2. Revenue from contracts

Accounting policy

We recognize energy sales revenue on a gross basis when electricity and steam are delivered and capacity revenue when capacity is provided under the terms of the related contracts. PPAs, steam purchase arrangements and energy services agreements are long‑term contracts with performance obligations to provide electricity, steam and capacity on a predetermined basis.

For certain PPAs determined to be operating leases, we recognize lease income consistent with the recognition of energy sales and capacity revenue. When energy is delivered and capacity is provided, we recognize lease income as a component of energy sales and capacity revenue.

Nature of goods and services

We sell the majority of the capacity and energy from our power generation projects under PPAs to a variety of utilities and other parties. Under the PPAs, which have expiration dates ranging from June 30, 2019 to March 31, 2037, we receive payments for electric energy sold to our customers (known as energy payments), in addition to payments for electric generation capacity (known as capacity payments). We also sell steam from a number of our projects to industrial purchasers under steam sales agreements. Sales of electricity are generally higher during the summer and winter months, when temperature extremes create demand for either summer cooling or winter heating.

The following is a description of principal activities from which we generate our revenue.


Products and services	Nature, timing of satisfaction of performance obligations, and significant payment terms
Energy	Energy revenue is recognized upon transmission to the customer. Physical transactions, or the sale of generated electricity to meet supply and demand, are recorded on a gross basis in our consolidated statements of operations. The price of energy could be contracted under PPAs at set prices or merchant sales based on market merchant price. Energy revenue is billed and paid on a monthly basis.
Energy capacity	Capacity revenues are recognized when contractually earned, and consist of revenues billed to a third party at a negotiated contract price under the applicable PPAs for making installed generation capacity available in order to satisfy reliability requirements or merchant capacity sales based on the market price for such capacity. Energy capacity is billed and paid on a monthly basis.
Other revenue includes the following:
Steam energy and capacity	Steam revenue is recognized upon delivery to the customer. Steam capacity payments under the applicable PPAs are recognized as the amount billable under the respective PPA. Steam capacity is billed and paid on a monthly basis.
Waste heat	We generate electricity from excess steam provided by a nearby pipeline and its pumping station in the Canada segment. Waste heat is earned when it is generated and paid as a portion of monthly energy and capacity billing.
Enhanced dispatch contracts	We also bill and are paid for curtailment of energy generation under certain contractual arrangements with our offtaker. This revenue is recognized monthly under the terms of those agreements.
Ancillary and transmission services	We provide ancillary and transmission services to our customers under the terms of our PPAs. These services are billed and paid on a monthly basis.
Asset management and operation, operation and maintenance	We provide asset management and operation supervision to the Frederickson project, a facility that we jointly own with Puget Sound Energy. We also provide operation and maintenance services to several electric energy customers under the PPAs. All services are billed and paid on a monthly basis.

Disaggregation of revenue

We have four reportable segments: East U.S., West U.S., Canada and Un-Allocated Corporate. Each segment contains various power generation projects and performance obligations as described above. For more detailed information about reportable segments, see Note 13, Segment and geographical information. Revenue, receivables and contract liabilities by segment consists of following:


	Three Months Ended June 30, 2018
							Un-Allocated		Consolidated
	East U.S.		West U.S.		Canada		Corporate		Total
Project revenue:
Energy sales	$	21.6	$	1.7	$	8.1	$	—	$	31.4
Energy capacity revenue		13.6		6.8		2.9		—		23.3
Steam energy and capacity revenue		0.4		—		—		—		0.4
Waste heat revenue		—		—				—		—
Enhanced dispatch contracts		—		—		6.4		—		6.4
Ancillary and transmission services		3.4		—		1.3		—		4.7
Asset management and operation		—		—		—		—		—
Miscellaneous revenue		—		(0.2)				0.2		—
		39.0		8.3		18.7		0.2		66.2


	Three Months Ended June 30, 2017
								Un-Allocated		Consolidated
		East U.S.		West U.S.		Canada		Corporate		Total
Project revenue:
Energy sales	$	24.4	$	7.8	$	7.8	$	—	$	40.0
Energy capacity revenue		12.4		13.3		2.6		—		28.3
Steam energy and capacity revenue		2.6		7.1		—		—		9.7
Waste heat revenue		—		—		0.1		—		0.1
Enhanced dispatch contracts		—		—		40.8		—		40.8
Ancillary and transmission services		1.0		—		4.1		—		5.1
Asset management and operation		—		—		—		0.3		0.3
Miscellaneous revenue		—		(0.3)		—		—		(0.3)
		40.4		27.9		55.4		0.3		124.0


	Six Months Ended June 30, 2018
							Un-Allocated		Consolidated
	East U.S.		West U.S.		Canada		Corporate		Total
Project revenue:
Energy sales	$	47.0	$	6.8	$	16.0	$	—	$	69.8
Energy capacity revenue		24.9		12.7		5.8		—		43.4
Steam energy and capacity revenue		0.9		2.8		—		—		3.7
Waste heat revenue		—		—		0.1		—		0.1
Enhanced dispatch contracts		—		—		15.0		—		15.0
Ancillary and transmission services		7.8		—		6.3		—		14.1
Asset management and operation		—		—		—		—		—
Miscellaneous revenue		—		(0.4)		—		0.5		0.1
		80.6		21.9		43.2		0.5		146.2


	Six Months Ended June 30, 2017
								Un-Allocated		Consolidated
		East U.S.		West U.S.		Canada		Corporate		Total
Project revenue:
Energy sales	$	46.2	$	16.2	$	14.7	$	—	$	77.1
Energy capacity revenue		22.5		20.0		5.3		—		47.8
Steam energy and capacity revenue		5.9		15.6		—		—		21.5
Waste heat revenue		—		—		0.3		—		0.3
Enhanced dispatch contracts		—		—		65.0		—		65.0
Ancillary and transmission services		1.9		—		8.8		—		10.7
Asset management and operation		—		—		—		0.5		0.5
Miscellaneous revenue		—		(0.5)		—		—		(0.5)
		76.5		51.3		94.1		0.5		222.4

Contract balances

The following table provides information about receivables, contract assets and contract liabilities from contracts with customers.


	June 30,		December 31,
	2018		2017
Accounts receivables	$	25.3	$	52.7
Contract assets		—		—
Contract liabilities		0.6		1.0

Contract liabilities as of June 30, 2018 include a $0.4 million water license fee at Mamquam, which is a pass-through cost, and a $0.1 million capacity bonus accrual at Oxnard. Contract liabilities as of December 31, 2017 include recoverable wood fuel costs under the PPA and property tax at Williams Lake, which is proportionally estimated, pending receipt of an actual tax bill. The total $1.0 million was recognized as revenues from ancillary and transmission services in the first quarter of 2018.