Transcript Cleco Corporation

Cleco Corporation
Fuel Procurement
Electric Utility Perspective
McCloskey Annual Petcoke Conference
Houston, Texas
Bill Fontenot
Vice President Regulated
Generation Development
Cleco Power, LLC
Cleco Corporation (CNL)
Cleco
Corp.
Cleco
Power
Cleco
Midstream
Cleco
Headquarters
Two primary subsidiaries
Balance sheet: $2.7 billion
Market cap: $1.6 billion
Integrated, regulated electric
utility serving 270,000
customers in Louisiana for
over 70 years
Wholesale generation
subsidiary with 1,355 MW of
capacity
Overview of Rodemacher Unit 3
• 600-MW, solid-fuel
power generator
– Incorporates Circulating
Fluidized-Bed (CFB)
Technology
• Foster Wheeler design
– State-of-the-art pollution
controls
• Expected commercial
operation:
– mid-to-late 2009
Construction Facts
• Over 3 million man-hours worked
• Construction is 65% complete
• Design engineering effectively complete
• Remain on budget and on schedule
Why Rodemacher Unit 3?
2005
Purchased Power
33%
Coal & Lignite
24%
2010E¹
Purchased Power
11%
Natural Gas & Oil
Natural Gas & Oil
43%
40%
Solid Fuel
49%
CFB Fuel Flexibility
• CFB design allows for fuel consumption alternatives
• Fuel capability
–
–
–
–
Coal (Illinois, PRB, South American)
Lignite
Petcoke
Select re-newables
• Primary fuel specification
– Btu content
Flexible
– Sulfur content:
– HGI:
Up to 7%
30 to 100
• Sulfur removal primarily through limestone
consumption
Electric Utility Generation Objectives
• Low cost reliable power for its customers
Capital
Availability
Unit
Efficiency
O&M
Fuel
Costs
35% to 45% of
overall costs
Fuel Strategy - Supply
• Petcoke - Fuel choice for Rodemacher Unit 3
• Plentiful production in nearby Gulf Coast region
• Historically priced at a discount to coal
• 3-month storage capacity on site
Fuel Procurement Drivers
• Costs
• Reliability
– Commodity Price
– Origin or Source
– Delivery & Handling
– Term
– Treatment
– Mode of transportation
– Flexibility
– Alternative modes
Pricing
• Pricing Portfolio Approach
– Indexed pricing
– Fixed
– Collared
• Properties
– Costs driven by treatment or operational impact (i.e.
limestone, sand, fines)
• Overall cost per mmbtu is key
Cost Per Mmbtu
$/ mmbtu
Delivered Fuel
Adjusted for Treatment
2006
S Am Coal
2007
PRB
NAPP
Ill. Basin
Gulf Lignite
2008
USGC Petcoke
Terms and Conditions
• Contract tenure of 1 to 5 years
• Option to cancel or suspend delivery for
economic reasons
• Appropriate risk of loss and separation of
liability
Fuel Strategy - Transportation
• Reliable means of river/conveyor transportation
to site
• Use of Louisiana heartland waterways
(Mississippi, Red River)
• 5-to-7 day expected round trip from Gulf Coast
to site
• Loading/unloading facility to be constructed off
Red River
• 1.5 mile tube conveyor from loading/unloading
facility to site
1.5 Mile Conveyor to Plant
Delivery & Handling
• Costs typically driven by source location
• Will accept product from:
Production source
-orGulf Coast, Mississippi River fleet
• Will provide or use producer transportation
assets
• Availability of alternative delivery mode
Reliability is major concern
Status
• Savage Services will supply terminaling,
transportation and logistics
• Late stage petcoke supply negotiations with
multiple suppliers
– Expect 3-to-5 year supply in place by end of 3rd qtr
2008
• Continue to evaluate solid fuel pricing
Maintain Procurement Strategy
• Sustain savings to our customers
– Provide flexibility of solid fuel choice
– Reduce fuel dependence on natural gas
• Reliable delivery of power to Cleco
customers