A year after a group of foreign investors purchased Louisiana-based Cleco Corporation for roughly $4.7 billion, Gov. John Bel Edwards and the energy company’s execs have formalized a $7 million economic development fund that will be used to attract and create new jobs to the utility’s service area.
The fund is part of the deal the investors—led by Macquarie Infrastructure and Real Assets, British Columbia Investment Management Corporation and John Hancock Financial—struck with the state when it sought approval from the Louisiana Public Service Commission for the purchase.
On Wednesday, Cleco executives Peggy Scott and Bill Fontenot presented a “ceremonial check” to Edwards for the fund, which will be administered by Louisiana Economic Development.
“We embrace our mission to serve as a safe, reliable electricity provider, but Cleco is much more than that,” says Scott, the company’s board chairwoman. “We’re an economic development partner in communities across our state. Louisiana is poised for growth, and with Cleco’s $7 million contribution to LED, we will be a catalyst for that growth.”
The money will be used specifically for infrastructure improvements and other investments that attract new or prospective capital investment and job-creating projects to Cleco’s 23-parish service territory.
“We possess extraordinary economic development assets across the Cleco service territory, from Fort Polk and England Airpark to major ports, interstates and Class I railroads,” LED Secretary Don Pierson says in a statement. “What excites me most is that our No. 1 asset is our workforce, and I’m confident this fund will help us land tremendous projects that will significantly improve career opportunities and the quality of life for residents in this vital part of our state.”
The Louisiana Public Service Commission approved the purchase of Cleco in March 2016, with a 4-1 vote, and the deal closed the following month. The purchase was not without controversy as opponents of the deal argued the debt Cleco would take on as part of the deal exposed the utility to long-term financial risks and higher rates for customers.
Cleco’s buyers also agreed to put $134 million in escrow that the deal’s closing, not to raise rates for customers until 2020 and provide a onetime electricity bill credit averaging $500 for Cleco’s 288,000 customers.
The buyers also pledged to maintain Cleco’s statewide employment base of 1,200 people for the next decade.
“The Public Service Commission devoted an enormous amount of time and resources in our evaluation of the proposed sale,” Commission Chairman Scott Angelle says. “Only after we assured that ratepayers were fully protected—and would continue to receive safe, reliable service at the lowest reasonable cost—did we view the sale favorably.”