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Summary of Significant Accounting Policies
 9 Months Ended
Sep. 30, 2021
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies Summary of Significant Accounting Policies
Use of Estimates
The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions. These estimates and assumptions impact the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could be different from these estimates.
Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents include highly liquid investments with an original maturity of three months or less at the time of purchase. Cash and cash equivalents held at project subsidiaries was $152 million and $149 million as of September 30, 2021 and December 31, 2020, respectively.
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows:
 September 30, 2021December 31, 2020
 (In millions)
Cash and cash equivalents$189 $268 
Restricted cash366 197 
Cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows$555 $465 
Restricted cash consists primarily of funds held to satisfy the requirements of certain debt agreements and funds held within the Company's projects that are restricted in their use. As of September 30, 2021, these restricted funds were comprised of $121 million designated to fund operating expenses, approximately $68 million designated for current debt service payments and $133 million restricted for reserves including debt service, performance obligations and other reserves, as well as capital expenditures. The remaining $44 million is held in distribution reserve accounts.
In 2020, the members of the partnerships holding the Oahu Solar and Kawailoa Solar projects submitted applications to the state of Hawaii for refundable tax credits based on the cost of construction of the projects. In April 2021, the members of the partnerships contributed their respective portions of the tax credits in the amount of $49 million to the Oahu Solar and Kawailoa project companies, which is reflected in restricted cash on the Company's consolidated balance sheet with an offsetting adjustment to noncontrolling interests. In accordance with the projects' related agreements, the cash is held in a restricted account and utilized to offset invoiced amounts under the projects' PPAs. As of September 30, 2021, $13 million has been utilized to offset invoiced amounts under the projects' PPAs.
Accumulated Depreciation and Accumulated Amortization
The following table presents the accumulated depreciation included in the property, plant and equipment, net, and accumulated amortization included in intangible assets, net, respectively, as of September 30, 2021 and December 31, 2020:
September 30, 2021December 31, 2020
(In millions)
Property, Plant and Equipment Accumulated Depreciation $2,700 $2,323 
Intangible Assets Accumulated Amortization593 487 
Dividends to Class A and Class C common stockholders
The following table lists the dividends paid on the Company's Class A common stock and Class C common stock during the nine months ended September 30, 2021:
Third Quarter 2021
Second Quarter 2021
First Quarter 2021
Dividends per Class A share$0.3345 $0.3290 $0.3240 
Dividends per Class C share0.3345 0.3290 0.3240 
Dividends on the Class A common stock and Class C common stock are subject to available capital, market conditions, and compliance with associated laws, regulations and other contractual obligations. The Company expects that, based on current circumstances, comparable cash dividends will continue to be paid in the foreseeable future.
On November 3, 2021, the Company declared quarterly dividends on its Class A common stock and Class C common stock of $0.34 per share payable on December 15, 2021 to stockholders of record as of December 1, 2021.
Noncontrolling Interests
Clearway Energy LLC Distributions to CEG
The following table lists distributions paid to CEG during the nine months ended September 30, 2021 on Clearway Energy LLC's Class B and D units:
Third Quarter 2021Second Quarter 2021First Quarter 2021
Distributions per Class B Unit $0.3345 $0.3290 $0.3240 
Distributions per Class D Unit0.3345 0.3290 0.3240 
On November 3, 2021, Clearway Energy LLC declared a distribution on its Class B and Class D units of $0.34 per unit payable on December 15, 2021 to unit holders of record as of December 1, 2021.
Revenue Recognition
Revenue from Contracts with Customers
The Company applies the guidance in ASC 606, Revenue from Contracts with Customers, or Topic 606, when recognizing revenue associated with its contracts with customers. The Company's policies with respect to its various revenue streams are detailed below. In general, the Company applies the invoicing practical expedient to recognize revenue for the revenue streams detailed below, except in circumstances where the invoiced amount does not represent the value transferred to the customer.
Thermal Revenues
Steam and chilled water revenue is recognized as the Company transfers the product to the customer, based on customer usage as determined by meter readings taken at month-end. Some locations read customer meters throughout the month and recognize estimated revenue for the period between meter read date and month-end. For thermal contracts, the Company’s performance obligation to deliver steam and chilled water is satisfied over time and revenue is recognized based on the invoiced amount. The Thermal Business subsidiaries collect, and remit state and local taxes associated with sales to their customers, as required by governmental authorities. These taxes are presented on a net basis in the income statement.
As contracts for steam and chilled water are long-term contracts, the Company has performance obligations under these contracts that have not yet been satisfied. These performance obligations have transaction prices that are both fixed and variable, and that vary based on the contract duration, customer type, inception date and other contract-specific factors. For the fixed price contracts, the Company cannot accurately estimate the amount of its unsatisfied performance obligations as it will vary based on customer usage, which will depend on factors such as weather and customer activity.
Power Purchase Agreements, or PPAs
The majority of the Company’s revenues are obtained through PPAs or other contractual agreements. Energy, capacity and where applicable, renewable attributes, from the majority of the Company’s renewable energy assets and certain conventional energy plants is sold through long-term PPAs and tolling agreements to a single counterparty, which is often a utility or commercial customer. The majority of these PPAs are accounted for as leases as the Company retained its historical lease assessments and classification upon adoption of ASC 842. ASC 842 requires the minimum lease payments received to be amortized over the term of the lease and contingent rentals are recorded when the achievement of the contingency becomes probable. Judgment is required by management in determining the economic life of each generating facility, in evaluating whether certain lease provisions constitute minimum payments or represent contingent rent and other factors in determining whether a contract contains a lease and whether the lease is an operating lease or capital lease. Certain of these leases have no minimum lease payments and all of the rental income under these leases is recorded as contingent rent on an actual basis when the electricity is delivered.
Renewable Energy Credits, or RECs
Renewable energy credits, or RECs, are usually sold through long-term PPAs. Revenue from the sale of self-generated RECs is recognized when the related energy is generated and simultaneously delivered even in cases where there is a certification lag as it has been deemed to be perfunctory.
In a bundled contract to sell energy, capacity and/or self-generated RECs, all performance obligations are deemed to be delivered at the same time and hence, timing of recognition of revenue for all performance obligations is the same and occurs over time. In such cases, it is often unnecessary to allocate transaction price to multiple performance obligations.
Disaggregated Revenues     
The following tables represent the Company’s disaggregation of revenue from contracts with customers along with the reportable segment for each category for the three and nine months ended September 30, 2021 and 2020, respectively:
Three months ended September 30, 2021
(In millions)Conventional GenerationRenewablesThermalTotal
Energy revenue(a)
$3 $231 $33 $267 
Capacity revenue(a)
120 1 12 133 
Contract amortization(5)(32)(1)(38)
Other revenue— 14 10 24 
Mark-to-market for economic hedges— (35)— (35)
Total operating revenue
118 179 54 351 
Less: Mark-to-market for economic hedges— 35 — 35 
Less: Lease revenue(123)(198)(1)(322)
Less: Contract amortization5 32 1 38 
Total revenue from contracts with customers
$— $48 $54 $102 
(a) The following amounts of energy and capacity revenue relate to leases and are accounted for under ASC 842:
(In millions)Conventional GenerationRenewablesThermalTotal
Energy revenue$3 $198 $1 $202 
Capacity revenue120 — — 120 
Total
$123 $198 $1 $322 
Nine months ended September 30, 2021
(In millions)Conventional GenerationRenewables Thermal Total
Energy revenue(a)
$6 $618 $91 $715 
Capacity revenue(a)
340 1 40 381 
Contract amortization(17)(87)(3)(107)
Other revenue— 45 24 69 
Mark-to-market for economic hedges— (90)— (90)
Total operating revenue
329 487 152 968 
Less: Mark-to-market for economic hedges— 90 — 90 
Less: Lease revenue(346)(571)(2)(919)
Less: Contract amortization17 87 3 107 
Total revenue from contracts with customers
$— $93 $153 $246 
(a) The following amounts of energy and capacity revenue relate to leases and are accounted for under ASC 842:
(In millions)Conventional GenerationRenewablesThermalTotal
Energy revenue$6 $571 $2 $579 
Capacity revenue340 — — 340 
Total
$346 $571 $2 $919 
Three months ended September 30, 2020
(In millions)Conventional GenerationRenewables Thermal Total
Energy revenue(a)
$3 $166 $27 $196 
Capacity revenue(a)
119 — 24 143 
Contract amortization(6)(15)(1)(22)
Other revenue— 6 9 15 
Total operating revenue
116 157 59 332 
Less: Lease revenue(122)(153)— (275)
Less: Contract amortization6 15 1 22 
Total revenue from contracts with customers
$— $19 $60 $79 
(a) The following amounts of energy and capacity revenue relate to leases and are accounted for under ASC 842:
(In millions)Conventional GenerationRenewablesThermalTotal
Energy revenue$3 $153 $— $156 
Capacity revenue119 — — 119 
Total
$122 $153 $— $275 
Nine months ended September 30, 2020
(In millions)Conventional GenerationRenewables Thermal Total
Energy revenue(a)
$6 $486 $77 $569 
Capacity revenue(a)
338 — 50 388 
Contract amortization(18)(46)(2)(66)
Other revenue— 12 24 36 
Mark-to-market for economic hedges— (8)— (8)
Total operating revenue
326 444 149 919 
Less: Mark-to-market for economic hedges— 8 — 8 
Less: Lease revenue(344)(449)(1)(794)
Less: Contract amortization18 46 2 66 
Total revenue from contracts with customers
$— $49 $150 $199 
(a) The following amounts of energy and capacity revenue relate to leases and are accounted for under ASC 842:
(In millions)Conventional GenerationRenewablesThermalTotal
Energy revenue$6 $449 $1 $456 
Capacity revenue338 — — 338 
Total
$344 $449 $1 $794 
Contract Amortization
Assets and liabilities recognized from power sales agreements assumed through acquisitions related to the sale of electric capacity and energy in future periods for which the fair value has been determined to be significantly less (more) than market are amortized to revenue over the term of each underlying contract based on actual generation and/or contracted volumes or on a straight-line basis, where applicable.
Contract Balances
The following table reflects the contract assets and liabilities included on the Company’s consolidated balance sheets as of September 30, 2021 and December 31, 2020:
September 30, 2021December 31, 2020
(In millions)
Accounts receivable, net - Contracts with customers$60 $57 
Accounts receivable, net - Leases143 86 
Total accounts receivable, net$203 $143 
Recently Adopted Accounting Standards
In March 2020, the FASB issued ASU No. 2020-4, Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments provide for optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. These amendments apply only to contracts that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The guidance is effective for all entities as of March 12, 2020 through December 31, 2022. The Company intends to apply the amendments to all its eligible contract modifications where applicable during the reference rate reform period.
In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this ASU simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, Income Taxes. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The Company adopted the guidance as of January 1, 2021, with no material impact to the financial statements.