Cleco Corporate Holdings LLC

11/06/2026 | Press release | Distributed by Public on 11/06/2026 15:11

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

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, 2025, 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, 2026, and 2025.
OVERVIEW
Cleco is a regional energy company that conducts substantially all of its operations through its principal business segment, Cleco Power. Cleco Power is a regulated electric utility that owns eight generating units with a total rated capacity of 2,676 MW and serves approximately 298,000 customers in Louisiana through its retail business while also supplying wholesale power within the state.
Cleco's business of generating, transmitting, distributing, and selling electricity is influenced by numerous factors, including growth in customer demand, particularly from large commercial and industrial customers; the ability to safely and reliably operate and maintain its generation, transmission, and distribution systems; and the ability to manage costs while operating within the MISO market and evolving regulatory environment.
Additional factors affecting Cleco Power include regulatory outcomes and cost recovery mechanisms, including future base rate proceedings; execution of grid modernization, reliability, and resiliency initiatives; generation planning and resource adequacy requirements; recovery of costs associated with severe weather events and infrastructure investments; compliance with increasingly stringent environmental, cybersecurity, and other regulatory requirements; and the ability to meet changing customer energy needs.
Cleco's current and near-term areas of focus include supporting continued customer load growth, maintaining system reliability, advancing generation and transmission planning, and executing strategic capital investments designed to support long-term customer and stakeholder needs, and completing the Proposed Cleco Group Sale Transaction. These and other significant events and strategic
initiatives impacting Cleco and Cleco Power are discussed below.
Equity Purchase Agreement
On April 24, 2026, Cleco Partners entered into an equity purchase agreement to sell Cleco Group to Stonepeak and Bernhard Capital Partners, which is expected to close in December 2026. For more information on this transaction, see Item 1, "Notes to the Unaudited Condensed Consolidated Financial Statements - Note 17 - Equity Purchase Agreement."
Regulatory Structure and Rate Case Outlook
Cleco Power's retail rates are governed by an FRP approved by the LPSC, which allows for annual adjustments based on an ROE. The current FRP includes a target ROE of 9.7% and refund obligations for earnings above 10.3%. The FRP also included a residential revenue decoupling pilot mechanism, which has concluded, with related rate adjustments expected to begin July 1, 2027.
On June 23, 2026, Cleco Power filed its next base rate proceeding with the LPSC, with anticipated new rates to be effective July 1, 2027. The filing addresses Cleco Power's cost of service, capital investment requirements, and other factors affecting customer rates. The proceeding remains pending, and Cleco Power continues to respond to data requests and provide supporting information in connection with the regulatory review of its filed testimony.
Corporate Sustainability
Cleco is evaluating renewable and electrification initiatives as part of its long-term resource and infrastructure planning. Currently, management is unable to predict what impact the implementation of these sustainability initiatives will have on the Registrants. For more information on these sustainability goals, see Part I, Item 1, "Business - Human Capital," "- Communities," and "- Oversight and Governance" in the Registrants' Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2025. For more information about Cleco's environmental initiatives, see "- Decarbonization Initiatives" and "- Renewable and Electrification Initiatives."
People
Cleco is committed to providing affordable, reliable, and sustainable electricity. It supports community investment across its service territory and fosters a workplace culture that values a sense of belonging, safety, and innovation.
Planet
Cleco is expanding renewable and electrification initiatives and transitioning away from coal-fired generation. These efforts support Cleco's long-term ambition of achieving net-zero GHG emissions by 2050. Progress toward this ambition will depend
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2026 3RD QUARTER FORM 10-Q
on factors such as policy developments, load growth, technology advancements, and implementation feasibility.
Principles
Cleco maintains a governance framework supported by policies and practices that promote accountability. A Corporate Sustainability Steering Committee and a Chief Administrative and Sustainability Officer oversee the implementation of sustainability initiatives.
Grid Reliability
Cleco Power is actively advancing grid reliability and operational resilience to support safe and consistent service amid evolving grid demands and environmental conditions. Cleco Power closely monitors system performance and manages grid conditions through targeted infrastructure investments and coordination with MISO. These efforts are intended to support overall grid stability during periods of elevated demand, extreme weather, or transmission constraints. Cleco Power employs operational load management tools when necessary to preserve grid integrity, including in circumstances where MISO may issue system reliability directives. Cleco Power continues to enhance system readiness through grid modernization investments, evaluation of generation availability, and ongoing assessment of changing load patterns, including increased electrification and peak usage growth. Through these initiatives, Cleco Power remains focused on reducing the likelihood, duration, and impact of service interruptions while supporting a resilient and reliable electric system for customers.
Generation Planning
Cleco Power is participating in MISO's ERAS process and evaluating generation alternatives to support future reliability and capacity needs. In August 2026, Cleco Power entered into an equipment reservation agreement for a proposed combined-cycle gas turbine generation project and continues development activities. ERAS provides an accelerated interconnection pathway for certain generation resources, while MISO's Definitive Planning Phase remains the primary interconnection process for most projects. The timing, cost, and outcome of these processes may affect Cleco Power's future resource planning and capital investment decisions.
Decarbonization Initiatives
Management is considering the most economically viable decarbonization strategies to address carbon emissions from Cleco Power's solid fuel generating units.
Renewable and Electrification Initiatives
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 DESRI. 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 currently expects commercial operations to begin by the end of 2026, subject to satisfaction of applicable conditions and project milestones.
Cleco Power is evaluating potential future resources to diversify its generation portfolio as part of its IRP process and is engaging with customers to assess demand for potential renewable energy offerings. For more information about Cleco Power's IRP, see "- Financial Condition - Regulatory and Other Matters - IRP."
Cleco Power is also pursuing electrification initiatives for its customers such as gas compression, e-trucking, green tariffs, infrastructure for light-duty electric vehicles and forklifts, and electric vehicle charging sites, among others.
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 provides savings through a reduction in outage restoration time and improved operational efficiencies. The project also improves 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 $111.4 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, 2026, Cleco Power has spent $95.3 million on the project.
Grid Resiliency and Hardening
Cleco Power is actively participating in programs to enhance its grid resilience against growing threats of extreme weather and climate change. 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's grid resiliency plan is a 10-year plan that identifies an estimated 1,400 projects with a total investment of approximately $510.0 million. Phase I of the plan, as approved by the LPSC in November 2025, includes approximately $200.0 million of project investments to be completed over five years. Effective January 1, 2026, Cleco Power began collecting revenues under the LPSC-approved Grid Resiliency Rate Rider, which provides for contemporaneous recovery of prudently incurred costs associated with Phase I, subject to a semi-annual true-up and prudency review by the LPSC. As a result of the prudency review process, certain costs could be subject to disallowance. Management anticipates that costs incurred under future phases of the grid resiliency plan will continue to be recovered through this mechanism.
Large Load Growth Initiatives
Cleco Power is supporting long-term load growth associated with increasing demand from large-load customers, including data centers, driven predominately by the expansion of artificial intelligence and related digital infrastructure. Cleco Power has executed arrangements related to a data center project within its service territory and continues to evaluate additional opportunities to serve large-load customers, including potential increases in contracted load and opportunities with other prospective customers.
In connection with certain large-load growth and interconnection projects, Cleco Power has received customer
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advances and cost reimbursements and executed arrangements for project progression, subject to applicable regulatory requirements. As part of these efforts, Cleco Power may incur planning, engineering, procurement, and other initial capital costs to prepare to serve large-load customers in advance of receiving final approval from the LPSC. Cleco Power has structured these arrangements to limit financial and operational exposure prior to approval by the LPSC and has implemented significant contractual and credit protections intended to mitigate risk, including customer funding mechanisms that provide for the upfront payment of required construction-related contributions prior to facilities being placed in service. Because large-load projects are typically associated with a single customer or a limited number of customers, Cleco Power could experience increased customer concentration over time as these facilities become operational.
On April 20, 2026, Cleco Power executed an electric service agreement with a data center developer in connection with a project under development that is intended to serve a future large-load customer. Electric service is expected to commence in 2027 and increase over time as the project progresses, subject to certain conditions, including required regulatory approvals, and is expected to support approximately 430 MW of load. To support the anticipated load, Cleco Power also entered into related power supply and
commercial agreements, including a capacity power purchase agreement with a third party, subject to applicable regulatory and other approvals. On July 1, 2026, Cleco Power filed an application with the LPSC seeking approval of the project. The electric service agreement includes credit support, including a substantial letter of credit in favor of Cleco Power, and other contractual protections, including customer responsibility for costs associated with the capacity power purchase agreement, designed to ensure recovery of applicable costs and limit exposure to Cleco Power's other customers. In addition, the electric service agreement includes termination and cancellation payment provisions that provide further protection to Cleco in the event the project does not proceed as planned.
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, and other manufacturing.
RESULTS OF OPERATIONS
Summary of Consolidated Results
Comparison of the Three and Nine Months Ended September 30, 2026, and 2025
FOR THE THREE MONTHS ENDED SEPT. 30, FOR THE NINE MONTHS ENDED SEPT. 30,
CLECO POWER
OTHER
SEGMENTS
CLECO
CLECO POWER
OTHER
SEGMENTS
CLECO
(THOUSANDS) 2026 2025
VARIANCE*
VARIANCE*
VARIANCE*
2026 2025
VARIANCE*
VARIANCE*
VARIANCE*
Operating revenue
Base $ 256,634 $ 237,027 $ 19,607 $ - $ 19,607 $ 654,579 $ 610,434 $ 44,145 $ - $ 44,145
Fuel cost and purchased power recovery 131,627 134,515 (2,888) - (2,888) 349,298 321,074 28,224 - 28,224
Other operations 40,735 33,835 6,900 (1,577) 5,323 101,665 87,672 13,993 (5,146) 8,847
Affiliate revenue 242 244 (2) 2 - 733 734 (1) 1 -
Operating revenue, net 429,238 405,621 23,617 (1,575) 22,042 1,106,275 1,019,914 86,361 (5,145) 81,216
Operating expenses
Recoverable fuel and purchased power 131,665 134,491 2,826 - 2,826 349,263 321,052 (28,211) - (28,211)
Non-recoverable fuel and purchased power 9,241 13,196 3,955 - 3,955 24,123 19,340 (4,783) - (4,783)
Other operations and maintenance 69,567 67,374 (2,193) 1,651 (542) 210,788 187,889 (22,899) 3,946 (18,953)
Depreciation and amortization 56,491 52,209 (4,282) 139 (4,143) 157,777 151,039 (6,738) 116 (6,622)
Taxes other than income taxes 16,603 15,943 (660) 15 (645) 49,256 45,386 (3,870) (487) (4,357)
Total operating expenses
283,567 283,213 (354) 1,805 1,451 791,207 724,706 (66,501) 3,575 (62,926)
Operating income 145,671 122,408 23,263 230 23,493 315,068 295,208 19,860 (1,570) 18,290
Interest income
5,231 1,408 3,823 (2,578) 1,245 10,608 7,434 3,174 (2,723) 451
AFUDC - equity funds 1,501 780 721 - 721 4,264 2,213 2,051 - 2,051
Other income, net 1,118 2,433 (1,315) (1,281) (2,596) 4,946 2,723 2,223 1,647 3,870
Interest charges 29,761 26,631 (3,130) 486 (2,644) 89,225 78,566 (10,659) 376 (10,283)
Federal and state income tax expense 39,966 20,269 (19,697) 758 (18,939) 66,023 44,715 (21,308) 150 (21,158)
Net income $ 83,794 $ 80,129 $ 3,665 $ (2,385) $ 1,280 $ 179,638 $ 184,297 $ (4,659) $ (2,120) $ (6,779)
* Favorable/(Unfavorable)
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2026 3RD QUARTER FORM 10-Q
The changes in Cleco's and Cleco Power's results of operations are primarily attributable to the following:
Base
Three Months Ended September 30, 2026
Base revenue increased $19.6 million primarily due to $9.8 million of higher usage due to warmer summer weather, $4.8 million of increased retail revenue largely attributable to higher demand charges from new industrial customers, $3.0 million of lower refunds under the residential revenue decoupling mechanism, and $1.8 million related to the absence of the amortization of carrying charges on the associated Dolet Hills regulatory asset.
Nine Months Ended September 30, 2026
Base revenue increased $44.1 million primarily due to $32.4 million of higher retail revenue, driven by an increase in
the IICR and higher demand charges from new industrial customers, $8.7 million related to changes in the residential revenue decoupling mechanism, and $3.9 million of higher usage resulting from warmer summer weather. These increases were partially offset by $2.3 million from higher amortization of carrying charges on the Dolet Hills regulatory asset.
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, 2025.
The following tables show the components of Cleco Power's base revenue:
FOR THE THREE MONTHS ENDED SEPT. 30, FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS) 2026 2025 FAVORABLE/
(UNFAVORABLE) 		2026 2025 FAVORABLE/
(UNFAVORABLE)
Electric sales
Residential $ 142,357 $ 130,700 8.9 % $ 333,019 $ 315,170 5.7 %
Commercial 70,407 69,156 1.8 % 199,768 190,822 4.7 %
Industrial 39,190 32,262 21.5 % 107,365 89,235 20.3 %
Other retail 3,706 3,635 2.0 % 11,060 10,705 3.3 %
Total retail 255,660 235,753 8.4 % 651,212 605,932 7.5 %
Sales for resale 974 1,274 (23.5) % 3,367 4,502 (25.2) %
Total base revenue
$ 256,634 $ 237,027 8.3 % $ 654,579 $ 610,434 7.2 %
FOR THE THREE MONTHS ENDED SEPT. 30, FOR THE NINE MONTHS ENDED SEPT. 30,
(MILLION kWh) 2026 2025 FAVORABLE/
(UNFAVORABLE) 		2026 2025 FAVORABLE/
(UNFAVORABLE)
Electric sales
Residential 1,257 1,175 7.0 % 2,976 2,992 (0.5) %
Commercial 843 788 7.0 % 2,151 2,095 2.7 %
Industrial 717 580 23.6 % 2,002 1,681 19.1 %
Other retail 30 32 (6.3) % 88 93 (5.4) %
Total retail 2,847 2,575 10.6 % 7,217 6,861 5.2 %
Sales for resale 2 7 (71.4) % 34 172 (80.2) %
Total retail and wholesale customer sales
2,849 2,582 10.3 % 7,251 7,033 3.1 %
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 table 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 THREE MONTHS ENDED SEPT. 30, FOR THE NINE MONTHS ENDED SEPT. 30,
% CHANGE
% CHANGE
2026 2025 NORMAL PRIOR YEAR NORMAL 2026 2025 NORMAL PRIOR YEAR NORMAL
Heating degree-days * * * * * 700 893 889 (21.6) % (21.3) %
Cooling degree-days 1,765 1,656 1,564 6.6 % 12.9 % 3,053 2,955 2,647 3.3 % 15.3 %
*Heating degree days are not presented for the three months ended September 30, 2026, and 2025 because heating-related weather conditions are not significant during the period.
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2026 3RD QUARTER FORM 10-Q
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. For the three and nine months ended September 30, 2026, approximately 99.9% and 99.7%, respectively, of Cleco Power's total fuel cost 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 and nine months ended September 30, 2026, were impacted primarily by increased generation as compared to the three and nine months ended September 30, 2025.
Other Operations Revenue
Three Months Ended September 30, 2026
Other operations revenue increased $5.3 million primarily due to the recognition of carrying charges on accumulated unreimbursed storm restoration costs.
Nine Months Ended September 30, 2026
Other operations revenue increased $8.8 million primarily due to $5.3 million of higher transmission revenue attributable to increased rates and changes in transmission service arrangements, $5.1 million for the recognition of carrying charges on accumulated unreimbursed storm restoration costs, and $4.4 million of higher securitization revenue at Cleco Power. These increases were partially offset by $5.2 million related to the absence of other service agreement revenue associated with the Cleco Cajun Divestiture.
Non-Recoverable Fuel and Purchased Power
Three Months Ended September 30, 2026
Non-recoverable fuel and purchased power decreased $4.0 million primarily due to $2.8 million associated with the regulatory treatment of certain purchased power costs in the Northlake service territory and $1.8 million of lower MISO transmission charges.
Nine Months Ended September 30, 2026
Non-recoverable fuel and purchased power increased $4.8 million primarily due to $8.1 million associated with the regulatory treatment of certain purchased power costs in the Northlake service territory, partially offset by $5.0 million of lower MISO transmission charges.
Other Operations and Maintenance
Nine Months Ended September 30, 2026
Other operations and maintenance expense increased $19.0 million primarily due to $6.3 million of higher distribution right-of-way maintenance costs, $4.8 million of higher generation operations expenses, $3.2 million of higher generation maintenance largely attributable to routine plant maintenance expenses, $2.9 million of computer software maintenance expenses, $2.6 million of higher distribution operations expenses related to increased costs for contracted
underground utility locating services, and $1.5 million of higher general liability expenses. These increases were partially offset by $4.3 million of lower energy efficiency program costs for public entities and $1.7 million of lower information technology outside service expenses.
Depreciation and Amortization
Three Months Ended September 30, 2026
Depreciation and amortization increased $4.1 million primarily due to $2.0 million of higher depreciation from normal recurring additions to fixed assets, $1.1 million of higher amortization of securitized intangible assets, and $0.8 million due to the timing of amortization of various regulatory assets.
Nine Months Ended September 30, 2026
Depreciation and amortization increased $6.6 million primarily due to $7.5 million of higher depreciation from normal recurring additions to fixed assets and $1.8 million of higher amortization of securitized intangible assets. These increases were partially offset by $2.1 million due to the timing of amortization of various regulatory assets.
Taxes Other Than Income Taxes
Nine Months Ended September 30, 2026
Taxes other than income taxes increased $4.4 million primarily due to higher property tax rates.
Other Income, Net
Three Months Ended September 30, 2026
Other income, net decreased $2.6 million primarily due to unfavorable market changes in the cash surrender value of company-owned life insurance policies.
Nine Months Ended September 30, 2026
Other income, net increased $3.9 million primarily due to $3.1 million of higher oil and gas royalties and $1.5 million of lower non-service pension and benefit costs.
Interest Charges
Three Months Ended September 30, 2026
Interest charges increased $2.6 million primarily due to higher debt balances associated with Cleco Power's $350.0 million senior notes issued in November 2025 and Cleco Holdings' $250.0 million bank term loan entered into in April 2026. These increases were partially offset by the maturity of Cleco Holdings' $360.0 million senior notes in May 2026.
Nine Months Ended September 30, 2026
Interest charges increased $10.3 million primarily due to higher debt balances associated with Cleco Power's $350.0 million senior notes issued in November 2025, the energy transition bonds issued by Cleco Securitization II in March 2025, and Cleco Holdings' $250.0 million bank term loan entered into in April 2026. These increases were partially offset by lower interest associated with Cleco Power debt repayments and maturities, lower interest on revolving credit facility borrowings, and the maturity of Cleco Holdings' $360.0 million senior notes in May 2026.
Income Taxes
For more information on Cleco's and Cleco Power's effective income tax rates, see Item 1, "Notes to the Unaudited
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2026 3RD QUARTER FORM 10-Q
Condensed Consolidated Financial Statements - Note 9 - 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, 2026, and 2025:
FOR THE THREE MONTHS
ENDED SEPT. 30, 		FOR THE NINE MONTHS
ENDED SEPT. 30,
(THOUSANDS) 2026 2025 2026 2025
Net income
$ 83,794 $ 80,129 $ 179,638 $ 184,297
Add: Depreciation and amortization 56,491 52,209 157,777 151,039
Less: Interest income 5,231 1,408 10,608 7,434
Add: Interest charges 29,761 26,631 89,225 78,566
Add: Federal and state income tax expense 39,966 20,269 66,023 44,715
EBITDA $ 204,781 $ 177,830 $ 482,055 $ 451,183
FINANCIAL CONDITION
Liquidity and Capital Resources
General Considerations and Credit-Related Risks
Credit Ratings and Counterparties
Financing for operational needs and capital expenditures not funded through operating cash flows depends on access to short- and long-term capital markets. Credit ratings are an important factor in maintaining that access and the associated cost of financing. 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, 2026:
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 A- 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.
In May 2026, Fitch upgraded its rating for Cleco Power's senior unsecured debt from BBB+ to A- and its corporate/long-term issuer rating from BBB to BBB+. Fitch revised its rating primarily due to Cleco Power's strong financial performance following the completion of the securitization financing of Cleco Securitization II. Fitch also updated Cleco Power's rating outlook from positive to stable.
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, 2025. For more information about credit support see Item 1, "Notes to the Unaudited Condensed Consolidated Financial Statements - Note 12 - 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 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.
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."
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2026 3RD QUARTER FORM 10-Q
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 5 - 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
At September 30, 2026, Cleco Power's working capital surplus was $199.3 million, compared to $164.4 million at December 31, 2025, reflecting an increase of $34.9 million.
At September 30, 2026, Cleco's working capital surplus was $218.4 million, compared to a working capital deficit of $74.2 million at December 31, 2025, reflecting an increase of $292.6 million.
The following table summarizes the key drivers of the changes in working capital variances between September 30, 2026, and December 31, 2025.
CLECO POWER OTHER
SEGMENTS 		CLECO
(THOUSANDS) AT SEPT. 30, 2026 AT DEC. 31, 2025
VARIANCE(1)
VARIANCE(1)
VARIANCE(1)
Current assets
Cash and cash equivalents $ 295,738 $ 162,660 $ 133,078 $ 4,330 $ 137,408
Restricted cash and cash equivalents 22,100 33,865 (11,765) - (11,765)
Customer accounts receivable 73,893 53,053 20,840 - 20,840
Accounts receivable - affiliate - 9 (9) (52) (61)
Receivable - Cleco Cajun Divestiture - - - (108,445) (108,445)
Other accounts receivable 34,630 67,449 (32,819) (46) (32,865)
Unbilled revenue 56,176 47,453 8,723 - 8,723
Fuel inventory, at average cost 83,903 84,951 (1,048) - (1,048)
Materials and supplies, at average cost 218,218 183,085 35,133 - 35,133
Energy risk management assets(2)
1,464 2,452 (988) - (988)
Accumulated deferred fuel(2)
26,997 25,711 1,286 - 1,286
Cash surrender value of company/trust-owned life insurance policies 6,785 7,813 (1,028) 4,502 3,474
Prepayments 64,636 60,702 3,934 (306) 3,628
Regulatory assets 25,706 37,923 (12,217) (116) (12,333)
Other current assets 2,236 353 1,883 3,263 5,146
Total current assets(2)
912,482 767,479 145,003 (96,870) 48,133
Current liabilities
Long-term debt due within one year 306,021 254,943 (51,078) 359,883 308,805
Accounts payable(2)
124,893 133,283 8,390 1,803 10,193
Accounts payable - affiliate 11,325 13,038 1,713 (32,261) (30,548)
Customer deposits 53,826 58,787 4,961 - 4,961
Provision for customer refund 228 20,900 20,672 - 20,672
Taxes payable 129,537 28,454 (101,083) 5,666 (95,417)
Interest accrued 30,646 13,891 (16,755) 388 (16,367)
Energy risk management liabilities(2)
9,400 10,890 1,490 - 1,490
Regulatory liabilities 9,696 10,199 503 - 503
Deferred compensation - - - 17,243 17,243
Postretirement benefit obligations 15,206 22,530 7,324 - 7,324
Energy transition reserves 2,825 10,730 7,905 - 7,905
Other current liabilities 19,588 25,414 5,826 1,865 7,691
Total current liabilities(2)
713,191 603,059 (110,132) 354,587 244,455
Working capital surplus $ 199,291 $ 164,420 $ 34,871 $ 257,717 $ 292,588
(1) Favorable/(Unfavorable)
(2) Energy risk management assets, Accumulated deferred fuel, Accounts payable, and Energy risk management liabilities do not include FTRs. FTR activity is not included in working capital.
Summary of Consolidated Results
The $292.6 million increase in Cleco's working capital is primarily due to:
•a $308.8 million decrease in long-term debt due within one year primarily due to repayment of Cleco Holdings' $360.0 million 3.743% senior notes at maturity, partially offset by the
reclassification of Cleco Power's $50.0 million senior notes to long-term debt due within one year. For more information on Cleco's debt, see Item 1, "Notes to the Unaudited Condensed Consolidated Financial Statements - Note 7 - Debt,"
•a $137.4 million increase in cash and cash equivalents,
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•a $35.1 million increase in materials and supplies inventory primarily due to higher purchases of transmission and distribution inventory in order to support future needs at Cleco Power,
•a $20.8 million increase in customer accounts receivable primarily reflecting higher revenues from warmer summer weather and the timing of customer collections,
•a $20.7 million decrease in provision for customer refund primarily due to the third quarter 2026 refunds issued to Cleco Power's retail customers resulting from the settlement of the Dolet Hills prudency review,
•a $17.2 million decrease in deferred compensation primarily due to the reclassification to long-term deferred compensation,
•a $10.2 million decrease in accounts payable primarily due to lower information technology, materials inventory, MISO, and energy efficiency accruals, partially offset by higher accruals for generation, transmission, construction, and reliability bonuses, as well as petroleum coke purchases,
•an $8.7 million increase in unbilled revenue primarily due to higher customer usage resulting from warmer summer weather,
•a $7.9 million decrease in energy transition reserve primarily due to the changes in forecasted costs resulting in a reclassification of amounts to long-term,
•a $7.7 million decrease in other current liabilities primarily due to pension contributions, the reclassification of short-term Dolet Hills ARO obligations, lower accruals for engineering studies, and the timing of long-term incentive plan compensation payments, and
•a $7.3 million decrease in postretirement benefit obligations primarily due to a decrease in return on assets, the reclassification of obligations to long-term and an adjustment to the required contributions, partially offset by higher interest and service costs.
These increases in working capital were partially offset by:
•a $108.4 million decrease in the Cleco Cajun Divestiture receivable primarily due to the receipt of the remaining sale proceeds on May 29, 2026,
•a $95.4 million increase in taxes payable primarily due to higher federal and state income taxes and property tax accruals due to the timing of payments,
•a $32.9 million decrease in other accounts receivable primarily due to lower customer reimbursements, CIAC receivables, and general liability receivables, partially offset by the timing of the collection of pole attachment rents,
•a $30.5 million increase in accounts payable - affiliate primarily due to affiliate settlements related to tax returns filed at Cleco Group,
•a $16.4 million increase in interest accrued primarily due to the timing of interest payments on long-term debt,
•a $12.3 million decrease in regulatory assets primarily due to the amortization of Northlake transmission costs and the reclassification of the Dolet Hills ARO regulatory asset for decommissioning to long-term, and
•an $11.8 million decrease in restricted cash and cash equivalents.
Debt
For more information on Cleco Power's long-term debt due within one year, see Item 1, "Notes to the Unaudited
Condensed Consolidated Financial Statements - Note 7 - Debt."
Liquidity
The following tables present the total liquidity for Cleco and Cleco Power at September 30, 2026, and December 31, 2025:
Cleco
(THOUSANDS) AT SEPT. 30, 2026 AT DEC. 31, 2025
Cash and cash equivalents $ 308,464 $ 171,056
Cleco Power revolving credit facility(1)
300,000 300,000
Cleco Holdings revolving credit facility(1)
175,000 175,000
Total liquidity $ 783,464 $ 646,056
(1) At September 30, 2026, and December 31, 2025, Cleco Holdings and Cleco Power had no outstanding draws under their respective revolving credit facilities.
Cleco Power
(THOUSANDS) AT SEPT. 30, 2026 AT DEC. 31, 2025
Cash and cash equivalents $ 295,738 $ 162,660
Revolving credit facility(1)
300,000 300,000
Total liquidity $ 595,738 $ 462,660
(1) At September 30, 2026, and December 31, 2025, Cleco Power had no outstanding draws under its revolving credit facility.
Credit Facilities
At September 30, 2026, Cleco had two separate revolving credit facilities, a $175.0 million facility for Cleco Holdings and a $300.0 million facility for Cleco Power with no outstanding borrowings under either facility. The total of all revolving credit facilities maintains a maximum aggregate capacity of $475.0 million.
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 Holdings is required to maintain total indebtedness, not including securitization indebtedness, less than or equal to 65% of total capitalization. At September 30, 2026, Cleco Holdings was in compliance with the covenants of its revolving credit facility. At September 30, 2026, the borrowing costs under Cleco Holdings' revolving credit agreement were 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, not including securitization indebtedness, less than or equal to 65% of total capitalization. At September 30, 2026, Cleco Power was in compliance with the covenants of its revolving credit facility. At September 30, 2026, the borrowing costs under Cleco Power's revolving credit agreement were 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
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2026 3RD QUARTER FORM 10-Q
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.
Concentrations of Credit Risk
At September 30, 2026, and December 31, 2025, Cleco and Cleco Power were exposed to concentrations of credit risk through their short-term investments classified as cash equivalents. In order to mitigate potential credit risk, Cleco and Cleco Power have established guidelines for short-term investments. For more information on the concentration of credit risk through short-term investments classified as cash equivalents, see Item 1, "Notes to the Unaudited Condensed Consolidated Financial Statements - Note 5 - Fair Value Accounting Instruments - Concentrations of Credit Risk."
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, 2026, 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, 2026, Cleco Power was in compliance with the provisions of the 2016 Merger Commitments that would restrict the amount of distributions available. At September 30, 2026, Cleco was in compliance with the provisions of the 2016 Merger Commitments that would restrict 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, 2025.
Cleco - Cash Flows
Cash Flows Comparison for the Nine Months Ended September 30, 2026, and 2025
FOR THE NINE MONTHS ENDED SEPT. 30,
CLECO POWER
CLECO
(THOUSANDS) 2026 2025
VARIANCE
2026 2025
VARIANCE
Operating activities
Net income, adjusted for non-cash items(1)
$ 304,863 $ 381,398 $ (76,535) $ 308,028 $ 372,209 $ (64,181)
Changes in assets and liabilities
Accounts receivable (15,199) (34,592) 19,393 (19,752) (37,414) 17,662
Fuel inventory and materials and supplies (34,085) (14,159) (19,926) (34,085) (14,159) (19,926)
Prepayments (20,732) (36,845) 16,113 (20,482) (37,968) 17,486
Accounts payable (26,541) (7,622) (18,919) (27,631) (9,749) (17,882)
Taxes accrued 99,292 56,340 42,952 124,041 46,982 77,059
Other operating items with immaterial variances(2)
(40,723) (42,308) 1,585 (59,527) (67,168) 7,641
Net cash provided by operating activities $ 266,875 $ 302,212 $ (35,337) $ 270,592 $ 252,733 $ 17,859
Investing activities
Additions to property, plant, and equipment $ (362,048) $ (251,200) $ (110,848) $ (363,881) $ (251,223) $ (112,658)
CIAC, net of refunds 184,698 11 184,687 184,698 11 184,687
Proceeds from the sale of discontinued operations - - - 113,046 - 113,046
Other investing items with immaterial variances(2)
3,619 2,024 1,595 3,619 2,024 1,595
Net cash used in investing activities $ (173,731) $ (249,165) $ 75,434 $ (62,518) $ (249,188) $ 186,670
Financing activities
Draws on revolving credit facilities $ - $ 105,000 $ (105,000) $ 130,000 $ 153,000 $ (23,000)
Payments on revolving credit facilities - (180,000) 180,000 (130,000) (180,000) 50,000
Issuances of long-term debt - 305,000 (305,000) 249,525 305,000 (55,475)
Repayment of long-term debt (19,219) (190,087) 170,868 (379,219) (190,087) (189,132)
Other financing items with immaterial variances(2)
(136) (12,311) 12,175 (260) (12,311) 12,051
Net cash (used in) provided by financing activities
$ (19,355) $ 27,602 $ (46,957) $ (129,954) $ 75,602 $ (205,556)
(1) Non-cash items primarily include depreciation and amortization, unearned compensation, AFUDC - equity funds, deferred income taxes, and market-driven changes in the cash surrender value of company/trust-owned life insurance.
(2) For purposes of this analysis, management considered variances to be immaterial if they remained within plus or minus $10.0 million.
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2026 3RD QUARTER FORM 10-Q
Summary of Consolidated Results
Net Operating Cash Flows
Cleco's net cash provided by operating activities increased $17.9 million primarily due to changes in taxes accrued, accounts receivable, and prepayments. These increases were partially offset by lower net income, adjusted for non-cash items, primarily consisting of deferred income taxes, and changes in fuel inventory, materials and supplies inventory, and accounts payable. For more information on net income, see the discussion of operating results for the nine months ended September 30, 2026, and 2025 in "- Results of Operations - Summary of Consolidated Results." For more information on deferred income taxes, see Item 1, "Notes to the Unaudited Condensed Consolidated Financial Statements - Note 9 - Income Taxes."
Year-over-year changes in working capital accounts also materially impact the net cash provided by operating activities. For more information on these changes in working capital, see "- Working Capital."
Net Investing Cash Flows
Cleco's net cash used in investing activities decreased $186.7 million primarily due to the receipt of the remaining sale proceeds from the Cleco Cajun Divestiture and higher CIAC, net of refunds. The increase in CIAC was driven primarily by transactions with a data center developer, as well as the timing of receipts and increased customer-funded construction activity. These increases were partially offset by higher additions to property, plant, and equipment, net of AFUDC, which included a $55.0 million payment made in August 2026 to reserve manufacturing capacity for certain generation equipment for Cleco Power's proposed new combined-cycle gas turbine generating facility.
For more information on the data center developer, see Item 1, "Notes to the Unaudited Condensed Consolidated Financial Statements - Note 1 - Summary of Significant Accounting Policies - Related-Party Transactions."
For more information on the equipment reservation payment, see Item 1, "Notes to the Unaudited Condensed Consolidated Financial Statements - Note 4 - Regulatory Matters - Other Regulatory Matters - Other Deferred Costs."
Net Financing Cash Flows
For more information on financing activities, see Item 1, "Notes to the Unaudited Condensed Consolidated Financial Statements - Note 7 - 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, 2025.
Off-Balance Sheet Commitments and Guarantees
For information about off-balance sheet commitments and guarantees, see Item 1, "Notes to the Unaudited Condensed Consolidated Financial Statements - Note 12 - Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees."
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 9, 2024, the EPA issued a final rule under Section 111 of the Clean Air Act establishing GHG emission standards for existing fossil fuel-fired electric generating units (the Section 111d GHG Rule) and New Source Performance Standards for modified coal-fired units and new or reconstructed stationary combustion turbines. On September 17, 2026, the EPA published a final rule repealing most provisions of the May 9, 2024, rule, including the guidelines under the Section 111d GHG Rule, the carbon capture and sequestration/storage (CCS) standards for coal-fired generating units undergoing a large modification, and the CCS-based standards for new baseload stationary combustion turbines. Currently, Cleco does not expect the repeal to result in changes to the operation of its existing generating units.
Cleco continues to monitor and evaluate environmental regulatory developments that could affect its generating units. For a discussion of other Cleco environmental matters, see Item 1, "Notes to the Unaudited Condensed Consolidated Financial Statements - Note 12 - Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees - Litigation - LPSC Audits - 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, 2025.
Retail and Wholesale Rates
For information on Cleco Power's base rates, fuel rates, and environmental rates, see Part I, Item 1, "Business - Regulatory Matters, Industry Developments, and Franchises - Rates" in the Registrants' Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
On June 23, 2026, Cleco Power filed an application with the LPSC for a new FRP, with anticipated rates being effective July 1, 2027. For information on Cleco Power's FRP, see Item 1, "Notes to the Unaudited Condensed Consolidated Financial
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Statements - Note 4 - Regulatory Matters - Ratemaking - 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 12 - Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees - Litigation - LPSC Audits - Fuel Audit."
For information on Cleco Power's EAC, see Item 1, "Notes to the Unaudited Condensed Consolidated Financial Statements - Note 12 - Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees - Litigation - LPSC Audits - Environmental Audit."
For information on Cleco Power's wholesale rates, see Part II, Item 8, "Financial Statements and Supplementary Data - Notes to the Financial Statements - Note 14 - Regulation and Rates - Wholesale Rates" in the Registrants' Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
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, 2025.
Cleco Power is actively participating in programs to enhance its grid resilience against growing threats of extreme weather and climate change. For more information on Cleco Power's grid resiliency plan, see Part I, Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Overview - Grid Resiliency and Hardening."
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, 2025.
Market Structure
Wholesale Electric Markets
Regional Transmission Organization
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, 2025.
Electric Reliability Organization (ERO)
NERC, under oversight by FERC, develops and enforces mandatory reliability standards for the bulk power system and delegates compliance oversight authority to SERC. Cleco Power is subject to periodic Reliability Standards and Critical Infrastructure Protection (CIP) audits, with the next audits scheduled to begin in 2028.
Management cannot predict the outcome of future audits or whether any resulting findings could materially affect the Registrants' results of operations, financial condition, or cash flows. For a discussion of risks associated with FERC's regulation of Cleco Power's transmission system, see Part I,
Cleco Corporate Holdings LLC published this content on November 06, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 06, 2026 at 21:12 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]