CNL Cleco Corp.

The Louisiana Public Service Commission today unanimously approved plans by Cleco Power LLC, the electric utility subsidiary of Cleco Corp. (NYSE:CNL), to build a 600-megawatt solid-fuel unit at its Rodemacher Power Station near Boyce. Completion of the unit is expected in late 2009. "We still have hurdles to clear in the coming weeks before construction can start, but the LPSC's decision is great news for our customers and for the state," Cleco President and CEO Michael Madison said. "The LPSC showed its commitment to customers by approving our plan to diversify our fuel mix and reduce dependence on expensive natural gas. This unit will help stabilize and lower the cost of power, saving Cleco Power customers approximately $4 billion over a 30-year period. "The project is going to provide a huge economic boost to central Louisiana and the state both during construction and once it is up and running. We estimate that at the peak of construction 1,200 people will be working on the unit. The project is going to add millions of dollars in tax revenue for state and local governments as well," Madison said. "Commissioners also recognized the financial obligation we're undertaking with this $1 billion project, which is the largest investment in Cleco's history. They approved measures that help protect the financial integrity of our company once construction begins," Madison said. As part of the package of items before it Wednesday, the LPSC also approved: -- A staff recommendation that Cleco Power collect from customers a portion of its costs during the construction phase of the unit. Cleco Power will collect an amount equivalent to approximately 75 percent of the carrying costs of capital during construction, also known as Allowance for Funds Used During Construction (AFUDC). -- Recovery of $23.4 million annually of storm costs, which is the 10-year amortization of the estimated $161 million Cleco Power spent restoring power following hurricanes Katrina and Rita. Later this year, the LPSC will reevaluate and verify storm costs, consider securitization, and determine availability of other funds to offset Cleco Power's costs. Cleco Power is continuing to pursue federal funds to cover storm restoration costs and reduce what customers will have to pay. "It's in the best interest of our customers and our company that we finance the project in a way that allows us to keep our investment-grade credit ratings. Strong credit ratings help ensure access to capital and keep the cost of borrowing as low as possible, saving customers money. The collection of storm restoration expenses and a portion of the project construction costs should enable us to sustain our credit ratings," Madison said. "We're also pleased the commission agreed on the need to actively pursue securitization of storm costs. If securitization proves viable in Louisiana, it offers two major benefits -- first, customers save because it would lower customers' financing costs, and second it provides a cash infusion for the company while construction is under way," Madison said. Under securitization, Cleco Power would sell bonds backed by LPSC-approved storm cost recovery charges. Construction of the new unit will not begin until Cleco secures needed permits. The board of directors also must approve the project. "We're waiting for our final air permit, but we remain cautiously optimistic we'll receive it and other permits within our project timeline," Madison said. "It will be one of the cleanest units of its type in the country." The unit will use two circulating fluidized-bed boilers, which can burn a variety of solid fuels including petroleum coke, and a single steam turbine to will produce a nominal 600 megawatts. Cleco Corp. is a regional energy provider headquartered in Pineville, La. It operates a regulated electric utility company that serves about 267,000 customers across Louisiana. Cleco also operates a wholesale energy business that has approximately 1,350 megawatts of generating capacity. For more information about Cleco, visit www.cleco.com. Please note: This news release contains forward-looking statements about future results and circumstances with respect to which there are many risks and uncertainties, including the timing of receipt of the remaining environmental permits and approvals, weather and other natural phenomena, state and federal legislative and regulatory initiatives, the timing and extent of changes in commodity prices and interest rates, the timing of completion of the construction of and operational startup of the new unit, and the other risks and uncertainties more fully described in the company's latest Annual Report on Form 10-K. Actual results may differ materially from those indicated in such forward-looking statements.