Transactions with Affiliates (Notes)

6 Months Ended

Jun. 30, 2023

Related Party Transactions [Abstract]

Transactions with Affiliates

Transactions with Affiliates

We are a participant in Williams’ cash management program, and we make advances to and receive advances from Williams. At June 30, 2023 and December 31, 2022, our advances to Williams totaled approximately $174.4 million and $310.6 million, respectively. These advances are represented by demand notes and are classified as Receivables - Advances to affiliate on the 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 4.9 percent at June 30, 2023. The interest income from these advances was $1.9 million and $4.3 million for the three and six months ended June 30, 2023, respectively, and $0.5 million for each of the three and six months ended June 30, 2022. Such interest income is included in Other (Income) and Other Expenses – Miscellaneous other (income) expense, net on the 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. We have recorded $20.9 million and $43.0 million for the three and six months ended June 30, 2023, respectively and $21.9 million and $42.2 million for the three and six months ended June 30, 2022, respectively, for these service expenses, which are primarily included in Operation and maintenance and General and administrative expenses on the Statement of Net Income.

During July 2023, we declared and paid a cash distribution of $37 million to our parent.