----

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**UNITED      STATES SECURITIES AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-Q**

**For      the quarterly period ended **
**June 30, 2006**

**Or**

**Commission      file number 1-15759**

**CLECO      CORPORATION**

*(Exact      name of registrant as specified in its charter)*

|                                                                                                                      |                                                                |
|---------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------|
| **Louisiana***(State                or other jurisdiction of incorporation or                organization)*               | **72-1445282***(I.R.S.                Employer Identification No.)* |
|                                                                                                                      |                                                                |
| **2030                Donahue Ferry Road, Pineville, Louisiana***(Address                of principal executive offices)* | **71360-5226***(Zip                Code)*                           |
|                                                                                                                      |                                                                |
| **Registrant’s                telephone number, including area code: (318)                484-7400**                |
|                                                                                                                      |

**Commission      file number 1-05663**

**CLECO      POWER LLC**

*(Exact      name of registrant as specified in its charter)*

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------|
| **Louisiana***(State                or other jurisdiction of incorporation or                organization)*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | **72-0244480***(I.R.S.                Employer Identification No.)* |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                |
| **2030                Donahue Ferry Road, Pin****eville,                Louisiana***(Address                of principal executive offices)*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | **71360-5226***(Zip                Code)*                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                |
| **Registrant’s                telephone number, including area code: (318)                484-7400**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Indicate                by check mark whether the Registrants: (1) have filed all reports                required                to be filed by Section 13 or 15(d) of the Securities Exchange Act                of 1934                during the preceding 12 months (or for such shorter period that the                Registrants were required to file such reports) and (2) have been                subject                to such filing requirements for the past 90 days. Yes                 x     No __                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Indicate                by check mark whether Cleco Corporation is a large accelerated filer,                an                accelerated filer, or a non-accelerated filer. See definition of                “accelerated filer and large accelerated filer” in Rule 12b-2 of the                Exchange Act. (Check one): Large                accelerated filer                  x                         Accelerated                filer                               Non-accelerated                filer                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Indicate                by check mark whether Cleco Power LLC is a large accelerated filer,                an                accelerated filer, or a non-accelerated filer. See definition of                “accelerated filer and large accelerated filer” in Rule 12b-2 of the                Exchange Act. (Check one): Large                accelerated filer                                             Accelerated                filer                              Non-accelerated                filer                    x       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Indicate                by check mark whether the Registrants are shell companies (as defined                in                Rule 12b-2 of the Exchange Act) Yes                                      No  x                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

| Registrant                       | Description                of Class          | Shares                Outstanding at July 31, 2006 |
|----------------------------------|----------------------------------------------|----------------------------------------------------|
|                             |                                         |                                               |
| Cleco                Corporation | Common                Stock, $1.00 Par Value | 50,518,476                                         |

**Cleco      Power LLC, a wholly owned subsidiary of Cleco Corporation, meets the conditions      set forth in General Instructions H(1)(a) and (b) of Form 10-Q and is therefore      filing this Form 10-Q with the reduced disclosure      format.**

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|  TABLE                OF CONTENTS                                                             |                                                                                                                          |
|----------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------|
|                                                                                               | PAGE                                                                                                                          |
| GLOSSARY OF                  TERMS                                                            | 3                                                                                                                             |
| DISCLOSURE                  REGARDING                  FORWARD-LOOKING                  STATEMENTS | 5                                                                                                                             |
|                                                                                               |                                                                                                                          |   |
| **PART                  I**                                                                        | **Financial                  Information**                                                                                    |   |
| ITEM                  1.                                                                           | Cleco                  Corporation — Condensed Consolidated Financial Statements                                        | 6 |
|                                                                                               | Cleco                  Power — Condensed Financial Statements                                                           | 14 |
|                                                                                               | Notes                  to the Unaudited Condensed Financial Statements                                                        | 19 |
| ITEM                  2.                                                                           | Management’s                  Discussion and Analysis of Financial Condition and Results of                  Operations | 40 |
| ITEM                  3.                                                                           | Quantitative                  and Qualitative Disclosures about Market Risk                                                   | 55 |
| ITEM                  4.                                                                           | Controls                  and Procedures                                                                                      | 56 |
|                                                                                               |                                                                                                                          |   |
| **PART                  II**                                                                       | **Other                  Information**                                                                                        |   |
| ITEM                  1.                                                                           | Legal                  Proceedings                                                                                            | 57 |
| ITEM                  1A.                                                                          | Risk                  Factors                                                                                                 | 57 |
| ITEM                  2.                                                                           | Unregistered                  Sales of Equity Securities and Use of Proceeds                                                  | 59 |
| ITEM                  4.                                                                           | Submission                  of Matters to a Vote of Security Holders                                                          | 59 |
| ITEM                  5.                                                                           | Other                  Information                                                                                            | 59 |
| ITEM                  6.                                                                           | Exhibits                                                                                                                      | 60 |
|                                                                                               | Signatures                                                                                                                    | 61 |

----

GLOSSARY      OF      TERMS                                                                                                                                          

| ABBREVIATION                OR ACRONYM          | DEFINITION                                                                                                                                                                                                                         |
|-------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 401(k)                Plan                      | Cleco                Power 401(k) Savings and Investment Plan                                                                                                                                                                      |
| Acadia                                          | Acadia                Power Partners, LLC and its 1,160-MW combined-cycle, natural gas-fired                power plant near Eunice, Louisiana, 50% owned by APH and 50% owned                by                Calpine            |
| Amended                EPC Contract             | Amended                and Restated EPC Contract between Cleco Power and Shaw Constructors,                Inc.,                executed on May 12, 2006, to engineer, design, and construct Rodemacher                Unit 3.     |
| APB                                             | Accounting                Principles Board                                                                                                                                                                                         |
| APB                Opinion No. 18               | The                Equity Method of Accounting for Investments in Common                Stock                                                                                                                                      |
| APB                Opinion No. 25               | Accounting                for Stock Issued to Employees                                                                                                                                                                            |
| APB                Opinion No. 29               | Accounting                for Nonmonetary Transactions                                                                                                                                                                             |
| APH                                             | Acadia                Power Holdings LLC, a wholly owned subsidiary of                Midstream                                                                                                                                    |
| Attala                                          | Attala                Transmission LLC, a wholly owned subsidiary of                Midstream                                                                                                                                      |
| Calpine                                         | Calpine                Corporation                                                                                                                                                                                                 |
| Calpine                Debtors                  | Calpine,                CES, and certain other Calpine subsidiaries                                                                                                                                                                |
| Calpine                Debtors Bankruptcy Court | U.S.                Bankruptcy Court for the Southern District of New York                                                                                                                                                         |
| Calpine                Tolling Agreements       | Capacity                Sale and Tolling Agreements between Acadia and CES which expires                in                2022                                                                                                     |
| CCN                                             | Certificate                of Public Convenience and Necessity                                                                                                                                                                     |
| CES                                             | Calpine                Energy Services, L.P.                                                                                                                                                                                       |
| Cleco                Energy                     | Cleco                Energy LLC, a wholly owned subsidiary of Midstream                                                                                                                                                            |
| Compliance                Plan                  | The                compliance plan included in the Consent Agreement in FERC Docket                IN03-1-000                                                                                                                      |
| Consent                Agreement                | Stipulation                and Consent Agreement, dated as of July 25, 2003, between Cleco and                FERC                Staff                                                                                            |
| Diversified                Lands                | Diversified                Lands LLC, a wholly owned subsidiary of Cleco Innovations LLC, a                wholly                owned subsidiary of Cleco Corporation                                                             |
| EITF                                            | Emerging                Issues Task Force of the FASB                                                                                                                                                                              |
| EITF                No. 04-13                   | Accounting                for Purchases and Sales of Inventory with the Same                Counterparty                                                                                                                           |
| EITF                No. 06-3                    | How                Sales Taxes Collected from Customers and Remitted to Governmental                Authorities Should be Presented in the Income Statement (That Is,                Gross                Versus Net Presentation) |
| Entergy                                         | Entergy                Corporation                                                                                                                                                                                                 |
| Entergy                Gulf States              | Entergy                Gulf States, Inc.                                                                                                                                                                                           |
| Entergy                Louisiana                | Entergy                Louisiana, Inc.                                                                                                                                                                                             |
| Entergy                Mississippi              | Entergy                Mississippi, Inc.                                                                                                                                                                                           |
| Entergy                Services                 | Entergy                Services, Inc., as agent for Entergy Louisiana and Entergy Gulf                States                                                                                                                       |
| EPC                                             | Engineering,                Procurement, and Construction                                                                                                                                                                          |
| ERO                                             | Electric                Reliability Organization                                                                                                                                                                                   |
| ESOP                                            | Cleco                Corporation Employee Stock Ownership Plan                                                                                                                                                                     |
| ESPP                                            | Cleco                Corporation Employee Stock Purchase Plan                                                                                                                                                                      |
| Evangeline                                      | Cleco                Evangeline LLC, a wholly owned subsidiary of Midstream, and its 775-MW                combined-cycle, natural gas-fired power plant located in Evangeline                Parish, Louisiana                    |
| Evangeline                Tolling Agreement     | Capacity                Sale and Tolling Agreement between Evangeline and Williams which                expires                in 2020                                                                                             |
| FASB                                            | Financial                Accounting Standards Board                                                                                                                                                                                |
| FERC                                            | Federal                Energy Regulatory Commission                                                                                                                                                                                |
| FIN                                             | FASB                Interpretation No.                                                                                                                                                                                             |
| FIN                45                           | Guarantor’s                Accounting and Disclosure Requirements for Guarantees, Including                Indirect                Guarantees of Indebtedness to Others                                                      |
| FIN                46R                          | Consolidation                of Variable Interest Entities - an Interpretation of Accounting Research                Bulletin No. 51 (revised December 2003)                                                                       |
| FIN                48                           | Accounting                for Uncertainty in Income Taxes - an Interpretation of FASB Statement                No.                109                                                                                              |
| FSP                SFAS FIN 46R-6               | Determining                the Variability to Be Considered in Applying FASB Interpretation                No.                46R                                                                                                  |
| GDP-IPD                                         | Gross                Domestic Product - Implicit Price Deflator                                                                                                                                                                    |
| ICT                                             | Independent                Coordinator of Transmission                                                                                                                                                                             |
| Interconnection                Agreement        | Interconnection                Agreement and Real Estate Agreement between Attala and Entergy                Mississippi                                                                                                           |
| IRP                                             | Integrated                Resource Planning                                                                                                                                                                                        |
| kWh                                             | Kilowatt-hour(s)                as applicable                                                                                                                                                                                      |
| LDEQ                                            | Louisiana                Department of Environmental Quality                                                                                                                                                                       |
| LIBOR                                           | London                Inter-Bank Offer Rate                                                                                                                                                                                        |
| Lignite                Mining Agreement         | Dolet                Hills Mine Lignite Mining Agreement, dated as of May 31,                2001                                                                                                                                  |
| LPSC                                            | Louisiana                Public Service Commission                                                                                                                                                                                 |
| LTICP                                           | Cleco                Corporation Long-Term Incentive Compensation                Plan                                                                                                                                              |

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| ABBREVIATION                OR ACRONYM     | DEFINITION                                                                                                                                                                                                                                                                                                                                                                               |
|--------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| MAI                                        | Mirant                Americas, Inc., a wholly owned subsidiary of Mirant                Corporation                                                                                                                                                                                                                                                                                     |
| Midstream                                  | Cleco                Midstream Resources LLC, a wholly owned subsidiary of Cleco                Corporation                                                                                                                                                                                                                                                                              |
| Moody’s                              | Moody’s                Investors Service                                                                                                                                                                                                                                                                                                                                           |
| MW                                         | Megawatt(s)                as applicable                                                                                                                                                                                                                                                                                                                                                 |
| NOPR                                       | Notice                of Proposed Rulemaking                                                                                                                                                                                                                                                                                                                                             |
| Not                meaningful              | A                percentage comparison of these items is not statistically meaningful                because the percentage difference is greater than                1,000%.                                                                                                                                                                                                            |
| PEH                                        | Perryville                Energy Holdings LLC, a wholly owned subsidiary of                Midstream                                                                                                                                                                                                                                                                                     |
| Perryville                                 | Perryville                Energy Partners, L.L.C., a wholly owned subsidiary of PEH, which                retained                ownership of the plant-related transmission assets following the                sale of                its 718-MW, natural gas-fired power plant (sold to Entergy Louisiana                on                June 30, 2005) near Perryville, Louisiana |
| Power                Purchase Agreement    | Power                Purchase Agreement, dated as of January 28, 2004, between Perryville                and                Entergy Services                                                                                                                                                                                                                                             |
| Registrant(s)                              | Cleco                Corporation and Cleco Power                                                                                                                                                                                                                                                                                                                                         |
| RFP                                        | Request                for Proposal                                                                                                                                                                                                                                                                                                                                                      |
| Rodemacher                Unit 3           | A                600-MW solid fuel generating unit under construction by Cleco Power                at its                existing Rodemacher plant site in Boyce, Louisiana. The unit will                utilize                circulating fluidized bed combustion technology, with petroleum coke                as                the unit’s planned primary fuel source.    |
| RSP                                        | Rate                Stabilization Plan                                                                                                                                                                                                                                                                                                                                                   |
| RTO                                        | Regional                Transmission Organization                                                                                                                                                                                                                                                                                                                                        |
| Sale                Agreement              | Purchase                and Sale Agreement, dated as of January 28, 2004, between Perryville                and                Entergy Louisiana                                                                                                                                                                                                                                         |
| SEC                                        | Securities                and Exchange Commission                                                                                                                                                                                                                                                                                                                                        |
| Senior                Loan Agreement       | Construction                and Term Loan Agreement, dated as of June 7, 2001, between Perryville                and                KBC Bank N.V., as Agent Bank                                                                                                                                                                                                                         |
| SERP                                       | Cleco                Corporation Supplemental Executive Retirement Plan                                                                                                                                                                                                                                                                                                                  |
| SFAS                                       | Statement                of Financial Accounting Standards                                                                                                                                                                                                                                                                                                                               |
| SFAS                No. 71                 | Accounting                for the Effects of Certain Types of Regulation                                                                                                                                                                                                                                                                                                                 |
| SFAS                No. 109                | Accounting                for Income Taxes                                                                                                                                                                                                                                                                                                                                               |
| SFAS                No. 123                | Accounting                for Stock-Based Compensation                                                                                                                                                                                                                                                                                                                                   |
| SFAS                No. 123R               | Share-Based                Payment                                                                                                                                                                                                                                                                                                                                                       |
| SFAS                No. 131                | Disclosures                about Segments of an Enterprise and Related Information                                                                                                                                                                                                                                                                                                       |
| SFAS                No. 133                | Accounting                for Derivative Instruments and Hedging Activities                                                                                                                                                                                                                                                                                                              |
| SFAS                No. 140                | Accounting                for Transfers and Servicing of Financial Assets and Extinguishments                of                Liabilities                                                                                                                                                                                                                                               |
| SFAS                No. 149                | Amendment                of Statement 133 on Derivative Instruments and Hedging                Activities                                                                                                                                                                                                                                                                                |
| SFAS                No. 155                | Accounting                for Certain Hybrid Financial Instruments - an amendment of FASB Statements                No. 133 and 140                                                                                                                                                                                                                                                      |
| SFAS                No. 156                | Accounting                for Servicing of Financial Assets - an amendment of FASB Statement                No.                140                                                                                                                                                                                                                                                       |
| Shaw                                       | Shaw                Constructors, Inc., a subsidiary of The Shaw Group Inc.                                                                                                                                                                                                                                                                                                              |
| Subordinated                Loan Agreement | Subordinated                Loan Agreement, dated as of August 23, 2002, between Perryville and                MAI                                                                                                                                                                                                                                                                       |
| Support                Group               | Cleco                Support Group LLC, a wholly owned subsidiary of Cleco                Corporation                                                                                                                                                                                                                                                                                    |
| SWEPCO                                     | Southwestern                Electric Power Company                                                                                                                                                                                                                                                                                                                                       |
| VaR                                        | Value-at-risk                                                                                                                                                                                                                                                                                                                                                                            |
| Westar                                     | Westar                Energy, Inc.                                                                                                                                                                                                                                                                                                                                                       |
| Williams                                   | Williams                Power Company, Inc.                                                                                                                                                                                                                                                                                                                                              |

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DISCLOSURE      REGARDING      FORWARD-LOOKING STATEMENTS                                                                                             

| §   | Factors                affecting utility operations, such as unusual weather conditions                or other                natural phenomena; catastrophic                weather-related damage (such as hurricanes and tropical storms);                unscheduled generation outages; unusual maintenance or repairs;                unanticipated changes to fuel costs, cost of and reliance on natural                gas                as a component of Cleco’s generation fuel mix and their impact on                competition and franchises, fuel supply costs or availability constraints                due to higher demand, shortages, transportation problems or other                developments; environmental incidents; or power transmission system                constraints; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Cleco                Corporation’s holding company structure and its dependence on the                earnings, dividends, or distributions from its subsidiaries to meet                its                debt obligations and pay dividends on its common                stock; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Cleco                Power’s ability to construct, operate, and maintain, within its projected                costs (including financing) and timeframe, Rodemacher Unit 3, in                addition                to any other self-build projects identified in future IRP and RFP                processes; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Dependence                of Cleco Power for energy from sources other than its facilities                and the                uncertainty of future long-term sources of such additional                energy; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Nonperformance                by and creditworthiness of counterparties under tolling, power purchase,                and energy service agreements, or the restructuring of those agreements,                including possible termination; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Outcome                of the Calpine Debtors bankruptcy filing and its effect on agreements                with                Acadia; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| §   | The                final amount of storm restoration costs approved by the LPSC that                ultimately can be recovered from Cleco Power’s                customers; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Regulatory                factors such as changes in rate-setting policies, recovery of investments                made under traditional regulation, the frequency and timing of rate                increases or decreases, the results of periodic fuel audits, the                results                of IRP and RFP processes, the formation of RTOs and ICTs, and the                establishment by an ERO of reliability standards for bulk power systems                and compliance with these standards by Cleco                Power; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Financial                or regulatory accounting principles or policies imposed by the FASB,                the                SEC, the Public Company Accounting Oversight Board, the FERC, the                LPSC or                similar entities with regulatory or accounting                oversight; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Economic                conditions, including the ability of customers to continue paying                for high                energy costs, related growth and/or down-sizing of businesses in                Cleco’s                service area, monetary fluctuations, increase in commodity prices,                and                inflation rates; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Credit                ratings of Cleco Corporation, Cleco Power, and                Evangeline; |
|--------------------|-------------------------------------------------------------------------------------------------|

| §   | Changing                market conditions and a variety of other factors associated with                physical                energy, financial transactions, and energy service activities, including,                but not limited to, price, basis, credit, liquidity, volatility,                capacity,                transmission, interest rates, and warranty                risks; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Acts                of terrorism; |
|--------------------|-----------------------------------|

| §   | Availability                or cost of capital resulting from changes in Cleco’s business or financial                condition, interest rates, or market perceptions of the electric                utility                industry and energy-related                industries; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Employee                work force factors, including work stoppages and changes in key                executives; |
|--------------------|--------------------------------------------------------------------------------------------------------------------|

| §   | Legal,                environmental, and regulatory delays and other obstacles associated                with                mergers, acquisitions, capital projects, reorganizations, or investments                in joint ventures; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Costs                and other effects of legal and administrative proceedings, settlements,                investigations, claims and other matters;                and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Changes                in federal, state, or local legislative requirements, such as the                adoption                of the Energy Policy Act of 2005, and changes in tax laws or rates,                regulating policies or environmental laws and                regulations. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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PART        I— FINANCIAL        INFORMATION                                                                                                                         

**ITEM      1.** CONDENSED      CONSOLIDATED FINANCIAL STATEMENTS                                                                             

**Cleco      Corporation**

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|  Condensed                Consolidated Statements of Income (Unaudited)                                                                   |                                                 |           |
|------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------|----------------|
|                                                                                                                                           | FOR                  THE THREE MONTHS ENDED JUNE 30, |           |
| (THOUSANDS,                  EXCEPT SHARE AND PER SHARE AMOUNTS)                                                                               | **2006**                                             |           | 2005 |   |
| **Operating                  revenue**                                                                                                         |                                                 |           |   |   |
| Electric                  operations                                                                                                           | **$**                                                | **241,286**    |   | $ | 183,881 |   |
| Other                  operations                                                                                                              |                                                 | **7,929**      |   |   | 8,102 |   |
| Affiliate                  revenue                                                                                                             |                                                 | **1,737**      |   |   | 2,378 |   |
| Gross                  operating revenue                                                                                                       |                                                 | **250,952**    |   |   | 194,361 |   |
| Electric                  customer credits                                                                                                     |                                                 | **-**          |   |   | (253 | ) |
| Operating                  revenue, net                                                                                                        |                                                 | **250,952**    |   |   | 194,108 |   |
| **Operating                  expenses**                                                                                                        |                                                 |           |   |   |   |   |
| Fuel                  used for electric generation                                                                                             |                                                 | **57,990**     |   |   | 13,725 |   |
| Power                  purchased for utility customers                                                                                         |                                                 | **98,703**     |   |   | 92,501 |   |
| Other                  operations                                                                                                              |                                                 | **24,399**     |   |   | 21,118 |   |
| Maintenance                                                                                                                                    |                                                 | **14,221**     |   |   | 13,653 |   |
| Depreciation                                                                                                                                   |                                                 | **15,714**     |   |   | 15,105 |   |
| Taxes                  other than income taxes                                                                                                 |                                                 | **10,577**     |   |   | 9,281 |   |
| Gain                  on sales of assets                                                                                                       |                                                 | **(68**        | **)** |   | (2,201 | ) |
| Total                  operating expenses                                                                                                      |                                                 | **221,536**    |   |   | 163,182 |   |
| **Operating                  income**                                                                                                          |                                                 | **29,416**     |   |   | 30,926 |   |
| Interest                  income                                                                                                               |                                                 | **1,943**      |   |   | 884 |   |
| Allowance                  for other funds used during construction                                                                            |                                                 | **1,372**      |   |   | 831 |   |
| Equity                  income from investees                                                                                                  |                                                 | **15,233**     |   |   | 11,044 |   |
| Other                  income                                                                                                                  |                                                 | **119**        |   |   | 441 |   |
| Other                  expense                                                                                                                 |                                                 | **(385**       | **)** |   | (228 | ) |
| **Interest                  charges**                                                                                                          |                                                 |           |   |   |   |   |
| Interest                  charges, including amortization of debt expenses, premium and discount,                  net of capitalized interest |                                                 | **11,403**     |   |   | 10,930 |   |
| Allowance                  for borrowed funds used during construction                                                                         |                                                 | **(493**       | **)** |   | (278 | ) |
| Total                  interest charges                                                                                                        |                                                 | **10,910**     |   |   | 10,652 |   |
| **Income                  from continuing operations before income taxes**                                                                     |                                                 | **36,788**     |   |   | 33,246 |   |
| Federal                  and state income tax expense                                                                                          |                                                 | **13,459**     |   |   | 12,547 |   |
| **Income                  from continuing operations**                                                                                         |                                                 | **23,329**     |   |   | 20,699 |   |
| **Discontinued                  operations**                                                                                                   |                                                 |           |   |   |   |   |
| Loss                  from discontinued operations, net of tax                                                                                 |                                                 | **(103**       | **)** |   | (72 | ) |
| **Net                  income**                                                                                                                |                                                 | **23,226**     |   |   | 20,627 |   |
| Preferred                  dividends requirements, net                                                                                         |                                                 | **427**        |   |   | 448 |   |
| **Net                  income applicable to common stock**                                                                                     | **$**                                                | **22,799**     |   | $ | 20,179 |   |
| **Average                  shares of common stock outstanding**                                                                                |                                                 |           |   |   |   |   |
| Basic                                                                                                                                          |                                                 | **50,053,685** |   |   | 49,507,159 |   |
| Diluted                                                                                                                                        |                                                 | **52,297,838** |   |   | 51,628,677 |   |
| **Basic                  earnings per share**                                                                                                  |                                                 |           |   |   |   |   |
| From                  continuing operations                                                                                                    | **$**                                                | **0.45**       |   | $ | 0.40 |   |
| Net                  income applicable to common stock                                                                                         | **$**                                                | **0.45**       |   | $ | 0.40 |   |
| **Diluted                  earnings per share**                                                                                                |                                                 |           |   |   |   |   |
| From                  continuing operations                                                                                                    | **$**                                                | **0.44**       |   | $ | 0.40 |   |
| Net                  income applicable to common stock                                                                                         | **$**                                                | **0.44**       |   | $ | 0.40 |   |
| **Cash                  dividends paid per share of common stock**                                                                             | **$**                                                | **0.225**      |   | $ | 0.225 |   |
| The                  accompanying notes are an integral part of the condensed consolidated                  financial statements.              |                                                 |           |   |   |   |   |

----

|  CondensedConsolidated              Statements of Comprehensive Income (Unaudited)                                                                          |                                               |       |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------|------------|
|                                                                                                                                                                  | FOR                THE THREE MONTHS ENDED JUNE 30, |       |
| (THOUSANDS)                                                                                                                                                           | **200****6**                                       |       | 2005 |   |
| Net                income                                                                                                                                             | **$**                                              | **23,226** |   | $ | 20,627 |   |
| Other                comprehensive income, net of tax:                                                                                                                |                                               |       |   |   |   |   |
| Net                unrealized loss                from limited partnership (net of tax benefit of $7 in                2005)                                          |                                               | **-**      |   |   | (11 | ) |
| Net                unrealized loss                from available-for-sale securities (net of tax benefit of $42 in                2006 and                $0 in 2005) |                                               | **(67**    | **)** |   | - |   |
| Other                comprehensive                income (loss)                                                                                                       |                                               | **(67**    | **)** |   | (11 | ) |
| **Comprehensive                income, net of tax**                                                                                                                   | **$**                                              | **23,159** |   | $ | 20,616 |   |
| The                accompanying notes are an integral part of the condensed consolidated                financial statements.                                         |                                               |       |   |   |   |   |

----

|  Condensed              Consolidated Statements of Income (Unaudited)                                                            |                                                            |           |
|--------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------|----------------|
|                                                                                                                                       | FOR                THE SIX MONTHS ENDED JUNE                30, |           |
| (THOUSANDS,                EXCEPT SHARE AND PER SHARE AMOUNTS)                                                                             | **2006**                                                        |           | 2005 |   |
| **Operating                revenue**                                                                                                       |                                                            |           |   |   |
| Electric                operations                                                                                                         | **$**                                                           | **452,275**    |   | $ | 346,712 |   |
| Other                operations                                                                                                            |                                                            | **14,525**     |   |   | 15,252 |   |
| Affiliate                revenue                                                                                                           |                                                            | **3,188**      |   |   | 4,731 |   |
| Gross                operating revenue                                                                                                     |                                                            | **469,988**    |   |   | 366,695 |   |
| Electric                customer credits                                                                                                   |                                                            | **4,382**      |   |   | (471 | ) |
| Operating                revenue, net                                                                                                      |                                                            | **474,370**    |   |   | 366,224 |   |
| **Operating                expenses**                                                                                                      |                                                            |           |   |   |   |   |
| Fuel                used for electric generation                                                                                           |                                                            | **106,353**    |   |   | 62,473 |   |
| Power                purchased for utility customers                                                                                       |                                                            | **199,486**    |   |   | 143,015 |   |
| Other                operations                                                                                                            |                                                            | **41,108**     |   |   | 43,494 |   |
| Maintenance                                                                                                                                |                                                            | **20,153**     |   |   | 23,124 |   |
| Depreciation                                                                                                                               |                                                            | **31,358**     |   |   | 29,876 |   |
| Taxes                other than income taxes                                                                                               |                                                            | **20,589**     |   |   | 19,708 |   |
| Gain                on sales of assets                                                                                                     |                                                            | **(68**        | **)** |   | (2,206 | ) |
| Total                operating expenses                                                                                                    |                                                            | **418,979**    |   |   | 319,484 |   |
| **Operating                income**                                                                                                        |                                                            | **55,391**     |   |   | 46,740 |   |
| Interest                income                                                                                                             |                                                            | **4,435**      |   |   | 1,851 |   |
| Allowance                for other funds used during construction                                                                          |                                                            | **2,041**      |   |   | 1,779 |   |
| Equity                income from investees                                                                                                |                                                            | **15,606**     |   |   | 20,873 |   |
| Other                income                                                                                                                |                                                            | **227**        |   |   | 819 |   |
| Other                expense                                                                                                               |                                                            | **(713**       | **)** |   | (791 | ) |
| **Interest                charges**                                                                                                        |                                                            |           |   |   |   |   |
| Interest                charges, including amortization of debt expenses, premium and discount,                net of capitalized interest |                                                            | **22,579**     |   |   | 23,049 |   |
| Allowance                for borrowed funds used during construction                                                                       |                                                            | **(719**       | **)** |   | (594 | ) |
| Total                interest charges                                                                                                      |                                                            | **21,860**     |   |   | 22,455 |   |
| **Income                from continuing operations before income taxes**                                                                   |                                                            | **55,127**     |   |   | 48,816 |   |
| Federal                and state income tax expense                                                                                        |                                                            | **19,573**     |   |   | 18,543 |   |
| **Income                from continuing operations**                                                                                       |                                                            | **35,554**     |   |   | 30,273 |   |
| **Discontinued                operations**                                                                                                 |                                                            |           |   |   |   |   |
| Loss                from discontinued operations, net of tax                                                                               |                                                            | **(190**       | **)** |   | (205 | ) |
| **Net                income**                                                                                                              |                                                            | **35,364**     |   |   | 30,068 |   |
| Preferred                dividends requirements, net                                                                                       |                                                            | **886**        |   |   | 923 |   |
| **Net                income applicable to common stock**                                                                                   | **$**                                                           | **34,478**     |   | $ | 29,145 |   |
| **Average                shares of common stock outstanding**                                                                              |                                                            |           |   |   |   |   |
| Basic                                                                                                                                      |                                                            | **49,956,429** |   |   | 49,396,105 |   |
| Diluted                                                                                                                                    |                                                            | **52,095,625** |   |   | 51,558,920 |   |
| **Basic                earnings per share**                                                                                                |                                                            |           |   |   |   |   |
| From                continuing operations                                                                                                  | **$**                                                           | **0.68**       |   | $ | 0.59 |   |
| From                discontinued operations                                                                                                | **$**                                                           | **-**          |   | $ | (0.01 | ) |
| Net                income applicable to common stock                                                                                       | **$**                                                           | **0.68**       |   | $ | 0.58 |   |
| **Diluted                earnings per share**                                                                                              |                                                            |           |   |   |   |   |
| From                continuing operations                                                                                                  | **$**                                                           | **0.68**       |   | $ | 0.59 |   |
| From                discontinued operations                                                                                                | **$**                                                           | **-**          |   | $ | (0.01 | ) |
| Net                income applicable to common stock                                                                                       | **$**                                                           | **0.68**       |   | $ | 0.58 |   |
| **Cash                dividends paid per share of common stock**                                                                           | **$**                                                           | **0.450**      |   | $ | 0.450 |   |
| The                accompanying notes are an integral part of the condensed consolidated                financial statements.              |                                                            |           |   |   |   |   |

----

|  CondensedConsolidated              Statements of Comprehensive Income (Unaudited)                                                                           |                                                            |       |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------|------------|
|                                                                                                                                                                   | FOR                THE SIX MONTHS ENDED JUNE                30, |       |
| (THOUSANDS)                                                                                                                                                            | **200****6**                                                    |       | 2005 |   |
| Net                income                                                                                                                                              | **$**                                                           | **35,364** |   | $ | 30,068 |   |
| Other                comprehensive income, net of tax:                                                                                                                 |                                                            |       |   |   |   |   |
| Net                unrealized income from limited partnership (net of tax expense of                $20                in 2005)                                        |                                                            | **-**      |   |   | 33 |   |
| Net                unrealized loss from available-for-sale securities (net of tax benefit                of                $12                in 2006 and $37 in 2005) |                                                            | **(19**    | **)** |   | (59 | ) |
| Other                comprehensive                loss                                                                                                                 |                                                            | **(19**    | **)** |   | (26 | ) |
| **Comprehensive                income, net of tax**                                                                                                                    | **$**                                                           | **35,345** |   | $ | 30,042 |   |
| The                accompanying notes are an integral part of the condensed consolidated                financial statements.                                          |                                                            |       |   |   |   |   |

----

|  CondensedConsolidated              Balance Sheets (Unaudited)                                                                    |                                               |          |                                |   |
|----------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------|---------------|-------------------------------------|--------|
| (THOUSANDS)                                                                                                                            | **AT                JUNE 30,                2006** |          | AT                DECEMBER 31, 2005 |
| **Assets**                                                                                                                             |                                               |          |                                |   |
| Current                assets                                                                                                          |                                               |          |                                |   |
| Cash                and cash equivalents                                                                                               | **$**                                              | **81,962**    |                                | $      | 219,153 |   |
| Customer                accounts receivable (less allowance for doubtful accounts of $1,139                in 2006 and $1,262 in 2005) |                                               | **46,753**    |                                |   | 54,768 |   |
| Accounts                receivable - affiliate                                                                                         |                                               | **8,239**     |                                |   | 1,071 |   |
| Other                accounts receivable                                                                                               |                                               | **28,552**    |                                |   | 33,911 |   |
| Unbilled                revenue                                                                                                        |                                               | **22,967**    |                                |   | 17,878 |   |
| Fuel                inventory, at average cost                                                                                         |                                               | **44,088**    |                                |   | 21,313 |   |
| Material                and supplies inventory, at average cost                                                                        |                                               | **30,861**    |                                |   | 24,289 |   |
| Risk                management assets                                                                                                  |                                               | **-**         |                                |   | 10,110 |   |
| Accumulated                deferred fuel                                                                                               |                                               | **66,431**    |                                |   | 23,165 |   |
| Cash                surrender value of company-/trust-owned life insurance                policies                                     |                                               | **24,416**    |                                |   | 22,888 |   |
| Margin                deposits                                                                                                         |                                               | **16,194**    |                                |   | - |   |
| Prepayments                                                                                                                            |                                               | **4,262**     |                                |   | 3,344 |   |
| Other                current assets                                                                                                    |                                               | **1,220**     |                                |   | 2,578 |   |
| Total                current assets                                                                                                    |                                               | **375,945**   |                                |   | 434,468 |   |
| Property,                plant and equipment                                                                                           |                                               |          |                                |   |   |   |
| Property,                plant and equipment                                                                                           |                                               | **1,861,125** |                                |   | 1,836,973 |   |
| Accumulated                depreciation                                                                                                |                                               | **(852,853**  | **)**                               |   | (804,323 | ) |
| Net                property, plant and equipment                                                                                       |                                               | **1,008,272** |                                |   | 1,032,650 |   |
| Construction                work in progress                                                                                           |                                               | **156,241**   |                                |   | 156,053 |   |
| Total                property, plant and equipment, net                                                                                |                                               | **1,164,513** |                                |   | 1,188,703 |   |
| Equity                investment in investees                                                                                          |                                               | **336,179**   |                                |   | 317,762 |   |
| Prepayments                                                                                                                            |                                               | **6,018**     |                                |   | 5,961 |   |
| Restricted                cash                                                                                                         |                                               | **88**        |                                |   | 87 |   |
| Regulatory                assets and liabilities - deferred taxes, net                                                                 |                                               | **91,945**    |                                |   | 90,960 |   |
| Regulatory                assets - other                                                                                               |                                               | **178,255**   |                                |   | 53,439 |   |
| Other                deferred charges                                                                                                  |                                               | **42,147**    |                                |   | 58,108 |   |
| **Total                assets**                                                                                                        | **$**                                              | **2,195,090** |                                | $      | 2,149,488 |   |
| The                accompanying notes are an integral part of the condensed consolidated                financial statements.          |                                               |          |                                |   |   |   |

----

|  CondensedConsolidated              Balance Sheets (Unaudited) (Continued)                                                                                                                                        |                                               |          |                                |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------|---------------|-------------------------------------|--------|
| (THOUSANDS)                                                                                                                                                                                                            | **AT                JUNE 30,                2006** |          | AT                DECEMBER 31, 2005 |
| **Liabilities                and shareholders’ equity**                                                                                                                                                          |                                               |          |                                |   |
| **Liabilities**                                                                                                                                                                                                        |                                               |          |                                |   |
| Current                liabilities                                                                                                                                                                                     |                                               |          |                                |   |
| Long-term                debt due within one year                                                                                                                                                                      | **$**                                              | **55,000**    |                                | $      | 40,000 |   |
| Accounts                payable                                                                                                                                                                                        |                                               | **110,328**   |                                |   | 143,692 |   |
| Retainage                                                                                                                                                                                                              |                                               | **3,025**     |                                |   | 768 |   |
| Accrued                payroll                                                                                                                                                                                         |                                               | **2,966**     |                                |   | 2,875 |   |
| Accounts                payable - affiliate                                                                                                                                                                            |                                               | **8,870**     |                                |   | 3,439 |   |
| Customer                deposits                                                                                                                                                                                       |                                               | **24,534**    |                                |   | 23,436 |   |
| Provision                for rate refund                                                                                                                                                                               |                                               | **3,652**     |                                |   | 7,927 |   |
| Taxes                accrued                                                                                                                                                                                           |                                               | **59,730**    |                                |   | 35,475 |   |
| Interest                accrued                                                                                                                                                                                        |                                               | **8,892**     |                                |   | 9,167 |   |
| Accumulated                current deferred taxes, net                                                                                                                                                                 |                                               | **23,219**    |                                |   | 17,402 |   |
| Margin                deposits                                                                                                                                                                                         |                                               | **-**         |                                |   | 4,316 |   |
| Risk                management liability                                                                                                                                                                               |                                               | **36,798**    |                                |   | - |   |
| Other                current liabilities                                                                                                                                                                               |                                               | **9,183**     |                                |   | 5,607 |   |
| Total                current liabilities                                                                                                                                                                               |                                               | **346,197**   |                                |   | 294,104 |   |
| Deferred                credits                                                                                                                                                                                        |                                               |          |                                |   |   |   |
| Accumulated                deferred federal and state income taxes, net                                                                                                                                                |                                               | **444,162**   |                                |   | 449,129 |   |
| Accumulated                deferred investment tax credits                                                                                                                                                             |                                               | **14,866**    |                                |   | 15,632 |   |
| Other                deferred credits                                                                                                                                                                                  |                                               | **78,623**    |                                |   | 74,717 |   |
| Total                deferred credits                                                                                                                                                                                  |                                               | **537,651**   |                                |   | 539,478 |   |
| Long-term                debt, net                                                                                                                                                                                     |                                               | **584,521**   |                                |   | 609,643 |   |
| Total                liabilities                                                                                                                                                                                       |                                               | **1,468,369** |                                |   | 1,443,225 |   |
| Commitments                and Contingencies (Note                8)                                                                                                                                                   |                                               |          |                                |   |   |   |
| **Shareholders’                equity**                                                                                                                                                                          |                                               |          |                                |   |   |   |
| Preferred                stock                                                                                                                                                                                         |                                               |          |                                |   |   |   |
| Not                subject to mandatory redemption, $100 par value, authorized 1,491,900                shares, issued 201,761 and 218,170 shares at June                30, 2006, and December 31, 2005, respectively |                                               | **20,176**    |                                |   | 21,817 |   |
| Deferred                compensation related to preferred stock held by ESOP                                                                                                                                           |                                               | **(37**       | **)**                               |   | (1,783 | ) |
| Total                preferred stock not subject to mandatory redemption                                                                                                                                               |                                               | **20,139**    |                                |   | 20,034 |   |
| Common                shareholders’ equity                                                                                                                                                                       |                                               |          |                                |   |   |   |
| Common                stock, $1                par value, authorized 100,000,000 shares, issued 50,536,779 and 50,030,035                shares at June 30, 2006, and December                31, 2005, respectively   |                                               | **50,453**    |                                |   | 50,030 |   |
| Premium                on common stock                                                                                                                                                                                 |                                               | **203,089**   |                                |   | 202,416 |   |
| Retained                earnings                                                                                                                                                                                       |                                               | **457,851**   |                                |   | 443,912 |   |
| Unearned                compensation                                                                                                                                                                                   |                                               | **-**         |                                |   | (5,285 | ) |
| Treasury                stock, at cost,                34,189 and 36,644 shares at June 30, 2006, and December 31, 2005,                respectively                                                                   |                                               | **(662**      | **)**                               |   | (714 | ) |
| Accumulated                other comprehensive loss                                                                                                                                                                    |                                               | **(4,149**    | **)**                               |   | (4,130 | ) |
| Total                common shareholders’ equity                                                                                                                                                                 |                                               | **706,582**   |                                |   | 686,229 |   |
| Total                shareholders’ equity                                                                                                                                                                        |                                               | **726,721**   |                                |   | 706,263 |   |
| **Total                liabilities and shareholders’ equity**                                                                                                                                                    | **$**                                              | **2,195,090** |                                | $      | 2,149,488 |   |
| The                accompanying notes are an integral part of the condensed consolidated                financial statements.                                                                                          |                                               |          |                                |   |   |   |

----

|  CondensedConsolidated              Statements of Cash Flows (Unaudited)                                            |                                                            |            |
|-------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------|-----------------|
|                                                                                                                          | FOR                THE SIX MONTHS ENDED JUNE                30, |            |
| (THOUSANDS)                                                                                                                   | **2006**                                                        |            | 2005 |   |
| **Operating                activities**                                                                                       |                                                            |            |   |   |
| Net                income                                                                                                     | **$**                                                           | **35,364**      |   | $ | 30,068 |   |
| Adjustments                to reconcile net income to net cash provided by operating                activities:               |                                                            |            |   |   |   |   |
| Depreciation                and amortization                                                                                  |                                                            | **36,117**      |   |   | 31,418 |   |
| Gain                on sale of property, plant and equipment                                                                  |                                                            | **(68**         | **)** |   | (2,206 | ) |
| Provision                for doubtful accounts                                                                                |                                                            | **1,546**       |   |   | 780 |   |
| Return                on equity investment in investee                                                                        |                                                            | **4,578**       |   |   | 15,913 |   |
| Income                from equity investments                                                                                 |                                                            | **(15,606**     | **)** |   | (20,873 | ) |
| Unearned/deferred                compensation expense                                                                         |                                                            | **1,981**       |   |   | 3,333 |   |
| ESOP                expense                                                                                                   |                                                            | **656**         |   |   | 578 |   |
| Allowance                for other funds used during construction                                                             |                                                            | **(2,041**      | **)** |   | (1,779 | ) |
| Amortization                of investment tax credits                                                                         |                                                            | **(766**        | **)** |   | (836 | ) |
| Net                deferred income taxes                                                                                      |                                                            | **(148**        | **)** |   | 19,625 |   |
| Deferred                fuel costs                                                                                            |                                                            | **11,090**      |   |   | (24,583 | ) |
| Loss                on economic hedges                                                                                        |                                                            | **2,390**       |   |   | - |   |
| Cash                surrender value of company-/trust-owned life insurance                                                    |                                                            | **(399**        | **)** |   | (353 | ) |
| Changes                in assets and liabilities:                                                                             |                                                            |            |   |   |   |   |
| Accounts                receivable, net                                                                                       |                                                            | **9,463**       |   |   | (23,133 | ) |
| Accounts                and notes receivable, affiliate                                                                       |                                                            | **(7,179**      | **)** |   | (138 | ) |
| Unbilled                revenue                                                                                               |                                                            | **(5,089**      | **)** |   | (4,379 | ) |
| Fuel,                materials and supplies inventory                                                                         |                                                            | **(29,347**     | **)** |   | 883 |   |
| Accounts                payable                                                                                               |                                                            | **(43,147**     | **)** |   | (4,822 | ) |
| Prepayments                                                                                                                   |                                                            | **(505**        | **)** |   | 2,133 |   |
| Accounts                and notes payable, affiliate                                                                          |                                                            | **7,538**       |   |   | 4,749 |   |
| Retainage                payable                                                                                              |                                                            | **2,257**       |   |   | (50 | ) |
| Customer                deposits                                                                                              |                                                            | **3,464**       |   |   | 2,618 |   |
| Regulatory                assets and liabilities, net                                                                         |                                                            | **(46,083**     | **)** |   | (701 | ) |
| Other                deferred accounts                                                                                        |                                                            | **3,277**       |   |   | 9,789 |   |
| Taxes                accrued                                                                                                  |                                                            | **21,968**      |   |   | (2,473 | ) |
| Interest                accrued                                                                                               |                                                            | **413**         |   |   | (1,548 | ) |
| Margin                deposits                                                                                                |                                                            | **(26,180**     | **)** |   | 6,068 |   |
| Other,                net                                                                                                     |                                                            | **4,310**       |   |   | (771 | ) |
| Net                cash (used                in) provided by operating activities                                             |                                                            | **(30,146**     | **)** |   | 39,310 |   |
| **Investing                activities**                                                                                       |                                                            |            |   |   |   |   |
| Additions                to property, plant and equipment                                                                     |                                                            | **(72,362**     | **)** |   | (44,484 | ) |
| Allowance                for other funds used during construction                                                             |                                                            | **2,041**       |   |   | 1,779 |   |
| Proceeds                from sale of property, plant and equipment                                                            |                                                            | **429**         |   |   | 2,760 |   |
| Return                of equity investment in investee                                                                        |                                                            | **1,925**       |   |   | 5,874 |   |
| Investment                in cost method investments                                                                          |                                                            | **-**           |   |   | (1,385 | ) |
| Equity                investment in investee                                                                                  |                                                            | **(7,026**      | **)** |   | (20 | ) |
| Premiums                paid on company-/trust-owned life insurance                                                           |                                                            | **(1,815**      | **)** |   | (1,545 | ) |
| Other                investing activities                                                                                     |                                                            | **(1**          | **)** |   | 8 |   |
| Net                cash used in investing activities                                                                          |                                                            | **(76,809**     | **)** |   | (37,013 | ) |
| **Financing                activities**                                                                                       |                                                            |            |   |   |   |   |
| Exercise                of options to common stock                                                                            |                                                            | **2,010**       |   |   | 1,910 |   |
| Issuance                of common stock under the ESOP                                                                        |                                                            | **814**         |   |   | - |   |
| Stock                based compensation tax benefit                                                                           |                                                            | **154**         |   |   | - |   |
| Change                in short-term debt, net                                                                                 |                                                            | **-**           |   |   | 30,000 |   |
| Retirement                of long-term obligations                                                                            |                                                            | **(10,162**     | **)** |   | (160,020 | ) |
| Issuance                of long-term debt                                                                                     |                                                            | **-**           |   |   | 40,000 |   |
| Deferred                financing costs                                                                                       |                                                            | **(787**        | **)** |   | (1,345 | ) |
| Change                in ESOP trust                                                                                           |                                                            | **1,668**       |   |   | 1,636 |   |
| Dividends                paid on preferred stock                                                                              |                                                            | **(1,336**      | **)** |   | (1,442 | ) |
| Dividends                paid on common stock                                                                                 |                                                            | **(22,597**     | **)** |   | (22,399 | ) |
| Net                cash used in financing activities                                                                          |                                                            | **(****30,236** | **)** |   | (111,660 | ) |
| **Net****decrease in cash and cash equivalents**                                                                              |                                                            | **(137,191**    | **)** |   | (109,363 | ) |
| **Cash                and cash equivalents at beginning of period**                                                           |                                                            | **219,153**     |   |   | 123,787 |   |
| **Cash                and cash equivalents at end of period**                                                                 | **$**                                                           | **81,962**      |   | $ | 14,424 |   |
| **Supplementary                cash flow information**                                                                        |                                                            |            |   |   |   |   |
| Interest                paid                                                                                                  | **$**                                                           | **21,526**      |   | $ | 23,003 |   |
| Income                taxes paid                                                                                         | **$**                                                           | **212**         |   | $ | 6,061 |   |
| **Supplementary                non****-cash                investing and financing activities**                               |                                                            |            |   |   |   |   |
| Issuance                of treasury stock - LTICP and ESOP plans                                                              | **$**                                                           | **52**          |   | $ | 65 |   |
| Issuance                of common stock - LTICP/ESOP/ESPP                (1)                                                  | **$**                                                           | **3,032**       |   | $ | 2,920 |   |
| Accrued                additions to property, plant and equipment not reported                above                           | **$**                                                           | **39,976**      |   | $ | - |   |
| (1)Includes                conversion of preferred stock to common stock ($1,640/2006,                $1,513/2005)            |                                                            |            |   |   |   |   |
| The                accompanying notes are an integral part of the condensed consolidated                financial statements. |                                                            |            |   |   |   |   |

----

**ITEM      1.**

**Cleco      Power**

----

|  Condensed              Statements of Income              (Unaudited)                   |                                                              |        |
|------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------|-------------|
|                                                                                                             | FOR                THE THREE MONTHS ENDED JUNE                30, |        |
| (THOUSANDS)                                                                                                      | **2006**                                                          |        | 2005 |   |
| **Operating                revenue**                                                                             |                                                              |        |   |   |
| Electric                operations                                                                               | **$**                                                             | **241,286** |   | $ | 183,881 |   |
| Other                operations                                                                                  |                                                              | **7,883**   |   |   | 8,034 |   |
| Affiliate                revenue                                                                                 |                                                              | **512**     |   |   | 496 |   |
| Gross                operating revenue                                                                           |                                                              | **249,681** |   |   | 192,411 |   |
| Electric                customer credits                                                                         |                                                              | **-**       |   |   | (253 | ) |
| Operating                revenue, net                                                                            |                                                              | **249,681** |   |   | 192,158 |   |
| **Operating                expenses**                                                                            |                                                              |        |   |   |   |   |
| Fuel                used for electric generation                                                                 |                                                              | **57,990**  |   |   | 13,725 |   |
| Power                purchased for utility customers                                                             |                                                              | **98,703**  |   |   | 92,501 |   |
| Other                operations                                                                                  |                                                              | **23,065**  |   |   | 19,003 |   |
| Maintenance                                                                                                      |                                                              | **13,591**  |   |   | 12,804 |   |
| Depreciation                                                                                                     |                                                              | **15,301**  |   |   | 14,662 |   |
| Taxes                other than income taxes                                                                     |                                                              | **10,315**  |   |   | 8,659 |   |
| Gain                on sales of assets                                                                           |                                                              | **(68**     | **)** |   | (2,201 | ) |
| Total                operating expenses                                                                          |                                                              | **218,897** |   |   | 159,153 |   |
| **Operating                income**                                                                              |                                                              | **30,784**  |   |   | 33,005 |   |
| Interest                income                                                                                   |                                                              | **1,793**   |   |   | 532 |   |
| Allowance                for other funds used during construction                                                |                                                              | **1,372**   |   |   | 831 |   |
| Other                income                                                                                      |                                                              | **124**     |   |   | 458 |   |
| Other                expense                                                                                     |                                                              | **(300**    | **)** |   | (401 | ) |
| **Interest                charges**                                                                              |                                                              |        |   |   |   |   |
| Interest                charges, including amortization of debt expenses, premium and                discount    |                                                              | **9,417**   |   |   | 6,596 |   |
| Allowance                for borrowed funds used during construction                                             |                                                              | **(493**    | **)** |   | (278 | ) |
| Total                interest charges                                                                            |                                                              | **8,924**   |   |   | 6,318 |   |
| **Income                before income taxes**                                                                    |                                                              | **24,849**  |   |   | 28,107 |   |
| Federal                and state income taxes                                                                    |                                                              | **7,802**   |   |   | 10,783 |   |
| **Net                income**                                                                                    | **$**                                                             | **17,047**  |   | $ | 17,324 |   |
| The                accompanying notes are an integral part of the condensed financial                statements. |                                                              |        |   |   |   |   |

----

|  Condensed              Statements of Income              (Unaudited)                                  |                                                            |        |
|------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------|-------------|
|                                                                                                             | FOR                THE SIX MONTHS ENDED JUNE                30, |        |
| (THOUSANDS)                                                                                                      | **2006**                                                        |        | 2005 |   |
| **Operating                revenue**                                                                             |                                                            |        |   |   |
| Electric                operations                                                                               | **$**                                                           | **452,275** |   | $ | 346,712 |   |
| Other                operations                                                                                  |                                                            | **14,432**  |   |   | 15,115 |   |
| Affiliate                revenue                                                                                 |                                                            | **1,024**   |   |   | 991 |   |
| Gross                operating revenue                                                                           |                                                            | **467,731** |   |   | 362,818 |   |
| Electric                customer credits                                                                         |                                                            | **4,382**   |   |   | (471 | ) |
| Operating                revenue, net                                                                            |                                                            | **472,113** |   |   | 362,347 |   |
| **Operating                expenses**                                                                            |                                                            |        |   |   |   |   |
| Fuel                used for electric generation                                                                 |                                                            | **106,353** |   |   | 62,473 |   |
| Power                purchased for utility customers                                                             |                                                            | **199,486** |   |   | 143,015 |   |
| Other                operations                                                                                  |                                                            | **39,306**  |   |   | 39,351 |   |
| Maintenance                                                                                                      |                                                            | **18,938**  |   |   | 21,350 |   |
| Depreciation                                                                                                     |                                                            | **30,526**  |   |   | 29,059 |   |
| Taxes                other than income taxes                                                                     |                                                            | **19,623**  |   |   | 18,242 |   |
| Gain                on sales of assets                                                                           |                                                            | **(68**     | **)** |   | (2,206 | ) |
| Total                operating expenses                                                                          |                                                            | **414,164** |   |   | 311,284 |   |
| **Operating                income**                                                                              |                                                            | **57,949**  |   |   | 51,063 |   |
| Interest                income                                                                                   |                                                            | **4,129**   |   |   | 1,144 |   |
| Allowance                for other funds used during construction                                                |                                                            | **2,041**   |   |   | 1,779 |   |
| Other                income                                                                                      |                                                            | **190**     |   |   | 756 |   |
| Other                expense                                                                                     |                                                            | **(625**    | **)** |   | (846 | ) |
| **Interest                charges**                                                                              |                                                            |        |   |   |   |   |
| Interest                charges, including amortization of debt expenses, premium and                discount    |                                                            | **18,623**  |   |   | 14,100 |   |
| Allowance                for borrowed funds used during construction                                             |                                                            | **(719**    | **)** |   | (594 | ) |
| Total                interest charges                                                                            |                                                            | **17,904**  |   |   | 13,506 |   |
| **Income                before income taxes**                                                                    |                                                            | **45,780**  |   |   | 40,390 |   |
| Federal                and state income taxes                                                                    |                                                            | **14,859**  |   |   | 15,456 |   |
| **Net                income**                                                                                    | **$**                                                           | **30,921**  |   | $ | 24,934 |   |
| The                accompanying notes are an integral part of the condensed financial                statements. |                                                            |        |   |   |   |   |

----

|  Condensed              Balance Sheets              (Unaudited)                                                                   |                                               |          |                                |   |
|----------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------|---------------|-------------------------------------|--------|
| (THOUSANDS)                                                                                                                            | **AT                JUNE 30,                2006** |          | AT                DECEMBER 31, 2005 |
| **Assets**                                                                                                                             |                                               |          |                                |   |
| Utility                plant and equipment                                                                                             |                                               |          |                                |   |
| Property,                plant and equipment                                                                                           | **$**                                              | **1,846,433** |                                | $      | 1,822,798 |   |
| Accumulated                depreciation                                                                                                |                                               | **(845,398**  | **)**                               |   | (797,690 | ) |
| Net                property, plant and equipment                                                                                       |                                               | **1,001,035** |                                |   | 1,025,108 |   |
| Construction                work in progress                                                                                           |                                               | **155,976**   |                                |   | 155,427 |   |
| Total                utility plant, net                                                                                                |                                               | **1,157,011** |                                |   | 1,180,535 |   |
| Current                assets                                                                                                          |                                               |          |                                |   |   |   |
| Cash                and cash equivalents                                                                                               |                                               | **66,080**    |                                |   | 183,381 |   |
| Customer                accounts receivable (less allowance for doubtful accounts of $1,139                in 2006 and $1,262 in 2005) |                                               | **46,753**    |                                |   | 54,768 |   |
| Other                accounts receivable                                                                                               |                                               | **27,954**    |                                |   | 31,690 |   |
| Accounts                receivable - affiliate                                                                                         |                                               | **18,017**    |                                |   | 4,530 |   |
| Unbilled                revenue                                                                                                        |                                               | **22,967**    |                                |   | 17,878 |   |
| Fuel                inventory, at average cost                                                                                         |                                               | **44,088**    |                                |   | 21,313 |   |
| Material                and supplies inventory, at average cost                                                                        |                                               | **30,861**    |                                |   | 24,289 |   |
| Margin                deposits                                                                                                         |                                               | **16,194**    |                                |   | - |   |
| Risk                management assets                                                                                                  |                                               | **-**         |                                |   | 10,110 |   |
| Prepayments                                                                                                                            |                                               | **3,849**     |                                |   | 2,460 |   |
| Accumulated                deferred fuel                                                                                               |                                               | **66,431**    |                                |   | 23,165 |   |
| Cash                surrender value of life insurance policies                                                                         |                                               | **5,141**     |                                |   | 5,143 |   |
| Other                current assets                                                                                                    |                                               | **399**       |                                |   | 512 |   |
| Total                current assets                                                                                                    |                                               | **348,734**   |                                |   | 379,239 |   |
| Prepayments                                                                                                                            |                                               | **6,018**     |                                |   | 5,961 |   |
| Regulatory                assets and liabilities - deferred taxes, net                                                                 |                                               | **91,945**    |                                |   | 90,960 |   |
| Regulatory                assets - other                                                                                               |                                               | **178,255**   |                                |   | 53,439 |   |
| Other                deferred charges                                                                                                  |                                               | **40,044**    |                                |   | 55,800 |   |
| **Total                assets**                                                                                                        | **$**                                              | **1,822,007** |                                | $      | 1,765,934 |   |
| **Liabilities                and member’s equity**                                                                               |                                               |          |                                |   |   |   |
| Member’s                equity                                                                                                   | **$**                                              | **565,131**   |                                | $      | 534,210 |   |
| Long-term                debt,                net                                                                                      |                                               | **484,521**   |                                |   | 509,643 |   |
| Total                capitalization                                                                                                    |                                               | **1,049,652** |                                |   | 1,043,853 |   |
| Current                liabilities                                                                                                     |                                               |          |                                |   |   |   |
| Long-term                debt due within one year                                                                                      |                                               | **55,000**    |                                |   | 40,000 |   |
| Accounts                payable                                                                                                        |                                               | **106,846**   |                                |   | 135,342 |   |
| Accounts                payable - affiliate                                                                                            |                                               | **29,488**    |                                |   | 8,122 |   |
| Retainage                                                                                                                              |                                               | **3,025**     |                                |   | 768 |   |
| Customer                deposits                                                                                                       |                                               | **24,534**    |                                |   | 23,436 |   |
| Provision                for rate refund                                                                                               |                                               | **3,652**     |                                |   | 7,927 |   |
| Taxes                accrued                                                                                                           |                                               | **23,115**    |                                |   | 12,149 |   |
| Interest                accrued                                                                                                        |                                               | **7,725**     |                                |   | 8,001 |   |
| Accumulated                deferred taxes, net                                                                                         |                                               | **22,561**    |                                |   | 18,033 |   |
| Margin                deposits                                                                                                         |                                               | **-**         |                                |   | 4,316 |   |
| Risk                management liability                                                                                               |                                               | **36,798**    |                                |   | - |   |
| Other                current liabilities                                                                                               |                                               | **5,976**     |                                |   | 3,047 |   |
| Total                current liabilities                                                                                               |                                               | **318,720**   |                                |   | 261,141 |   |
| Deferred                credits                                                                                                        |                                               |          |                                |   |   |   |
| Accumulated                deferred federal and state income taxes, net                                                                |                                               | **381,525**   |                                |   | 390,906 |   |
| Accumulated                deferred investment tax credits                                                                             |                                               | **14,866**    |                                |   | 15,632 |   |
| Other                deferred credits                                                                                                  |                                               | **57,244**    |                                |   | 54,402 |   |
| Total                deferred credits                                                                                                  |                                               | **453,635**   |                                |   | 460,940 |   |
| **Total                liabilities and member’s equity**                                                                         | **$**                                              | **1,822,007** |                                | $      | 1,765,934 |   |
| The                accompanying notes are an integral part of the condensed financial                statements.                       |                                               |          |                                |   |   |   |

----

|  Statements              of Cash Flows              (Unaudited)                                             |                                                            |         |
|------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------|--------------|
|                                                                                                             | FOR                THE SIX MONTHS ENDED JUNE                30, |         |
| (THOUSANDS)                                                                                                      | **200****6**                                                    |         | 2005 |   |
| **Operating                activities**                                                                          |                                                            |         |   |   |
| Net                income                                                                                        | **$**                                                           | **30,921**   |   | $ | 24,934 |   |
| Adjustments                to reconcile net income to net cash provided by operating                activities:  |                                                            |         |   |   |   |   |
| Depreciation                and amortization                                                                     |                                                            | **35,010**   |   |   | 29,959 |   |
| Gain                on sale of property, plant and equipment                                                     |                                                            | **(68**      | **)** |   | (2,206 | ) |
| Provision                for doubtful accounts                                                                   |                                                            | **1,546**    |   |   | 750 |   |
| Unearned/deferred                compensation expense                                                            |                                                            | **978**      |   |   | 996 |   |
| Allowance                for other funds used during construction                                                |                                                            | **(2,041**   | **)** |   | (1,779 | ) |
| Amortization                of investment tax credits                                                            |                                                            | **(766**     | **)** |   | (836 | ) |
| Net                deferred income taxes                                                                         |                                                            | **(4,903**   | **)** |   | 5,161 |   |
| Deferred                fuel costs                                                                               |                                                            | **11,090**   |   |   | (24,583 | ) |
| Loss                on economic hedges                                                                           |                                                            | **2,390**    |   |   | - |   |
| Cash                surrender value of company-owned life insurance                                              |                                                            | **(215**     | **)** |   | (151 | ) |
| Changes                in assets and liabilities:                                                                |                                                            |         |   |   |   |   |
| Accounts                receivable, net                                                                          |                                                            | **7,837**    |   |   | (24,338 | ) |
| Accounts                and notes receivable, affiliate                                                          |                                                            | **(13,178**  | **)** |   | 2,118 |   |
| Unbilled                revenue                                                                                  |                                                            | **(5,089**   | **)** |   | (4,379 | ) |
| Fuel,                materials and supplies inventory                                                            |                                                            | **(29,347**  | **)** |   | 883 |   |
| Prepayments                                                                                                      |                                                            | **(976**     | **)** |   | 1,433 |   |
| Accounts                payable                                                                                  |                                                            | **(38,798**  | **)** |   | (2,684 | ) |
| Accounts                and notes payable, affiliate                                                             |                                                            | **19,585**   |   |   | (1,037 | ) |
| Retainage                payable                                                                                 |                                                            | **2,257**    |   |   | (50 | ) |
| Customer                deposits                                                                                 |                                                            | **3,464**    |   |   | 2,635 |   |
| Regulatory                assets and liabilities, net                                                            |                                                            | **(46,083**  | **)** |   | (701 | ) |
| Other                deferred accounts                                                                           |                                                            | **2,445**    |   |   | 8,536 |   |
| Taxes                accrued                                                                                     |                                                            | **10,966**   |   |   | 11,926 |   |
| Interest                accrued                                                                                  |                                                            | **413**      |   |   | (859 | ) |
| Margin                deposits                                                                                   |                                                            | **(26,180**  | **)** |   | 6,068 |   |
| Other,                net                                                                                        |                                                            | **2,392**    |   |   | (1,321 | ) |
| Net                cash (used                in) provided by operating activities                                |                                                            | **(36,350**  | **)** |   | 30,475 |   |
| **Investing                activities**                                                                          |                                                            |         |   |   |   |   |
| Additions                to property, plant and equipment                                                        |                                                            | **(72,194**  | **)** |   | (44,021 | ) |
| Allowance                for other funds used during construction                                                |                                                            | **2,041**    |   |   | 1,779 |   |
| Proceeds                from sale of property, plant and equipment                                               |                                                            | **429**      |   |   | 2,760 |   |
| Premiums                paid on company-owned life insurance                                                     |                                                            | **(470**     | **)** |   | (629 | ) |
| Net                cash used in investing activities                                                             |                                                            | **(70,194**  | **)** |   | (40,111 | ) |
| **Financing                activities**                                                                          |                                                            |         |   |   |   |   |
| Retirement                of long-term obligations                                                               |                                                            | **(10,162**  | **)** |   | (60,020 | ) |
| Issuance                of long-term debt                                                                        |                                                            | **-**        |   |   | 40,000 |   |
| Deferred                financing costs                                                                          |                                                            | **(595**     | **)** |   | (614 | ) |
| Distribution                to parent                                                                            |                                                            | **-**        |   |   | (19,900 | ) |
| Net                cash used in financing activities                                                             |                                                            | **(10,757**  | **)** |   | (40,534 | ) |
| **Net                decrease in cash and cash equivalents**                                                     |                                                            | **(117,301** | **)** |   | (50,170 | ) |
| **Cash                and cash equivalents at beginning of period**                                              |                                                            | **183,381**  |   |   | 54,113 |   |
| **Cash                and cash equivalents at end of period**                                                    | **$**                                                           | **66,080**   |   | $ | 3,943 |   |
| **Supplementary                cash flow information**                                                           |                                                            |         |   |   |   |   |
| Interest                paid                                                                                     | **$**                                                           | **17,983**   |   | $ | 14,300 |   |
| Income                taxes paid                                                                                 | **$**                                                           | **189**      |   | $ | 7,143 |   |
| **Supplementary****non-cash                investing and financing activities**                                  |                                                            |         |   |   |   |   |
| Accrued                additions to property, plant and equipment not reported                above              | **$**                                                           | **39,976**   |   | $ | - |   |
| The                accompanying notes are an integral part of the condensed financial                statements. |                                                            |         |   |   |   |   |

----

|  Index              to Applicable Notes to the Unaudited Condensed Financial Statements              of              Registrants |                                                              |
|---------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------|
|                                                                                                                                  |                                                              |   |
| Note                1                                                                                                                 | Summary                of Significant Accounting Policies         | Cleco                Corporation and Cleco Power |
| Note                2                                                                                                                 | Reclassifications                                                 | Cleco                Corporation and Cleco Power |
| Note                3                                                                                                                 | Regulatory                Assets and Liabilities                  | Cleco                Corporation and Cleco Power |
| Note                4                                                                                                                 | Disclosures                about Segments                         | Cleco                Corporation |
| Note                5                                                                                                                 | Equity                Investment                in Investees      | Cleco                Corporation |
| Note                6                                                                                                                 | Recent                Accounting                Standards         | Cleco                Corporation and Cleco Power |
| Note                7                                                                                                                 | Electric                Customer Credits                          | Cleco                Corporation and Cleco Power |
| Note                8                                                                                                                 | Litigation                and Other Commitments and Contingencies | Cleco                Corporation and Cleco Power |
| Note                9                                                                                                                 | Disclosures                about Guarantees                       | Cleco                Corporation and Cleco Power |
| Note                10                                                                                                                | Debt                                                              | Cleco                Corporation and Cleco Power |
| Note                11                                                                                                                | Pension                Plan and Employee Benefits                 | Cleco                Corporation and Cleco Power |
| Note                12                                                                                                                | Discontinued                Operations and Dispositions           | Cleco                Corporation |
| Note                13                                                                                                                | Income                Taxes                                       | Cleco                Corporation and Cleco Power |
| Note                14                                                                                                                | Deferred                Fuel and Purchased Power Costs            | Cleco                Corporation and Cleco Power |
| Note                15                                                                                                                | Affiliate                Transactions                             | Cleco                Corporation |
| Note                16                                                                                                                | Calpine                Bankruptcy                                 | Cleco                Corporation |

Notes      to the Unaudited Condensed      Financial Statements                                                                                                                    

**Note      **

**1      — Summary of Significant Accounting Policies                                                                          **

***Principles      of Consolidation***

----

***Basis      of Presentation***

***Risk      Management***
** **

***Earnings      per Average Common Share***

----

|                                                                            |             |       |             |   |                                   |   |                                                              |     |
|---------------------------------------------------------------------------------|------------------|------------|------------------|--------|----------------------------------------|--------|-------------------------------------------------------------------|----------|
|                                                                            |             |       |             |   |                                   |   | FOR                THE THREE MONTHS ENDED JUNE                30, |     |
|                                                                            |             |       |             |   | **2006**                               |   |                                                              |     |   |   | 2005 |   |
|  (THOUSANDS,                EXCEPT PER SHARE AMOUNTS)                      |  **INCOME** |       |  **SHARES** |   | **PER                SHARE****AMOUNT** |   |  INCOME                                                      |     |  SHARES |   | PER                SHAREAMOUNT |   |
| Income                from continuing operations                                | **$**            | **23,329** |             |   |                                   |   |                                                              |     |   | $ | 20,699 |   |   |   |   |   |   |   |
| Deduct:                non-participating stock dividends (4.5% preferred stock) |             | **12**     |             |   |                                   |   |                                                              |     |   |   | 12 |   |   |   |   |   |   |   |
| Deduct:                participating preferred stock dividends                  |             | **413**    |             |   |                                   |   |                                                              |     |   |   | 451 |   |   |   |   |   |   |   |
| Deduct:                amount allocated to participating preferred              |             | **421**    |             |   |                                   |   |                                                              |     |   |   | 358 |   |   |   |   |   |   |   |
| **Basic                earnings per share**                                     |             |       |             |   |                                   |   |                                                              |     |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations                                | **$**            | **22,483** |             |   | **50,054**                             |   | **$**                                                             | **0.45** |   | $ | 19,878 |   |   | 49,507 |   | $ | 0.40 |   |
| Loss                from discontinued operations                                |             | **(103**   | **)**            |   |                                   |   |                                                              |     |   |   | (72 | ) |   |   |   |   |   |   |
| Total                basic net income applicable to common stock                | **$**            | **22,380** |             |   | **50,054**                             |   | **$**                                                             | **0.45** |   | $ | 19,806 |   |   | 49,507 |   | $ | 0.40 |   |
| **Effect                of Dilutive Securities**                                |             |       |             |   |                                   |   |                                                              |     |   |   |   |   |   |   |   |   |   |   |
| Add:                stock                option grants                          |             | **-**      |             |   | **107**                                |   |                                                              |     |   |   |   |   |   | 86 |   |   |   |   |
| Add:                restricted                stock (LTICP)                     |             | **8**      |             |   | **258**                                |   |                                                              |     |   |   |   |   |   | 13 |   |   |   |   |
| Add:                Convertible ESOP preferred stock                            |             | **835**    |             |   | **1,879**                              |   |                                                              |     |   |   | 809 |   |   | 2,023 |   |   |   |   |
| **Diluted                earnings per share**                                   |             |       |             |   |                                   |   |                                                              |     |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations plus assumed conversions       | **$**            | **23,326** |             |   | **52,298**                             |   | **$**                                                             | **0.44** |   | $ | 20,687 |   |   | 51,629 |   | $ | 0.40 |   |
| Loss                from discontinued operations                                |             | **(103**   | **)**            |   |                                   |   |                                                              |     |   |   | (72 | ) |   |   |   |   |   |   |
| Total                diluted net income applicable to common stock              | **$**            | **23,223** |             |   | **52,298**                             |   | **$**                                                             | **0.44** |   | $ | 20,615 |   |   | 51,629 |   | $ | 0.40 |   |

|                                                                            |             |       |             |   |                                   |   |                                                            |     |
|---------------------------------------------------------------------------------|------------------|------------|------------------|--------|----------------------------------------|--------|-----------------------------------------------------------------|----------|
|                                                                            |             |       |             |   |                                   |   | FOR                THE SIX MONTHS ENDED JUNE                30, |     |
|                                                                            |             |       |             |   | **2006**                               |   |                                                            |     |   |   | 2005 |   |
|  (THOUSANDS,                EXCEPT PER SHARE AMOUNTS)                      |  **INCOME** |       |  **SHARES** |   | **PER                SHARE****AMOUNT** |   |  INCOME                                                    |     |  SHARES |   | PER                SHAREAMOUNT |   |
| Income                from continuing operations                                | **$**            | **35,554** |             |   |                                   |   |                                                            |     |   | $ | 30,273 |   |   |   |   |   |   |   |
| Deduct:                non-participating stock dividends (4.5% preferred stock) |             | **23**     |             |   |                                   |   |                                                            |     |   |   | 23 |   |   |   |   |   |   |   |
| Deduct:                participating preferred stock dividends                  |             | **863**    |             |   |                                   |   |                                                            |     |   |   | 935 |   |   |   |   |   |   |   |
| Deduct:                amount allocated to participating preferred              |             | **454**    |             |   |                                   |   |                                                            |     |   |   | 286 |   |   |   |   |   |   |   |
| **Basic                earnings per share**                                     |             |       |             |   |                                   |   |                                                            |     |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations                                | **$**            | **34,214** |             |   | **49,956**                             |   | **$**                                                           | **0.68** |   | $ | 29,029 |   |   | 49,396 |   | $ | 0.59 |   |
| Loss                from discontinued operations                                |             | **(190**   | **)**            |   |                                   |   |                                                            |     |   |   | (206 | ) |   |   |   |   | (0.01 | ) |
| Total                basic net income applicable to common stock                | **$**            | **34,024** |             |   | **49,956**                             |   | **$**                                                           | **0.68** |   | $ | 28,823 |   |   | 49,396 |   | $ | 0.58 |   |
| **Effect                of Dilutive Securities**                                |             |       |             |   |                                   |   |                                                            |     |   |   |   |   |   |   |   |   |   |   |
| Add:                stock                option grants                          |             |       |             |   | **96**                                 |   |                                                            |     |   |   |   |   |   | 73 |   |   |   |   |
| Add:                restricted                stock (LTICP)                     |             | **17**     |             |   | **114**                                |   |                                                            |     |   |   |   |   |   | 13 |   |   |   |   |
| Add:                Convertible ESOP preferred stock                            |             | **1,317**  |             |   | **1,929**                              |   |                                                            |     |   |   | 1,221 |   |   | 2,077 |   |   |   |   |
| **Diluted                earnings per share**                                   |             |       |             |   |                                   |   |                                                            |     |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations plus assumed conversions       | **$**            | **35,548** |             |   | **52,095**                             |   | **$**                                                           | **0.68** |   | $ | 30,250 |   |   | 51,559 |   | $ | 0.59 |   |
| Loss                from discontinued operations                                |             | **(190**   | **)**            |   |                                   |   |                                                            |     |   |   | (206 | ) |   |   |   |   | (0.01 | ) |
| Total                diluted net income applicable to common stock              | **$**            | **35,358** |             |   | **52,095**                             |   | **$**                                                           | **0.68** |   | $ | 30,044 |   |   | 51,559 |   | $ | 0.58 |   |

|                                        |                                  |                              |             |   |                                                              |
|---------------------------------------------|---------------------------------------|-----------------------------------|------------------|--------|-------------------------------------------------------------------|
|                                        |                                  |                              |             |   | FOR                THE THREE MONTHS ENDED JUNE                30, |
|                                        |                                  |                              | **2006**         |   |                                                              |   | 2005 |
|                                        |  **STRIKE                PRICE** | **AVERAGE** **MARKET PRICE** |  **SHARES** |   | STRIKE                PRICE                                       | AVERAGEMARKET                PRICE | SHARES |
| Stock                option grants excluded | **$22.69                - $24.25**    | **$****22.57**                    | **136,934**      |   | $21.88                - $ 24.25                                   | $21.05 | 377,968 |

|                                        |                               |                              |        |   |                                             |
|---------------------------------------------|------------------------------------|-----------------------------------|-------------|--------|--------------------------------------------------|
|                                        |                               |                              |        |   | FOR                THE SIX MONTHS ENDED JUNE 30, |
|                                        |                               |                              | **2006**    |   |                                             |   | 2005 |
|                                        | **STRIKE                PRICE**    | **AVERAGE** **MARKET PRICE** | **SHARES**  |   |  STRIKE                PRICE                | AVERAGEMARKET                PRICE |  SHARES |
| Stock                option grants excluded | **$22.25                - $24.25** | **$****22.22**                    | **290,036** |   | $21.88                - $24.25                   | $20.64 | 377,968 |

***Stock-Based      Compensation***

----

|                                                                                                                                                                                                                                                                                                                                    |                             |                                             |                       |   |                             |                                             |                       |    |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------|--------------------------------------------------|----------------------------|--------|----------------------------------|--------------------------------------------------|----------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                    | CLECO                CORPORATION |                                             | CLECO                POWER |   | CLECO                CORPORATION |                                             | CLECO                POWER |    |
|                                                                                                                                                                                                                                                                                                                                    |                             | FOR              THE THREE MONTHS ENDED JUNE 30, |                       |   |                             | FOR                THE SIX MONTHS ENDED JUNE 30, |                       |
| (THOUSANDS)                                                                                                                                                                                                                                                                                                                             | **2006**                         |                                             | 2005                       |   | **2006**                         |                                             | 2005                       |    | **2006** |   | 2005 |   | **2006** |   | 2005 |   |
| **Equity                classification**                                                                                                                                                                                                                                                                                                |                             |                                             |                       |   |                             |                                             |                       |    |   |   |   |   |   |   |   |   |
| Non-vested                stock                                                                                                                                                                                                                                                                                                         | **$**                            | **669**                                          |                       | $      | 845                              |                                             | **$**                      | **299** |   | $ | (51 | ) | **$** | **1,037** |   | $ | 2,000 |   | **$** | **580** |   | $ | 553 |   |
| Stock                options (1)                                                                                                                                                                                                                                                                                                        |                             | **27**                                           |                       |   | -                                |                                             |                       | **6**   |   |   | - |   |   | **49** |   |   | - |   |   | **13** |   |   | - |   |
| Non-forfeitable                dividends (1)                                                                                                                                                                                                                                                                                            |                             | **9**                                            |                       |   | -                                |                                             |                       | **5**   |   |   | - |   |   | **17** |   |   | - |   |   | **9** |   |   | - |   |
| **Total**                                                                                                                                                                                                                                                                                                                               | **$**                            | **705**                                          |                       | $      | 845                              |                                             | **$**                      | **310** |   | $ | (51 | ) | **$** | **1,103** |   | $ | 2,000 |   | **$** | **602** |   | $ | 553 |   |
| **Liability                classification**                                                                                                                                                                                                                                                                                             |                             |                                             |                       |   |                             |                                             |                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                stock equivalent units                                                                                                                                                                                                                                                                                            | **$**                            | **91**                                           |                       | $      | -                                |                                             | **$**                      | **37**  |   | $ | - |   | **$** | **204** |   | $ | - |   | **$** | **82** |   | $ | - |   |
| Company                funded participants income tax obligations                                                                                                                                                                                                                                                                       |                             | **291**                                          |                       |   | 949                              |                                             |                       | **155** |   |   | 355 |   |   | **554** |   |   | 1,266 |   |   | **291** |   |   | 442 |   |
| **Total**                                                                                                                                                                                                                                                                                                                               | **$**                            | **382**                                          |                       | $      | 949                              |                                             | **$**                      | **192** |   | $ | 355 |   | **$** | **758** |   | $ | 1,266 |   | **$** | **373** |   | $ | 442 |   |
| **Total                pre-tax compensation expense**                                                                                                                                                                                                                                                                                   | **$**                            | **1,087**                                        |                       | $      | 1,794                            |                                             | **$**                      | **502** |   | $ | 304 |   | **$** | **1,861** |   | $ | 3,266 |   | **$** | **975** |   | $ | 995 |   |
| **Tax                benefit (expense) (excluding income tax gross-up)**                                                                                                                                                                                                                                                                | **$**                            | **306**                                          |                       | $      | 325                              |                                             | **$**                      | **133** |   | $ | (19 | ) | **$** | **503** |   | $ | 769 |   | **$** | **263** |   | $ | 213 |   |
| (1)For                the three and six months ended June 30, 2006, compensation expense                charged                against income for the first time for non-forfeitable dividends paid                on                non-vested stock not expected to vest and stock options                was less than $0.1 million. |

***                                                                                                        ***
|  ***Cleco ***                                                                                                                                                                                                         |                                                   |   |                                                                |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------|--------|---------------------------------------------------------------------|--------|
|  (THOUSANDS,                EXCEPT PER SHARE AMOUNTS)                                                                                                                                                                      | FOR                THE THREE MONTHSENDED JUNE 30, 2005 |   | FOR                THE SIX MONTHSENDED                JUNE 30, 2005 |   |
| Net                income applicable to common stock, as reported                                                                                                                                                               | $                                                      | 20,179 |                                                                | $      | 29,145 |   |
| Add:                stock-based                employee compensation expense recognized and included in reported                net                income applicable to common stock, net of related tax                effects |                                                   | 520    |                                                                |   | 1,230 |   |
| Deduct:                total                stock-based employee compensation expense determined under the fair                value                based method of all awards, net of related tax effects                      |                                                   | 516    |                                                                |   | 1,073 |   |
| Pro                forma net income applicable to common stock                                                                                                                                                                  | $                                                      | 20,183 |                                                                | $      | 29,302 |   |
| Earnings                per share:                                                                                                                                                                                              |                                                   |   |                                                                |   |   |   |
| Basic                - as reported                                                                                                                                                                                              | $                                                      | 0.40   |                                                                | $      | 0.58 |   |
| Basic                - pro forma                                                                                                                                                                                                | $                                                      | 0.40   |                                                                | $      | 0.59 |   |
| Diluted                - as reported                                                                                                                                                                                            | $                                                      | 0.40   |                                                                | $      | 0.58 |   |
| Diluted                - pro forma                                                                                                                                                                                              | $                                                      | 0.40   |                                                                | $      | 0.58 |   |

----

|  ***Cleco                Power***                                                                                                                                                                             |                                                                      |   |                                                                    |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------|--------|-------------------------------------------------------------------------|--------|
|  (THOUSANDS,                  EXCEPT PER SHARE AMOUNTS)                                                                                                                                                       | FOR                  THE THREE MONTHSENDED                  JUNE 30, 2005 |   | FOR                  THE SIX MONTHSENDED                  JUNE 30, 2005 |   |
| Net                  income, as reported                                                                                                                                                                           | $                                                                         | 17,324 |                                                                    | $      | 24,934 |   |
| Add:                  stock-based                  employee compensation expense recognized and included in reported                  net                  income, net of related tax effects                      |                                                                      | (31    | )                                                                       |   | 340 |   |
| Deduct:                  total                  stock-based employee compensation expense determined under the                  fair value                  based method of all awards, net of related tax effects |                                                                      | 195    |                                                                    |   | 387 |   |
| Pro                  forma net income                                                                                                                                                                              | $                                                                         | 17,098 |                                                                    | $      | 24,887 |   |

***Share-Based      Plan Descriptions and Share Information***

**Stock      Options**

|                                                                                                                                                                                               |                                  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------|
|                                                                                                                                                                                               | AS                OF JUNE 30,         |
|                                                                                                                                                                                               | **2006**                              |   | 2005 |
| Expected                term (in years) (1)                                                                                                                                                        | **7.0**                               |   | 1.0 |
| Volatility                (2)                                                                                                                                                                      | **28.00%                to 30.39%**   |   | 22.0% |
| Expected                dividend yield                                                                                                                                                             | **4.2%**                              |   | 4.2% |
| Risk-free                interest rate                                                                                                                                                             | **4.4%**                              |   | 2.8% |
| Weighted                average fair value (Black-Scholes                value)                                                                                                                    | **$    ****4.75** |   | $                      4.04 |
| (1)The                expected term was                determined using an SEC safe harbor method due to the small number                of  recipients                of these options. |
| (2)The                volatility rate is based on historical stock prices over an appropriate                period, generally equal to the expected                term.                          |

|                                          |                |   |                                                                                     |   |                                                                        |   |                                   |
|-----------------------------------------------|---------------------|--------|------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------|--------|----------------------------------------|
|                                          |  SHARES        |   |  WEIGHTED-AVERAGE                EXERCISE PRICE                                     |   | WEIGHTED-AVERAGEREMAINING  CONTRACTUALTERM                (YEARS) |   | AGGREGATEINTRINSICVALUE(THOUSANDS)     |
| Outstanding                at January 1, 2006 | **1,023,729 ** |   | **$    ****20.01**                                                   |   |                                                                        |   |                                   |
| Granted                                       | **60,000 **    |   | **$    ****22.00**                                                   |   |                                                                        |   |                                   |
| Exercised                                     | **(109,467)**       |   | **$    ****18.89**                                                   |   |                                                                        |   |                                   |
| Forfeited                                     | **(21,099)**        |   | **$    ****19.19**                                                   |   |                                                                        |   |                                   |
| Expired                                       | **- **         |   | **$             ****-** |   |                                                                        |   |                                   |
| Outstanding                at June 30, 2006   | **953,163 **   |   | **$    ****20.29**                                                   |   | **5.08**                                                                    |   | **$    ****2,893** |
| Exercisable                at June 30, 2006   | **806,579 **   |   | **$    ****20.02**                                                   |   | **5.41**                                                                    |   | **$    ****2,649** |

***Non-Vested      Stock and Common Stock Equivalent Units***

----

|                                                                                                                                                                      |                                   |   |                                   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------|--------|----------------------------------------|
|                                                                                                                                                                      |                                   |   | AS                OF JUNE 30,          |
|                                                                                                                                                                      |                                   |   | **2006**                               |   | 2005 |
|                                                                                                                                                                      | **NON-VESTED                STOCK**    |   | **CEU****s**                           |   | NON-VESTED                STOCK |
| Expected                term (in years) (1)                                                                                                                               | **3.0**                                |   | **3.0**                                |   | 3.0 |
| Volatility                of Cleco stock (2)                                                                                                                              | **23.0%**                              |   | **20.5%**                              |   | 33.0% |
| Correlation                between Cleco stock                volatility and peer group                                                                                   | **33.7%**                              |   | **33.4%**                              |   | 41.4% |
| Expected                dividend yield                                                                                                                                    | **4.1%**                               |   | **4.1%**                               |   | 4.2% |
| Weighted                average fair value (Monte                Carlo model)                                                                                             | **$    ****24.85** |   | **$    ****24.11** |   | $                    24.98 |
| (1)The                expected term was based on the service period of the                award.                                                                          |
| (2)The                volatility rate is based on historical stock prices over an appropriate                period, generally equal to the expected                term. |

|                                                                                                                                         |                            |   |                                                                                     |   |             |         |                                                                                     |
|----------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------|--------|------------------------------------------------------------------------------------------|--------|------------------|--------------|------------------------------------------------------------------------------------------|
|                                                                                                                                         |  SHARES                    |   | WEIGHTED-AVERAGE  GRANT-DATE                FAIR VALUE                         |   | UNITS            |         | WEIGHTED-AVERAGE  GRANT-DATE                FAIR VALUE                    |
|                                                                                                                                         | NON-VESTED                STOCK |   | CEUs                                                                                     |
| Non-vested                at January 1, 2006                                                                                                 | **289,267 **               |   | **$    ****22.08**                                                   |   | **- **      |         | **$             ****-** |
| Granted                                                                                                                                      | **83,425 **                |   | **$    ****24.11**                                                   |   | **61,145 ** |         | **$    ****24.11**                                                   |
| Vested                                                                                                                                       | **(6,017)**                     |   | **$    ****20.40**                                                   |   | **- **      |         | **$             ****-** |
| Expected                to vest (1)                                                                                                          | **(191,479)**                   |   | **$    ****22.01**                                                   |   | **(10,134)**     |         | **$    ****24.11**                                                   |
| Forfeited                                                                                                                                    | **- **                     |   | **$             ****-** |   | **- **      |    | **$             ****-** |
| Non-vested                at June 30, 2006                                                                                                   | **175,196 **               |   | **$    ****23.17**                                                   |   | **51,011 ** |         | **$    ****24.11**                                                   |
| (1)Expected                to vest is the pro rata amount of shares that have been earned as                of June                30, 2006. |                            |   |                                                                                     |   |             |         |                                                                                     |

**Note      **

**2      — Reclassifications                                                                                             **

**Note      **

**3      — Regulatory Assets and Liabilities                                                                                  **

----

**Note      **

**4      — Disclosures about Segments                                                                                    **

----

|  **SEGMENT INFORMATION FOR THE THREE                MONTHS ENDED JUNE 30,**  |                                                           |                              |          |   |        |     |             |        |             |   |
|----------------------------------------------------------------------------------------|----------------------------------------------------------------|-----------------------------------|---------------|--------|-------------|----------|------------------|-------------|------------------|--------|
|                                                                                   | **CLECO**                                                      |                              |          |   |        |     |             |        |             |   |
| 2006                (THOUSANDS)                                                        | **POWER**                                                      |                              | **MIDSTREAM** |   | **OTHER**   |     | **ELIMINATIONS** |        | **CONSOLIDATED** |   |
| Revenue                                                                                |                                                           |                              |          |   |        |     |             |        |             |   |
| Electric                operations                                                     | **$**                                                          | **241,286**                       |          | **$**  | **-**       |     | **$**            | **-**       |             | **$**  | **-** |   | **$** | **241,286** |   |
| Other                operations                                                        |                                                           | **7,883**                         |          |   | **1**       |     |             | **59**      |             |   | **(14** | **)** |   | **7,929** |   |
| Electric                customer credits                                               |                                                           | **-**                             |          |   | **-**       |     |             | **-**       |             |   | **-** |   |   | **-** |   |
| Affiliate                revenue                                                       |                                                           | **12**                            |          |   | **1,138**   |     |             | **587**     |             |   | **-** |   |   | **1,737** |   |
| Intercompany                revenue                                                    |                                                           | **500**                           |          |   | **-**       |     |             | **10,523**  |             |   | **(11,023** | **)** |   | **-** |   |
| Operating                revenue, net                                                  | **$**                                                          | **249,681**                       |          | **$**  | **1,139**   |     | **$**            | **11,169**  |             | **$**  | **(11,037** | **)** | **$** | **250,952** |   |
| Depreciation                expense                                                    | **$**                                                          | **15,301**                        |          | **$**  | **78**      |     | **$**            | **335**     |             | **$**  | **-** |   | **$** | **15,714** |   |
| Interest                charges                                                        | **$**                                                          | **8,924**                         |          | **$**  | **4,645**   |     | **$**            | **1,968**   |             | **$**  | **(4,627** | **)** | **$** | **10,910** |   |
| Interest                income                                                         | **$**                                                          | **1,793**                         |          | **$**  | **-**       |     | **$**            | **4,777**   |             | **$**  | **(4,627** | **)** | **$** | **1,943** |   |
| Equity                income (loss)                from investees                      | **$**                                                          | **-**                             |          | **$**  | **15,283**  |     | **$**            | **(50**     | **)**            | **$**  | **-** |   | **$** | **15,233** |   |
| Federal                and state income tax expense                                    | **$**                                                          | **7,802**                         |          | **$**  | **4,779**   |     | **$**            | **947**     |             | **$**  | **(69** | **)** | **$** | **13,459** |   |
| Segment                profit from continuing operations, net                          | **$**                                                          | **17,047**                        |          | **$**  | **4,917**   |     | **$**            | **1,365**   |             | **$**  | **-** |   | **$** | **23,329** |   |
| Loss                from discontinued operations                                       |                                                           | **-**                             |          |   | **(103**    | **)**    |             | **-**       |             |   | **-** |   |   | **(103** | **)** |
| Segment                profit (1)                                                 | **$**                                                          | **17,047**                        |          | **$**  | **4,814**   |     | **$**            | **1,365**   |             | **$**  | **-** |   | **$** | **23,226** |   |
| Additions                to long-lived assets                                          | **$**                                                          | **71,627**                        |          | **$**  | **5**       |     | **$**            | **40**      |             | **$**  | **-** |   | **$** | **71,672** |   |
| Segment                assets                                                          | **$**                                                          | **1,822,007**                     |          | **$**  | **367,859** |     | **$**            | **678,890** |             | **$**  | **(673,666** | **)** | **$** | **2,195,090** |   |
| **(1)****Reconciliation                of segment profit to consolidated profit:**     |                                                           | **Segment                profit** |          |   |        |     |             |        |             | **$**  | **23,226** |   |   |   |   |
|                                                                                        | **Unallocated                items:**                     |                              |          |   |        |     |             |        |             |   |
|                                                                                   | **Preferred                dividends**                    |                              |          |   |        | **(427** | **)**            |        |             |   |
|                                                                                        | **Net                income applicable to common stock**  | **$**                             | **22,799**    |   |        |     |             |

|                                                                                |                                                       |                          |      |   |    |   |         |    |         |   |
|-------------------------------------------------------------------------------------|------------------------------------------------------------|-------------------------------|-----------|--------|---------|--------|--------------|---------|--------------|--------|
|                                                                                | CLECO                                                      |                          |      |   |    |   |         |    |         |   |
| 2005                (THOUSANDS)                                                     | POWER                                                      |                          | MIDSTREAM |   | OTHER   |   | ELIMINATIONS |    | CONSOLIDATED |   |
| Revenue                                                                             |                                                       |                          |      |   |    |   |         |    |         |   |
| Electric                operations                                                  | $                                                          | 183,881                       |      | $      | -       |   | $            | -       |         | $      | - |   | $ | 183,881 |   |
| Other                operations                                                     |                                                       | 8,034                         |      |   | 28      |   |         | 42      |         |   | (2 | ) |   | 8,102 |   |
| Electric                customer credits                                            |                                                       | (253                          | )         |   | -       |   |         | -       |         |   | - |   |   | (253 | ) |
| Affiliate                revenue                                                    |                                                       | 8                             |      |   | 1,523   |   |         | 847     |         |   | - |   |   | 2,378 |   |
| Intercompany                revenue                                                 |                                                       | 488                           |      |   | -       |   |         | 11,483  |         |   | (11,971 | ) |   | - |   |
| Operating                revenue, net                                               | $                                                          | 192,158                       |      | $      | 1,551   |   | $            | 12,372  |         | $      | (11,973 | ) | $ | 194,108 |   |
| Depreciation                expense                                                 | $                                                          | 14,662                        |      | $      | 79      |   | $            | 364     |         | $      | - |   | $ | 15,105 |   |
| Interest                charges                                                     | $                                                          | 6,318                         |      | $      | 3,752   |   | $            | 4,359   |         | $      | (3,777 | ) | $ | 10,652 |   |
| Interest                income                                                      | $                                                          | 532                           |      | $      | -       |   | $            | 4,121   |         | $      | (3,769 | ) | $ | 884 |   |
| Equity                income (loss)                from investees                   | $                                                          | -                             |      | $      | 11,047  |   | $            | (3      | )            | $      | - |   | $ | 11,044 |   |
| Federal                and state income tax expense (benefit)                       | $                                                          | 10,783                        |      | $      | 2,510   |   | $            | (755    | )            | $      | 9 |   | $ | 12,547 |   |
| Segment                profit (loss)                from continuing operations, net | $                                                          | 17,324                        |      | $      | 3,584   |   | $            | (209    | )            | $      | - |   | $ | 20,699 |   |
| Loss                from discontinued operations, net of tax                        |                                                       | -                             |      |   | (72     | )      |         | -       |         |   | - |   |   | (72 | ) |
| Segment                profit                (loss) (1)                        | $                                                          | 17,324                        |      | $      | 3,512   |   | $            | (209    | )            | $      | - |   | $ | 20,627 |   |
| Additions                to long-lived assets                                       | $                                                          | 25,619                        |      | $      | -       |   | $            | 201     |         | $      | - |   | $ | 25,820 |   |
| Segment                assets                                                       | $                                                          | 1,413,082                     |      | $      | 340,635 |   | $            | 554,966 |         | $      | (544,150 | ) | $ | 1,764,533 |   |
| (1)Reconciliation                of segment profit to consolidated profit:          |                                                       | Segment                profit |      |   |    |   |         |    |         | $      | 20,627 |   |   |   |   |
|                                                                                     | Unallocated                items:                     |                          |      |   |    |   |         |    |         |   |
|                                                                                     | Preferred                dividends                    |                          |      |   |    | (448   | )            |    |         |   |
|                                                                                     | Net                income applicable to common stock  | $                             | 20,179    |   |    |   |         |

----

|  **SEGMENT                INFORMATION FOR THE****SIX                MONTHS ENDED JUNE 30,**  |                                                           |                              |          |   |        |     |             |        |             |   |
|--------------------------------------------------------------------------------------------------------|----------------------------------------------------------------|-----------------------------------|---------------|--------|-------------|----------|------------------|-------------|------------------|--------|
|                                                                                                   | **CLECO**                                                      |                              |          |   |        |     |             |        |             |   |
| 2006                (THOUSANDS)                                                                        | **POWER**                                                      |                              | **MIDSTREAM** |   | **OTHER**   |     | **ELIMINATIONS** |        | **CONSOLIDATED** |   |
| Revenue                                                                                                |                                                           |                              |          |   |        |     |             |        |             |   |
| Electric                operations                                                                     | **$**                                                          | **452,275**                       |          | **$**  | **-**       |     | **$**            | **-**       |             | **$**  | **-** |   | **$** | **452,275** |   |
| Other                operations                                                                        |                                                           | **14,432**                        |          |   | **5**       |     |             | **104**     |             |   | **(16** | **)** |   | **14,525** |   |
| Electric                customer credits                                                               |                                                           | **4,382**                         |          |   | **-**       |     |             | **-**       |             |   | **-** |   |   | **4,382** |   |
| Affiliate                revenue                                                                       |                                                           | **24**                            |          |   | **2,188**   |     |             | **976**     |             |   | **-** |   |   | **3,188** |   |
| Intercompany                revenue                                                                    |                                                           | **1,000**                         |          |   | **-**       |     |             | **19,660**  |             |   | **(20,660** | **)** |   | **-** |   |
| Operating                revenue, net                                                                  | **$**                                                          | **472,113**                       |          | **$**  | **2,193**   |     | **$**            | **20,740**  |             | **$**  | **(20,676** | **)** | **$** | **474,370** |   |
| Depreciation                expense                                                                    | **$**                                                          | **30,526**                        |          | **$**  | **156**     |     | **$**            | **676**     |             | **$**  | **-** |   | **$** | **31,358** |   |
| Interest                charges                                                                        | **$**                                                          | **17,904**                        |          | **$**  | **8,876**   |     | **$**            | **3,916**   |             | **$**  | **(8,836** | **)** | **$** | **21,860** |   |
| Interest                income                                                                         | **$**                                                          | **4,129**                         |          | **$**  | **-**       |     | **$**            | **9,142**   |             | **$**  | **(8,836** | **)** | **$** | **4,435** |   |
| Equity                income (loss)                from investees                                      | **$**                                                          | **-**                             |          | **$**  | **15,681**  |     | **$**            | **(75**     | **)**            | **$**  | **-** |   | **$** | **15,606** |   |
| Federal                and state income tax expense                                                    | **$**                                                          | **14,859**                        |          | **$**  | **3,237**   |     | **$**            | **1,601**   |             | **$**  | **(124** | **)** | **$** | **19,573** |   |
| Segment                profit from continuing operations, net                                          | **$**                                                          | **30,921**                        |          | **$**  | **1,917**   |     | **$**            | **2,716**   |             | **$**  | **-** |   | **$** | **35,554** |   |
| Loss                from discontinued operations                                                       |                                                           | **-**                             |          |   | **(190**    | **)**    |             | **-**       |             |   | **-** |   |   | **(190** | **)** |
| Segment                profit (1)                                                                 | **$**                                                          | **30,921**                        |          | **$**  | **1,727**   |     | **$**            | **2,716**   |             | **$**  | **-** |   | **$** | **35,364** |   |
| Additions                to long-lived assets                                                          | **$**                                                          | **122,318**                       |          | **$**  | **13**      |     | **$**            | **155**     |             | **$**  | **-** |   | **$** | **122,486** |   |
| Segment                assets                                                                          | **$**                                                          | **1,822,007**                     |          | **$**  | **367,859** |     | **$**            | **678,890** |             | **$**  | **(673,666** | **)** | **$** | **2,195,090** |   |
| **(1)****Reconciliation                of segment profit to consolidated profit:**                     |                                                           | **Segment                profit** |          |   |        |     |             |        |             | **$**  | **35,364** |   |   |   |   |
|                                                                                                        | **Unallocated                items:**                     |                              |          |   |        |     |             |        |             |   |
|                                                                                                        | **Preferred                dividends**                    |                              |          |   |        | **(886** | **)**            |        |             |   |
|                                                                                                        | **Net                income applicable to common stock**  | **$**                             | **34,478**    |   |        |     |             |

|                                                                                |                                                       |                          |      |   |    |   |         |    |         |   |
|-------------------------------------------------------------------------------------|------------------------------------------------------------|-------------------------------|-----------|--------|---------|--------|--------------|---------|--------------|--------|
|                                                                                | CLECO                                                      |                          |      |   |    |   |         |    |         |   |
| 2005                (THOUSANDS)                                                     | POWER                                                      |                          | MIDSTREAM |   | OTHER   |   | ELIMINATIONS |    | CONSOLIDATED |   |
| Revenue                                                                             |                                                       |                          |      |   |    |   |         |    |         |   |
| Electric                operations                                                  | $                                                          | 346,712                       |      | $      | -       |   | $            | -       |         | $      | - |   | $ | 346,712 |   |
| Other                operations                                                     |                                                       | 15,115                        |      |   | 40      |   |         | 101     |         |   | (4 | ) |   | 15,252 |   |
| Electric                customer credits                                            |                                                       | (471                          | )         |   | -       |   |         | -       |         |   | - |   |   | (471 | ) |
| Affiliate                revenue                                                    |                                                       | 15                            |      |   | 3,016   |   |         | 1,700   |         |   | - |   |   | 4,731 |   |
| Intercompany                revenue                                                 |                                                       | 976                           |      |   | -       |   |         | 22,254  |         |   | (23,230 | ) |   | - |   |
| Operating                revenue, net                                               | $                                                          | 362,347                       |      | $      | 3,056   |   | $            | 24,055  |         | $      | (23,234 | ) | $ | 366,224 |   |
| Depreciation                expense                                                 | $                                                          | 29,059                        |      | $      | 159     |   | $            | 658     |         | $      | - |   | $ | 29,876 |   |
| Interest                charges                                                     | $                                                          | 13,506                        |      | $      | 7,233   |   | $            | 8,849   |         | $      | (7,133 | ) | $ | 22,455 |   |
| Interest                income                                                      | $                                                          | 1,144                         |      | $      | -       |   | $            | 7,825   |         | $      | (7,118 | ) | $ | 1,851 |   |
| Equity                income (loss)                from investees                   | $                                                          | -                             |      | $      | 20,966  |   | $            | (93     | )            | $      | - |   | $ | 20,873 |   |
| Federal                and state income tax expense (benefit)                       | $                                                          | 15,456                        |      | $      | 4,500   |   | $            | (1,410  | )            | $      | (3 | ) | $ | 18,543 |   |
| Segment                profit (loss)                from continuing operations, net | $                                                          | 24,934                        |      | $      | 6,473   |   | $            | (1,134  | )            | $      | - |   | $ | 30,273 |   |
| Loss                from discontinued operations, net of tax                        |                                                       | -                             |      |   | (205    | )      |         | -       |         |   | - |   |   | (205 | ) |
| Segment                profit                (loss) (1)                        | $                                                          | 24,934                        |      | $      | 6,268   |   | $            | (1,134  | )            | $      | - |   | $ | 30,068 |   |
| Additions                to long-lived assets                                       | $                                                          | 44,021                        |      | $      | 8       |   | $            | 455     |         | $      | - |   | $ | 44,484 |   |
| Segment                assets                                                       | $                                                          | 1,413,082                     |      | $      | 340,635 |   | $            | 554,966 |         | $      | (544,150 | ) | $ | 1,764,533 |   |
| (1)Reconciliation                of segment profit to consolidated profit:          |                                                       | Segment                profit |      |   |    |   |         |    |         | $      | 30,068 |   |   |   |   |
|                                                                                     | Unallocated                items:                     |                          |      |   |    |   |         |    |         |   |
|                                                                                     | Preferred                dividends                    |                          |      |   |    | (923   | )            |    |         |   |
|                                                                                     | Net                income applicable to common stock  | $                             | 29,145    |   |    |   |         |

**Note      **

**5      — **

**Equity      Investment in Investees                                                                                    **

----

|                               |                                                              |        |
|------------------------------------|-------------------------------------------------------------------|-------------|
|                               | FOR                THE THREE MONTHS ENDED JUNE                30, |        |
| (THOUSANDS)                        | **2006**                                                          |        | 2005 |   |
| Perryville                         | **$**                                                             | **1,567**   |   | $ | - |   |
| APH                                |                                                              | **11,903**  |   |   | 7,641 |   |
| Evangeline                         |                                                              | **1,573**   |   |   | 3,406 |   |
| Other                              |                                                              | **19****0** |   |   | (3 | ) |
| Total                equity income | **$**                                                             | **15,233**  |   | $ | 11,044 |   |

|                               |                                                            |       |
|------------------------------------|-----------------------------------------------------------------|------------|
|                               | FOR                THE SIX MONTHS ENDED JUNE                30, |       |
| (THOUSANDS)                        | **2006**                                                        |       | 2005 |   |
| Perryville                         | **$**                                                           | **1,807**  |   | $ | - |   |
| APH                                |                                                            | **11,837** |   |   | 15,913 |   |
| Evangeline                         |                                                            | **1,611**  |   |   | 5,053 |   |
| Other                              |                                                            | **351**    |   |   | (93 | ) |
| Total                equity income | **$**                                                           | **15,606** |   | $ | 20,873 |   |

***Acadia***

|                                               |                                          |        |                           |   |
|----------------------------------------------------|-----------------------------------------------|-------------|--------------------------------|--------|
|                                               | **AT                JUNE                30,** |        | AT                DECEMBER 31, |   |
| INCEPTION                TO DATE (THOUSANDS)       | **2006**                                      |        | 2005                           |   |
| Contributed                assets (cash and land)  | **$**                                         | **250,612** |                           | $      | 250,612 |   |
| Income                before taxes                 |                                          | **108,551** |                           |   | 96,714 |   |
| Capitalized                interest and other      |                                          | **19,469**  |                           |   | 19,469 |   |
| Less:                Cash distributions            |                                          | **124,235** |                           |   | 121,464 |   |
| Total                equity investment in investee | **$**                                         | **254,397** |                           | $      | 245,331 |   |

|                                                         |                                          |        |                           |   |
|--------------------------------------------------------------|-----------------------------------------------|-------------|--------------------------------|--------|
|                                                         | **AT                JUNE                30,** |        | AT                DECEMBER 31, |   |
| (THOUSANDS)                                                  | **2006**                                      |        | 2005                           |   |
| Current                assets                                | **$**                                         | **6,627**   |                           | $      | 6,258 |   |
| Property,                plant and equipment, net            |                                          | **443,904** |                           |   | 451,759 |   |
| Other                assets                                  |                                          | **-**       |                           |   | 624 |   |
| Total                assets                                  | **$**                                         | **450,531** |                           | $      | 458,641 |   |
| Current                liabilities                           | **$**                                         | **4,585**   |                           | $      | 6,878 |   |
| Other                liabilities                             |                                          | **489**     |                           |   | - |   |
| Partners’                capital                       |                                          | **445,457** |                           |   | 451,763 |   |
| Total                liabilities and partners’ capital | **$**                                         | **450,531** |                           | $      | 458,641 |   |

|                                                                                                                                                                                                                                                             |                                               |       |                                                            |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------|------------|-----------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                             | FOR                THE THREE MONTHS ENDED JUNE 30, |       | FOR                THE SIX MONTHS ENDED JUNE                30, |   |
| (THOUSANDS)                                                                                                                                                                                                                                                      | **2006**                                           |       | 2005                                                            |   | **2006** |   | 2005 |   |
| Total                revenue                                                                                                                                                                                                                                     | **$**                                              | **42,204** |                                                            | $      | 17,923 |   | **$** | **59,496** |   | $ | 36,552 |   |
| Total                operating expenses                                                                                                                                                                                                                          |                                               | **41,751** |                                                            |   | 6,149 |   |   | **64,772** |   |   | 11,745 |   |
| Other                income                                                                                                                                                                                                                                      |                                               | **1,737**  |                                                            |   | 13 |   |   | **1,741** |   |   | 22 |   |
| Income                (loss) before                taxes                                                                                                                                                                                                         | **$**                                              | **2,190**  |                                                            | $      | 11,787 |   | **$** | **(3,535** | **)*** | $ | 24,829 |   |
| *****The                $3.5 million loss before taxes for the six months ended June 30,                2006,                includes the $2.8 million draw against the letter of credit which                was                allocated 100% to APH earnings. |

***Evangeline***

|                                               |                                          |        |                           |   |
|----------------------------------------------------|-----------------------------------------------|-------------|--------------------------------|--------|
|                                               | **AT                JUNE                30,** |        | AT                DECEMBER 31, |   |
| INCEPTION                TO DATE (THOUSANDS)       | **2006**                                      |        | 2005                           |   |
| Contributed                assets (cash)           | **$**                                         | **43,580**  |                           | $      | 43,580 |   |
| Income                before taxes                 |                                          | **125,431** |                           |   | 123,819 |   |
| Less:                distributions                 |                                          | **108,293** |                           |   | 107,887 |   |
| Total                equity investment in investee | **$**                                         | **60,718**  |                           | $      | 59,512 |   |

----

|                                                        |                                          |        |                           |   |
|-------------------------------------------------------------|-----------------------------------------------|-------------|--------------------------------|--------|
|                                                        | **AT                JUNE                30,** |        | AT                DECEMBER 31, |   |
| (THOUSANDS)                                                 | **2006**                                      |        | 2005                           |   |
| Current                assets                               | **$**                                         | **21,763**  |                           | $      | 19,142 |   |
| Accounts                receivable - affiliate              |                                          | **1,300**   |                           |   | 146 |   |
| Property,                plant and equipment, net           |                                          | **191,863** |                           |   | 194,159 |   |
| Other                assets                                 |                                          | **47,372**  |                           |   | 46,728 |   |
| Total                assets                                 | **$**                                         | **262,298** |                           | $      | 260,175 |   |
| Current                liabilities                          | **$**                                         | **15,226**  |                           | $      | 16,649 |   |
| Accounts                payable - affiliate                 |                                          | **3,436**   |                           |   | 475 |   |
| Long-term                debt                               |                                          | **180,890** |                           |   | 184,716 |   |
| Other                liabilities                            |                                          | **64,106**  |                           |   | 59,568 |   |
| Member’s                deficit                       |                                          | **(1,360**  | **)**                          |   | (1,233 | ) |
| Total                liabilities and member’s deficit | **$**                                         | **262,298** |                           | $      | 260,175 |   |

|                               |                                               |       |                                                            |   |
|------------------------------------|----------------------------------------------------|------------|-----------------------------------------------------------------|--------|
|                               | FOR                THE THREE MONTHS ENDED JUNE 30, |       | FOR                THE SIX MONTHS ENDED JUNE                30, |   |
| (THOUSANDS)                        | **2006**                                           |       | 2005                                                            |   | **200****6** |   | 2005 |   |
| Operating                revenue   | **$**                                              | **12,678** |                                                            | $      | 11,988 |   | **$** | **23,021** |   | $ | 21,706 |   |
| Operating                expenses  |                                               | **5,901**  |                                                            |   | 3,048 |   |   | **10,795** |   |   | 5,559 |   |
| Depreciation                       |                                               | **1,299**  |                                                            |   | 1,296 |   |   | **2,607** |   |   | 2,589 |   |
| Interest                charges    |                                               | **4,204**  |                                                            |   | 4,350 |   |   | **8,469** |   |   | 8,748 |   |
| Other                income        |                                               | **308**    |                                                            |   | 165 |   |   | **602** |   |   | 299 |   |
| Other                expense       |                                               | **9**      |                                                            |   | 53 |   |   | **141** |   |   | 56 |   |
| Income                before taxes | **$**                                              | **1,573**  |                                                            | $      | 3,406 |   | **$** | **1,611** |   | $ | 5,053 |   |

***Perryville***

|                                               |                                          |        |                           |   |
|----------------------------------------------------|-----------------------------------------------|-------------|--------------------------------|--------|
|                                               | **AT                JUNE                30,** |        | AT                DECEMBER 31, |   |
| INCEPTION                TO DATE (THOUSANDS)       | **2006**                                      |        | 2005                           |   |
| Contributed                assets (cash)           | **$**                                         | **102,174** |                           | $      | 102,174 |   |
| Income                before taxes                 |                                          | **49,767**  |                           |   | 47,960 |   |
| Less:                distributions                 |                                          | **138,320** |                           |   | 137,424 |   |
| Total                equity investment in investee | **$**                                         | **13,621**  |                           | $      | 12,710 |   |

|                                                       |                                          |       |                           |   |
|------------------------------------------------------------|-----------------------------------------------|------------|--------------------------------|--------|
|                                                       | **AT                JUNE                30,** |       | AT                DECEMBER 31, |   |
| (THOUSANDS)                                                | **2006**                                      |       | 2005                           |   |
| Current                assets                              | **$**                                         | **1,501**  |                           | $      | 9,249 |   |
| Accounts                receivable - affiliate             |                                          | **7,570**  |                           |   | 43 |   |
| Other                assets                                |                                          | **17,106** |                           |   | 14,035 |   |
| Total                assets                                | **$**                                         | **26,177** |                           | $      | 23,327 |   |
| Current                liabilities                         | **$**                                         | **10,374** |                           | $      | 7,365 |   |
| Accounts                payable - affiliate                |                                          | **4,724**  |                           |   | 111 |   |
| Other                liabilities                           |                                          | **328**    |                           |   | 329 |   |
| Member’s                equity                       |                                          | **10,751** |                           |   | 15,522 |   |
| Total                liabilities and member’s equity | **$**                                         | **26,177** |                           | $      | 23,327 |   |

|                                   |                                               |       |                                                            |   |
|----------------------------------------|----------------------------------------------------|------------|-----------------------------------------------------------------|--------|
|                                   | FOR                THE THREE MONTHS ENDED JUNE 30, |       | FOR                THE SIX MONTHS ENDED JUNE                30, |   |
| (THOUSANDS)                            | **2006**                                           |       | 2005                                                            |   | **200****6** |   | 2005 |   |
| Operating                revenue       | **$**                                              | **264**    |                                                            | $      | 5,008 |   | **$** | **528** |   | $ | 9,788 |   |
| Operating                expenses      |                                               | **(1,267** | **)**                                                           |   | 3,961 |   |   | **(1,104** | **)** |   | 7,603 |   |
| Depreciation                           |                                               | **-**      |                                                            |   | 1,566 |   |   | **-** |   |   | 3,135 |   |
| Interest                charges        |                                               | **-**      |                                                            |   | 2,873 |   |   | **(108** | **)** |   | 5,459 |   |
| Interest                income         |                                               | **36**     |                                                            |   | 67 |   |   | **67** |   |   | 127 |   |
| Gain                on sales of assets |                                               | **-**      |                                                            |   | 10,110 |   |   | **-** |   |   | 10,110 |   |
| Other                expense           |                                               | **-**      |                                                            |   | 3 |   |   | **-** |   |   | 6 |   |
| Income                before taxes     | **$**                                              | **1,567**  |                                                            | $      | 6,782 |   | **$** | **1,807** |   | $ | 3,822 |   |

**Note      **

**6      — Recent Accounting Standards                                                                                    **

----

| §   | Cleco                chose the modified prospective method of transition,                which requires a company to prospectively recognize compensation                expense                calculated pursuant to SFAS No. 123R for all non-vested stock-based                compensation outstanding on the date of                adoption. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Cleco                chose the straight-line basis over the requisite service                period to recognize expense for instruments with graded                vesting. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Cleco                chose the short-cut method to calculate its pool of excess tax benefits                available to absorb tax deficiencies recognized subsequent to                adoption. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | permit                fair value accounting for hybrid financial instruments                that contain an embedded derivative that otherwise would require                bifurcation, |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | clarify                the exemption from SFAS No. 133 for certain interest-only and                principal-only strips, |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

| §   | establish                a requirement to evaluate interests in securitized financial assets                that                contain an embedded derivative requiring                bifurcation, |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | clarify                that concentrations of credit risk in the form of subordination are                not                embedded derivatives, and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | amend                SFAS No. 140 as it relates to qualifying special-purpose entities                and                derivative financial instruments. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Note      **

**7      —**

**      Electric Customer Credits                                                                                    **

|                                                 |                                          |      |                           |   |
|------------------------------------------------------|-----------------------------------------------|-----------|--------------------------------|--------|
|                                                 | **AT                JUNE                30,** |      | AT                DECEMBER 31, |   |
| (THOUSANDS)                                          | **2006**                                      |      | 2005                           |   |
| Provision                for rate refund             | **$**                                         | **3,652** |                           | $      | 7,927 |   |
| Other                deferred                credits |                                          | **3,047** |                           |   | 3,154 |   |
| Total                customer                credits | **$**                                         | **6,699** |                           | $      | 11,081 |   |

----

**Note**

**      8 — Litigation and Other Commitments and Contingencies                                                                    **

***Securities****Litigation***

***Other****Litigation***

***Off-Balance      Sheet Commitments***

----

|                                                                                                                                           |   |        |       |   |        |   |                                     |        |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|------------|--------|-------------|--------|------------------------------------------|-------------|
|                                                                                                                                           |   |        |       |   |        |   | AT                JUNE 30, 2006          |        |
|                                                                                                                                           |   |        |       |   |        |   | REDUCTIONS                TO THE         |        |
|                                                                                                                                           |   |        |       |   |        |   | AMOUNT                AVAILABLE          |        |
|                                                                                                                                           |   |        |       |   |        |   | TO                BE DRAWN ON            |        |
|                                                                                                                                           | FACE   |        |       |   | NET         |   | CLECO                CORPORATION’S |        |
| (THOUSANDS)                                                                                                                                    | AMOUNT |        | REDUCTIONS |   | AMOUNT      |   | CREDIT                FACILITY           |        |
| Cleco                Corporation guarantee issued to Entergy companies for performance                obligations of Perryville                | **$**  | **277,400** |       | **$**  | **135,000** |   | **$**                                    | **142,400** |   | **$** | **328** |   |
| Cleco                Corporation guarantees issued to purchasers of the assets of Cleco                Energy                                  |   | **1,400**   |       |   | **-**       |   |                                     | **1,400**   |   |   | **1,400** |   |
| Cleco                Corporation obligations under standby letter of credit issued to                Evangeline Tolling Agreement counterparty |   | **15,000**  |       |   | **-**       |   |                                     | **15,000**  |   |   | **15,000** |   |
| Cleco                Corporation guarantee issued to Central Mississippi Generating Co.                on                behalf of Attala      |   | **727**     |       |   | **-**       |   |                                     | **727**     |   |   | **727** |   |
| Cleco                Corporation guarantee issued to Entergy Mississippi on behalf of                Attala                                    |   | **500**     |       |   | **-**       |   |                                     | **500**     |   |   | **500** |   |
| Cleco                Power obligations under standby letter of credit issued to Louisiana                Department of Labor                   |   | **525**     |       |   | **-**       |   |                                     | **525**     |   |   | **-** |   |
| Cleco                Power obligations under Lignite Mining Agreement                                                                          |   | **14,586**  |       |   | **-**       |   |                                     | **14,586**  |   |   | **-** |   |
| Total                                                                                                                                          | **$**  | **310,138** |       | **$**  | **135,000** |   | **$**                                    | **175,138** |   | **$** | **17,955** |   |

----

|                                            |      |        |                                                                             |   |                         |   |                                |   |
|-------------------------------------------------|-----------|-------------|----------------------------------------------------------------------------------|--------|------------------------------|--------|-------------------------------------|--------|
|                                            |      |        |                                                                             |   |                         |   | AT                    JUNE 30, 2006 |   |
|                                            |      |        | AMOUNT                    OF COMMITMENT EXPIRATION                    PER PERIOD |   |
|                                            | NET       |        |                                                                             |   |                         |   |                                |   | MORE |   |
|                                            | AMOUNT    |        | LESS                    THAN                                                     |   |                         |   |                                |   | THAN |   |
| (THOUSANDS)                                     | COMMITTED |        | ONE                    YEAR                                                      |   | 1-3                    YEARS |   | 4-5                    YEARS        |   | 5                    YEARS |   |
| Guarantees                                      | **$**     | **159,613** |                                                                             | **$**  | **727**                      |   | **$**                               | **-**  |   | **$** | **101,400** |   | **$** | **57,486** |   |
| Standby                    letters of credit    |      | **15,525**  |                                                                             |   | **525**                      |   |                                | **-**  |   |   | **-** |   |   | **15,000** |   |
| Total                    commercial commitments | **$**     | **175,138** |                                                                             | **$**  | **1,252**                    |   | **$**                               | **-**  |   | **$** | **101,400** |   | **$** | **72,486** |   |

***Acadia***

***Other***
**Contingencies**

**General      Electric Services Corporation**

**CBL      Capital Corporation**

**Other**

**Fuel      Audit**

----

***Risks        and Uncertainties***

**Cleco**

| §   | If                Williams’ failure to perform constituted a default under the tolling                agreement, the holders of the Evangeline bonds would have the right                to                declare the entire outstanding principal amount ($188.3 million at                June                30, 2006) and interest to be immediately due and payable, which could                result in: |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Cleco                may not be able to enter into agreements in replacement of the Evangeline                Tolling Agreement on terms as favorable as that agreement or at                all; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Cleco’s                equity investment in Evangeline may be impaired, requiring a write-down                to                its fair market value, which could be substantial;                and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Cleco’s                credit ratings could be downgraded, which would increase borrowing                costs                and limit sources of financing. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Cleco**
**      Power**

**Note      **

**9      — Disclosures about Guarantees                                                                                    **

----

**Note      **

**10      — Debt                                                                                                  **

***Credit      Facilities***

**Note      1**

**1      — Pension Plan and Employee Benefits                                                                                **

***Pension      Plan and Other Benefits Plan***

----

|                                                           |                                                              |       |                          |   |
|----------------------------------------------------------------|-------------------------------------------------------------------|------------|-------------------------------|--------|
|                                                           | PENSION                BENEFITS                                   |       | OTHER                BENEFITS |   |
|                                                           | FOR                THE THREE MONTHS ENDED JUNE                30, |       |
| (THOUSANDS)                                                    | **2006**                                                          |       | 2005                          |   | **2006** |   | 2005 |   |
| Components                of periodic benefit  costs |                                                              |       |                          |   |   |   |   |   |
| Service                cost                                    | **$**                                                             | **2,069**  |                          | $      | 1,640 |   | **$** | **376** |   | $ | 654 |   |
| Interest                cost                                   |                                                              | **3,507**  |                          |   | 3,290 |   |   | **415** |   |   | 594 |   |
| Expected                return on plan assets                  |                                                              | **(4,851** | **)**                         |   | (4,587 | ) |   | **-** |   |   | - |   |
| Amortization                of transition  obligation     |                                                              | **-**      |                          |   | - |   |   | **5** |   |   | - |   |
| Prior                period service cost  amortization    |                                                              | **239**    |                          |   | 246 |   |   | **(527** | **)** |   | (188 | ) |
| Net                loss amortization                           |                                                              | **1,143**  |                          |   | 221 |   |   | **221** |   |   | 304 |   |
| Net                periodic benefit cost                       | **$**                                                             | **2,107**  |                          | $      | 810 |   | **$** | **490** |   | $ | 1,364 |   |

|                                                           |                                                            |       |                          |   |
|----------------------------------------------------------------|-----------------------------------------------------------------|------------|-------------------------------|--------|
|                                                           | PENSION                BENEFITS                                 |       | OTHER                BENEFITS |   |
|                                                           | FOR                THE SIX MONTHS ENDED JUNE                30, |       |
| (THOUSANDS)                                                    | **2006**                                                        |       | 2005                          |   | **2006** |   | 2005 |   |
| Components                of periodic benefit  costs |                                                            |       |                          |   |   |   |   |   |
| Service                cost                                    | **$**                                                           | **3,921**  |                          | $      | 3,397 |   | **$** | **769** |   | $ | 1,308 |   |
| Interest                cost                                   |                                                            | **7,211**  |                          |   | 6,654 |   |   | **847** |   |   | 1,189 |   |
| Expected                return on plan assets                  |                                                            | **(9,143** | **)**                         |   | (9,183 | ) |   | **-** |   |   | - |   |
| Amortization                of transition  obligation     |                                                            | **-**      |                          |   | - |   |   | **10** |   |   | - |   |
| Prior                period service cost  amortization    |                                                            | **486**    |                          |   | 493 |   |   | **(1,033** | **)** |   | (378 | ) |
| Net                loss amortization                           |                                                            | **1,272**  |                          |   | 507 |   |   | **433** |   |   | 608 |   |
| Net                periodic benefit cost                       | **$**                                                           | **3,747**  |                          | $      | 1,868 |   | **$** | **1,026** |   | $ | 2,727 |   |

***SERP***

|                                                  |                                               |      |                                                            |   |
|-------------------------------------------------------|----------------------------------------------------|-----------|-----------------------------------------------------------------|--------|
|                                                  | FOR                THE THREE MONTHS ENDED JUNE 30, |      | FOR                THE SIX MONTHS ENDED JUNE                30, |   |
| (THOUSANDS)                                           | **2006**                                           |      | 2005                                                            |   | **200****6** |   | 2005 |   |
| Components                of periodic benefit costs   |                                               |      |                                                            |   |   |   |   |   |
| Service                cost                           | **$**                                              | **350**   |                                                            | $      | 380 |   | **$** | **690** |   | $ | 641 |   |
| Interest                cost                          |                                               | **425**   |                                                            |   | 377 |   |   | **793** |   |   | 695 |   |
| Prior                period service cost amortization |                                               | **13**    |                                                            |   | 13 |   |   | **27** |   |   | 26 |   |
| Net                loss amortization                  |                                               | **216**   |                                                            |   | 217 |   |   | **418** |   |   | 348 |   |
| Net                periodic benefit cost              | **$**                                              | **1,004** |                                                            | $      | 987 |   | **$** | **1,928** |   | $ | 1,710 |   |

----

***401***
***(k)      Plan/ESOP***

|                                                                                       |                                                              |    |
|--------------------------------------------------------------------------------------------|-------------------------------------------------------------------|---------|
|                                                                                       | FOR                THE THREE MONTHS ENDED JUNE                30, |    |
| (THOUSANDS)                                                                                | **2006**                                                          |    | 2005 |   |
| 401(k)                Plan expense                                                         | **$**                                                             | **576** |   | $ | 553 |   |
| Dividend                requirements to ESOP on convertible                preferred stock | **$**                                                             | **414** |   | $ | 451 |   |
| Interest                incurred                by ESOP on its indebtedness                | **$**                                                             | **-**   |   | $ | 41 |   |

|                                                                                       |                                                            |    |
|--------------------------------------------------------------------------------------------|-----------------------------------------------------------------|---------|
|                                                                                       | FOR                THE SIX MONTHS ENDED JUNE                30, |    |
| (THOUSANDS)                                                                                | **2006**                                                        |    | 2005 |   |
| 401(k)                Plan expense                                                         | **$**                                                           | **676** |   | $ | 755 |   |
| Dividend                requirements to ESOP on convertible                preferred stock | **$**                                                           | **863** |   | $ | 935 |   |
| Interest                incurred                by ESOP on its indebtedness                | **$**                                                           | **8**   |   | $ | 85 |   |

**Note      1**

**2      — Discontinued Operations and Dispositions                                                                            **

***Cleco      Energy***

|                                                     |                                               |     |                                                            |   |
|----------------------------------------------------------|----------------------------------------------------|----------|-----------------------------------------------------------------|--------|
|                                                     | FOR                THE THREE MONTHS ENDED JUNE 30, |     | FOR                THE SIX MONTHS ENDED JUNE                30, |   |
| (THOUSANDS)                                              | **2006**                                           |     | 2005                                                            |   | **200****6** |   | 2005 |   |
| Operating                revenue,                net     | **$**                                              | **-**    |                                                            | $      | - |   | **$** | **-** |   | $ | - |   |
| Pre-tax                loss                              |                                               | **(150** | **)**                                                           |   | (108 | ) |   | **(241** | **)** |   | (307 | ) |
| Federal                and state income tax benefit      |                                               | **(47**  | **)**                                                           |   | (36 | ) |   | **(51** | **)** |   | (102 | ) |
| Operating                loss, net                of tax | **$**                                              | **(103** | **)**                                                           | $      | (72 | ) | **$** | **(190** | **)** | $ | (205 | ) |

**Note      1**

**3      — Income Taxes                                                                                             **

|                                          |                                                              |
|-----------------------------------------------|-------------------------------------------------------------------|
|                                          | FOR                THE THREE MONTHS ENDED JUNE                30, |
|                                          | **2006**                                                          |   | 2005 |
| **Effective                income tax rates** |                                                              |   |   |
| Cleco                Corporation              | **36.6                %**                                         |   | 37.7                % |
| Cleco                Power                    | **31.4                %**                                         |   | 38.4                % |

|                                          |                                                            |
|-----------------------------------------------|-----------------------------------------------------------------|
|                                          | FOR                THE SIX MONTHS ENDED JUNE                30, |
|                                          | **2006**                                                        |   | 2005 |
| **Effective                income tax rates** |                                                            |   |   |
| Cleco                Corporation              | **35.5                %**                                       |   | 38.0                % |
| Cleco                Power                    | **32.5                %**                                       |   | 38.3                % |

| §   | tax                reserve adjustments related to favorable settlements                of federal and state income tax audits and appeals                and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | adjustment                for Cleco Power related to state income                taxes deducted on the federal return for                2004. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Note      1**

**4      — Deferred Fuel and Purchased Power Costs                                                                            **

**Note      1**

**5      — Affiliate Transactions                                                                                        **

**Note      1**

**6      — Calpine Bankruptcy                                                                                        **

***Background***

***Calpine      Bankruptcy***

----

**ITEM      2****.** MANAGEMENT’S      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      OPERATIONS                                 

**OVERVIEW                                                                                                    **

| §   | Cleco                Power, an integrated electric utility services subsidiary                regulated by the LPSC and the FERC, among other regulators, which                also                engages in energy management activities,                and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | Midstream,                a merchant energy subsidiary that owns and operates a merchant generation                station, invests in a joint venture that owns and operates a merchant                generation station, and owns and operates transmission interconnection                facilities. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Cleco      Power***

----

***Midstream***

***Comparison      of the Three Months Ended June 30, 2006, and 2005***

|                **Cleco                Consolidated** |     |        |                                                              |   |
|-----------------------------------------------------------|----------|-------------|-------------------------------------------------------------------|--------|
|                                                      |     |        | FOR                THE THREE MONTHS ENDED JUNE                30, |   |
|                                                      |     |        |                                                              |   | FAVORABLE/(UNFAVORABLE) |   |
| (THOUSANDS)                                               | **2006** |        | 2005                                                              |   | VARIANCE |   | CHANGE |   |
| Operating                revenue, net                     | **$**    | **250,952** |                                                              | $      | 194,108 |   | $ | 56,844 |   |   | 29.28 |  % |
| Operating                expenses                         |     | **221,536** |                                                              |   | 163,182 |   |   | (58,354 | ) |   | (35.76 | )% |
| Operating                income                           | **$**    | **29,416**  |                                                              | $      | 30,926 |   | $ | (1,510 | ) |   | (4.88 | )% |
| Interest                income                            | **$**    | **1,943**   |                                                              | $      | 884 |   | $ | 1,059 |   |   | 119.80 |  % |
| Equity                income from investees          | **$**    | **15,233**  |                                                              | $      | 11,044 |   | $ | 4,189 |   |   | 37.93 |  % |
| Net                income applicable to common stock      | **$**    | **22,799**  |                                                              | $      | 20,179 |   | $ | 2,620 |   |   | 12.98 |  % |

**Cleco      Power**

| §   | higher                other operations and maintenance                expenses, |
|--------------------|---------------------------------------------------------------------------------|

| §   | higher                depreciation expense, |
|--------------------|---------------------------------------------|

| §   | higher                other taxes, |
|--------------------|------------------------------------|

| §   | absence                of the gain on the sale of certain distribution assets,                and |
|--------------------|---------------------------------------------------------------------------------------------------|

| §   | higher                interest charges. |
|--------------------|-----------------------------------------|

| §   | higher                base revenue and |
|--------------------|----------------------------------------|

| §   | higher                interest income. |
|--------------------|----------------------------------------|

----

|                                                                                    |     |        |                                                              |   |
|-----------------------------------------------------------------------------------------|----------|-------------|-------------------------------------------------------------------|--------|
|                                                                                    |     |        | FOR                THE THREE MONTHS ENDED JUNE                30, |   |
|                                                                                    |     |        |                                                         |   | FAVORABLE/(UNFAVORABLE) |   |
| (THOUSANDS)                                                                             | **2006** |        |  2005                                                        |   | VARIANCE |   | CHANGE |   |
| Operating                revenue                                                        |     |        |                                                         |   |   |   |   |   |
| Base                                                                                    | **$**    | **90,677**  |                                                              | $      | 82,653 |   | $ | 8,024 |   |   | 9.71 |  % |
| Fuel                cost recovery                                                       |     | **150,609** |                                                              |   | 101,228 |   |   | 49,381 |   |   | 48.78 |  % |
| Electric                customer credits                                                |     | **-**       |                                                              |   | (253 | ) |   | 253 |   |   | * |   |
| Other                operations                                                         |     | **7,883**   |                                                              |   | 8,034 |   |   | (151 | ) |   | (1.88 | )% |
| Affiliate                revenue                                                        |     | **12**      |                                                              |   | 8 |   |   | 4 |   |   | 50.00 |  % |
| Intercompany                revenue                                                     |     | **500**     |                                                              |   | 488 |   |   | 12 |   |   | 2.46 |  % |
| Operating                revenue, net                                                   |     | **249,681** |                                                              |   | 192,158 |   |   | 57,523 |   |   | 29.94 |  % |
| Operating                expenses                                                       |     |        |                                                              |   |   |   |   |   |   |   |   |   |
| Fuel                used for electric  generation                - recoverable     |     | **55,424**  |                                                              |   | 13,249 |   |   | (42,175 | ) |   | (318.33 | )% |
| Power                purchased for utility  customers                - recoverable |     | **95,275**  |                                                              |   | 87,745 |   |   | (7,530 | ) |   | (8.58 | )% |
| Non-recoverable                fuel and  power                purchased            |     | **5,994**   |                                                              |   | 5,232 |   |   | (762 | ) |   | (14.56 | )% |
| Other                operations                                                         |     | **23,065**  |                                                              |   | 19,003 |   |   | (4,062 | ) |   | (21.38 | )% |
| Maintenance                                                                             |     | **13,591**  |                                                              |   | 12,804 |   |   | (787 | ) |   | (6.15 | )% |
| Depreciation                                                                            |     | **15,301**  |                                                              |   | 14,662 |   |   | (639 | ) |   | (4.36 | )% |
| Taxes                other than income  taxes                                      |     | **10,315**  |                                                              |   | 8,659 |   |   | (1,656 | ) |   | (19.12 | )% |
| Gain                on sales of assets                                                  |     | **(68**     | **)**                                                             |   | (2,201 | ) |   | (2,133 | ) |   | (96.91 | )% |
| Total                operating expenses                                                 |     | **218,897** |                                                              |   | 159,153 |   |   | (59,744 | ) |   | (37.54 | )% |
| Operating                income                                                         | **$**    | **30,784**  |                                                              | $      | 33,005 |   | $ | (2,221 | ) |   | (6.73 | )% |
| Interest                income                                                          | **$**    | **1,793**   |                                                              | $      | 532 |   | $ | 1,261 |   |   | 237.03 |  % |
| Interest                charges                                                         | **$**    | **8,924**   |                                                              | $      | 6,318 |   | $ | (2,606 | ) |   | (41.25 | )% |
| Federal                and state income taxes                                           | **$**    | **7,802**   |                                                              | $      | 10,783 |   | $ | 2,981 |   |   | 27.65 |  % |
| Net                income                                                               | **$**    | **17,047**  |                                                              | $      | 17,324 |   | $ | (277 | ) |   | (1.60 | )% |
| *Not                meaningful                                                          |     |        |                                                              |   |   |   |   |   |   |   |   |   |

|                                                     |                                                              |
|----------------------------------------------------------|-------------------------------------------------------------------|
|                                                     | FOR                THE THREE MONTHS ENDED JUNE                30, |
|  (MILLION                kWh)                       |  **2006**                                                    |   |  2005 |   | FAVORABLE/(UNFAVORABLE) |
| Electric                sales                            |                                                              |   |   |   |   |
| Residential                                              | **820**                                                           |   | 751 |   | 9.19                % |
| Commercial                                               | **471**                                                           |   | 437 |   | 7.78                % |
| Industrial                                               | **725**                                                           |   | 705 |   | 2.84                % |
| Other                retail                              | **147**                                                           |   | 143 |   | 2.80                % |
| Unbilled                                                 | **223**                                                           |   | 224 |   | (0.45)% |
| Total                retail                              | **2,386**                                                         |   | 2,260 |   | 5.58                % |
| Sales                for resale                          | **284**                                                           |   | 264 |   | 7.58                % |
| Total                retail and wholesale customer sales | **2,670**                                                         |   | 2,524 |   | 5.78                % |

|                                                     |                                                                  |
|----------------------------------------------------------|-----------------------------------------------------------------------|
|                                                     | FOR                THE THREE MONTHS ENDED JUNE                30,     |
|  (THOUSANDS)                                        |  **2006**                                                        |   |  2005 |   | FAVORABLE/(UNFAVORABLE) |
| Electric                sales                            |                                                                  |   |   |   |   |
| Residential                                              | **$         ****39,634** |   | $                         35,025 |   | 13.16                % |
| Commercial                                               | **18,834**                                                            |   | 17,021 |   | 10.65                % |
| Industrial                                               | **14,277**                                                            |   | 13,325 |   | 7.14                % |
| Other                retail                              | **6,053**                                                             |   | 5,686 |   | 6.45                % |
| Unbilled                                                 | **7,597**                                                             |   | 7,486 |   | 1.48                % |
| Total                retail                              | **86,395**                                                            |   | 78,543 |   | 10.00                % |
| Sales                for resale                          | **4,282**                                                             |   | 4,110 |   | 4.18                % |
| Total                retail and wholesale customer sales | **$         ****90,677** |   | $                         82,653 |   | 9.71                % |

|                                    |                                                              |
|-----------------------------------------|-------------------------------------------------------------------|
|                                    | FOR                THE THREE MONTHS ENDED JUNE                30, |
|                                    | **2006**                                                          |   | 2005 |
| **Cooling****degree-days**              |                                                              |   |   |
| Increase                from normal     | **19.60                %**                                        |   | 7.57% |
| Increase                from prior year | **11.18                %**                                        |   | 5.57% |

***Base***

***Fuel      Cost Recovery***

----

***Other      Operations***

***Operating      Expenses***

***Interest      Income***

***Interest      Charges***

***Income      Taxes***

**Midstream**

----

|                                                               |                                                              |       |
|--------------------------------------------------------------------|-------------------------------------------------------------------|------------|
|                                                               | FOR                THE THREE MONTHS ENDED JUNE                30, |       |
|                                                               |                                                              |       |   |   | FAVORABLE/(UNFAVORABLE) |   |
| (THOUSANDS)                                                        | **2006**                                                          |       | 2005 |   | VARIANCE |   | CHANGE |   |
| Operating                revenue                                   |                                                              |       |   |   |   |   |   |   |
| Other                operations                                    | **$**                                                             | **1**      |   | $ | 28 |   | $ | (27 | ) |   | (96.43 | )% |
| Affiliate                revenue                                   |                                                              | **1,138**  |   |   | 1,523 |   |   | (385 | ) |   | (25.28 | )% |
| Operating                revenue                                   |                                                              | **1,139**  |   |   | 1,551 |   |   | (412 | ) |   | (26.56 | )% |
| Operating                expenses                                  |                                                              |       |   |   |   |   |   |   |   |   |   |   |
| Other                operations                                    |                                                              | **1,399**  |   |   | 1,933 |   |   | 534 |   |   | 27.63 |  % |
| Maintenance                                                        |                                                              | **537**    |   |   | 666 |   |   | 129 |   |   | 19.37 |  % |
| Depreciation                                                       |                                                              | **78**     |   |   | 79 |   |   | 1 |   |   | 1.27 |  % |
| Taxes                other than income  taxes                 |                                                              | **65**     |   |   | 69 |   |   | 4 |   |   | 5.80 |  % |
| Total                operating  expenses                 |                                                              | **2,079**  |   |   | 2,747 |   |   | 668 |   |   | 24.32 |  % |
| Operating                loss                                      | **$**                                                             | **(940**   | **)** | $ | (1,196 | ) | $ | 256 |   |   | 21.40 |  % |
| Equity                income from investees                        | **$**                                                             | **15,283** |   | $ | 11,047 |   | $ | 4,236 |   |   | 38.35 |  % |
| Interest                charges                                    | **$**                                                             | **4,645**  |   | $ | 3,752 |   | $ | (893 | ) |   | (23.80 | )% |
| Federal                and state income tax                expense | **$**                                                             | **4,779**  |   | $ | 2,510 |   | $ | (2,269 | ) |   | (90.40 | )% |
| Loss                from discontinued operations                   | **$**                                                             | **(103**   | **)** | $ | (72 | ) | $ | (31 | ) |   | (43.06 | )% |
| Net                income                                          | **$**                                                             | **4,814**  |   | $ | 3,512 |   | $ | 1,302 |   |   | 37.07 |  % |

***Operating      Revenue***

***Operating      Expenses***

***Equity      Income from Investees***

***Interest      Charges***

***Income      Taxes***

***Comparison      of the****Six      Months Ended June 30, 2006, and 2005***

|  **Cleco              Consolidated**            |   |     |        |                                                            |   |
|------------------------------------------------------|--------|----------|-------------|-----------------------------------------------------------------|--------|
|                                                 |   |     |        | FOR                THE SIX MONTHS ENDED JUNE                30, |   |
|                                                 |   |     |        |                                                            |   | FAVORABLE/(UNFAVORABLE) |   |
| (THOUSANDS)                                          |   | **2006** |        | 2005                                                            |   | VARIANCE |   | CHANGE |   |
| Operating                revenue, net                |   | **$**    | **474,370** |                                                            | $      | 366,224 |   | $ | 108,146 |   |   | 29.53 |  % |
| Operating                expenses                    |   |     | **418,979** |                                                            |   | 319,484 |   |   | (99,495 | ) |   | (31.14 | )% |
| Operating                income                      |   | **$**    | **55,391**  |                                                            | $      | 46,740 |   | $ | 8,651 |   |   | 18.51 |  % |
| Interest                income                       |   | **$**    | **4,435**   |                                                            | $      | 1,851 |   | $ | 2,584 |   |   | 139.60 |  % |
| Equity                income from investees     |   | **$**    | **15,606**  |                                                            | $      | 20,873 |   | $ | (5,267 | ) |   | (25.23 | )% |
| Interest                charges                      |   | **$**    | **21,860**  |                                                            | $      | 22,455 |   | $ | 595 |   |   | 2.65 |  % |
| Net                income applicable to common stock |   | **$**    | **34,478**  |                                                            | $      | 29,145 |   | $ | 5,333 |   |   | 18.30 |  % |

----

**Cleco      Power**

| §   | higher                base revenue, |
|--------------------|-------------------------------------|

| §   | favorable                customer credit adjustments, |
|--------------------|-------------------------------------------------------|

| §   | lower                maintenance expense, and |
|--------------------|-----------------------------------------------|

| §   | higher                interest income. |
|--------------------|----------------------------------------|

| §   | higher                non-recoverable fuel and power                purchased, |
|--------------------|--------------------------------------------------------------------------------|

| §   | higher                depreciation expense, |
|--------------------|---------------------------------------------|

| §   | higher                other taxes, |
|--------------------|------------------------------------|

| §   | absence                of the gain on the sale of certain distribution assets,                and |
|--------------------|---------------------------------------------------------------------------------------------------|

| §   | higher                interest charges. |
|--------------------|-----------------------------------------|

|                                                                                    |     |        |                                                            |   |
|-----------------------------------------------------------------------------------------|----------|-------------|-----------------------------------------------------------------|--------|
|                                                                                    |     |        | FOR                THE SIX MONTHS ENDED JUNE                30, |   |
|                                                                                    |     |        |                                                       |   | FAVORABLE/(UNFAVORABLE) |   |
| (THOUSANDS)                                                                             | **2006** |        |  2005                                                      |   | VARIANCE |   | CHANGE |   |
| Operating                revenue                                                        |     |        |                                                       |   |   |   |   |   |
| Base                                                                                    | **$**    | **158,575** |                                                            | $      | 149,444 |   | $ | 9,131 |   |   | 6.11 |  % |
| Fuel                cost recovery                                                       |     | **293,700** |                                                            |   | 197,268 |   |   | 96,432 |   |   | 48.88 |  % |
| Electric                customer credits                                                |     | **4,382**   |                                                            |   | (471 | ) |   | 4,853 |   |   | * |   |
| Other                operations                                                         |     | **14,432**  |                                                            |   | 15,115 |   |   | (683 | ) |   | (4.52 | )% |
| Affiliate                revenue                                                        |     | **24**      |                                                            |   | 15 |   |   | 9 |   |   | 60.00 |  % |
| Intercompany                revenue                                                     |     | **1,000**   |                                                            |   | 976 |   |   | 24 |   |   | 2.46 |  % |
| Operating                revenue, net                                                   |     | **472,113** |                                                            |   | 362,347 |   |   | 109,766 |   |   | 30.29 |  % |
| Operating                expenses                                                       |     |        |                                                            |   |   |   |   |   |   |   |   |   |
| Fuel                used for electric  generation                - recoverable     |     | **101,575** |                                                            |   | 61,350 |   |   | (40,225 | ) |   | (65.57 | )% |
| Power                purchased for utility  customers                - recoverable |     | **192,242** |                                                            |   | 133,859 |   |   | (58,383 | ) |   | (43.62 | )% |
| Non-recoverable                fuel and  power                purchased            |     | **12,022**  |                                                            |   | 10,279 |   |   | (1,743 | ) |   | (16.96 | )% |
| Other                operations                                                         |     | **39,306**  |                                                            |   | 39,351 |   |   | 45 |   |   | 0.11 |  % |
| Maintenance                                                                             |     | **18,938**  |                                                            |   | 21,350 |   |   | 2,412 |   |   | 11.30 |  % |
| Depreciation                                                                            |     | **30,526**  |                                                            |   | 29,059 |   |   | (1,467 | ) |   | (5.05 | )% |
| Taxes                other than income  taxes                                      |     | **19,623**  |                                                            |   | 18,242 |   |   | (1,381 | ) |   | (7.57 | )% |
| Gain                on sales of assets                                                  |     | **(68**     | **)**                                                           |   | (2,206 | ) |   | (2,138 | ) |   | (96.92 | )% |
| Total                operating expenses                                            |     | **414,164** |                                                            |   | 311,284 |   |   | (102,880 | ) |   | (33.05 | )% |
| Operating                income                                                         | **$**    | **57,949**  |                                                            | $      | 51,063 |   | $ | 6,886 |   |   | 13.49 |  % |
| Interest                income                                                          | **$**    | **4,129**   |                                                            | $      | 1,144 |   | $ | 2,985 |   |   | 260.93 |  % |
| Interest                charges                                                         | **$**    | **17,904**  |                                                            | $      | 13,506 |   | $ | (4,398 | ) |   | (32.56 | )% |
| Federal                and state income taxes                                           | **$**    | **14,859**  |                                                            | $      | 15,456 |   | $ | 597 |   |   | 3.86 |  % |
| Net                income                                                               | **$**    | **30,921**  |                                                            | $      | 24,934 |   | $ | 5,987 |   |   | 24.01 |  % |
| *Not                meaningful                                                          |     |        |                                                            |   |   |   |   |   |   |   |   |   |

|                                                     |                                                            |
|----------------------------------------------------------|-----------------------------------------------------------------|
|                                                     | FOR                THE SIX MONTHS ENDED JUNE                30, |
|  (MILLION                kWh)                       |  **2006**                                                  |   |  2005 |   | FAVORABLE/(UNFAVORABLE) |
| Electric                sales                            |                                                            |   |   |   |   |
| Residential                                              | **1,570**                                                       |   | 1,541 |   | 1.88                % |
| Commercial                                               | **878**                                                         |   | 843 |   | 4.15                % |
| Industrial                                               | **1,417**                                                       |   | 1,386 |   | 2.24                % |
| Other                retail                              | **279**                                                         |   | 279 |   | - |
| Unbilled                                                 | **141**                                                         |   | 131 |   | 7.63                % |
| Total                retail                              | **4,285**                                                       |   | 4,180 |   | 2.51                % |
| Sales                for resale                          | **519**                                                         |   | 385 |   | 34.81                % |
| Total                retail and wholesale customer sales | **4,804**                                                       |   | 4,565 |   | 5.24                % |

|                                                     |                                                                   |
|----------------------------------------------------------|------------------------------------------------------------------------|
|                                                     | FOR                THE SIX MONTHS ENDED JUNE                30,        |
|  (THOUSANDS)                                        | **2006**                                                               |   | 2005 |   | FAVORABLE/(UNFAVORABLE) |
| Electric                sales                            |                                                                   |   |   |   |   |
| Residential                                              | **$         ****69,974**  |   | $                         66,578 |   | 5.10                % |
| Commercial                                               | **35,780**                                                             |   | 33,834 |   | 5.75                % |
| Industrial                                               | **27,660**                                                             |   | 26,623 |   | 3.90                % |
| Other                retail                              | **11,550**                                                             |   | 11,354 |   | 1.73                % |
| Unbilled                                                 | **5,088**                                                              |   | 4,379 |   | 16.19                % |
| Total                retail                              | **150,052**                                                            |   | 142,768 |   | 5.10                % |
| Sales                for resale                          | **8,523**                                                              |   | 6,676 |   | 27.67                % |
| Total                retail and wholesale customer sales | **$         ****158,575** |   | $                         149,444 |   | 6.11                % |

----

|                                    |                                                            |
|-----------------------------------------|-----------------------------------------------------------------|
|                                    | FOR                THE SIX MONTHS ENDED JUNE                30, |
|                                    | **2006**                                                        |   | 2005 |
| **Cooling****degree-days**              |                                                            |   |   |
| Increase                from normal     | **22.31                %**                                      |   | 9.84                % |
| Increase                from prior year | **11.70                %**                                      |   | 5.79                % |
| **Heating****degree-days**              |                                                            |   |   |
| Decrease                from normal     | **(32.46)%**                                                    |   | (28.97)% |
| Decrease                from prior year | **(3.21)%**                                                     |   | (21.32)% |

***Base***

***Fuel      Cost Recovery***

***Electric      Customer Credits***

***Other      Operations***

***Operating      Expenses***

----

***Interest****Income***

***Interest      Charges***

***Income      Taxes***

**Midstream**

|                                                |   |                                                            |       |
|-----------------------------------------------------|--------|-----------------------------------------------------------------|------------|
|                                                |   | FOR                THE SIX MONTHS ENDED JUNE                30, |       |
|                                                |   |                                                            |       |   |   | FAVORABLE/(UNFAVORABLE) |   |
| (THOUSANDS)                                         |   | **2006**                                                        |       | 2005 |   | VARIANCE |   | CHANGE |   |
| Operating                revenue                    |   |                                                            |       |   |   |   |   |   |   |
| Other                operations                     |   | **$**                                                           | **5**      |   | $ | 40 |   | $ | (35 | ) |   | (87.50 | )% |
| Affiliate                revenue                    |   |                                                            | **2,188**  |   |   | 3,016 |   |   | (828 | ) |   | (27.45 | )% |
| Operating                revenue                    |   |                                                            | **2,193**  |   |   | 3,056 |   |   | (863 | ) |   | (28.24 | )% |
| Operating                expenses                   |   |                                                            |       |   |   |   |   |   |   |   |   |   |   |
| Other                operations                     |   |                                                            | **2,523**  |   |   | 4,121 |   |   | 1,598 |   |   | 38.78 |  % |
| Maintenance                                         |   |                                                            | **1,040**  |   |   | 1,337 |   |   | 297 |   |   | 22.21 |  % |
| Depreciation                                        |   |                                                            | **156**    |   |   | 159 |   |   | 3 |   |   | 1.89 |  % |
| Taxes                other than income  taxes  |   |                                                            | **122**    |   |   | 191 |   |   | 69 |   |   | 36.13 |  % |
| Total                operating expenses        |   |                                                            | **3,841**  |   |   | 5,808 |   |   | 1,967 |   |   | 33.87 |  % |
| Operating                loss                       |   | **$**                                                           | **(1,648** | **)** | $ | (2,752 | ) | $ | 1,104 |   |   | 40.12 |  % |
| Equity                income from investees         |   | **$**                                                           | **15,681** |   | $ | 20,966 |   | $ | (5,285 | ) |   | (25.21 | )% |
| Interest                charges                     |   | **$**                                                           | **8,876**  |   | $ | 7,233 |   | $ | (1,643 | ) |   | (22.72 | )% |
| Federal                and state income tax expense |   | **$**                                                           | **3,237**  |   | $ | 4,500 |   | $ | 1,263 |   |   | 28.07 |  % |
| Loss                from discontinued operations    |   | **$**                                                           | **(190**   | **)** | $ | (205 | ) | $ | 15 |   |   | 7.32 |  % |
| Net                income                           |   | **$**                                                           | **1,727**  |   | $ | 6,268 |   | $ | (4,541 | ) |   | (72.45 | )% |

***Operating      Revenue***

***Operating      Expenses***

***Equity      Income from Investees***

----

***Interest      Charges***

***Income      Taxes***

**FINANCIAL      CONDITION                                                                                            **

**Liquidity      and Capital Resources**

**General      Considerations and Credit-Related Risks**

***Credit      Ratings and Counterparties***

***Debt***

***Cleco***
***Consolidated***

----

***Cleco      Corporation (Holding Company Level)***

***Cleco      Power***

----

***Midstream***

***Restricted      Cash***

***Contractual***
***Obligations      and Other Commitments***

***Off-Balance      Sheet Commitments***

|                                                                                                                                           |   |        |       |   |        |   |                                     |        |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|------------|--------|-------------|--------|------------------------------------------|-------------|
|                                                                                                                                           |   |        |       |   |        |   | AT                JUNE 30, 2006          |        |
|                                                                                                                                           |   |        |       |   |        |   | REDUCTIONS                TO THE         |        |
|                                                                                                                                           |   |        |       |   |        |   | AMOUNT                AVAILABLE          |        |
|                                                                                                                                           |   |        |       |   |        |   | TO                BE DRAWN ON            |        |
|                                                                                                                                           | FACE   |        |       |   | NET         |   | CLECO                CORPORATION’S |        |
| (THOUSANDS)                                                                                                                                    | AMOUNT |        | REDUCTIONS |   | AMOUNT      |   | CREDIT                FACILITY           |        |
| Cleco                Corporation guarantee issued to Entergy companies for performance                obligations of Perryville                | **$**  | **277,400** |       | **$**  | **135,000** |   | **$**                                    | **142,400** |   | **$** | **328** |   |
| Cleco                Corporation guarantees issued to purchasers of the assets of Cleco                Energy                                  |   | **1,400**   |       |   | **-**       |   |                                     | **1,400**   |   |   | **1,400** |   |
| Cleco                Corporation obligations under standby letter of credit issued to                Evangeline Tolling Agreement counterparty |   | **15,000**  |       |   | **-**       |   |                                     | **15,000**  |   |   | **15,000** |   |
| Cleco                Corporation guarantee issued to Central Mississippi Generating Co.                on                behalf of Attala      |   | **727**     |       |   | **-**       |   |                                     | **727**     |   |   | **727** |   |
| Cleco                Corporation guarantee issued to Entergy Mississippi, Inc. on behalf                of                Attala               |   | **500**     |       |   | **-**       |   |                                     | **500**     |   |   | **500** |   |
| Cleco                Power obligations under standby letter of credit issued to Louisiana                Department of Labor                   |   | **525**     |       |   | **-**       |   |                                     | **525**     |   |   | **-** |   |
| Cleco                Power obligations under Lignite Mining Agreement                                                                          |   | **14,586**  |       |   | **-**       |   |                                     | **14,586**  |   |   | **-** |   |
| Total                                                                                                                                          | **$**  | **310,138** |       | **$**  | **135,000** |   | **$**                                    | **175,138** |   | **$** | **17,955** |   |

----

|                                        |      |        |                                                                     |   |
|---------------------------------------------|-----------|-------------|--------------------------------------------------------------------------|--------|
|                                        |      |        | AT                JUNE 30, 2006                                          |   |
|                                        |      |        | AMOUNT                OF COMMITMENT EXPIRATION                PER PERIOD |   |
|                                        | NET       |        |                                                                     |   |   |   |   |   | MORE |   |
|                                        | AMOUNT    |        | LESS                THAN                                                 |   |   |   |   |   | THAN |   |
| (THOUSANDS)                                 | COMMITTED |        | ONE                YEAR                                                  |   | 1-3                YEARS |   | 4-5                YEARS |   | 5                YEARS |   |
| Guarantees                                  | **$**     | **159,613** |                                                                     | **$**  | **727** |   | **$** | **-** |   | **$** | **101,400** |   | **$** | **57,486** |   |
| Standby                letters of credit    |      | **15,525**  |                                                                     |   | **525** |   |   | **-** |   |   | **-** |   |   | **15,000** |   |
| Total                commercial commitments | **$**     | **175,138** |                                                                     | **$**  | **1,252** |   | **$** | **-** |   | **$** | **101,400** |   | **$** | **72,486** |   |

**Regulatory      Matters**

***Wholesale      Rates of Cleco***

***Retail      Rates of Cleco Power***

----

***Wholesale      Electric Markets***

***Generation      RFP***

***Rodemacher      Unit 3***

----

***Acadia-Related      Power Sales***

***Lignite      Deferral***

***Environmental      Matters***

***Recent****Accounting      Standards***

**CRITICAL      ACCOUNTING POLICIES                                                                                    **

----

**CLECO      POWER — NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS                                                            **

----

**ITEM      3.** QUANTITATIVE AND QUALITATIVE      DISCLOSURES ABOUT MARKET RISK

***Risk      Overview                                                                                                    ***

**Interest**
**      Rate Risks**

**Commodity      Price Risks**

----

|                       |                                                                                                         |
|----------------------------|--------------------------------------------------------------------------------------------------------------|
|                       | **FOR                THE THREE                MONTHS**** ** **ENDED                JUNE 30, 2006** |
| (THOUSANDS)                | **HIGH**                                                                                                     |   | **LOW** |   | **AVERAGE** |
| Cleco                Power | **$  ****608.3**                                                                                   |   | **$  ****477.2** |   | **$  ****525.9** |

|                       |                                                                                                       |   |                           |   |                           |
|----------------------------|------------------------------------------------------------------------------------------------------------|--------|--------------------------------|--------|--------------------------------|
|                       | **FOR                THE SIX                MONTHS**** ** **ENDED                JUNE 30, 2006** |   | **AT                JUNE 30,** |   | AT                DECEMBER 31, |
| (THOUSANDS)                | **HIGH**                                                                                                   |   | **LOW**                        |   | **AVERAGE**                    |   | **2006** |   | 2005 |
| Cleco                Power | **$  ****608.3**                                                                                 |   | **$  ****442.0**     |   | **$  ****528.8**     |   | **$  ****529.7** |   | $                  442.0 |

**Cleco      Power                                                                                                    **

**ITEM      4.** CONTROLS AND      PROCEDURES

***Evaluation      of Disclosure Controls and Procedures***

----

PART      II — OTHER      INFORMATION

**ITEM      1****.** LEGAL      PROCEEDINGS

**CLECO                                                                                                        **

**CLECO      POWER                                                                                                  **

**ITEM****1A.** RISK      FACTORS

**FERC      Staff Investigation**

***The      remedial actions that FERC ultimately may take with respect to the results      of      the current FERC Staff investigation could have a m****aterial      adverse impact on Cleco’s results of operations, financial condition, and cash      flows.***

**Rodemacher      Unit 3 Construction Costs **

***The      recovery of costs incurred to construct Rodemacher Unit 3 is subject to LPSC      review and approval.***

----

**Termination      of the Rodemacher Unit 3 Project or the Amended EPC      Contract**

***The      abandonment of the Rodemacher Unit 3 Project or the termin****ation      of Amended EPC Contract could result in unrecoverable costs.***

**Rodemacher      Unit 3 CCN**

***A      judicial appeal has been filed of the LPSC’s CCN for Rodemacher Unit      3.***

**LPSC      Regulation**

***Cleco      Power’s rate plan extension is not final.***

**Fuel      Costs**

***The      LPSC conducts fuel audits that could result in Cleco Power      ma****king      substantial refunds of previously recorded revenue.***

**FERC      Regulation**

***Cleco      Power’s wholesale electric business practices and ele****ctric      rates are regulated by the FERC.***

**ERO**

***In      2005, FERC’s authority was expanded to include the****establishment      and enforcement of mandatory reliability standards on the transmission system      as      well as the capacity to impose fines and civil penalties on those who fail      to      comply with those standards.***

----

**ITEM      2.** UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF      PROCEEDS

***Cleco***
***Purchases      of Equity Securities***

**ITEM      4.** SUBMISSION OF      MATTERS TO A VOTE OF SECURITY      HOLDERS

| (a) | The                Annual Meeting of Shareholders of Cleco Corporation                was held April 21, 2006, in Alexandria,                Louisiana. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Proxies                for the election of directors were solicited pursuant to Regulation                14A                under the Securities Exchange Act of 1934, as amended. There was                no                solicitation in opposition to management’s nominees, and all nominees                listed in the Proxy Statement were                elected. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | The                following is a tabulation of the votes cast upon each proposal presented                at the Annual Meeting of Shareholders of Cleco Corporation on April                21,                2006. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                            |          |                                |                    |
|-------------------------------------------------|---------------|-------------------------------------|-------------------------|
|  **CLASS****III                DIRECTORS** |  **FOR** |  **WITHHELD**                  | **BROKER****NON-VOTES** |
| J.                Patrick Garrett               | 41,339,924    | 1,322,915                           | 0                       |
| F.                Ben James, Jr.                | 41,331,786    | 1,331,053                           | 0                       |
| Elton                R. King                    | 41,709,080    |                   953,759 | 0                       |

|          |              |              |                    |
|---------------|-------------------|-------------------|-------------------------|
|  **FOR** |  **AGAINST** |  **ABSTAIN** | **BROKER****NON-VOTES** |
| 41,659,661    | 845,239           | 157,939           | 0                       |

**ITEM      5.** OTHER      INFORMATION                                                                                                                              ** **

----

|  **ITEM                6****.** EXHIBITS |                                                                                                                                                                                                                                                                                                  |
|----------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  **CLECO                CORPORATION**         |                                                                                                                                                                                                                                                                                                  |
| 3(a)                                               | Bylaws                of Cleco Corporation (Revised effective April 21, 2006)                                                                                                                                                                                                                    |
| 10.1                                               | First                Amended and Restated Credit Agreement dated as of June 2, 2006 among                Cleco                Corporation, The Bank of New York, as Administrative Agent, and the                lenders and other parties thereto                                               |
| 12(a)                                              | Computation                of Ratios of Earnings to Fixed Charges and of Earnings to Combined                Fixed                Charges and Preferred Stock Dividends for the three-, six-, and                twelve-month periods ended June 30, 2006, for Cleco                Corporation  |
| 31(a)                                              | CEO                Certification in accordance with section 302 of the Sarbanes-Oxley                Act of                2002CFO                Certification in accordance with section 302 of the Sarbanes-Oxley                Act of                2002                                   |
| 32(a)                                              | CEO                and CFO Certification pursuant to section 906 of the Sarbanes-Oxley                Act of                2002                                                                                                                                                                 |
|                                               |                                                                                                                                                                                                                                                                                                  |
|  **CLECO                POWER**               |                                                                                                                                                                                                                                                                                                  |
| 10.2                                               | First                Amended and Restated Credit Agreement dated as of June 2, 2006 among                Cleco                Power LLC, The Bank of New York, as Administrative Agent, and the                lenders                and other parties thereto                                  |
| 12(b)                                              | Computation                of Ratios of Earnings to Fixed Charges for the three-, six-, and                twelve-month periods ended June 30, 2006, for Cleco Power                                                                                                                             |
| 31(b)                                              | CEO                Certification in accordance with section 302 of the Sarbanes-Oxley                Act of                2002CFO                Certification in accordance with section 302 of the Sarbanes-Oxley                Act of                2002                                   |
| 32(b)                                              | CEO                and CFO Certification pursuant to section 906 of the Sarbanes-Oxley                Act of                2002                                                                                                                                                                 |
|                                               |                                                                                                                                                                                                                                                                                                  |

----

SIGNATURE

|   | **CLECO                CORPORATION**                                                                                                                                                                                                                                                                                          |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (Registrant)                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                          |
|   | By: /s/                R. Russell                Davis                                            |
|   | R.                Russell Davis                                                                                                                                                                                                                                                                                               |
|   | Vice                President and Chief Accounting                Officer                                                                                                                                                                                                                                                     |

----

|   | **CLECO                POWER LLC**                                                                                                                                                                                                                                                                                                                                    |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (Registrant)                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                  |
|   | By: /s/                R. Russell                Davis                                                                |
|   | R.                Russell Davis                                                                                                                                                                                                                                                                                                                                       |
|   | Vice                President and Chief Accounting                Officer                                                                                                                                                                                                                                                                                             |

----

----