Note 5. 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.

The total minimum lease and easement commitments at February 28, 2017 under these land use agreements are as follows:

(in thousands)

2017 (remaining

nine months)

2018

2019

2020

2021

Thereafter

Total

Land use payments

871

1,329

1,686

1,742

1,782

56,249

63,659

Solar Power 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 $0.1 million and $0.2 million as of February 28, 2017 and November 30, 2016, respectively. The Partnership has also recorded in “Other current assets” amounts of $0.1 million and $0.2 million as of February 28, 2017 and November 30, 2016, relating to anticipated performance warranty reimbursements from the O&M provider.

The following table summarizes accrued system output performance warranty activity for the three months ended February 28, 2017 and February 29, 2016, respectively:

	Three Months Ended
	February 28,			February 29,
(in thousands)	2017			2016
Balance at the beginning of the period	$	196		$	237
Settlements during the period		(29	)		(76	)
Adjustments during the period		(29	)		65
Balance at the end of the period	$	138		$	226

Asset Retirement Obligations

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 three months ended February 28, 2017 and February 29, 2016, respectively:

	Three Months Ended
	February 28,		February 29,
(in thousands)	2017		2016
Balance at the beginning of the period	$	13,448	$	9,992
ARO assumed in acquisition		493		547
Accretion expense		171		119
Revisions to ARO during the period		17		—
Balance at the end of the period	$	14,129	$	10,658

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 out of 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 three months ended February 28, 2017 and February 29, 2016, there were no known environmental contingencies that required the Partnership to recognize a liability.