VARIABLE INTEREST ENTITIES

12 Months Ended

Dec. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

The Company’s overall methodology for evaluating transactions and relationships under the variable interest entity (“VIE”) accounting and disclosure requirements includes the following two steps: (i) determining whether the entity meets the criteria to qualify as a VIE; and (ii) determining whether the Company is the primary beneficiary of the VIE.

In performing the first step, the significant factors and judgments that the Company considers in making the determination as to whether an entity is a VIE include: (i) the design of the entity, including the nature of its risks and the purpose for which the entity was created, to determine the variability that the entity was designed to create and distribute to its interest holders; (ii) the nature of the Company’s involvement with the entity; (iii) whether control of the entity may be achieved through arrangements that do not involve voting equity; (iv) whether there is sufficient equity investment at risk to finance the activities of the entity; and (v) whether parties other than the equity holders have the obligation to absorb expected losses or the right to receive residual returns.

If the Company identifies a VIE based on the above considerations, it then performs the second step and evaluates whether it is the primary beneficiary of the VIE by considering the following significant factors and judgments: (i) whether the Company has the power to direct the activities of the VIE that most significantly impact the entity’s economic performance; and (ii) whether the Company has the obligation to absorb losses of the entity that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE.

The Company’s VIEs include certain of its wholly owned subsidiaries that own one or more power plants with long-term PPAs. In most cases, the PPAs require the utility to purchase substantially all of the plant’s electrical output over a significant portion of its estimated useful life. Some of the VIEs have associated project financing debt that is non-recourse to the general creditors of the Company, is collateralized by substantially all of the assets of the VIE and those of its wholly owned subsidiaries (also VIEs) and is fully and unconditionally guaranteed by such subsidiaries. The Company has concluded that such entities are VIEs primarily because the entities do not have sufficient equity at risk and/or subordinated financial support is provided through the long-term PPAs. The Company has evaluated each of its VIEs to determine the primary beneficiary by considering the party that has the power to direct the most significant activities of the entity. Such activities include, among others, construction of the power plant, operations and maintenance, dispatch of electricity, financing and strategy. Except for power plants that it acquired, the Company is responsible for the construction of its power plants and generally provides operation and maintenance services. Primarily due to its involvement in these and other activities, the Company has concluded that it directs the most significant activities at each of its VIEs and, therefore, is considered the primary beneficiary. The Company performs an ongoing reassessment of the VIEs to determine the primary beneficiary for each. The Company has aggregated its consolidated VIEs into the following categories: (i) wholly owned subsidiaries with project debt; and (ii) wholly owned subsidiaries with PPAs.

The tables below detail the assets and liabilities (excluding intercompany balances which are eliminated in consolidation) for the Company’s VIEs, combined by VIE classifications, that were included in the consolidated balance sheets as of December 31, 2024 and 2023:


	December 31, 2024
	Project Debt		PPAs
	(Dollars in thousands)
Assets:
Restricted cash and cash equivalents	$	111,248	$	—
Other current assets	134,316		43,368
Property, plant and equipment, net	1,852,498		1,418,750
Construction-in-process	85,592		165,850
Other long-term assets	286,840		89,261
Total assets	$	2,470,494	$	1,717,229

Liabilities:
Accounts payable and accrued expenses	$	28,028	$	12,635
Long-term debt	710,477		—
Other long-term liabilities	427,813		72,374
Total liabilities	$	1,166,318	$	85,009


	December 31, 2023
		Project Debt		PPAs
	(Dollars in thousands)
Assets:
Restricted cash and cash equivalents		$	91,586	$	—
Other current assets		154,781		46,501

Property, plant and equipment, net		1,646,973		1,155,947
Construction-in-process		112,469		264,133
Other long-term assets		306,183		43,478
Total assets		$	2,311,992	$	1,510,059

Liabilities:
Accounts payable and accrued expenses		$	33,357	$	14,619
Long-term debt		545,954		—
Other long-term liabilities		440,621		61,285
Total liabilities		$	1,019,932	$	75,904