An administrative law judge will hear testimony from both sides on the proposed sale of Cleco Corp. during hearings in Pineville this week in one of the final steps before the transaction is ultimately approved or rejected.
The Town Talk reports the hearings will begin at 9:30 a.m. this week in the Pineville City Council Chambers and could continue through the week. The hearings are public, but only previously entered witnesses will be allowed to testify.
The judge will make a recommendation to the Louisiana Public Service Commission, which is expected to vote early next year whether to approve the sale of central Louisiana’s only publicly traded company. The public will be allowed to speak before the PSC at the meeting where the vote will be taken.
“I am determined to keep Cleco customers’ long term interest at the heart of the commission’s analysis,” PSC Commissioner Clyde Holloway tells The Town Talk. “What is best for Louisiana, not Wall Street, is my concern.”
Whether the sale is good for Pineville-based Cleco and, by extension, the customers who depend on the company for affordable electricity has been the subject of intense debate for months.
Cleco agreed in October 2014 to a sale proposal for nearly $5 billion from an investment group led by Macquarie Infrastructure and Real Assets and British Columbia Investment Management Corp., together with John Hancock Financial.
The sale has received other regulatory clearance and was approved by Cleco stockholders in February, leaving PSC approval as the last significant hurdle before the deal can be closed.
Supporters of the sale say it offers stability because of promises the prospective new owners have made, including keeping Cleco headquartered in Pineville and operating independently, maintaining the number of employees and benefits at their current levels, continuing charitable and economic development contributions and extending service commitments. The new owners have also pledged to pay out $65 million in customer rate credits over 10 years.
The Pineville City Council and Central Louisiana Chamber of Commerce are among those who have passed resolutions supporting the sale.
Opponents worry that the amount of debt Cleco is taking on will negatively impact the company and ultimately cost ratepayers. In addition to $1.35 billion in assumed debt, the buyers are proposing using $1.35 billion in new debt as part of the sale. Opponents are also concerned about what happens 10 to 14 years down the road, when the Macquarie fund will look to sell its stake.
