Storm Restoration Charge

When large storms or other disasters damage our electric system, Cleco Power launches massive, round-the-clock efforts to restore power as quickly and safely as possible.  In addition to deploying Cleco crews, we call upon contractor crews from across the country to help, which entails paying for wages, equipment rental, transportation, lodging and more.  Added to that are equipment costs, wire, poles, transformers, cross arms and fuses. 

The Interim Storm Restoration Charge was approved by the LPSC on May 19, 2021 and will be on customer bills as a line item titled “Storm Restoration Charge” beginning June 1, 2021.

For the average residential customer using 1,000 kilowatt-hours, approximately $2.23 per month.

The LPSC has authorized interim storm relief while Cleco Power works on securitization to recover the approved storm costs.  Securitization is a financing mechanism electric utilities use to recover storm expenses that usually takes 10-12 months.  Thus, customers will see an Interim Storm Restoration Charge on their bills until securitization process is complete.  Once the approved storm costs are securitized, the interim charge will be adjusted to reflect the new securitized rate, and the word “Interim” will be removed from the line item on the bill.

Securitization allows companies like Cleco Power to recover its storm costs by borrowing the money spent at low-interest bond rates which benefits customers.  The bond or loan is used to repay the company, and customers pay off the bond through a dedicated line item on their bill.  Customers will pay a lower amount over a longer period of time until the balance is paid.  Cleco Power earns no profit on securitized funds.

No. The expenses from the 2020 hurricanes are being combined into one Storm Restoration Charge.  This includes the recovery of approved expenses from Hurricanes Laura, Delta and Zeta.

The costs of providing reliable power are spread across the system and shared by all customers who are served by Cleco Power.  All customers are vulnerable to unexpected weather events, such as hurricanes, tornadoes and ice storms.  Spreading the costs across all customers helps keep the impact of storm recovery on individuals as low as possible.

Even if a customer wasn’t directly affected by the hurricanes, Cleco Power’s transmission and distribution systems were severely damaged from these storms.  Electrical systems are interconnected, and it takes all of the systems, including generation, to deliver reliable electricity to all customers.  A stronger grid in one section benefits customers in other sections of the grid.

These costs are reviewed and approved by the Louisiana Public Service Commission (LPSC).

After Hurricane Andrew in 1992, insurance companies stopped insuring utility poles, wires and other structures.  

As it pertains to the 2020 hurricane season, the company is pursuing opportunities, such as federal aid, to help offset costs.  However, to date, Cleco Power has not received any federal funding to cover the costs of rebuilding the electrical grid following the 2020 hurricanes, nor did the company receive any federal funds after Hurricanes Katrina or Rita.