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Clearway Energy, Inc. - Quarter Report: 2022 September (Form 10-Q)



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2022
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 001-36002
Clearway Energy, Inc.
(Exact name of registrant as specified in its charter)
Delaware46-1777204
(State or other jurisdiction
of incorporation or organization)
(I.R.S. Employer
Identification No.)
300 Carnegie Center, Suite 300 PrincetonNew Jersey08540
(Address of principal executive offices)(Zip Code)
(609) 608-1525
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, par value $0.01CWEN.ANew York Stock Exchange
Class C Common Stock, par value $0.01CWENNew York Stock Exchange
Indicate by check mark whether the registrant (1) has 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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes       No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes       No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer  
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes       No
As of October 31, 2022, there were 34,599,645 shares of Class A common stock outstanding, par value $0.01 per share, 42,738,750 shares of Class B common stock outstanding, par value $0.01 per share, 82,204,753 shares of Class C common stock outstanding, par value $0.01 per share, and 42,336,750 shares of Class D common stock outstanding, par value $0.01 per share.




TABLE OF CONTENTS
Index
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION
GLOSSARY OF TERMS
PART I — FINANCIAL INFORMATION
ITEM 1 — FINANCIAL STATEMENTS AND NOTES
ITEM 2 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 3 — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 4 — CONTROLS AND PROCEDURES
PART II — OTHER INFORMATION
ITEM 1 — LEGAL PROCEEDINGS
ITEM 1A — RISK FACTORS
ITEM 2 — UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
ITEM 3 — DEFAULTS UPON SENIOR SECURITIES
ITEM 4 — MINE SAFETY DISCLOSURES
ITEM 5 — OTHER INFORMATION
ITEM 6 — EXHIBITS
SIGNATURES

2



CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This Quarterly Report on Form 10-Q of Clearway Energy, Inc., together with its consolidated subsidiaries, or the Company, includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The words “believes,” “projects,” “anticipates,” “plans,” “expects,” “intends,” “estimates” and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance and achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These factors, risks and uncertainties include the factors described under Item 1A — Risk Factors in Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as well as the following:
The Company’s ability to maintain and grow its quarterly dividend;
Potential risks related to COVID-19 (including any variant of the virus) or any other pandemic;
Potential risks related to the Company's relationships with GIP, TotalEnergies and CEG;
The Company’s ability to successfully identify, evaluate and consummate acquisitions from, and dispositions to, third parties;
The Company’s ability to acquire assets from GIP, TotalEnergies or CEG;
The Company’s ability to raise additional capital due to its indebtedness, corporate structure, market conditions or otherwise;
Changes in law, including judicial decisions;
Hazards customary to the power production industry and power generation operations such as fuel and electricity price volatility, unusual weather conditions (including wind and solar conditions), catastrophic weather-related or other damage to facilities, unscheduled generation outages, maintenance or repairs, unanticipated changes to fuel supply costs or availability due to higher demand, shortages, transportation problems or other developments, environmental incidents, or electric transmission or gas pipeline system constraints and the possibility that the Company may not have adequate insurance to cover losses as a result of such hazards;
The Company’s ability to operate its businesses efficiently, manage maintenance capital expenditures and costs effectively, and generate earnings and cash flows from its asset-based businesses in relation to its debt and other obligations;
The willingness and ability of counterparties to the Company’s offtake agreements to fulfill their obligations under such agreements;
The Company’s ability to enter into contracts to sell power and procure fuel on acceptable terms and prices as current offtake agreements expire;
Government regulation, including compliance with regulatory requirements and changes in market rules, rates, tariffs and environmental laws;
Operating and financial restrictions placed on the Company that are contained in the project-level debt facilities and other agreements of certain subsidiaries and project-level subsidiaries generally, in the Clearway Energy Operating LLC amended and restated revolving credit facility and in the indentures governing the Senior Notes;
Cyber terrorism and inadequate cybersecurity, or the occurrence of a catastrophic loss and the possibility that the Company may not have adequate insurance to cover losses resulting from such hazards or the inability of the Company’s insurers to provide coverage; and
The Company’s ability to borrow additional funds and access capital markets, as well as the Company’s substantial indebtedness and the possibility that the Company may incur additional indebtedness going forward.
Forward-looking statements speak only as of the date they were made, and the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The foregoing review of factors that could cause the Company’s actual results to differ materially from those contemplated in any forward-looking statements included in this Quarterly Report on Form 10-Q should not be construed as exhaustive.
3



GLOSSARY OF TERMS
When the following terms and abbreviations appear in the text of this report, they have the meanings indicated below:
2025 Senior Notes$600 million aggregate principal amount of 5.750% unsecured senior notes due 2025, issued by Clearway Energy Operating LLC, which were repurchased and redeemed in March 2021
2028 Senior Notes$850 million aggregate principal amount of 4.750% unsecured senior notes due 2028, issued by Clearway Energy Operating LLC
2031 Senior Notes$925 million aggregate principal amount of 3.750% unsecured senior notes due 2031, issued by Clearway Energy Operating LLC
2032 Senior Notes$350 million aggregate principal amount of 3.750% unsecured senior notes due 2032, issued by Clearway Energy Operating LLC
Adjusted EBITDAA non-GAAP measure, represents earnings before interest (including loss on debt extinguishment), tax, depreciation and amortization adjusted for mark-to-market gains or losses, asset write offs and impairments; and factors which the Company does not consider indicative of future operating performance
ASCThe FASB Accounting Standards Codification, which the FASB established as the source of
authoritative GAAP
ASUAccounting Standards Updates - updates to the ASC
ATM ProgramsAt-The-Market Equity Offering Programs
Bridge Loan AgreementSenior secured bridge credit agreement entered into by Clearway Energy Operating LLC that provided a term loan facility in an aggregate principal amount of $335 million and was repaid on May 3, 2022
CAFD
A non-GAAP measure, Cash Available for Distribution is defined as of September 30, 2022 as Adjusted EBITDA plus cash distributions/return of investment from unconsolidated affiliates, cash receipts from notes receivable, cash distributions from noncontrolling interests, adjustments to reflect sales-type lease cash payments and payments for lease expenses, less cash distributions to noncontrolling interests, maintenance capital expenditures, pro-rata Adjusted EBITDA from unconsolidated affiliates, cash interest paid, income taxes paid, principal amortization of indebtedness, changes in prepaid and accrued capacity payments and adjusted for development expenses
Capistrano Wind PortfolioFive wind projects representing 413 MW of capacity, which includes Broken Bow and Crofton Bluffs located in Nebraska, Cedro Hill located in Texas and Mountain Wind Power I and II located in Wyoming
CEGClearway Energy Group LLC (formerly Zephyr Renewables LLC)
CEG Master Services AgreementMaster Services Agreements entered into as of August 31, 2018 between the Company, Clearway Energy LLC and Clearway Energy Operating LLC, and CEG
Clearway Energy LLCThe holding company through which the projects are owned by Clearway Energy Group LLC, the holder of Class B and Class D units, and Clearway Energy, Inc., the holder of the Class A and Class C units
Clearway Energy Group LLCThe holder of all of the Company’s Class B and Class D common shares and Clearway Energy LLC’s Class B and Class D units and from time to time, possibly shares of the Company’s Class A and/or Class C common stock
Clearway Energy Operating LLCThe holder of the project assets that are owned by Clearway Energy LLC
CompanyClearway Energy, Inc., together with its consolidated subsidiaries
CVSR California Valley Solar Ranch
CVSR Holdco CVSR Holdco LLC, the indirect owner of CVSR
Distributed SolarSolar power projects, typically less than 20 MW in size (on an alternating current, or AC, basis), that primarily sell power produced to customers for usage on site, or are interconnected to sell power into the local distribution grid
Drop Down AssetsAssets under common control acquired by the Company from CEG
Exchange ActThe Securities Exchange Act of 1934, as amended
FASBFinancial Accounting Standards Board
FWS
U.S. Fish & Wildlife Service
GAAPAccounting principles generally accepted in the U.S.
4



GenConnGenConn Energy LLC
GIP
Global Infrastructure Partners
HLBVHypothetical Liquidation at Book Value
IRAInflation Reduction Act of 2022
KKRKKR Thor Bidco, LLC, an affiliate of Kohlberg Kravis Roberts & Co. L.P.
LIBORLondon Inter-Bank Offered Rate
Mesquite StarMesquite Star Special LLC
MMBtuMillion British Thermal Units
Mt. StormNedPower Mount Storm LLC
MWMegawatt
MWhSaleable megawatt hours, net of internal/parasitic load megawatt-hours
MWtMegawatts Thermal Equivalent
Net ExposureCounterparty credit exposure to Clearway Energy, Inc. net of collateral
NOLsNet Operating Losses
NPNSNormal Purchases and Normal Sales
OCIOther comprehensive income
OCLOther comprehensive loss
O&MOperations and Maintenance
PG&EPacific Gas and Electric Company
PPAPower Purchase Agreement
RENOMClearway Renewable Operation & Maintenance LLC
SCESouthern California Edison
SEC U.S. Securities and Exchange Commission
Senior NotesCollectively, the 2028 Senior Notes, the 2031 Senior Notes and the 2032 Senior Notes
SOFRSecured Overnight Financing Rate
SPPSolar Power Partners
SREC Solar Renewable Energy Credit
Tax Act Tax Cuts and Jobs Act of 2017
Thermal BusinessThe Company’s thermal business, which consists of thermal infrastructure assets that provide steam, hot water and/or chilled water, and in some instances electricity, to commercial businesses, universities, hospitals and governmental units
Thermal DispositionOn May 1, 2022, the Company completed the sale of 100% of its interests in the Thermal Business to KKR
TotalEnergiesTotalEnergies SE
U.S.United States of America
Utah Solar PortfolioSeven utility-scale solar farms located in Utah, representing 530 MW of capacity
Utility Scale SolarSolar power projects, typically 20 MW or greater in size (on an alternating current, or AC, basis), that are interconnected into the transmission or distribution grid to sell power at a wholesale level
VaRValue at Risk
VIEVariable Interest Entity

5



PART I - FINANCIAL INFORMATION
ITEM 1 — FINANCIAL STATEMENTS
CLEARWAY ENERGY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three months ended September 30,Nine months ended September 30,
(In millions, except per share amounts)2022202120222021
Operating Revenues
Total operating revenues$340 $351 $922 $968 
Operating Costs and Expenses
Cost of operations, exclusive of depreciation, amortization and accretion shown separately below98 117 338 334 
Depreciation, amortization and accretion129 131 379 387 
General and administrative10 31 30 
Transaction and integration costs— 
Development costs— 
Total operating costs and expenses235 262 755 760 
Gain on sale of business— — 1,291 — 
Operating Income105 89 1,458 208 
Other Income (Expense)
Equity in earnings of unconsolidated affiliates14 20 28 32 
Other income, net10 
Loss on debt extinguishment— — (2)(42)
Interest expense(49)(84)(143)(232)
Total other expense, net(30)(63)(107)(239)
Income (Loss) Before Income Taxes75 26 1,351 (31)
Income tax expense (benefit)13 237 (12)
Net Income (Loss)62 25 1,114 (19)
Less: Income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests30 544 (78)
Net Income Attributable to Clearway Energy, Inc.
$32 $21 $570 $59 
Earnings Per Share Attributable to Clearway Energy, Inc. Class A and Class C Common Stockholders
Weighted average number of Class A common shares outstanding - basic and diluted
35 35 35 35 
Weighted average number of Class C common shares outstanding - basic and diluted
82 82 82 82 
Earnings per Weighted Average Class A and Class C Common Share - Basic and Diluted
$0.28 $0.18 $4.89 $0.51 
Dividends Per Class A Common Share $0.3604 $0.3345 $1.0608 $0.9875 
Dividends Per Class C Common Share $0.3604 $0.3345 $1.0608 $0.9875 
.    
See accompanying notes to consolidated financial statements.
6



CLEARWAY ENERGY, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
Three months ended September 30,Nine months ended September 30,
(In millions)2022202120222021
Net Income (Loss)$62 $25 $1,114 $(19)
Other Comprehensive Income
Unrealized gain on derivatives and changes in accumulated OCI/OCL, net of income tax expense (benefit), of $3, $(2), $6 and $(3)
11 31 14 
Other comprehensive income11 31 14 
Comprehensive Income (Loss)73 28 1,145 (5)
Less: Comprehensive income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests37 563 (70)
Comprehensive Income Attributable to Clearway Energy, Inc.$36 $22 $582 $65 
See accompanying notes to consolidated financial statements.
7



CLEARWAY ENERGY, INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except shares)September 30, 2022December 31, 2021
ASSETS(Unaudited)
Current Assets  
Cash and cash equivalents$793 $179 
Restricted cash 363 475 
Accounts receivable — trade200 144 
Inventory48 37 
Derivative instruments23 — 
Current assets held-for-sale— 631 
Prepayments and other current assets61 65 
Total current assets1,488 1,531 
Property, plant and equipment, net 7,437 7,650 
Other Assets
Equity investments in affiliates377 381 
Intangible assets for power purchase agreements, net2,537 2,419 
Other intangible assets, net 78 80 
Derivative instruments71 
Deferred income taxes— 95 
Right-of-use assets, net519 550 
Other non-current assets89 101 
Total other assets3,671 3,632 
Total Assets$12,596 $12,813 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Current portion of long-term debt$493 $772 
Accounts payable — trade53 74 
Accounts payable — affiliates15 107 
Derivative instruments79 46 
Accrued interest expense41 54 
Current liabilities held-for-sale— 494 
Accrued expenses and other current liabilities127 84 
Total current liabilities808 1,631 
Other Liabilities
Long-term debt6,519 6,939 
Deferred income taxes125 13 
Derivative instruments291 196 
Long-term lease liabilities541 561 
Other non-current liabilities196 173 
Total other liabilities7,672 7,882 
Total Liabilities8,480 9,513 
Redeemable noncontrolling interest in subsidiaries— 
Commitments and Contingencies
Stockholders’ Equity 
Preferred stock, $0.01 par value; 10,000,000 shares authorized; none issued
— — 
Class A, Class B, Class C and Class D common stock, $0.01 par value; 3,000,000,000 shares authorized (Class A 500,000,000, Class B 500,000,000, Class C 1,000,000,000, Class D 1,000,000,000); 201,872,521 shares issued and outstanding (Class A 34,599,645, Class B 42,738,750, Class C 82,197,376, Class D 42,336,750) at September 30, 2022 and 201,856,166 shares issued and outstanding (Class A 34,599,645, Class B 42,738,750, Class C 81,779,021, Class D 42,738,750) at December 31, 2021
Additional paid-in capital1,786 1,872 
Retained earnings (accumulated deficit)494 (33)
Accumulated other comprehensive income (loss)10 (6)
Noncontrolling interest1,818 1,466 
Total Stockholders’ Equity4,109 3,300 
Total Liabilities and Stockholders’ Equity$12,596 $12,813 
See accompanying notes to consolidated financial statements.
8



CLEARWAY ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended September 30,
(In millions)20222021
Cash Flows from Operating Activities
Net Income (Loss)$1,114 $(19)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Equity in earnings of unconsolidated affiliates (28)(32)
Distributions from unconsolidated affiliates25 25 
Depreciation, amortization and accretion379 387 
Amortization of financing costs and debt discounts10 10 
Amortization of intangibles123 107 
Loss on debt extinguishment 42 
Gain on sale of business(1,291)— 
Reduction in carrying amount of right-of-use assets10 
Changes in deferred income taxes207 (12)
Changes in derivative instruments and amortization of accumulated OCI/OCL77 50 
Cash used in changes in other working capital:
Changes in prepaid and accrued liabilities for tolling agreements 24 20 
Changes in other working capital(45)(57)
Net Cash Provided by Operating Activities607 529 
Cash Flows from Investing Activities
Acquisitions, net of cash acquired
— (211)
Acquisition of Drop Down Assets(51)(132)
Acquisition of Capistrano Wind Portfolio, net of cash acquired(223)— 
Capital expenditures(95)(124)
Asset purchase from affiliate— (21)
Return of investment from unconsolidated affiliates12 37 
Proceeds from sale of business1,457 — 
Other— 21 
Net Cash Provided by (Used in) Investing Activities1,100 (430)
Cash Flows from Financing Activities
(Distributions to) contributions from noncontrolling interests(14)251 
Payments of dividends and distributions(214)(199)
Distributions to CEG of escrowed amounts(64)— 
Tax-related distributions(8)— 
Proceeds from the revolving credit facility80 377 
Payments for the revolving credit facility(325)(300)
Proceeds from the issuance of long-term debt 219 1,037 
Payments of debt issuance costs(4)(13)
Payments for short-term and long-term debt(868)(1,170)
Other(7)
Net Cash Used in Financing Activities(1,205)(9)
Net Increase in Cash, Cash Equivalents and Restricted Cash502 90 
Cash, Cash Equivalents and Restricted Cash at beginning of period654 465 
Cash, Cash Equivalents and Restricted Cash at end of period$1,156 $555 
See accompanying notes to consolidated financial statements.
9



CLEARWAY ENERGY, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
For the Nine Months Ended September 30, 2022
(Unaudited)
(In millions)Preferred StockCommon StockAdditional
Paid-In
Capital
(Accumulated Deficit) Retained EarningsAccumulated
Other
Comprehensive (Loss) Income
Noncontrolling
Interest
Total
Stockholders’
Equity
Balances at December 31, 2021$— $$1,872 $(33)$(6)$1,466 $3,300 
Net loss— — — (32)— (67)(99)
Unrealized gain on derivatives and changes in accumulated OCL, net of tax— — — — 14 
Distributions to CEG, net of contributions, cash— — — — — (3)(3)
Contributions from noncontrolling interests, net of distributions, cash— — — — — 28 28 
Mesquite Sky Drop Down— — (1)— — (7)(8)
Black Rock Drop Down— — — — — 
Mililani I Drop Down— — (11)— — (19)(30)
Non-cash adjustments for change in tax basis— — — — — 
Stock-based compensation— — (2)— — — (2)
Common stock dividends and distributions to CEG unit holders— — (40)— — (30)(70)
Balances at March 31, 2022$— $$1,826 $(65)$— $1,377 $3,139 
Net income— — — 570 — 575 1,145 
Unrealized gain on derivatives and changes in accumulated OCI, net of tax— — — — 
Distributions to CEG, net of contributions, cash— — — — — (20)(20)
Distributions to noncontrolling interests, net of contributions, cash— — — — — (10)(10)
Non-cash adjustments for change in tax basis— — (1)— — — (1)
Stock-based compensation— — — — — 
Common stock dividends and distributions to CEG unit holders— — (41)— — (30)(71)
Balances at June 30, 2022$— $$1,785 $505 $$1,896 $4,189 
Net income— — — 32 — 27 59 
Unrealized gain on derivatives and changes in accumulated OCI, net of tax— — — — 11 
Distributions to CEG, non-cash— — — — — (4)(4)
Contributions from CEG, net of distributions, cash— — — — — 
Tax-related distributions — — — — — (8)(8)
Distributions to noncontrolling interests, net of contributions, cash— — — — — (14)(14)
Stock-based compensation— — (1)— — — 
Capistrano Wind Portfolio Acquisition— — — — 11 
Kawailoa Sale to Clearway Renew LLC— — — — — (69)(69)
Common stock dividends and distributions to CEG unit holders— — — (42)— (31)(73)
Balances at September 30, 2022$— $$1,786 $494 $10 $1,818 $4,109 
See accompanying notes to consolidated financial statements.
10



CLEARWAY ENERGY, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
For the Nine Months Ended September 30, 2021
(Unaudited)
(In millions)Preferred StockCommon StockAdditional
Paid-In
Capital
Accumulated DeficitAccumulated
Other
Comprehensive Loss
Noncontrolling
Interest
Total
Stockholders’
Equity
Balances at December 31, 2020$— $$1,922 $(84)$(14)$890 $2,715 
Net income (loss)— — — — (81)(78)
Unrealized gain on derivatives and changes in accumulated OCL, net of tax— — — — 11 
Contributions from CEG, non-cash— — — — — 27 27 
Contributions from CEG, cash— — — — — 103 103 
Contributions from noncontrolling interests, net of distributions, cash— — — — — 126 126 
Agua Caliente acquisition— — — — — 273 273 
Rattlesnake Drop Down— — — — — (118)(118)
Non-cash adjustments for change in tax basis— — — — — 
Common stock dividends and distributions to CEG unit holders— — (38)— — (28)(66)
Balances at March 31, 2021$— $$1,886 $(81)$(10)$1,199 $2,995 
Net income (loss)— — — 35 — (4)31 
Unrealized gain (loss) on derivatives and changes in accumulated OCL, net of tax— — — — (1)— 
Contributions from CEG, non-cash— — — — — 
Contributions from CEG, cash— — — — — 
Contributions from noncontrolling interests, net of distributions, cash— — — — — 38 38 
Rattlesnake Drop Down — — — — — 
Stock-based compensation— — — — — 
Non-cash adjustment for change in tax basis— — (1)— — — (1)
Common stock dividends and distributions to CEG unit holders— — (38)— — (28)(66)
Balances at June 30, 2021$— $$1,848 $(46)$(9)$1,209 $3,003 
Net income— — — 21 — 24 
Changes in accumulated OCL, net of tax— — — — 
Contributions from CEG, non-cash— — — — — 
Distributions to noncontrolling interests, net of contributions, cash
— — — — — (11)(11)
Stock-based compensation— — — — — 
Common stock dividends and distributions to CEG unit holders— — (39)— — (28)(67)
Balances at September 30, 2021$— $$1,810 $(25)$(8)$1,177 $2,955 
See accompanying notes to consolidated financial statements.

11



CLEARWAY ENERGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 — Nature of Business
Clearway Energy, Inc., together with its consolidated subsidiaries, or the Company, is a publicly-traded energy infrastructure investor in and owner of modern, sustainable and long-term contracted assets across North America. The Company is sponsored by GIP and TotalEnergies through the portfolio company, Clearway Energy Group LLC, or CEG, which became equally owned by GIP and TotalEnergies as of September 12, 2022, when TotalEnergies acquired, through its investment in an intermediate holding company, 50% of GIP’s interest in CEG. GIP is an independent infrastructure fund manager that makes equity and debt investments in infrastructure assets and businesses. TotalEnergies is a global multi-energy company.
The Company is one of the largest renewable energy owners in the U.S. with over 5,500 net MW of installed wind and solar generation projects. The Company’s over 8,000 net MW of assets also includes approximately 2,500 net MW of environmentally-sound, highly efficient natural gas-fired generation facilities. Through this environmentally-sound, diversified and primarily contracted portfolio, the Company endeavors to provide its investors with stable and growing dividend income. Substantially all of the Company’s generation assets are under long-term contractual arrangements for the output or capacity from these assets.
On May 1, 2022, the Company completed the sale of 100% of its interests in the Thermal Business to KKR. For further details of the Thermal Disposition, refer to Note 3, Acquisitions and Dispositions.
The Company consolidates the results of Clearway Energy LLC through its controlling interest, with CEG’s interest shown as non-controlling interest in the consolidated financial statements. The holders of the Company’s outstanding shares of Class A and Class C common stock are entitled to dividends as declared. CEG receives its distributions from Clearway Energy LLC through its ownership of Clearway Energy LLC Class B and Class D units. From time to time, CEG may also hold shares of the Company’s Class A and/or Class C common stock.
As of September 30, 2022, the Company owned 57.86% of the economic interests of Clearway Energy LLC, with CEG owning 42.14% of the economic interests of Clearway Energy LLC.
12



The following table represents a summarized structure of the Company as of September 30, 2022:
cwen-20220930_g1.jpg
Basis of Presentation
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with the SEC’s regulations for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The following notes should be read in conjunction with the accounting policies and other disclosures as set forth in the notes to the consolidated financial statements included in the Company’s 2021 Form 10-K. Interim results are not necessarily indicative of results for a full year.
In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all material adjustments consisting of normal and recurring accruals necessary to present fairly the Company’s consolidated financial position as of September 30, 2022, and results of operations, comprehensive income and cash flows for the three and nine months ended September 30, 2022 and 2021.
Note 2 — 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. They also impact the reported amounts of net earnings during the reporting periods. Actual results could be different from these estimates.
13



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 $168 million and $146 million as of September 30, 2022 and December 31, 2021, 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, 2022December 31, 2021
 (In millions)
Cash and cash equivalents$793 $179 
Restricted cash363 475 
Cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows$1,156 $654 
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, 2022, these restricted funds were comprised of $144 million designated to fund operating expenses, $66 million designated for current debt service payments and $124 million restricted for reserves including debt service, performance obligations and other reserves as well as capital expenditures. The remaining $29 million is held in distributions 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 2021, the members of the partnerships contributed their respective portions of the tax credits in the amount of $27 million to the Oahu Solar and $22 million to the Kawailoa Solar project companies, which were recorded to 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. On August 1, 2022, the Company sold its Class A interests in the Kawailoa Partnership, which consolidates the Kawailoa Solar project, to Clearway Renew LLC, as further described in Note 3, Acquisitions and Dispositions, resulting in the removal of $7 million that remained in restricted cash at the time of sale. As of September 30, 2022, $22 million of the $27 million previously contributed to the Oahu Solar projects 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 property, plant and equipment, net, and accumulated amortization included in intangible assets, net as of September 30, 2022 and December 31, 2021:
September 30, 2022December 31, 2021
(In millions)
Property, Plant and Equipment Accumulated Depreciation $3,124 $2,501 
Intangible Assets Accumulated Amortization728 605 
Dividends to Class A and Class C Common Stockholders
The following table lists the dividends paid on the Company's Class A and Class C common stock during the nine months ended September 30, 2022:
Third Quarter 2022
Second Quarter 2022
First Quarter 2022
Dividends per Class A share$0.3604 $0.3536 $0.3468 
Dividends per Class C share0.3604 0.3536 0.3468 
Dividends on the Class A 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 2, 2022, the Company declared quarterly dividends on its Class A and Class C common stock of $0.3672 per share payable on December 15, 2022 to stockholders of record as of December 1, 2022.
14



Noncontrolling Interests
Clearway Energy LLC Distributions to CEG
The following table lists distributions paid to CEG during the nine months ended September 30, 2022 on Clearway Energy LLC’s Class B and D units:
Third Quarter 2022Second Quarter 2022First Quarter 2022
Distributions per Class B Unit $0.3604 $0.3536 $0.3468 
Distributions per Class D Unit0.3604 0.3536 0.3468 
In addition to the quarterly distributions paid to CEG, Clearway Energy LLC distributed an additional $8 million to CEG during the third quarter of 2022, which represents CEG’s pro-rata share of a distribution that was paid in order for the Company to make certain tax payments associated with the sale of the Thermal Business. The Company’s share of the distribution was $11 million.
On November 2, 2022, Clearway Energy LLC declared a distribution on its Class B and Class D units of $0.3672 per unit payable on December 15, 2022 to unit holders of record as of December 1, 2022.
Redeemable Noncontrolling Interests
To the extent that a third party has the right to redeem their interests for cash or other assets, the Company has included the noncontrolling interest attributable to the third party as a component of temporary equity in the mezzanine section of the consolidated balance sheet. The following table reflects the changes in the Company’s redeemable noncontrolling interest balance for the nine months ended September 30, 2022:
(In millions)
Balances at December 31, 2021$— 
Cash distributions to redeemable noncontrolling interests(2)
Comprehensive income attributable to redeemable noncontrolling interests
Balances at September 30, 2022$
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.
Power Purchase Agreements, or PPAs
The majority of the Company’s revenues are obtained through PPAs or similar 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 operating leases as the Company retained its historical lease assessments and classification upon adoption of ASC 842, Leases. 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 PPAs have no minimum lease payments and all of the lease revenue under these PPAs is recorded as contingent rent on an actual basis when the electricity is delivered.
15



Renewable Energy Credits, or RECs
Renewable energy credits, or RECs, are usually sold through long-term PPAs or through REC contracts with counterparties. 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.
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 consolidated statements of income.
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.
On May 1, 2022, the Company completed the sale of 100% of its interests in the Thermal Business to KKR. For further details of the Thermal Disposition, refer to Note 3, Acquisitions and Dispositions.
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, 2022 and 2021, respectively:
Three months ended September 30, 2022
(In millions)Conventional GenerationRenewables
Total
Energy revenue (a)
$$272 $274 
Capacity revenue (a)
106 107 
Contract amortization(6)(36)(42)
Other revenues— 18 18 
Mark-to-market for economic hedges— (17)(17)
Total operating revenues102 238 340 
Less: Mark-to-market for economic hedges— 17 17 
Less: Lease revenue(108)(226)(334)
Less: Contract amortization36 42 
Total revenue from contracts with customers$— $65 $65 
(a) The following amounts of energy and capacity revenue relate to leases and are accounted for under ASC 842:
(In millions)Conventional GenerationRenewablesTotal
Energy revenue$$226 $228 
Capacity revenue106 — 106 
Total$108 $226 $334 
16



Three months ended September 30, 2021
(In millions)Conventional GenerationRenewablesThermalTotal
Energy revenue (a)
$$231 $33 $267 
Capacity revenue (a)
120 12 133 
Contract amortization(5)(32)(1)(38)
Other revenues— 14 10 24 
Mark-to-market for economic hedges— (35)— (35)
Total operating revenues118 179 54 351 
Less: Mark-to-market for economic hedges— 35 — 35 
Less: Lease revenue(123)(198)(1)(322)
Less: Contract amortization32 38 
Total revenue from contracts with customers$— $48 $54 $102 
(a) The following amounts of energy and capacity revenue relate to leases and are accounted for under ASC 842:
(In millions)Conventional GenerationRenewablesThermalTotal
Energy revenue$$198 $$202 
Capacity revenue120 — — 120 
Total$123 $198 $$322 
Nine months ended September 30, 2022
(In millions)Conventional GenerationRenewables Thermal Total
Energy revenue (a)
$$773 $48 $826 
Capacity revenue (a)
326 18 346 
Contract amortization(18)(107)— (125)
Other revenues— 59 11 70 
Mark-to-market for economic hedges— (195)— (195)
Total operating revenues313 532 77 922 
Less: Mark-to-market for economic hedges— 195 — 195 
Less: Lease revenue(331)(656)(1)(988)
Less: Contract amortization18 107 — 125 
Total revenue from contracts with customers$— $178 $76 $254 
(a) The following amounts of energy and capacity revenue relate to leases and are accounted for under ASC 842:
(In millions)Conventional GenerationRenewablesThermalTotal
Energy revenue$$656 $$662 
Capacity revenue326 — — 326 
Total$331 $656 $$988 
17



Nine months ended September 30, 2021
(In millions)Conventional GenerationRenewables Thermal Total
Energy revenue (a)
$$618 $91 $715 
Capacity revenue (a)
340 40 381 
Contract amortization(17)(87)(3)(107)
Other revenues— 45 24 69 
Mark-to-market for economic hedges— (90)— (90)
Total operating revenues329 487 152 968 
Less: Mark-to-market for economic hedges— 90 — 90 
Less: Lease revenue(346)(571)(2)(919)
Less: Contract amortization17 87 107 
Total revenue from contracts with customers$— $93 $153 $246 
(a) The following amounts of energy and capacity revenue relate to leases and are accounted for under ASC 842:
(In millions)Conventional GenerationRenewablesThermalTotal
Energy revenue$$571 $$579 
Capacity revenue340 — — 340 
Total$346 $571 $$919 
Contract Amortization
Assets and liabilities recognized from power sales agreements assumed through acquisitions relating to the sale of electric capacity and energy in future periods arising from differences in contract and market prices 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, 2022 and December 31, 2021:
September 30, 2022December 31, 2021
(In millions)
Accounts receivable, net - Contracts with customers$47 $44 
Accounts receivable, net - Leases153 100 
Total accounts receivable, net$200 $144 
Recently Adopted Accounting Standards
In March 2020, the FASB issued ASU No. 2020-04, 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, which affects certain of the Company’s debt and interest rate swap agreements. The guidance is effective for all entities as of March 12, 2020 through December 31, 2022. As of September 30, 2022, the Company has applied the amendments to all of its eligible contract modifications, where applicable, during the reference rate reform period. Additionally, the Company has not elected any optional expedients provided in the standard.
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Note 3 — Acquisitions and Dispositions
Acquisitions
Waiawa Drop Down — On October 3, 2022, the Company, through its indirect subsidiary, Lighthouse Renewable Holdco LLC, acquired Waiawa BL Borrower Holdco LLC, the indirect owner of the Waiawa solar project, a 36 MW solar project with matching storage capacity that is currently under construction and located in Honolulu, Hawaii, from Clearway Renew LLC, a subsidiary of CEG, for cash consideration of $20 million. Lighthouse Renewable Holdco LLC is a partnership between the Company and a third-party investor. The third-party investor also contributed cash consideration of $12 million, which was utilized to acquire their portion of the acquired entity. Waiawa BL Borrower Holdco LLC consolidates, as the direct owner of the primary beneficiary, a tax equity fund, Waiawa TE Holdco LLC, which directly holds the Waiawa solar project. Waiawa has a 20-year PPA with an investment-grade utility that commences when the project reaches commercial operations, as defined in the PPA. The acquisition was funded with existing sources of liquidity.
Capistrano Wind Portfolio Acquisition — On August 22, 2022, the Company, through its wholly-owned indirect subsidiary, Capistrano Portfolio Holdco LLC, acquired the Capistrano Wind Portfolio from Capistrano Wind Partners LLC, an indirect subsidiary of CEG, for a base purchase price of approximately $255 million, less working capital adjustments in the net amount of approximately $16 million, representing total net consideration of approximately $239 million. Concurrent with the acquisition, the Company also entered into a development agreement with Clearway Renew LLC, whereby Clearway Renew LLC paid $10 million to the Company at acquisition date for an exclusive right to develop, construct and repower the projects in the Capistrano Wind Portfolio, which was utilized to partially fund the acquisition of the Capistrano Wind Portfolio. The Capistrano Wind Portfolio consists of five wind projects located in Texas, Nebraska and Wyoming with a combined capacity of 413 MW that reached commercial operations between 2008 and 2012. The assets within the portfolio sell power under PPAs with investment-grade counterparties that have a weighted average remaining contract duration of approximately 10 years. The Capistrano Wind Portfolio operations are reflected in the Company’s Renewables segment and the acquisition was funded with existing sources of liquidity. The acquisition was determined to be an asset acquisition and the Company consolidates the Capistrano Wind Portfolio on a prospective basis in its financial statements. The assets and liabilities transferred to the Company relate to interests under common control by GIP and were transferred at historical cost in accordance with ASC 805-50, Business Combinations - Related Issues, which reflects GIP’s basis. The difference between the historical cost of the Company’s net assets acquired of $250 million, less the sum of the cash paid of $239 million and the $4 million in accumulated other comprehensive income transferred to the Company, was recorded as an adjustment to CEG’s noncontrolling interest balance.
The following is a summary of assets and liabilities transferred in connection with the acquisition as of August 22, 2022:
(In millions)Capistrano Wind Portfolio
Other current and non-current assets (a)
$39 
Property, plant and equipment, net147 
Intangible assets for power purchase agreements237 
Right-of-use-assets, net27 
Total assets acquired450 
Long-term debt162 
Long-term lease liabilities28 
Other current and non-current liabilities10 
Total liabilities assumed200 
Net assets acquired$250 
(a) Includes cash of $12 million and restricted cash of $4 million.

19



Mililani I Drop Down — On March 25, 2022, the Company, through its indirect subsidiary, Lighthouse Renewable Holdco LLC, acquired Mililani BL Borrower Holdco LLC, the indirect owner of the Mililani I solar project, a 39 MW solar project with matching storage capacity located in Honolulu, Hawaii, from Clearway Renew LLC for cash consideration of $22 million. Lighthouse Renewable Holdco LLC is a partnership between the Company and a third-party investor. The third-party investor also contributed cash consideration of $14 million utilized to acquire their portion of the acquired entity. Mililani BL Borrower Holdco LLC consolidates, as the direct owner of the primary beneficiary, a tax equity fund, Mililani TE Holdco LLC, which directly holds the Mililani I solar project, as further described in Note 4, Investments Accounted for by the Equity Method and Variable Interest Entities. Mililani I has a 20-year PPA with an investment-grade utility that commenced in July 2022. The Mililani I operations are reflected in the Company’s Renewables segment and the acquisition was funded with existing sources of liquidity. The acquisition was determined to be an asset acquisition and the Company consolidates Mililani I on a prospective basis in its financial statements. The assets and liabilities transferred to the Company relate to interests under common control by GIP and were recorded at historical cost in accordance with ASC 805-50, Business Combinations - Related Issues. The sum of the cash paid of $22 million and the historical cost of the Company’s net liabilities assumed of $8 million was recorded as an adjustment to CEG’s noncontrolling interest balance. In addition, the Company reflected $15 million of the Company’s purchase price, which was contributed back by CEG to pay down the acquired long-term debt, as distributions to CEG, net of contributions, in the consolidated statement of stockholders’ equity.
The following is a summary of assets and liabilities transferred in connection with the acquisition as of March 25, 2022:
(In millions)Mililani I
Other current and non-current assets$
Property, plant and equipment118 
Right-of-use-assets19 
Total assets acquired139 
Long-term debt (a)
100 
Long-term lease liabilities20 
Other current and non-current liabilities27 
Total liabilities assumed147 
Net liabilities assumed$(8)
(a) Includes a $16 million construction loan, $27 million sponsor equity bridge loan and $60 million tax equity bridge loan, offset by $3 million in unamortized debt issuance costs. The sponsor equity bridge loan was repaid at acquisition date utilizing $14 million from the cash equity investor, as well as $15 million of the Company’s purchase price, which was contributed back to the Company by CEG, of which $27 million was utilized to pay down the acquired long-term debt and $2 million was utilized to pay associated fees. Also at acquisition date, the tax equity investor contributed $18 million into escrow, which was included in restricted cash on the Company’s consolidated balance sheet. The tax equity investor will contribute an additional $42 million when the project reaches substantial completion, which will be utilized, along with the $18 million in escrow, to repay the $60 million tax equity bridge loan. The project is expected to reach substantial completion in the fourth quarter of 2022.
Dispositions
Kawailoa Sale — On August 1, 2022, the Company sold 100% of its Class A interests in the Kawailoa Partnership to Clearway Renew LLC, a subsidiary of CEG, for cash proceeds of $9 million, which equals the Company’s initial investment. The Kawailoa Partnership is a partnership that consolidates, through its 51% controlling majority interest, a lower-level partnership that is 49% owned by a third-party investor, and which consolidates the Kawailoa solar project through its ownership of a controlling interest in the tax equity fund that holds the project. The assets and liabilities transferred to Clearway Renew LLC relate to interests under common control by GIP and were transferred at historical cost in accordance with ASC 805-50, Business Combinations - Related Issues. This resulted in the Company removing $69 million from noncontrolling interest related to the Kawailoa Partnership at the time of sale. Noncontrolling interests prior to the sale include the interests of the third-party investor, tax equity investor and Clearway Renew LLC.
20



Thermal Disposition — On May 1, 2022, the Company completed the sale of 100% of its interests in the Thermal Business to KKR for net proceeds of approximately $1.46 billion, inclusive of working capital adjustments, which excludes approximately $18 million in transaction expenses that were incurred in connection with the disposition. The Thermal Disposition resulted in a gain on sale of business of approximately $1.29 billion, which is net of the $18 million in transaction expenses referenced above. The proceeds from the sale were utilized to repay certain borrowings outstanding as further described in Note 7, Long-term Debt, with the remaining proceeds invested in short-term investments classified as cash and cash equivalents on the Company’s consolidated balance sheet as of September 30, 2022. Effective with the approval by the Board of Directors and signing of the agreement to sell the Thermal Business on October 22, 2021, the Company concluded that all entities that are included within the Thermal Business would be treated as held for sale on a prospective basis, thus the assets and liabilities were reported as separate held for sale line items on the Company’s consolidated balance sheets as of December 31, 2021. As of December 31, 2021, property, plant and equipment represented 78% and intangible assets represented 9% of assets classified as held for sale while long-term debt represented 85% of liabilities classified as held for sale. The Company’s Thermal segment is comprised solely of the Thermal Business's results of operations.
Note 4 — Investments Accounted for by the Equity Method and Variable Interest Entities
Entities that are Consolidated
The Company has a controlling financial interest in certain entities which have been identified as VIEs under ASC 810, Consolidations, or ASC 810. These arrangements are primarily related to tax equity arrangements entered into with third parties in order to monetize certain tax credits associated with wind and solar facilities, as further described under Item 15 — Note 5, Investments Accounted for by the Equity Method and Variable Interest Entities, to the consolidated financial statements included in the Company’s 2021 Form 10-K.
Summarized financial information for the Company’s consolidated VIEs consisted of the following as of September 30, 2022:
(In millions)Alta TE HoldcoBuckthorn Renewables, LLC
DGPV Funds(a)
Langford TE Partnership LLC
Lighthouse Renewable Holdco LLC (b)
Lighthouse Renewable Holdco 2 LLC (c)
Other current and non-current assets$54 $$95 $17 $105 $48 
Property, plant and equipment312 196 577 127 714 364 
Intangible assets203 — 14 — — 
Total assets569 200 686 146 819 412 
Current and non-current liabilities38 11 76 55 310 132 
Total liabilities38 11 76 55 310 132 
Noncontrolling interest35 33 14 63 422 239 
Net assets less noncontrolling interests$496 $156 $596 $28 $87 $41 
(a) DGPV Funds is comprised of DGPV Fund 2 LLC, Clearway & EFS Distributed Solar LLC, DGPV Fund 4 LLC, Golden Puma Fund LLC, Renew Solar CS4 Fund LLC and Chestnut Fund LLC.
(b) Lighthouse Renewable Holdco LLC consolidates Mesquite Star Tax Equity Holdco LLC, Black Rock TE Holdco LLC and Mililani TE Holdco LLC, which are also consolidated VIEs.
(c) Lighthouse Renewable Holdco 2 LLC consolidates Mesquite Sky TE Holdco LLC, which is also a consolidated VIE.
21



(In millions)Oahu Solar Partnership
Pinnacle Repowering Partnership LLC
Rattlesnake TE Holdco LLC Rosie TargetCo LLC
Wildorado TE Holdco
Other (a)
Other current and non-current assets$56 $$14 $45 $22 $17 
Property, plant and equipment166 104 187 241 213 159 
Intangible assets— 17 — — — 
Total assets222 129 201 286 235 177 
Current and non-current liabilities104 17 103 19 73 
Total liabilities104 17 103 19 73 
Noncontrolling interest26 49 93 138 114 74 
Net assets less noncontrolling interests$92 $75 $91 $45 $102 $30 
(a) Other is comprised of Crosswind Transmission, LLC, Hardin Hilltop Wind LLC, Elbow Creek TE Holdco and Spring Canyon TE Holdco projects.
The discussion below describes material changes to VIEs during the nine months ended September 30, 2022.
Kawailoa Partnership — As described in Note 3, Acquisitions and Dispositions, on August 1, 2022, the Company sold 100% of its Class A interests in the Kawailoa Partnership to Clearway Renew LLC, a subsidiary of CEG.
Lighthouse Renewable Holdco LLC — As described in Note 3, Acquisitions and Dispositions, on March 25, 2022, Lighthouse Renewable Holdco LLC acquired the Class B interests in a partnership, Mililani BL Borrower Holdco LLC, which consolidates, as the direct owner of the primary beneficiary, a tax equity fund, Mililani TE Holdco LLC, that holds the Mililani I solar project. The tax equity investor’s interest is shown as noncontrolling interest and the HLBV method is utilized to allocate the income or losses of Mililani TE Holdco LLC. The third-party investor in Lighthouse Renewable Holdco LLC also acquired and contributed an interest in Mililani BL Borrower Holdco LLC to Lighthouse Renewable Holdco LLC. The Company recorded the related noncontrolling interest at historical carrying amount, with the offset to contributed capital.
Entities that are not Consolidated
The Company has interests in entities that are considered VIEs under ASC 810, but for which it is not considered the primary beneficiary. The Company accounts for its interests in these entities and entities in which it has a significant investment under the equity method of accounting, as further described under Item 15 — Note 5, Investments Accounted for by the Equity Method and Variable Interest Entities, to the consolidated financial statements included in the Company’s 2021 Form 10-K.
The Company’s maximum exposure to loss as of September 30, 2022 is limited to its equity investment in the unconsolidated entities, as further summarized in the table below:
NameEconomic InterestInvestment Balance
(In millions)
Avenal50%$
Desert Sunlight25%246 
Elkhorn Ridge67%23 
GenConn (a)
50%82 
San Juan Mesa75%17 
$377 
(a) GenConn is a variable interest entity.
22



Note 5 — Fair Value of Financial Instruments
Fair Value Accounting under ASC 820
ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:
Level 1—quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date.
Level 2—inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.
Level 3—unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date.
In accordance with ASC 820, the Company determines the level in the fair value hierarchy within which each fair value measurement in its entirety falls, based on the lowest level input that is significant to the fair value measurement.
For cash and cash equivalents, restricted cash, accounts receivable — trade, accounts payable — trade, accounts payable — affiliates and accrued expenses and other current liabilities, the carrying amounts approximate fair value because of the short-term maturity of those instruments and are classified as Level 1 within the fair value hierarchy.
The carrying amounts and estimated fair values of the Company’s recorded financial instruments not carried at fair market value or that do not approximate fair value are as follows:
As of September 30, 2022As of December 31, 2021
Carrying AmountFair ValueCarrying AmountFair Value
(In millions)
Long-term debt, including current portion (a)
$7,077 $6,297 $7,782 $7,997 
(a) Excludes net debt issuance costs, which are recorded as a reduction to long-term debt on the Company’s consolidated balance sheets.
The fair value of the Company’s publicly-traded long-term debt is based on quoted market prices and is classified as Level 2 within the fair value hierarchy. The fair value of debt securities, non-publicly traded long-term debt and certain notes receivable of the Company are based on expected future cash flows discounted at market interest rates, or current interest rates for similar instruments with equivalent credit quality and are classified as Level 3 within the fair value hierarchy. The following table presents the level within the fair value hierarchy for long-term debt, including current portion as of September 30, 2022 and December 31, 2021:
As of September 30, 2022As of December 31, 2021
Level 2Level 3Level 2Level 3
 (In millions)
Long-term debt, including current portion
$1,752 $4,545 $2,159 $5,838 
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Recurring Fair Value Measurements
The Company records its derivative assets and liabilities at fair market value on its consolidated balance sheet. The following table presents assets and liabilities measured and recorded at fair value on the Company’s consolidated balance sheets on a recurring basis and their level within the fair value hierarchy:
As of September 30, 2022As of December 31, 2021
Fair Value (a)
Fair Value (a)
(In millions)Level 2Level 3Level 2Level 3
Derivative assets:
Interest rate contracts$94 $— $$— 
Other financial instruments (b)
— 21 — 25 
Total assets$94 $21 $$25 
Derivative liabilities:
Commodity contracts$— $370 $— $179 
Interest rate contracts— — 63 — 
Total liabilities$— $370 $63 $179 
(a) There were no derivative assets classified as Level 1 or Level 3 and no liabilities classified as Level 1 as of September 30, 2022 and December 31, 2021.
(b) SREC contract.
The following table reconciles the beginning and ending balances for instruments that are recognized at fair value in the consolidated financial statements using significant unobservable inputs:
 Three months ended September 30,
Nine months ended September 30,
2022
2021
20222021
(In millions)Fair Value Measurement Using Significant Unobservable Inputs (Level 3)Fair Value Measurement Using Significant Unobservable Inputs (Level 3)
Beginning balance$(332)$(79)$(154)$(15)
Settlements14 42 
Additions due to loss of NPNS exception— — (22)— 
Total losses for the period included in earnings(31)(37)(215)(90)
Purchases — — — (9)
Ending balance $(349)$(113)$(349)$(113)
Change in unrealized losses included in earnings for derivatives and other financial instruments held as of September 30, 2022
$(31)$(215)
Derivative and Financial Instruments Fair Value Measurements
The Company's contracts are non-exchange-traded and valued using prices provided by external sources. The Company uses quoted observable forward prices to value its energy contracts. To the extent that observable forward prices are not available, the quoted prices reflect the average of the forward prices from the prior year, adjusted for inflation. As of September 30, 2022, contracts valued with prices provided by models and other valuation techniques make up 100% of derivative liabilities and other financial instruments.
The Company’s significant positions classified as Level 3 include physical commodity contracts executed in illiquid markets. The significant unobservable inputs used in developing fair value include illiquid power tenors and location pricing, which is derived by extrapolating pricing as a basis to liquid locations. The tenor pricing and basis spread are based on observable market data when available or derived from historic prices and forward market prices from similar observable markets when not available.
24



The following table quantifies the significant unobservable inputs used in developing the fair value of the Company’s Level 3 positions as of September 30, 2022:
September 30, 2022
Fair ValueInput/Range
AssetsLiabilitiesValuation TechniqueSignificant Unobservable InputLowHighWeighted Average
(In millions)
Commodity Contracts $— $370 Discounted Cash FlowForward Market Price (per MWh)$23.33 $129.06 $41.69 
Other Financial Instruments21 — Discounted Cash FlowForecast annual generation levels of certain DG solar facilities58,539 MWh117,078 MWh114,223 MWh
The following table provides the impact on the fair value measurements to increases/(decreases) in significant unobservable inputs as of September 30, 2022:
Significant Unobservable InputPositionChange In InputImpact on Fair Value Measurement
Forward Market Price PowerSellIncrease/(Decrease)Lower/(Higher)
Forecast Generation LevelsSellIncrease/(Decrease)Higher/(Lower)
The fair value of each contract is discounted using a risk-free interest rate. In addition, a credit reserve is applied to reflect credit risk, which is, for interest rate swaps, calculated based on credit default swaps using the bilateral method. For commodities, to the extent that the Net Exposure under a specific master agreement is an asset, the Company uses the counterparty’s default swap rate. If the Net Exposure under a specific master agreement is a liability, the Company uses a proxy of its own default swap rate. For interest rate swaps and commodities, the credit reserve is added to the discounted fair value to reflect the exit price that a market participant would be willing to receive to assume the liabilities or that a market participant would be willing to pay for the assets. As of September 30, 2022, the non-performance reserve was a $48 million gain recorded primarily to total operating revenues in the consolidated statement of income. It is possible that future market prices could vary from those used in recording assets and liabilities and such variations could be material.
Concentration of Credit Risk
In addition to the credit risk discussion as disclosed under Item 15 — Note 2, Summary of Significant Accounting Policies, to the consolidated financial statements included in the Company’s 2021 Form 10-K, the following item is a discussion of the concentration of credit risk for the Company’s financial instruments. Credit risk relates to the risk of loss resulting from non-performance or non-payment by counterparties pursuant to the terms of their contractual obligations. The Company monitors and manages credit risk through credit policies that include: (i) an established credit approval process; (ii) monitoring of counterparties' credit limits on an as needed basis; (iii) as applicable, the use of credit mitigation measures such as margin, collateral, prepayment arrangements, or volumetric limits; (iv) the use of payment netting agreements; and (v) the use of master netting agreements that allow for the netting of positive and negative exposures of various contracts associated with a single counterparty. Risks surrounding counterparty performance and credit could ultimately impact the amount and timing of expected cash flows. The Company seeks to mitigate counterparty risk by having a diversified portfolio of counterparties.
Counterparty credit exposure includes credit risk exposure under certain long-term agreements, including solar and other PPAs. As external sources or observable market quotes are not available to estimate such exposure, the Company estimates the exposure related to these contracts based on various techniques including, but not limited to, internal models based on a fundamental analysis of the market and extrapolation of observable market data with similar characteristics. A significant portion of these commodity contracts are with utilities with strong credit quality and public utility commission or other regulatory support. However, such regulated utility counterparties can be impacted by changes in government regulations or adverse financial conditions, which the Company is unable to predict. Certain subsidiaries of the Company sell the output of their facilities to PG&E, a significant counterparty of the Company, under long-term PPAs, and PG&E’s credit rating is below investment-grade.
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Note 6 — Derivative Instruments and Hedging Activities
This footnote should be read in conjunction with the complete description under Item 15 — Note 7, Accounting for Derivative Instruments and Hedging Activities, to the consolidated financial statements included in the Company’s 2021 Form 10-K.
Interest Rate Swaps
The Company enters into interest rate swap agreements in order to hedge the variability of expected future cash interest payments. As of September 30, 2022, the Company had interest rate derivative instruments on non-recourse debt extending through 2031, a portion of which were designated as cash flow hedges. Under the interest rate swap agreements, the Company pays a fixed rate and the counterparties to the agreements pay a variable interest rate.
Energy-Related Commodities
As of September 30, 2022, the Company had energy-related derivative instruments extending through 2033. At September 30, 2022, these contracts were not designated as cash flow or fair value hedges.
Volumetric Underlying Derivative Transactions
The following table summarizes the net notional volume buy/(sell) of the Company’s open derivative transactions broken out by commodity as of September 30, 2022 and December 31, 2021:
Total Volume
September 30, 2022December 31, 2021
CommodityUnits(In millions)
Natural GasMMBtu— 
PowerMWh(18)(17)
InterestDollars$1,217 $1,326 
Fair Value of Derivative Instruments
The following table summarizes the fair value within the derivative instrument valuation on the consolidated balance sheets:
 Fair Value
 Derivative AssetsDerivative Liabilities
September 30, 2022December 31, 2021September 30, 2022December 31, 2021
(In millions)
Derivatives Designated as Cash Flow Hedges:    
Interest rate contracts current$$— $— $
Interest rate contracts long-term21 — 
Total Derivatives Designated as Cash Flow Hedges$29 $$— $
Derivatives Not Designated as Cash Flow Hedges:  
Interest rate contracts current$15 $— $— $17 
Interest rate contracts long-term50 — 38 
Commodity contracts current— — 79 24 
Commodity contracts long-term— — 291 155 
Total Derivatives Not Designated as Cash Flow Hedges$65 $$370 $234 
Total Derivatives$94 $$370 $242 
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The Company has elected to present derivative assets and liabilities on the balance sheet on a trade-by-trade basis and does not offset amounts at the counterparty level. As of September 30, 2022 and December 31, 2021, there was no outstanding collateral paid or received. The following tables summarize the offsetting of derivatives by counterparty:
Gross Amounts Not Offset in the Statement of Financial Position
As of September 30, 2022Gross Amounts of Recognized Assets/LiabilitiesDerivative InstrumentsNet Amount
Commodity contracts(In millions)
Derivative liabilities$(370)$— $(370)
Total commodity contracts$(370)$— $(370)
Interest rate contracts
Derivative assets$94 $— $94 
Total interest rate contracts$94 $— $94 
Total derivative instruments $(276)$— $(276)
Gross Amounts Not Offset in the Statement of Financial Position
As of December 31, 2021Gross Amounts of Recognized Assets/LiabilitiesDerivative InstrumentsNet Amount
Commodity contracts(In millions)
Derivative liabilities$(179)$— $(179)
Total commodity contracts$(179)$— $(179)
Interest rate contracts:
Derivative assets$$(5)$
Derivative liabilities(63)(58)
Total interest rate contracts$(57)$— $(57)
Total derivative instruments$(236)$— $(236)
Accumulated Other Comprehensive Income (Loss)
The following table summarizes the effects on the Company’s accumulated OCI (OCL) balance attributable to interest rate swaps designated as cash flow hedge derivatives, net of tax:
Three months ended September 30,Nine months ended September 30,
2022202120222021
(In millions)
Accumulated OCI (OCL) beginning balance$$(19)$(11)$(30)
Reclassified from accumulated OCI (OCL) to income due to realization of previously deferred amounts
Capistrano Wind Portfolio Acquisition (a)
— — 
Mark-to-market of cash flow hedge accounting contracts— 26 
Accumulated OCI (OCL) ending balance, net of income tax expense (benefit) of $4, $(3), $4 and $(3), respectively
27 (16)27 (16)
Accumulated OCI (OCL) attributable to noncontrolling interests17 (8)17 (8)
Accumulated OCI (OCL) attributable to Clearway Energy, Inc.$10 $(8)$10 $(8)
Gains expected to be realized from OCI during the next 12 months, net of income tax expense of $2
$$
(a) Represents $4 million attributable to Clearway Energy, Inc. and $3 million attributable to noncontrolling interests.
Amounts reclassified from accumulated OCI (OCL) into income are recorded to interest expense.
27



Impact of Derivative Instruments on the Consolidated Statements of Income
Mark-to-market gains and losses related to the Company’s derivatives are recorded in the consolidated statements of income as follows:
Three months ended September 30,Nine months ended September 30,
2022202120222021
(In millions)
Interest Rate Contracts (Interest expense)$33 $$110 $42 
Commodity Contracts (Mark-to-market for economic hedging activities) (a)
(17)(36)(191)(86)
(a) Relates to long-term commodity contracts at Elbow Creek Wind Project LLC, or Elbow Creek, Mesquite Star, Mt. Storm, Langford and Mesquite Sky and gains or losses are recognized in operating revenues. During the nine months ended September 30, 2022, the commodity contract for Langford, which previously met the NPNS exception, no longer qualified for NPNS treatment and, accordingly, is accounted for as a derivative and marked to fair value through operating revenues.
Prior to the Thermal Disposition, which is further described in Note 3, Acquisitions and Dispositions, a portion of the Company’s derivative commodity contracts were related to its Thermal Business for the purchase of fuel/electricity commodities based on the forecasted usage of the thermal district energy centers. Realized gains and losses on these contracts were reflected in the fuel costs that were permitted to be billed to customers through the related customer contracts or tariffs and, accordingly, no gains or losses were reflected in the consolidated statements of income for these contracts through the period that the Company owned the Thermal Business.
See Note 5, Fair Value of Financial Instruments, for a discussion regarding concentration of credit risk.
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Note 7 — Long-term Debt
This note should be read in conjunction with the complete description under Item 15 — Note 10, Long-term Debt, to the consolidated financial statements included in the Company’s 2021 Form 10-K. The Company’s borrowings, including short-term and long-term portions consisted of the following:
(In millions, except rates)September 30, 2022December 31, 2021
September 30, 2022 interest rate % (a) (b)
Letters of Credit Outstanding at September 30, 2022
2028 Senior Notes$850 $850 4.750 
2031 Senior Notes925 925 3.750 
2032 Senior Notes350 350 3.750 
Clearway Energy LLC and Clearway Energy Operating LLC Revolving Credit Facility, due 2023 (c)
— 245 
L+1.750
$112 
Bridge Loan, due 2022— 335 
S+1.250
Project-level debt:
Agua Caliente Solar LLC, due 2037665 684 
2.395 - 3.633
45 
Alta Wind Asset Management LLC, due 203112 13 
L+2.625
— 
Alta Wind I-V lease financing arrangements, due 2034 and 2035727 756 
5.696 - 7.015
22 
Alta Wind Realty Investments LLC, due 203123 24 7.000 — 
Borrego, due 2024 and 203852 54 Various
Buckthorn Solar, due 2025120 123 
L+1.750
22 
Capistrano Wind Portfolio, due 2029 and 2031160 — 
L+2.000
37 
Carlsbad Energy Holdings LLC, due 2027121 136 
L+1.750
68 
Carlsbad Energy Holdings LLC, due 2038407 407 4.120 — 
Carlsbad Holdco, due 2038203 205 4.210 10 
CVSR, due 2037627 652 
2.339 - 3.775
— 
CVSR Holdco Notes, due 2037160 169 4.680 13 
DG-CS Master Borrower LLC, due 2040413 441 3.510 30 
El Segundo Energy Center, due 2023130 193 
L+1.875 - L+2.500
128 
Kawailoa Solar Portfolio LLC, due 2026— 78 
L+1.375
— 
Laredo Ridge, due 2028 (d)
— 72 
L+2.125
— 
Marsh Landing, due 202338 84 
L+2.375
55 
Mililani I, due 2022 and 2024103 — 
L+1.000 - L+1.250
NIMH Solar, due 2024171 176 
L+2.000
14 
Oahu Solar Holdings LLC, due 202684 86 
L+1.375
10 
Rosie Class B LLC, due 202777 78 
L+1.750
17 
Tapestry Wind LLC, due 2031 (d)
— 85 
L+1.375
— 
Utah Solar Holdings, due 2036268 273 3.590 15 
Viento Funding II, LLC, due 2023 and 2029 (d)
186 29 
S+1.475
26 
Walnut Creek, due 202334 74 
L+1.750
73 
WCEP Holdings, LLC, due 202327 30 
L+3.000
— 
Other140 151 Various193 
Subtotal project-level debt:4,948 5,073 
Total debt7,073 7,778 
Less current maturities(493)(772)
Less net debt issuance costs(65)(71)
Add premiums (e)
Total long-term debt$6,519 $6,939 
(a) As of September 30, 2022, L+ equals 3 month LIBOR plus x%, except Marsh Landing, due 2023, Mililani I, due 2022 and 2024, and Walnut Creek, due 2023, where L+ equals 1 month LIBOR plus x%.
(b) S+ equals SOFR, plus x%.
(c) Applicable rate is determined by the borrower leverage ratio, as defined in the credit agreement.
(d) Laredo Ridge, due 2028; Tapestry Wind, LLC, due 2031; and Viento Funding II, LLC, due 2023 project-level debt were repaid on March 16, 2022 totaling $186 million and was replaced with $190 million in new project-level debt under Viento Funding II, LLC that was obtained on March 16, 2022 and is due in 2029, as discussed further below.
(e) Premiums relate to the 2028 Senior Notes.
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The financing arrangements listed above contain certain covenants, including financial covenants that the Company is required to be in compliance with during the term of the respective arrangement. As of September 30, 2022, the Company was in compliance with all of the required covenants.
The discussion below describes material changes to or additions of long-term debt for the nine months ended September 30, 2022.
Clearway Energy LLC and Clearway Energy Operating LLC Revolving Credit Facility
As of September 30, 2022, the Company had no outstanding borrowings under the revolving credit facility and $112 million in letters of credit outstanding. During the nine months ended September 30, 2022, the Company borrowed $80 million under the revolving credit facility and repaid $325 million, $305 million of which was repaid on May 3, 2022, utilizing the proceeds received from the Thermal Disposition.
Bridge Loan Agreement
On May 3, 2022, the Company repaid the $335 million in outstanding borrowings under the Bridge Loan Agreement utilizing proceeds received from the Thermal Disposition, as further described in Note 3, Acquisitions and Dispositions.
Project-level Debt
Capistrano Wind Portfolio
On August 22, 2022, as part of the acquisition of the Capistrano Wind Portfolio, as further described in Note 3, Acquisitions and Dispositions, the Company acquired non-recourse project-level debt totaling $164 million held by the Broken Bow, Cedro Hill and Crofton Bluffs wind projects, which is net of $2 million in previously deferred unamortized debt issuance costs. The non-recourse project-level debt bears interest at a rate of LIBOR plus an applicable margin, which is currently 2.00% per annum, and maturities range from September 30, 2029 to July 14, 2031.
Mililani I
On March 25, 2022, as part of the acquisition of Mililani I, as further described in Note 3, Acquisitions and Dispositions, the Company assumed the project’s financing agreement, which included a $16 million construction loan that converts to a term loan upon the project reaching substantial completion, $60 million tax equity bridge loan and $27 million sponsor equity bridge loan. The sponsor equity bridge loan was repaid at acquisition date, utilizing $14 million from the cash equity investor, as well as $15 million of the Company’s acquisition price, which was contributed back by CEG, and $2 million was utilized to pay associated fees. The tax equity bridge loan will be repaid with the final proceeds received from the tax equity investor upon Mililani I reaching substantial completion, which is expected to occur in the fourth quarter of 2022, along with the $18 million that was contributed into escrow by the tax equity investor at acquisition date. Subsequent to the Mililani I acquisition, the Company borrowed an additional $27 million in construction loans. As of September 30, 2022, the Company had $43 million in outstanding construction loans in addition to the $60 million tax equity bridge loan referenced above.
Viento Funding II, LLC
On March 16, 2022, the Company, through its indirect subsidiary, Viento Funding II, LLC, entered into a financing agreement which included the issuance of a $190 million term loan as well as $35 million in letters of credit, supported by the Company’s interests in the Elkhorn Ridge, Laredo Ridge, San Juan Mesa and Taloga wind projects. The term loan bears annual interest at a rate of SOFR plus a spread of 0.10% and an applicable margin, which is 1.375% per annum through the fourth anniversary of the term loan and 1.50% per annum thereafter through the maturity date of March 16, 2029. The proceeds from the term loan were used to pay off the existing debt in the amount of $186 million related to Laredo Ridge, Tapestry Wind LLC and Viento Funding II, LLC and to pay related financing costs. The Company recorded a loss on debt extinguishment of $2 million to expense unamortized debt issuance costs.
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Note 8 — Earnings Per Share
Basic earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding. Shares issued during the year are weighted for the portion of the year that they were outstanding. Diluted earnings per share is computed in a manner consistent with that of basic earnings per share while giving effect to all potentially dilutive common shares that were outstanding during the period.
The reconciliation of the Company’s basic and diluted earnings per share is shown in the following tables:
Three months ended September 30,
20222021
(In millions, except per share data) (a)
Common Class ACommon Class CCommon Class ACommon Class C
Basic and diluted earnings per share attributable to Clearway Energy, Inc. common stockholders
Net income attributable to Clearway Energy, Inc.$$23 $$15 
Weighted average number of common shares outstanding — basic and diluted35 82 35 82 
Earnings per weighted average common share — basic and diluted$0.28 $0.28 $0.18 $0.18 
(a) Net income attributable to Clearway Energy, Inc. and basic and diluted earnings per share might not recalculate due to presenting amounts in millions rather than whole dollars.
Nine months ended September 30,
20222021
(In millions, except per share data) (a)
Common Class ACommon Class CCommon Class ACommon Class C
Basic and diluted earnings per share attributable to Clearway Energy, Inc. common stockholders
Net income attributable to Clearway Energy, Inc.$169 $401 $18 $41 
Weighted average number of common shares outstanding — basic and diluted35 82 35 82 
Earnings per weighted average common share — basic and diluted$4.89 $4.89 $0.51 $0.51 
(a) Net income attributable to Clearway Energy, Inc. and basic and diluted earnings per share might not recalculate due to presenting amounts in millions rather than whole dollars.

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Note 9 — Segment Reporting
The Company’s segment structure reflects how management currently operates and allocates resources. The Company’s businesses are segregated based on conventional power generation, renewable businesses which consist of solar and wind, and the Thermal Business, which was sold to KKR on May 1, 2022, as further described in Note 3, Acquisitions and Dispositions. The Corporate segment reflects the Company’s corporate costs and includes eliminating entries. The Company’s chief operating decision maker, its Chief Executive Officer, evaluates the performance of its segments based on operational measures including adjusted earnings before interest, taxes, depreciation and amortization, or Adjusted EBITDA, and CAFD, as well as net income (loss).
Three months ended September 30, 2022
(In millions)Conventional GenerationRenewables
Corporate (a)
Total
Operating revenues$102 $238 $— $340 
Cost of operations, exclusive of depreciation, amortization and accretion shown separately below19 79 — 98 
Depreciation, amortization and accretion33 96 — 129 
General and administrative— — 
Operating income (loss)50 63 (8)105 
Equity in earnings of unconsolidated affiliates13 — 14 
Other income, net— 
Interest expense(11)(14)(24)(49)
Income (loss) before income taxes 41 62 (28)75 
Income tax expense— — 13 13 
Net Income (Loss)$41 $62 $(41)$62 
Total Assets $2,327 $9,634 $635 $12,596 
(a) Includes eliminations.
Three months ended September 30, 2021
(In millions)Conventional GenerationRenewablesThermal
Corporate (a)
Total
Operating revenues$118 $179 $54 $— $351 
Cost of operations, exclusive of depreciation, amortization and accretion shown separately below20 60 37 — 117 
Depreciation, amortization and accretion34 90 — 131 
General and administrative— — 10 
Transaction and integration costs — — — 
Development costs— — 
Operating income (loss)
64 29 (12)89 
Equity in earnings of unconsolidated affiliates18 — — 20 
Other income, net— — — 
Interest expense(14)(41)(5)(24)(84)
Income (loss) before income taxes52 (36)26 
Income tax expense— — — 
Net Income (Loss)$52 $$$(37)$25 
(a) Includes eliminations.
32



Nine months ended September 30, 2022
(In millions)Conventional GenerationRenewablesThermal
Corporate (a)
Total
Operating revenues$313 $532 $77 $— $922 
Cost of operations, exclusive of depreciation, amortization and accretion shown separately below68 220 50 — 338 
Depreciation, amortization and accretion99 280 — — 379 
General and administrative— — 29 31 
Transaction and integration costs— — — 
Development costs— — — 
Total operating costs and expenses167 500 54 34 755 
Gain on sale of business— — — 1,291 1,291 
Operating income 146 32 23 1,257 1,458 
Equity in earnings of unconsolidated affiliates25 — — 28 
Other income, net— 10 
Loss on debt extinguishment— (2)— — (2)
Interest expense(29)(33)(6)(75)(143)
Income before income taxes121 26 17 1,187 1,351 
Income tax expense— — — 237 237 
Net Income$121 $26 $17 $950 $1,114 
(a) Includes eliminations.
Nine months ended September 30, 2021
(In millions)Conventional GenerationRenewablesThermal
Corporate (a)
Total
Operating revenues$329 $487 $152 $— $968 
Cost of operations, exclusive of depreciation, amortization and accretion shown separately below70 166 99 (1)334 
Depreciation, amortization and accretion99 266 22 — 387 
General and administrative— 27 30 
Transaction and integration costs— — — 
Development costs— — 
Operating income (loss)
160 54 26 (32)208 
Equity in earnings of unconsolidated affiliates26 — — 32 
Other income, net— — 
Loss on debt extinguishment— (1)— (41)(42)
Interest expense(41)(103)(14)(74)(232)
Income (loss) before income taxes
125 (23)14 (147)(31)
Income tax benefit— — — (12)(12)
Net Income (Loss)$125 $(23)$14 $(135)$(19)
(a) Includes eliminations.
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Note 10 — Income Taxes
Effective Tax Rate
The income tax provision consisted of the following amounts:
 Three months ended September 30,Nine months ended September 30,
2022202120222021
(In millions, except percentages)
Income (loss) before income taxes$75 $26 $1,351 $(31)
Income tax expense (benefit)13 237 (12)
Effective income tax rate17.3 %3.8 %17.5 %38.7 %
For the three and nine months ended September 30, 2022, the overall effective tax rate was different than the statutory rate of 21% primarily due to the allocation of taxable earnings and losses, including the gain on the sale of the Thermal Business, based on the partners’ interest in Clearway Energy LLC, which includes the effects of applying the HLBV method of accounting for book purposes for certain partnerships.
For the three and nine months ended September 30, 2021, the overall effective tax rate was different than the statutory rate of 21% primarily due to the allocation of taxable earnings and losses based on the partners’ interest in Clearway Energy LLC, which includes the effects of applying the HLBV method of accounting for book purposes for certain partnerships.
The Company treated the sale of the Thermal Business as a discrete event and recorded the income taxes associated with the transaction during the nine months ended September 30, 2022.
For tax purposes, Clearway Energy LLC is treated as a partnership; therefore, the Company and CEG each record their respective share of taxable income or loss.
Note 11 — Related Party Transactions
In addition to the transactions and relationships described elsewhere in the notes to the consolidated financial statements, certain subsidiaries of CEG provide services to the Company and its project entities. Amounts due to CEG subsidiaries are recorded as accounts payable — affiliates and amounts due to the Company from CEG subsidiaries are recorded as accounts receivable — affiliates in the Company’s consolidated balance sheets. The disclosures below summarize the Company’s material related party transactions with CEG and its subsidiaries that are included in the Company’s operating costs.
O&M Services Agreements by and between the Company and Clearway Renewable Operation & Maintenance LLC
Various wholly-owned subsidiaries of the Company in the Renewables segment are party to services agreements with Clearway Renewable Operation & Maintenance LLC, or RENOM, a wholly-owned subsidiary of CEG, which provides operation and maintenance, or O&M, services to these subsidiaries. The Company incurred total expenses for these services of $19 million and $13 million for the three months ended September 30, 2022 and 2021, respectively. The Company incurred total expenses for these services of $49 million and $40 million for the nine months ended September 30, 2022 and 2021, respectively. There was a balance of $9 million due to RENOM as of both September 30, 2022 and December 31, 2021.
Administrative Services Agreements by and between the Company and CEG
Various wholly-owned subsidiaries of the Company are parties to services agreements with Clearway Asset Services LLC and Solar Asset Management LLC, two wholly-owned subsidiaries of CEG, which provide various administrative services to the Company's subsidiaries. The Company incurred expenses under these agreements of $3 million for each of the three months ended September 30, 2022 and 2021. The Company incurred expenses under these agreements of $11 million and $10 million for the nine months ended September 30, 2022 and 2021, respectively. There was a balance of $2 million due to CEG as of both September 30, 2022 and December 31, 2021.
34



CEG Master Services Agreements
The Company is a party to Master Services Agreements with CEG, or MSAs, pursuant to which CEG and certain of its affiliates or third-party service providers provide certain services to the Company, including operational and administrative services, which include human resources, information systems, external affairs, accounting, procurement and risk management services, and the Company provides certain services to CEG, including accounting, internal audit, tax and treasury services, in exchange for the payment of fees in respect of such services. The Company incurred net expenses of $1 million under these agreements for each of the three months ended September 30, 2022 and 2021. The Company incurred net expenses of $4 million and $3 million under these agreements for the nine months ended September 30, 2022 and 2021, respectively.
Note 12 Contingencies
This note should be read in conjunction with the complete description under Item 15 — Note 16, Commitments and Contingencies, to the consolidated financial statements included in the Company’s 2021 Form 10-K.
The Company’s material legal proceedings are described below. The Company believes that it has valid defenses to these legal proceedings and intends to defend them vigorously. The Company records reserves for estimated losses from contingencies when information available indicates that a loss is probable and the amount of the loss, or range of loss, can be reasonably estimated. As applicable, the Company has established an adequate reserve for the matters discussed below. In addition, legal costs are expensed as incurred. Management assesses such matters based on current information and makes a judgment concerning its potential outcome, considering the nature of the claim, the amount and nature of damages sought, and the probability of success. The Company is unable to predict the outcome of the legal proceedings below or reasonably estimate the scope or amount of any associated costs and potential liabilities. As additional information becomes available, management adjusts its assessment and estimates of such contingencies accordingly. Because litigation is subject to inherent uncertainties and unfavorable rulings or developments, it is possible that the ultimate resolution of the Company’s liabilities and contingencies could be at amounts that are different from its currently recorded reserves and that such difference could be material.
In addition to the legal proceedings noted below, the Company and its subsidiaries are party to other litigation or legal proceedings arising in the ordinary course of business. In management’s opinion, the disposition of these ordinary course matters will not materially adversely affect the Company’s consolidated financial position, results of operations, or cash flows.
Buckthorn Solar Litigation
On October 8, 2019, the City of Georgetown, Texas, or Georgetown, filed a petition in the District Court of Williamson County, Texas naming Buckthorn Westex, LLC, the Company’s subsidiary that owns the Buckthorn Westex solar project, as the defendant, alleging fraud by nondisclosure and breach of contract in connection with the project and the PPA, and seeking (i) rescission and/or cancellation of the PPA, (ii) declaratory judgment that the alleged breaches constitute an event of default under the PPA entitling Georgetown to terminate, and (iii) recovery of all damages, costs of court, and attorneys’ fees. On November 15, 2019, Buckthorn Westex filed an original answer and counterclaims (i) denying Georgetown’s claims, (ii) alleging Georgetown has breached its contracts with Buckthorn Westex by failing to pay amounts due, and (iii) seeking relief in the form of (x) declaratory judgment that Georgetown’s alleged failure to pay amounts due constitute breaches of and an event of default under the PPA and that Buckthorn did not commit any events of default under the PPA, (y) recovery of costs, expenses, interest, and attorneys’ fees, and (z) such other relief to which it is entitled at law or in equity. The case is currently in discovery and is expected to proceed to trial in June 2023. Buckthorn Westex believes the allegations of Georgetown are meritless, and Buckthorn Westex is vigorously defending its rights under the PPA.
35



ITEM 2 — Management’s Discussion and Analysis of Financial Condition and the Results of Operations
The following discussion analyzes the Company’s historical financial condition and results of operations.
As you read this discussion and analysis, refer to the Company’s consolidated financial statements to this Form 10-Q, which present the results of operations for the three and nine months ended September 30, 2022 and 2021. Also refer to the Company’s 2021 Form 10-K, which includes detailed discussions of various items impacting the Company’s business, results of operations and financial condition.
The discussion and analysis below has been organized as follows:
Executive Summary, including a description of the business and significant events that are important to understanding the results of operations and financial condition;
Results of operations, including an explanation of significant differences between the periods in the specific line items of the consolidated statements of income;
Financial condition addressing liquidity position, sources and uses of cash, capital resources and requirements, commitments and off-balance sheet arrangements;
Known trends that may affect the Company’s results of operations and financial condition in the future; and
Critical accounting policies which are most important to both the portrayal of the Company’s financial condition and results of operations, and which require management's most difficult, subjective or complex judgment.
36



Executive Summary
Introduction and Overview
Clearway Energy, Inc., together with its consolidated subsidiaries, or the Company, is a publicly-traded energy infrastructure investor in and owner of modern, sustainable and long-term contracted assets across North America. The Company is sponsored by GIP and TotalEnergies through the portfolio company, Clearway Energy Group LLC, or CEG, which became equally owned by GIP and TotalEnergies as of September 12, 2022, when TotalEnergies acquired, through its investment in an intermediate holding company, 50% of GIP’s interest in CEG. GIP is an independent infrastructure fund manager that makes equity and debt investments in infrastructure assets and businesses. TotalEnergies is a global multi-energy company.
The Company is one of the largest renewable energy owners in the U.S. with over 5,500 net MW of installed wind and solar generation projects. The Company’s over 8,000 net MW of assets also includes approximately 2,500 net MW of environmentally-sound, highly efficient natural gas-fired generation facilities. Through this environmentally-sound, diversified and primarily contracted portfolio, the Company endeavors to provide its investors with stable and growing dividend income. Substantially all of the Company’s generation assets are under long-term contractual arrangements for the output or capacity from these assets. The weighted average remaining contract duration of these offtake agreements was approximately 11 years as of September 30, 2022 based on CAFD.
On May 1, 2022, the Company completed the sale of 100% of its interests in the Thermal Business to KKR. For further details of the Thermal Disposition, refer to Note 3, Acquisitions and Dispositions.
As of September 30, 2022, the Company’s operating assets are comprised of the following projects:
ProjectsPercentage Ownership
Net Capacity (MW) (a)
 CounterpartyExpiration
Conventional
Carlsbad100 %527 San Diego Gas & Electric2038
El Segundo100 %550 SCE2023 - 2026
GenConn Devon50 %95 Connecticut Light & Power2040
GenConn Middletown50 %95 Connecticut Light & Power2041
Marsh Landing100 %720 Various2023 - 2030
Walnut Creek100 %485 SCE2023 - 2026
Total Conventional 2,472 
Utility Scale Solar
Agua Caliente51 %148 PG&E2039
Alpine 100 %66 PG&E2033
Avenal 50 %23 PG&E2031
Avra Valley100 %27 Tucson Electric Power2032
Blythe100 %21 SCE2029
Borrego100 %26 San Diego Gas and Electric2038
Buckthorn Solar (b)
100 %154 City of Georgetown, TX2043
CVSR 100 %250 PG&E2038
Desert Sunlight 25025 %63 SCE2034
Desert Sunlight 300 25 %75 PG&E2039
Kansas South 100 %20 PG&E2033
Mililani I (b) (c)
50 %20 Hawaiian Electric Company2042
Oahu Solar Projects (b)
100 %62 Hawaiian Electric Company2041
Roadrunner100 %20 El Paso Electric2031
Rosamond Central (b)
50 %96 Various2035 - 2047
TA High Desert 100 %20 SCE2033
Utah Solar Portfolio100 %530 PacifiCorp2036
Total Utility Scale Solar1,621 
Distributed Solar
DGPV Fund Projects (b)
100 %286 Various2030 - 2044
Solar Power Partners (SPP) Projects100 %25 Various2026 - 2037
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ProjectsPercentage Ownership
Net Capacity (MW) (a)
 CounterpartyExpiration
Other DG Projects100 %21 Various2023 - 2039
Total Distributed Solar332 
Wind
Alta I100 %150 SCE2035
Alta II100 %150 SCE2035
Alta III100 %150 SCE2035
Alta IV100 %102 SCE2035
Alta V100 %168 SCE2035
Alta X (b)
100 %137 SCE2038
Alta XI (b)
100 %90 SCE2038
Black Rock (b)
50 %58 Toyota and AEP2036
Buffalo Bear100 %19 Western Farmers Electric Co-operative2033
Capistrano Wind Portfolio 100 %413 Various2030 - 2033
Crosswinds 99 %21 Corn Belt Power Cooperative2027
Elbow Creek (b)
100 %122 Various2029
Elkhorn Ridge 66.7 %54 Nebraska Public Power District2029
Forward 100 %29 Constellation NewEnergy, Inc.2022
Goat Wind 100 %150 Dow Pipeline Company2025
Hardin 99 %15 Interstate Power and Light Company2027
Langford (b)
100 %160 Goldman Sachs2033
Laredo Ridge100 %81 Nebraska Public Power District2031
Lookout (b)
100 %38 Southern Maryland Electric Cooperative2030
Mesquite Sky (b)
50 %170 Various2033 - 2036
Mesquite Star (b)
50 %210 Various2032 - 2035
Mt. Storm100 %264 Citigroup2031
Ocotillo100 %59 N/A
Odin 99.9 %21 Missouri River Energy Services2028
Pinnacle (b)
100 %54 Maryland Department of General Services and University System of Maryland2031
Rattlesnake (b) (d)
100 %160 Avista Corporation2040
San Juan Mesa 75 %90 Southwestern Public Service Company2025
Sleeping Bear 100 %95 Public Service Company of Oklahoma2032
South Trent100 %101 AEP Energy Partners2029
Spanish Fork 100 %19 PacifiCorp2028
Spring Canyon II (b)
90.1 %31 Platte River Power Authority2039
Spring Canyon III (b)
90.1 %26 Platte River Power Authority2039
Taloga100 %130 Oklahoma Gas & Electric2031
Wildorado (b)
100 %161 Southwestern Public Service Company2027
Total Wind 3,698 
Total net generation capacity8,123 
(a) Net capacity represents the maximum, or rated, generating capacity of the facility multiplied by the Company’s percentage ownership in the facility as of September 30, 2022.
(b) Projects are part of tax equity arrangements and ownership percentage is based on cash to be distributed, as further described in Note 4, Investments Accounted for by the Equity Method and Variable Interest Entities.
(c) Includes storage capacity that matches the facility’s rated generating capacity.
(d) Rattlesnake has a deliverable capacity of 144 MW.
38



Significant Events
Thermal Disposition
On May 1, 2022, the Company completed the sale of 100% of its interests in the Thermal Business to KKR for net proceeds of approximately $1.46 billion, inclusive of working capital adjustments, which excludes approximately $18 million in transaction expenses that were incurred in connection with the disposition. The transaction resulted in a gain on sale of business of approximately $1.29 billion, which is net of the $18 million in transaction expenses referenced above. The proceeds from the sale were utilized to repay certain borrowings outstanding, as described under “Corporate Financing Activities” below, with the remaining proceeds invested in short-term investments classified as cash and cash equivalents on the Company’s consolidated balance sheet as of September 30, 2022.
Capistrano Wind Portfolio Acquisition
On August 22, 2022, the Company, through its wholly-owned indirect subsidiary, Capistrano Portfolio Holdco LLC, acquired the Capistrano Wind Portfolio from Capistrano Wind Partners LLC, an indirect subsidiary of CEG, for a base purchase price of approximately $255 million less working capital adjustments in the net amount of approximately $16 million, representing total net consideration of approximately $239 million. Concurrent with the acquisition, the Company also entered into a development agreement with Clearway Renew LLC, whereby Clearway Renew LLC paid $10 million to the Company at acquisition date for an exclusive right to develop, construct and repower the projects in the Capistrano Wind Portfolio, which was utilized to partially fund the acquisition of the Capistrano Wind Portfolio. The Capistrano Wind Portfolio consists of five wind projects located in Texas, Nebraska and Wyoming with a combined capacity of 413 MW that reached commercial operations between 2008 and 2012. The assets within the portfolio sell power under PPAs with investment-grade counterparties that have a weighted average remaining contract duration of approximately 10 years. The Capistrano Wind Portfolio operations are reflected in the Company’s Renewables segment and the acquisition was funded with existing sources of liquidity.
Drop Down Transactions
On October 3, 2022, the Company, through its indirect subsidiary, Lighthouse Renewable Holdco LLC, acquired Waiawa BL Borrower Holdco LLC, the indirect owner of the Waiawa solar project, a 36 MW solar project with matching storage capacity that is currently under construction and located in Honolulu, Hawaii, from Clearway Renew LLC, a subsidiary of CEG, for cash consideration of $20 million. Lighthouse Renewable Holdco LLC is a partnership between the Company and a third-party investor. The third-party investor also contributed cash consideration of $12 million, which was utilized to acquire their portion of the acquired entity. Waiawa BL Borrower Holdco LLC consolidates, as the direct owner of the primary beneficiary, a tax equity fund, Waiawa TE Holdco LLC, which directly holds the Waiawa solar project. Waiawa has a 20-year PPA with an investment-grade utility that commences when the project reaches commercial operations, as defined in the PPA. The acquisition was funded with existing sources of liquidity.
On March 25, 2022, the Company, through its indirect subsidiary, Lighthouse Renewable Holdco LLC, acquired Mililani BL Borrower Holdco LLC, the indirect owner of the Mililani I solar project, a 39 MW solar project with matching storage capacity, located in Honolulu, Hawaii, from Clearway Renew LLC for cash consideration of $22 million. Lighthouse Renewable Holdco LLC is a partnership between the Company and a third-party investor. The third-party investor also contributed cash consideration of $14 million utilized to acquire their portion of the acquired entity. Mililani BL Borrower Holdco LLC consolidates, as the direct owner of the primary beneficiary, a tax equity fund, Mililani TE Holdco LLC, which directly holds the Mililani I solar project. Mililani I has a 20-year PPA with an investment-grade utility that commenced in July 2022. The acquisition was funded with existing sources of liquidity. As part of the acquisition of Mililani I, the Company assumed the project’s financing agreement, which included a $16 million construction loan that converts to a term loan upon the project reaching substantial completion, $60 million tax equity bridge loan and $27 million sponsor equity bridge loan. The sponsor equity bridge loan was repaid at acquisition date, utilizing $14 million from the cash equity investor, as well as $15 million of the Company’s acquisition price, which was contributed back by CEG, and $2 million was utilized to pay associated fees. The tax equity bridge loan will be repaid with the final proceeds received from the tax equity investor upon Mililani I reaching substantial completion, which is expected to occur in the fourth quarter of 2022, along with the $18 million that was contributed into escrow by the tax equity investor at acquisition date.
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In February 2022, in connection with the Company’s 2021 acquisition of the Class B membership interests in Black Rock Wind Holding LLC, through its indirect subsidiary Lighthouse Renewable Holding Sub LLC, from Clearway Renew LLC, the Company paid an additional $23 million as final funding after all remaining turbines of the Black Rock wind project became operational. Concurrent with the final funding, the $59 million that was contributed in 2021 by third-party investors, consisting of $36 million contributed by the cash equity investor and $23 million contributed by the tax equity investor, was released to Clearway Renew LLC.
Resource Adequacy Agreements
In August 2022, the Company contracted with SCE to sell 100% of El Segundo’s available capacity commencing in August 2023 and ending in August 2026.
In July 2022, the Company contracted with several load serving entities to sell the remaining 20% of Marsh Landing’s available capacity commencing in May 2023. The agreements are for approximately three and a half years. Marsh Landing’s capacity is now 100% contracted for a weighted average contract tenor of approximately four years commencing in May 2023.
Corporate Financing Activities
On May 3, 2022, the Company repaid (i) $305 million in outstanding borrowings under the revolving credit facility and (ii) $335 million in outstanding borrowings under the Bridge Loan Agreement utilizing proceeds received from the Thermal Disposition.
Project-level Financing Activities
On March 16, 2022, the Company, through its indirect subsidiary, Viento Funding II, LLC, entered into a financing agreement which included the issuance of a $190 million term loan as well as $35 million in letters of credit, supported by the Company’s interests in the Elkhorn Ridge, Laredo Ridge, San Juan Mesa and Taloga wind projects. The proceeds from the term loan were used to pay off the existing debt in the amount of $186 million related to Laredo Ridge, Tapestry Wind LLC and Viento Funding II, LLC and to pay related financing costs.
Environmental Matters
The Company is subject to a wide range of environmental laws during the development, construction, ownership and operation of facilities. These existing and future laws generally require that governmental permits and approvals be obtained before construction and maintained during operation of facilities. The Company is obligated to comply with all environmental laws and regulations applicable within each jurisdiction and required to implement environmental programs and procedures to monitor and control risks associated with the construction, operation and decommissioning of regulated or permitted energy assets. Federal and state environmental laws have historically become more stringent over time, although this trend could change in the future.
Proposed Federal Reclassification of Northern Long-Eared Bat — On March 23, 2022, the U.S. Fish and Wildlife Service (FWS) announced a proposal to reclassify the northern long-eared bat as endangered under the Endangered Species Act. The bat, currently listed as threatened, faces extinction due to the range-wide impacts of white-nose syndrome, a deadly disease affecting cave-dwelling bats across the continent. The northern long-eared bat is found in 37 states in the eastern and north central United States and in Canada. The Company is working with renewable energy industry groups to provide comments on the proposed reclassification as this proposal could affect renewable energy facility siting and operations. The proposed listing was recently published by FWS in the Federal Register and the public comment period closed on May 23, 2022. The Company participated in this comment process through the renewable industry group. FWS has yet to release its final decision.
The Company’s environmental matters are further described in the Company’s 2021 Form 10-K in Item 1, Business Environmental Matters and Item 1A, Risk Factors.
Regulatory Matters
The Company’s regulatory matters are described in the Company’s 2021 Form 10-K in Item 1, Business Regulatory Matters and Item 1A, Risk Factors.
40



Trends Affecting Results of Operations and Future Business Performance
The Company’s trends are described in the Company’s 2021 Form 10-K in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations Trends Affecting Results of Operations and Future Business Performance.
Recent Developments Affecting Industry Conditions and the Company’s Business
COVID-19 Update
As of the date of this report, the Company has not experienced any material financial or operational impacts related to COVID-19, or variants thereof. All of the Company’s facilities have remained operational. The Company will continue to assess any financial or operational impacts based on any future developments. For additional discussion regarding risks associated with the COVID-19 pandemic, see Part I, Item 1A, Risk Factors, of the Company’s 2021 Form 10-K.
41



Consolidated Results of Operations
The following table provides selected financial information:
 Three months ended September 30,Nine months ended September 30,
(In millions)20222021Change20222021Change
Operating Revenues
Energy and capacity revenues$381 $400 $(19)$1,172 $1,096 $76 
Other revenues18 24 (6)70 69 
Contract amortization(42)(38)(4)(125)(107)(18)
Mark-to-market for economic hedges(17)(35)18 (195)(90)(105)
Total operating revenues340 351 (11)922 968 (46)
Operating Costs and Expenses
Cost of fuels— 20 (20)29 55 (26)
Operations and maintenance71 69 223 206 17 
Other costs of operations 27 28 (1)86 73 13 
Depreciation, amortization and accretion129 131 (2)379 387 (8)
General and administrative10 (2)31 30 
Transaction and integration costs— (1)
Development costs— (3)(3)
Total operating costs and expenses235 262 (27)755 760 (5)
Gain on sale of business— — — 1,291 — 1,291 
Operating Income 105 89 16 1,458 208 1,250 
Other Income (Expense)
Equity in earnings of unconsolidated affiliates14 20 (6)28 32 (4)
Other income, net10 
Loss on debt extinguishment— — — (2)(42)40 
Derivative interest income33 27 110 42 68 
Other interest expense(82)(90)(253)(274)21 
Total other expense, net(30)(63)33 (107)(239)132 
Income (Loss) Before Income Taxes75 26 49 1,351 (31)1,382 
Income tax expense (benefit)13 12 237 (12)249 
Net Income (Loss)62 25 37 1,114 (19)1,133 
Less: Income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests30 26 544 (78)622 
Net Income Attributable to Clearway Energy, Inc.
$32 $21 $11 $570 $59 $511 
Three months ended September 30,Nine months ended September 30,
Business metrics:2022202120222021
Renewables MWh generated/sold (in thousands) (a)
3,367 2,740 11,102 8,640 
Thermal MWt sold (in thousands) (b)
— 509 835 1,577 
Thermal MWh sold (in thousands) (b)
— 17 19 43 
Conventional MWh generated (in thousands) (a) (c)
491 450 912 897 
Conventional equivalent availability factor93.9 %99.8 %92.5 %93.4 %
(a) Volumes do not include the MWh generated/sold by the Company’s equity method investments.
(b) On May 1, 2022, the Company completed the sale of 100% of its interests in the Thermal Business to KKR.
(c) Volumes generated are not sold as the Conventional facilities sell capacity rather than energy.
42



Management’s Discussion of the Results of Operations for the Three Months Ended September 30, 2022 and 2021
Operating Revenues
Operating revenues decreased by $11 million during the three months ended September 30, 2022, compared to the same period in 2021, due to a combination of the drivers summarized in the table below:
(In millions)
Renewables SegmentIncrease due to the acquisitions of the Utah Solar Portfolio and Black Rock in December 2021, Mililani I in March 2022 and the Capistrano Wind Portfolio in August 2022, as well as the repowering of the Pinnacle wind project in December 2021.$37 
Increase primarily driven by higher average realized prices at the wind facilities.
Conventional SegmentDecrease primarily driven by forced outages at the El Segundo and Walnut Creek facilities in 2022, resulting in lower capacity revenue.(15)
Thermal SegmentDecrease primarily driven by the sale of the Thermal Business on May 1, 2022.(55)
Mark-to-market for economic hedgesDecrease in unrealized losses primarily driven by a smaller increase in forward power prices in the ERCOT and PJM markets in 2022, compared to the same period in 2021.18 
Contract amortizationIncrease primarily driven by amortization of the intangible assets for PPAs related to the 2021 acquisition of the Utah Solar Portfolio.(4)
$(11)
Cost of Fuels
Cost of fuels decreased by $20 million during the three months ended September 30, 2022, compared to the same period in 2021, due to the sale of the Thermal Business on May 1, 2022, as further described in Note 3, Acquisitions and Dispositions.
Operations and Maintenance Expense
Operations and maintenance expense increased by $2 million during the three months ended September 30, 2022, compared to the same period in 2021, due to a combination of the drivers summarized in the table below:
(In millions)
Renewables Segment Increase due to the acquisitions of the Utah Solar Portfolio, Black Rock and Mesquite Sky in December 2021 and the Capistrano Wind Portfolio in August 2022.$12 
Increase primarily driven by timing of maintenance activities, as well as increasing material costs largely at the wind facilities.
Conventional Segment Increase primarily driven by forced outages at El Segundo and Walnut Creek in 2022.
Thermal SegmentDecrease primarily driven by the sale of the Thermal Business on May 1, 2022.(16)
$
Equity in Earnings of Unconsolidated Affiliates
Equity in earnings of unconsolidated affiliates decreased by $6 million during the three months ended September 30, 2022, compared to the same period in 2021, primarily driven by a decrease in earnings from Avenal, as well as the consolidation of the of the Utah Solar Portfolio in December 2021, which had earnings in 2021.
43



Interest Expense
Interest expense decreased by $35 million during the three months ended September 30, 2022, compared to the same period in 2021, primarily due to the following:
(In millions)
Change in fair value of interest rate swaps$(27)
Decrease in interest expense due to decreased principal balances of project-level debt(4)
Decrease in interest expense due to the sale of the Thermal Business on May 1, 2022(4)
$(35)
Income Tax Expense
For the three months ended September 30, 2022, the Company recorded an income tax expense of $13 million on pretax income of $75 million. For the same period in 2021, the Company recorded an income tax expense of $1 million on pretax income of $26 million. The primary driver of the $12 million increase in income tax expense is the increase in taxable earnings allocated to the Company in 2022 compared to 2021.
Income Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests
For the three months ended September 30, 2022, the Company had income of $30 million attributable to noncontrolling interests and redeemable noncontrolling interests comprised of the following:
(In millions)
CEG’s economic interest in Clearway Energy LLC $33 
Income attributable to third-party partnerships
Losses attributable to tax equity financing arrangements and the application of the HLBV method(5)
$30 
For the three months ended September 30, 2021, the Company had income of $4 million attributable to noncontrolling interests and redeemable noncontrolling interests comprised of the following:
(In millions)
CEG's economic interest in Clearway Energy LLC$16 
Losses attributable to third-party partnerships(7)
Losses attributable to tax equity financing arrangements and the application of the HLBV method(5)
$
44



Management’s Discussion of the Results of Operations for the Nine Months Ended September 30, 2022 and 2021
Operating Revenues
Operating revenues decreased by $46 million during the nine months ended September 30, 2022, compared to the same period in 2021, due to a combination of the drivers summarized in the table below:
(In millions)
Renewables SegmentIncrease due to the 2021 acquisitions of the Utah Solar Portfolio, Agua Caliente, Black Rock and Mt. Storm, and the 2022 acquisitions of Mililani I and the Capistrano Wind Portfolio, along with the 2021 repowering of the Pinnacle wind project.$104 
Favorable impact from the loss of $50 million in February 2021 related to net settlements of obligations for wind facilities that were unable to produce the required output during extreme weather conditions in Texas.50 
Increase primarily driven by higher average realized prices at the wind facilities.16 
Conventional SegmentDecrease primarily driven by forced outages at Walnut Creek and El Segundo Energy Center during the third quarter of 2022, resulting in lower capacity revenue.(15)
Thermal SegmentDecrease primarily driven by the sale of the Thermal Business on May 1, 2022.(78)
Mark-to-market economic hedging activitiesIncrease in unrealized losses due to changes in the fair value of commodity contracts, primarily driven by the acquisition of Mesquite Sky in 2021, as well as increased unrealized losses due to increases in forward power prices in the ERCOT and PJM markets.(68)
Increase in unrealized losses driven by mark-to-market losses of the Langford commodity contract, which previously qualified for the NPNS exception.(37)
Contract amortizationIncrease primarily driven by amortization of the intangible assets for PPAs related to the 2021 acquisitions of Agua Caliente and the Utah Solar Portfolio.(18)
$(46)
Cost of Fuels
Cost of fuels decreased by $26 million during the nine months ended September 30, 2022, compared to the same period in 2021, due to the sale of the Thermal Business on May 1, 2022, as further described in Note 3, Acquisitions and Dispositions.
Operations and Maintenance Expense
Operations and maintenance expense increased by $17 million during the nine months ended September 30, 2022, compared to the same period in 2021, due to a combination of the drivers summarized in the table below:
(In millions)
Renewables Segment Increase from the acquisitions of the Utah Solar Portfolio, Mesquite Sky, Black Rock and Mt. Storm in 2021, and the acquisition of Mililani I and the Capistrano Wind Portfolio in 2022.$32 
Increase primarily driven by timing of maintenance activities, as well as increasing material costs largely at the wind facilities.
Conventional Segment Increase due to the forced outages at El Segundo and Walnut Creek during the third quarter of 2022.
Thermal SegmentDecrease primarily driven by the sale of the Thermal Business on May 1, 2022.(23)
$17 
Other Cost of Operations Expense
Other cost of operations expense increased by $13 million during the nine months ended September 30, 2022, compared to the same period in 2021, primarily due to the acquisitions of the Utah Solar Portfolio, Mesquite Sky, Black Rock and Mt. Storm in 2021 and the acquisition of the Capistrano Wind Portfolio in 2022.
Gain on Sale of Business
On May 1, 2022, the Company completed the sale of 100% of its interests in the Thermal Business to KKR resulting in a gain on sale of business of approximately $1.29 billion, as further described in Note 3, Acquisitions and Dispositions.
45



Equity in Earnings of Unconsolidated Affiliates
Equity in earnings of unconsolidated affiliates decreased by $4 million during the nine months ended September 30, 2022, compared to the same period in 2021, primarily driven by the consolidation of the Utah Solar Portfolio in December 2021, which had earnings in 2021.
Loss on Debt Extinguishment
The Company recorded a loss on debt extinguishment of $2 million during the nine months ended September 30, 2022, which reflects the write-off of previously deferred finance costs related to the Laredo Ridge, Tapestry Wind LLC and Viento Funding II, LLC, as further described in Note 7, Long-term Debt.
The Company recorded a loss on debt extinguishment of $42 million during the nine months ended, September 30, 2021, which primarily reflects the write-off of previously deferred finance costs and payment of premiums related to the redemption of the 2025 Senior Notes.
Interest Expense
Interest expense decreased by $89 million during the nine months ended September 30, 2022, compared to the same period in 2021, primarily due to the following:
(In millions)
Change in fair value of interest rate swaps$(68)
Decrease in interest expense due to decreased principal balances of project-level debt(15)
Decrease in interest expense due to the sale of the Thermal Business on May 1, 2022(7)
Amortization of deferred financing costs related to the Bridge Loan that was entered into during the fourth quarter of 2021 and paid in full on May 3, 2022
$(89)
Income Tax Expense (Benefit)
For the nine months ended September 30, 2022, the Company recorded an income tax expense of $237 million on pretax income of $1,351 million. For the same period in 2021, the Company recorded an income tax benefit of $12 million on a pretax loss of $31 million. The primary driver of the $249 million increase in income tax expense is the increase in taxable earnings allocated to the Company in 2022 compared to 2021, including the gain recorded on the sale of the Thermal Business on May 1, 2022, as further described in Note 3, Acquisitions and Dispositions.
Income (Loss) Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests
For the nine months ended September 30, 2022, the Company had income of $544 million attributable to noncontrolling interests and redeemable noncontrolling interests comprised of the following:
(In millions)
CEG’s economic interest in Clearway Energy LLC (primarily driven by the gain on sale of the Thermal Business)$593 
Losses attributable to tax equity financing arrangements and the application of the HLBV method(29)
Losses attributable to third-party partnerships(20)
$544 
For the nine months ended September 30, 2021, the Company had a loss of $78 million attributable to noncontrolling interests and redeemable noncontrolling interests comprised of the following:
(In millions)
Losses attributable to tax equity financing arrangements and the application of the HLBV method$(82)
Losses attributable to third-party partnerships(32)
CEG's economic interest in Clearway Energy LLC36 
$(78)
46



Liquidity and Capital Resources
The Company’s principal liquidity requirements are to meet its financial commitments, finance current operations, fund capital expenditures, including acquisitions from time to time, service debt and pay dividends. As a normal part of the Company’s business, depending on market conditions, the Company will from time to time consider opportunities to repay, redeem, repurchase or refinance its indebtedness. Changes in the Company’s operating plans, lower than anticipated sales, increased expenses, acquisitions or other events may cause the Company to seek additional debt or equity financing in future periods. There can be no guarantee that financing will be available on acceptable terms or at all. Debt financing, if available, could impose additional cash payment obligations and additional covenants and operating restrictions.
Current Liquidity Position
As of September 30, 2022 and December 31, 2021, the Company’s liquidity was approximately $1.54 billion and $821 million, respectively, comprised of cash, restricted cash and availability under the Company’s revolving credit facility.
(In millions)September 30, 2022December 31, 2021
Cash and cash equivalents:
Clearway Energy, Inc. and Clearway Energy LLC, excluding subsidiaries$625 $33 
Subsidiaries168 146 
Restricted cash:
Operating accounts 144246 
Reserves, including debt service, distributions, performance obligations and other reserves 219 229 
Total cash, cash equivalents and restricted cash$1,156 $654 
Revolving credit facility availability383 167 
Total liquidity$1,539 $821 
The Company’s liquidity includes $363 million and $475 million of restricted cash balances as of September 30, 2022 and December 31, 2021, respectively. Restricted cash consists primarily of funds to satisfy the requirements of certain debt arrangements and funds held within the Company’s projects that are restricted in their use. As of September 30, 2022, these restricted funds were comprised of $144 million designated to fund operating expenses, approximately $66 million designated for current debt service payments and $124 million restricted for reserves including debt service, performance obligations and other reserves, as well as capital expenditures. The remaining $29 million is held in distribution reserve accounts.
As of September 30, 2022, the Company had no outstanding borrowings under the revolving credit facility and $112 million in letters of credit outstanding. During the nine months ended September 30, 2022, the Company borrowed $80 million under the revolving credit facility and repaid $325 million, $305 million of which was repaid on May 3, 2022, utilizing the proceeds received from the Thermal Disposition. The facility will continue to be used for general corporate purposes including financing of future acquisitions and posting letters of credit.
Management believes that the Company’s liquidity position, cash flows from operations, and availability under its revolving credit facility will be adequate to meet the Company’s financial commitments; debt service obligations; growth, operating and maintenance capital expenditures; and to fund dividends to holders of the Company’s Class A common stock and Class C common stock. Management continues to regularly monitor the Company’s ability to finance the needs of its operating, financing and investing activity within the dictates of prudent balance sheet management.
Sources of Liquidity
The Company’s principal sources of liquidity include cash on hand, cash generated from operations, proceeds from sales of assets, borrowings under new and existing financing arrangements and the issuance of additional equity and debt securities as appropriate given market conditions. As described in Note 7, Long-term Debt, to this Form 10-Q and Item 15 — Note 10, Long-term Debt, to the consolidated financial statements included in the Company’s 2021 Form 10-K, the Company’s financing arrangements consist of corporate level debt, which includes Senior Notes and the revolving credit facility, the ATM Programs and project-level financings for its various assets.
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Thermal Disposition
On May 1, 2022, the Company completed the sale of 100% of its interests in the Thermal Business to KKR for net proceeds of approximately $1.46 billion, inclusive of working capital adjustments, which excludes approximately $18 million in transaction expenses that were incurred in connection with the disposition. The transaction resulted in a gain on sale of business of approximately $1.29 billion, which is net of the $18 million in transaction expenses referenced above. The proceeds from the sale were utilized to repay certain borrowings outstanding, as further described in Note 7, Long-term Debt, with the remaining proceeds invested in short-term investments classified as cash and cash equivalents on the Company’s consolidated balance sheet as of September 30, 2022.
Credit Ratings
Credit rating agencies rate a firm’s public debt securities. These ratings are utilized by the debt markets in evaluating a firm’s credit risk. Ratings influence the price paid to issue new debt securities by indicating to the market the Company’s ability to pay principal, interest and preferred dividends. Rating agencies evaluate a firm’s industry, cash flow, leverage, liquidity and hedge profile, among other factors, in their credit analysis of a firm’s credit risk.
The following table summarizes the credit ratings for the Company and its Senior Notes as of September 30, 2022:
 S&PMoody’s
Clearway Energy, Inc. BBBa2
4.750% Senior Notes, due 2028BBBa2
3.750% Senior Notes, due 2031BBBa2
3.750% Senior Notes, due 2032BBBa2
Uses of Liquidity
The Company’s requirements for liquidity and capital resources, other than for operating its facilities, are categorized as: (i) debt service obligations, as described more fully in Note 7, Long-term Debt, to the consolidated financial statements; (ii) capital expenditures; (iii) off-balance sheet arrangements; (iv) acquisitions and investments; and (v) cash dividends to investors.
Capital Expenditures
The Company’s capital spending program is mainly focused on maintenance capital expenditures, consisting of costs to maintain the assets currently operating, such as costs to replace or refurbish assets during routine maintenance, and growth capital expenditures consisting of costs to construct new assets and costs to complete the construction of assets where construction is in process.
For the nine months ended September 30, 2022, the Company used approximately $95 million to fund capital expenditures, including growth expenditures of $75 million in the Renewables segment, funded through construction-related financing. Renewables segment capital expenditures included $24 million incurred in connection with the Mililani solar project, $28 million incurred in connection with the Mesquite Sky wind project, $13 million incurred in connection with the Black Rock wind project, $5 million incurred in connection with the Rattlesnake wind project and $5 million incurred by other wind and solar projects. Prior to the sale of the Thermal Business on May 1, 2022, the Company incurred $4 million of growth capital expenditures in the Thermal segment in connection with various development projects. In addition, the Company incurred $16 million in maintenance capital expenditures. The Company estimates $30 million of maintenance expenditures for 2022. These estimates are subject to continuing review and adjustment. Actual capital expenditures may vary from these estimates.
Acquisitions and Investments
The Company intends to acquire generation assets developed and constructed by CEG, as well as generation assets from third parties where the Company believes its knowledge of the market and operating expertise provides a competitive advantage, and to utilize such acquisitions as a means to grow its business.
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Waiawa Drop Down On October 3, 2022, the Company, through its indirect subsidiary, Lighthouse Renewable Holdco LLC, acquired Waiawa BL Borrower Holdco LLC, the indirect owner of the Waiawa solar project, a 36 MW solar project with matching storage capacity that is currently under construction and located in Honolulu, Hawaii, from Clearway Renew LLC, a subsidiary of CEG, for cash consideration of $20 million. Lighthouse Renewable Holdco LLC is a partnership between the Company and a third-party investor. The third-party investor also contributed cash consideration of $12 million, which was utilized to acquire their portion of the acquired entity. Waiawa BL Borrower Holdco LLC consolidates, as the direct owner of the primary beneficiary, a tax equity fund, Waiawa TE Holdco LLC, which directly holds the Waiawa solar project. Waiawa has a 20-year PPA with an investment-grade utility that commences when the project reaches commercial operations, as defined in the PPA. The acquisition was funded with existing sources of liquidity.
Capistrano Wind Portfolio AcquisitionOn August 22, 2022, the Company, through its wholly-owned indirect subsidiary, Capistrano Portfolio Holdco LLC, acquired the Capistrano Wind Portfolio from Capistrano Wind Partners LLC, an indirect subsidiary of CEG, for a base purchase price of approximately $255 million, less working capital adjustments in the net amount of approximately $16 million, representing total net consideration of approximately $239 million. Concurrent with the acquisition, the Company also entered into a development agreement with Clearway Renew LLC, whereby Clearway Renew LLC paid $10 million to the Company at acquisition date for an exclusive right to develop, construct and repower the projects in the Capistrano Wind Portfolio, which was utilized to partially fund the acquisition of the Capistrano Wind Portfolio. The Capistrano Wind Portfolio consists of five wind projects located in Texas, Nebraska and Wyoming with a combined capacity of 413 MW that reached commercial operations between 2008 and 2012. The assets within the portfolio sell power under PPAs with investment-grade counterparties that have a weighted average remaining contract duration of approximately 10 years. The Capistrano Wind Portfolio operations are reflected in the Company’s Renewables segment and the acquisition was funded with existing sources of liquidity.
Mililani I Drop DownOn March 25, 2022, the Company, through its indirect subsidiary, Lighthouse Renewable Holdco LLC, acquired Mililani BL Borrower Holdco LLC, the indirect owner of the Mililani I solar project, a 39 MW Solar project with matching storage capacity, located in Honolulu, Hawaii, from Clearway Renew LLC for cash consideration of $22 million. Lighthouse Renewable Holdco LLC is a partnership between the Company and a third-party investor. The third-party investor also contributed cash consideration of $14 million utilized to acquire their portion of the acquired entity. Mililani BL Borrower Holdco LLC consolidates, as the direct owner of the primary beneficiary, a tax equity fund, Mililani TE Holdco LLC, which directly holds the Mililani I solar project. Mililani I has a 20-year PPA with an investment-grade utility that commenced in July 2022. The acquisition was funded with existing sources of liquidity. As part of the acquisition of Mililani I, the Company assumed the project’s financing agreement, which included a $16 million construction loan that converts to a term loan upon substantial completion of the project, $60 million tax equity bridge loan and $27 million sponsor equity bridge loan. The sponsor equity bridge loan was repaid at acquisition date, utilizing $14 million from the cash equity investor, as well as $15 million of the Company’s acquisition price, which was contributed back by CEG, and $2 million was utilized to pay associated fees. The tax equity bridge loan will be repaid with the final proceeds received from the tax equity investor upon Mililani I reaching substantial completion, which is expected to occur in the fourth quarter of 2022, along with the $18 million that was contributed into escrow by the tax equity investor at acquisition date.
Black Rock Drop Down In February 2022, in connection with the Company’s 2021 acquisition of the Class B membership interests in Black Rock Wind Holding LLC, through its indirect subsidiary Lighthouse Renewable Holding Sub LLC, from Clearway Renew LLC, the Company paid an additional $23 million as final funding after all remaining turbines of the Black Rock wind project became operational. Concurrent with the final funding, the $59 million that was contributed in 2021 by third-party investors, consisting of $36 million contributed by the cash equity investor and $23 million contributed by the tax equity investor, was released to Clearway Renew LLC.
Bridge Loan Agreement
On May 3, 2022, the Company repaid the $335 million in outstanding borrowings under the Bridge Loan Agreement utilizing proceeds received from the Thermal Disposition.
Cash Dividends to Investors
The Company intends to use the amount of cash that it receives from its distributions from Clearway Energy LLC to pay quarterly dividends to the holders of its Class A common stock and Class C common stock. Clearway Energy LLC intends to distribute to its unit holders in the form of a quarterly distribution all of the CAFD that is generated each quarter, less reserves for the prudent conduct of the business. 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.
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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, 2022:
Third Quarter 2022Second Quarter 2022First Quarter 2022
Dividends per Class A share$0.3604 $0.3536 $0.3468 
Dividends per Class C share0.3604 0.3536 0.3468 
On November 2, 2022, the Company declared quarterly dividends on its Class A and Class C common stock of $0.3672 per share payable on December 15, 2022 to stockholders of record as of December 1, 2022.
Off-Balance Sheet Arrangements
Obligations under Certain Guarantee Contracts
The Company may enter into guarantee arrangements in the normal course of business to facilitate commercial transactions with third parties.
Retained or Contingent Interests
The Company does not have any material retained or contingent interests in assets transferred to an unconsolidated entity.
Obligations Arising Out of a Variable Interest in an Unconsolidated Entity
As of September 30, 2022, the Company has several investments with an ownership interest percentage of 50% or less in energy and an energy-related entity that is accounted for under the equity method. GenConn is a variable interest entity for which the Company is not the primary beneficiary. The Company’s pro-rata share of non-recourse debt held by unconsolidated affiliates was approximately $333 million as of September 30, 2022. This indebtedness may restrict the ability of these subsidiaries to issue dividends or distributions to the Company.
Contractual Obligations and Commercial Commitments
The Company has a variety of contractual obligations and other commercial commitments that represent prospective cash requirements in addition to the Company’s capital expenditure programs, as disclosed in the Company’s 2021 Form 10-K.

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Cash Flow Discussion
The following table reflects the changes in cash flows for the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021:
Nine months ended September 30,
20222021Change
(In millions)
Net cash provided by operating activities$607 $529 $78 
Net cash provided by (used in) investing activities1,100 (430)1,530 
Net cash used in financing activities(1,205)(9)(1,196)
Net Cash Provided by Operating Activities
Changes to net cash provided by operating activities were driven by:(In millions)
Increase in operating income adjusted for non-cash items$62 
Increase in working capital primarily driven by the timing of accounts receivable collections and payments of accounts payable34 
Transaction expenses paid on May 1, 2022 in connection with the sale of the Thermal Business(18)
$78 
Net Cash Provided by (Used in) Investing Activities
Changes to net cash provided by (used in) investing activities were driven by:(In millions)
Proceeds from the sale of the Thermal Business$1,457 
Cash paid for acquisitions, net of cash acquired, in 2021211 
Decrease in cash paid for Drop Down assets81 
Decrease in capital expenditures29 
Cash paid to CEG in 2021 for equipment for the Pinnacle wind project repowering21 
Cash paid to CEG in 2022 for Capistrano Wind Portfolio(223)
Decrease in the return of investment from unconsolidated affiliates(25)
Other(21)
$1,530 
Net Cash Used in Financing Activities
Changes in net cash used in financing activities were driven by:(In millions)
Decrease in proceeds from the issuance of long-term debt, net of payments$(516)
Decrease in proceeds from the revolving credit facility, net of payments(322)
Decrease in contributions from noncontrolling interest members, net of distributions(265)
Cash released from escrow distributed to CEG in 2022(64)
Increase in dividends paid to common stockholders and distributions paid to CEG unit holders(15)
Tax-related distributions in 2022(8)
Other(6)
$(1,196)

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NOLs, Deferred Tax Assets and Uncertain Tax Position Implications, under ASC 740
As of December 31, 2021, the Company had a cumulative federal NOL carryforward balance of $1.3 billion for financial statement purposes, of which $0.9 billion will begin expiring between 2033 to 2037 if unutilized. As a result of the taxable gain recognized on the sale of the Thermal Business, the Company estimates that it will utilize $837 million of federal NOL carryforward. The Company does not anticipate any federal income tax payments for 2022, due to federal NOL carryforward utilization. Additionally, as of December 31, 2021, the Company had a cumulative state NOL carryforward balance of $769 million for financial statement purposes, which will expire between 2023 to 2040 if unutilized. As a result of the sale of the Thermal Business, the Company, after the utilization of various state NOL carryforwards, has paid $7 million in state income taxes through September 30, 2022, expects to pay approximately $2 million in state income taxes before December 31, 2022 and expects to pay an additional approximately $23 million in state income taxes by April 15, 2023. The Company does not anticipate being subject to the corporate minimum tax on financial statement income as enacted by the recently passed Inflation Reduction Act of 2022, or the IRA, which is discussed in further detail below.
In addition, the Company has PTC and ITC carryforward balances totaling $15 million, which will expire between 2034 and 2041 if unutilized.
Based on the Company’s current portfolio of assets, which include renewable assets that benefit from accelerated tax depreciation deductions and federal tax credits, current and expected NOL balances, and after taking into account the taxable gain from the sale of the Thermal Business, the Company estimates that it will not pay material federal income tax through 2027, but does expect to pay material state income tax across certain jurisdictions beginning in 2022, as indicated above.
As of December 31, 2021, the Company had a carryforward of $7 million of interest expense, the deductibility of which was limited under §163(j) of the Internal Revenue Code, which was enacted as part of the Tax Act. This interest expense carryforward has an indefinite carryforward period and any limitations on the utilization of this carryforward have been factored into our valuation allowance analysis.
On February 9, 2022, the governor of California signed Senate Bill 113, or SB 113, removing the suspension of California NOL utilization for tax year 2022. After assessing the law change, the Company expects SB 113 to have an immaterial impact on the consolidated financial statements.
On August 16, 2022, President Biden signed the IRA into law. The IRA contains a number of revisions to the Internal Revenue Code, including a 15% corporate minimum income tax for certain taxpayers, a 1% excise tax on corporate stock repurchases in tax years beginning after December 31, 2022 and business tax credits and incentives for the development of clean energy projects and the production of clean energy. The Company continues to analyze the potential impact of the IRA and monitor guidance to be issued by the United States Department of the Treasury, but it does not anticipate the corporate minimum tax applying to it or that the IRA will otherwise have a material impact on its consolidated financial statements.
The Company is subject to examination by taxing authorities for income tax returns filed in the U.S. federal jurisdiction and various state jurisdictions. The Company is not subject to U.S. federal or state income tax examinations for years prior to 2013.
The Company does not have uncertain tax benefits as of September 30, 2022.
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Fair Value of Derivative Instruments
The Company may enter into commodity purchase contracts and other energy-related financial instruments to mitigate variability in earnings due to fluctuations in spot market prices. In addition, in order to mitigate interest rate risk associated with the issuance of variable rate debt, the Company enters into interest rate swap agreements.
The tables below disclose the activities of non-exchange traded contracts accounted for at fair value in accordance with ASC 820. Specifically, these tables disaggregate realized and unrealized changes in fair value; disaggregate estimated fair values at September 30, 2022, based on their level within the fair value hierarchy defined in ASC 820; and indicate the maturities of contracts at September 30, 2022. For a full discussion of the Company’s valuation methodology of its contracts, see Derivative Fair Value Measurements in Note 5, Fair Value of Financial Instruments.
Derivative Activity (Losses) Gains(In millions)
Fair value of contracts as of December 31, 2021$(236)
Contracts realized or otherwise settled during the period59 
Contracts acquired during the period
Contracts added due to loss of NPNS exception(22)
Contracts removed during the period
Changes in fair value(89)
Fair value of contracts as of September 30, 2022$(276)
Fair value of contracts as of September 30, 2022
Maturity
Fair Value Hierarchy (Losses) Gains1 Year or Less
Greater Than
1 Year to 3 Years
Greater Than
3 Years to 5 Years
Greater Than
5 Years
Total Fair
Value
(In millions)
Level 2$23 $44 $15 $12 $94 
Level 3(79)(98)(72)(121)(370)
Total$(56)$(54)$(57)$(109)$(276)
The Company has elected to disclose derivative assets and liabilities on a trade-by-trade basis and does not offset amounts at the counterparty master agreement level. As discussed below in Quantitative and Qualitative Disclosures about Market Risk - Commodity Price Risk, the Company, measures the sensitivity of the portfolio to potential changes in market prices using VaR, a statistical model which attempts to predict risk of loss based on market price and volatility. The Company’s risk management policy places a limit on one-day holding period VaR, which limits the net open position.

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Critical Accounting Policies and Estimates
The Company’s discussion and analysis of the financial condition and results of operations are based upon the consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements and related disclosures in compliance with GAAP requires the application of appropriate technical accounting rules and guidance, as well as the use of estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. The application of these policies necessarily involves judgments regarding future events, including the likelihood of success of particular projects, legal and regulatory challenges and the fair value of certain assets and liabilities. These judgments, in and of themselves, could materially affect the financial statements and disclosures based on varying assumptions, which may be appropriate to use. In addition, the financial and operating environment may also have a significant effect, not only on the operation of the business, but on the results reported through the application of accounting measures used in preparing the financial statements and related disclosures, even if the nature of the accounting policies has not changed.
On an ongoing basis, the Company evaluates these estimates, utilizing historic experience, consultation with experts and other methods the Company considers reasonable. Actual results may differ substantially from the Company’s estimates. Any effects on the Company’s business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the information that gives rise to the revision becomes known.
The Company identifies its most critical accounting policies as those that are the most pervasive and important to the portrayal of the Company’s financial position and results of operations, and that require the most difficult, subjective and/or complex judgments by management regarding estimates about matters that are inherently uncertain. The Company’s critical accounting policies include income taxes and valuation allowance for deferred tax assets, accounting utilizing Hypothetical Liquidation at Book Value, or HLBV, and acquisition accounting.
Recent Accounting Developments
See Note 2, Summary of Significant Accounting Policies, for a discussion of recent accounting developments.

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ITEM 3 — Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to several market risks in its normal business activities. Market risk is the potential loss that may result from market changes associated with the Company’s power generation or with an existing or forecasted financial or commodity transaction. The types of market risks the Company is exposed to are commodity price risk, interest rate risk, liquidity risk, and credit risk. The following disclosures about market risk provide an update to, and should be read in conjunction with, Item 7A — Quantitative and Qualitative Disclosures About Market Risk, of the Company’s 2021 Form 10-K.
Interest Rate Risk
The Company is exposed to fluctuations in interest rates through its issuance of variable rate debt. Exposures to interest rate fluctuations may be mitigated by entering into derivative instruments known as interest rate swaps, caps, collars and put or call options. These contracts reduce exposure to interest rate volatility and result in primarily fixed rate debt obligations when taking into account the combination of the variable rate debt and the interest rate derivative instrument. See Note 6, Derivative Instruments and Hedging Activities, for more information.
Most of the Company’s project subsidiaries enter into interest rate swaps, intended to hedge the risks associated with interest rates on non-recourse project-level debt. See Item 15 — Note 10, Long-term Debt, to the Company’s audited consolidated financial statements for the year ended December 31, 2021 included in the 2021 Form 10-K for more information about interest rate swaps of the Company’s project subsidiaries.
If all of the interest rate swaps had been discontinued on September 30, 2022, the Company would have owed the counterparties $90 million. Based on the credit ratings of the counterparties, the Company believes its exposure to credit risk due to nonperformance by counterparties to its hedge contracts to be insignificant.
The Company has long-term debt instruments that subject it to the risk of loss associated with movements in market interest rates. As of September 30, 2022, a change of 1%, or 100 basis points, in interest rates would result in an approximately $1 million change in market interest expense on a rolling twelve-month basis.
As of September 30, 2022, the fair value of the Company’s debt was $6.30 billion and the carrying value was $7.08 billion. The Company estimates that a decrease of 1%, or 100 basis points, in market interest rates would have increased the fair value of its long-term debt by approximately $361 million.
Liquidity Risk
Liquidity risk arises from the general funding needs of the Company’s activities and in the management of the Company’s assets and liabilities.
Commodity Price Risk
Commodity price risks result from exposures to changes in spot prices, forward prices, volatilities, and correlations between various commodities, such as electricity and emissions credits. The Company manages the commodity price risk of its merchant generation operations by entering into derivative or non-derivative instruments to hedge the variability in future cash flows from forecasted power sales. The portion of forecasted transactions hedged may vary based upon management's assessment of market, weather, operation and other factors.
Based on a sensitivity analysis using simplified assumptions, the impact of a $0.50 per MWh increase or decrease in power prices across the term of the derivatives contracts would cause a change of approximately $7 million to the net value of power derivatives as of September 30, 2022.
Counterparty Credit Risk
Credit risk relates to the risk of loss resulting from non-performance or non-payment by counterparties pursuant to the terms of their contractual obligations. The Company monitors and manages credit risk through credit policies that include: (i) an established credit approval process; and (ii) the use of credit mitigation measures such as prepayment arrangements or volumetric limits. Risks surrounding counterparty performance and credit could ultimately impact the amount and timing of expected cash flows. The Company seeks to mitigate counterparty risk by having a diversified portfolio of counterparties. See Note 5, Fair Value of Financial Instruments, to the consolidated financial statements for more information about concentration of credit risk.
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ITEM 4 — Controls and Procedures
Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
Under the supervision and with the participation of the Company’s management, including its principal executive officer, principal financial officer and principal accounting officer, the Company conducted an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures, as such term is defined in Rules 13a-15(e) or 15d-15(e) of the Exchange Act. Based on this evaluation, the Company’s principal executive officer, principal financial officer and principal accounting officer concluded that the disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the quarter ended September 30, 2022 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II - OTHER INFORMATION
ITEM 1 — LEGAL PROCEEDINGS
For a discussion of the material legal proceedings in which the Company was involved through September 30, 2022, see Note 12, Contingencies, to this Form 10-Q.

ITEM 1A — RISK FACTORS
Information regarding risk factors appears in Part I, Item 1A, Risk Factors, in the Company’s 2021 Form 10-K. There have been no material changes in the Company’s risk factors since those reported in its 2021 Form 10-K.

ITEM 2 — UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.

ITEM 3 — DEFAULTS UPON SENIOR SECURITIES
None.

ITEM 4 — MINE SAFETY DISCLOSURES
Not applicable.

ITEM 5 — OTHER INFORMATION
Disclosure Pursuant to Item 5.02 of Form 8-K – Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On October 27, 2022, Ferrell P. McClean informed the Company of her intention to retire from the board of directors (the “Board”) of the Company effective as of such date. Ms. McClean’s retirement from the Board was not the result of any disagreement with the Company.
Also on October 27, 2022, the Board elected Guillaume Hédiard, Vincent Stoquart and Emmanuel Barrois (the “New Directors”) to serve as members of the Board, effective immediately. None of the New Directors will initially serve on any committee of the Board or receive compensation for their services as directors.
The Company and each of the New Directors have entered into an indemnification agreement that provides each such director with contractual rights to indemnification, expense advancement and reimbursement to the fullest extent permitted under Delaware law. The foregoing description of such indemnification agreements does not purport to be complete and is qualified in its entirety by reference to the complete text of the Form of Indemnification Agreement, the form of which is filed as Exhibit 10.9 to the Company’s 2021 Form 10-K, and which is incorporated herein by reference.
There are no arrangements or understandings between any of the New Directors and any other person pursuant to which any such directors was elected to serve on the Board. None of the New Directors has any direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.
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ITEM 6 — EXHIBITS
NumberDescriptionMethod of Filing
10.1Incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on August 19, 2022.
31.1Filed herewith.
31.2Filed herewith.
32Furnished herewith.
101 INSInline XBRL Instance Document.Filed herewith.
101 SCHInline XBRL Taxonomy Extension Schema.Filed herewith.
101 CALInline XBRL Taxonomy Extension Calculation Linkbase.Filed herewith.
101 DEFInline XBRL Taxonomy Extension Definition Linkbase.Filed herewith.
101 LABInline XBRL Taxonomy Extension Label Linkbase.Filed herewith.
101 PREInline XBRL Taxonomy Extension Presentation Linkbase.Filed herewith.
104Cover Page Interactive Data File (the cover page interactive data file does not appear in Exhibit 104 because its Inline XBRL tags are embedded within the Inline XBRL document).Filed herewith.

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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 CLEARWAY ENERGY, INC.
(Registrant) 
 
 /s/ CHRISTOPHER S. SOTOS 
 Christopher S. Sotos 
 
President and Chief Executive Officer
(Principal Executive Officer) 
 
 
   
 /s/ SARAH RUBENSTEIN 
 Sarah Rubenstein 
Date: November 2, 2022
Senior Vice President and Chief Accounting Officer
(Principal Financial Officer and Principal Accounting Officer) 
 
 
59