Clearway Energy, Inc.CWEN
Clearway Energy, Inc. Leases Disclosure
Leases
Accounting for Leases
The Company evaluates each arrangement at inception to determine if it contains a lease. Substantially all of the Company’s leases are operating leases.
Lessee
The Company records its operating lease liabilities at the present value of the lease payments over the lease term at lease commencement date. 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 when the expense is probable. 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.
The Company’s leases consist of land leases for numerous operating asset locations, real estate leases and equipment leases. The terms and conditions for these leases vary by the type of underlying asset. Certain of these leases have both lease and non-lease components and the Company has elected to apply the practical expedient to not separate these components.
Lease expense was comprised of the following:
| Year Ended December 31, | ||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Operating lease cost - Fixed | $ | 51 | $ | 31 | $ | 40 | ||||||||||||||
| Operating lease cost - Variable | 15 | 12 | 11 | |||||||||||||||||
| Total lease cost | $ | 66 | $ | 43 | $ | 51 | ||||||||||||||
Operating lease information was as follows:
| Year Ended December 31, | ||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Cash paid for operating leases | $ | 50 | $ | 34 | $ | 30 | ||||||||||||||
| (In millions, except term and rate) | December 31, 2025 | December 31, 2024 | ||||||||||||
Right-of-use assets - operating leases, net (a) | $ | 714 | $ | 547 | ||||||||||
| $ | 20 | $ | 10 | |||||||||||
Long-term lease liability - operating leases (a) | 796 | 569 | ||||||||||||
| Total lease liabilities | $ | 816 | $ | 579 | ||||||||||
| Weighted average remaining lease term (in years) | 25 | 26 | ||||||||||||
| Weighted average discount rate | 5.7 | % | 4.5 | % | ||||||||||
(a) Increases in right-of-use assets and long-term lease liabilities are primarily due to third-party acquisitions, as further described in Note 3, Acquisitions and Dispositions.
(b) Short-term lease liability balances are included within the accrued expenses and other current liabilities line item of the consolidated balance sheets as of December 31, 2025 and 2024.
Minimum future rental payments of operating lease liabilities as of December 31, 2025 are as follows:
| (In millions) | ||||||||
| 2026 | $ | 63 | ||||||
| 2027 | 63 | |||||||
| 2028 | 64 | |||||||
| 2029 | 62 | |||||||
| 2030 | 63 | |||||||
| Thereafter | 1,214 | |||||||
| Total lease payments | 1,529 | |||||||
| Less imputed interest | (713) | |||||||
| Total lease liability - operating leases | $ | 816 | ||||||
The Company is party to various land lease agreements with wholly-owned subsidiaries of CEG that are accounted for as operating leases. The following table summarizes the land lease agreements:
| (In millions) | Right-of-use assets, net | Long-term lease liabilities | Lease expiration | |||||||||||||||||
| As of December 31, 2025 | ||||||||||||||||||||
| Daggett 2 | $ | 22 | $ | 23 | June 30, 2058 | |||||||||||||||
| Daggett 3 | 29 | 34 | December 18, 2062 | |||||||||||||||||
| Luna Valley | 16 | 19 | September 23, 2058 | |||||||||||||||||
| Mililani I | 18 | 21 | March 31, 2057 | |||||||||||||||||
Oahu Solar (a) | 17 | 19 | August 1, 2057 | |||||||||||||||||
Rosamond Central (a) | 10 | 12 | March 31, 2056 | |||||||||||||||||
| Rosamond South I | 14 | 16 | September 30, 2058 | |||||||||||||||||
| As of December 31, 2024 | ||||||||||||||||||||
| Daggett 2 | $ | 22 | $ | 23 | June 30, 2058 | |||||||||||||||
| Daggett 3 | 30 | 34 | December 18, 2062 | |||||||||||||||||
| Mililani I | 18 | 21 | March 31, 2057 | |||||||||||||||||
Oahu Solar (a) | 17 | 19 | August 1, 2057 | |||||||||||||||||
Rosamond Central (a) | 11 | 12 | March 31, 2056 | |||||||||||||||||
(a) The Company has the ability to extend each of these leases for two additional five-year periods.
Lessor
The majority of the Company’s revenue is obtained through PPAs or other contractual agreements that are accounted for as leases. These leases are comprised of both fixed payments and variable payments contingent upon volumes or performance metrics. Many of the leases have renewal options at the end of the lease term. Termination may be allowed under specific circumstances in the lease arrangements, such as under an event of default. All but one of the Company’s active leases are operating leases. This sales-type lease is further described below. Certain of these operating leases have both lease and non-lease components, and the Company allocates the transaction price to the components based on standalone selling prices.
The following amounts of energy, capacity and other revenues are related to the Company’s operating leases:
| Flexible Generation | Renewables & Storage | Total | ||||||||||||||||||
| December 31, 2025 | (In millions) | |||||||||||||||||||
| Energy revenue | $ | 2 | $ | 783 | $ | 785 | ||||||||||||||
| Capacity revenue | 113 | 63 | 176 | |||||||||||||||||
| Operating revenues | $ | 115 | $ | 846 | $ | 961 | ||||||||||||||
| Flexible Generation | Renewables & Storage | Total | ||||||||||||||||||
| December 31, 2024 | (In millions) | |||||||||||||||||||
| Energy revenue | $ | 3 | $ | 817 | $ | 820 | ||||||||||||||
| Capacity revenue | 110 | 43 | 153 | |||||||||||||||||
| Operating revenues | $ | 113 | $ | 860 | $ | 973 | ||||||||||||||
| Flexible Generation | Renewables & Storage | Total | ||||||||||||||||||
| December 31, 2023 | (In millions) | |||||||||||||||||||
| Energy revenue | $ | 4 | $ | 760 | $ | 764 | ||||||||||||||
| Capacity revenue | 249 | 20 | 269 | |||||||||||||||||
Other revenues (a) | 21 | — | 21 | |||||||||||||||||
| Operating revenues | $ | 274 | $ | 780 | $ | 1,054 | ||||||||||||||
(a) On May 31, 2023, the Marsh Landing Black Start addition reached commercial operations and the Company receives an annual fixed fee over a five-year term under the related agreement. The agreement was determined to be a sales-type lease resulting in the Company recording a lease receivable of $21 million included in total operating revenues, offset by net investment costs of $13 million included in cost of operations, resulting in a net pre-tax profit of $8 million. The lease receivable is included in other current and non-current assets on the Company’s consolidated balance sheet.
Minimum future rent payments the Company expects to receive for the remaining periods related to various facility operating leases as of December 31, 2025 were as follows:
| (In millions) | |||||
| 2026 | $ | 214 | |||
| 2027 | 215 | ||||
| 2028 | 213 | ||||
| 2029 | 211 | ||||
| 2030 | 212 | ||||
| Thereafter | 1,918 | ||||
| Total lease payments | $ | 2,983 | |||
Property, plant and equipment, net related to the Company’s operating leases were as follows:
| (In millions) | December 31, 2025 | December 31, 2024 | |||||||||
| Property, plant and equipment | $ | 6,642 | $ | 6,284 | |||||||
| Accumulated depreciation | (2,520) | (2,276) | |||||||||
| Net property, plant and equipment | $ | 4,122 | $ | 4,008 | |||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Mar 2, 2020 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.