Cleco Corporate Holdings LLC Annual Report: A Performance Summary

I’ve put together this guide to help you understand how Cleco Corporate Holdings performed this year. My goal is to translate complex filings into plain English so you can decide if this company fits your investment goals.

1. What does this company do?

Cleco is a regulated electric utility based in Louisiana. Think of them as the "pipes and wires" of the energy world. They generate electricity and manage the lines that deliver power to about 298,000 customers across 33 parishes. Their business is stable because electricity is a "must-have" service. In 2025, the company reported about $1.2 billion in revenue, mostly from retail electric sales and wholesale power agreements.

Important Note for Investors: A group of long-term infrastructure investors, including Macquarie Infrastructure Partners, owns Cleco. You cannot buy shares of Cleco on the public stock market. If you see "Cleco" in the news, it likely refers to their bonds or their role as a subsidiary within a private equity portfolio.

2. Major Strategic Shifts

The biggest news is the "Cleco Cajun Divestiture." In June 2024, the company sold its unregulated utility business, Cleco Cajun, for about $1.0 billion. This move simplifies the company. By selling these assets, Cleco is focusing entirely on its core, regulated utility business. They now rely on the steady income provided by their power grid, where they work with the Louisiana Public Service Commission (LPSC) to recover investments through authorized rates.

3. How they manage the "Checkbook"

As a utility, Cleco negotiates its prices:

• Rate Stability: Cleco uses a "Formula Rate Plan" to adjust prices annually. This helps them earn a target profit of 9.5% to 10.5% on the money they spend on power lines and plants.
• Fuel Costs: Natural gas fuels 60-70% of their generation. Because they are a regulated utility, they use "Fuel Adjustment Clauses." These allow them to pass fuel and power costs directly to customers, protecting their profit from volatile energy prices.
• Customer Base: No single customer accounts for more than 10% of their revenue. This makes their income more stable than it was in 2023. Residential customers provide about 45% of total revenue, ensuring consistent, recession-resistant cash flow.

4. Operational Snapshot

Cleco’s power generation fluctuates. In 2025, they generated 8,372 thousand MWh of electricity, down from 9,201 thousand MWh in 2024. This is normal because they participate in the MISO regional grid, which chooses the cheapest power plants to run. Their peak demand dropped from 2,777 MW in 2024 to 2,084 MW in 2025, largely because they sold the Cajun assets.

5. Key Risks

• Environmental Rules: New EPA mandates on carbon emissions and water systems will require over $300 million in upgrades through 2028. If the LPSC prevents Cleco from charging customers for these costs, the company’s profit will drop.
• Data Center Growth: New data centers could increase power demand by 15-20% over five years. This is a big opportunity, but it requires $500 million in grid upgrades. The company must spend this money before it starts earning revenue from these new customers.
• Weather & Infrastructure: Louisiana weather is a constant threat. The company keeps a $50 million storm reserve, but major hurricanes can cause over $100 million in damage. This forces the company to borrow money or seek emergency rate hikes, which can hurt their credit rating.

Final Thought for Your Strategy: Because Cleco is privately held, your primary way to participate in their growth is through their corporate debt. If you are looking for a stable, bond-based investment, focus on how the company manages its relationship with the LPSC and its ability to fund the $800 million in combined environmental and data-center-related upgrades over the next few years.