XML 25 R14.htm IDEA: XBRL DOCUMENT
v3.22.2

Derivative Instruments and Hedging Activities | 6 Months Ended
--- | ---
Jun. 30, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments and Hedging Activities | 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 2021 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, 2022, the Company had interest rate derivative instruments on non-recourse debt extending through 2031, 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, 2022, the Company had energy-related derivative instruments extending through 2033. At June 30, 2022, 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 as of June 30, 2022 and December 31, 2021:
|  |  | Total Volume
|  |  | June 30, 2022 |  | December 31, 2021
Commodity | Units |  | (In millions)
Natural Gas | MMBtu |  | — |  |  | 2 |
Power | MWh |  | (19) |  |  | (17) |
Interest | Dollars |  | $ | 1,200 |  |  | $ | 1,326 |
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, 2022 |  | December 31, 2021 |  | June 30, 2022 |  | December 31, 2021
| (In millions)
Derivatives Designated as Cash Flow Hedges: |  |  |  |  |  |  |
Interest rate contracts current | $ | 2 |  |  | $ | — |  |  | $ | — |  |  | $ | 5 |
Interest rate contracts long-term | 8 |  |  | 2 |  |  | — |  |  | 3 |
Total Derivatives Designated as Cash Flow Hedges | $ | 10 |  |  | $ | 2 |  |  | $ | — |  |  | $ | 8 |
Derivatives Not Designated as Cash Flow Hedges: |  |  |  |  |  |  |
Interest rate contracts current | $ | 7 |  |  | $ | — |  |  | $ | 1 |  |  | $ | 17 |
Interest rate contracts long-term | 27 |  |  | 4 |  |  | 1 |  |  | 38 |
Commodity contracts current | — |  |  | — |  |  | 74 |  |  | 24 |
Commodity contracts long-term | — |  |  | — |  |  | 279 |  |  | 155 |
Total Derivatives Not Designated as Cash Flow Hedges | $ | 34 |  |  | $ | 4 |  |  | $ | 355 |  |  | $ | 234 |
Total Derivatives | $ | 44 |  |  | $ | 6 |  |  | $ | 355 |  |  | $ | 242 |
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, 2022 and December 31, 2021, there was no outstanding collateral paid or received. The following tables summarize the offsetting of derivatives by counterparty:
| Gross Amounts Not Offset in the Statement of Financial Position
As of June 30, 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 | $ | 44 |  |  | $ | (2) |  |  | $ | 42 |
Derivative liabilities | (2) |  |  | 2 |  |  | — |
Total interest rate contracts | $ | 42 |  |  | $ | — |  |  | $ | 42 |
Total derivative instruments | $ | (311) |  |  | $ | — |  |  | $ | (311) |
| Gross Amounts Not Offset in the Statement of Financial Position
As of December 31, 2021 | Gross Amounts of Recognized Assets/Liabilities |  | Derivative Instruments |  | Net Amount
Commodity contracts | (In millions)
Derivative liabilities | $ | (179) |  |  | $ | — |  |  | $ | (179) |
Total commodity contracts | $ | (179) |  |  | $ | — |  |  | $ | (179) |
Interest rate contracts: |
Derivative assets | $ | 6 |  |  | $ | (5) |  |  | $ | 1 |
Derivative liabilities | (63) |  |  | 5 |  |  | (58) |
Total interest rate contracts | $ | (57) |  |  | $ | — |  |  | $ | (57) |
Total derivative instruments | $ | (236) |  |  | $ | — |  |  | $ | (236) |
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,
| 2022 |  | 2021 |  | 2022 |  | 2021
| (In millions)
Accumulated OCI (OCL) beginning balance | $ | 3 |  |  | $ | (19) |  |  | $ | (11) |  |  | $ | (30) |
Reclassified from accumulated OCI (OCL) to income due to realization of previously deferred amounts | 1 |  |  | 2 |  |  | 3 |  |  | 4 |
Mark-to-market of cash flow hedge accounting contracts | 5 |  |  | (2) |  |  | 17 |  |  | 7 |
Accumulated OCI (OCL) ending balance, net of income tax (benefit) expense of $—, $(4) ,$1 and $(4), respectively | 9 |  |  | (19) |  |  | 9 |  |  | (19) |
Accumulated OCI (OCL) attributable to noncontrolling interests | 7 |  |  | (10) |  |  | 7 |  |  | (10) |
Accumulated OCI (OCL) attributable to Clearway Energy, Inc. | $ | 2 |  |  | $ | (9) |  |  | $ | 2 |  |  | $ | (9) |
Losses expected to be realized from OCI during the next 12 months, net of income tax benefit of $— | $ | (1) |  |  |  |  | $ | (1) |  |  |
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 and 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,
| 2022 |  | 2021 |  | 2022 |  | 2021
| (In millions)
Interest Rate Contracts (Interest expense) | $ | 36 |  |  | $ | (11) |  |  | $ | 77 |  |  | $ | 36 |
Commodity Contracts (Mark-to-market for economic hedging activities) (a) | (49) |  |  | (28) |  |  | (174) |  |  | (50) |
(a) Relates to long-term commodity contracts at Elbow Creek Wind Project LLC, or Elbow Creek, Mesquite Star, Mt. Storm, Langford and Mesquite Sky and gains or losses are recognized in operating revenues. 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 market value through operating revenues. Prior to the Thermal Disposition, which is further described in Note 3, Acquisitions and Dispositions, a portion of the Company’s derivative commodity contracts were related to its Thermal Business for the purchase of fuel/electricity commodities based on the forecasted usage of the thermal district energy centers. Realized gains and losses on these contracts were reflected in the fuel costs that were permitted to be billed to customers through the related customer contracts or tariffs and, accordingly, no gains or losses were reflected in the consolidated statements of income for these contracts through the period that the Company owned the Thermal Business. See Note 5, Fair Value of Financial Instruments, for a discussion regarding concentration of credit risk.

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 5 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123477628&loc=d3e90205-114008 + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration