NEXTERA ENERGY PARTNERS, LP - Annual Report: 2019 (Form 10-K)

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(a)	Third party investors own noncontrolling Class B interests in the NEP subsidiaries that own these projects. See Note 2 - Noncontrolling Interests and Note 11 - Equity.

(b)	NEP owns these wind projects together with third-party investors with differential membership interests. See Note 2 - Noncontrolling Interests and Note 10.

(c)	These projects are encumbered by liens against their assets securing various financings.

(d)	NEP has indirect approximately 50% equity method investments in Desert Sunlight and Rosmar and an indirect controlling 50% interest in Silver State South. See Note 2 - Investments in Unconsolidated Entities and Noncontrolling Interests.

(e)	MWs reflect NEP's net ownership interest in plant capacity based on respective ownership interests as discussed in (d).

(f)	In addition, NEP owns an approximately 50% non-economic ownership interest in three NEER solar projects with a total generating capacity of 277 MW. All equity in earnings of these non-economic ownership interests is allocated to net income attributable to noncontrolling interests. See Note 2 - Investments in Unconsolidated Entities.

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(a)	NEP's ownership interests in the pipelines are pledged as collateral securing various financings. Additionally, third party investors own noncontrolling Class B interests in the respective NEP subsidiaries that have ownership interests in these pipelines. See Note 2 - Noncontrolling Interests and Note 11 - Equity.

(b)	Reflects NEP's net ownership interest in pipeline capacity based on respective ownership interests as discussed in (c) and (d).

(c)	A subsidiary of Pemex owns a 10% interest in the NET Mexico pipeline.

(d)

Through its ownership interest in Meade Pipeline Co, LLC, NEP has an indirect equity method investment in the Central Penn Line (CPL), which represents an approximately 39% aggregate ownership interest in the CPL, and a 40% interest in an expansion project that is expected to add an estimated 0.2 Bcf per day of natural gas capacity through the addition of compression at new and existing stations scheduled for commercial operation by mid-2022, subject to receipt of certain regulatory approvals. See Note 3.

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(a)	Project must be placed in service no more than four years after the year in which construction of the project began to qualify for the PTC or ITC.

(b)	Percentage of the full PTC available for wind projects that begin construction during the applicable year.

(c)	Percentage of eligible project costs that can be claimed as ITC by wind projects that begin construction during the applicable year.

(d)	Percentage of eligible project costs that can be claimed as ITC by solar projects that begin construction during the applicable year. ITC is limited to 10% for solar projects not placed in service before January 1, 2024.

•	Focus on contracted clean energy projects. NEP intends to focus on long-term contracted clean energy projects with newer and more reliable technology, lower operating costs and relatively stable cash flows, subject to seasonal variances, consistent with the characteristics of its portfolio.

•	Focus on North America. NEP intends to focus its investments in North America, where it believes industry trends present significant opportunities to acquire contracted clean energy projects in diverse regions and favorable locations. By focusing on North America, NEP believes it will be able to take advantage of NEE’s long-standing industry relationships, knowledge and experience.

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Maintain a sound capital structure and financial flexibility. NEP and its subsidiaries have various financing structures in place including limited-recourse project-level financings, the sale of differential membership interests and equity interests in certain subsidiaries, preferred units, convertible senior unsecured notes and senior unsecured notes, as well as revolving credit facilities and term loans. NEP believes its cash flow profile, its credit rating, the long-term nature of its contracts and its ability to raise capital provide flexibility for optimizing its capital structure and increasing distributions. NEP intends to continually evaluate opportunities to finance future acquisitions or refinance its existing debt and seeks to limit recourse, optimize leverage, hedge exposure, extend maturities and increase cash distributions to common unitholders over the long term.

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Take advantage of NEER’s operational excellence to maintain the value of the projects in NEP's portfolio. At the direction of the board, NEER provides O&M, administrative and management services to NEP's projects pursuant to the MSA and other agreements. Through these agreements, NEP benefits from the operational expertise that NEER currently provides across its entire portfolio. NEP expects that these services will maximize the operational efficiencies of its portfolio.

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Grow NEP's business and cash distributions through selective acquisitions of operating projects or projects under construction. NEP intends to grow primarily through the acquisition of projects that have similar characteristics to the renewable energy projects and pipelines in its portfolio. NEP intends to focus on acquiring projects in operation, maintaining a disciplined investment approach and taking advantage of opportunities to acquire additional projects from NEER and third parties in the future, which it believes will enable it to increase cash distributions to its common unitholders over the long term.

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•	the FERC, which oversees the acquisition and disposition of generation, transmission and other facilities, transmission of electricity and natural gas in interstate commerce and wholesale purchases and sales of electric energy, among other things;

•	the NERC, which, through its regional entities, establishes and enforces mandatory reliability standards, subject to approval by the FERC, to ensure the reliability of the U.S. electric transmission and generation system and to prevent major system blackouts;

•	the Environmental Protection Agency (EPA), which has the responsibility to maintain and enforce national standards under a variety of environmental laws. The EPA also works with industries and all levels of government, including federal and state governments, in a wide variety of voluntary pollution prevention programs and energy conservation efforts;

•	various agencies in Texas and Pennsylvania, which oversee safety, environmental and certain aspects of rates and transportation related to the pipeline projects; and

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•	the Pipeline and Hazardous Materials Safety Administration and the Texas Railroad Commission's Pipeline Safety Division, which, among other things, oversee the safety of natural gas pipelines.

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•	breakdown or failure of, or damage to, turbines, blades, blade attachments, solar panels, mirrors and other equipment, which could reduce a project’s energy output or result in personal injury or loss of life;

•	catastrophic events, such as fires, earthquakes, severe weather, tornadoes, ice or hail storms, other meteorological conditions, landslides and other similar events beyond NEP's control, which could severely damage or destroy all or a part of a project, reduce its energy output or result in personal injury or loss of life;

•	technical performance below expected levels, including, but not limited to, the failure of wind turbines, solar panels, mirrors and other equipment to produce energy as expected due to incorrect measures of expected performance provided by equipment suppliers;

•	increases in the cost of operating the projects, including, but not limited to, costs relating to labor, equipment, insurance and real estate taxes;

•	operator or contractor error or failure to perform;

•	serial design or manufacturing defects, which may not be covered by warranty;

•	extended events, including, but not limited to, force majeure, under certain PPAs that may give rise to a termination right of the customer under such a PPA (renewable energy counterparty);

•	failure to comply with permits and the inability to renew or replace permits that have expired or terminated;

•	the inability to operate within limitations that may be imposed by current or future governmental permits;

•	replacements for failed equipment, which may need to meet new interconnection standards or require system impact studies and compliance that may be difficult or expensive to achieve;

•	land use, environmental or other regulatory requirements;

•	disputes with the BLM, other owners of land on which NEP's projects are located or adjacent landowners;

•	changes in law, including, but not limited to, changes in governmental permit requirements, corporate income tax laws, regulations and policies and international trade laws, regulations, agreements, treaties and policies;

•	government or utility exercise of eminent domain power or similar events; and

•	existence of liens, encumbrances and other imperfections in title affecting real estate interests.

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•	the protection of wildlife, including, but not limited to, migratory birds, bats and threatened and endangered species, such as desert tortoises, or protected species, such as eagles, and other protected plants or animals whose presence or movements often cannot be anticipated or controlled;

•	the storage, handling, use and transportation of natural gas as well as other hazardous or toxic substances and other regulated substances, materials, and/or chemicals;

•	air emissions, water quality, releases of hazardous materials into the environment and the prevention of and responses to releases of hazardous materials into soil and groundwater;

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federal, state or local land use, zoning, building and transportation laws and requirements, which may mandate conformance with sound levels, radar and communications interference, hazards to aviation or navigation, or other potential nuisances, such as the flickering effect, caused when rotating wind turbine blades periodically cast shadows through openings, such as the windows of neighboring properties, which is known as shadow flicker;

•	the presence or discovery of archaeological, religious or cultural resources at or near NEP's projects or pipelines; and

•	the protection of workers’ health and safety.

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•	delays in obtaining, or the inability to obtain, necessary permits and licenses;

•	delays and increased costs related to the interconnection of new projects to the transmission system;

•	the inability to acquire or maintain land use and access rights;

•	the failure to receive contracted third-party services;

•	interruptions to dispatch at the projects;

•	supply interruptions, including as a result of changes in international trade laws, regulations, agreements, treaties or policies of the U.S. or other countries in which NEP's suppliers are located;

•	work stoppages;

•	labor disputes;

•	weather interferences;

•	unforeseen engineering, environmental and geological problems, including, but not limited to, discoveries of contamination, protected plant or animal species or habitat, archaeological or cultural resources or other environment-related factors;

•	unanticipated cost overruns in excess of budgeted contingencies; and

•	failure of contracting parties to perform under contracts.

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•	Specified events beyond NEP's control or the control of a customer may temporarily or permanently excuse the customer from its obligation to accept and pay for delivery of energy generated by a project. These events could include, among other things, a system emergency, transmission failure or curtailment, adverse weather conditions or labor disputes.

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Since Pemex, an autonomous state entity controlled by the government of Mexico, makes payments with respect to natural gas transportation agreements, NEP is subject to the risk that Pemex may attempt to unilaterally change or terminate its contract with NEP, whether as a result of legislative, regulatory, political or other activities, including changes in international trade laws, regulations, agreements, treaties or policies of the U.S. or other countries.

•	Certain of NEP’s customers, including PG&E, have been impacted by wildfires in California and have been or could be subject to significant liability in excess of their insurance coverage which could be expected to have a significant impact on their financial condition.

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The ability of NEP's customers to fulfill their contractual obligations to NEP depends on their financial condition. NEP is exposed to the credit risk of its customers over an extended period of time due to the long-term nature of NEP's contracts with them. These customers could become subject to insolvency or liquidation proceedings or otherwise suffer a deterioration of their financial condition when they have not yet paid for services delivered, any of which could result in underpayment or nonpayment under such agreements.

•	A default or failure by NEP to satisfy minimum energy or natural gas delivery requirements or mechanical availability levels under NEP's agreements could result in damage payments to the applicable customer or termination of the applicable agreement.

•	whether the PPA counterparty has a continued need for energy at the time of the agreement’s expiration, which could be affected by, among other things, the presence or absence of governmental incentives or mandates, prevailing market prices, and the availability of other energy sources;

•	the amount of commercial natural gas supply available to its pipelines' systems and changing natural gas supply flow patterns in North America;

•	the satisfactory performance of NEP's obligations under such PPAs, natural gas transportation agreements or other customer contracts;

•	the regulatory environment applicable to NEP's contract counterparties at the time;

•	macroeconomic factors present at the time, such as population, business trends, international trade laws, regulations, agreements, treaties or policies of the U.S. or other countries and related energy demand; and

•	the effects of regulation on the contracting practices of NEP's contract counterparties.

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•	competing bids for a project from companies that may have substantially greater purchasing power, capital or other resources or a greater willingness to accept lower returns or more risk than NEP does;

•	NEP's failure to agree to favorable financial or legal terms with sellers with respect to any proposed acquisitions;

•	fewer acquisition opportunities than NEP expects, which could result from, among other things, available projects having less desirable economic returns or higher risk profiles than NEP believes suitable for its acquisition strategy and future growth;

•	NEP's failure to successfully complete construction of and finance projects, to the extent that it decides to acquire projects that are not yet operational or to otherwise pursue construction activities with respect to new projects;

•	NEP's inability to obtain regulatory approvals or other necessary consents to consummate an acquisition; and

•	the presence or potential presence of:

•	pollution, contamination or other wastes at the project site;

•	protected plant or animal species;

•	archaeological or cultural resources;

•	wind waking or solar shadowing effects caused by neighboring activities, which reduce potential energy production by decreasing wind speeds or reducing available insolation;

•	land use restrictions and other environment-related siting factors; and

•	local opposition to wind and solar projects and pipeline projects in certain markets due to concerns about noise, health, environmental or other alleged impacts of such projects.

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•	incur or guarantee additional debt;

•	make distributions on or redeem or repurchase common units;

•	make certain investments and acquisitions;

•	incur certain liens or permit them to exist;

•	enter into certain types of transactions with affiliates;

•	merge or consolidate with another company; and

•	transfer, sell or otherwise dispose of projects.

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•	failure to comply with the covenants in the agreements governing these obligations could result in an event of default under those agreements, which could be difficult to cure, result in bankruptcy or, with respect to subsidiary debt, result in loss of NEP OpCo's ownership interest in one or more of its subsidiaries or in some or all of their assets as a result of foreclosure;

•	NEP's subsidiaries’ debt service obligations require them to dedicate a substantial portion of their cash flow to pay principal and interest on their debt, thereby reducing their cash available for distribution to NEP;

•	NEP's subsidiaries’ substantial indebtedness could limit NEP's ability to fund operations of any projects acquired in the future and NEP's financial flexibility, which could reduce its ability to plan for and react to unexpected opportunities or challenges;

•	NEP's subsidiaries’ substantial debt service obligations make NEP vulnerable to adverse changes in general economic, credit markets, capital markets, industry, competitive conditions and government regulation that could place NEP at a disadvantage compared to competitors with less debt; and

•	NEP's subsidiaries’ substantial indebtedness could limit NEP's ability to obtain financing for working capital, including, but not limited to, collateral postings, capital expenditures, debt service requirements, acquisitions and general partnership or other purposes.

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•	NEP is able to identify attractive acquisition candidates;

•	NEP is able to negotiate acceptable purchase agreements;

•	NEP is able to obtain financing for these acquisitions on economically acceptable terms; and

•	NEP is outbid by competitors.

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•	No agreement requires NEE or its affiliates to pursue a business strategy that favors NEP or uses NEP's projects or dictates what markets to pursue or grow.

•	NEE and its affiliates are not limited in their ability to compete with NEP, and neither NEP GP nor its affiliates have any obligation to present business opportunities to NEP.

•	So long as the officers of NEP are officers of NEE or its affiliates, they will also devote significant time to the business of NEE or its affiliates and will be compensated by NEE or its affiliates.

•	The board may cause NEP to borrow funds in order to permit the payment of cash distributions, even if the purpose or effect of the borrowing is to make a payment of the IDR fee.

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NEP's partnership agreement replaces the fiduciary duties that would otherwise be owed by NEP GP and the directors and officers of NEP with contractual standards governing their duties and limits NEP GP’s and such directors’ and officers' liabilities and the remedies available to NEP's unitholders for actions that, without these limitations, might constitute breaches of fiduciary duty under applicable Delaware law.

•	Except in limited circumstances, the board has the power and authority to conduct NEP's business without the approval of NEP GP or NEP's unitholders.

•	Actions taken by the board may affect the amount of cash available to pay distributions to NEP's unitholders.

•	NEP GP has limited liability regarding NEP's contractual and other obligations.

•	The board controls the exercise of the rights of NEP against NEE and its affiliates, and the enforcement of the obligations that NEE and its affiliates owe to NEP.

•	NEP may choose not to retain counsel, independent accountants or other advisors separate from those retained by NEP GP or NEE to perform services for NEP or for the holders of common units.

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•	NEE Management defaults in the performance or observance of any material term, condition or covenant contained therein in a manner that results in material harm to NEP or its affiliates and the default continues unremedied for a period of 90 days after written notice thereof is given to NEE Management;

•	NEE Management engages in any act of fraud, misappropriation of funds or embezzlement that results in material harm to NEP or its affiliates;

•	NEE Management is reckless in the performance of its duties under the agreement and such recklessness results in material harm to NEP or its affiliates;

•	upon the happening of certain events relating to the bankruptcy or insolvency of NEP or certain of its affiliates; or

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NEE Management intentionally or willfully takes any action that materially conflicts with or directly contravenes any resolution or other determination of the board relating to certain significant activities of NEP, such action has caused, or would reasonably be expected to cause, material harm to NEP and its subsidiaries, and such action continues unremedied for a period of 90 days after written notice thereof is given to NEE Management.

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•	the amount of power generated from its projects and the amount of natural gas transported in its pipelines, and the prices received therefor;

•	its operating costs;

•	payment of interest and principal amortization, which depends on the amount of its indebtedness and the interest payable thereon;

•	the ability of NEP OpCo’s subsidiaries to distribute cash under their respective financing agreements;

•	the completion of any ongoing construction activities on time and on budget;

•	its capital expenditures; and

•	if NEP OpCo acquires a project prior to its COD, timely completion of future construction projects.

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•	availability of borrowings under its subsidiaries' credit facility to pay distributions;

•	the costs of acquisitions, if any;

•	fluctuations in its working capital needs;

•	timing and collectability of receivables;

•	restrictions on distributions contained in its subsidiaries' credit facility and other financing documents;

•	prevailing economic conditions;

•	access to credit or capital markets; and

•	the amount of cash reserves established by NEP OpCo GP, NEP OpCo’s general partner, for the proper conduct of its business.

•	appointment of three directors of NEP;

•	how to exercise voting rights with respect to the units NEP GP or its affiliates own in NEP OpCo and NEP;

•	whether to exchange NEP OpCo common units owned by NEE Equity for NEP common units or, with the approval of the conflicts committee, to have NEP OpCo redeem NEP OpCo common units owned by NEE Equity for cash; and

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•	whether to consent to, among other things, NEP’s participation in certain activities or lines of business, the sale of all or substantially all of the assets of NEP, any merger, consolidation or conversion of NEP, dissolution of NEP, or an amendment to NEP OpCo’s partnership agreement.

•	whenever NEP GP or the board, or any director or any committee of the board (including, but not limited to, the conflicts committee), makes a determination or takes, or declines to take, any other action in its respective capacity, they are required to act in good faith;

•	NEP GP will not have any liability to NEP or its unitholders for decisions made in its capacity as a general partner so long as such decisions are made in good faith;

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NEP GP and its officers and directors and the officers and directors of NEP will not be liable for monetary damages to NEP or NEP's limited partners resulting from any act or omission unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining such persons acted in bad faith or engaged in fraud or willful misconduct or, in the case of a criminal matter, acted with knowledge that the conduct was criminal; and

•	NEP GP and its affiliates and NEP’s directors will not be in breach of their obligations under NEP’s partnership agreement (including, but not limited to, any duties to NEP or its unitholders) if a transaction with an affiliate or the resolution of a conflict of interest is:

•	approved by the conflicts committee of the board, although the board is not obligated to seek such approval;

•	approved by the vote of a majority of the outstanding common units, excluding any common units owned by NEP GP and its affiliates if the conflict involves NEP GP or any of its affiliates;

•	determined by the board to be on terms no less favorable to NEP than those generally being provided to or available from unrelated third parties; or

•	determined by the board to be fair and reasonable to NEP, taking into account the totality of the relationships among the parties involved, including, but not limited to, other transactions that may be particularly favorable or advantageous to NEP.

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•	NEP's existing unitholders’ proportionate ownership interest in NEP will decrease;

•	the amount of cash distributions per common unit may decrease;

•	because the IDR fee is based on a percentage of total available cash, the IDR fee will increase if total available cash increases even if the per unit distribution on common units remains the same;

•	the relative voting strength of each previously outstanding unit may be diminished; and

•	the market price of the common units may decline.

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•	NEP was conducting business in a state but had not complied with that particular state ’s partnership statute; or

•	the unitholder’s right to act with other unitholders to remove or replace NEP GP, to approve some amendments to NEP's partnership agreement or to take other actions under NEP's partnership agreement constitute “control” of NEP's business.

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•	an existing unitholder’s proportionate ownership interest in NEP will decrease;

•	the amount of cash available for distribution on each common unit may decrease;

•	the relative voting strength of each previously outstanding common unit will be diminished; and

•	the market price of NEP's common units may decline.

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(a)

The year ended December 31, 2019 reflects higher losses related to NEP's derivative instruments (see Note 7 - Financial Statement Impact of Derivative Instruments). The year ended December 31, 2018 reflects a gain of approximately $153 million (see Note 2 - Disposal of Canadian Holdings). The year ended December 31, 2017 reflects an income tax charge of approximately $100 million, all of which was attributable to NEP, related to tax reform (see Note 5). The year ended December 31, 2016 reflects a favorable fair value adjustment of approximately $189 million.

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•	when required by its subsidiaries’ financings;

•	when its subsidiaries’ financings otherwise permit distributions to be made to NEP OpCo;

•	when funds are required to be returned to NEP OpCo; or

•	when otherwise demanded by NEP OpCo.

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(a)	Excludes credit facilities discussed below due to restrictions on the use of the borrowings. See Note 11 - Debt.

(b)	In February 2020, an additional $50 million was borrowed under the NEP OpCo credit facility and the maturity date was extended until 2025.

(c)	Excludes current restricted cash of approximately $3 million and $8 million at December 31, 2019 and 2018, respectively. See Note 2 - Restricted Cash.

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(a)	Includes principal, interest, fees on credit facilities and interest rate swaps. Variable rate interest was computed using December 31, 2019 rates. Such amounts reflect scheduled payments under the financing agreements for debt in default as the lenders have not issued any acceleration notices. See Note 11 - Debt.

(b)	Primarily reflects commitments related to construction activities (see Note 15 - Development, Engineering and Construction Commitments), lease payment obligations (see Note 14) and payments related to the acquisition of certain development rights.

(c)	Represents expected cash payments adjusted for inflation for estimated costs to perform asset retirement activities.

(d)	Represents minimum fees under the MSA and CSCS agreement. See Note 13.

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(a)	A security rating is not a recommendation to buy, sell or hold securities and should be evaluated independently of any other rating. The rating is subject to revision or withdrawal at any time by the assigning rating organization.

(b)	The outlook indicated by each of Moody's, S&P and Fitch is stable.

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•	We tested the effectiveness of controls over purchase accounting, including NEP’s review of the third-party specialist’s valuation report.

•	We tested the effectiveness of NEP’s controls over the accounting and reporting for the transaction and the Class B

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•	We read the joint venture agreement to evaluate the business purpose of the transaction.

•	We used our firm specialist resources to assist in auditing management’s conclusions through an accounting consultation. The accounting consultation included evaluation of the terms of the agreement to determine the appropriateness of the accounting conclusions reached regarding the application of HLBV accounting.

•	We tested the initial recording of the NCI balance related to the Class B Investor and the income allocation to the Class B Investor for the period.

•	We evaluated the competency of the third party specialist engaged by NEP to perform the valuation. We read and tested the third party valuation report.

•	We assessed the reasonableness of management’s future cash flows by comparing the projections to historical results and similar companies acquired in previous years.

•	We evaluated whether the estimated future cash flows were consistent with evidence obtained in other areas of the audit.

•	With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology and (2) discount rate, including testing the source information underlying the determination of the discount rate, testing the mathematical accuracy of the calculation, and developing a range of independent estimates and comparing those to the discount rate selected by management.

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(a)	Includes related party revenues of approximately $8 million, $4 million and $9 million for 2019, 2018 and 2017, respectively.

(b)

Includes operations and maintenance (O&M) expenses related to renewable energy projects of approximately $182 million, $128 million and $132 million and O&M expenses related to the Texas pipelines of $47 million, $45 million and $44 million for 2019, 2018 and 2017, respectively. Total O&M expenses presented includes related party amounts of approximately $116 million, $97 million and $88 million for 2019, 2018 and 2017, respectively.

(c)	For 2017, net income attributable to noncontrolling interests includes the pre-acquisition net income of the common control acquisitions. See Note 2 - Basis of Presentation.

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(a)	For 2017, comprehensive income attributable to noncontrolling interests includes the pre-acquisition comprehensive income of the common control acquisitions. See Note 2 - Basis of Presentation.

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(a)	Net loss attributable to differential membership interests includes approximately $231 million ($211 million after tax) related to the reduction of differential membership interests as a result of the change in federal corporate income tax rates effective January 1, 2018.

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•	100% of the membership interests in Ashtabula Wind II, LLC, a project company that owns a 120 MW wind generation facility located in North Dakota;

•	100% of the membership interests in Garden Wind, LLC, a project company that owns a 150 MW wind generation facility (Story County II) located in Iowa;

•	100% of the membership interests in White Oak Energy Holdings, LLC, which owns 100% of the membership interests of White Oak Energy LLC, which owns a 150 MW wind generation facility located in Illinois;

•	100% of the Class C membership interests in Rosmar Holdings, LLC (Rosmar), which represents a 49.99% noncontrolling ownership interest in two solar generation facilities, Marshall and Roswell, with a total combined generating capacity of approximately 132 MW located in Minnesota and New Mexico, respectively; and

•	49.99% of the membership interests, representing a controlling ownership interest, in Silver State South Solar, LLC (Silver State), which indirectly owns a 250 MW solar generation facility located in Nevada.

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•	reflect the historical results of NEP Renewables beginning on January 1, 2017;

•	reflect the estimated depreciation and amortization expense based on the estimated fair value of property, plant and equipment - net and the intangible assets - PPAs;

•	reflect allocations of income to noncontrolling interests related to the financing transaction to fund the acquisition; and

•	reflect related income tax effects.

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(a)	At December 31, 2018, approximately $9 million of restricted cash equivalents are included in other non-current assets on NEP's consolidated balance sheets.

(a)

At December 31, 2019 and December 31, 2018, approximately $4,211 million and $2,826 million respectively, of the fair value is estimated using a market approach based on quoted market prices for the same or similar issues (Level 2); the balance is estimated using an income approach utilizing a discounted cash flow valuation technique, considering the current credit profile of the debtor (Level 3).

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(a)	Approximately 87% of power generation assets represent machinery and equipment used to generate electricity with a 35-year depreciable life.

(a)	For 2019, includes the equity method investment related to Meade's ownership interests in the CPL and the related expansion project.

(b)	At December 31, 2019 and 2018, approximately $479 million and $503 million, respectively, of long-term debt is reflected as current liabilities as a result of being notified by the lender of an event of default under the related financing agreement. See Note 15 - PG&E Bankruptcy.

(c)	Substantially all of the difference between the investment carrying amount and the underlying equity in net assets is being amortized over the life of the related projects.

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(a)	See additional discussion of the convertible notes and the NEP OpCo credit facility below.

(b)	The NEP OpCo senior unsecured notes are absolutely and unconditionally guaranteed, on a senior unsecured basis, by NEP and a subsidiary of NEP OpCo.

(c)	Variable rate is based on an underlying index plus a margin.

(d)	Interest rate contracts, primarily swaps, have been entered into for a majority of these debt issuances. See Note 7.

(e)	At December 31, 2018, included approximately $641 million of principal with final maturity dates ranging from 2033 - 2038, net of the related unamortized debt issuance costs, which was reclassified to current debt as a result of events of default under the related financing agreements. See Note 15 - PG&E Bankruptcy.

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(a)	Increases to 95% if NEP has not exercised its entire buyout right by December 4, 2025.

(b)	The buyout right is subject to certain limitations, including NEP being able to purchase a maximum of the Class B units at certain anniversaries specified in the agreement.

(c)	The NEP non-voting common units will have the right to receive pro rata quarterly cash distributions and rights to convert, subject to certain limitation, the NEP non-voting common units into NEP common units on a one-for-one basis. The specified percentage of the buyout price for the Class B noncontrolling interests in STX Midstream are payable in NEP common units.

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(a)

In the opinion of management, all adjustments, which consist of normal recurring accruals necessary to present a fair statement of the amounts shown for such periods, have been made. Results of operations for an interim period generally will not give a true indication of results for the year. Variations in operations reported on a quarterly basis primarily reflect the seasonal nature of NEP's business. The sum of the quarterly amounts may not equal the total for the year due to rounding.

(b)	Second quarter of 2018 includes the gain on the sale of Canadian Holdings. See Note 2 - Disposal of Canadian Holdings.

(c)	First quarter of 2018 reflects a reduction of differential membership interests as a result of the change in federal income tax rates effective January 1, 2018, which is included in net loss attributable to noncontrolling interests. See Note 2 - Noncontrolling Interests.

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*	Incorporated herein by reference.

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