NEW IBERIA — Cleco Corp.’s proposed $4.9 billion sale to a private group of companies prompted a bevy of questions Thursday from the utility’s customers in Iberia Parish: Why sell the company? Will the rates go up? And why is CEO Bruce Williamson going to walk away with almost $30 million?
Susan Broussard, Cleco’s human resources director, assured the group of about 65 — 20 of them wearing shirts and hats that indicated they were Cleco employees — that their rates would stay the same and that no employees would be let go because of the sale.
On Williamson’s windfall of $27.7 million, Broussard said it was just part of the deal. “I’m not here to justify anybody’s paycheck,” she said. “We are interested in the future of our company.”
The five-member Louisiana Public Service Commission, which regulates utilities, is slated to vote Wednesday on whether to allow Cleco to be sold to a private equity group consisting of Macquarie Infrastructure and Real Assets, British Columbia Investment Management Corp. and John Hancock Financial. The deal would transition Cleco from a public company to a private concern based in Delaware.
Buried in the details of the sale is the plan for the equity group to borrow $1.35 billion to help finance the deal. The details also reveal the money that would be paid to Williamson and the almost $20 million that would be divided among the five other Cleco executives.
The meeting in New Iberia on Thursday night ran simultaneously with Cleco customer meetings in Many and Madisonville. All three meetings were organized by the nonprofit Alliance for Affordable Energy, which opposes the deal. Yvonne Cappel-Vickery, the alliance’s spokeswoman in New Iberia, said Thursday that Cleco already has the most expensive electricity in the state and that the deal with Macquarie would boost the rates higher. “We really do not feel that this deal is in the customers’ best interest,” Cappel-Vickery said.
At least one commissioner, District 4’s Clyde Holloway, in a letter penned Tuesday to Cleco customers, said he “has grave concerns regarding the sale of Cleco.”
One of his concerns was the way Cleco and Macquarie kept details under wraps: In filings submitted to the commission, Cleco and Macquarie were able to seal much of the information contained in the filings, and the seal also prevented commissioners and the commission’s staff from sharing the details publicly.
“At my request, this confidentiality seal was lifted by a judge, thereby allowing me to finally share … some of the larger issues I find troubling,” Holloway wrote.
Among the troubling aspects Holloway found: a plan by Macquarie to charge ratepayers $30 million under the guise it would go toward paying federal and state taxes, when the money actually would be distributed to the shareholders of the private company.
Holloway also chided the impression that Cleco allegedly gave civic organizations that donations from the utility would be cut off if the deal didn’t go through.
Holloway also said the Cleco and Macquarie filings show that Macquarie plans to sell the company in 10 years.
Broussard, Cleco’s HR director, on Thursday defended sealing the files. She said they contained sensitive information that, if leaked, could have hurt Cleco’s credit ratings.
The proposed sale also met opposition from administrative law Judge Valerie Seal Meiners, who in a nonbinding ruling Wednesday said the deal is not in the best interest of the ratepayers.
Darren Olagues, president of Cleco Corp. subsidiary Cleco Power, said in a news release that Meiners’ ruling described commitments that should be plugged into the deal to elevate it to being good for ratepayers, including regulatory commitments made by Macquarie. Olagues said those commitments, 77 of them, have been made part of the deal.
Olagues also said Meiners “was clearly unable” to consider the most recent opinions by debt-rating agencies Moody’s and Standard & Poor’s that claim Cleco’s debt would remain at investment grade level if the sale goes through.
Olagues also said the agreement with Macquarie calls for ratepayers’ savings of $143 million over 10 years.
Cleco has 286,000 customers in central and south Louisiana and on the north shore of Lake Pontchartrain.
Follow Billy Gunn on Twitter, @BillyGunnAcad