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Leases (Notes)
 3 Months Ended
Mar. 31, 2023
Lessor, Lease, Description [Line Items]  
Lessor, Operating Leases LEASES
LESSOR — The Company has operating leases for certain generation contracts that contain provisions to provide capacity to a customer, which is a stand-ready obligation to deliver energy when required by the customer. Capacity receipts are generally considered lease elements as they cover the majority of available output from a facility. The allocation of contract payments between the lease and non-lease elements is made at the inception of the lease. Lease receipts from such contracts are recognized as lease revenue on a straight-line basis over the lease term, whereas variable lease receipts are recognized when earned.
The following table presents lease revenue from operating leases in which the Company is the lessor, recognized in Revenue on the Condensed Consolidated Statements of Operations for the periods indicated (in millions):
Three Months Ended March 31,
Operating Lease Revenue20232022
Total lease revenue$121 $134 
Less: Variable lease revenue(8)(7)
Total Non-variable lease revenue$113 $127 
The following table presents the underlying gross assets and accumulated depreciation of operating leases included in Property, plant and equipment on the Condensed Consolidated Balance Sheets for the periods indicated (in millions):
Property, Plant and Equipment, NetMarch 31, 2023December 31, 2022
Gross assets$1,272 $1,319 
Less: Accumulated depreciation(147)(139)
Net assets$1,125 $1,180 
The option to extend or terminate a lease is based on customary early termination provisions in the contract, such as payment defaults, bankruptcy, and lack of performance on energy delivery. The Company has not recognized any early terminations as of March 31, 2023. Certain leases may provide for variable lease payments based on usage or index-based (e.g., the U.S. Consumer Price Index) adjustments to lease payments.
The following table shows the future lease receipts as of March 31, 2023 for the remainder of 2023 through 2027 and thereafter (in millions):
Future Cash Receipts for
Sales-Type Leases
Operating Leases
2023$19 $292 
202425 390 
202525 390 
202625 279 
202725 203 
Thereafter360 545 
Total$479 $2,099 
Less: Imputed interest(252)
Present value of total lease receipts$227 
Battery Storage Lease Arrangements — The Company constructs and operates projects consisting only of a stand-alone battery energy storage system (“BESS”) facility, as well as projects that pair a BESS with solar energy systems. These projects allow more flexibility on when to provide energy to the grid. The Company will enter into PPAs for the full output of the facility that allow customers the ability to determine when to charge and discharge the BESS. These arrangements include both lease and non-lease elements under ASC 842, with the BESS component typically constituting a sales-type lease. The Company recognized lease income on sales-type leases through interest income of $4 million and $3 million for the three months ended March 31, 2023 and March 31, 2022, respectively.