Related-Party Transactions

3 Months Ended

Mar. 31, 2017

Questar Gas engages in related party-transactions primarily with affiliates Wexpro, for cost-of-service natural gas supply, and Questar Pipeline, for transportation and storage services. Questar Gas' receivables and payables balances with affiliates are settled based on contractual terms or on a monthly basis, depending on the nature of the underlying transactions. A discussion of significant related party transactions follows.

Dominion Questar and other affiliates provide accounting, legal, finance and certain administrative and technical services to Questar Gas. These costs are included in other operations and maintenance in the Statements of Income. The administrative charges are generally allocated based on each affiliated company's proportional share of revenues less product costs; property, plant and equipment; and labor costs. Management believes that the allocation method is reasonable. Questar Gas provides certain services to related parties, including technical services. The billed amounts of these services are allocated based on the specific nature of the charges. Management believes that the allocation methods are reasonable. The amounts of these services follow:



	Three Months Ended
	March 31,
	2017		2016
(millions)
Affiliated operator service fee⁽¹⁾	$	75.9	$	79.8
Transportation and storage services from affiliates⁽¹⁾	19.6		19.2
Services provided by related parties	10.8		13.5
Services provided to related parties	1.5		0.5

(1) The costs of these services were included in cost of sales in Questar Gas' Statements of Income.

Questar Gas participates in certain Dominion Questar benefit plans as described in Note 15 to the Financial Statements in Questar Gas' Annual Report on Form 10-K for the year ended December 31, 2016. At March 31, 2017 and December 31, 2016, amounts due from Dominion Questar associated with the Dominion Questar Corporation Retirement Plan and included in receivables from affiliates in the Balance Sheets were $100.3 million and $87.8 million, respectively. At March 31, 2017 and December 31, 2016, Questar Gas' amounts due to Dominion Questar associated with the Dominion Questar Corporation Umbrella Health Plan and included in payables to affiliates in the Balance Sheets were $13.1 million and $13.0 million, respectively.

The Dominion Questar Combination resulted in merger and restructuring costs of $0.3 million charged from Dominion Questar for the three months ended March 31, 2017. There were no merger and restructuring costs for the same prior year periods. These costs primarily consist of employee related costs allocated to Questar Gas and are included in other operations and maintenance in Questar Gas' Statements of Income.

Questar Gas had no balance under the IRCA with Dominion as of March 31, 2017 and a $48.0 million balance at December 31, 2016. The weighted-average interest rate for these borrowing was 1.04% as of December 31, 2016. Interest charges related to Questar Gas' total borrowings from Dominion and Dominion Questar were immaterial for the three months ended March 31, 2017 and $0.3 million for the three months ended March 31, 2016.

In March 2017, Questar Gas entered into agreements, at rates and on terms and conditions that are subject to regulation by FERC, with Questar Pipeline to extend transportation services through 2027. Under these agreements, Questar Gas will pay Questar Pipeline approximately $55 million annually.

Also in March 2017, Questar Gas extended a storage contract, at rates and on terms and conditions that are subject to regulation by FERC, with Questar Pipeline through 2022. Under this extension, Questar Gas will pay Questar Pipeline approximately $2 million annually.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

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