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Leases (Notes)
 9 Months Ended
Sep. 30, 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 September 30,Nine Months Ended September 30,
Operating Lease Revenue2023202220232022
Total lease revenue$133 $134 $390 $408 
Less: Variable lease revenue(22)(14)(54)(37)
Total Non-variable lease revenue$111 $120 $336 $371 
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 as of the periods indicated (in millions):
Property, Plant and Equipment, NetSeptember 30, 2023December 31, 2022
Gross assets$1,223 $1,319 
Less: Accumulated depreciation(180)(139)
Net assets$1,043 $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 September 30, 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 September 30, 2023 for the remainder of 2023 through 2027 and thereafter (in millions):
Future Cash Receipts for
Sales-Type Leases
Operating Leases
2023$7 $96 
202426 385 
202526 386 
202626 278 
202726 183 
Thereafter375 544 
Total$486 $1,872 
Less: Imputed interest(257)
Present value of total lease receipts$229 
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 $3 million and $10 million for the three and nine months ended September 30, 2023, respectively; and $4 million and $20 million for the three and nine months ended September 30, 2022, respectively.