Cleco gets $411m depreciation on Madison Unit 3

Louisiana-based Cleco has sought and been awarded a $411m depreciation order from the Internal Revenue Service for the company’s Madison Unit 3.

The development was reported in a Jan. 4 8-K filing with the U.S. Securities and Exchange Commission (SEC).

As previously reported in a September SEC filing, Cleco and its Cleco Power unit filed a private letter ruling (PLR) request with the IRS.

The request was filed “in order to determine the appropriateness and timing of the special allowance for depreciation for the Madison Unit 3 Generating Station. Subsequently, on December 28, 2012, Cleco received a favorable PLR from the IRS, consistent with the request allowing for the additional first year depreciation deduction in the amount of $411 million as reflected on Cleco Corporation’s 2011 federal income tax return,” the company said.

“We filed a PLR request to eliminate uncertainty related to this deduction on the tax return,” a Cleco spokesperson said Jan. 8.

According to a Cleco website, Madison 3 is a 600-MW unit fueled by petroleum coke. The circulating fluidized combustion (CFB) plant is also capable of burning biomass as a fuel.

It entered operation in February 2010. The $1bn plant was built at the Brame energy center near Boyce, La.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.