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Energy Assets, Net | 12 Months Ended
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Dec. 31, 2023
Other Assets [Abstract] |
Energy Assets, Net | ENERGY ASSETS, NET Energy assets, net consisted of the following:
| December 31,
| 2023 |  | 2022
Energy assets (1) | $ | 2,054,145 |  |  | $ | 1,493,913 |
Less: accumulated depreciation and amortization | (364,721) |  |  | (312,388) |
Energy assets, net | $ | 1,689,424 |  |  | $ | 1,181,525 |
(1) Includes financing lease assets (see Note 8), capitalized interest and ARO assets (see tables below). Also includes the energy asset project acquired in August 2023. See section below for additional information.
Energy Asset Acquisitions In order to expand our portfolio of energy assets, we have acquired energy projects, which did not constitute businesses under the guidance discussed in Note 2. August 2023 Purchase and Sale Agreement On August 4, 2023, we entered into a purchase and sale agreement to acquire an energy asset project and rights to acquire 100% of the stock of Bright Canyon Energy Corporation (“BCE”) in a two-phased transaction exclusive of each other. Phase 1, the purchase of the energy asset project, closed on August 4, 2023 and did not constitute a business in accordance with ASC 805-50, Business Combinations. The adjusted purchase price for phase 1 was $87,964, of which $5,000 was paid in cash, $46,694 was financed through a seller’s note, and we assumed a construction loan on the energy asset project for $36,270. We also acquired cash of $11,206. During the year ended December 31, 2023, we paid $18,400 in principal on the sellers note and at December 31, 2023, the balance of the seller’s note was $28,294. See Note 9 for additional information about these loans. We agreed to sell back to the seller investment tax credits for the project acquired as part of this transaction for the fair market value of these credits in early in 2024 and recorded $20,970 in other receivables which is included in prepaid expenses and other current assets in the consolidated balance sheets. This amount was collected in January 2024. We also assumed a land lease for the energy asset project. See Note 8. for additional information on the lease. On December 28, 2023, we executed an amended and restated purchase and sale agreement, which primarily revised the timing of payments on phase 2. In the second phase, which closed on January 12, 2024, we acquired BCE, including its interest in a consolidated joint venture and its interests in project subsidiaries developing or with rights to develop solar, battery, and microgrid assets for a purchase price of $39,100. November 2023 Purchase Agreement On November 1, 2023, we purchased a solar asset project for $3,128, of which $1,251 has been paid to date. The remaining balance of $1,877 is included in accrued expenses and other current liabilities in the consolidated balance sheets at December 31, 2023. The payments are due when certain conditions as outlined in the agreement are met. 2022 Energy Asset Acquisitions During the year ended December 31, 2022, we purchased two energy projects, one solar and one wind, for $11,022. Depreciation and Amortization The following table sets forth our depreciation and amortization expense on energy assets, net of deferred grant amortization:
| Year Ended December 31,
Location | 2023 |  | 2022 |  | 2021
Cost of revenues (1) | $ | 59,390 |  |  | $ | 49,755 |  |  | $ | 43,113 |
(1) Includes depreciation and amortization expense on financing lease assets. See Note 8.
Capitalized Interest The following table presents the interest costs relating to construction financing during the period of construction, which were capitalized as part of energy assets, net:
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
Capitalized interest | $ | 43,561 |  |  | $ | 13,050 |  |  | $ | 2,814 |
Long-lived Asset Impairment During December 2023, there was a triggering event which caused us to perform an impairment analysis on an energy asset group. The triggering event was related to the requirement to shut down the plant and replace transmission lines due to transfer trip issues. We determined that the cost to overhaul the transfer trip line would be cost prohibitive, therefore, we made a decision to shut the plant down. As a result, we recorded an impairment charge of $1,298, which fully impaired this asset group. During December 2023, there was an additional energy asset group that had successive years of losses, the PPA expires in November 2024, and we expect losses to continue in 2024, therefore, we recorded an impairment charge of $311, which fully impaired this asset group. Both of these asset groups were within the Alternative Fuels segment. During September 2021, there was a triggering event which caused us to perform an impairment analysis on an energy asset group within the Alternative Fuels segment. This triggering event was related to a decision by the applicable state environmental agency to discontinue an environmental permit. This action materially modified the obligation of the landfill owner to continue maintaining the wellfield, therefore, we plan to decommission the impacted landfill gas plant. As a result, we recorded an impairment charge of $1,901, which fully impaired this asset group. The impairment charges are included in asset impairments within the consolidated statements of income for the years ended December 31, 2023 and 2021. There were no impairment charges for the year ended December 31, 2022. Customer Energy Asset Projects We include certain customer energy asset projects in our energy assets, as we control and operate the assets as well as obtain financing during the construction and operating periods of the assets. We also carry a liability associated with these energy assets as we have an obligation to the customer for performance of the asset. Provided that performance criteria are met, the customer is responsible for repayment of the liability to the financing party. As of December 31, 2023 there were six energy asset projects which were included in energy assets and as of December 31, 2022, there were five. The liabilities recognized in association with these customer energy assets were as follows:
| December 31,
Location | 2023 |  | 2022
Accrued expenses and other current liabilities | $ | 598 |  |  | $ | 261 |
Other liabilities | 41,680 |  |  | 27,168 |
Total customer energy asset projects liability | $ | 42,278 |  |  | $ | 27,429 |
ARO Assets and ARO Liabilities Our ARO assets and ARO liabilities relate to the removal of equipment and pipelines at certain renewable gas projects and obligations related to the decommissioning of certain solar facilities. The following tables sets forth information related to our ARO assets and ARO liabilities:
|  | December 31,
| Location | 2023 |  | 2022
ARO assets, net | Energy assets, net | $ | 4,800 |  |  | $ | 2,359 |
ARO liabilities, non-current | Other liabilities | $ | 5,960 |  |  | $ | 3,052 |
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
Depreciation expense of ARO assets | $ | 215 |  |  | $ | 146 |  |  | $ | 113 |
Accretion expense of ARO liabilities | $ | 258 |  |  | $ | 146 |  |  | $ | 123 |

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