Regulatory environment allows for reasonable return on equity of 11.25% through base rates, full and timely pass-through of fuel costs, and rate certainty through the construction phase of the 600 MW Rodemacher Unit 3 plant; Regulated utility operations provided nearly 100% of cash flow as of year-end 2006, with moderate operational risk and a favorable cost structure; and Lack of competitive pressures in the service territory. Utility service territory has average to below-average demographics; Utility-owned generation cannot currently support peak power requirements, necessitating short-term power purchases; and Funding the construction of Rodemacher Unit 3 could challenge the company's financial profile. The ratings on diversified energy company Cleco Corp. reflect the company's strong business risk profile and expectations of an aggressive
