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Government Assistance | 9 Months Ended
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Sep. 30, 2024
Government Assistance [Abstract] |
Government Assistance | Government Assistance As a result of the enactment of the IRA, we qualify for certain federal government incentives through eligible activities. These incentives include both refundable and transferable tax credits. The current GAAP framework does not address the receipt of government assistance by for-profit entities. We account for this government assistance by analogy to International Accounting Standard (IAS) 20, Accounting for Government Grants and Disclosure of Government Assistance, and recognize the benefits when there is reasonable assurance that we will comply with the required conditions and that the benefits will be received. We believe the reasonable assurance term as used in IAS 20 is analogous to the term probable as defined in Accounting Standards Codification 450-20 of GAAP. Beginning in 2024, our nuclear units are eligible for a PTC extending through 2032. The nuclear PTC provides a transferable credit up to $15 per MWh (a base credit of $3 per MWh with a five times multiplier provided certain prevailing wage requirements are met) and is subject to phase-out when annual gross receipts are between $25.00 per MWh and $43.75 per MWh. We have determined that we will meet the annual prevailing wage requirements at all our nuclear units and are eligible for the five times multiplier. Both the amount of the PTC and the gross receipts thresholds adjust for inflation after 2024 through the duration of the program based on the GDP price deflator for the preceding calendar year. The benefits of the PTC may be realized through a credit against our federal income taxes or transferred via sale to an unrelated party. For the three and nine months ended September 30, 2024, our Consolidated Statements of Operations and Comprehensive Income include an estimated nuclear PTC benefit of approximately $670 million and $1,380 million, respectively. Our estimate required the exercise of judgment in determining the amount of nuclear PTC expected for each of our nuclear units. Since the amount of nuclear PTC is a function of annual gross receipts, the actual amount of PTC earned cannot be determined until 2025 and may be different from this initial estimate. Further, the nuclear PTC continues to be the subject of additional guidance expected to be issued from the U.S. Treasury and IRS that may materially impact the total amount of benefits we receive. Nuclear PTCs are initially recorded within Other deferred debits and other assets within the Consolidated Balance Sheets and reclassified as a reduction to Accounts payable and accrued expenses when used to reduce our federal income tax payable, or an increase in Cash and cash equivalents or Other current assets when sold, depending on the specific payment terms of each contract. During the third quarter of 2024, we executed agreements for the sale of $1 billion of nuclear PTCs to unaffiliated third parties at a nominal discount, with approximately $670 million of cash proceeds received upon sale (included within Cash flows from operating activities in our Consolidated Statements of Cash Flows) and approximately $290 million to be received over the course of the fourth quarter of 2024 and first quarter of 2025. As of September 30, 2024, our Consolidated Balance Sheets reflect approximately, $240 million of estimated nuclear PTCs within Other deferred debits and other assets, $290 million within Other current assets, and a reduction to Accounts payable and accrued expenses of $140 million for estimated nuclear PTCs that we have utilized as a credit against our current federal income taxes payable. Many of the state-sponsored programs providing compensation for the emissions-free attributes of generation from certain of our nuclear units include contractual or other provisions that require us to refund that compensation up to the amount of the nuclear PTC received or pass through the entirety of the nuclear PTC received. As of September 30, 2024, we have recognized approximately $720 million of estimated payables within Other deferred credits and other liabilities on our Consolidated Balance Sheets and a reduction to net operating revenue of approximately $115 million (pre-tax) for the three months ended September 30, 2024 and recognized approximately $10 million of net operating revenue (pre-tax) for the nine months ended September 30, 2024 associated with programs requiring refunds or pass through of the nuclear PTC in our Consolidated Statements of Operations and Comprehensive Income. As with the actual amount of the PTC earned, which cannot be determined until after the end of the calendar year, the actual amounts due under state-sponsored programs may be different from our initial estimate.

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