Constellation Energy Corp

For the period ended Dec 31, 2023. Filed Feb 27, 2024.

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FY2023 · Filed Feb 27, 2024

CEG$249.95+4.3%Stored close · as of Nov 6, 2026

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Contents

22. Variable Interest Entities

Variable Interest Entities

As of December 31, 2023 and 2022, we consolidated several VIEs or VIE groups for which we are the primary beneficiary (see Consolidated VIEs below) and had significant interests in several other VIEs for which we do not have the power to direct the entities’ activities and, accordingly, we were not the primary beneficiary (see Unconsolidated VIEs below). Consolidated and unconsolidated VIEs are aggregated to the extent that the entities have similar risk profiles.

Consolidated VIEs

The table below shows the carrying amounts and classification of the consolidated VIEs’ assets and liabilities included in the consolidated financial statements as of December 31, 2023 and 2022. The assets, except as noted in the footnotes to the table below, can only be used to settle obligations of the VIEs. The liabilities, except as noted in the footnotes to the table below, are such that creditors, or beneficiaries, do not have recourse to our general credit.

	December 31, 2023	December 31, 2022
Cash and cash equivalents	$48	$51
Restricted cash and cash equivalents	47	46
Accounts receivable
Customer	19	20
Other	10	9
Inventories, net
Materials and supplies	14	12
Other current assets	1,249	549
Total current assets	1,387	687
Property, plant and equipment, net	1,979	1,965
Other noncurrent assets	166	190
Total noncurrent assets	2,145	2,155
Total assets(a)	$3,532	$2,842
Long-term debt due within one year	$63	$60
Accounts payable	11	17
Accrued expenses	20	23
Other current liabilities	—	2
Total current liabilities	94	102
Long-term debt	704	764
Asset retirement obligations	190	173
Other noncurrent liabilities	2	3
Total noncurrent liabilities	896	940
Total liabilities(b)	$990	$1,042

(a)Our balances include unrestricted assets for current unamortized energy contract assets of $22 million and $23 million, disclosed within other current assets in the table above and noncurrent unamortized energy contract assets of $155 million and $178 million, disclosed within other noncurrent assets in the table above as of December 31, 2023 and 2022, respectively.

(b)As of December 31, 2023, our balance does not include any liabilities with recourse. Our balance includes liabilities with recourse of $1 million as of December 31, 2022.

As of December 31, 2023 and 2022, our consolidated VIEs included the following:

Consolidated VIE or VIE groups:	Reason entity is a VIE:	Reason we are the primary beneficiary:
CRP - A collection of wind and solar project entities. We have a 51% equity ownership in CRP. See additional discussion below.	Similar structure to a limited partnership and the limited partners do not have kick out rights with respect to the general partner.	We conduct the operational activities.
Bluestem Wind Energy Holdings, LLC - A Tax Equity structure which is consolidated by CRP.	Similar structure to a limited partnership and the limited partners do not have kick out rights with respect to the general partner.	We conduct the operational activities.
Antelope Valley - A solar generating facility, which is 100% owned by us. Antelope Valley sells all of its output to PG&E through a PPA.	The PPA contract absorbs variability through a performance guarantee.	We conduct all activities.
NER - A bankruptcy remote, special purpose entity which is 100% owned by us, which purchases certain of our customer accounts receivable arising from the sale of retail electricity.NER’s assets will be available first and foremost to satisfy the claims of the creditors of NER. Refer to Note 6 —Accounts Receivable for additional information on the sale of receivables.	Equity capitalization is insufficient to support its operations.	We conduct all activities.

CRP - CRP is a collection of wind and solar project entities and some of these project entities are VIEs that are consolidated by CRP. While we or CRP own 100% of the solar entities and 100% of the majority of the wind entities, it has been determined that the wholly owned solar and wind entities are VIEs because the entities' customers absorb price variability from the entities through fixed price power and/or REC purchase agreements. Additionally, for the wind entities that have minority interests, it has been determined that these entities are VIEs because the governance rights of some investors are not proportional to their financial rights. We are the primary beneficiary of these solar and wind entities that qualify as VIEs because we control operations and direct all activities of the facilities. There is limited recourse to us related to certain solar and wind entities.

In 2017, our interests in CRP were contributed to and are pledged for the CR non-recourse debt project financing structure. Refer to Note 17 — Debt and Credit Agreements for additional information.

Unconsolidated VIEs

Our variable interests in unconsolidated VIEs generally include equity investments and energy purchase and sale contracts. For the equity investments, the carrying amount of the investments is reflected in the Consolidated Balance Sheets in Investments. For the energy purchase and sale contracts (commercial agreements), the carrying amount of assets and liabilities in the Consolidated Balance Sheets that relate to our involvement with the VIEs are predominantly related to working capital accounts and generally represent the amounts owed by, or owed to, us for the deliveries associated with the current billing cycles under the commercial agreements.

As of December 31, 2023 and 2022, we had significant unconsolidated variable interests in several VIEs for which we were not the primary beneficiary. These interests include certain equity method investments and certain commercial agreements.

The following table presents summary information about our significant unconsolidated VIE entities:

	December 31, 2023			December 31, 2022
	CommercialAgreementVIEs	EquityInvestmentVIEs	Total	CommercialAgreementVIEs	EquityInvestmentVIEs	Total
Total assets(a)	$704	$—	$704	$715	$—	$715
Total liabilities(a)	77	—	77	54	—	54
Other ownership interests in VIE(a)	627	—	627	661	—	661

(a)These items represent amounts on the unconsolidated VIE balance sheets, not in the Consolidated Balance Sheets. These items are included to provide information regarding the relative size of the unconsolidated VIEs. We do not have any exposure to loss as we do not have a carrying amount in the equity investment VIEs as of December 31, 2023 and 2022.

As of December 31, 2023 and 2022, the unconsolidated VIEs consist of:

Unconsolidated VIE groups:	Reason entity is a VIE:	Reason we are not the primary beneficiary:
Equity investments in distributed energy companies. We have a 90% equity ownership in a distributed energy company. We sold this investment in the fourth quarter of 2022 resulting in it no longer being classified as an unconsolidated VIE .	Similar structures to a limited partnership and the limited partners do not have kick out rights with respect to the general partner.	We do not conduct the operational activities.
Energy Purchase and Sale agreements - We have several energy purchase and sale agreements with generating facilities.	PPA contracts that absorb variability through fixed pricing.	We do not conduct the operational activities.

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