Power
Note 15	Affiliate Transactions	Cleco and Cleco Power
Note 16	Intangible Assets	Cleco and Cleco Power
Note 17	Accumulated Other Comprehensive Loss	Cleco and Cleco Power
Note 18	Storm Restoration	Cleco and Cleco Power
Note 19	Property, Plant, and Equipment	Cleco and Cleco Power
Note 20	Subsequent Event	Cleco and Cleco Power

Notes to the Unaudited Condensed Consolidated Financial Statements

Note 1 — Summary of Significant Accounting Policies

Discontinued Operations

In March 2023, Cleco Holdings’ management, with the support of its Board of Managers, committed to a plan of action for the disposition of the Cleco Cajun Sale Group. As a result, Cleco Holdings’ management determined that the criteria under GAAP for the Cleco Cajun Sale Group to be classified as held for sale were met, and the sale represents a strategic shift that will have a major effect on Cleco’s future operations and financial results. Therefore, the results of operations and financial position of the Cleco Cajun Sale Group have been presented as discontinued operations since March 31, 2023. On June 1, 2024, the Cleco Cajun Divestiture closed. For more information, see Note 3 — “Discontinued Operations.”

Principles of Consolidation

The accompanying condensed consolidated financial statements of Cleco include the accounts of Cleco Holdings and its majority-owned subsidiaries after elimination of intercompany accounts and transactions.

Basis of Presentation

The condensed consolidated financial statements of Cleco and Cleco Power have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these condensed consolidated financial statements do not include all of the information and notes required by GAAP for annual financial statements. The year-end condensed consolidated balance sheet data was derived from audited financial statements and adjusted for discontinued operations. Because the interim condensed consolidated financial statements and the accompanying notes do not include all of the information and notes required by GAAP for annual financial statements, the

condensed consolidated financial statements and other information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

These condensed consolidated financial statements, in the opinion of management, reflect all normal recurring adjustments that are necessary for a fair statement of the financial position and results of operations of Cleco and Cleco Power. Amounts reported in Cleco’s and Cleco Power’s interim financial statements are not necessarily indicative of amounts expected for the annual periods due to the effects of seasonal temperature variations on energy consumption, regulatory rulings, the timing of maintenance on electric generating units, changes in mark-to-market valuations, changing commodity prices, discrete income tax items, and other factors.

In preparing financial statements that conform to GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses, and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. For information on recent authoritative guidance and its effect on financial results, see Note 2 — “Recent Authoritative Guidance.” For information on discontinued operations, see Note 3 — “Discontinued Operations.”

Restricted Cash and Cash Equivalents

Various agreements to which Cleco is subject contain covenants that restrict its use of cash. As certain provisions under these agreements are met, cash is transferred out of related escrow accounts and becomes available for its intended purposes and/or general corporate purposes.

26

CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

Cleco’s and Cleco Power’s restricted cash and cash equivalents consisted of the following:

Cleco
(THOUSANDS)	AT SEPT. 30, 2024		AT DEC. 31, 2023
Current
Cleco Securitization I’s operating expenses and storm recovery bond issuance costs and debt service	$	7,537	$	15,818
Total current	7,537		15,818
Non-current
Diversified Lands’ mitigation escrow	24		24
Cleco Power’s future storm restoration costs	118,110		113,549
Total non-current	118,134		113,573
Total restricted cash and cash equivalents	$	125,671	$	129,391

Cleco Power
(THOUSANDS)	AT SEPT. 30, 2024		AT DEC. 31, 2023
Current
Cleco Securitization I’s operating expenses and storm recovery bond issuance costs and debt service	$	7,537	$	15,818
Total current	7,537		15,818
Non-current
Future storm restoration costs	118,110		113,549
Total non-current	118,110		113,549
Total restricted cash and cash equivalents	$	125,647	$	129,367

Reserves for Credit Losses

Customer accounts receivable are recorded at the invoiced amount and do not bear interest. Customer accounts receivable are generally considered past due 20 days after the billing date. Cleco recognizes write-offs within the allowance for credit losses once all recovery methods have been exhausted. It is the policy of management to review accounts receivable and unbilled revenue monthly using a reserve matrix based on historical bad debt write-offs, as well as current and forecasted economic conditions, to establish a credit loss estimate. Management’s historical credit loss analysis included periods of economic recessions, natural disasters, and temporary changes to collection policies. Due to the critical necessity of electricity, these past events have not significantly impacted Cleco’s credit loss rates.

Cleco’s credit losses at September 30, 2024, were within range of its historical credit loss analysis.

The tables below present the changes in the allowance for credit losses by receivable for Cleco and Cleco Power:

Cleco
	FOR THE THREE MONTHS ENDED SEPT. 30, 2024						FOR THE NINE MONTHS ENDED SEPT. 30, 2024
(THOUSANDS)	ACCOUNTS RECEIVABLE		OTHER		TOTAL		ACCOUNTS RECEIVABLE		OTHER		TOTAL
Balances, beginning of period	$	1,368	$	1,638	$	3,006	$	3,012	$	1,638	$	4,650
Current period provision	401		—		401		911		—		911
Charge-offs	(854)		—		(854)		(3,614)		—		(3,614)
Recovery	217		—		217		823		—		823
Balances, Sept. 30, 2024	$	1,132	$	1,638	$	2,770	$	1,132	$	1,638	$	2,770

	FOR THE THREE MONTHS ENDED SEPT. 30, 2023						FOR THE NINE MONTHS ENDED SEPT. 30, 2023
(THOUSANDS)	ACCOUNTS RECEIVABLE		OTHER		TOTAL		ACCOUNTS RECEIVABLE		OTHER		TOTAL
Balances, beginning of period	$	1,252	$	1,638	$	2,890	$	1,147	$	1,638	$	2,785
Current period provision	1,106		—		1,106		3,252		—		3,252
Charge-offs	(325)		—		(325)		(3,071)		—		(3,071)
Recovery	215		—		215		920		—		920
Balances, Sept. 30, 2023	$	2,248	$	1,638	$	3,886	$	2,248	$	1,638	$	3,886

Cleco Power
	FOR THE THREE MONTHS ENDED SEPT. 30, 2024		FOR THE NINE MONTHS ENDED SEPT. 30, 2024
(THOUSANDS)	ACCOUNTS RECEIVABLE
Balances, beginning of period	$	1,368	$	3,012
Current period provision	401		911
Charge-offs	(854)		(3,614)
Recovery	217		823
Balances, Sept. 30, 2024	$	1,132	$	1,132

	FOR THE THREE MONTHS ENDED SEPT. 30, 2023		FOR THE NINE MONTHS ENDED SEPT. 30, 2023
(THOUSANDS)	ACCOUNTS RECEIVABLE
Balances, beginning of period	$	1,252	$	1,147
Current period provision	1,106		3,252
Charge-offs	(325)		(3,071)
Recovery	215		920
Balances, Sept. 30, 2023	$	2,248	$	2,248

27

CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

Note 2 — Recent Authoritative Guidance

In March 2023, FASB issued guidance that applies to leases between entities under common control. The guidance provides a practical expedient for determining whether an arrangement between entities under common control is a lease as well as the classification of the lease. In addition, the leasehold improvements amortization period is to be determined by the useful life to the common group rather than the term of the lease. The new guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Cleco has arrangements between entities under common control. The implementation of this guidance did not have a material impact on the results of operations, financial condition, or cash flows of the Registrants.

In November 2023, FASB issued guidance to improve reportable segment disclosure requirements. The guidance enhances interim disclosure requirements, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss, provides new segment disclosure requirements for entities with a single reportable segment, and contains other disclosure requirements. Disclosure requirements include disclosing significant segment expenses by reportable segment if they are regularly provided to the chief operating decision maker and included in each reported measure of segment profit or loss. Disclosures are required on both an annual and an interim basis. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Management does not expect this guidance to have a significant impact on the results of operations, financial condition, or cash flows of the Registrants.

Note 3 — Discontinued Operations

In March 2023, Cleco Holdings’ management, with the support of its Board of Managers, committed to a plan of action for the disposition of the Cleco Cajun Sale Group. As a result, Cleco Holdings’ management determined that the criteria under GAAP for the Cleco Cajun Sale Group to be classified as held for sale were met, and the sale represents a strategic shift that will have a major effect on Cleco’s future operations and financial results. Therefore, the results of operations and financial position of the Cleco Cajun Sale Group have been presented as discontinued operations since March 31, 2023. Certain expenses incurred by the Cleco Cajun Sale Group as a result of common services provided by Support Group are reflected in Cleco’s results of continuing operations due to the expected ongoing nature of those expenses. In addition, revenue recognized by Cleco Power from transmission services provided to the Cleco Cajun Sale Group is no longer eliminated upon consolidation of Cleco’s financial statements

and is reflected in Cleco’s results of continuing operations due to the ongoing nature of these services.

On June 1, 2024, the Cleco Cajun Sellers completed the sale of the Cleco Cajun Sale Group. Upon closing, the Cleco Cajun Sellers received $474.5 million, net of adjustments as set forth in the Cleco Cajun Divestiture Purchase and Sale Agreement and adjustments based on net working capital. Also, in conjunction with the closing of the Cleco Cajun Divestiture, the Cleco Cajun Sellers paid $10.8 million to professional service firms that were engaged to facilitate the transaction. Cleco expects to receive an additional $113.0 million 24 months after closing, which is not contingent upon the post-divestiture performance of the divested business. This receivable is discounted to its net present value and recorded in Receivable - Cleco Cajun Divestiture on Cleco’s Condensed Consolidated Balance Sheet. In connection with the sale, Cleco entered into an other services agreement and a transition services agreement to provide certain services to the Cleco Cajun Purchasers for up to twelve months.

In February 2019 in connection with the approval of the Cleco Cajun Acquisition, Cleco made commitments to the LPSC that included the repayment of $400.0 million of Cleco Holdings’ debt by December 31, 2024. On April 26, 2024, the remaining $66.7 million of that debt was paid and this LPSC commitment was satisfied. Interest expense on that debt is included in discontinued operations.

Cleco determined that the estimated fair value less the estimated cost to sell the Cleco Cajun Sale Group was less than the carrying value of the Cleco Cajun Sale Group. As a result, the Cleco Cajun Sale Group had an impairment of $173.0 million at December 31, 2023. During the three months ended March 31, 2024, an additional impairment charge of $17.0 million was recorded. On June 1, 2024, the Cleco Cajun Divestiture closed, and an incremental $27.1 million loss on the sale of the Cleco Cajun Sale Group was recorded. This resulted in a cumulative loss related to the Cleco Cajun Divestiture of $217.1 million. The incremental loss on the sale of the Cleco Cajun Sale Group recognized during the three months ended June 30, 2024, was the difference between the fair value of the proceeds received and the derecognized net assets of the Cleco Cajun Sale Group on the closing date. During the three months ended September 30, 2024, the working capital adjustments related to the Cleco Cajun Divestiture were finalized and resulted in a $0.4 million decrease to the loss on the Cleco Cajun Divestiture that was previously recorded.

The following table presents the amounts that have been reclassified from continuing operations and included in discontinued operations within Cleco’s Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2024, and 2023:

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CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

	FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024		2023		2024		2023
Operating revenue, net
Electric operations	$	—	$	153,025	$	207,555	$	385,249
Other operations	—		34,231		50,992		95,413
Operating revenue, net	—		187,256		258,547		480,662
Operating expenses
Fuel used for electric generation	5		41,339		21,061		70,053
Purchased power	52		67,297		93,087		175,884
Other operations and maintenance	33		28,611		37,623		75,926
Depreciation and amortization	65		433		4,336		15,448
Total operating expenses	155		137,680		156,107		337,311
Operating (loss) income	(155)		49,576		102,440		143,351
Other (expense) income, net	—		(7)		239		125
Interest, net	643		(1,835)		1,225		(5,545)
Gain (loss) - Cleco Cajun Divestiture(1)	360		(38,000)		(43,715)		(154,000)
Income (loss) from discontinued operations before income taxes	848		9,734		60,189		(16,069)
Federal and state income tax expense (benefit)	106		152,463		14,774		(6,362)
Income (loss) from discontinued operations, net of income taxes	$	742	$	(142,729)	$	45,415	$	(9,707)

(1) This represents the loss on the classification as held for sale until the closing of the Cleco Cajun Divestiture. After the closing of the Cleco Cajun Divestiture, this represents the gain (loss) on the sale of the Cleco Cajun Sale Group.

The following table presents the assets and liabilities of the Cleco Cajun Sale Group that have been reclassified as held for sale within Cleco’s Condensed Consolidated Balance Sheet as of December 31, 2023:

(THOUSANDS)	AT DEC. 31, 2023
Cash, cash equivalents, and restricted cash equivalents	$	4,100
Accounts receivable	70,001
Fuel inventory, at average cost	47,243
Materials and supplies, at average cost	36,283
Energy risk management assets	1,066
Property, plant, and equipment, net	648,676
Prepayments	18,587
Intangible assets - other	32,569
Other assets	20,207
Accumulated loss recognized on classification as held for sale	(173,000)
Total assets held for sale - discontinued operations	$	705,732
Accounts payable	$	30,442
Deferred lease revenue	19,945
Intangible liabilities	12,695
Asset retirement obligations	46,165
Other liabilities	5,705
Total liabilities held for sale - discontinued operations	$	114,952

Cleco has elected to present cash flows of discontinued operations combined with cash flows of continuing operations. The following table presents the cash flows from discontinued operations related to the Cleco Cajun Sale Group for the nine months ended September 30, 2024, and 2023:

	FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024		2023
Net cash provided by operating activities - discontinued operations	$	1,828	$	5,425
Net cash used in investing activities - discontinued operations	$	(5,928)	$	(5,401)

Note 4 — Revenue Recognition

Disaggregated Revenue

Operating revenue, net for the three and nine months ended September 30, 2024, and 2023 was as follows:

29

CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

	FOR THE THREE MONTHS ENDED SEPT. 30, 2024
(THOUSANDS)	CLECO POWER			OTHER			ELIMINATIONS		TOTAL
Revenue from contracts with customers
Retail revenue
Residential(1)	$	157,033		$	—		$	—	$	157,033
Commercial(1)	88,564			—			—		88,564
Industrial(1)	47,731			—			—		47,731
Other retail(1)	4,679			—			—		4,679
Electric customer credits	(1,046)			—			—		(1,046)
Total retail revenue	296,961			—			—		296,961
Wholesale, net	14,093		(1)	(186)		(2)	—		13,907
Transmission	11,043			—			—		11,043
Other	4,565			—			(12)		4,553
Affiliate(3)	1,397			22,733			(24,130)		—
Total revenue from contracts with customers	328,059			22,547			(24,142)		326,464
Revenue unrelated to contracts with customers
Securitization revenue	8,825			—			—		8,825
Other	483		(4)	4,364		(5)	(1)		4,846
Total revenue unrelated to contracts with customers	9,308			4,364			(1)		13,671
Operating revenue, net	$	337,367		$	26,911		$	(24,143)	$	340,135

(1) Includes fuel recovery revenue.

(2) Amortization of intangible assets related to Cleco Power’s wholesale power supply agreements.

(3) Includes interdepartmental rents and support services. This revenue is eliminated upon consolidation.

(4) Realized gains associated with FTRs.

(5) Primarily related to the other services agreement and transition services agreement as a result of the Cleco Cajun Divestiture.

	FOR THE THREE MONTHS ENDED SEPT. 30, 2023
(THOUSANDS)	CLECO POWER			OTHER			ELIMINATIONS		TOTAL
Revenue from contracts with customers
Retail revenue
Residential(1)	$	166,638		$	—		$	—	$	166,638
Commercial(1)	85,137			—			—		85,137
Industrial(1)	45,214			—			—		45,214
Other retail(1)	4,126			—			—		4,126
Electric customer credits	24			—			—		24
Total retail revenue	301,139			—			—		301,139
Wholesale, net	60,844		(1)	(2,323)		(2)	(1)		58,520
Transmission	17,077			—			—		17,077
Other	4,923			—			—		4,923
Affiliate(3)	1,645			30,253			(31,898)		—
Total revenue from contracts with customers	385,628			27,930			(31,899)		381,659
Revenue unrelated to contracts with customers
Securitization revenue	9,984			—			—		9,984
Other	2,202		(4)	—			1		2,203
Total revenue unrelated to contracts with customers	12,186			—			1		12,187
Operating revenue, net	$	397,814		$	27,930		$	(31,898)	$	393,846

(1) Includes fuel recovery revenue.

(2) Amortization of intangible assets related to Cleco Power’s wholesale power supply agreements.

(3) Includes interdepartmental rents and support services. This revenue is eliminated upon consolidation.

(4) Realized gains associated with FTRs.

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CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

	FOR THE NINE MONTHS ENDED SEPT. 30, 2024
(THOUSANDS)	CLECO POWER			OTHER			ELIMINATIONS		TOTAL
Revenue from contracts with customers
Retail revenue
Residential(1)	$	352,471		$	—		$	—	$	352,471
Commercial(1)	224,292			—			—		224,292
Industrial(1)	123,002			—			—		123,002
Other retail(1)	12,029			—			—		12,029
Electric customer credits	(3,441)			—			—		(3,441)
Total retail revenue	708,353			—			—		708,353
Wholesale, net	82,026		(1)	(2,695)		(2)	—		79,331
Transmission, net	34,395			—			—		34,395
Other	14,932			—			(12)		14,920
Affiliate(3)	11,788			80,156			(91,944)		—
Total revenue from contracts with customers	851,494			77,461			(91,956)		836,999
Revenue unrelated to contracts with customers
Securitization revenue	24,705			—			—		24,705
Other	1,913		(4)	5,545		(5)	—		7,458
Total revenue unrelated to contracts with customers	26,618			5,545			—		32,163
Operating revenue, net	$	878,112		$	83,006		$	(91,956)	$	869,162
(1) Includes fuel recovery revenue. (2) Amortization of intangible assets related to Cleco Power’s wholesale power supply agreements. (3) Includes interdepartmental rents and support services. This revenue is eliminated upon consolidation. (4) Realized gains associated with FTRs. (5) Primarily related to the other services agreement and transition services agreement as a result of the Cleco Cajun Divestiture.

	FOR THE NINE MONTHS ENDED SEPT. 30, 2023
(THOUSANDS)	CLECO POWER			OTHER			ELIMINATIONS		TOTAL
Revenue from contracts with customers
Retail revenue
Residential(1)	$	376,978		$	—		$	—	$	376,978
Commercial(1)	230,861			—			—		230,861
Industrial(1)	132,239			—			—		132,239
Other retail(1)	12,770			—			—		12,770
Electric customer credits	(1,362)			—			—		(1,362)
Total retail revenue	751,486			—			—		751,486
Wholesale, net	166,008		(1)	(7,131)		(2)	—		158,877
Transmission, net	43,562			—			—		43,562
Other	15,023			—			—		15,023
Affiliate(3)	4,967			86,669			(91,636)		—
Total revenue from contracts with customers	981,046			79,538			(91,636)		968,948
Revenue unrelated to contracts with customers
Securitization Revenue	25,444			—			—		25,444
Other	4,828		(4)	1			1		4,830
Total revenue unrelated to contracts with customers	30,272			1			1		30,274
Operating revenue, net	$	1,011,318		$	79,539		$	(91,635)	$	999,222
(1) Includes fuel recovery revenue. (2) Amortization of intangible assets related to Cleco Power’s wholesale power supply agreements. (3) Includes interdepartmental rents and support services. This revenue is eliminated upon consolidation. (4) Realized gains associated with FTRs.

Cleco and Cleco Power have unsatisfied performance obligations under contracts with wholesale and retail customers with durations between 2 and 10 years that primarily relate to stand-ready obligations as part of fixed capacity minimums. At September 30, 2024, Cleco and Cleco Power had $255.7 million of unsatisfied fixed performance obligations that will be recognized as revenue over the term of such contracts as the stand-ready obligation to provide energy is provided.

Note 5 — Regulatory Assets and Liabilities

Cleco Power recognizes an asset for certain costs capitalized or deferred for recovery from customers and recognizes a liability for amounts expected to be returned to customers or collected for future expected costs. Cleco Power records these assets and liabilities based on regulatory approval and management’s ongoing assessment that it is probable these items will be recovered or refunded through the ratemaking process.

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CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

Under the current regulatory environment, Cleco Power believes these regulatory assets will be fully recoverable. If in the future, as a result of regulatory changes or competition, Cleco Power’s ability to recover these regulatory assets would no longer be probable, then to the extent that such regulatory assets were determined not to be recoverable, Cleco Power would be required to write-down such assets. In addition,

potential deregulation of the industry, or possible future changes in the method of rate regulation of Cleco Power, could require discontinuance of the application of the authoritative guidance on regulated operations.

The following table summarizes Cleco Power’s regulatory assets and liabilities:

Cleco Power
					REMAINING RECOVERY PERIOD (YRS.)
(THOUSANDS)	AT SEPT. 30, 2024		AT DEC. 31, 2023
Regulatory assets
Acadia Unit 1 acquisition costs	$	1,622	$	1,701	15.25
Accumulated deferred fuel(1)	4,974		11,627		Various
Affordability study	9,303		10,337		6.75
AFUDC equity gross-up	58,058		60,381		Various	(2)
AMI deferred revenue requirement	545		954		1.5
AROs(7)	10,222		20,094
Coughlin transaction costs	761		784		24.75
COVID-19 executive order(9)	3,674		3,039		2.75
Deferred lignite and mine closure costs(7)	122,208		136,076
Deferred storm restoration costs(6)	442		462
Deferred taxes, net	64,897		43,866		Various
Dolet Hills Power Station closure costs(7)	136,168		147,323
Financing costs(1)	5,809		6,087		Various	(3)
Interest costs	2,774		2,961		Various	(2)
Madison Unit 3 property taxes	14,364		13,297		Various	(8)
Non-service cost of postretirement benefits	14,233		14,526		Various	(2)
Postretirement costs	64,399		64,399		Various	(4)
Production operations and maintenance expenses	3,940		7,002		Various	(5)
Rodemacher Unit 2 deferred costs(7)	25,251		19,282
Solar development costs(7)	2,122		—
St. Mary Clean Energy Center	1,305		3,705		0.75
Training costs	5,501		5,618		35.25
Tree trimming costs	1,621		3,657		0.5
Other	7,608		10,483		Various
Total regulatory assets	561,801		587,661
Regulatory liabilities
Deferred taxes, net	(6,983)		(21,939)		Various
Residential revenue decoupling(7)	(3,000)		—
Storm reserves	(81,227)		(111,509)
Total regulatory liabilities	(91,210)		(133,448)
Total regulatory assets, net	$	470,591	$	454,213
(1) Represents regulatory assets for past expenditures that were not earning a return on investment at September 30, 2024, and December 31, 2023. All other assets are earning a return on investment. (2) Amortized over the estimated lives of the respective assets. (3) Amortized over the terms of the related debt issuances. (4) Amortized over the average service life of the remaining plan participants. (5) Deferral is recovered over the following three-year regulatory period. (6) These costs were included in the October 8, 2024, filing with the LPSC whereby Cleco Power requested recovery from the storm reserve. For more information, see “— Storm Reserves.” (7) Currently not in a recovery period. (8) Beginning July 1, 2021, property taxes paid for the year ended December 31, are being amortized over the subsequent 12 months beginning July 1. (9) Beginning July 1, 2024, the lost revenues and incremental costs associated with the COVID-19 executive order are being amortized over three years as approved by the LPSC in May 2024.

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CLECO POWER	2024 3RD QUARTER FORM 10-Q

The following table summarizes Cleco’s net regulatory assets and liabilities:

Cleco
(THOUSANDS)	AT SEPT. 30, 2024		AT DEC. 31, 2023
Total Cleco Power regulatory assets, net	$	470,591	$	454,213
2016 Merger adjustments(1)
Fair value of long-term debt	91,794		97,345
Postretirement costs	7,958		9,448
Financing costs	6,302		6,560
Debt issuance costs	4,004		4,254
Total Cleco regulatory assets, net	$	580,649	$	571,820

(1) Cleco regulatory assets include acquisition accounting adjustments as a result of the 2016 Merger.

Deferred Lignite and Mine Closure Costs and Dolet Hills Power Station Closure Costs

In 2020, Cleco Power and SWEPCO made a joint filing with the LPSC seeking authorization to close the Oxbow mine and to include and defer certain accelerated mine closing costs in fuel and related ratemaking treatment. In 2021, the LPSC approved the establishment of a regulatory asset for certain lignite costs that would otherwise be billed through Cleco Power’s FAC and any reasonable incremental third-party professional costs related to the closure of the mine.

In 2020, Cleco Power revised depreciation rates for the Dolet Hills Power Station to utilize the December 31, 2021, expected end-of-life and early retirement of the Dolet Hills Power Station and defer depreciation expense to a regulatory asset for the amount in excess of the previously approved depreciation rates by the LPSC. The Dolet Hills Power Station was retired on December 31, 2021.

In 2022, Cleco Power filed an application with the LPSC requesting approval of the regulatory treatment and recovery of stranded and decommissioning costs associated with the retirement of the Dolet Hills Power Station over 20 years as well as recovery of deferred fuel and mine-related costs. On April 19, 2024, the LPSC approved an uncontested settlement that contains a provision for a $40.0 million reduction in the regulatory asset associated with the Dolet Hills Power Station. This amount was recorded as a reduction to the associated regulatory asset on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets and an increase to Depreciation and amortization on Cleco’s and Cleco Power’s Statements of Income. At June 30, 2024, $12.3 million of the ARO regulatory asset, which is related to the Dolet Hills Power Station, was reclassified to the Dolet Hills Power Station Closure Costs regulatory asset. This amount was included in the related securitization application filed with the LPSC on May 17, 2024. Management anticipates the securitization of these costs to close by the end of March 2025, and as a result, reclassified these costs as current Regulatory assets on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets.

For more information about the settlement, see Note 14 — “Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — Litigation — LPSC Audits and Reviews — Dolet Hills Prudency Review.”

Solar Development Costs

In July 2022, Cleco Power entered into a long-term agreement to purchase, among other things, the output, capacity, and current and future environmental resource credits of a 240-MW solar electric generation facility to be constructed in DeSoto

Parish, Louisiana and owned by a third party. On September 17, 2024, the LPSC approved the agreement and authorized Cleco Power to establish a regulatory asset for the stipulated settlement of development costs incurred through December 31, 2023, associated with the long-term agreement. As approved by the LPSC, Cleco Power will begin amortizing these costs over 25 years once it begins purchasing power from the third party, which is expected by January 2027.

Residential Revenue Decoupling

Under the terms of Cleco Power’s new FRP, effective July 1, 2024, Cleco Power implemented a residential revenue decoupling mechanism through its infrastructure and incremental cost recovery rider that provides a charge or credit to its residential customers for any under or over collection of residential base revenue as a result of changes in usage driven by weather or other measures. The under or over collection of residential base revenue is assessed on Cleco Power’s rate year and an associated credit or charge for decoupling, not to exceed $3.0 million, will be adjusted for the infrastructure and incremental cost recovery rider filings for July 2025 and 2026, respectively.

Storm Reserves

Cleco Power has a storm reserve to fund future storm restoration costs. Accumulated storm restoration costs that are probable of recovery from retail customers are netted against the storm reserve. At December 31, 2023, Cleco Power had a storm reserve balance of $111.5 million, net of $2.5 million of accumulated restoration costs. During 2024, Cleco Power’s service territory was impacted by multiple severe weather events resulting in significant storm restoration costs. At September 30, 2024, Cleco Power had a storm reserve balance of $81.2 million, net of $37.3 million of accumulated storm restoration costs. For more information on the storm restoration costs associated with severe weather events that impacted Cleco Power’s service territory, see Note 18 — “Storm Restoration.”

Note 6 — Fair Value Accounting Instruments

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Cleco utilizes a three-tier fair value hierarchy that prioritizes inputs that may be used to measure fair value. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. In some cases, the inputs used to measure fair value might fall in different levels of the fair value hierarchy. All assets and liabilities are required to be classified in their entirety based on the lowest level of input that is significant to the fair value measurement in its entirety. Assessing the significance of a particular input may require judgment considering factors specific to the asset or liability and may affect the valuation of the asset or liability and its placement within the fair value hierarchy. Significant increases or decreases in any of those inputs in isolation could result in a significantly different fair value measurement. Cleco

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CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

classifies fair value balances based on the fair value hierarchy defined as follows:

•Level 1 — observable inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that Cleco can observe as of the measurement date.

•Level 2 — observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets, quoted market prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3 — unobservable inputs for assets or liabilities whose fair value is estimated based on internally or third-party developed models or methodologies using inputs that are generally less readily observable and supported by little, if any, market activity at the measurement date. Unobservable inputs are developed based on the best available information and subject to cost-benefit constraints.

When available, Cleco uses observable market prices to measure fair value. Credit risk of Cleco and its counterparties

is incorporated in the valuation of assets and liabilities through the use of credit reserves. Cleco applies the provisions of the fair value measurement standard to its non-recurring, non-financial measurements including business combinations as well as impairment related to goodwill and other long-lived assets.

Fair Value Measurements on a Recurring Basis

The amounts reflected in Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets at September 30, 2024, and December 31, 2023, for cash equivalents, restricted cash equivalents, accounts receivable, other accounts receivable, short-term debt, and accounts payable approximate fair value because of their short-term nature.

The following tables disclose the fair value of financial assets and liabilities measured on a recurring basis on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets. These amounts are presented on a gross basis.

Cleco
	FAIR VALUE MEASUREMENTS AT REPORTING DATE
(THOUSANDS)	AT SEPT. 30, 2024		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		AT DEC. 31, 2023		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)
Asset description
Short-term investments	$	365,228	$	365,228	$	—	$	—	$	242,596	$	242,596	$	—	$	—
FTRs	2,753		—		—		2,753		3,087		—		—		3,087
Natural gas derivatives	8,471		—		8,471		—		5,042		—		5,042		—
Total assets	$	376,452	$	365,228	$	8,471	$	2,753	$	250,725	$	242,596	$	5,042	$	3,087
Liability description
FTRs	$	369	$	—	$	—	$	369	$	781	$	—	$	—	$	781
Natural gas derivatives	—		—		—		—		15,005		—		15,005		—
Total liabilities	$	369	$	—	$	—	$	369	$	15,786	$	—	$	15,005	$	781

Cleco Power
	FAIR VALUE MEASUREMENTS AT REPORTING DATE
(THOUSANDS)	AT SEPT. 30, 2024		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		AT DEC. 31, 2023		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)
Asset description
Short-term investments	$	166,204	$	166,204	$	—	$	—	$	169,606	$	169,606	$	—	$	—
FTRs	2,753		—		—		2,753		3,087		—		—		3,087
Natural gas derivatives	8,471		—		8,471		—		—		—		—		—
Total assets	$	177,428	$	166,204	$	8,471	$	2,753	$	172,693	$	169,606	$	—	$	3,087
Liability description
FTRs	$	369	$	—	$	—	$	369	$	781	$	—	$	—	$	781
Natural gas derivatives	—		—		—		—		14,331		—		14,331		—
Total liabilities	$	369	$	—	$	—	$	369	$	15,112	$	—	$	14,331	$	781

Cleco has applied the Level 2 and Level 3 fair value techniques between comparative fiscal periods. During the nine months ended September 30, 2024, and the year ended December 31, 2023, Cleco did not experience any transfers into or out of Level 3 of the fair value hierarchy.

Short-term Investments

At September 30, 2024, and December 31, 2023, Cleco and Cleco Power had short-term investments in money market

funds and treasury bills that have a maturity of three months or less when purchased.

The following tables present the short-term investments as recorded on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets at September 30, 2024, and December 31, 2023:

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CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

Cleco
(THOUSANDS)	AT SEPT. 30, 2024		AT DEC. 31, 2023
Cash and cash equivalents	$	239,557	$	113,207
Current restricted cash and cash equivalents	$	7,537	$	15,818
Non-current restricted cash and cash equivalents	$	118,134	$	113,571

Cleco Power
(THOUSANDS)	AT SEPT. 30, 2024		AT DEC. 31, 2023
Cash and cash equivalents	$	40,557	$	40,240
Current restricted cash and cash equivalents	$	7,537	$	15,818
Non-current restricted cash and cash equivalents	$	118,110	$	113,548

FTRs

FTRs are financial instruments used to provide a financial hedge to manage the risk of transmission congestion charges

between MISO nodes in MISO’s Day-Ahead Energy Market. Cleco is awarded and/or purchases FTRs in auctions facilitated by MISO. FTRs are derivatives not designated as hedging instruments for accounting purposes.

FTRs are valued using MISO’s monthly auction prices as a price index reference (Level 3). Unrealized gains or losses are deferred as a component of Accumulated deferred fuel on the balance sheet in accordance with regulatory policy, and at settlement, realized gains or losses are included in Cleco Power’s FAC and reflected on customers’ bills as a component of the fuel charge.

The following table summarizes the changes in the net fair value of FTR assets and liabilities classified as Level 3 in the fair value hierarchy for Cleco and Cleco Power:

	FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024		2023		2024		2023
Balances, beginning of period	$	3,548	$	6,459	$	2,306	$	2,276
Unrealized (losses) gains*	(156)		114		(108)		(186)
Purchases	(7)		12		4,242		8,035
Settlements	(1,001)		(2,442)		(4,056)		(5,982)
Balances, end of period	$	2,384	$	4,143	$	2,384	$	4,143
* Unrealized losses are reported through Accumulated deferred fuel on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets.

The following table quantifies the significant unobservable inputs used in developing the fair value of Level 3 positions for Cleco and Cleco Power at September 30, 2024, and December 31, 2023:

	FAIR VALUE				VALUATION TECHNIQUE	SIGNIFICANT UNOBSERVABLE INPUTS	INPUT/RANGE
(THOUSANDS, EXCEPT FORWARD PRICE RANGE)	ASSETS		LIABILITIES				LOW(1)		HIGH(1)		WEIGHTED AVERAGE(2)
FTRs at Sept. 30, 2024	$	2,753	$	369	RTO auction pricing	FTR price - per MWh	$	(5.52)	$	8.68	$	0.22
FTRs at Dec. 31, 2023	$	3,087	$	781	RTO auction pricing	FTR price - per MWh	$	(3.51)	$	7.07	$	0.24
(1) The low and high prices reflect the lowest and highest values of all single point-to-point FTRs and not the range of aggregate price changes. (2) The weighted average reflects the market price and volume of each commodity weighted by the total volume of commodities.

Natural Gas Derivatives

Cleco may enter into physical and financial fixed price forward or options contracts that financially settle or are physically delivered at a future date. Management has not elected to apply hedge accounting to these contracts as allowed under applicable accounting standards. Cleco Power’s natural gas derivative contracts are marked-to-market with the resulting unrealized gain or loss recorded as a component of Accumulated deferred fuel on the balance sheet. At settlement, realized gains or losses are included in Cleco Power’s FAC and reflected on customer’s bills as a component of the fuel charge. Prior to the closing of the Cleco Cajun Divestiture, Cleco Cajun’s unrealized gains or losses as well as realized gains or losses at settlement were recorded on the income statements as a component of fuel expense. After the closing of the Cleco Cajun Divestiture in June 2024, all of Cleco Cajun’s natural gas derivative contracts were liquidated. Upon liquidation, a $6.4 million gain was recorded in Cleco’s Condensed Consolidated Statements of Income as a component of fuel expense.

Fair Value Measurements on a Nonrecurring Basis

The following tables summarize the carrying value and estimated market value of Cleco’s and Cleco Power’s financial instruments not measured at fair value on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets:

Cleco
	AT SEPT. 30, 2024				AT DEC. 31, 2023
(THOUSANDS)	CARRYING VALUE*		FAIR VALUE		CARRYING VALUE*		FAIR VALUE
Long-term debt	$	3,148,776	$	3,027,874	$	3,400,293	$	3,177,654

* The carrying value of long-term debt does not include deferred issuance costs of $12.4 million at September 30, 2024, and $14.2 million at December 31, 2023.

Cleco Power
	AT SEPT. 30, 2024				AT DEC. 31, 2023
(THOUSANDS)	CARRYING VALUE*		FAIR VALUE		CARRYING VALUE*		FAIR VALUE
Long-term debt	$	1,871,983	$	1,913,692	$	1,886,248	$	1,867,559

* The carrying value of long-term debt does not include deferred issuance costs of $10.5 million at September 30, 2024, and $11.5 million at December 31, 2023.

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CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

In order to fund capital requirements, Cleco may issue fixed and variable rate long-term debt with various tenors. The fair value of this class fluctuates as the market interest rates for fixed and variable rate debt with similar tenors and credit ratings change. The fair value of the debt could also change from period to period due to changes in the credit rating of the Cleco entity by which the debt was issued. The fair value of long-term debt is classified as Level 2 in the fair value hierarchy.

Concentrations of Credit Risk

At September 30, 2024, and December 31, 2023, Cleco and Cleco Power were exposed to concentrations of credit risk through their short-term investments classified as cash equivalents and restricted cash equivalents. If the short-term investments failed to perform under the terms of the investments, Cleco and Cleco Power could be exposed to a loss of the invested amounts. Collateral on these types of investments is not required. In order to optimize interest income and minimize risk, cash is invested primarily in short-term securities issued by the U.S. government and money market mutual funds to maintain liquidity and achieve the goal of a net asset value of a dollar.

When Cleco enters into commodity derivative or physical commodity transactions directly with market participants, Cleco may be exposed to counterparty credit risk. Cleco is exposed to counterparty credit risk when a counterparty fails to meet their financial obligations causing Cleco to potentially incur replacement cost losses. Cleco enters into long-form contracts and master agreements with counterparties that govern the risk of counterparty credit default and allow for collateralization above prenegotiated thresholds to help mitigate potential losses. Alternatively, Cleco may be required to provide credit support with respect to bilateral transactions and contracts that Cleco has entered into or may enter into in the future. The amount of credit support required may change based on margining formulas, changes in credit agency ratings, or liquidity ratios.

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. Generally, Cleco’s derivative positions are subject to netting agreements that provide for offsetting of asset and liability positions as well as related collateral with the same counterparty. At September 30,

2024, and December 31, 2023, there were no fair value amounts offset on the balance sheets and no collateral posted with or received from counterparties. The following tables present 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, 2024, and December 31, 2023:

Cleco
	DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
(THOUSANDS)	BALANCE SHEET LINE ITEM	AT SEPT. 30, 2024		AT DEC. 31, 2023
Commodity-related contracts
FTRs
Current	Energy risk management assets	$	2,753	$	3,087
Current	Energy risk management liabilities	(369)		(781)
Natural gas derivatives
Current	Energy risk management assets	7,825		5,042
Non-current	Energy risk management assets	646		—
Current	Energy risk management liabilities	—		(15,005)
Commodity-related contracts, net		$	10,855	$	(7,657)

Cleco Power
	DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
(THOUSANDS)	BALANCE SHEET LINE ITEM	AT SEPT. 30, 2024		AT DEC. 31, 2023
Commodity-related contracts
FTRs
Current	Energy risk management assets	$	2,753	$	3,087
Current	Energy risk management liabilities	(369)		(781)
Natural gas derivatives
Current	Energy risk management assets	7,825		—
Non-current	Energy risk management assets	646		—
Current	Energy risk management liabilities	—		(14,331)
Commodity-related contracts, net		$	10,855	$	(12,025)

The following tables present 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, 2024, and 2023:

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CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

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	2024		2023		2024		2023
Commodity-related contracts
FTRs(1)	Electric operations	$	483	$	2,227	$	1,991	$	4,920
FTRs(1)	Purchased power	(484)		(1,690)		(2,683)		(3,786)
Natural gas derivatives(2)(3)	Fuel used for electric generation	(7,129)		(10,250)		(22,786)		(110,506)
Total		$	(7,130)	$	(9,713)	$	(23,478)	$	(109,372)

(1) For the three and nine months ended September 30, 2024, unrealized losses associated with FTRs of$(0.2) million and $(0.1) million, respectively, were reported through Accumulated deferred fuel on the balance sheet. 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.

(2) For the three and nine months ended September 30, 2024, unrealized gains associated with natural gas derivatives of $1.7 million and $11.8 million, respectively, were reported through Accumulated deferred fuel on the balance sheet. 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.

(3) For the three and nine months ended September 30, 2024, realized losses associated with natural gas derivatives of $(1.5) million were reported through Accumulated deferred fuel on the balance sheet. 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.

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	2024		2023		2024		2023
Commodity-related contracts
FTRs(1)	Electric operations	$	483	$	2,227	$	1,991	$	4,920
FTRs(1)	Purchased power	(484)		(1,690)		(2,683)		(3,786)
Natural gas derivatives (2)(3)	Fuel used for electric generation	(7,129)		(2,053)		(22,786)		(19,876)
Total		$	(7,130)	$	(1,516)	$	(23,478)	$	(18,742)

(1) For the three and nine months ended September 30, 2024, unrealized losses associated with FTRs of $(0.2) million, and $(0.1) million, respectively, were reported through Accumulated deferred fuel on the balance sheet. 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.

(2) For the three and nine months ended September 30, 2024, unrealized gains associated with natural gas derivatives of $1.7 million and $11.8 million, respectively, were reported through Accumulated deferred fuel on the balance sheet. 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.

(3) For the three and nine months ended September 30, 2024, realized losses associated with natural gas derivatives of $(1.5) million were reported through Accumulated deferred fuel on the balance sheet. 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.

The following tables present the volume of commodity-related derivative contracts outstanding at September 30, 2024, and December 31, 2023, for Cleco and Cleco Power:

Cleco
	UNIT OF MEASURE	TOTAL VOLUME OUTSTANDING
(THOUSAND)		AT SEPT. 30, 2024	AT DEC. 31, 2023
Commodity-related contracts
FTRs	MWh	10,641	9,611
Natural gas derivatives	MMBtus	24,805	61,119

Cleco Power
	UNIT OF MEASURE	TOTAL VOLUME OUTSTANDING
(THOUSAND)		AT SEPT. 30, 2024	AT DEC. 31, 2023
Commodity-related contracts
FTRs	MWh	10,641	9,611
Natural gas derivatives	MMBtus	24,805	19,915

Note 8 — Debt

On May 17, 2024, Cleco Holdings entered into a $175.0 million revolving credit agreement. This agreement replaced Cleco Holdings’ existing revolving credit agreement and matures on May 17, 2029. Under this agreement, Cleco Holdings is required to maintain total indebtedness, not including securitization indebtedness, less than or equal to 65% of total

capitalization. The borrowing costs under Cleco Holdings’ revolving credit agreement are currently equal to SOFR plus 1.725% or ABR plus 0.625%, plus commitment fees of 0.275% on the unused portion of the facility. If Cleco Holdings’ credit ratings were to be downgraded one level by the credit rating agencies, Cleco Holdings may be required to pay higher commitment fees and additional interest of 0.05%. At September 30, 2024, Cleco Holdings had no borrowings outstanding under its revolving credit facility.

In addition, on May 17, 2024, Cleco Power entered into a $300.0 million revolving credit agreement and a $125.0 million term loan agreement. The revolving credit agreement replaced Cleco Power’s existing revolving credit agreement and matures on May 17, 2029. The term loan agreement replaced Cleco Power’s existing term loan agreement and matures on May 17, 2025. Under these agreements, Cleco Power is required to maintain total indebtedness, not including securitization indebtedness, less than or equal to 65% for total capitalization. The borrowing costs under the revolving credit agreement are currently equal to SOFR plus 1.35% or ABR plus 0.25%, plus commitment fees of 0.15% on the unused portion of the facility. If Cleco Power’s credit ratings were to be downgraded one level by the credit rating agencies, Cleco Power may be required to pay higher commitment fees and additional interest of 0.025%. At September 30, 2024, Cleco Power had no borrowings outstanding under the revolving credit agreement. The term loan under the term loan

37

CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

agreement bears interest at a rate of SOFR plus 1.35% or ABR plus 0.25%.

On April 26, 2024, Cleco Holdings repaid its $66.7 million term loan that was due on May 21, 2024. In addition, on June 4, 2024, Cleco Holdings redeemed its $165.0 million floating rate senior notes due on May 1, 2025.

Cleco Power’s $50.0 million GO-Zone bonds have a mandatory tender in April 2025. This amount is reflected in long-term debt due within one year on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets at September 30, 2024.

At September 30, 2024, and December 31, 2023, Cleco’s long-term debt and finance leases outstanding due within one year were $240.9 million and $256.8 million, respectively. The decrease of $15.9 million is primarily due to the repayment of Cleco Holdings’ $66.7 million term loan, partially offset by the reclassification of Cleco Power’s $50.0 million GO-Zone bonds with a mandatory tender in April 2025.

At September 30, 2024, and December 31, 2023, Cleco Power’s long-term debt and finance leases outstanding due within one year was $240.9 million and $190.3 million, respectively. The increase of $50.6 million is primarily due to the reclassification of $50.0 million GO-Zone bonds with a mandatory tender in April 2025.

Note 9 — Pension Plan and Employee Benefits

Pension Plan and Other Benefits Plan

Employees hired before August 1, 2007, are covered by a non-contributory, defined benefit pension plan. Based on the

funding assumptions at December 31, 2023, management estimates that pension contributions totaling $94.2 million will be required through 2028, of which $25.7 million is required in 2024. In April 2024 and July 2024, Cleco made payments of $3.5 million and $7.1 million, respectively, toward its 2024 contribution requirement. In July 2024, Cleco also made a $15.2 million required contribution payment towards the 2023 plan year.

In June 2024, an amendment to the pension plan was executed allowing the transfer of the cash balance and

pension liabilities to the Cleco Cajun Purchaser’s pension plan. This transfer was for the former Cleco Cajun employees that became employees of the Cleco Cajun Purchasers following the closing of the Cleco Cajun Divestiture. The transfer was completed in June 2024.

Cleco’s retirees may be eligible to receive Other Benefits. Dependents of Cleco’s retirees may also be eligible to receive Other Benefits with the exception of life insurance benefits.

The non-service components of net periodic pension and Other Benefits cost are included in Other income (expense), net within Cleco’s and Cleco Power’s Condensed Consolidated Statements of Income. The components of net periodic pension and Other Benefits cost for the three and nine months ended September 30, 2024, and 2023 were as follows:

	PENSION BENEFITS				OTHER BENEFITS
	FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE THREE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024		2023		2024		2023
Components of periodic benefit costs
Service cost	$	1,114	$	1,173	$	475	$	365
Interest cost	6,535		6,606		583		566
Expected return on plan assets	(7,607)		(7,386)		—		—
Amortizations
Net loss (gain)	—		—		156		(13)
Net periodic benefit cost	$	42	$	393	$	1,214	$	918

	PENSION BENEFITS				OTHER BENEFITS
	FOR THE NINE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024		2023		2024		2023
Components of periodic benefit costs
Service cost	$	3,490	$	3,520	$	1,375	$	1,094
Interest cost	19,605		19,817		1,750		1,698
Expected return on plan assets	(22,821)		(22,158)		—		—
Amortizations
Net loss (gain)	—		—		367		(39)
Net periodic benefit cost	$	274	$	1,179	$	3,492	$	2,753

Because Cleco Power is the pension plan sponsor and the related trust holds the assets, the net unfunded status of the pension plan is reflected at Cleco Power. The liability of Cleco’s other subsidiaries is transferred, with a like amount of assets, to Cleco Power monthly. The expense of the pension plan related to Cleco’s other subsidiaries for the three and nine months ended September 30, 2024, was $0.4 million and $1.3 million, respectively. The expense of the pension plan related

to Cleco’s other subsidiaries for the three and nine months ended September 30, 2023, was $0.4 million and $1.2 million, respectively.

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CLECO
CLECO POWER	2024 3RD QUARTER FORM 10-Q

The current and non-current portions of the pension benefits liability for Cleco and Cleco Power at September 30, 2024, and December 31, 2023, were as follows:

(THOUSANDS)	AT SEPT. 30, 2024		AT DEC. 31, 2023
Current	$	12,594	$	25,685
Non-current	$	79,250	$	91,638

Cleco Holdings is the plan sponsor for the Other Benefit plan. There are no assets set aside in a trust, and the liabilities are reported on the individual subsidiaries’ financial statements. The expense related to Other Benefits reflected in Cleco Power’s Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2024, was $1.1 million and $3.2 million, respectively. The expense related to Other Benefits reflected in Cleco Power’s Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2023, was $0.9 million and $2.6 million, respectively. The current and non-current portions of the Other Benefits liability for Cleco and Cleco Power at September 30, 2024, and December 31, 2023, were as follows:

Cleco
(THOUSANDS)	AT SEPT. 30, 2024		AT DEC. 31, 2023
Current	$	5,235	$	5,241
Non-current	$	41,012	$	41,815

Cleco Power
(THOUSANDS)	AT SEPT. 30, 2024		AT DEC. 31, 2023
Current	$	4,480	$	4,479
Non-current	$	31,893	$	32,289

SERP

Certain current and former Cleco officers are covered by SERP. Cleco does not fund the SERP liability but instead pays for current benefits out of cash available of the respective company of the officer. Because SERP is a non-qualified plan, Cleco has purchased life insurance policies on certain SERP participants as a mechanism to provide a source of funding. These policies are held in a rabbi trust formed by Cleco Power. The rabbi trust is the named beneficiary of the life insurance policies and, therefore, receives the proceeds upon the death of the insured participants. The life insurance policies may be used to reimburse Cleco for benefits paid from general funds, pay the SERP participants’ death benefits, or pay future SERP payments. Market conditions could have a significant impact on the cash surrender value of these life insurance policies. Because SERP is a non-qualified plan, the assets of the trust could be used to satisfy general creditors of Cleco Power in the event of insolvency. Cleco Power is the plan sponsor and Support Group is the plan administrator.

The non-service components of net periodic benefit cost related to SERP are included in Other income (expense), net within Cleco’s and Cleco Power’s Condensed Consolidated Statements of Income. The components of the net periodic benefit cost related to SERP for the three and nine months ended September 30, 2024, and 2023, were as follows:

	FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024		2023		2024		2023
Components of periodic benefit costs
Service cost	$	34	$	35	$	101	$	106
Interest cost	836		901		2,507		2,703
Amortizations
Prior period service credit	(54)		(54)		(161)		(161)
Net gain	(21)		(16)		(61)		(47)
Net periodic benefit cost	$	795	$	866	$	2,386	$	2,601

The expense related to SERP reflected on Cleco Power’s Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2024, was $0.1 million and $0.4 million, respectively. The expense related to SERP reflected on Cleco Power’s Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2023, was $0.1 million and $0.4 million, respectively.

Liabilities relating to SERP are reported on the individual subsidiaries’ financial statements. The current and non-current portions of the SERP liability for Cleco and Cleco Power at September 30, 2024, and December 31, 2023, were as follows:

Cleco
(THOUSANDS)	AT SEPT. 30, 2024		AT DEC. 31, 2023
Current	$	4,593	$	4,593
Non-current	$	62,039	$	62,868

Cleco Power
(THOUSANDS)	AT SEPT. 30, 2024		AT DEC. 31, 2023
Current	$	613	$	613
Non-current	$	8,134	$	8,394

401(k) Plan

Cleco’s 401(k) Plan is intended to provide active, eligible employees with voluntary, long-term savings and investment opportunities. The 401(k) Plan is a defined contribution plan and is subject to the applicable provisions of the Employee Retirement Income Security Act of 1974. In accordance with the 401(k) Plan, employer contributions are made in the form of cash. Cash contributions are invested in proportion to the participant’s voluntary contribution investment choices. Participation in the Plan is voluntary, and active Cleco employees are eligible to participate. Cleco’s 401(k) Plan expense for the three and nine months ended September 30, 2024, and 2023, was as follows:

	FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024		2023		2024		2023
401(k) Plan expense	$	1,766	$	1,741	$	7,078	$	5,821

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CLECO POWER	2024 3RD QUARTER FORM 10-Q

Cleco Power is the plan sponsor for the 401(k) Plan. The expense of the 401(k) Plan related to Cleco’s other subsidiaries for the three and nine months ended September 30, 2024, and 2023, was as follows:

	FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024		2023		2024		2023
401(k) Plan expense	$	347	$	592	$	2,685	$	2,164

Note 10 — Income Taxes

Effective Tax Rates

The following tables summarize the effective income tax rates from continuing operations for Cleco and Cleco Power for the three and nine months ended September 30, 2024, and 2023:

Cleco
	FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
	2024		2023		2024		2023
Effective tax rate	(7.6)	%	(470.9)	%	(10.2)	%	1,006.9	%

Cleco Power
	FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
	2024		2023		2024		2023
Effective tax rate	10.1	%	(0.6)	%	9.2	%	2.6	%

For Cleco and Cleco Power, the effective income tax rates for the three and nine months ended September 30, 2024, and 2023, were different than the federal statutory rate primarily due to the amortization of excess ADIT, the adjustment to record tax expense at the projected annual effective tax rate, flow through of state tax benefits, and state tax expense.

Cleco’s effective tax rate for the three and nine months ended September 30, 2024, compared to the three and nine months ended September 30, 2023, was different primarily due to the amortization of excess ADIT, the adjustment to record tax expense at the projected annual effective tax rate, flow through of state tax benefits, and higher pre-tax book income in 2024 due to lower losses on gas-related derivative contracts at Cleco Cajun.

Uncertain Tax Positions

Cleco classifies all interest related to uncertain tax positions as a component of interest payable and interest expense. For the three and nine months ended September 30, 2024, and 2023, Cleco and Cleco Power had no interest expense related to uncertain tax positions. At September 30, 2024, and December 31, 2023, Cleco and Cleco Power had no liability for uncertain tax positions or interest payable related to uncertain tax positions.

Income Tax Audits

Cleco and Cleco Power are party to the consolidated income tax return filed by Cleco Group. Cleco Group participates in

the IRS’s Compliance Assurance Process in which tax positions are examined and agreed upon prior to filing the federal tax return. While the statute of limitations remains open for tax years 2021, 2022, and 2023, the IRS has placed Cleco Group in the Bridge phase of the Compliance Assurance Process for the 2021 tax year. In this phase, the IRS will not accept any disclosures, conduct any reviews, or provide any assurances. These tax returns were filed consistent with the IRS’s review. The IRS has accepted Cleco Group’s application for the Compliance Assurance Process for the 2022 tax year and the Compliance Assurance Maintenance phase for the 2023 tax year. In this maintenance phase, the IRS typically will, at its discretion, reduce the level of its review of the tax year relative to the regular Compliance Assurance Process phase.

The state income tax years 2021, 2022, and 2023 remain subject to examination by the Louisiana Department of Revenue.

Cleco classifies income tax penalties as a component of other expense. For the three and nine months ended September 30, 2024, and 2023, no penalties were recognized.

Note 11 — Segment Disclosures

Segment disclosures are based on Cleco’s method of internal reporting, which disaggregates business units by first-tier subsidiary. Cleco’s segment structure and its allocation of corporate expenses were updated to reflect how management measures performance and allocates resources.

Segment managers report periodically to Cleco’s CEO, who is Cleco’s chief operating decision maker, with discrete financial information and, at least quarterly, present discrete financial information to Cleco Holdings’ and, in the case of Cleco Power, Cleco Power’s Boards of Managers. The reportable segment prepares budgets that are presented to and approved by Cleco Holdings’ and, in the case of Cleco Power, Cleco Power’s Boards of Managers. The column shown as Other in the following tables includes the holding company, a shared services subsidiary, an investment subsidiary, discontinued operations, and Cleco Cajun’s natural gas derivatives. After the closing of the Cleco Cajun Divestiture, all of Cleco Cajun’s natural gas derivative contracts were liquidated.

The financial results in the following tables are presented on an accrual basis. EBITDA is a key non-GAAP financial measure used by the CEO to assess the operating performance of Cleco’s segments. Management evaluates the performance of Cleco’s segments and allocates resources to it based on segment profit and the requirements to implement strategic initiatives and projects to meet current business objectives. EBITDA is defined as net income adjusted for interest, income taxes, depreciation, and amortization. Depreciation and amortization in the following tables includes amortization of intangible assets recorded for the fair value adjustment of wholesale power supply agreements as a result of the 2016 Merger. Material intercompany transactions occur on a regular basis. These intercompany transactions relate primarily to joint and common administrative support services.

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CLECO POWER	2024 3RD QUARTER FORM 10-Q

Segment Information
FOR THE THREE MONTHS ENDED SEPT. 30, 2024 (THOUSANDS)	CLECO POWER
Revenue
Electric operations	$	312,583
Other operations	24,433
Affiliate revenue	1,397
Electric customer credits	(1,046)
Operating revenue, net	$	337,367
Net income	$	83,672
Add: Depreciation and amortization	48,213
Less: Interest income	1,065
Add: Interest charges	25,014
Add: Federal and state income tax expense	9,396
EBITDA	$	165,230

FOR THE THREE MONTHS ENDED SEPT. 30, 2024 (THOUSANDS)	CLECO POWER		OTHER			ELIMINATIONS		TOTAL
Revenue
Electric operations	$	312,583	$	(186)		$	—	$	312,397
Other operations	24,433		4,364			(13)		28,784
Affiliate revenue	1,397		22,733			(24,130)		—
Electric customer credits	(1,046)		—			—		(1,046)
Operating revenue, net	$	337,367	$	26,911		$	(24,143)	$	340,135
Depreciation and amortization	$	48,213	$	2,266	(1)	$	—	$	50,479
Interest income	$	1,065	$	5,326		$	(25)	$	6,366
Interest charges	$	25,014	$	12,445		$	(23)	$	37,436
Federal and state income tax expense (benefit)	$	9,396	$	(16,039)		$	—	$	(6,643)
Income from continuing operations, net of income taxes	$	83,672	$	10,178		$	—	$	93,850
Income from discontinued operations, net of income taxes	—		742			—		742
Net income	$	83,672	$	10,920		$	—	$	94,592
(1) Includes $0.2 million of amortization of intangible assets related to Cleco Power’s wholesale power supply agreements as a result of the 2016 Merger.

FOR THE THREE MONTHS ENDED SEPT. 30, 2023 (THOUSANDS)	CLECO POWER
Revenue
Electric operations	$	364,161
Other operations	31,984
Affiliate revenue	1,645
Electric customer credits	24
Operating revenue, net	$	397,814
Net income	$	90,914
Add: Depreciation and amortization	48,012
Less: Interest income	1,215
Add: Interest charges	24,921
Add: Federal and state income tax benefit	(552)
EBITDA	$	162,080

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CLECO POWER	2024 3RD QUARTER FORM 10-Q

FOR THE THREE MONTHS ENDED SEPT. 30, 2023 (THOUSANDS)	CLECO POWER		OTHER			ELIMINATIONS		TOTAL
Revenue
Electric operations	$	364,161	$	(2,323)		$	—	$	361,838
Other operations	31,984		—			—		31,984
Affiliate revenue	1,645		30,253			(31,898)		—
Electric customer credits	24		—			—		24
Operating revenue, net	$	397,814	$	27,930		$	(31,898)	$	393,846
Depreciation and amortization	$	48,012	$	4,365	(1)	$	1	$	52,378
Interest income	$	1,215	$	81		$	(13)	$	1,283
Interest charges	$	24,921	$	17,125		$	(12)	$	42,034
Federal and state income tax benefit	$	(552)	$	(245,942)		$	—	$	(246,494)
Income from continuing operations, net of income taxes	$	90,914	$	207,927		$	—	$	298,841
Income from discontinued operations, net of income taxes	—		(142,729)			—		(142,729)
Net income	$	90,914	$	65,198		$	—	$	156,112
(1) Includes $2.3 million of amortization of intangible assets related to Cleco Power’s wholesale power supply agreements as a result of the 2016 Merger.

Segment Information
FOR THE NINE MONTHS ENDED SEPT. 30, 2024 (THOUSANDS)	CLECO POWER
Revenue
Electric operations	$	795,733
Other operations	74,032
Affiliate revenue	11,788
Electric customer credits	(3,441)
Operating revenue, net	$	878,112
Net income	$	103,810
Add: Depreciation and amortization	188,970
Less: Interest income	3,257
Add: Interest charges	73,614
Add: Federal and state income tax expense	10,508
EBITDA	$	373,645

FOR THE NINE MONTHS ENDED SEPT. 30, 2024 (THOUSANDS)	CLECO POWER		OTHER			ELIMINATIONS		TOTAL
Revenue
Electric operations	$	795,733	$	(2,695)		$	—	$	793,038
Other operations	74,032		5,545			(12)		79,565
Affiliate revenue	11,788		80,156			(91,944)		—
Electric customer credits	(3,441)		—			—		(3,441)
Operating revenue, net	$	878,112	$	83,006		$	(91,956)	$	869,162
Depreciation and amortization	$	188,970	$	8,885	(2)	$	—	$	197,855
Interest income	$	3,257	$	7,432		$	(262)	$	10,427
Interest charges	$	73,614	$	45,768		$	(262)	$	119,120
Federal and state income tax expense (benefit)	$	10,508	$	(15,436)		$	—	$	(4,928)
Income (loss) from continuing operations, net of income taxes	$	103,810	$	(50,574)		$	—	$	53,236
Income from discontinued operations, net of income taxes	—		45,415			—		45,415
Net income (loss)	$	103,810	$	(5,159)		$	—	$	98,651
Additions to property, plant, and equipment	$	168,528	$	3,985		$	—	$	172,513
Equity investment in investees(1)	$	1,916	$	(617,314)		$	617,314	$	1,916
Goodwill(1)	$	1,490,797	$	—		$	—	$	1,490,797
Total segment assets(1)	$	6,961,746	$	762,789		$	(69,927)	$	7,654,608
(1) Balances as of September 30, 2024. (2) Includes $2.7 million of amortization of intangible assets related to Cleco Power’s wholesale power supply agreements as a result of the 2016 Merger.

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CLECO POWER	2024 3RD QUARTER FORM 10-Q

FOR THE NINE MONTHS ENDED SEPT. 30, 2023 (THOUSANDS)	CLECO POWER
Revenue
Electric operations	$	923,685
Other operations	84,028
Affiliate revenue	4,967
Electric customer credits	(1,362)
Operating revenue, net	$	1,011,318
Net income	$	157,170
Add: Depreciation and amortization	142,467
Less: Interest income	2,979
Add: Interest charges	73,442
Add: Federal and state income tax expense	4,185
EBITDA	$	374,285

FOR THE NINE MONTHS ENDED SEPT. 30, 2023 (THOUSANDS)	CLECO POWER		OTHER			ELIMINATIONS		TOTAL
Revenue
Electric operations	$	923,685	$	(7,131)		$	—	$	916,554
Other operations	84,028		1			1		84,030
Affiliate revenue	4,967		86,669			(91,636)		—
Electric customer credits	(1,362)		—			—		(1,362)
Operating revenue, net	$	1,011,318	$	79,539		$	(91,635)	$	999,222
Depreciation and amortization	$	142,467	$	13,276	(2)	$	—	$	155,743
Interest income	$	2,979	$	357		$	(113)	$	3,223
Interest charges	$	73,442	$	48,961		$	(114)	$	122,289
Federal and state income tax expense (benefit)	$	4,185	$	(125,345)		$	—	$	(121,160)
Income (loss) from continuing operations, net of income taxes	$	157,170	$	(48,043)		$	—	$	109,127
Loss from discontinued operations, net of income taxes	—		(9,707)			—		(9,707)
Net income (loss)	$	157,170	$	(57,750)		$	—	$	99,420
Additions to property, plant, and equipment	$	159,947	$	5,803		$	—	$	165,750
Equity investment in investees(1)	$	1,992	$	(467,329)		$	467,329	$	1,992
Goodwill(1)	$	1,490,797	$	—		$	—	$	1,490,797
Total segment assets(1)	$	6,920,339	$	870,743		$	309,311	$	8,100,393
(1) Balances as of December 31, 2023. (2) Includes $7.1 million of amortization of intangible assets related to Cleco Power’s wholesale power supply agreements as a result of the 2016 Merger.

	FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024		2023		2024		2023
Net income	$	94,592	$	156,112	$	98,651	$	99,420
Less: income (loss) from discontinued operations, net of income taxes	742		(142,729)		45,415		(9,707)
Income from continuing operations, net of income taxes	93,850		298,841		53,236		109,127
Add: Depreciation and amortization	50,479		52,378		197,855		155,743
Less: Interest income	6,366		1,283		10,427		3,223
Add: Interest charges	37,436		42,034		119,120		122,289
Add: Federal and state income tax benefit	(6,643)		(246,494)		(4,928)		(121,160)
Add: Other corporate costs and noncash items(1)(2)(3)	(3,526)		16,604		18,789		111,509
Total segment EBITDA	$	165,230	$	162,080	$	373,645	$	374,285
(1) Adjustments made for Other and Elimination totals not allocated to total segment EBITDA. (2) Includes loss on Cleco Cajun’s natural gas derivatives of $(6.5) million for the nine months ended September 30, 2024. After the closing of the Cleco Cajun Divestiture, all natural gas derivatives related to Cleco Cajun were liquidated; therefore, there were no gain (loss) on natural gas derivatives for Cleco Cajun for the three months ended September 30, 2024. (3) Includes loss on Cleco Cajun’s natural gas derivatives of $(8.2) million and $(90.6) million, respectively, for the three and nine months ended September 30, 2023.

Note 12 — Regulation and Rates

Dolet Hills Regulatory Refund

Cleco Power is seeking recovery for stranded and decommissioning costs associated with the retirement of the Dolet Hills Power Station as well as deferred fuel and other mine-related closure costs. These costs were subject to a prudency review by the LPSC. On February 2, 2024, the ALJ released a final recommendation indicating a partial disallowance of the recovery of fuel costs and a refund of

related costs previously recovered from customers. Management estimated that a loss resulting from a potential disallowance was probable, and as a result, Cleco Power accrued an estimated contingent loss of $58.7 million as of December 31, 2023. Cleco Power recorded an additional loss of $1.3 million as of March 31, 2024, as a result of the approval of an uncontested settlement by the LPSC on April 19, 2024. The settlement contains a provision for refunding to Cleco Power’s retail customers $20.0 million per year during each of the third quarters of 2024, 2025, and 2026 for a total refund of

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CLECO POWER	2024 3RD QUARTER FORM 10-Q

$60.0 million. Cleco Power has issued refunds for the third quarter of 2024. For more information about the settlement, see Note 14 — “Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — Litigation — LPSC Audits and Reviews — Dolet Hills Prudency Review.”

FRP

Prior to July 1, 2024, Cleco Power’s annual retail earnings were subject to an FRP approved by the LPSC in June 2021. The prior FRP allowed Cleco Power 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%, were required to be refunded to customers.

On June 19, 2024, the LPSC approved Cleco Power’s new retail rate plan. Effective July 1, 2024, under the terms of the new FRP, Cleco Power is allowed to earn a target ROE of 9.7%, while providing the opportunity to earn up to 10.3%. Additionally, 60% of retail earnings between 10.3% and 10.9%, and all retail earnings over 10.9%, are required to be refunded to customers. Cleco Power’s next base rate case is required to be filed with the LPSC on or before June 30, 2026. The amount of credits due to customers, if any, is determined by Cleco Power’s monitoring report, which is filed with the LPSC annually. Additionally, as approved in Cleco Power’s FRP, a residential revenue decoupling mechanism was implemented through its infrastructure and incremental cost recovery rider that provides a charge or credit to residential customers for any under or over collection of residential base revenue. For more information on the regulatory liability established for the revenue decoupling mechanism, see Note 5 — “Regulatory Assets and Liabilities — Residential Revenue Decoupling.”

On May 22, 2024, the LPSC approved Cleco Power’s monitoring report for the 12-month period ended June 30, 2023, indicating no material findings and no refund to Cleco Power’s retail customers. On October 31, 2024, Cleco Power filed its monitoring report for the 12-month period ending June 30, 2024, indicating no refund to Cleco Power’s retail customers.

Other Deferred Costs

Cleco Power defers other costs that it believes are prudently incurred and probable of recovery from its retail customers. These costs are recorded in Other deferred charges on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets. On June 19, 2024, the LPSC approved for Cleco Power to recover through its new rates, effective on July 1, 2024, costs associated with Cleco Power’s rate case, IRP, and storm preparation. As a result, $3.8 million was reclassified to Other regulatory assets on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets. At September 30, 2024, Cleco Power had $4.6 million recorded for deferred costs it anticipates to recover from its customers, subject to approval by the LPSC.

TCJA

Cleco Power’s retail customers are continuing to receive bill credits resulting from the TCJA. Beginning in July 2021, under Cleco Power’s prior retail rate plan, retail customers received approximately $2.5 million in monthly bill credits for the target retail portion of the unprotected excess ADIT. At June 30, 2024, all amounts for the unprotected excess ADIT had been returned to retail customers.

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, 2024, Cleco Power had $191.3 million accrued for the excess ADIT, of which $7.0 million is reflected in current regulatory liabilities.

Teche Unit 3

In May 2023, Cleco Power filed an Attachment Y with MISO requesting retirement of Teche Unit 3, barring any violations of specific applicable reliability standards. In January 2024, Cleco Power filed a notice with the LPSC to retire Teche Unit 3, and on June 1, 2024, Teche Unit 3 was retired.

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. 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 SEPT. 30, 2024		AT DEC. 31, 2023
Restricted cash - current	$	7,537	$	15,818
Accounts receivable - affiliate	3,398		3,492
Intangible asset - securitization	388,135		398,658
Total assets	$	399,070	$	417,968
Long-term debt due within one year	$	15,087	$	14,499
Accounts payable - affiliate	33		176
Interest accrued	1,499		6,191
Long-term debt, net	380,318		394,944
Total liabilities	396,937		415,810
Member’s equity	2,133		2,158
Total liabilities and member’s equity	$	399,070	$	417,968

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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 SEPT. 30,				FOR THE NINE MONTHS  ENDED SEPT. 30,
(THOUSANDS)	2024		2023		2024		2023
Operating revenue	$	8,776	$	9,946	$	24,578	$	25,329
Operating expenses	(4,271)		(5,264)		(10,876)		(11,017)
Interest income	214		188		557		430
Interest charges, net	(4,694)		(4,845)		(14,185)		(14,668)
Income before taxes	$	25	$	25	$	74	$	74

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 September 30, 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 SEPT. 30, 2024		AT DEC. 31, 2023
Purchase price	$	12,873	$	12,873
Cash contributions	6,399		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 SEPT. 30, 2024		AT 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 SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024		2023		2024		2023
Operating revenue	$	55	$	78	$	306	$	311
Operating expenses	(55)		(78)		(209)		(311)
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.

Note 14 — Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees

Litigation

Gulf Coast Spinning

In September 2015, a potential customer sued Cleco for failure to fully perform an alleged verbal agreement to lend or otherwise fund its startup costs of $6.5 million. Gulf Coast Spinning Company, LLC (Gulf Coast), the primary plaintiff, alleges that Cleco promised to assist it in raising approximately $60.0 million, which Gulf Coast needed to construct a cotton spinning facility near Bunkie, Louisiana (the Bunkie project). According to the petition filed by Gulf Coast in the 12th Judicial District Court for Avoyelles Parish, Louisiana, Cleco made such promises of funding assistance in order to cultivate a new industrial electric customer which would increase its revenues under a power supply agreement that it executed with Gulf Coast. Gulf Coast seeks unspecified damages arising from its inability to raise sufficient funds to complete the project, including lost profits.

Cleco filed an Exception of No Cause of Action arguing that the case should be dismissed. The 12th Judicial District Court denied Cleco’s exception in December 2015, after considering briefs and arguments. In January 2016, Cleco appealed the 12th Judicial District Court’s denial of its exception by filing with the Third Circuit Court of Appeal. In June 2016, the Third Circuit Court of Appeal denied the request to have the case dismissed. In July 2016, Cleco filed a writ to the Louisiana Supreme Court seeking a review of the 12th Judicial District Court’s denial of Cleco’s exception. In November 2016, the Louisiana Supreme Court denied Cleco’s writ application.

In February 2016, the parties agreed to a stay of all proceedings pending discussions concerning settlement. In May 2016, the 12th Judicial District Court lifted the stay at the request of Gulf Coast. The parties are currently participating in discovery.

Diversified Lands loaned $2.0 million to Gulf Coast for the Bunkie project. The loan was secured by a mortgage on the Bunkie project site. Diversified Lands foreclosed on the Bunkie property in February 2020 and has also asserted claims personally against the former owner of Gulf Coast. These claims are based on contracts and credit documents executed by Gulf Coast, the obligations and performance of which were personally guaranteed by the former owner of Gulf Coast. Diversified Lands is seeking recovery of the indebtedness still owed by Gulf Coast to Diversified Lands following the February 2020 foreclosure. This action has been consolidated with the litigation filed by Gulf Coast in the 12th Judicial District Court for Avoyelles Parish, Louisiana. Discovery is ongoing and the trial date has been scheduled for April 2025.

Cleco believes all allegations made by Gulf Coast are contradicted by the written documents executed by Gulf Coast, are otherwise without merit, and that it has substantial meritorious defenses to the claims alleged by Gulf Coast.

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Dispute with Saulsbury Industries

In October 2018, Cleco Power sued Saulsbury Industries, Inc., the former general contractor for the St. Mary Clean Energy Center project, seeking damages for Saulsbury Industries, Inc.’s failure to complete the St. Mary Clean Energy Center project on time and for costs incurred by Cleco Power in hiring a replacement general contractor. The action was filed in the Ninth Judicial District Court for Rapides Parish. Saulsbury Industries, Inc. removed the case to the U.S. District Court for the Western District of Louisiana, in March 2019. In September 2020, Cabot Corporation was allowed to join the case pending in the Ninth Judicial District Court for Rapides Parish.

In January 2019, Cleco Power was served with a summons in Saulsbury Industries, Inc. v. Cabot Corporation and Cleco Power LLC, in the U.S. District Court for the Western District of Louisiana. Saulsbury Industries, Inc. alleged that Cleco Power and Cabot Corporation caused delays in the St. Mary Clean Energy Center project, resulting in alleged impacts to Saulsbury Industries, Inc.’s direct and indirect costs. In June 2019, Cleco Power and Cabot Corporation each filed separate motions to dismiss. In October 2019, the District Court denied Cleco Power’s motion as premature and ruled that Saulsbury Industries, Inc. had six weeks to conduct discovery on specified jurisdictional issues. The Magistrate Judge presiding over the Western District of Louisiana consolidated cases issued a report and recommendation to the District Judge that the case instituted by Saulsbury Industries, Inc. be dismissed without prejudice and the case initiated by Cleco Power be remanded to the Ninth Judicial District Court for Rapides Parish. Saulsbury Industries, Inc. did not oppose the Magistrate Judge’s report and recommendation, and the District Judge issued a ruling that adopted the Magistrate Judge’s report and recommendation, which included reasoning consistent with Cleco Power’s arguments. Thus, the federal consolidated cases are now closed.

In October 2019, Cleco Power was served with a summons in Saulsbury Industries, Inc. v. Cabot Corporation and Cleco Power LLC in the 16th Judicial District Court for St. Mary Parish. Saulsbury Industries, Inc. asserted the same claim as the Western District litigation and further asserts claims for payment on an open account. In December 2019, Cleco Power moved to stay the case, arguing that the Rapides Parish suit should proceed. In February 2020, the court granted Cleco Power’s motion. The 16th Judicial District Court for the St. Mary Parish case held a hearing in October 2020, and the judge granted Cleco Power’s declinatory exceptions of lis pendens. Thus, the St. Mary’s Parish case has been dismissed. Saulsbury appealed this decision.

In May 2022, the Court of Appeal, First Circuit, ruled in favor of Cleco Power and affirmed the decision of the 16th Judicial District Court for St. Mary Parish with respect to Cleco Power. However, the First Circuit Court reversed the 16th Judicial District Court for St. Mary Parish’s decision dismissing Cabot Corporation from the St. Mary Parish case. All parties filed applications for rehearing, which were denied in June 2022.

Cabot Corporation applied for review by the Louisiana Supreme Court of the portion of the First Circuit Court’s ruling that denied Cabot Corporation’s exception seeking dismissal from the St. Mary Parish litigation. In November 2022, the Louisiana Supreme Court rendered a decision in favor of Cabot Corporation. The Louisiana Supreme Court’s decision reversed the First Circuit Court’s decision and reinstated the decision of the 16th Judicial District Court granting Cabot

Corporation’s declinatory exceptions of lis pendens. The St. Mary Parish case has been dismissed in full.

The stay was lifted in the Rapides Parish case and the Rapides Parish case is proceeding. Cleco Power and Saulsbury are currently participating in discovery.

LPSC Audits and Reviews

Fuel Audits

Generally, Cleco Power’s cost of fuel used for electric generation and the cost of purchased power are recovered through the LPSC-established FAC that enables Cleco Power to pass on to its customers substantially all such expenses. Recovery of FAC costs is subject to periodic fuel audits by the LPSC, which are performed at least every other year.

In January 2023, Cleco Power received a notice of audit from the LPSC for the period of January 2020 to December 2022. The total amount of fuel expense included in the audit is $1.10 billion. Cleco Power has responded to multiple sets of LPSC data requests. Cleco Power has FAC filings for January 2023 and thereafter that remain subject to audit. Management is unable to predict or give a reasonable estimate of the possible range of the disallowance, if any, related to these filings. Historically, the disallowances have not been material. If a disallowance of fuel cost is ordered resulting in a refund, it could have a material adverse effect on the results of operations, financial condition, or cash flows of the Registrants.

Environmental Audit

In 2009, the LPSC approved Cleco Power to recover certain costs of environmental compliance through an EAC. The costs eligible for recovery are those for prudently incurred air emissions credits associated with complying with federal, state, and local air emission regulations that apply to the generation of electricity reduced by the sale of such allowances. Also eligible for recovery are variable emission mitigation costs, which are the costs of reagents such as ammonia and limestone that are a part of the fuel mix used to reduce air emissions, among other things. Cleco Power has EAC filings for January 2023 and thereafter that remain subject to audit. Management is unable to predict or give a reasonable estimate of the possible range of the disallowance, if any, related to these filings. Historically, the disallowances have not been material. If a disallowance of environmental cost is ordered resulting in a refund to Cleco Power’s customers, any such refund could have a material adverse effect on the results of operations, financial condition, or cash flows of the Registrants.

Cleco Power incurs environmental compliance expenses for reagents associated with the compliance standards of MATS. These expenses are also eligible for recovery through Cleco Power’s EAC and are subject to periodic review by the LPSC. In May 2020, the EPA finalized a rule that concluded that it is not appropriate and necessary to regulate hazardous air pollutants from coal- and oil-fired electric generating units. The EPA also determined that the results of its risk and technology review did not require any revisions to the emissions standards. Several petitions for review of the rule’s findings were filed between May and July 2020 in the D.C. Circuit Court of Appeals. In January 2021, the Presidential Administration issued an executive order that specifically directed the EPA to consider issuing a proposed rule to suspend, revise, or rescind the rule. The EPA determined the most environmentally protective course is to implement the

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rules in the executive order. In March 2023, the EPA published in the Federal Register a final rule that reinstates the April 2016 finding that it is appropriate and necessary to regulate hazardous air pollutants from coal and oil-fired electric generating units through MATS. The EPA published a final rule in the Federal Register on May 7, 2024, that reconsiders the risk and technology review that took place in 2020. The rule lowers the emission limit for filterable particulate on coal-fired EGUs. The rule also requires installation of continuous emission monitors for particulate on the units. The compliance deadlines are in July 2027. At September 30, 2024, Cleco is in compliance with the MATS regulation and does not expect MATS to materially impact its environmental strategy.

Energy Efficiency Audit

In 2013, the LPSC issued a General Order adopting rules promoting energy efficiency programs. Cleco Power began participating in energy efficiency programs in November 2014. Through an approved rate tariff, Cleco Power recovered $8.5 million and $6.8 million for the 2022 and 2021 program years, respectively.

In May 2024, the LPSC approved the audit report for program years 2021 and 2022, which indicated no material findings.

On January 24, 2024, the LPSC voted to shift control of energy efficiency programs from utilities to an independent, third-party administrator selected by and accountable to the LPSC. This action will remove the provision whereby utilities were allowed to recover any lost revenues associated with unsold electricity. Cleco Power is subject to audits for program years 2023 and thereafter until the time these programs are shifted to the third-party administrator, which is expected in January 2026.

Dolet Hills Prudency Review

Cleco Power is seeking recovery for stranded and decommissioning costs associated with the retirement of the Dolet Hills Power Station as well as deferred fuel and other mine-related closure costs. On February 2, 2024, the ALJ released a final recommendation indicating a partial disallowance of the recovery of fuel costs and a refund of related costs previously recovered from customers. Management estimated that a loss resulting from a potential disallowance was probable, and as a result, an estimated contingent loss of $58.7 million was accrued in provision for rate refund as of December 31, 2023.

On April 19, 2024, the LPSC approved an uncontested settlement containing the following provisions:

•a $40.0 million reduction in the regulatory asset associated with the Dolet Hills Power Station,

•refunding $20.0 million per year to Cleco Power’s retail customers as a credit to their bills during the third quarters of 2024, 2025, and 2026 for a total of $60.0 million, and

•allowing securitization of $305.0 million. If the securitization is not complete by September 1, 2024, Cleco Power is allowed to accrue a carrying charge through the earlier of the completion of the securitization or January 31, 2025.

As a result of the settlement, the following was recorded in Cleco’s and Cleco Power’s Condensed Consolidated Financial Statements as of March 31, 2024:

•a $40.0 million reduction in regulatory assets with an offsetting increase recorded as depreciation expense and

•a $1.3 million increase in the provision for rate refund and electric customer credits.

During the third quarter of 2024, $20.0 million was refunded to Cleco Power’s retail customers as a credit to their bills in accordance with the settlement, as previously discussed.

On May 17, 2024, Cleco Power filed an application with the LPSC for a financing order authorizing the securitization. Management anticipates the securitization to close by the end of March 2025.

Other

Cleco is involved in various litigation matters, including regulatory, environmental, and administrative proceedings before various courts, regulatory commissions, arbitrators, and governmental agencies regarding matters arising in the ordinary course of business. The liability Cleco may ultimately incur with respect to any one of these matters may be in excess of amounts currently accrued. Management regularly analyzes current information and, as of September 30, 2024, believes the probable and reasonably estimable liabilities based on the eventual disposition of these matters for Cleco and Cleco Power are $11.9 million and $11.3 million, respectively. Cleco and Cleco Power have accrued these amounts.

Off-Balance Sheet Commitments and Guarantees

Cleco Holdings and Cleco Power have entered into various off-balance sheet commitments, in the form of guarantees and standby letters of credit, in order to facilitate their activities and the activities of Cleco Holdings’ subsidiaries and equity investees (affiliates). Cleco Holdings and Cleco Power have also agreed to contractual terms that require the Registrants to pay third parties if certain triggering events occur. These contractual terms generally are defined as guarantees.

Cleco Holdings entered into these off-balance sheet commitments in order to entice desired counterparties to contract with its affiliates by providing some measure of credit assurance to the counterparty in the event Cleco’s affiliates do not fulfill certain contractual obligations. If Cleco Holdings had not provided the off-balance sheet commitments, the desired counterparties may not have contracted with Cleco’s affiliates or may have contracted with them at terms less favorable to its affiliates.

The off-balance sheet commitments are not recognized on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets because management has determined that Cleco’s and Cleco Power’s affiliates are able to perform the obligations under their contracts and that it is not probable that payments by Cleco or Cleco Power will be required.

Cleco Holdings provided guarantees and indemnities to Entergy Louisiana and Entergy Gulf States as a result of the sale of the Perryville generation facility in 2005. The remaining indemnities relate to environmental matters that may have been present prior to closing. These remaining indemnities have no time limitations. The maximum amount of the potential payment to Entergy Louisiana and Entergy Gulf States is $42.4

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million. Management does not expect to be required to pay Entergy Louisiana and Entergy Gulf States under these guarantees.

On behalf of Acadia, Cleco Holdings provided guarantees and indemnities as a result of the sales of Acadia Unit 1 to Cleco Power and Acadia Unit 2 to Entergy Louisiana in 2010 and 2011, respectively. The remaining indemnities relate to the fundamental organizational structure of Acadia. These remaining indemnities have no time limitations or maximum potential future payments. Management does not expect to be required to pay Cleco Power or Entergy Louisiana under these guarantees.

Cleco Holdings provided indemnities to Cleco Power as a result of the transfer of Coughlin to Cleco Power in March 2014. Cleco Power also provided indemnities to Cleco Holdings as a result of the transfer of Coughlin to Cleco Power. The maximum amount of the potential payment to Cleco Power and Cleco Holdings, for their respective indemnities is $40.0 million, except for indemnities relating to the fundamental organizational structure of each respective entity, of which the maximum amount is $400.0 million. Management does not expect to be required to make any payments under these indemnities.

As part of the Amended Lignite Mining Agreement, Cleco Power and SWEPCO, joint owners of the Dolet Hills Power Station, have agreed to pay the loan and lease principal obligations of the lignite miner, DHLC, when due if DHLC does not have sufficient funds or credit to pay. Any amounts projected to be paid would be based on the forecasted loan and lease obligations to be incurred by DHLC, primarily for reclamation obligations. As of September 30, 2024, Cleco Power does not expect any payments to be made under this guarantee. Cleco Power has the right to dispute the incurrence of such loan and lease obligations through the review of the mining reclamation plan before the incurrence of such obligations. The Amended Lignite Mining Agreement does not affect the amount the Registrants can borrow under their credit facilities.

Cleco has letters of credit to MISO pursuant to energy market requirements. The letters of credit automatically renew each year and have no impact on Cleco Holdings’ or Cleco Power’s revolving credit facility.

Generally, neither Cleco Holdings nor Cleco Power has recourse that would enable them to recover amounts paid under their guarantee or indemnification obligations. There are no assets held as collateral for third parties that either Cleco Holdings or Cleco Power could obtain and liquidate to recover amounts paid pursuant to the guarantees or indemnification obligations.

Other Commitments

Cleco has accrued for liabilities related to third parties, employee medical benefits, and AROs.

In April 2015, the EPA published a final rule in the Federal Register for regulating the disposal and management of CCRs from coal-fired power plants (CCR Rule). In August 2018, the D.C. Court of Appeals vacated several requirements in the CCR regulation, which included eliminating the previous acceptability of compacted clay material as a liner for impoundments. As a result, in August 2020, the EPA published a final rule in the Federal Register that would set deadlines for costly modifications including retrofitting of clay-lined impoundments with compliant liners or closure of the impoundments. In November 2020, demonstrations were

submitted to the EPA specifying its intended course of action for the ash disposal facilities at Rodemacher Unit 2 and the Dolet Hills Power Station in order to comply with the final CCR Rule. In January 2022, Cleco Power received communication from the EPA that the demonstrations had been deemed complete. Cleco Power withdrew the Dolet Hills demonstration due to the cessation of receiving waste. The remaining demonstration is still subject to EPA approval based on pending technical review.

On May 8, 2024, the EPA published a final rule in the Federal Register that expands the scope of units regulated under the CCR regulations to include inactive surface impoundments at inactive generating facilities that ceased operations prior to October 19, 2015. None of these impoundments exist at Cleco’s facilities. The rule also regulates CCR Management Units (MUs), which includes non-containerized accumulations of CCR on the land at facilities otherwise subject to federal CCR regulations. The final regulation mandates the conducting of facility evaluations at such facilities after the effective date of the rule to determine if MUs are present. For any identified MUs of a particular size, the regulation would require evaluating any impacts on groundwater along with planning for closure of any identified CCR MU sites. Cleco does not expect this final rule to have a material financial impact on its generating units and environmental obligations.

Risks and Uncertainties

Cleco could be subject to possible adverse consequences if Cleco’s counterparties fail to perform their obligations or if Cleco or its affiliates are not in compliance with loan agreements or bond indentures.

Access to capital markets is a significant source of funding for both short- and long-term capital requirements not satisfied by operating cash flows.

Changes in the regulatory environment or market forces could cause Cleco to determine its assets have suffered an other-than-temporary decline in value, whereby an impairment would be required, and Cleco’s financial condition could be materially adversely affected.

Note 15 — Affiliate Transactions

At September 30, 2024, and December 31, 2023, Cleco Holdings had an affiliate receivable of $34.5 million and $24.2 million, respectively, primarily for estimated income taxes paid on behalf of Cleco Group. At September 30, 2024, and December 31, 2023, Cleco Holdings had an affiliate payable of $20.0 million and $10.7 million, respectively, to Cleco Group primarily for settlement of taxes payable.

Cleco Power has balances that are payable to or due from its affiliates. The following table is a summary of those balances:

	AT SEPT. 30, 2024				AT DEC. 31, 2023
(THOUSANDS)	AFFILIATE RECEIVABLE		AFFILIATE PAYABLE		AFFILIATE RECEIVABLE		AFFILIATE PAYABLE
Cleco Holdings	$	150	$	15,844	$	14	$	367
Support Group	3,841		13,772		1,104		12,833
Cleco Cajun	—		—		3,425		—
Total	$	3,991	$	29,616	$	4,543	$	13,200

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Note 16 — Intangible Assets and Goodwill

Securitized Intangible Asset

On June 22, 2022, Cleco Securitization I acquired the Storm Recovery Property from Cleco Power for a purchase price of $415.9 million. The Storm Recovery Property is classified as a securitized intangible asset on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets. This securitized intangible asset is being amortized ratably each period consistent with actual collections of the asset’s portion of the revenue requirement billed to Cleco Power’s customers. At the end of its life, this securitized intangible asset will have no residual value. Amortization is included in Depreciation and amortization on Cleco’s and Cleco Power’s Condensed Consolidated Statements of Income.

The following table presents the amortization expense recognized during the three and nine months ended September 30, 2024, and 2023:

	FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024		2023		2024		2023
Amortization expense
Storm Recovery Property intangible asset	$	4,176	$	5,127	$	10,523	$	10,679

The following table summarizes the balance of the securitized intangible asset subject to amortization included on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets:

(THOUSANDS)	AT SEPT. 30, 2024		AT DEC. 31, 2023
Storm Recovery Property intangible asset	$	415,946	$	415,946
Accumulated amortization	(27,811)		(17,288)
Net securitized intangible asset subject to amortization	$	388,135	$	398,658

Other Intangible Assets

As a result of the 2016 Merger, fair value adjustments were recorded on Cleco’s Condensed Consolidated Balance Sheet for the valuation of finite intangible assets relating to long-term wholesale power supply agreements. At the end of their lives, these power supply agreement intangible assets will have no residual value. At September 30, 2024, Cleco had one remaining power supply agreement intangible asset being amortized over the estimated life of its contract of 19 years, and the amortization is included in Electric operations on Cleco’s Condensed Consolidated Statements of Income.

The following table presents the amortization expense recognized during the three and nine months ended September 30, 2024, and 2023:

Cleco
	FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024		2023		2024		2023
Amortization expense
Power supply agreements	$	186	$	2,323	$	2,695	$	7,131

The following table summarizes the balance of other intangible assets subject to amortization included in Cleco’s Condensed Consolidated Balance Sheets:

Cleco
(THOUSANDS)	AT SEPT. 30, 2024		AT DEC. 31, 2023
Power supply agreements	$	14,238	$	85,104
Accumulated amortization	(6,300)		(74,471)
Net other intangible assets subject to amortization	$	7,938	$	10,633

Goodwill

On April 13, 2016, in connection with the completion of the 2016 Merger, Cleco recognized goodwill of $1.49 billion. Management assigned the recognized goodwill to the Cleco Power reporting unit. Goodwill is required to be tested for impairment at the reporting unit level on an annual basis or whenever events or circumstances indicate that the value of goodwill may be impaired.

In performing the impairment test, Cleco compares the fair value of the reporting unit to its carrying value including goodwill. If the carrying value including goodwill were to exceed the fair value of a reporting unit, an impairment loss would be recognized. A goodwill impairment loss is measured as the amount by which a reporting unit’s carrying value exceeds fair value, not to exceed the carrying amount of goodwill.

Cleco estimates the reporting unit’s fair value using a weighted combination of the income approach, which estimates fair value based on discounted cash flows, and the market approach, which estimates fair value based on market comparables within the utility and energy industries. The income approach cash flow valuations involve a number of estimates that require broad assumptions and significant judgment by management regarding future performance, including estimation of future cash flows related to capital expenditures, the weighted average cost of capital or discount rate and the assumed long-term growth rate approach, which incorporates management's assumptions regarding sustainable long-term growth. The market approach includes significant assumptions around the implied market multiples for certain peer companies. Management selects comparable peers based on each peer’s primary business mix, operations, and market capitalization compared to the applicable reporting unit and calculates implied market multiples based on available projected earnings guidance and peer company market values as of the test date.

Cleco performs an annual impairment test each August. In between annual tests, Cleco monitors its estimates and assumptions regarding estimated future cash flows, including the impact of movements in market indicators in future quarters, and will update the impairment analyses if a triggering event occurs. While Cleco believes the assumptions are reasonable, actual results may differ from projections. To the extent cash flows, long-term growth rates, U.S. Treasury rates, or other factors outside of Cleco’s control may impact Cleco’s projected results, Cleco may be required to reduce all or a portion of the carrying value of goodwill.

Cleco conducted its 2024 annual impairment test using an August 1, 2024, measurement date and determined that the estimated fair value of the Cleco Power reporting unit exceeded its carrying value, and no impairment existed.

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Note 17 — Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss are summarized in the following tables for Cleco and Cleco Power. All amounts are reported net of income taxes. Amounts in parentheses indicate debits.

Cleco
	FOR THE THREE MONTHS ENDED SEPT. 30, 2024		FOR THE NINE MONTHS ENDED SEPT. 30, 2024
(THOUSANDS)	POSTRETIREMENT BENEFIT NET LOSS
Balances, beginning of period	$	(5,555)	$	(5,112)
Amounts reclassified from AOCI
Amortization of postretirement benefit net gain	(300)		(743)
Balance, Sept. 30, 2024	$	(5,855)	$	(5,855)

	FOR THE THREE MONTHS ENDED SEPT. 30, 2023		FOR THE NINE MONTHS ENDED SEPT. 30, 2023
(THOUSANDS)	POSTRETIREMENT BENEFIT NET GAIN (LOSS)
Balances, beginning of period	$	(786)	$	59
Amounts reclassified from AOCI
Amortization of postretirement benefit net gain	(422)		(1,267)
Balance, Sept. 30, 2023	$	(1,208)	$	(1,208)

Cleco Power
	FOR THE THREE MONTHS ENDED SEPT. 30, 2024						FOR THE NINE MONTHS ENDED SEPT. 30, 2024
(THOUSANDS)	POSTRETIREMENT BENEFIT NET LOSS		NET LOSS ON CASH FLOW HEDGES		TOTAL AOCI		POSTRETIREMENT BENEFIT NET LOSS		NET LOSS ON CASH FLOW HEDGES		TOTAL AOCI
Balances, beginning of period	$	(5,204)	$	(4,670)	$	(9,874)	$	(5,555)	$	(4,796)	$	(10,351)
Amounts reclassified from AOCI
Amortization of postretirement benefit net loss	192		—		192		543		—		543
Reclassification of net loss to interest charges	—		63		63		—		189		189
Balances, Sept. 30, 2024	$	(5,012)	$	(4,607)	$	(9,619)	$	(5,012)	$	(4,607)	$	(9,619)

	FOR THE THREE MONTHS ENDED SEPT. 30, 2023						FOR THE NINE MONTHS ENDED SEPT. 30, 2023
(THOUSANDS)	POSTRETIREMENT BENEFIT NET LOSS		NET LOSS ON CASH FLOW HEDGES		TOTAL AOCI		POSTRETIREMENT BENEFIT NET LOSS		NET LOSS ON CASH FLOW HEDGES		TOTAL AOCI
Balances, beginning of period	$	(3,126)	$	(4,921)	$	(8,047)	$	(3,318)	$	(5,047)	$	(8,365)
Amounts reclassified from AOCI
Amortization of postretirement benefit net loss	97		—		97		289		—		289
Reclassification of net loss to interest charges	—		62		62		—		188		188
Balances, Sept. 30, 2023	$	(3,029)	$	(4,859)	$	(7,888)	$	(3,029)	$	(4,859)	$	(7,888)

Note 18 — Storm Restoration

During April and May 2024, Cleco Power’s service territory sustained damage in multiple severe weather events. Total storm restoration costs related to these events were approximately $14.2 million.

On September 11, 2024, Hurricane Francine made landfall in southeast Louisiana as a Category 2 storm, causing power outages for approximately 37,000 of Cleco Power’s electric customers. By September 14, 2024, power was restored to all affected customers. Cleco Power’s total storm restoration costs related to this weather event is estimated to be between $18.0 million and $20.0 million.

On October 8, 2024, Cleco Power made a filing with the LPSC seeking approval to withdraw storm restoration costs associated with the April 2024 storm, as well as costs associated with other storm events that occurred since December 2022, from the storm reserve. This request is currently under review by the LPSC. Management is assessing the accumulated restoration costs for Hurricane Francine as well as other storms that occurred in 2024 and anticipates filing an additional application seeking approval for withdrawal of these costs from the restricted storm reserve in 2025. For more information on the storm reserve, see Note 5 — “Regulatory Assets and Liabilities — Storm Reserves.”

Note 19 — Property, Plant, and Equipment

In April 2022, Cleco Power announced Project Diamond Vault, a proposed project with the goal of reducing up to 95% of carbon dioxide emissions from Madison Unit 3 through various possible carbon capture and sequestration technologies.

Development efforts using an amine-based carbon capture technology began in 2022, and a $9.0 million congressional appropriation was secured to help offset the costs associated with a related Feasibility study, a Pre-FEED study, and a FEED study. Both the related Feasibility study and the Pre-FEED study have been completed. The FEED study, which focused on the use of this amine-based carbon capture technology began in April 2024. Due to increases in the estimated investment required as well as the current economic and financing environment, Cleco Power’s management decided to discontinue the current FEED study and transition to evaluate other potential carbon capture and sequestration technologies or alternatives to decarbonize Madison Unit 3, including fuel switching technology. As of September 30, 2024, Cleco Power has incurred a total of $18.2 million related to Project Diamond Vault, of which Cleco Power has received $5.9 million from a congressional appropriation and expects to receive an additional $1.0 million to offset these costs. As of June 30, 2024, Cleco Power expensed $10.8 million of

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previously deferred project costs due to the uncertainty of recoverability. Given that the unique nature of these project costs did not relate to Cleco’s core operations, these costs were removed from Construction work in progress on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets and expensed to Other expense, net on Cleco’s and Cleco Power’s Condensed Consolidated Statements of Income. As of September 30, 2024, Cleco Power incurred an additional $0.5 million of project costs and expensed these costs to Other expense, net on Cleco’s and Cleco Power’s Condensed Consolidated Statements of Income.

Note 20 — Subsequent Event

In April 2018, Cleco Power entered into an agreement with Savage Inland Marine for continued use of 42 barges to transport solid fuel to Madison Unit 3 through March 2033. As

of September 30, 2024, there were 41 remaining barges. On October 15, 2024, pursuant to a provision for early termination in accordance with the terms of the agreement, Cleco Power notified Savage Inland Marine that Cleco Power will be terminating the lease agreement of the remaining 41 barges effective April 15, 2025. This termination is not expected to result in a material impact to Cleco Power’s results of operations, financial conditions, or cash flows. For more information on the agreement, see Part II, Item 8, “Financial Statements and Supplementary Data — Note 4 — Leases — Finance Lease” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cleco uses its website, https://www.cleco.com, as a routine channel for distribution of important information, including news releases and financial information. Cleco’s website is the primary source of publicly disclosed news about Cleco. Cleco is providing the address to its website solely for informational purposes and does not intend for the address to be an active link. The contents of the website are not incorporated into this Quarterly Report on Form 10-Q.

The following discussion and analysis should be read in combination with the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and Cleco’s and Cleco Power’s Condensed Consolidated Financial Statements contained in this Quarterly Report on Form 10-Q. The information included therein is essential to understanding the following discussion and analysis. Below is information concerning the consolidated results of operations of Cleco for the three and nine months ended September 30, 2024, and 2023.

OVERVIEW

Cleco is a regional energy company that conducts substantially all of its business operations through its principal operating business segment, Cleco Power. Cleco Power is a regulated electric utility company that owns eight generating units with a total rated capacity of 2,676 MW and serves approximately 295,000 customers in Louisiana through its retail business and supplies wholesale power in Louisiana.

Many factors affect Cleco’s primary business of generating, delivering, and selling electricity. These factors include the ability to increase energy sales while containing costs and the ability to successfully perform in MISO while subject to the related operating challenges and uncertainties. In addition, factors affecting Cleco Power include weather and the presence of a stable regulatory environment, which impacts the ROE and future rate cases, as well as the recovery of costs related to storms, growing energy demand, and volatile fuel prices; the ability to reliably deliver power to its jurisdictional customers; and the ability to comply with increasingly stringent regulatory and environmental standards. Significant events and major initiatives impacting Cleco and Cleco Power are discussed below.

FRP

On June 19, 2024, the LPSC approved Cleco Power’s new retail rate plan. Effective July 1, 2024, under the terms of the new FRP, Cleco Power is allowed to earn a target ROE of 9.7%, while providing the opportunity to earn up to 10.3%. Additionally, 60.0% of retail earnings between 10.3% and 10.9%, and all retail earnings over 10.9%, 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. For information on Cleco Power’s FRP, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 12 — Regulation and Rates — FRP.”

Cleco Cajun Divestiture

In March 2023, Cleco Holdings’ management, with the support of its Board of Managers, committed to a plan of action for the disposition of the Cleco Cajun Sale Group. As a result, Cleco Holdings’ management determined that the criteria under GAAP for the Cleco Cajun Sale Group to be classified as held for sale were met, and the sale represents a strategic shift that will have a major effect on Cleco’s future operations and financial results. Therefore, the results of operations and financial position of the Cleco Cajun Sale Group have been presented as discontinued operations since March 31, 2023. On June 1, 2024, the Cleco Cajun Divestiture closed. For more information, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 3 — Discontinued Operations.”

Dolet Hills

Cleco Power is seeking recovery of stranded and decommissioning costs associated with the retirement of the Dolet Hills Power Station as well as deferred fuel and other costs associated with the closure of the Oxbow mine. On February 2, 2024, the ALJ released a final recommendation indicating a partial disallowance of the recovery of fuel costs and a refund of related costs previously recovered from customers. Management estimated that a loss resulting from a potential disallowance was probable, and as a result, an estimated contingent loss of $58.7 million was accrued in provision for rate refund as of December 31, 2023. Cleco Power recorded an additional loss of $1.3 million as of March

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31, 2024, as a result of the approval of the uncontested settlement by the LPSC on April 19, 2024.

On April 19, 2024, the LPSC approved an uncontested settlement containing the following provisions:

•a $40.0 million reduction in the regulatory asset associated with the Dolet Hills Power Station,

•refunding $20.0 million per year to Cleco Power’s retail customers as a credit to their bills during the third quarters of 2024, 2025, and 2026 for a total of $60.0 million, and

•allowing securitization of $305.0 million. If the securitization is not complete by September 1, 2024, Cleco Power is allowed to accrue a carrying charge through the earlier of the completion of the securitization or January 31, 2025.

On May 17, 2024, Cleco Power filed an application with the LPSC authorizing a financing order for the securitization. For more information, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 14 — Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — LPSC Audits and Reviews — Dolet Hills Prudency Review.”

ESG

Cleco is accelerating its efforts to protect the environment, manage social relationships, govern responsibly, and ensure accountability. To protect the environment, Cleco is increasing its renewable and electrification initiatives. Cleco is also aiming to reduce GHG emissions in ways such as incorporating renewable energy resources into its generating fleet, as it replaces coal-fired generation units retired after serving their useful lives. Cleco aims to sustainably reduce its GHG emissions by approximately 60.0% by 2030, with aspirations of net zero emissions by 2050. To manage social relationships, Cleco plans to ensure that the electricity that it generates is affordable, reliable, and sustainable. Cleco also continues to support community investment opportunities across its service territory and has created a workforce culture that rewards inclusion, safety, and innovation. To govern responsibly, Cleco plans to continue operating according to policies and practices that support the governance framework. To ensure accountability, Cleco has created an ESG Steering Committee and appointed a Chief Sustainability Officer to oversee the continued implementation of ESG initiatives. Currently, management is unable to predict the impact of implementing these ESG initiatives on the Registrants. For more information on these ESG initiatives, see Part I, Item 1, “Business — Human Capital — Diversity and Inclusion,” “— Communities,” and “— Oversight and Governance” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2023. For more information about Cleco’s environmental initiatives, see “— Decarbonization Initiatives” and “— Renewable and Electrification Initiatives.”

On March 24, 2024, the SEC issued a rule requiring certain registrants to provide climate-related disclosures in their annual reports and registration statements. This rule is effective for Cleco’s Annual Report on Form 10-K for the year ending December 31, 2027. In April 2024, the SEC issued a voluntary stay on the implementation of the rule amidst pending litigation, which delayed the rule indefinitely pending completion of a judicial review. Management is currently assessing the impact this rule will have on the Registrants. Management is also unable to predict the outcome and timing

of the stay and pending litigation and the effect it may have on this rule.

Tax Reform

On August 16, 2022, the IRA of 2022 became law. The IRA of 2022 seeks to lower gasoline and electricity prices, increase energy security, and help consumers afford emissions-cutting technologies. In addition, the IRA of 2022 provides tax credits for clean electricity sources and energy storage, as well as creates programs to enable states and electric utilities to transition to clean power. There are several tax and renewables provisions in this legislation that could have a material effect on the results of operations, financial condition, or cash flows of the Registrants. These include provisions related to direct pay and credit transferability, enhanced carbon capture and sequestration credits, new technology-neutral clean energy investment credits, and new technology-neutral clean energy production credits. These credits are expected to help fund future renewable and electrification projects. Management continues to monitor any potential impact the IRA of 2022 could have on the Registrants. In addition, the IRA of 2022 could increase business growth in Cleco’s service territory.

Decarbonization Initiatives

In April 2022, Cleco Power announced Project Diamond Vault, a proposed project with the goal of reducing up to 95% of carbon dioxide emissions from Madison Unit 3 through various possible carbon capture and sequestration technologies.

Development efforts using an amine-based carbon capture technology began in 2022, and a $9.0 million congressional appropriation was secured to help offset the costs associated with a related Feasibility study, a Pre-FEED study, and a FEED study. Both the related Feasibility study and the Pre-FEED study have been completed. The FEED study, which focused on the use of this amine-based carbon capture technology began in April 2024. Due to increases in the estimated investment required as well as the current economic and financing environment, Cleco Power’s management decided to discontinue the current FEED study and transition to evaluate other potential carbon capture and sequestration technologies or alternatives to decarbonize Madison Unit 3, including fuel switching technology. As of September 30, 2024, Cleco Power has incurred a total of $18.2 million related to Project Diamond Vault, of which Cleco Power has received $5.9 million from a congressional appropriation and expects to receive an additional $1.0 million to offset these costs. At June 30, 2024, Cleco Power expensed $10.8 million of previously deferred project costs due to the uncertainty of recoverability. Given that the unique nature of these project costs did not relate to Cleco’s core operations, these costs were removed from Construction work in progress on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets and expensed to Other expense, net on Cleco’s and Cleco Power’s Condensed Consolidated Statements of Income. As of September 30, 2024, Cleco Power incurred an additional $0.5 million of project costs and recorded these costs in Other expense, net on Cleco’s and Cleco Power’s Condensed Consolidated Statements of Income.

Management is considering the most economically viable decarbonization strategy and remains committed to addressing Cleco Power’s carbon output of its solid fuel generating unit and ESG goals to sustainably reduce its GHG emissions.

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For more information on environmental matters that could affect Madison Unit 3 and Cleco Power’s decarbonization initiatives, see “— Results of Operations — Regulatory and Other Matters — Environmental Matters.”

Renewable and Electrification Initiatives

On July 22, 2022, Cleco Power entered into a long-term agreement to purchase, among other things, the output, capacity, and current and future environmental resource credits of a 240-MW solar electric generation facility to be constructed in DeSoto Parish, Louisiana and owned by a third party. In September 2024, the LPSC approved the agreement, including the recovery of $2.1 million of incurred development costs. The LPSC also approved Cleco Power’s recovery of future costs to construct, own, operate, and maintain the transmission line necessary to deliver the energy from the solar generation facility to Cleco Power’s transmission grid. Cleco Power expects to begin receiving output from this facility by 2027. For information about the regulatory asset associated with Cleco Power’s solar development costs, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 5 — Regulatory Assets and Liabilities — Solar Development Costs.”

Cleco Power is also pursuing electrification initiatives for its customers such as gas compression, e-trucking, green tariffs, residential heating programs, and increasing the supply of light duty electric vehicles and forklifts, among others.

Cleco Power is seeking available funds from the U.S. government for funding of these electrification initiatives. Cleco Power cannot predict the likelihood that any funding from the U.S. government ultimately will be approved.

DSMART Project

The DSMART project includes modernization of Cleco Power’s distribution system by replacing or upgrading distribution line equipment to utilize new and emerging technologies to facilitate automatic fault isolation, service restoration, and fault location. The project is expected to provide savings through a reduction in outage restoration time and improve operational efficiencies and time to locate faults. The project is also expected to improve safety and reliability of Cleco Power’s distribution assets by minimizing outage patrols and improving situational awareness in the distribution operations center. The total estimated project cost is $90.2 million. The project implementation will be completed in phases, and management expects the total project will be completed by the end of 2028. Cleco Power is currently in the second phase of the project. As of September 30, 2024, Cleco Power had spent $64.1 million on the project.

Grid Resiliency and Hardening

In 2023, the LPSC Staff proposed a final rule for LPSC consideration and adoption setting guidelines and requirements for utilities to develop grid resilience plans in an effort to enhance the state of Louisiana’s collective ability to withstand, adapt to, and recover from risks posed to the electric system. Management is unable to determine the outcome and timing of approval of this proposed rule.

Cleco Power is actively participating in programs to enhance its grid resilience against growing threats of extreme weather and climate change. Cleco Power has identified another possible course of action to improve the resilience of its electric system. This may include potential hardening projects aimed at reinforcing or replacing critical infrastructure

on Cleco Power’s transmission and distribution systems with materials that can better withstand extreme weather events, avoid or mitigate customer outages from such events, and facilitate faster restoration after such events. Cleco Power anticipates filing an application with the LPSC by the end of 2024 for approval of a proposed grid resilience plan.

Other

Cleco Power is working to secure load growth opportunities that include renewing existing franchises, pursuing new franchises, and adding new retail load opportunities with large industrial, commercial, and residential customers. The retail opportunities include sectors such as agriculture, oil and gas, chemicals, metals, national accounts, government, military, wood, paper, health care, information technology, transportation, clean and green fuels, data centers, and other manufacturing.

On March 31, 2024, a contract with a significant wholesale customer expired and was not renewed with Cleco Power. The absence of this agreement affected jurisdictional retail rates that were reviewed by the LPSC in conjunction with Cleco Power’s most recent rate case. The LPSC approved Cleco Power’s new rate plan effective July 1, 2024.

RESULTS OF OPERATIONS

Comparison of the Three Months Ended September 30, 2024, and 2023

Cleco
	FOR THE THREE MONTHS ENDED SEPT. 30,
					FAVORABLE/(UNFAVORABLE)
(THOUSANDS)	2024		2023		VARIANCE		CHANGE
Operating revenue, net	$	340,135	$	393,846	$	(53,711)	(13.6)	%
Operating expenses	224,166		299,961		75,795		25.3	%
Operating income	115,969		93,885		22,084		23.5	%
Interest income	6,366		1,283		5,083		396.2	%
Allowance for equity funds used during construction	977		1,617		(640)		(39.6)	%
Other income (expense), net	1,331		(2,404)		3,735		155.4	%
Interest charges	37,436		42,034		4,598		10.9	%
Federal and state income tax benefit	(6,643)		(246,494)		(239,851)		(97.3)	%
Income from continuing operations, net of income taxes	93,850		298,841		(204,991)		(68.6)	%
Income (loss) from discontinued operations, net of income taxes	742		(142,729)		143,471		100.5	%
Net income	$	94,592	$	156,112	$	(61,520)	(39.4)	%

The decrease in Cleco’s results of operations is primarily attributable to the following:

•changes in federal and state income taxes. For more information on Cleco’s effective income tax rates on continuing operations, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 10 — Income Taxes — Effective Tax Rates.”

•activity of its reportable segment, Cleco Power. For detailed discussions of those impacts, see “— Cleco Power.”

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These decreases were partially offset by:

•the effects of the presentation of the Cleco Cajun Sale Group as discontinued operations. For information on discontinued operations, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 3 — Discontinued Operations.”

Cleco Power
			FOR THE THREE MONTHS ENDED SEPT. 30,
					FAVORABLE/(UNFAVORABLE)
(THOUSANDS)	2024		2023			VARIANCE		CHANGE
Operating revenue
Base	$	226,990	$	218,566		$	8,424	3.9	%
Fuel cost and purchased power recovery	85,593		145,595			(60,002)		(41.2)	%
Electric customer credits	(1,046)		24			(1,070)		*
Other operations	24,433		31,984			(7,551)		(23.6)	%
Affiliate revenue	1,397		1,645			(248)		(15.1)	%
Operating revenue, net	337,367		397,814			(60,447)		(15.2)	%
Operating expenses
Recoverable fuel and purchased power	85,706		145,664			59,958		41.2	%
Non-recoverable fuel and purchased power	12,169		16,314			4,145		25.4	%
Other operations and maintenance	60,387		59,452			(935)		(1.6)	%
Depreciation and amortization	48,213		48,012			(201)		(0.4)	%
Taxes other than income taxes	14,590		15,818			1,228		7.8	%
Total operating expenses	221,065		285,260			64,195		22.5	%
Operating income	116,302		112,554			3,748		3.3	%
Interest income	1,065		1,215			(150)		(12.3)	%
Allowance for equity funds used during construction	977		1,617			(640)		(39.6)	%
Other expense, net	(262)		(103)			(159)		(154.4)	%
Interest charges	25,014		24,921			(93)		(0.4)	%
Federal and state income tax expense (benefit)	9,396		(552)			(9,948)		*
Net income	$	83,672	$	90,914		$	(7,242)	(8.0)	%
* Not meaningful

The following table shows the components of Cleco Power’s retail and wholesale customer sales related to base revenue:

	FOR THE THREE MONTHS ENDED SEPT. 30,
(MILLION kWh)	2024	2023	FAVORABLE/ (UNFAVORABLE)
Electric sales
Residential	1,169	1,329		(12.0)	%
Commercial	797	849		(6.1)	%
Industrial	598	582		2.7	%
Other retail	33	33		—	%
Total retail	2,597	2,793		(7.0)	%
Sales for resale	139	973		(85.7)	%
Total retail and wholesale customer sales	2,736	3,766		(27.3)	%

The following table shows the components of Cleco Power’s base revenue:

	FOR THE THREE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024		2023		FAVORABLE/ (UNFAVORABLE)
Electric sales
Residential	$	123,278	$	119,697		3.0	%
Commercial	66,220		55,697			18.9	%
Industrial	32,100		25,908			23.9	%
Other retail	3,758		2,983			26.0	%
Total retail	225,356		204,285			10.3	%
Sales for resale	1,634		14,281			(88.6)	%
Total base revenue	$	226,990	$	218,566		3.9	%

Cleco Power’s residential customers’ demand for electricity is affected largely by weather. Weather is generally measured in cooling degree-days and heating degree-days. A high number of cooling degree-days may indicate consumers will use more air conditioning, while a high number of heating degree-days may indicate consumers will use more heating. An increase in heating degree-days does not produce the same increase in revenue as an increase in cooling degree-days because alternative heating sources are more readily available, and winter energy is typically priced below the rate charged for energy used in the summer. Normal heating degree-days and cooling degree-days are calculated for a month by separately calculating the average actual heating and cooling degree-days for that month over a period of 30 years.

The following chart shows how cooling degree-days varied from normal conditions and from the prior period. Cleco Power uses weather data provided by the National Oceanic and Atmospheric Administration to determine degree-days.

	FOR THE THREE MONTHS ENDED SEPT. 30,
				2024 CHANGE
	2024	2023	NORMAL	PRIOR YEAR		NORMAL
Cooling degree-days	1,649	2,023	1,564	(18.5)	%	5.4	%

Base

Base revenue increased $8.4 million primarily due to $31.0 million of higher rates largely resulting from the implementation of Cleco Power’s new retail rate plan. Also contributing to the increase was $5.8 million of lower excess ADIT. These increases were partially offset by $17.3 million of lower usage from milder summer weather and $12.7 million of lower wholesale revenue primarily due to the expiration of a wholesale contract in March 2024.

For information on the effects of future energy sales on the results of operations, financial condition, or cash flows of Cleco Power, see Part I, Item 1A, “Risk Factors — Operational Risks — Future Electricity Sales” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Fuel Cost and Purchased Power Recovery/Recoverable Fuel and Purchased Power

Changes in fuel costs historically have not significantly affected Cleco Power’s net income. Generally, fuel and purchased power expenses are recovered through the LPSC-established FAC, which enables Cleco Power to pass on to its customers substantially all such expenses. Approximately 95%

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of Cleco Power’s total fuel cost during the third quarter of 2024 was regulated by the LPSC. Recovery of FAC costs is subject to periodic fuel audits by the LPSC which may result in a refund to customers. Generally, fuel and purchased power expenses are impacted by customer usage, the per unit cost of fuel used for electric generation, and the dispatch of Cleco Power’s generating facilities by MISO. Cleco Power’s incremental recoverable fuel and purchased power expenses for the three months ended September 30, 2024, were impacted primarily by lower natural gas costs as compared to the three months ended September 30, 2023. For more information on Cleco Power’s most current fuel audits, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 14 — Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — Litigation — LPSC Audits and Reviews — Fuel Audits.”

Other Operations Revenue

Other operations decreased $7.6 million primarily due to lower transmission revenue resulting from the expiration of a wholesale contract in March 2024.

Non-Recoverable Fuel and Purchased Power

Non-recoverable fuel and purchased power decreased $4.1 million primarily due to lower transmission costs resulting from the expiration of a wholesale contract in March 2024.

Income Taxes

For more information on Cleco Power’s effective income tax rates, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 10 — Income Taxes — Effective Tax Rates.”

Comparison of the Nine Months Ended September 30, 2024, and 2023

Cleco
	FOR THE NINE MONTHS ENDED SEPT. 30,
					FAVORABLE/(UNFAVORABLE)
(THOUSANDS)	2024		2023		VARIANCE		CHANGE
Operating revenue, net	$	869,162	$	999,222	$	(130,060)	(13.0)	%
Operating expenses	705,301		893,956		188,655		21.1	%
Operating income	163,861		105,266		58,595		55.7	%
Interest income	10,427		3,223		7,204		223.5	%
Allowance for equity funds used during construction	1,758		4,423		(2,665)		(60.3)	%
Equity income from investee before income tax	672		—		672		100.0	%
Other expense, net	(9,290)		(2,656)		(6,634)		(249.8)	%
Interest charges	119,120		122,289		3,169		2.6	%
Federal and state income tax benefit	(4,928)		(121,160)		(116,232)		(95.9)	%
Income from continuing operations, net of income taxes	53,236		109,127		(55,891)		(51.2)	%
Income (loss) from discontinued operations, net of income taxes	45,415		(9,707)		55,122		567.9	%
Net income	$	98,651	$	99,420	$	(769)	(0.8)	%

The decrease in Cleco’s results of operations is primarily attributable to the following:

•changes in federal and state income taxes. For more information on Cleco’s effective income tax rates on continuing operations, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 10 — Income Taxes — Effective Tax Rates.”

•activity of its reportable segment, Cleco Power. For detailed discussions of those impacts, see “— Cleco Power.”

These decreases were partially offset by:

•lower losses on gas-related derivative contracts at Cleco Cajun of $84.1 million which are included in continuing operations.

•the effects of the presentation of the Cleco Cajun Sale Group as discontinued operations. For information on discontinued operations, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 3 — Discontinued Operations.”

Cleco Power
			FOR THE NINE MONTHS ENDED SEPT. 30,
					FAVORABLE/(UNFAVORABLE)
(THOUSANDS)	2024		2023		VARIANCE		CHANGE
Operating revenue
Base	$	546,335	$	532,878	$	13,457	2.5	%
Fuel cost and purchased power recovery	249,398		390,807		(141,409)		(36.2)	%
Electric customer credits	(3,441)		(1,362)		(2,079)		(152.6)	%
Other operations	74,032		84,028		(9,996)		(11.9)	%
Affiliate revenue	11,788		4,967		6,821		137.3	%
Operating revenue, net	878,112		1,011,318		(133,206)		(13.2)	%
Operating expenses
Recoverable fuel and purchased power	249,549		390,843		141,294		36.2	%
Non-recoverable fuel and purchased power	25,781		33,829		8,048		23.8	%
Other operations and maintenance	176,817		170,827		(5,990)		(3.5)	%
Depreciation and amortization	188,970		142,467		(46,503)		(32.6)	%
Taxes other than income taxes	43,711		46,155		2,444		5.3	%
Total operating expenses	684,828		784,121		99,293		12.7	%
Operating income	193,284		227,197		(33,913)		(14.9)	%
Interest income	3,257		2,979		278		9.3	%
Allowance for equity funds used during construction	1,758		4,423		(2,665)		(60.3)	%
Equity income from investee before income tax	672		—		672		100.0	%
Other (expense) income, net	(11,039)		198		(11,237)		*
Interest charges	73,614		73,442		(172)		(0.2)	%
Federal and state income tax expense	10,508		4,185		(6,323)		(151.1)	%
Net income	$	103,810	$	157,170	$	(53,360)	(34.0)	%
* Not meaningful

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The following table shows the components of Cleco Power’s retail and wholesale customer sales related to base revenue:

	FOR THE NINE MONTHS ENDED SEPT. 30,
(Million kWh)	2024	2023	FAVORABLE/ (UNFAVORABLE)
Electric sales
Residential	2,908	3,003		(3.2)	%
Commercial	2,082	2,118		(1.7)	%
Industrial	1,680	1,661		1.1	%
Other retail	94	95		(1.1)	%
Total retail	6,764	6,877		(1.6)	%
Sales for resale	859	2,372		(63.8)	%
Total retail and wholesale customer sales	7,623	9,249		(17.6)	%

The following table shows the components of Cleco Power’s base revenue:

	FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024		2023		FAVORABLE/ (UNFAVORABLE)
Electric sales
Residential	$	272,255	$	259,806		4.8	%
Commercial	167,403		151,242			10.7	%
Industrial	78,223		68,620			14.0	%
Other retail	9,394		8,970			4.7	%
Total retail	527,275		488,638			7.9	%
Sales for resale	19,060		44,240			(56.9)	%
Total base revenue	$	546,335	$	532,878		2.5	%

The following chart shows how cooling and heating degree-days varied from normal conditions and from the prior period. Cleco Power uses weather data provided by the National Oceanic and Atmospheric Administration to determine degree-days.

			FOR THE NINE MONTHS ENDED SEPT. 30,
				2024 CHANGE
	2024	2023	NORMAL	PRIOR YEAR		NORMAL
Heating degree-days	789	542	889	45.6	%	(11.2)	%
Cooling degree-days	2,928	3,404	2,647	(14.0)	%	10.6	%

Base

Base revenue increased $13.5 million primarily due to $38.5 million of higher rates largely resulting from the implementation of Cleco Power’s new retail rate plan. Also contributing to the increase was $5.6 million of lower excess ADIT and $5.4 million of higher demand charges from new industrial customers in the third quarter of 2023. These increases were partially offset by $25.2 million of lower wholesale revenue largely due to the expiration of a wholesale contract in March 2024 and $11.1 million of lower usage from milder summer weather.

For information on the effects of future energy sales on the results of operations, financial condition, or cash flows of Cleco Power, see Part I, Item 1A, “Risk Factors — Operational Risks — Future Electricity Sales” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Fuel Cost and Purchased Power Recovery/Recoverable Fuel and Purchased Power

Changes in fuel costs historically have not significantly affected Cleco Power’s net income. Generally, fuel and purchased power expenses are recovered through the LPSC-established FAC, which enables Cleco Power to pass on to its customers substantially all such expenses. Approximately 86% of Cleco Power’s total fuel cost during the first nine months of 2024 was regulated by the LPSC. Recovery of FAC costs is subject to periodic fuel audits by the LPSC which may result in a refund to customers. Generally, fuel and purchased power expenses are impacted by customer usage, the per unit cost of fuel used for electric generation, and the dispatch of Cleco Power’s generating facilities by MISO. Cleco Power’s incremental recoverable fuel and purchased power expenses for the nine months ended September 30, 2024, were impacted primarily by lower natural gas costs as compared to the nine months ended September 30, 2023. For more information on Cleco Power’s most current fuel audits, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 14 — Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — Litigation — LPSC Audits and Reviews — Fuel Audits.”

Other Operations Revenue

Other operations revenue decreased $10.0 million primarily due to lower transmission revenue resulting from the expiration of a wholesale contract in March 2024.

Affiliate Revenue

Affiliate revenue increased $6.8 million primarily due to higher internal software services provided in accordance with service agreements.

Non-Recoverable Fuel and Purchased Power

Non-recoverable fuel and purchased power decreased $8.0 million primarily due to lower transmission costs resulting from the expiration of a wholesale contract in March 2024.

Other Operations and Maintenance Expense

Other operations and maintenance expense increased $6.0 million primarily due to $4.5 million of higher employee-related expenses largely resulting from the transfer of employees from Support Group and Cleco Cajun to Cleco Power and $1.9 million of higher outside service costs primarily related to information technology support and legal fees. These increases were partially offset by $0.9 million of lower maintenance costs.

Depreciation and Amortization

Depreciation and amortization increased $46.5 million primarily due to $40.0 million for a reduction in the regulatory asset associated with the Dolet Hills Power Station as a result of the settlement of the Dolet Hills prudency review and $5.3 million for changes in estimated useful lives of internal software. For more information on the reduction in the regulatory asset associated with the Dolet Hills Power Station and the settlement of the Dolet Hills prudency review, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 5 — Regulatory Assets and Liabilities” — “Deferred Lignite and Mine Closure Costs and Dolet Hills Power Station Closure Costs” and — “Note 14 — Litigation, Other Commitments and Contingencies, and Disclosures

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about Guarantees — Litigation — LPSC Audits and Reviews — Dolet Hills Prudency Review.”

Other Expense, Net

Other expense, net increased $11.2 million primarily due to expenses relating to Project Diamond Vault. For more information, see “— Overview — Decarbonization Initiatives.”

Income Taxes

For more information on Cleco Power’s effective income tax rates, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 10 — Income Taxes — Effective Tax Rates.”

Non-GAAP Measure

The financial results in the following table are presented on an accrual basis. EBITDA is a key non-GAAP financial measure used by the CEO to assess the operating performance of Cleco’s segment; however, it is not indicative of future performance. Management evaluates the performance of Cleco’s segment and allocates resources to it based on segment profit and the requirements to implement strategic initiatives and projects to meet current business objectives. EBITDA is defined as net income adjusted for interest, income taxes, depreciation, and amortization.

Cleco’s segment structure and its allocation of corporate expenses were updated to reflect how management makes financial decisions and allocates resources.

The following table sets forth a reconciliation of net income, the nearest comparable GAAP financial performance measure, to EBITDA for the Cleco Power reportable segment for the three and nine months ended September 30, 2024, and 2023:

	FOR THE THREE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024		2023
Net income	$	83,672	$	90,914
Add: Depreciation and amortization	48,213		48,012
Less: Interest income	1,065		1,215
Add: Interest charges	25,014		24,921
Add: Federal and state income tax expense (benefit)	9,396		(552)
EBITDA	$	165,230	$	162,080

	FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024		2023
Net income	$	103,810	$	157,170
Add: Depreciation and amortization	188,970		142,467
Less: Interest income	3,257		2,979
Add: Interest charges	73,614		73,442
Add: Federal and state income tax expense	10,508		4,185
EBITDA	$	373,645	$	374,285

FINANCIAL CONDITION

Liquidity and Capital Resources

General Considerations and Credit-Related Risks

Credit Ratings and Counterparties

Financing for operational needs and capital expenditure requirements not satisfied by operating cash flows depends

upon the cost and availability of external funds through both short- and long-term financing. The inability to raise capital on favorable terms could negatively affect Cleco’s ability to maintain or expand its businesses. Access to funds is dependent upon factors such as general economic and capital market conditions, regulatory authorizations and policies, Cleco Holdings’ and Cleco Power’s credit ratings, cash flows from routine operations, and credit ratings of project counterparties. After assessing the current operating performance, liquidity, and credit ratings of Cleco Holdings and Cleco Power, management believes that Cleco will have access to the capital markets at prevailing market rates for companies with comparable credit ratings. The following table presents the credit ratings of Cleco Holdings and Cleco Power at September 30, 2024:

	SENIOR UNSECURED DEBT			CORPORATE/LONG-TERM ISSUER
	S&P	MOODY’S	FITCH	S&P	MOODY’S	FITCH
Cleco Holdings	BBB-	Baa3	BBB-	BBB	Baa3	BBB-
Cleco Power	A-	A3	BBB+	A-	A3	BBB

Credit ratings are not recommendations to buy, sell, or hold securities, and may be subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating.

On June 7, 2024, and following the closing of the Cleco Cajun Divestiture, S&P upgraded its ratings for Cleco Holdings from BBB- to BBB at the issuer level and Cleco Power from BBB+ to A- at both the issuer and issue level. S&P revised its ratings due to the expected improvement in business risk from having a fully regulated utility business after the closing of the Cleco Cajun Divestiture.

Cleco Holdings and Cleco Power pay fees and interest under their bank credit agreements based on the highest rating held. If Cleco Holdings’ or Cleco Power’s credit ratings were to be downgraded, Cleco Holdings or Cleco Power, respectively, could be required to pay additional fees and incur higher interest rates for borrowings under their respective revolving credit facilities.

Cleco Holdings and Cleco Power may be required to provide credit support with respect to bilateral transactions and contracts that they have entered into or may enter into in the future. The amount of credit support required may change based on margining formulas, changes in credit agency ratings, or liquidity ratios.

Cleco Power participates in the MISO market. MISO requires participants to provide credit support which may increase or decrease due to the timing of the settlement schedules and MISO margining formulas. For more information about MISO, see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Regulatory and Other Matters — Transmission Rates” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2023. For more information about credit support see Item 1, “Financial Statements and Supplementary Data — Notes to the Unaudited Condensed Consolidated Financial Statements — Note 14 — Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees.”

Global and U.S. Economic Environment

Global and domestic economic conditions may have an impact on Cleco’s business and financial condition. Access to capital markets is a significant source of funding for both short- and long-term capital requirements not satisfied by operating cash

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flows. During periods of capital market volatility, the availability of capital could be limited and the costs of capital may increase for many companies. Although the Registrants have not experienced restrictions in the financial markets, their ability to access the capital markets may be restricted at a time when the Registrants would like, or need, to do so. Any restrictions could have a material impact on the Registrants’ ability to fund capital expenditures or debt service, or on their flexibility to react to changing economic and business conditions. Credit constraints could have a material negative impact on the Registrants’ lenders or customers, causing them to fail to meet their obligations to the Registrants or to delay payment of such obligations. The higher interest rate environment the Registrants have been exposed to has negatively affected interest expense on variable rate debt and positively affected interest income for the Registrants’ short-term investments.

In recent years, inflationary pressures have increased substantially. Under established regulatory practice, historical costs have traditionally formed the basis for recovery from customers. As a result, Cleco Power’s future cash flows designed to provide recovery of historical plant costs may not be adequate to replace property, plant, and equipment in future years. For information on the impacts of inflation and market price volatility of natural gas on credit loss reserves related to customer accounts receivable, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 1 — Summary of Significant Accounting Policies — Reserves for Credit Losses.”

TCJA

At June 30, 2024, all amounts for the TCJA unprotected excess ADIT had been returned to Cleco Power’s retail customers. Cleco Power’s retail customers will continue receiving bill credits for the TCJA protected excess ADIT until the full amount has been returned. For more information on the regulatory impact of the TCJA, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 12 — Regulation and Rates — TCJA.”

Fair Value Measurements

Various accounting pronouncements require certain assets and liabilities to be measured at their fair values. For more information, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 6 — Fair Value Accounting Instruments.”

Cash Generation and Cash Requirements

Restricted Cash and Cash Equivalents

For information on Cleco’s and Cleco Power’s restricted cash and cash equivalents, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 1 — Summary of Significant Accounting Policies — Restricted Cash and Cash Equivalents.”

Working Capital and Debt

Cleco

At September 30, 2024, Cleco had no outstanding borrowings under its aggregate $475.0 million revolving credit facilities. At December 31, 2023, Cleco had $110.0 million of short-term debt for outstanding borrowings under its revolving credit

facilities. For more information on Cleco’s revolving credit facilities, see “— Credit Facilities.”

At September 30, 2024, Cleco’s long-term debt and finance leases outstanding, excluding fair value adjustments resulting from the 2016 merger, was $3.06 billion, of which $240.9 million was due within one year. The long-term debt due within one year at September 30, 2024, primarily represents Cleco Power’s $125.0 million bank term loan due in May 2025; $50.0 million of Cleco Power’s senior notes due in December 2024; $50.0 million of Cleco Power’s GO-Zone bonds with a mandatory tender in April 2025; and $15.1 million of Cleco Securitization I storm recovery bond principal payments scheduled to be paid in 2025.

In February 2019 in connection with the approval of the Cleco Cajun Acquisition, Cleco made commitments to the LPSC that included the repayment of $400.0 million of Cleco Holdings’ debt by December 31, 2024. On April 26, 2024, Cleco Holdings paid the remaining $66.7 million satisfying this LPSC commitment. In addition, on June 4, 2024, Cleco Holdings redeemed its $165.0 million floating rate senior notes due on May 1, 2025.

At September 30, 2024, cash and cash equivalents available of $248.9 million combined with $475.0 million of available revolving credit facility capacity ($175.0 million from Cleco Holdings and $300.0 million from Cleco Power) provided total liquidity of $723.9 million.

At September 30, 2024, and December 31, 2023, Cleco had a working capital surplus of $417.1 million and a deficit of $17.5 million, respectively. The $434.6 million increase in working capital is primarily due to:

•a $255.2 million increase in regulatory assets primarily due to the reclassification of the Dolet Hills and mine-related regulatory assets to short-term as a result of Cleco Power expecting the securitization of those amounts to be completed by the end of March 2025,

•a $126.3 million increase in cash and cash equivalents,

•a $110.0 million decrease in short-term debt due to payments on Cleco Holdings’ revolving credit facility,

•a $38.4 million decrease in provision for rate refund primarily due to the reclassification of the long-term portion of refunds to be made to Cleco Power’s retail customers and the third quarter 2024 refund issued to Cleco Power’s retail customers resulting from the settlement of the Dolet Hills prudency review. For more information about the settlement, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 14 — Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — LPSC Audits and Reviews — Dolet Hills Prudency Review,”

•a $19.4 million increase in fuel inventory primarily due to higher coal volume with higher transportation costs driven by lower usage from a decrease in market gas prices, partially offset by lower petroleum coke volume at a lower price per ton,

•a $15.9 million decrease in long-term debt and finance leases due within one year primarily due to the repayment of Cleco Holdings’ $66.7 million term loan, partially offset by the reclassification of Cleco Power’s $50.0 million GO-Zone bonds with a mandatory tender in April 2025,

•a $15.0 million decrease in energy risk management liabilities primarily due to lower mark-to-market losses on gas related derivative contracts as a result of the liquidation of

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Cleco Cajun’s natural gas derivative contracts following the Cleco Cajun Divestiture,

•a $14.7 million increase in materials and supplies inventory primarily due to higher purchases of transmission and distribution inventory in order to support future needs and mitigate future supply chain uncertainty,

•a $14.2 million decrease in regulatory liabilities primarily due to the amortization of the TCJA regulatory liability,

•a $13.1 million decrease in postretirement benefit obligations primarily due to pension plan contributions made in 2024,

•a $10.3 million increase in affiliate accounts receivable due to estimated income taxes paid by Cleco Holdings on behalf of Cleco Group, and

•a $9.9 million increase in other current assets primarily due to the accrual of short-term and long-term incentive compensation.

These increases in working capital were partially offset by:

•a $120.5 million decrease in the net assets and liabilities held for sale as a result of the closing of the Cleco Cajun Divestiture. For more information about assets and liabilities held for sale, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements —Note 3 — Discontinued Operations”,

•a $64.4 million increase in taxes payable primarily due to higher provision for federal income taxes and accruals for property taxes,

•a $17.6 million increase in interest accrued primarily due to the timing of interest payments on long-term debt, and

•a $9.3 million increase in affiliate accounts payable primarily due to an increase in the amounts payable to Cleco Group for income taxes.

Cleco Holdings

At September 30, 2024, Cleco Holdings had no short-term debt outstanding under its $175.0 million revolving credit facility. At December 31, 2023, Cleco Holdings had $110.0 million of short-term debt for outstanding borrowings under its $175.0 million revolving credit facility. For more information on Cleco Holdings’ revolving credit facility, see “— Credit Facilities.”

On April 26, 2024, Cleco Holdings repaid its $66.7 million term loan that was due on May 21, 2024. In addition, on June 4, 2024, Cleco Holdings redeemed its $165.0 million floating rate senior notes due on May 1, 2025.

On September 20, 2024, Cleco Holdings’ individual $10.0 million uncommitted line of credit expired. Previously, this line of credit was being renewed on an annual basis. For more information on Cleco’s uncommitted line of credit, see “— Credit Facilities.”

At September 30, 2024, Cleco Holdings’ long-term debt outstanding, excluding fair value adjustments, was $1.18 billion, of which none was due within one year.

At September 30, 2024, cash and cash equivalents available at Cleco Holdings of $185.3 million combined with $175.0 million of available revolving credit facility capacity provided a total liquidity of $360.3 million.

Cleco Power

At September 30, 2024, and December 31, 2023, Cleco Power had no outstanding borrowings of short-term debt under its $300.0 million revolving credit facility. For more information on Cleco Power’s revolving credit facility, see “— Credit Facilities.”

On September 20, 2024, Cleco Power’s individual $10.0 million uncommitted line of credit expired. Previously, this line of credit was being renewed on an annual basis. For more information on Cleco’s uncommitted line of credit, see “— Credit Facilities.”

At September 30, 2024, Cleco Power’s long-term debt and finance leases outstanding was $1.87 billion, of which $240.9 million was due within one year. The long-term debt due within one year at September 30, 2024, primarily represents the $125.0 million bank term loan due in May 2025; $50.0 million of GO-Zone bonds with a mandatory tender in April 2025; $50.0 million of senior notes due in December 2024; and $15.1 million of Cleco Securitization I storm recovery bond principal payments scheduled to be paid in 2025.

On May 17, 2024, Cleco Power entered into a $125.0 million bank term loan. This term loan replaces Cleco Power’s existing term loan credit agreement. The term loan has an interest rate of SOFR plus 1.35% or ABR plus 0.25% and a maturity date of May 17, 2025.

At September 30, 2024, cash and cash equivalents available of $49.6 million combined with $300.0 million of available revolving credit facility capacity provided a total liquidity of $349.6 million.

At September 30, 2024, and December 31, 2023, Cleco Power had a working capital surplus of $197.6 million and a working capital deficit of $66.2 million, respectively. The $263.8 million increase in working capital is primarily due to:

•a $255.2 million increase in regulatory assets primarily due to the reclassification of the Dolet Hills and mine-related regulatory assets to short-term as a result of Cleco Power expecting the securitization of those amounts to be completed by the end of March 2025,

•a $38.4 million decrease in provision for rate refund primarily due to the reclassification of the long-term portion of refunds to be made to Cleco Power’s retail customers and the third quarter 2024 refund issued to Cleco Power’s retail customers resulting from the settlement of the Dolet Hills prudency review. For more information about the settlement, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 14 — Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — LPSC Audits and Reviews — Dolet Hills Prudency Review,”

•a $19.4 million increase in fuel inventory primarily due to higher coal volume with higher transportation costs driven by lower usage from a decrease in market gas prices, partially offset by lower petroleum coke volume at a lower price per ton,

•a $14.7 million increase in materials and supplies inventory primarily due to higher purchases of transmission and distribution inventory in order to support future needs and mitigate future supply chain uncertainty,

•a $14.3 million decrease in energy risk management liabilities primarily due to lower mark-to-market losses on gas-related derivative contracts,

•a $14.2 million decrease in regulatory liabilities primarily due to the amortization of the TCJA regulatory liability, and

•a $13.1 million decrease in postretirement benefit obligations primarily due to pension plan contributions made in 2024.

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These increases in working capital were partially offset by:

•a $50.6 million increase of long-term debt and finance leases due within one year primarily due to the reclassification of $50.0 million GO-Zone bonds with a mandatory tender in April 2025,

•a $24.6 million increase in taxes payable primarily due to higher provision for federal income taxes and accruals for property taxes,

•a $16.4 million increase in affiliate accounts payable primarily due to an increase in the amounts payable to Cleco Holdings for income taxes,

•a $13.4 million increase in accounts payable primarily due to an increase in storm accruals related to the restoration efforts for Hurricane Francine, partially offset by lower accruals for fuel, and

•a $12.0 million increase in interest accrued primarily due to the timing of interest payments on long-term debt.

Credit Facilities

At September 30, 2024, Cleco had two separate revolving credit facilities, one for Cleco Holdings in the amount of $175.0 million and one for Cleco Power in the amount of $300.0 million. There were no outstanding borrowings on the revolving credit facilities. These revolving credit facilities were entered into on May 17, 2024, and replaced the existing agreements. The total of all revolving credit facilities maintains a maximum aggregate capacity of $475.0 million.

Cleco Holdings and Cleco Power each elected not to renew its individual $10.0 million uncommitted lines of credit that were used to support working capital needs. The individual uncommitted lines of credit allowed up to $10.0 million in short-term borrowings, but no more than $10.0 million in the aggregate. These lines of credit were previously being renewed on an annual basis; however, on September 20, 2024, these lines of credit expired.

Cleco Holdings’ revolving credit facility provides funding for working capital and other financing needs. The revolving credit facility includes restrictive financial covenants and matures in May 2029. Under covenants contained in Cleco Holdings’ revolving credit facility, Cleco is required to maintain total indebtedness, not including securitization indebtedness, less than or equal to 65% of total capitalization. At September 30, 2024, Cleco Holdings was in compliance with the covenants of its revolving credit facility. At September 30, 2024, the borrowing costs under Cleco Holdings’ revolving credit agreement are currently equal to SOFR plus 1.725% or ABR plus 0.625%, plus commitment fees of 0.275% on the unused portion of the facility. If Cleco Holdings’ credit ratings were to be downgraded one level by the credit rating agencies, Cleco Holdings may be required to pay incremental interest and commitment fees of 0.125% and 0.05%, respectively, under the pricing levels of its revolving credit facility.

Cleco Power’s revolving credit facility provides funding for working capital and other financing needs. The revolving credit facility includes restrictive financial covenants and matures in May 2029. Under covenants contained in Cleco Power’s revolving credit facility, Cleco Power is required to maintain total indebtedness less than or equal to 65% of total capitalization. At September 30, 2024, Cleco Power was in compliance with the covenants of its revolving credit facility. At September 30, 2024, the borrowing costs under Cleco Power’s revolving credit agreement are currently equal to SOFR plus

1.35% or ABR plus 0.25%, plus commitment fees of 0.15% on the unused portion of the facility. If Cleco Power’s credit ratings were to be downgraded one level by the credit rating agencies, Cleco Power may be required to pay incremental interest and commitment fees of 0.125% and 0.025%, respectively, under the pricing levels of its revolving credit facility.

If Cleco Holdings or Cleco Power were to not comply with certain covenants in their respective revolving credit facilities or other debt agreements, they would be unable to borrow additional funds under the facilities, and the lenders under the respective credit facility or debt agreement could accelerate all principal and interest outstanding. Further, if Cleco Power were to default under its revolving credit facility or other debt agreements, Cleco Holdings would be considered in default under its revolving credit facility.

Debt and Distribution Limitations

The 2016 Merger Commitments include provisions for limiting the amount of distributions that can be made from Cleco Holdings to Cleco Group, depending on Cleco Holdings’ debt to EBITDA ratio and its corporate credit ratings. Cleco Holdings may not make any distribution unless, after giving effect to such distribution, Cleco Holdings’ debt to EBITDA ratio is equal to or less than 6.50 to 1.00 and Cleco Holdings’ corporate credit rating is investment grade with one or more of the three credit rating agencies. At September 30, 2024, Cleco Holdings was in compliance with the provisions of the 2016 Merger Commitments that would restrict the amount of distributions available. Additionally, in accordance with the 2016 Merger Commitments, Cleco Power is subject to certain provisions limiting the amount of distributions that may be paid to Cleco Holdings, depending on Cleco Power’s common equity ratio and its corporate credit ratings. Cleco Power may not make any distribution unless, after giving effect to such distribution, Cleco Power’s common equity ratio would not be less than 48% and Cleco Power’s corporate credit rating is investment grade with two of the three credit rating agencies. At September 30, 2024, Cleco Power was in compliance with the provisions of the 2016 Merger Commitments that would restrict the amount of distributions available. The 2016 Merger Commitments also prohibit Cleco from incurring additional long-term debt, excluding non-recourse debt, unless certain financial ratios are achieved. For more information on the 2016 Merger Commitments, see Part I, Item 1A, “Risk Factors — Structural Risks — Holding Company” and “— Regulatory Risks — Regulatory Compliance” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Cleco - Cash Flows

Cleco’s operating, investing, and financing cash flows include both continuing and discontinued operations. For information on the cash flows from discontinued operations, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 3 — Discontinued Operations.”

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Cleco’s net cash activities are as follows for the nine months ended September 30, 2024, and 2023:

	FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024		2023		VARIANCE
Net cash provided by operating activities	$	265,136	$	321,173	$	(56,037)
Net cash provided by (used in) investing activities	$	293,291	$	(163,682)	$	456,973
Net cash (used in) provided by financing activities	$	(439,911)	$	(44,690)	$	(395,221)

Cleco - Net Operating Cash Flows

Net cash provided by operating activities decreased $56.1 million, which includes net cash used related to discontinued operations of $3.7 million, primarily due to:

•$38.8 million of lower recoveries of fuel and purchased power costs primarily due to the timing of collections at a lower fuel rate at Cleco Power,

•$25.8 million of higher minimum required contributions made for the pension plan at Cleco Power,

•$14.6 million of higher payments for non-capital severe weather events,

•the absence of $6.5 million of cash collateral remitted to counterparties for Cleco Cajun’s natural gas derivatives, and

•$4.7 million of higher payments for fuel inventory primarily due to lower volume of purchases for petroleum coke at Cleco Power.

These decreases were partially offset by:

•$17.5 million of lower payments for fuel inventory primarily due to lower volume of purchases of coal at Cleco Cajun,

•$9.6 million of lower interest paid on debt, and

•$8.6 million of lower prepayments largely due to the timing of property insurance payments and lower deposits on prepaid inventory.

Cleco - Net Investing Cash Flows

Net cash provided by investing activities increased $456.9 million, which includes net cash used by discontinued operations of $0.4 million, primarily due to $463.8 million of net proceeds from the Cleco Cajun Divestiture.

Cleco - Net Financing Cash Flows

Net cash used in financing activities increased $395.2 million primarily due to:

•$236.6 million of higher repayments on long-term debt,

•$85.0 million of lower draws on revolving credit facilities,

•$52.5 million of higher distributions to Cleco Group, and

•$21.0 million of higher payments on revolving credit facilities.

Cleco Power - Cash Flows

Cleco Power’s net cash activities are as follows for the nine months ended September 30, 2024, and 2023:

	FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2024		2023		VARIANCE
Net cash provided by operating activities	$	248,855	$	341,933	$	(93,078)
Net cash used in investing activities	$	(166,493)	$	(157,976)	$	(8,517)
Net cash used in financing activities	$	(85,706)	$	(105,289)	$	19,583

Cleco Power - Net Operating Cash Flows

Net cash provided by operating activities decreased $93.1 million primarily due to:

•$38.8 million of lower recoveries of fuel and purchased power costs primarily due to the timing of collections at a lower fuel rate,

•$25.8 million of higher minimum required contributions made for the pension plan,

•$14.6 million of higher payments for non-capital severe weather events,

•$11.0 million of higher payments for natural gas derivatives,

•$5.4 million of lower collections from joint owners primarily due to the timing of receipts for their portions of generating station expenses, and

•$4.7 million of higher payments for fuel inventory primarily due to lower volume of purchases for petroleum coke.

These decreases were partially offset by:

•$5.8 million of lower payments for affiliate settlements and

•$3.8 million of lower payments for purchased power from MISO.

Cleco Power - Net Investing Cash Flows

Net cash used in investing activities increased $8.5 million, primarily due to higher additions to property, plant, and equipment, net of AFUDC.

Cleco Power - Net Financing Cash Flows

Net cash used in financing activities decreased $19.6 million primarily due to $70.0 million of lower payments on revolving credit facilities.

This decrease was partially offset by:

•$25.0 million of lower draws on revolving credit facilities,

•$20.0 million of higher distributions to Cleco Holdings, and

•$4.9 million of higher repayments on long-term debt.

Contractual Obligations

Cleco, in the normal course of business activities, enters into a variety of contractual obligations. Some of these result in direct obligations that are reflected in Cleco’s Condensed Consolidated Balance Sheets while others are commitments, some firm and some based on uncertainties, that are not reflected in the Condensed Consolidated Financial Statements. For more information regarding Cleco’s Contractual Obligations, see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Contractual Obligations” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Off-Balance Sheet Commitments and Guarantees

Cleco Holdings and Cleco Power have entered into various off-balance sheet commitments, in the form of guarantees and standby letters of credit in order to facilitate their activities and the activities of Cleco Holdings’ subsidiaries and equity investees (affiliates). Cleco Holdings and Cleco Power have also agreed to contractual terms that require them to pay third parties if certain triggering events occur. These contractual terms generally are defined as guarantees. For more information about off-balance sheet commitments and

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guarantees, see Item 1, “Note 14 — Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees.”

Cybersecurity

For information related to Cleco’s cybersecurity, see Part I, Item 1C, “Cybersecurity,” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Regulatory and Other Matters

Environmental Matters

Cleco is subject to extensive environmental regulation by federal, state, and local authorities and is required to comply with numerous environmental laws and regulations, and to obtain and comply with numerous governmental permits in operating its facilities. In addition, existing environmental laws, regulations, and permits could be revised or reinterpreted; new laws and regulations could be adopted or become applicable to Cleco or its facilities; and future changes in environmental laws and regulations could occur, including potential regulatory and enforcement developments related to air emissions, water and/or waste management. Cleco may incur significant additional costs to comply with these revisions, reinterpretations, and requirements. Cleco Power could then seek recovery of additional environmental compliance costs as riders through the LPSC’s EAC or FRP. If Cleco fails to comply with these revisions, reinterpretations, and requirements, it could be subject to civil or criminal liabilities and fines.

On May 8, 2024, the EPA published a final rule in the Federal Register that would regulate CCR Management Units (MUs), which includes non-containerized accumulations of CCR on the land at facilities otherwise subject to federal CCR regulations. For more information, see Note 14 — “Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — Other Commitments.”

On May 9, 2024, the EPA issued a final rule under the Section 111 GHG Rule. The rule rescinds the ACE regulation, and sets carbon dioxide standards for existing coal-fired units, existing natural-gas fired boilers, and new combustion turbines. For the existing units, the state will be required to submit an implementation plan to the EPA by May 11, 2026. The final rule requires significant reductions in CO2 emissions for existing EGUs. Cleco is currently working to complete its review of the final regulation. Cleco’s compliance with this final rule could have a material impact on the results of operations, financial condition, or cash flows of the Registrants.

Also, on May 9, 2024, the EPA issued a final rule under the Clean Water Act. The regulation continues to allow facilities to comply with the bottom ash transfer water limit of zero discharge by committing to cease coal burning at the respective EGU by December 31, 2028. In addition, the final regulation also places discharge limits on landfill leachate and on the legacy wastewater in retiring impoundments. Until a review of the final regulation has been completed, Cleco is unable to predict if this will have a material impact on the results of operations, financial condition, or cash flow of the Registrants.

Cleco is currently evaluating possible impacts various proposed environmental rules may have on its generating units. For a discussion of other Cleco environmental matters, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 14 — Litigation, Other

Commitments and Contingencies, and Disclosures about Guarantees — Litigation — LPSC Audits and Reviews — Environmental Audit” in this Quarterly Report on Form 10-Q and Part I, Item 1, “Business — Environmental Matters” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Retail and Wholesale Rates

For information on Cleco Power’s base rates, fuel rates, and environmental rates, see Part I, Item 1, “Regulatory Matters, Industry Developments, and Franchises — Rates” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Effective July 1, 2024, Cleco Power’s annual retail earnings are subject to an FRP that was approved by the LPSC on June 19, 2024. For information on Cleco Power’s FRP, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 12 — Regulation and Rates — FRP.”

For information on Cleco Power’s FAC and the most recent fuel audit, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 14 — Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — Litigation — LPSC Audits and Reviews — Fuel Audits.”

For information on Cleco Power’s EAC, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 14 — Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — Litigation — LPSC Audits and Reviews — Environmental Audit.”

For information on Cleco Power’s wholesale rates, see Part I, Item 1, “Regulatory Matters, Industry Developments, and Franchises — Rates” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Transmission Rates

For information about the risks associated with Cleco’s participation in MISO, see Part I, Item 1A, “Risk Factors — Regulatory Risks — MISO” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

For information on transmission rates of Cleco, see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Regulatory and Other Matters — Transmission Rates” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Market Structure

Wholesale Electric Markets

RTO

For information on Cleco’s operations within MISO and for information on regulatory aspects of wholesale electric markets affecting Cleco, see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Regulatory and Other Matters — Market Structure — Wholesale Electric Markets” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

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Electric Reliability Organization (ERO)

NERC, subject to oversight by FERC, is the ERO responsible for developing and enforcing mandatory reliability standards for users, owners, and operators of the bulk power system. NERC, as the ERO, delegates authority to the SERC Reliability Corporation.

A revised NERC reliability standard relating to the winterization of generation assets became effective on April 1, 2023. This revised standard requires the implementation of cold weather preparedness plans that include geographical based freeze protection measures, annual inspections, unit design temperature basis, and employee training. A new winterization standard requiring additional freeze protection measures has been approved by FERC with an effective date of October 1, 2024, and a targeted implementation period of 60 months from the effective date. Management does not expect this new standard to have any impact on Cleco’s results of operations, financial condition, or cash flows.

A NERC Operations and Planning Reliability Standards audit is conducted at least every three years for Cleco Power. The next Operations and Planning Reliability Standards audit for Cleco Power is scheduled to begin in the first quarter of 2025.

A NERC CIP audit is also conducted at least every three years for Cleco Power. The next audit is scheduled to begin in 2025.

Management is unable to predict the final outcome of any future audits or whether any findings will have a material adverse effect on the results of operations, financial condition, or cash flows of the Registrants. For a discussion of risks associated with FERC’s regulation of Cleco Power’s transmission system, see Part I, Item 1A, “Risk Factors — Regulatory Risks — Reliability and CIP Standards Compliance” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Retail Electric Markets

For information on the regulatory aspects of retail electric markets affecting Cleco Power, see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Regulatory and Other Matters — Market Structure — Retail Electric Markets” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Integrated Resource Plan (IRP)

The IRP process includes conducting stakeholder meetings and receiving feedback from stakeholders. The final IRP was filed with the LPSC in May 2023. On March 21, 2024, the LPSC issued an order acknowledging that Cleco Power’s Final IRP complied with the LPSC’s IRP General Order. The LPSC’s acknowledgement completes this IRP cycle. The next IRP cycle is expected to begin in the fourth quarter of 2025.

The IRP report describes how Cleco Power plans to meet its forecasted load requirements on a reliable and economic basis, while reducing Cleco Power’s carbon footprint. The IRP is used as a guide in future decision-making and does not represent firm operational commitments.

Service Quality Plan (SQP)

In October 2015, the LPSC proposed an SQP containing 21 requirements for Cleco Power. The SQP has provisions relating to employee headcount, customer service, reliability,

vegetation management, and reporting. In April 2016, the SQP was approved by the LPSC. The SQP expired in December 2020; however, Cleco continued to maintain its compliance with the SQP. On March 28, 2024, Cleco Power filed its annual SQP monitoring report for 2023 based on the expired reporting requirements.

A request to renew the conditions of the expired SQP was included in Cleco Power’s application for its most recent rate case, which was approved by the LPSC on June 19, 2024. As a result, all parties are required to engage and present an amended and extended SQP, including an implementation plan and timeline, 90 days from the issuance of the LPSC order approving the settlement of the rate case, which was on July 17, 2024. On October 15, 2024, Cleco Power filed a proposed amended and extended SQP with the LPSC. Cleco Power is unable to determine the outcome and timing of this process.

Franchises

Two parish franchise agreements remain expired, and Cleco Power is continuing to make efforts in 2024 to renew these contracts. There is no financial impact to Cleco’s business as a result of the expired franchise agreements. For information on franchises, see Part I, Item 1, “Business — Regulatory Matters, Industry Developments, and Franchises — Franchises” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Recent Authoritative Guidance

For a discussion of recent authoritative guidance, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 2 — Recent Authoritative Guidance.”

CRITICAL ACCOUNTING ESTIMATES

The preparation of Cleco’s and Cleco Power’s Consolidated Financial Statements in conformity with GAAP requires management to apply appropriate accounting policies and to make estimates and judgments that could have a material impact on the results of operations, financial condition, or cash flows of the Registrants.

For more information on Cleco’s critical accounting estimates, see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Estimates” in the Registrant’s Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

CLECO POWER — NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS

Cleco Power meets the conditions specified in General Instructions H(1)(a) and (b) to Form 10-Q and is, therefore, permitted to use the reduced disclosure format for wholly owned subsidiaries of reporting companies. Accordingly, Cleco Power has omitted from this Quarterly Report on Form 10-Q the information called for by Item 2 (Management’s Discussion and Analysis of Financial Condition and Results of Operations) and Item 3 (Quantitative and Qualitative Disclosures about Market Risk) of Part I of Form 10-Q and the following Part II items of Form 10-Q: Item 2 (Unregistered Sales of Equity Securities and Use of Proceeds) and Item 3 (Defaults upon Senior Securities).

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ITEM 3.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

RISK OVERVIEW

Cleco is exposed to counterparty credit risk, liquidity risk, interest rate risk, and commodity price risk. Cleco has implemented a governance framework, inclusive of risk policies and procedures to help manage these and other risks.

Counterparty Credit Risk

Cleco is exposed to counterparty credit risk when a counterparty fails to meet their financial obligations which causes Cleco to incur replacement cost losses. Cleco may be exposed when it enters certain transactions such as commodity derivative or physical commodity transactions directly with market participants and contracts with retail electric customers that require Cleco to construct grid facilities for the purpose of serving those customers. Cleco enters into long-form contract and master agreements with counterparties that govern the risk of counterparty credit default and allow for collateralization above prenegotiated thresholds to help mitigate potential losses. Alternatively, Cleco may be required to provide credit support with respect to bilateral transactions and contracts that Cleco has entered into or may enter into in the future. The amount of credit support required may change based on margining formulas, changes in credit agency ratings or liquidity ratios.

Cleco monitors and manages its credit risk exposure through credit risk management policies and procedures that require retail customer and counterparty credit quality review and monitoring, establishment of credit and default terms in bilateral contracts and master agreements, monitoring changing credit exposure as compared to fair value, and collateralization and other methods of counterparty credit assurance.

For more information, see Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Liquidity and Capital Resources — General Considerations and Credit-Related Risks.”

Liquidity Risk

Access to capital markets is a significant source of funding for both short- and long-term capital requirements not satisfied by operating cash flows. Disruption in the capital and credit markets may potentially increase the costs of capital and limit the ability to access the capital markets. The inability to raise capital on favorable terms could negatively affect Cleco’s ability to maintain and expand its business. After assessing the current operating performance, liquidity, and credit ratings of Cleco Holdings and Cleco Power, management believes that Cleco will have access to the capital markets at prevailing market rates for companies with comparable credit ratings. For more information, see Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Liquidity and Capital Resources — General Considerations and Credit-Related Risks.”

Interest Rate Risk

Cleco monitors its mix of fixed- and variable-rate debt obligations in light of changing market conditions and from time to time may alter that mix, for example, refinancing balances outstanding under its variable-rate bank facilities with fixed-rate debt or vice versa. Calculations of the changes in

fair market value and interest expense of the debt securities are made over a one-year period.

Sensitivity to changes in interest rates for variable-rate obligations is computed by assuming a 1% change in the current interest rate applicable to such debt.

At September 30, 2024, Cleco Holdings had no short-term debt outstanding under its $175.0 million revolving credit facility. At September 30, 2024, the borrowing costs under Cleco Holdings’ revolving credit facility were equal to SOFR plus 1.725% or ABR plus 0.625%, plus commitment fees of 0.275% paid on the unused portion of the facility.

At September 30, 2024, Cleco Power had no short-term debt outstanding under its $300.0 million revolving credit facility. The borrowing costs under Cleco Power’s $300.0 million revolving credit facility are equal to SOFR plus 1.35% or ABR plus 0.25%, plus commitment fees of 0.15% paid on the unused portion of the facility.

At September 30, 2024, Cleco Power had a $125.0 million long-term variable rate bank term loan outstanding, at an interest rate of SOFR plus 1.35% or ABR plus 0.25%, for an all-in interest rate of 6.20%. Each 1% increase in the interest rate applicable to Cleco Power’s long-term variable rate debt would result in a decrease in Cleco Power’s pretax earnings of $1.3 million on an annualized basis. The weighted average rate for the outstanding term loan debt at Cleco Power for the nine months ended September 30, 2024, was 6.68%.

Each 1% increase in the interest rate applicable to Cleco’s short- and long-term variable rate debt would result in a decrease in Cleco’s consolidated pretax earnings of $1.3 million on an annualized basis.

Cleco may enter into contracts to mitigate the volatility in interest rate risk. These contracts include, but are not limited to, interest rate swaps and treasury rate locks. For each reporting period presented, the Registrants did not enter into any contracts to mitigate the volatility in interest rate risk.

Commodity Price Risk

Cleco Power’s financial performance can be adversely impacted by the volatility in future fuel and power prices, which may impact customer costs passed through Cleco Power’s FAC; therefore, Cleco Power has implemented a natural gas hedging program to mitigate the volatility of customer costs. The program includes transacting in financially settled swaps, physical fixed price supply agreements, and financially settled options contracts. Cleco Power executes this program within a risk management framework inclusive of risk management policies, procedures, and guidelines, set forth by its Board of Managers and management. Cleco Power may be exposed to transmission congestion price risk as a result of physical transmission constraints present between MISO locational marginal price nodes when serving customer load. Cleco Power is awarded and/or purchases FTRs in auctions facilitated by MISO. FTRs are accounted for as derivatives not designated as hedging instruments for accounting purposes.

Some of these transactions may qualify for the normal purchase, normal sale (NPNS) exception under derivative accounting guidance. Contracts that do not qualify for NPNS accounting treatment or are not elected for NPNS accounting treatment are marked-to-market and recorded on the balance sheet at their fair value.

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During the nine months ended September 30, 2024, Cleco Cajun and Cleco Power had natural gas derivative contracts consisting of fixed price physical forwards and financially settled swap and/or options contract transactions. After the closing of the Cleco Cajun Divestiture, all natural gas derivative contracts related to Cleco Cajun were liquidated during June 2024. Cleco monitors the Value at Risk (VaR) of its natural gas derivative contracts requiring derivative accounting treatment. VaR is defined as the maximum expected loss over a given holding period at a given confidence level based on observable market prices and volatilities. Cleco uses a parametric variance-covariance model methodology to

estimate VaR using a combination of implied and historical volatilities within a 5-day holding period at a 95% confidence interval. Given Cleco’s reliance on historical data, VaR is effective in estimating risk exposures in markets in which there are no sudden fundamental changes or abnormal shifts in market conditions. An inherent limitation of VaR is that past changes in market risk factors, even when weighted toward more recent observations, may not produce accurate predictions of future market risk. VaR should be evaluated in light of this and the methodology’s other limitations.

The following table presents the VaR of natural gas derivative contracts based on these assumptions:

			FOR THE THREE MONTHS ENDED SEPT. 30, 2024						FOR THE NINE MONTHS ENDED SEPT. 30, 2024
(THOUSANDS)	AT SEPT. 30, 2024		HIGH		LOW		AVERAGE		HIGH		LOW		AVERAGE
Cleco	$	4,793	$	6,720	$	3,672	$	4,935	$	13,864	$	3,672	$	8,145
Cleco Power	$	4,793	$	6,720	$	3,672	$	4,935	$	9,066	$	2,576	$	4,989

For more information on the accounting treatment and fair value of FTRs and other commodity derivatives, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial

Statements — Note 6 — Fair Value Accounting Instruments” and “Note 7 — Derivative Instruments.”

ITEM 4.     CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of Cleco Holdings and Cleco Power (individually, “Registrant” and collectively, the “Registrants”) management, including the CEO and CFO, the Registrants have evaluated the effectiveness of their disclosure controls and procedures as of September 30, 2024. Based on the evaluations, the CEO and CFO have concluded that the Registrants’ disclosure controls and procedures are effective to ensure that information required to be disclosed by each Registrant in reports that it files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, and reported within the time periods specified in

SEC rules and forms; and that the Registrants’ disclosure controls and procedures are also effective in ensuring that such information is accumulated and communicated to the Registrants’ management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in the Registrants’ internal control over financial reporting that occurred during the quarter ended September 30, 2024, that have materially affected, or are reasonably likely to materially affect, the Registrants’ internal control over financial reporting.

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PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

CLECO

For information on legal proceedings affecting Cleco, see Part I, Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 14 — Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — Litigation.”

CLECO POWER

For information on legal proceedings affecting Cleco Power, see Part I, Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 14 —Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — Litigation.”

ITEM 1A.      RISK FACTORS

There have been no material changes from the risk factors disclosed in Part I, Item 1A, “Risk Factors” of the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2023. For risks that could affect actual

results and cause results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Registrants, see the risk factors disclosed in the aforementioned report.

ITEM 5.      OTHER INFORMATION

During the three months ended September 30, 2024, no director or officer (as defined in Rule 16a-1(f) of the Exchange Act) of Cleco Holdings or Cleco Power adopted or terminated

a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

ITEM 6.  EXHIBITS
CLECO
	31.1	CEO Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002
	31.2	CFO Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002
	32.1	CEO Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002
	32.2	CFO Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002
	101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
	101.SCH	Inline XBRL Taxonomy Extension Schema
	101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase
	101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase
	101.LAB	Inline XBRL Taxonomy Extension Label Linkbase
	101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase
	104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
CLECO POWER
	31.3	CEO Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002
	31.4	CFO Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002
	32.3	CEO Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002
	32.4	CFO Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002
	101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
	101.SCH	Inline XBRL Taxonomy Extension Schema
	101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase
	101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase
	101.LAB	Inline XBRL Taxonomy Extension Label Linkbase
	101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase
	104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CLECO CORPORATE HOLDINGS LLC
(Registrant)
By:	/s/ Tonita Laprarie
	Tonita Laprarie
	Controller and Chief Accounting Officer

Date: November 6, 2024

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CLECO POWER LLC
(Registrant)
By:	/s/ Tonita Laprarie
	Tonita Laprarie
	Controller and Chief Accounting Officer

Date: November 6, 2024

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