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 June 30, 2023

☐			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)

Delaware									46-1777204
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)
300 Carnegie Center, Suite 300			Princeton			New Jersey			08540
(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 class			Trading Symbol(s)			Name of each exchange on which registered
Class A Common Stock, par value $0.01			CWEN.A			New York Stock Exchange
Class C Common Stock, par value $0.01			CWEN			New 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 July 31, 2023, there were 34,613,853 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, 82,385,884 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.

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TABLE OF CONTENTS

Index

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION			3
GLOSSARY OF TERMS			4
PART I — FINANCIAL INFORMATION			6
ITEM 1 — FINANCIAL STATEMENTS AND NOTES			6
ITEM 2 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			33
ITEM 3 — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			51
ITEM 4 — CONTROLS AND PROCEDURES			52
PART II — OTHER INFORMATION			53
ITEM 1 — LEGAL PROCEEDINGS			53
ITEM 1A — RISK FACTORS			53
ITEM 2 — UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			53
ITEM 3 — DEFAULTS UPON SENIOR SECURITIES			53
ITEM 4 — MINE SAFETY DISCLOSURES			53
ITEM 5 — OTHER INFORMATION			53
ITEM 6 — EXHIBITS			54
SIGNATURES			55

2

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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, 2022, as well as the following:

•The Company’s ability to maintain and grow its quarterly dividend;

•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 CEG;

•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;

•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; and

•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.

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

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GLOSSARY OF TERMS

When the following terms and abbreviations appear in the text of this report, they have the meanings indicated below:

2028 Senior Notes			$850 million aggregate principal amount of 4.75% unsecured senior notes due 2028, issued by Clearway Energy Operating LLC
2031 Senior Notes			$925 million aggregate principal amount of 3.75% unsecured senior notes due 2031, issued by Clearway Energy Operating LLC
2032 Senior Notes			$350 million aggregate principal amount of 3.75% unsecured senior notes due 2032, issued by Clearway Energy Operating LLC
Adjusted EBITDA			A 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
ASC			The FASB Accounting Standards Codification, which the FASB established as the source of authoritative GAAP
ASU			Accounting Standards Updates - updates to the ASC
ATM Program			At-The-Market Equity Offering Program
Bridge Loan Agreement			Senior 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 that was repaid on May 3, 2022
BESS			Battery energy storage system
Black Start			The capability of a generating asset to restore the grid in the event of a blackout without relying on the external electric power transmission network
CAFD			A non-GAAP measure, Cash Available for Distribution is defined as of June 30, 2023 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 Portfolio			Five 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
CEG			Clearway Energy Group LLC (formerly Zephyr Renewables LLC)
CEG Master Services Agreements			Master Services Agreements entered into as of August 31, 2018 and amended on February 2, 2023 between the Company, Clearway Energy LLC and Clearway Energy Operating LLC, and CEG
Clearway Energy LLC			The 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 LLC			The holder of all the Company’s Class B and Class D common stock 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 LLC			The holder of the project assets that are owned by Clearway Energy LLC
Clearway Renew			Clearway Renew LLC, a subsidiary of CEG
Company			Clearway Energy, Inc., together with its consolidated subsidiaries
CVSR			California Valley Solar Ranch
CVSR Holdco			CVSR Holdco LLC, the indirect owner of CVSR
Distributed Solar			Solar 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 Assets			Assets under common control acquired by the Company from CEG
Exchange Act			The Securities Exchange Act of 1934, as amended
FASB			Financial Accounting Standards Board

4

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GAAP			Accounting principles generally accepted in the U.S.
GenConn			GenConn Energy LLC
GIP			Global Infrastructure Partners
HLBV			Hypothetical Liquidation at Book Value
IRA			Inflation Reduction Act of 2022
ITC			Investment Tax Credit
KKR			KKR Thor Bidco, LLC, an affiliate of Kohlberg Kravis Roberts & Co. L.P.
LIBOR			London Inter-Bank Offered Rate
Mesquite Star			Mesquite Star Special LLC
Mt. Storm			NedPower Mount Storm LLC
MW			Megawatt
MWh			Saleable megawatt hours, net of internal/parasitic load megawatt-hours
MWt			Megawatts Thermal Equivalent
Net Exposure			Counterparty credit exposure to Clearway Energy, Inc. net of collateral
NOLs			Net Operating Losses
NPNS			Normal Purchases and Normal Sales
OCI/OCL			Other comprehensive income/loss
O&M			Operations and Maintenance
PG&E			Pacific Gas and Electric Company
PPA			Power Purchase Agreement
PTC			Production Tax Credit
RA			Resource adequacy
RENOM			Clearway Renewable Operation & Maintenance LLC
Rosie Central BESS			Rosie BESS Devco LLC
SCE			Southern California Edison
SEC			U.S. Securities and Exchange Commission
Senior Notes			Collectively, the 2028 Senior Notes, the 2031 Senior Notes and the 2032 Senior Notes
SOFR			Secured Overnight Financing Rate
SPP			Solar Power Partners
SREC			Solar Renewable Energy Credit
Thermal Business			The 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
TotalEnergies			TotalEnergies SE
U.S.			United States of America
Utah Solar Portfolio			Seven utility-scale solar farms located in Utah, representing 530 MW of capacity
Utility Scale Solar			Solar 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
VIE			Variable Interest Entity

5

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PART I — FINANCIAL INFORMATION

ITEM 1 — FINANCIAL STATEMENTS

CLEARWAY ENERGY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

			Three months ended June 30,												Six months ended June 30,
(In millions, except per share amounts)			2023						2022						2023						2022
Operating Revenues
Total operating revenues			$	406					$	368					$	694					$	582
Operating Costs and Expenses
Cost of operations, exclusive of depreciation, amortization and accretion shown separately below			118						112						226						240
Depreciation, amortization and accretion			128						126						256						250
General and administrative			9						11						19						23
Transaction and integration costs			2						3						2						5
Development costs			—						1						—						2
Total operating costs and expenses			257						253						503						520
Gain on sale of business			—						1,291						—						1,291
Operating Income			149						1,406						191						1,353
Other Income (Expense)
Equity in earnings of unconsolidated affiliates			3						10						—						14
Other income, net			9						5						17						5
Loss on debt extinguishment			—						—						—						(2)
Interest expense			(55)						(47)						(154)						(94)
Total other expense, net			(43)						(32)						(137)						(77)
Income Before Income Taxes			106						1,374						54						1,276
Income tax expense			22						225						10						224
Net Income			84						1,149						44						1,052
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interests			46						579						6						514
Net Income Attributable to Clearway Energy, Inc.			$	38					$	570					$	38					$	538
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			$	0.33					$	4.89					$	0.32					$	4.62
Dividends Per Class A Common Share			$	0.3818					$	0.3536					$	0.7563					$	0.7004
Dividends Per Class C Common Share			$	0.3818					$	0.3536					$	0.7563					$	0.7004

See accompanying notes to consolidated financial statements.

6

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CLEARWAY ENERGY, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

			Three months ended June 30,												Six months ended June 30,
(In millions)			2023						2022						2023						2022
Net Income			$	84					$	1,149					$	44					$	1,052
Other Comprehensive Income
Unrealized gain on derivatives and changes in accumulated OCI/OCL, net of income tax expense, of $1, $1, $— and $3			3						6						—						20
Other comprehensive income			3						6						—						20
Comprehensive Income			87						1,155						44						1,072
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interests			48						583						6						526
Comprehensive Income Attributable to Clearway Energy, Inc.			$	39					$	572					$	38					$	546

See accompanying notes to consolidated financial statements.

7

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CLEARWAY ENERGY, INC.

CONSOLIDATED BALANCE SHEETS

(In millions, except shares)			June 30, 2023						December 31, 2022
ASSETS			(Unaudited)
Current Assets
Cash and cash equivalents			$	547					$	657
Restricted cash			371						339
Accounts receivable — trade			215						153
Accounts receivable — affiliates			1						—
Inventory			51						47
Derivative instruments			34						26
Prepayments and other current assets			70						54
Total current assets			1,289						1,276
Property, plant and equipment, net			7,748						7,421
Other Assets
Equity investments in affiliates			352						364
Intangible assets for power purchase agreements, net			2,397						2,488
Other intangible assets, net			74						77
Derivative instruments			83						63
Right-of-use assets, net			550						527
Other non-current assets			131						96
Total other assets			3,587						3,615
Total Assets			$	12,624					$	12,312
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Current portion of long-term debt			$	330					$	322
Accounts payable — trade			63						55
Accounts payable — affiliates			61						22
Derivative instruments			44						50
Accrued interest expense			54						54
Accrued expenses and other current liabilities			54						114
Total current liabilities			606						617
Other Liabilities
Long-term debt			6,708						6,491
Deferred income taxes			118						119
Derivative instruments			259						303
Long-term lease liabilities			578						548
Other non-current liabilities			213						201
Total other liabilities			7,876						7,662
Total Liabilities			8,482						8,279
Redeemable noncontrolling interest in subsidiaries			15						7
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); 202,075,237 shares issued and outstanding (Class A 34,613,853, Class B 42,738,750, Class C 82,385,884, Class D 42,336,750) at June 30, 2023 and 201,972,813 shares issued and outstanding (Class A 34,613,853, Class B 42,738,750, Class C 82,283,460, Class D 42,336,750) at December 31, 2022			1						1
Additional paid-in capital			1,718						1,761
Retained earnings			412						463
Accumulated other comprehensive income			9						9
Noncontrolling interest			1,987						1,792
Total Stockholders’ Equity			4,127						4,026
Total Liabilities and Stockholders’ Equity			$	12,624					$	12,312

See accompanying notes to consolidated financial statements.

8

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CLEARWAY ENERGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

			Six months ended June 30,
(In millions)			2023						2022
Cash Flows from Operating Activities
Net Income			$	44					$	1,052
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in earnings of unconsolidated affiliates			—						(14)
Distributions from unconsolidated affiliates			11						17
Depreciation, amortization and accretion			256						250
Amortization of financing costs and debt discounts			6						7
Amortization of intangibles			94						82
Loss on debt extinguishment			—						2
Gain on sale of business			—						(1,291)
Reduction in carrying amount of right-of-use assets			8						7
Changes in deferred income taxes			9						197
Changes in derivative instruments and amortization of accumulated OCI/OCL			(51)						92
Cash used in changes in other working capital:
Changes in prepaid and accrued liabilities for tolling agreements			(56)						(74)
Changes in other working capital			(112)						(48)
Net Cash Provided by Operating Activities			209						279
Cash Flows from Investing Activities
Acquisition of Drop Down Assets, net of cash acquired			(7)						(51)
Capital expenditures			(109)						(81)
Return of investment from unconsolidated affiliates			10						6
Investments in unconsolidated affiliates			(10)						—
Proceeds from sale of business			—						1,457
Net Cash (Used in) Provided by Investing Activities			(116)						1,331
Cash Flows from Financing Activities
Contributions from (distributions to) noncontrolling interests, net			275						(7)
Payments of dividends and distributions			(153)						(141)
Distributions to CEG of escrowed amounts			—						(64)
Tax-related distributions			(19)						—
Proceeds from the revolving credit facility			—						80
Payments for the revolving credit facility			—						(325)
Proceeds from the issuance of long-term debt			42						214
Payments of debt issuance costs			(8)						(4)
Payments for long-term debt			(306)						(722)
Other			(2)						(7)
Net Cash Used in Financing Activities			(171)						(976)
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash			(78)						634
Cash, Cash Equivalents and Restricted Cash at Beginning of Period			996						654
Cash, Cash Equivalents and Restricted Cash at End of Period			$	918					$	1,288

See accompanying notes to consolidated financial statements.

9

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CLEARWAY ENERGY, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Six Months Ended June 30, 2023

(Unaudited)

(In millions)			Preferred Stock						Common Stock						Additional Paid-In Capital						Retained Earnings						Accumulated Other Comprehensive Income						Noncontrolling Interest						Total Stockholders’ Equity
Balances at December 31, 2022			$	—					$	1					$	1,761					$	463					$	9					$	1,792					$	4,026
Net loss			—						—						—						—						—						(43)						(43)
Unrealized loss on derivatives and changes in accumulated OCI, net of tax			—						—						—						—						(1)						(2)						(3)
Contributions from CEG, net of distributions, cash			—						—						—						—						—						30						30
Contributions from noncontrolling interests, net of distributions, cash			—						—						—						—						—						215						215
Transfers of assets under common control			—						—						(52)						—						—						46						(6)
Non-cash adjustments for change in tax basis			—						—						9						—						—						—						9
Stock-based compensation			—						—						1						—						—						—						1
Common stock dividends and distributions to CEG unit holders			—						—						—						(44)						—						(32)						(76)
Balances at March 31, 2023			—						1						1,719						419						8						2,006						4,153
Net income			—						—						—						38						—						40						78
Unrealized gain on derivatives and changes in accumulated OCI, net of tax			—						—						—						—						1						2						3
Distributions to CEG, net of contributions, cash			—						—						—						—						—						(4)						(4)
Distributions to noncontrolling interests, net of contributions, cash			—						—						—						—						—						(5)						(5)
Tax-related distributions			—						—						—						—						—						(19)						(19)
Stock-based compensation			—						—						(1)						—						—						—						(1)
Common stock dividends and distributions to CEG unit holders			—						—						—						(45)						—						(32)						(77)
Other			—						—						—						—						—						(1)						(1)
Balances at June 30, 2023			$	—					$	1					$	1,718					$	412					$	9					$	1,987					$	4,127

See accompanying notes to consolidated financial statements.

10

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CLEARWAY ENERGY, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Six Months Ended June 30, 2022

(Unaudited)

(In millions)			Preferred Stock						Common Stock						Additional Paid-In Capital						Accumulated Deficit						Accumulated Other Comprehensive Loss						Noncontrolling Interest						Total Stockholders’ Equity
Balances at December 31, 2021			$	—					$	1					$	1,872					$	(33)					$	(6)					$	1,466					$	3,300
Net loss			—						—						—						(32)						—						(67)						(99)
Unrealized gain on derivatives, net of tax			—						—						—						—						6						8						14
Distributions to CEG, net of contributions, cash			—						—						—						—						—						(3)						(3)
Contributions from noncontrolling interests, net of distributions, cash			—						—						—						—						—						28						28
Transfers of assets under common control			—						—						(12)						—						—						(25)						(37)
Non-cash adjustments for change in tax basis			—						—						8						—						—						—						8
Stock based compensation			—						—						(2)						—						—						—						(2)
Common stock dividends and distributions to CEG unit holders			—						—						(40)						—						—						(30)						(70)
Balances at March 31, 2022			—						1						1,826						(65)						—						1,377						3,139
Net income			—						—						—						570						—						575						1,145
Unrealized gain on derivatives, net of tax			—						—						—						—						2						4						6
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			—						—						1						—						—						—						1
Common stock dividends and distributions to CEG unit holders			—						—						(41)						—						—						(30)						(71)
Balances at June 30, 2022			$	—					$	1					$	1,785					$	505					$	2					$	1,896					$	4,189

See accompanying notes to consolidated financial statements.

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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 with a focus on investments in clean energy 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 is equally owned by GIP and TotalEnergies. 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. The majority of the Company’s revenues are derived from long-term contractual arrangements for the output or capacity from these assets.

The Company consolidates the results of Clearway Energy LLC through its controlling interest, with CEG’s interest shown as noncontrolling 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 June 30, 2023, the Company owned 57.90% of the economic interests of Clearway Energy LLC, with CEG owning 42.10% of the economic interests of Clearway Energy LLC.

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The following table represents a summarized structure of the Company as of June 30, 2023:

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 2022 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 June 30, 2023, and results of operations, comprehensive income and cash flows for the three and six months ended June 30, 2023 and 2022.

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.

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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 $134 million and $121 million as of June 30, 2023 and December 31, 2022, 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:

			June 30, 2023						December 31, 2022
			(In millions)
Cash and cash equivalents			$	547					$	657
Restricted cash			371						339
Cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows			$	918					$	996

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 June 30, 2023, these restricted funds were comprised of $104 million designated to fund operating expenses, $168 million designated for current debt service payments and $85 million restricted for reserves including debt service, performance obligations and other reserves as well as capital expenditures. The remaining $14 million is held in distributions reserve accounts.

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:

			June 30, 2023						December 31, 2022
			(In millions)
Property, Plant and Equipment Accumulated Depreciation			$	3,232					$	3,024
Intangible Assets Accumulated Amortization			972						877

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 six months ended June 30, 2023:

															Second Quarter 2023						First Quarter 2023
Dividends per Class A share															$	0.3818					$	0.3745
Dividends per Class C share															0.3818						0.3745

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 August 7, 2023, the Company declared quarterly dividends on its Class A and Class C common stock of $0.3891 per share payable on September 15, 2023 to stockholders of record as of September 1, 2023.

Noncontrolling Interests

Clearway Energy LLC Distributions to CEG

The following table lists distributions paid to CEG during the six months ended June 30, 2023 on Clearway Energy LLC’s Class B and D units:

															Second Quarter 2023						First Quarter 2023
Distributions per Class B Unit															$	0.3818					$	0.3745
Distributions per Class D Unit															0.3818						0.3745

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In addition to the quarterly distributions paid to CEG, Clearway Energy LLC distributed an additional $19 million to CEG during the second quarter of 2023, which represents CEG’s pro-rata share of a distribution that was paid in order for the Company to make certain additional tax payments primarily associated with the sale of the Thermal Business. The Company’s share of the distribution was $26 million.

On August 7, 2023, Clearway Energy LLC declared a distribution on its Class B and Class D units of $0.3891 per unit payable on September 15, 2023 to unit holders of record as of September 1, 2023.

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:

						(In millions)
Balance at December 31, 2022						$	7
Cash distributions to redeemable noncontrolling interests						(1)
Comprehensive income attributable to redeemable noncontrolling interests						9
Balance at June 30, 2023						$	15

Revenue Recognition

Disaggregated Revenues

The following tables represent the Company’s disaggregation of revenue from contracts with customers along with the reportable segment for each category:

			Three months ended June 30, 2023
(In millions)			Conventional Generation						Renewables																		Total
Energy revenue (a)			$	3					$	275																	$	278
Capacity revenue (a)			96						5																		101
Other revenue (a)			21						27																		48
Contract amortization			(5)						(42)																		(47)
Mark-to-market for economic hedges			—						26																		26
Total operating revenues			115						291																		406
Less: Mark-to-market for economic hedges			—						(26)																		(26)
Less: Lease revenue			(104)						(237)																		(341)
Less: Contract amortization			5						42																		47
Total revenue from contracts with customers			$	16					$	70																	$	86

(a) The following amounts of energy, capacity and other revenue relate to leases and are accounted for under ASC 842:

(In millions)			Conventional Generation						Renewables						Total
Energy revenue			$	1					$	233					$	234
Capacity revenue			82						4						86
Other revenue (b)			21						—						21
Total			$	104					$	237					$	341

(b) On May 31, 2023, the Marsh Landing Black Start addition reached commercial operations and the Company will receive an annual fixed fee over a five-year term under the related agreement. The agreement was determined to be a sales-type lease resulting in the Company recording a lease receivable of $21 million included in total operating revenues, offset by net investment costs of $13 million included in cost of operations, resulting in a net pre-tax profit of $8 million.

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			Three months ended June 30, 2022
(In millions)			Conventional Generation						Renewables						Thermal																		Total
Energy revenue (a)			$	3					$	306					$	11																	$	320
Capacity revenue (a)			106						1						4																		111
Other revenue			—						27						3																		30
Contract amortization			(6)						(35)						—																		(41)
Mark-to-market for economic hedges			—						(52)						—																		(52)
Total operating revenues			103						247						18																		368
Less: Mark-to-market for economic hedges			—						52						—																		52
Less: Lease revenue			(109)						(268)						—																		(377)
Less: Contract amortization			6						35						—																		41
Total revenue from contracts with customers			$	—					$	66					$	18																	$	84

(a) The following amounts of energy and capacity revenue relate to leases and are accounted for under ASC 842:

(In millions)			Conventional Generation						Renewables												Total
Energy revenue			$	3					$	268											$	271
Capacity revenue			106						—												106
Total			$	109					$	268											$	377

			Six months ended June 30, 2023
(In millions)			Conventional Generation						Renewables																		Total
Energy revenue (a)			$	4					$	473																	$	477
Capacity revenue (a)			196						10																		206
Other revenue (a)			21						39																		60
Contract amortization			(11)						(83)																		(94)
Mark-to-market for economic hedges			—						45																		45
Total operating revenues			210						484																		694
Less: Mark-to-market for economic hedges			—						(45)																		(45)
Less: Lease revenue			(205)						(393)																		(598)
Less: Contract amortization			11						83																		94
Total revenue from contracts with customers			$	16					$	129																	$	145

(a) The following amounts of energy, capacity and other revenue relate to leases and are accounted for under ASC 842:

(In millions)			Conventional Generation						Renewables						Total
Energy revenue			$	2					$	385					$	387
Capacity revenue			182						8						190
Other revenue (b)			21						$	—					21
Total			$	205					$	393					$	598

(b) Includes revenue recognized for the Marsh Landing Black Start addition that reached commercial operations on May 31, 2023, as described above.

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			Six months ended June 30, 2022
(In millions)			Conventional Generation						Renewables						Thermal												Total
Energy revenue (a)			$	3					$	501					$	48											$	552
Capacity revenue (a)			220						1						18												239
Other revenue			—						41						11												52
Contract amortization			(12)						(71)						—												(83)
Mark-to-market for economic hedges			—						(178)						—												(178)
Total operating revenues			211						294						77												582
Less: Mark-to-market for economic hedges			—						178						—												178
Less: Lease revenue			(223)						(430)						(1)												(654)
Less: Contract amortization			12						71						—												83
Total revenue from contracts with customers			$	—					$	113					$	76											$	189

(a) The following amounts of energy and capacity revenue relate to leases and are accounted for under ASC 842:

(In millions)			Conventional Generation						Renewables						Thermal						Total
Energy revenue			$	3					$	430					$	1					$	434
Capacity revenue			220						—						—						220
Total			$	223					$	430					$	1					$	654

Contract Balances

The following table reflects the contract assets and liabilities included on the Company’s consolidated balance sheets:

			June 30, 2023						December 31, 2022
			(In millions)
Accounts receivable, net - Contracts with customers			$	62					$	37
Accounts receivable, net - Leases			153						116
Total accounts receivable, net			$	215					$	153

Recently Adopted Accounting Standards

In March 2020, the FASB issued ASU No. 2020-4, Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments provide for optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. These amendments apply only to contracts that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform, which affects certain of the Company’s debt and interest rate swap agreements. The guidance is effective for all entities as of March 20, 2020 through December 31, 2022. In December 2022, the FASB issued ASU No. 2022-6, Deferral of the Sunset Date of Reference Rate Reform, to extend the end of the transition period to December 31, 2024. As of July 14, 2023, the Company has amended all of the applicable contracts that previously used LIBOR as a reference rate and elected to apply the practical expedient to certain modified cash flow interest rate swap and debt agreements. The adoption did not have a material impact on the Company’s financial statements.

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Note 3 — Acquisitions and Dispositions

Acquisitions

Daggett 3 Drop Down — On February 17, 2023, the Company, through its indirect subsidiary, Daggett Solar Investment LLC, acquired the Class A membership interests in Daggett TargetCo LLC, the indirect owner of the Daggett 3 solar project, a 300 MW solar project with matching storage capacity that is currently under construction, located in San Bernardino, California, from Clearway Renew, a subsidiary of CEG, for cash consideration of $21 million. Simultaneously, a cash equity investor acquired the Class B membership interests in Daggett TargetCo LLC from Clearway Renew for cash consideration of $129 million. The Company and the cash equity investor then contributed their Class A and B membership interests, respectively, into Daggett Renewable Holdco LLC, a partnership between the Company and the cash equity investor, which consolidates Daggett TargetCo LLC. Daggett TargetCo LLC consolidates, as the indirect owner of the primary beneficiary, a tax equity fund, Daggett TE Holdco LLC, which owns the Daggett 3 solar project, as further described in Note 4, Investments Accounted for by the Equity Method and Variable Interest Entities. Daggett 3 has PPAs with investment-grade counterparties that have a 15-year weighted average contract duration that commence when the underlying operating assets reach commercial operations, which is expected to occur in the second half of 2023. The Daggett 3 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 Daggett 3 on a prospective basis in its financial statements. The assets and liabilities transferred to the Company relate to interests under common control and were recorded at historical cost in accordance with ASC 805-50, Business Combinations - Related Issues. The difference between the cash paid of $21 million and the historical cost of the Company’s net assets acquired of $15 million was recorded as an adjustment to CEG’s noncontrolling interest balance. In addition, the Company reflected $21 million of the Company’s purchase price, which was contributed back to the Company by CEG to pay down the acquired long-term debt, in the line item contributions from CEG, net of distributions in the consolidated statements of stockholders’ equity.

The following is a summary of assets and liabilities transferred in connection with the acquisition as of February 17, 2023:

(In millions)						Daggett 3
Restricted cash						$	14
Property, plant and equipment						534
Right-of-use-assets, net						31
Derivative assets						27
Total assets acquired						606
Long-term debt (a)						480
Long-term lease liabilities						33
Other current and non-current liabilities (b)						78
Total liabilities assumed						591
Net assets acquired						$	15

(a) Includes a $181 million construction loan, $75 million sponsor equity bridge loan and $229 million tax equity bridge loan, offset by $5 million in unamortized debt issuance costs. See Note 7, Long-term Debt, for further discussion of the long-term debt assumed in the acquisition.

(b) Includes $32 million of project costs that were subsequently funded by CEG. Subsequent to the acquisition date, CEG funded an additional $11 million in project costs. The combined $43 million funded by CEG will be repaid with the proceeds received when the project reaches substantial completion, which is expected to occur in the second half of 2023.

Note 4 — Investments Accounted for by the Equity Method and Variable Interest Entities

Entities that are not Consolidated

The Company has an interest in an entity that is considered a VIE under ASC 810, but for which it is not considered the primary beneficiary. The Company accounts for its interest in this entity 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 2022 Form 10-K.

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Rosie Central BESS — On June 30, 2023, the Company, through its indirect subsidiary, Rosie Class B LLC, the indirect owner of the Rosamond Central solar project, became the owner of the Class B membership interests of Rosie BESS Devco LLC, or Rosie Central BESS, in order to facilitate and fund the construction of a 147 MW battery energy storage system, or BESS, that will be co-located at the Rosamond Central solar facility. Clearway Renew indirectly owns the Class A membership interests. The Company accounts for its investment in Rosie Central BESS as an equity method investment. The Company’s investment consists of $10 million contributed into Rosie Central BESS, funded through contributions from the Company and its cash equity investor in Rosie TargetCo LLC, which consolidates Rosie Class B LLC. On July 3, 2023, Rosie Class B LLC contributed an additional $20 million into Rosie Central BESS, as further described in Note 7, Long-term Debt.

Additionally, on June 30, 2023, Rosamond Central entered into an asset purchase agreement with Clearway Renew to acquire the BESS project assets at mechanical completion for a purchase price of $360 million, of which $72 million is payable at mechanical completion with the remaining $288 million payable at substantial completion. The Company will fund $17 million of the purchase price at mechanical completion and $67 million of the purchase price at substantial completion with the remaining purchase price funded through contributions from the cash equity investor in Rosie TargetCo LLC and the tax equity investor in Rosie TE Holdco LLC. The BESS project is anticipated to reach mechanical completion in the second half of 2023 and to reach substantial completion in the first half of 2024.

The Company’s maximum exposure to loss as of June 30, 2023 is limited to its equity investment in the unconsolidated entities, as further summarized in the table below:

Name			Economic Interest			Investment Balance
						(In millions)
Avenal			50%			$	5
Desert Sunlight			25%			227
Elkhorn Ridge			67%			18
GenConn (a)			50%			80
Rosie Central BESS			50%			10
San Juan Mesa			75%			12
						$	352

(a) GenConn is a variable interest entity.

Entities that are Consolidated

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 2022 Form 10-K, 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. The Company also has a controlling financial interest in certain partnership arrangements with third-party investors, which have also been identified as VIEs. Under the Company’s arrangements that have been identified as VIEs, the third-party investors are allocated earnings, tax attributes and distributable cash in accordance with the respective limited liability agreements. Many of these arrangements also provide a mechanism to facilitate achievement of the investor’s specified return by providing incremental cash distributions to the investor at a specified date if the specified return has not yet been achieved.

The discussion below describes material changes to VIEs during the six months ended June 30, 2023.

Daggett Renewable Holdco LLC — As described in Note 3, Acquisitions and Dispositions, on February 17, 2023, Daggett Solar Investment LLC, an indirect subsidiary of the Company, acquired the Class A membership interests in Daggett TargetCo LLC while a cash equity investor acquired the Class B membership interests. The Company and the cash equity investor then contributed their Class A and B membership interests, respectively, into Daggett Renewable Holdco LLC, a partnership between the Company and the cash equity investor, and concurrently, Daggett TargetCo LLC became a wholly-owned subsidiary of Daggett Renewable Holdco LLC. The Company consolidates Daggett Renewable Holdco LLC as a VIE as the Company is the primary beneficiary, through its role as managing member. The Company recorded the noncontrolling interest of the cash equity investor in Daggett Renewable Holdco LLC at historical carrying amount, with the offset to additional paid-in capital. Daggett TargetCo LLC consolidates, as the indirect owner of the primary beneficiary, a tax equity fund, Daggett TE Holdco LLC, which owns the Daggett 3 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 Daggett TE Holdco LLC.

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Summarized financial information for the Company’s consolidated VIEs consisted of the following as of June 30, 2023:

(In millions)			Alta TE Holdco LLC						Buckthorn Holdings, LLC						DGPV Funds (a)						Daggett Renewable Holdco LLC (b)						Langford TE Partnership LLC						Lighthouse Renewable Holdco LLC (c)
Other current and non-current assets			$	59					$	6					$	88					$	142					$	12					$	123
Property, plant and equipment			290						189						510						570						119						819
Intangible assets			193						—						13						—						2						—
Total assets			542						195						611						712						133						942
Current and non-current liabilities			37						11						66						492						53						299
Total liabilities			37						11						66						492						53						299
Noncontrolling interest			39						22						27						234						62						511
Net assets less noncontrolling interest			$	466					$	162					$	518					$	(14)					$	18					$	132

(a) DGPV Funds is comprised of Clearway & EFS Distributed Solar LLC, DGPV Fund 4 LLC, Golden Puma Fund LLC, Renew Solar CS4 Fund LLC and Chestnut Fund LLC, which are all tax equity funds.

(b) Daggett Renewable Holdco LLC consolidates Daggett TE Holdco LLC, which is a consolidated VIE.

(c) Lighthouse Renewable Holdco LLC consolidates Mesquite Star Tax Equity Holdco LLC, Black Rock TE Holdco LLC, Mililani TE Holdco LLC and Waiawa TE Holdco LLC, which are consolidated VIEs.

(In millions)			Lighthouse Renewable Holdco 2 LLC(a)						Oahu Solar LLC						Pinnacle Repowering TE Holdco LLC						Rattlesnake TE Holdco LLC						Rosie TargetCo LLC						Wildorado TE Holdco LLC						Other (b)
Other current and non-current assets			$	42					$	39					$	6					$	14					$	45					$	20					$	14
Property, plant and equipment			353						160						100						180						234						202						148
Intangible assets			—						—						15						—						—						—						1
Total assets			395						199						121						194						279						222						163
Current and non-current liabilities			130						22						5						17						97						19						71
Total liabilities			130						22						5						17						97						19						71
Noncontrolling interest			232						24						42						83						128						105						67
Net assets less noncontrolling interest			$	33					$	153					$	74					$	94					$	54					$	98					$	25

(a) Lighthouse Renewable Holdco 2 LLC consolidates Mesquite Sky TE Holdco LLC, which is a consolidated VIE.

(b) Other is comprised of Elbow Creek TE Holdco LLC and Spring Canyon TE Holdco LLC.

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.

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For cash and cash equivalents, restricted cash, accounts receivable — trade, accounts receivable — affiliates, 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 June 30, 2023												As of December 31, 2022
			Carrying Amount						Fair Value						Carrying Amount						Fair Value
			(In millions)
Long-term debt, including current portion (a)			$	7,097					$	6,516					$	6,874					$	6,288

(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 June 30, 2023												As of December 31, 2022
			Level 2						Level 3						Level 2						Level 3
			(In millions)
Long-term debt, including current portion			$	1,839					$	4,677					$	1,834					$	4,454

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 June 30, 2023												As of December 31, 2022
									Fair Value (a)												Fair Value (a)
(In millions)									Level 2						Level 3												Level 2						Level 3
Derivative assets:
Interest rate contracts									$	117					$	—											$	89					$	—
Other financial instruments (b)									—						12												—						17
Total assets									$	117					$	12											$	89					$	17
Derivative liabilities:
Commodity contracts									$	—					$	303											$	—					$	353
Total liabilities									$	—					$	303											$	—					$	353

(a) There were no derivative assets classified as Level 1 or Level 3 and no liabilities classified as Level 1 as of June 30, 2023 and December 31, 2022.

(b) Includes SREC contract.

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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 June 30,												Six months ended June 30,
						2023						2022						2023						2022
(In millions)						Fair Value Measurement Using Significant Unobservable Inputs (Level 3)												Fair Value Measurement Using Significant Unobservable Inputs (Level 3)
Beginning balance						$	(316)					$	(280)					$	(336)					$	(154)
Settlements						5						22						9						28
Additions due to loss of NPNS exception						—						—						—						(22)
Total gains (losses) for the period included in earnings						20						(74)						36						(184)
Ending balance						$	(291)					$	(332)					$	(291)					$	(332)
Change in unrealized gains included in earnings for derivatives and other financial instruments held as of June 30, 2023						$	20											$	36

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 commodity 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 June 30, 2023, 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.

The following table quantifies the significant unobservable inputs used in developing the fair value of the Company’s Level 3 positions:

June 30, 2023

Fair Value

Input/Range

Assets

Liabilities

Valuation Technique

Significant Unobservable Input

Low

High

Weighted Average

(In millions)

Commodity Contracts

$

—

$

(303)

Discounted Cash Flow

Forward Market Price (per MWh)

$

21.02

$

71.74

$

38.17

Other Financial Instruments

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Discounted Cash Flow

Forecast annual generation levels of certain DG solar facilities

60,801 MWh

121,602 MWh

115,622 MWh

The following table provides the impact on the fair value measurements to increases/(decreases) in significant unobservable inputs as of June 30, 2023:

Significant Unobservable Input			Position			Change In Input			Impact on Fair Value Measurement
Forward Market Price Power			Sell			Increase/(Decrease)			Lower/(Higher)
Forecast Generation Levels			Sell			Increase/(Decrease)			Higher/(Lower)

22

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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 June 30, 2023, the non-performance reserve was a $26 million gain recorded primarily to total operating revenues in the consolidated statements 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 2022 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.

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 2022 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 June 30, 2023, the Company had interest rate derivative instruments on non-recourse debt extending through 2040, 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 June 30, 2023, the Company had energy-related derivative instruments extending through 2033. At June 30, 2023, 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:

Total Volume

June 30, 2023

December 31, 2022

Commodity

Units

(In millions)

Power

MWh

(17)

(18)

Interest

Dollars

$

1,667

$

1,084

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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 Assets												Derivative Liabilities
			June 30, 2023						December 31, 2022						June 30, 2023						December 31, 2022
			(In millions)
Derivatives Designated as Cash Flow Hedges:
Interest rate contracts current			$	7					$	7					$	—					$	—
Interest rate contracts long-term			16						18						—						—
Total Derivatives Designated as Cash Flow Hedges			$	23					$	25					$	—					$	—
Derivatives Not Designated as Cash Flow Hedges:
Interest rate contracts current			$	27					$	19					$	—					$	—
Interest rate contracts long-term			67						45						—						—
Commodity contracts current			—						—						44						50
Commodity contracts long-term			—						—						259						303
Total Derivatives Not Designated as Cash Flow Hedges			$	94					$	64					$	303					$	353
Total Derivatives			$	117					$	89					$	303					$	353

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 June 30, 2023 and December 31, 2022, the amount of outstanding collateral paid or received was immaterial. The following tables summarize the offsetting of derivatives by counterparty:

			Gross Amounts Not Offset in the Statement of Financial Position
As of June 30, 2023			Gross Amounts of Recognized Assets/Liabilities						Derivative Instruments						Net Amount
Commodity contracts			(In millions)
Derivative liabilities			$	(303)					$	—					$	(303)
Total commodity contracts			$	(303)					$	—					$	(303)
Interest rate contracts
Derivative assets			$	117					$	—					$	117
Total interest rate contracts			$	117					$	—					$	117
Total derivative instruments			$	(186)					$	—					$	(186)

			Gross Amounts Not Offset in the Statement of Financial Position
As of December 31, 2022			Gross Amounts of Recognized Assets/Liabilities						Derivative Instruments						Net Amount
Commodity contracts			(In millions)
Derivative liabilities			$	(353)					$	—					$	(353)
Total commodity contracts			$	(353)					$	—					$	(353)
Interest rate contracts
Derivative assets			$	89					$	—					$	89
Total interest rate contracts			$	89					$	—					$	89
Total derivative instruments			$	(264)					$	—					$	(264)

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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 June 30,												Six months ended June 30,
			2023						2022						2023						2022
			(In millions)
Accumulated OCI (OCL) beginning balance			$	21					$	3					$	24					$	(11)
Reclassified from accumulated OCI (OCL) to income due to realization of previously deferred amounts			(1)						1						(1)						3
Mark-to-market of cash flow hedge accounting contracts			4						5						1						17
Accumulated OCI ending balance, net of income tax expense of $3, $1, $3 and $1, respectively			24						9						24						9
Accumulated OCI attributable to noncontrolling interests			15						7						15						7
Accumulated OCI attributable to Clearway Energy, Inc.			$	9					$	2					$	9					$	2
Gains expected to be realized from OCI during the next 12 months, net of income tax expense of $2			$	4											$	4

Amounts reclassified from accumulated OCI (OCL) into income are recorded to interest expense.

Impact of Derivative Instruments on the Consolidated Statements of Income

Mark-to-market gains/(losses) related to the Company’s derivatives are recorded in the consolidated statements of income as follows:

			Three months ended June 30,												Six months ended June 30,
			2023						2022						2023						2022
			(In millions)
Interest Rate Contracts (Interest expense)			$	22					$	36					$	1					$	77
Commodity Contracts (Mark-to-market for economic hedging activities) (a)			32						(49)						50						(174)

(a) Relates to long-term commodity contracts at Elbow Creek, Mesquite Star, Mt. Storm, Langford and Mesquite Sky. During the six months ended June 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.

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 2022 Form 10-K. The Company’s borrowings, including short-term and long-term portions, consisted of the following:

(In millions, except rates)			June 30, 2023						December 31, 2022						June 30, 2023 interest rate % (a)						Letters of Credit Outstanding at June 30, 2023
2028 Senior Notes			$	850					$	850					4.750
2031 Senior Notes			925						925						3.750
2032 Senior Notes			350						350						3.750
Clearway Energy LLC and Clearway Energy Operating LLC Revolving Credit Facility, due 2028 (b)			—						—						S+1.850						$	188
Non-recourse project-level debt:
Agua Caliente Solar LLC, due 2037			640						649						2.395-3.633						45
Alta Wind Asset Management LLC, due 2031			11						12						L+2.625						—
Alta Wind I-V lease financing arrangements, due 2034 and 2035			679						709						5.696-7.015						47
Alta Wind Realty Investments LLC, due 2031			21						22						7.000						—
Borrego, due 2024 and 2038			50						51						Various						—
Buckthorn Solar, due 2025			119						119						S+2.100						22
Capistrano Wind Portfolio, due 2029 and 2031			145						156						S+2.100-S+2.150						34
Carlsbad Energy Holdings LLC, due 2027			114						115						S+1.900						82
Carlsbad Energy Holdings LLC, due 2038			407						407						4.120						—
Carlsbad Holdco, LLC, due 2038			197						197						4.210						6
CVSR, due 2037			612						627						2.339-3.775						—
CVSR Holdco Notes, due 2037			151						160						4.680						12
Daggett 3, due 2023 and 2028			446						—						S+1.262						35
DG-CS Master Borrower LLC, due 2040			406						413						3.510						30
Marsh Landing, due 2023			—						19												—
Mililani I, due 2027			47						47						S+1.600						5
NIMH Solar, due 2024			156						163						S+2.150						16
Oahu Solar Holdings LLC, due 2026			82						83						S+1.525						11
Rosie Class B LLC, due 2029			77						76						S+1.375						15
Utah Solar Holdings, due 2036			253						257						3.590						15
Viento Funding II, LLC, due 2029			180						184						S+1.475						25
Waiawa, due 2028			46						97						S+1.600						12
Walnut Creek, due 2023			—						19												—
WCEP Holdings, LLC, due 2023			—						26												—
Other			130						137						Various						250
Subtotal non-recourse project-level debt			4,969						4,745
Total debt			7,094						6,870
Less current maturities			(330)						(322)
Less net debt issuance costs			(59)						(61)
Add premiums (c)			3						4
Total long-term debt			$	6,708					$	6,491

(a) As of June 30, 2023, S+ equals SOFR plus x% and L+ equals 3 month LIBOR plus x%.

(b) Applicable rate is determined by the borrower leverage ratio, as defined in the credit agreement.

(c) Premiums relate to the 2028 Senior Notes.

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 June 30, 2023, the Company was in compliance with all of the required covenants.

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The discussion below describes material changes to or additions of long-term debt for the six months ended June 30, 2023.

Clearway Energy LLC and Clearway Energy Operating LLC Revolving Credit Facility

On March 15, 2023, Clearway Energy Operating LLC refinanced the Amended and Restated Credit Agreement, which (i) replaced LIBOR with SOFR plus a credit spread adjustment of 0.10% as the applicable reference rate, (ii) increased the available revolving commitments to an aggregate principal amount of $700 million, (iii) extended the maturity date to March 15, 2028, (iv) increased the letter of credit sublimit to $594 million and (v) implemented certain other technical modifications.

As of June 30, 2023, the Company had no outstanding borrowings under the revolving credit facility and $188 million in letters of credit outstanding.

Project-level Debt    

Rosamond Central (Rosie Class B LLC)

On June 30, 2023, Rosie Class B LLC amended its financing agreement to provide for (i) a term loan in the amount of $77 million, (ii) construction loans up to $115 million, which will convert to a term loan upon the BESS project reaching substantial completion, (iii) tax equity bridge loans up to $188 million, which will be repaid with tax equity proceeds received upon the BESS project reaching substantial completion, (iv) an increase to the letter of credit sublimit to $41 million and (v) an extension of the maturity date of the term loan and construction loans to five years subsequent to term conversions.

On July 3, 2023, Rosie Class B LLC received total loan proceeds of $138 million, which was comprised of $115 million in construction loans and $28 million in tax equity bridge loans, net of $5 million in debt issuance costs that were deferred. Also on July 3, 2023, Rosie Class B LLC issued a loan to a consolidated subsidiary of Clearway Renew in the aggregate principal amount of $117 million in order to finance the construction of the BESS project. The loan bears interest at 9.00% and matures when the project reaches substantial completion, which is anticipated in the first half of 2024. The Company also contributed $20 million of the loan proceeds into Rosie Central BESS, as further described in Note 4, Investments Accounted for by the Equity Method and Variable Interest Entities.

Waiawa

On March 30, 2023, when the Waiawa solar project reached substantial completion, the tax equity investor contributed an additional $41 million and CEG contributed an additional $8 million, which was utilized, along with the $17 million in escrow, to repay the $55 million tax equity bridge loan, to fund $10 million in construction completion reserves and to pay $1 million in associated fees. Subsequent to the acquisition on October 3, 2022, the Company borrowed an additional $25 million in construction loans that was converted to a term loan in the amount of $47 million on March 30, 2023 that matures on March 30, 2028.

Daggett 3

On February 17, 2023, as part of the acquisition of Daggett 3, as further described in Note 3, Acquisitions and Dispositions, the Company assumed the project’s financing agreement, which included a $181 million construction loan that converts to a term loan upon the project reaching substantial completion, $229 million tax equity bridge loan and $75 million sponsor equity bridge loan. The sponsor equity bridge loan was repaid at acquisition date, along with $8 million in associated fees, utilizing all of the proceeds from the Company and cash equity investor, which were contributed back to the Company by CEG. The tax equity bridge loan will be repaid with the final proceeds received from the tax equity investor upon Daggett 3 reaching substantial completion, which is expected to occur in the second half of 2023, along with the $62 million that was contributed into escrow by the tax equity investor at acquisition date. Subsequent to the acquisition, the Company borrowed an additional $36 million in construction loans.

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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 June 30,
			2023												2022
(In millions, except per share data) (a)			Common Class A						Common Class C						Common Class A						Common Class C
Basic and diluted earnings per share attributable to Clearway Energy, Inc. common stockholders
Net income attributable to Clearway Energy, Inc.			$	11					$	27					$	169					$	401
Weighted average number of common shares outstanding — basic and diluted			35						82						35						82
Earnings per weighted average common share — basic and diluted			$	0.33					$	0.33					$	4.89					$	4.89

(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.

			Six months ended June 30,
			2023												2022
(In millions, except per share data) (a)			Common Class A						Common Class C						Common Class A						Common Class C
Basic and diluted earnings per share attributable to Clearway Energy, Inc. common stockholders
Net income attributable to Clearway Energy, Inc.			$	11					$	27					$	160					$	378
Weighted average number of common shares outstanding — basic and diluted			35						82						35						82
Earnings per weighted average common share — basic and diluted			$	0.32					$	0.32					$	4.62					$	4.62

(a) Net income attributable to Clearway Energy, Inc. and basic and diluted earnings per share might not recalculate due to presenting values 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, wind and energy storage 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 June 30, 2023
(In millions)			Conventional Generation						Renewables												Corporate (a)						Total
Operating revenues			$	115					$	291											$	—					$	406
Cost of operations, exclusive of depreciation, amortization and accretion shown separately below			40						79												(1)						118
Depreciation, amortization and accretion			32						96												—						128
General and administrative			—						—												9						9
Transaction and integration costs			—						—												2						2
Operating income (loss)			43						116												(10)						149
Equity in earnings of unconsolidated affiliates			1						2												—						3
Other income, net			1						3												5						9
Interest expense			(8)						(23)												(24)						(55)
Income (loss) before income taxes			37						98												(29)						106
Income tax expense			—						—												22						22
Net Income (Loss)			$	37					$	98											$	(51)					$	84
Total Assets			$	2,169					$	10,020											$	435					$	12,624

(a) Includes eliminations.

			Three months ended June 30, 2022
(In millions)			Conventional Generation						Renewables						Thermal						Corporate (a)						Total
Operating revenues			$	103					$	247					$	18					$	—					$	368
Cost of operations, exclusive of depreciation, amortization and accretion shown separately below			28						73						11						—						112
Depreciation, amortization and accretion			33						93						—						—						126
General and administrative			—						—						1						10						11
Transaction and integration costs			—						—						—						3						3
Development costs			—						—						1						—						1
Total operating costs and expenses			61						166						13						13						253
Gain on sale of business			—						—						—						1,291						1,291
Operating income			42						81						5						1,278						1,406
Equity in earnings of unconsolidated affiliates			1						9						—						—						10
Other income, net			—						4						—						1						5
Interest expense			(10)						(11)						(1)						(25)						(47)
Income before income taxes			33						83						4						1,254						1,374
Income tax expense			—						—						—						225						225
Net Income			$	33					$	83					$	4					$	1,029					$	1,149

(a) Includes eliminations.

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			Six months ended June 30, 2023
(In millions)			Conventional Generation						Renewables						Corporate (a)						Total
Operating revenues			$	210					$	484					$	—					$	694
Cost of operations, exclusive of depreciation, amortization and accretion shown separately below			69						158						(1)						226
Depreciation, amortization and accretion			65						191						—						256
General and administrative			—						—						19						19
Transaction and integration costs			—						—						2						2
Operating income (loss)			76						135						(20)						191
Equity in earnings (losses) of unconsolidated affiliates			2						(2)						—						—
Other income, net			2						4						11						17
Interest expense			(19)						(87)						(48)						(154)
Income (loss) before income taxes			61						50						(57)						54
Income tax expense			—						—						10						10
Net Income (Loss)			$	61					$	50					$	(67)					$	44

(a) Includes eliminations.

			Six months ended June 30, 2022
(In millions)			Conventional Generation						Renewables						Thermal						Corporate (a)						Total
Operating revenues			$	211					$	294					$	77					$	—					$	582
Cost of operations, exclusive of depreciation, amortization and accretion shown separately below			49						141						50						—						240
Depreciation, amortization and accretion			66						184						—						—						250
General and administrative			—						—						2						21						23
Transaction and integration costs			—						—						—						5						5
Development costs			—						—						2						—						2
Total operating costs and expenses			115						325						54						26						520
Gain on sale of business			—						—						—						1,291						1,291
Operating income (loss)			96						(31)						23						1,265						1,353
Equity in earnings of unconsolidated affiliates			2						12						—						—						14
Other income, net			—						4						—						1						5
Loss on debt extinguishment			—						(2)						—						—						(2)
Interest expense			(18)						(19)						(6)						(51)						(94)
Income (loss) before income taxes			80						(36)						17						1,215						1,276
Income tax expense			—						—						—						224						224
Net Income (Loss)			$	80					$	(36)					$	17					$	991					$	1,052

(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 June 30,												Six months ended June 30,
			2023						2022						2023						2022
			(In millions, except percentages)
Income before income taxes			$	106					$	1,374					$	54					$	1,276
Income tax expense			22						225						10						224
Effective income tax rate			20.8		%				16.4		%				18.5		%				17.6		%

For the three and six months ended June 30, 2023, 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.

For the three and six months ended June 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 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 $15 million for the three months ended June 30, 2023 and 2022, respectively. The Company incurred total expenses for these services of $36 million and $30 million for the six months ended June 30, 2023 and 2022, respectively. There was a balance of $11 million and $14 million due to RENOM as of June 30, 2023 and December 31, 2022, respectively.

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 $6 million and $5 million for the three months ended June 30, 2023, and 2022, respectively. The Company incurred expenses under these agreements of $10 million and $8 million for the six months ended June 30, 2023 and 2022, respectively. There was a balance of $2 million and $3 million due to CEG as of June 30, 2023 and December 31, 2022, respectively.

CEG Master Services Agreements

The Company is a party to the CEG Master Services Agreements, 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 under these agreements of $2 million and $1 million for each of the three months ended June 30, 2023, and 2022, respectively. The Company incurred net expenses under these agreements of $3 million and $2 million for the six months ended June 30, 2023 and 2022, respectively.

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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 2022 Form 10-K.

The Company’s material legal proceeding is described below. The Company believes that it has a valid defense to this legal proceeding and intends to defend it 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 matter 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 proceeding 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 estimate of such contingency 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 proceeding 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. In response to motions for partial summary judgment filed by each party, the court denied Georgetown’s motion in its entirety, granted Buckthorn Westex’s motion with respect to the fraud by nondisclosure claim and denied Buckthorn Westex’s motion with respect to the breach of contract claim. The case is scheduled to proceed to trial in October 2023. Buckthorn Westex believes the allegations of Georgetown are meritless, and Buckthorn Westex is vigorously defending its rights under the PPA.

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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 six months ended June 30, 2023 and 2022. Also refer to the Company’s 2022 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.

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Executive Summary

Introduction and Overview

Clearway Energy, Inc., together with its consolidated subsidiaries, or the Company, is a publicly-traded energy infrastructure investor with a focus on investments in clean energy 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 is equally owned by GIP and TotalEnergies. 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. The majority of the Company’s revenues are derived from long-term contractual arrangements for the output or capacity from these assets. The weighted average remaining contract duration of these offtake agreements was approximately 10 years as of June 30, 2023 based on CAFD.

As of June 30, 2023, the Company’s operating assets are comprised of the following projects:

Projects						Percentage Ownership						Net Capacity (MW) (a)						Counterparty						Expiration
Conventional
Carlsbad						100		%				527						San Diego Gas & Electric						2038
El Segundo						100		%				550						SCE						2023 - 2026
GenConn Devon						50		%				95						Connecticut Light & Power						2040
GenConn Middletown						50		%				95						Connecticut Light & Power						2041
Marsh Landing						100		%				720						Various						2023 - 2030
Walnut Creek						100		%				485						SCE						2023 - 2026
Total Conventional												2,472
Utility Scale Solar
Agua Caliente						51		%				148						PG&E						2039
Alpine						100		%				66						PG&E						2033
Avenal						50		%				23						PG&E						2031
Avra Valley						100		%				27						Tucson Electric Power						2032
Blythe						100		%				21						SCE						2029
Borrego						100		%				26						San Diego Gas and Electric						2038
Buckthorn Solar (b)						100		%				150						City of Georgetown, TX						2043
CVSR						100		%				250						PG&E						2038
Desert Sunlight 250						25		%				63						SCE						2034
Desert Sunlight 300						25		%				75						PG&E						2039
Kansas South						100		%				20						PG&E						2033
Mililani I (b) (c)						50		%				20						Hawaiian Electric Company						2042
Oahu Solar Projects (b)						100		%				61						Hawaiian Electric Company						2041
Roadrunner						100		%				20						El Paso Electric						2031
Rosamond Central (b)						50		%				96						Various						2035 - 2047
TA High Desert						100		%				20						SCE						2033
Utah Solar Portfolio						100		%				530						PacifiCorp						2036
Waiawa (b) (c)						50		%				36						Hawaiian Electric Company						2043
Total Utility Scale Solar (d)												1,652
Distributed Solar
DGPV Fund Projects (b)						100		%				286						Various						2030 - 2044
Solar Power Partners (SPP) Projects						100		%				25						Various						2026 - 2037
Other DG Projects						100		%				21						Various						2023 - 2039
Total Distributed Solar (d)												332

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Projects						Percentage Ownership						Net Capacity (MW) (a)						Counterparty						Expiration
Wind
Alta I						100		%				150						SCE						2035
Alta II						100		%				150						SCE						2035
Alta III						100		%				150						SCE						2035
Alta IV						100		%				102						SCE						2035
Alta V						100		%				168						SCE						2035
Alta X (b)						100		%				137						SCE						2038
Alta XI (b)						100		%				90						SCE						2038
Black Rock (b)						50		%				58						Toyota and AEP						2036
Buffalo Bear						100		%				19						Western Farmers Electric Co-operative						2033
Capistrano Wind Portfolio						100		%				413						Various						2030 - 2033
Elbow Creek (b)						100		%				122						Various						2029
Elkhorn Ridge						66.7		%				54						Nebraska Public Power District						2029
Forward						100		%				29						Constellation NewEnergy, Inc.						2025
Goat Wind						100		%				150						Dow Pipeline Company						2025
Langford (b)						100		%				160						Goldman Sachs						2033
Laredo Ridge						100		%				81						Nebraska Public Power District						2031
Lookout						100		%				38						Southern Maryland Electric Cooperative						2030
Mesquite Sky (b)						50		%				170						Various						2033 - 2036
Mesquite Star (b)						50		%				210						Various						2032 - 2035
Mt. Storm						100		%				264						Citigroup						2031
Ocotillo						100		%				55						N/A
Odin						99.9		%				21						Missouri River Energy Services						2028
Pinnacle (b)						100		%				54						Maryland Department of General Services and University System of Maryland						2031
Rattlesnake (b) (e)						100		%				160						Avista Corporation						2040
San Juan Mesa						75		%				90						Southwestern Public Service Company						2025
Sleeping Bear						100		%				95						Public Service Company of Oklahoma						2032
South Trent						100		%				101						AEP Energy Partners						2029
Spanish Fork						100		%				19						PacifiCorp						2028
Spring Canyon II (b)						90.1		%				31						Platte River Power Authority						2039
Spring Canyon III (b)						90.1		%				26						Platte River Power Authority						2039
Taloga						100		%				130						Oklahoma Gas & Electric						2031
Wildorado (b)						100		%				161						Southwestern Public Service Company						2027
Total Wind (d)												3,658
Total net generation capacity												8,114

(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 June 30, 2023.

(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) Typical average capacity factors are 25% for solar facilities and 25-45% for wind facilities. For the six months ended June 30, 2023, the Company's solar and wind facilities had weighted-average capacity factors of 27% and 31%, respectively. For the six months ended June 30, 2022, the Company’s solar and wind facilities had weighted-average capacity factors of 30% and 35%, respectively. The weight-average capacity factors can vary based on seasonality and weather conditions.

(e) Rattlesnake has a deliverable capacity of 144 MW.

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Significant Events

Drop Down Transactions

•On June 30, 2023, the Company, through its indirect subsidiary, Rosie Class B LLC, the indirect owner of the Rosamond Central solar project, became the owner of the Class B membership interests of Rosie Central BESS in order to facilitate and fund the construction of a 147 MW BESS project that will be co-located at the Rosamond Central solar facility. Clearway Renew indirectly owns the Class A membership interests. The Company’s investment consists of $10 million contributed into Rosie Central BESS, funded through contributions from the Company and its cash equity investor in Rosie TargetCo LLC, which consolidates Rosie Class B LLC. On July 3, 2023, Rosie Class B LLC contributed an additional $20 million into Rosie Central BESS. Additionally, on June 30, 2023, Rosamond Central entered into an asset purchase agreement with Rosie Central BESS to acquire the BESS project assets at mechanical completion for a purchase price of $360 million, of which $72 million is payable at mechanical completion with the remaining $288 million payable at substantial completion. The Company will fund $17 million of the purchase price at mechanical completion and $67 million of the purchase price at substantial completion. See Note 4, Investments Accounted for by the Equity Method and Variable Interest Entities, for further discussion of the transactions.

•On May 19, 2023, the Company, through an indirect subsidiary, entered into an agreement with Clearway Renew to acquire Cedar Creek Holdco LLC, which is the indirect owner of the Cedar Creek wind project, a 160 MW project located in Bingham County, Idaho, for $107 million in cash, subject to customary working capital adjustments. Upon the closing of the transaction, the Company will indirectly own all of the Class B membership interests in Cedar Creek TE Holdco LLC, a tax equity fund which will consolidate the Cedar Creek wind project, while a tax equity investor will own all of the Class A membership interests. The consummation of the transaction is subject to customary closing conditions and certain third-party approvals and is expected in the first half of 2024.

•On May 3, 2023, the Company entered into an agreement with Clearway Renew to repower the Cedro Hill wind project, which is included in the Capistrano Wind Portfolio and is located in Bruni, Texas. The Company expects to invest approximately $63 million in net corporate capital, subject to closing adjustments. Contingent upon achieving repowering commercial operations in the second half of 2024, the 160 MW project will sell power to its existing counterparty, an investment-grade utility, for an additional 15 years ending in 2045 under an amended PPA.

•On February 17, 2023, the Company, through its indirect subsidiary, Daggett Solar Investment LLC, acquired the Class A membership interests in Daggett TargetCo LLC, the indirect owner of the Daggett 3 solar project, a 300 MW solar project with matching storage capacity that is currently under construction, located in San Bernardino, California from Clearway Renew for cash consideration of $21 million. Simultaneously, a cash equity investor acquired the Class B membership interests in Daggett TargetCo LLC from Clearway Renew for cash consideration of $129 million. The Company and the cash equity investor then contributed their Class A and B membership interests, respectively, into Daggett Renewable Holdco LLC, a partnership between the Company and the cash equity investor, which consolidates Daggett TargetCo LLC. Daggett TargetCo LLC consolidates, as the indirect owner of the primary beneficiary, a tax equity fund, Daggett TE Holdco LLC, which owns the Daggett 3 solar project. See Note 3, Acquisitions and Dispositions, for further discussion of the transaction.

Corporate Financing Activities

•On March 15, 2023, Clearway Energy Operating LLC refinanced the Amended and Restated Credit Agreement. See Note 7, Long-term Debt, for further discussion of the amendment.

Project-level Financing Activities

•In connection with the 2022 Drop Down of Waiawa and the 2023 Drop Down of Daggett 3, the Company assumed non-recourse project-level debt. See Note 7, Long-term Debt, for further discussion of the non-recourse project-level debt associated with each project.

•On June 30, 2023, Rosie Class B LLC amended its financing agreement. On July 3, 2023, the Company received total loan proceeds of $138 million under the refinancing. Also on July 3, 2023, Rosie Class B LLC issued a loan to a consolidated subsidiary of Clearway Renew in the aggregate principal amount of $117 million in order to finance the construction of the BESS project. See Note 7, Long-term Debt, for further discussion of the project financing activities.

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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.

The Company’s environmental matters are further described in the Company’s 2022 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 2022 Form 10-K in Item 1, Business — Regulatory Matters and Item 1A, Risk Factors.

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Consolidated Results of Operations

The following table provides selected financial information:

			Three months ended June 30,																		Six months ended June 30,
(In millions)			2023						2022						Change						2023						2022						Change
Operating Revenues
Energy and capacity revenues			$	379					$	431					$	(52)					$	683					$	791					$	(108)
Other revenue			48						30						18						60						52						8
Contract amortization			(47)						(41)						(6)						(94)						(83)						(11)
Mark-to-market for economic hedges			26						(52)						78						45						(178)						223
Total operating revenues			406						368						38						694						582						112
Operating Costs and Expenses
Cost of fuels			16						7						9						16						29						(13)
Operations and maintenance			76						76						—						159						152						7
Other costs of operations			26						29						(3)						51						59						(8)
Depreciation, amortization and accretion			128						126						2						256						250						6
General and administrative			9						11						(2)						19						23						(4)
Transaction and integration costs			2						3						(1)						2						5						(3)
Development costs			—						1						(1)						—						2						(2)
Total operating costs and expenses			257						253						4						503						520						(17)
Gain on sale of business			—						1,291						(1,291)						—						1,291						(1,291)
Operating Income			149						1,406						(1,257)						191						1,353						(1,162)
Other Income (Expense)
Equity in earnings of unconsolidated affiliates			3						10						(7)						—						14						(14)
Other income, net			9						5						4						17						5						12
Loss on debt extinguishment			—						—						—						—						(2)						2
Derivative interest income			22						36						(14)						1						77						(76)
Other interest expense			(77)						(83)						6						(155)						(171)						16
Total other expense, net			(43)						(32)						(11)						(137)						(77)						(60)
Income Before Income Taxes			106						1,374						(1,268)						54						1,276						(1,222)
Income tax expense			22						225						(203)						10						224						(214)
Net Income			84						1,149						(1,065)						44						1,052						(1,008)
Less: Net income attributable to noncontrolling interests and redeemable noncontrolling interests			46						579						(533)						6						514						(508)
Net Income Attributable to Clearway Energy, Inc.			$	38					$	570					$	(532)					$	38					$	538					$	(500)

			Three months ended June 30,												Six months ended June 30,
Business metrics:			2023						2022						2023						2022
Solar MWh generated/sold (in thousands) (a)			1,544						1,538						2,410						2,598
Wind MWh generated/sold (in thousands) (a)			2,433						2,878						5,177						5,137
Renewables MWh generated/sold (in thousands) (a)			3,977						4,416						7,587						7,735
Thermal MWt sold (in thousands) (b)			—						183						—						835
Thermal MWh sold (in thousands) (b)			—						5						—						19
Conventional MWh generated (in thousands) (a) (c)			139						289						227						421
Conventional equivalent availability factor			90.1		%				88.3		%				82.3		%				91.8		%

(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 in 2022 were not sold as the Conventional facilities sold only capacity rather than energy prior to 2023.

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Management’s Discussion of the Results of Operations for the Three Months Ended June 30, 2023 and 2022

Operating Revenues

Operating revenues increased by $38 million during the three months ended June 30, 2023, compared to the same period in 2022, due to a combination of the drivers summarized in the table below:

						(In millions)
Renewables Segment			Decrease driven primarily by lower than average wind production in 2023, compared with higher than average wind production in 2022.			$	(46)
			Increase driven primarily by the acquisition of the Capistrano Wind Portfolio in August 2022.			16
			Increase for solar acquisitions driven by Mililani I and Waiawa, which reached commercial operations in July 2022 and January 2023, respectively, offset by the disposition of Kawailoa in August 2022.			2
Conventional Segment			Increase driven by the sales-type lease revenue recognition of the Marsh Landing Black Start addition that commenced operations on May 31, 2023.			21
			Increase at El Segundo facility primarily driven by higher availability due to the timing of the 2023 annual planned maintenance outages.			6
			Decrease at Walnut Creek and Marsh Landing facilities primarily driven by lower prices for capacity revenue due to the expiring PPAs during the second quarter of 2023 and commencement of RA capacity revenue.			(15)
Thermal Segment			Decrease in revenue due to the sale of the Thermal business on May 1, 2022.			(18)
Mark-to-market for economic hedges			Increase primarily driven by decreases in forward power prices in the ERCOT and PJM markets.			78
Contract amortization			Increase primarily driven by amortization of the intangible assets of PPAs related to the acquisition of the Capistrano Wind Portfolio in August 2022.			(6)
						$	38

Cost of Fuels

Cost of fuels increased by $9 million during the three months ended June 30, 2023, compared to the same period in 2022, due to a $15 million increase for the Conventional segment primarily due to the associated costs of the sales-type lease recognition of the Marsh Landing Black Start addition that commenced operations on May 31, 2023, as further described in Note 2, Summary of Significant Accounting Policies, offset by a $6 million decrease driven by the sale of the Thermal Business on May 1, 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.

Equity in Earnings of Unconsolidated Affiliates

Equity in earnings of unconsolidated affiliates decreased by $7 million during the three months ended June 30, 2023, compared to the same period in 2022, primarily due to the change in fair value of interest rate swaps, as well as lower wind production.

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Interest Expense

Interest expense increased by $8 million during the three months ended June 30, 2023, compared to the same period in 2022, primarily due to the following:

			(In millions)
Change in fair value of interest rate swaps			$	14
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			(1)
Decrease in interest expense due to decreased principal balances of Corporate debt, which includes repayment of the outstanding borrowings under the Bridge Loan Agreement and the revolving credit facility on May 3, 2022			(1)
			$	8

Income Tax Expense

For the three months ended June 30, 2023, the Company recorded an income tax expense of $22 million on pretax income of $106 million. For the same period in 2022, the Company recorded an income tax expense of $225 million on pretax income of $1.37 billion. The $203 million decrease in income tax expense is primarily driven by the sale of the Thermal Business on May 1, 2022.

Net Income Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests

For the three months ended June 30, 2023, the Company had net income of $46 million attributable to noncontrolling interests and redeemable noncontrolling interests comprised of the following:

			(In millions)
CEG’s economic interest in Clearway Energy LLC			$	46
Income attributable to third-party partnerships			11
Losses attributable to tax equity financing arrangements and the application of the HLBV method			(11)
			$	46

For the three months ended June 30, 2022, the Company had net income of $579 million attributable to noncontrolling interests and redeemable noncontrolling interests comprised of the following:

			(In millions)
CEG’s economic interest in Clearway Energy LLC			$	585
Losses attributable to tax equity financing arrangements and the application of the HLBV method			(6)
			$	579

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Management’s Discussion of the Results of Operations for the Six Months Ended June 30, 2023 and 2022

Operating Revenues

Operating revenues increased by $112 million during the six months ended June 30, 2023, compared to the same period in 2022, due to a combination of the drivers summarized in the table below:

						(In millions)
Renewables Segment			Decrease driven primarily by lower than average wind production during the second quarter of 2023, compared with higher than average wind production during the second quarter of 2022.			$	(47)
			Decrease driven primarily by lower solar generation due to weather.			(14)
			Increase driven primarily by the acquisition of the Capistrano Wind Portfolio in August 2022.			36
			Increase for solar acquisitions driven by Mililani I and Waiawa, which reached commercial operations in July 2022 and January 2023, respectively, offset by the disposition of Kawailoa in August 2022.			3
Conventional Segment			Decrease at Walnut Creek and Marsh Landing facilities primarily driven by lower prices for capacity revenue due to the expiring PPAs during the second quarter of 2023 and commencement of RA capacity revenue.			(15)
			Decrease driven by outages at the Walnut Creek and Marsh Landing facilities during the first quarter of 2023, resulting in lower capacity revenue.			(5)
			Decrease primarily driven by longer planned maintenance outages at the El Segundo facility in 2023.			(2)
			Increase driven by the sales-type lease revenue recognition of the Marsh Landing Black Start addition that commenced operations on May 31, 2023.			21
Thermal Segment			Decrease primarily driven by the sale of the Thermal Business on May 1, 2022.			(77)
Mark-to-market economic hedging activities			Increase primarily driven by decreases in forward power prices in the ERCOT and PJM markets.			223
Contract amortization			Increase primarily driven by amortization of the intangible assets of PPAs related to the acquisition of the Capistrano Wind Portfolio in August 2022.			(11)
						$	112

Cost of Fuels

Cost of fuels decreased by $13 million during the six months ended June 30, 2023, compared to the same period in 2022, due to the sale of the Thermal Business on May 1, 2022, which resulted in a decrease of $28 million, offset by a $15 million increase for the Conventional segment primarily due to the associated costs of the sales-type lease recognition of the Marsh Landing Black Start addition that commenced operations on May 31, 2023, as further described in Note 2, Summary of Significant Accounting Policies.

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Operations and Maintenance Expense

Operations and maintenance expense increased by $7 million during the six months ended June 30, 2023, compared to the same period in 2022, due to a combination of the drivers summarized in the table below:

						(In millions)
Renewables Segment			Increase primarily driven by the acquisition of the Capistrano Wind Portfolio in August 2022.			$	11
			Increase primarily driven by maintenance activities at the wind facilities.			6
			Increase for solar acquisitions driven by Daggett 3 in February 2023, Mililani I in March 2022 and Waiawa in November 2022, offset by the disposition of Kawailoa in August 2022.			2
Conventional Segment			Increase primarily driven by outages at the Walnut Creek and Marsh Landing facilities.			4
			Increase primarily driven by higher costs related to additional planned maintenance outages at the El Segundo facility in 2023.			2
Thermal Segment			Decrease primarily driven by the sale of the Thermal Business on May 1, 2022.			(18)
						$	7

Other Costs of Operations Expense

Other costs of operations expense decreased by $8 million during the six months ended June 30, 2023, compared to the same period in 2022, primarily due to the sale of the Thermal Business on May 1, 2022 and a decrease in property taxes in both the Conventional and the Renewables segments.

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.

Equity in Earnings of Unconsolidated Affiliates

Equity in earnings of unconsolidated affiliates decreased by $14 million during the six months ended June 30, 2023, compared to the same period in 2022, primarily due to the change in fair value of interest swaps and higher depreciation expense, as well as lower wind production.

Other Income, Net

Other income, net increased by $12 million during the six months ended June 30, 2023, compared to the same period in 2022, primarily due to higher interest income earned on investments in money market and time deposit accounts, which have retained larger balances as a result of the proceeds received from the sale of the Thermal Business on May 1, 2022.

Interest Expense

Interest expense increased by $60 million during the six months ended June 30, 2023, compared to the same period in 2022, primarily due to the following:

			(In millions)
Change in fair value of interest rate swaps			$	76
Decrease in interest expense due to decreased principal balances of project-level debt			(7)
Decrease in interest expense due to the sale of the Thermal Business on May 1, 2022			(6)
Decrease in interest expense due to decreased principal balances of Corporate debt, which includes repayment of the outstanding borrowings under the Bridge Loan Agreement and the revolving credit facility on May 3, 2022			(3)
			$	60

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Income Tax Expense

For the six months ended June 30, 2023, the Company recorded an income tax expense of $10 million on pretax income of $54 million. For the same period in 2022, the Company recorded an income tax expense of $224 million on a pretax income of $1.28 billion. The $214 million decrease in income tax expense is primarily driven by the sale of the Thermal Business on May 1, 2022.

Net Income Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests

For the six months ended June 30, 2023, the Company had net income of $6 million attributable to noncontrolling interests and redeemable noncontrolling interests comprised of the following:

			(In millions)
CEG’s economic interest in Clearway Energy LLC			$	36
Income attributable to third-party partnerships			14
Losses attributable to tax equity financing arrangements and the application of the HLBV method			(44)
			$	6

For the six months ended June 30, 2022, the Company had net income of $514 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)			$	560
Losses attributable to tax equity financing arrangements and the application of the HLBV method			(24)
Losses attributable to third-party partnerships			(22)
			$	514

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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 June 30, 2023 and December 31, 2022, the Company’s liquidity was approximately $1.43 billion and $1.37 billion, respectively, comprised of cash, restricted cash and availability under the Company’s revolving credit facility.

(In millions)						June 30, 2023						December 31, 2022
Cash and cash equivalents:
Clearway Energy, Inc. and Clearway Energy LLC, excluding subsidiaries						$	413					$	536
Subsidiaries						134						121
Restricted cash:
Operating accounts						104						109
Reserves, including debt service, distributions, performance obligations and other reserves						267						230
Total cash, cash equivalents and restricted cash						918						996
Revolving credit facility availability						512						370
Total liquidity						$	1,430					$	1,366

The Company’s liquidity includes $371 million and $339 million of restricted cash balances as of June 30, 2023 and December 31, 2022, 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 June 30, 2023, these restricted funds were comprised of $104 million designated to fund operating expenses, approximately $168 million designated for current debt service payments and $85 million restricted for reserves including debt service, performance obligations and other reserves, as well as capital expenditures. The remaining $14 million is held in distribution reserve accounts.

Clearway Energy LLC and Clearway Energy Operating LLC Revolving Credit Facility

On March 15, 2023, Clearway Energy Operating LLC refinanced the Amended and Restated Credit Agreement, which (i) replaced LIBOR with SOFR plus a credit spread adjustment of 0.10% as the applicable reference rate, (ii) increased the available revolving commitments to an aggregate principal amount of $700 million, (iii) extended the maturity date to March 15, 2028, (iv) increased the letter of credit sublimit to $594 million and (v) implemented certain other technical modifications.

As of June 30, 2023, the Company had no outstanding borrowings under the revolving credit facility and $188 million in letters of credit outstanding. 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 2022 Form 10-K, the Company’s financing arrangements consist of corporate level debt, which includes Senior Notes and the revolving credit facility, the ATM Program and project-level financings for its various assets.

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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 June 30, 2023:

S&P

Moody’s

Clearway Energy, Inc.

BB

Ba2

4.750% Senior Notes, due 2028

BB

Ba2

3.750% Senior Notes, due 2031

BB

Ba2

3.750% Senior Notes, due 2032

BB

Ba2

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; (ii) capital expenditures; (iii) off-balance sheet arrangements; (iv) acquisitions and investments, as described more fully in Note 3, Acquisitions and Dispositions and Note 4, Investments Accounted for by the Equity Method and Variable Interest Entities; 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 six months ended June 30, 2023, the Company used approximately $109 million to fund capital expenditures, including growth expenditures of $96 million in the Renewables segment, funded through construction-related financing. Renewables segment capital expenditures included $86 million incurred in connection with the Daggett 3 solar project, $7 million incurred in connection with the Waiawa solar project and $3 million incurred by other wind and solar projects. In addition, the Company incurred $13 million in maintenance capital expenditures. The Company estimates $35 million of maintenance expenditures for 2023. These estimates are subject to continuing review and adjustment. Actual capital expenditures may vary from these estimates.

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 June 30, 2023, 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 $317 million as of June 30, 2023. 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 2022 Form 10-K.

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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.

Rosie Central BESS — On June 30, 2023, the Company, through its indirect subsidiary, Rosie Class B LLC, the indirect owner of the Rosamond Central solar project, became the owner of the Class B membership interests of Rosie Central BESS in order to facilitate and fund the construction of a 147 MW BESS project that will be co-located at the Rosamond Central solar facility. Clearway Renew indirectly owns the Class A membership interests. The Company’s investment consists of $10 million contributed into Rosie Central BESS, funded through contributions from the Company and its cash equity investor in Rosie TargetCo LLC, which consolidates Rosie Class B LLC. On July 3, 2023, Rosie Class B LLC contributed an additional $20 million into Rosie Central BESS. Additionally, on June 30, 2023, Rosamond Central entered into an asset purchase agreement with Rosie Central BESS to acquire the BESS project assets at mechanical completion for a purchase price of $360 million, of which $72 million is payable at mechanical completion with the remaining $288 million payable at substantial completion. The Company will fund $17 million of the purchase price at mechanical completion and $67 million of the purchase price at substantial completion. The BESS project is anticipated to reach mechanical completion in the second half of 2023 and to reach substantial completion in the first half of 2024.

On June 30, 2023, Rosie Class B LLC amended its financing agreement. On July 3, 2023, the Company received total loan proceeds of $138 million under the refinancing, which is net of $5 million in debt issuance costs. Also on July 3, 2023, Rosie Class B LLC issued a loan to a consolidated subsidiary of Clearway Renew in the aggregate principal amount of $117 million in order to finance the construction of the BESS project.

Waiawa Drop Down — In connection with the 2022 Drop Down of Waiawa, the Company assumed the project’s financing agreement, which includes a construction loan that converted to a term loan on March 30, 2023 upon the project reaching substantial completion and a tax equity bridge loan that was repaid on March 30, 2023.

Daggett 3 Drop Down — On February 17, 2023, the Company, through its indirect subsidiary, Daggett Solar Investment LLC, acquired the Class A membership interests in Daggett TargetCo LLC, the indirect owner of the Daggett 3 solar project, from Clearway Renew for cash consideration of $21 million and then contributed its Class A membership interests into Daggett Renewable Holdco LLC, a partnership between the Company and a cash equity investor, which consolidates Daggett TargetCo LLC. Daggett TargetCo LLC consolidates, as the indirect owner of the primary beneficiary, a tax equity fund, Daggett TE Holdco LLC, which owns the Daggett 3 solar project. Daggett 3 has PPAs with investment-grade counterparties that have a 15-year weighted average contract duration that commence when the underlying operating assets reach commercial operations, which is expected to occur in the second half of 2023. The acquisition was funded with existing sources of liquidity. As part of the acquisition, the Company assumed the project’s financing agreement, which included a construction loan that converts to a term loan upon the project reaching substantial completion, a tax equity bridge loan that will be repaid when the project reaches substantial completion and a sponsor equity bridge loan that was repaid at acquisition date. Subsequent to the acquisition, CEG funded an additional $43 million in project completion costs, which will be repaid with the proceeds received when the project reaches substantial completion, which is expected to occur in the second half of 2023.

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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.

The following table lists the dividends paid on the Company’s Class A common stock and Class C common stock during the six months ended June 30, 2023:

															Second Quarter 2023						First Quarter 2023
Dividends per Class A share															$	0.3818					$	0.3745
Dividends per Class C share															0.3818						0.3745

On August 7, 2023, the Company declared quarterly dividends on its Class A and Class C common stock of $0.3891 per share payable on September 15, 2023 to stockholders of record as of September 1, 2023.

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Cash Flow Discussion

The following tables reflect the changes in cash flows for the comparative periods:

			Six months ended June 30,
			2023						2022						Change
			(In millions)
Net cash provided by operating activities			$	209					$	279					$	(70)
Net cash (used in) provided by investing activities			(116)						1,331						(1,447)
Net cash used in financing activities			(171)						(976)						805

Net Cash Provided by Operating Activities

Changes to net cash provided by operating activities were driven by:			(In millions)
Increase in working capital primarily driven by the timing of accounts receivable collections and payments of current liabilities			$	(64)
Decrease in operating income adjusted for non-cash items			(18)
Decrease in distributions from unconsolidated affiliates			(6)
Transaction expenses paid on May 1, 2022 in connection with the sale of the Thermal Business			18
			$	(70)

Net Cash (Used in) Provided by Investing Activities

Changes to net cash (used in) provided by investing activities were driven by:			(In millions)
Proceeds from the sale of the Thermal Business in 2022			$	(1,457)
Increase in capital expenditures			(28)
Increase in investments in unconsolidated affiliates			(10)
Decrease in cash paid for Drop Down Assets			44
Increase in the return of investment from unconsolidated affiliates			4
			$	(1,447)

Net Cash Used in Financing Activities

Changes in net cash used in financing activities were driven by:			(In millions)
Increase in contributions from noncontrolling interest members, net of distributions			$	282
Decrease in payments for the revolving credit facility, net of proceeds			245
Decrease in payments for long-term debt, net of proceeds			244
Cash released from escrow distributed to CEG in 2022			64
Tax related distributions in 2023			(19)
Increase in dividends paid to common stockholders and distributions paid to CEG unit holders			(12)
Other			1
			$	805

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NOLs, Deferred Tax Assets and Uncertain Tax Position Implications, under ASC 740

As of December 31, 2022, the Company had a cumulative federal NOL carry forward balance of $481 million for financial statement purposes, of which $88 million will begin expiring in 2037 if unutilized. The Company does not anticipate material federal income tax payments until 2027. Additionally, as of December 31, 2022, the Company had a cumulative state NOL carryforward balance of $64 million for financial statement purposes, which will expire between 2023 to 2040 if unutilized. In addition, the Company has PTC and ITC carryforward balances totaling $18 million, which will expire between 2034 and 2042 if unutilized.

The Company, after the utilization of various federal and state NOL carryforwards, has paid $5 million in federal and state income taxes through June 30, 2023, and expects to pay approximately $3 million of additional federal and state income taxes by December 31, 2023, for the December 31, 2023 year-end. The Company does not anticipate being subject to the corporate minimum tax on financial statement income as enacted by the recently passed the IRA, which is discussed in further detail below.

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.

The recently enacted 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 will apply 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. All tax returns filed by the Company for the year ended December 31, 2013 and forward remain subject to audit. As of December 31, 2022, the U.S federal partnership returns of three subsidiaries of the Company have ongoing audits being conducted by the IRS. The Company believes that the ultimate resolution of each of these audits will not be material to the Company’s financial condition, results of operations or liquidity. The Company believes that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in tax audits of the Company are resolved in a manner inconsistent with its expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs.

The Company has no material uncertain tax benefits as of June 30, 2023.

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 June 30, 2023, based on their level within the fair value hierarchy defined in ASC 820; and indicate the maturities of contracts at June 30, 2023. 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, 2022			$	(264)
Contracts realized or otherwise settled during the period			22
Contracts acquired during the period			27
Changes in fair value			29
Fair value of contracts as of June 30, 2023			$	(186)

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			Fair value of contracts as of June 30, 2023
			Maturity
Fair Value Hierarchy (Losses) Gains			1 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			$	34					$	40					$	24					$	19					$	117
Level 3			(44)						(85)						(75)						(99)						(303)
Total			$	(10)					$	(45)					$	(51)					$	(80)					$	(186)

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.

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, acquisition accounting and determining the fair value of financial instruments.

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 2022 Form 10-K.

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, natural gas and emissions credits. The Company manages the commodity price risk of certain 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 $0.05 per MWh increase or decrease in power prices across the term of the derivatives contracts would cause a change of approximately $6 million to the net value of power derivatives as of June 30, 2023.

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, 2022 included in the 2022 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 June 30, 2023, the counterparties would have owed the Company $121 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 June 30, 2023, a change of 1%, or 100 basis points, in interest rates would result in an approximately $2 million change in market interest expense on a rolling twelve-month basis.

As of June 30, 2023, the fair value of the Company’s debt was $6.52 billion and the carrying value was $7.10 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 $338 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.

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 June 30, 2023 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 June 30, 2023, 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 2022 Form 10-K. There have been no material changes in the Company’s risk factors since those reported in its 2022 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

During the three months ended June 30, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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ITEM 6 — EXHIBITS

Number

Description

Method of Filing

10.1†*

Membership Interest Purchase Agreement, dated as of May 19, 2023, by and between Renew Development HoldCo LLC and Cedar Creek Wind Holdco LLC.

Incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 24, 2023.

31.1

Rule 13a-14(a)/15d-14(a) certification of Christopher S. Sotos.

Filed herewith.

31.2

Rule 13a-14(a)/15d-14(a) certification of Sarah Rubenstein.

Filed herewith.

32

Section 1350 Certification.

Furnished herewith.

101 INS

Inline XBRL Instance Document.

Filed herewith.

101 SCH

Inline XBRL Taxonomy Extension Schema.

Filed herewith.

101 CAL

Inline XBRL Taxonomy Extension Calculation Linkbase.

Filed herewith.

101 DEF

Inline XBRL Taxonomy Extension Definition Linkbase.

Filed herewith.

101 LAB

Inline XBRL Taxonomy Extension Label Linkbase.

Filed herewith.

101 PRE

Inline XBRL Taxonomy Extension Presentation Linkbase.

Filed herewith.

104

Cover 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.

† Schedules and similar attachments to this Exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the U.S. Securities and Exchange Commission upon request.

* Certain portions of this Exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. The omitted information is (i) not material and (ii) would likely cause competitive harm to the Company if publicly disclosed. The Company agrees to furnish supplementally an unredacted copy of this Exhibit to the SEC upon request.

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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: August 8, 2023

Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

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