v3.26.1
Derivative Instruments and Hedging Activities
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Hedging Activities Derivative Instruments and Hedging Activities
Interest Rate Swaps
The Company enters into interest rate swap agreements in order to hedge the variability of expected future cash interest payments that may arise in connection with its non-recourse debt or a potential refinancing of its Senior Notes. As of June 30, 2026, the Company had interest rate derivative instruments extending through 2036, a portion of which were designated as cash flow hedges. Under the interest rate swap agreements, the Company pays a fixed rate and the counterparties to the agreements pay a variable interest rate.
Energy-Related Commodity Contracts
As of June 30, 2026, the Company had energy-related derivative instruments extending through 2032. At June 30, 2026, these contracts were not designated as cash flow or fair value hedges.
Volumetric Underlying Derivative Transactions
The following table summarizes the net notional volume buy/(sell) of the Company’s open derivative transactions broken out by commodity:
Total Volume
June 30, 2026December 31, 2025
CommodityUnits(In millions)
PowerMWh(23)(29)
Natural Gas MMBtu2 5 
InterestDollars$3,971 $4,080 
Fair Value of Derivative Instruments
The following table summarizes the fair value within the derivative instrument valuation on the consolidated balance sheets:
Fair Value
Derivative Assets Derivative Liabilities
June 30, 2026December 31, 2025June 30, 2026December 31, 2025
(In millions)
Derivatives Designated as Cash Flow Hedges:
Interest rate contracts current$9 $2 $2 $6 
Interest rate contracts long-term42 29 8 21 
Total Derivatives Designated as Cash Flow Hedges$51 $31 $10 $27 
Derivatives Not Designated as Cash Flow Hedges:
Interest rate contracts current$24 $17 $— $— 
Interest rate contracts long-term98 94 1 — 
Energy-related commodity contracts current14 10 12 46 
Energy-related commodity contracts long-term6 4 70 287 
Total Derivatives Not Designated as Cash Flow Hedges$142 $125 $83 $333 
Total Derivatives$193 $156 $93 $360 
The Company has elected to present derivative assets and liabilities on the balance sheet on a trade-by-trade basis and does not offset amounts at the counterparty level. As of June 30, 2026 and December 31, 2025, there was no outstanding collateral paid or received. The following tables summarize the offsetting of derivatives by counterparty:
Gross Amounts Not Offset in the Statement of Financial Position
As of June 30, 2026Gross Amounts of Recognized Assets/LiabilitiesDerivative InstrumentsNet Amount
Energy-related commodity contracts(In millions)
Derivative assets$20 $— $20 
Derivative liabilities(82)— (82)
Total energy-related commodity contracts$(62)$— $(62)
Interest rate contracts
Derivative assets$173 $— $173 
Derivative liabilities(11)— (11)
Total interest rate contracts$162 $— $162 
Total derivative instruments$100 $— $100 
Gross Amounts Not Offset in the Statement of Financial Position
As of December 31, 2025Gross Amounts of Recognized Assets/LiabilitiesDerivative InstrumentsNet Amount
Energy-related commodity contracts(In millions)
Derivative assets$14 $— $14 
Derivative liabilities(333)— (333)
Total energy-related commodity contracts$(319)$— $(319)
Interest rate contracts
Derivative assets$142 $— $142 
Derivative liabilities(27)— (27)
Total interest rate contracts$115 $— $115 
Total derivative instruments$(204)$— $(204)
Accumulated Other Comprehensive Income (Loss)
The following table summarizes the effects on the Company’s accumulated OCI (OCL) balance attributable to interest rate swaps designated as cash flow hedge derivatives:
Three months ended June 30,Six months ended June 30,
2026202520262025
(In millions)
Accumulated OCI (OCL) beginning balance$5 $5 $(6)$15 
Rosamond South I Drop Down (a)
— — — (4)
Daggett 1 Drop Down— (6)— (6)
Luna Valley Drop Down— (8)— (8)
Pine Forest Drop Down— 5 — 5 
Reclassified from accumulated OCI/OCL to income due to realization of previously deferred amounts1 — 2 — 
Mark-to-market of cash flow hedge accounting contracts21 (17)31 (23)
Accumulated OCI (OCL) ending balance27 (21)27 (21)
Accumulated OCI attributable to noncontrolling interests7 3 7 3 
Accumulated OCI (OCL) attributable to Clearway Energy LLC$20 $(24)$20 $(24)
Gains expected to be realized from OCI during the next 12 months$6 $6 
(a) Represents $2 million attributable to the Company and $2 million attributable to noncontrolling interests.
Amounts reclassified from accumulated OCI/OCL into income are recorded to interest expense.
Impact of Derivative Instruments on the Consolidated Statements of Operations
Mark-to-market gains/(losses) related to the Company’s derivatives are recorded in the consolidated statements of operations as follows:
Three months ended June 30,Six months ended June 30,
2026202520262025
(In millions)
Interest Rate Contracts (Interest expense)$7 $2 $7 $(32)
Energy-Related Commodity Contracts (Mark-to-market for economic hedging activities included in Total operating revenues) (a)
5 (10)35 (21)
Energy-Related Commodity Contracts (Mark-to-market for economic hedging activities included in Cost of operations) (b)
(1)— (1)— 
(a) Relates to long-term energy-related commodity contracts at Elbow Creek, Mesquite Star, Mt. Storm, Langford and Mesquite Sky and heat rate call option energy-related commodity contracts at El Segundo, Marsh Landing and Walnut Creek.
(b) Relates to backbone transportation service energy-related commodity contracts at El Segundo and Walnut Creek.
See Note 5, Fair Value of Financial Instruments, for a discussion regarding concentration of credit risk.