Revenues from Contracts with Customers

12 Months Ended

Dec. 31, 2021

Revenue from Contract with Customer [Abstract]

Revenues from Contracts with Customers

NOTE 4—REVENUES FROM CONTRACTS WITH CUSTOMERS

The Company’s revenues are comprised of renewable energy and related Environmental Attribute sales provided under long-term contracts with its customers. All revenue is recognized when (or as) the Company satisfies its performance obligation(s) under the contract (either implicit or explicit) by transferring the promised product or service to its customer either when (or as) its customer obtains control of the product or service. A performance obligation is a promise in a contract to transfer a distinct product or service to a customer. A contract’s transaction price is allocated to each distinct performance obligation. The Company allocates the contract’s transaction price to each performance obligation using the product’s observable market standalone selling price for each distinct product in the contract.

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring its products or services. As such, revenue is recorded net of allowances and customer discounts as well as net of transportation and gathering costs incurred by the customer following the transfer of control of the commodities sold. To the extent applicable, sales, value add and other taxes collected from customers and remitted to governmental authorities are accounted for on a net (excluded from revenues) basis.

The Company’s performance obligations related to the sale of renewable energy (i.e. RNG and Renewable Electricity) are generally satisfied over time. Revenue related to the sale of renewable energy is generally recognized over time using an output based upon the product quantity delivered to the customer. This measure is used to best depict the Company’s performance to date under the terms of the contract. Revenue from products transferred to customers over time accounted for approximately 28%, 32% and 37% of revenue for the years ended December 31, 2021, 2020 and 2019, respectively.

The nature of the Company’s long-term contracts may give rise to several types of variable consideration, such as periodic price increases. This variable consideration is outside of the Company’s influence as the variable consideration is dictated by the market. Therefore, the variable consideration associated with the long-term contracts is considered fully constrained.

The Company’s performance obligations related to the sale of Environmental Attributes are generally satisfied at a point in time and were approximately 72%, 68% and 63% of revenue for the years ended December 31, 2021, 2020 and 2019, respectively. The Company recognizes Environmental Attribute revenue at the point in time in which the customer obtains control of the Environmental Attributes, which is generally when the title of the Environmental Attribute passes to the customer upon delivery. In limited cases, title does not transfer to the customer and revenue is not recognized until the customer has accepted the Environmental Attributes. The Company’s performance obligations under its counterparty sharing agreements are generally satisfied at a point in time when the earnings process is completed by the counterparty. Counterparty sharing arrangement revenues were approximately 10%, 6%, and 6% of revenue for the years ended December 31, 2021, 2020, and 2019, respectively. 

The following tables display the Company’s revenue by major source, excluding realized and unrealized gains or losses under the Company’s gas hedge program, based on product type and timing of transfer of goods and services for the years ended December 31, 2021, 2020 and 2019:

	Year Ended December 31, 2021
	Goods transferred at a point in time		Goods Transferred over time		Total
Major Goods/Service Line:
Natural Gas Commodity	$	15,178	$	32,143	$	47,321
Natural Gas Environmental Attributes		84,906		—		84,906
Electric Commodity		—		9,692		9,692
Electric Environmental Attributes		6,208		—		6,208
	$	106,292	$	41,835	$	148,127
Operating Segment:
RNG	$	100,084	$	32,143	$	132,227
REG		6,208		9,692		15,900
	$	106,292	$	41,835	$	148,127

	Year Ended December 31, 2020
	Goods transferred at a point in time		Goods Transferred over time		Total
Major Goods/Service Line:
Natural Gas Commodity	$	6,991	$	22,467	$	29,458
Natural Gas Environmental Attributes		54,098		—		54,098
Electric Commodity		—		9,642		9,642
Electric Environmental Attributes		7,023		—		7,023
	$	68,112	$	32,109	$	100,221
Operating Segment:
RNG	$	61,089	$	22,467	$	83,556
REG		7,023		9,642		16,665
	$	68,112	$	32,109	$	100,221

	Year Ended December 31, 2019
	Goods transferred at a point in time		Goods transferred over time		Total
Major Goods/Service Line:
Natural Gas Commodity	$	6,591	$	25,594	$	32,185
Natural Gas Environmental Attributes		52,204		—		52,204
Electric Commodity		—		12,396		12,396
Electric Environmental Attributes		7,231		—		7,231
	$	66,026	$	37,990	$	104,016
Operating Segment:
RNG	$	58,795	$	25,594	$	84,389
REG		7,231		12,396		19,627
	$	66,026	$	37,990	$	104,016

Practical expedients

The Company elected to recognize the sale of the gas and electric commodities using the right to invoice practical expedient. The Company determined that the amounts invoiced to customers correspond directly with the value to customers and the Company’s satisfaction of the performance obligations to date. Furthermore, with the election of the right to invoice practical expedient, the Company also elects to omit disclosures on the remaining, or unsatisfied performance obligations since the revenue recognized corresponds to the amount that the Company has the right to invoice.