The project will use three state-of-the-art 160 megawatt natural gas-fueled combustion turbine generators, on order from Westinghouse Power Generation, to repower two existing units at the Coughlin Power Station. "The two Coughlin units currently have a combined generating capacity of 330 megawatts, but their age and lower fuel efficiency compared to newer technologies make them uneconomical to operate in today's market, except in heavy-demand periods," said Cleco President and CEO Greg Nesbitt.

The project will be owned and operated by a wholly-owned subsidiary of Cleco and is expected to be put in service on June 1, 2000. It is anticipated that the project's generation capacity and energy will be available to Cleco at competitive market rat es and that any excess will be available for sale to the regional wholesale market. Raw construction and refurbishment cost of the project is estimated to be between $180 million and $200 million, with total costs estimated at up to $240 million. It is an ticipated that the project will be financed with non-recourse financing. The project's engineers are Burns and McDonnell of Kansas City, Missouri, and the project's financial advisor is Credit Suisse First Boston. Implementation of the project is subjec t to approval by the Louisiana Public Service Commission and the Federal Energy Regulatory Commission.

"This project addresses several issues," Nesbitt said. "First, Cleco needs an economical, reliable source for additional capacity to address our own needs. Second, our region needs additional capacity. Third, part of our strategy is to become a regi onal power supplier. Deregulation is breaking down the barriers that prevented us from doing business outside our traditional service territory in the past. We like the competitive wholesale market we see emerging today, and we have the skills and exper tise to take part in it."

Cleco has not added any new generation capacity during the past 12 years. During that time, the peak demand of its native retail load has increased by about 450 megawatts. During its 1997 peak season, Cleco purchased off-system capacity of 75 megawat ts and anticipates that without additional generation capacity, the amount of off-system purchases would grow substantially in the future.

"Handling power supply demand as the electric industry moves toward deregulation is becoming a top priority in this country," Nesbitt said. "The industry in general has not invested in new generating capacity over the past decade or so. Power compani es knew deregulation was coming and were reluctant to add capital expenditures that could wind up as stranded costs in a deregulated market. That's why this project is being constructed by a subsidiary, as opposed to asking our customers to pay for it th ro ugh a regulated rate base."

Cleco Corporation provides electric services to approximately 238,000 customers in about one-third of Louisiana's parishes (counties). Through subsidiaries, the Company also markets unregulated energy and energy management services and engages in ener gy asset development opportunities in the southeast region of the United States.

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