Cleco Power LLC, the regulated utility subsidiary of Cleco Corp. in Pineville, is providing wholesale power to Dixie Electric Membership Corp. under a 10-year contract.
“We are happy to begin serving DEMCO and its suburban Baton Rouge customers,” Bruce Williamson, president and CEO of Cleco Corp., said Tuesday.
DEMCO serves about 103,000 customers in a seven-parish Baton Rouge area and has a peak load of about 600 megawatts. It is a distribution cooperative that purchases its power.
The DEMCO agreement with Cleco Power received state regulatory approval in October 2012. At the time, DEMCO officials said the power company was facing a rate increase with the impending 2014 end of a what they described as a generous 10-year contract with Louisiana Generating LLC.
They said Cleco Power’s proposal is DEMCO’s best option to keep customers’ costs down and serve the utility’s growing power needs.
“Our generation fleet, fueled by multiple fuel types, will insulate DEMCO from risks related to generation tied to a single fuel source or individual power plant. Our entire fleet is well-positioned to support DEMCO’s growing power needs,” Williamson said.
The addition of DEMCO will increase Cleco Power’s load by about 20 percent.
Cleco Power said in 2012 that its power-generating units, located in north, central and south Louisiana, are capable of using five different fuels that will help DEMCO mitigate risks associated with fuel commodity prices and environmental regulations.
The Cleco Power contract ended DEMCO’s long-standing power relationship with the Big Cajun II plant near New Roads owned by Louisiana Generating.
In addition to the power services agreement, Cleco and DEMCO will work together on economic development and other efforts.
Cleco is a regional energy company headquartered in Pineville. Cleco owns a regulated electric utility company, Cleco Power LLC, which owns 11 generating units with a total capacity of 3,340 megawatts. The utility serves about 284,000 customers in Louisiana through its retail business and supplies wholesale power in Louisiana and Mississippi.