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SEC Filings
10-Q
TERRAFORM POWER, INC. filed this Form 10-Q on 11/09/2018
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Incentive revenue for our Solar segment decreased by $10.5 million during the three months ended September 30, 2018, compared to the same period in 2017, primarily driven by a (i) $5.1 million decrease due to a change in revenue recognition timing for Renewable Energy Credits (“RECs”) and a $4.5 million reduction in deferred revenue related to incentive tax credits, each as a result of our adoption of the new revenue standard, and (ii) $1.1 million reduction due to decreased REC sales to one off-taker that declared bankruptcy in the first quarter of 2018 (see Note 5. Renewable Energy Facilities). Incentive revenue for our Wind segment decreased by $0.3 million, primarily due to lower pricing in the Northeast, partially offset by the change in revenue recognition timing for REC’s resulting from our adoption of the new revenue standard. Saeta contributed incentive revenue of $14.2 million to the new Regulated Solar and Wind segment.

Costs of Operations

Costs of operations for the three months ended September 30, 2018 and 2017 were as follows:
 
 
Three Months Ended September 30,
 
 
(In thousands)
 
2018
 
2017
 
Change
Cost of operations:
 
 
 
 
 
 
Solar
 
$
9,775

 
$
17,393

 
$
(7,618
)
Wind
 
27,684

 
24,466

 
3,218

Regulated Solar and Wind
 
21,568

 

 
21,568

Cost of operations - affiliate:
 
 
 
 
 
 
Solar
 

 
691

 
(691
)
Wind
 

 
508

 
(508
)
Total cost of operations
 
$
59,027

 
$
43,058

 
$
15,969


Total cost of operations for the three months ended September 30, 2018 increased compared to the same period in 2017, primarily driven by a $21.6 million million contribution from Saeta’s new Regulated Solar and Wind segment. Solar segment cost of operations decreased by $7.6 million million during the three months ended September 30, 2018, compared to the same period in 2017, primarily due to reduced operations and maintenance (“O&M”) and other operating expenses of [$4.3] million in the current year. Total cost of operations for our Wind segment increased by $3.2 million as compared to the same period in 2017, primarily driven by increased costs of $3.1 million contributed by Saeta’s operations in Portugal and Uruguay.

Subsequent to the Company’s consummation of the merger (the “Merger”) with affiliates of Brookfield on October 16, 2017, the Company is no longer an affiliate of SunEdison, Inc., and in the fourth quarter of 2017, with the exception of its 101.6 MW renewable energy facility in Chile, the Company is operating independently from SunEdison as a provider of operations and maintenance and asset management services to the Company.

General and Administrative Expenses

General and administrative expenses for the three months ended September 30, 2018 and 2017 were as follows:
 
 
Three Months Ended September 30,
 
 
(In thousands)
 
2018
 
2017
 
Change
General and administrative expenses:
 
 
 
 
 
 
Solar
 
$
1,334

 
$
2,074

 
$
(740
)
Wind
 
3,618

 
835

 
2,783

Regulated Solar and Wind
 
3,403

 

 
3,403

Corporate
 
12,979

 
18,755

 
(5,776
)
Total general and administrative expenses
 
$
21,334

 
$
21,664

 
$
(330
)
General and administrative expenses - affiliate:
 
 
 
 
 
 
Corporate
 
3,432

 
2,192

 
1,240

    


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