Revenue

3 Months Ended

Mar. 31, 2020

Revenue from Contract with Customer [Abstract]

We recognize revenue when we have satisfied our obligations under the terms of a contract with a customer, which generally occurs when the control of promised goods or services transfers to the customer. We measure revenue as the amount of consideration we expect to receive in exchange for providing those goods or services. Contracts with customers may include multiple performance obligations. For such contracts, we allocate revenue to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers. Certain revenues are not within the scope of ASC 606, such as revenues from leasing, derivatives, other revenues that are not from contracts with customers and other contractual rights or obligations, and we account for such revenues in accordance with the applicable accounting standards. We exclude from revenue amounts collected on behalf of third parties, including any such taxes collected from customers and remitted to governmental authorities. We do not have any significant payment terms that are material because we receive payment at or shortly after the point of sale.

The following describes the principal activities, by reportable segment, from which we generate revenue. For more detailed information about reportable segments, refer to Note 13.

Networks Segment

Networks derives its revenue primarily from tariff-based sales of electricity and natural gas service to customers in New York, Connecticut, Maine and Massachusetts, with no defined contractual term. For such revenues, we recognize revenues in an amount derived from the commodities delivered to customers. Other major sources of revenue are electricity transmission and wholesale sales of electricity and natural gas.

Tariff-based sales are subject to the corresponding state regulatory authorities, which determine prices and other terms of service through the ratemaking process. Maine state law prohibits the utility from providing the electricity commodity to customers. In New York, Connecticut and Massachusetts, customers have the option to obtain the electricity or natural gas commodity directly from the utility or from another supplier. For customers that receive their commodity from another supplier, the utility acts as an agent and delivers the electricity or natural gas provided by that supplier. Revenue in those cases is only for providing the service of delivery of the commodity.

Transmission revenue results from others’ use of the utility’s transmission system to transmit electricity and is subject to Federal Energy Regulatory Commission (FERC) regulation, which establishes the prices and other terms of service. Long-term wholesale sales of electricity are based on individual bilateral contracts. Short-term wholesale sales of electricity are generally on a daily basis based on market prices and are administered by the Independent System Operator-New England (ISO-NE) and the New York Independent System Operator (NYISO) or PJM Interconnection, L.L.C. (PJM), as applicable. Wholesale sales of natural gas are generally short-term based on market prices through contracts with the specific customer.

The performance obligation in all arrangements is satisfied over time because the customer simultaneously receives and consumes the benefits as Networks delivers or sells the electricity or natural gas or provides the delivery or transmission service.

Certain Networks entities record revenue from Alternative Revenue Programs (ARPs), which is not ASC 606 revenue. Such programs represent contracts between the utilities and their regulators. The Networks ARPs include revenue decoupling mechanisms, other ratemaking mechanisms, annual revenue requirement reconciliations and other demand side management programs.

Networks also has various other sources of revenue including billing, collection, other administrative charges, sundry billings, rent of utility property and miscellaneous revenue. It classifies such revenues as other ASC 606 revenues to the extent they are not related to revenue generating activities from leasing, derivatives or ARPs.

Renewables Segment

Renewables derives its revenue primarily from the sale of energy, transmission, capacity and other related charges from its renewable wind, solar and thermal energy generating sources. For such revenues, we will recognize revenues in an amount derived from the commodities delivered and from services as they are made available. Renewables has bundled power purchase agreements consisting of electric energy, transmission, capacity and/or renewable energy credits (RECs). The related contracts are generally long-term with no stated contract amount, that is, the customer is entitled to all of the unit’s output. Renewables also has unbundled sales of electric energy and capacity, RECs and natural gas, which are generally for periods of less than a year. The performance obligations in substantially all of both bundled and unbundled arrangements for electricity and natural gas are satisfied over time, for which we record revenue based on the amount invoiced to the customer for the actual energy delivered. The performance obligation for stand-alone RECs is satisfied at a point in time, for which we record revenue when the performance obligation is satisfied upon delivery of the REC.

Renewables classifies certain contracts for the sale of electricity as derivatives, in accordance with the applicable accounting standards. Renewables also has revenue from its energy trading operations, which it generally classifies as derivative revenue. However, trading contracts not classified as derivatives are within the scope of ASC 606, with the performance obligation of the delivery of energy (electricity, natural gas) and settlement of the contracts satisfied at a point in time at which time we recognize the revenue. Renewables also has other ASC 606 revenue, which we recognize based on the amount invoiced to the customer.

Other

Other, which does not represent a segment, includes miscellaneous Corporate revenues and intersegment eliminations.

Contract Costs and Contract Liabilities

We recognize an asset for incremental costs of obtaining a contract with a customer when we expect the benefit of those costs to be longer than one year. We have contract assets for costs from development success fees, which we paid for during the solar asset development period in 2018, and will amortize ratably into expense over the 15-year life of the power purchase agreement (PPA), expected to commence in December 2021 upon commercial operation. We also have a contract asset for costs incurred to cancel a PPA, which we will amortize over the 10-year contract period of the replacement PPA that will commence upon completion of the project. Contract assets totaled $12 million at both March 31, 2020 and December 31, 2019, and are presented in "Other non-current assets" on our condensed consolidated balance sheets.

We have contract liabilities for revenue from transmission congestion contract (TCC) auctions, for which we receive payment at the beginning of an auction period, and amortize ratably each month into revenue over the applicable auction period. The auction periods range from six months to two years. TCC contract liabilities totaled $5 million and $10 million at March 31, 2020 and December 31, 2019, respectively, and are presented in "Other current liabilities" on our condensed consolidated balance sheets. We recognized $5 million as revenue during both the three months ended March 31, 2020 and 2019.

Revenues disaggregated by major source for our reportable segments for the three months ended March 31, 2020 and 2019 are as follows:



	Three Months Ended March 31, 2020
	Networks		Renewables		Other (b)		Total
(Millions)
Regulated operations – electricity	$	873	$	—	$	—	$	873
Regulated operations – natural gas	507		—		—		507
Nonregulated operations – wind	—		211		—		211
Nonregulated operations – solar	—		4		—		4
Nonregulated operations – thermal	—		10		—		10
Other(a)	19		28		—		47
Revenue from contracts with customers	1,399		253		—		1,652
Leasing revenue	1		—		—		1
Derivative revenue	—		70		—		70
Alternative revenue programs	56		—		—		56
Other revenue	5		5		—		10
Total operating revenues	$	1,461	$	328	$	—	$	1,789



	Three Months Ended March 31, 2019
	Networks		Renewables			Other (b)			Total
(Millions)
Regulated operations – electricity	$	913	$	—		$	—		$	913
Regulated operations – natural gas	625		—			—			625
Nonregulated operations – wind	—		182			—			182
Nonregulated operations – solar	—		5			—			5
Nonregulated operations – thermal	—		16			—			16
Other(a)	37		(7		)	(4		)	26
Revenue from contracts with customers	1,575		196			(4		)	1,767
Leasing revenue	1		—			—			1
Derivative revenue	—		41			—			41
Alternative revenue programs	16		—			—			16
Other revenue	12		5			—			17
Total operating revenues	$	1,604	$	242		$	(4	)	$	1,842


(a)	Primarily includes certain intra-month trading activities, billing, collection and administrative charges, sundry billings and other miscellaneous revenue.


(b)	Does not represent a segment. Includes Corporate and intersegment eliminations.

As of March 31, 2020 and December 31, 2019, accounts receivable balances related to contracts with customers were approximately $1,039 million and $1,050 million, respectively, including unbilled revenues of $312 million and $345 million, which are included in “Accounts receivable and unbilled revenues, net” on our condensed consolidated balance sheets.

As of March 31, 2020, the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) were as follows:



As of March 31, 2020	2021		2022		2023		2024		2025		Thereafter		Total
(Millions)
Revenue expected to be recognized on multiyear retail energy sales contracts in place	$	1	$	1	$	1	$	1	$	—	$	—	$	4
Revenue expected to be recognized on multiyear capacity and carbon-free energy sale contracts	35		19		11		8		7		17		97
Revenue expected to be recognized on multiyear renewable energy credit sale contracts	17		9		6		4		3		5		44
Total operating revenues	$	53	$	29	$	18	$	13	$	10	$	22	$	145

As of March 31, 2020, the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) for the remainder of 2020 was $64 million.