Transactions with Major Customers and Affiliates (Notes)

12 Months Ended

Dec. 31, 2023

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:

	Year Ended December 31,
	2023		2022		2021
	(Thousands)
Puget Sound Energy, Inc.	$	126,206	$	130,705	$	131,462
Cascade Natural Gas Corporation	47,046		48,664		49,078
Northwest Natural Gas Company	46,637		48,921		48,901

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, 2023 and 2022, our advances to Williams totaled approximately $157.8 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 5.2 percent at December 31, 2023. The interest income from these advances was $8.3 million and $4.9 million for the years ended December 31, 2023 and 2022, respectively. The interest income from these advances was minimal for the year ended December 31, 2021. 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 $86.0 million, $87.7 million, and $85.2 million for the years ended December 31, 2023, 2022, and 2021, 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 January 2024, we declared and paid a cash distribution of $33.0 million to our parent.