Good utility and power plant operations, Low cost structure, and Little prospect for competitive pressure in the service territory. Poor regulatory environment, Exposure to merchant electric market risk and weak counterparties, and Lack of clarity on the company's strategic direction. The ratings on Cleco Corp. were lowered to 'BBB' from 'BBB+' in 2002, reflecting the response to revelations of energy-trading improprieties. That issue is no longer a concern, but continued uncertainties surrounding the company's unregulated merchant energy activities remain relevant. Cleco's involvement in unregulated electric generation raised its business-risk profile. The consequences of exposing itself to greater risk have materialized, as the creditworthiness of tolling counterparties has weakened and problems in the energy trading operations have been disclosed. Cleco's management
