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Accounting for Derivative Instruments and Hedging Activities
 12 Months Ended
Dec. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Accounting for Derivative Instruments and Hedging Activities Accounting for Derivative Instruments and Hedging Activities
ASC 815 requires the Company to recognize all derivative instruments on the balance sheet as either assets or liabilities and to measure them at fair value each reporting period unless they qualify for a NPNS exception. The Company may elect to designate certain derivatives as cash flow hedges, if certain conditions are met, and defer the change in fair value of the derivatives to accumulated OCI/OCL, until the hedged transactions occur and are recognized in earnings. For derivatives that are not designated as cash flow hedges or do not qualify for hedge accounting treatment, the changes in the fair value will be immediately recognized in earnings. Certain derivative instruments may qualify for the NPNS exception and are therefore exempt from fair value accounting treatment. ASC 815 applies to the Company’s energy-related commodity contracts and interest rate swaps.
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 December 31, 2024, the Company had interest rate derivative instruments on non-recourse debt extending through 2033, 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 Commodity Contracts
As of December 31, 2024, the Company had energy-related derivative instruments extending through 2033. At December 31, 2024, 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:
Total Volume
December 31, 2024December 31, 2023
CommodityUnits(In millions)
PowerMWh(25)(23)
Natural GasMMBtu11 17 
InterestDollars$1,769 $2,467 
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
December 31, 2024December 31, 2023December 31, 2024December 31, 2023
(In millions)
Derivatives Designated as Cash Flow Hedges:    
Interest rate contracts current$5 $7 $— $— 
Interest rate contracts long-term22 12 — 2 
Total Derivatives Designated as Cash Flow Hedges
$27 $19 $— $2 
Derivatives Not Designated as Cash Flow Hedges:    
Interest rate contracts current$30 $33 $— $— 
Interest rate contracts long-term109 69 — — 
Energy-related commodity contracts current 4 1 56 51 
Energy-related commodity contracts long-term
5 1 315 279 
Total Derivatives Not Designated as Cash Flow Hedges$148 $104 $371 $330 
Total Derivatives$175 $123 $371 $332 
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 December 31, 2024 and 2023, the amount of outstanding collateral paid or received was immaterial. The following tables summarize the offsetting of derivatives by counterparty:
Gross Amounts Not Offset in the Statement of Financial Position
As of December 31, 2024Gross Amounts of Recognized Assets/LiabilitiesDerivative InstrumentsNet Amount
Energy-related commodity contracts(In millions)
Derivative assets$9 $— $9 
Derivative liabilities(371)— (371)
Total energy-related commodity contracts$(362)$— $(362)
Interest rate contracts
Derivative assets$166 $— $166 
Total interest rate contracts$166 $— $166 
Total derivative instruments$(196)$— $(196)
Gross Amounts Not Offset in the Statement of Financial Position
As of December 31, 2023Gross Amounts of Recognized Assets/LiabilitiesDerivative InstrumentsNet Amount
Energy-related commodity contracts(In millions)
Derivative assets$2 $— $2 
Derivative liabilities(330)— (330)
Total energy-related commodity contracts$(328)$— $(328)
Interest rate contracts
Derivative assets$121 $(2)$119 
Derivative liabilities(2)2 — 
Total interest rate contracts$119 $— $119 
Total derivative instruments$(209)$— $(209)
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:
Year ended December 31,
202420232022
(In millions)
Accumulated OCI (OCL) beginning balance$18 $24 $(11)
Reclassified from accumulated OCI (OCL) to income due to realization of previously deferred amounts(1)(4)4 
Capistrano Wind Portfolio Acquisition (a)
— — 7 
Mark-to-market of cash flow hedge accounting contracts(3)(2)24 
Accumulated OCI ending balance, net of income tax expense of $1, $2 and $3, respectively
14 18 24 
Accumulated OCI attributable to noncontrolling interests11 11 15 
Accumulated OCI attributable to Clearway Energy, Inc.$3 $7 $9 
Income expected to be realized from OCI during the next 12 months, net of income tax expense of $1
$1 
(a) Represents $4 million attributable to Clearway Energy, Inc. and $3 million attributable to noncontrolling interests.
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/(losses) related to the Company’s derivatives are recorded in the consolidated statements of income as follows:
Year ended December 31,
202420232022
(In millions)
Interest Rate Contracts (Interest expense)$29 $(17)$100 
Energy-Related Commodity Contracts (Mark-to-market for economic hedging activities included in Total operating revenues) (a)
(32)23 (174)
Energy-Related Commodity Contracts (Mark-to-market for economic hedging activities included in Cost of operations) (b)
(2)2 — 
(a) Relates to long-term energy-related commodity contracts at Elbow Creek, Mesquite Star, Mt. Storm, Langford and Mesquite Sky and heat rate call option energy-related commodity contracts at El Segundo, Marsh Landing and Walnut Creek.
(b) Relates to long-term backbone transportation service energy-related commodity contracts at El Segundo and Walnut Creek.
See Note 6, Fair Value of Financial Instruments, for a discussion regarding concentration of credit risk.