Subsequent Event |
6 Months Ended |
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Jun. 30, 2020 | |
| Subsequent Events [Abstract] | |
| Subsequent Event | Subsequent Event On July 1, 2020, we acquired a preferred equity interest in a partnership ("the Partnership") that is expected to own an approximately 2.3 gigawatt portfolio of renewable energy projects. We have agreed to guarantee certain of the obligations of the subsidiary in connection with these agreements.
On July 1, 2020, we made an initial capital contribution to the Partnership of approximately $150 million related to four operating wind projects with an aggregate capacity of approximately 663 megawatts. We expect to ultimately invest approximately $540 million in the Partnership by making additional periodic capital contributions related to nine more projects anticipated to be commercially operational on or prior to June 30, 2021, at which time the additional projects relating to a specific funding will be transferred into the partnership. Assuming all of the projects are acquired by the Partnership, the renewables portfolio will consist of 13 projects (nine onshore wind projects and four utility-scale solar projects) and will feature cash flows from fixed-price power purchase agreements and financial hedges with a weighted average contract life of 13 years, contracted with highly creditworthy off-takers and counterparties.
The Partnership is governed by an amended and restated limited liability company agreement, dated July 1, 2020, by and among the Partnership, one of our subsidiaries and a subsidiary of the project sponsor, and contains customary terms and conditions. We own 100% of the Class A Units in the Partnership corresponding to 49% of the distributions from the Partnership subject to the preferences discussed below. Most major decisions that may impact the Partnership, its subsidiaries or its assets, require the majority vote of a four person committee in which we and the project sponsor each have two representatives. Through the Partnership, we will be entitled to preferred distributions until certain return targets are achieved. Once these return targets are achieved, then distributions will be allocated approximately 33% to us and approximately 67% to the sponsor. We and the sponsor each have a right of first offer if the other party desires to transfer any of its equity ownership to a third party on or after July 1, 2023. We expect to use the equity method of accounting to account for our preferred equity interest in the Partnership.
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