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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K/A
(Amendment No. 1)
 
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 
 
For the Fiscal Year ended

December 31, 2019
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition period from                      to                       .

Commission File Number: 001-36002
Clearway Energy, Inc.
(Exact name of registrant as specified in its charter)
Delaware
 
46-1777204
(State or other jurisdiction
of incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
 
 
 
300 Carnegie Center, Suite 300
Princeton
New Jersey
08540
(Address of principal executive offices)
(Zip Code)
(609608-1525
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Class A Common Stock, par value $0.01
CWEN.A
New York Stock Exchange
Class C Common Stock, par value $0.01
CWEN
New York Stock Exchange
     Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes     No ☐
Indicate by check mark if registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes ☐    No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.                Yes       No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).                            Yes       No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
        
Large accelerated filer
Accelerated filer
Non-accelerated filer  
Smaller reporting company
 
 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes     No x
As of the last business day of the most recently completed second fiscal quarter, the aggregate market value of the common stock of the registrant held by non-affiliates was approximately$1,788,899,961 based on the closing sale prices of such shares as reported on the New York Stock Exchange.
Indicate the number of shares outstanding of each of the registrant's classes of common stock as of the latest practicable date.
Class
 
Outstanding at March 24, 2020
Common Stock, Class A, par value $0.01 per share
 
34,599,645
Common Stock, Class B, par value $0.01 per share
 
42,738,750
Common Stock, Class C, par value $0.01 per share
 
79,329,761
Common Stock, Class D, par value $0.01 per share
 
42,738,750
Documents Incorporated by Reference:
Portions of the Registrant's Definitive Proxy Statement relating to its 2020 Annual Meeting of Stockholders, filed on March 17, 2020
are incorporated by reference into Part III of the Registrant's Annual Report on Form 10-K, filed on March 2, 2020
 
 
 
 
 


1



Explanatory Note
On March 2, 2020, Clearway Energy, Inc. (the "Company") filed with the Securities and Exchange Commission its Annual Report on Form 10-K for the year ended December 31, 2019.
This Amendment No. 1 to Form 10-K (this "Amendment") of the Company is being filed solely to amend Item 15 of Part IV to include the consolidated financial statements of DGPV Holdco 3 LLC and Subsidiaries ("DGPV Holdco 3") as required under Rule 3-09 of Regulation S-X. The financial statements of DGPV Holdco 3 for its fiscal year ended December 31, 2019 were not available at the time the Company filed its Annual Report on Form 10-K. The required financial statements are now provided as Exhibit 99.1 to this Amendment.
Item 15(c) is the only portion of the Company's Annual Report on Form 10-K being supplemented or amended by this Amendment. Except as set forth herein, this Amendment does not change or update any other information set forth in the original filing of the Company's Annual Report on Form 10-K for the year ended December 31, 2019, and does not reflect events occurring after the original filing of the Company's Annual Report on Form 10-K for the year ended December 31, 2019. This Amendment consists solely of the preceding cover page, this explanatory note, the information required by Item 15(c) of Form 10-K as provided in Exhibit 99.1, an updated exhibit index, a signature page, the accountants' consent for DGPV Holdco 3 and the certifications required to be filed as exhibits hereto.


2



PART IV
Item 15 — Exhibits, Financial Statement Schedules
(a)(1) Financial Statements
The following consolidated financial statements of Clearway Energy, Inc. and related notes thereto, together with the reports thereon of KPMG LLP, were included in Item 15 of Clearway Energy, Inc.'s Annual Report on Form 10-K filed on March 2, 2020:
Consolidated Statements of Operations — Years ended December 31, 2019, 2018 and 2017
Consolidated Statements of Comprehensive Income — Years ended December 31, 2019, 2018 and 2017
Consolidated Balance Sheets — As of December 31, 2019 and 2018
Consolidated Statements of Cash Flows — Years ended December 31, 2019, 2018 and 2017
Consolidated Statements of Stockholders' Equity — Years ended December 31, 2019, 2018 and 2017
Notes to Consolidated Financial Statements
(a)(2) Financial Statement Schedules
The following schedules of Clearway Energy, Inc. were filed as part of Item 15 of Clearway Energy, Inc.'s Annual Report on Form 10-K filed on March 2, 2020 and should be read in conjunction with the Consolidated Financial Statements:
Schedule I — Clearway Energy, Inc. Financial Statements for the years ended December 31, 2019, 2018 and 2017, are included in Clearway Energy, Inc.'s Annual Report on Form 10-K pursuant to the requirements of Rule 5-04(c) of Regulation S-X
Schedule II — Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore, have been omitted
(a)(3) Exhibits: See Exhibit Index submitted as a separate section of this report
(b) Exhibits
See Exhibit Index submitted as a separate section of this report
(c) Separate financial statements of subsidiaries not consolidated and fifty percent or less owned persons
The following financial statements of DGPV Holdco 3 LLC are required under Rule 3-09 of Regulation S-X and are incorporated by reference to Item 15 of this report. They should be read in conjunction with the Consolidated Financial Statements:
DGPV Holdco 3 LLC Consolidated Financial Statements for the years ended December 31, 2019 and 2018 are included as Exhibit 99.1 to Amendment No. 1 to Clearway Energy, Inc.'s Annual Report on Form 10-K


3



EXHIBIT INDEX
Number
 
Description
 
Method of Filing
2.1
 
 
Incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on May 9, 2014.
2.2
 
 
Incorporated herein by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K filed on May 9, 2014.
2.3
 
 
Incorporated herein by reference to Exhibit 2.3 to the Company’s Current Report on Form 8-K filed on May 9, 2014.
2.4
 
 
Incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 9, 2014.
2.5
 
 
Incorporated herein by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed on November 7, 2014.
2.6
 
 
Incorporated herein by reference to Exhibit 2.2 to the Company's Current Report on Form 8-K filed on November 7, 2014.
2.7*^
 
 
Incorporated herein by reference to Exhibit 2.1 to the Company's Quarterly Report on Form 10-Q filed on August 4, 2015.
2.8
 

 
Incorporated herein by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed on September 21, 2015.

2.9
 

 
Incorporated herein by reference to Exhibit 2.1 to the Registrant's Current Report on Form 8-K, filed on August 9, 2016.
2.10*
 
 
Incorporated herein by reference to Exhibit 2.10 to the Registrant's Annual Report on Form 10-K, filed on March 1, 2018.
2.11*
 

 
Incorporated herein by reference to Exhibit 2.1 to the Registrant's Current Report on Form 8-K, filed on December 9, 2019.

3.1
 
 
Incorporated herein by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q filed on May 5, 2016.
3.2
 
 
Incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on September 5, 2018.
3.3
 
 
Incorporated herein by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed on September 5, 2018.
4.1
 
 
Incorporated herein by reference to Exhibit 10.6 to the Company's Current Report on Form 8-K filed on September 5, 2018.
4.2
 
 
Incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on February 11, 2014.
4.3
 
 
Incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on February 11, 2014.

4



4.4
 
 
Incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on August 5, 2014.
4.5
 
 
Incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed on August 5, 2014.
4.6
 
 
Incorporated herein by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed on August 5, 2014.
4.7
 
 
Incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on November 13, 2014.
4.8
 
 
Incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on February 27, 2015.
4.9
 
 
Incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on April 16, 2015.
4.10
 
 
Incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on May 8, 2015.
4.11
 
 
Incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on June 29, 2015.
4.12
 

 
Incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed on June 29, 2015.
4.13
 
 
Incorporated herein by reference to Exhibit 4.13 to the Company's Annual Report on Form 10-K filed on February 28, 2019.
4.14
 
 
Incorporated herein by reference to Exhibit 4.14 to the Company's Annual Report on Form 10-K filed on February 28, 2019.

4.15
 
 
Incorporated herein by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K, filed on August 18, 2016.
4.16
 

 
Incorporated herein by reference to Exhibit 4.2 to the Registrant's Current Report on Form 8-K, filed on August 18, 2016.
4.17
 
 
Incorporated herein by reference to Exhibit 4.3 to the Registrant's Current Report on Form 8-K, filed on August 18, 2016.
4.18
 
 
Incorporated herein by reference to Exhibit 4.1 to Clearway Energy LLC's Current Report on Form 8-K, filed on January 31, 2018.

4.19
 
 
Incorporated herein by reference to Exhibit 4.2 to Clearway Energy LLC's Current Report on Form 8-K, filed on January 31, 2018.
4.20
 
 
Incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on June 12, 2018.

4.21
 
 
Incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed on June 12, 2018.


5



4.22
 
 
Incorporated herein by reference to Exhibit 4.3 to the Company's Quarterly Report on Form 10-Q filed on August 2, 2018.

4.23
 
 
Incorporated herein by reference to Exhibit 4.4 to the Company's Quarterly Report on Form 10-Q filed on August 2, 2018.
4.24
 
 
Incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on September 6, 2018.

4.25
 
 
Incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed on September 6, 2018.

4.26
 
 
Incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on October 2, 2018.
4.27
 

 
Incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed on October 2, 2018.
4.28
 
 
Incorporated herein by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed on October 2, 2018.
4.29
 
 
Incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on October 31, 2018.
4.30
 
 
Incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed on October 31, 2018.

4.31
 
 
Incorporated herein by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed on October 31, 2018.

4.32
 
 
Incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on December 12, 2018.
4.33
 
 
Incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed on December 12, 2018.
4.34
 
 
Incorporated herein by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed on December 12, 2018.

4.35
 
 
Incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on September 12, 2019.
4.36
 

 
Incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed on September 12, 2019.

4.37
 

 
Incorporated herein by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed on September 12, 2019.


6



4.38
 
 
Incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on November 22, 2019.
4.39
 

 
Incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed on November 22, 2019.
4.40
 

 
Incorporated herein by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed on November 22, 2019.

4.41
 
 
Incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on December 12, 2019.
4.42
 
 
Incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed on December 12, 2019.

4.43
 
 
Incorporated herein by reference to Exhibit 4.43 to the Company's Annual Report on Form 10-K filed on March 2, 2020.

10.1
 
 
Incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on September 5, 2018.
10.2
 
 
Incorporated herein by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on September 5, 2018.
10.3.1
 
 
Incorporated herein by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed on September 5, 2018.
10.3.2
 
 
Incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on February 14, 2019.
10.3.3
 
 
Incorporated herein by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed on August 6, 2019.
10.3.4
 


 
Incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on December 9, 2019.

10.4
 
 
Incorporated herein by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K filed on September 5, 2018.
10.5
 
 
Incorporated herein by reference to Exhibit 10.5 to the Company's Current Report on Form 8-K filed on September 5, 2018.
10.6
 
 
Incorporated herein by reference to Exhibit 10.7 to the Company's Current Report on Form 8-K filed on September 5, 2018.
10.7
 
 
Incorporated herein by reference to Exhibit 10.9 to the Company's Current Report on Form 8-K filed on September 5, 2018.
10.8
 
 
Incorporated herein by reference to Exhibit 10.8 to the Company's Draft Registration Statement on Form S-1, filed on February 13, 2013.

7



10.9†
 
 
Incorporated herein by reference to Exhibit 10.9 to the Company's Annual Report on Form 10-K filed on February 28, 2019.
10.10
 
 
Incorporated herein by reference to Exhibit 10.10 to the Company's Annual Report on Form 10-K filed on February 28, 2019.

10.11.1
 
 
Incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 28, 2014.
10.11.2
 
 
Incorporated herein by reference to Exhibit 10.9 to the Company's Quarterly Report on Form 10-Q filed on August 4, 2015.

10.11.3
 
 
Incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on February 12, 2018.
10.11.4
 
 
Incorporated herein by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed on May 3, 2018.
10.11.5
 
 
Incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on December 6, 2018.
10.11.6
 
 
Incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on December 23, 2019.

10.12.1
 
 
Incorporated herein by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed on August 7, 2014.
10.12.2
 
 
Incorporated herein by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q filed on August 7, 2014.
10.12.3
 
 
Incorporated herein by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q filed on August 7, 2014.
10.12.4
 
 
Incorporated herein by reference to Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q filed on August 4, 2015.
10.12.5
 
 
Incorporated herein by reference to Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q filed on August 4, 2015.

10.12.6
 

 
Incorporated herein by reference to Exhibit 10.8 to the Company's Quarterly Report on Form 10-Q filed on August 4, 2015.

10.13.1
 
 
Incorporated herein by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q filed on August 7, 2014.

8



10.13.2
 
 
Incorporated herein by reference to Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q filed on August 7, 2014.
10.14^
 

 
Incorporated herein by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed on August 4, 2015.
10.15^
 
 
Incorporated herein by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed on August 4, 2015.
10.16^
 
 
Incorporated herein by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed on May 5, 2016.

10.17^
 
 
Incorporated herein by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed on May 5, 2016.
10.18^
 
 
Incorporated herein by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q filed on May 5, 2016.

10.19
 
 
Incorporated herein by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed on August 9, 2016.

10.20†
 
 
Incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K/A, filed on August 9, 2016.
10.21†
 
 
Incorporated herein by reference to Exhibit 10.28 to the Company's Annual Report on Form 10-K filed on March 1, 2018.
10.22†
 
 
Incorporated herein by reference to Exhibit 10.22 to the Company's Annual Report on Form 10-K filed on February 28, 2019.


10.23†
 
 
Incorporated herein by reference to Exhibit 10.23 to the Company's Annual Report on Form 10-K filed on February 28, 2019.


10.24†
 
 
Incorporated herein by reference to Exhibit 10.24 to the Company's Annual Report on Form 10-K filed on February 28, 2019.


10.25†
 
 
Incorporated herein by reference to Exhibit 10.25 to the Company's Annual Report on Form 10-K filed on February 28, 2019.
10.26†
 
 
Incorporated herein by reference to Exhibit 10.26 to the Company's Annual Report on Form 10-K filed on March 2, 2020.

10.27†
 
 
Incorporated herein by reference to Exhibit 10.27 to the Company's Annual Report on Form 10-K filed on March 2, 2020.


10.28†
 
 
Incorporated herein by reference to Exhibit 10.28 to the Company's Annual Report on Form 10-K filed on March 2, 2020.


10.29^
 
 
Incorporated by reference to Exhibit 10.34 to the Company's Annual Report on Form 10-K, filed on March 1, 2018.
10.30
 
 
Incorporated herein by reference to Exhibit 10.30 to the Company's Annual Report on Form 10-K filed on February 28, 2019.


9



10.31*+
 
 
Incorporated herein by reference to Exhibit 10.31 to the Company's Annual Report on Form 10-K filed on March 2, 2020.

10.32*+
 
 
Incorporated herein by reference to Exhibit 10.32 to the Company's Annual Report on Form 10-K filed on March 2, 2020.

10.33
 


 
Incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on May 15, 2015.

10.34
 
 


 
Incorporated herein by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on May 15, 2015.

21.1
 
 
Incorporated herein by reference to Exhibit 21.1 to the Company's Annual Report on Form 10-K filed on March 2, 2020.

23.1
 
 
Incorporated herein by reference to Exhibit 23.1 to the Company's Annual Report on Form 10-K filed on March 2, 2020.

23.2
 
 
Filed herewith.
31.1
 
 
Filed herewith.
31.2
 
 
Filed herewith.
31.3
 
 
Filed herewith.
32
 
 
Furnished herewith.
99.1
 

 
Filed herewith.
101 INS
 
Inline XBRL Instance Document.
 
Filed herewith.


101 SCH
 
Inline XBRL Taxonomy Extension Schema.
 
Filed herewith.

101 CAL
 
Inline XBRL Taxonomy Extension Calculation Linkbase.
 
Filed herewith.

101 DEF
 
Inline XBRL Taxonomy Extension Definition Linkbase.
 
Filed herewith.

101 LAB
 
Inline XBRL Taxonomy Extension Label Linkbase.
 
Filed herewith.

101 PRE
 
Inline XBRL Taxonomy Extension Presentation Linkbase.
 
Filed herewith.

104
 
Cover Page Interactive Data File (the cover page interactive date file does not appear in Exhibit 104 because its Inline XBRL tags are embedded within the Inline XBRL document)
 
 


 
Indicates exhibits that constitute compensatory plans or arrangements.
*
 
This filing excludes schedules pursuant to Item 601(b)(2) of Regulation S-K, which the registrant agrees to furnish supplementary to the Securities and Exchange Commission upon request by the Commission.
^
 
Portions of this exhibit have been redacted and are subject to a confidential treatment request filed with the Secretary of the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

+
 
Information in this exhibit identified by the mark “[***]” is confidential and has been excluded pursuant to Item 601(b)(10)(iv) of Regulation S-K because it (i) is not material and (ii) would likely cause competitive harm to the Registrant if disclosed.


10



SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
CLEARWAY ENERGY, INC.
(Registrant) 
 
 
 
 
 
/s/ CHRISTOPHER S. SOTOS
 
 
Christopher S. Sotos
 
 
Chief Executive Officer
(Principal Executive Officer) 
 
 
Date: March 30, 2020
 
 
 


11
Exhibit


EXHIBIT 23.2
Consent of Independent Registered Public Accounting Firm
The Board of Directors
Clearway Energy, Inc.:
We consent to the incorporation by reference in the registration statements Numbers 333-206061 and 333-190071 on Form S-8, and Numbers 333-224684, 333-212096, 333-205140, 333-204589 on Form S-3 of Clearway Energy, Inc. of our report dated March 30, 2020, with respect to the consolidated balance sheets of DGPV HoldCo 3 LLC, as of December 31, 2019 and 2018, and the related consolidated statements of operations, members’ equity (deficit), and cash flows for the years then ended, and the related notes (collectively, the "financial statements"), which report appears in the Form 10-K/A of Clearway Energy, Inc. dated March 30, 2020.

Our report dated March 30, 2020 refers to changes in accounting principle, the Company’s adoption of Topic 842, Leases.

(signed) KPMG LLP
Philadelphia, Pennsylvania
March 30, 2020



Exhibit


EXHIBIT 31.1
CERTIFICATION
I, Christopher S. Sotos, certify that:

1.
I have reviewed this annual report on Form 10-K/A of Clearway Energy, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
/s/ CHRISTOPHER S. SOTOS
 
Christopher S. Sotos
Chief Executive Officer
(Principal Executive Officer)
 
Date: March 30, 2020



Exhibit


EXHIBIT 31.2
CERTIFICATION
I, Chad Plotkin, certify that:

1.
I have reviewed this annual report on Form 10-K/A of Clearway Energy, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
/s/ CHAD PLOTKIN
 
Chad Plotkin
Chief Financial Officer
(Principal Financial Officer)
 
Date: March 30, 2020



Exhibit


EXHIBIT 31.3
CERTIFICATION
I, Mary-Lee Stillwell, certify that:

1.
I have reviewed this annual report on Form 10-K/A of Clearway Energy, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
/s/ MARY-LEE STILLWELL
 
Mary-Lee Stillwell
Chief Accounting Officer
(Principal Accounting Officer)
 
Date: March 30, 2020


Exhibit


EXHIBIT 32

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Clearway Energy LLC on Form 10-K/A for the year ended December 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-K/A”), each of the undersigned officers of the Company certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer's knowledge:
(1)
The Form 10-K/A fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)
The information contained in the Form 10-K/A fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Form 10-K/A.

Date: March 30, 2020

 
/s/ CHRISTOPHER S. SOTOS
 
 
Christopher S. Sotos
 
 
Chief Executive Officer
(Principal Executive Officer) 
 
 
 
 
 
 
/s/ CHAD PLOTKIN
 
 
Chad Plotkin
 
 
Chief Financial Officer
(Principal Financial Officer) 
 
 
 
 
 
 
/s/ MARY-LEE STILLWELL
 
 
Mary-Lee Stillwell
 
 
Chief Accounting Officer
(Principal Accounting Officer
 
The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of this Form 10-K/A or as a separate disclosure document.
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Clearway Energy, Inc. and will be retained by Clearway Energy, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.



Exhibit
Exhibit 99.1

DGPV HOLDCO 3 LLC AND SUBSIDIARIES
Table of Contents

 
Page
Independent Auditors' Report
1
Consolidated Balance Sheets — December 31, 2019 and 2018
2
Consolidated Statements of Operations — Years ended December 31, 2019 and 2018
3
Consolidated Statements of Member's Equity (Deficit) — Years ended December 31, 2019 and 2018
4
Consolidated Statements of Cash Flows — Years ended December 31, 2019 and 2018
5
Notes to Consolidated Financial Statements
6



Exhibit 99.1

Independent Auditor's Report


The Members
DGPV HoldCo 3 LLC:
We have audited the accompanying consolidated financial statements of DGPV HoldCo 3 LLC and its subsidiaries, which comprise the consolidated balance sheets as of December 31, 2019 and 2018, and the related consolidated statements of operations, members’ equity (deficit), and cash flows for the years then ended, and the related notes to the consolidated financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of DGPV HoldCo 3 LLC and its subsidiaries as of December 31, 2019 and 2018, and the results of their operations and their cash flows for the years then ended in accordance with U.S. generally accepted accounting principles.
Change in Accounting Principle
As discussed in Note 2(h) to the consolidated financial statements, DGPV HoldCo 3 LLC changed its method of accounting for leases as of January 1, 2019, due to the adoption of Accounting Standards Update 2016-02, Leases (Topic 842) and related amendments. Our opinion is not modified with respect to this matter.

(signed) KPMG LLP
Philadelphia, Pennsylvania
March 30, 2020


1

Exhibit 99.1

    
DGPV HOLDCO 3 LLC AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 2019 and 2018
(In thousands)
Assets
 
2019

2018
Current assets:
 
 
 
 
 
Cash
 
$
19,104

 
$
5,035

 
Restricted cash
 
6,862

 
16,022

 
Accounts receivable – trade, net
 
9,251

 
7,942

 
Accounts receivable – affiliate
 
72

 

 
Derivative instruments
 
155

 
184

 
Prepayments and other current assets
 
3,153

 
758

 
 
 
Total current assets
 
38,597

 
29,941

Property, plant, and equipment, net
 
332,176


247,759

Intangible asset for power purchase agreement, net
 
1,367

 
1,427

Derivative instruments
 
2,599

 
1,489

Right-of-use assets, net
 
34,767

 

Other non-current assets
 
310

 
310

 
 
 
Total assets
 
$
409,816

 
$
280,926

Liabilities and Member's Equity
 
 
 
 
Current liabilities:
 
 
 
 
 
Short-term debt – affiliate
 
$
1,598

 
$
1,604

 
Current portion of long-term debt
 
40,996

 
27,050

 
Accounts payable – trade
 
3,765

 
13,342

 
Accounts payable – affiliate
 
11,385

 
6,929

 
Accrued interest expense
 
1,307

 
1,141

 
Derivative instruments
 
862

 
72

 
Lease liabilities
 
500

 

 
Accrued liabilities
 
250

 
7

 
 
 
Total current liabilities
 
60,663

 
50,145

Other liabilities:
 
 
 
 
 
Long-term debt
 
169,612

 
133,277

 
Derivative instruments
 
7,712

 
992

 
Other non-current liabilities
 
153

 
411

 
Asset retirement obligations
 
4,151

 
1,953

 
Long-term lease liabilities
 
34,703

 

 
 
 
Total non-current liabilities
 
216,331

 
136,633

 
 
 
Total liabilities
 
$
276,994

 
$
186,778

Redeemable noncontrolling interest
 
(737
)
 
(294
)
Commitments and contingencies
 
 
 
 
Equity:
 
 
 
 
Member's equity
 
132,498

 
96,094

Noncontrolling interest
 
1,061

 
(1,652
)
 
 
 
Total equity
 
133,559

 
94,442

 
 
 
Total liabilities and member's equity
 
$
409,816

 
$
280,926

See accompanying notes to consolidated financial statements.
 
 
 
 


2

Exhibit 99.1

DGPV HOLDCO 3 LLC AND SUBSIDIARIES
Consolidated Statements of Operations
Years ended December 31, 2019 and 2018
(In thousands)
 
 
 
 
 
 
 
 
2019

2018
Operating revenues:
 
 
 
 
 
Electric revenue
 
$
16,023

 
$
7,417

 
Renewable energy certificates
 
11,534

 
9,699

 
Government incentives
 
500

 
83

 
 
 
 
 
Total operating revenues
 
28,057

 
17,199

Operating costs and expenses:
 
 
 
 
 
Cost of operations
 
4,335

 
3,604

 
Cost of operations – affiliate
 
2,073

 
1,199

 
Depreciation and accretion
 
8,891

 
5,234

 
 
 
 
 
Total operating costs and expenses
 
15,299

 
10,037

 
 
 
 
 
Operating income
 
12,758

 
7,162

Other income (expense):
 
 
 
 
 
Interest income
 
173

 
127

 
Interest expense
 
(19,120
)
 
(4,460
)
 
 
 
 
 
Total other expense
 
(18,947
)
 
(4,333
)
 
 
 
 
 
Net (loss) income before noncontrolling interest
 
(6,189
)
 
2,829

 
 
 
 
 
Less: noncontrolling interest
 
(53,058
)
 
(54,498
)
 
 
 
 
 
Net income attributable to DGPV Holdco 3 LLC
 
$
46,869

 
$
57,327

See accompanying notes to consolidated financial statements.
 
 
 
 


3

Exhibit 99.1

DGPV HOLDCO 3 LLC AND SUBSIDIARIES
Consolidated Statements of Members' Equity (Deficit)
Years ended December 31, 2019 and 2018
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
Contributed
 
Retained
 
Noncontrolling
 
member's
 
 
 
 
 
 
 
 
capital
 
earnings
 
interest
 
equity (deficit)
Balance at December 31, 2017
 
$
(28,591
)
$
$
28,579

 

 
$
(12
)
 
Net income (loss)
 

 
57,327

 
(4,349
)
 
52,978

 
Cash contributions
 
120,782

 

 
5,066

 
125,848

 
Cash distributions
 
(79,970
)
 

 
(2,369
)
 
(82,339
)
 
Distributions to Clearway Renew, non-cash
 
(2,033
)
 

 

 
(2,033
)
Balance at December 31, 2018
 
$
10,188

$
$
85,906

 
$
(1,652
)
 
$
94,442

 
Net income (loss)
 

 
46,869

 
(52,482
)
 
(5,613
)
 
Cash contributions
 
123,619

 

 
56,774

 
180,393

 
Cash distributions
 
(135,719
)
 

 
(1,579
)
 
(137,298
)
 
Contributions, net of distributions, non-cash
 
1,635

 

 

 
1,635

Balance at December 31, 2019
 
$
(277
)
$
$
132,775

 
$
1,061

 
$
133,559

See accompanying notes to consolidated financial statements.
 
 
 
 
 
 


4

Exhibit 99.1

DGPV HOLDCO 3 LLC AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years ended December 31, 2019 and 2018
(In thousands)
 
 
2019
 
2018
Cash flows from operating activities:
 
 
 
 
 
Net (loss) income
$
(6,189
)
$
2,829

 
Adjustments to reconcile net income (loss) to net cash provided by
 
 
 
 
 
 
operating activities:
 
 
 
 
 
 
 
Depreciation and accretion
 
8,891

 
5,234

 
 
 
Right-of-use asset amortization
 
900

 

 
 
 
Provision for losses on accounts receivable
 
74

 

 
 
 
Amortization of intangible asset
 
60

 
60

 
 
 
Amortization of debt issuance costs
 
1,859

 
810

 
 
 
Non-cash interest expense applied to long-term debt
 
4,205

 

 
 
 
Changes in derivative instruments
 
6,429

 
(468
)
 
Cash provided (used) by changes in other working capital:
 
 
 
 
 
 
 
Accounts receivable – trade
 
(5,273
)
 
(6,368
)
 
 
 
Accounts receivable – affiliate
 
(2
)
 
676

 
 
 
Prepayments and other current assets
 
49

 
(253
)
 
 
 
Accounts payable – trade
 
(9,766
)
 
1,687

 
 
 
Accounts payable – affiliate
 
14,164

 
(9,204
)
 
 
 
Accrued interest expense
 
166

 
902

 
 
 
Accrued liabilities
 
273

 
(178
)
 
 
 
Deferred rent
 

 
313

 
 
 
Operating lease liabilities
 
(484
)
 

 
 
 
 
 
Net cash provided (used) by operating activities
 
15,356

 
(3,960
)
Cash flows from investing activities:
 
 
 
 
 
Capital expenditures
 
(91,909
)
 
(52,039
)
 
Acquisition of membership interests
 
(6,032
)
 
(147,014
)
 
Receipt of insurance proceeds
 
59

 

 
 
 
 
 
Net cash used by investing activities
 
(97,882
)
 
(199,053
)
Cash flows from financing activities:
 
 
 
 
 
Proceeds from short-term debt – affiliate, net of payments
 
(5
)
 
500

 
Proceeds from issuance of long-term debt
 
94,543

 
132,289

 
Payments for long-term debt
 
(49,720
)
 

 
Payment of debt issuance costs
 
(611
)
 
(5,680
)
 
Contributions from noncontrolling interests, net of distributions
 
55,328

 
46,035

 
Contributions from member
 
123,619

 
125,674

 
Distributions to member
 
(135,719
)
 
(79,970
)
 
 
 
 
 
Net cash provided by financing activities
 
87,435

 
218,848

 
 
 
 
 
Net increase in cash and restricted cash
 
4,909

 
15,835

Cash and restricted cash at beginning of period
 
21,057

 
5,222

Cash and restricted cash at end of period
$
25,966

$
21,057

Supplemental disclosures:
 
 
 
 
 
Interest paid
$
6,520

$
2,703

 
Interest paid by affiliate
 
44

 
513

 
Non-cash investing and financing activities:
 
 
 
 
 
 
Increase to fixed assets for capitalized asset retirement costs
 
2,127

 
887

 
 
Increase to fixed assets for capitalized debt issuance costs
 
1,327

 
84

 
 
Reduction to fixed assets for accrued government incentives
 
(2,835
)
 
(997
)
 
 
Additions to fixed assets for accrued capital expenditures
 
1,873

 
8,820

 
 
Debt issuance costs incurred not paid
 
(4
)
 
306

 
 
Interest added to long-term debt principal
 
4,205

 

 
 
Non-cash contributions
 
2,220

 
1,776

 
 
Non-cash distribution – developer fee on fixed assets
 
(1,549
)
 
(8,678
)
 
 
Accounts payable – affiliate for capital expenditures
 
(5,773
)
 
(82,653
)
See accompanying notes to consolidated financial statements.
 
 
 
 

5

Exhibit 99.1


DGPV HOLDCO 3 LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements

(1) Nature of Business
DGPV Holdco 3, LLC, or the Company, a Delaware limited liability company, is a partnership between Clearway Renew DG Holdings, LLC, a subsidiary of Clearway Renew LLC, and DGPV Holding LLC, a subsidiary of Clearway Energy Operating LLC. Clearway Renew LLC is a wholly owned subsidiary of Clearway Energy Group LLC, or Clearway Energy Group, which is a wholly owned subsidiary of Global Infrastructure Partners III, or GIP. Clearway Energy Operating LLC is a wholly owned subsidiary of Clearway Energy LLC, which is a partnership between Clearway Energy, Inc. and Clearway Energy Group.
On August 31, 2018, NRG Energy, Inc., or NRG, transferred its full ownership interest in Clearway Energy, Inc. to Clearway Energy Group, and subsequently sold 100% of its interest in Clearway Energy Group to GIP, including its interests in the Company, referred to as the GIP Transaction. The GIP Transaction did not impact the Company’s direct ownership structure.
The Company was formed on April 26, 2017 as a partnership to facilitate investment in an operating portfolio of distributed solar assets, primarily comprised of community solar projects and commercial distributed solar projects developed by Clearway Energy Group. The Company owns an interest in two portfolios of solar projects that participate in tax equity arrangements with tax equity investors, through its wholly owned subsidiaries, Chestnut Borrower, LLC, or Chestnut Borrower, and Renew Solar CS4 Borrower LLC, or CS4 Borrower. See Note 3, Tax Equity Arrangements, for a more detailed description of each tax equity arrangement. Each of the portfolios owns, operates and maintains solar energy systems that sell power to customers through long-term power purchase agreements, or PPAs. The commercial distributed solar projects sell power to a single commercial offtaker and the community solar projects sell power to a group of offtakers in one location.
The Company is governed by an Amended and Restated Operating Agreement, or Operating Agreement, where Clearway DGPV Holding LLC, or DGPV Holding, is the Class A Member and Clearway Renew DG Holdings, LLC, or Renew DG Holdings, is the Class B Member and the Manager of the Company. As Manager, Renew DG Holdings conducts and directs all operating activities of the Company. Contributions are made to the Company pursuant to requests made by the Manager on behalf of a fund company and calculated using specific modeling guidelines outlined in the Operating Agreement.
Contributions by DGPV Holding are calculated to equal an amount that enables DGPV Holding to achieve an annual yield based on available cash flow of 9.0% on average over the first ten years. Contributions by Renew DG Holdings are calculated based on the purchase price of a project less the relevant contribution from the Fund's tax equity partner and the contribution from DGPV Holding. Pursuant to the Operating Agreement, all tax basis income, gain, loss, deduction and credit, as well as all cash available for distribution, of the Company are allocated at 1% and 99% to the Class B Member and Class A Member, respectively.
(a) Chestnut Fund
The Company's wholly owned subsidiary, Chestnut Borrower, was formed on April 26, 2017 for the purpose of acting as a borrower of term loans for the Chestnut Fund, as described in note 6, Long-Term Debt, and Chestnut Borrower owns a 100% of Chestnut Class B LLC, the Class B Member of the Clearway Chestnut Fund LLC, or Chestnut Fund, tax equity arrangement. Chestnut Class B LLC, or Chestnut Class B, is the Managing Member of Chestnut Fund and conducts and directs all operating activities of the fund. The Class A Member of Chestnut Fund, or Investor Member, is Firstar Development, LLC, or Firstar, an affiliate of U.S. Bancorp.

6

Exhibit 99.1

Chestnut Fund's 100% owned subsidiaries and related solar facilities are listed below:
Project company
 
Facility
 
Type
 
Location
 
Facility capacity (kWdc)
 
Commercial operations date
 
PPA offtaker
 
PPA term in years
Black Cat Road Solar, LLC
 
77 Black Cat Rd
 
Community
 
MA
 
1,321

 
08/30/17
 
Ahold USA/Various (a)
 
20
Brook St Solar 1, LLC
 
134 Brook St A, B & C
 
Community
 
MA
 
6,480

 
09/06/17
 
Target Ahold USA/Various (a)
 
15 20
Solar Mule, LLC
 
Colby College
 
Commercial
 
ME
 
1,811

 
09/18/17
 
Colby College
 
27 (b)
Big Lake Holdco LLC
 
Big Lake
 
Community
 
MN
 
6,912

 
10/01/17
 
Various
 
25
Solar West Shaft LLC
 
N Adams-West Shaft Rd
 
Community
 
MA
 
1,346

 
10/10/17
 
Ahold USA/Raytheon/Various (a)
 
20
DG Foxborough Elm LLC
 
Elm Street
 
Community
 
MA
 
2,614

 
10/12/17
 
Town of Foxborough/Various (a)
 
20
Redbrook Solar 1 LLC
 
Redbrook B, C & D
 
Community
 
MA
 
5,568

 
11/09/17
 
Ahold USA/Various (a)
 
20
Northfield Holdco LLC
 
Northfield
 
Community
 
MN
 
6,962

 
12/01/17
 
Various
 
25
Waterford Holdco LLC
 
Waterford
 
Community
 
MN
 
3,767

 
12/01/17
 
Various
 
25
Center St Solar 1 LLC
 
1077 Center St A, B & C
 
Community
 
MA
 
3,870

 
12/21/2017 & 01/03/2018
 
Target Raytheon/Various (a)
 
15 20
TOS Solar 1, LLC
 
725 Guelphwood
 
Community
 
MA
 
646

 
12/30/17
 
Target/Various (a)
 
15/20
TOS Solar 2, LLC
 
726 Guelphwood
 
Community
 
MA
 
1,341

 
12/30/17
 
Target/Various (a)
 
15/20
Stafford St Solar 1, LLC
 
466 Stafford St Site A
 
Community
 
MA
 
2,776

 
12/31/17
 
Target/Various (a)
 
15/20
Stafford St Solar 3, LLC
 
466 Stafford St Site C
 
Community
 
MA
 
1,388

 
12/31/17
 
Raytheon/Various (a)
 
20
ETCAP NES CS MN 02 LLC
 
Nystuen
 
Community
 
MN
 
1,055

 
05/01/18
 
100% residential
 
25
ETCAP NES CS MN 06 LLC
 
Armstrong
 
Community
 
MN
 
3,714

 
05/01/18
 
Various
 
25
Stafford St Solar 2, LLC
 
466 Stafford St Site B
 
Community
 
MA
 
2,776

 
05/09/18
 
Target/Various (a)
 
15/20
Bullock Road Solar 1, LLC
 
247 & 249 Bullock
 
Community
 
MA
 
5,754

 
07/25/18
 
Various
 
20
Mapleton Solar LLC
 
Mapleton
 
Community
 
MN
 
5,080

 
09/01/18
 
Various
 
25
Osakis Solar LLC
 
Osakis
 
Community
 
MN
 
7,213

 
09/01/18
 
Various
 
25
Solar Wauwinet LLC
 
85 Wauwinet Rd-Barre
 
Community
 
MA
 
1,294

 
09/17/18
 
Target/Various (a)
 
15/20
Minisink Solar 1 LLC
 
Minisink North
 
Community
 
NY
 
2,495

 
10/26/18
 
100% residential
 
20
Minisink Solar 2 LLC
 
Minisink South
 
Community
 
NY
 
2,795

 
11/01/18
 
100% residential
 
20
DG Marathon LLC
 
Sage Stone
 
Community
 
MA
 
2,614

 
01/04/19
 
Ahold USA/Various (a)
 
20
 
 
 
 
 
 
 
 
81,592

 
 
 
 
 
 
 
(a) 50% sold through community solar services agreements and 50% sold to named customer through net metering purchase agreements.
(b) The initial term of 27 years shall automatically extend for 3 years, then for 1 year in perpetuity unless terminated by either party.
(b) CS4 Fund
The Company's wholly owned subsidiary, CS4 Borrower, was formed on July 9, 2018 for the purpose of acting as the borrower under a credit agreement for the CS4 Fund, as described in note 6, Long-Term Debt, and CS4 Borrower owns 100% of Renew Solar CS4 Class B LLC, the Class B Member of the Renew Solar CS4 Fund LLC, or CS4 Fund, tax equity arrangement. Renew Solar CS4 Class B LLC, or CS4 Class B, is the Managing Member of CS4 Fund and conducts and directs all operating activities of the fund. The Class A Member of CS4 Fund, or Investor Member, is PNC Commercial, LLC, or PNC, an indirect wholly owned subsidiary of PNC Financial Services Group, Inc. CS4 Borrower's wholly owned subsidiary Renew Solar CS4 Seller LLC, or CS4 Seller, acquires the project entities from a subsidiary of Clearway Renew, funds the construction of the projects, and in turn, sells these projects to CS4 Fund.

7

Exhibit 99.1

CS4 Fund's 100% owned subsidiaries and related solar facilities are listed below:
 
 
 
 
Facility
 
Commercial
 
 
 
 
 
 
 
 
capacity
 
operations
 
 
 
PPA
Project company
 
Location
 
(kWdc)
 
date
 
PPA offtaker
 
terms
Montevideo Solar LLC
 
Minnesota
 
7,497

 
1/1/2019
 
Various
 
25 years
Underhill Solar LLC
 
New York
 
3,011

 
3/18/2019
 
NYSERDA/Various (b)
 
10/20 years
Bluestone Solar LLC
 
New York
 
3,013

 
3/27/2019
 
Various
 
20 years
Chisago Holdco LLC
 
Minnesota
 
3,937

 
5/1/2019
 
Various
 
25 years
Frontenac Holdco LLC
 
Minnesota
 
7,208

 
5/1/2019
 
Various
 
25 years
CMR Solar LLC
 
New York
 
2,808

 
5/10/2019
 
NYSERDA/Various (b)
 
10/20 years
Sartell Solar LLC
 
Minnesota
 
7,501

 
6/1/2019
 
Various
 
25 years
Grabinski Solar LLC
 
New York
 
3,002

 
7/25/2019
 
Various
 
20 years
Clara City Solar LLC
 
Minnesota
 
1,400

 
9/1/2019
 
Various
 
25 years
New Munich Solar LLC
 
Minnesota
 
1,400

 
9/1/2019
 
Various
 
25 years
Olinda Trail Solar LLC
 
Minnesota
 
1,400

 
9/1/2019
 
Various
 
25 years
Rollingstone Holdco LLC
 
Minnesota
 
7,005

 
9/1/2019
 
Various
 
25 years
Stearns Solar I LLC
 
Minnesota
 
1,400

 
9/1/2019
 
Various
 
25 years
Wabasha Solar LLC
 
Minnesota
 
1,400

 
9/1/2019
 
Various
 
25 years
Wabasha Solar II LLC
 
Minnesota
 
1,400

 
9/1/2019
 
Various
 
25 years
Wabasha Solar III LLC
 
Minnesota
 
1,400

 
9/1/2019
 
Various
 
25 years
Winona Solar I LLC
 
Minnesota
 
1,400

 
9/1/2019
 
Various
 
25 years
Winona Solar II LLC
 
Minnesota
 
1,400

 
9/1/2019
 
Various
 
25 years
Mount Hope Solar 1 LLC
 
New York
 
2,793

 
10/9/2019
 
Various
 
20 years
Rounseville Solar 1, LLC
 
Massachusetts
 
3,324

 
11/14/19
 
Various
 
20 years
Wilmarth Lane Solar 1 LLC
 
Massachusetts
 
6,372

 
N/A (a)
 
Various
 
20 years
Partridgeville Road Solar 1 LLC
 
Massachusetts
 
4,743

 
N/A (a)
 
Various
 
20 years
Eastman Street Solar 1 LLC
 
Massachusetts
 
1,438

 
N/A (a)
 
Various
 
20 years
 
 
 
 
76,252

 
 
 
 
 
 
 
(a) Projects have not yet begun commercial operations.
(b) 1,000 kWdc sold to New York State Energy Research and Development Authority, or NYSERDA, through the 10-year PPA and the remainder through community solar customer agreements.

8

Exhibit 99.1

The following diagram provides further information related to the Company’s ownership structure as of December 31, 2019:
https://cdn.kscope.io/d8c47a0cc4b6d9a1e34e6bff99801acc-dgpvholdco3diagram2019a01.jpg


(2) Summary of Significant Accounting Policies
(a) Basis of Presentation and Principles of Consolidation
The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. The Accounting Standards Codification, or ASC, established by the Financial Accounting Standards Board, or FASB, is the source of authoritative U.S. GAAP to be applied by nongovernmental entities.
The consolidated financial statements include the Company's accounts and operations of those of its subsidiaries. All significant intercompany transactions and balances have been eliminated in the consolidated financial statements. The usual condition for a controlling financial interest is ownership of a majority of the voting interests of an entity. However, a controlling financial interest may also exist through arrangements that do not involve controlling voting interests. As such, the Company applies the guidance of ASC 810, Consolidations, to determine when an entity that is not controlled through its voting interests should be consolidated.
The Company has elected not to push down the effects of the GIP Transaction to its consolidated financial statements and accordingly, there was no change in basis of presentation related to the GIP Transaction.

9

Exhibit 99.1

(b) Restricted Cash
The following table provides a reconciliation of cash and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows as of December 31, 2019 and 2018 (in thousands):
 
 
 
 
 
 
 
 
2019

2018
Cash
 
$
19,104

$
$
5,035

Restricted cash
 
6,862

 
16,022

 
 
 
Cash and restricted cash shown in the consolidated statements of cash flows
 
$
25,966

$
$
21,057

As of December 31, 2019, restricted cash consists of $5 million held at Renew Solar CS4 Borrower LLC for debt service and $2 million held at Chestnut Class B Borrower LLC for distributions and to satisfy reserves for performance obligations. As of December 31, 2018, restricted cash consists of $5 million held at Renew Solar CS4 Borrower LLC for debt service and $10 million held at Chestnut Class B Borrower LLC for distributions and to satisfy reserves for performance obligations.
(c) Accounts Receivable – Trade
Accounts receivable represent trade receivables from sales of electricity to residential, commercial and municipal customers. Also included in accounts receivable – trade are receivables for the sale of renewable energy credits to a former affiliate, NRG Power Marketing LLC and receivables related to government incentives. The Company reviews its accounts receivable by aging category to identify significant customer balances with known collections issues. In evaluating the allowance, the Company makes judgments about the creditworthiness of its customers based on ongoing credit evaluations. The Company also considers current economic trends that might impact the level of future credit losses. As of December 31, 2019 and 2018, the allowance for doubtful accounts was $52 thousand and $11 thousand, respectively.
(d) Debt Issuance Costs
Debt issuance costs consist of legal fees and closing costs incurred by the Company in obtaining its financings. These costs are capitalized and amortized as interest expense on a basis which approximates the effective interest method over the term of the financing obligation and are presented as a direct deduction from the carrying amount of the related debt.
Amortization expense, included in interest expense in the consolidated statements of operations, was $1,859 thousand and $810 thousand for the years ended December 31, 2019 and 2018, respectively.
(e) Property, Plant, and Equipment
The Company purchased certain of its solar installations from Clearway Renew and its subsidiaries through its acquisitions of wholly owned project subsidiaries listed in note 1, Nature of Business. The acquisitions were recorded as a transfer of assets under common control and accordingly, the assets are recorded at Clearway Renew’s historical cost. The excess of the purchase price over the historical cost was recorded as a developer fee as a non-cash reduction to member's equity. Purchased solar installations from third parties are stated at cost.
Significant additions or improvements extending asset lives are capitalized as incurred, while repairs and maintenance that do not improve or extend the life of the respective asset are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Certain assets and their related accumulated depreciation amounts are adjusted for asset retirements and disposals with the resulting gain or loss included in cost of operations in the consolidated statements of operations. See note 4, Property, Plant, and Equipment, for additional information.
Interest incurred on funds borrowed to finance capital projects is capitalized until the project under construction is ready for its intended use. The amount of interest capitalized for the years ended December 31, 2019 and 2018 was $2,134 thousand and $506 thousand, respectively.
Construction in progress represents cumulative construction costs, including the costs incurred for the purchase of major equipment and engineering costs and capitalized interest. Once the project achieves commercial operation, the Company reclassifies the amounts recorded in construction in progress to plant equipment.

10

Exhibit 99.1

(f) Intangible Asset
Intangible asset for power purchase agreement represents the fair value of the out-of-market component of the PPA acquired at the DG Foxborough Elm LLC facility determined at acquisition date, when Clearway Renew acquired the project from a third party. The Company recognizes specifically identifiable intangible assets when specific rights and contracts are acquired. This definite-lived intangible asset is amortized as a reduction to operating revenues on a straight line basis over the term of the PPA (through October 2042), which is 25 years from the date the facility achieved commercial operations.
As of December 31, 2019 and 2018, the intangible asset subject to amortization consists of the following (in thousands):
    
 
 
 
 
 
 
 
 
2019

2018
Intangible asset for power purchase agreement
 
$
1,500

 
$
1,500

Less accumulated amortization
 
(133
)
 
(73
)
 
 
 
Net intangible asset for power purchase agreement
 
$
1,367

 
$
1,427

Aggregate amortization expense was $60 thousand for each of the years ended December 31, 2019 and 2018, which was recorded as a reduction to operating revenues in the consolidated statements of operations. Estimated amortization expense for each of the next five years is $60 thousand.
(g) Asset Impairments
Long-lived assets that are held and used are reviewed for impairment whenever events or changes in circumstances indicate carrying values may not be recoverable. Such reviews are performed in accordance with ASC 360, Property, Plant, and Equipment. An impairment loss is indicated if the total future estimated undiscounted cash flows expected from an asset are less than its carrying value. An impairment charge is measured by the difference between an asset’s carrying amount and fair value with the difference recorded in operating costs and expenses in the consolidated statements of operations. Fair values are determined by a variety of valuation methods, including third-party appraisals, sales prices of similar assets, and present value techniques. There were no indicators of impairment loss as of December 31, 2019 and 2018.
(h) Leases
The Company adopted ASU No. 2016-02, Leases (Topic 842), or Topic 842, on January 1, 2019, using the modified retrospective transition method and therefore, prior period financial information has not been adjusted and continues to be reflected in accordance with the Company's historical accounting policy. Topic 842 requires the establishment of a lease liability and related right-of-use, or ROU, asset for all leases with a term longer than 12 months. The Company elected certain of the permitted practical expedients, including the expedient that permits the Company to retain its existing lease assessment and classification. The Company also elected to account for lease and non-lease components for specific asset classes as a single lease component.
The adoption of the standard resulted in the recording of operating lease liabilities of $30.4 million and related ROU assets of $30.4 million. There was no impact to the Company’s consolidated statement of operations or cash flows. The Company utilized its incremental borrowing rate at adoption date of 4.17% to determine the amount of the lease liabilities.
All of the Company’s leases are operating leases as of December 31, 2019.
For new leases, the Company records its operating lease liabilities at the present value at lease commencement date of the lease payments over the lease term. Lease payments include fixed payment amounts, as well as variable rate payments based on an index initially measured at lease commencement date. Variable payments, including payments based on future performance and based on index changes, are recorded as the expense is incurred. The Company determines the relevant lease term by evaluating whether renewal and termination options are reasonably certain to be exercised. The Company uses its incremental borrowing rate to calculate the present value of the lease payments, based on information available at the lease commencement date.
See note 2(k), Revenue Recognition below and note 8, Leases for information on the Company's leases.
(i) Deferred Rent
Prior to the adoption of Topic 842, the Company recorded rent expense on a straight line basis over the life of the lease term. The cumulative difference between the payments made and the expense recognized was recorded in deferred rent on the consolidated balance sheets.

11

Exhibit 99.1

(j) Income Taxes
The Company is classified as a partnership for federal and state income tax purposes. Therefore, federal and state income taxes are assessed at the partner level. Accordingly, no provision has been made for federal or state income taxes in the accompanying consolidated financial statements.
(k) Revenue Recognition
On January 1, 2018, the Company adopted the guidance in ASC 606, Revenue from Contracts with Customers, or ASC 606, using the modified retrospective method applied to contracts which were not completed as of the adoption date, with no adjustment required to the financial statements upon adoption. Following the adoption of ASC 606, the Company's revenue recognition of its contracts with customers remains materially consistent with its historical practice. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company's policies with respect to its various revenue streams are detailed below. In general, the Company applies the invoicing practical expedient to recognize revenue for the revenue streams detailed below, except in circumstances where the invoiced amount does not represent the value transferred to the customer.
Electric Revenue
The Company's electric revenue is related to energy contract revenue from the PPAs listed in note 1, Nature of Business. The contractual rates could be fixed or increase annually during the terms of the PPAs, ranging from 10-27 years. Electric revenue is billed and paid on a monthly basis.
The PPA at Solar Mule, LLC is accounted for as an operating lease. Previously ASC 840, Leases, or ASC 840, and currently Topic 842, requires the minimum lease payments received to be amortized over the term of the lease and contingent rentals are recorded when the achievement of the contingency becomes probable. Judgment is required by management in determining the economic life of each generating facility, in evaluating whether certain lease provisions constitute minimum payments or represent contingent rent and other factors in determining whether a contract contains a lease and whether the lease is an operating lease or capital lease. The lease has no minimum lease payments and all of the rental income under this lease is recorded as contingent rent on an actual basis each period when electricity is produced by the solar facility and delivered to the offtaker at the rate billable per kWh under the terms of the PPA. The lease has renewal options at the end of the lease term. Termination may be allowed under specific circumstances in the lease arrangement, such as under an event of default.
For PPAs accounted for as executory contracts under ASC 606, revenue is recognized on an accrual basis each period, as electricity is produced by the solar facility and delivered to the offtaker at the rate billable per kWh under the terms of the PPA.
The Company's electric revenue for the years ended December 31, 2019 and 2018 is summarized as follows (in thousands):
 
 
 
 
 
 
 
 
2019
 
2018
Energy revenue
 
$
15,669

 
$
7,205

Lease revenue
 
245

 
272

Contract amortization
 
(60
)
 
(60
)
 
 
 
Total electric revenue
 
$
15,854

 
$
7,417

Renewable Energy Certificates, or RECs
The Company has entered into agreements with NRG Power Marketing LLC, or PML, a wholly owned subsidiary of NRG, to purchase and sell RECs generated from 2017 through 2028 by the Massachusetts projects in accordance with vintage years, quantities, and prices in the REC agreements with PML. Prices range between $123.16 and $270.00 per REC. PML sells the RECs to third parties. Revenue is recognized as the REC is generated based on actual production multiplied by the contract rates. REC revenue is billed and paid on a quarterly basis. REC revenue from PML is recorded as Renewable energy certificates – affiliate prior to the GIP Transaction, and as Renewable energy certificates after the GIP Transaction, in the consolidated statements of operations.

12

Exhibit 99.1

Government Incentives
The Company is entitled to state performance based incentives, or PBIs, paid by NYSERDA for the Minisink Solar 1 LLC and Minisink Solar 2 LLC projects, not to exceed $900,607 for Minisink Solar 1 LLC and $1,092,655 for Minisink Solar 2 LLC, as well as for five projects in the CS4 Fund, not to exceed $5.7 million. The incentive payments for each project will consist of one payment at commercial operation date for 50% of the awarded amount, which was recorded to property, plant, and equipment, and two annual performance-based payments each of which is estimated to be 25% of the incentive. For CS4 Fund, the commercial operation date payment of $2.8 million for all five projects was recorded to property, plant and equipment in 2019. The two annual performance based payments are earned monthly based upon the actual electricity produced by the project multiplied by a rate stipulated in the agreements. PBI revenue is recorded as Government incentives in the consolidated statements of operations. As of December 31, 2019, $2.8 million was recorded to prepayments and other currents related to the NYSERDA commercial operation date payment, which was collected during the first quarter of 2020.
Contract Balances
The following table reflects the contract assets in the Company's consolidated balance sheets as of December 31, 2019 and 2018 (in thousands):
 
 
 
 
 
 
 
 
2019
 
2018
Accounts receivable - contracts with customers
 
$
9,243

 
$
7,927

Accounts receivable - leases
 
8

 
15

 
 
 
Total accounts receivable - trade, net
 
$
9,251

 
$
7,942

(l) Derivative Financial Instruments
The Company accounts for derivative financial instruments in accordance with ASC 815, Derivatives and Hedging, which 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 normal purchase normal sale exception. The Company uses interest rate swaps to manage its interest rate exposure on long-term debt, which are not designated as cash flow hedges. Changes in the fair value of non-hedge derivatives are immediately recognized in earnings. See note 5, Accounting for Derivative Instruments and Hedging Activities, for more information.
(m) Risks and Uncertainties
Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of accounts receivable – trade, accounts receivable – affiliate, and derivative instruments. Accounts receivable are concentrated with residential, commercial, and municipal customers. The energy industry may impact the Company’s overall exposure to credit risk, either positively or negatively, in that the customer may be similarly affected by changes in economic, industry, or other conditions. Municipal entities are generally subject to budget decisions made at superior governmental levels, which may impede or delay the Company’s collection of accounts receivable from these customers. However, the Company believes that the credit risk posed by such concentrations is offset by the diversification and creditworthiness of its customer base. The Company is exposed to credit losses in the event of noncompliance by counterparties on its derivative financial instruments.
Due to the concentration of sales of RECs to PML, the Company is exposed to credit risk of potential nonperformance by them, which could impact liquidity if this customer were to experience financial difficulties. As of December 31, 2019 and 2018, accounts receivable – trade with PML totaled $5.8 million and $5.5 million, respectively. The maximum amount of loss due to credit risk, should the customer fail to perform, is the amount of the outstanding receivable, and any losses associated with replacing this customer.
Risks associated with the Company’s operations include the performance of a solar installation below expected levels of efficiency and output, shutdowns due to the breakdown or failure of equipment, or catastrophic events such as fires, earthquakes, floods, explosions, pandemics, or other similar occurrences affecting a power generation installation or its energy purchaser.
(n) Fair Value of Financial Instruments
The Company accounts for the fair value of financial instruments in accordance with ASC 820, Fair Value Measurement, or ASC 820. The Company does not hold or issue financial instruments for trading purposes. The carrying amounts of cash, restricted cash, accounts receivable – trade, accounts receivable – affiliate, accounts payable – trade, accounts payable – affiliate and accrued liabilities approximate fair value because of the short-term maturity of these instruments and are classified as Level 1 within the fair value hierarchy.

13

Exhibit 99.1

Derivative instruments consisting of interest rate swaps are recorded at fair value on the Company’s consolidated balance sheet on a recurring basis and are classified as Level 2 within the fair value hierarchy as the fair value can be determined based on observable values of underlying interest rates. The fair value of each contract is discounted using a risk free interest rate. In addition, the Company applies a credit reserve to reflect credit risk, which for interest rate swaps is calculated utilizing the bilateral method based on published default probabilities. The credit reserve is added to the discounted fair value to reflect the exit price that a market participant would be willing to receive to assume the Company's liabilities or that a market participant would be willing to pay for the Company's assets. For further discussion of interest rate swaps, see note 5, Accounting for Derivatives Instruments and Hedging Activities.
The carrying value of long-term debt approximates fair value at December 31, 2019 and 2018 as the debt carries a variable interest rate. The carrying value of short-term debt – affiliate approximates fair value at December 31, 2019 and 2018 due to its short-term maturity. The fair values of long-term debt and short-term debt – affiliate are based on current interest rates for similar instruments with equivalent credit quality and is classified as Level 3 inputs within the fair value hierarchy.
ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date.
•    Level 2 – Inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.
•    Level 3 – Unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date.
In accordance with ASC 820, the Company determines the level in the fair value hierarchy within which each fair value measurement in its entirety falls, based on the lowest level input that is significant to the fair value measurement in its entirety.
(o) Commitments and Contingencies
In the normal course of business, the Company is subject to various claims and litigation. Management of the Company expects that these various litigation items will not have a material adverse effect on the results of operations, cash flows, or financial position of the Company.
(p) Asset Retirement Obligations
The Company accounts for its asset retirement obligations, or AROs, in accordance with ASC 410-20, Asset Retirement Obligations, or ASC 410-20. Retirement obligations associated with long-lived assets included within the scope of ASC 410-20 are those for which a legal obligation exists under enacted laws, statutes, and written or oral contracts, including obligations arising under the doctrine of promissory estoppel, and for which the timing and/or method of settlement may be conditional on a future event. ASC 410-20 requires the Company to recognize the fair value of a liability for an ARO in the period in which it is incurred and a reasonable estimate of fair value can be made.
Upon initial recognition of a liability for an ARO, the Company capitalizes the asset retirement cost by increasing the carrying amount of the related long-lived asset by the same amount. Over time, the liability is accreted to its future value, while the capitalized cost is depreciated over the useful life of the related asset. The Company’s AROs are the estimated cost to remove the above ground solar equipment and restore the site to conditions similar to the surrounding parcels.
The following table represents the balance of the ARO obligation as of December 31, 2019 and 2018, along with the additions and accretion expense related to the Company's ARO for the year ended December 31, 2019 (in thousands):
Balance as of December 31, 2018
 
$
1,953

Additions
 
2,127

Accretion expense
 
196

Balance as of December 31, 2019
 
$
4,276

(q) Comprehensive Income
The Company’s total comprehensive income is equal to its net income for the years ended December 31, 2019 and 2018.

14

Exhibit 99.1

(r) Redeemable Noncontrolling Interests
The tax equity investor in the Chestnut Fund, Firstar, has the right to redeem its interests for cash or other assets and accordingly, the Company has included the noncontrolling interest attributable to Firstar as a component of temporary equity in the mezzanine section of the consolidated balance sheets. The following table reflects the changes in the Company's redeemable noncontrolling interest balance for the years ended December 31, 2019 and 2018 (in thousands):
Balance as of December 31, 2017
 
$
6,517

 
Cash contributions
 
44,266

 
Cash distributions
 
(928
)
 
Net loss attributable to noncontrolling interest
 
(50,149
)
Balance as of December 31, 2018
 
$
(294
)
 
Cash contributions
 
1,724

 
Cash distributions
 
(1,591
)
 
Net loss attributable to noncontrolling interest
 
(576
)
Balance as of December 31, 2019
 
$
(737
)
(s) Tax Equity Arrangements
The Company has determined that the appropriate methodology for calculating its noncontrolling interest and redeemable noncontrolling interest is a balance sheet approach using the hypothetical liquidation at book value, or HLBV, method. Under the HLBV method, the amount reported as noncontrolling interests and redeemable noncontrolling interests represent the amount that each tax equity investor would hypothetically receive at each balance sheet date under the liquidation provisions of the contractual agreements assuming the net assets were liquidated at their recorded amounts determined in accordance with GAAP. The tax equity investors' interest in the results of operations are determined as the difference in the noncontrolling interest or redeemable noncontrolling interest at the start and end of each reporting period, after taking into account any capital transactions. The calculations utilized to apply the HLBV method include estimated calculations of taxable income or losses for the reporting period. These amounts are reconciled to the taxable income or loss included within the tax return once the tax return is filed.
(t) Use of Estimates
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.


15

Exhibit 99.1

(3) Tax Equity Arrangements
(a) Chestnut Fund
The Company's wholly owned subsidiary Chestnut Class B LLC is the Class B Member and the Managing Member of the Chestnut Fund tax equity arrangement and it conducts and directs all operating activities of the fund. The Investor Member is Firstar. Chestnut Fund is a VIE and Chestnut Class B LLC is the primary beneficiary due to its role as Managing Member and the ability to direct the activities that most significantly impact the economics of the tax equity arrangement.
The summarized financial information for Chestnut Fund as of December 31, 2019 and 2018 is as follows (in thousands):
 
 
 
 
 
2019
 
2018
Current assets
 
$
14,596

 
$
13,490

Property, plant, and equipment, net
 
175,492

 
182,416

Intangible asset for power purchase agreement, net
 
1,367

 
1,427

Right-of-use assets, net
 
22,817

 

Other non-current assets
 
311

 
310

 
 
 
Total assets
 
214,583

 
197,643

Accounts payable – affiliate
 
651

 
3,473

Long-term lease liabilities
 
22,753

 

Other current and non-current liabilities
 
3,110

 
7,290

 
 
 
Total liabilities
 
26,514

 
10,763

Redeemable noncontrolling interests
 
(737
)
 
(294
)
 
 
 
Net assets less redeemable noncontrolling interests
 
$
188,806

 
$
187,174

(b) CS4 Fund
The Company's wholly owned subsidiary Renew Solar CS4 Class B LLC is the Class B Member and Managing Member of the CS4 Fund tax equity arrangement, and conducts and directs all operating activities of the fund. The Investor Member is PNC. CS4 Fund is a VIE and Renew Solar CS4 Class B LLC is the primary beneficiary due to its role as Managing Member and the ability to direct the activities that most significantly impact the economics of the tax equity arrangement.
The summarized financial information for CS4 Fund as of December 31, 2019 and 2018 is as follows (in thousands):
 
 
 
 
 
2019
 
2018
Current assets
 
$
6,573

 
$

Property, plant, and equipment, net
 
156,684

 
43,274

Right-of-use assets, net
 
11,950

 

 
 
 
Total assets
 
175,207

 
43,274

Accounts payable – affiliate
 
67,739

 
57,126

Long-term lease liabilities
 
11,950

 

Other current and non-current liabilities
 
6,283

 
2,750

 
 
 
Total liabilities
 
85,972

 
59,876

Noncontrolling interests
 
1,061

 
(1,652
)
 
 
 
Net assets less noncontrolling interests
 
$
88,174

 
$
(14,950
)


16

Exhibit 99.1

(4) Property, Plant, and Equipment
The Company’s major classes of property, plant, and equipment as of December 31, 2019 and 2018 were as follows (in thousands):
 
 
 
 
 
 
 
 
2019

2018
 
Depreciable lives
Plant equipment
 
$
300,747

 
$
184,558

 
10 - 30 years
Construction in progress
 
45,488

 
68,564

 
 
 
 
Total property, plant, and equipment
 
346,235

 
253,122

 
 
Less accumulated depreciation
 
(14,059
)
 
(5,363
)
 
 
 
 
 
Net property, plant, and equipment
 
$
332,176

 
$
247,759

 
 
 
 
 
 
 
 
 
 
 

 
 

 
 
(a) Chestnut Fund
Chestnut Fund purchased its solar installations through the acquisition of membership interests in its subsidiaries from Clearway Renew. During 2017 through 2019, the purchase price of the acquired property, plant, and equipment was $259.4 million. As of December 31, 2018, $5.8 million of the purchase price was payable to Clearway Renew and was recorded on the Company's consolidated balance sheets in accounts payable – affiliate. As described in note 2, Summary of Significant Accounting Policies, the acquisitions were a transfer of assets under common control. Accordingly, the assets are recorded at Clearway Renew's historical cost. The purchase price less the historical cost is recorded as a developer fee and a corresponding reduction to equity. In addition, AROs totalling $1.5 million have been recorded by Chestnut Fund upon acquisitions and are included in property, plant, and equipment. In 2018, $997 thousand was recorded as a reduction to property, plant, and equipment for a NYSERDA government incentive award related to the Minisink Solar 1 LLC and Minisink Solar 2 LLC facilities reaching commercial operation. For additional information on the award, see note 2(k), Revenue Recognition.

17

Exhibit 99.1

Chestnut Fund completed the following acquisitions of membership interests in its subsidiaries with the purchase price allocated primarily to property, plant, and equipment (in thousands):
Project company
 
Purchase price
 
Historical cost
 
Developer fee
 
Acquisition date
 
Placed in service date
Black Cat Road Solar, LLC
 
$
5,183

 
$
3,666

 
$
1,517

 
August 14, 2017
 
August 30, 2017
Brook St Solar 1, LLC
 
25,593

 
18,192

 
7,401

 
August 14, 2017
 
September 6, 2017
Solar Mule, LLC
 
4,211

 
3,142

 
1,069

 
September 1, 2017
 
September 18, 2017
Big Lake Holdco LLC
 
18,583

 
14,559

 
4,024

 
August 14, 2017
 
October 1, 2017
Solar West Shaft LLC
 
4,550

 
3,189

 
1,361

 
August 14, 2017
 
October 10, 2017
DG Foxborough Elm LLC  (a)
 
10,183

 
7,838

 
2,345

 
September 27, 2017
 
October 12, 2017
Redbrook Solar 1 LLC
 
21,090

 
15,415

 
5,675

 
September 27, 2017
 
November 9, 2017
Northfield Holdco LLC
 
17,639

 
12,742

 
4,897

 
October 27, 2017
 
December 1, 2017
Waterford Holdco LLC
 
9,218

 
6,453

 
2,765

 
October 27, 2017
 
December 1, 2017
Center St Solar 1 LLC
 
13,529

 
10,042

 
3,487

 
August 14, 2017
 
December 21, 2017
TOS Solar 1, LLC