0001193125-12-330323.txt : 20120802 0001193125-12-330323.hdr.sgml : 20120802 20120802074800 ACCESSION NUMBER: 0001193125-12-330323 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20120630 FILED AS OF DATE: 20120802 DATE AS OF CHANGE: 20120802 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTHWEST PIPELINE GP CENTRAL INDEX KEY: 0000110019 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS TRANSMISSION [4922] IRS NUMBER: 261157701 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07414 FILM NUMBER: 121001743 BUSINESS ADDRESS: STREET 1: 295 CHIPETA WAY CITY: SALT LAKE CITY STATE: UT ZIP: 84108 BUSINESS PHONE: 801-583-8800 MAIL ADDRESS: STREET 1: 295 CHIPETA WAY CITY: SALT LAKE CITY STATE: UT ZIP: 84108 FORMER COMPANY: FORMER CONFORMED NAME: NORTHWEST PIPELINE CORP DATE OF NAME CHANGE: 19920703 10-Q 1 d389332d10q.htm 10-Q 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

(Mark One)

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

For the quarterly period ended June 30, 2012

OR

 

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

For the transition period from                      to                     

Commission file number 1-7414

 

 

NORTHWEST PIPELINE GP

(Exact name of registrant as specified in its charter)

 

 

 

DELAWARE   26-1157701

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

295 Chipeta Way

Salt Lake City, Utah

  84108
(Address of principal executive offices)   (Zip Code)

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

NO CHANGE

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

 

 

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

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

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

 

Large accelerated filer   ¨    Accelerated filer   ¨
Non-accelerated filer   x  (Do not check if a smaller reporting company)    Smaller reporting company   ¨

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

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

 

 

 


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NORTHWEST PIPELINE GP

FORM 10-Q

INDEX

 

      Page  

PART I. FINANCIAL INFORMATION:

  

Item 1. Financial Statements -

  

Statement of Comprehensive Income — Three and Six Months Ended June 30, 2012 and 2011

     1   

Balance Sheet — June 30, 2012 and December 31, 2011

     2   

Statement of Cash Flows — Six Months Ended June 30, 2012 and 2011

     4   

Notes to Financial Statements

     5   

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

     9   

Item 4. Controls and Procedures

     10   

Part II. Other Information

     11   

Item 1. Legal Proceedings

     11   

Item 6. Exhibits

     12   

Forward Looking Statements

Certain matters contained in this report include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to anticipated financial performance, management’s plans and objectives for future operations, business prospects, outcome of regulatory proceedings, market conditions, and other matters. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995.

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

 

   

Amounts and nature of future capital expenditures;

 

   

Expansion and growth of our business and operations;

 

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Financial condition and liquidity;

 

   

Business strategy;

 

   

Cash flow from operations or results of operations;

 

   

Rate case filings; and

 

   

Natural gas prices and demand.

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

 

   

Availability of supplies, market demand, volatility of prices, and the availability and cost of capital;

 

   

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

 

   

The strength and financial resources of our competitors;

 

   

Development of alternative energy sources;

 

   

The impact of operational and development hazards;

 

   

Costs of, changes in, or the results of laws, government regulations (including safety and climate change regulation and changes in natural gas production from exploration and production areas that we serve), environmental liabilities, litigation and rate proceedings;

 

   

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

 

   

Changes in maintenance and construction costs;

 

   

Changes in the current geopolitical situation;

 

   

Our exposure to the credit risks of our customers and counterparties;

 

   

Risks related to strategy and financing, including restrictions stemming from our debt agreements, future changes in our credit ratings and the availability and cost of credit;

 

   

Risks associated with future weather conditions;

 

   

Acts of terrorism, including cybersecurity threats and related disruptions; and

 

   

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

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

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

 

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Because forward-looking statements involve risks and uncertainties, we caution that there are important factors, in addition to those listed above, that may cause actual results to differ materially from those contained in the forward-looking statements. For a detailed discussion of those factors, see Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2011.

 

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PART I – FINANCIAL INFORMATION

ITEM 1. Financial Statements.

NORTHWEST PIPELINE GP

STATEMENT OF COMPREHENSIVE INCOME

(Thousands of Dollars)

(Unaudited)

 

     Three months ended     Six months ended  
     June 30,     June 30,  
     2012     2011     2012     2011  

OPERATING REVENUES

   $ 106,311     $ 106,576     $ 217,683     $ 216,495  
  

 

 

   

 

 

   

 

 

   

 

 

 

OPERATING EXPENSES:

        

General and administrative

     17,305       13,694       33,888       28,503  

Operation and maintenance

     18,561       19,096       35,416       34,983  

Depreciation

     23,225       22,543       46,535       45,101  

Regulatory credits

     (115     (267     (404     (534

Taxes, other than income taxes

     4,524       4,914       9,778       10,614  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     63,500       59,980       125,213       118,667  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating Income

     42,811       46,596       92,470       97,828  
  

 

 

   

 

 

   

 

 

   

 

 

 

OTHER INCOME - net:

        

Interest income -

        

Affiliated

     2       2       3       5  

Other

     1       1       6       1  

Allowance for equity funds used during construction

     506       287       719       407  

Miscellaneous other (expense) income, net

     (83     (27     (158     (133
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income - net

     426       263       570       280  
  

 

 

   

 

 

   

 

 

   

 

 

 

INTEREST CHARGES:

        

Interest on long-term debt

     11,109       11,109       22,219       22,219  

Other interest

     478       504       961       1,014  

Allowance for borrowed funds used during construction

     (236     (133     (334     (187
  

 

 

   

 

 

   

 

 

   

 

 

 

Total interest charges

     11,351       11,480       22,846       23,046  
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME

     31,886       35,379       70,194       75,062  

CASH FLOW HEDGES:

        

Amortization of cash flow hedges

     (15     (16     (31     (31
  

 

 

   

 

 

   

 

 

   

 

 

 

COMPREHENSIVE INCOME

   $ 31,871     $ 35,363     $ 70,163     $ 75,031  
  

 

 

   

 

 

   

 

 

   

 

 

 

See accompanying notes.

 

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NORTHWEST PIPELINE GP

BALANCE SHEET

(Thousands of Dollars)

(Unaudited)

 

     June 30,      December 31,  
     2012      2011  

ASSETS

     

CURRENT ASSETS:

     

Cash

   $ 240      $ 37  

Receivables:

     

Trade

     36,147        38,245  

Affiliated companies

     —           2,250  

Advances to affiliate

     61,462        52,024  

Materials and supplies, less reserves of $59 at June 30, 2012 and $816 at December 31, 2011

     10,049        10,488  

Exchange gas due from others

     1,145        3,441  

Prepayments and other

     4,447        3,469  
  

 

 

    

 

 

 

Total current assets

     113,490        109,954  
  

 

 

    

 

 

 

PROPERTY, PLANT AND EQUIPMENT, at cost

     3,120,625        3,068,915  

Less-Accumulated depreciation

     1,128,771        1,076,943  
  

 

 

    

 

 

 

Total property, plant and equipment, net

     1,991,854        1,991,972  
  

 

 

    

 

 

 

OTHER ASSETS:

     

Deferred charges

     8,742        10,250  

Regulatory assets

     59,394        59,605  
  

 

 

    

 

 

 

Total other assets

     68,136        69,855  
  

 

 

    

 

 

 

Total assets

   $ 2,173,480      $ 2,171,781  
  

 

 

    

 

 

 

See accompanying notes.

 

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NORTHWEST PIPELINE GP

BALANCE SHEET

(Thousands of Dollars)

(Unaudited)

 

     June 30,      December 31,  
     2012      2011  

LIABILITIES AND OWNER’S EQUITY

  

CURRENT LIABILITIES:

     

Payables:

     

Trade

   $ 16,848      $ 13,634  

Affiliated companies

     13,441        8,812  

Accrued liabilities:

     

Taxes, other than income taxes

     11,622        10,252  

Interest

     4,045        4,045  

Exchange gas due to others

     2,126        10,472  

Exchange gas offset

     2,049        2,241  

Other

     3,940        5,006  
  

 

 

    

 

 

 

Total current liabilities

     54,071        54,462  
  

 

 

    

 

 

 

LONG-TERM DEBT

     693,929        693,831  

DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES

     105,540        103,041  

CONTINGENT LIABILITIES AND COMMITMENTS (Note 3)

     

OWNER’S EQUITY:

     

Owner’s capital

     1,054,292        1,051,962  

Retained earnings

     265,403        268,209  

Accumulated other comprehensive income

     245        276  
  

 

 

    

 

 

 

Total owner’s equity

     1,319,940        1,320,447  
  

 

 

    

 

 

 

Total liabilities and owner’s equity

   $ 2,173,480      $ 2,171,781  
  

 

 

    

 

 

 

See accompanying notes.

 

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NORTHWEST PIPELINE GP

STATEMENT OF CASH FLOWS

(Thousands of Dollars)

(Unaudited)

 

     Six months ended June 30,  
     2012     2011  

OPERATING ACTIVITIES:

    

Net income

   $ 70,194     $ 75,062  

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

    

Depreciation

     46,535       45,101  

Regulatory credits

     (404     (534

Amortization of deferred charges and credits

     795       859  

Allowance for equity funds used during construction

     (719     (407

Changes in current assets and liabilities:

    

Trade accounts receivable

     2,098       4,541  

Affiliated receivables

     2,250       84  

Exchange gas due from others

     2,296       7,780  

Materials and supplies

     439       499  

Other current assets

     (978     (1,320

Trade accounts payable

     (2,465     (2,620

Affiliated payables

     4,695       3,650  

Exchange gas due to others

     (2,295     (7,781

Other accrued liabilities

     303       2,821  

Changes in noncurrent assets and liabilities:

    

Deferred charges

     (954     (1,130

Other deferred credits

     2,639       2,748  
  

 

 

   

 

 

 

Net cash provided by operating activities

     124,429       129,353  
  

 

 

   

 

 

 

FINANCING ACTIVITIES:

    

Capital contributions from parent

     2,330       3,500  

Distributions paid

     (73,000     (64,000

Other

     (1,719     (1,424
  

 

 

   

 

 

 

Net cash used in financing activities

     (72,389     (61,924
  

 

 

   

 

 

 

INVESTING ACTIVITIES:

    

Property, plant and equipment:

    

Capital expenditures*

     (47,147     (36,245

Proceeds from sales

     4,748       1,150  

Advances to affiliates

     (9,438     (32,332
  

 

 

   

 

 

 

Net cash used in investing activities

     (51,837     (67,427
  

 

 

   

 

 

 

NET INCREASE IN CASH

     203       2  

CASH AT BEGINNING OF PERIOD

     37       5  
  

 

 

   

 

 

 

CASH AT END OF PERIOD

   $ 240     $ 7  
  

 

 

   

 

 

 

 

*       Increases to property, plant and equipment

   $ (54,479   $ (36,850

         Changes in related accounts payable and accrued liabilities

     7,332       605  
  

 

 

   

 

 

 

         Capital expenditures

   $ (47,147   $ (36,245
  

 

 

   

 

 

 

See accompanying notes.

 

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NORTHWEST PIPELINE GP

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

1. BASIS OF PRESENTATION

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

Northwest is indirectly owned by Williams Partners L.P. (WPZ), a publicly traded Delaware limited partnership, which is consolidated by The Williams Companies, Inc. (Williams). As of June 30, 2012, Williams holds an approximate 68 percent interest in WPZ, comprised of an approximate 66 percent limited partner interest and all of WPZ’s 2 percent general partner interest.

General

The accompanying interim financial statements do not include all the notes in our annual financial statements, and therefore, should be read in conjunction with the financial statements and notes thereto in our 2011 Annual Report on Form 10-K. The accompanying unaudited financial statements include all adjustments both normal recurring and others which, in the opinion of our management, are necessary to present fairly our interim financial statements.

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.

Certain reclassifications from Administrative and general to Operations and maintenance, related to certain employee related expenses of $0.9 million and $1.5 million for the three and six months ended June 30, 2011, respectively, have been made to conform to the presentation utilized in the 2012 Statement of Comprehensive Income.

2. RATE AND REGULATORY MATTERS

Rate Case Settlement Filing

On April 26, 2012, the Federal Energy Regulatory Commission (FERC) unconditionally approved Northwest’s Stipulation and Settlement Agreement (Settlement) filed on March 15, 2012. The supporting or non-opposing customers named in the Settlement represent approximately 99.5 percent of our long-term firm transportation and storage capacity. The Settlement specified an annual cost of service of $466.5 million and established a new general system firm transportation rate of $0.44 per dekatherm, a 7.4 percent increase over the current rate. New rates will become effective January 1, 2013, and will remain in effect for a minimum of 3 years and a maximum of 5 years.

3. CONTINGENT LIABILITIES AND COMMITMENTS

Legal Proceedings

We are a party to legal, administrative, and regulatory proceedings arising in the ordinary course of business.

 

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NORTHWEST PIPELINE GP

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

 

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. We believe that compliance with applicable environmental requirements is not likely to have a material adverse effect upon our financial position or results of operations.

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 and mercury contamination at certain natural gas metering sites. 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 mercury clean-ups in Washington. Currently, we are conducting assessment and remediation activities for mercury and other constituents to bring the sites up to Washington’s current environmental standards. At June 30, 2012, we had accrued liabilities totaling approximately $6.3 million for these costs which are expected to be incurred through 2017. We are conducting environmental assessments and implementing a variety of remedial measures that may result in increases or decreases in the total estimated costs.

In March 2008, the EPA promulgated a new, lower National Ambient Air Quality Standard (NAAQS) for ground-level ozone. However, in September 2009, the EPA announced it would reconsider the 2008 NAAQS for ground-level ozone to ensure that the standards were clearly grounded in science, and were protective of both public health and the environment. As a result, the EPA delayed designation of new eight-hour ozone non-attainment areas under the 2008 standards until the reconsideration is complete. In January 2010, the EPA proposed to further reduce the ground-level ozone NAAQS from the March 2008 levels. In September 2011, the EPA announced that it was proceeding with required actions to implement the 2008 ozone standard and area designations. In May 2012, the EPA completed designation of new eight-hour ozone non-attainment areas. Based on the published designations, no Northwest facilities are located within the non-attainment areas. At this time, it is unknown whether future state regulatory actions associated with implementation of the 2008 ozone standard will impact our operations and increase the cost of additions to property, plant and equipment. Until any additional state regulatory actions are proposed, we are unable to estimate the cost of additions that may be required to meet this new regulation.

Additionally, in August 2010, the EPA promulgated National Emission Standards for hazardous air pollutants (NESHAP) regulations that will impact our operations. The emission control additions required to comply with the hazardous air pollutant regulations are estimated to include capital costs in the range of $3 million to $4 million through 2013, the compliance date.

In February 2010, the EPA promulgated a final rule establishing a new one-hour nitrogen dioxide (NO2) NAAQS. In February 2012, the EPA designated all areas of the country as “unclassifiable/attainment,” meaning that information available at that time did not indicate that air quality in these areas exceeded the NAAQS. Also, at that time, the EPA noted its plan to deploy an expanded NO2 monitoring network beginning in 2013. Once three years of data is collected from the new monitoring network, the EPA will reassess attainment status with the one-hour NO2 NAAQS. Until that time, the EPA or states may require ambient air quality modeling on a case by case basis to demonstrate compliance with the NO2 standard. Because we are unable to predict the outcome of the EPA’s or states’ future assessment using the new monitoring network, we are unable to estimate the cost of additions that may be required.

 

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NORTHWEST PIPELINE GP

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

 

Safety Matters

Pipeline Integrity Regulations We have developed an Integrity Management Program that we believe meets the United States Department of Transportation Pipeline and Hazardous Materials Safety Administration final rule that was issued pursuant to the requirements of the Pipeline Safety Improvement Act of 2002. The rule requires gas pipeline operators to develop an integrity management program for transmission pipelines that could affect high consequence areas in the event of pipeline failure. The Integrity Management Program includes a baseline assessment plan to be completed in 2012 along with periodic reassessments to be completed within required timeframes. In meeting the integrity regulations, we have identified high consequence areas and developed our baseline assessment plan. We are on schedule to complete the required assessments within the required timeframes.

We estimate the cost to complete the required initial assessments and associated remediation through 2012 will be primarily capital in nature and range between $30 million and $35 million for the full year of 2012. Ongoing periodic reassessments and initial assessments of any new high consequence areas will be completed within the timeframes required by the rule. Management considers the costs associated with compliance with the rule to be prudent costs incurred in the ordinary course of business and, therefore, recoverable through our rates.

Other Matters

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

Summary

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

4. DEBT AND FINANCING ARRANGEMENT

Credit Facility

Total letter of credit capacity available to WPZ under the $2.0 billion credit facility is $1.3 billion. At June 30, 2012, WPZ had a total of $345 million outstanding under the credit facility and no letters of credit have been issued. At June 30, 2012, the full $400 million under the credit facility was available to us.

5. FINANCIAL INSTRUMENTS

Fair Value of Financial Instruments

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

Cash and advances to affiliate - The carrying amounts of these items approximates their fair value.

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 $693.9 million and $826.7 million, respectively, at June 30, 2012, and $693.8 million and $826.3 million, respectively, at December 31, 2011.

 

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NORTHWEST PIPELINE GP

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

 

6. TRANSACTIONS WITH AFFILIATES

We are a participant in WPZ’s cash management program, and we make advances to and receive advances from WPZ. At June 30, 2012 and December 31, 2011, the advances due to us by WPZ totaled approximately $61.5 million and $52.0 million, respectively. These advances are represented by demand notes. The interest rate on these intercompany demand notes is based upon the daily overnight investment rate paid on WPZ’s excess cash at the end of each month, which was approximately 0.01 percent at June 30, 2012. The interest income from these advances was minimal during the six months ended June 30, 2012 and June 30, 2011. Such interest income is included in “Other Income – net: Interest income – Affiliated” on the accompanying Statement of Comprehensive Income.

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 six months ended June 30, 2012 and 2011, were $21.3 million and $18.0 million, respectively. These expenses are included in “General and administrative expense” on the accompanying Statement of Comprehensive Income. Management considers the cost of these services to be reasonable.

We have no employees. Services are provided to us by an affiliate, Northwest Pipeline Services LLC (NPS). Pursuant to an administrative services agreement, NPS provides personnel, facilities, goods, and equipment not otherwise provided by us that are necessary to operate our business. 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 six months ended June 30, 2012 and 2011, we were billed $33.7 million and $30.9 million, respectively. Such expenses are primarily included in “General and administrative” and “Operation and maintenance” expenses on the accompanying Statement of Comprehensive 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 six months ended June 30, 2012 were minimal. Combined revenues for the six months ended 2011 were $12.1 million. The reduction in revenues from 2011 is a result of Williams’ spin-off of its former exploration and production business, which was completed on December 31, 2011. These revenues, associated with transportation transactions, are now reflected with the revenues from outside parties.

During the six months ended June 30, 2012 and 2011, we declared and paid equity distributions to our parent of $73.0 million and $64.0 million, respectively. During July 2012, we declared and paid equity distributions of $34.5 million to our parent.

During the six months ended June 30, 2012 and 2011, we received contributions of $2.3 million and $3.5 million, respectively, from our parent to fund a portion of our expansion related expenditures for additions to property, plant, and equipment. In July 2012, our parent authorized an additional $1.2 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.

 

8


Table of Contents

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

GENERAL

The following discussion should be read in conjunction with the Financial Statements, Notes, and Management’s Discussion and Analysis contained in Items 7 and 8 of our 2011 Annual Report on Form 10-K and with the Financial Statements and Notes contained in this Form 10-Q.

RESULTS OF OPERATIONS

ANALYSIS OF FINANCIAL RESULTS

This analysis discusses financial results of our operations for the six-month periods ended June 30, 2012 and 2011. Variances due to changes in natural gas prices and transportation volumes have little impact on revenues, because under our rate design methodology, the majority of overall cost of service is recovered through firm capacity reservation charges in our transportation rates.

Our operating revenues increased $1.2 million, or 1 percent. This increase is primarily attributed to higher reservation charges and the timing effect of leap year in 2012.

Transportation service and gas storage service accounted for 97 percent and 3 percent, respectively, of our operating revenues for both periods.

Operating expenses increased $6.5 million, or 6 percent, due primarily to i) higher allocated overhead from affiliates of $3.4 million; ii) higher depreciation of $1.4 million, attributed to property additions; iii) higher employee incentive compensation expense of $0.9 million; iv) higher pension costs of $0.8 million; and (v) higher labor costs of $0.8 million; partially offset by lower ad valorem taxes of $0.8 million, resulting primarily from favorable valuation settlements.

CAPITAL EXPENDITURES

Our capital expenditures were $47.1 million and $36.2 million for the six months ended June 30, 2012 and 2011, respectively. Our capital expenditures estimate for 2012 is discussed in our 2011 Annual Report on Form 10-K. That estimate includes the following new capital projects proposed by us:

North and South Seattle Lateral Delivery Expansions

We have executed agreements with Puget Sound Energy to expand the North and South Seattle laterals and provide additional lateral capacity of approximately 84 MDth per day and 74 MDth per day, respectively. We estimate the expansion of the two laterals to cost between $28 million and $30 million. North Seattle is scheduled for a fall 2012 in-service date and South Seattle is scheduled for a fall 2013 in-service date.

 

9


Table of Contents

Item 4. Controls and Procedures

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

Evaluation of Disclosure Controls and Procedures

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

Second-Quarter 2012 Changes in Internal Controls

There have been no changes during the second quarter of 2012 that have materially affected, or are reasonably likely to materially affect, our Internal Controls.

 

10


Table of Contents

PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS.

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

 

11


Table of Contents

ITEM 6. EXHIBITS

The following instruments are included as exhibits to this report.

 

Exhibit

 

Description

3(a)   Statement of Partnership Existence of Northwest Pipeline GP (Exhibit 3.1 to our report on Form 8-K, filed October 2, 2007) and incorporated herein by reference.
3(b)   Amended and Restated General Partnership Agreement of Northwest Pipeline GP (Exhibit 3.1 to our report on Form 8-K, filed January 30, 2008) and incorporated herein by reference.
31(a)*   Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended and Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.
31(b)*   Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended, and Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.
32(a)**   Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**

 

101.SCH**

 

101.CAL**

 

101.DEF**

 

101.LAB**

 

101.PRE**

 

XBRL Instance Document.

 

XBRL Taxonomy Extension Schema.

 

XBRL Taxonomy Extension Calculation Linkbase.

 

XBRL Taxonomy Definition Linkbase.

 

XBRL Taxonomy Extension Label Linkbase.

 

XBRL Taxonomy Extension Presentation Linkbase.

 

* Filed herewith.
** Furnished herewith.

 

12


Table of Contents

SIGNATURE

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

 

   

NORTHWEST PIPELINE GP

Registrant
By:  

/s/ R. Rand Clark

  R. Rand Clark
  Controller
  (Duly Authorized Officer and
  Chief Accounting Officer)

Date: August 2, 2012


Table of Contents

EXHIBIT INDEX

 

Exhibit

 

Description

3(a)   Statement of Partnership Existence of Northwest Pipeline GP (Exhibit 3.1 to our report on Form 8-K, filed October 2, 2007) and incorporated herein by reference.
3(b)   Amended and Restated General Partnership Agreement of Northwest Pipeline GP (Exhibit 3.1 to our report on Form 8-K, filed January 30, 2008) and incorporated herein by reference.
31(a)*   Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended and Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.
31(b)*   Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended, and Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.
32(a)**   Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**   XBRL Instance Document.
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.

 

* Filed herewith.
** Furnished herewith.
EX-31.A 2 d389332dex31a.htm EX-31.A EX-31.a

Exhibit 31(a)

SECTION 302 CERTIFICATION

I, Randall L. Barnard, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of Northwest Pipeline GP;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

Date: August 2, 2012

 

By:  

/s/ Randall L. Barnard

  Randall L. Barnard
  Senior Vice President
  (Principal Executive Officer)
EX-31.B 3 d389332dex31b.htm EX-31.B EX-31.b

Exhibit 31(b)

SECTION 302 CERTIFICATION

I, Richard D. Rodekohr, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of Northwest Pipeline GP;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

Date: August 2, 2012

 

By:  

/s/ Richard D. Rodekohr

  Richard D. Rodekohr
  Vice President and Treasurer
  (Principal Financial Officer)
EX-32.A 4 d389332dex32a.htm EX-32.A EX-32.a

Exhibit 32(a)

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Northwest Pipeline GP (the “Company”) on Form 10-Q for the period ending June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned hereby certifies, in his capacity as an officer of the Company, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

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

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

 

/s/ Randall L. Barnard
Randall L. Barnard
Senior Vice President
August 2, 2012
/s/ Richard D. Rodekohr
Richard D. Rodekohr
Vice President and Treasurer
August 2, 2012

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

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

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(WPZ), a publicly traded Delaware limited partnership, which is consolidated by The Will</font><font style="font-family:Arial;font-size:10pt;">iams Companies, Inc. (Williams). As of </font><font style="font-family:Arial;font-size:10pt;">June 30, 2012</font><font style="font-family:Arial;font-size:10pt;">,</font><font style="font-family:Arial;font-size:10pt;"> Williams holds an approximate </font><font style="font-family:Arial;font-size:10pt;">68</font><font style="font-family:Arial;font-size:10pt;"> percent interest in WPZ</font><font style="font-family:Arial;font-size:10pt;">, comprised of an approximate </font><font style="font-family:Arial;font-size:10pt;">66</font><font style="font-family:Arial;font-size:10pt;"> percent limited partner interest and all of WPZ's 2 percent general partner interest.</font><font style="font-family:Arial;font-size:10pt;"> </font></p><p style='margin-top:0pt; margin-bottom:0pt'>&#160;</p><p style='margin-top:0pt; margin-bottom:0pt'><font style="font-family:Arial;font-size:10pt;font-weight:bold;margin-left:0px;">General </font></p><p style='margin-top:0pt; margin-bottom:0pt'>&#160;</p><p style='margin-top:0pt; margin-bottom:0pt'><font style="font-family:Arial;font-size:10pt;margin-left:0px;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;The accompanying interim financial statements do not include all the notes in our annual financial statements, and therefore, should be read in conjunction with the financial statements and notes thereto in our </font><font style="font-family:Arial;font-size:10pt;">2011</font><font style="font-family:Arial;font-size:10pt;"> Annual Report on Form 10-K. The accompanying unaudited financial statements include all adjustments both normal recurring and others which, in the opinion of our management, are necessary to present fairly our </font><font style="font-family:Arial;font-size:10pt;">interim financial statements</font><font style="font-family:Arial;font-size:10pt;">. </font></p><p style='margin-top:0pt; margin-bottom:0pt'>&#160;</p><p style='margin-top:0pt; margin-bottom:0pt'><font style="font-family:Arial;font-size:10pt;margin-left:18px;">The preparation of financial statements in conformity with accounting principles generally accepted in the </font><font style="font-family:Arial;font-size:10pt;">United States</font><font style="font-family:Arial;font-size:10pt;"> requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. 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The PCBs were remediated pursuant to a Consent Decree with the U.S.&#160;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 mercury clean-ups in Washington. Currently, we are conducting assessment and remediation activities for mercury and other constituents to bring the sites up to Washington's current environmental standards. At </font><font style="font-family:Arial;font-size:10pt;">June 30</font><font style="font-family:Arial;font-size:10pt;">, 2012, we had accrued liabilities totaling approximately $</font><font style="font-family:Arial;font-size:10pt;">6.3</font><font style="font-family:Arial;font-size:10pt;"> million for these costs which are expected to be incurred through 2017. 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The interest rate on these intercompany demand notes is based upon the </font><font style="font-family:Arial;font-size:10pt;">daily </font><font style="font-family:Arial;font-size:10pt;">overnight investment rate paid on WPZ's excess cash</font><font style="font-family:Arial;font-size:10pt;"> at the end of each month, which was approximately </font><font style="font-family:Arial;font-size:10pt;">0.01</font><font style="font-family:Arial;font-size:10pt;"> percent at </font><font style="font-family:Arial;font-size:10pt;">June 30,</font><font style="font-family:Arial;font-size:10pt;"> </font><font style="font-family:Arial;font-size:10pt;">2012</font><font style="font-family:Arial;font-size:10pt;">. </font><font style="font-family:Arial;font-size:10pt;">The interest income from these advances was minimal during the </font><font style="font-family:Arial;font-size:10pt;">six</font><font style="font-family:Arial;font-size:10pt;"> months ended </font><font style="font-family:Arial;font-size:10pt;">June 30,</font><font style="font-family:Arial;font-size:10pt;"> </font><font style="font-family:Arial;font-size:10pt;">2012</font><font style="font-family:Arial;font-size:10pt;"> </font><font style="font-family:Arial;font-size:10pt;">and June 30, 2011</font><font style="font-family:Arial;font-size:10pt;">.</font><font style="font-family:Arial;font-size:10pt;"> Such interest income is included in &#8220;Other Income &#8211; net: Interest income &#8211; Affiliated&#8221; on the accompanying Statement of </font><font style="font-family:Arial;font-size:10pt;">Comprehensive </font><font style="font-family:Arial;font-size:10pt;">Income.</font></p><p style='margin-top:0pt; margin-bottom:10pt'><font style="font-family:Arial;font-size:10pt;margin-left:18px;">The Williams Companies, Inc. (</font><font style="font-family:Arial;font-size:10pt;">Williams</font><font style="font-family:Arial;font-size:10pt;">)</font><font style="font-family:Arial;font-size:10pt;"> 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</font><font style="font-family:Arial;font-size:10pt;">, f</font><font style="font-family:Arial;font-size:10pt;">or the </font><font style="font-family:Arial;font-size:10pt;">six</font><font style="font-family:Arial;font-size:10pt;"> months ended </font><font style="font-family:Arial;font-size:10pt;">June 30,</font><font style="font-family:Arial;font-size:10pt;"> </font><font style="font-family:Arial;font-size:10pt;">2012</font><font style="font-family:Arial;font-size:10pt;"> and 2011</font><font style="font-family:Arial;font-size:10pt;">,</font><font style="font-family:Arial;font-size:10pt;"> were $</font><font style="font-family:Arial;font-size:10pt;">2</font><font style="font-family:Arial;font-size:10pt;">1</font><font style="font-family:Arial;font-size:10pt;">.3</font><font style="font-family:Arial;font-size:10pt;"> million and $</font><font style="font-family:Arial;font-size:10pt;">18.0</font><font style="font-family:Arial;font-size:10pt;"> million,</font><font style="font-family:Arial;font-size:10pt;"> respectively</font><font style="font-family:Arial;font-size:10pt;">.</font><font style="font-family:Arial;font-size:10pt;"> These expenses are included in &#8220;General and administrative expense&#8221; on the accompanying Statement of </font><font style="font-family:Arial;font-size:10pt;">Comprehensive </font><font style="font-family:Arial;font-size:10pt;">Income. Management considers the cost of these services to be reasonable.</font></p><p style='margin-top:0pt; margin-bottom:10pt'><font style="font-family:Arial;font-size:10pt;margin-left:18px;">We have</font><font style="font-family:Arial;font-size:10pt;"> no employees. Services are provided to us by an affiliate, Northwest Pipeline Services LLC (NPS). </font><font style="font-family:Arial;font-size:10pt;">Pursuant to an administrative services agreement, NPS provides personnel, facilities, goods, and equipment not otherwise provided by us that are necessary to operate our business. </font><font style="font-family:Arial;font-size:10pt;">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. </font><font style="font-family:Arial;font-size:10pt;">For the six months ended June 30, 2012 and 2011, w</font><font style="font-family:Arial;font-size:10pt;">e were billed $</font><font style="font-family:Arial;font-size:10pt;">33.7</font><font style="font-family:Arial;font-size:10pt;"> million</font><font style="font-family:Arial;font-size:10pt;"> and $</font><font style="font-family:Arial;font-size:10pt;">30.9</font><font style="font-family:Arial;font-size:10pt;"> million</font><font style="font-family:Arial;font-size:10pt;">, respectively. Such expenses are primarily included in &#8220;General and administrative&#8221; and &#8220;Operation and maintenance&#8221; expenses on the accompanying Statement of </font><font style="font-family:Arial;font-size:10pt;">Comprehensive </font><font style="font-family:Arial;font-size:10pt;">Income.</font></p><p style='margin-top:0pt; margin-bottom:10pt'><font style="font-family:Arial;font-size:10pt;margin-left:18px;">During the periods presented, our revenues include transportation transactions and rental of communication facilities with subsidiaries of Williams. Combined revenues for these activities</font><font style="font-family:Arial;font-size:10pt;">, f</font><font style="font-family:Arial;font-size:10pt;">or the </font><font style="font-family:Arial;font-size:10pt;">six</font><font style="font-family:Arial;font-size:10pt;"> months ended </font><font style="font-family:Arial;font-size:10pt;">June 30,</font><font style="font-family:Arial;font-size:10pt;"> </font><font style="font-family:Arial;font-size:10pt;">2012</font><font style="font-family:Arial;font-size:10pt;"> </font><font style="font-family:Arial;font-size:10pt;">were minimal. Combined revenues for the six months ended </font><font style="font-family:Arial;font-size:10pt;">2011</font><font style="font-family:Arial;font-size:10pt;"> </font><font style="font-family:Arial;font-size:10pt;">were </font><font style="font-family:Arial;font-size:10pt;">$</font><font style="font-family:Arial;font-size:10pt;">12.1</font><font style="font-family:Arial;font-size:10pt;"> million</font><font style="font-family:Arial;font-size:10pt;">.</font><font style="font-family:Arial;font-size:10pt;"> The reduction </font><font style="font-family:Arial;font-size:10pt;">in revenues </font><font style="font-family:Arial;font-size:10pt;">from 2011 is </font><font style="font-family:Arial;font-size:10pt;">a result of</font><font style="font-family:Arial;font-size:10pt;"> Williams' spin</font><font style="font-family:Arial;font-size:10pt;">-</font><font style="font-family:Arial;font-size:10pt;">off of its</font><font style="font-family:Arial;font-size:10pt;"> former exploration and production business, which was completed on December 31, 2011. These revenues, associated with transportation transactions, are now reflected with the revenues from outside parties. </font><font style="font-family:Arial;font-size:10pt;"> </font></p><p style='margin-top:0pt; margin-bottom:10pt'><font style="font-family:Arial;font-size:10pt;margin-left:18px;">During the six months ended </font><font style="font-family:Arial;font-size:10pt;">June 30, 2012</font><font style="font-family:Arial;font-size:10pt;"> and 2011</font><font style="font-family:Arial;font-size:10pt;">, we declared and paid equity distributions </font><font style="font-family:Arial;font-size:10pt;">to our parent </font><font style="font-family:Arial;font-size:10pt;">of </font><font style="font-family:Arial;font-size:10pt;">$</font><font style="font-family:Arial;font-size:10pt;">73</font><font style="font-family:Arial;font-size:10pt;">.0</font><font style="font-family:Arial;font-size:10pt;"> million and </font><font style="font-family:Arial;font-size:10pt;">$</font><font style="font-family:Arial;font-size:10pt;">64</font><font style="font-family:Arial;font-size:10pt;">.0 million</font><font style="font-family:Arial;font-size:10pt;">, respectively</font><font style="font-family:Arial;font-size:10pt;">. During </font><font style="font-family:Arial;font-size:10pt;">July</font><font style="font-family:Arial;font-size:10pt;"> 201</font><font style="font-family:Arial;font-size:10pt;">2</font><font style="font-family:Arial;font-size:10pt;">, we declared </font><font style="font-family:Arial;font-size:10pt;">and paid </font><font style="font-family:Arial;font-size:10pt;">equity</font><font style="font-family:Arial;font-size:10pt;"> distributions of $</font><font style="font-family:Arial;font-size:10pt;">34.5</font><font style="font-family:Arial;font-size:10pt;"> million to </font><font style="font-family:Arial;font-size:10pt;">our parent</font><font style="font-family:Arial;font-size:10pt;">.</font><font style="font-family:Arial;font-size:10pt;"> </font></p><p style='margin-top:0pt; margin-bottom:10pt'><font style="font-family:Arial;font-size:10pt;margin-left:18px;">During the six months ended June 30, 2012 and 2011, we received contributions of $</font><font style="font-family:Arial;font-size:10pt;">2.3</font><font style="font-family:Arial;font-size:10pt;"> million and $3.5 million, respectively, from our parent to fund a portion of our </font><font style="font-family:Arial;font-size:10pt;">expansion related </font><font style="font-family:Arial;font-size:10pt;">expenditures for additions to property, plant, and equipment. </font><font style="font-family:Arial;font-size:10pt;">In </font><font style="font-family:Arial;font-size:10pt;">July</font><font style="font-family:Arial;font-size:10pt;"> 201</font><font style="font-family:Arial;font-size:10pt;">2</font><font style="font-family:Arial;font-size:10pt;">, </font><font style="font-family:Arial;font-size:10pt;">our parent</font><font style="font-family:Arial;font-size:10pt;"> authorized a</font><font style="font-family:Arial;font-size:10pt;">n</font><font style="font-family:Arial;font-size:10pt;"> </font><font style="font-family:Arial;font-size:10pt;">additional </font><font style="font-family:Arial;font-size:10pt;">$</font><font style="font-family:Arial;font-size:10pt;">1.2</font><font style="font-family:Arial;font-size:10pt;"> million capital contribution to us to fund a portion of our expenditures for additions to property, plant and equipment. </font></p><p style='margin-top:0pt; margin-bottom:0pt'><font style="font-family:Arial;font-size:10pt;margin-left:0px;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;We have entered into various other transactions with certain related parties, the amounts of which were not significant. 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Contingent Liabilities and Commitments
6 Months Ended
Jun. 30, 2012
Contingent Liabilities and Commitments [Abstract]  
CONTINGENT LIABILITIES AND COMMITMENTS
3. CONTINGENT LIABILITIES AND COMMITMENTS

 

Legal Proceedings

 

We are a party to legal, administrative, and regulatory proceedings arising in the ordinary course of business.

 

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. We believe that compliance with applicable environmental requirements is not likely to have a material adverse effect upon our financial position or results of operations.

 

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 and mercury contamination at certain natural gas metering sites. 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 mercury clean-ups in Washington. Currently, we are conducting assessment and remediation activities for mercury and other constituents to bring the sites up to Washington's current environmental standards. At June 30, 2012, we had accrued liabilities totaling approximately $6.3 million for these costs which are expected to be incurred through 2017. We are conducting environmental assessments and implementing a variety of remedial measures that may result in increases or decreases in the total estimated costs.

 

In March 2008, the EPA promulgated a new, lower National Ambient Air Quality Standard (NAAQS) for ground-level ozone. However, in September 2009, the EPA announced it would reconsider the 2008 NAAQS for ground-level ozone to ensure that the standards were clearly grounded in science, and were protective of both public health and the environment. As a result, the EPA delayed designation of new eight-hour ozone non-attainment areas under the 2008 standards until the reconsideration is complete. In January 2010, the EPA proposed to further reduce the ground-level ozone NAAQS from the March 2008 levels. In September 2011, the EPA announced that it was proceeding with required actions to implement the 2008 ozone standard and area designations. In May 2012, the EPA completed designation of new eight-hour ozone non-attainment areas. Based on the published designations, no Northwest facilities are located within the non-attainment areas. At this time, it is unknown whether future state regulatory actions associated with implementation of the 2008 ozone standard will impact our operations and increase the cost of additions to property, plant and equipment. Until any additional state regulatory actions are proposed, we are unable to estimate the cost of additions that may be required to meet this new regulation.

 

Additionally, in August 2010, the EPA promulgated National Emission Standards for hazardous air pollutants (NESHAP) regulations that will impact our operations. The emission control additions required to comply with the hazardous air pollutant regulations are estimated to include capital costs in the range of $3 million to $4 million through 2013, the compliance date.

 

In February 2010, the EPA promulgated a final rule establishing a new one-hour nitrogen dioxide (NO2) NAAQS. In February 2012, the EPA designated all areas of the country as “unclassifiable/attainment,” meaning that information available at that time did not indicate that air quality in these areas exceeded the NAAQS. Also, at that time, the EPA noted its plan to deploy an expanded NO2 monitoring network beginning in 2013. Once three years of data is collected from the new monitoring network, the EPA will reassess attainment status with the one-hour NO2 NAAQS. Until that time, the EPA or states may require ambient air quality modeling on a case by case basis to demonstrate compliance with the NO2 standard. Because we are unable to predict the outcome of the EPA's or states' future assessment using the new monitoring network, we are unable to estimate the cost of additions that may be required.

 

Safety Matters

 

Pipeline Integrity Regulations We have developed an Integrity Management Program that we believe meets the United States Department of Transportation Pipeline and Hazardous Materials Safety Administration final rule that was issued pursuant to the requirements of the Pipeline Safety Improvement Act of 2002. The rule requires gas pipeline operators to develop an integrity management program for transmission pipelines that could affect high consequence areas in the event of pipeline failure. The Integrity Management Program includes a baseline assessment plan to be completed in 2012 along with periodic reassessments to be completed within required timeframes. In meeting the integrity regulations, we have identified high consequence areas and developed our baseline assessment plan. We are on schedule to complete the required assessments within the required timeframes.

 

We estimate the cost to complete the required initial assessments and associated remediation through 2012 will be primarily capital in nature and range between $30 million and $35 million for the full year of 2012. Ongoing periodic reassessments and initial assessments of any new high consequence areas will be completed within the timeframes required by the rule. Management considers the costs associated with compliance with the rule to be prudent costs incurred in the ordinary course of business and, therefore, recoverable through our rates.

 

Other Matters

 

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

 

Summary

 

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

 

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Rate and Regulatory Matters
6 Months Ended
Jun. 30, 2012
Rate and Regulatory Matters [Abstract]  
RATE AND REGULATORY MATTERS
2. RATE AND REGULATORY MATTERS
 

Rate Case Settlement Filing

 

On April 26, 2012, the Federal Energy Regulatory Commission (FERC) unconditionally approved Northwest's Stipulation and Settlement Agreement (Settlement) filed on March 15, 2012. The supporting or non-opposing customers named in the Settlement represent approximately 99.5 percent of our long-term firm transportation and storage capacity. The Settlement specified an annual cost of service of $466.5 million and established a new general system firm transportation rate of $0.44 per dekatherm, a 7.4 percent increase over the current rate. New rates will become effective January 1, 2013, and will remain in effect for a minimum of 3 years and a maximum of 5 years.

XML 15 R2.htm IDEA: XBRL DOCUMENT v2.4.0.6
Statement of Comprehensive Income (Unaudited) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
STATEMENT OF COMPREHENSIVE INCOME        
Operating Revenues $ 106,311 $ 106,576 $ 217,683 $ 216,495
OPERATING EXPENSES:        
General and administrative 17,305 13,694 33,888 28,503
Operation and maintenance 18,561 19,096 35,416 34,983
Depreciation 23,225 22,543 46,535 45,101
Regulatory credits (115) (267) (404) (534)
Taxes, other than income taxes 4,524 4,914 9,778 10,614
Total operating expenses 63,500 59,980 125,213 118,667
Operating Income 42,811 46,596 92,470 97,828
Interest income -        
Affiliated 2 2 3 5
Other 1 1 6 1
Allowance for equity funds used during construction 506 287 719 407
Miscellaneous other (expense) income, net (83) (27) (158) (133)
Total other income - net 426 263 570 280
INTEREST CHARGES:        
Interest on long-term debt 11,109 11,109 22,219 22,219
Other interest 478 504 961 1,014
Allowance for borrowed funds used during construction (236) (133) (334) (187)
Total interest charges 11,351 11,480 22,846 23,046
NET INCOME 31,886 35,379 70,194 75,062
CASH FLOW HEDGES:        
Amortization of cash flow hedges (15) (16) (31) (31)
COMPREHENSIVE INCOME $ 31,871 $ 35,363 $ 70,163 $ 75,031
XML 16 R6.htm IDEA: XBRL DOCUMENT v2.4.0.6
Statement of Cash Flows (Unaudited) (Parenthetical) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Statement of Cash Flows [Abstract]    
Increases to property, plant and equipment $ (54,479) $ (36,850)
Changes in related accounts payable and accrued liabilities 7,332 605
Capital expenditures $ (47,147) $ (36,245)
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All rights reserved. * Version 2.1.0.1 * */ var moreDialog = null; var Show = { Default:'raw', more:function( obj ){ var bClosed = false; if( moreDialog != null ) { try { bClosed = moreDialog.closed; } catch(e) { //Per article at http://support.microsoft.com/kb/244375 there is a problem with the WebBrowser control // that somtimes causes it to throw when checking the closed property on a child window that has been //closed. So if the exception occurs we assume the window is closed and move on from there. bClosed = true; } if( !bClosed ){ moreDialog.close(); } } obj = obj.parentNode.getElementsByTagName( 'pre' )[0]; var hasHtmlTag = false; var objHtml = ''; var raw = ''; //Check for raw HTML var nodes = obj.getElementsByTagName( '*' ); if( nodes.length ){ objHtml = obj.innerHTML; }else{ if( obj.innerText ){ raw = obj.innerText; }else{ raw = obj.textContent; } var matches = raw.match( /<\/?[a-zA-Z]{1}\w*[^>]*>/g ); if( matches && matches.length ){ objHtml = raw; //If there is an html node it will be 1st or 2nd, // but we can check a little further. var n = Math.min( 5, matches.length ); for( var i = 0; i < n; i++ ){ var el = matches[ i ].toString().toLowerCase(); if( el.indexOf( '= 0 ){ hasHtmlTag = true; break; } } } } if( objHtml.length ){ var html = ''; if( hasHtmlTag ){ html = objHtml; }else{ html = ''+ "\n"+''+ "\n"+' Report Preview Details'+ "\n"+' '+ "\n"+''+ "\n"+''+ objHtml + "\n"+''+ "\n"+''; } moreDialog = window.open("","More","width=700,height=650,status=0,resizable=yes,menubar=no,toolbar=no,scrollbars=yes"); moreDialog.document.write( html ); moreDialog.document.close(); if( !hasHtmlTag ){ moreDialog.document.body.style.margin = '0.5em'; } } else { //default view logic var lines = raw.split( "\n" ); var longest = 0; if( lines.length > 0 ){ for( var p = 0; p < lines.length; p++ ){ longest = Math.max( longest, lines[p].length ); } } //Decide on the default view this.Default = longest < 120 ? 'raw' : 'formatted'; //Build formatted view var text = raw.split( "\n\n" ) >= raw.split( "\r\n\r\n" ) ? raw.split( "\n\n" ) : raw.split( "\r\n\r\n" ) ; var formatted = ''; if( text.length > 0 ){ if( text.length == 1 ){ text = raw.split( "\n" ) >= raw.split( "\r\n" ) ? raw.split( "\n" ) : raw.split( "\r\n" ) ; formatted = "

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XML 19 R7.htm IDEA: XBRL DOCUMENT v2.4.0.6
Basis of Presentation
6 Months Ended
Jun. 30, 2012
Basis of Presentation [Abstract]  
BASIS OF PRESENTATION
1. BASIS OF PRESENTATION

 

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

 

       Northwest is indirectly owned by Williams Partners L.P. (WPZ), a publicly traded Delaware limited partnership, which is consolidated by The Williams Companies, Inc. (Williams). As of June 30, 2012, Williams holds an approximate 68 percent interest in WPZ, comprised of an approximate 66 percent limited partner interest and all of WPZ's 2 percent general partner interest.

 

General

 

       The accompanying interim financial statements do not include all the notes in our annual financial statements, and therefore, should be read in conjunction with the financial statements and notes thereto in our 2011 Annual Report on Form 10-K. The accompanying unaudited financial statements include all adjustments both normal recurring and others which, in the opinion of our management, are necessary to present fairly our interim financial statements.

 

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.

 

       Certain reclassifications from Administrative and general to Operations and maintenance, related to certain employee related expenses of $0.9 million and $1.5 million for the three and six months ended June 30, 2011, respectively, have been made to conform to the presentation utilized in the 2012 Statement of Comprehensive Income.

 

XML 20 R3.htm IDEA: XBRL DOCUMENT v2.4.0.6
Balance Sheet (Unaudited) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
CURRENT ASSETS:    
Cash $ 240 $ 37
Receivables:    
Trade 36,147 38,245
Affiliated companies 0 2,250
Advances to affiliate 61,462 52,024
Materials and supplies, less reserves of $59 at June 30, 2012 and $816 at December 31, 2011 10,049 10,488
Exchange gas due from others 1,145 3,441
Prepayments and other 4,447 3,469
Total current assets 113,490 109,954
PROPERTY, PLANT AND EQUIPMENT, at cost 3,120,625 3,068,915
Less-Accumulated depreciation 1,128,771 1,076,943
Total property, plant and equipment, net 1,991,854 1,991,972
OTHER ASSETS:    
Deferred charges 8,742 10,250
Regulatory assets 59,394 59,605
Total other assets 68,136 69,855
Total assets 2,173,480 2,171,781
Payables:    
Trade 16,848 13,634
Affiliated companies 13,441 8,812
Accrued liabilities:    
Taxes, other than income taxes 11,622 10,252
Interest 4,045 4,045
Exchange gas due to others 2,126 10,472
Exchange gas offset 2,049 2,241
Other 3,940 5,006
Total current liabilities 54,071 54,462
LONG-TERM DEBT 693,929 693,831
DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES 105,540 103,041
CONTINGENT LIABILITIES AND COMMITMENTS (Note 3)      
OWNER'S EQUITY:    
Owner's capital 1,054,292 1,051,962
Retained earnings 265,403 268,209
Accumulated other comprehensive income 245 276
Total owner's equity 1,319,940 1,320,447
Total liabilities and owner's equity $ 2,173,480 $ 2,171,781
XML 21 R17.htm IDEA: XBRL DOCUMENT v2.4.0.6
Financial Instruments (Details Textual) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Fair Value, Inputs, Level 2 [Member]
   
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Long-term Debt, Fair Value $ 826.7  
Carrying (Reported) Amount, Fair Value Disclosure [Member]
   
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Long-term Debt, Fair Value 693.9 693.8
Estimate of Fair Value, Fair Value Disclosure [Member]
   
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Long-term Debt, Fair Value $ 826.7 $ 826.3
XML 22 R1.htm IDEA: XBRL DOCUMENT v2.4.0.6
Document and Entity Information
6 Months Ended
Jun. 30, 2012
Document and Entity Information [Abstract]  
Entity Registrant Name Northwest Pipeline GP
Entity Central Index Key 0000110019
Document Type 10-Q
Document Period End Date Jun. 30, 2012
Amendment Flag false
Document Fiscal Year Focus 2012
Document Fiscal Period Focus Q2
Current Fiscal Year End Date --12-31
Entity Well-known Seasoned Issuer No
Entity Voluntary Filers No
Entity Current Reporting Status Yes
Entity Filer Category Non-accelerated Filer
Entity Common Stock, Shares Outstanding 0
XML 23 R18.htm IDEA: XBRL DOCUMENT v2.4.0.6
Transactions with Affiliates (Details Textual) (USD $)
3 Months Ended 6 Months Ended 6 Months Ended 1 Months Ended 6 Months Ended
Jun. 30, 2012
Employees
Jun. 30, 2011
Jun. 30, 2012
Employees
Jun. 30, 2011
Dec. 31, 2011
Jun. 30, 2012
Affiliated Entity [Member]
Jun. 30, 2011
Affiliated Entity [Member]
Jul. 31, 2012
Williams Partners L.P. [Member]
Jun. 30, 2012
Williams Partners L.P. [Member]
Jun. 30, 2011
Williams Partners L.P. [Member]
Jun. 30, 2012
Northwest Pipeline Services LLC [Member]
Jun. 30, 2011
Northwest Pipeline Services LLC [Member]
Related Party Transaction [Line Items]                        
Advances to affiliate $ 61,462,000   $ 61,462,000   $ 52,024,000       $ 61,500,000 $ 52,000,000    
Related Party Transaction, Rate     0.01%                  
General and administrative 17,305,000 13,694,000 33,888,000 28,503,000   21,300,000 18,000,000          
Entity Number of Employees 0   0                  
Labor and Related Expense                     33,700,000 30,900,000
Operating Revenues 106,311,000 106,576,000 217,683,000 216,495,000     12,100,000          
Distributions paid     73,000,000 64,000,000       34,500,000 73,000,000 64,000,000    
Capital contributions from parent     $ 2,330,000 $ 3,500,000       $ 1,200,000 $ 2,300,000 $ 3,500,000    
XML 24 R4.htm IDEA: XBRL DOCUMENT v2.4.0.6
Balance Sheet (Unaudited) (Parenthetical) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Receivables:    
Reserves, materials and supplies $ 59 $ 816
XML 25 R12.htm IDEA: XBRL DOCUMENT v2.4.0.6
Transactions with Affiliates
6 Months Ended
Jun. 30, 2012
Transactions with Affiliates [Abstract]  
TRANSACTIONS WITH AFFILIATES
6. TRANSACTIONS WITH AFFILIATES

 

We are a participant in WPZ's cash management program, and we make advances to and receive advances from WPZ. At June 30, 2012 and December 31, 2011, the advances due to us by WPZ totaled approximately $61.5 million and $52.0 million, respectively. These advances are represented by demand notes. The interest rate on these intercompany demand notes is based upon the daily overnight investment rate paid on WPZ's excess cash at the end of each month, which was approximately 0.01 percent at June 30, 2012. The interest income from these advances was minimal during the six months ended June 30, 2012 and June 30, 2011. Such interest income is included in “Other Income – net: Interest income – Affiliated” on the accompanying Statement of Comprehensive Income.

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 six months ended June 30, 2012 and 2011, were $21.3 million and $18.0 million, respectively. These expenses are included in “General and administrative expense” on the accompanying Statement of Comprehensive Income. Management considers the cost of these services to be reasonable.

We have no employees. Services are provided to us by an affiliate, Northwest Pipeline Services LLC (NPS). Pursuant to an administrative services agreement, NPS provides personnel, facilities, goods, and equipment not otherwise provided by us that are necessary to operate our business. 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 six months ended June 30, 2012 and 2011, we were billed $33.7 million and $30.9 million, respectively. Such expenses are primarily included in “General and administrative” and “Operation and maintenance” expenses on the accompanying Statement of Comprehensive 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 six months ended June 30, 2012 were minimal. Combined revenues for the six months ended 2011 were $12.1 million. The reduction in revenues from 2011 is a result of Williams' spin-off of its former exploration and production business, which was completed on December 31, 2011. These revenues, associated with transportation transactions, are now reflected with the revenues from outside parties.

During the six months ended June 30, 2012 and 2011, we declared and paid equity distributions to our parent of $73.0 million and $64.0 million, respectively. During July 2012, we declared and paid equity distributions of $34.5 million to our parent.

During the six months ended June 30, 2012 and 2011, we received contributions of $2.3 million and $3.5 million, respectively, from our parent to fund a portion of our expansion related expenditures for additions to property, plant, and equipment. In July 2012, our parent authorized an additional $1.2 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.

XML 26 R11.htm IDEA: XBRL DOCUMENT v2.4.0.6
Financial Instruments
6 Months Ended
Jun. 30, 2012
Financial Instruments [Abstract]  
FINANCIAL INSTRUMENTS
5. FINANCIAL INSTRUMENTS

 

Fair Value of Financial Instruments

 

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

 

Cash and advances to affiliate - The carrying amounts of these items approximates their fair value.

 

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 $693.9 million and $826.7 million, respectively, at June 30, 2012, and $693.8 million and $826.3 million, respectively, at December 31, 2011.

 

XML 27 R15.htm IDEA: XBRL DOCUMENT v2.4.0.6
Contingent Liabilities and Commitments (Details Textual) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2012
Environmental Matters [Abstract]  
Accrual for Environmental Loss Contingencies $ 6.3
Minimum [Member]
 
Environmental Matters [Abstract]  
Estimated Capital Costs For Compliance With Hazardous Air Pollutant Regulations 3
Pipeline Integrity Regulations [Abstract]  
Cost To Complete Required Initial Assessments 30
Maximum [Member]
 
Environmental Matters [Abstract]  
Estimated Capital Costs For Compliance With Hazardous Air Pollutant Regulations 4
Pipeline Integrity Regulations [Abstract]  
Cost To Complete Required Initial Assessments $ 35
XML 28 R13.htm IDEA: XBRL DOCUMENT v2.4.0.6
Basis of Presentation (Details Textual) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Basis of Presentation [Abstract]      
Parent, total ownership percentage   68.00%  
Parent, limited partner ownership percentage   66.00%  
Parent, general partner ownership percentage   2.00%  
Prior Period Reclassification Adjustment [Abstract]      
Prior Period Reclassification Adjustment $ 0.9   $ 1.5
XML 29 R14.htm IDEA: XBRL DOCUMENT v2.4.0.6
Rate and Regulatory Matters (Details Textual) (USD $)
In Millions, unless otherwise specified
1 Months Ended 6 Months Ended
Apr. 30, 2012
Jun. 30, 2012
Minimum [Member]
Jun. 30, 2012
Maximum [Member]
Settlement Agreement [Line Items]      
Percentage Of Capacity Representing Non Opposing Customers 99.50%    
Annual Cost Of Service $ 466.5    
General System Firm Transportation Rate Per Unit 0.44    
General System Firm Transportation Rate Increase 7.40%    
Duration Of Effective Period Of Rate Case Settlement   3 years 5 years
XML 30 R16.htm IDEA: XBRL DOCUMENT v2.4.0.6
Debt and Financing Arrangements (Details Textual) (USD $)
Jun. 30, 2012
Line of Credit Facility [Line Items]  
Line of Credit Facility, Maximum Borrowing Capacity $ 400,000,000
Letters of Credit Outstanding, Amount 0
$2 billion unsecured credit facility [Member] | Williams Partners L.P. [Member]
 
Line of Credit Facility [Line Items]  
Line of Credit Facility, Maximum Borrowing Capacity 2,000,000,000
Line of Credit Facility, Amount Outstanding 345,000,000
$2 billion unsecured credit facility [Member] | Letter Of Credit Capacity [Member] | Williams Partners L.P. [Member]
 
Line of Credit Facility [Line Items]  
Line of Credit Facility, Maximum Borrowing Capacity $ 1,300,000,000
XML 31 R5.htm IDEA: XBRL DOCUMENT v2.4.0.6
Statement of Cash Flows (Unaudited) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
OPERATING ACTIVITIES:    
Net income $ 70,194 $ 75,062
Adjustments to reconcile net income to net cash provided by (used in) operating activities:    
Depreciation 46,535 45,101
Regulatory credits (404) (534)
Amortization of deferred charges and credits 795 859
Allowance for equity funds used during construction (719) (407)
Changes in current assets and liabilities:    
Trade accounts receivable 2,098 4,541
Affiliated receivables 2,250 84
Exchange gas due from others 2,296 7,780
Materials and supplies 439 499
Other current assets (978) (1,320)
Trade accounts payable (2,465) (2,620)
Affiliated payables 4,695 3,650
Exchange gas due to others (2,295) (7,781)
Other accrued liabilities 303 2,821
Changes in noncurrent assets and liabilities:    
Deferred charges (954) (1,130)
Other deferred credits 2,639 2,748
Net cash provided by operating activities 124,429 129,353
FINANCING ACTIVITIES:    
Capital contributions from parent 2,330 3,500
Distributions paid (73,000) (64,000)
Other (1,719) (1,424)
Net cash used in financing activities (72,389) (61,924)
Property, plant and equipment -    
Capital expenditures (47,147) (36,245)
Proceeds from sales 4,748 1,150
Advances to affiliates (9,438) (32,332)
Net cash used in investing activities (51,837) (67,427)
NET INCREASE IN CASH 203 2
CASH AT BEGINNING OF PERIOD 37 5
CASH AT END OF PERIOD $ 240 $ 7
XML 32 R10.htm IDEA: XBRL DOCUMENT v2.4.0.6
Debt and Financing Arrangements
6 Months Ended
Jun. 30, 2012
Debt and Financing Arrangement [Abstract]  
DEBT AND FINANCING ARRANGEMENT
4. DEBT AND FINANCING ARRANGEMENT
 

Credit Facility

       

Total letter of credit capacity available to WPZ under the $2.0 billion credit facility is $1.3 billion. At June 30, 2012, WPZ had a total of $345 million outstanding under the credit facility and no letters of credit have been issued. At June 30, 2012, the full $400 million under the credit facility was available to us.

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