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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Effective Tax Rate
The income tax provision consisted of the following amounts:
 Year Ended December 31,
 202420232022
 (In millions)
Current  
U.S. Federal$1 $(13)$— 
State4 (2)28 
Total — current5 (15)28 
Deferred   
U.S. Federal$22 $13 $150 
State3 — 44 
Total — deferred25 13 194 
Total income tax expense (benefit) $30 $(2)$222 
As further described in Note 2, Summary of Significant Accounting Policies, the Company has elected to prospectively adopt the guidance in ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Taxes Disclosures, or ASU 2023-09. The following table is a reconciliation of the U.S. federal statutory rate of 21% to the Company’s effective rate for the year ended December 31, 2024 in accordance with the guidance in ASU No. 2023-09:
 Year Ended December 31,
 2024
 (In millions, except percentages)
Loss Before Income Taxes$(33)
Tax at 21%(7)21.0 %
State taxes, net of federal benefit (a)
6 (18.2)%
Tax credits(4)12.1 %
Nontaxable/nondeductible items:
HLBV impact32 (96.9)%
Employee share-based payments2 (6.0)%
Other 1 (2.9)%
Income tax expense$30 (90.9)%
Effective income tax rate(90.9)%
(a) State taxes in California made up the majority of the tax effect in this category.
The following table is a reconciliation of the U.S. federal statutory rate of 21% to the Company’s effective rate for the years ended December 31, 2023 and 2022 in accordance with the guidance prior to the adoption of ASU 2023-09:
 Year Ended December 31,
 20232022
 (In millions, except percentages)
(Loss) Income Before Income Taxes$(16)$1,282 
Tax at 21%(3)269 
State taxes, net of federal benefit(2)58 
Impact of non-taxable partnership earnings (losses)21 (101)
Valuation allowance3 — 
Investment tax credits(1)— 
Production tax credits (a)
(16)(2)
Rate change1 (2)
State taxes assessed at subsidiaries(3)2 
Other (2)(2)
Income tax (benefit) expense$(2)$222 
Effective income tax rate12.5 %17.3 %
(a) On December 6, 2023, the Company executed an agreement with a third party to sell the PTCs generated by the Alta X and Alta XI wind facilities, which resulted in a $14 million income tax benefit (reduction to income tax expense) during the year ended December 31, 2023.
For the year ended December 31, 2024, the overall effective tax rate was different than the statutory rate of 21% primarily due to the allocation of taxable earnings and losses based on the partners’ interest in Clearway Energy LLC, which includes the effects of applying the HLBV method of accounting for book purposes for certain partnerships.
For the year ended December 31, 2023, the overall effective tax rate was different than the statutory rate of 21% primarily due to the allocation of taxable earnings and losses based on the partners’ interest in Clearway Energy LLC, which includes the effects of applying the HLBV method of accounting for book purposes for certain partnerships, partially offset by the impact of PTCs generated.
For the year ended December 31, 2022, the overall effective tax rate was different than the statutory rate of 21% primarily due to the allocation of taxable earnings and losses, including the gain on the sale of the Thermal Business, based on the partners’ interest in Clearway Energy LLC, which includes the effects of applying the HLBV method of accounting for book purposes for certain partnerships.
For tax purposes, Clearway Energy LLC is treated as a partnership; therefore, the Company and CEG each record their respective share of taxable income or loss.
The temporary differences, which gave rise to the Company’s deferred tax balances consisted of the following:
 As of December 31,
 20242023
 (In millions)
Deferred tax liabilities:
Investment in projects$191 $241 
Total deferred tax liabilities191 241 
Deferred tax assets: 
Interest expense disallowance carryforward - Investment in Projects$18 $17 
Production tax credits 16 15 
Investment tax credits7 6 
U.S. Federal net operating loss carryforwards58 73 
State net operating loss carryforwards7 7 
Total deferred tax assets106 118 
Valuation allowance(4)(4)
Total deferred tax assets, net of valuation allowance102 114 
Net deferred non-current tax liability$(89)$(127)
Tax Receivable
As of December 31, 2024, the Company had a $9 million tax receivable.
Deferred Tax Balances and Valuation Allowance
Net deferred tax balances — As of December 31, 2024 and 2023, the Company recorded a net deferred tax liability of $89 million and $127 million, respectively. The Company believes it is more likely than not that the results of future operations will generate sufficient taxable income, which includes the future reversal of existing taxable temporary differences to realize deferred tax assets. The Company considered the profit before tax generated in recent years as well as projections of future earnings and estimates of taxable income in arriving at this conclusion. The Company believes that $4 million of existing state NOLs, based on forecasted future earnings and estimated taxable income, will expire unutilized, resulting in the recording of a valuation allowance.
NOL and Tax Credit carryforwards — As of December 31, 2024, the Company had tax-effected domestic NOL carryforwards for federal income tax purposes of $58 million. Additionally, the Company has a cumulative tax-effected state NOL carryforward of $7 million, which will expire between 2025 and 2041 if unutilized. In addition, the Company has PTC and ITC carryforward balances totaling $23 million, which will expire between 2035 and 2044 if unutilized.
Income Tax Payments
During the year ended December 31, 2024, the Company paid $1 million in federal income taxes. Additionally, the amount paid in state income taxes, net of refunds received, was immaterial for the year ended December 31, 2024.
Uncertain Tax Positions
The Company has not identified any material uncertain tax positions to be reported as of December 31, 2024.