Clearway Energy LLC

08/06/2025 | Press release | Distributed by Public on 08/06/2025 04:01

Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and the Results of Operations
The following discussion analyzes the Company's historical financial condition and results of operations.
As you read this discussion and analysis, refer to the Company's consolidated financial statements to this Form 10-Q, which present the results of operations for the three and six months ended June 30, 2025 and 2024. Also refer to the Company's 2024 Form 10-K, which includes detailed discussions of various items impacting the Company's business, results of operations and financial condition.
The discussion and analysis below has been organized as follows:
•Executive Summary, including a description of the business and significant events that are important to understanding the results of operations and financial condition;
•Results of operations, including an explanation of significant differences between the periods in the specific line items of the consolidated statements of operations;
•Financial condition addressing liquidity position, sources and uses of cash, capital resources and requirements, commitments and off-balance sheet arrangements;
•Known trends that may affect the Company's results of operations and financial condition in the future; and
•Critical accounting policies which are most important to both the portrayal of the Company's financial condition and results of operations, and which require management's most difficult, subjective or complex judgment.
Executive Summary
Introduction and Overview
Clearway Energy LLC, together with its consolidated subsidiaries, or the Company, is an energy infrastructure investor with a focus on investments in clean energy and owner of modern, sustainable and long-term contracted assets across North America. The Company is sponsored by Clearway Energy Group LLC, or CEG, which is equally owned by GIP and TotalEnergies.
The Company is one of the largest owners of clean energy generation assets in the U.S. The Company's portfolio comprises approximately 12 GW of gross capacity in 27 states, including approximately 9.2 GW of wind, solar and battery energy storage systems, or BESS, and approximately 2.8 GW of dispatchable combustion-based power generation assets included in the Flexible Generation segment that provide critical grid reliability services. Through this environmentally-sound, diversified and primarily contracted portfolio, the Company endeavors to provide its investors with stable and growing distributions.The majorityof the Company's revenues are derived from long-term contractual arrangements for the output or capacity from these assets. The weighted average remaining contract duration of the Company's Renewables & Storage segment offtake agreements was approximately 11 years as of June 30, 2025based on CAFD.
As of June 30, 2025, the Company's operating assets are comprised of the following facilities:
Capacity
Percentage Rated Net Contract
Facilities Ownership MW
MW (a)
Counterparty Expiration
Flexible Generation
Carlsbad 100 % 527 527 SDG&E 2038
El Segundo 100 % 546 546 Various 2027 - 2029
GenConn Devon 50 % 190 95 Connecticut Light & Power 2040
GenConn Middletown 50 % 190 95 Connecticut Light & Power 2041
Marsh Landing 100 % 820 820 Various 2026 - 2030
Walnut Creek 100 % 501 501 Various 2026 - 2027
Total Flexible Generation 2,774 2,584
Utility Scale Solar
Agua Caliente 51 % 290 148 PG&E 2039
Alpine 100 % 66 66 PG&E 2033
Arica (b)
40 % 263 105 Various 2026 - 2041
Avenal 50 % 45 23 PG&E 2031
Avra Valley 100 % 27 27 Tucson Electric Power 2032
Blythe 100 % 21 21 SCE 2029
Borrego 100 % 26 26 SDG&E 2038
Buckthorn Solar (b)
100 % 150 150 City of Georgetown, TX 2043
CVSR 100 % 250 250 PG&E 2038
Daggett 2 (b)
25 % 182 46 Various 2038
Daggett 3 (b)
25 % 300 75 Various 2033 - 2038
Desert Sunlight 250 25 % 250 63 SCE 2034
Desert Sunlight 300 25 % 300 75 PG&E 2039
Enterprise 100 % 80 80 PacifiCorp 2036
Escalante I 100 % 80 80 PacifiCorp 2036
Escalante II 100 % 80 80 PacifiCorp 2036
Escalante III 100 % 80 80 PacifiCorp 2036
Granite Mountain East 100 % 80 80 PacifiCorp 2036
Granite Mountain West 100 % 50 50 PacifiCorp 2036
Iron Springs 100 % 80 80 PacifiCorp 2036
Kansas South 100 % 20 20 PG&E 2033
Mililani I(b)
50 % 39 20 Hawaiian Electric Company 2042
Oahu Solar (b)
100 % 61 61 Hawaiian Electric Company 2041
Roadrunner 100 % 20 20 El Paso Electric 2031
Capacity
Percentage Rated Net Contract
Facilities Ownership MW
MW (a)
Counterparty Expiration
Rosamond Central (b)
50 % 192 96 Various 2035 - 2047
TA High Desert 100 % 20 20 SCE 2033
Texas Solar Nova 1 (b)
50 % 252 126 Verizon 2042
Texas Solar Nova 2 (b)
50 % 200 100 Verizon 2042
Victory Pass (b)
40 % 200 80 Various 2039
Waiawa (b)
50 % 36 18 Hawaiian Electric Company 2043
Total Utility Scale Solar 3,740 2,166
Utility Scale BESS
Arica (b)
40 % 136 54 Various 2039 - 2041
Daggett 2 (b)
25 % 131 33 Various 2038
Daggett 3 (b)
25 % 149 37 Various 2033 - 2038
Mililani I(b)
50 % 39 20 Hawaiian Electric Company 2042
Rosamond Central (b)
50 % 147 74 SCE 2039
Victory Pass (b)
40 % 50 20 Various 2039
Waiawa (b)
50 % 36 18 Hawaiian Electric Company 2043
Total Utility Scale BESS 688 256
Distributed Solar
DGPV Funds (b)
100 % 286 286 Various 2030 - 2044
Solar Power Partners (SPP) 100 % 24 24 Various 2026 - 2037
Other DG Facilities 100 % 20 20 Various 2025 - 2039
Total Distributed Solar 330 330
Wind
Alta I 100 % 150 150 SCE 2035
Alta II 100 % 150 150 SCE 2035
Alta III 100 % 150 150 SCE 2035
Alta IV 100 % 102 102 SCE 2035
Alta V 100 % 168 168 SCE 2035
Alta X
100 % 137 137 SCE 2038
Alta XI
100 % 90 90 SCE 2038
Black Rock (b)
50 % 115 58 Toyota and Google 2036
Broken Bow 100 % 80 80 Nebraska Public Power District 2032
Buffalo Bear 100 % 19 19 Western Farmers Electric Co-operative 2033
Cedar Creek (b)
100 % 160 160 PacifiCorp 2049
Cedro Hill (b)
100 % 160 160 CPS Energy 2045
Crofton Bluffs 100 % 42 42 Nebraska Public Power District 2032
Dan's Mountain (b)
50 % 55 28 Constellation Energy Generation 2034
Elbow Creek (b)
100 % 122 122 Various 2029
Elkhorn Ridge 66.7 % 81 54 Nebraska Public Power District 2029
Forward 100 % 29 29 Constellation NewEnergy, Inc. 2025
Goat Wind 100 % 150 150 Dow Pipeline Company 2026
Langford (b)
100 % 160 160 Goldman Sachs 2033
Laredo Ridge 100 % 81 81 Nebraska Public Power District 2031
Lookout 100 % 38 38 Southern Maryland Electric Cooperative 2030
Mesquite Sky(b)
50 % 340 170 Various 2033 - 2036
Mesquite Star (b)
50 % 419 210 Various 2032 - 2035
Mountain Wind 1 100 % 61 61 PacifiCorp 2033
Mountain Wind 2 100 % 80 80 PacifiCorp 2033
Capacity
Percentage Rated Net Contract
Facilities Ownership MW
MW (a)
Counterparty Expiration
Mt. Storm 100 % 264 264 Citigroup 2031
Ocotillo 100 % 55 55 N/A
Pinnacle (b)
100 % 54 54 Maryland Department of General Services and University System of Maryland 2031
Rattlesnake (b) (c)
100 % 160 160 Avista Corporation 2040
San Juan Mesa 75 % 120 90 Southwestern Public Service Company 2026
Sleeping Bear 100 % 95 95 Public Service Company of Oklahoma 2032
South Trent 100 % 101 101 AEP Energy Partners 2029
Spanish Fork 100 % 19 19 PacifiCorp 2028
Spring Canyon II
90.1 % 34 31 Platte River Power Authority 2039
Spring Canyon III
90.1 % 29 26 Platte River Power Authority 2039
Taloga 100 % 130 130 Oklahoma Gas & Electric 2031
Tuolumne 100 % 137 137 Turlock Irrigation District 2040
Wildorado(b)
100 % 161 161 Southwestern Public Service Company 2030
Total Wind 4,498 3,972
Total Clearway Energy LLC 12,030 9,308
(a) Net capacity represents the maximum, or rated, generating or storage capacity of the facility multiplied by the Company's percentage ownership in the facility as of June 30, 2025.
(b) Facilities are part of tax equity arrangements, as further described in Note 4, Investments Accounted for by the Equity Method and Variable Interest Entities.
(c) Rattlesnake has a deliverable capacity of 144 MW.
Significant Events
Third-Party Acquisitions
•On July 16, 2025, the Company, through its indirect subsidiary, Catalina Solar Investment LLC, acquired Catalina Solar Lessee Holdco LLC, which leases and operates the Catalina solar facility, from a third-party for approximately $127 million. The Company estimates that its net capital investment in Catalina will be $125 million after factoring in cash acquired and estimated transaction expenses. See Note 3, Acquisitions, for further discussion of the transaction.
•On April 29, 2025, the Company, through its indirect subsidiary, Washington Wind LLC, acquired the Tuolumne wind facility from an investment-grade regulated entity for approximately $210 million, which excludes $1 million in transaction expenses incurred in connection with the acquisition during the six months ended June 30, 2025. The Company's net capital investment in Tuolumne was $59 million, and the acquisition was also funded through the issuance of a $163 million term loan. See Note 3, Acquisitions, and Note 7, Long-term Debt, for further discussion of the transactions.
Drop Down Transactions
•On June 10, 2025, the Company,through its indirect subsidiary, Pine Forest CE Class A Owner LLC, acquired the Class A membership interests in Pine Forest TargetCo, a partnership and the indirect owner of the Pine Forest solar and BESS facility, from Clearway Renew for initial cash consideration of $18 million. Simultaneously, a third-party cash equity investor acquired the Class B membership interests in Pine Forest TargetCo from Clearway Renew for initial cash consideration of $36 million. Also on June 10, 2025, Clearway, Inc., through its indirect subsidiary, Pine Forest TE Class A, contributed $9 million to acquire the Class A membership interests in Pine Forest TE HoldCo LLC. At substantial completion, which is expected to occur in the second half of 2025, the Company estimates it will pay an additional $72 million to Clearway Renew for its Class A membership interests in Pine Forest TargetCo and Clearway, Inc. will contribute an additional $37 million for its Class A membership interests in Pine Forest TE HoldCo LLC. In addition, the third-party cash equity investor in Pine Forest TargetCo is expected to contribute an additional $144 million. The Company estimates that its total capital investment in Pine Forest TargetCo will be $90 million, excluding the impact of any closing adjustments noted in the purchase agreement. See Note 3, Acquisitions, for further discussion of the transaction.
•On April 29, 2025, the Company, through its indirect subsidiary, LV-Daggett Parent Holdco LLC,acquired Luna Valley Class B, the indirect owner of the Luna Valley solar facility, fromClearway Renew for initial cash consideration of $18 million. At substantial completion, which is expected to occur in the second half of 2025, the Company estimates it will pay an additional $72 million to Clearway Renew. The Company estimates that its total capital investment in Luna Valley Class B will be $90 million, excluding the impact of any closing adjustments noted in the purchase agreement. See Note 3, Acquisitions, for further discussion of the transaction.
•On April 29, 2025, the Company, through its indirect subsidiary, LV-Daggett Parent Holdco LLC, acquired Daggett 1 Class B, the indirect owner of the Daggett 1 BESS facility, from Clearway Renew for initial cash consideration of $11 million. At substantial completion, which is expected to occur in the second half of 2025, the Company estimates it will pay an additional $42 million to Clearway Renew. The Company estimates that its total capital investment in Daggett 1 Class B will be $53 million, excluding the impact of any closing adjustments noted in the purchase agreement. See Note 3, Acquisitions, for further discussion of the transaction.
•On March 20, 2025, the Company, through its indirect subsidiary, Rosamond South Investment LLC,acquired the Class A membership interests in Rosie South TargetCo, a partnership and the indirect owner of the Rosamond South I solar and BESS facility, from Clearway Renew for initial cash consideration of $4 million. Simultaneously, a third-party cash equity investor acquired the Class B membership interests in Rosie South TargetCo from Clearway Renew for initial cash consideration of $10 million. At substantial completion, which is expected to occur in the second half of 2025, the Company estimates it will pay an additional $17 million to Clearway Renew and the third-party cash equity investor will contribute an additional $41 million. The Company estimates that its total capital investment in Rosie South TargetCo will be $21 million, excluding the impact of any closing adjustments noted in the purchase agreement.See Note 3, Acquisitions, for further discussion of the transaction.
•On February 12, 2025, the Company, through an indirect subsidiary, entered into an agreement with Clearway Renew to sell its membership interests in Mt. Storm, a 264 MW wind facility that is located in Grant County, West Virginia, for $121 million in cash consideration in order for Clearway Renew to repower the facility, which will occur in two phases. The consummation of the transaction is subject to customary conditions and third-party approvals and is expected in the second half of 2025. Additionally, the agreement contains an exclusive option for the Company to purchase the Class B membership interests in the tax equity fund that, upon mechanical completion of the first phase of the repowering of the facility, will own Mt. Storm. Mechanical completion of the first phase of the Mt. Storm repowering is expected to occur in the second half of 2026 with the second phase of the repowering expected to occur in the second half of 2027. The repowering of the facility is expected to increase the facility's capacity to 335 MW. Upon achieving repowering commercial operations, which is expected to occur in 2027, the facility will sell power to Microsoft under a 20-year PPA. On May 1, 2025, the Company bought down a portion of Mt. Storm's current contract to sell power to a counterparty through a hedge agreement and paid approximately $35 million to the hedge counterparty to reduce the contract by approximately 50%. On July 22, 2025, the Company paid approximately $39 million to the hedge counterparty to buy out the remaining contract.
RA Agreements
•On January 14, 2025, the Company contracted with a load serving entity to sell approximately 75 MW of El Segundo's RA commencing in August 2026 and ending in December 2029. On February 4, 2025, the Company contracted with an additional load serving entity to sell approximately 197 MW of El Segundo's RA commencing in August 2026 and ending in December 2029. El Segundo is now contracted for 100% of its capacity through 2027 and approximately 50% of its capacity through 2028.
Facility-level Financing Activities
•In connection with the 2025 Drop Downs of Rosamond South I, Luna Valley, Daggett 1 and Pine Forest, the Company assumed non-recourse facility-level debt. See Note 7, Long-term Debt, for further discussion of the non-recourse facility-level debt associated with each facility.
•On May 21, 2025, when the Dan's Mountain wind facility reached substantial completion, the Company paid $36 million to Clearway Renew as additional purchase price in connection with the Company's acquisition of the Class A membership interests in Dan's Mountain TargetCo on November 18, 2024. Also, on May 21, 2025, a third-party cash equity investor contributed $45 million to acquire the Class B membership interests in Dan's Mountain TargetCo from Clearway Renew and the tax equity investor contributed an additional $90 million. The Company utilized the combined proceeds to repay the cash equity bridge loan, to repay the tax equity bridge loan and to pay associated fees with the remaining proceeds distributed to CEG. The Company's total capital investment in Dan's Mountain was $43 million. See Note 7, Long-term Debt, for further discussion of the transaction.
•On April 29, 2025, in order to partially fund the third-party acquisition of the Tuolumne wind facility, the Company entered into a financing agreement, which included the issuance of a $163 million term loan, as well as $22 million in letters of credit in support of debt service and facility obligations. See Note 7, Long-term Debt, for further discussion of the financing agreement.
•On April 9, 2025, the Company, through its indirect subsidiary, Buckthorn Solar Portfolio LLC, refinanced its credit agreement, which was scheduled to mature in May 2025, resulting in the issuance of a $104 million term loan facility, as well as $22 million in letters of credit in support of debt service and facility obligations. The Company utilized the proceeds from the term loan and existing sources of liquidity to pay off the existing debt. See Note 7, Long-term Debt, for further discussion of the refinanced credit agreement.
Environmental Matters
The Company is subject to a wide range of environmental laws during the development, construction, ownership and operation of facilities. These existing and future laws generally require that governmental permits and approvals be obtained before construction and maintained during operation of facilities. The Company is obligated to comply with all environmental laws and regulations applicable within each jurisdiction and required to implement environmental programs and procedures to monitor and control risks associated with the construction, operation and decommissioning of regulated or permitted energy assets. Federal, state and local environmental laws have historically become more stringent over time, although this trend could change in the future.
The Company's environmental matters are further described in the Company's 2024 Form 10-K in Item 1, Business - Environmental Mattersand Item 1A, Risk Factors.
Regulatory Matters
The following disclosures about the Company's regulatory matters provide an update to, and should be read in conjunction with, Item 1, Business - Regulatory Mattersand Item 1A, Risk Factors, of the Company's 2024 Form 10-K.
On March 6, 2024, the SEC adopted a new set of rules that would require a wide range of climate-related disclosures, including material climate-related risks, information on any climate-related targets or goals that are material to the registrant's business, results of operations or financial condition, Scope 1 and Scope 2 GHG emissions on a phased-in basis by certain larger registrants when those emissions are material and the filing of an attestation report covering the same, and disclosure of the financial statement effects of severe weather events and other natural conditions including costs and losses. Litigation challenging the rules was filed by multiple parties in multiple jurisdictions, which was consolidated and assigned to the U.S. Court of Appeals for the Eighth Circuit. On April 4, 2024, the SEC announced that it was voluntarily delaying the implementation of the climate disclosure rules while the U.S. Court of Appeals considered the litigation. On March 27, 2025, the SEC voted to end the defense of the rules in the litigation.
On July 4, 2025, federal tax legislation was enacted. Among other changes, the federal tax legislation phases out, repeals, and/or adds stricter eligibility requirements for business tax credits and incentives for the development of clean energy facilities and production of clean energy, including wind, solar and BESS facilities. Among other things, (i) wind and solar facilities that begin construction after July 4, 2026 must be placed in service by December 31, 2027 in order to qualify for production tax credits or investment tax credits, (ii) BESS facilities that begin construction by December 31, 2033 receive full investment tax credit value, stepping down to 75% for BESS facilities that begin construction in 2034, 50% for BESS facilities that begin construction in 2035 and 0% for BESS facilities that begin construction after 2035 and (iii) for facilities that begin construction after 2024, new foreign entity of concern requirements will restrict availability of the credits to wind, solar and BESS facilities if the entity that owns the facility has certain relationships with or makes certain payments to foreign entities of concern and, for facilities that begin construction after 2025, if the percentage of components in the facility manufactured by foreign entities of concern exceeds a specified percentage.
On July 7, 2025, a federal executive order was issued directing the Secretary of the Treasury to issue, within 45 days, new and revised guidance that could potentially seek to limit the interpretation of "begin construction" requirements for wind, solar and BESS facilities that claim "technology neutral" tax credits under sections 45Y or 48E of the Internal Revenue Code. Facilities that began construction before 2025 qualify for tax credits under section 45 and 48 of the Internal Revenue Code and so are not within the scope of the executive order. Similarly, the executive order does not impact operating facilities, so the facilities owned and operated by the Company are not within the scope of the executive order. The Company will continue to assess the impact of any such guidance under the executive order when it is issued.
Consolidated Results of Operations
The following table provides selected financial information:
Three months ended June 30, Six months ended June 30,
(In millions) 2025 2024 Change 2025 2024 Change
Operating Revenues
Energy and capacity revenues $ 428 $ 424 $ 4 $ 761 $ 739 $ 22
Other revenues 22 30 (8) 42 46 (4)
Contract amortization (45) (46) 1 (89) (92) 3
Mark-to-market for economic hedges (13) (42) 29 (24) (64) 40
Total operating revenues 392 366 26 690 629 61
Operating Costs and Expenses
Cost of fuels 1 3 (2) 3 19 (16)
Operations and maintenance 100 86 14 193 169 24
Other costs of operations 29 28 1 56 55 1
Depreciation, amortization and accretion 163 153 10 326 307 19
General and administrative 10 8 2 20 19 1
Transaction and integration costs 2 3 (1) 5 4 1
Total operating costs and expenses 305 281 24 603 573 30
Operating Income 87 85 2 87 56 31
Other Income (Expense)
Equity in earnings of unconsolidated affiliates 7 8 (1) 12 20 (8)
Other income, net 8 12 (4) 15 28 (13)
Loss on debt extinguishment - (2) 2 - (3) 3
Derivative interest income (expense) 2 1 1 (32) 24 (56)
Other interest expense (85) (89) 4 (167) (169) 2
Total other expense, net (68) (70) 2 (172) (100) (72)
Net Income (Loss) 19 15 4 (85) (44) (41)
Less: Net loss attributable to noncontrolling interests and redeemable noncontrolling interests (50) (92) 42 (161) (125) (36)
Net Income Attributable to Clearway Energy LLC $ 69 $ 107 $ (38) $ 76 $ 81 $ (5)
Three months ended June 30, Six months ended June 30,
Business metrics: 2025 2024 2025 2024
Solar MWh generated/sold (in thousands) (a)
2,650 2,613 4,388 4,056
Wind MWh generated/sold (in thousands) (a)
2,941 2,947 5,684 5,466
Solar & Wind MWh generated/sold (in thousands) (a)
5,591 5,560 10,072 9,522
Solar weighted-average capacity factor (b)
36.9 % 36.1 % 31.3 % 28.6 %
Wind weighted-average capacity factor (c)
33.6 % 34.8 % 33.6 % 32.9 %
Flexible Generation MWh generated (in thousands) 55 75 120 250
Flexible Generation equivalent availability factor 95.0 % 97.1 % 92.2 % 91.7 %
(a) Volumes do not include the MWh generated/sold by the Company's equity method investments.
(b)Typical average capacity factors for solar facilities is 25%. The weighted-average capacity factors can vary based on seasonality and weather.
(c)Typical average capacity factors for wind facilities is 25-45%. The weighted-average capacity factors can vary based on seasonality and weather.
Management's Discussion of the Results of Operations for the Three Months Ended June 30, 2025 and 2024
Operating Revenues
Operating revenues increased by $26 million during the three months ended June 30, 2025, compared to the same period in 2024, due to a combination of the drivers summarized in the table below:
(In millions)
Renewables & Storage Segment Increase driven by the Tuolumne wind acquisition in April 2025. $ 10
Increase primarily driven by the Arica solar and BESS and Rosamond Central BESS acquisitions, which reached commercial operations in April 2024 and June 2024, respectively. 9
Decrease primarily driven by lower wind resource at certain facilities. (14)
Loss incurred on the buy-down of a portion of the Mt. Storm commodity contract in April 2025. (5)
Flexible Generation Segment Decrease in energy revenue primarily driven by lower generation at the Walnut Creek, Marsh Landing and El Segundo facilities. (4)
Contract amortization Increase primarily driven by Cedro Hill, which reached repowering commercial operations in December 2024, resulting in the extension of the amortization period. 1
Mark-to-market economic hedging activities Increase primarily driven by decreases in forward power prices in the ERCOT market. 44
Decrease in heat rate call option contracts primarily driven by changes in power market prices. (15)
$ 26
Operations and Maintenance Expense
Operation and maintenance expense increased by $14 million during the three months ended June 30, 2025, compared to the same period in 2024, due to a combination of the drivers summarized in the table below:
(In millions)
Renewables & Storage Segment Increase primarily driven by the Victory Pass and Arica solar and BESS acquisition, which reached commercial operations in March 2024 and April 2024, respectively, and the Rosamond South I solar and BESS acquisition in March 2025. $ 6
Increase primarily driven by maintenance activities at various wind facilities. 6
Increase driven by the Dan's Mountain wind acquisition, which reached commercial operations in May 2025, and the Tuolumne wind acquisition in April 2025. 1
Flexible Generation Segment Increase primarily driven by maintenance activities at various facilities. 1
$ 14
Net Loss Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests
For the three months ended June 30, 2025, the Company had a net loss of $50 million attributable to noncontrolling interests and redeemable noncontrolling interests comprised of the following:
(In millions)
Losses attributable to tax equity financing arrangements and the application of the HLBV method $ (40)
Losses attributable to third-party partnerships (10)
$ (50)
For the three months ended June 30, 2024, the Company had a net loss of $92 million attributable to noncontrolling interests and redeemable noncontrolling interests comprised of the following:
(In millions)
Losses attributable to tax equity financing arrangements and the application of the HLBV method (primarily due to VP-Arica TE Holdco LLC HLBV losses) $ (153)
Income attributable to third-party partnerships (primarily due to VP-Arica TE Holdco LLC HLBV losses) 61
$ (92)
Management's Discussion of the Results of Operations for the Six Months Ended June 30, 2025 and 2024
Operating Revenues
Operating revenues increased by $61 million during the six months ended June 30, 2025, compared to the same period in 2024, due to a combination of the drivers summarized in the table below:
(In millions)
Renewables & Storage Segment Increase driven by the Victory Pass and Arica solar and BESS and Rosamond Central BESS acquisitions, which reached commercial operations in March 2024, April 2024 and June 2024, respectively. $ 32
Increase driven by the Cedar Creek and Tuolumne wind acquisitions in April 2024 and April 2025, respectively. 15
Increase primarily driven by higher solar generation. 7
Decrease primarily driven by lower wind resource at certain facilities. (11)
Loss incurred on the buy-down of a portion of the Mt. Storm commodity contract in April 2025. (5)
Flexible Generation Segment Decrease in energy revenue primarily driven by lower generation at the Walnut Creek, Marsh Landing and El Segundo facilities due to milder weather, which also decreased cost of fuels as noted below. (20)
Contract amortization Increase primarily driven by Cedro Hill, which reached repowering commercial operations in December 2024, resulting in the extension of the amortization period. 3
Mark-to-market economic hedging activities Increase primarily driven by decreases in forward power prices in the ERCOT and PJM markets. 66
Decrease in heat rate call option contracts primarily driven by changes in power market prices. (26)
$ 61
Cost of Fuels
Cost of fuels decreased by $16 million during the six months ended June 30, 2025, compared to the same period in 2024, primarily due to lower generation at the Walnut Creek, Marsh Landing and El Segundo facilities due to milder weather, which resulted in less fuel purchases.
Operations and Maintenance Expense
Operation and maintenance expense increased by $24 million during the six months ended June 30, 2025, compared to the same period in 2024, due to a combination of the drivers summarized in the table below:
(In millions)
Renewables & Storage Segment Increase primarily driven by the Victory Pass and Arica solar and BESS acquisition, which reached commercial operations in March 2024 and April 2024, respectively, and the Rosamond South I solar and BESS and Texas Solar Nova 2 acquisitions in March 2025 and March 2024, respectively. $ 10
Increase primarily driven by maintenance activities at various wind facilities. 6
Increase driven by the Cedar Creek and Dan's Mountain wind acquisitions, which reached commercial operations in April 2024 and May 2025, respectively, and the Tuolumne wind acquisition in April 2025. 3
Flexible Generation Segment Increase primarily driven by maintenance activities at various facilities. 5
$ 24
Interest Expense
Interest expense increased by $54 million during the six months ended June 30, 2025, compared to the same period in 2024, primarily due to the change in fair value of interest rate swaps due to changes in interest rates.
Net Loss Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests
For the six months ended June 30, 2025, the Company had a net loss of $161 million attributable to noncontrolling interests and redeemable noncontrolling interests comprised of the following:
(In millions)
Losses attributable to tax equity financing arrangements and the application of the HLBV method (primarily due to Cedro Hill TE Holdco, Daggett TE Holdco LLC, Daggett 2 TE Holdco LLC, Rosie TE HoldCo LLC, TSN1 TE Holdco LLC and VP-Arica TE Holdco LLC HLBV losses) $ (186)
Income attributable to third-party partnerships 25
$ (161)
Net Loss Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests
For the six months ended June 30, 2024, the Company had a net loss of $125 million attributable to noncontrolling interests and redeemable noncontrolling interests comprised of the following:
(In millions)
Losses attributable to tax equity financing arrangements and the application of the HLBV method (primarily due to VP-Arica TE Holdco LLC, Daggett TE Holdco LLC and Daggett 2 TE Holdco LLC HLBV losses) $ (195)
Income attributable to third-party partnerships (primarily due to VP-Arica TE Holdco LLC, Daggett TE Holdco LLC and Daggett 2 TE Holdco LLC HLBV losses) 70
$ (125)
Liquidity and Capital Resources
The Company's principal liquidity requirements are to meet its financial commitments, finance current operations, fund capital expenditures, including investments and acquisitions from time to time, service debt and pay distributions. As a normal part of the Company's business, depending on market conditions, the Company will from time to time consider opportunities to repay, redeem, repurchase or refinance its indebtedness. Changes in the Company's operating plans, lower than anticipated sales, increased expenses, investments, acquisitions or other events may cause the Company to seek additional debt or equity financing in future periods. There can be no guarantee that financing will be available on acceptable terms or at all. Debt financing, if available, could impose additional cash payment obligations and additional covenants and operating restrictions.
Current Liquidity Position
As of June 30, 2025and December 31, 2024, the Company's liquidity was approximately $1,298 millionand $1,330 million, respectively, comprised of cash, restricted cash and availability under the Company's revolving credit facility.
(In millions) June 30, 2025 December 31, 2024
Cash and cash equivalents:
Clearway Energy LLC, excluding subsidiaries $ 46 $ 138
Subsidiaries 214 194
Restricted cash:
Operating accounts 112 184
Reserves, including debt service, distributions, performance obligations and other reserves 414 217
Total cash, cash equivalents and restricted cash 786 733
Revolving credit facility availability 512 597
Total liquidity $ 1,298 $ 1,330
The Company's liquidity includes $526 million and $401 million of restricted cash balances as of June 30, 2025 and December 31, 2024, respectively. Restricted cash consists primarily of funds to satisfy the requirements of certain debt arrangements and funds held within the Company's facilities that are restricted in their use. As of June 30, 2025, these restricted funds were comprised of $112 million designated to fund operating expenses, approximately $176 million designated for current debt service payments and $83 million restricted for reserves including debt service, performance obligations and other reserves, as well as capital expenditures. The remaining $155 million is held in distribution reserve accounts.
Clearway Energy LLC and Clearway Energy Operating LLC Revolving Credit Facility
As of June 30, 2025, the Company had $112 million in outstanding borrowings under the revolving credit facility and $76 million in letters of credit outstanding. On July 10, 2025, the Company borrowed an additional $123 million under the revolving credit facility, primarily to support the acquisition of Catalina on July 16, 2025, as described in Note 3, Acquisitions. The facility will continue to be used for general corporate purposes including financing of future investments or acquisitions and posting letters of credit.
Management believes that the Company's liquidity position, cash flows from operations and availability under its revolving credit facility will be adequate to meet the Company's financial commitments; debt service obligations; growth, operating and maintenance capital expenditures; and to fund distributions to Clearway, Inc. and CEG. Management continues to regularly monitor the Company's ability to finance the needs of its operating, financing and investing activity within the dictates of prudent balance sheet management.
Credit Ratings
Credit rating agencies rate a firm's public debt securities. These ratings are utilized by the debt markets in evaluating a firm's credit risk. Ratings influence the price paid to issue new debt securities by indicating to the market the Company's ability to pay principal, interest and preferred dividends. Rating agencies evaluate a firm's industry, cash flow, leverage, liquidity and hedge profile, among other factors, in their credit analysis of a firm's credit risk. As of June 30, 2025, the Company's 2028 Senior Notes, 2031 Senior Notes and 2032 Senior Notes were rated BB by S&P and Ba2 by Moody's.
Sources of Liquidity
The Company's principal sources of liquidity include cash on hand, cash generated from operations, proceeds from sales of assets, borrowings under new and existing financing arrangements and the issuance of additional equity and debt securities by Clearway, Inc. or the Company as appropriate given market conditions. As described in Note 7, Long-term Debt, to this Form 10-Q and Item 15 - Note 10, Long-term Debt, to the consolidated financial statements included in the Company's 2024 Form 10-K, the Company's financing arrangements consist of corporate level debt, which includes Senior Notes, intercompany borrowings with Clearway, Inc. and the revolving credit facility; the ATM Program; and facility-level financings for its various assets.
Uses of Liquidity
The Company's requirements for liquidity and capital resources, other than for operating its facilities, are categorized as: (i) debt service obligations, as described more fully in Note 7, Long-term Debt;(ii) capital expenditures; (iii) off-balance sheet arrangements; (iv) acquisitions and investments, as described more fully in Note 3, Acquisitions; and (v) distributions.
Capital Expenditures
The Company's capital spending program is mainly focused on maintenance capital expenditures, consisting of costs to maintain the assets currently operating, such as costs to replace or refurbish assets during routine maintenance, and growth capital expenditures consisting of costs to construct new assets, costs to increase the operating capacity of existing assets and costs to complete the construction of assets where construction is in process.
For the six months ended June 30, 2025, the Company used approximately $132 million to fund capital expenditures, including growth expenditures of $123 million, primarily in the Renewables & Storage segment, funded through construction-related financing. Growth capital expenditures included $32 million incurred in connection with the Rosamond South I solar and BESS facility, $29 million incurred in connection with the Dan's Mountain wind facility, $17 million incurred in connection with the repowering of the Cedro Hill wind facility, $14 million incurred in connection with the Luna Valley solar facility, $10 million incurred in connection with the Victory Pass and Arica solar and BESS facilities, $9 million incurred in connection with the Pine Forest solar and BESS facility, $7 million incurred in connection with the Daggett 1 BESS facility and $5 million incurred by other facilities.In addition, the Company incurred $9 million of maintenance capital expenditures, which is net of credits received from equipment manufacturers.
Off-Balance Sheet Arrangements
Obligations under Certain Guarantee Contracts
The Company may enter into guarantee arrangements in the normal course of business to facilitate commercial transactions with third parties.
Retained or Contingent Interests
The Company does not have any material retained or contingent interests in assets transferred to an unconsolidated entity.
Obligations Arising Out of a Variable Interest in an Unconsolidated Entity
Variable interest in equity investments- As of June 30, 2025, the Company has several investments with an ownership interest percentage of 50% or less. GenConn is a VIE for which the Company is not the primary beneficiary. The Company's pro-rata share of non-recourse debt held by unconsolidated affiliates was approximately $273 million as of June 30, 2025. This indebtedness may restrict the ability of these subsidiaries to issue dividends or distributions to the Company.
Contractual Obligations and Commercial Commitments
The Company has a variety of contractual obligations and other commercial commitments that represent prospective cash requirements in addition to the Company's capital expenditure programs, as disclosed in the Company's 2024Form 10-K.
Acquisitions and Investments
The Company intends to acquire generation assets developed and constructed by CEG, as well as generation assets from third parties where the Company believes its knowledge of the market and operating expertise provides a competitive advantage, and to utilize such acquisitions as a means to grow its business.
Catalina Solar Acquisition- On July 16, 2025, the Company, through its indirect subsidiary, Catalina Solar Investment LLC, acquired Catalina Solar Lessee Holdco LLC, which leases and operates the Catalina solar facility, from a third-party for approximately $127 million. Catalina reached commercial operations in 2013 and has a PPA with an investment-grade utility through 2038. The acquisition was funded with existing sources of liquidity. The Company estimates that its net capital investment in Catalina will be $125 million after factoring in cash acquired and estimated transaction expenses.
Pine Forest Drop Down- On June 10, 2025, the Company, through its indirect subsidiary, Pine Forest CE Class A Owner LLC, acquired the Class A membership interests in Pine Forest TargetCo, a partnership and the indirect owner of the Pine Forest solar and BESS facility, from Clearway Renew for initial cash consideration of $18 million. At substantial completion, which is expected to occur in the second half of 2025, the Company estimates it will pay an additional $72 million to Clearway Renew for its Class A membership interests in Pine Forest TargetCo. The Company estimates that its total capital investment in Pine Forest TargetCo will be $90 million, excluding the impact of any closing adjustments noted in the purchase agreement. Pine Forest has PPAs for the solar facility with investment-grade counterparties and a 20-year weighted average contract duration that will commence when the underlying operating assets reach commercial operations, which is expected to occur in the second half of 2025. The acquisition was funded with existing sources of liquidity. As part of the acquisition of Pine Forest, the Company assumed the facility's financing agreement, which included a construction loan that converts to a term loan when the facility reaches substantial completion, a cash equity bridge loan, a tax equity bridge loan and a tax credit transfer bridge loan, all of which will be completely paid off when the facility reaches substantial completion.Subsequent to the acquisition, the Company borrowed an additional $14 million in cash equity bridge loans through June 30, 2025.
Dan's Mountain Drop Down - On May 21, 2025, when the Dan's Mountain wind facility reached substantial completion, the Company paid $36 million to Clearway Renew as additional purchase price in connection with the Company's acquisition of the Class A membership interests in Dan's Mountain TargetCo on November 18, 2024, which was funded with existing sources of liquidity. Also on May 21, 2025, a third-party cash equity investor contributed $45 million to acquire the Class B membership interests in Dan's Mountain TargetCo from Clearway Renew and the tax equity investor contributed an additional $90 million. The Company utilized the combined proceeds from the cash equity and tax equity investors, along with the Company's entire additional purchase price, which was contributed back to the Company by CEG, and the $18 million previously held in escrow, to repay the tax equity bridge loan, to repay the cash equity bridge loan and to pay associated fees with the remaining proceeds distributed to CEG. Prior to substantial completion being reached, the Company borrowed an additional $18 million in construction loans during 2025. The Company's total capital investment in Dan's Mountain was $43 million.
Tuolumne Wind Acquisition -On April 29, 2025, the Company, through its indirect subsidiary, Washington Wind LLC, acquired the Tuolumne wind facility from an investment-grade regulated entity for approximately $210 million, which excludes $1 million in transaction expenses incurred in connection with the acquisition during the six months ended June 30, 2025. Tuolumne reached commercial operations in 2009. In connection with the acquisition, the Company entered into a 15-year PPA with an investment-grade regulated entity that commenced in April 2025. Also in connection with the acquisition, the Company entered into a financing agreement, which included the issuance of a $163 million term loan, as well as $22 million in letters of credit in support of debt service and facility obligations, supported by the Company's interests in the Tuolumne wind facility. The acquisition was funded with the borrowings under the new financing agreement, as well as existing sources of liquidity. The Company's net capital investment in Tuolumne was $59 million.
Luna Valley Drop Down- On April 29, 2025, the Company, through its indirect subsidiary, LV-Daggett Parent Holdco LLC, acquired Luna Valley Class B, the indirect owner of the Luna Valley solar facility, from Clearway Renew for initial cash consideration of $18 million. At substantial completion, which is expected to occur in the second half of 2025, the Company estimates it will pay an additional $72 million to Clearway Renew. The Company estimates that its total capital investment in Luna Valley Class B will be $90 million, excluding the impact of any closing adjustments noted in the purchase agreement.Luna Valley has PPAs with investment-grade counterparties that have a 17-year weighted average contract duration that commence when the underlying operating assets reach commercial operations, which is expected to occur in the second half of 2025. The acquisition was funded with existing sources of liquidity. As part of the acquisition of Luna Valley, the Company assumed the facility's financing agreement, which included a construction loan that converts to a term loan when the facility reaches substantial completion, a cash equity bridge loan that was partially paid off at acquisition date and a tax equity bridge loan, both of which will be repaid when the facility reaches substantial completion. Subsequent to the acquisition, the Company borrowed an additional $17 million in construction loans through June 30, 2025.
Daggett 1 Drop Down-On April 29, 2025, the Company, through its indirect subsidiary, LV-Daggett Parent Holdco LLC, acquired Daggett 1 Class B, the indirect owner of the Daggett 1 BESS facility, from Clearway Renew for initial cash consideration of $11 million. At substantial completion, which is expected to occur in the second half of 2025, the Company estimates it will pay an additional $42 million to Clearway Renew. The Company estimates that its total capital investment in Daggett 1 Class B will be $53 million, excluding the impact of any closing adjustments noted in the purchase agreement.Daggett 1 has a PPA for capacity with an investment-grade counterparty for a contract duration of 15 years that commences when the facility reaches commercial operations, which is expected to occur in the second half of 2025. The acquisition was funded with existing sources of liquidity. As part of the acquisition of Daggett 1, the Company assumed the facility's financing agreement, which included a construction loan that converts to a term loan when the facility reaches substantial completion and a tax equity bridge loan that will be repaid when the facility reaches substantial completion. Subsequent to the acquisition, the Company borrowed an additional $7 million in construction loans through June 30, 2025.
Rosamond South I Drop Down- On March 20, 2025, the Company, through its indirect subsidiary, Rosamond South Investment LLC,acquired the Class A membership interests in Rosie South TargetCo, a partnership and the indirect owner of the Rosamond South I solar and BESS facility, from Clearway Renew for initial cash consideration of $4 million. At substantial completion, which is expected to occur in the second half of 2025, the Company estimates it will pay an additional $17 million to Clearway Renew. The Company estimates that its total capital investment in Rosie South TargetCo will be $21 million, excluding the impact of any closing adjustments noted in the purchase agreement. Rosamond South I has PPAs with investment-grade counterparties that have a 15-year weighted average contract duration that commence when the underlying operating assets reach commercial operations, which is expected to occur in the second half of 2025. The acquisition was funded with existing sources of liquidity. As part of the acquisition of Rosamond South I, the Company assumed the facility's financing agreement, which included a construction loan that converts to a term loan when the facility reaches substantial completion, a cash equity bridge loan that was paid off at acquisition date and a tax equity bridge loan that will be repaid when the facility reaches substantial completion.Subsequent to the acquisition, the Company borrowed an additional $35 million in construction loans through June 30, 2025.
Cash Distributions to Clearway, Inc. and CEG
The Company intends to distribute to its unit holders in the form of a quarterly distribution all of the CAFD it generates each quarter, less reserves for the prudent conduct of the business, including among others, maintenance capital expenditures to maintain the operating capacity of the Company's assets. Distributions on the Company's units are subject to available capital, market conditions and compliance with associated laws, regulations and other contractual obligations. The Company expects that, based on current circumstances, comparable cash distributions will continue to be paid in the foreseeable future.
The following table lists the distributions paid on the Company's Class A, B, C and D units during the six months ended June 30, 2025:
Second Quarter 2025
First Quarter 2025
Distributions per Class A, B, C and D unit $ 0.4384 $ 0.4312
On August 4, 2025, the Company declared a distribution on its Class A, Class B, Class C and Class D units of $0.4456 per unit payable on September 16, 2025 to unit holders of record as of September 2, 2025.
Cash Flow Discussion
The following tables reflect the changes in cash flows for the comparative periods:
Six months ended June 30,
2025 2024 Change
(In millions)
Net cash provided by operating activities $ 283 $ 279 $ 4
Net cash used in investing activities (398) (647) 249
Net cash provided by (used in) financing activities 168 (113) 281
Net Cash Provided by Operating Activities
Changes to net cash provided by operating activities were driven by: (In millions)
Increase from changes in working capital primarily driven by the timing of accounts receivable collections and payments of accounts payable $ 53
Partial buy-down of the Mt. Storm commodity contract in 2025 (35)
Decrease in operating income after adjusting for non-cash items (12)
Decrease in distributions from unconsolidated affiliates (2)
$ 4
Net Cash Used in Investing Activities
Changes to net cash used in investing activities were driven by: (In millions)
Decrease in cash paid for Drop Down Assets, net of cash acquired $ 594
Decrease in capital expenditures 70
Cash paid for acquisitions related to the Tuolumne wind acquisition in 2025 (211)
Repayment of note receivable - affiliate in 2024 related to the Rosie Class B LLC loan issued to Clearway Renew (184)
Decrease in the return of investment from unconsolidated affiliates (25)
Other 5
$ 249
Net Cash Provided by (Used in) Financing Activities
Changes in net cash provided by (used in) financing activities were driven by: (In millions)
Decrease in payments for long-term debt and increase in proceeds from issuance of long-term debt $ 1,210
Proceeds from the revolving credit facility in 2025 112
Decrease in contributions from noncontrolling interests, Clearway, Inc. and CEG, net of distributions (1,011)
Pro-rata distributions to Clearway, Inc. and CEG in 2025 (16)
Increase in distributions paid to unit holders (12)
Increase in payments of debt issuance costs (3)
Other 1
$ 281
Fair Value of Derivative Instruments
The Company may enter into energy-related commodity contracts to mitigate variability in earnings due to fluctuations in spot market prices. In addition, in order to mitigate interest rate risk associated with the issuance of variable rate debt, the Company enters into interest rate swap agreements.
The tables below disclose the activities of non-exchange traded contracts accounted for at fair value in accordance with ASC 820. Specifically, these tables disaggregate realized and unrealized changes in fair value; disaggregate estimated fair values at June 30, 2025, based on their level within the fair value hierarchy defined in ASC 820; and indicate the maturities of contracts at June 30, 2025. For a full discussion of the Company's valuation methodology of its contracts, see Derivative Fair Value Measurements in Note 5, Fair Value of Financial Instruments.
Derivative Activity (Losses) Gains (In millions)
Fair value of contracts as of December 31, 2024 $ (196)
Contracts realized or otherwise settled during the period 54
Changes in fair value (110)
Fair value of contracts as of June 30, 2025 $ (252)
Fair value of contracts as of June 30, 2025
Maturity
Fair Value Hierarchy (Losses) Gains 1 Year or Less
Greater Than
1 Year to 3 Years
Greater Than
3 Years to 5 Years
Greater Than
5 Years
Total Fair
Value
(In millions)
Level 2 $ 19 $ 10 $ 64 $ 7 $ 100
Level 3 (56) (124) (93) (79) (352)
Total $ (37) $ (114) $ (29) $ (72) $ (252)
The Company has elected to disclose derivative assets and liabilities on a trade-by-trade basis and does not offset amounts at the counterparty master agreement level.
Critical Accounting Policies and Estimates
The Company's discussion and analysis of the financial condition and results of operations are based upon the consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements and related disclosures in compliance with GAAP requires the application of appropriate technical accounting rules and guidance, as well as the use of estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. The application of these policies necessarily involves judgments regarding future events, including the likelihood of success of particular facilities, legal and regulatory challenges and the fair value of certain assets and liabilities. These judgments, in and of themselves, could materially affect the financial statements and disclosures based on varying assumptions, which may be appropriate to use. In addition, the financial and operating environment may also have a significant effect, not only on the operation of the business, but on the results reported through the application of accounting measures used in preparing the financial statements and related disclosures, even if the nature of the accounting policies has not changed.
On an ongoing basis, the Company evaluates these estimates, utilizing historic experience, consultation with experts and other methods the Company considers reasonable. Actual results may differ substantially from the Company's estimates. Any effects on the Company's business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the information that gives rise to the revision becomes known.
The Company identifies its most critical accounting policies as those that are the most pervasive and important to the portrayal of the Company's financial position and results of operations, and that require the most difficult, subjective and/or complex judgments by management regarding estimates about matters that are inherently uncertain. The Company's critical accounting policies include accounting utilizing HLBV and determining the fair value of financial instruments.
Recent Accounting Developments
See Note 2, Summary of Significant Accounting Policies, for a discussion of recent accounting developments.
Clearway Energy LLC published this content on August 06, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on August 06, 2025 at 10:01 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]