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Project Assets | 12 Months Ended
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Oct. 31, 2019
Project Assets [Abstract] |
Project Assets | Note 7. Project Assets Project assets as of October 31, 2019 and 2018 were $144.1 million and $99.6 million, respectively. As of October 31, 2019, the gross project asset values were $160.0 million and $107.7 million, respectively, and the project asset accumulated depreciation was $15.9 million and $8.1 million, respectively. The estimated useful lives of these project assets are 20 years for balance of plant and site construction, and 5 to 7 years for modules. The Bridgeport Fuel Cell Project is being depreciated based on similar useful lives adjusted for time elapsed prior to the acquisition. Project assets as of October 31, 2019 and 2018 included six and five, respectively, completed, commissioned installations generating power with respect to which the Company has a PPA with the end-user of power and site host with an aggregate value of $59.2 million and $28.6 million as of October 31, 2019 and 2018, respectively. Certain of these assets are the subject of sale-leaseback arrangements with PNC, which are accounted for using the financing method. The increase in project assets is primarily a result of the acquisition of the Bridgeport Fuel Cell Project. Project assets as of October 31, 2019 and 2018 also includes installations with carrying values of $84.9 million and $71.0 million, respectively, which are being developed and constructed by the Company under existing PPAs and have not been placed in service. During the year ended October 31, 2019, the Company recorded project asset impairment charges for (i) the Triangle Street Project and (ii) the Bolthouse Farms Project, which are further described as follows:
| i. | Impairment charge for the Triangle Street Project: In the fourth quarter of fiscal 2019, management determined that it will not be able to secure a PPA with terms acceptable to the Company for the Triangle Street Project. Therefore, it is management’s current intention to operate the project under a merchant model for the next 5 years. The project will sell power through the Connecticut grid under wholesale tariff rates and Renewable Energy Credits (RECs) to market participants. As a result of management’s decision to operate the project in this manner, an impairment charge of $14.4 million was recorded in the fourth quarter of fiscal 2019. The amount of the impairment charge was determined by comparing the estimated discounted cash flows of the project and the expected residual value of the project to its carrying value. Management expects to continue to pursue economic enhancements for this project, but cannot currently assess the probability of closing on a revenue contract for the power above wholesale market rates.
| ii. | Impairment charge for the Bolthouse Farms Project: An impairment charge for the Bolthouse Farms Project was recorded as management has decided to pursue termination of the PPA given recent regulatory changes impacting the future cost profile for the Company and Bolthouse Farms. Since it is considered probable that the PPA will be terminated, a $3.1 million impairment charge was recorded, which reflects the difference between the carrying value of the asset and the value of the components that are expected to be redeployed to other projects. This project was removed from the Company’s backlog as of October 31, 2019.
The Company recorded a $0.5 million impairment of a project asset during the year ended October 31, 2018 due to the termination of a project. The impairments for both years were recorded as “Cost of generation revenues” in the Consolidation Statements of Operations. Depreciation expense for project assets was $6.8 million, $4.1 million and $4.1 million for the years ended October 31, 2019, 2018 and 2017, respectively. Project construction costs incurred for long-term project assets are reported as investing activities in the Consolidated Statements of Cash Flows. The proceeds received from the sale and subsequent leaseback of project assets are classified as “Cash flows from financing activities” within the Consolidated Statements of Cash Flows and are classified as a financing obligation within “Current portion of long-term debt” and “Long-term debt and other liabilities” on the Consolidated Balance Sheets (refer to Note 13. “Debt” for more information).

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