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Investments Accounted for by the Equity Method and Variable Interest Entities | 9 Months Ended
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Sep. 30, 2020
Equity Method Investments and Joint Ventures [Abstract] |
Investments Accounted for by the Equity Method and Variable Interest Entities | Investments Accounted for by the Equity Method and Variable Interest Entities Entities that are Consolidated The Company has a controlling financial interest in certain entities which have been identified as VIEs under ASC 810, Consolidations, or ASC 810. These arrangements are primarily related to tax equity arrangements entered into with third parties in order to monetize certain tax credits associated with wind and solar facilities, as further described in Note 5, Investments Accounted for by the Equity Method and Variable Interest Entities, to the consolidated financial statements included in the Company's 2019 Form 10-K. Summarized financial information for the Company's consolidated VIEs consisted of the following as of September 30, 2020:
(In millions) | Oahu Solar Partnership |  | Kawailoa Partnership |  | Elbow Creek TE Holdco |  | Wildorado TE Holdco |  | DGPV Holdco 3 |  | Alta TE Holdco |  | Spring Canyon |  | Buckthorn Renewables LLC |  | Other (a)
Other current and non-current assets | $ | 25 |  |  | $ | 24 |  |  | $ | 10 |  |  | $ | 16 |  |  | $ | 61 |  |  | $ | 58 |  |  | $ | 3 |  |  | $ | 3 |  |  | $ | 5 |
Property, plant and equipment | 182 |  |  | 142 |  |  | 102 |  |  | 244 |  |  | 329 |  |  | 363 |  |  | 82 |  |  | 209 |  |  | 8 |
Intangible assets | — |  |  | — |  |  | 1 |  |  | — |  |  | 1 |  |  | 228 |  |  | — |  |  | — |  |  | — |
Total assets | 207 |  |  | 166 |  |  | 113 |  |  | 260 |  |  | 391 |  |  | 649 |  |  | 85 |  |  | 212 |  |  | 13 |
Current and non-current liabilities | 125 |  |  | 116 |  |  | 27 |  |  | 12 |  |  | 276 |  |  | 44 |  |  | 5 |  |  | 7 |  |  | 3 |
Total liabilities | 125 |  |  | 116 |  |  | 27 |  |  | 12 |  |  | 276 |  |  | 44 |  |  | 5 |  |  | 7 |  |  | 3 |
Noncontrolling interest | 25 |  |  | 35 |  |  | 74 |  |  | 107 |  |  | 3 |  |  | 38 |  |  | 29 |  |  | 62 |  |  | — |
Net assets less noncontrolling interests | $ | 57 |  |  | $ | 15 |  |  | $ | 12 |  |  | $ | 141 |  |  | $ | 112 |  |  | $ | 567 |  |  | $ | 51 |  |  | $ | 143 |  |  | $ | 10 |
(a) Other is comprised of Crosswinds and Hardin projects. The discussion below describes material changes to VIEs during the nine months ended September 30, 2020. DGPV Holdco 3 LLC DGPV Holdco 3 owns approximately 113 MW of distributed solar capacity, based on cash to be distributed, with a weighted average remaining contract life of approximately 21 years as of September 30, 2020. On May 29, 2020, the final construction projects for DGPV Holdco 3 were placed in service which resulted in a reconsideration event for consolidation of the entity. Upon the reconsideration event, the Company determined that it was the primary beneficiary of DGPV Holdco 3, as it is entitled to 99% of allocations of income and cash distributions from the entity. As such, effective on May 29, 2020, the Company consolidates DGPV Holdco 3, and shows the interest owned by CEG as noncontrolling interest. DGPV Holdco 3 owns an interest in two tax equity funds with tax equity investors, both of which are consolidated by DGPV Holdco 3, and the interests owned by the tax equity investors are shown as noncontrolling interests. The Company removed its investment in DGPV Holdco 3 of $155 million as of May 29, 2020 and recorded the difference between the net assets consolidated and the investment balance as a reduction to noncontrolling interests. The following table shows the balances that were consolidated effective on May 29, 2020:
(In millions) | May 29, 2020
Current assets | $ | 32 |
Property, plant and equipment | 331 |
Intangible assets | 1 |
Other non-current assets | 37 |
Total assets | $ | 401 |
Debt | 206 |
Other current and non-current liabilities | 84 |
Total liabilities | $ | 290 |
Noncontrolling interests and redeemable noncontrolling interests | 6 |
Net assets less noncontrolling interests | $ | 105 |
Prior to the reconsideration event described above, the Company invested $10 million of cash in DGPV Holdco 3 during the first half of 2020. DGPV Holdco Consolidation On November 2, 2020, the Company acquired the Class B membership interests in DGPV Holdco 1, DGPV Holdco 2 and DGPV Holdco 3, or DGPV Holdco Entities, from Renew DG Holdings LLC, a subsidiary of CEG, and an SREC contract for $44 million in cash consideration. The Company previously held the Class A membership interests in the DGPV Holdco Entities and accounted for its interests in DGPV Holdco 1 and DGPV Holdco 2 as equity method investments, while DGPV Holdco 3 was consolidated by the Company effective May 29, 2020 as described above. As further described in Note 7, Long-term Debt, subsequent to the acquisition of the remaining interests in the DGPV Holdco Entities, the Company transferred its interests to DG-CS Master Borrower LLC, and issued debt that was utilized to repay existing project-level debt outstanding and unwind interest rate swaps for certain of the tax equity arrangements related to the underlying project funds. Effective with the acquisition of the Class B membership interests of the DGPV Holdco Entities, the Company consolidates all of the DGPV Holdco Entities, including DG-CS Master Borrower LLC, and its subsidiaries, which consist of seven tax equity funds that collectively own approximately 172 distributed solar projects with a combined 286 MW of capacity. Each of the tax equity funds is a VIE, where the Company is the primary beneficiary and consolidates the fund, with the tax equity investor's interest shown as noncontrolling interest or redeemable noncontrolling interest. The acquired SREC contract, a contract to receive incremental cash flows related to renewable energy credits from certain of the underlying solar projects, will be considered a derivative financial instrument. Repowering Partnership II LLC On May 11, 2020, the Company acquired CEG's interest in Repowering Partnership II LLC, for cash consideration of $70 million. Repowering Partnership II LLC is no longer a VIE and subsequent to the acquisition, is a wholly-owned subsidiary of the Company. Repowering Partnership II LLC continues to own interests in two VIEs, Wildorado Repowering Tax Equity Holdco LLC, or Wildorado TE Holdco, and Elbow Creek Repowering Tax Equity Holdco LLC, or Elbow Creek TE Holdco. The Company removed the related noncontrolling interest balance of $8 million and recorded the difference between the cash paid and the noncontrolling interest balance removed as a reduction to noncontrolling interests. On February 7, 2020, a third party tax equity investor purchased 100% of the Class A membership interests in Wildorado TE Holdco, for $148 million. In addition, the Company contributed $112 million to Wildorado TE Holdco. The combined proceeds were used to repay construction debt under the Repowering Partnership Holdco credit agreement, as described in Note 7, Long-term Debt. The third party tax equity investor, or Wildorado Investor, will receive 99% of allocations of taxable income and other items until the Wildorado Investor obtains a specified return on its initial investment, or the last day of the PTC period, whichever occurs sooner. At such time, the allocations to the Wildorado Investor will change to 5%. Until such time, the Wildorado Investor will receive a variable percentage of cash distributions. Wildorado TE Holdco is a VIE and the Repowering Partnership II LLC is the primary beneficiary through its position as managing member. As a result, the Company consolidates Wildorado TE Holdco, with the Wildorado Investor's interest shown as noncontrolling interest. In connection with the Wildorado TE Holdco closing, the allocations of income at Repowering Partnership II LLC changed to 60.14% for Wind TE Holdco LLC (the Company member) and 39.86% for CWSP Wildorado Elbow Holding LLC (the CEG member). As noted above, CEG no longer has an interest in Repowering Partnership II LLC as of June 30, 2020. The Company utilizes the HLBV method to determine the net income or loss allocated to tax equity noncontrolling interest. The Company recorded a de minimis loss and a loss of $36 million attributable to the noncontrolling interest of Wildorado TE Holdco for the three and nine months ending September 30, 2020 and recorded a loss of $1 million and $9 million attributable to the noncontrolling interest of Elbow Creek TE Holdco for the three and nine months ending September 30, 2020, respectively. Entities that are not Consolidated The Company has interests in entities that are considered VIEs under ASC 810, but for which it is not considered the primary beneficiary. The Company accounts for its interests in these entities under the equity method of accounting, as further described in Note 5, Investments Accounted for by the Equity Method and Variable Interest Entities, to the consolidated financial statements included in the Company's 2019 Form 10-K. Mesquite Star Pledgor LLC On September 1, 2020, the Company, through its indirect subsidiary Mesquite Star HoldCo LLC, acquired the Class A membership interests in Mesquite Star Pledgor LLC from Clearway Renew LLC, a subsidiary of CEG, for $79 million in cash consideration. Mesquite Star Pledgor LLC is the primary beneficiary and consolidates its interest in a tax equity fund that owns the Mesquite Star wind project, a 419 MW utility scale wind project located in Fisher County, Texas. A majority of the project’s output is backed by contracts with investment grade counterparties with a 12 year weighted average contract life. The transaction is reflected in the Company's Renewables segment and was funded with cash on hand. Mesquite Star Pledgor LLC is a VIE and the Company is not the primary beneficiary. Accordingly, the Company recorded the acquired interest as an equity method investment. The membership interests acquired by the Company relate to interests under common control by GIP and were recorded at historical cost. The difference between the $79 million cash paid and the historical value of the Company's acquired interests of $83 million was recorded as an adjustment to noncontrolling interest. The Company's maximum exposure to loss as of September 30, 2020 is limited to its equity investment in the unconsolidated entities, as further summarized in the table below:
Name | Economic Interest | Investment Balance
|  | (In millions)
Utah Solar Portfolio (a) | 50% | $ | 268 |
Desert Sunlight | 25% | 257 |
Agua Caliente Solar | 16% | 89 |
GenConn | 50% | 90 |
DGPV Holdco 1 LLC (a) | 95% | 81 |
DGPV Holdco 2 LLC (a) | 95% | 63 |
San Juan Mesa | 75% | 42 |
Elkhorn Ridge | 66.7% | 39 |
Avenal | 50% | (5) |
Mesquite Star (a) | 50% | 77 |
|  | $ | 1,001 |
(a) VIEs and tax equity structures and economic interest are based on cash to be distributed The following tables present summarized financial information for the Company's significant equity method investments:
| Three months ended September 30, |  | Nine months ended September 30,
(In millions) | 2020 |  | 2019 |  | 2020 |  | 2019
Income Statement Data: |  |  |
DGPV Holdco 3 (a) |  |  |  |  |  |  |
Operating revenue | $ | — |  |  | $ | 9 |  |  | $ | 14 |  |  | $ | 22 |
Operating income | — |  |  | 6 |  |  | 6 |  |  | 11 |
Net income (loss) | $ | — |  |  | $ | 16 |  |  | $ | (12) |  |  | $ | 24 |
(a) Year to date as of the reconsideration event on May 29, 2020
(In millions) | As of September 30, 2020 |  | As of December 31, 2019
Balance Sheet Data: |
DGPV Holdco 3 (a) |  |  |
Current assets | $ | — |  |  | $ | 39 |
Non-current assets | — |  |  | 371 |
Current liabilities | — |  |  | 61 |
Non-current liabilities | — |  |  | 216 |
Redeemable noncontrolling interest | $ | — |  |  | $ | (1) |
(a) DGPV Holdco 3 was no longer an equity method investment as of the reconsideration event on May 29, 2020

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section S99 -Paragraph 4 -Subparagraph (SX 210.3A-04) -URI http://asc.fasb.org/extlink&oid=116822174&loc=d3e355119-122828 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI http://asc.fasb.org/topic&trid=2196965 + Details
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