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**UNITED      STATES SECURITIES AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-Q**

**For      the quarterly period ended **
**September 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  Noo                                                                                                                                                                                                                                                                                                                                    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 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  o                          Non-accelerated                  filer  o         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 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   o                           Accelerated                  filer o                          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 o   No x                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

| Registrant                       | Description                of Class          | Shares                Outstanding at October 31, 2006 |
|----------------------------------|----------------------------------------------|-------------------------------------------------------|
|                             |                                         |                                                  |
| Cleco                Corporation | Common                Stock, $1.00 Par Value | 57,488,574                                            |

**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 | 43 |
| ITEM                3.                                         | Quantitative                and Qualitative Disclosures about Market Risk                                                 | 59 |
| ITEM                4.                                         | Controls                and Procedures                                                                                    | 60 |
|                                                           |                                                                                                                      |   |
| **PART                II**                                     | **Other                Information**                                                                                      |   |
| ITEM                1.                                         | Legal                Proceedings                                                                                          | 61 |
| ITEM                1A.                                        | Risk                Factors                                                                                               | 61 |
| ITEM                6.                                         | Exhibits                                                                                                                  | 62 |
|                                                           | Signatures                                                                                                                | 63 |

----

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 a                subsidiary of 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. 12               | Omnibus                Opinion-1967                                                                                                                                                                                                     |
| 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                                                                                                                                                                 |
| 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)      |
| EITF                No. 06-4                    | Accounting                for Deferred Compensation and Postretirement Benefit Aspects of                Endorsement Split-Dollar Life Insurance Arrangements                                                                           |
| EITF                No. 06-5                    | Accounting                for Purchases of Life Insurance - Determining the Amount That Could                Be                Realized in Accordance with FASB Technical BulletinNo.                85-4                               |
| 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                                                                                                                                                                                     |
| FASB                Technical Bulletin No. 85-4 | Accounting                for Purchases of Life Insurance                                                                                                                                                                               |
| 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                                             | FASB                Staff Position                                                                                                                                                                                                      |
| FSP                No. 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                                                                                                                                                                                           |

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| ABBREVIATION                OR ACRONYM     | DEFINITION                                                                                                                                                                                                                                                                                                                                                                               |
|--------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 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                                                                                                                                                                                                                                                                                                                   |
| 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                                                                                                                                                                                                                                                                                                                                             |
| OATT                                       | Open                access transmission tariff                                                                                                                                                                                                                                                                                                                                           |
| 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                                        | U.S.                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. 106                | Employers’                Accounting for Postretirement Benefits Other Than                Pensions                                                                                                                                                                                                                                                                                |
| 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                                                                                                                                                                                                                                                       |
| SFAS                No. 157                | Fair                Value Measurements                                                                                                                                                                                                                                                                                                                                                   |
| SFAS                No. 158                | Employers’                Accounting for Defined Benefit Pension and Other Postretirement Plans                - an                amendment of FASB Statements No. 87, 88, 106,and                132(R)                                                                                                                                                                          |
| 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                                                                                                                                                                                                                                                                                                                                                                            |
| 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 other 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 and storm reserve, if any,                approved by the LPSC and the method through which such amounts 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, Acadia, Attala,                Evangeline, and Perryville; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| §   | 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 SEPTEMBER 30, |     |
| (THOUSANDS,                EXCEPT SHARE AND PER SHARE AMOUNTS)                                                                                                               |                                                          | **2006** |   | 2005 |   |
|                                                                                                                                                                         |                                                          |     |   | ADJUSTED                (NOTE 2) |   |
| **Operating                revenue**                                                                                                                                         |                                                          |     |   |   |   |
|                    Electric operations                                                                                                                        |                                                          | **$**    | **284,490** |   | $ | 267,958 |   |
|                    Other operations                                                                                                                           |                                                          |     | **7,644** |   |   | 14,240 |   |
|                    Affiliate revenue                                                                                                                          |                                                          |     | **1,969** |   |   | 1,758 |   |
|                        Gross operating revenue                                                                                            |                                                          |     | **294,103** |   |   | 283,956 |   |
|                            Electric customer credits                                                                  |                                                          |     | **-** |   |   | (300 | ) |
|                        Operating revenue, net                                                                                             |                                                          |     | **294,103** |   |   | 283,656 |   |
| **Operating                expenses**                                                                                                                                        |                                                          |     |   |   |   |   |   |
|                    Fuel used for electric generation                                                                                                          |                                                          |     | **80,627** |   |   | 54,665 |   |
|                    Power purchased for utility customers                                                                                                      |                                                          |     | **106,940** |   |   | 124,261 |   |
|                    Other operations                                                                                                                           |                                                          |     | **25,670** |   |   | 23,647 |   |
|                    Maintenance                                                                                                                                |                                                          |     | **8,850** |   |   | 9,723 |   |
|                    Depreciation                                                                                                                               |                                                          |     | **23,750** |   |   | 15,182 |   |
|                    Taxes other than income taxes                                                                                                              |                                                          |     | **11,066** |   |   | 10,938 |   |
|                        Total operating expenses                                                                                           |                                                          |     | **256,903** |   |   | 238,416 |   |
| **Operating                income**                                                                                                                                          |                                                          |     | **37,200** |   |   | 45,240 |   |
| Interest                income                                                                                                                                               |                                                          |     | **2,782** |   |   | 1,136 |   |
| Allowance                for other funds used during construction                                                                                                            |                                                          |     | **2,190** |   |   | 325 |   |
| Equity                income from investees                                                                                                                                  |                                                          |     | **15,197** |   |   | 200,986 |   |
| Other                income                                                                                                                                                  |                                                          |     | **702** |   |   | 2,626 |   |
| Other                expense                                                                                                                                                 |                                                          |     | **(463** | **)** |   | (861 | ) |
| **Interest                charges**                                                                                                                                          |                                                          |     |   |   |   |   |   |
|                    Interest charges, including amortization of debt expenses, premium                and                discount, net of capitalized interest |                                                          |     | **11,094** |   |   | 9,535 |   |
|                    Allowance for borrowed funds used during construction                                                                                      |                                                          |     | **(816** | **)** |   | (108 | ) |
|                        Total interest charges                                                                                             |                                                          |     | **10,278** |   |   | 9,427 |   |
| **Income                from continuing operations before income taxes**                                                                                                     |                                                          |     | **47,330** |   |   | 240,025 |   |
| Federal                and state income tax expense                                                                                                                          |                                                          |     | **19,350** |   |   | 89,569 |   |
| **Income                from continuing operations**                                                                                                                         |                                                          |     | **27,980** |   |   | 150,456 |   |
| **Discontinued                operations**                                                                                                                                   |                                                          |     |   |   |   |   |   |
|                    Income (loss) from discontinued operations, net of tax                                                                                     |                                                          |     | **36** |   |   | (25 | ) |
| **Net                income**                                                                                                                                                |                                                          |     | **28,016** |   |   | 150,431 |   |
| Preferred                dividends requirements, net                                                                                                                         |                                                          |     | **424** |   |   | 451 |   |
| **Net                income applicable to common stock**                                                                                                                     |                                                          | **$**    | **27,592** |   | $ | 149,980 |   |
| **Average                shares of common stock outstanding**                                                                                                                |                                                          |     |   |   |   |   |   |
|                    Basic                                                                                                                                      |                                                          |     | **53,630,494** |   |   | 49,548,835 |   |
|                    Diluted                                                                                                                                    |                                                          |     | **55,938,995** |   |   | 51,714,320 |   |
| **Basic                earnings per share**                                                                                                                                  |                                                          |     |   |   |   |   |   |
|                    From continuing operations                                                                                                                 |                                                          | **$**    | **0.50** |   | $ | 2.92 |   |
|                    Net income applicable to common stock                                                                                                      |                                                          | **$**    | **0.50** |   | $ | 2.92 |   |
| **Diluted                earnings per share**                                                                                                                                |                                                          |     |   |   |   |   |   |
|                    From continuing operations                                                                                                                 |                                                          | **$**    | **0.50** |   | $ | 2.91 |   |
|                    Net income applicable to common stock                                                                                                      |                                                          | **$**    | **0.50** |   | $ | 2.91 |   |
| **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.                                                |                                                          |     |   |   |   |   |   |

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| Condensed              Consolidated Statements of Comprehensive Income (Unaudited)                                                                                                                             |                                                          |         |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------|--------------|
|                                                                                                                                                                                                           |  FOR                THE THREE MONTHS ENDED SEPTEMBER 30, |         |
| (THOUSANDS)                                                                                                                                                                                                    |                                                          | **200****6** |   | 2005 |   |
|                                                                                                                                                                                                           |                                                          |         |   | ADJUSTED                (NOTE 2) |   |
| Net                income                                                                                                                                                                                      |                                                          | **$**        | **28,016** |   | $ | 150,431 |   |
| Other                comprehensive (loss)                income, net of tax:                                                                                                                                   |                                                          |         |   |   |   |   |   |
|                    Net unrealized loss                from limited partnership (net of tax benefit of $47 in                2005)                                                               |                                                          |         | **-** |   |   | (76 | ) |
|                    Net unrealized (loss)                income from available-for-sale securities (net of tax (benefit) expense                of                $(23) in 2006 and $23 in 2005) |                                                          |         | **(37** | **)** |   | 37 |   |
| Other                comprehensive                loss, net of tax                                                                                                                                             |                                                          |         | **(37** | **)** |   | (39 | ) |
| **Comprehensive                income, net of tax**                                                                                                                                                            |                                                          | **$**        | **27,979** |   | $ | 150,392 |   |
| The                accompanying notes are an integral part of the condensed consolidated                financial statements.                                                                                  |                                                          |         |   |   |   |   |   |

----

| Condensed                Consolidated Statements of Income (Unaudited)                                                                                                       |   |                                                   |           |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|----------------|
|                                                                                                                                                                         |   | FOR                THE NINE MONTHS ENDED SEPTEMBER 30, |           |
| (THOUSANDS,                EXCEPT SHARE AND PER SHARE AMOUNTS)                                                                                                               |   | **2006**                                               |           | 2005 |   |
|                                                                                                                                                                         |   |                                                   |           | ADJUSTED                (NOTE 2) |   |
| **Operating                revenue**                                                                                                                                         |   |                                                   |           |   |   |
|                    Electric operations                                                                                                                        |   | **$**                                                  | **736,765**    |   | $ | 614,670 |   |
|                    Other operations                                                                                                                           |   |                                                   | **22,167**     |   |   | 29,493 |   |
|                    Affiliate revenue                                                                                                                          |   |                                                   | **5,157**      |   |   | 6,488 |   |
|                        Gross operating revenue                                                                                            |   |                                                   | **764,089**    |   |   | 650,651 |   |
|                            Electric customer credits                                                                  |   |                                                   | **4,382**      |   |   | (771 | ) |
|                        Operating revenue, net                                                                                             |   |                                                   | **768,471**    |   |   | 649,880 |   |
| **Operating                expenses**                                                                                                                                        |   |                                                   |           |   |   |   |   |
|                    Fuel used for electric generation                                                                                                          |   |                                                   | **186,980**    |   |   | 117,139 |   |
|                    Power purchased for utility customers                                                                                                      |   |                                                   | **306,426**    |   |   | 265,441 |   |
|                    Other operations                                                                                                                           |   |                                                   | **66,776**     |   |   | 68,974 |   |
|                    Maintenance                                                                                                                                |   |                                                   | **29,003**     |   |   | 32,848 |   |
|                    Depreciation                                                                                                                               |   |                                                   | **55,108**     |   |   | 45,059 |   |
|                    Taxes other than income taxes                                                                                                              |   |                                                   | **31,655**     |   |   | 30,646 |   |
|                    Gain on sales of assets                                                                                                                    |   |                                                   | **(71**        | **)** |   | (2,207 | ) |
|                        Total operating expenses                                                                                           |   |                                                   | **675,877**    |   |   | 557,900 |   |
| **Operating                income**                                                                                                                                          |   |                                                   | **92,594**     |   |   | 91,980 |   |
| Interest                income                                                                                                                                               |   |                                                   | **7,217**      |   |   | 2,987 |   |
| Allowance                for other funds used during construction                                                                                                            |   |                                                   | **4,231**      |   |   | 2,104 |   |
| Equity                income from investees                                                                                                                                  |   |                                                   | **30,802**     |   |   | 221,859 |   |
| Other                income                                                                                                                                                  |   |                                                   | **929**        |   |   | 3,445 |   |
| Other                expense                                                                                                                                                 |   |                                                   | **(1,177**     | **)** |   | (1,652 | ) |
| **Interest                charges**                                                                                                                                          |   |                                                   |           |   |   |   |   |
|                    Interest charges, including amortization of debt expenses, premium                and                discount, net of capitalized interest |   |                                                   | **33,673**     |   |   | 32,584 |   |
|                    Allowance for borrowed funds used during construction                                                                                      |   |                                                   | **(1,535**     | **)** |   | (702 | ) |
|                        Total interest charges                                                                                             |   |                                                   | **32,138**     |   |   | 31,882 |   |
| **Income                from continuing operations before income taxes**                                                                                                     |   |                                                   | **102,458**    |   |   | 288,841 |   |
| Federal                and state income tax expense                                                                                                                          |   |                                                   | **38,923**     |   |   | 108,112 |   |
| **Income                from continuing operations**                                                                                                                         |   |                                                   | **63,535**     |   |   | 180,729 |   |
| **Discontinued                operations**                                                                                                                                   |   |                                                   |           |   |   |   |   |
|                    Loss from discontinued operations, net of tax                                                                                              |   |                                                   | **(154**       | **)** |   | (230 | ) |
| **Net                income**                                                                                                                                                |   |                                                   | **63,381**     |   |   | 180,499 |   |
| Preferred                dividends requirements, net                                                                                                                         |   |                                                   | **1,310**      |   |   | 1,374 |   |
| **Net                income applicable to common stock**                                                                                                                     |   | **$**                                                  | **62,071**     |   | $ | 179,125 |   |
| **Average                shares of common stock outstanding**                                                                                                                |   |                                                   |           |   |   |   |   |
|                    Basic                                                                                                                                      |   |                                                   | **51,408,708** |   |   | 49,443,912 |   |
|                    Diluted                                                                                                                                    |   |                                                   | **53,621,679** |   |   | 51,625,000 |   |
| **Basic                earnings per share**                                                                                                                                  |   |                                                   |           |   |   |   |   |
|                    From continuing operations                                                                                                                 |   | **$**                                                  | **1.19**       |   | $ | 3.50 |   |
|                    Net income applicable to common stock                                                                                                      |   | **$**                                                  | **1.19**       |   | $ | 3.50 |   |
| **Diluted                earnings per share**                                                                                                                                |   |                                                   |           |   |   |   |   |
|                    From continuing operations                                                                                                                 |   | **$**                                                  | **1.18**       |   | $ | 3.50 |   |
|                    Net income applicable to common stock                                                                                                      |   | **$**                                                  | **1.18**       |   | $ | 3.50 |   |
| **Cash                dividends paid per share of common stock**                                                                                                             |   | **$**                                                  | **0.675**      |   | $ | 0.675 |   |
| The                accompanying notes are an integral part of the condensed consolidated                financial statements.                                                |   |                                                   |           |   |   |   |   |

----

| Condensed              Consolidated Statements of Comprehensive Income              (Unaudited)                                                                            |   |                                                   |       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|------------|
|                                                                                                                                                                       |   | FOR                THE NINE MONTHS ENDED SEPTEMBER 30, |       |
| (THOUSANDS)                                                                                                                                                                |   | **200****6**                                           |       | 2005 |   |
|                                                                                                                                                                       |   |                                                   |       | ADJUSTED                (NOTE 2) |   |
| Net                income                                                                                                                                                  |   | **$**                                                  | **63,381** |   | $ | 180,499 |   |
| Other                comprehensive loss, net of tax:                                                                                                                       |   |                                                   |       |   |   |   |   |
|                    Net unrealized loss from limited partnership (net of tax benefit                of $27 in                2005)                           |   |                                                   | **-**      |   |   | (43 | ) |
|                    Net unrealized loss from available-for-sale securities (net of tax                benefit                of $35 in 2006 and $14 in 2005) |   |                                                   | **(57**    | **)** |   | (22 | ) |
| Other                comprehensive loss, net of tax                                                                                                                        |   |                                                   | **(57**    | **)** |   | (65 | ) |
| **Comprehensive                income, net of tax**                                                                                                                        |   | **$**                                                  | **63,324** |   | $ | 180,434 |   |
| The                accompanying notes are an integral part of the condensed consolidated                financial statements.                                              |   |                                                   |       |   |   |   |   |

|  Condensed              Consolidated Statements of Changes in Common Shareholders’ Equity              (Unaudited) |   |                        |       |     |   |                     |   |     |   |
|-------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|------------|----------|--------|--------------------------|--------|----------|--------|
|                                                                                                                          |   |                        |       |     |   |                     |   |     |   |   |   |   |   |   |   | ACCUMULATED |   | TOTAL |   |
|                                                                                                                          |   |                        |       |     |   |                     |   | PREMIUM  |   |   |   |   |   |   |   | OTHER |   | COMMON |   |
|                                                                                                                          |   | COMMON                STOCK |       | UNEARNED |   | ON                COMMON |   | RETAINED |   | TREASURY                STOCK |   | COMPREHENSIVE |   | SHAREHOLDERS’ |   |
| (THOUSANDS,                EXCEPT SHARE AMOUNTS)                                                                              |   | SHARES                      |       | AMOUNT   |   | COMPENSATION             |   | STOCK    |   | EARNINGS |   | SHARES |   | COST |   | LOSS |   | EQUITY |   |
| **BALANCE,****DECEMBER                31, 2005**                                                                              |   |                        | 50,030,035 |     | $      | 50,030                   |   | $        | (5,285 | ) | $ | 202,416 |   | $ | 443,912 |   |   | (36,644 | ) | $ | (714 | ) | $ | (4,130 | ) | $ | 686,229 |   |
| Issuance                of common stock                                                                                       |   |                        | 6,900,000  |     |   | 6,900                    |   |     |   |   |   | 150,834 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 157,734 |   |
| Common                stock issued for compensatory                plans                                                      |   |                        | 590,228    |     |   | 507                      |   |     |   |   |   | 3,312 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 3,819 |   |
| Issuance                of treasury stock                                                                                     |   |                        |       |     |   |                     |   |     |   |   |   | 6 |   |   |   |   |   | 3,480 |   |   | 73 |   |   |   |   |   | 79 |   |
| Unearned                compensation (LTICP)                                                                                  |   |                        |       |     |   |                     |   |     | 5,285  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 5,285 |   |
| Common                stock issuance costs                                                                                    |   |                        |       |     |   |                     |   |     |   |   |   | (309 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   | (309 | ) |
| Dividend                requirements, preferred                stock, net                                                     |   |                        |       |     |   |                     |   |     |   |   |   |   |   |   | (1,310 | ) |   |   |   |   |   |   |   |   |   |   | (1,310 | ) |
| Cash                dividends, common stock, $0.675                per share                                                  |   |                        |       |     |   |                     |   |     |   |   |   |   |   |   | (34,006 | ) |   |   |   |   |   |   |   |   |   |   | (34,006 | ) |
| Net                income                                                                                                     |   |                        |       |     |   |                     |   |     |   |   |   |   |   |   | 63,381 |   |   |   |   |   |   |   |   |   |   |   | 63,381 |   |
| Other                comprehensive loss,                net of tax                                                            |   |                        |       |     |   |                     |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (57 | ) |   | (57 | ) |
| **BALANCE,****SEPTEMBER                30, 2006**                                                                             |   |                        | 57,520,263 |     | $      | 57,437                   |   | $        | -      |   | $ | 356,259 |   | $ | 471,977 |   |   | (33,164 | ) | $ | (641 | ) | $ | (4,187 | ) | $ | 880,845 |   |
| The                accompanying notes are an integral part of the condensed consolidated                financial statements. |   |                        |       |     |   |                     |   |     |   |   |   |   |   |   |   |   |   |   |

----

| Condensed              Consolidated Balance Sheets (Unaudited)                                                                                                                                                |   |                         |          |                                |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|---------------|-------------------------------------|--------|
| (THOUSANDS)                                                                                                                                                                                                   |   | **AT****SEPTEMBER 30, 2006** |          | AT                DECEMBER 31, 2005 |   |
| **Assets**                                                                                                                                                                                                    |   |                         |          |                                |   |
|                    Current assets                                                                                                                                                              |   |                         |          |                                |   |
|                        Cash and cash equivalents                                                                                                                           |   | **$**                        | **196,022**   |                                | $      | 219,153 |   |
|                        Customer accounts receivable (less allowance for doubtful accounts                of                $990                in 2006 and $1,262 in 2005) |   |                         | **54,294**    |                                |   | 54,768 |   |
|                        Accounts receivable - affiliate                                                                                                                     |   |                         | **7,012**     |                                |   | 1,071 |   |
|                        Other accounts receivable                                                                                                                           |   |                         | **29,961**    |                                |   | 33,911 |   |
|                        Unbilled revenue                                                                                                                                    |   |                         | **19,945**    |                                |   | 17,878 |   |
|                        Fuel inventory, at average cost                                                                                                                     |   |                         | **43,719**    |                                |   | 21,313 |   |
|                        Material and supplies inventory, at average cost                                                                                                    |   |                         | **31,940**    |                                |   | 24,289 |   |
|                        Risk management assets                                                                                                                              |   |                         | **-**         |                                |   | 10,110 |   |
|                        Accumulated deferred fuel                                                                                                                           |   |                         | **94,062**    |                                |   | 23,165 |   |
|                        Cash surrender value of company-/trust-owned life insurance                policies                                                                 |   |                         | **25,072**    |                                |   | 22,888 |   |
|                        Margin deposits                                                                                                                                     |   |                         | **25,948**    |                                |   | - |   |
|                        Prepayments                                                                                                                                         |   |                         | **4,691**     |                                |   | 3,344 |   |
|                       Other current assets                                                                                                                                      |   |                         | **-**         |                                |   | 2,578 |   |
|                            Total current assets                                                                                                        |   |                         | **532,666**   |                                |   | 434,468 |   |
|                    Property, plant and equipment                                                                                                                                               |   |                         |          |                                |   |   |   |
|                        Property, plant and equipment                                                                                                                       |   |                         | **1,867,724** |                                |   | 1,836,973 |   |
|                        Accumulated depreciation                                                                                                                            |   |                         | **(863,315**  | **)**                               |   | (804,323 | ) |
|                        Net property, plant and equipment                                                                                                                   |   |                         | **1,004,409** |                                |   | 1,032,650 |   |
|                        Construction work in progress                                                                                                                       |   |                         | **230,502**   |                                |   | 156,053 |   |
|                            Total property, plant and equipment, net                                                                                    |   |                         | **1,234,911** |                                |   | 1,188,703 |   |
|                    Equity investment in investees                                                                                                                                              |   |                         | **327,309**   |                                |   | 317,762 |   |
|                    Prepayments                                                                                                                                                                 |   |                         | **5,936**     |                                |   | 5,961 |   |
|                    Restricted cash                                                                                                                                                             |   |                         | **89**        |                                |   | 87 |   |
|                    Regulatory assets and liabilities - deferred taxes, net                                                                                                                     |   |                         | **91,775**    |                                |   | 90,960 |   |
|                    Regulatory assets - other                                                                                                                                                   |   |                         | **173,654**   |                                |   | 53,439 |   |
|                    Other deferred charges                                                                                                                                                      |   |                         | **38,754**    |                                |   | 58,108 |   |
| **                           Total assets**                                                                                                            |   | **$**                        | **2,405,094** |                                | $      | 2,149,488 |   |
| The                accompanying notes are an integral part of the condensed consolidated                financial statements.                                                                                 |   |                         |          |                                |   |   |   |

----

| Condensed              Consolidated Balance Sheets (Unaudited) (Continued)                                                                                                                                                                                                                                                                                    |   |                         |          |                                |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|---------------|-------------------------------------|--------|
| (THOUSANDS)                                                                                                                                                                                                                                                                                                                                                   |   | **AT****SEPTEMBER 30, 2006** |          | AT                DECEMBER 31, 2005 |   |
| **Liabilities                and shareholders’ equity**                                                                                                                                                                                                                                                                                                 |   |                         |          |                                |   |
| **                   Liabilities**                                                                                                                                                                                                                                                                                                             |   |                         |          |                                |   |
|                        Current liabilities                                                                                                                                                                                                                                                                                 |   |                         |          |                                |   |
|                            Short-term debt                                                                                                                                                                                                                                                             |   | **$**                        | **20,000**    |                                | $      | - |   |
|                            Long-term debt due within one year                                                                                                                                                                                                                                          |   |                         | **25,000**    |                                |   | 40,000 |   |
|                            Accounts payable                                                                                                                                                                                                                                                            |   |                         | **110,663**   |                                |   | 143,692 |   |
|                            Retainage                                                                                                                                                                                                                                                                   |   |                         | **7,817**     |                                |   | 768 |   |
|                            Accounts payable - affiliate                                                                                                                                                                                                                                                |   |                         | **7,204**     |                                |   | 3,439 |   |
|                            Customer deposits                                                                                                                                                                                                                                                           |   |                         | **25,020**    |                                |   | 23,436 |   |
|                            Provision for rate refund                                                                                                                                                                                                                                                   |   |                         | **2,371**     |                                |   | 7,927 |   |
|                            Taxes accrued                                                                                                                                                                                                                                                               |   |                         | **51,615**    |                                |   | 35,475 |   |
|                            Interest accrued                                                                                                                                                                                                                                                            |   |                         | **9,950**     |                                |   | 9,167 |   |
|                            Accumulated current deferred taxes, net                                                                                                                                                                                                                                     |   |                         | **32,611**    |                                |   | 17,402 |   |
|                            Margin deposits                                                                                                                                                                                                                                                             |   |                         | **-**         |                                |   | 4,316 |   |
|                            Risk management liability                                                                                                                                                                                                                                                   |   |                         | **62,971**    |                                |   | - |   |
|                            Regulatory liabilities - other                                                                                                                                                                                                                                              |   |                         | **3,113**     |                                |   | 635 |   |
|                            Other current liabilities                                                                                                                                                                                                                                                   |   |                         | **10,253**    |                                |   | 7,847 |   |
|                        Total current liabilities                                                                                                                                                                                                                                                                           |   |                         | **368,588**   |                                |   | 294,104 |   |
|                    Deferred credits                                                                                                                                                                                                                                                                                                            |   |                         |          |                                |   |   |   |
|                        Accumulated deferred federal and state income taxes, net                                                                                                                                                                                                                                            |   |                         | **456,638**   |                                |   | 449,129 |   |
|                        Accumulated deferred investment tax credits                                                                                                                                                                                                                                                         |   |                         | **14,483**    |                                |   | 15,632 |   |
|                        Other deferred credits                                                                                                                                                                                                                                                                              |   |                         | **79,849**    |                                |   | 74,717 |   |
|                            Total deferred credits                                                                                                                                                                                                                                                      |   |                         | **550,970**   |                                |   | 539,478 |   |
|                    Long-term debt, net                                                                                                                                                                                                                                                                                                         |   |                         | **584,428**   |                                |   | 609,643 |   |
|                            Total liabilities                                                                                                                                                                                                                                                           |   |                         | **1,503,986** |                                |   | 1,443,225 |   |
| Commitments                and Contingencies (Note 9)                                                                                                                                                                                                                                                                                                         |   |                         |          |                                |   |   |   |
| **Shareholders’                equity**                                                                                                                                                                                                                                                                                                                 |   |                         |          |                                |   |   |   |
|                    Preferred stock                                                                                                                                                                                                                                                                                                             |   |                         |          |                                |   |   |   |
|                        Not subject to mandatory redemption, $100 par value, authorized 1,491,900                shares, issued 201,386 and 218,170 shares                            at September                30, 2006, and December 31, 2005, respectively |   |                         | **20,139**    |                                |   | 21,817 |   |
|                        Deferred compensation related to preferred stock held by                ESOP                                                                                                                                                                                                                        |   |                         | **124**       |                                |   | (1,783 | ) |
|                        Total preferred stock not subject to mandatory redemption                                                                                                                                                                                                                                           |   |                         | **20,263**    |                                |   | 20,034 |   |
|                    Common shareholders’ equity                                                                                                                                                                                                                                                                                           |   |                         |          |                                |   |   |   |
|                        Common stock, $1                par value, authorized 100,000,000 shares, issued 57,520,263 and 50,030,035                shares at September 30,                           2006, and December                31, 2005, respectively         |   |                         | **57,437**    |                                |   | 50,030 |   |
|                        Premium on common stock                                                                                                                                                                                                                                                                             |   |                         | **356,259**   |                                |   | 202,416 |   |
|                        Retained earnings                                                                                                                                                                                                                                                                                   |   |                         | **471,977**   |                                |   | 443,912 |   |
|                        Unearned compensation                                                                                                                                                                                                                                                                               |   |                         | **-**         |                                |   | (5,285 | ) |
|                        Treasury stock, at cost,                33,164 and 36,644 shares at September 30, 2006, and December 31,                2005,                respectively                                                                                                                                           |   |                         | **(641**      | **)**                               |   | (714 | ) |
|                        Accumulated other comprehensive loss                                                                                                                                                                                                                                                                |   |                         | **(4,187**    | **)**                               |   | (4,130 | ) |
|                            Total common shareholders’ equity                                                                                                                                                                                                                                     |   |                         | **880,845**   |                                |   | 686,229 |   |
|                                Total shareholders’ equity                                                                                                                                                                                                                    |   |                         | **901,108**   |                                |   | 706,263 |   |
| **Total                liabilities and shareholders’ equity**                                                                                                                                                                                                                                                                                           |   | **$**                        | **2,405,094** |                                | $      | 2,149,488 |   |
| The                accompanying notes are an integral part of the condensed consolidated                financial statements.                                                                                                                                                                                                                                 |   |                         |          |                                |   |   |   |

----

| Condensed                Consolidated Statements of Cash Flows                (Unaudited)                                                         |   |                                                   |         |
|---------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|--------------|
|                                                                                                                                                   |   | FOR                THE NINE MONTHS ENDED SEPTEMBER 30, |         |
| (THOUSANDS)                                                                                                                                       |   | **2006**                                               |         |  2005 |   |
|                                                                                                                                              |   |                                                   |         | ADJUSTED                (NOTE 2) |   |
| **Operating                activities**                                                                                                           |   |                                                   |         |    |   |
|                    Net income                                                                                                      |   | **$**                                                  | **63,381**   |   | $ | 180,499 |   |
|                    Adjustments                to reconcile net income to net cash provided by operating                activities: |   |                                                   |         |   |   |   |   |
|                        Depreciation and amortization                                                           |   |                                                   | **57,722**   |   |   | 47,091 |   |
|                        Gain on sales of property, plant and equipment                                          |   |                                                   | **(71**      | **)** |   | (2,207 | ) |
|                        Provision for doubtful accounts                                                         |   |                                                   | **2,049**    |   |   | 1,342 |   |
|                        Return on equity investment in investee                                                 |   |                                                   | **15,997**   |   |   | 24,451 |   |
|                        Income from equity investments                                                          |   |                                                   | **(30,802**  | **)** |   | (221,859 | ) |
|                        Unearned/deferred                compensation expense                                   |   |                                                   | **3,189**    |   |   | 5,158 |   |
|                        ESOP expense                                                                            |   |                                                   | **1,309**    |   |   | 693 |   |
|                        Allowance for other funds used during construction                                      |   |                                                   | **(4,231**   | **)** |   | (2,104 | ) |
|                        Amortization of investment tax credits                                                  |   |                                                   | **(1,148**   | **)** |   | (1,253 | ) |
|                        Net deferred income taxes                                                               |   |                                                   | **5,880**    |   |   | 92,493 |   |
|                        Deferred fuel costs                                                                     |   |                                                   | **13,229**   |   |   | (42,621 | ) |
|                        Loss (gain) on economic hedges                                                          |   |                                                   | **4,256**    |   |   | (4,376 | ) |
|                        Cash surrender value of company-/trust-owned life                insurance              |   |                                                   | **(1,074**   | **)** |   | (531 | ) |
|                        Changes in assets and liabilities:                                                      |   |                                                   |         |   |   |   |   |
|                            Accounts receivable                                             |   |                                                   | **(2,509**   | **)** |   | (42,362 | ) |
|                            Accounts and notes receivable, affiliate                        |   |                                                   | **(5,941**   | **)** |   | (37,936 | ) |
|                            Unbilled revenue                                                |   |                                                   | **(2,067**   | **)** |   | (1,886 | ) |
|                            Fuel, materials and supplies inventory                          |   |                                                   | **(30,058**  | **)** |   | 6,730 |   |
|                            Accounts payable                                                |   |                                                   | **(53,714**  | **)** |   | 43,495 |   |
|                            Prepayments                                                     |   |                                                   | **(852**     | **)** |   | (5,317 | ) |
|                            Accounts and notes payable, affiliate                           |   |                                                   | **3,766**    |   |   | 9,745 |   |
|                            Retainage payable                                               |   |                                                   | **7,048**    |   |   | 231 |   |
|                            Customer deposits                                               |   |                                                   | **5,283**    |   |   | 4,064 |   |
|                            Regulatory assets and liabilities                               |   |                                                   | **(46,547**  | **)** |   | (5,160 | ) |
|                            Other deferred accounts                                         |   |                                                   | **4,298**    |   |   | 5,937 |   |
|                            Taxes accrued                                                   |   |                                                   | **37,835**   |   |   | 69,171 |   |
|                            Interest accrued                                                |   |                                                   | **1,471**    |   |   | (1,342 | ) |
|                            Margin deposits                                                 |   |                                                   | **(30,264**  | **)** |   | 22,832 |   |
|                            Other                                                           |   |                                                   | **4,928**    |   |   | (75 | ) |
|                        Net cash provided by operating activities                                               |   |                                                   | **22,363**   |   |   | 144,903 |   |
| **Investing                activities**                                                                                                           |   |                                                   |         |   |   |   |   |
|                    Additions to property, plant and equipment                                                                      |   |                                                   | **(155,532** | **)** |   | (92,315 | ) |
|                    Allowance for other funds used during construction                                                              |   |                                                   | **4,231**    |   |   | 2,104 |   |
|                    Proceeds from sale of property, plant and equipment                                                             |   |                                                   | **869**      |   |   | 2,792 |   |
|                    Return of equity investment in investee                                                                         |   |                                                   | **7,154**    |   |   | 2,891 |   |
|                    Investment in cost method investments                                                                           |   |                                                   | **-**        |   |   | (1,385 | ) |
|                    Equity investment in investee                                                                                   |   |                                                   | **(7,026**   | **)** |   | (20 | ) |
|                    Other investing activities                                                                                      |   |                                                   | **(1,894**   | **)** |   | (1,538 | ) |
|                        Net cash used in investing activities                                                   |   |                                                   | **(152,198** | **)** |   | (87,471 | ) |
| **Financing                activities**                                                                                                           |   |                                                   |         |   |   |   |   |
|                    Sale of common stock, net                                                                                       |   |                                                   | **157,530**  |   |   | - |   |
|                    Exercise of options to common stock                                                                             |   |                                                   | **2,855**    |   |   | 2,157 |   |
|                    Issuance of common stock under the ESOP                                                                         |   |                                                   | **1,206**    |   |   | - |   |
|                    Stock based compensation tax benefit                                                                            |   |                                                   | **252**      |   |   | - |   |
|                    Change in short-term debt                                                                                       |   |                                                   | **20,000**   |   |   | - |   |
|                    Retirement of long-term obligations                                                                             |   |                                                   | **(40,275**  | **)** |   | (200,070 | ) |
|                    Issuance of long-term debt                                                                                      |   |                                                   | **-**        |   |   | 90,000 |   |
|                    Deferred financing costs                                                                                        |   |                                                   | **(822**     | **)** |   | (2,026 | ) |
|                    Change in ESOP trust                                                                                            |   |                                                   | **1,668**    |   |   | 1,636 |   |
|                    Dividends paid on preferred stock                                                                               |   |                                                   | **(1,760**   | **)** |   | (1,904 | ) |
|                    Dividends paid on common stock                                                                                  |   |                                                   | **(33,950**  | **)** |   | (33,632 | ) |
|                        Net cash provided                by (used in) financing activities                      |   |                                                   | **106,704**  |   |   | (143,839 | ) |
| **Net****decrease in cash and cash equivalents**                                                                                                  |   |                                                   | **(23,131**  | **)** |   | (86,407 | ) |
| **Cash                and cash equivalents at beginning of period**                                                                               |   |                                                   | **219,153**  |   |   | 123,787 |   |
| **Cash                and cash equivalents at end of period**                                                                                     |   | **$**                                                  | **196,022**  |   | $ | 37,380 |   |
| **Supplementary                cash flow information**                                                                                            |   |                                                   |         |   |   |   |   |
|                    Interest paid                                                                                                   |   | **$**                                                  | **31,161**   |   | $ | 31,847 |   |
|                    Income taxes paid                                                                                          |   | **$**                                                  | **12,712**   |   | $ | 6,061 |   |
| **Supplementary                non****-cash                investing and financing activities**                                                   |   |                                                   |         |   |   |   |   |
|                    Issuance of treasury stock - LTICP and ESOP plans                                                               |   | **$**                                                  | **73**       |   | $ | 149 |   |
|                    Issuance of common stock - LTICP/ESOP/ESPP                (1)                                                   |   | **$**                                                  | **3,642**    |   | $ | 2,692 |   |
|                    Accrued additions to property, plant and equipment not reported                above                            |   | **$**                                                  | **42,088**   |   | $ | 75,853 |   |
| (1)Includes                conversion of preferred stock to common stock ($1,678/2006,                $1,574/2005)                           |   |                                                   |         |   |   |   |   |
| 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 SEPTEMBER 30, |     |
| (THOUSANDS)                                                                                                                                     |                                                          | **2006** |        | 2005 |   |
| **Operating                revenue**                                                                                                            |                                                          |     |        |   |   |
|                    Electric operations                                                                                           |                                                          | **$**    | **284,490** |   | $ | 267,958 |   |
|                    Other operations                                                                                              |                                                          |     | **7,621**   |   |   | 14,113 |   |
|                    Affiliate revenue                                                                                             |                                                          |     | **514**     |   |   | 498 |   |
|                        Gross operating revenue                                                               |                                                          |     | **292,625** |   |   | 282,569 |   |
|                            Electric customer credits                                     |                                                          |     | **-**       |   |   | (300 | ) |
|                        Operating revenue, net                                                                |                                                          |     | **292,625** |   |   | 282,269 |   |
| **Operating                expenses**                                                                                                           |                                                          |     |        |   |   |   |   |
|                    Fuel used for electric generation                                                                             |                                                          |     | **80,627**  |   |   | 54,665 |   |
|                    Power purchased for utility customers                                                                         |                                                          |     | **106,940** |   |   | 124,261 |   |
|                    Other operations                                                                                              |                                                          |     | **25,323**  |   |   | 23,193 |   |
|                    Maintenance                                                                                                   |                                                          |     | **7,981**   |   |   | 8,948 |   |
|                    Depreciation                                                                                                  |                                                          |     | **23,353**  |   |   | 14,765 |   |
|                    Taxes other than income taxes                                                                                 |                                                          |     | **10,576**  |   |   | 10,424 |   |
|                        Total operating expenses                                                              |                                                          |     | **254,800** |   |   | 236,256 |   |
| **Operating                income**                                                                                                             |                                                          |     | **37,825**  |   |   | 46,013 |   |
| Interest                income                                                                                                                  |                                                          |     | **1,559**   |   |   | 1,089 |   |
| Allowance                for other funds used during construction                                                                               |                                                          |     | **2,190**   |   |   | 325 |   |
| Other                income                                                                                                                     |                                                          |     | **497**     |   |   | 161 |   |
| Other                expense                                                                                                                    |                                                          |     | **(759**    | **)** |   | (397 | ) |
| **Interest                charges**                                                                                                             |                                                          |     |        |   |   |   |   |
|                    Interest charges, including amortization of debt expenses, premium                and                discount |                                                          |     | **9,144**   |   |   | 7,274 |   |
|                    Allowance for borrowed funds used during construction                                                         |                                                          |     | **(816**    | **)** |   | (108 | ) |
|                        Total interest charges                                                                |                                                          |     | **8,328**   |   |   | 7,166 |   |
| **Income                before income taxes**                                                                                                   |                                                          |     | **32,984**  |   |   | 40,025 |   |
| Federal                and state income taxes                                                                                                   |                                                          |     | **11,428**  |   |   | 12,842 |   |
| **Net                income**                                                                                                                   |                                                          | **$**    | **21,556**  |   | $ | 27,183 |   |
| The                accompanying notes are an integral part of the condensed financial                statements.                                |                                                          |     |        |   |   |   |   |

----

| Condensed                Statements of Income (Unaudited)                                                                                       |   |                                                   |        |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|-------------|
|                                                                                                                                            |   | FOR                THE NINE MONTHS ENDED SEPTEMBER 30, |        |
| (THOUSANDS)                                                                                                                                     |   | **2006**                                               |        | 2005 |   |
| **Operating                revenue**                                                                                                            |   |                                                   |        |   |   |
|                    Electric operations                                                                                           |   | **$**                                                  | **736,765** |   | $ | 614,670 |   |
|                    Other operations                                                                                              |   |                                                   | **22,052**  |   |   | 29,228 |   |
|                    Affiliate revenue                                                                                             |   |                                                   | **1,538**   |   |   | 1,489 |   |
|                        Gross operating revenue                                                               |   |                                                   | **760,355** |   |   | 645,387 |   |
|                            Electric customer credits                                     |   |                                                   | **4,382**   |   |   | (771 | ) |
|                        Operating revenue, net                                                                |   |                                                   | **764,737** |   |   | 644,616 |   |
| **Operating                expenses**                                                                                                           |   |                                                   |        |   |   |   |   |
|                    Fuel used for electric generation                                                                             |   |                                                   | **186,980** |   |   | 117,139 |   |
|                    Power purchased for utility customers                                                                         |   |                                                   | **306,426** |   |   | 265,441 |   |
|                    Other operations                                                                                              |   |                                                   | **64,633**  |   |   | 64,379 |   |
|                    Maintenance                                                                                                   |   |                                                   | **26,919**  |   |   | 30,298 |   |
|                    Depreciation                                                                                                  |   |                                                   | **53,879**  |   |   | 43,824 |   |
|                    Taxes other than income taxes                                                                                 |   |                                                   | **30,199**  |   |   | 28,666 |   |
|                    Gain on sales of assets                                                                                       |   |                                                   | **(71**     | **)** |   | (2,207 | ) |
|                    Total operating expenses                                                                                      |   |                                                   | **668,965** |   |   | 547,540 |   |
| **Operating                income**                                                                                                             |   |                                                   | **95,772**  |   |   | 97,076 |   |
| Interest                income                                                                                                                  |   |                                                   | **5,688**   |   |   | 2,233 |   |
| Allowance                for other funds used during construction                                                                               |   |                                                   | **4,231**   |   |   | 2,104 |   |
| Other                income                                                                                                                     |   |                                                   | **688**     |   |   | 917 |   |
| Other                expense                                                                                                                    |   |                                                   | **(1,384**  | **)** |   | (1,243 | ) |
| **Interest                charges**                                                                                                             |   |                                                   |        |   |   |   |   |
|                    Interest charges, including amortization of debt expenses, premium                and                discount |   |                                                   | **27,767**  |   |   | 21,373 |   |
|                    Allowance for borrowed funds used during construction                                                         |   |                                                   | **(1,535**  | **)** |   | (702 | ) |
|                        Total interest charges                                                                |   |                                                   | **26,232**  |   |   | 20,671 |   |
| **Income                before income taxes**                                                                                                   |   |                                                   | **78,763**  |   |   | 80,416 |   |
| Federal                and state income taxes                                                                                                   |   |                                                   | **26,287**  |   |   | 28,299 |   |
| **Net                income**                                                                                                                   |   | **$**                                                  | **52,476**  |   | $ | 52,117 |   |
| The                accompanying notes are an integral part of the condensed financial                statements.                                |   |                                                   |        |   |   |   |   |

----

| Condensed              Balance Sheets (Unaudited)                                                                                                                                                             |   |                         |          |                                |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|---------------|-------------------------------------|--------|
| (THOUSANDS)                                                                                                                                                                                                   |   | **AT****SEPTEMBER 30, 2006** |          | AT                DECEMBER 31, 2005 |   |
| **Assets**                                                                                                                                                                                                    |   |                         |          |                                |   |
|                    Utility plant and equipment                                                                                                                                                 |   |                         |          |                                |   |
|                        Property, plant and equipment                                                                                                                       |   | **$**                        | **1,853,041** |                                | $      | 1,822,798 |   |
|                        Accumulated depreciation                                                                                                                            |   |                         | **(855,469**  | **)**                               |   | (797,690 | ) |
|                        Net property, plant and equipment                                                                                                                   |   |                         | **997,572**   |                                |   | 1,025,108 |   |
|                        Construction work in progress                                                                                                                       |   |                         | **230,116**   |                                |   | 155,427 |   |
|                            Total utility plant, net                                                                                                    |   |                         | **1,227,688** |                                |   | 1,180,535 |   |
|                    Current assets                                                                                                                                                              |   |                         |          |                                |   |   |   |
|                        Cash and cash equivalents                                                                                                                           |   |                         | **16,889**    |                                |   | 183,381 |   |
|                        Customer accounts receivable (less allowance for doubtful accounts                of                $990                in 2006 and $1,262 in 2005) |   |                         | **54,294**    |                                |   | 54,768 |   |
|                        Other accounts receivable                                                                                                                           |   |                         | **29,156**    |                                |   | 31,690 |   |
|                        Accounts receivable - affiliate                                                                                                                     |   |                         | **15,807**    |                                |   | 4,530 |   |
|                        Unbilled revenue                                                                                                                                    |   |                         | **19,945**    |                                |   | 17,878 |   |
|                        Fuel inventory, at average cost                                                                                                                     |   |                         | **43,719**    |                                |   | 21,313 |   |
|                        Material and supplies inventory, at average cost                                                                                                    |   |                         | **31,940**    |                                |   | 24,289 |   |
|                        Margin deposits                                                                                                                                     |   |                         | **25,948**    |                                |   | - |   |
|                        Risk management assets                                                                                                                              |   |                         | **-**         |                                |   | 10,110 |   |
|                        Prepayments                                                                                                                                         |   |                         | **3,908**     |                                |   | 2,460 |   |
|                        Accumulated deferred fuel                                                                                                                           |   |                         | **94,062**    |                                |   | 23,165 |   |
|                        Cash surrender value of life insurance policies                                                                                                     |   |                         | **5,117**     |                                |   | 5,143 |   |
|                        Other current assets                                                                                                                                |   |                         | **-**         |                                |   | 512 |   |
|                            Total current assets                                                                                                        |   |                         | **340,785**   |                                |   | 379,239 |   |
|                    Prepayments                                                                                                                                                                 |   |                         | **5,936**     |                                |   | 5,961 |   |
|                    Regulatory assets and liabilities - deferred taxes, net                                                                                                                     |   |                         | **91,775**    |                                |   | 90,960 |   |
|                    Regulatory assets - other                                                                                                                                                   |   |                         | **173,654**   |                                |   | 53,439 |   |
|                    Other deferred charges                                                                                                                                                      |   |                         | **36,893**    |                                |   | 55,800 |   |
| **Total                assets**                                                                                                                                                                               |   | **$**                        | **1,876,731** |                                | $      | 1,765,934 |   |
| **Liabilities                and member’s equity**                                                                                                                                                      |   |                         |          |                                |   |   |   |
|                    Member’s equity                                                                                                                                                       |   | **$**                        | **586,686**   |                                | $      | 534,210 |   |
|                    Long-term debt,                net                                                                                                                                          |   |                         | **484,428**   |                                |   | 509,643 |   |
|                        Total capitalization                                                                                                                                |   |                         | **1,071,114** |                                |   | 1,043,853 |   |
|                    Current liabilities                                                                                                                                                         |   |                         |          |                                |   |   |   |
|                        Short-term debt                                                                                                                                     |   |                         | **20,000**    |                                |   | - |   |
|                        Long-term debt due within one year                                                                                                                  |   |                         | **25,000**    |                                |   | 40,000 |   |
|                        Accounts payable                                                                                                                                    |   |                         | **106,553**   |                                |   | 135,342 |   |
|                        Accounts payable - affiliate                                                                                                                        |   |                         | **8,730**     |                                |   | 8,122 |   |
|                        Retainage                                                                                                                                           |   |                         | **7,817**     |                                |   | 768 |   |
|                        Customer deposits                                                                                                                                   |   |                         | **25,020**    |                                |   | 23,436 |   |
|                        Provision for rate refund                                                                                                                           |   |                         | **2,371**     |                                |   | 7,927 |   |
|                        Taxes accrued                                                                                                                                       |   |                         | **31,820**    |                                |   | 12,149 |   |
|                        Interest accrued                                                                                                                                    |   |                         | **7,033**     |                                |   | 8,001 |   |
|                        Accumulated deferred taxes, net                                                                                                                     |   |                         | **31,270**    |                                |   | 18,033 |   |
|                        Margin deposits                                                                                                                                     |   |                         | **-**         |                                |   | 4,316 |   |
|                        Risk management liability                                                                                                                           |   |                         | **62,971**    |                                |   | - |   |
|                        Regulatory liabilities - other                                                                                                                      |   |                         | **3,113**     |                                |   | 635 |   |
|                        Other current liabilities                                                                                                                           |   |                         | **3,517**     |                                |   | 2,412 |   |
|                            Total current liabilities                                                                                                   |   |                         | **335,215**   |                                |   | 261,141 |   |
|                    Deferred credits                                                                                                                                                            |   |                         |          |                                |   |   |   |
|                        Accumulated deferred federal and state income taxes, net                                                                                            |   |                         | **397,951**   |                                |   | 390,906 |   |
|                        Accumulated deferred investment tax credits                                                                                                         |   |                         | **14,483**    |                                |   | 15,632 |   |
|                        Other deferred credits                                                                                                                              |   |                         | **57,968**    |                                |   | 54,402 |   |
|                            Total deferred credits                                                                                                      |   |                         | **470,402**   |                                |   | 460,940 |   |
| **Total                liabilities and member’s equity**                                                                                                                                                |   | **$**                        | **1,876,731** |                                | $      | 1,765,934 |   |
| The                accompanying notes are an integral part of the condensed financial                statements.                                                                                              |   |                         |          |                                |   |   |   |

----

| Statements                of Cash Flows (Unaudited)                                                                                |   |                                                   |         |
|------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|--------------|
|                                                                                                                               |   | FOR                THE NINE MONTHS ENDED SEPTEMBER 30, |         |
| (THOUSANDS)                                                                                                                        |   | **200****6**                                           |         | 2005 |   |
| **Operating                activities**                                                                                            |   |                                                   |         |   |   |
|                    Net income                                                                                       |   | **$**                                                  | **52,476**   |   | $ | 52,117 |   |
|                    Adjustments to reconcile net income to net cash provided by operating                activities: |   |                                                   |         |   |   |   |   |
|                        Depreciation and amortization                                            |   |                                                   | **56,069**   |   |   | 45,077 |   |
|                        Gain on sales of property, plant and equipment                           |   |                                                   | **(71**      | **)** |   | (2,207 | ) |
|                        Provision for doubtful accounts                                          |   |                                                   | **2,049**    |   |   | 1,300 |   |
|                        Unearned/deferred                compensation expense                    |   |                                                   | **1,502**    |   |   | 1,603 |   |
|                        Allowance for other funds used during construction                       |   |                                                   | **(4,231**   | **)** |   | (2,104 | ) |
|                        Amortization of investment tax credits                                   |   |                                                   | **(1,148**   | **)** |   | (1,253 | ) |
|                        Net deferred income taxes                                                |   |                                                   | **839**      |   |   | 66,103 |   |
|                        Deferred fuel costs                                                      |   |                                                   | **13,229**   |   |   | (42,621 | ) |
|                        Loss (gain) on economic hedges                                           |   |                                                   | **4,256**    |   |   | (4,376 | ) |
|                        Cash surrender value of company-owned life insurance                     |   |                                                   | **(287**     | **)** |   | (285 | ) |
|                        Changes in assets and liabilities:                                       |   |                                                   |         |   |   |   |   |
|                            Accounts receivable                              |   |                                                   | **(3,925**   | **)** |   | (42,269 | ) |
|                            Accounts and notes receivable, affiliate         |   |                                                   | **(10,947**  | **)** |   | (18,139 | ) |
|                            Unbilled revenue                                 |   |                                                   | **(2,068**   | **)** |   | (1,886 | ) |
|                            Fuel, materials and supplies inventory           |   |                                                   | **(30,057**  | **)** |   | 6,730 |   |
|                            Prepayments                                      |   |                                                   | **(953**     | **)** |   | (5,727 | ) |
|                            Accounts payable                                 |   |                                                   | **(50,181**  | **)** |   | 42,193 |   |
|                            Accounts and notes payable, affiliate            |   |                                                   | **(1,179**   | **)** |   | (6,686 | ) |
|                            Retainage payable                                |   |                                                   | **7,048**    |   |   | 231 |   |
|                            Customer deposits                                |   |                                                   | **5,283**    |   |   | 4,082 |   |
|                            Regulatory assets and liabilities                |   |                                                   | **(46,547**  | **)** |   | (5,160 | ) |
|                            Other deferred accounts                          |   |                                                   | **3,254**    |   |   | 4,562 |   |
|                            Taxes accrued                                    |   |                                                   | **39,460**   |   |   | 1,823 |   |
|                            Interest accrued                                 |   |                                                   | **(279**     | **)** |   | (2,423 | ) |
|                            Margin deposits                                  |   |                                                   | **(30,264**  | **)** |   | 22,832 |   |
|                            Other                                            |   |                                                   | **1,703**    |   |   | (601 | ) |
|                        Net cash provided                by                operating activities  |   |                                                   | **5,031**    |   |   | 112,916 |   |
| **Investing                activities**                                                                                            |   |                                                   |         |   |   |   |   |
|                    Additions to property, plant and equipment                                                       |   |                                                   | **(155,248** | **)** |   | (91,622 | ) |
|                    Allowance for other funds used during construction                                               |   |                                                   | **4,231**    |   |   | 2,104 |   |
|                    Proceeds from sale of property, plant and equipment                                              |   |                                                   | **869**      |   |   | 2,792 |   |
|                    Premiums paid on company-owned life insurance                                                    |   |                                                   | **(470**     | **)** |   | (629 | ) |
|                        Net cash used in investing activities                                    |   |                                                   | **(150,618** | **)** |   | (87,355 | ) |
| **Financing                activities**                                                                                            |   |                                                   |         |   |   |   |   |
|                    Change in short-term debt                                                                        |   |                                                   | **20,000**   |   |   | - |   |
|                    Retirement of long-term obligations                                                              |   |                                                   | **(40,275**  | **)** |   | (100,070 | ) |
|                    Issuance of long-term debt                                                                       |   |                                                   | **-**        |   |   | 90,000 |   |
|                    Deferred financing costs                                                                         |   |                                                   | **(630**     | **)** |   | (1,277 | ) |
|                    Distribution to parent                                                                           |   |                                                   | **-**        |   |   | (59,900 | ) |
|                    Contribution from parent                                                                         |   |                                                   | **-**        |   |   | 7,000 |   |
|                        Net cash used in financing activities                                    |   |                                                   | **(20,905**  | **)** |   | (64,247 | ) |
| **Net                decrease in cash and cash equivalents**                                                                       |   |                                                   | **(166,492** | **)** |   | (38,686 | ) |
| **Cash                and cash equivalents at beginning of period**                                                                |   |                                                   | **183,381**  |   |   | 54,113 |   |
| **Cash                and cash equivalents at end of period**                                                                      |   | **$**                                                  | **16,889**   |   | $ | 15,427 |   |
| **Supplementary                cash flow information**                                                                             |   |                                                   |         |   |   |   |   |
|                    Interest paid                                                                                    |   | **$**                                                  | **27,617**   |   | $ | 22,896 |   |
|                    Income taxes paid (received)                                                                     |   | **$**                                                  | **(2,311**   | **)** | $ | 7,143 |   |
| **Supplementary****non-cash                investing and financing activities**                                                    |   |                                                   |         |   |   |   |   |
|                    Accrued additions to property, plant and equipment not reported                above             |   | **$**                                                  | **42,088**   |   | $ | 75,853 |   |
| 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                                                                                                                          | Perryville                  Retroactive Adjustments                 | Cleco                  Corporation |
| 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                                                                                                                          | Common                  Stock Issuance                              | Cleco                  Corporation |
| Note                  8                                                                                                                          | Electric                  Customer Credits                          | Cleco                  Corporation and Cleco Power |
| Note                  9                                                                                                                          | Litigation                  and Other Commitments and Contingencies | Cleco                  Corporation and Cleco Power |
| Note                  10                                                                                                                         | Disclosures                  about Guarantees                       | Cleco                  Corporation and Cleco Power |
| Note                  11                                                                                                                         | Debt                                                                | Cleco                  Corporation and Cleco Power |
| Note                  12                                                                                                                         | Pension                  Plan and Employee Benefits                 | Cleco                  Corporation and Cleco Power |
| 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 and Cleco Power |
| 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***

***Reclassifications***

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

----

***Earnings      per Average Common Share***

|                                                                            |             |       |             |   |                                   |                                                          |         |     |
|---------------------------------------------------------------------------------|------------------|------------|------------------|--------|----------------------------------------|---------------------------------------------------------------|--------------|----------|
|                                                                            |             |       |             |   |                                   |  FOR                THE THREE MONTHS ENDED SEPTEMBER 30, |
|                                                                            |             |       |             |   | **2006**                               |                                                          |         |     |   |   | 2005 |   |
|  (THOUSANDS,                EXCEPT SHARES AND PER SHARE AMOUNTS)           |  **INCOME** |       |  **SHARES** |   | **PER                SHARE****AMOUNT** |                                                          |  INCOME |     |  SHARES |   | PER                SHAREAMOUNT |   |
|                                                                            |             |       |             |   |                                   |                                                          | ADJUSTED     |     |   |   | ADJUSTED |   |
| Income                from continuing operations                                | **$**            | **27,980** |             |   |                                   |                                                          |         |     |   | $ | 150,456 |   |   |   |   |   |   |   |
| Deduct:                non-participating stock dividends (4.5% preferred stock) |             | **11**     |             |   |                                   |                                                          |         |     |   |   | 11 |   |   |   |   |   |   |   |
| Deduct:                participating preferred stock dividends                  |             | **413**    |             |   |                                   |                                                          |         |     |   |   | 451 |   |   |   |   |   |   |   |
| Deduct:                amount allocated to participating preferred              |             | **539**    |             |   |                                   |                                                          |         |     |   |   | 5,393 |   |   |   |   |   |   |   |
| **Basic                earnings per share**                                     |             |       |             |   |                                   |                                                          |         |     |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations                                | **$**            | **27,017** |             |   |                                   |                                                          | **$**        | **0.50** |   | $ | 144,601 |   |   |   |   | $ | 2.92 |   |
| Income                (loss) from discontinued operations                       |             | **36**     |             |   |                                   |                                                          |         | **-**    |   |   | (25 | ) |   |   |   |   | - |   |
| Deduct:                amount allocated to participating preferred              |             | **1**      |             |   |                                   |                                                          |         |     |   |   | - |   |   |   |   |   |   |   |
| Total                basic net income applicable to common stock                | **$**            | **27,052** |             |   | **53,630,494**                         |                                                          | **$**        | **0.50** |   | $ | 144,576 |   |   | 49,548,835 |   | $ | 2.92 |   |
| **Effect                of Dilutive Securities**                                |             |       |             |   |                                   |                                                          |         |     |   |   |   |   |   |   |   |   |   |   |
| Add:                stock                option grants                          |             | **-**      |             |   | **157,004**                            |                                                          |         |     |   |   | - |   |   | 149,602 |   |   |   |   |
| Add:                restricted                stock (LTICP)                     |             | **10**     |             |   | **315,157**                            |                                                          |         |     |   |   | - |   |   | 13,577 |   |   |   |   |
| Add:                Convertible ESOP preferred stock                            |             | **952**    |             |   | **1,836,340**                          |                                                          |         |     |   |   | 5,844 |   |   | 2,002,306 |   |   |   |   |
| **Diluted                earnings per share**                                   |             |       |             |   |                                   |                                                          |         |     |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations plus assumed conversions       | **$**            | **27,979** |             |   |                                   |                                                          | **$**        | **0.50** |   | $ | 150,445 |   |   |   |   | $ | 2.91 |   |
| Income                (loss) from discontinued operations                       |             | **36**     |             |   |                                   |                                                          |         | **-**    |   |   | (25 | ) |   |   |   |   | - |   |
| Total                diluted net income applicable to common stock              | **$**            | **28,015** |             |   | **55,938,995**                         |                                                          | **$**        | **0.50** |   | $ | 150,420 |   |   | 51,714,320 |   | $ | 2.91 |   |

----

|                                                                            |             |       |             |   |                                   |   |                                                   |     |
|---------------------------------------------------------------------------------|------------------|------------|------------------|--------|----------------------------------------|--------|--------------------------------------------------------|----------|
|                                                                            |             |       |             |   |                                   |   | FOR                THE NINE MONTHS ENDED SEPTEMBER 30, |     |
|                                                                            |             |       |             |   | **2006**                               |   |                                                   |     |   |   | 2005 |   |
|  (THOUSANDS,                EXCEPT SHARES AND PER SHARE AMOUNTS)           |  **INCOME** |       |  **SHARES** |   | **PER                SHARE****AMOUNT** |   |  INCOME                                           |     |  SHARES |   | PER                SHAREAMOUNT |   |
|                                                                            |             |       |             |   |                                   |   | ADJUSTED                                               |     |   |   | ADJUSTED |   |
| Income                from continuing operations                                | **$**            | **63,535** |             |   |                                   |   |                                                   |     |   | $ | 180,729 |   |   |   |   |   |   |   |
| Deduct:                non-participating stock dividends (4.5% preferred stock) |             | **35**     |             |   |                                   |   |                                                   |     |   |   | 35 |   |   |   |   |   |   |   |
| Deduct:                participating preferred stock dividends                  |             | **1,275**  |             |   |                                   |   |                                                   |     |   |   | 1,385 |   |   |   |   |   |   |   |
| Deduct:                amount allocated to participating preferred              |             | **1,016**  |             |   |                                   |   |                                                   |     |   |   | 5,823 |   |   |   |   |   |   |   |
| **Basic                earnings per share**                                     |             |       |             |   |                                   |   |                                                   |     |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations                                | **$**            | **61,209** |             |   |                                   |   | **$**                                                  | **1.19** |   | $ | 173,486 |   |   |   |   | $ | 3.50 |   |
| Loss                from discontinued operations                                |             | **(154**   | **)**            |   |                                   |   |                                                   | **-**    |   |   | (230 | ) |   |   |   |   | - |   |
| Total                basic net income applicable to common stock                | **$**            | **61,055** |             |   | **51,408,708**                         |   | **$**                                                  | **1.19** |   | $ | 173,256 |   |   | 49,443,912 |   | $ | 3.50 |   |
| **Effect                of Dilutive Securities**                                |             |       |             |   |                                   |   |                                                   |     |   |   |   |   |   |   |   |   |   |   |
| Add:                stock                option grants                          |             | **-**      |             |   | **119,003**                            |   |                                                   |     |   |   | - |   |   | 113,518 |   |   |   |   |
| Add:                restricted                stock (LTICP)                     |             | **27**     |             |   | **192,837**                            |   |                                                   |     |   |   | - |   |   | 13,024 |   |   |   |   |
| Add:                Convertible ESOP preferred stock                            |             | **2,291**  |             |   | **1,901,131**                          |   |                                                   |     |   |   | 7,208 |   |   | 2,054,546 |   |   |   |   |
| **Diluted                earnings per share**                                   |             |       |             |   |                                   |   |                                                   |     |   |   |   |   |   |   |   |   |   |   |
| Income                from continuing operations plus assumed conversions       | **$**            | **63,527** |             |   |                                   |   | **$**                                                  | **1.18** |   | $ | 180,694 |   |   |   |   | $ | 3.50 |   |
| Loss                from discontinued operations                                |             | **(154**   | **)**            |   |                                   |   |                                                   | **-**    |   |   | (230 | ) |   |   |   |   | - |   |
| Total                diluted net income applicable to common stock              | **$**            | **63,373** |             |   | **53,621,679**                         |   | **$**                                                  | **1.18** |   | $ | 180,464 |   |   | 51,625,000 |   | $ | 3.50 |   |

|                                        |   |                                                    |                          |
|---------------------------------------------|--------|---------------------------------------------------------|-------------------------------|
|                                        |   | FOR                THE THREE MONTHS ENDED SEPTEMBER 30, |                          |
|                                        |   |                                                    |                          |   |   | 2005 |   |
|                                        |   |  STRIKE                PRICE                       |                          | AVERAGEMARKET                PRICE |   |  SHARES |   |
| Stock                option grants excluded |   | $                                                       | 22.69                - $24.25 |   | $ | 22.66 |   |   | 136,934 |   |

|                                        |   |                                  |                             |                              |   |             |   |                                                   |        |
|---------------------------------------------|--------|---------------------------------------|----------------------------------|-----------------------------------|--------|------------------|--------|--------------------------------------------------------|-------------|
|                                        |   |                                  |                             |                              |   |             |   | FOR                THE NINE MONTHS ENDED SEPTEMBER 30, |        |
|                                        |   |                                  |                             |                              |   | **2006**         |   |                                                   |        |   |   | 2005 |   |
|                                        |   |  **STRIKE                PRICE** |                             | **AVERAGE** **MARKET PRICE** |   |  **SHARES** |   |  STRIKE                PRICE                      |        | AVERAGEMARKET                PRICE |   |  SHARES |   |
| Stock                option grants excluded |   | **$**                                 | **23.25-                $24.25** |                              | **$**  | **23.05**        |   |                                                   | **125,934** |   | $ | 21.88                - $24.25 |   | $ | 21.35 |   |   | 331,968 |   |

***Stock-Based      Compensation***

----

|                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                |      |                                                               |   |                             |   |                       |    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------|-----------|--------------------------------------------------------------------|--------|----------------------------------|--------|----------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                       |   | CLECO                CORPORATION                                    |      | CLECO                POWER                                         |   | CLECO                CORPORATION |   | CLECO                POWER |    |
|                                                                                                                                                                                                                                                                                                                                                                                       |   |   FOR                THE THREE MONTHS ENDED SEPTEMBER 30, |      |   FOR                THE NINE MONTHS ENDED SEPTEMBER 30, |   |
| (THOUSANDS)                                                                                                                                                                                                                                                                                                                                                                                |   | **2006**                                                            |      | 2005                                                               |   | **2006**                         |   | 2005                       |    | **2006** |   | 2005 |   | **2006** |   | 2005 |   |
| **Equity                classification**                                                                                                                                                                                                                                                                                                                                                   |   |                                                                |      |                                                               |   |                             |   |                       |    |   |   |   |   |   |   |   |   |
| Non-vested                stock                                                                                                                                                                                                                                                                                                                                                            |   | **$**                                                               | **633**   |                                                               | $      | 1,343                            |   | **$**                      | **279** |   | $ | 403 |   | **$** | **1,670** |   | $ | 3,343 |   | **$** | **859** |   | $ | 957 |   |
| Stock                options (1)                                                                                                                                                                                                                                                                                                                                                           |   |                                                                | **26**    |                                                               |   | -                                |   |                       | **6**   |   |   | - |   |   | **76** |   |   | - |   |   | **20** |   |   | - |   |
| Non-forfeitable                dividends (1)                                                                                                                                                                                                                                                                                                                                               |   |                                                                | **9**     |                                                               |   | -                                |   |                       | **5**   |   |   | - |   |   | **26** |   |   | - |   |   | **14** |   |   | - |   |
| **Total**                                                                                                                                                                                                                                                                                                                                                                                  |   | **$**                                                               | **668**   |                                                               | $      | 1,343                            |   | **$**                      | **290** |   | $ | 403 |   | **$** | **1,772** |   | $ | 3,343 |   | **$** | **893** |   | $ | 957 |   |
| **Liability                classification**                                                                                                                                                                                                                                                                                                                                                |   |                                                                |      |                                                               |   |                             |   |                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common                stock equivalent units                                                                                                                                                                                                                                                                                                                                               |   | **$**                                                               | **195**   |                                                               | $      | -                                |   | **$**                      | **78**  |   | $ | - |   | **$** | **406** |   | $ | - |   | **$** | **163** |   | $ | - |   |
| Company                funded participants income tax obligations                                                                                                                                                                                                                                                                                                                          |   |                                                                | **299**   |                                                               |   | 435                              |   |                       | **155** |   |   | 204 |   |   | **853** |   |   | 1,701 |   |   | **446** |   |   | 646 |   |
| **Total**                                                                                                                                                                                                                                                                                                                                                                                  |   | **$**                                                               | **494**   |                                                               | $      | 435                              |   | **$**                      | **233** |   | $ | 204 |   | **$** | **1,259** |   | $ | 1,701 |   | **$** | **609** |   | $ | 646 |   |
| **Total                pre-tax compensation expense**                                                                                                                                                                                                                                                                                                                                      |   | **$**                                                               | **1,162** |                                                               | $      | 1,778                            |   | **$**                      | **523** |   | $ | 607 |   | **$** | **3,031** |   | $ | 5,044 |   | **$** | **1,502** |   | $ | 1,603 |   |
| **Tax                benefit (excluding income tax gross-up)**                                                                                                                                                                                                                                                                                                                             |   | **$**                                                               | **332**   |                                                               | $      | 517                              |   | **$**                      | **142** |   | $ | 155 |   | **$** | **838** |   | $ | 1,286 |   | **$** | **406** |   | $ | 368 |   |
| (1)For                the three and nine months ended September 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 and $0.1 million, respectively.  |

| ***Cleco***                                                                                                                                                                                                                     |                                                                       |    |                                                                      |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------|---------|---------------------------------------------------------------------------|--------|
|  (THOUSANDS,                EXCEPT PER SHARE AMOUNTS)                                                                                                                                                                      | FOR                THE THREE MONTHSENDED                SEPTEMBER 30, 2005 |    | FOR                THE NINE MONTHSENDED                SEPTEMBER 30, 2005 |   |
|                                                                                                                                                                                                                            |                                                                       |    | ADJUSTED                                                                  |   |
| Net                income applicable to common stock, as reported                                                                                                                                                               | $                                                                          | 149,980 |                                                                      | $      | 179,125 |   |
| Add:                stock-based                employee compensation expense recognized and included in reported                net                income applicable to common stock, net of related tax                effects |                                                                       | 827     |                                                                      |   | 2,057 |   |
| Deduct:                total                stock-based employee compensation expense determined under the fair                value                based method of all awards, net of related tax effects                      |                                                                       | 260     |                                                                      |   | 1,333 |   |
| Pro                forma net income applicable to common stock                                                                                                                                                                  | $                                                                          | 150,547 |                                                                      | $      | 179,849 |   |
| Earnings                per share:                                                                                                                                                                                              |                                                                       |    |                                                                      |   |   |   |
|                    Basic - as reported                                                                                                                                                                           | $                                                                          | 2.92    |                                                                      | $      | 3.50 |   |
|                    Basic - pro forma                                                                                                                                                                             | $                                                                          | 2.93    |                                                                      | $      | 3.52 |   |
|                    Diluted - as reported                                                                                                                                                                         | $                                                                          | 2.91    |                                                                      | $      | 3.50 |   |
|                    Diluted - pro forma                                                                                                                                                                           | $                                                                          | 2.91    |                                                                      | $      | 3.50 |   |

|  ***Cleco              Power***                                                                                                                                                                       |                                                                       |   |                                                                      |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|
|  (THOUSANDS)                                                                                                                                                                                          | FOR                THE THREE MONTHSENDED                SEPTEMBER 30, 2005 |   | FOR                THE NINE MONTHSENDED                SEPTEMBER 30, 2005 |   |
| Net                income, as reported                                                                                                                                                                     | $                                                                          | 27,183 |                                                                      | $      | 52,117 |   |
| Add:                stock-based                employee compensation expense recognized and included in reported                net                income, net of related tax effects                      |                                                                       | 248    |                                                                      |   | 588 |   |
| Deduct:                total                stock-based employee compensation expense determined under the fair                value                based method of all awards, net of related tax effects |                                                                       | 214    |                                                                      |   | 662 |   |
| Pro                forma net income                                                                                                                                                                        | $                                                                          | 27,217 |                                                                      | $      | 52,043 |   |

----

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

**Stock      Options**

|                                                                                                                                                                                                        |                              |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------|
|                                                                                                                                                                                                        | SEPTEMBER                30,      |
|                                                                                                                                                                                                        | **2006**                          |   | 2005 |
| Expected                term (in years) (1)                                                                                                                                                                 | **7.0**                           |   | 1.0 |
| Volatility                (2)                                                                                                                                                                               | **28.0%                to 30.4%** |   | 22.0% |
| Expected                dividend yield                                                                                                                                                                      | **4.2%**                          |   | 4.3% |
| Risk-free                interest rate                                                                                                                                                                      | **4.4%**                          |   | 2.7% |
| Weighted                average fair value (Black-Scholes                value)                                                                                                                             | **$****4.75**                     |   | $3.89 |
| (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-AVERAGEEXERCISE                PRICE              |   | WEIGHTED-AVERAGEREMAINING  CONTRACTUALTERM                (YEARS) |   | AGGREGATE INTRINSIC                VALUE(THOUSANDS) |
| Outstanding                at January 1, 2006    | **1,023,729** |   | **$****20.01**                                             |   |                                                                        |   |                                                     |
| Granted                                          | **60,000**    |   | **$****22.00**                                             |   |                                                                        |   |                                                     |
| Exercised                                        | **(153,734)** |   | **$****18.92**                                             |   |                                                                        |   |                                                     |
| Forfeited                                        | **(24,099)**  |   | **$****19.15**                                             |   |                                                                        |   |                                                     |
| Expired                                          | **-**         |   | **$        ****-** |   |                                                                        |   |                                                     |
| Outstanding                at September 30, 2006 | **905,896**   |   | **$****20.35**                                             |   | **5.42**                                                                    |   | **$****4,427**                                           |
| Exercisable                at September 30, 2006 | **815,846**   |   | **$****20.22**                                             |   | **5.72**                                                                    |   | **$****4,093**                                           |

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

----

|                                                                                                                                                                 |                                  |   |                             |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------|--------|----------------------------------|
|                                                                                                                                                                 |                                  |   | SEPTEMBER                  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%**                             |   | **19.4%**                        |   | 33.0% |
| Correlation                  between Cleco stock                  volatility and peer group                                                                          | **33.7%**                             |   | **33.8%**                        |   | 41.4% |
| Expected                  dividend yield                                                                                                                             | **4.1%**                              |   | **3.5%**                         |   | 4.2% |
| Weighted                  average fair value (Monte                  Carlo model)                                                                                    | **$   ****24.85**      |   | **$   ****30.87** |   | $                     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-DATEFAIR                VALUE |
|                                                                                                                                                    | NON-VESTED                STOCK |   | CEUs                                                                  |
| Non-vested                at January 1, 2006                                                                                                            | **289,267**                     |   | **$****22.08**                                                        |   | **-**        |   | **$        ****-**      |
| Granted                                                                                                                                                 | **83,425**                      |   | **$****24.11**                                                        |   | **61,145**   |   | **$****30.87**                                                  |
| Vested                                                                                                                                                  | **(15,530)**                    |   | **$****21.33**                                                        |   | **-**        |   | **$        ****-**      |
| Expected                to vest (1)                                                                                                                     | **(219,357)**                   |   | **$****22.10**                                                        |   | **(14,373)** |   | **$****30.87**                                                  |
| Forfeited                                                                                                                                               | **(6,849)**                     |   | **$****24.37**                                                        |   | **(3,438)**  |   | **$****30.87**                                                  |
| Non-vested                at September 30, 2006                                                                                                         | **130,956**                     |   | **$****23.31**                                                        |   | **43,334**   |   | **$****30.87**                                                  |
| (1)Expected                to vest is the pro rata amount of shares that have been earned as                of                September 30, 2006.  |                            |   |                                                                  |   |         |   |

**Note      **

**2      — Perryville Retroactive Adjustments                                                                                **

----

| ***Statements              of Income***                              |                                                                                   |               |                                                                                  |           |   |
|----------------------------------------------------------------------|----------------------------------------------------------------------------------------|--------------------|---------------------------------------------------------------------------------------|----------------|--------|
|                                                                 |  FOR                THE THREE MONTHS ENDED SEPTEMBER                30, 2005 |               | FOR                THE NINE MONTHS ENDED  SEPTEMBER                30, 2005 |           |
| (THOUSANDS,                EXCEPT PER SHARE AMOUNTS)                 |                                                                                   | PREVIOUSLYREPORTED |                                                                                  |  ADJUSTED |   | PREVIOUSLYREPORTED |   |  ADJUSTED |   |
| Other                operations                                      |                                                                                   | $                  | 22,724                                                                                |           | $      | 22,718 |   | $ | 66,215 |   | $ | 66,209 |   |
| Total                operating expenses                              |                                                                                   | $                  | 238,422                                                                               |           | $      | 238,416 |   | $ | 557,906 |   | $ | 557,900 |   |
| Operating                income                                      |                                                                                   | $                  | 45,234                                                                                |           | $      | 45,240 |   | $ | 91,974 |   | $ | 91,980 |   |
| Equity                income from investees                          |                                                                                   | $                  | 25,249                                                                                |           | $      | 200,986 |   | $ | 46,121 |   | $ | 221,859 |   |
| Income                from continuing operations before income taxes |                                                                                   | $                  | 64,282                                                                                |           | $      | 240,025 |   | $ | 113,097 |   | $ | 288,841 |   |
| Federal                and state income tax expense                  |                                                                                   | $                  | 21,948                                                                                |           | $      | 89,569 |   | $ | 40,490 |   | $ | 108,112 |   |
| Income                from continuing operations                     |                                                                                   | $                  | 42,334                                                                                |           | $      | 150,456 |   | $ | 72,607 |   | $ | 180,729 |   |
| Net                income                                            |                                                                                   | $                  | 42,309                                                                                |           | $      | 150,431 |   | $ | 72,377 |   | $ | 180,499 |   |
| Net                income applicable to common stock                 |                                                                                   | $                  | 41,858                                                                                |           | $      | 149,980 |   | $ | 71,003 |   | $ | 179,125 |   |
| **Basic                earnings per share**                          |                                                                                   |               |                                                                                  |           |   |   |   |   |   |   |   |   |   |
| From                continuing operations                            |                                                                                   | $                  | 0.82                                                                                  |           | $      | 2.92 |   | $ | 1.41 |   | $ | 3.50 |   |
| From                discontinued operations                          |                                                                                   | $                  | -                                                                                     |           | $      | - |   | $ | (0.01 | ) | $ | - |   |
| Net                income applicable to common stock                 |                                                                                   | $                  | 0.82                                                                                  |           | $      | 2.92 |   | $ | 1.40 |   | $ | 3.50 |   |
| **Diluted                earnings per share**                        |                                                                                   |               |                                                                                  |           |   |   |   |   |   |   |   |   |   |
| From                continuing operations                            |                                                                                   | $                  | 0.82                                                                                  |           | $      | 2.91 |   | $ | 1.41 |   | $ | 3.50 |   |
| From                discontinued operations                          |                                                                                   | $                  | -                                                                                     |           | $      | - |   | $ | (0.01 | ) | $ | - |   |
| Net                income applicable to common stock                 |                                                                                   | $                  | 0.82                                                                                  |           | $      | 2.91 |   | $ | 1.40 |   | $ | 3.50 |   |

| ***Statements                of Comprehensive Income*** |                                                                       |   |                                                                                  |
|---------------------------------------------------------|----------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|
|                                                    | FOR                THE THREE MONTHS ENDEDSEPTEMBER                30, 2005 |   | FOR                THE NINE MONTHS ENDED  SEPTEMBER                30, 2005 |
|  (THOUSANDS)                                       | PREVIOUSLY REPORTED                                                   |   |  ADJUSTED                                                                        |   | PREVIOUSLYREPORTED |   |    ADJUSTED |
| Net                income                               | $42,309                                                                    |   | $150,431                                                                              |   | $72,377 |   | $180,499 |
| Comprehensive                income, net of tax         | $42,270                                                                    |   | $150,392                                                                              |   | $72,312 |   | $180,434 |

| ***Statement                of Cash Flows***              |   |                                                                      |    |
|-----------------------------------------------------------|--------|---------------------------------------------------------------------------|---------|
|                                                      |   | FOR                THE NINE MONTHS ENDEDSEPTEMBER                30, 2005 |    |
|  (THOUSANDS)                                         |   | PREVIOUSLYREPORTED                                                        |    |  ADJUSTED |   |
| Net                income                                 |   | $                                                                         | 72,377  |   | $ | 180,499 |   |
| Income                from equity investments             |   | $                                                                         | (44,475 | ) | $ | (221,859 | ) |
| Net                deferred income taxes                  |   | $                                                                         | 24,739  |   | $ | 92,493 |   |
| Accounts                and notes receivable, affiliate   |   | $                                                                         | 338     |   | $ | (37,936 | ) |
| Accounts                and notes payable, affiliate      |   | $                                                                         | 9,872   |   | $ | 9,745 |   |
| Other                deferred accounts                    |   | $                                                                         | 2,100   |   | $ | 5,937 |   |
| Taxes                accrued                              |   | $                                                                         | 28,549  |   | $ | 69,171 |   |
| Other,                net                                 |   | $                                                                         | 747     |   | $ | (75 | ) |
| Net                cash provided by operating activities  |   | $                                                                         | 144,862 |   | $ | 144,903 |   |
| Net                decrease in cash and cash equivalents  |   | $                                                                         | (86,448 | ) | $ | (86,407 | ) |
| Cash                and cash equivalents at end of period |   | $                                                                         | 37,339  |   | $ | 37,380 |   |

|  ***Segment              Information***                  |   |                                                                       |   |                                                                                   |   |
|---------------------------------------------------------------|--------|----------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------|--------|
|                                                          |   | FOR                THE THREE MONTHS ENDEDSEPTEMBER                30, 2005 |   | FOR                THE THREE MONTHS ENDED  SEPTEMBER                30, 2005 |   |
|                                                          |   | MIDSTREAM                                                                  |   | CLECO                CONSOLIDATED                                                      |   |
|  (THOUSANDS)                                             |   | PREVIOUSLYREPORTED                                                         |   |  ADJUSTED                                                                         |   | PREVIOUSLYREPORTED |   |    ADJUSTED |   |
| Equity                income from investees                   |   | $                                                                          | 25,121 |                                                                                   | $      | 200,859 |   | $ | 25,249 |   | $ | 200,986 |   |
| Federal                and state income tax expense           |   | $                                                                          | 8,612  |                                                                                   | $      | 76,233 |   | $ | 21,948 |   | $ | 89,569 |   |
| Segment                profit from continuing operations, net |   | $                                                                          | 13,153 |                                                                                   | $      | 121,275 |   | $ | 42,334 |   | $ | 150,456 |   |
| Segment                profit                                 |   | $                                                                          | 13,128 |                                                                                   | $      | 121,250 |   | $ | 42,309 |   | $ | 150,431 |   |
| Net                income applicable to common stock          |   |                                                                       |   |                                                                                   |   |   |   | $ | 41,858 |   | $ | 149,980 |   |

|                                                          |   |                                                                      |   |                                                                                  |   |
|---------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|
|                                                          |   | FOR                THE NINE MONTHS ENDEDSEPTEMBER                30, 2005 |   | FOR                THE NINE MONTHS ENDED  SEPTEMBER                30, 2005 |   |
|                                                          |   | MIDSTREAM                                                                 |   | CLECO                CONSOLIDATED                                                     |   |
|  (THOUSANDS)                                             |   | PREVIOUSLY REPORTED                                                  |   | ADJUSTED                                                                              |   | PREVIOUSLYREPORTED |   |    ADJUSTED |   |
| Equity                income from investees                   |   | $                                                                         | 46,088 |                                                                                  | $      | 221,825 |   | $ | 46,121 |   | $ | 221,859 |   |
| Federal                and state income tax expense           |   | $                                                                         | 13,112 |                                                                                  | $      | 80,734 |   | $ | 40,490 |   | $ | 108,112 |   |
| Segment                profit from continuing operations, net |   | $                                                                         | 19,625 |                                                                                  | $      | 127,747 |   | $ | 72,607 |   | $ | 180,729 |   |
| Segment                profit                                 |   | $                                                                         | 19,395 |                                                                                  | $      | 127,517 |   | $ | 72,377 |   | $ | 180,499 |   |
| Net                income applicable to common stock          |   |                                                                      |   |                                                                                  |   |   |   | $ | 71,003 |   | $ | 179,125 |   |

----

|  ***Miscellaneous              Financial              Information*** |   |                                                                             |   |                                                                                  |   |
|---------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|
|                                                                      |   | FOR                THE THREE MONTHS ENDED SEPTEMBER                30, 2005 |   | FOR                THE THREE MONTHS ENDED  DECEMBER                31, 2005 |   |
| (THOUSANDS,                EXCEPT PER SHARE AMOUNTS)                      |   | PREVIOUSLY REPORTED                                                         |   |  ADJUSTED                                                                        |   | PREVIOUSLYREPORTED |   |  ADJUSTED |   |
| Operating                income                                           |   | $                                                                                | 45,234 |                                                                                  | $      | 45,240 |   | $ | 19,766 |   | $ | 19,754 |   |
| Net                income applicable to common stock                      |   | $                                                                                | 41,858 |                                                                                  | $      | 149,980 |   | $ | 109,776 |   | $ | 1,654 |   |
| Basic                net income per average common share                  |   | $                                                                                | 0.82   |                                                                                  | $      | 2.92 |   | $ | 2.14 |   | $ | 0.03 |   |
| Diluted                net income per average common share                |   | $                                                                                | 0.82   |                                                                                  | $      | 2.91 |   | $ | 2.12 |   | $ | 0.03 |   |

**Note      **

**3      — Regulatory Assets and Liabilities                                                                                  **

**Note      **

**4      — Disclosures about Segments                                                                                    **

----

| **SEGMENT              INFORMATION FOR THE THREE MONTHS ENDED SEPTEMBER 30,**      |   |                                                                        |          |          |   |        |     |
|------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------|---------------|---------------|--------|-------------|----------|
|                                                                               |   | **CLECO**                                                                   |          |          |   |        |     |   |   |   |   |
| 2006                (THOUSANDS)                                                    |   | **POWER**                                                                   |          | **MIDSTREAM** |   | **OTHER**   |     | **ELIMINATIONS** |   | **CONSOLIDATED** |   |
| Revenue                                                                            |   |                                                                        |          |          |   |        |     |   |   |   |   |
|                    Electric operations                              |   | **$**                                                                       | **284,490**   |          | **$**  | **-**       |     | **$** | **-** |   | **$** | **-** |   | **$** | **284,490** |   |
|                    Other operations                                 |   |                                                                        | **7,621**     |          |   | **21**      |     |   | **4** |   |   | **(2** | **)** |   | **7,644** |   |
|                    Electric customer credits                        |   |                                                                        | **-**         |          |   | **-**       |     |   | **-** |   |   | **-** |   |   | **-** |   |
| Affiliate                revenue                                                   |   |                                                                        | **13**        |          |   | **1,443**   |     |   | **513** |   |   | **-** |   |   | **1,969** |   |
| Intercompany                revenue                                                |   |                                                                        | **501**       |          |   |        |     |   | **12,079** |   |   | **(12,580** | **)** |   | **-** |   |
| Operating                revenue, net                                              |   | **$**                                                                       | **292,625**   |          | **$**  | **1,464**   |     | **$** | **12,596** |   | **$** | **(12,582** | **)** | **$** | **294,103** |   |
| Depreciation                expense                                                |   | **$**                                                                       | **23,353**    |          | **$**  | **76**      |     | **$** | **321** |   | **$** | **-** |   | **$** | **23,750** |   |
| Interest                charges                                                    |   | **$**                                                                       | **8,328**     |          | **$**  | **4,989**   |     | **$** | **1,946** |   | **$** | **(4,985** | **)** | **$** | **10,278** |   |
| Interest                income                                                     |   | **$**                                                                       | **1,559**     |          | **$**  | **-**       |     | **$** | **6,208** |   | **$** | **(4,985** | **)** | **$** | **2,782** |   |
| Equity                income (loss)                from investees                  |   | **$**                                                                       | **-**         |          | **$**  | **15,252**  |     | **$** | **(55** | **)** | **$** | **-** |   | **$** | **15,197** |   |
| Federal                and state income tax expense                                |   | **$**                                                                       | **11,428**    |          | **$**  | **6,276**   |     | **$** | **1,974** |   | **$** | **(328** | **)** | **$** | **19,350** |   |
| Segment                profit from continuing operations, net                      |   | **$**                                                                       | **21,556**    |          | **$**  | **3,810**   |     | **$** | **2,614** |   | **$** | **-** |   | **$** | **27,980** |   |
| Income                from discontinued operations                                 |   |                                                                        | **-**         |          |   | **36**      |     |   | **-** |   |   | **-** |   |   | **36** |   |
| Segment                profit (1)                                             |   | **$**                                                                       | **21,556**    |          | **$**  | **3,846**   |     | **$** | **2,614** |   | **$** | **-** |   | **$** | **28,016** |   |
| Additions                to long-lived assets                                      |   | **$**                                                                       | **85,182**    |          | **$**  | **-**       |     | **$** | **115** |   | **$** | **-** |   | **$** | **85,297** |   |
| Segment                assets                at                September 30, 2006  |   | **$**                                                                       | **1,876,731** |          | **$**  | **339,922** |     | **$** | **801,652** |   | **$** | **(613,211** | **)** | **$** | **2,405,094** |   |
| **(1)****Reconciliation                of segment profit to consolidated profit:** |   | **Segment              profit**                                             |          |          |   |        |     |   |   | **$** | **28,016** |   |   |   |   |
|                                                                                    |   | **Unallocated                items:**                                  |          |          |   |        |     |   |   |   |   |
|                                                                                    |   | **                   Preferred d****ividends**          |          |          |   |        | **(424** | **)** |   |   |   |
|                                                                                    |   | **Net                income applicable to co****mmon                stock** | **$**         | **27,592**    |   |        |     |   |

|                                                                                  |   |                                                        |      |      |   |    |   |         |    |         |    |
|---------------------------------------------------------------------------------------|--------|-------------------------------------------------------------|-----------|-----------|--------|---------|--------|--------------|---------|--------------|---------|
|                                                                                  |   | CLECO                                                       |      |      |   |    |   |         |    |         |    |
| 2005                (THOUSANDS)                                                       |   | POWER                                                       |      | MIDSTREAM |   | OTHER   |   | ELIMINATIONS |    | CONSOLIDATED |    |
|                                                                                  |   |                                                        |      | ADJUSTED  |   |    |   |         |    | ADJUSTED     |    |
| Revenue                                                                               |   |                                                        |      |      |   |    |   |         |    |         |    |
|                    Electric operations                                 |   | $                                                           | 267,958   |      | $      | -       |   | $            | -       |         | $       | - |   | $ | 267,958 |   |
|                    Other operations                                    |   |                                                        | 14,113    |      |   | 53      |   |         | 76      |         |    | (2 | ) |   | 14,240 |   |
|                    Electric customer credits                           |   |                                                        | (300      | )         |   | -       |   |         | -       |         |    | - |   |   | (300 | ) |
| Affiliate                revenue                                                      |   |                                                        | 7         |      |   | 1,053   |   |         | 698     |         |    | - |   |   | 1,758 |   |
| Intercompany                revenue                                                   |   |                                                        | 491       |      |   | 43      |   |         | 14,023  |         |    | (14,557 | ) |   | - |   |
| Operating                revenue, net                                                 |   | $                                                           | 282,269   |      | $      | 1,149   |   | $            | 14,797  |         | $       | (14,559 | ) | $ | 283,656 |   |
| Depreciation                expense                                                   |   | $                                                           | 14,765    |      | $      | 78      |   | $            | 339     |         | $       | - |   | $ | 15,182 |   |
| Interest                charges                                                       |   | $                                                           | 7,166     |      | $      | 3,938   |   | $            | 2,262   |         | $       | (3,939 | ) | $ | 9,427 |   |
| Interest                income                                                        |   | $                                                           | 1,089     |      | $      | -       |   | $            | 3,986   |         | $       | (3,939 | ) | $ | 1,136 |   |
| Equity                income from investees                                           |   | $                                                           | -         |      | $      | 200,859 |   | $            | 127     |         | $       | - |   | $ | 200,986 |   |
| Federal                and state income tax expense                                   |   | $                                                           | 12,842    |      | $      | 76,233  |   | $            | 531     |         | $       | (37 | ) | $ | 89,569 |   |
| Segment                profit from continuing operations, net                         |   | $                                                           | 27,183    |      | $      | 121,275 |   | $            | 1,998   |         | $       | - |   | $ | 150,456 |   |
| Loss                from discontinued operations, net of tax                          |   |                                                        | -         |      |   | (25     | )      |         | -       |         |    | - |   |   | (                25 | ) |
| Segment                profit (1)                                           |   | $                                                           | 27,183    |      | $      | 121,250 |   | $            | 1,998   |         | $       | - |   | $ | 150,431 |   |
| Additions                to long-lived assets                                         |   | $                                                           | 123,454   |      | $      | -       |   | $            | 230     |         | $       | - |   | $ | 123,684 |   |
| Segment                assets                at                December 31, 2005      |   | $                                                           | 1,765,934 |      | $      | 338,645 |   | $            | 658,914 |         | $       | (614,005 | ) | $ | 2,149,488 |   |
| (1)Reconciliation                of segment profit to consolidated profit (adjusted): |   | Segment                profit                               |      |      |   |    |   |         |    | $            | 150,431 |   |   |   |   |
|                                                                                       |   | Unallocated                items:                      |      |      |   |    |   |         |    |         |    |
|                                                                                  |   |                    Preferred dividends  |      |      |   |    | (451   | )            |    |         |    |
|                                                                                       |   | Net                income applicable to common stock        | $         | 149,980   |   |    |   |         |

----

| **SEGMENT                INFORMATION FOR THE****NINE MONTHS ENDED SEPTEMBER                30,** |   |                                                                        |          |          |   |        |       |
|--------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------|---------------|---------------|--------|-------------|------------|
|                                                                                             |   | **CLECO**                                                                   |          |          |   |        |       |   |   |   |   |
| 2006                (THOUSANDS)                                                                  |   | **POWER**                                                                   |          | **MIDSTREAM** |   | **OTHER**   |       | **ELIMINATIONS** |   | **CONSOLIDATED** |   |
| Revenue                                                                                          |   |                                                                        |          |          |   |        |       |   |   |   |   |
|                    Electric operations                                            |   | **$**                                                                       | **736,765**   |          | **$**  | **-**       |       | **$** | **-** |   | **$** | **-** |   | **$** | **736,765** |   |
|                    Other operations                                               |   |                                                                        | **22,052**    |          |   | **26**      |       |   | **107** |   |   | **(18** | **)** |   | **22,167** |   |
|                    Electric customer credits                                      |   |                                                                        | **4,382**     |          |   | **-**       |       |   | **-** |   |   | **-** |   |   | **4,382** |   |
| Affiliate                revenue                                                                 |   |                                                                        | **37**        |          |   | **3,630**   |       |   | **1,490** |   |   | **-** |   |   | **5,157** |   |
| Intercompany                revenue                                                              |   |                                                                        | **1,501**     |          |   | **-**       |       |   | **31,738** |   |   | **(33,239** | **)** |   | **-** |   |
| Operating                revenue, net                                                            |   | **$**                                                                       | **764,737**   |          | **$**  | **3,656**   |       | **$** | **33,335** |   | **$** | **(33,257** | **)** | **$** | **768,471** |   |
| Depreciation                expense                                                              |   | **$**                                                                       | **53,879**    |          | **$**  | **232**     |       | **$** | **997** |   | **$** | **-** |   | **$** | **55,108** |   |
| Interest                charges                                                                  |   | **$**                                                                       | **26,232**    |          | **$**  | **13,865**  |       | **$** | **5,862** |   | **$** | **(13,821** | **)** | **$** | **32,138** |   |
| Interest                income                                                                   |   | **$**                                                                       | **5,688**     |          | **$**  | **-**       |       | **$** | **15,350** |   | **$** | **(13,821** | **)** | **$** | **7,217** |   |
| Equity                income (loss)                from investees                                |   | **$**                                                                       | **-**         |          | **$**  | **30,934**  |       | **$** | **(132** | **)** | **$** | **-** |   | **$** | **30,802** |   |
| Federal                and state income tax expense                                              |   | **$**                                                                       | **26,287**    |          | **$**  | **9,514**   |       | **$** | **3,574** |   | **$** | **(452** | **)** | **$** | **38,923** |   |
| Segment                profit from continuing operations, net                                    |   | **$**                                                                       | **52,476**    |          | **$**  | **5,727**   |       | **$** | **5,332** |   | **$** | **-** |   | **$** | **63,535** |   |
| Loss                from discontinued operations                                                 |   |                                                                        | **-**         |          |   | **(154**    | **)**      |   | **-** |   |   | **-** |   |   | **(154** | **)** |
| Segment                profit (1)                                                           |   | **$**                                                                       | **52,476**    |          | **$**  | **5,573**   |       | **$** | **5,332** |   | **$** | **-** |   | **$** | **63,381** |   |
| Additions                to long-lived assets                                                    |   | **$**                                                                       | **207,499**   |          | **$**  | **13**      |       | **$** | **270** |   | **$** | **-** |   | **$** | **207,782** |   |
| Segment                assets                at                September 30, 2006                |   | **$**                                                                       | **1,876,731** |          | **$**  | **339,922** |       | **$** | **801,652** |   | **$** | **(613,211** | **)** | **$** | **2,405,094** |   |
| **(1)****Reconciliation                of segment profit to consolidated profit:**               |   | **Segment              profit**                                             |          |          |   |        |       |   |   | **$** | **63,381** |   |   |   |   |
|                                                                                                  |   | **Unallocated                items:**                                  |          |          |   |        |       |   |   |   |   |
|                                                                                                  |   | **Preferred                d****ividends**                             |          |          |   |        | **(1,310** | **)** |   |   |   |
|                                                                                                  |   | **Net                income applicable to co****mmon                stock** | **$**         | **62,071**    |   |        |       |   |

|                                                                                  |   |                                                       |      |      |   |    |   |         |    |         |    |
|---------------------------------------------------------------------------------------|--------|------------------------------------------------------------|-----------|-----------|--------|---------|--------|--------------|---------|--------------|---------|
|                                                                                  |   | CLECO                                                      |      |      |   |    |   |         |    |         |    |
| 2005                (THOUSANDS)                                                       |   | POWER                                                      |      | MIDSTREAM |   | OTHER   |   | ELIMINATIONS |    | CONSOLIDATED |    |
|                                                                                  |   |                                                       |      | ADJUSTED  |   |    |   |         |    | ADJUSTED     |    |
| Revenue                                                                               |   |                                                       |      |      |   |    |   |         |    |         |    |
|                    Electric operations                                 |   | $                                                          | 614,670   |      | $      | -       |   | $            | -       |         | $       | - |   | $ | 614,670 |   |
|                    Other operations                                    |   |                                                       | 29,228    |      |   | 93      |   |         | 177     |         |    | (5 | ) |   | 29,493 |   |
|                    Electric customer credits                           |   |                                                       | (771      | )         |   | -       |   |         | -       |         |    | - |   |   | (771 | ) |
| Affiliate                revenue                                                      |   |                                                       | 22        |      |   | 4,069   |   |         | 2,397   |         |    | - |   |   | 6,488 |   |
| Intercompany                revenue                                                   |   |                                                       | 1,467     |      |   | 42      |   |         | 36,278  |         |    | (37,787 | ) |   | - |   |
| Operating                revenue, net                                                 |   | $                                                          | 644,616   |      | $      | 4,204   |   | $            | 38,852  |         | $       | (37,792 | ) | $ | 649,880 |   |
| Depreciation                expense                                                   |   | $                                                          | 43,824    |      | $      | 237     |   | $            | 998     |         | $       | - |   | $ | 45,059 |   |
| Interest                charges                                                       |   | $                                                          | 20,671    |      | $      | 11,171  |   | $            | 11,112  |         | $       | (11,072 | ) | $ | 31,882 |   |
| Interest                income                                                        |   | $                                                          | 2,233     |      | $      | -       |   | $            | 11,811  |         | $       | (11,057 | ) | $ | 2,987 |   |
| Equity                income from investees                                           |   | $                                                          | -         |      | $      | 221,825 |   | $            | 34      |         | $       | - |   | $ | 221,859 |   |
| Federal                and state income tax expense (benefit)                         |   | $                                                          | 28,299    |      | $      | 80,734  |   | $            | (881    | )            | $       | (40 | ) | $ | 108,112 |   |
| Segment                profit from continuing operations, net                         |   | $                                                          | 52,117    |      | $      | 127,747 |   | $            | 865     |         | $       | - |   | $ | 180,729 |   |
| Loss                from discontinued operations, net of tax                          |   |                                                       | -         |      |   | (230    | )      |         | -       |         |    | - |   |   | (230 | ) |
| Segment                profit (1)                                           |   | $                                                          | 52,117    |      | $      | 127,517 |   | $            | 865     |         | $       | - |   | $ | 180,499 |   |
| Additions                to long-lived assets                                         |   | $                                                          | 167,475   |      | $      | 8       |   | $            | 685     |         | $       | - |   | $ | 168,168 |   |
| Segment                assets                at                December 31, 2005      |   | $                                                          | 1,765,934 |      | $      | 338,645 |   | $            | 658,914 |         | $       | (614,005 | ) | $ | 2,149,488 |   |
| (1)Reconciliation                of segment profit to consolidated profit (adjusted): |   | Segment              profit                                |      |      |   |    |   |         |    | $            | 180,499 |   |   |   |   |
|                                                                                       |   | Unallocated                items:                          |      |      |   |    |   |         |    |         |    |
|                                                                                       |   | Preferred                dividends                         |      |      |   |    | (1,374 | )            |    |         |    |
|                                                                                       |   | Net                income applicable to common stock  | $         | 179,125   |   |    |   |         |

**Note      **

**5      — **

**Equity      Investment in Investees                                                                                    **

----

|                                                  |                                                          |     |       |
|-------------------------------------------------------|---------------------------------------------------------------|----------|------------|
|                                                  |  FOR                THE THREE MONTHS ENDED SEPTEMBER 30, |     |
| (THOUSANDS)                                           |                                                          | **2006** |       | 2005 |   |
|                                                  |                                                          |     |       | ADJUSTED |   |
| APH                                                   |                                                          | **$**    | **1,458**  |   | $ | 8,537 |   |
| Attala                                                |                                                          |     | **240**    |   |   | - |   |
| Evangeline                                            |                                                          |     | **13,283** |   |   | 16,584 |   |
| Perryville                                            |                                                          |     | **272**    |   |   | 175,738 |   |
| Other                                                 |                                                          |     | **(56**    | **)** |   | 127 |   |
|                    Total equity income |                                                          | **$**    | **15,197** |   | $ | 200,986 |   |

|                                                  |   |                                                   |       |
|-------------------------------------------------------|--------|--------------------------------------------------------|------------|
|                                                  |   | FOR                THE NINE MONTHS ENDED SEPTEMBER 30, |       |
| (THOUSANDS)                                           |   | **2006**                                               |       | 2005 |   |
|                                                  |   |                                                   |       | ADJUSTED |   |
| APH                                                   |   | **$**                                                  | **13,295** |   | $ | 24,451 |   |
| Attala                                                |   |                                                   | **666**    |   |   | - |   |
| Evangeline                                            |   |                                                   | **14,894** |   |   | 21,637 |   |
| Perryville                                            |   |                                                   | **2,078**  |   |   | 175,738 |   |
| Other                                                 |   |                                                   | **(131**   | **)** |   | 33 |   |
|                    Total equity income |   | **$**                                                  | **30,802** |   | $ | 221,859 |   |

***Acadia***

|                                                                                          |   |                                |        |                           |   |
|-----------------------------------------------------------------------------------------------|--------|-------------------------------------|-------------|--------------------------------|--------|
|                                                                                          |   | **AT                SEPTEMBER 30,** |        | AT                DECEMBER 31, |   |
| INCEPTION                TO DATE (THOUSANDS)                                                  |   | **2006**                            |        | 2005                           |   |
| Contributed                assets (cash and land)                                             |   | **$**                               | **250,612** |                           | $      | 250,612 |   |
| Income                before taxes                                                            |   |                                | **110,009** |                           |   | 96,714 |   |
| Capitalized                interest and other                                                 |   |                                | **19,469**  |                           |   | 19,469 |   |
|                    Less: Cash distributions                                    |   |                                | **136,464** |                           |   | 121,464 |   |
|                        Total equity investment in investee |   | **$**                               | **243,626** |                           | $      | 245,331 |   |

|                                                                            |   |                                |        |                           |   |
|---------------------------------------------------------------------------------|--------|-------------------------------------|-------------|--------------------------------|--------|
|                                                                            |   | **AT                SEPTEMBER 30,** |        | AT                DECEMBER 31, |   |
| (THOUSANDS)                                                                     |   | **2006**                            |        | 2005                           |   |
| Current                assets                                                   |   | **$**                               | **15,879**  |                           | $      | 6,258 |   |
| Property,                plant and equipment, net                               |   |                                | **436,930** |                           |   | 451,759 |   |
| Other                assets                                                     |   |                                | **-**       |                           |   | 624 |   |
|                    Total assets                                  |   | **$**                               | **452,809** |                           | $      | 458,641 |   |
| Current                liabilities                                              |   | **$**                               | **4,023**   |                           | $      | 6,878 |   |
| Other                liabilities                                                |   |                                | **458**     |                           |   | - |   |
| Partners’                capital                                          |   |                                | **448,328** |                           |   | 451,763 |   |
|                    Total liabilities and partners’ capital |   | **$**                               | **452,809** |                           | $      | 458,641 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                  |       |                                                                 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|------------|----------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | FOR                THE THREE MONTHS ENDEDSEPTEMBER                30, |       | FOR                THE NINE MONTHS ENDEDSEPTEMBER                30, |   |
| (THOUSANDS)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | **2006**                                                              |       | 2005                                                                 |   | **2006** |   | 2005 |   |
| Total                revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | **$**                                                                 | **65,918** |                                                                 | $      | 17,790 |   | **$** | **125,414** |   | $ | 54,342 |   |
| Total                operating expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                  | **50,698** |                                                                 |   | 4,239 |   |   | **115,349** |   |   | 15,984 |   |
| Other                income                (expense)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                                                  | **(119**   | **)**                                                                |   | 25 |   |   | **1,501** |   |   | 47 |   |
|                    Income (loss)  before                taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | **$**                                                                 | **15,101** |  *****                                                          | $      | 13,576 |   | **$** | **11,566** |  ****** | $ | 38,405 |   |
|  *The                $15.1 million income before taxes for the three months ended September                30,                2006, includes the $12.2 million draw against the letter of credit                which                was allocated 100% to APH earnings.**The                $11.6 million income before taxes for the nine months ended September                30,                2006, includes the $15.0 million in draws against the letter of credit                which was allocated 100% to APH                earnings. |

***Attala***

----

|                                                                                          |                                           |   |
|-----------------------------------------------------------------------------------------------|------------------------------------------------|--------|
| INCEPTION                TO DATE (THOUSANDS)                                                  |  **AT                SEPTEMBER 30, 2006** |   |
| Contributed                assets (cash)                                                      |                                           | **$**  | **7,006** |   |
| Income                before taxes                                                            |                                           |   | **666** |   |
|                    Less: distributions                                         |                                           |   | **780** |   |
|                        Total equity investment in investee |                                           | **$**  | **6,892** |   |

|                                                                          |                                           |   |
|-------------------------------------------------------------------------------|------------------------------------------------|--------|
| (THOUSANDS)                                                                   |  **AT                SEPTEMBER 30, 2006** |   |
| Current                assets                                                 |                                           | **$**  | **15** |   |
| Accounts                receivable - affiliate                                |                                           |   | **-** |   |
| Other                assets                                                   |                                           |   | **6,926** |   |
|                    Total assets                                |                                           | **$**  | **6,941** |   |
| Current                liabilities                                            |                                           | **$**  | **60** |   |
| Accounts                payable - affiliate                                   |                                           |   | **15** |   |
| Other                liabilities                                              |                                           |   | **75** |   |
| Member’s                equity                                          |                                           |   | **6,791** |   |
|                    Total liabilities and member’s equity |                                           | **$**  | **6,941** |   |

|                               |   |                                          |    |                                         |   |
|------------------------------------|--------|-----------------------------------------------|---------|----------------------------------------------|--------|
|                               |   | **FOR                THE THREE MONTHS ENDED** |    | **FOR                THE NINE MONTHS ENDED** |   |
| (THOUSANDS)                        |   | **SEPTEMBER                30, 2006**         |    | **SEPTEMBER                30, 2006**        |   |
| Operating                revenue   |   | **$**                                         | **260** |                                         | **$**  | **728** |   |
| Operating                expenses  |   |                                          | **20**  |                                         |   | **62** |   |
| Income                before taxes |   | **$**                                         | **240** |                                         | **$**  | **666** |   |

***Evangeline***

|                                                                                          |   |                                |        |                           |   |
|-----------------------------------------------------------------------------------------------|--------|-------------------------------------|-------------|--------------------------------|--------|
|                                                                                          |   | **AT                SEPTEMBER 30,** |        | AT                DECEMBER 31, |   |
| INCEPTION                TO DATE (THOUSANDS)                                                  |   | **2006**                            |        | 2005                           |   |
| Contributed                assets (cash)                                                      |   | **$**                               | **43,580**  |                           | $      | 43,580 |   |
| Income                before taxes                                                            |   |                                | **138,714** |                           |   | 123,819 |   |
|                    Less: distributions                                         |   |                                | **111,046** |                           |   | 107,887 |   |
|                        Total equity investment in investee |   | **$**                               | **71,248**  |                           | $      | 59,512 |   |

|                                                                           |   |                                |        |                           |   |
|--------------------------------------------------------------------------------|--------|-------------------------------------|-------------|--------------------------------|--------|
|                                                                           |   | **AT                SEPTEMBER 30,** |        | AT                DECEMBER 31, |   |
| (THOUSANDS)                                                                    |   | **2006**                            |        | 2005                           |   |
| Current                assets                                                  |   | **$**                               | **20,270**  |                           | $      | 19,142 |   |
| Accounts                receivable - affiliate                                 |   |                                | **6,914**   |                           |   | 146 |   |
| Property,                plant and equipment, net                              |   |                                | **190,111** |                           |   | 194,159 |   |
| Other                assets                                                    |   |                                | **47,186**  |                           |   | 46,728 |   |
|                    Total assets                                 |   | **$**                               | **264,481** |                           | $      | 260,175 |   |
| Current                liabilities                                             |   | **$**                               | **11,546**  |                           | $      | 16,649 |   |
| Accounts                payable - affiliate                                    |   |                                | **4,901**   |                           |   | 475 |   |
| Long-term                debt                                                  |   |                                | **177,064** |                           |   | 184,716 |   |
| Other                liabilities                                               |   |                                | **65,612**  |                           |   | 59,568 |   |
| Member’s                equity (deficit)                                 |   |                                | **5,358**   |                           |   | (1,233 | ) |
|                    Total liabilities and member’s deficit |   | **$**                               | **264,481** |                           | $      | 260,175 |   |

|                               |   |                                                                  |       |                                                                             |   |
|------------------------------------|--------|-----------------------------------------------------------------------|------------|----------------------------------------------------------------------------------|--------|
|                               |   | FOR                THE THREE MONTHS ENDEDSEPTEMBER                30, |       | FOR                THE NINE MONTHS ENDED  SEPTEMBER                30, |   |
| (THOUSANDS)                        |   | **2006**                                                              |       | 2005                                                                             |   | **200****6** |   | 2005 |   |
| Operating                revenue   |   | **$**                                                                 | **24,814** |                                                                             | $      | 26,538 |   | **$** | **47,835** |   | $ | 48,243 |   |
| Operating                expenses  |   |                                                                  | **5,740**  |                                                                             |   | 4,559 |   |   | **16,535** |   |   | 10,118 |   |
| Depreciation                       |   |                                                                  | **1,305**  |                                                                             |   | 1,298 |   |   | **3,912** |   |   | 3,887 |   |
| Interest                charges    |   |                                                                  | **4,208**  |                                                                             |   | 4,313 |   |   | **12,677** |   |   | 13,061 |   |
| Other                income        |   |                                                                  | **379**    |                                                                             |   | 233 |   |   | **981** |   |   | 533 |   |
| Other                expense       |   |                                                                  | **657**    |                                                                             |   | 17 |   |   | **798** |   |   | 73 |   |
| Income                before taxes |   | **$**                                                                 | **13,283** |                                                                             | $      | 16,584 |   | **$** | **14,894** |   | $ | 21,637 |   |

***Perryville***

|                                                                                          |   |                                |        |                           |   |
|-----------------------------------------------------------------------------------------------|--------|-------------------------------------|-------------|--------------------------------|--------|
|                                                                                          |   | **AT                SEPTEMBER 30,** |        | AT                DECEMBER 31, |   |
| INCEPTION                TO DATE (THOUSANDS)                                                  |   | **2006**                            |        | 2005                           |   |
| Contributed                assets (cash)                                                      |   | **$**                               | **102,174** |                           | $      | 102,174 |   |
| Income                before taxes                                                            |   |                                | **50,039**  |                           |   | 47,960 |   |
|                    Less: distributions                                         |   |                                | **146,766** |                           |   | 137,424 |   |
|                        Total equity investment in investee |   | **$**                               | **5,447**   |                           | $      | 12,710 |   |

----

|                                                                          |   |                                |       |                           |   |
|-------------------------------------------------------------------------------|--------|-------------------------------------|------------|--------------------------------|--------|
|                                                                          |   | **AT                SEPTEMBER 30,** |       | AT                DECEMBER 31, |   |
| (THOUSANDS)                                                                   |   | **2006**                            |       | 2005                           |   |
| Current                assets                                                 |   | **$**                               | **46**     |                           | $      | 9,249 |   |
| Accounts                receivable - affiliate                                |   |                                | **290**    |                           |   | 43 |   |
| Other                assets                                                   |   |                                | **19,096** |                           |   | 14,035 |   |
|                    Total assets                                |   | **$**                               | **19,432** |                           | $      | 23,327 |   |
| Current                liabilities                                            |   | **$**                               | **7,981**  |                           | $      | 7,365 |   |
| Accounts                payable - affiliate                                   |   |                                | **2,096**  |                           |   | 111 |   |
| Other                liabilities                                              |   |                                | **328**    |                           |   | 329 |   |
| Member’s                equity                                          |   |                                | **9,027**  |                           |   | 15,522 |   |
|                    Total liabilities and member’s equity |   | **$**                               | **19,432** |                           | $      | 23,327 |   |

|                                   |   |                                                                  |    |                                                                             |   |
|----------------------------------------|--------|-----------------------------------------------------------------------|---------|----------------------------------------------------------------------------------|--------|
|                                   |   | FOR                THE THREE MONTHS ENDEDSEPTEMBER                30, |    | FOR                THE NINE MONTHS ENDED  SEPTEMBER                30, |   |
| (THOUSANDS)                            |   | **2006**                                                              |    | 2005                                                                             |   | **200****6** |   | 2005 |   |
| Operating                revenue       |   | **$**                                                                 | **264** |                                                                             | $      | 264 |   | **$** | **792** |   | $ | 10,052 |   |
| Operating                expenses      |   |                                                                  | **(8**  | **)**                                                                            |   | 1,035 |   |   | **(1,111** | **)** |   | 8,637 |   |
| Depreciation                           |   |                                                                  | **-**   |                                                                             |   | - |   |   | **-** |   |   | 3,135 |   |
| Interest                charges        |   |                                                                  | **-**   |                                                                             |   | - |   |   | **(108** | **)** |   | 5,459 |   |
| Interest                income         |   |                                                                  | **-**   |                                                                             |   | 601 |   |   | **67** |   |   | 728 |   |
| Gain                on sales of assets |   |                                                                  | **-**   |                                                                             |   | - |   |   | **-** |   |   | 10,110 |   |
| Other                income            |   |                                                                  | **-**   |                                                                             |   | 206,950 |   |   | **-** |   |   | 206,950 |   |
| Other                expense           |   |                                                                  | **-**   |                                                                             |   | 27,129 |   |   | **-** |   |   | 27,136 |   |
| Income                before taxes     |   | **$**                                                                 | **272** |                                                                             | $      | 179,651 |   | **$** | **2,078** |   | $ | 183,473 |   |

**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      — Common Stock Issuance                                                                                       **

**Note      **

**8      —**

**      Electric Customer Credits                                                                                      **

----

|                                                                    |   |                                |      |                           |   |
|-------------------------------------------------------------------------|--------|-------------------------------------|-----------|--------------------------------|--------|
|                                                                    |   | **AT                SEPTEMBER 30,** |      | AT                DECEMBER 31, |   |
| (THOUSANDS)                                                             |   | **2006**                            |      | 2005                           |   |
| Provision                for rate refund                                |   | **$**                               | **2,371** |                           | $      | 7,927 |   |
| Other                deferred                credits                    |   |                                | **3,047** |                           |   | 3,154 |   |
|                    Total customer                credits |   | **$**                               | **5,418** |                           | $      | 11,081 |   |

**Note**

**      9 — Litigation and Other Commitments and Contingencies                                                                    **

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

----

***Off-Balance      Sheet Commitments***

|                                                                                                                                                           |   |   |        |       |   |        |   |                                     |        |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------|------------|--------|-------------|--------|------------------------------------------|-------------|
|                                                                                                                                                           |   |   |        |       |   |        |   | AT                SEPTEMBER 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** |   |
|                    Guarantees                issued to purchasers of the assets of Cleco Energy                                                 |   |   | **1,400**   |       |   | **-**       |   |                                     | **1,400**   |   |   | **1,400** |   |
|                    Obligations                under standby letter of credit issued to Evangeline Tolling Agreement                counterparty |   |   | **15,000**  |       |   | **-**       |   |                                     | **15,000**  |   |   | **15,000** |   |
|                    Guarantee                issued to Central Mississippi Generating Co. on behalf of Attala                                    |   |   | **363**     |       |   | **-**       |   |                                     | **363**     |   |   | **363** |   |
|                    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**     |   |   | **-** |   |
|                    Obligations                under Lignite Mining Agreement                                                                    |   |   | **14,043**  |       |   | **-**       |   |                                     | **14,043**  |   |   | **-** |   |
|                        Total                                                                                                |   | **$**  | **309,231** |       | **$**  | **135,000** |   | **$**                                    | **174,231** |   | **$** | **17,591** |   |

----

|                                                           |   |      |        |                                                      |   |                     |   |                                 |    |
|----------------------------------------------------------------|--------|-----------|-------------|-----------------------------------------------------------|--------|--------------------------|--------|--------------------------------------|---------|
|                                                           |   |      |        |                                                      |   |                     |   | AT                SEPTEMBER 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                                                     |   | **$**     | **158,706** |                                                      | **$**  | **363**                  |   | **$**                                | **400** |   | **$** | **101,000** |   | **$** | **56,943** |   |
| Standby                letters of credit                       |   |      | **15,525**  |                                                      |   | **525**                  |   |                                 | **-**   |   |   | **-** |   |   | **15,000** |   |
|                    Total commercial commitments |   | **$**     | **174,231** |                                                      | **$**  | **888**                  |   | **$**                                | **400** |   | **$** | **101,000** |   | **$** | **71,943** |   |

***Acadia***

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

**General      Electric Services Corporation**

**CBL      Capital Corporation**

----

**Other**

**Fuel      Audit**

***Risks      and Uncertainties***

**Cleco      Corporation**

| §   | 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 ($184.7 million at                September 30, 2006) and interest to be immediately due and payable,                which                could result in: |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| §   | Cleco                seeking to refinance the bonds, the terms of which may be less favorable                than existing terms; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------|
| §   | Evangeline                seeking protection under federal bankruptcy laws;                or |
|--------------------|-----------------------------------------------------------------------------------------------|
| §   | the                trustee of the bonds foreclosing on the mortgage and assuming ownership                of                the Evangeline plant; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|
| §   | 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      **

**10      — Disclosures about Guarantees                                                                                   **

----

**Note      11 — Debt                                                                                                  **

***Cleco***

***Cleco      Power***

***Credit      Facilities***

**Note      1**

**2      — Pension Plan and Employee Benefits                                                                                **

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

|                                                                           |   |                                                    |       |                          |   |
|--------------------------------------------------------------------------------|--------|---------------------------------------------------------|------------|-------------------------------|--------|
|                                                                           |   | PENSION                BENEFITS                         |       | OTHER                BENEFITS |   |
|                                                                           |   | FOR                THE THREE MONTHS ENDED SEPTEMBER 30, |       |
| (THOUSANDS)                                                                    |   | **2006**                                                |       | 2005                          |   | **2006** |   | 2005 |   |
| Components                of periodic benefit  costs                 |   |                                                    |       |                          |   |   |   |   |   |
|                    Service cost                                 |   | **$**                                                   | **1,960**  |                          | $      | 1,718 |   | **$** | **384** |   | $ | 654 |   |
|                    Interest cost                                |   |                                                    | **3,606**  |                          |   | 3,339 |   |   | **424** |   |   | 594 |   |
|                    Expected return on plan assets               |   |                                                    | **(4,571** | **)**                         |   | (4,593 | ) |   | **-** |   |   | - |   |
|                    Amortization of transition  obligation  |   |                                                    | **-**      |                          |   | - |   |   | **5** |   |   | - |   |
|                    Prior period service cost  amortization |   |                                                    | **243**    |                          |   | 246 |   |   | **(516** | **)** |   | (188 | ) |
|                    Net loss amortization                        |   |                                                    | **636**    |                          |   | 265 |   |   | **217** |   |   | 304 |   |
|                    Net periodic benefit cost                    |   | **$**                                                   | **1,874**  |                          | $      | 975 |   | **$** | **514** |   | $ | 1,364 |   |

----

|                                                                           |   |                                                   |        |                          |   |
|--------------------------------------------------------------------------------|--------|--------------------------------------------------------|-------------|-------------------------------|--------|
|                                                                           |   | PENSION                BENEFITS                        |        | OTHER                BENEFITS |   |
|                                                                           |   | FOR                THE NINE MONTHS ENDED SEPTEMBER 30, |        |
| (THOUSANDS)                                                                    |   | **2006**                                               |        | 2005                          |   | **2006** |   | 2005 |   |
| Components                of periodic benefit  costs                 |   |                                                   |        |                          |   |   |   |   |   |
|                    Service cost                                 |   | **$**                                                  | **5,881**   |                          | $      | 5,115 |   | **$** | **1,153** |   | $ | 1,962 |   |
|                    Interest cost                                |   |                                                   | **10,817**  |                          |   | 9,993 |   |   | **1,271** |   |   | 1,783 |   |
|                    Expected return on plan assets               |   |                                                   | **(13,714** | **)**                         |   | (13,776 | ) |   | **-** |   |   | - |   |
|                    Amortization of transition  obligation  |   |                                                   | **-**       |                          |   | - |   |   | **15** |   |   | - |   |
|                    Prior period service cost  amortization |   |                                                   | **729**     |                          |   | 739 |   |   | **(1,549** | **)** |   | (567 | ) |
|                    Net loss amortization                        |   |                                                   | **1,908**   |                          |   | 773 |   |   | **650** |   |   | 913 |   |
|                    Net periodic benefit cost                    |   | **$**                                                  | **5,621**   |                          | $      | 2,844 |   | **$** | **1,540** |   | $ | 4,091 |   |

***SERP***

|                                                  |   |                                                                  |    |                                                                 |   |
|-------------------------------------------------------|--------|-----------------------------------------------------------------------|---------|----------------------------------------------------------------------|--------|
|                                                  |   | FOR                THE THREE MONTHS ENDEDSEPTEMBER                30, |    | FOR                THE NINE MONTHS ENDEDSEPTEMBER                30, |   |
| (THOUSANDS)                                           |   | **2006**                                                              |    | 2005                                                                 |   | **200****6** |   | 2005 |   |
| Components                of periodic benefit costs   |   |                                                                  |    |                                                                 |   |   |   |   |   |
| Service                cost                           |   | **$**                                                                 | **345** |                                                                 | $      | 320 |   | **$** | **1,035** |   | $ | 961 |   |
| Interest                cost                          |   |                                                                  | **397** |                                                                 |   | 348 |   |   | **1,190** |   |   | 1,042 |   |
| Prior                period service cost amortization |   |                                                                  | **13**  |                                                                 |   | 13 |   |   | **40** |   |   | 40 |   |
| Net                loss amortization                  |   |                                                                  | **209** |                                                                 |   | 174 |   |   | **627** |   |   | 522 |   |
| Net                periodic benefit cost              |   | **$**                                                                 | **964** |                                                                 | $      | 855 |   | **$** | **2,892** |   | $ | 2,565 |   |

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

----

|                                                                                       |   |                                                                  |    |
|--------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|---------|
|                                                                                       |   | FOR                THE THREE MONTHS ENDEDSEPTEMBER                30, |    |
| (THOUSANDS)                                                                                |   | **2006**                                                              |    | 2005 |   |
| 401(k)                Plan expense                                                         |   | **$**                                                                 | **662** |   | $ | 227 |   |
| Dividend                requirements to ESOP on convertible                preferred stock |   | **$**                                                                 | **413** |   | $ | 451 |   |
| Interest                incurred                by ESOP on its indebtedness                |   | **$**                                                                 | **-**   |   | $ | 43 |   |

|                                                                                       |   |                                                                 |      |
|--------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------|-----------|
|                                                                                       |   | FOR                THE NINE MONTHS ENDEDSEPTEMBER                30, |      |
| (THOUSANDS)                                                                                |   | **2006**                                                             |      | 2005 |   |
| 401(k)                Plan expense                                                         |   | **$**                                                                | **1,338** |   | $ | 983 |   |
| Dividend                requirements to ESOP on convertible                preferred stock |   | **$**                                                                | **1,276** |   | $ | 1,386 |   |
| Interest                incurred                by ESOP on its indebtedness                |   | **$**                                                                | **8**     |   | $ | 128 |   |

**Note      1**

**3      — Income Taxes                                                                                                      **

|                                                |                                                                  |
|-----------------------------------------------------|-----------------------------------------------------------------------|
|                                                | FOR                THE THREE MONTHS ENDEDSEPTEMBER                30, |
|                                                | **2006**                                                              |   | 2005 |
| **Effective                income tax rates**       |                                                                  |   |   |
|                    Cleco Corporation | **40.9                %**                                             |   | 37.3                %* |
|                    Cleco Power       | **34.6                %**                                             |   | 32.1                %   |
| *Adjusted                                           |                                                                  |   |   |

|                                                |                                                                 |
|-----------------------------------------------------|----------------------------------------------------------------------|
|                                                | FOR                THE NINE MONTHS ENDEDSEPTEMBER                30, |
|                                                | **2006**                                                             |   | 2005 |
| **Effective                income tax rates**       |                                                                 |   |   |
|                    Cleco Corporation | **38.0                %**                                            |   | 37.4                %* |
|                    Cleco Power       | **33.4                %**                                            |   | 35.2                %   |
| *Adjusted                                           |                                                                 |   |   |

**Note      1**

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

**Note      1**

**5      — Affiliate Transactions                                                                                         **

----

**Note      1**

**6      — Calpine Bankruptcy                                                                                        **

***Background***

***Bankruptcy***
**      Proceedings**

***Outstanding      Claims***

***Letter      of Credit***

***Other***

----

**ITEM      2.**

**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 September 30, 2006, **
**and      2005**

| **Cleco              Consolidated**             |   |     |        |                                                    |   |
|------------------------------------------------------|--------|----------|-------------|---------------------------------------------------------|--------|
|                                                 |   |     |        | FOR                THE THREE MONTHS ENDED SEPTEMBER 30, |   |
|                                                 |   |     |        |                                                    |   | FAVORABLE/(UNFAVORABLE) |   |
| (THOUSANDS)                                          |   | **2006** |        | 2005                                                    |   | VARIANCE |   | CHANGE |   |
|                                                 |   |     |        | ADJUSTED                                                |   |   |   |   |   |
| Operating                revenue, net                |   | **$**    | **294,103** |                                                    | $      | 283,656 |   | $ | 10,447 |   |   | 3.68 |  % |
| Operating                expenses                    |   |     | **256,903** |                                                    |   | 238,416 |   |   | (18,487 | ) |   | (7.75 | )% |
| Operating                income                      |   | **$**    | **37,200**  |                                                    | $      | 45,240 |   | $ | (8,040 | ) |   | (17.77 | )% |
| Equity                income from investees     |   | **$**    | **15,197**  |                                                    | $      | 200,986 |   | $ | (185,789 | ) |   | (92.44 | )% |
| Net                income applicable to common stock |   | **$**    | **27,592**  |                                                    | $      | 149,980 |   | $ | (122,388 | ) |   | (81.60 | )% |

**Cleco      Power**

| §   | lower                other operations revenue, |
|--------------------|------------------------------------------------|

| §   | higher                other operations expense, and |
|--------------------|-----------------------------------------------------|

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

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

| §   | higher                allowance for other funds used during construction. |
|--------------------|---------------------------------------------------------------------------|

----

|                                                                                                       |   |     |        |                                                    |   |
|------------------------------------------------------------------------------------------------------------|--------|----------|-------------|---------------------------------------------------------|--------|
|                                                                                                       |   |     |        | FOR                THE THREE MONTHS ENDED SEPTEMBER 30, |   |
|                                                                                                       |   |     |        |                                                    |   | FAVORABLE/(UNFAVORABLE) |   |
| (THOUSANDS)                                                                                                |   | **2006** |        | 2005                                                    |   | VARIANCE |   | CHANGE |   |
| Operating                revenue                                                                           |   |     |        |                                                    |   |   |   |   |   |
|                    Base                                                                     |   | **$**    | **103,149** |                                                    | $      | 95,070 |   | $ | 8,079 |   |   | 8.50 |  % |
|                    Fuel cost recovery                                                       |   |     | **181,341** |                                                    |   | 172,888 |   |   | 8,453 |   |   | 4.89 |  % |
|                    Electric customer credits                                                |   |     | **-**       |                                                    |   | (300 | ) |   | 300 |   |   | 100.00 |  % |
|                    Other operations                                                         |   |     | **7,621**   |                                                    |   | 14,113 |   |   | (6,492 | ) |   | (46.00 | )% |
|                    Affiliate revenue                                                        |   |     | **13**      |                                                    |   | 7 |   |   | 6 |   |   | 85.71 |  % |
|                    Intercompany revenue                                                     |   |     | **501**     |                                                    |   | 491 |   |   | 10 |   |   | 2.04 |  % |
|                        Operating revenue, net                           |   |     | **292,625** |                                                    |   | 282,269 |   |   | 10,356 |   |   | 3.67 |  % |
| Operating                expenses                                                                          |   |     |        |                                                    |   |   |   |   |   |   |   |   |   |
|                    Fuel used for electric  generation                - recoverable     |   |     | **77,730**  |                                                    |   | 53,982 |   |   | (23,748 | ) |   | (43.99 | )% |
|                    Power purchased for utility  customers                - recoverable |   |     | **103,732** |                                                    |   | 118,654 |   |   | 14,922 |   |   | 12.58 |  % |
|                    Non-recoverable fuel and  power                purchased            |   |     | **6,105**   |                                                    |   | 6,290 |   |   | 185 |   |   | 2.94 |  % |
|                    Other operations                                                         |   |     | **25,323**  |                                                    |   | 23,193 |   |   | (2,130 | ) |   | (9.18 | )% |
|                    Maintenance                                                              |   |     | **7,981**   |                                                    |   | 8,948 |   |   | 967 |   |   | 10.81 |  % |
|                    Depreciation                                                             |   |     | **23,353**  |                                                    |   | 14,765 |   |   | (8,588 | ) |   | (58.16 | )% |
|                    Taxes other than income  taxes                                      |   |     | **10,576**  |                                                    |   | 10,424 |   |   | (152 | ) |   | (1.46 | )% |
|                        Total operating expenses                         |   |     | **254,800** |                                                    |   | 236,256 |   |   | (18,544 | ) |   | (7.85 | )% |
| Operating                income                                                                            |   | **$**    | **37,825**  |                                                    | $      | 46,013 |   | $ | (8,188 | ) |   | (17.79 | )% |
| Allowance                for other funds used during construction                                          |   | **$**    | **2,190**   |                                                    | $      | 325 |   | $ | 1,865 |   |   | 573.85 |  % |
| Interest                charges                                                                            |   | **$**    | **8,328**   |                                                    | $      | 7,166 |   | $ | (1,162 | ) |   | (16.22 | )% |
| Federal                and state income taxes                                                              |   | **$**    | **11,428**  |                                                    | $      | 12,842 |   | $ | 1,414 |   |   | 11.01 |  % |
| Net                income                                                                                  |   | **$**    | **21,556**  |                                                    | $      | 27,183 |   | $ | (5,627 | ) |   | (20.70 | )% |

|                                                                   |   |                                                    |      |
|------------------------------------------------------------------------|--------|---------------------------------------------------------|-----------|
|                                                                   |   | FOR                THE THREE MONTHS ENDED SEPTEMBER 30, |      |
|  (MILLION                kWh)                                     |   |  **2006**                                          |      |  2005 |   | FAVORABLE/(UNFAVORABLE) |   |
| Electric                sales                                          |   |                                                    |      |   |   |   |   |
|                    Residential                          |   |                                                    | **1,190** |   |   | 1,155 |   |   | 3.03 |  % |
|                    Commercial                           |   |                                                    | **651**   |   |   | 540 |   |   | 20.56 |  % |
|                    Industrial                           |   |                                                    | **784**   |   |   | 760 |   |   | 3.16 |  % |
|                    Other retail                         |   |                                                    | **101**   |   |   | 174 |   |   | (41.95 | )% |
|                        Total retail |   |                                                    | **2,726** |   |   | 2,629 |   |   | 3.69 |  % |
|                    Sales for resale                     |   |                                                    | **159**   |   |   | 203 |   |   | (21.67 | )% |
|                    Unbilled                             |   |                                                    | **(89**   | **)** |   | (74 | ) |   | 20.27 |  % |
| Total                retail and wholesale customer sales               |   |                                                    | **2,796** |   |   | 2,758 |   |   | 1.38 |  % |

|                                                                   |   |                                                    |        |
|------------------------------------------------------------------------|--------|---------------------------------------------------------|-------------|
|                                                                   |   | FOR                THE THREE MONTHS ENDED SEPTEMBER 30, |        |
|  (THOUSANDS)                                                      |   |  **2006**                                          |        |  2005 |   | FAVORABLE/(UNFAVORABLE) |   |
| Electric                sales                                          |   |                                                    |        |   |   |   |   |
|                    Residential                          |   | **$**                                                   | **53,855**  |   | $ | 52,287 |   |   | 3.00 |  % |
|                    Commercial                           |   |                                                    | **22,442**  |   |   | 18,720 |   |   | 19.88 |  % |
|                    Industrial                           |   |                                                    | **14,399**  |   |   | 13,903 |   |   | 3.57 |  % |
|                    Other retail                         |   |                                                    | **3,671**   |   |   | 6,082 |   |   | (39.64 | )% |
|                    Storm surcharge                      |   |                                                    | **6,582**   |   |   | - |   |   | - |   |
|                        Total retail |   |                                                    | **100,949** |   |   | 90,992 |   |   | 10.94 |  % |
|                    Sales for resale                     |   |                                                    | **5,222**   |   |   | 6,571 |   |   | (20.53 | )% |
|                    Unbilled                             |   |                                                    | **(3,022**  | **)** |   | (2,493 | ) |   | 21.22 |  % |
| Total                retail and wholesale customer sales               |   | **$**                                                   | **103,149** |   | $ | 95,070 |   |   | 8.50 |  % |

|                               |      |   |   |                                                          |   |
|------------------------------------|-----------|--------|--------|---------------------------------------------------------------|--------|
|                               |      |   |   |  FOR                THE THREE MONTHS ENDED SEPTEMBER 30, |
|                               |      |   |   |                                                          |   |   | 2006                CHANGE |
|                               | **2006**  |   | 2005   |                                                          | NORMAL |   | PRIOR                YEAR |   | NORMAL |
| Cooling                degree-days | **1,524** |   | 1,721  |                                                          | 1,468  |   | (11.45)% |   | 3.81                % |

***Base***

----

***Fuel      Cost Recovery***

***Other      Operations***

***Operating      Expenses***

***Allowance      For Other Funds Used During Construction***

***Interest***
**Charges**

***Income      Taxes***

----

**Midstream**

|                                                                                    |   |                                                    |       |
|-----------------------------------------------------------------------------------------|--------|---------------------------------------------------------|------------|
|                                                                                    |   | FOR                THE THREE MONTHS ENDED SEPTEMBER 30, |       |
|                                                                                    |   |                                                    |       |   |   | FAVORABLE/(UNFAVORABLE) |   |
| (THOUSANDS)                                                                             |   | **2006**                                                |       | 2005 |   | VARIANCE |   | CHANGE |   |
|                                                                                    |   |                                                    |       | ADJUSTED |   |   |   |   |   |
| Operating                revenue                                                        |   |                                                    |       |   |   |   |   |   |   |
|                    Other operations                                      |   | **$**                                                   | **21**     |   | $ | 53 |   | $ | (32 | ) |   | (60.38 | )% |
|                    Affiliate revenue                                     |   |                                                    | **1,443**  |   |   | 1,053 |   |   | 390 |   |   | 37.04 |  % |
|                    Intercompany revenue                                  |   |                                                    | **-**      |   |   | 43 |   |   | (43 | ) |   | (100.00 | )% |
|                        Operating revenue             |   |                                                    | **1,464**  |   |   | 1,149 |   |   | 315 |   |   | 27.42 |  % |
| Operating                expenses                                                       |   |                                                    |       |   |   |   |   |   |   |   |   |   |   |
|                    Other operations                                      |   |                                                    | **762**    |   |   | 1,221 |   |   | 459 |   |   | 37.59 |  % |
|                    Maintenance                                           |   |                                                    | **740**    |   |   | 429 |   |   | (311 | ) |   | (72.49 | )% |
|                    Depreciation                                          |   |                                                    | **76**     |   |   | 78 |   |   | 2 |   |   | 2.56 |  % |
|                    Taxes other than income  taxes                   |   |                                                    | **52**     |   |   | 62 |   |   | 10 |   |   | 16.13 |  % |
|                        Total operating expenses |   |                                                    | **1,630**  |   |   | 1,790 |   |   | 160 |   |   | 8.94 |  % |
| Operating                loss                                                           |   | **$**                                                   | **(166**   | **)** | $ | (641 | ) | $ | 475 |   |   | 74.10 |  % |
| Equity                income from investees                                             |   | **$**                                                   | **15,252** |   | $ | 200,859 |   | $ | (185,607 | ) |   | (92.41 | )% |
| Other                income                                                             |   | **$**                                                   | **-**      |   | $ | 1,250 |   | $ | (1,250 | ) |   | (100.00 | )% |
| Interest                charges                                                         |   | **$**                                                   | **4,989**  |   | $ | 3,938 |   | $ | (1,051 | ) |   | (26.69 | )% |
| Federal                and state income tax                expense                      |   | **$**                                                   | **6,276**  |   | $ | 76,233 |   | $ | 69,957 |   |   | 91.77 |  % |
| Income                (loss)                from discontinued operations                |   | **$**                                                   | **36**     |   | $ | (25 | ) | $ | 61 |   |   | 244.00 |  % |
| Net                income                                                               |   | **$**                                                   | **3,846**  |   | $ | 121,250 |   | $ | (117,404 | ) |   | (96.83 | )% |

***Equity      Income from Investees***

***Other      Income***

***Interest      Charges***

***Income      Taxes***

***Comparison      of the***
**Nine      Months Ended September 30, 2006, **
**and      2005**

| **Cleco              Consolidated**                  |   |     |        |                                                   |   |
|------------------------------------------------------|--------|----------|-------------|--------------------------------------------------------|--------|
|                                                 |   |     |        | FOR                THE NINE MONTHS ENDED SEPTEMBER 30, |   |
|                                                 |   |     |        |                                                   |   | FAVORABLE/(UNFAVORABLE) |   |
| (THOUSANDS)                                          |   | **2006** |        | 2005                                                   |   | VARIANCE |   | CHANGE |   |
|                                                 |   |     |        | ADJUSTED                                               |   |   |   |   |   |
| Operating                revenue, net                |   | **$**    | **768,471** |                                                   | $      | 649,880 |   | $ | 118,591 |   |   | 18.25 |  % |
| Operating                expenses                    |   |     | **675,877** |                                                   |   | 557,900 |   |   | (117,977 | ) |   | (21.15 | )% |
| Operating                income                      |   | **$**    | **92,594**  |                                                   | $      | 91,980 |   | $ | 614 |   |   | 0.67 |  % |
| Interest                income                       |   | **$**    | **7,217**   |                                                   | $      | 2,987 |   | $ | 4,230 |   |   | 141.61 |  % |
| Equity                income from investees     |   | **$**    | **30,802**  |                                                   | $      | 221,859 |   | $ | (191,057 | ) |   | (86.12 | )% |
| Other                income                          |   | **$**    | **929**     |                                                   | $      | 3,445 |   | $ | (2,516 | ) |   | (73.03 | )% |
| Interest                charges                      |   | **$**    | **32,138**  |                                                   | $      | 31,882 |   | $ | (256 | ) |   | (0.80 | )% |
| Net                income applicable to common stock |   | **$**    | **62,071**  |                                                   | $      | 179,125 |   | $ | (117,054 | ) |   | (65.35 | )% |

----

**Cleco      Power**

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

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

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

| §   | higher                interest income, and |
|--------------------|--------------------------------------------|

| §   | higher                allowance for other funds used during construction. |
|--------------------|---------------------------------------------------------------------------|

| §   | lower                other operations revenue, |
|--------------------|------------------------------------------------|

| §   | higher                other operations expense, |
|--------------------|-------------------------------------------------|

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

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

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

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

|                                                                                                       |   |     |        |                                                   |   |
|------------------------------------------------------------------------------------------------------------|--------|----------|-------------|--------------------------------------------------------|--------|
|                                                                                                       |   |     |        | FOR                THE NINE MONTHS ENDED SEPTEMBER 30, |   |
|                                                                                                       |   |     |        |                                              |   | FAVORABLE/(UNFAVORABLE) |   |
| (THOUSANDS)                                                                                                |   | **2006** |        |  2005                                             |   | VARIANCE |   | CHANGE |   |
| Operating                revenue                                                                           |   |     |        |                                              |   |   |   |   |   |
|                    Base                                                                     |   | **$**    | **261,724** |                                                   | $      | 244,514 |   | $ | 17,210 |   |   | 7.04 |  % |
|                    Fuel cost recovery                                                       |   |     | **475,041** |                                                   |   | 370,156 |   |   | 104,885 |   |   | 28.34 |  % |
|                    Electric customer credits                                                |   |     | **4,382**   |                                                   |   | (771 | ) |   | 5,153 |   |   | (668.35 | )% |
|                    Other operations                                                         |   |     | **22,052**  |                                                   |   | 29,228 |   |   | (7,176 | ) |   | (24.55 | )% |
|                    Affiliate revenue                                                        |   |     | **37**      |                                                   |   | 22 |   |   | 15 |   |   | 68.18 |  % |
|                    Intercompany revenue                                                     |   |     | **1,501**   |                                                   |   | 1,467 |   |   | 34 |   |   | 2.32 |  % |
|                        Operating revenue, net                           |   |     | **764,737** |                                                   |   | 644,616 |   |   | 120,121 |   |   | 18.63 |  % |
| Operating                expenses                                                                          |   |     |        |                                                   |   |   |   |   |   |   |   |   |   |
|                    Fuel used for electric  generation                - recoverable     |   |     | **179,305** |                                                   |   | 115,333 |   |   | (63,972 | ) |   | (55.47 | )% |
|                    Power purchased for utility  customers                - recoverable |   |     | **295,974** |                                                   |   | 252,514 |   |   | (43,460 | ) |   | (17.21 | )% |
|                    Non-recoverable fuel and  power                purchased            |   |     | **18,127**  |                                                   |   | 14,733 |   |   | (3,394 | ) |   | (23.04 | )% |
|                    Other operations                                                         |   |     | **64,633**  |                                                   |   | 64,379 |   |   | (254 | ) |   | (0.39 | )% |
|                    Maintenance                                                              |   |     | **26,919**  |                                                   |   | 30,298 |   |   | 3,379 |   |   | 11.15 |  % |
|                    Depreciation                                                             |   |     | **53,879**  |                                                   |   | 43,824 |   |   | (10,055 | ) |   | (22.94 | )% |
|                    Taxes other than income  taxes                                      |   |     | **30,199**  |                                                   |   | 28,666 |   |   | (1,533 | ) |   | (5.35 | )% |
|                    Gain on sales of assets                                                  |   |     | **(71**     | **)**                                                  |   | (2,207 | ) |   | (2,136 | ) |   | (96.78 | )% |
|                        Total operating expenses                    |   |     | **668,965** |                                                   |   | 547,540 |   |   | (121,425 | ) |   | (22.18 | )% |
| Operating                income                                                                            |   | **$**    | **95,772**  |                                                   | $      | 97,076 |   | $ | (1,304 | ) |   | (1.34 | )% |
| Interest                income                                                                             |   | **$**    | **5,688**   |                                                   | $      | 2,233 |   | $ | 3,455 |   |   | 154.72 |  % |
| Allowance                for other funds used during construction                                          |   | **$**    | **4,231**   |                                                   | $      | 2,104 |   | $ | 2,127 |   |   | 101.09 |  % |
| Interest                charges                                                                            |   | **$**    | **26,232**  |                                                   | $      | 20,671 |   | $ | (5,561 | ) |   | (26.90 | )% |
| Federal                and state income taxes                                                              |   | **$**    | **26,287**  |                                                   | $      | 28,299 |   | $ | 2,012 |   |   | 7.11 |  % |
| Net                income                                                                                  |   | **$**    | **52,476**  |                                                   | $      | 52,117 |   | $ | 359 |   |   | 0.69 |  % |

|                                                                   |   |                                                   |      |
|------------------------------------------------------------------------|--------|--------------------------------------------------------|-----------|
|                                                                   |   | FOR                THE NINE MONTHS ENDED SEPTEMBER 30, |      |
|  (MILLION                kWh)                                     |   |  **2006**                                         |      |  2005 |   | FAVORABLE/(UNFAVORABLE) |   |
| Electric                sales                                          |   |                                                   |      |   |   |   |   |
|                    Residential                          |   |                                                   | **2,760** |   |   | 2,696 |   |   | 2.37 |  % |
|                    Commercial                           |   |                                                   | **1,529** |   |   | 1,383 |   |   | 10.56 |  % |
|                    Industrial                           |   |                                                   | **2,201** |   |   | 2,146 |   |   | 2.56 |  % |
|                    Other retail                         |   |                                                   | **380**   |   |   | 454 |   |   | (16.30 | )% |
|                        Total retail |   |                                                   | **6,870** |   |   | 6,679 |   |   | 2.86 |  % |
|                    Sales for resale                     |   |                                                   | **391**   |   |   | 409 |   |   | (4.40 | )% |
|                    Unbilled                             |   |                                                   | **53**    |   |   | 56 |   |   | (5.36 | )% |
| Total                retail and wholesale customer sales               |   |                                                   | **7,314** |   |   | 7,144 |   |   | 2.38 |  % |

|                                                                   |   |                                                   |        |
|------------------------------------------------------------------------|--------|--------------------------------------------------------|-------------|
|                                                                   |   | FOR                THE NINE MONTHS ENDED SEPTEMBER 30, |        |
|  (THOUSANDS)                                                      |   |  **2006**                                         |        |  2005 |   | FAVORABLE/(UNFAVORABLE) |   |
| Electric                sales                                          |   |                                                   |        |   |   |   |   |
|                    Residential                          |   | **$**                                                  | **121,724** |   | $ | 118,865 |   |   | 2.41 |  % |
|                    Commercial                           |   |                                                   | **57,232**  |   |   | 52,553 |   |   | 8.90 |  % |
|                    Industrial                           |   |                                                   | **41,554**  |   |   | 40,526 |   |   | 2.54 |  % |
|                    Other retail                         |   |                                                   | **14,894**  |   |   | 17,436 |   |   | (14.58 | )% |
|                    Storm surcharge                      |   |                                                   | **10,508**  |   |   | - |   |   | - |   |
|                        Total retail |   |                                                   | **245,912** |   |   | 229,380 |   |   | 7.21 |  % |
|                    Sales for resale                     |   |                                                   | **13,745**  |   |   | 13,248 |   |   | 3.75 |  % |
|                    Unbilled                             |   |                                                   | **2,067**   |   |   | 1,886 |   |   | 9.60 |  % |
| Total                retail and wholesale customer sales               |   | **$**                                                  | **261,724** |   | $ | 244,514 |   |   | 7.04 |  % |

----

|                               |   |     |      |   |   |                                                   |   |
|------------------------------------|--------|----------|-----------|--------|--------|--------------------------------------------------------|--------|
|                               |   |     |      |   |   | FOR                THE NINE MONTHS ENDED SEPTEMBER 30, |   |
|                               |   |     |      |   |   |                                                   |   | 2006                CHANGE |   |
|                               |   | **2006** |      | 2005   |   | NORMAL                                                 |   | PRIOR                YEAR |   | NORMAL |   |
| Cooling                degree-days |   |     | **2,708** |   |   | 2,781                                                  |   |   | 2,436 |   |   | (2.62 | )% |   | 11.17 |  % |
| Heating                degree-days |   |     | **693**   |   |   | 716                                                    |   |   | 1,026 |   |   | (3.21 | )% |   | (32.46 | )% |

***Base***

***Fuel      Cost Recovery***

***Electric      Customer Credits***

***Other      Operations***

***Operating      Expenses***

----

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

***Allowance      For Other Funds Used During Construction***

***Interest      Charges***

***Income      Taxes***

**Midstream**

|                                                                                    |   |                                                   |       |
|-----------------------------------------------------------------------------------------|--------|--------------------------------------------------------|------------|
|                                                                                    |   | FOR                THE NINE MONTHS ENDED SEPTEMBER 30, |       |
|                                                                                    |   |                                                   |       |   |   | FAVORABLE/(UNFAVORABLE) |   |
| (THOUSANDS)                                                                             |   | **2006**                                               |       | 2005 |   | VARIANCE |   | CHANGE |   |
|                                                                                    |   |                                                   |       | ADJUSTED |   |   |   |   |   |
| Operating                revenue                                                        |   |                                                   |       |   |   |   |   |   |   |
|                    Other operations                                      |   | **$**                                                  | **26**     |   | $ | 93 |   |   | (67 | ) |   | (72.04 | )% |
|                    Affiliate revenue                                     |   |                                                   | **3,630**  |   |   | 4,069 |   |   | (439 | ) |   | (10.79 | )% |
|                    Intercompany revenue                                  |   |                                                   | **-**      |   |   | 42 |   |   | (42 | ) |   | (100.00 | )% |
|                        Operating revenue             |   |                                                   | **3,656**  |   |   | 4,204 |   |   | (548 | ) |   | (13.04 | )% |
| Operating                expenses                                                       |   |                                                   |       |   |   |   |   |   |   |   |   |   |   |
|                    Other operations                                      |   |                                                   | **3,285**  |   |   | 5,342 |   |   | 2,057 |   |   | 38.51 |  % |
|                    Maintenance                                           |   |                                                   | **1,780**  |   |   | 1,765 |   |   | (15 | ) |   | (0.85 | )% |
|                    Depreciation                                          |   |                                                   | **232**    |   |   | 237 |   |   | 5 |   |   | 2.11 |  % |
|                    Taxes other than income  taxes                   |   |                                                   | **174**    |   |   | 253 |   |   | 79 |   |   | 31.23 |  % |
|                        Total operating expenses |   |                                                   | **5,471**  |   |   | 7,597 |   |   | 2,126 |   |   | 27.98 |  % |
| Operating                loss                                                           |   | **$**                                                  | **(1,815** | **)** | $ | (3,393 | ) | $ | 1,578 |   |   | 46.51 |  % |
| Equity                income from investees                                             |   | **$**                                                  | **30,934** |   | $ | 221,825 |   | $ | (190,891 | ) |   | (86.05 | )% |
| Other                income                                                             |   | **$**                                                  | **-**      |   | $ | 1,250 |   | $ | (1,250 | ) |   | (100.00 | )% |
| Interest                charges                                                         |   | **$**                                                  | **13,865** |   | $ | 11,171 |   | $ | (2,694 | ) |   | (24.12 | )% |
| Federal                and state income tax expense                                     |   | **$**                                                  | **9,514**  |   | $ | 80,734 |   | $ | 71,220 |   |   | 88.22 |  % |
| Loss                from discontinued operations                                        |   | **$**                                                  | **(154**   | **)** | $ | (230 | ) | $ | 76 |   |   | 33.04 |  % |
| Net                income                                                               |   | **$**                                                  | **5,573**  |   | $ | 127,517 |   | $ | (121,944 | ) |   | (95.63 | )% |

***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                SEPTEMBER 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** |   |
|                    Guarantees                issued to purchasers of the assets of Cleco Energy                                                 |   |   | **1,400**   |       |   | **-**       |   |                                     | **1,400**   |   |   | **1,400** |   |
|                    Obligations                under standby letter of credit issued to Evangeline Tolling Agreement                counterparty |   |   | **15,000**  |       |   | **-**       |   |                                     | **15,000**  |   |   | **15,000** |   |
|                    Guarantee                issued to Central Mississippi Generating Co. on behalf of Attala                                    |   |   | **363**     |       |   | **-**       |   |                                     | **363**     |   |   | **363** |   |
|                    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**     |   |   | **-** |   |
|                    Obligations                under Lignite Mining Agreement                                                                    |   |   | **14,043**  |       |   | **-**       |   |                                     | **14,043**  |   |   | **-** |   |
|                        Total                                                                                                |   | **$**  | **309,231** |       | **$**  | **135,000** |   | **$**                                    | **174,231** |   | **$** | **17,591** |   |

----

|                                                           |   |      |        |                                                      |   |
|----------------------------------------------------------------|--------|-----------|-------------|-----------------------------------------------------------|--------|
|                                                           |   |      |        | AT                SEPTEMBER 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                                                     |   | **$**     | **158,706** |                                                      | **$**  | **363** |   | **$** | **400** |   | **$** | **101,000** |   | **$** | **56,943** |   |
| Standby                letters of credit                       |   |      | **15,525**  |                                                      |   | **525** |   |   | **-** |   |   | **-** |   |   | **15,000** |   |
|                    Total commercial commitments |   | **$**     | **174,231** |                                                      | **$**  | **888** |   | **$** | **400** |   | **$** | **101,000** |   | **$** | **71,943** |   |

**Regulatory      Matters**

***Wholesale      Rates of Cleco***

***Retail      Rates of Cleco Power***

----

***Wholesale      Electric Markets***

***Generation      RFP***

***Rodemacher      Unit 3***

----

***Lignite      Deferral***

***Environmental      Matters***

----

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

***Miscellaneous***

**CRITICAL      ACCOUNTING POLICIES                                                                                    **

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

----

**ITEM      3.**

***Risk      Overview                                                                                                    ***

**Interest**
**      Rate Risks**

**Commodity      Price Risks**

----

|                       |                                                                                               |
|----------------------------|----------------------------------------------------------------------------------------------------|
|                       | **FOR                THE THREE MONTHS**** ** **ENDED                SEPTEMBER 30, 2006** |
| (THOUSANDS)                | **HIGH**                                                                                           |   | **LOW** |   | **AVERAGE** |
| Cleco                Power | **$****550.8**                                                                                     |   | **$****321.1** |   | **$****423.3** |

|                       |                                                                              |   |                                |   |                           |
|----------------------------|-----------------------------------------------------------------------------------|--------|-------------------------------------|--------|--------------------------------|
|                       | **FOR                THE NINE MONTHS****ENDED                SEPTEMBER 30, 2006** |   | **AT                SEPTEMBER 30,** |   | AT                DECEMBER 31, |
| (THOUSANDS)                | **HIGH**                                                                          |   | **LOW**                             |   | **AVERAGE**                    |   | **2006** |   | 2005 |
| Cleco                Power | **$****608.3**                                                                    |   | **$****321.1**                      |   | **$****492.9**                 |   | **$****503.0** |   | $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

**Rodemacher      Unit 3 CCN**

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

**FERC      Regulation**

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

----

 

| **ITEM                6****.** EXHIBITS |
|----------------------------------------------|
|  **CLECO                  CORPORATION** |   |
| 10(a)                                        | Executive                  Employment Agreement by and between Cleco Corporation and Samuel                  H.                  Charlton III dated June 29, 2006 (incorporated by reference to                  Exhibit                  10.1 of Form 8-K (file no. 1-15759), filed July 6, 2006)  |
| 10(b)                                        | Separation                  Agreement and General Release by and between Cleco Corporation                  and R.                  O’Neal Chadwick, Jr. dated August 14, 2006 (incorporated by reference                  to                  Exhibit 10.1 of Form 8-K (file no. 1-15759), filed August 29,                  2006)  |
| 12(a)                                        | Computation                  of Ratios of Earnings to Fixed Charges and of Earnings to Combined                  Fixed                  Charges and Preferred Stock Dividends for the three-,                  nine-, and twelve-month periods ended September 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**       |   |
| 12(b)                                        | Computation                  of Ratios                  of Earnings to Fixed Charges for the three-, nine-, and twelve-month                  periods ended September 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                                                                                                                                                                                                                                                        |

----

----