Cleco rate hike approved

Cleco Power company and their more than 276,000 customers in Louisiana should see their utility bills drop by the end of the year provided the company’s new solid fuel power plant goes online a scheduled.

The Rodemacher 3 plant, a petroleum coke-fired generator in central Louisiana, will offer a cheaper form of power to customers and shrink Cleco’s reliance on more costly natural gas to make electricity.

On Wednesday, state utility regulators agreed to a base rate increase to cover the costs of building the $1 billion Rodemacher unit. The Public Service Commission unanimously approved the rate hike to take effect when the plant is operational, which is expected to be at the end of the year.

However, the base rate increase - its first change since 1986 - is expected to be more than offset by Pineville-based Cleco getting a cheaper fuel source to generate power.

That will lower the fuel rate charged to customers and leave them with a net decrease in their utility bills, said Cleco Power President and COO Dilek Samil.

“The bill for fuel customers is going to go down,” she said. Samil added that Cleco estimates that its customers on average will see about a five percent reduction on their annual bill.

The Public Service Commission agreed to boost Cleco’s base rate by $173 million a year. The fuel savings with the new power plant, combined with tax credits, is expected to generate $213 million in annual savings, Samil said. The actual savings could fluctuate based on the costs of the fuel used by the plants.

Cleco has customers in 23 parishes in Louisiana, with its largest service area in the central part of the state.

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