Investments Accounted for Using the Equity Method and Variable Interest Entities, or VIEs

3 Months Ended

Mar. 31, 2020

Variable Interest Entities Disclosure [Abstract]

Investments Accounted for Using the Equity Method and Variable Interest Entities, or VIEs

Entities that are not Consolidated

NRG accounts for the Company's significant investments using the equity method of accounting. NRG's carrying value of equity investments can be impacted by a number of elements including impairments, unrealized gains and losses on derivatives and movements in foreign currency exchange rates.

PG&E Bankruptcy — Agua Caliente and two of the three Ivanpah units are party to PPAs with PG&E. Both projects have project financing with the U.S. DOE. On January 29, 2019, PG&E Corp. and primary operating subsidiary utility PG&E filed for Chapter 11 relief in the United States Bankruptcy Court for the Northern District of California (the "California Bankruptcy Court"). As a result of the bankruptcy filing, Agua Caliente and the two Ivanpah units have issued notices of events of default under their respective loan agreements. The Ivanpah project signed a forbearance agreement with the U.S. DOE on October 25, 2019. The Company's subsidiaries are working with their partners on the projects and the loan counterparties.

On September 9, 2019, PG&E filed a plan of reorganization that would assume all power purchase agreements, including those held by Agua Caliente and the two Ivanpah units. There are many conditions that must be satisfied before the PG&E plan and assumption of the power purchase agreements can become effective, including, but not limited to, formal approvals by various classes of creditors, the California Bankruptcy Court, and the CPUC. A hearing before the California Bankruptcy Court to consider whether the PG&E plan will be approved and confirmed is currently expected to occur on May 29, 2020.

NRG's maximum exposure to loss is limited to its equity investment, which was $213 million for Agua Caliente and $6 million for Ivanpah as of March 31, 2020.

Variable Interest Entities that are not consolidated

Through its consolidated subsidiary, NRG Solar Ivanpah LLC, NRG owns a 54.5% interest in Ivanpah Master Holdings LLC, the owner of the Ivanpah projects. NRG considers this investment a VIE under ASC 810 and NRG is not considered the primary beneficiary. The Company accounts for its interest under the equity method of accounting.

Variable Interest Entities that are Consolidated

The Company has a controlling financial interest in certain entities that have been identified as VIEs under ASC 810. These arrangements are primarily related to tax equity arrangements entered into with third-parties in order to finance the cost of solar energy systems under operating leases eligible for certain tax credits as further described in Note 2, Summary of Significant Accounting Policies, to the Company's 2019 Form 10-K. During the first quarter of 2020, the Company repurchased its partners' equity interest in one of the partnerships. As the Company retains control of its interest, the repurchase was recorded to equity.

The summarized financial information for the Company's consolidated VIEs consisted of the following:


(In millions)	March 31, 2020		December 31, 2019
Current assets	$	1	$	3
Net property, plant and equipment	—		71
Other long-term assets	26		27
Total assets	27		101
Current liabilities	4		4
Long-term debt	24		24


Other long-term liabilities	4		8
Total liabilities	32		36
Redeemable noncontrolling interest	—		20

Net assets less noncontrolling interest	$	(5)	$	45