ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the fiscal year ended | ||||||||
OR | ||||||||
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the transition period from to |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ☐ | Accelerated filer | ☐ | þ | Smaller reporting company | Emerging growth company |
Page | ||||||||
PART I | ||||||||
Item 1. | ||||||||
Rate Matters | ||||||||
Item 1A. | ||||||||
Item 1B. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
PART II | ||||||||
Item 5. | ||||||||
Item 7. | ||||||||
Item 7A. | ||||||||
Item 8. | ||||||||
Item 9. | ||||||||
Item 9A. | ||||||||
Item 9B. | ||||||||
PART III | ||||||||
Item 10. | ||||||||
Item 11. | ||||||||
Item 12. | ||||||||
Item 13. | ||||||||
Item 14. | ||||||||
PART IV | ||||||||
Item 15. | ||||||||
Item 16. |
Item 1. | Business |
Item 1A. | Risk Factors |
Item 1B. | Unresolved Staff Comments |
Item 2. | Properties |
Item 3. | Legal Proceedings |
Item 4. | Mine Safety Disclosures |
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk |
December 31, 2021 | |||||
Fixed rates on long-term debt: | |||||
7.125% unsecured debentures due 2025 | $ | 85,000 | |||
4.0% unsecured debentures due 2027 | 500,000 | ||||
585,000 | |||||
Unamortized debt issuance costs | (3,059) | ||||
Unamortized debt discount | (2,911) | ||||
Total long-term debt, including current portion | $ | 579,030 |
Item 8. | Financial Statements and Supplementary Data |
Page | |||||
Description of the Matter | Regulatory Assets and Liabilities As discussed in Note 1 to the financial statements, the Company is an interstate natural gas transmission company that is regulated by the Federal Energy Regulatory Commission (“FERC”) and applies accounting principles in Topic 980 for regulated operations. As such, certain incurred costs that would otherwise be charged to expense are deferred as regulatory assets, based on the expected recovery from customers in future rates. Likewise, certain actual or anticipated credits that would otherwise reduce expense are deferred as regulatory liabilities, based on the expected return to customers in future rates. The Company records items as regulatory assets or liabilities if, based on regulatory orders or other available evidence, it is probable that the costs or obligations will be included in amounts allowable for recovery or refund in future rates. Auditing regulatory assets and liabilities is complex as it requires specialized knowledge of rate-regulated activities and judgments as to matters that could affect the recording of regulatory assets and liabilities. | ||||||||||
How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over the Company’s accounting for regulatory assets and liabilities, including, among others, controls over the evaluation of filings with regulatory bodies and their effects on existing regulatory assets and liabilities, including factors that may affect the timing or nature of recoverability. We performed audit procedures that included, among others, reviewing evidence of correspondence with regulatory bodies to test that the Company evaluated information obtained from regulatory rulings. For example, we assessed the recoverability, considering information obtained from the Company’s stipulation and settlement agreement, for various regulatory assets. In addition, we tested calculations of material regulatory assets and liabilities, including that amortization for certain regulatory assets and liabilities corresponded to relevant regulatory filings and/or orders. For example, we tested whether the calculation of regulatory liabilities attributable to changes in tax rates was consistent with methods agreed to by regulatory bodies. |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
(Thousands) | |||||||||||||||||
OPERATING REVENUES: | |||||||||||||||||
Natural gas transportation | $ | $ | $ | ||||||||||||||
Natural gas storage | |||||||||||||||||
Other | |||||||||||||||||
Total operating revenues | |||||||||||||||||
OPERATING EXPENSES: | |||||||||||||||||
General and administrative | |||||||||||||||||
Operation and maintenance | |||||||||||||||||
Depreciation and amortization | |||||||||||||||||
Regulatory debits | |||||||||||||||||
Taxes, other than income taxes | |||||||||||||||||
Regulatory charges resulting from tax rate changes | |||||||||||||||||
Other (income) expenses, net | ( | ||||||||||||||||
Total operating expenses | |||||||||||||||||
OPERATING INCOME | |||||||||||||||||
OTHER (INCOME) AND OTHER EXPENSES: | |||||||||||||||||
Interest expense | |||||||||||||||||
Allowance for equity and borrowed funds used during construction | ( | ( | ( | ||||||||||||||
Miscellaneous other (income) expenses, net | ( | ( | ( | ||||||||||||||
Total other (income) and other expenses | |||||||||||||||||
NET INCOME | $ | $ | $ | ||||||||||||||
December 31, | |||||||||||
2021 | 2020 | ||||||||||
(Thousands) | |||||||||||
ASSETS | |||||||||||
CURRENT ASSETS: | |||||||||||
Cash | $ | $ | |||||||||
Receivables: | |||||||||||
Trade | |||||||||||
Affiliated companies | |||||||||||
Advances to affiliate | |||||||||||
Other | |||||||||||
Materials and supplies | |||||||||||
Exchange gas due from others | |||||||||||
Prepayments and other | |||||||||||
Total current assets | |||||||||||
PROPERTY, PLANT AND EQUIPMENT, at cost | |||||||||||
Less-Accumulated depreciation | |||||||||||
Total property, plant and equipment, net | |||||||||||
OTHER ASSETS: | |||||||||||
Regulatory assets | |||||||||||
Right-of-use assets | |||||||||||
Other | |||||||||||
Total other assets | |||||||||||
Total assets | $ | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
(Thousands) | |||||||||||
LIABILITIES AND MEMBER’S EQUITY | |||||||||||
CURRENT LIABILITIES: | |||||||||||
Payables: | |||||||||||
Trade | $ | $ | |||||||||
Affiliated companies | |||||||||||
Accrued liabilities: | |||||||||||
Taxes, other than income taxes | |||||||||||
Interest | |||||||||||
Exchange gas due to others | |||||||||||
Customer advances | |||||||||||
Other | |||||||||||
Total current liabilities | |||||||||||
LONG-TERM DEBT | |||||||||||
OTHER NON-CURRENT LIABILITIES: | |||||||||||
Asset retirement obligations | |||||||||||
Regulatory liabilities | |||||||||||
Lease liability | |||||||||||
Other | |||||||||||
Total other non-current liabilities | |||||||||||
CONTINGENT LIABILITIES AND COMMITMENTS (Note 4) | |||||||||||
MEMBER'S EQUITY: | |||||||||||
Member’s capital | |||||||||||
Retained earnings | |||||||||||
Total member’s equity | |||||||||||
Total liabilities and member’s equity | $ | $ |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
(Thousands) | |||||||||||||||||
MEMBER'S CAPITAL: | |||||||||||||||||
Balance at beginning and end of period | $ | $ | $ | ||||||||||||||
RETAINED EARNINGS: | |||||||||||||||||
Balance at beginning of period | |||||||||||||||||
Net income | |||||||||||||||||
Cash distributions to parent | ( | ( | ( | ||||||||||||||
Balance at end of period | |||||||||||||||||
Total member’s equity | $ | $ | $ |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
(Thousands) | |||||||||||||||||
OPERATING ACTIVITIES: | |||||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Adjustments to reconcile to net cash provided (used) by operating activities: | |||||||||||||||||
Depreciation and amortization | |||||||||||||||||
Regulatory debits | |||||||||||||||||
Regulatory charges resulting from tax rate changes | |||||||||||||||||
Amortization of deferred charges and credits | ( | ( | ( | ||||||||||||||
Allowance for equity funds used during construction (equity AFUDC) | ( | ( | ( | ||||||||||||||
Changes in current assets and liabilities: | |||||||||||||||||
Trade and other accounts receivable | ( | ( | |||||||||||||||
Affiliated receivables | ( | ( | |||||||||||||||
Materials and supplies | ( | ||||||||||||||||
Other current assets | ( | ||||||||||||||||
Trade accounts payable | ( | ( | |||||||||||||||
Affiliated payables | ( | ( | |||||||||||||||
Other accrued liabilities | ( | ( | ( | ||||||||||||||
Changes in non-current assets and liabilities: | |||||||||||||||||
Regulatory liabilities | |||||||||||||||||
Other, net | ( | ||||||||||||||||
Net cash provided by operating activities | |||||||||||||||||
FINANCING ACTIVITIES: | |||||||||||||||||
Payments for debt issuance costs | ( | ||||||||||||||||
Cash distributions to parent | ( | ( | ( | ||||||||||||||
Net cash used in financing activities | ( | ( | ( | ||||||||||||||
INVESTING ACTIVITIES: | |||||||||||||||||
Property, plant and equipment: | |||||||||||||||||
Capital expenditures* | ( | ( | ( | ||||||||||||||
Contributions and advances for construction costs | |||||||||||||||||
Disposal of property, plant and equipment, net | ( | ( | ( | ||||||||||||||
Advances to affiliates, net | ( | ( | ( | ||||||||||||||
Net cash used in investing activities | ( | ( | ( | ||||||||||||||
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 | $ | ( | $ | ( | $ | ( | |||||||||||
Changes in related accounts receivable, accounts payable, and accrued liabilities | |||||||||||||||||
Capital expenditures | $ | ( | $ | ( | $ | ( |
Category of Property | |||||||||||||||||
Storage Facilities | % | — | |||||||||||||||
Transmission Facilities | % | — |
Year ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
(Thousands) | |||||||||||
Balance at beginning of period | $ | $ | |||||||||
Revenue recognized in excess of amounts invoiced | |||||||||||
Balance at end of period | $ | $ |
Year ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
(Thousands) | |||||||||||
Balance at beginning of period | $ | $ | |||||||||
Recognized in Revenue | ( | ( | |||||||||
Balance at end of period | $ | $ |
Contract Liabilities | Remaining Performance Obligations | |||||||
(Thousands) | ||||||||
2022 ( | $ | $ | ||||||
2023 ( | ||||||||
2024 ( | ||||||||
2025 ( | ||||||||
2026 ( | ||||||||
Thereafter | ||||||||
Total | $ | $ |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
(Thousands) | |||||||||||||||||
Lease Cost: | |||||||||||||||||
Operating lease cost | $ | $ | $ | ||||||||||||||
Variable lease cost | |||||||||||||||||
Total lease cost | $ | $ | $ | ||||||||||||||
Cash paid for amounts included in the measurement of operating lease liabilities | $ | $ | $ | ||||||||||||||
December 31, | |||||||||||||||||
2021 | 2020 | ||||||||||||||||
(Thousands) | |||||||||||||||||
Other Information: | |||||||||||||||||
Right-of-use assets | $ | $ | |||||||||||||||
Operating lease liabilities: | |||||||||||||||||
Current (included in Accrued liabilities - Other in our Balance Sheet) | $ | $ | |||||||||||||||
Lease liability | $ | $ | |||||||||||||||
Weighted-average remaining lease term - operating leases (years) | |||||||||||||||||
Weighted-average discount rate - operating leases | % | % |
(Thousands) | |||||
2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
Thereafter | |||||
Total future lease payments | |||||
Less amount representing interest | |||||
Total obligations under operating leases | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
(Thousands) | |||||||||||
7.125% unsecured debentures due 2025 | $ | $ | |||||||||
4.0% unsecured debentures due 2027 | |||||||||||
Unamortized debt issuance costs | ( | ( | |||||||||
Unamortized debt discount | ( | ( | |||||||||
Total long-term debt | $ | $ |
(Thousands) | ||||||||
7.125% unsecured debentures due 2025 | $ | |||||||
Total | $ |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
(Thousands) | |||||||||||||||||
Puget Sound Energy, Inc. | $ | $ | $ | ||||||||||||||
Cascade Natural Gas Corporation | |||||||||||||||||
Northwest Natural Gas Company |
2021 | 2020 | ||||||||||
Beginning balance | $ | $ | |||||||||
Accretion | |||||||||||
Changes in estimates of existing obligations (1) | ( | ||||||||||
Ending balance | $ | $ |
2021 | 2020 | |||||||||||||
(Thousands) | ||||||||||||||
Current regulatory assets: | ||||||||||||||
Levelized depreciation | $ | $ | ||||||||||||
Fuel recovery | ||||||||||||||
Total current regulatory assets | ||||||||||||||
Non-current regulatory assets: | ||||||||||||||
Grossed-up deferred taxes on equity funds used during construction | ||||||||||||||
Levelized depreciation | ||||||||||||||
Total non-current regulatory assets | ||||||||||||||
Total regulatory assets | $ | $ | ||||||||||||
Current regulatory liabilities: | ||||||||||||||
Fuel recovery | $ | $ | ||||||||||||
Non-current regulatory liabilities: | ||||||||||||||
Postretirement benefits | ||||||||||||||
Deferred federal taxes - liability | ||||||||||||||
Deferred state taxes - liability | ||||||||||||||
Customer tax refund | ||||||||||||||
Asset retirement obligations, net | ||||||||||||||
Total non-current regulatory liabilities | ||||||||||||||
Total regulatory liabilities | $ | $ |
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
Item 9A. | Controls and Procedures |
Item 9B. | Other Information |
Item 14. | Principal Accounting Fees and Services |
2021 | 2020 | ||||||||||
Audit fees | $ | 0.6 | $ | 0.6 | |||||||
Audit-related fees | — | — | |||||||||
Tax fees | — | — | |||||||||
All other fees | — | — | |||||||||
Total fees | $ | 0.6 | $ | 0.6 |
Item 15. | Exhibits and Financial Statement Schedules |
Page Reference to 2021 Form 10-K | |||||
(a) 1. and 2. Northwest Pipeline LLC financial statements and schedules | |||||
Index | |||||
Covered by reports of independent auditors: | |||||
Exhibit | Description | |||||||
2 | ||||||||
3.1 | ||||||||
3.2 | ||||||||
4.1 | ||||||||
4.2 | ||||||||
10.1 | ||||||||
10.2 | ||||||||
10.3 | ||||||||
31.1* | ||||||||
31.2* | ||||||||
32** | ||||||||
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 |
Item 16. | FORM 10-K SUMMARY |
NORTHWEST PIPELINE LLC | |||||||||||
(Registrant) | |||||||||||
By: | /s/ Billeigh W. Mark | ||||||||||
Billeigh W. Mark | |||||||||||
Controller | |||||||||||
Signature | Title | |||||||
/s/ Scott A. Hallam | Management Committee Member and Senior Vice President (Principal Executive Officer) | |||||||
Scott A. Hallam | ||||||||
/s/ Mary A. Hausman | Vice President and Chief Accounting Officer (Principal Financial Officer) | |||||||
Mary A. Hausman | ||||||||
/s/ Billeigh W. Mark | Controller (Principal Accounting Officer) | |||||||
Billeigh W. Mark | ||||||||
By: | /s/ Scott A. Hallam | ||||
Scott A. Hallam | |||||
Senior Vice President | |||||
(Principal Executive Officer) |
By: | /s/ Mary A. Hausman | ||||
Mary A. Hausman | |||||
Vice President and Chief Accounting Officer | |||||
(Principal Financial Officer) |
/s/ Scott A. Hallam | ||
Scott A. Hallam | ||
Senior Vice President | ||
February 28, 2022 |
/s/ Mary A. Hausman | ||
Mary A. Hausman | ||
Vice President and Chief Accounting Officer | ||
February 28, 2022 |
Audit Information |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Name | Ernst & Young LLP |
Auditor Location | Houston, Texas |
Auditor Firm ID | 42 |
Statement of Member's Equity - USD ($) $ in Thousands |
Total |
MEMBER'S CAPITAL |
RETAINED EARINGS |
---|---|---|---|
Balance at beginning of period at Dec. 31, 2018 | $ 1,073,892 | $ 46,750 | |
Net income | $ 142,667 | 142,667 | |
Cash distributions to parent | (110,000) | (110,000) | |
Balance at end of period at Dec. 31, 2019 | 1,153,309 | 1,073,892 | 79,417 |
Net income | 151,086 | 151,086 | |
Cash distributions to parent | (164,000) | (164,000) | |
Balance at end of period at Dec. 31, 2020 | 1,140,395 | $ 1,073,892 | 66,503 |
Net income | 135,508 | 135,508 | |
Cash distributions to parent | (166,500) | (166,500) | |
Balance at end of period at Dec. 31, 2021 | $ 1,109,403 | $ 35,511 |
Summary of Significant Accounting Policies (Notes) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Corporate Structure and Control In this report, Northwest is at times referred to in the first person as “we,” “us” or “our.” Northwest Pipeline LLC (Northwest) is indirectly owned by The Williams Companies, Inc. (Williams), a publicly traded Delaware corporation. Northwest is a single member limited liability company, and as such, single member losses are limited to the amount of its investment. Nature of Operations We own and operate an interstate pipeline system for the mainline transmission of natural gas. This system extends from the San Juan Basin in northwestern New Mexico and southwestern Colorado through Colorado, Utah, Wyoming, Idaho, Oregon and Washington to a point on the Canadian border near Sumas, Washington. Basis of Presentation A reclassification within Operating Revenues in the Statement of Net Income from the service line of Natural gas storage to Other of approximately $1.7 million and $2.2 million for the years 2020 and 2019, respectively, has been made to conform to the 2021 presentation. Regulatory Accounting We are regulated by the Federal Energy Regulatory Commission (FERC). Accounting Standards Codification (ASC) Topic 980, “Regulated Operations,” (Topic 980), provides that certain costs that would otherwise be charged to expense should be deferred as regulatory assets, based on the expected recovery from customers in future rates. Likewise, certain actual or anticipated credits that would otherwise reduce expense should be deferred as regulatory liabilities, based on the expected return to customers in future rates. Management's expected recovery of deferred costs and return of deferred credits generally results from specific decisions by regulators granting such ratemaking treatment. We record certain incurred costs and obligations as regulatory assets or liabilities if, based on regulatory orders or other available evidence, it is probable that the costs or obligations will be included in amounts allowable for recovery or refunded in future rates. Accounting for businesses that are regulated and apply the provisions of Topic 980 can differ from the accounting requirements for non-regulated businesses. Transactions that are recorded differently as a result of regulatory accounting requirements include the capitalization of an equity return component on regulated capital projects, capitalization of other project costs, retirements of general plant assets, employee-related benefits, environmental costs, negative salvage, asset retirement obligations, and other costs and taxes included in, or expected to be included in, future rates. As a rate-regulated entity, our management has determined that it is appropriate to apply the accounting prescribed by Topic 980, and, accordingly, the accompanying financial statements include the effects of the types of transactions described above that result from regulatory accounting requirements. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Estimates and assumptions which, in the opinion of management, are significant to the underlying amounts included in the financial statements and for which it would be reasonably possible that future events or information could change those estimates include: 1) litigation-related contingencies; 2) environmental remediation obligations; 3) impairment assessments of long-lived assets; 4) depreciation; 5) asset retirement obligations; and 6) measurement of regulatory assets and liabilities. Revenue Recognition Our customers are comprised of public utilities, municipalities, direct industrial users, electric power generators, and natural gas marketers and producers. Service revenue contracts from our gas pipeline business contain a series of distinct services, with the majority of our contracts having a single performance obligation that is satisfied over time as the customer simultaneously receives and consumes the benefits provided by our performance. Certain customers reimburse us for costs we incur associated with construction of property, plant, and equipment utilized in our operations. As a rate-regulated entity applying Topic 980, we follow FERC guidelines with respect to reimbursement of construction costs. FERC tariffs only allow for cost reimbursement and are non-negotiable in nature; thus, in our judgment, the construction activities do not represent an ongoing major and central operation of our gas pipelines business and are not within the scope of ASC Topic 606, “Revenues from Contracts with Customers” (ASC 606). Accordingly, cost reimbursements are treated as a reduction to the cost of the constructed assets. Operating Revenues We are subject to regulation by certain state and federal authorities, including the FERC, with revenue derived from both firm and interruptible transportation and storage contracts. Most of our firm transportation and storage agreements provide for a fixed reservation charge based on the pipeline or storage capacity reserved, and a commodity charge based on the volume of natural gas scheduled, each at rates specified in our FERC tariffs or as negotiated with our customers, with contract terms that are generally long-term in nature. Most of our long-term contracts contain an evergreen provision, which allows the contracts to be extended beyond the specified contract term and until terminated generally by either us or the customer, but in certain cases unilaterally by the customer, with advance notice of termination ranging from one to five years. Interruptible transportation and storage agreements provide for a volumetric charge based on actual commodity transportation or storage utilized in the period in which those services are provided, and the contracts are generally limited to one-month periods or less. Our performance obligations include the following: •Firm transportation or storage under firm transportation and storage contracts—an integrated package of services typically constituting a single performance obligation, which includes standing ready to provide such services and receiving, transporting or storing (as applicable), and redelivering commodities; •Interruptible transportation and storage under interruptible transportation and storage contracts—an integrated package of services typically constituting a single performance obligation once scheduled, which includes receiving, transporting or storing (as applicable), and redelivering commodities. In situations where, in our judgment, we consider the integrated package of services as a single performance obligation, which represents a majority of our contracts with customers, we do not consider there to be multiple performance obligations because the nature of the overall promise in the contract is to stand ready (with regard to firm transportation and storage contracts), receive, transport or store, and redeliver natural gas to the customer; therefore, revenue is recognized over time upon satisfaction of our daily stand ready performance obligation. We recognize revenues for reservation charges over the performance obligation period, which is the contract term, regardless of the volume of natural gas that is transported or stored. Revenues for commodity charges from both firm and interruptible transportation services and storage services are recognized based on volumes of natural gas scheduled for delivery at the agreed upon delivery point or based on volumes of natural gas scheduled for injection or withdrawn from the storage facility because they specifically relate to our efforts to provide these distinct services. Generally, reservation charges and commodity charges are recognized as revenue in the same period they are invoiced to our customers. As a result of the ratemaking process, certain amounts collected by us may be subject to refunds upon the issuance of final orders by the FERC in pending rate proceedings. We use judgment to record estimates of rate refund liabilities considering our and other third-party regulatory proceedings, advice of counsel, and other risks. At December 31, 2021, we had no such rate refund liabilities. In the course of providing transportation services to customers, we may receive different quantities of natural gas from customers than the quantities delivered on behalf of those customers or consumed in fuel to operate our system. The resulting customer imbalances are typically settled through the receipt or delivery of gas in the future based on the timelines outlined in Northwest’s Tariff, whereas the over/under recovery of fuel is cleared up through Northwest’s semi-annual fuel tracker. Customer imbalances to be repaid or recovered in-kind are recorded as Exchange gas due from others or Exchange gas due to others in our Balance Sheet. The under recovery of fuel is recorded as a Regulatory Asset and the over recovery is recorded as a Regulatory Liability. These imbalances are valued at the average of the spot market rates at the Canadian border and the Rocky Mountain market as published in the SNL Financial "Bidweek Index - Spot Rates." Contract Assets Our contract assets consist of discounts provided to customers in the beginning of the contract term that are recognized on a straight-line basis over the entire contract term resulting in revenue recognition occurring prior to actual billings. Contract assets are included within Other in our Balance Sheet. Contract Liabilities Our contract liabilities consist of a fixed rate facility charge billed to customers that declines annually as specified per the tariff. These liabilities are classified as current or non-current according to when such amounts are expected to be recognized. Current and non-current liabilities are included within Accrued Liabilities and Other Non-current Liabilities, respectively, in our Balance Sheet. Leases We are a lessee through noncancellable lease agreements for property and equipment consisting primarily of buildings, land, vehicles, and equipment used in both our operations and administrative functions. We recognize a lease liability with an offsetting right-of-use asset in our Balance Sheet for operating leases based on the present value of the future lease payments. We have elected to combine lease and nonlease components for all classes of leased assets in our calculation of the lease liability and the offsetting right-of-use asset. Our lease agreements require both fixed and variable periodic payments, with initial terms typically ranging from one year to 30 years. Payment provisions in certain of our lease agreements contain escalation factors which may be based on stated rates or a change in a published index at a future time. The amount by which a lease escalates based on the change in a published index, which is not known at lease commencement, is considered a variable payment and is not included in the present value of the future lease payments, which only includes those that are stated or can be calculated based on the lease agreement at lease commencement. In addition to the noncancellable periods, many of our lease agreements provide for one or more extensions of the lease agreement for periods ranging from one year in length to an indefinite number of times following the specified contract term. Other lease agreements provide for extension terms that allow us to utilize the identified leased asset for an indefinite period of time so long as the asset continues to be utilized in our operations. In consideration of these renewal features, we assess the term of the lease agreements, which includes using judgment in the determination of which renewal periods and termination provisions, when at our sole election, will be reasonably certain of being exercised. Periods after the initial term or extension terms that allow for either party to the lease to cancel the lease are not considered in the assessment of the lease term. Additionally, we have elected to exclude leases with an original term of one year or less, including renewal periods, from the calculation of the lease liability and the offsetting right-of-use asset. We use judgment in determining the discount rate upon which the present value of the future lease payments is determined. This rate is based on a collateralized interest rate corresponding to the term of the lease agreement using company, industry, and market information available. Environmental Matters We are subject to federal, state, and local environmental laws and regulations. Environmental expenditures are expensed or capitalized depending on their economic benefit and potential for rate recovery. We believe that expenditures required to meet applicable environmental laws and regulations are prudently incurred in the ordinary course of business and such expenditures would be permitted to be recovered through rates. Property, Plant, and Equipment Property, plant and equipment, consisting principally of natural gas transmission facilities, is recorded at original cost. The FERC identifies installation, construction and replacement costs that are to be capitalized and included in our asset base for recovery in rates. Routine maintenance, repairs, and renewal costs are charged to income as incurred. Gains or losses from the ordinary sale or retirement of property, plant and equipment are charged or credited to accumulated depreciation; certain other gains or losses are recorded in operating income. We provide for depreciation under the composite (group) method at straight-line FERC prescribed rates that are applied to the cost of the group for transmission and storage facilities. Under this method, assets with similar lives and characteristics are grouped and depreciated as one asset. Included in our depreciation rates is a negative salvage component (net cost of removal) that we currently collect in rates. Our depreciation rates are subject to change each time we file a general rate case with the FERC. Depreciation rates used for major regulated gas plant facilities at December 31, 2021, 2020, and 2019 are as follows:
The incrementally priced Evergreen Expansion Project, which was an expansion of our pipeline system, was placed in service on October 1, 2003. The levelized rate design of this project creates a consistent revenue stream over the related 25-year customer contract term. FERC has approved the accounting for the differences between book depreciation and the Evergreen Expansion Project’s levelized depreciation as a regulatory asset. We recorded regulatory debits totaling, $1.4 million in 2021 and $1.1 million in 2020 and 2019 in the accompanying Statement of Net Income. These debits relate primarily to the levelized depreciation adjustment for the Evergreen Expansion Project discussed above. We record a liability and increase the basis in the underlying asset for the present value of each expected future asset retirement obligation (ARO) at the time the liability is initially incurred, typically when the asset is acquired or constructed. Measurement of AROs includes, as a component of future expected costs, an estimate of the price that a third party would demand, and could expect to receive, for bearing the uncertainties inherent in the obligations, sometimes referred to as market-risk premium. We measure changes in the liability due to passage of time by applying an interest method of allocation. This amount is recognized as an increase in the carrying amount of the liability and is offset by a regulatory asset. The gross regulatory asset balances associated with ARO as of December 31, 2021 and 2020 were $102.1 million and $96.3 million, respectively. The regulatory asset is expected to be fully recovered through the negative salvage component of depreciation included in our rates; as such, that amount of the negative salvage component of accumulated depreciation has been reclassified and netted against the amount of the ARO regulatory asset to result in a regulatory liability of $26.7 million and $22.0 million at December 31, 2021 and 2020, respectively. Impairment of Long-lived Assets We evaluate our long-lived assets, including capitalized project development costs, for impairment when, in our judgement, events or circumstances, including probable abandonment, indicate that the carrying value of such assets may not be recoverable. When an indicator of impairment has occurred, we compare our estimate of undiscounted future cash flows attributable to the assets to the carrying value of the assets to determine whether an impairment has occurred and we may apply a probability-weighted approach to consider the likelihood of different cash flow assumptions and possible outcomes. If an impairment of the carrying value has occurred, we determine the amount of the impairment to be recognized in our financial statements by estimating the fair value of the assets and recording a loss for the amount that the carrying value exceeds the estimated fair value. For assets identified to be disposed of in the future and considered held for sale, we compare the carrying value to the estimated fair value less the cost to sell to determine if recognition of an impairment is required. Until the assets are disposed of, the estimated fair value, which includes estimated cash flows from operations until the assumed date of sale, is recalculated when related events or circumstances change. Judgment and assumptions are inherent in our estimate of undiscounted future cash flows used to determine recoverability of an asset and the estimate of an asset’s fair value used to calculate the amount of impairment to recognize. Allowance for Funds Used During Construction Allowance for funds used during construction (AFUDC) represents the estimated cost of borrowed and equity funds applicable to utility plant in process of construction and is included as a cost of property, plant and equipment because it constitutes an actual cost of construction under established regulatory practices. The FERC has prescribed a formula to be used in computing separate allowances for borrowed and equity AFUDC. The allowance for borrowed funds used during construction was $0.2 million for 2021, $0.3 million for 2020, and $0.7 million for 2019. The allowance for equity funds was $1.4 million, $0.4 million, and $2.7 million for 2021, 2020, and 2019, respectively. Income Taxes We are a natural gas company organized as a pass-through entity and our taxable income or loss is consolidated on the federal income tax return of our parent, Williams. We generally are treated as a pass-through entity for state and local income tax purposes, and those taxes are generally borne on a consolidated basis by Williams. Net income for financial statement purposes may differ significantly from taxable income of Williams as a result of differences between the tax basis and financial reporting basis of assets and liabilities. Accounts Receivable Accounts receivable are carried on a gross basis, with no discounting, less an allowance for doubtful accounts. We estimate the allowance for doubtful accounts, considering current expected credit losses using a forward-looking “expected loss” model, the financial condition of our customers, and the age of past due accounts. The majority of our trade receivable balances are due within 30 days. We monitor the credit quality of our counterparties through review of collection trends, credit ratings, and other analyses, such as bankruptcy monitoring, if applicable. Financial assets are evaluated as one pool. Changes in counterparty risk factors could lead to reassessment of the composition of our financial assets as one pool. We calculate our allowance for credit losses incorporating an aging method. In estimating our expected credit losses, we utilized historical loss rates over many years. Our expected credit loss estimate considered both internal and external forward-looking commodity price expectations, as well as counterparty credit ratings, and factors impacting their near-term liquidity. We do not offer extended payment terms and typically receive payment within one month. We consider receivables past due if full payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for doubtful accounts only after all collection attempts have been exhausted. We do not have a material amount of significantly aged receivables at December 31, 2021 and 2020. Materials and Supplies Inventory All materials and supplies inventory is stated at average cost. We perform an annual review of materials and supplies inventories, including a quarterly analysis of parts that may no longer be useful due to planned replacements of compressor engines and other components on our system. Based on this assessment, we record a reserve for the value of the inventory which can no longer be used for maintenance and repairs on our pipeline. There was a minimal reserve at December 31, 2021 and 2020. Contingent Liabilities We record liabilities for estimated loss contingencies, including environmental matters, when we assess that a loss is probable and the amount of the loss can be reasonably estimated. These liabilities are calculated based upon our assumptions and estimates with respect to the likelihood or amount of loss and upon advice of legal counsel, engineers, or other third-parties regarding the probable outcomes of the matters. These calculations are made without consideration of any potential recovery from third-parties. We recognize insurance recoveries or reimbursements from others when realizable. Revisions to these liabilities are generally reflected in income when new or different facts or information become known or circumstances change that affect the previous assumptions or estimates. Pension and Other Postretirement Benefits We do not have employees. Certain of the costs charged to us by Williams associated with employees who directly support us include costs related to Williams’ pension and other postretirement benefit plans (See Note 6 – Benefit Plans). Although the underlying benefit plans of Williams are single-employer plans, we follow multiemployer plan accounting whereby the amount charged to us, and thus paid by us, is based on our share of net periodic benefit cost. Cash Flows from Operating Activities and Cash Equivalents We use the indirect method to report cash flows from operating activities, which requires adjustments to net income to reconcile to net cash flows provided by operating activities. We include short-term, highly-liquid investments that have an original maturity of three months or less as cash equivalents.
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Revenue Recognition (Notes) |
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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:
Contract Liabilities The following table presents a reconciliation of our contract liabilities:
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 the periodic review and approval by the 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 and other renewal provisions for periods beyond the initial term of the contract. The remaining performance obligations as of December 31, 2021, do not consider potential future performance obligations for which the renewal has not been exercised and exclude 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 December 31, 2021.
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.
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Leases (Notes) |
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Leases of Lessee Disclosure [Text Block] | Leases We are a lessee through noncancellable lease agreements for property and equipment consisting primarily of buildings, land, vehicles, and equipment used in both our operations and administrative functions.
As of December 31, 2021, the following table represents our operating lease maturities, including renewal provisions that we have assessed as being reasonably certain of exercise, for each of the years ended December 31:
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Contingent Liabilities and Commitments (Notes) |
12 Months Ended |
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Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingent Liabilities and Commitments | 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 December 31, 2021, 2 meter stations are still being remediated. During 2006 to 2018, 14 compressor stations were evaluated, of which 11 required remediation. As of December 31, 2021, 5 compressor stations are still being remediated. At December 31, 2021 we had accrued liabilities totaling approximately $1.0 million, $0.1 million of which is recorded in Accrued liabilities - Other and $0.9 million of which is recorded in Other Non-current 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 Non-current 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 propose and promulgate 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, review and updates to the National Ambient Air Quality Standards, and rules for new and existing source performance standards for volatile organic compounds and methane. We continuously monitor these regulatory changes and how they may impact our operations. Implementation of new or modified regulations may result in impacts to our operations and increase the cost of additions to Total property, plant, and equipment, net in the Balance Sheet for both new and existing facilities in affected areas; however, due to regulatory uncertainty on final rule content and applicability timeframes, we are unable to reasonably estimate the cost of these regulatory impacts at this time. Other Matters Various other proceedings are pending against us and are considered incidental to our operations. SummaryWe have disclosed all significant matters for which we are unable to reasonably estimate a range of possible loss. 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.
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Debt and Financing Arrangements [Notes] |
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Debt Disclosure | Debt and Financing Arrangements Long-Term Debt Long-term debt, presented net of unamortized discount and unamortized debt issuance costs, consists of the following:
The following table reflects future maturities of long-term (at face value) debt for the next five years.
No property is pledged as collateral under any of our long-term debt. Restrictive Debt Covenants At December 31, 2021, none of our debt instruments restrict the amount of distributions to our parent, provided, however, that under the credit facility described below, we are restricted from making distributions to our parent during an event of default if we have directly incurred indebtedness under the credit facility. Our debt agreements contain restrictions on our ability to incur secured debt beyond certain levels. Credit Facility In October 2021, we along with Williams and Transcontinental Gas Pipe Line Company, LLC (Transco), the lenders named therein, and an administrative agent entered into an amended and restated credit agreement (Credit Agreement) that reduced aggregate commitments available from $4.5 billion to $3.75 billion, with up to an additional $500 million increase in aggregate commitments available under certain circumstances. The Credit Agreement was effective on October 8, 2021. The maturity date of the credit facility is October 8, 2026. However, the co-borrowers may request up to two extensions of the maturity date each for an additional one-year period to allow a maturity date as late as October 8, 2028, under certain circumstances. The Credit Agreement allows for swing line loans up to an aggregate of $200 million, subject to available capacity under the credit facility, and letters of credit commitments of $500 million. We and Transco are each able to borrow up to $500 million under this credit facility to the extent not otherwise utilized by the other co-borrowers. At December 31, 2021, no letters of credit have been issued and no loans to Williams were outstanding under the credit facility. The Credit Agreement contains the following terms and conditions: •Various covenants may limit, among other things, a borrower’s and its material subsidiaries’ ability to grant certain liens supporting indebtedness, merge or consolidate, sell all or substantially all of its assets in certain circumstances, make certain distributions during an event of default, and each borrower and each borrower’s respective material subsidiaries’ ability to enter into certain restrictive agreements. •If an event of default with respect to a borrower occurs under the credit facility, the lenders will be able to terminate the commitments for the respective borrowers and accelerate the maturity of the loans of the defaulting borrower under the credit facility and exercise other rights and remedies. •Other than swing line loans, each time funds are borrowed, the applicable borrower may choose from two methods of calculating interest: a fluctuating base rate equal to an alternative base rate as defined in the Credit Agreement plus an applicable margin or a periodic fixed rate equal to the London Interbank Offered Rate (LIBOR) plus an applicable margin. Williams is required to pay a commitment fee based on the unused portion of the credit facility. The applicable margin is determined by reference to a pricing schedule based on the applicable borrower’s senior unsecured long-term debt ratings and the commitment fee is determined by reference to a pricing schedule based on Williams’ senior unsecured long-term debt ratings. The Credit Agreement also includes customary provisions to provide for replacement of LIBOR with an alternative benchmark rate when LIBOR ceases to be available. The ratio of debt to capitalization (defined as net worth plus debt), each as defined in the Credit Agreement, must be no greater than 65 percent for each of Transco and Northwest. At December 31, 2021, we are in compliance with this covenant. Commercial Paper Program In 2018, Williams entered into a $4.0 billion commercial paper program that has been reduced to $3.5 billion in connection with the October 2021 Credit Agreement. Williams management considers amounts outstanding under this program to be a reduction of available capacity under the credit facility. At December 31, 2021 and 2020, Williams had no outstanding commercial paper.
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Employee Benefit Plans (Notes) |
12 Months Ended |
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Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans [Text Block] | Benefit Plans Certain of the benefit costs charged to us by Williams associated with employees who directly support us are described below. Additionally, allocated corporate expenses from Williams to us also include amounts related to these same employee benefits, which are not included in the amounts presented below (See Note 8 – Transactions With Major Customers and Affiliates). Pension and Other Postretirement Benefit Plans Williams has noncontributory defined benefit pension plans (Williams Pension Plan, Williams Inactive Employees Pension Plan, and The Williams Companies Retirement Restoration Plan) that provide pension benefits for its eligible employees hired prior to January 1, 2019. Pension costs charged to us by Williams were $0.8 million in 2021, $1.9 million in 2020 and $2.2 million in 2019. Included in our pension costs are settlement charges of $0.7 million in 2020. Williams provides subsidized retiree medical benefits to a closed group of participants as well as retiree life insurance to eligible participants. During 2021, 2020, and 2019, we received credits from Williams related to retiree medical and life insurance benefits of $1.6 million, $1.7 million and $1.5 million, respectively. These credits were recorded as regulatory liabilities. We have been allowed by rate case settlements to collect or refund in future rates any differences between the actuarially determined costs and amounts currently being recovered in rates related to other postretirement benefits. Any differences between the annual actuarially determined cost and amounts currently being recovered in rates are recorded as regulatory assets or liabilities and collected or refunded through future rate adjustments. The amounts of other postretirement benefits costs deferred as regulatory liabilities at December 31, 2021 and 2020 are $41.0 million and $39.4 million, respectively. Defined Contribution Plan Williams maintains a defined contribution plan for substantially all of its employees. Williams charged us compensation expense of $2.7 million in 2021, $2.3 million in 2020 and $1.8 million in 2019 for Williams’ company contributions to this plan. Employee Stock-Based Compensation Plan Information The Williams Companies, Inc. 2007 Incentive Plan (the Plan), as subsequently amended and restated, provides for Williams’ common stock-based awards to both employees and non-management directors. The Plan permits the granting of various types of awards including, but not limited to, restricted stock units and stock options. Awards may be granted for no consideration other than prior and future services or based on certain financial performance targets achieved. Williams currently bills us directly for compensation expense related to stock-based compensation awards based on the fair value of the awards. We are also billed for our proportionate share of Williams’ and other affiliates’ stock-based compensation expense through various allocation processes. Total stock-based compensation expense for the years ended December 31, 2021, 2020 and 2019 was $1.2 million, $1.3 million and $1.5 million, respectively, excluding amounts allocated from Williams.
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Financial Instruments (Notes) |
12 Months Ended |
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Dec. 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 that have variable interest rates (advances to affiliate), 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, including current maturities, were $579.0 million and $646.2 million, respectively, at December 31, 2021, and $578.0 million and $680.6 million, respectively, at December 31, 2020.
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Transactions with Major Customers and Affiliates (Notes) |
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Transactions with Major Customers and Affiliates [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transactions with Major Customers and Affiliates | Major Customers During the periods presented, more than 10 percent of our operating revenues were generated from each of the following customers:
Our major customers are located in the Pacific Northwest. As a general policy, collateral is not required for receivables, but customers’ financial condition and credit worthiness are regularly evaluated and historical collection losses have been minimal. Affiliates We are a participant in Williams’ cash management program. At December 31, 2021 and 2020, the advances due to us by Williams totaled approximately $281.4 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 approximately 0.01 percent at December 31, 2021. The interest income from these advances was minimal for the year ended December 31, 2021, and $0.6 million, and $4.1 million for the years ended 2020 and 2019, respectively. Such interest income is included in Other (Income) and Other Expenses: Miscellaneous other (income) expenses, net on the accompanying Statement of Net Income. 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. In the accompanying Statement of Net Income, we have recorded approximately $85.2 million, $77.9 million, and $84.5 million in the years ended December 31, 2021, 2020, and 2019, respectively, for theses service expenses which are primarily included in General and administrative and Operation and maintenance expenses. During 2021, 2020, and 2019, we declared and paid cash distributions to our parent of $166.5 million, $164.0 million, and $110.0 million, respectively. During January 2022, we declared and paid cash distributions of $42.0 million to our parent.
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Asset Retirement Obligations (Notes) |
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Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligations | Asset Retirement Obligations Our accrued asset retirement obligations relate to our gas storage and transmission facilities. At the end of the useful life of our facilities, we are legally obligated to remove or plug and abandon certain transmission facilities including underground pipelines, major river spans, compressor stations and meter station facilities. These obligations also include restoration of the property sites after removal of the facilities from above and below the ground. During 2021 and 2020, our overall asset retirement obligation changed as follows (in thousands):
(1)Changes in estimates of existing obligations are primarily due to the annual review process, which considers various factors including inflation rate, current estimates for removal costs, discount rates, and the estimated remaining life of assets. The increase in 2021 is primarily due to a decrease in the discount rate and an increase in the estimated life of the ARO assets.
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Regulatory Assets and Liabilities (Notes) |
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Regulatory Assets and Liabilities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Assets and Liabilities | Regulatory Assets and Liabilities Our regulatory assets and liabilities result from our application of the provisions of Topic 980 and are reflected on our Balance Sheet. Current regulatory assets are included in Prepayments and other. Current regulatory liabilities are included in Exchange gas due to others. These balances are presented on our Balance Sheet on a gross basis and are recoverable or refundable over various periods. Below are the details of our regulatory assets and liabilities as of December 31, 2021 and 2020:
The significant regulatory assets and liabilities include: Levelized Depreciation - Levelized depreciation allows contract revenue streams to remain constant over the primary contract terms by recognizing lower than book depreciation in the early years and higher than book depreciation in later years. The depreciation component of the levelized incremental rates will equal the accumulated book depreciation by the end of the primary contract terms. The difference between levelized depreciation and straight-line book depreciation is recorded as a FERC approved regulatory asset or liability and is eliminated over the levelization period. Fuel Recovery - These amounts reflect the value of the cumulative volumetric difference between the gas retained from our customers and the gas consumed in operations. These amounts are not included in the rate base, but are expected to be recovered or refunded by changing the fuel reimbursement factor in subsequent annual fuel filings. Grossed-Up Deferred Taxes on Equity Funds Used During Construction - The regulatory asset balance was established to offset the deferred tax for the equity component of the allowance for funds used during the construction of long-lived assets. All amounts were generated during the period that we were a taxable entity. Taxes on capitalized funds used during construction and the offsetting deferred income taxes are included in the rate base and are recovered over the depreciable lives of the long-lived assets to which they relate. Postretirement Benefits - We seek to recover the actuarially determined cost of postretirement benefits through rates that are set through periodic general rate filings. Any differences between the annual actuarially determined cost and amounts currently being recovered in rates are recorded as regulatory assets or liabilities and collected or refunded through future rate adjustments. These amounts are not included in the rate base, and we are not currently recovering postretirement benefit costs in our rates (See Note 6 - Benefit Plans). Deferred Federal Taxes-Liability - This regulatory liability balance was established as a result of a decrease to rate base deferred taxes due to a decrease to the effective federal income tax rate. The timing of the refund of the regulatory liability to rate payers will be subject to future discussions and negotiations with our customers in our next rate case. Deferred State Taxes-Liability - This regulatory liability balance, following the August 10, 2018 merger of Williams with Williams Partners L.P., reflects a decrease to rate base deferred taxes due to a decrease to the estimated effective state income tax rates. The timing of the refund of the regulatory liability to rate payers will be subject to future discussions and negotiations with our customers in our next rate case. Customer Tax Refund - In our 2017 Settlement, which became effective January 1, 2018, we agreed with our customers that if federal income tax rates decreased due to subsequent legislation, such as the Tax Cuts and Jobs Act of 2017 (Tax Reform), we would record a regulatory liability. As a result of Tax Reform, the regulatory liability will be $23.6 million annually plus accrued interest ($7.7 million at December 31, 2021) for the period beginning January 1, 2018 and continuing through the time that our current rates remain effective. Asset Retirement Obligations, net - This regulatory liability balance reflects the amount that we have recovered in our rates related to our future retirement costs offset by depreciation of the ARO asset and changes in the ARO liability due to the passage of time. AROs are expected to be fully recovered through the net negative salvage component of depreciation included in our rates (See Note 9. Asset Retirement Obligations).
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Summary of Significant Accounting Policies (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Accounting | Regulatory AccountingWe are regulated by the Federal Energy Regulatory Commission (FERC). Accounting Standards Codification (ASC) Topic 980, “Regulated Operations,” (Topic 980), provides that certain costs that would otherwise be charged to expense should be deferred as regulatory assets, based on the expected recovery from customers in future rates. Likewise, certain actual or anticipated credits that would otherwise reduce expense should be deferred as regulatory liabilities, based on the expected return to customers in future rates. Management's expected recovery of deferred costs and return of deferred credits generally results from specific decisions by regulators granting such ratemaking treatment. We record certain incurred costs and obligations as regulatory assets or liabilities if, based on regulatory orders or other available evidence, it is probable that the costs or obligations will be included in amounts allowable for recovery or refunded in future rates. Accounting for businesses that are regulated and apply the provisions of Topic 980 can differ from the accounting requirements for non-regulated businesses. Transactions that are recorded differently as a result of regulatory accounting requirements include the capitalization of an equity return component on regulated capital projects, capitalization of other project costs, retirements of general plant assets, employee-related benefits, environmental costs, negative salvage, asset retirement obligations, and other costs and taxes included in, or expected to be included in, future rates. As a rate-regulated entity, our management has determined that it is appropriate to apply the accounting prescribed by Topic 980, and, accordingly, the accompanying financial statements include the effects of the types of transactions described above that result from regulatory accounting requirements. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Estimates and assumptions which, in the opinion of management, are significant to the underlying amounts included in the financial statements and for which it would be reasonably possible that future events or information could change those estimates include: 1) litigation-related contingencies; 2) environmental remediation obligations; 3) impairment assessments of long-lived assets; 4) depreciation; 5) asset retirement obligations; and 6) measurement of regulatory assets and liabilities.
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Revenue Recognition | Revenue Recognition Our customers are comprised of public utilities, municipalities, direct industrial users, electric power generators, and natural gas marketers and producers. Service revenue contracts from our gas pipeline business contain a series of distinct services, with the majority of our contracts having a single performance obligation that is satisfied over time as the customer simultaneously receives and consumes the benefits provided by our performance. Certain customers reimburse us for costs we incur associated with construction of property, plant, and equipment utilized in our operations. As a rate-regulated entity applying Topic 980, we follow FERC guidelines with respect to reimbursement of construction costs. FERC tariffs only allow for cost reimbursement and are non-negotiable in nature; thus, in our judgment, the construction activities do not represent an ongoing major and central operation of our gas pipelines business and are not within the scope of ASC Topic 606, “Revenues from Contracts with Customers” (ASC 606). Accordingly, cost reimbursements are treated as a reduction to the cost of the constructed assets. Operating Revenues We are subject to regulation by certain state and federal authorities, including the FERC, with revenue derived from both firm and interruptible transportation and storage contracts. Most of our firm transportation and storage agreements provide for a fixed reservation charge based on the pipeline or storage capacity reserved, and a commodity charge based on the volume of natural gas scheduled, each at rates specified in our FERC tariffs or as negotiated with our customers, with contract terms that are generally long-term in nature. Most of our long-term contracts contain an evergreen provision, which allows the contracts to be extended beyond the specified contract term and until terminated generally by either us or the customer, but in certain cases unilaterally by the customer, with advance notice of termination ranging from one to five years. Interruptible transportation and storage agreements provide for a volumetric charge based on actual commodity transportation or storage utilized in the period in which those services are provided, and the contracts are generally limited to one-month periods or less. Our performance obligations include the following: •Firm transportation or storage under firm transportation and storage contracts—an integrated package of services typically constituting a single performance obligation, which includes standing ready to provide such services and receiving, transporting or storing (as applicable), and redelivering commodities; •Interruptible transportation and storage under interruptible transportation and storage contracts—an integrated package of services typically constituting a single performance obligation once scheduled, which includes receiving, transporting or storing (as applicable), and redelivering commodities. In situations where, in our judgment, we consider the integrated package of services as a single performance obligation, which represents a majority of our contracts with customers, we do not consider there to be multiple performance obligations because the nature of the overall promise in the contract is to stand ready (with regard to firm transportation and storage contracts), receive, transport or store, and redeliver natural gas to the customer; therefore, revenue is recognized over time upon satisfaction of our daily stand ready performance obligation. We recognize revenues for reservation charges over the performance obligation period, which is the contract term, regardless of the volume of natural gas that is transported or stored. Revenues for commodity charges from both firm and interruptible transportation services and storage services are recognized based on volumes of natural gas scheduled for delivery at the agreed upon delivery point or based on volumes of natural gas scheduled for injection or withdrawn from the storage facility because they specifically relate to our efforts to provide these distinct services. Generally, reservation charges and commodity charges are recognized as revenue in the same period they are invoiced to our customers. As a result of the ratemaking process, certain amounts collected by us may be subject to refunds upon the issuance of final orders by the FERC in pending rate proceedings. We use judgment to record estimates of rate refund liabilities considering our and other third-party regulatory proceedings, advice of counsel, and other risks. At December 31, 2021, we had no such rate refund liabilities. In the course of providing transportation services to customers, we may receive different quantities of natural gas from customers than the quantities delivered on behalf of those customers or consumed in fuel to operate our system. The resulting customer imbalances are typically settled through the receipt or delivery of gas in the future based on the timelines outlined in Northwest’s Tariff, whereas the over/under recovery of fuel is cleared up through Northwest’s semi-annual fuel tracker. Customer imbalances to be repaid or recovered in-kind are recorded as Exchange gas due from others or Exchange gas due to others in our Balance Sheet. The under recovery of fuel is recorded as a Regulatory Asset and the over recovery is recorded as a Regulatory Liability. These imbalances are valued at the average of the spot market rates at the Canadian border and the Rocky Mountain market as published in the SNL Financial "Bidweek Index - Spot Rates." Contract Assets Our contract assets consist of discounts provided to customers in the beginning of the contract term that are recognized on a straight-line basis over the entire contract term resulting in revenue recognition occurring prior to actual billings. Contract assets are included within Other in our Balance Sheet. Contract Liabilities Our contract liabilities consist of a fixed rate facility charge billed to customers that declines annually as specified per the tariff. These liabilities are classified as current or non-current according to when such amounts are expected to be recognized. Current and non-current liabilities are included within Accrued Liabilities and Other Non-current Liabilities, respectively, in our Balance Sheet.
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Leases | Leases We are a lessee through noncancellable lease agreements for property and equipment consisting primarily of buildings, land, vehicles, and equipment used in both our operations and administrative functions. We recognize a lease liability with an offsetting right-of-use asset in our Balance Sheet for operating leases based on the present value of the future lease payments. We have elected to combine lease and nonlease components for all classes of leased assets in our calculation of the lease liability and the offsetting right-of-use asset. Our lease agreements require both fixed and variable periodic payments, with initial terms typically ranging from one year to 30 years. Payment provisions in certain of our lease agreements contain escalation factors which may be based on stated rates or a change in a published index at a future time. The amount by which a lease escalates based on the change in a published index, which is not known at lease commencement, is considered a variable payment and is not included in the present value of the future lease payments, which only includes those that are stated or can be calculated based on the lease agreement at lease commencement. In addition to the noncancellable periods, many of our lease agreements provide for one or more extensions of the lease agreement for periods ranging from one year in length to an indefinite number of times following the specified contract term. Other lease agreements provide for extension terms that allow us to utilize the identified leased asset for an indefinite period of time so long as the asset continues to be utilized in our operations. In consideration of these renewal features, we assess the term of the lease agreements, which includes using judgment in the determination of which renewal periods and termination provisions, when at our sole election, will be reasonably certain of being exercised. Periods after the initial term or extension terms that allow for either party to the lease to cancel the lease are not considered in the assessment of the lease term. Additionally, we have elected to exclude leases with an original term of one year or less, including renewal periods, from the calculation of the lease liability and the offsetting right-of-use asset. We use judgment in determining the discount rate upon which the present value of the future lease payments is determined. This rate is based on a collateralized interest rate corresponding to the term of the lease agreement using company, industry, and market information available.
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Environmental Matters | Environmental Matters We are subject to federal, state, and local environmental laws and regulations. Environmental expenditures are expensed or capitalized depending on their economic benefit and potential for rate recovery. We believe that expenditures required to meet applicable environmental laws and regulations are prudently incurred in the ordinary course of business and such expenditures would be permitted to be recovered through rates.
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Property, Plant, and Equipment | Property, Plant, and Equipment Property, plant and equipment, consisting principally of natural gas transmission facilities, is recorded at original cost. The FERC identifies installation, construction and replacement costs that are to be capitalized and included in our asset base for recovery in rates. Routine maintenance, repairs, and renewal costs are charged to income as incurred. Gains or losses from the ordinary sale or retirement of property, plant and equipment are charged or credited to accumulated depreciation; certain other gains or losses are recorded in operating income. We provide for depreciation under the composite (group) method at straight-line FERC prescribed rates that are applied to the cost of the group for transmission and storage facilities. Under this method, assets with similar lives and characteristics are grouped and depreciated as one asset. Included in our depreciation rates is a negative salvage component (net cost of removal) that we currently collect in rates. Our depreciation rates are subject to change each time we file a general rate case with the FERC. Depreciation rates used for major regulated gas plant facilities at December 31, 2021, 2020, and 2019 are as follows:
The incrementally priced Evergreen Expansion Project, which was an expansion of our pipeline system, was placed in service on October 1, 2003. The levelized rate design of this project creates a consistent revenue stream over the related 25-year customer contract term. FERC has approved the accounting for the differences between book depreciation and the Evergreen Expansion Project’s levelized depreciation as a regulatory asset. We recorded regulatory debits totaling, $1.4 million in 2021 and $1.1 million in 2020 and 2019 in the accompanying Statement of Net Income. These debits relate primarily to the levelized depreciation adjustment for the Evergreen Expansion Project discussed above. We record a liability and increase the basis in the underlying asset for the present value of each expected future asset retirement obligation (ARO) at the time the liability is initially incurred, typically when the asset is acquired or constructed. Measurement of AROs includes, as a component of future expected costs, an estimate of the price that a third party would demand, and could expect to receive, for bearing the uncertainties inherent in the obligations, sometimes referred to as market-risk premium. We measure changes in the liability due to passage of time by applying an interest method of allocation. This amount is recognized as an increase in the carrying amount of the liability and is offset by a regulatory asset. The gross regulatory asset balances associated with ARO as of December 31, 2021 and 2020 were $102.1 million and $96.3 million, respectively. The regulatory asset is expected to be fully recovered through the negative salvage component of depreciation included in our rates; as such, that amount of the negative salvage component of accumulated depreciation has been reclassified and netted against the amount of the ARO regulatory asset to result in a regulatory liability of $26.7 million and $22.0 million at December 31, 2021 and 2020, respectively.
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Impairment of Long-Lived Assets | Impairment of Long-lived Assets We evaluate our long-lived assets, including capitalized project development costs, for impairment when, in our judgement, events or circumstances, including probable abandonment, indicate that the carrying value of such assets may not be recoverable. When an indicator of impairment has occurred, we compare our estimate of undiscounted future cash flows attributable to the assets to the carrying value of the assets to determine whether an impairment has occurred and we may apply a probability-weighted approach to consider the likelihood of different cash flow assumptions and possible outcomes. If an impairment of the carrying value has occurred, we determine the amount of the impairment to be recognized in our financial statements by estimating the fair value of the assets and recording a loss for the amount that the carrying value exceeds the estimated fair value. For assets identified to be disposed of in the future and considered held for sale, we compare the carrying value to the estimated fair value less the cost to sell to determine if recognition of an impairment is required. Until the assets are disposed of, the estimated fair value, which includes estimated cash flows from operations until the assumed date of sale, is recalculated when related events or circumstances change. Judgment and assumptions are inherent in our estimate of undiscounted future cash flows used to determine recoverability of an asset and the estimate of an asset’s fair value used to calculate the amount of impairment to recognize.
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Allowance for Funds Used During Construction | Allowance for Funds Used During ConstructionAllowance for funds used during construction (AFUDC) represents the estimated cost of borrowed and equity funds applicable to utility plant in process of construction and is included as a cost of property, plant and equipment because it constitutes an actual cost of construction under established regulatory practices. The FERC has prescribed a formula to be used in computing separate allowances for borrowed and equity AFUDC. The allowance for borrowed funds used during construction was $0.2 million for 2021, $0.3 million for 2020, and $0.7 million for 2019. The allowance for equity funds was $1.4 million, $0.4 million, and $2.7 million for 2021, 2020, and 2019, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes We are a natural gas company organized as a pass-through entity and our taxable income or loss is consolidated on the federal income tax return of our parent, Williams. We generally are treated as a pass-through entity for state and local income tax purposes, and those taxes are generally borne on a consolidated basis by Williams. Net income for financial statement purposes may differ significantly from taxable income of Williams as a result of differences between the tax basis and financial reporting basis of assets and liabilities.
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Accounts Receivable and Allowance for Doubtful Receivables | Accounts Receivable Accounts receivable are carried on a gross basis, with no discounting, less an allowance for doubtful accounts. We estimate the allowance for doubtful accounts, considering current expected credit losses using a forward-looking “expected loss” model, the financial condition of our customers, and the age of past due accounts. The majority of our trade receivable balances are due within 30 days. We monitor the credit quality of our counterparties through review of collection trends, credit ratings, and other analyses, such as bankruptcy monitoring, if applicable. Financial assets are evaluated as one pool. Changes in counterparty risk factors could lead to reassessment of the composition of our financial assets as one pool. We calculate our allowance for credit losses incorporating an aging method. In estimating our expected credit losses, we utilized historical loss rates over many years. Our expected credit loss estimate considered both internal and external forward-looking commodity price expectations, as well as counterparty credit ratings, and factors impacting their near-term liquidity. We do not offer extended payment terms and typically receive payment within one month. We consider receivables past due if full payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for doubtful accounts only after all collection attempts have been exhausted. We do not have a material amount of significantly aged receivables at December 31, 2021 and 2020.
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Materials and Supplies Inventory | Materials and Supplies Inventory All materials and supplies inventory is stated at average cost. We perform an annual review of materials and supplies inventories, including a quarterly analysis of parts that may no longer be useful due to planned replacements of compressor engines and other components on our system. Based on this assessment, we record a reserve for the value of the inventory which can no longer be used for maintenance and repairs on our pipeline. There was a minimal reserve at December 31, 2021 and 2020.
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Contingent Liabilities | Contingent Liabilities We record liabilities for estimated loss contingencies, including environmental matters, when we assess that a loss is probable and the amount of the loss can be reasonably estimated. These liabilities are calculated based upon our assumptions and estimates with respect to the likelihood or amount of loss and upon advice of legal counsel, engineers, or other third-parties regarding the probable outcomes of the matters. These calculations are made without consideration of any potential recovery from third-parties. We recognize insurance recoveries or reimbursements from others when realizable. Revisions to these liabilities are generally reflected in income when new or different facts or information become known or circumstances change that affect the previous assumptions or estimates.
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Pension and Other Postretirement Benefits | Pension and Other Postretirement Benefits We do not have employees. Certain of the costs charged to us by Williams associated with employees who directly support us include costs related to Williams’ pension and other postretirement benefit plans (See Note 6 – Benefit Plans). Although the underlying benefit plans of Williams are single-employer plans, we follow multiemployer plan accounting whereby the amount charged to us, and thus paid by us, is based on our share of net periodic benefit cost.
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Cash Equivalents | Cash Flows from Operating Activities and Cash Equivalents We use the indirect method to report cash flows from operating activities, which requires adjustments to net income to reconcile to net cash flows provided by operating activities. We include short-term, highly-liquid investments that have an original maturity of three months or less as cash equivalents.
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Interest payments | Interest Payments Cash payments for interest, net of interest capitalized, were $26.1 million in both 2021 and 2020, and $26.2 million in 2019.
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Financial Instruments (Policies) |
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Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair value of 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 that have variable interest rates (advances to affiliate), 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, including current maturities, were $579.0 million and $646.2 million, respectively, at December 31, 2021, and $578.0 million and $680.6 million, respectively, at December 31, 2020.
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Revenue Recognition (Tables) |
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Revenue Recognition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contract with Customer, Asset and Liability [Table Text Block] | Contract Assets The following table presents a reconciliation of our contract assets:
Contract Liabilities The following table presents a reconciliation of our contract liabilities:
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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 December 31, 2021.
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Leases Leases (Tables) |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease, Cost [Table Text Block] |
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Lessee, Operating Lease, Liability, Maturity [Table Text Block] | As of December 31, 2021, the following table represents our operating lease maturities, including renewal provisions that we have assessed as being reasonably certain of exercise, for each of the years ended December 31:
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Debt Disclosure (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term debt | Long-term debt, presented net of unamortized discount and unamortized debt issuance costs, consists of the following:
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Transactions with Major Customers and Affiliates (Tables) |
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Transactions with Major Customers and Affiliates [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of revenue by major customers | During the periods presented, more than 10 percent of our operating revenues were generated from each of the following customers:
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Asset Retirement Obligations (Tables) |
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Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of change in asset retirement obligation | During 2021 and 2020, our overall asset retirement obligation changed as follows (in thousands):
(1)Changes in estimates of existing obligations are primarily due to the annual review process, which considers various factors including inflation rate, current estimates for removal costs, discount rates, and the estimated remaining life of assets. The increase in 2021 is primarily due to a decrease in the discount rate and an increase in the estimated life of the ARO assets.
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Regulatory Assets and Liabilities (Tables) |
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Schedule of Regulatory Assets and Liabilities [Table Text Block] | Our regulatory assets and liabilities result from our application of the provisions of Topic 980 and are reflected on our Balance Sheet. Current regulatory assets are included in Prepayments and other. Current regulatory liabilities are included in Exchange gas due to others. These balances are presented on our Balance Sheet on a gross basis and are recoverable or refundable over various periods. Below are the details of our regulatory assets and liabilities as of December 31, 2021 and 2020:
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Contract Assets (Details) - USD ($) $ in Thousands |
12 Months Ended | |
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Dec. 31, 2021 |
Dec. 31, 2020 |
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Revenue Recognition [Abstract] | ||
Contract with Customer, Asset, Net - Beginning of Period | $ 3,395 | $ 554 |
Revenue recognized in excess of amounts invoiced | 4,548 | 2,841 |
Contract with Customer, Asset, Net - End of Period | 7,943 | $ 3,395 |
Revenue, Remaining Performance Obligation, Amount | $ 4,317,397 |
Revenue from Contract Liabilities (Details) - USD ($) $ in Thousands |
12 Months Ended | |
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Dec. 31, 2021 |
Dec. 31, 2020 |
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Contract With Customer, Liability [Line Items] | ||
Contract with Customer, Liability - Balance at beginning of period | $ 4,610 | $ 5,464 |
Recognized in Revenue | (938) | (854) |
Contract with Customer, Liability - Balance at end of Period | $ 3,672 | $ 4,610 |
Leases (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
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Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
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Lessee, Lease, Description [Line Items] | |||
Operating lease cost | $ 1,334 | $ 2,075 | $ 2,234 |
Variable lease cost | 681 | 1,122 | 1,107 |
Total lease cost | 2,015 | 3,197 | 3,341 |
Cash paid for amounts included in the measurement of operating lease liabilities | 2,395 | 2,500 | $ 2,064 |
Right-of-use assets | 10,238 | 10,692 | |
Current (included in Other in our Balance Sheet | 676 | 2,022 | |
Lease liability | $ 8,202 | $ 8,341 | |
Weighted-average remaining lease term - operating lease | 16 years | 15 years | |
Weighted-average discount rate - operating lease | 4.13% | 3.96% | |
2021 | $ 962 | ||
2022 | 944 | ||
2023 | 944 | ||
2024 | 960 | ||
2025 | 962 | ||
Thereafter | 8,181 | ||
Total future lease payments | 12,953 | ||
Less amount representing interest | 4,075 | ||
Total obligations under operating leases | $ 8,878 |
Contingent Liabilities and Commitments (Details) - Environmental assessment and remediation - USD ($) $ in Millions |
Dec. 31, 2021 |
Dec. 31, 2020 |
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Site Contingency [Line Items] | ||
Accrued environmental assessment and remediation costs, total | $ 1.0 | $ 1.1 |
Accrued environmental assessment and remediation costs, current | 0.1 | 0.1 |
Accrued environmental assessment and remediation costs, noncurrent | $ 0.9 | $ 1.0 |
Debt and Financing Arrangements (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
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Debt Instrument [Line Items] | ||
Long-term Debt | $ 579,030 | $ 578,018 |
Issuance of debt | 3,059 | 3,581 |
Debt Instrument, Unamortized Discount | 2,911 | 3,401 |
Long-term Debt, Fiscal Year Maturity [Abstract] | ||
2025 | 85,000 | |
7.125 percent unsecured debentures due 2025 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 85,000 | 85,000 |
4.0% unsecured debentures due 2027 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 500,000 | $ 500,000 |
Asset Pledged as Collateral [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 0 |
Financial Instruments (Details) - USD ($) $ in Millions |
Dec. 31, 2021 |
Dec. 31, 2020 |
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Reported Value Measurement [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term Debt, Fair Value | $ 579.0 | $ 578.0 |
Estimate of fair value of long-term debt, including current maturities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term Debt, Fair Value | $ 646.2 | $ 680.6 |
Asset Retirement Obligations (Details) - USD ($) $ in Thousands |
12 Months Ended | |
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Dec. 31, 2021 |
Dec. 31, 2020 |
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Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | ||
Beginning balance | $ 95,777 | $ 91,251 |
Accretion | 5,725 | 5,410 |
Changes in estimates of existing obligations (1) | 21,148 | (884) |
Ending balance | $ 122,650 | $ 95,777 |
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