Note 6. Commitments and Contingencies

Land Use Commitments

The Partnership is a party to various agreements that provide for payments to landowners for the right to use the land upon which projects under PPAs are located.

Total lease and easement expense was $2.1 million, $1.1 million and $1.2 million in the year ended November 30, 2016, the eleven months ended November 30, 2015 and the year ended December 28, 2014, respectively, and is classified as SG&A expenses when the projects are in the construction phase and as costs of operations when the projects have commenced operations in the Partnership’s accompanying consolidated statements of operations.

The total minimum lease and easement commitments at November 30, 2016 under these land use agreements are as follows:

(in thousands)		2017				2018				2019				2020				2021				Thereafter				Total
Land use payments		$	1,293			$	1,329			$	1,686			$	1,742			$	1,782			$	56,087			$	63,919

Solar Energy System Performance Warranty

Lease agreements require the Partnership to undertake a system output performance warranty. The Partnership has recorded in “Accounts payable and other current liabilities” amounts related to these system output performance warranties totaling $0.2 million as of each of November 30, 2016 and November 30, 2015. The Partnership has also recorded in “Other current assets” amounts of $0.2 million as of each of November 30, 2016 and November 30, 2015 relating to anticipated performance warranty reimbursements from the O&M provider.

The following table summarizes accrued solar power systems performance warranty activity for the year ended November 30, 2016 and the eleven months ended November 30, 2015:

	Year Ended			Eleven Months Ended
	November 30,			November 30,
(in thousands)	2016			2015
Balance at the beginning of the period	$	237		$	525
Settlements during the period		(285	)		(6	)
Adjustments during the period		244			(282	)
Balance at the end of the period	$	196		$	237

Asset Retirement Obligations (“ARO”)

The Partnership’s AROs are based on estimated third-party costs associated with the decommissioning of the applicable project assets. Revisions to these costs may increase or decrease in the future as a result of changes in regulations, engineering designs and technology, permit modifications, inflation or other factors. Decommissioning activities generally occur over a period of time commencing at the end of the system’s life.

The following table summarizes ARO activity for the year ended November 30, 2016 and the eleven months ended November 30, 2015, respectively:

	Year Ended			Eleven Months Ended
	November 30,			November 30,
(in thousands)	2016			2015
Balance at the beginning of the period	$	9,992		$	—
ARO assumed in acquisition		2,989			2,130
Accretion expense		539			64
Liabilities incurred during the period		—			7,798
Revisions to ARO during the period		(72	)		—
Balance at the end of the period	$	13,448		$	9,992

Legal Proceedings

In the normal course of business, the Partnership may be notified of possible claims or assessments. The Partnership will record a provision for these claims when it is both probable that a liability has been incurred and the amount of the loss, or a range of the potential loss, can be reasonably estimated. These provisions are reviewed regularly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information or events pertaining to a particular case.

Although the Partnership may, from time to time, be involved in litigation and claims arising from its operations in the ordinary course of business, the Partnership is not a party to any litigation or governmental or other proceeding that the Partnership believes will have a material adverse impact on its financial position, results of operations, or liquidity.

Environmental Contingencies

The Partnership reviews its obligations as they relate to compliance with environmental laws, including site restoration and remediation. During the year ended November 30, 2016, the eleven months ended November 30, 2015 and the year ended December 28, 2014, there were no known environmental contingencies that required the Partnership to recognize a liability.