Regulatory environment allows for reasonable ROE of 12.3% through base rates and full and timely pass-through of fuel costs, Regulated utility generates 70% of projected cash flow, with low operational risk and cost structure, and Little prospect for competitive pressure in the service territory. Failed merchant power strategy resulted in large write-offs, debt at the holding company level, and continued exposure to weak counterparties, Utility owns less than half of power requirements, with the balance met with short-term, purchased-power agreements, and The company will be challenged to fund a planned solid fuel plant in such a manner as to maintain financial ratios. The ratings on diversified energy company Cleco Corp. reflect a satisfactory business profile and an aggressive financial profile.
