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United States securities and exchange commission logo
October 17, 2022
Chad Plotkin
Chief Financial Officer
Clearway Energy, Inc.
300 Carnegie Center, Suite 300
Princeton, NJ 08540
Re: Clearway Energy,
Inc.
Form 10-K for the
Fiscal Year ended December 31, 2021
Filed February 28,
2022
File No. 001-36002
Dear Chad Plotkin:
We have reviewed your September 15, 2022 response to our comment
letter and have the
following comments. In some of our comments, we may ask you to provide
us with information
so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your response to these comments, we may have
additional
comments. Unless we note otherwise, our references to prior comments are
to comments in our
August 31, 2022 letter.
Form 10-K for the Fiscal Year ended December 31, 2021
Properties, page 41
1. We note your response
to prior comment two indicating that you believe disclosures of
rated and net capacity
along with "information regarding related agreements to sell
power" are responsive
to the requirement to address utilization. However, you have not
identified such
information in your response or along with the list of facilities.
We note that you
disclose renewable facilities MWh generated and sold of 11,313,000 for
2021 on page 52, and
that if divided by the annualized net MW capacity of your solar and
wind facilities of
5,215 on pages 41 and 42, as a proxy for the weighted average, this
would yield a combined
plant load factor of about 25%. However, you have not disclosed
the weighted average
net MW capacity, MWh generated and sold separately for the solar
Chad Plotkin
FirstName LastNameChad Plotkin
Clearway Energy, Inc.
Comapany
October 17,NameClearway
2022 Energy, Inc.
October
Page 2 17, 2022 Page 2
FirstName LastName
and wind facilities, or plant load factors, which would generally
indicate the extent to
which your facilities were utilized during the periods covered by your
report.
We continue to believe that you will need to disclose information that
will reasonably
inform investors as to the extent of utilization of your facilities to
comply with Instruction
1 to Item 102 of Regulation S-K. We reissue prior comment two.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Consolidated Results of Operations, page 52
2. We note that you have not complied with prior comment three,
concerning the need to
more clearly address the requirements of Item 303 of Regulation S-K.
You explain
that you have not provided further details because you regard you
acquisition-related
activity as the largest driver of changes, and will continue to
aggregate such changes with
other changes when you deem there to be no other material items to
disclose.
You also explain that you believe you have addressed the applicable
disclosure
requirements by presenting your results of operations by reportable
segment, although this
does not appear to be an accurate description of your disclosure
approach. We note that
you attribute some changes in certain line items to the operating
segments, though do not
otherwise present or discuss the results of operations by reportable
segment to provide
context for the discussion and analysis of changes.
You also indicate that you do not believe it would be meaningful to
provide investors with
information about revenues separately for the solar and wind
facilities, renewable energy
credits, or information about changes in these components, because the
renewable
generating facilities do not require fuel and are not actively
dispatched, notwithstanding
differences in the circumstances under which power is generated by
these facilities.
Tell us how you have considered such differences, as well as
contractual differences
between the conventional and renewable sources and plant load factors
in formulating
your view on the adequacy of your present disclosures. Provide us with
schedules of
revenues disaggregated for the solar facilities, wind facilities, and
the renewable energy
credit components of the PPAs, reconciled to the segment financial
information for all
periods presented in your annual report and subsequent interim
reports.
Financial Statements
Note 2 - Summary of Significant Accounting Policies
Revenue Recognition, page 89
3. We note that in response to prior comment four you acknowledge that
revenues from the
wind and solar facilities are variable, due to the uncertain nature of
weather patterns, and
explain that these have had a significant impact on your results of
operations. However,
you also state that "the nature, timing and uncertainty of revenues
and cash flows are
similar for all renewable assets with similar power purchase
agreements."
Chad Plotkin
FirstName LastNameChad Plotkin
Clearway Energy, Inc.
Comapany
October 17,NameClearway
2022 Energy, Inc.
October
Page 3 17, 2022 Page 3
FirstName LastName
Please submit the analyses that you performed in formulating the view
that revenues from
your solar and wind facilities are correlated in all of these
respects.
Tell us how you considered factors impacting the generation of power
from these
facilities, such as seasonality, cloud covers, fluctuations in wind
currents, climate
conditions, as well as equipment efficiency losses, transmission
system reliability, and
grid availability, with details sufficient to understand how you have
found changes in all
of these factors to have corresponding effects for the solar and wind
facilities.
Provide details of the power and revenues generated by the solar and
wind facilities each
quarter during the periods covered by your annual report and the
subsequent interim
period, identify the prevailing factors impacting revenues each
quarter, and provide an
explanation for all non-correlated activity. It should be clear how
you considered the
amounts of electricity generated, plant load factors, and geographical
diversity of your
wind and solar facilities, including variability and trends, in
concluding that separate
disclosure of revenues for wind and solar facilities would not be
meaningful.
4. We understand from your response to prior comment five that you did
not reassess
whether your PPAs contained a lease when adopting FASB ASC 842, and
have therefore
relied on conclusions reached when applying FASB ASC 840, including a
view that
renewable energy credits (RECs) are an output of the facilities being
leased.
However, it appears that you have acquired solar and wind facilities
subsequent to
2018, which do not appear to be represented in your response. Tell us
how you evaluated
the associated PPAs under FASB ASC 842 in conjunction with your
acquisitions of those
properties, as well as any PPAs arising in connection with new
projects, and any
amendments to agreements that originated prior to the required
adoption date.
With regard to your prior accounting determinations, describe the
specific contractual
elements that you relied upon in concluding that the PPAs associated
with the wind and
solar properties listed on pages 41 and 42 were not disqualified as
leases based on the
guidance in FASB ASC 840-10-15-10, 15-11, and 15-12, and identify the
criteria that you
believe were met for such PPAs in FASB ASC 840-10-15-6. Please clarify
the extent to
which you relied on different criteria in reaching your accounting
conclusions.
Tell us how MWh's covered by the PPAs compare to your expectations for
average output
from the associated facilities, and describe any minimum and maximum
provisions,
options to fulfill your obligations with output of alternate
facilities, options to sell excess
output to other customers, and the manner by which pricing is
established.
Also describe the provisions governing RECs, the mechanism by which
counterparties
obtain the associated economic benefits, and associated timeframes
involved subsequent
to generating the power. Please identify the particular RECs conveyed,
describe any
lapses in funding REC programs during the last three fiscal years and
subsequent interim
Chad Plotkin
Clearway Energy, Inc.
October 17, 2022
Page 4
period, any contractual exposure that you have if REC programs are not
renewed, and
explain how characterizing RECs as an output reconciles with their
origin under the
associated governmental incentive programs, in your view.
You may contact John Cannarella, Staff Accountant, at (202) 551-3337 or
Karl Hiller,
Branch Chief, at (202) 551-3686 with any questions.
FirstName LastNameChad Plotkin Sincerely,
Comapany NameClearway Energy, Inc.
Division of
Corporation Finance
October 17, 2022 Page 4 Office of Energy &
Transportation
FirstName LastName