A consumer group that opposed the sale of Cleco to a coalition led by the world’s largest infrastructure asset manager is urging credit ratings agencies to review the details of the sale and also has asked the Public Service Commission to revisit its approval of the deal.
Several changes made to the Cleco sale during the last 20 minutes of the Louisiana Public Service Commission’s March 28 meeting will likely increase the risk to utility customers and could affect the company’s credit rating, according to the Alliance for Affordable Energy.
Neither the commission’s staff nor the public got the chance to review the changes, which included paying Cleco customers $136 million.
The alliance has asked the commission for permission to argue its position during a special meeting or at the commission’s April 28 meeting. If the sale is allowed to go through, Cleco’s customers could suffer “irreparable harm,” the group says in its motion for a rehearing.
Cleco sells electricity in parts of the parishes on the north shore of Lake Pontchartrain, in Acadiana and over much of central Louisiana.
Macquarie Infrastructure and Real Assets, which manages more than $100 billion in assets, is leading the coalition that agreed to pay $4.9 billion for Cleco. Cleco spokeswoman Robbyn Cooper issued a statement Wednesday saying the company’s credit worthiness remains strong.
The Public Service Commission built safeguards into the sale agreement that protects customers from any increased costs associated with Cleco’s credit ratings, she said. Cleco customers will not pay for any increased costs as a result of the company’s credit ratings.
“Any comment to the contrary is unfounded,” the statement says.
However, Alliance for Affordable Energy CEO Casey DeMoss said the sale requires Cleco to take on $2.8 billion in debt, and the utility has $2.9 billion in assets.
In January, Moody’s and Standard and Poor’s said Cleco’s credit rating would be downgraded to the lowest investment-grade status because of the sale.
“It is simply prudent to know what Cleco’s future outlook will be when we’re talking about billions of dollars of debt carried on the shoulders of Cleco’s customers,” DeMoss said.
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