Transactions with Affiliates

9 Months Ended

Sep. 30, 2011

Transactions with Affiliates [Abstract]

TRANSACTIONS WITH AFFILIATES

5. TRANSACTIONS WITH AFFILIATES

We are a participant in WPZ's cash management program. At September 30,2011 and December 31, 2010, the advances due to us by WPZ totaled approximately $81.1 million and $45.0 million, respectively. These advances are represented by demand notes. The interest rate on these intercompany demand notes is based upon the overnight investment rate paid on WPZ's excess cash, which was approximately 0.01 percent at September 30,2011. The interest income from these advances was minimal during the nine months ended September 30,2011and September 30, 2010.

The Williams Companies, Inc. (Williams) charges its subsidiary companies for management services provided by it and other affiliated companies. Such corporate expenses charged by Williams, WPZ, and other affiliated companies, for the nine months ended September 30,2011 and 2010, were $26.8 million and $24.7 million, respectively. These expenses are included in “General and administrative expense” on the accompanying Statement of Income. Management considers the cost of these services to be reasonable.

Northwest has no employees. Services are provided to us by an affiliate, Northwest Pipeline Services LLC (NPS). In return, we reimburse NPS for all direct and indirect expenses it incurs or payments it makes (including salary, bonus, incentive compensation, pension and other benefits) in connection with these services. For the nine months ended September 30, 2011 and 2010, we were billed $46.7 million and $44.2 million, respectively. Such expenses are primarily included in “General and administrative” and “Operation and maintenance” expenses on the accompanying Statement of Income.

During the periods presented, our revenues include transportation transactions and rental of communication facilities with subsidiaries of Williams. Combined revenues for these activities, for the nine months ended September 30,2011 and 2010, were $18.4 millionand $2.5 million, respectively.

During the nine months ended September 30, 2011, we declared and paid equity distributions of $94.0 million to WPZ. During October 2011, we declared and paid equity distributions of $33.0 million to WPZ. In October 2011, Williams Partners Operating LLC authorized a $0.7 million capital contribution to us to fund a portion of our expenditures for additions to property, plant and equipment.

       We have entered into various other transactions with certain related parties, the amounts of which were not significant. These transactions and the above-described transactions are made on the basis of commercial relationships and prevailing market prices or general industry practices.