LESSOR — The Company has operating leases for certain generation contracts that contain provisions to provide capacity to a customer, which is a stand-ready obligation to deliver energy when required by the customer. Capacity obligations are generally considered lease elements as they cover the majority of available output from a facility. The allocation of contract payments between the lease and non-lease elements is made at the inception of the lease. Lease receipts from such contracts are recognized as lease revenue on a straight-line basis over the lease term, whereas variable lease receipts are recognized when earned.

The following table presents lease revenue from operating leases in which the Company is the lessor, recognized in Revenue on the Condensed Consolidated Statements of Operations for the periods indicated (in millions):


	Three Months Ended June 30,				Six Months Ended June 30,
Operating Lease Revenue	2025		2024		2025		2024
Non-variable lease revenue	$	81	$	135	$	157	$	237
Variable lease revenue	28		18		43		31
Total lease revenue	$	109	$	153	$	200	$	268

The following table presents the underlying gross assets and accumulated depreciation of operating leases included in Property, plant and equipment, net on the Condensed Consolidated Balance Sheets as of the dates indicated (in millions):

The option to extend or terminate a lease is based on customary early termination provisions in the contract, such as payment defaults, bankruptcy, or lack of performance on energy delivery. The Company has not recognized any early terminations as of June 30, 2025. Certain leases may provide for variable lease payments based on usage or index-based (e.g., the U.S. Consumer Price Index) adjustments to lease payments.


	Future Cash Receipts for
	Sales-Type Leases		Operating Leases
2025	$	26	$	133
2026	49		144
2027	50		65
2028	50		—
2029	50		—
Thereafter	719		1
Total	$	944	$	343
Less: Imputed interest	(352)
Present value of total lease receipts	$	592

Battery Storage Lease Arrangements — The Company constructs and operates projects consisting only of a stand-alone BESS facility, as well as projects that pair a BESS with solar energy systems. These projects allow more flexibility on when to provide energy to the grid. The Company will enter into PPAs for the full output of the facility that allow customers the ability to determine when to charge and discharge the BESS. Generally, these arrangements include both lease and non-lease elements under ASC 842, with the BESS component typically constituting a sales-type lease. Generally, losses recognized on the commencement of sales-type leases primarily relate to PPAs that contain no variable lease payments and the exclusion of the value of ITCs from the fair value of the renewable asset, which is used in the determination of the rate implicit in the lease. This results in a higher discount rate, reducing the lease receivable to an amount below the carrying value of the associated lease asset, and a resulting pre-tax loss on commencement.