Cleco customers to get $475 bill credit

PINEVILLE – As part of Cleco’s approved sale earlier this year, customers are set for a bill credit beginning in July.
It is then that the electric utility will give its customers a $475 credit that will likely cover several months of free electricity for the average customer.
In April, an investor group led by New York-based Macquarie Infrastructure and Real Assets officially bought Cleco Corp. – based in Pineville. The $4.7 billion sale was approved by the Louisiana Public Service Commission in March. As part of that final agreement, however, the purchaser included $136 million in electricity bill credits for customers as well as $7 million in grants to be administered by the state economic developers in Cleco’s service territory.
About 286,000 customers will receive the one-time credit averaging about $475. The credit will be applied to a customer’s monthly bills starting in July until it runs out.
The average Cleco customer, using about 1,000 kilowatt hours of electricity, typically pays about $117 per month for power. Those numbers, as provided by Cleco, would equate to four months of free electricity with the $7 left over credited to the fifth month’s bill. At least, on average, that means for multiple months, Louisianans serviced by Cleco will be able to enjoy cool air in the hot summer for free.
Advocates with the Alliance for Affordable Energy argue consumers are getting a raw deal no matter how the math shakes out, however.
The cash-debt deal puts $2.8 billion of debt dollars on Cleco while assets of the company are valued at $2.9 billion. Those figures do not include the bill credits and other deals made to allow for the sale. Advocates believe that the imbalance will hurt consumers down the line and say the deal is too risky and the “sweeteners” only add to the risk.
The Alliance was pushing the PSC to request credit ratings agencies Moody’s and Standard & Poor’s to re-assess Cleco’s long-term outlook. But, the PSC denied the request last week and the purchase of the company closed on April 13.
In a statement, PSC Chairman Eric Skrmetta has criticized the Alliance’s “aggressive attempt to derail” the transaction. Skrmetta says that on top of the bill credits, Cleco’s buyers have committed to keep employee head count, benefits and salaries in Louisiana at current levels for the next decade.
“Job levels at Cleco have been stabilized, the company will invest more money in Louisiana than ever before and rates will remain stable,” he said. “This was a big win for consumers and Louisiana.