Variable Interest Entities

3 Months Ended

Mar. 31, 2025

Organization, Consolidation and Presentation of Financial Statements [Abstract]


Note 13 — Variable Interest Entities

Securitization Entities

Cleco Securitization I and Cleco Securitization II are special-purpose, wholly owned subsidiaries of Cleco Power that were formed for the purpose of issuing storm recovery bonds and energy transition bonds, respectively, for the securitization financing of intangible property at Cleco Power. Cleco Securitization I’s and Cleco Securitization II’s assets cannot be used to settle Cleco Power’s obligations, and the holders of their respective bonds have no recourse against Cleco Power.

Cleco Securitization I’s and Cleco Securitization II’s equity at risk is less than 1% of their total assets; therefore, they are considered variable interest entities. Cleco Power, through its equity ownership interest and role as servicer of each securitization entity’s respective bonds, has the power to direct the most significant financial and operating activities, including billings, collections, and remittances of retail customer cash receipts to enable each securitization entity to pay the principal and interest payments on bond payments. Cleco Power also has the obligation to absorb losses up to its equity investments and rights to receive returns from each securitization entity. Therefore, management has determined that Cleco Power is the primary beneficiary of each securitization entity, and as a result, Cleco Securitization I and Cleco Securitization II are included in the consolidated financial statements of Cleco Power. No gain or loss was recognized upon initial consolidation of the securitization entities.

Cleco Securitization I

The following table summarizes the impact of Cleco Securitization I on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets:


(THOUSANDS)	AT MAR. 31, 2025		AT DEC. 31, 2024
Restricted cash - current	$	7,187	$	15,918
Accounts receivable - affiliate	2,506		4,683
Intangible asset - securitization	381,569		384,908
Total assets	$	391,262	$	405,509
Long-term debt due within one year	$	15,390	$	15,087
Accounts payable	20		—
Accounts payable - affiliate	69		1,800
Interest accrued	1,472		5,997
Long-term debt, net	372,178		380,468
Total liabilities	389,129		403,352
Member’s equity	2,133		2,157
Total liabilities and member’s equity	$	391,262	$	405,509

The following table summarizes the impact of Cleco Securitization I on Cleco’s and Cleco Power’s Condensed Consolidated Statements of Income:


	FOR THE THREE MONTHS ENDED MAR. 31,
(THOUSANDS)	2025		2024
Operating revenue	$	7,937	$	8,036
Operating expenses	(3,477)		(3,466)
Interest income	184		228
Interest charges, net	(4,619)		(4,773)
Net income	$	25	$	25

Cleco Securitization II

The following table summarizes the impact of Cleco Securitization II on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets:


(THOUSANDS)	AT MAR. 31, 2025
Restricted cash - current	$	2,540

Intangible asset - securitization	299,735
Total assets	$	302,275
Long-term debt due within one year	$	3,214

Accounts payable - affiliate	19
Interest accrued	825
Long-term debt, net	296,794
Total liabilities	300,852
Member’s equity	1,423
Total liabilities and member’s equity	$	302,275

The following table summarizes the impact of Cleco Securitization II on Cleco’s and Cleco Power’s Condensed Consolidated Statements of Income:


(THOUSANDS)	FOR THE THREE MONTHS ENDED MAR. 31, 2025

Operating expenses	$	(18)

Interest charges, net	(847)
Net loss	$	(865)

Oxbow

Cleco and Cleco Power apply the equity method of accounting to report the investment in Oxbow in the consolidated financial statements. Under the equity method, the assets and liabilities of this entity are reported as Equity investment in investee on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets. The revenue and expenses (excluding income taxes) of this entity are netted and reported as equity income or loss from investees on Cleco’s and Cleco Power’s Condensed Consolidated Statements of Income.

Oxbow is owned 50% by Cleco Power and 50% by SWEPCO. Cleco Power is not the primary beneficiary because it shares the power to control Oxbow’s significant activities with SWEPCO. Cleco Power’s current assessment of its maximum exposure to loss related to Oxbow at March 31, 2025, consisted of its equity investment of approximately $1.9 million.

The following table presents the components of Cleco Power’s equity investment in Oxbow:


INCEPTION TO DATE (THOUSANDS)	AT MAR. 31, 2025		AT DEC. 31, 2024
Purchase price	$	12,873	$	12,873
Cash contributions	6,399		6,399
Distributions	(18,033)		(18,033)
Equity income from investee	677		677
Total equity investment in investee	$	1,916	$	1,916

The following table compares the carrying amount of Oxbow’s assets and liabilities with Cleco Power’s maximum exposure to loss related to its investment in Oxbow:


(THOUSANDS)	AT MAR. 31, 2025		AT DEC. 31, 2024
Oxbow’s net assets/liabilities	$	3,832	$	3,832
Cleco Power’s 50% equity	$	1,916	$	1,916
Cleco Power’s maximum exposure to loss	$	1,916	$	1,916

The following table contains summarized financial information for Oxbow:


	FOR THE THREE MONTHS ENDED MAR. 31,
(THOUSANDS)	2025		2024
Operating revenue	$	103	$	184
Operating expenses	(103)		(87)
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.