Dive Brief:
- Cleco Corp. has asked the Louisiana Public Service Commission to reconsider a proposal to take the utility private, arguing that company officials were not allowed to sufficiently counter claims made by opponents of the $4.9 billion deal during a recent hearing, the New Orleans Advocate reports.
- In February, regulators voted to reject the proposed acquisition of public utility Cleco by an international consortium led by Australian investor firm Macquarie Infrastructure & Real Assets Inc. (MIRA) and Canada's British Columbia Investment Management Corp.
- According to Cleco, the commission’s vote was "procedurally flawed and wrongly decided," when protestors were allowed six hours to testify against the deal.
- Cleco offered shareholders more than $55/share for their stock, a 15% premium to shares' closing price in October 2014, when the deal was announced. But opponents of the deal say there is little benefit to ratepayers, and they are wary of an internal loan scheme the utility would use to reduce its tax burden.
Dive Insight:
Cleco and the international investors seeking to take the utility private have asked state regulators to reconsider the deal, but a report by The New Orleans Advocate paints a grim picture for a potential reversal.
“We had more than six and half hours of [hearings],” PSC Chairman Clyde Holloway told the newspaper. “We’ve reviewed thousands of pages of testimony. I think this thing has been thoroughly reviewed.”
While the utility has improved its offer slightly, with revised credit ratings resulting in lower rates, Holloway indicated it would not be enough to sway votes.“There’s no doubt about one thing, I’m going to vote no and I’m going to fight it with every ounce in my body,” he said.
The Alliance for Affordable Energy, which opposes the deal, has indicated it will challenge the petition for rehearing. The group argues that backers of the deal had been given plenty of time to speak already.
Customers would have received about $1.2 million per year in cost-of-service savings from the deal, which the investors said would bring total customer savings to approximately $143 million in the next decade and a half.