10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _____________

Commission File Number: 1-7414

NORTHWEST PIPELINE LLC

(Exact name of registrant as specified in its charter)

Delaware		26-1157701
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
295 Chipeta Way
Salt Lake City	UT	84108
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (801)  583-8800

NO CHANGE

(Former name, former address, and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  þ    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  þ    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer þ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  þ

THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION (H)(1)(a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM 10-Q WITH THE REDUCED DISCLOSURE FORMAT.

NORTHWEST PIPELINE LLC

FORM 10-Q

INDEX

	Page
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Statement of Net Income — Three Months Ended March 31, 2021 and 2020	1
Balance Sheet — March 31, 2021 and December 31, 2020	2
Statement of Member's Equity — Three Months Ended March 31, 2021 and 2020	4
Statement of Cash Flows — Three Months Ended March 31, 2021 and 2020	5
Notes to Financial Statements	6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	10
Item 4. Controls and Procedures	11
PART II. OTHER INFORMATION:	11
Item 1. Legal Proceedings	11
Item 1A.Risk Factors	11
Item 6. Exhibits	12

FORWARD-LOOKING STATEMENTS

The reports, filings, and other public announcements of Northwest Pipeline LLC may contain or incorporate by reference statements that do not directly or exclusively relate to historical facts. Such statements are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act). These forward-looking statements relate to anticipated financial performance, management’s plans and objectives for future operations, business prospects, outcome of regulatory proceedings, market conditions, and other matters.

All statements, other than statements of historical facts, included in this report that address activities, events, or developments that we expect, believe, or anticipate will exist or may occur in the future are forward-looking statements. Forward-looking statements can be identified by various forms of words such as “anticipates,” “believes,” “seeks,” “could,” “may,” “should,” “continues,” “estimates,” “expects,” “forecasts,” “intends,” “might,” “goals,” “objectives,” “targets,” “planned,” “potential,” “projects,” “scheduled,” “will,” “assumes,” “guidance,” “outlook,” “in-service date,” or other similar expressions. These forward-looking statements are based on management’s beliefs and assumptions and on information currently available to management and include, among others, statements regarding:

•Our and our affiliates’ future credit ratings;

•Amounts and nature of future capital expenditures;

•Expansion and growth of our business and operations;

•Expected in-service dates for capital projects;

•Financial condition and liquidity;

•Business strategy;

•Cash flow from operations or results of operations;

•Rate case filings;

i

•Natural gas prices, supply, and demand;

•Demand for our services; and

•The impact of the coronavirus (COVID-19) pandemic.

Forward-looking statements are based on numerous assumptions, uncertainties, and risks that could cause future events or results to be materially different from those stated or implied in this report. Many of the factors that will determine these results are beyond our ability to control or predict. Specific factors that could cause actual results to differ from results contemplated by the forward-looking statements include, among others, the following:

•The impact of operational and developmental hazards and unforeseen interruptions;

•Development and rate of adoption of alternative energy sources;

•The strength and financial resources of our competitors and the effects of competition;

•Availability of supplies, including lower than anticipated volumes from third parties, and market demand;

•Volatility of pricing including the effect of lower than anticipated energy commodity prices;

•Changes in maintenance and construction costs, as well as our ability to obtain sufficient construction-related inputs, including skilled labor;

•The impact of existing and future laws and regulations, the regulatory environment, environmental matters, and litigation, as well as our ability to obtain necessary permits and approvals, and achieve favorable rate proceeding outcomes;

•Increasing scrutiny and changing expectations from stakeholders with respect to our environmental, social, and governance practices;

•The physical and financial risks associated with climate change;

•Our exposure to the credit risk of our customers and counterparties;

•Our ability to successfully expand our facilities and operations;

•Whether we are able to successfully identify, evaluate, and timely execute our capital projects and investment opportunities;

•Risks related to financing, including restrictions stemming from debt agreements, future changes in credit ratings as determined by nationally recognized credit rating agencies, and the availability and cost of capital;

•Inflation, interest rates, and general economic conditions (including future disruptions and volatility in the global credit markets and the impact of these events on customers and suppliers);

•Our costs for defined benefit pension plans and other postretirement benefit plans sponsored by our affiliates;

•The risks resulting from outbreaks or other public health crises, including COVID-19;

•Changes in the current geopolitical situation;

•Changes in U.S. governmental administration and policies;

•Risks associated with weather and natural phenomena, including climate conditions and physical damage to our facilities;

•Acts of terrorism, cybersecurity incidents, and related disruptions; and

ii

•Additional risks described in our filings with the Securities and Exchange Commission (SEC).

Given the uncertainties and risk factors that could cause our actual results to differ materially from those contained in any forward-looking statement, we caution investors not to unduly rely on our forward-looking statements. We disclaim any obligations to and do not intend to update the above list or announce publicly the result of any revisions to any of the forward-looking statements to reflect future events or developments.

In addition to causing our actual results to differ, the factors listed above and referred to below may cause our intentions to change from those statements of intention set forth in this report. Such changes in our intentions may also cause our results to differ. We may change our intentions, at any time and without notice, based upon changes in such factors, our assumptions, or otherwise.

Because forward-looking statements involve risks and uncertainties, we caution that there are important factors, in addition to those listed above, that may cause actual results to differ materially from those contained in the forward-looking statements. For a detailed discussion of those factors, see Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K filed with the SEC on February 24, 2021.

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

NORTHWEST PIPELINE LLC

STATEMENT OF NET INCOME

(Thousands of Dollars)

(Unaudited)

	Three months ended
	March 31,
	2021		2020
OPERATING REVENUES:
Natural gas transportation	$	109,277	$	112,021
Natural gas storage	3,670		3,346
Other	(53)		(21)
Total operating revenues	112,894		115,346
OPERATING EXPENSES:
General and administrative	11,670		12,699
Operation and maintenance	16,646		15,499
Depreciation and amortization	28,068		28,060
Regulatory debits	348		291
Taxes, other than income taxes	4,216		4,120
Regulatory charges resulting from tax rate changes	5,814		5,814
Other (income) expenses, net	(31)		(2)
Total operating expenses	66,731		66,481
OPERATING INCOME	46,163		48,865
OTHER (INCOME) AND OTHER EXPENSES:
Interest expense	7,361		7,451
Allowance for equity and borrowed funds used during construction (AFUDC)	(265)		(298)
Miscellaneous other (income) expenses, net	(161)		(1,092)
Total other (income) and other expenses	6,935		6,061
NET INCOME	$	39,228	$	42,804

See accompanying notes.

1

NORTHWEST PIPELINE LLC

BALANCE SHEET

(Thousands of Dollars)

(Unaudited)

	March 31, 2021		December 31, 2020
ASSETS
CURRENT ASSETS:
Cash	$	—	$	—
Receivables:
Trade	37,283		37,365
Affiliated companies	60		51
Advances to affiliate	265,719		247,869
Other	765		840
Materials and supplies	9,849		9,807
Exchange gas due from others	3,276		4,466
Prepayments and other	3,396		4,078
Total current assets	320,348		304,476
PROPERTY, PLANT AND EQUIPMENT	3,657,039		3,653,792
Less-Accumulated depreciation and amortization	1,785,462		1,761,229
Total property, plant and equipment, net	1,871,577		1,892,563
OTHER ASSETS:
Deferred charges	4,808		3,775
Regulatory assets	19,374		20,022
Right-of-use assets	10,452		10,692
Total other assets	34,634		34,489
Total assets	$	2,226,559	$	2,231,528

See accompanying notes.

2

NORTHWEST PIPELINE LLC

BALANCE SHEET

(Thousands of Dollars)

(Unaudited)

	March 31, 2021		December 31, 2020
LIABILITIES AND MEMBER’S EQUITY
CURRENT LIABILITIES:
Payables:
Trade	$	5,636	$	16,157
Affiliated companies	7,977		4,110
Accrued liabilities:
Taxes, other than income taxes	14,613		10,905
Interest	12,019		5,505
Exchange gas due to others	1,830		4,557
Customer advances	1,781		539
Other	6,377		6,786
Total current liabilities	50,233		48,559
LONG-TERM DEBT	578,267		578,018
OTHER NON-CURRENT LIABILITIES:
Asset retirement obligations	97,129		95,777
Regulatory liabilities	363,771		355,725
Lease liability	8,158		8,341
Other	4,378		4,713
Total other non-current liabilities	473,436		464,556
CONTINGENT LIABILITIES AND COMMITMENTS (Note 3)
MEMBER’S EQUITY:
Member’s capital	1,073,892		1,073,892
Retained earnings	50,731		66,503
Total member’s equity	1,124,623		1,140,395
Total liabilities and member’s equity	$	2,226,559	$	2,231,528

See accompanying notes.

3

NORTHWEST PIPELINE LLC

STATEMENT OF MEMBER’S EQUITY

(Thousands of Dollars)

(Unaudited)

	Three months ended March 31,
	2021		2020
MEMBER'S CAPITAL:
Balance at beginning and end of period	$	1,073,892	$	1,073,892
RETAINED EARNINGS:
Balance at beginning of period	66,503		79,417
Net income	39,228		42,804
Cash distributions to parent	(55,000)		(45,000)
Balance at end of period	50,731		77,221
Total Member’s Equity	$	1,124,623	$	1,151,113

See accompanying notes.

4

NORTHWEST PIPELINE LLC

STATEMENT OF CASH FLOWS

(Thousands of Dollars)

(Unaudited)

	Three months ended March 31,
	2021		2020
Cash flows from operating activities:
Net income	$	39,228	$	42,804
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	28,068		28,060
Regulatory debits	348		291
Regulatory charges resulting from tax rate changes	5,814		5,814
Amortization of deferred charges and credits	(772)		(821)
Allowance for equity funds used during construction (equity AFUDC)	(215)		(241)
Changes in current assets and liabilities:
Trade and other accounts receivable	1,822		5,132
Affiliated receivables	(9)		29
Materials and supplies	(42)		(87)
Other current assets	1,872		3,840
Trade accounts payable	(8,375)		(1,676)
Affiliated payables	3,867		(1,308)
Other accrued liabilities	6,175		578
Changes in noncurrent assets and liabilities:
Regulatory liabilities	957		1,079
Other, net	85		636
Net cash provided by operating activities	78,823		84,130
Cash flows from financing activities:
Cash distributions to parent	(55,000)		(45,000)
Net cash used in financing activities	(55,000)		(45,000)
Cash flows from investing activities:
Property, plant and equipment:
Capital expenditures*	(7,426)		(9,562)
Contributions and advances for construction costs	1,699		4,094
Disposal of property, plant and equipment, net	(246)		(240)
Advances to affiliate, net	(17,850)		(33,422)
Net cash used in investing activities	(23,823)		(39,130)
NET INCREASE (DECREASE) IN CASH	—		—
CASH AT BEGINNING OF PERIOD	—		—
CASH AT END OF PERIOD	$	—	$	—
____________________________________
* Increases to property, plant and equipment, exclusive of equity AFUDC	$	(5,741)	$	(5,520)
Changes in related accounts payable and accrued liabilities	(1,685)		(4,042)
Capital expenditures	$	(7,426)	$	(9,562)

See accompanying notes.

5

NORTHWEST PIPELINE LLC

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

1. BASIS OF PRESENTATION

In this report, Northwest Pipeline LLC (Northwest) is at times referred to in the first person as “we,” “us,” or “our.”

Northwest is indirectly owned by The Williams Companies, Inc. (Williams).

General

The accompanying unaudited financial statements have been prepared from our books and records. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted in this Form 10-Q pursuant to Securities and Exchange Commission rules and regulations. The unaudited financial statements include all normal recurring adjustments and others which, in the opinion of our management, are necessary to present fairly our interim financial statements. These unaudited financial statements should be read in conjunction with the financial statements and notes thereto in our 2020 Annual Report on Form 10-K.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the interim financial statements and accompanying notes. Actual results could differ from those estimates.

2. REVENUE RECOGNITION

Revenue by Category

Our revenue disaggregation by major service line includes Natural gas transportation, Natural gas storage, and Other, which are separately presented on the Statement of Net Income.

Contract Assets

The following table presents a reconciliation of our contract assets:

	Three months ended
	March 31,
	2021		2020
	(Thousands)
Balance at beginning of period	$	3,395	$	554
Revenue recognized in excess of amounts invoiced	1,121		620
Balance at end of period	$	4,516	$	1,174

Contract Liabilities

The following table presents a reconciliation of our contract liabilities:

	Three months ended
	March 31,
	2021		2020
	(Thousands)
Balance at beginning of period	$	4,610	$	5,464
Recognized in Revenue	(232)		(213)
Balance at end of period	$	4,378	$	5,251

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Remaining Performance Obligations

Our remaining performance obligations primarily include reservation charges on contracted capacity on our firm transportation and storage contracts with customers. Amounts from certain contracts included in the table below, which are subject to periodic review and approval by the Federal Energy Regulatory Commission (FERC), reflect the rates for such services in our current FERC tariffs for the life of the related contracts; however, these rates may change based on future rate cases or settlements approved by the FERC and the amount and timing of these changes is not currently known. This table excludes the variable consideration component for commodity charges. Certain of our contracts contain evergreen provisions for periods beyond the initial term of the contract. The remaining performance obligations, as of March 31, 2021, do not consider potential future performance obligations for which the renewal has not been exercised. The table below also does not include contracts with customers for which the underlying facilities have not received FERC authorization to be placed into service.

The following table presents the amount of the contract liabilities balance expected to be recognized as revenue when performance obligations are satisfied and the transaction price allocated to the remaining performance obligations under certain contracts as of March 31, 2021.

	Contract Liabilities		Remaining Performance Obligations
	(Thousands)
2021 (remainder)	$	707	$	314,230
2022	1,029		410,694
2023	1,120		365,687
2024	1,218		334,497
2025	304		331,136
Thereafter	—		2,645,508
Total	$	4,378	$	4,401,752

Accounts Receivable

Receivables from contracts with customers are included within Receivables - Trade and Receivables - Affiliated companies and receivables that are not related to contracts with customers are included within the balance of Receivables - Advances to affiliate and Receivables - Other in our Balance Sheet.

3. CONTINGENT LIABILITIES AND COMMITMENTS

Environmental Matters

We are subject to the National Environmental Policy Act and other federal and state legislation regulating the environmental aspects of our business. Except as discussed below, our management believes that we are in substantial compliance with existing environmental requirements. Environmental expenditures are expensed or capitalized depending on their future economic benefit and potential for rate recovery. We believe that, with respect to any expenditures required to meet applicable standards and regulations, the FERC would grant the requisite rate relief so that substantially all of such expenditures would be permitted to be recovered through rates.

Beginning in the mid-1980s, we evaluated many of our facilities for the presence of toxic and hazardous substances to determine to what extent, if any, remediation might be necessary. We identified polychlorinated biphenyl (PCB) contamination in air compressor systems, soils, and related properties at certain compressor station sites. Similarly, we identified hydrocarbon impacts at these facilities due to the former use of earthen pits, lubricating oil leaks or spills, and excess pipe coating released to the environment. In addition, heavy metals have been identified at these sites due to the former use of mercury containing meters and paint and welding rods containing lead, cadmium, and arsenic. The PCBs were remediated pursuant to a Consent Decree with the U.S. Environmental Protection Agency (EPA) in the late 1980s, and we conducted a voluntary clean-up of the hydrocarbon and mercury impacts in the early 1990s. In 2005, the Washington Department of Ecology required us to re-evaluate our previous clean-ups in Washington. During 2006 to 2015, 129 meter stations were evaluated, of which 82 required remediation. As of March 31, 2021, all of the meter stations have been remediated. During 2006 to 2018, 14 compressor stations were evaluated, of which 11 required remediation. As of March 31, 2021, 10 compressor stations have been remediated. At March 31, 2021, we had accrued liabilities totaling approximately $1.1 million, $0.2 million of which is recorded in Accrued liabilities - Other and $0.9 million of which is recorded in Other Noncurrent Liabilities - Other in the accompanying Balance Sheet. At December 31, 2020, we had accrued liabilities totaling approximately $1.1 million, $0.1

7

million of which is recorded in Accrued liabilities - Other and $1.0 million of which is recorded in Other Noncurrent Liabilities - Other in the accompanying Balance Sheet. We are conducting environmental assessments and implementing a variety of remedial measures that may result in increases or decreases in the total estimated costs.

The EPA and various state regulatory agencies routinely promulgate and propose new rules, and issue updated guidance to existing rules. These rulemakings include, but are not limited to, rules for reciprocating internal combustion engine and combustion turbine maximum achievable control technology, air quality standards for one-hour nitrogen dioxide emissions, and volatile organic compound and methane new source performance standards impacting design and operation of storage vessels, pressure valves, and compressors. The EPA previously issued its rule regarding National Ambient Air Quality Standards for ground-level ozone. We are monitoring the rule’s implementation as it will trigger additional federal and state regulatory actions that may impact our operations. Implementation of the regulations is expected to result in impacts to our operations and increase the cost of additions to Property, plant, and equipment - net in the Balance Sheet for both new and existing facilities in affected areas. We are unable to reasonably estimate the cost of additions that may be required to meet the regulations at this time due to uncertainty created by various legal challenges to these regulations and the need for further specific regulatory guidance.

Other Matters

Various other proceedings are pending against us and are considered incidental to our operations.

Summary

We estimate that for all matters for which we are able to reasonably estimate a range of loss, including those noted above and others that are not individually significant, our aggregate reasonably possible losses beyond amounts accrued for all of our contingent liabilities are immaterial to our expected future annual results of operations, liquidity and financial position. These calculations have been made without consideration of any potential recovery from third-parties. We have disclosed all significant matters for which we are unable to reasonably estimate a range of possible loss.

4. DEBT AND FINANCING ARRANGEMENTS

Credit Facility

We, along with Williams and Transcontinental Gas Pipe Line Company, LLC (Transco), are party to a credit agreement with aggregate commitments available of $4.5 billion, with up to an additional $500 million increase in aggregate commitments available under certain circumstances. We and Transco are each subject to a $500 million borrowing sublimit. Letter of credit commitments of $1.0 billion are subject to the $500 million borrowing sublimit applicable to us and Transco. At March 31, 2021, no letters of credit have been issued and no loans were outstanding under the credit facility.

Williams participates in a commercial paper program and Williams’ management considers amounts outstanding under this program to be a reduction of available capacity under the credit facility. The program allows a maximum outstanding amount at any time of $4.0 billion of unsecured commercial paper notes. At March 31, 2021, Williams had no outstanding commercial paper.

5. FINANCIAL INSTRUMENTS

Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

Short-term financial assets—The carrying values of short-term financial assets (advances to affiliate) that have variable interest rates, accounts receivable and accounts payable approximate fair value because of the short-term nature of these instruments.

Long-term debt—The disclosed fair value of our long-term debt, which we consider as a level 2 measurement, is determined by a market approach using broker quoted indicative period-end bond prices. The quoted prices are based on observable transactions in less active markets for our debt or similar instruments. The carrying amount and estimated fair value of our long-term debt were $578.3 million and $661.5 million, respectively, at March 31, 2021, and $578.0 million and $680.6 million, respectively, at December 31, 2020.

8

6. TRANSACTIONS WITH AFFILIATES

We are a participant in Williams’ cash management program, and we make advances to and receive advances from Williams. At March 31, 2021 and December 31, 2020, our advances to Williams totaled approximately $265.7 million and $247.9 million, respectively. These advances are represented by demand notes and are classified as Receivables - Advances to affiliate in the accompanying Balance Sheet. The interest rate on these intercompany demand notes is based upon the daily overnight investment rate paid on Williams’ excess cash at the end of each month, which was 0.01 percent at March 31, 2021. The interest income from these advances was minimal and $0.5 million for the three months ended March 31, 2021 and 2020, respectively. Such interest income is included in Other (Income) and Other Expenses – Miscellaneous other (income) expenses, net on the accompanying Statement of Net Income.

Included in Operating Revenues in the accompanying Statement of Net Income are revenues received from affiliates of $0.4 million and $0.2 million for the three months ended March 31, 2021 and 2020, respectively. The rates charged to provide services to affiliates are the same as those that are charged to similarly-situated nonaffiliated customers.

We have no employees. Services necessary to operate our business are provided to us by Williams and certain affiliates of Williams. We reimburse Williams and its affiliates for all direct and indirect expenses incurred or payments made (including salary, bonus, incentive compensation, and benefits) in connection with these services. Employees of Williams also provide general, administrative and management services to us, and we are charged for certain administrative expenses incurred by Williams. These charges are either directly identifiable or allocated to our assets. Direct charges are for goods and services provided by Williams at our request. Allocated charges are based on a three-factor formula, which considers revenues; property, plant, and equipment; and payroll. In management’s estimation, the allocation methodologies used are reasonable and result in a reasonable allocation to us of our costs of doing business incurred by Williams. We were billed $22.1 million and $22.7 million in the three months ended March 31, 2021 and 2020, respectively, for these services. Such expenses are primarily included in General and administrative and Operation and maintenance expenses on the accompanying Statement of Net Income.

During the three months ended March 31, 2021 and 2020, we declared and paid cash distributions to our parent of $55.0 million and $45.0 million, respectively. During April 2021, we declared and paid an additional cash distribution of $44.0 million to our parent.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

GENERAL

The following discussion should be read in conjunction with the Management’s Discussion and Analysis, Financial Statements, and Notes contained in Items 7 and 8 of our 2020 Annual Report on Form 10-K and with the Financial Statements and Notes contained in this Form 10-Q.

RESULTS OF OPERATIONS

Analysis of Financial Results

This analysis discusses financial results of our operations for the three-month periods ended March 31, 2021 and 2020. Variances due to changes in natural gas prices and transportation volumes have little impact on revenues, because under our rate design methodology, the majority of overall cost of service is recovered through firm capacity reservation charges in our transportation rates.

Operating Revenues decreased $2.5 million, or approximately 2 percent, in the first three months of 2021 as compared to the same period in 2020 primarily due to:

•$2.7 million lower natural gas transportation revenues as a result of lower firm transportation demand ($4.0 million) primarily resulting from the termination of two base agreements in the third quarter of 2020, partially offset by higher short-term firm transportation demand due to Winter Storm Uri ($1.3 million).

•The decrease in natural gas transportation revenues was partially offset by $0.3 million in higher storage revenues, with higher park and loan services in 2021 and higher capacity releases at the Clay Basin storage facility.

Transportation services accounted for 97 percent and gas storage services accounted for 3 percent of our operating revenues for both periods ended March 31, 2021 and 2020.

Operating Expenses increased $0.3 million, or less than 1 percent, in the first three months of 2021 as compared to the same period in 2020, primarily due to:

•$1.1 million of higher operating and maintenance costs mostly attributable to higher measurement software maintenance and site rentals, and higher transmission related expenses including contract labor and right of way expenses.

•The increase in operating maintenance costs were mostly offset by $1.0 million of lower general and administrative expenses, including lower building rent, a decrease in outside services, and lower salaries and wages partially offset by higher employee benefits accrual.

Other (income) and other expenses, net had an unfavorable change of $0.9 million, or approximately 14 percent, in the first three months of 2021 as compared to the same period in 2020 primarily due to lower interest income on our note with Williams.

Recent Developments

COVID-19

The outbreak of COVID-19 has severely impacted global economic activity and caused significant volatility and negative pressure in financial markets. We continue to monitor the COVID-19 pandemic and have taken steps intended to protect the safety of our customers, employees and communities, and to support the continued delivery of safe and reliable service to our customers and the communities we serve. Our financial condition, results of operations, and liquidity have not been materially impacted by direct effects of COVID-19.

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Item 4. Controls and Procedures

Our management, including our Senior Vice President and our Vice President and Chief Accounting Officer, does not expect that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended) (Disclosure Controls) or our internal control over financial reporting (Internal Controls) will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. We monitor our Disclosure Controls and Internal Controls and make modifications as necessary; our intent in this regard is that the Disclosure Controls and Internal Controls will be modified as systems change and conditions warrant.

Evaluation of Disclosure Controls and Procedures

An evaluation of the effectiveness of the design and operation of our Disclosure Controls was performed as of the end of the period covered by this report. This evaluation was performed under the supervision and with the participation of our management, including our Senior Vice President and our Vice President and Chief Accounting Officer. Based upon that evaluation, our Senior Vice President and our Vice President and Chief Accounting Officer concluded that these Disclosure Controls are effective at a reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There have been no changes during the first quarter of 2021 that have materially affected, or are reasonably likely to materially affect, our Internal Control over Financial Reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Environmental

While it is not possible for us to predict the final outcome of any pending legal proceedings involving governmental authorities under federal, state, and local laws regulating the discharge of materials into the environment, we do not anticipate a material effect on our financial position if we were to receive an unfavorable outcome in any one or more of such proceedings. Our threshold for disclosing material environmental legal proceedings involving a governmental authority where potential monetary sanctions are involved is $1 million.

Other

The additional information called for by this item is provided in Note 3. Contingent Liabilities and Commitments, included in the Notes to Financial Statements included under Part 1, Item 1. Financial Statements of this Form 10-Q, which information is incorporated by reference into this item.

Item 1A. Risk Factors

    Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2020 includes certain risk factors that could materially affect our business, financial condition, or future results. Those Risk Factors have not materially changed.  

11

Item 6. Exhibits

The following instruments are included as exhibits to this report.

Exhibit	Description
2	Certificate of Conversion of Northwest Pipeline GP (filed July 3, 2013 as Exhibit 2.1 to our current report on Form 8-K (File No. 001-07414) and incorporated herein by reference).
3.1	Certificate of Formation of Northwest Pipeline LLC (filed July 3, 2013 as Exhibit 2.2 to our current report on Form 8-K (File No. 001-07414) and incorporated herein by reference).
3.2	Operating Agreement of Northwest Pipeline LLC (filed July 3, 2013 as Exhibit 3.1 to our current report on Form 8-K (File No. 001-07414) and incorporated herein by reference).
31.1*	Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended and Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended, and Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.
32**	Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document. The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
101.SCH*	XBRL Taxonomy Extension Schema.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase.
101.DEF*	XBRL Taxonomy Definition Linkbase.
101.LAB*	XBRL Taxonomy Extension Label Linkbase.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase.
104*	Cover Page Interactive Data File. The cover page interactive data file does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document (contained in Exhibit 101).

*	Filed herewith.
**	Furnished herewith.

12

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

			NORTHWEST PIPELINE LLC
			Registrant
Date:	May 3, 2021	By:	/s/ Billeigh W. Mark
			Billeigh W. Mark
			Controller
			(Principal Accounting Officer)

EX-31.1

Exhibit 31.1

SECTION 302 CERTIFICATION

I, Scott A. Hallam, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Northwest Pipeline LLC;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 3, 2021

By:	/s/Scott A. Hallam
	Scott A. Hallam
	Senior Vice President
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

SECTION 302 CERTIFICATION

I, John D. Porter, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Northwest Pipeline LLC;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 3, 2021

By:	/s/John D. Porter
	John D. Porter
	Vice President and Chief Accounting Officer
	(Principal Financial Officer)

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Northwest Pipeline LLC (the “Company”) on Form 10-Q for the period ending March 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned hereby certifies, in his capacity as an officer of the Company, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/Scott A. Hallam

Scott A. Hallam

Senior Vice President

May 3, 2021

/s/John D. Porter

John D. Porter

Vice President and Chief Accounting Officer

May 3, 2021

A signed original of this written statement required by Section 906 has been provided to, and will be retained by, the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished to the Securities and Exchange Commission as an exhibit to the Report and shall not be considered filed as part of the Report.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2021	May 03, 2021
Document and Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document period end date	Mar. 31, 2021
Document Transition Report	false
Entity File Number	1-7414
Entity registrant name	NORTHWEST PIPELINE LLC
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	26-1157701
Entity Address, Address Line One	295 Chipeta Way
Entity Address, City or Town	Salt Lake City
Entity Address, State or Province	UT
Entity Address, Postal Zip Code	84108
City Area Code	801
Local Phone Number	583-8800
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity filer category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity central index key	0000110019
Amendment flag	false
Document fiscal year focus	2021
Document fiscal period focus	Q1
Current fiscal year end date	--12-31
Entity common stock, shares outstanding		0

XML

Statement of Net Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
OPERATING REVENUES:
Natural gas transportation	$ 109,277	$ 112,021
Natural gas storage	3,670	3,346
Other	(53)	(21)
Total operating revenues	112,894	115,346
OPERATING EXPENSES:
General and administrative	11,670	12,699
Operation and maintenance	16,646	15,499
Depreciation and amortization	28,068	28,060
Regulatory debits	348	291
Taxes, other than income taxes	4,216	4,120
Regulatory charges resulting from tax rate changes	5,814	5,814
Other (income) expenses, net	(31)	(2)
Total operating expenses	66,731	66,481
OPERATING INCOME	46,163	48,865
OTHER (INCOME) AND OTHER EXPENSES:
Interest expense	7,361	7,451
Allowance for equity and borrowed funds used during construction (AFUDC)	(265)	(298)
Miscellaneous other (income) expenses, net	(161)	(1,092)
Total other (income) and other expenses	6,935	6,061
NET INCOME	$ 39,228	$ 42,804

XML

Balance Sheet (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
CURRENT ASSETS:
Cash	$ 0	$ 0
Receivables:
Trade	37,283	37,365
Affiliated companies	60	51
Advances to affiliate	265,719	247,869
Other	765	840
Materials and supplies	9,849	9,807
Exchange gas due from others	3,276	4,466
Prepayments and other	3,396	4,078
Total current assets	320,348	304,476
PROPERTY, PLANT AND EQUIPMENT	3,657,039	3,653,792
Less-Accumulated depreciation and amortization	1,785,462	1,761,229
Total property, plant and equipment, net	1,871,577	1,892,563
OTHER ASSETS:
Deferred charges	4,808	3,775
Regulatory assets	10,452	10,692
Right-of-use assets	19,374	20,022
Total other assets	34,634	34,489
Total assets	2,226,559	2,231,528
Payables:
Trade	5,636	16,157
Affiliated companies	7,977	4,110
Accrued liabilities:
Taxes, other than income taxes	14,613	10,905
Interest	12,019	5,505
Exchange gas due to others	1,830	4,557
Customer advances	1,781	539
Other	6,377	6,786
Total current liabilities	50,233	48,559
LONG-TERM DEBT	578,267	578,018
OTHER NONCURRENT LIABILITIES:
Asset retirement obligations	97,129	95,777
Regulatory liabilities	363,771	355,725
Lease liability	8,158	8,341
Other	4,378	4,713
Total other noncurrent liabilities	473,436	464,556
CONTINGENT LIABILITIES AND COMMITMENTS (Note 3)
MEMBER'S EQUITY:
Member's capital	1,073,892	1,073,892
Retained earnings	50,731	66,503
Total member's equity	1,124,623	1,140,395
Total liabilities and member's equity	$ 2,226,559	$ 2,231,528

XML

Statement of Member's Equity (Unaudited) - USD ($) $ in Thousands	Total	MEMBER'S CAPITAL	RETAINED EARNINGS
Balance at beginning and end of period at Dec. 31, 2019		$ 1,073,892	$ 79,417
Net income	$ 42,804		42,804
Cash distributions to parent	(45,000)		(45,000)
Balance at end of period at Mar. 31, 2020	1,151,113		77,221
Balance at beginning and end of period at Dec. 31, 2020	1,140,395	$ 1,073,892	66,503
Net income	39,228		39,228
Cash distributions to parent	(55,000)		(55,000)
Balance at end of period at Mar. 31, 2021	$ 1,124,623		$ 50,731

XML

Statement of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash flows from operating activities:
Net income	$ 39,228	$ 42,804
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	28,068	28,060
Regulatory debits	348	291
Regulatory charges resulting from tax rate changes	5,814	5,814
Amortization of deferred charges and credits	(772)	(821)
Allowance for equity funds used during construction (equity AFUDC)	(215)	(241)
Changes in current assets and liabilities:
Trade and other accounts receivable	1,822	5,132
Affiliated receivables	(9)	29
Materials and supplies	(42)	(87)
Other current assets	1,872	3,840
Trade accounts payable	(8,375)	(1,676)
Affiliated payables	3,867	(1,308)
Other accrued liabilities	6,175	578
Changes in noncurrent assets and liabilities:
Regulatory liabilities	957	1,079
Other, net	85	636
Net cash provided by operating activities	78,823	84,130
Cash flows from financing activities:
Cash distributions to parent	(55,000)	(45,000)
Net cash used in financing activities	(55,000)	(45,000)
Property, plant and equipment:
Capital expenditures	(7,426)	(9,562)
Contributions and advances for construction costs	1,699	4,094
Disposal of property, plant and equipment, net	(246)	(240)
Advances to affiliates, net	(17,850)	(33,422)
Net cash used in investing activities	(23,823)	(39,130)
NET INCREASE (DECREASE) IN CASH	0	0
CASH AT BEGINNING OF PERIOD	0	0
CASH AT END OF PERIOD	0	0
Increases to property, plant and equipment, exclusive of equity AFUDC	(5,741)	(5,520)
Changes in related accounts payable and accrued liabilities	(1,685)	(4,042)
Capital expenditures	$ (7,426)	$ (9,562)

XML

Basis of Presentation (Notes)

3 Months Ended

Mar. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

BASIS OF PRESENTATION

In this report, Northwest Pipeline LLC (Northwest) is at times referred to in the first person as “we,” “us,” or “our.”

Northwest is indirectly owned by The Williams Companies, Inc. (Williams).

General

The accompanying unaudited financial statements have been prepared from our books and records. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted in this Form 10-Q pursuant to Securities and Exchange Commission rules and regulations. The unaudited financial statements include all normal recurring adjustments and others which, in the opinion of our management, are necessary to present fairly our interim financial statements. These unaudited financial statements should be read in conjunction with the financial statements and notes thereto in our 2020 Annual Report on Form 10-K.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the interim financial statements and accompanying notes. Actual results could differ from those estimates.

XML

Revenue Recognition (Notes)

3 Months Ended

Mar. 31, 2021

Revenue Recognition [Abstract]

Revenue from Contract with Customer [Text Block]

REVENUE RECOGNITION

Revenue by Category

Our revenue disaggregation by major service line includes Natural gas transportation, Natural gas storage, and Other, which are separately presented on the Statement of Net Income.

Contract Assets

The following table presents a reconciliation of our contract assets:

	Three months ended
	March 31,
	2021		2020
	(Thousands)
Balance at beginning of period	$	3,395	$	554
Revenue recognized in excess of amounts invoiced	1,121		620
Balance at end of period	$	4,516	$	1,174

Contract Liabilities

The following table presents a reconciliation of our contract liabilities:

	Three months ended
	March 31,
	2021		2020
	(Thousands)
Balance at beginning of period	$	4,610	$	5,464
Recognized in Revenue	(232)		(213)
Balance at end of period	$	4,378	$	5,251

Remaining Performance Obligations

Our remaining performance obligations primarily include reservation charges on contracted capacity on our firm transportation and storage contracts with customers. Amounts from certain contracts included in the table below, which are subject to periodic review and approval by the Federal Energy Regulatory Commission (FERC), reflect the rates for such services in our current FERC tariffs for the life of the related contracts; however, these rates may change based on future rate cases or settlements approved by the FERC and the amount and timing of these changes is not currently known. This table excludes the variable consideration component for commodity charges. Certain of our contracts contain evergreen provisions for periods beyond the initial term of the contract. The remaining performance obligations, as of March 31, 2021, do not consider potential future performance obligations for which the renewal has not been exercised. The table below also does not include contracts with customers for which the underlying facilities have not received FERC authorization to be placed into service.

The following table presents the amount of the contract liabilities balance expected to be recognized as revenue when performance obligations are satisfied and the transaction price allocated to the remaining performance obligations under certain contracts as of March 31, 2021.

	Contract Liabilities		Remaining Performance Obligations
	(Thousands)
2021 (remainder)	$	707	$	314,230
2022	1,029		410,694
2023	1,120		365,687
2024	1,218		334,497
2025	304		331,136
Thereafter	—		2,645,508
Total	$	4,378	$	4,401,752

Accounts Receivable

Receivables from contracts with customers are included within Receivables - Trade and Receivables - Affiliated companies and receivables that are not related to contracts with customers are included within the balance of Receivables - Advances to affiliate and Receivables - Other in our Balance Sheet.

XML

Contingent Liabilities and Commitments (Notes)

3 Months Ended

Mar. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

CONTINGENT LIABILITIES AND COMMITMENTS

Environmental Matters

We are subject to the National Environmental Policy Act and other federal and state legislation regulating the environmental aspects of our business. Except as discussed below, our management believes that we are in substantial compliance with existing environmental requirements. Environmental expenditures are expensed or capitalized depending on their future economic benefit and potential for rate recovery. We believe that, with respect to any expenditures required to meet applicable standards and regulations, the FERC would grant the requisite rate relief so that substantially all of such expenditures would be permitted to be recovered through rates.

Beginning in the mid-1980s, we evaluated many of our facilities for the presence of toxic and hazardous substances to determine to what extent, if any, remediation might be necessary. We identified polychlorinated biphenyl (PCB) contamination in air compressor systems, soils, and related properties at certain compressor station sites. Similarly, we identified hydrocarbon impacts at these facilities due to the former use of earthen pits, lubricating oil leaks or spills, and excess pipe coating released to the environment. In addition, heavy metals have been identified at these sites due to the former use of mercury containing meters and paint and welding rods containing lead, cadmium, and arsenic. The PCBs were remediated pursuant to a Consent Decree with the U.S. Environmental Protection Agency (EPA) in the late 1980s, and we conducted a voluntary clean-up of the hydrocarbon and mercury impacts in the early 1990s. In 2005, the Washington Department of Ecology required us to re-evaluate our previous clean-ups in Washington. During 2006 to 2015, 129 meter stations were evaluated, of which 82 required remediation. As of March 31, 2021, all of the meter stations have been remediated. During 2006 to 2018, 14 compressor stations were evaluated, of which 11 required remediation. As of March 31, 2021, 10 compressor stations have been remediated. At March 31, 2021, we had accrued liabilities totaling approximately $1.1 million, $0.2 million of which is recorded in Accrued liabilities - Other and $0.9 million of which is recorded in Other Noncurrent Liabilities - Other in the accompanying Balance Sheet. At December 31, 2020, we had accrued liabilities totaling approximately $1.1 million, $0.1

million of which is recorded in Accrued liabilities - Other and $1.0 million of which is recorded in Other Noncurrent Liabilities - Other in the accompanying Balance Sheet. We are conducting environmental assessments and implementing a variety of remedial measures that may result in increases or decreases in the total estimated costs.

The EPA and various state regulatory agencies routinely promulgate and propose new rules, and issue updated guidance to existing rules. These rulemakings include, but are not limited to, rules for reciprocating internal combustion engine and combustion turbine maximum achievable control technology, air quality standards for one-hour nitrogen dioxide emissions, and volatile organic compound and methane new source performance standards impacting design and operation of storage vessels, pressure valves, and compressors. The EPA previously issued its rule regarding National Ambient Air Quality Standards for ground-level ozone. We are monitoring the rule’s implementation as it will trigger additional federal and state regulatory actions that may impact our operations. Implementation of the regulations is expected to result in impacts to our operations and increase the cost of additions to Property, plant, and equipment - net in the Balance Sheet for both new and existing facilities in affected areas. We are unable to reasonably estimate the cost of additions that may be required to meet the regulations at this time due to uncertainty created by various legal challenges to these regulations and the need for further specific regulatory guidance.

Other Matters

Various other proceedings are pending against us and are considered incidental to our operations.

Summary

We estimate that for all matters for which we are able to reasonably estimate a range of loss, including those noted above and others that are not individually significant, our aggregate reasonably possible losses beyond amounts accrued for all of our contingent liabilities are immaterial to our expected future annual results of operations, liquidity and financial position. These calculations have been made without consideration of any potential recovery from third-parties. We have disclosed all significant matters for which we are unable to reasonably estimate a range of possible loss.

XML

Debt and Financing Arrangement (Notes)

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Debt and Financing Arrangement

DEBT AND FINANCING ARRANGEMENTS

Credit Facility

We, along with Williams and Transcontinental Gas Pipe Line Company, LLC (Transco), are party to a credit agreement with aggregate commitments available of $4.5 billion, with up to an additional $500 million increase in aggregate commitments available under certain circumstances. We and Transco are each subject to a $500 million borrowing sublimit. Letter of credit commitments of $1.0 billion are subject to the $500 million borrowing sublimit applicable to us and Transco. At March 31, 2021, no letters of credit have been issued and no loans were outstanding under the credit facility.

Williams participates in a commercial paper program and Williams’ management considers amounts outstanding under this program to be a reduction of available capacity under the credit facility. The program allows a maximum outstanding amount at any time of $4.0 billion of unsecured commercial paper notes. At March 31, 2021, Williams had no outstanding commercial paper.

XML

Financial Instruments (Notes)

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

Financial Instruments

FINANCIAL INSTRUMENTS

Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

Short-term financial assets—The carrying values of short-term financial assets (advances to affiliate) that have variable interest rates, accounts receivable and accounts payable approximate fair value because of the short-term nature of these instruments.

Long-term debt—The disclosed fair value of our long-term debt, which we consider as a level 2 measurement, is determined by a market approach using broker quoted indicative period-end bond prices. The quoted prices are based on observable transactions in less active markets for our debt or similar instruments. The carrying amount and estimated fair value of our long-term debt were $578.3 million and $661.5 million, respectively, at March 31, 2021, and $578.0 million and $680.6 million, respectively, at December 31, 2020.

XML

Transactions with Affiliates (Notes)

3 Months Ended

Mar. 31, 2021

Related Party Transactions [Abstract]

Transactions with Affiliates

TRANSACTIONS WITH AFFILIATES

We are a participant in Williams’ cash management program, and we make advances to and receive advances from Williams. At March 31, 2021 and December 31, 2020, our advances to Williams totaled approximately $265.7 million and $247.9 million, respectively. These advances are represented by demand notes and are classified as Receivables - Advances to affiliate in the accompanying Balance Sheet. The interest rate on these intercompany demand notes is based upon the daily overnight investment rate paid on Williams’ excess cash at the end of each month, which was 0.01 percent at March 31, 2021. The interest income from these advances was minimal and $0.5 million for the three months ended March 31, 2021 and 2020, respectively. Such interest income is included in Other (Income) and Other Expenses – Miscellaneous other (income) expenses, net on the accompanying Statement of Net Income.

Included in Operating Revenues in the accompanying Statement of Net Income are revenues received from affiliates of $0.4 million and $0.2 million for the three months ended March 31, 2021 and 2020, respectively. The rates charged to provide services to affiliates are the same as those that are charged to similarly-situated nonaffiliated customers.

We have no employees. Services necessary to operate our business are provided to us by Williams and certain affiliates of Williams. We reimburse Williams and its affiliates for all direct and indirect expenses incurred or payments made (including salary, bonus, incentive compensation, and benefits) in connection with these services. Employees of Williams also provide general, administrative and management services to us, and we are charged for certain administrative expenses incurred by Williams. These charges are either directly identifiable or allocated to our assets. Direct charges are for goods and services provided by Williams at our request. Allocated charges are based on a three-factor formula, which considers revenues; property, plant, and equipment; and payroll. In management’s estimation, the allocation methodologies used are reasonable and result in a reasonable allocation to us of our costs of doing business incurred by Williams. We were billed $22.1 million and $22.7 million in the three months ended March 31, 2021 and 2020, respectively, for these services. Such expenses are primarily included in General and administrative and Operation and maintenance expenses on the accompanying Statement of Net Income.

During the three months ended March 31, 2021 and 2020, we declared and paid cash distributions to our parent of $55.0 million and $45.0 million, respectively. During April 2021, we declared and paid an additional cash distribution of $44.0 million to our parent.

XML

Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2021

Revenue Recognition [Abstract]

Contract with Customer, Asset and Liability [Table Text Block]

Contract Assets

The following table presents a reconciliation of our contract assets:

	Three months ended
	March 31,
	2021		2020
	(Thousands)
Balance at beginning of period	$	3,395	$	554
Revenue recognized in excess of amounts invoiced	1,121		620
Balance at end of period	$	4,516	$	1,174

Contract Liabilities

The following table presents a reconciliation of our contract liabilities:

	Three months ended
	March 31,
	2021		2020
	(Thousands)
Balance at beginning of period	$	4,610	$	5,464
Recognized in Revenue	(232)		(213)
Balance at end of period	$	4,378	$	5,251

Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Table Text Block]

The following table presents the amount of the contract liabilities balance expected to be recognized as revenue when performance obligations are satisfied and the transaction price allocated to the remaining performance obligations under certain contracts as of March 31, 2021.

	Contract Liabilities		Remaining Performance Obligations
	(Thousands)
2021 (remainder)	$	707	$	314,230
2022	1,029		410,694
2023	1,120		365,687
2024	1,218		334,497
2025	304		331,136
Thereafter	—		2,645,508
Total	$	4,378	$	4,401,752

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Contract Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenue Recognition [Abstract]
Contract with Customer, Asset, after Allowance for Credit Loss - Balance at beginning of period	$ 3,395	$ 554
Revenue recognized in excess of amounts invoiced	1,121	620
Contract with Customer, Asset, after Allowance for Credit Loss - Balance at end of period	$ 4,516	$ 1,174

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Revenue Recognition Contract Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020	Dec. 31, 2019
Contract With Customer, Liability [Line Items]
Contract with Customer, Liability	$ 4,378	$ 5,251	$ 4,610	$ 5,464
Recognized in revenue	$ (232)	$ (213)

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Contract Liabilities Performance Obligation (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020	Dec. 31, 2019
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract with Customer, Liability	$ 4,378	$ 4,610	$ 5,251	$ 5,464
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract with Customer, Liability	707
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract with Customer, Liability	1,029
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract with Customer, Liability	1,120
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract with Customer, Liability	1,218
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract with Customer, Liability	304
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract with Customer, Liability	$ 0
Performance Obligations Related To Contract Liabilities [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	9 months
Performance Obligations Related To Contract Liabilities [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	1 year
Performance Obligations Related To Contract Liabilities [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	1 year
Performance Obligations Related To Contract Liabilities [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	1 year
Performance Obligations Related To Contract Liabilities [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	1 year
Performance Obligations Related To Contract Liabilities [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	1 year

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Remaining Performance Obligation (Details) $ in Thousands	Mar. 31, 2021 USD ($)
Revenue Recognition [Abstract]
Revenue, Remaining Performance Obligation, Amount	$ 4,401,752
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01
Revenue Recognition [Abstract]
Revenue, Remaining Performance Obligation, Amount	314,230
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01
Revenue Recognition [Abstract]
Revenue, Remaining Performance Obligation, Amount	410,694
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue Recognition [Abstract]
Revenue, Remaining Performance Obligation, Amount	365,687
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue Recognition [Abstract]
Revenue, Remaining Performance Obligation, Amount	334,497
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Revenue Recognition [Abstract]
Revenue, Remaining Performance Obligation, Amount	331,136
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01
Revenue Recognition [Abstract]
Revenue, Remaining Performance Obligation, Amount	$ 2,645,508
Remaining Performance Obligations [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	9 months
Remaining Performance Obligations [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	1 year
Remaining Performance Obligations [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	1 year
Remaining Performance Obligations [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	1 year
Remaining Performance Obligations [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	1 year
Remaining Performance Obligations [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	1 year

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Contingent Liabilities and Commitments (Details) - Environmental assessment and remediation [Member] - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Site Contingency [Line Items]
Accrued environmental assessment and remediation costs, total	$ 1.1	$ 1.1
Accrued environmental assessment and remediation costs, current	0.2	0.1
Accrued environmental assessment and remediation costs, noncurrent	$ 0.9	$ 1.0

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Debt and Financing Arrangement (Details) $ in Millions	Mar. 31, 2021 USD ($)
Williams Companies Inc [Member] | Letter of credit
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 1,000.0
Credit Agreement [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	500.0
Letters of Credit Outstanding, Amount	0.0
Credit Agreement [Member] | Williams Companies Inc [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	4,500.0
Additional Amount By Which Credit Facility Can Be Increased	500.0
Line of credit facility, loans outstanding	0.0
Letter of credit
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	500.0
Commercial paper [Member] | Williams Companies Inc [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	4,000.0
Commercial paper, outstanding	$ 0.0

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Financial Instruments (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Carrying (reported) amount, fair value disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt including current maturities	$ 578.3	$ 578.0
Estimate of fair value, fair value disclosure [Member] | Fair value, inputs, level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt including current maturities	$ 661.5	$ 680.6

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Transactions with Affiliates (Details) $ in Thousands	1 Months Ended	3 Months Ended
	Apr. 30, 2021 USD ($)	Mar. 31, 2021 USD ($) employee	Mar. 31, 2020 USD ($)	Dec. 31, 2020 USD ($)
Related Party Transaction [Line Items]
Advances to affiliate		$ 265,719		$ 247,869
Related party transaction, rate		0.01%
Entity number of employees | employee		0
Related party transaction, expenses from transactions with related party		$ 22,100	$ 22,700
Cash distributions to parent		55,000	45,000
Subsequent Event [Member]
Related Party Transaction [Line Items]
Cash distributions to parent	$ 44,000
Affiliated Entity [Member]
Related Party Transaction [Line Items]
Revenue from Related Parties		400	200
Williams Companies Inc [Member]
Related Party Transaction [Line Items]
Advances to affiliate		$ 265,700		$ 247,900
Interest Income, Related Party			$ 500