Central Louisiana electric utility Cleco plans to pay $1 billion for NRG power plants and facilities that serve nine power cooperatives throughout Louisiana and indirectly increase its customer base by nearly 320,000 households, with the bulk of them in the state.
Under the proposed deal to acquire NRG's South Central business, Pineville-based Cleco would get five power generation stations, including Big Cajun in Jarreau, Big Cajun II in New Roads, Bayou Cove in Jennings, Sterlington in Sterlington and Cottonwood in Deweyville, Texas. The stations provide more than 3,500 megawatts of power. NRG would lease back Cottonwood and operate it until May 2025. The deal is subject to approval by federal and state regulators.
In comparison, Cleco's nine generating units produce 3,310 megawatts of power.
“Through this transformational acquisition, Cleco will more than double its generation capacity, while providing cost effective and reliable service across Louisiana,” said Bill Fontenot, CEO of Cleco Corporate Holdings. “This significant investment highlights the commitment of Cleco and its owners to our customers, communities, employees and the state of Louisiana.”
The plants provide power to nine Louisiana electric cooperatives, covering most of the state: Northeast Louisiana Power; Claiborne Electric Co-op; Concordia Electric Cooperative; Pointe Coupee Electric Membership; Jeff Davis Electric Co-op; Southwest Louisiana Electric Membership Corp., or SLEMCO; Washington-St. Tammany Electric; Beauregard Electric Cooperative; and South Louisiana Electric Cooperative Association, or SLECA.
The plants also provide power to five municipal power companies in Louisiana, Arkansas and Texas, with about 19,000 household and business customers. New Roads is the lone Louisiana municipal power company; it has about 2,600 customers.
An electric cooperative is a nonprofit corporation that is jointly owned by all of its members. The only two electric co-ops in Louisiana that don't receive power from NRG are Demco, based in Greenwell Springs, and Panola-Harrison Electric Co-op, which is based in Marshall, Texas, but serves parts of Caddo and DeSoto parishes.
Colby Cook, a spokesman for the Louisiana Public Service Commission, which would have to approve the sale, said no timeline for the review has been established. The PSC has yet to receive any formal data about the transaction, he said.
Cleco currently has 288,000 customers and serves another 156,000 households and businesses through wholesalers.
Cleco is setting up a new subsidiary, Cleco Energy LLC, to acquire the power plants. Cleco Power’s customers will not be affected by the transaction and the goal is to have a seamless transition for the customers receiving electricity from the plants, said Jennifer Cahill, a Cleco spokeswoman. The number of workers, salaries and benefits will remain the same for Cleco Energy and Cleco Power employees.
“Long term, our strategy will be to merge the companies under one regulated entity,” Fontenot said.
The sale is set to close before the end of 2018.