# notes_to_financial_statements_122_1_duration

entity_id: C000628
filing_name: Great_Lakes_Gas_Transmission_Limited_Partnership_form2_Q4_1743801937
publication_time: 2025-04-04 21:25:37.000000
start_date: 2024-01-01
end_date: 2024-12-31
disclosure_of_important_disclosures_regarding_the_financial_statements_text_block:
  <div style="margin-bottom:7pt;text-align:justify"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">(1) DESCRIPTION OF BUSINESS</span></div><div style="margin-bottom:7pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Great Lakes Gas Transmission Limited Partnership (the Partnership) is a Delaware limited partnership that owns 2,115 miles of natural gas pipeline system, which transports natural gas for delivery to wholesale customers in the midwestern and northeastern United States (U.S.) and eastern Canada. The partners’ ownership percentages in the Partnership at December 31, 2024 were as follows:</span></div><div style="margin-bottom:7pt;padding-left:18pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:95.386%"><tr><td style="width:1.0%"/><td style="width:84.391%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:13.409%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">Ownership<br/>percentage</span></td></tr><tr><td colspan="3" style="border-top:1pt solid #0d2e82;padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">General Partners:</span></td><td colspan="3" style="border-top:1pt solid #0d2e82;padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">TransCanada GL LLC (TCGL)</span></td><td colspan="3" style="padding:2px 1pt;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">46.45</span></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">TC PipeLines, LP (TCP)</span></td><td colspan="3" style="padding:2px 1pt;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">46.45</span></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">Limited Partner:</span></td><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">TransCanada American Investments Ltd (TAIL) (the Limited Partner Interest)</span></td><td colspan="3" style="padding:2px 1pt;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">7.10</span></td></tr></table></div><div style="margin-bottom:7pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">TAIL, TCGL, and TCP are wholly owned indirect subsidiaries of TC Energy Corporation (TC Energy).</span></div><div style="margin-bottom:7pt;text-align:justify"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">a.</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:8.84pt">Basis of Presentation</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The accompanying financial statements were prepared in conformity with the accounting practices prescribed by the Federal Energy Regulatory Commission (FERC) as set forth in its applicable Uniform System of Accounts and published accounting releases, which is a comprehensive basis of accounting other than the U.S. Generally Accepted Accounting Principles (GAAP). The most significant differences between GAAP and the financial statements presented herein are the inclusion of an income tax provision as well as classifications of certain accounts on the balance sheets, statements of income and statements of cash flows. Certain prior year amounts have been reclassified to conform to the current year presentation.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">b.</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:8.24pt">Use of Estimates</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses as well as the disclosure of contingent assets and liabilities during the reported period. Although management believes these estimates are reasonable, actual results could differ from these estimates in the financial statements and accompanying notes.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">c.</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:8.84pt">Trade Accounts Receivable</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Trade accounts receivable are recorded at the invoiced amount and do not bear interest, except for those receivables subject to late charges. The Partnership maintains an allowance for credit losses for estimated losses on accounts receivable, if it is determined the Partnership will not collect all or part of the outstanding receivable balance. The allowance for credit loss is a valuation account deducted from the amortized cost basis to present the net amount expected to be collected. The estimate of expected credit losses includes expected recoveries of amounts previously written off as well as amounts currently expected to be written off. The Partnership did not recognize any allowances for credit losses and no accounts were written off as of December 31, 2024 and 2023.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">d.</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:8.24pt">Natural Gas Imbalances</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Natural gas imbalances occur when the actual amount of natural gas delivered to or received from a pipeline system differs from the amount of natural gas scheduled to be delivered or received. The Partnership values these imbalances due to or from shippers and interconnecting parties at current index prices. Imbalances are settled in-kind, subject to the terms of the Partnership’s tariff.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Imbalances due from others are reported on the balance sheets as Miscellaneous Current and Accrued Assets (174). Imbalances owed to others are reported on the balance sheets as </span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Miscellaneous Current and Accrued Liabilities (242). In addition, the Partnership classifies all imbalances as current as the Partnership expects to settle them within a year.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">e.</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:8.84pt">Materials and Supplies</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The Partnership’s inventories primarily consist of materials and supplies and are carried at the lower of weighted average cost or net realizable value.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">f.</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:11.29pt">Property, Plant, and Equipment</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Property, plant, and equipment are recorded at their original cost of construction. For assets the Partnership constructs, direct costs, such as labor and materials, and indirect costs, such as overhead, interest, and an equity return component on regulated businesses as allowed by the FERC, are capitalized. The Partnership capitalizes major units of property replacements or improvements and expenses minor items.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The Partnership uses the composite (group) method to depreciate property, plant, and equipment. Under this method, assets with similar lives and characteristics are grouped and depreciated as one asset group. The depreciation rate is applied to the total cost of the group until its net book value equals its salvage value. All asset groups are depreciated using the depreciation rates approved by FERC in the Partnership’s last rate proceeding. A substantial portion of the Partnership’s principal operating assets are being depreciated at an annual rate of 1.27%. The remaining assets are depreciated at annual rates ranging from 2.33% to 20.00% per year. Using these rates, the remaining depreciable life of these assets ranges from less than 1 year to 55 years. Depreciation rates are reevaluated each time the Partnership files with the FERC for a change in its transportation service rates.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The Partnership collects estimated future removal costs related to its transmission facilities in its current rates (also known as “negative salvage”). Estimated costs associated with the future removal of transmission facilities are collected through depreciation as allowed by the FERC. </span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">When property, plant, and equipment are retired, the Partnership charges accumulated depreciation and amortization for the original cost of the assets in addition to the cost to remove, sell, or dispose of the assets, less their salvage value. The Partnership does not recognize a gain or loss unless an entire operating unit is sold or retired. The Partnership includes gains or losses on dispositions of operating units in income.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The Partnership capitalizes the carrying cost on funds invested in the construction of long-lived assets. This carrying cost includes a return on the investment financed by debt and equity allowance for funds used during construction (AFUDC). AFUDC is recorded based on the Partnership’s average cost of debt and equity. Capitalized carrying costs for AFUDC debt and equity are reflected as an increase in the cost of the asset on the balance sheets. </span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Capitalized AFUDC debt amounts are included as a reduction of interest and debt expense in the statements of income. Capitalized AFUDC equity amounts are included as other income in the statements of income and is a non-cash expenditure adjustment in the operating cash flows of the statements of cash flow. Debt amounts capitalized during the years ended December 31, 2024 and 2023 were $0.3 million and $0.1 million, respectively. Equity amounts capitalized during the years ended December 31, 2024 and 2023 were $3.4 million and $0.9 million, respectively. Amounts included in construction work in progress are not amortized until transferred into service.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">g.</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:8.24pt">Revenue Recognition</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The Partnership’s revenues are generated from contractual arrangements for committed capacity and from transportation of natural gas, which are treated as a single performance obligation. For the years ended December 31, 2024 and 2023, effectively all the Partnership’s revenues were from capacity arrangements and transportation contracts with customers.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Revenues earned from firm contracted capacity arrangements are recognized over the term of the contract, regardless of the amount of natural gas that is transported. Transportation revenues for interruptible or volumetric-based services are recognized when the service is performed. The Partnership utilizes the practical expedient of recognizing revenue as invoiced. In the application of the right to invoice practical expedient, the Partnership's revenues from regulated capacity arrangements are recognized based on rates specified in the contract. Therefore, the amount invoiced, which includes the capacity contracted and variable volume of natural gas transported, corresponds directly to the value the customer received. Revenues are invoiced and paid on a monthly basis.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The Partnership’s pipeline systems do not take ownership of the natural gas that is transported for customers. Revenues from contracts with customers are recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. The Partnership’s accounts receivable primarily consist of amounts due from customers, as reported under Customer Accounts Receivable (142) and Accounts Receivable from Associated Companies (146) in the balance sheet. Additionally, the Partnership’s accounts receivable represents the Partnership’s unconditional right to consideration for services completed which includes billed and unbilled accounts.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The Partnership's pipeline systems are subject to FERC regulations and, as a result, a portion of revenues collected may be subject to refund if invoiced during an interim period when a rate proceeding is ongoing. Allowances for these potential refunds are recognized using management's best estimate based on the facts and circumstances of the proceeding. Any allowances that are recognized during the proceeding process are refunded or retained, as applicable, at the time a regulatory decision becomes final. As of December 31, 2024 and 2023, there are no refund provisions reflected in these financial statements.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">h.</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:8.24pt">Asset Retirement Obligation</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The Partnership accounts for asset retirement obligations pursuant to the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 410-20, </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:400;line-height:120%">Asset Retirement Obligations</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">. ASC 410-20 requires the Partnership to record the fair value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development, and/or normal use of the assets. ASC 410-20 also requires the Partnership to record a corresponding asset that is depreciated over the life of the asset. Subsequent to the initial measurement of the asset retirement obligation, the obligation is to be adjusted at the end of each period to reflect the passage of time and changes in the estimated future cash flows underlying the obligation.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The fair value of a liability for an asset retirement obligation is recorded during the period in which the liability is incurred and if a reasonable estimate of fair value can be made. The Partnership has determined that asset retirement obligations exist for certain of its transmission assets; however, the fair value of the obligations cannot be determined because the end of the transmission system's life is not determinable with the degree of accuracy necessary to currently establish a liability for the obligations.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The Partnership has determined it has legal obligations associated with its natural gas pipelines and related transmission facilities. The obligations relate primarily to purging and sealing the pipelines if they are abandoned. The Partnership is also required to operate and maintain its natural gas pipeline system and intends to do so as long as supply and demand for natural gas exists, which the Partnership expects for the foreseeable future. Therefore, the Partnership believes its natural gas pipeline system assets have indeterminate lives and, accordingly, has recorded no asset retirement obligation as of December 31, 2024 and 2023. The Partnership continues to evaluate its asset retirement obligations and future developments that could impact amounts it records.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">i.</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:11.9pt">Income Taxes</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Income taxes are recorded in accordance with the Revised Policy Statement on Income Tax Allowances permitting the accrual of income taxes on pass-through entities and associated taxes accrued are treated as deemed contributions/distributions recorded in Other Paid in Capital. Deferred income taxes are recognized for differences between the financial reporting and tax basis of assets and liabilities at enacted statutory tax rates in effect for the years in which the differences are expected to reverse. Actual income taxes could vary from these estimates due to future changes in income tax law or results from the final review of tax returns by federal or state tax authorities.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The Partnership uses the asset and liability method of accounting for income taxes. This method requires the recognition of deferred income tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates at the balance sheet date that are anticipated to apply to taxable income in the years which temporary differences are expected to be recovered or settled. Changes to these balances are recognized in income in the period during which they occur, except for changes in balances subject to rate-regulated accounting, which are recorded as regulatory liabilities or assets. Unamortized deferred investment tax credits are amortized over the regulatory life of the assets in rates. The statute of limitations in each of the state jurisdictions in which the Partnership operates remain open until the years are settled for federal income tax purposes, at which time amended state income tax returns reflecting all federal income tax adjustments are filed. As of December 31, 2024, there were no state income tax audits in progress. </span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">j.</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:11.9pt">Fair Value Measurements</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">For related party and trade accounts receivables, accounts payable and certain accrued expenses, the carrying amount approximates fair value due to the short maturities of these instruments. For long-term debt instruments, fair value is estimated based upon market values (if applicable) or on the current interest rates available to the Partnership for debt with similar terms and remaining maturities. Judgment is required in developing these estimates.</span></div><div style="margin-bottom:7pt;text-align:justify"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">(3) COMMITMENTS AND CONTINGENCIES</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">a.</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:8.84pt">Contingencies</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The Partnership is subject to various legal proceedings in the ordinary course of business. The accounting for contingencies covers a variety of business activities, including contingencies for legal and environmental liabilities. The Partnership accrues for these contingencies when the assessments indicate that it is probable that a liability has been incurred or an asset will not be recovered, and an amount can be reasonably estimated in accordance with ASC 450, </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:400;line-height:120%">Contingencies</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">. The Partnership bases these estimates on currently available facts and the </span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">estimates of the ultimate outcome or resolution. Actual results may vary from estimates resulting in an impact, positive or negative, on results of operations and cash flows. The Partnership is not aware of any contingent liabilities that would have a material adverse effect on the Partnership’s financial condition, results of operations, or cash flows.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">b.</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:8.24pt">Regulatory Matters</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The FERC regulates the rates and charges for transportation of natural gas in interstate commerce. Natural gas companies may not charge rates that have been determined to be unjust and unreasonable by the FERC. Generally, rates for interstate pipelines are based on the cost of service, including recovery of and a return on the pipeline's actual prudent historical cost investment. The rates and terms and conditions for service are found in each pipeline's FERC-approved tariff. Under its tariff, an interstate pipeline is allowed to charge for its services on the basis of stated transportation rates. Transportation rates are established periodically in FERC proceedings known as rate cases. The tariff also allows the interstate pipeline to provide services under negotiated and discounted rates.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The Partnership operates under a rate settlement approved by FERC on April 26, 2022 (2022 Settlement), which maintains the Partnership’s existing maximum transportation rates through the term of the 2022 Settlement. The 2022 Settlement contains a moratorium until October 31, 2025. The Partnership will be required to file for new rates no later than April 30, 2025, with such new rates effective no later than November 1, 2025.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">c.</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:8.84pt">Legal Proceedings</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The Partnership is not a party in any material legal proceedings as of December 31, 2024 and 2023.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">d.</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:8.24pt">Environmental Matters</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The Partnership is not aware of any material contingent liabilities with respect to compliance with applicable environmental laws and regulations.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">e.</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:8.84pt">Rights-of-Way Agreements with Native American Tribes</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The majority of the land on which the Partnership operates is leased pursuant to easements, rights-of-way and other land use rights from individual landowners, Native American tribes, governmental authorities and other third parties, the majority of which are perpetual and obtained through agreement with land owners or legal process, if necessary. Certain rights, however, are subject to renewal and, with respect to tribal land held in trust by the Bureau of Indian Affairs (BIA), approval by the applicable tribal governing authorities and the BIA. </span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">During the second quarter of 2018, rights-of-way expired for approximately 16.68 miles of the Partnership’s pipeline system on tribal land located within the Fond du Lac Reservation and Leech Lake Reservation in Minnesota and the Bad River Reservation in Wisconsin. As a result, beginning the second quarter of 2018, the Partnership began accruing the estimated costs and associated liability related to these pending agreements. </span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">While the Partnership has progressed on the renewal process, the Partnership cannot predict the full outcome of these negotiations. If the Partnership is unable to obtain new easements or rights-of-way across all or a portion of the tribal lands at reasonable rates, or at all, the Partnership may be required to acquire the necessary rights at significant cost or remove and re-route portions of the pipeline at significant capital costs and disruption to operations that could have a material adverse effect on its financial condition, results of operations and cash flows.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The Partnership acquired a tribal resolution granting consent for the right-of-way renewal with Leech Lake in the 3rd quarter of 2020. The grant of the right-of-way for 2 of 4 tracts of Leech Lake were approved in September 2023 and the remaining tracts were approved on March 26, 2024. </span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The Partnership acquired a tribal resolution granting consent for the right-of-way renewal with the Fond du Lac in the 3rd quarter of 2022. The grant of the right-of-way for the thirteen tracts of Fond du Lac were approved by BIA on April 3, 2024. </span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">On January 3, 2024, the Partnership’s Right-of-way application has been deemed completed for review by the Bad River Band of Lake Superior Tribe of Chippewa Indians (Bad River). Right-of-way negotiations are progressing with Bad River, and we are working towards reaching mutually acceptable terms and resolution.</span></div><div style="margin-bottom:7pt;text-align:justify"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">(4) INCOME TAXES</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">a.</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:8.84pt">Components of Income Taxes</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The components of income tax expense for the years ended December 31:</span></div><div style="margin-bottom:7pt;padding-left:54pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:56.845%"><tr><td style="width:1.0%"/><td style="width:52.041%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:19.842%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:3.873%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:19.844%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">2024</span></td><td colspan="3" style="border-bottom:1pt solid #0d2e82;padding:0 1pt"/><td colspan="3" style="border-bottom:1pt solid #0d2e82;padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">2023</span></td></tr><tr><td colspan="3" style="border-top:1pt solid #0d2e82;padding:0 1pt"/><td colspan="9" style="border-top:1pt solid #0d2e82;padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:400;line-height:112%">(In thousands)</span></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Current expense </span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 13pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Federal</span></td><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">23,052</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="3" style="padding:0 1pt"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">23,068 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 13pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">State</span></td><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">4,237</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">4,616 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="border-top:1pt solid #330e74;padding:2px 1pt 2px 25pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Total current expense </span></td><td style="border-top:1pt solid #330e74;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">$</span></td><td style="border-top:1pt solid #330e74;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">27,289</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> </span></td><td style="border-top:1pt solid #330e74;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="3" style="border-top:1pt solid #330e74;padding:0 1pt"/><td style="border-top:1pt solid #330e74;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">$</span></td><td style="border-top:1pt solid #330e74;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">27,684 </span></td><td style="border-top:1pt solid #330e74;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="display:none"/><td colspan="3" style="display:none"/><td colspan="3" style="display:none"/><td colspan="3" style="display:none"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Deferred expense </span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 13pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Federal</span></td><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">9,717</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="3" style="padding:0 1pt"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">4,359 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 13pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">State</span></td><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">1,426</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">944 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="border-top:1pt solid #330e74;padding:2px 1pt 2px 25pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Total deferred expense</span></td><td style="border-top:1pt solid #330e74;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">$</span></td><td style="border-top:1pt solid #330e74;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">11,143</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> </span></td><td style="border-top:1pt solid #330e74;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="3" style="border-top:1pt solid #330e74;padding:0 1pt"/><td style="border-top:1pt solid #330e74;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">$</span></td><td style="border-top:1pt solid #330e74;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">5,303 </span></td><td style="border-top:1pt solid #330e74;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="display:none"/><td colspan="3" style="display:none"/><td colspan="3" style="display:none"/><td colspan="3" style="display:none"/></tr><tr><td colspan="3" style="border-bottom:1pt solid #000;border-top:1pt solid #330e74;padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Total income tax expense </span></td><td style="border-bottom:1pt solid #000;border-top:1pt solid #330e74;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">$</span></td><td style="border-bottom:1pt solid #000;border-top:1pt solid #330e74;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">38,432</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> </span></td><td style="border-bottom:1pt solid #000;border-top:1pt solid #330e74;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="3" style="border-bottom:1pt solid #000;border-top:1pt solid #330e74;padding:0 1pt"/><td style="border-bottom:1pt solid #000;border-top:1pt solid #330e74;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">$</span></td><td style="border-bottom:1pt solid #000;border-top:1pt solid #330e74;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">32,987 </span></td><td style="border-bottom:1pt solid #000;border-top:1pt solid #330e74;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr></table></div><div style="margin-bottom:7pt;padding-left:36pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Current income taxes are settled as a contribution of capital and recorded in Other Paid in Capital (FERC Account No. 211).</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">b.</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:8.24pt">Effective Tax Rate Reconciliation</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Book income (loss) before income taxes as shown is reflective of the full year’s activity for the periods ending December 31, 2023, and December 31, 2024. Reconciliation of the statutory U.S. federal income tax rate to the Partnership's effective income tax rate is as follows at December 31:</span></div><div style="margin-bottom:7pt;padding-left:54pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:87.053%"><tr><td style="width:1.0%"/><td style="width:67.959%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:12.746%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:2.147%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:12.748%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">2024</span></td><td colspan="3" style="border-bottom:1pt solid #0d2e82;padding:0 1pt"/><td colspan="3" style="border-bottom:1pt solid #0d2e82;padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">2023</span></td></tr><tr><td colspan="3" style="border-top:1pt solid #0d2e82;padding:0 1pt"/><td colspan="9" style="border-top:1pt solid #0d2e82;padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:400;line-height:112%">(In thousands)</span></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Book Income Before Income Taxes</span></td><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">165,022</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="3" style="padding:0 1pt"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">129,373 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr style="height:15pt"><td colspan="3" style="border-top:1pt solid #330e74;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #330e74;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #330e74;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #330e74;padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Tax Expense at statutory federal income tax rate</span></td><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">34,655</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="3" style="padding:0 1pt"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">27,168 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Increases/(decreases) in taxes resulting from:</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 13pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">State income taxes, net of federal income tax benefits</span></td><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">4,474</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">4,194 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 13pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Other, net</span></td><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">(697)</span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">(117)</span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="border-top:1pt solid #330e74;padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Total Income Tax Expense / (Benefit)</span></td><td style="border-top:1pt solid #330e74;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">$</span></td><td style="border-top:1pt solid #330e74;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">38,432</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> </span></td><td style="border-top:1pt solid #330e74;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="3" style="border-top:1pt solid #330e74;padding:0 1pt"/><td style="border-top:1pt solid #330e74;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">$</span></td><td style="border-top:1pt solid #330e74;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">31,245 </span></td><td style="border-top:1pt solid #330e74;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="border-top:1pt solid #000;padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Effective tax rate</span></td><td colspan="3" style="border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">23.3%</span></td><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">24.2%</span></td></tr></table></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">c.</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:8.84pt">Deferred Tax Assets and Liabilities</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The income tax effects of temporary differences that gave rise to the net deferred income tax liability is as follows at December 31:</span></div><div style="margin-bottom:7pt;padding-left:54pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:70.684%"><tr><td style="width:1.0%"/><td style="width:62.900%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:15.742%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:2.115%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:15.743%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">2024</span></td><td colspan="3" style="border-bottom:1pt solid #0d2e82;padding:0 1pt"/><td colspan="3" style="border-bottom:1pt solid #0d2e82;padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">2023</span></td></tr><tr><td colspan="3" style="border-top:1pt solid #0d2e82;padding:0 1pt"/><td colspan="9" style="border-top:1pt solid #0d2e82;padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:400;line-height:112%">(In thousands)</span></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">Deferred tax liabilities</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 13pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Property, plant &amp; equipment</span></td><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">95,984</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="3" style="padding:0 1pt"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">88,654 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 13pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Regulatory assets</span></td><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">406</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">153 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 13pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Other</span></td><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">201</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">237 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="border-top:1pt solid #330e74;padding:2px 1pt 2px 25pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Total deferred tax liabilities</span></td><td style="border-top:1pt solid #330e74;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">$</span></td><td style="border-top:1pt solid #330e74;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">96,591</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> </span></td><td style="border-top:1pt solid #330e74;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="3" style="border-top:1pt solid #330e74;padding:0 1pt"/><td style="border-top:1pt solid #330e74;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">$</span></td><td style="border-top:1pt solid #330e74;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">89,044 </span></td><td style="border-top:1pt solid #330e74;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr style="height:15pt"><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">Deferred tax assets</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 13pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Non Utility property, plant &amp; equipment</span></td><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">24,186</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="3" style="padding:0 1pt"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">28,162 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 13pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Other</span></td><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">2,994</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">3,673 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="border-top:1pt solid #330e74;padding:2px 1pt 2px 25pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Total deferred tax assets</span></td><td style="border-top:1pt solid #330e74;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">$</span></td><td style="border-top:1pt solid #330e74;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">27,180</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> </span></td><td style="border-top:1pt solid #330e74;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="3" style="border-top:1pt solid #330e74;padding:0 1pt"/><td style="border-top:1pt solid #330e74;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">$</span></td><td style="border-top:1pt solid #330e74;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">31,835 </span></td><td style="border-top:1pt solid #330e74;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr style="height:15pt"><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="border-bottom:1pt solid #0a2299;border-top:1pt solid #0d2e82;padding:2px 1pt;text-align:left;text-indent:6.75pt;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Net Deferred Tax Liability</span></td><td style="border-bottom:1pt solid #0a2299;border-top:1pt solid #330e74;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#0a2299;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">$</span></td><td style="border-bottom:1pt solid #0a2299;border-top:1pt solid #330e74;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#0a2299;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">69,411</span><span style="color:#0a2299;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%"> </span></td><td style="border-bottom:1pt solid #0a2299;border-top:1pt solid #330e74;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="border-bottom:1pt solid #0a2299;border-top:1pt solid #330e74;padding:0 1pt"/><td style="border-bottom:1pt solid #0a2299;border-top:1pt solid #330e74;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">$</span></td><td style="border-bottom:1pt solid #0a2299;border-top:1pt solid #330e74;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">57,209 </span></td><td style="border-bottom:1pt solid #0a2299;border-top:1pt solid #330e74;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr></table></div><div style="margin-bottom:7pt;text-align:justify"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">(5) LONG-TERM DEBT</span></div><div style="margin-bottom:7pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The Partnership’s outstanding long-term debt consisted of the following at December 31:</span></div><div style="margin-bottom:7pt;padding-left:18pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:82.142%"><tr><td style="width:1.0%"/><td style="width:61.218%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:17.740%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:17.742%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:112%">Year Ending</span></td><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">2024</span></td><td colspan="3" style="border-bottom:1pt solid #0d2e82;padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">2023</span></td></tr><tr><td colspan="3" style="border-top:1pt solid #0d2e82;padding:0 1pt"/><td colspan="6" style="border-top:1pt solid #0d2e82;padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:400;line-height:112%">(In thousands)</span></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">6.95% Series B Senior Notes due 2028</span></td><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">44,000</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">55,000 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">8.08% Senior Notes due 2030</span></td><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">60,000</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">70,000 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="border-top:1pt solid #0d2e82;padding:2px 1pt 2px 7pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Total</span></td><td style="border-top:1pt solid #330e74;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">$</span></td><td style="border-top:1pt solid #330e74;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">104,000</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> </span></td><td style="border-top:1pt solid #330e74;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td style="border-top:1pt solid #330e74;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">$</span></td><td style="border-top:1pt solid #330e74;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">125,000 </span></td><td style="border-top:1pt solid #330e74;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Less: Current maturities of long-term debt</span></td><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#0a2299;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">21,000</span><span style="color:#0a2299;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%"> </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">21,000 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="border-bottom:1pt solid #0a2299;border-top:1pt solid #0d2e82;padding:2px 1pt;text-align:left;text-indent:6.75pt;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Total long-term debt, net</span></td><td style="border-bottom:1pt solid #0a2299;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#0a2299;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">$</span></td><td style="border-bottom:1pt solid #0a2299;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#0a2299;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">83,000</span><span style="color:#0a2299;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%"> </span></td><td style="border-bottom:1pt solid #0a2299;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td style="border-bottom:1pt solid #0a2299;border-top:1pt solid #330e74;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">$</span></td><td style="border-bottom:1pt solid #0a2299;border-top:1pt solid #330e74;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">104,000 </span></td><td style="border-bottom:1pt solid #0a2299;border-top:1pt solid #330e74;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr></table></div><div style="padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">On January 29, 2024, the Partnership made a long-term debt principal payment of $10 million towards the 8.08% Series B Senior Notes. On March 25, 2024, the Partnership made a long-term debt principal payment of $11 million towards the 6.95% Senior Notes.</span></div><div style="padding-left:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The Partnership’s long-term debt repayments consisted of the following at December 31, 2024:</span></div><div style="margin-bottom:7pt;padding-left:18pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:59.077%"><tr><td style="width:1.0%"/><td style="width:64.643%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:33.157%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:112%">Year Ending</span></td><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:400;line-height:112%">(In thousands)</span></td></tr><tr><td colspan="3" style="border-top:1pt solid #0d2e82;padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">2025</span></td><td style="border-top:1pt solid #0d2e82;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">$</span></td><td style="border-top:1pt solid #0d2e82;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">21,000 </span></td><td style="border-top:1pt solid #0d2e82;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">2026</span></td><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">21,000 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">2027</span></td><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">21,000 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">2028</span></td><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">21,000 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Thereafter</span></td><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">20,000 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="border-bottom:1pt solid #0d2e82;border-top:1pt solid #0d2e82;padding:0 1pt"/><td style="border-bottom:1pt solid #0a2299;border-top:1pt solid #330e74;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">$</span></td><td style="border-bottom:1pt solid #0a2299;border-top:1pt solid #330e74;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">104,000 </span></td><td style="border-bottom:1pt solid #0a2299;border-top:1pt solid #330e74;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr></table></div><div style="margin-bottom:7pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The Partnership is required to comply with certain financial, operational, and legal covenants. Under the most restrictive covenants in the Senior Notes Agreements, approximately $56.0 million of partners’ capital was restricted as to distributions as of December 31, 2024. The Senior Notes and Series B Senior Notes also contain a covenant that limits total funded debt to no greater than 65 percent of the Partnership’s total GAAP capitalization. At December 31, 2024, the Partnership’s ratio of funded debt to GAAP capitalization was 12 percent. As of December 31, 2024, the Partnership was in compliance with all of its financial covenants.</span></div><div style="margin-bottom:7pt;text-align:justify"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">(6) FAIR VALUE MEASUREMENTS</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">a.</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:8.84pt">Fair Value Hierarchy</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Under ASC 820, </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:400;line-height:120%">Fair Value Measurement</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">, fair value measurements are characterized in one of three levels based upon the input used to arrive at the measurement. The three levels of the fair value hierarchy are as follows:</span></div><div style="margin-bottom:7pt;padding-left:54pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">•</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%;padding-left:14.15pt">Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Partnership has the ability to access at the measurement date.</span></div><div style="margin-bottom:7pt;padding-left:54pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">•</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%;padding-left:14.15pt">Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.</span></div><div style="margin-bottom:7pt;padding-left:54pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">•</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%;padding-left:14.15pt">Level 3 inputs are unobservable inputs for the asset or liability.</span></div><div style="margin-bottom:7pt;padding-left:54pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">When appropriate, valuations are adjusted for various factors including credit considerations. Such adjustments are generally based on available market evidence. In the absence of such evidence, management’s best estimate is used.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">b.</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:8.24pt">Fair Value of Financial Instruments</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The carrying value of demand loan receivable to related parties, accrued interest, and all current receivable and payable accounts, except for natural gas imbalances approximate their fair values because of the short maturity or duration of these instruments.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The Partnership’s natural gas imbalances, which are reported as part of accounts receivable, accounts payable and related party accounts, are classified as a Level 2 in the “Fair Value Hierarchy,” as the valuation approach includes quoted prices in the market index and observable volumes for the imbalance.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The Partnership values these imbalances by applying the difference between the measured quantities of natural gas delivered to or received from our shippers and operators to the current Emerson Viking GL index price. For the years ended December 31, 2024 and 2023, the total estimated fair value of our third party natural gas imbalance was a net payable of approximately $0.2 million and $0.2 million, respectively. For the years ended December 31, 2024 and 2023, </span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">the total estimated fair value of our related party natural gas imbalance was a net receivable of approximately $0.7 million and $0.7 million, respectively.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">For the years ended December 31, 2024 and 2023, the fair value of the Partnership’s long-term debt was $114 million and $140 million, respectively. The fair value was estimated based on quoted market prices for the same or similar debt instruments with similar terms and remaining maturities, which is classified as Level 2 in the “Fair Value Hierarchy,” where the fair value is determined by using valuation techniques that refer to observable market data.</span></div><div style="margin-bottom:7pt;text-align:justify"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">(7) TRANSACTIONS WITH RELATED PARTIES</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">a.</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:8.84pt">Cash Management Program</span></div><div style="margin-bottom:9pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The Partnership participates in TC Energy’s Cash Management Program through TC Energy’s subsidiary TransCanada PipeLine USA Ltd. (TCPL USA), which matches short‑term cash surpluses and needs of participating related parties, thus minimizing total borrowings from outside sources. Monies advanced under the program are considered loans, accruing interest and repayable on demand. The Partnership receives interest on monies advanced to TCPL USA at the rate of interest earned by TCPL USA on its short-term cash investments. The Partnership pays interest on monies advanced from TCPL USA based on TCPL USA’s short-term borrowing costs. For the years ended December 31, 2024 and 2023, the net interest income on this arrangement was $4.7 million and $4.9 million, respectively. At December 31, 2024 and 2023, the Partnership had a demand loan receivable from TCPL USA of $95.3 million and $117.2 million, respectively.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">b.</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:8.24pt">Related Party Transactions</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The Partnership earns significant transportation revenues from TC Energy and its related parties under contracts, which provide for negotiated, discounted and maximum recourse rates. The contracts are on the same terms as would be available to other shippers and the majority of the Partnership’s related party revenue is derived from both short-haul and long-haul transportation services.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Pursuant to the Partnership’s Operating Agreement, day-to-day operations of the Partnership's activities are the responsibility of TC Energy. The Partnership is charged by TC Energy and related parties for services such as legal, tax, and other costs incurred on its behalf. These include, but are not limited to, employee costs and property and liability insurance costs. These costs are based on direct assignment to the extent practicable, or by using allocation methods that are reasonable reflections of the utilization of services provided to or for the benefits received by the Partnership.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The following table shows revenues and charges from the Partnership’s related parties for the years ended December 31:</span></div><div style="margin-bottom:7pt;padding-left:36pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:91.369%"><tr><td style="width:1.0%"/><td style="width:66.489%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:15.838%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:14.373%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">2024</span></td><td colspan="3" style="border-bottom:1pt solid #0d2e82;padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">2023</span></td></tr><tr><td colspan="3" style="border-top:1pt solid #0d2e82;padding:0 1pt"/><td colspan="6" style="border-top:1pt solid #0d2e82;padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:400;line-height:112%">(In thousands)</span></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Transportation revenues from related parties:</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><div style="padding-left:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">TransCanada PipeLines Ltd. (Canadian Mainline) </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:7.15pt;font-weight:400;line-height:112%;position:relative;top:-3.85pt;vertical-align:baseline">(a)</span></div></td><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">72,239</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">75,371 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><div style="padding-left:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">American Natural Resources Pipeline (ANR) </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:7.15pt;font-weight:400;line-height:112%;position:relative;top:-3.85pt;vertical-align:baseline">(a)</span></div></td><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">60,718</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">59,420 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 19pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">TC Energy Marketing</span></td><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">926</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">400 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Costs charged by TC Energy's subsidiaries:</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 19pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Capital costs</span></td><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">8,709</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">4,105 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr></table></div><div style="margin-bottom:7pt;padding-left:36pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:91.369%"><tr><td style="width:1.0%"/><td style="width:66.489%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:15.838%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:14.373%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 19pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Operating costs</span></td><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">35,363</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">34,948 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="9" style="padding:2px 1pt;text-align:left;vertical-align:top"><div style="margin-bottom:7pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:5.2pt;font-weight:400;line-height:112%;position:relative;top:-2.8pt;vertical-align:baseline">(a) </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:112%">No single customer accounted for more than 10% of the Partnership's revenue in 2024 or 2023 other than Canadian Mainline and ANR noted above.</span></div></td></tr></table></div><div style="margin-bottom:7pt;padding-left:72pt;text-align:justify;text-indent:-14.4pt"><span><br/></span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The Partnership holds a 10-year transportation agreement with Canadian Mainline, a related entity, effective from November 1, 2017, for transporting up to 711,000 dekatherms (Dth) of natural gas daily. The contract includes options to reduce volumes from the third year onwards. The shipper opted to decrease the transport volume to 346,000 Dth/day starting November 1, 2022, and further to 306,537 Dth/day effective November 1, 2024. Annual volume reduction is permissible November 1 of any year with 349 days' notice.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Additionally, the Partnership holds multiple long-term service contracts with ANR, also a related party, including one 15-year service contract, initially effective from April 16, 2018, for transporting up to 160,000 Dth of natural gas daily. Over time, the service contract was amended to decrease the transport volume capacity to 155,407 Dth/day starting October 1, 2022, the anticipated in-service date of ANR’s Alberta XPress Project. The Alberta XPress Project was placed in-service on January 19, 2023, resulting in an amendment which terminated the aforementioned service contract, but also the execution of a 16-year Capacity Lease Agreement for the same capacity associated with the firm transportation service of 155,407 Dth/day, with fees according to the Partnership’s tariff rates for firm transportation from the Western to Central zone.</span></div><div style="margin-bottom:7pt;padding-left:36pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">At December 31, 2024 and 2023, the Partnership had outstanding receivables of $7.7 million and $10.2 million, respectively, from its related parties. Amounts reported in this footnote are Accounts Receivable from Assoc. Companies (146) net of Accounts Payable to Associated Companies (234) on the Partnership's balance sheets.</span></div><div style="margin-bottom:7pt;text-align:justify"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">(8) DISTRIBUTIONS</span></div><div style="margin-bottom:7pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The Partnership’s distribution policy generally results in a quarterly cash distribution equal to 100 percent of distributable cash flow based upon earnings before income taxes, depreciation, AFUDC less capital expenditures and debt repayments not funded with cash calls to its partners. The resulting distribution amount and timing are subject to Management Committee modification and approval after considering business risks as well as ensuring minimum cash balances, equity balances, and ratios are maintained.</span></div><div style="margin-bottom:7pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">For the years ended December 31, 2024 and 2023, the Partnership paid distributions to its general partners of $134.6 million and $80.1 million, respectively.</span></div><div style="margin-bottom:7pt;text-align:justify"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">(9) SUPPLEMENTAL CASH FLOW INFORMATION</span></div><div style="margin-bottom:7pt;padding-left:18pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:77.678%"><tr><td style="width:1.0%"/><td style="width:64.608%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:14.991%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:1.907%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:14.994%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:400;line-height:120%">(in thousands)</span></td><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">2024</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">2023</span></td></tr><tr><td colspan="3" style="border-top:1pt solid #0a2299;padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Interest paid, net of capitalized interest</span></td><td style="border-top:1pt solid #0a2299;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#0a2299;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">$</span></td><td style="border-top:1pt solid #0a2299;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#0a2299;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">8,395</span><span style="color:#0a2299;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%"> </span></td><td style="border-top:1pt solid #0a2299;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="border-top:1pt solid #0a2299;padding:0 1pt"/><td style="border-top:1pt solid #0a2299;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">$</span></td><td style="border-top:1pt solid #0a2299;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">10,174 </span></td><td style="border-top:1pt solid #0a2299;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">Accruals for property, plant, and equipment</span></td><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:112%">36,730</span><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:112%">10,824 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr></table></div><div style="margin-bottom:7pt;text-align:justify"><span style="color:#0d2e82;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">(10) SUBSEQUENT EVENTS</span></div><div style="margin-bottom:7pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">On January 29, 2025, the Partnership made a long-term debt principal payment of $10 million towards the 8.08% Series B Senior Notes.</span></div><div style="margin-bottom:7pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Subsequent events have been assessed through April 4, 2025, which is the date the financial statements were issued, and the Partnership has concluded there were no additional events nor </span></div><div style="margin-bottom:7pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:400;line-height:120%">transactions during this period that would require recognition or disclosure in the financial statements other than those already reflected here or in the preceding notes.</span></div>


entity_id: C001275
filing_name: Eastern_Shore_Natural_Gas_Company_form2_Q4_1744724390
publication_time: 2025-04-15 13:39:50.000000
start_date: 2024-01-01
end_date: 2024-12-31
disclosure_of_applicable_notes_text_block:
  <div style="padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">1.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:9.75pt">Organization and Basis of Presentation</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Eastern Shore Natural Gas Company (“we,” “our,” “us” or the “Company”) is a wholly-owned subsidiary of Chesapeake Utilities Corporation (“Chesapeake Utilities” or “Parent”). We own and operate an interstate natural gas pipeline that provides open access transportation services to affiliated and non-affiliated companies through an integrated gas pipeline extending from southeastern Pennsylvania through Delaware to our terminus on the eastern shore of Maryland. We also provide swing transportation service and contract storage service. Our rates and services are subject to regulation by the Federal Energy Regulatory Commission (“FERC”).</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Our financial statements are prepared in conformity with the accounting requirements of the FERC as set forth in the applicable Uniform System of Accounts and published accounting releases, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America (“US GAAP”). The accounting requirements of the FERC are consistent with US GAAP, except for:</span></div><div style="padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">•</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%;padding-left:13.8pt">lack of reclassification of certain negative balances on the balance sheets as required by US GAAP;</span></div><div style="padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">•</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%;padding-left:13.8pt">the presentation of deferred income tax assets and liabilities separately rather than as a single amount required by US GAAP;</span></div><div style="padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">•</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%;padding-left:13.8pt">the presentation of cost of removal as a component of accumulated depreciation rather than as a regulatory liability required by US GAAP;</span></div><div style="padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">•</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%;padding-left:13.8pt">lack of detail property, plant and equipment component costs disclosure required by US GAAP; </span></div><div style="padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">•</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%;padding-left:13.8pt">lack of detail regulatory assets and liability disclosure required by US GAAP; and </span></div><div style="padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">•</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%;padding-left:13.8pt">presentation of the components of net benefit costs in operating expenses whereas for US GAAP only the service component is presented in operating expenses. </span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">We have assessed and reported on subsequent events through April 15, 2025, the date these financial statements are available to be issued. If and where necessary to improve comparability, prior period amounts have been reclassified to conform to current period presentation.</span></div><div style="text-align:justify"><span><br/></span></div><div style="margin-bottom:5pt;padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:100%">2.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:100%;padding-left:9.75pt">Summary of Significant Accounting Policies</span></div><div style="padding-left:18pt;text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%;text-decoration:underline">Use of Estimates</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Our financial statements are prepared based on the accounting requirements of the FERC which require management to make estimates in measuring assets and liabilities and related revenues and expenses. These estimates involve judgments with respect to, among other things, various future economic factors that are difficult to predict and are beyond our control; therefore, actual results could differ from those estimates. As additional information becomes available, or actual amounts are determined, recorded estimates are revised. Consequently, operating results can be affected by revisions to prior accounting estimates.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%;text-decoration:underline">Utility Plant</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Utility plant is stated at original cost less accumulated depreciation or fair value, if impaired. Costs include direct labor, materials and third-party construction contractor costs, allowance for funds used during construction (“AFUDC”) and certain indirect costs related to equipment and employees engaged in construction. The costs of repairs and minor replacements are charged to expenses as incurred, and the costs of major renewals and improvements are capitalized. Upon retirement or disposition of utility plant, the gain or loss, net of salvage value, is charged to accumulated depreciation. </span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Customer contributions or advances in aid of construction reduce utility plant unless the amounts are refundable to customers. Contributions or advances may be refundable to customers after a number of years based on the amount of revenues generated from the customers or the duration of the service provided to the customers. Refundable contributions or advances are recorded initially as liabilities. The amounts that are determined to be </span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">non-refundable reduce utility plant at the time of such determination. Non-refundable contributions were not material at December 31, 2024 and 2023.</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">AFUDC represents the estimated cost of funds, from both debt and equity sources, used to finance the construction of major projects. AFUDC is capitalized in rate base for rate-making purposes when the completed projects are placed in service.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The costs of debt and equity funds are segregated between interest expense and other income, respectively. For each of the years ended December 31, 2024 and 2023, AFUDC was not material and was reflected as a reduction of interest charges. </span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Amounts for assets held for future use, which are included in utility plant, were not material at December 31, 2024 and 2023, respectively.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:112%;text-decoration:underline">Impairment</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%;text-decoration:underline"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:112%;text-decoration:underline">of Long-lived Assets</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:112%">We periodically evaluate whether events or circumstances have occurred, which indicate that other long-lived assets may not be fully recoverable. The determination of whether an impairment has occurred is based on an estimate of undiscounted future cash flows attributable to the asset, compared to the carrying value of the asset. When such events or circumstances are present, we record an impairment loss equal to the excess of the asset's carrying value over its fair value, if any.</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%;text-decoration:underline">Depreciation</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">We compute depreciation expense by applying composite, annual rates, as approved by the FERC. Depreciation expenses are provided at an annual rate averaging 2.7 percent for 2024 and 2023, respectively.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">In accordance with the accounting requirements of the FERC, we include the accretion of the cost of removal for future retirements of utility assets as depreciation expense. For both years ended December 31, 2024 and 2023, $1.3 million of such accretion was included in depreciation expense. We also report certain depreciation expense, mainly related to vehicle, computer software and hardware, in operations expenses rather than as a depreciation expense to comply with the accounting requirements of the FERC. These amounts were not material at December 31, 2024 and 2023.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%;text-decoration:underline">Regulated Operations</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">We account for our operations in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 980, </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:120%">“Regulated Operations.”</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%"> This Topic includes accounting principles for companies whose rates are determined by independent third-party regulators. When setting rates, regulators often make decisions, the economics of which require companies to defer costs or revenues in different periods than may be appropriate for unregulated enterprises. When this situation occurs, a regulated company defers the associated costs as regulatory assets on the balance sheet and records them as expense on the statement of income as it collects revenues. Further, regulators can also impose liabilities upon a regulated company, for amounts previously collected from customers and for recovery of costs that are expected to be incurred in the future, as regulatory liabilities. If we were required to terminate the application of these regulatory provisions to our operations, all such deferred amounts would be recognized in the statement of income at that time, which could have a material impact on our financial position, results of operations and cash flows.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">We monitor our regulatory and competitive environments to determine whether the recovery of our regulatory assets continues to be probable.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">If we were to determine that recovery of these assets is no longer probable, we would write off the assets against earnings. We believe that provisions of ASC Topic 980 continue to apply to our operations and that the recovery of our regulatory assets is probable.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%;text-decoration:underline">Revenue Recognition</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Our operating revenues are based on rates approved by the FERC. However, the FERC has also authorized us to negotiate rates above or below the FERC-approved maximum rates, which customers can elect as an alternative to FERC-approved maximum rates.</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">For agreements that contain variable consideration, we use the invoice practical expedient method. We determined that the amounts invoiced to customers correspond directly with the value to our customers and our performance to date.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%;text-decoration:underline">Cash and Cash Equivalents </span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Our cash is held in Chesapeake Utilities’ name. Chesapeake Utilities’ policy is to invest cash in excess of operating requirements in overnight income-producing accounts. Such amounts are stated at cost, which approximates fair value. Investments with an original maturity of three months or less when purchased are considered cash equivalents. </span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%;text-decoration:underline">Inventories </span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">We use the average cost method to value materials and supplies inventory. </span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%;text-decoration:underline">Pension and Other Postretirement Plans </span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Chesapeake Utilities sponsors an unfunded supplemental executive retirement plan (“Chesapeake SERP”), and an unfunded postretirement health care and life insurance plan (“Chesapeake Postretirement Plan”). Chesapeake Utilities allocates our share of the postretirement plan costs based on a portion of the benefits related to providing our service. Postretirement plan costs and liabilities are determined on an actuarial basis and are affected by numerous assumptions and estimates including assumed discount rates, the level of contributions made to the plans, and current demographic and actuarial mortality data. Chesapeake Utilities’ management annually reviews the estimates and assumptions underlying its postretirement plan costs and liabilities with the assistance of third-party actuarial firms.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The assumed health care cost trend rate and the assumed rates of retirement generally would not have an impact on the postretirement and supplemental executive retirement plans with respect to required funding contributions because these plans are not funded.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%;text-decoration:underline">Income Taxes and Investment Tax Credit Adjustments</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Deferred tax assets and liabilities are recorded for the income tax effect of temporary differences between the financial statement basis and tax basis of assets and liabilities and are measured using the enacted income tax rates in effect in the years in which the differences are expected to reverse. Deferred tax assets are recorded when it is more likely than not that such income tax benefits will be realized. Valuation allowances may be recorded if it is determined that some deferred tax assets will not be realized. Investment tax credits on utility property have been deferred and are allocated to income ratably over the lives of the subject property.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">We account for uncertainty in income taxes in the financial statements only if it is more likely than not that an uncertain tax position is sustainable based on technical merits. Recognizable tax positions are then measured to determine the amount of benefit recognized in the financial statements. We recognize penalties and interest related to unrecognized tax benefits as a component of other income.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%;text-decoration:underline">Financial Instruments</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Financial assets and liabilities with carrying values approximating fair value include accounts receivable, accounts payable and other accrued liabilities.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%;text-decoration:underline">Recent Accounting Standards Yet to be Adopted</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-style:italic;font-weight:400;line-height:112%">FASB</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:112%;text-decoration:underline">Income Taxes (ASC 740) </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:112%">- In December 2023, the FASB issued ASU 2023-09, </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:112%">Improvements to Income Tax Disclosures, </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:112%">which modifies required income tax disclosures primarily related to an entity's rate reconciliation and information pertaining to income taxes paid. These enhancements have been made to address requests from investors related to transparency and usefulness of income tax disclosures. ASU 2023-09 will be effective for </span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:112%">our annual financial statements beginning January 1, 2025. ASU 2023-09 only impacts disclosures, and as a result, will not have a material impact on our financial position or results of operations. </span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:112%;text-decoration:underline">Income Statement Expense Disaggregation (ASC 220)</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:112%"> - In November 2024, the FASB issued ASU 2024-04,</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:112%"> Disaggregation of Income Statement Expenses, </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:112%">which require disclosure in the notes to financial statements of specified information about certain costs and expenses. ASU 2024-04 will be effective for our annual financial statements beginning January 1, 2027 and our interim financial statements beginning January 1, 2028. ASU 2024-04 only impacts disclosures, and as a result, will not have an impact on our financial position or results of operations.</span></div><div style="text-align:justify"><span><br/></span></div><div style="padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:100%">3.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:100%;padding-left:9.75pt">Transaction with Affiliates</span></div><div style="padding-left:18pt;text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Revenue from gas sold and transportation services provided to Chesapeake Utilities and its subsidiaries during 2024 and 2023 were $35.2 million and $34.0 million, respectively.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">We utilize Chesapeake Utilities’ short-term borrowing facility and long-term debt to finance our capital requirements. The excess cash generated above our operating cash requirement is held in Chesapeake Utilities’ name. We are allocated a portion of interest expense on Chesapeake Utilities’ short-term borrowing facility and long-term debt and interest income generated from our excess cash held in Chesapeake Utilities’ name. Chesapeake Utilities allocated us net interest expense of $9.1 million and $7.8 million for the years ended December 31, 2024 and 2023, respectively.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">At December 31, 2024 and 2023, we had a net advance from Chesapeake Utilities and its subsidiaries of $92.0 million and $98.5 million, respectively. These amounts are reflected as accounts payable to associated companies in the accompanying financial statements.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Chesapeake Utilities provides us with administrative and support services. These services include certain managerial, accounting, information technology, payroll, human resources and treasury services. For the years ended December 31, 2024 and 2023, Chesapeake Utilities charged us $8.2 million and $10.6 million, respectively, for these services.</span></div><div style="text-align:justify"><span><br/></span></div><div style="padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:100%">4.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:100%;padding-left:9.75pt">Income Taxes</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">We are included in the Chesapeake Utilities consolidated federal income tax return, along with all of Chesapeake Utilities’ other subsidiaries. We file separate state income tax returns. Income taxes are allocated to us as if we were a separate taxpayer. As of December 31, 2024, the audit of the 2015 through 2019 federal income tax returns was complete, and there was no impact to us.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:132%">During 2018, Chesapeake Utilities completed the assessment of the impact of accounting for certain effects of the Tax Cuts and Jobs Act (“TCJA”), including the effects of the reduction of the corporate federal income tax rate from 35 percent to 21 percent. In 2019, Chesapeake Utilities allocated the tax basis cost of certain liabilities recognized at its corporate entity under the TCJA to its business units. </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:132%">The amounts allocated to us were not material and will be addressed in our next rate case.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">For the year ended December 31, 2024, we had $1.0 million in state net operating losses. There were no state net operating losses in 2023. Additionally, we have not established a valuation allowance to reduce future tax benefits because we believe that it is more likely than not that they will be fully utilized.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%"> </span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The components of federal and state income tax expense are:</span></div><div style="text-align:justify"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:100.000%"><tr><td style="width:1.0%"/><td style="width:53.530%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:14.873%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:14.873%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:12.324%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="background-color:#ffffff;border-top:1pt solid #000000;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">For the Year Ended December 31,</span></td><td colspan="2" style="border-top:1pt solid #000000;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">2024</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%"> </span></td><td style="border-top:1pt solid #000000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="border-top:1pt solid #000000;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">2023 </span></td><td style="border-top:1pt solid #000000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-style:italic;font-weight:400;line-height:120%">(in thousands)</span></td><td colspan="3" style="background-color:#ffffff;border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Current</span></td><td style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">$</span></td><td style="background-color:#ffffff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">6,966</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%"> </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#ffffff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">6,726 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Deferred</span></td><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">3,303</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%"> </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">1,516 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="background-color:#ffffff;border-bottom:2pt solid #000000;border-top:1pt solid #000000;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Total Income Tax Expense</span></td><td style="border-bottom:2pt solid #000000;border-top:1pt solid #000000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">$</span></td><td style="border-bottom:2pt solid #000000;border-top:1pt solid #000000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">10,269</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%"> </span></td><td style="border-bottom:2pt solid #000000;border-top:1pt solid #000000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td style="border-bottom:2pt solid #000000;border-top:1pt solid #000000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">$</span></td><td style="border-bottom:2pt solid #000000;border-top:1pt solid #000000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">8,242 </span></td><td style="border-bottom:2pt solid #000000;border-top:1pt solid #000000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="padding:0 1pt"/></tr></table></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:100%">Total income tax expense (benefit) results primarily from applying the federal income tax statutory rate to book income before tax, plus state income taxes, net of federal tax benefit as follows:</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:97.373%"><tr><td style="width:1.0%"/><td style="width:62.000%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:17.349%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:17.351%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="background-color:#ffffff;border-top:1pt solid #000000;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">For the Year Ended December 31,</span></td><td colspan="2" style="border-top:1pt solid #000000;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">2024</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%"> </span></td><td style="border-top:1pt solid #000000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="border-top:1pt solid #000000;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">2023 </span></td><td style="border-top:1pt solid #000000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;border-top:1pt solid #000000;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Federal income tax expense, 21% in 2024 and 2023</span></td><td style="background-color:#ffffff;border-top:1pt solid #000000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">$</span></td><td style="background-color:#ffffff;border-top:1pt solid #000000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">7,451</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%"> </span></td><td style="background-color:#ffffff;border-top:1pt solid #000000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td style="background-color:#ffffff;border-top:1pt solid #000000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#ffffff;border-top:1pt solid #000000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">6,620 </span></td><td style="background-color:#ffffff;border-top:1pt solid #000000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">State income taxes</span></td><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">2,831</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%"> </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">1,643 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Other</span></td><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">(13)</span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">(21)</span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="border-bottom:2pt solid #000000;border-top:1pt solid #000000;padding:0 1pt"/><td style="border-bottom:2pt solid #000000;border-top:1pt solid #000000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">$</span></td><td style="border-bottom:2pt solid #000000;border-top:1pt solid #000000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">10,269</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%"> </span></td><td style="border-bottom:2pt solid #000000;border-top:1pt solid #000000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="border-bottom:2pt solid #000000;border-top:1pt solid #000000;padding:2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">$8,242</span></td></tr></table></div><div style="text-align:justify"><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Deferred tax assets and liabilities at December 31, 2024 were $5.9 million and $71.9 million, respectively. Deferred tax assets and liabilities at December 31, 2023 were $6.1 million and $68.8 million, respectively. Deferred tax assets and liabilities are primarily the result of depreciation-related timing differences.</span></div><div style="padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:100%">5.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:100%;padding-left:9.75pt">Customer Concentration</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">We operate entirely in the natural gas industry. Operations include the purchase and transportation of natural gas in interstate commerce.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Three customers accounted for sales greater than 10 percent of our total revenues in 2024 and 2023. Revenues from these customers were $35.2 million, $15.1 million, and $12.4 million in 2024, and $34.0 million, $15.4 million, and $12.3 million in 2023. One of these customers in both 2024 and 2023 is Chesapeake Utilities, which owns and operates four affiliated local distribution companies, and the other two are unaffiliated industrial customers.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span><br/></span></div><div style="margin-bottom:10pt;padding-left:18pt;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:133%">6.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:133%;padding-left:9.75pt">Supplemental Disclosure of Cash Flow Information</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Cash paid for taxes, net of refunds as follows:</span></div><div><span><br/></span></div><div><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:97.373%"><tr><td style="width:1.0%"/><td style="width:62.000%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:17.349%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:17.351%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="border-top:1pt solid #000000;padding:2px 1pt 2px 3.77pt;text-align:left;vertical-align:middle"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">For the Years Ended,</span></td><td colspan="3" style="border-top:1pt solid #000000;padding:2px 3.77pt 2px 1pt;text-align:right;vertical-align:middle"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">2024</span></td><td colspan="3" style="border-top:1pt solid #000000;padding:2px 3.77pt 2px 1pt;text-align:right;vertical-align:middle"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">2023</span></td></tr><tr><td colspan="3" style="border-top:1pt solid #000000;padding:2px 1pt 2px 3.77pt;text-align:left;vertical-align:middle"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-style:italic;font-weight:400;line-height:120%">(in thousands)</span></td><td colspan="3" style="border-top:1pt solid #000000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 3.77pt;text-align:left;vertical-align:middle"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Cash Paid for interest</span></td><td style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">$</span></td><td style="background-color:#ffffff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">—</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%"> </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">$</span></td><td style="background-color:#ffffff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">—</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%"> </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="border-bottom:1pt solid #000000;padding:2px 1pt 2px 3.77pt;text-align:left;vertical-align:middle"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Cash Paid for income taxes, net</span></td><td style="background-color:#ffffff;border-bottom:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">$</span></td><td style="background-color:#ffffff;border-bottom:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">2,728</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%"> </span></td><td style="background-color:#ffffff;border-bottom:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td style="background-color:#ffffff;border-bottom:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">$</span></td><td style="background-color:#ffffff;border-bottom:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">1,915</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%"> </span></td><td style="background-color:#ffffff;border-bottom:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr></table></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Capital property and equipment acquired on account, but not paid was $4.8 million and $0.4 million at December 31, 2024 and 2023, respectively.</span></div><div style="padding-left:22.5pt;text-align:justify;text-indent:-22.5pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:100%">7.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:100%;padding-left:14.25pt">Employee Benefit Plans</span></div><div style="padding-left:22.5pt;text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Our eligible employees participate in various benefit plans sponsored by Chesapeake Utilities. Chesapeake Utilities allocates to us a portion of the benefit costs associated with these plans. Our share of the costs is based on a portion of the benefits related to providing services to us. For the years ended December 31, 2024 and 2023, we recorded benefit costs of $0.4 million and $0.6 million, respectively, </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">related to these plans.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Chesapeake Utilities’ 401(k) Retirement Savings Plan is offered to all eligible employees who have completed three months of service. Chesapeake Utilities matches 100 percent of eligible participants’ pre-tax contributions to the Chesapeake Utilities Retirement Savings Plan up to a maximum of six percent of the eligible compensation. The employer matching contribution is made in cash and is invested based on a participant’s investment directions. In addition, Chesapeake Utilities may make a discretionary supplemental contribution to participants in the plan, without regard to whether or not they make pre-tax contributions. Any supplemental employer contribution is generally made in Chesapeake Utilities common stock. With respect to the employer match and supplemental employer contribution, employees are 100 percent vested after two years of service or upon reaching 55 years of age while still employed by Chesapeake Utilities. New employees, who do not make an election to contribute or do not opt out of the Chesapeake Utilities Retirement Savings Plan, will be automatically enrolled at a deferral rate of three percent, and the automatic deferral rate will increase by one percent per year up to a maximum of ten percent. All contributions and matched funds can be invested among the mutual funds available for investment.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Chesapeake Utilities sponsors the Chesapeake SERP and Chesapeake Postretirement Plan for certain eligible employees. The Chesapeake SERP, a nonqualified plan, was frozen with respect to additional years of service and additional compensation as of December 31, 2004. Benefits under the Chesapeake SERP were based on each participant’s years of service and highest average compensation, prior to the freezing of the plan. Active participants on the date the Chesapeake SERP was frozen were credited with two additional years of service. </span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Chesapeake Utilities measures the assets and obligations of the SERP and other postretirement benefits plans to determine the plans’ funded status as of the end of the year as an asset or a liability on Chesapeake Utilities’ consolidated balance sheets. A portion of this asset or liability related to us is reflected on our balance sheets. At December 31, 2024 and 2023, $2.4 million and $2.5 million, respectively,</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%"> of the postretirement benefit liabilities were allocated to us.</span></div><div style="text-align:justify"><span><br/></span></div><div style="padding-left:27pt;text-align:justify;text-indent:-27pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:139%">8.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:139%;padding-left:18.75pt">Rates and Other Regulatory Activities </span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-style:italic;font-weight:400;line-height:120%">Worcester Resiliency Upgrade: </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">In August 2023, Eastern Shore filed an application with the FERC requesting authorization to construct the Worcester Resiliency Upgrade, which consists of a mixture of storage and transmission facilities in Sussex County, DE and Wicomico, Worcester, and Somerset Counties in Maryland. The project will provide long-term incremental supply necessary to support the growing demand of the participating shippers. In January 2025, the FERC approved the project, and construction is expected to be complete in the third quarter of 2025.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-style:italic;font-weight:400;line-height:120%">Capital Cost Surcharge:</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%"> In December 2024, Eastern Shore submitted a filing with the FERC regarding a capital cost surcharge to recover capital costs associated with the replacement of existing Eastern Shore facilities because of mandated highway relocation projects as well as compliance with a PHMSA regulation. The capital cost surcharge mechanism was approved in Eastern Shore's last rate case. In conjunction with the filing of this surcharge, a cumulative adjustment to the existing surcharge to reflect additional depreciation was included. The FERC issued an order approving the surcharge as filed in December 2024. The combined revised surcharge became effective January 1, 2025.</span></div><div style="padding-left:22.5pt;text-align:justify;text-indent:-22.5pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:100%">9.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:100%;padding-left:14.25pt">Other Commitments and Contingencies</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">From time to time, we may be involved in legal actions and claims arising in the normal course of business. We are also involved in certain legal and administrative proceedings before various governmental agencies concerning rates and other operating matters. In the opinion of management, the ultimate disposition of these proceedings will not have a material effect on our financial position, results of operation or cash flows. Our total purchase obligations for natural gas storage service are the following:</span></div><div style="text-align:justify"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:99.939%"><tr><td style="width:1.0%"/><td style="width:51.619%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:10.229%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.555%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:10.229%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.404%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:10.229%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.404%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:10.231%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">2025</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">2026-2027</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">2028-2029</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:120%">Total</span></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-style:italic;font-weight:400;line-height:120%">(in thousands)</span></td><td colspan="3" style="border-top:1pt solid #000000;padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Purchase obligations</span></td><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">497 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="padding:0 1pt"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">751 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="padding:0 1pt"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">94 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="padding:0 1pt"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">1,342 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr></table></div><div style="margin-bottom:6pt;text-align:center"><span><br/></span></div><div style="margin-bottom:6pt;padding-left:31.5pt;text-align:justify;text-indent:-27pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:100%">10.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:700;line-height:100%;padding-left:13.25pt">Revenue Recognition</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-style:italic;font-weight:400;line-height:120%;text-decoration:underline">Customer Revenue</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">We recognize revenue when our performance obligations under contracts with customers have been satisfied, which generally occurs when we have transported natural gas to customers. Our revenues are based on rates approved by the FERC. The FERC has also authorized us to negotiate rates above or below the FERC-approved maximum rates, which customers can elect as an alternative to the FERC-approved maximum rates. Our services can be firm or interruptible. Firm services are offered on a guaranteed basis and are available at all times unless prevented by force majeure or other permitted curtailments. Interruptible customers receive service only when there is available capacity or supply. Our performance obligation is satisfied over time as we deliver natural gas to the customers' locations. We recognize revenues based on capacity used or reserved and the fixed monthly charge. We exclude sales taxes and other similar taxes from the transaction price. Typically, our customers pay for the goods and/or services we provide in the month following the satisfaction of our performance obligation.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-style:italic;font-weight:400;line-height:120%;text-decoration:underline">Contract Balances</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The timing of revenue recognition, customer billings and cash collections results in trade receivables and customer advances (contract liabilities) in our balance sheet. As of December 31, 2024 and 2023, the balance of our trade receivables, net of our allowance for expected credit losses, was $3.9 million and $4.6 million, respectively. As of December 31, 2024 and 2023, there were no material contract assets or liabilities recorded on our balance sheet.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-style:italic;font-weight:400;line-height:120%;text-decoration:underline">Remaining performance obligations</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">We have long-term fixed fee contracts with customers in which revenues are recognized as performance obligations are satisfied over the contract term. Revenue for the remaining performance obligations at December 31, 2024 are expected to be recognized as follows:</span></div><div style="text-align:justify"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:99.939%"><tr><td style="width:1.0%"/><td style="width:36.362%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:8.567%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.706%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:8.567%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.404%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:8.567%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.857%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:8.567%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.555%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:8.567%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:1.008%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:8.573%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2025</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2026</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2027</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2028</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2029</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2030 and <br/>thereafter</span></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:9pt;font-style:italic;font-weight:400;line-height:120%">(in thousands)</span></td><td colspan="3" style="border-top:1pt solid #000000;padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Remaining performance obligations</span></td><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">35,961 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="padding:0 1pt"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">33,309 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="padding:0 1pt"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">29,700 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="padding:0 1pt"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">27,722 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="padding:0 1pt"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">25,452 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="padding:0 1pt"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">116,986 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr></table></div>


entity_id: C001217
filing_name: Portland_Natural_Gas_Transmission_System_form2_Q4_1744861135
publication_time: 2025-04-17 03:38:55.000000
start_date: 2024-01-01
end_date: 2024-12-31
disclosure_of_important_disclosures_regarding_the_financial_statements_text_block:
  <div style="margin-bottom:6pt;padding-left:18pt;text-indent:-4.5pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">1.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:13.34pt">Description of Business</span></div><div style="margin-bottom:6pt;padding-left:13.5pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Portland Natural Gas Transmission (“PNGTS”, “the Company”, or “Acquiree”) owns a 296-mile natural gas pipeline, which includes 107 miles of jointly owned pipeline facilities (the Joint Facilities) with Maritimes and Northeast Pipeline L.L.C. (MNE), extending from United States-Canadian border near Pittsburg, New Hampshire to Dracut, Massachusetts. The Joint Facilities extend from Westbrook, Maine to Dracut, Massachusetts and the Company owns a 52.5 percent of the undivided ownership interest based on contractually agreed upon percentages. M&amp;N Operating Company, LLC, a subsidiary of MNE, operates and maintains the Joint Facilities on behalf of the joint ownership and PNGTS reimburses MNE for operating costs related to its share of the Joint Facilities.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On August 15, 2024, TC Energy Corporation (TC Energy) and its joint venture partner, Ėnergir Inc. (Ėnergir), sold their entire interest in the Company to Beehive Loop AcquisitionCo LLC (“Beehive”, “Parent” or, “Acquirer”), which holds a 99.99% ownership interest of PNGTS (“Acquisition”, “Acquisition Transaction”). The remaining 0.01% ownership interest is owned by the wholly owned subsidiary Beehive Loop StubCo LLC. As a result of the Acquisition, the Company's structure was changed from a partnership to a disregarded entity and the partners' equity was converted to members' equity within the Statement of Equity.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Subsequent to August 15, 2024, TransCanada Northern Border Inc. (Northern Border-OpCo), a wholly owned indirect subsidiary of TC Energy, continues to provide services in line with the Transition Service Agreement (TSA) and continues to be the operator of PNGTS through April 2025. At the end of the TSA, TC Energy will no longer be the operator of PNGTS.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Prior to the Acquisition, PNGTS was a joint venture between TC PipeLines, L.P. (61.71 percent) and Northern New England Investment Company (38.29 percent). TCP is an indirect wholly owned subsidiary of TC Energy. NNEIC is a subsidiary of Ėnergir.</span></div><div style="margin-bottom:6pt;padding-left:36pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">2.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:8.84pt">Summary of Significant Accounting Policies</span></div><div style="margin-bottom:6pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%">a.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%;padding-left:8.84pt">Basis of Presentation</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The accompanying financial statements were prepared in conformity with the accounting practices prescribed by the Federal Energy Regulatory Commission (FERC) as set forth in its applicable Uniform System of Accounts and published accounting releases, which is a comprehensive basis of accounting other than the U.S. generally accepted accounting principles (USGAAP). The most significant differences between USGAAP and the financial statements presented herein are the classifications of certain accounts on the balance sheets, statements of income, and statements of cash flows. For informational purposes with regards to the Acquisition, the Notes to the Financial Statements have been prepared in conformity with Accounting Standards Codification (ASC) 805-50, </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Business Combinations</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> (ASC 805-50), for the Successor as a new basis of accounting, where applicable.</span></div><div style="margin-bottom:6pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%">b.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%;padding-left:8.24pt">Use of Estimates</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses as well as the disclosure of contingent assets and liabilities during the reported period. Although management believes these estimates are reasonable, actual results could differ from these estimates in the financial statements and accompanying notes. Judgment is required in developing these estimates.</span></div><div style="margin-bottom:6pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%">c.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%;padding-left:8.84pt">Cash and cash equivalents</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Company’s cash consist of cash and highly liquid short-term investments with original maturities of three months or less and are recorded at cost, which approximates fair value. </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:9pt;font-weight:400;line-height:120%">T</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">here were no cash equivalents as of December 31, 2024 and 2023.</span></div><div style="margin-bottom:6pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%">d.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%;padding-left:8.24pt">Accounts Receivable</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Accounts receivables are recorded at the invoiced amount and do not bear interest, except for those receivables subject to late charges. The Company maintains an allowance for credit losses for estimated losses on accounts receivable, if it is determined the Company will not collect all or part of the outstanding receivable balance. The allowance for credit loss is a valuation account deducted from the amortized cost basis to present the net amount expected to be collected. The estimate of expected credit losses includes expected recoveries of amounts previously written off as well as amounts currently expected to be written off. The Company did not recognize an allowance for credit losses as of December 31, 2024 and 2023 and no accounts were written-off during the period from January 1, 2024 through August 14, 2024 (Predecessor); the period from August 15, 2024 through December 31, 2024 (Successor); and the year ended December 31, 2023 (Predecessor).</span></div><div style="margin-bottom:6pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%">e.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%;padding-left:8.84pt">Natural Gas Imbalances</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Natural gas imbalances occur when the actual amount of natural gas delivered to or received from a pipeline system differs from the amount of natural gas scheduled to be delivered or received. The Company values </span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">these imbalances due to or from shippers and interconnecting parties at current index prices. Imbalances are settled in kind, subject to the terms of the Company’s tariff.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Imbalances due from others are reported on the balance sheets as Miscellaneous Current and Accrued Assets (174). Imbalances owed to others are reported on the balance sheets as Miscellaneous Current and Accrued Liabilities (242). In addition, the Company classifies all imbalances as current, as the Company expects to settle them within a year.</span></div><div style="margin-bottom:6pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%">f.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%;padding-left:11.29pt">Property, Plant and Equipment</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Property, plant and equipment are recorded at their original cost of construction. For assets PNGTS constructs, direct costs, such as labor and materials, and indirect costs, such as overhead, interest, and an equity return component on regulated businesses as allowed by the FERC, are capitalized. The Company capitalizes major units of property replacements or improvements and expenses minor items.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Company uses the composite (group) method to depreciate property, plant and equipment. Under this method, assets with similar lives and characteristics are grouped and depreciated as one asset group. The depreciation rate is applied to the total cost of the group until its net book value equals its salvage value. All asset groups are depreciated using depreciation rates approved in the Company’s last rate proceeding. Currently, the Company’s depreciation rates vary from 2 percent to 20 percent per year. Using these rates, the remaining depreciable life of these assets range from less than 2 years to 47 years. There were no adjustments to the useful lives or the depreciation rates applied to these assets as a result of the Acquisition Transaction. Depreciation rates are reevaluated each time the Company files with the FERC for a change in its transportation service rates.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">When property, plant and equipment are retired, the Company charges accumulated depreciation and amortization for the original cost of the assets in addition to the cost to remove, sell, or dispose of the assets, less their salvage value. The Company does not recognize a gain or loss unless an entire operating unit is sold or retired. The Company includes gains or losses on dispositions of operating units in income.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">PNGTS capitalizes a carrying cost on funds invested in the construction of long-lived assets. This carrying cost includes a return on the investment financed by debt and equity allowance for funds used during construction (AFUDC). AFUDC is recorded based on the Company’s average cost of debt and equity. Capitalized carrying costs for AFUDC debt and equity are reflected as an increase in the cost of the asset on the balance sheets. The equity component of AFUDC is a non-cash expenditure.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Capitalized AFUDC debt amounts are reported in the statements of income as Allowance for Borrowed Funds Used During Construction-Credit (432). Capitalized AFUDC equity amounts are reported in the statements of income as Allowance for Other Funds Used During Construction (419.1). Debt amounts capitalized during the period from January 1, 2024 through August 14, 2024 (Predecessor); the period from August 15, 2024 through December 31, 2024; and the year ended December 31, 2023 were immaterial. Equity amounts capitalized during the period from January 1, 2024 through August 14, 2024 (Predecessor); the period from August 15, 2024 through December 31, 2024; and the year ended December 31, 2023 were immaterial. Amounts included in construction work in progress are not amortized until transferred into service.</span></div><div style="margin-bottom:6pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%">g.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%;padding-left:8.24pt">Revenue Recognition</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On January 1, 2018, the Company adopted new FASB guidance on revenue from contracts with customers using the modified retrospective transition method for all contracts that were in effect on the date of adoption. The adoption did not result in any changes to the Company’s historical revenue recognition and the Company did not have any cumulative impact adjustment on the date of adoption. While FERC has not adopted FASB’s new revenue recognition guidance and disclosure requirements, there remains no difference between the revenue recognized under USGAAP and FERC due to the application of the right to invoice practical expedient. The following USGAAP disclosures over the adoption of the new revenue standard are included to reflect the Company’s criteria for recognizing revenue.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Company’s revenues are generated from contractual arrangements for committed capacity and from transportation of natural gas which are treated as a single performance obligation. For the period from January 1, 2024 through August 14, 2024 (Predecessor); the period from August 15, 2024 through December </span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">31, 2024 (Successor); and during the year ended December 31, 2023 (Predecessor), the Company's revenues were from capacity arrangements and transportation contracts with customers.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Revenues earned from firm contracted capacity arrangements are recognized over the term of the contract regardless of the amount of natural gas that is transported. Transportation revenues for interruptible or volumetric-based services are recognized when the service is performed. The Company utilizes the practical expedient of recognizing revenue as invoiced. In the application of the right to invoice practical expedient, the Company's revenues from regulated capacity arrangements are recognized based on rates specified in the contract. Therefore, the amount invoiced, which includes the capacity contracted and variable volume of natural gas transported, corresponds directly to the value the customer received. These revenues are recognized monthly once the Company's performance obligation to provide capacity has been satisfied.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Company’s pipeline systems do not take ownership of the natural gas that is transported for customers. Revenues from contracts with customers are recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. The Company’s contract balances consist primarily of receivables from contracts with customers reported under Customer Accounts Receivable (142) and Accounts Receivable from Associated Companies (146) in the balance sheet. Additionally, our accounts receivable represents the Company’s unconditional right to consideration for services completed which includes billed and unbilled accounts.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Company's pipeline systems are subject to FERC regulations and, as a result, a portion of revenues collected may be subject to refund if invoiced during an interim period when a rate proceeding is ongoing. Allowances for these potential refunds are recognized using management's best estimate based on the facts and circumstances of the proceeding. Any allowances that are recognized during the proceeding process are refunded or retained, as applicable, at the time a regulatory decision becomes final. As of December 31, 2024 (Successor) and December 31, 2023 (Predecessor), there are no refund provisions reflected in these financial statements. </span></div><div style="margin-bottom:6pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%">h.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%;padding-left:8.24pt">Asset Retirement Obligations</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">PNGTS accounts for asset retirement obligations pursuant to the provisions of ASC 410-20, </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Asset Retirement Obligations</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> (ASC 410-20). ASC 410-20 requires the Company to record the fair value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long lived assets that result from the acquisition, construction, development, and/or normal use of the assets. ASC 410-20 also requires the Company to record a corresponding asset that is depreciated over the life of the asset. Subsequent to the initial measurement of the asset retirement obligation, the obligation is to be adjusted at the end of each period to reflect the passage of time and changes in the estimated future cash flows underlying the obligation.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The fair value of a liability for an asset retirement obligation is recorded during the period in which the liability is incurred, if a reasonable estimate of fair value can be made. The Company has determined that asset retirement obligations exist for certain of its transmission assets; however, the fair value of the obligations cannot be determined because the end of the transmission system’s life is not determinable with the degree of accuracy necessary to currently establish a liability for the obligations.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">PNGTS has determined it has legal obligations associated with its natural gas pipeline and related transmission facilities. The obligations relate primarily to purging and sealing the pipeline if it is abandoned. The Company is also required to operate and maintain its natural gas pipeline system and intends to do so as long as supply and demand for natural gas exists, which the Company expects for the foreseeable future. Therefore, PNGTS believes its natural gas pipeline system assets have indeterminate lives and, accordingly, has recorded no asset retirement obligation as of December 31, 2024 (Successor) and 2023 (Predecessor)</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">. </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Company continues to evaluate its asset retirement obligations and future developments that could impact amounts it records.</span></div><div style="margin-bottom:6pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%">i.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%;padding-left:11.9pt">Income Taxes</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Income taxes are recorded in accordance with the Revised Policy Statement on Income Tax Allowances permitting the accrual of income taxes on pass-through entities and associated taxes accrued are treated as deemed contributions/distributions recorded in Other Paid in Capital. Deferred income taxes are recognized </span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">for differences between the financial reporting and tax basis of assets and liabilities at enacted statutory tax rates in effect for the years in which the differences are expected to reverse. Actual income taxes could vary from these estimates due to future changes in income tax law or results from the final review of tax returns by federal or state tax authorities.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Company uses the asset and liability method of accounting for income taxes. This method requires the recognition of deferred income tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates at the balance sheet date that are anticipated to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. Changes to these balances are recognized in income in the period during which they occur, except for changes in balances subject to rate-regulated accounting, which are recorded as regulatory liabilities or assets. Unamortized deferred investment tax credits are amortized over the regulatory life of the assets in rates. The statute of limitations in each of the state jurisdictions in which the Company operates remain open until the years are settled for federal income tax purposes, at which time amended state income tax returns reflecting all federal income tax adjustments are filed. As of December 31, 2024, there were no state income tax audits in progress.</span></div><div style="margin-bottom:6pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%">j.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%;padding-left:11.9pt">Fair Value Measurements</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">For cash and cash equivalents, receivables, accounts payable and certain accrued expenses, the carrying amount approximates fair value due to the short maturities of these instruments. For long-term debt instruments, fair value is estimated based upon market values (if applicable) or on the current interest rates available to the Company for debt with similar terms and remaining maturities.</span></div><div style="margin-bottom:6pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%">k.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%;padding-left:8.84pt">Collaborative Arrangements</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Company accounts for its Joint Facilities under ASC 808, </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Collaborative Arrangements</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> (ASC 808), by recognizing its share of the expenses incurred from the Joint Facilities. Expenses are recognized as incurred. For USGAAP reporting, the Company does not consolidate the financial statements of the entities with which it collaborates, as it does not have control over these entities. Instead, the Company records its proportionate share of the results of the collaborative activities in its financial statements.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Any payments made to collaborative partners are accounted for as contributions to the joint activities. For the period from January 1, 2024 through August 14, 2024 (Predecessor); the period from August 15, 2024 through December 31, 2024 (Successor); and the year ended December 31, 2023 (Predecessor), the Company recognized $3.5 million, $0.9 million, and $1.7 million in expense related to the Joint Facilities, respectively.</span></div><div style="margin-bottom:6pt;padding-left:36pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">3.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:8.84pt">Income Taxes</span></div><div style="margin-bottom:6pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%">a.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%;padding-left:8.84pt">Components of Income Taxes</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The components of income tax expense for the years ended December 31:</span></div><div style="margin-bottom:6pt;padding-left:18pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:72.321%"><tr><td style="width:1.0%"/><td style="width:54.867%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:1.240%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:19.476%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:1.240%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:19.477%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">(in thousands of dollars)</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Successor</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Predecessor</span></td></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2024</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2023</span></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Current Expense / (Benefit)</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 13pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Federal</span></td><td colspan="3" style="padding:0 1pt"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">15,255 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">10,734 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 13pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">State</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">6,489 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">5,647 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 25pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Total current expense / (benefit)</span></td><td colspan="3" style="padding:0 1pt"/><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">21,744 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">16,381 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Deferred expense</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 13pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Federal</span></td><td colspan="3" style="padding:0 1pt"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">58 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">5,088 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 13pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">State</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">18 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">1,074 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 25pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Total deferred expense / (benefit)</span></td><td colspan="3" style="padding:0 1pt"/><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">76 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">6,162 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="display:none"/><td colspan="3" style="display:none"/><td colspan="3" style="display:none"/><td colspan="3" style="display:none"/><td colspan="3" style="display:none"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Total income tax expense / (benefit)</span></td><td colspan="3" style="padding:0 1pt"/><td style="background-color:#ffffff;border-bottom:1pt solid #000;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#ffffff;border-bottom:1pt solid #000;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">21,820 </span></td><td style="background-color:#ffffff;border-bottom:1pt solid #000;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td style="background-color:#ffffff;border-bottom:1pt solid #000;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#ffffff;border-bottom:1pt solid #000;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">22,543 </span></td><td style="background-color:#ffffff;border-bottom:1pt solid #000;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr></table></div><div style="margin-bottom:6pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%">b.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%;padding-left:8.24pt">Effective Tax Rate Reconciliation</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Book income (loss) before income taxes as shown is reflective of the full year's activity for the periods ending December 31, 2024 and December 31, 2023. Reconciliation of the statutory U.S. federal income tax rate to is as follows at December 31:</span></div><div style="margin-bottom:6pt;padding-left:18pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:90.922%"><tr><td style="width:1.0%"/><td style="width:65.021%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:15.266%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.945%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:15.268%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">(in thousands of dollars)</span></td><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Successor</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Predecessor</span></td></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2024</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2023</span></td></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Book Income (Loss) Before Income Taxes</span></td><td style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td colspan="2" style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 7pt 2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">79,381</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td colspan="2" style="border-top:1pt solid #000;padding:2px 7pt 2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">81,971</span></td></tr><tr style="height:15pt"><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Tax Expense at statutory federal income tax rate</span></td><td style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td colspan="2" style="background-color:#ffffff;padding:2px 7pt 2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">16,670</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td colspan="2" style="padding:2px 7pt 2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">17,214</span></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Increases/(decreases) in taxes resulting from:</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 13pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">State income taxes, net of federal income tax benefits</span></td><td colspan="3" style="background-color:#ffffff;padding:2px 7pt 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">5,144</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="padding:2px 7pt 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">5,310</span></td></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 13pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">AFUDC</span></td><td colspan="3" style="padding:2px 7pt 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">—</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;padding:2px 7pt 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">19</span></td></tr><tr><td colspan="3" style="padding:2px 1pt 2px 13pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Other, net</span></td><td colspan="3" style="padding:2px 7pt 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">6</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="padding:2px 7pt 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">—</span></td></tr><tr><td colspan="3" style="padding:2px 1pt 2px 25pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Total Income Tax Expense / (Benefit)</span></td><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td colspan="2" style="border-top:1pt solid #000;padding:2px 7pt 2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">21,820</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td colspan="2" style="border-top:1pt solid #000;padding:2px 7pt 2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">22,543</span></td></tr><tr style="height:8pt"><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Effective tax rate</span></td><td colspan="3" style="padding:2px 7pt 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">27.5%</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="padding:2px 7pt 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">27.5%</span></td></tr></table></div><div style="margin-bottom:6pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%">c.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%;padding-left:8.84pt">Deferred Tax Assets and Liabilities</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The income tax effects of temporary differences that gave rise to the net deferred income tax asset/(liability) is as follows at December 31:</span></div><div style="margin-bottom:6pt;padding-left:18pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:77.827%"><tr><td style="width:1.0%"/><td style="width:59.320%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.020%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:1.138%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.022%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">(in thousands of dollars)</span></td><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Successor</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Predecessor</span></td></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2024</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2023</span></td></tr><tr><td colspan="3" style="display:none"/><td colspan="3" style="display:none"/><td colspan="3" style="display:none"/><td colspan="3" style="display:none"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Deferred tax assets</span></td><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 13pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Non-Utility Property, plant &amp; equipment</span></td><td style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#ffffff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">— </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">11,543 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 25pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Total deferred tax assets</span></td><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">— </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">11,543 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr style="height:15pt"><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Deferred tax liabilities</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 13pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Property, plant &amp; equipment</span></td><td style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#ffffff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">4,916 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#ffffff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">46,182 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 13pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Regulatory Assets</span></td><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">492 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">500 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 25pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Total deferred tax liabilities</span></td><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">5,408 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">46,682 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Net Deferred Tax asset / (Liability)</span></td><td style="border-bottom:1pt solid #000;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="border-bottom:1pt solid #000;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">5,408 </span></td><td style="border-bottom:1pt solid #000;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td style="border-bottom:1pt solid #000;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="border-bottom:1pt solid #000;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">35,139 </span></td><td style="border-bottom:1pt solid #000;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr></table></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Due to the acquisition of PNGTS described in the Description of Business, the Company's Accumulated Deferred Income Tax (ADIT) were reset to $0 as of the acquisition date.</span></div><div style="margin-bottom:6pt;padding-left:36pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">4.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:8.84pt">Commitments, Contingencies, Legal Proceedings, Environmental and Regulatory Matters</span></div><div style="margin-bottom:6pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%">a.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%;padding-left:8.84pt">Contingencies, Legal Proceedings, and Environmental Matters</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">PNGTS is subject to various legal proceedings in the ordinary course of business. The accounting for contingencies covers a variety of business activities, including contingencies for legal and environmental liabilities. The Company accrues for these contingencies when the assessments indicate that it is probable that a liability has been incurred or an asset will not be recovered and an amount can be reasonably estimated in accordance with ASC 450, </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Contingencies</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> (ASC 450). The Company bases these estimates on currently available facts and the estimates of the ultimate outcomes or resolution. Actual results may vary from estimates resulting in an impact, positive or negative, on results of operations and cash flows. The Company is not aware of any material contingent liabilities, including legal proceedings, nor any </span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">environmental matters that would have an effect on the PNGTS’s financial condition, results of operations, or cash flows as of December 31, 2024 (Successor) and 2023 (Predecessor). </span></div><div style="margin-bottom:6pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%">b.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%;padding-left:8.24pt">Regulatory Matters</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The FERC regulates the rates and charges for transportation of natural gas in interstate commerce. Natural gas companies may not charge rates that have been determined to be unjust and unreasonable by the FERC. Generally, the rates for interstate pipelines are based on the cost of service, including recovery of and a return on the pipeline’s actual prudent historical cost investment. The rates and terms and conditions for service are found in each pipeline’s FERC-approved tariff. Under its tariff, an interstate pipeline is allowed to charge for its services on the basis of stated transportation rates. Transportation rates are established periodically in FERC proceedings known as rate cases. The tariff also allows the interstate pipeline to provide services under negotiated and discounted rates.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">PNGTS continues to operate under the rates approved by FERC in the Company’s last rate proceeding, effective December 1, 2010. The Company has no requirement to file a new rate proceeding.</span></div><div style="margin-bottom:6pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">5.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:8.84pt">Leases</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">PNGTS accounts for leases in accordance with Docket No AI19-1-000 which permits the Company to record operating leases that may be capitalized under USGAAP in the FERC balance sheet accounts that have already been established for capital lease assets and liabilities. Docket No AI19-1000 did not impact any existing ratemaking treatment or practices, and all other provisions of regulatory lease accounting are not affected. The amounts in balance sheet accounts that are related to operating leases at December 31, 2024 (Successor) and 2023 (Predecessor) are as follows:</span></div><div style="margin-bottom:6pt;padding-left:18pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:88.392%"><tr><td style="width:1.0%"/><td style="width:64.051%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:15.735%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.978%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:15.736%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">(in thousands of dollars)</span></td><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Successor</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Predecessor</span></td></tr><tr><td colspan="3" style="padding:2px 1pt 2px 3.77pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">FERC Account and Description</span></td><td colspan="3" style="border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2024</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2023</span></td></tr><tr><td colspan="3" style="border-top:1pt solid #000;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">  Property under Capital Leases (101.1)</span></td><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">376 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;border-top:1pt solid #000;padding:0 1pt"/><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">275 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">  Accumulated provision for depreciation (108)</span></td><td colspan="3" style="padding:2px 3.77pt 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">269</span></td><td colspan="3" style="background-color:#000000;padding:0 3.77pt 0 1pt"/><td colspan="3" style="padding:2px 3.77pt 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">202</span></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">  Obligations under Capital Leases - Current (243)</span></td><td colspan="3" style="padding:2px 3.77pt 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">69</span></td><td colspan="3" style="background-color:#000000;padding:0 3.77pt 0 1pt"/><td colspan="3" style="padding:2px 3.77pt 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">51</span></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">  Obligations under Capital Leases - Noncurrent (227)</span></td><td colspan="3" style="padding:2px 3.77pt 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">38</span></td><td colspan="3" style="background-color:#000000;padding:0 3.77pt 0 1pt"/><td colspan="3" style="padding:2px 3.77pt 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">22</span></td></tr></table></div><div style="margin-bottom:6pt;padding-left:36pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">6.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:8.84pt">Credit Facility and Long-Term Debt</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Company’s outstanding long-term debt consists of the following: </span></div><div style="margin-bottom:6pt;padding-left:18pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:73.511%"><tr><td style="width:1.0%"/><td style="width:56.997%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:19.142%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:1.217%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:19.144%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">(in thousands of dollars)</span></td><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Successor</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Predecessor</span></td></tr><tr><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">December 31,</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">December 31,</span></td></tr><tr><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2024</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2023</span></td></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 1.02pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Revolving Credit Facility; due 2028</span></td><td style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">6,000 </span></td><td style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">— </span></td><td style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 1.02pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">2.84% Series A Senior Notes due 2030</span></td><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">125,000 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">125,000 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">2.68% Series B Senior Notes due 2031</span></td><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">125,000 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">125,000 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td style="background-color:#ffffff;border-top:1pt solid #000000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#ffffff;border-top:1pt solid #000000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">256,000 </span></td><td style="background-color:#ffffff;border-top:1pt solid #000000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td style="background-color:#ffffff;border-top:1pt solid #000000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#ffffff;border-top:1pt solid #000000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">250,000 </span></td><td style="background-color:#ffffff;border-top:1pt solid #000000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Less: Current portion </span></td><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">6,000 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">— </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Total long-term debt, net</span></td><td style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">250,000 </span></td><td style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">250,000 </span></td><td style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr style="height:15pt"><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;border-top:3pt double #000;padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;border-top:3pt double #000;padding:0 1pt"/></tr></table></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On April 5, 2018, PNGTS entered into a revolving credit agreement under which allowed PNGTS to borrow up to $125 million with a variable interest rate based on LIBOR (Revolving Credit Facility). The Revolving Credit Facility is utilized by PNGTS primarily to fund the costs of its expansion projects and for general company purposes. The Revolving Credit Facility's original term was set to mature on April 5, 2023. </span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On January 31, 2023, PNGTS amended the Revolving Credit Facility to extend the term for an additional five-year term with a variable interest rate based on Secured Overnight Financing Rate (SOFR). During the year </span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">ended December 31, 2024 for both the Successor and Predecessor periods, the weighted average interest rate was 5.98%.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On July 17, 2024, PNGTS amended the Revolving Credit Facility to reduce the aggregate revolving commitment amount to $50 million and adjusted the Revolving Credit Facility to reflect new ownership structure as result of the Acquisition discussed in Note 1. On December 2, 2024, PNGTS drew $6 million on the Revolving Credit Facility, as of December 31, 2024 (Successor), $44 million was available for future borrowings. Amounts outstanding under the Revolving Credit Facility as of December 31, 2024 are classified as current as the amount is required to be paid within the next year.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On October 8, 2020, PNGTS entered into a Note Purchase and Private Shelf Agreement, whereby PNGTS issued $125 million of 10-year Series A Senior Notes with a coupon of 2.84 percent per annum and entered into a 3-year private shelf agreement for an additional $125 million of Senior Notes (Private Shelf Facility). The Series A Notes do not require any principal payments until maturity on October 8, 2030. On October 29, 2021, PNGTS issued the remaining $125 million available under the Private Shelf Facility for 10-year Series B Senior Notes with a coupon of 2.68 percent per annum. The Series B Notes do not require any principal payments until maturity on October 29, 2031. There are no maturities of long-term debt over each of the next five years.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Revolving Credit Facility and the Series A and B Notes require the Company to maintain a leverage ratio not greater than 5.00 to 1.00. The leverage ratio was 2.44 to 1.00 as of December 31, 2024. The Series A Notes and Series B Notes also contain a covenant that limits total debt to no greater than 65 percent of PNGTS’s total USGAAP capitalization. At December 31, 2024, PNGTS’s ratio of funded debt to USGAAP capitalization is 53 percent. As of December 31, 2024, PNGTS was in compliance with its financial covenants.</span></div><div style="margin-bottom:6pt;padding-left:36pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">7.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:8.84pt">Fair Value Measurements</span></div><div style="margin-bottom:6pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%">a.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%;padding-left:8.84pt">Fair Value Hierarchy</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Under ASC 820, </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Fair Value Measurement</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">, fair value measurements are characterized in one of three levels based upon the input used to arrive at the measurement. The three levels of the fair value hierarchy are as follows:</span></div><div style="margin-bottom:6pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">•</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:14.5pt">Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.</span></div><div style="margin-bottom:6pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">•</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:14.5pt">Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.</span></div><div style="margin-bottom:6pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">•</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:14.5pt">Level 3 inputs are unobservable inputs for the asset or liability.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">When appropriate, valuations are adjusted for various factors including credit considerations. Such adjustments are generally based on available market evidence. In the absence of such evidence, management’s best estimate is used.</span></div><div style="margin-bottom:6pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%">b.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-style:italic;font-weight:700;line-height:120%;padding-left:8.24pt">Fair Value of Financial Instruments </span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The carrying value of cash and cash equivalents, accrued interest, and all current receivable and payable accounts, except for natural gas imbalances, approximate their fair values because of the short maturity or duration of these instruments. </span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">PNGTS’s natural gas imbalances, which are reported as part of Miscellaneous Current and Accrued Assets (174) or Miscellaneous Current and Accrued Liabilities (242), are classified as a Level 2 in the “Fair Value Hierarchy,” as the valuation approach includes quoted prices in the market index and observable volumes for the imbalance. Natural gas imbalances represent the difference between the amount of natural gas delivered to or received from a pipeline system and the amount of natural gas scheduled to be delivered or received at current market prices. The Company values these imbalances by applying the difference between the measured quantities of natural gas delivered to or received from its shippers and operators to the current Platts Gas Daily Tennessee, zone 6 del, index price.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The fair value of the PNGTS’s long-term debt under the Revolving Credit Facility approximates the carrying value since the interest rates are periodically adjusted to reflect current market condition. At December 31, </span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">2024, the estimated fair value of the 2.84 percent Series A Senior Notes was $110.8 million (2023 - $108.7 million), and the estimated fair value of the 2.68 percent Series B Senior Notes was $108.5 million (2023 - $104.8 million). The fair value was estimated based on quoted market prices for the same or similar debt instruments with similar terms and remaining maturities, which is classified as Level 2 in the “Fair Value Hierarchy,” where the fair value is determined by using valuation techniques that refer to observable market data. </span></div><div style="margin-bottom:6pt;padding-left:36pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">8.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:8.84pt">Transactions with Major Customers</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The following table represents the customers providing significant operating revenues to PNGTS for the years ended December 31:</span></div><div style="margin-bottom:6pt;padding-left:18pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:95.982%"><tr><td style="width:1.0%"/><td style="width:26.341%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.885%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:9.287%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.420%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:11.303%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.420%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:9.287%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.420%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:11.303%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.420%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:9.287%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.420%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:11.307%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">(in thousands of dollars)</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="9" style="border-bottom:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Successor</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="21" style="background-color:#ffffff;padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Predecessor</span></td></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="9" style="border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Period from</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="9" style="border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:middle"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Period from</span></td><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="9" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">August 15,</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="9" style="padding:2px 1pt;text-align:center;vertical-align:middle"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">January 1,</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="9" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2024 through</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="9" style="padding:2px 1pt;text-align:center;vertical-align:middle"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2024 through</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="9" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Year ended</span></td></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="9" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">December 31,</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="9" style="padding:2px 1pt;text-align:center;vertical-align:middle"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">August 14,</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="9" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">December 31,</span></td></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="9" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2024</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="9" style="padding:2px 1pt;text-align:center;vertical-align:middle"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%"> 2024</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="9" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2023</span></td></tr><tr style="height:15pt"><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="3" rowspan="2" style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:middle"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Amount</span></td><td colspan="3" style="background-color:#ffffff;border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Percentage</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" rowspan="2" style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:middle"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Amount</span></td><td colspan="3" style="background-color:#ffffff;border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Percentage</span></td><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="3" rowspan="2" style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:middle"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Amount</span></td><td colspan="3" style="background-color:#ffffff;border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Percentage</span></td></tr><tr style="height:15pt"><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">of total</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">of total</span></td><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">of total</span></td></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 1.02pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Eversource Gas Company of Massachusetts</span></td><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">7,561 </span></td><td style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="2" style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">14 </span></td><td style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">%</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">12,357 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">15 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">%</span></td><td colspan="3" style="padding:0 1pt"/><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">19,073 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="2" style="border-top:1pt solid #000000;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">16 </span></td><td style="border-top:1pt solid #000000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">%</span></td></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 1.02pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Irving Oil Terminals Operations LLC</span></td><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">5,185 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">10 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">%</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">8,482 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">10 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">%</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">10,262 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">8 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">%</span></td></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 1.02pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Northern Utilities, Inc</span></td><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">5,376 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">10 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">%</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">8,117 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">10 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">%</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">11,420 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">9 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">%</span></td></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 1.02pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">New Brunswick Energy Marketing Corporation</span></td><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:middle"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">4,605 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:middle"/><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:middle"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">9 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:middle"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">%</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">7,520 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">9 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">%</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:middle"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">12,092 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:middle"/><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:middle"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">10 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:middle"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">%</span></td></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 1.02pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">National Grid</span></td><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">3,805 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">7 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">%</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">6,419 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">8 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">%</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">16,529 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">14 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">%</span></td></tr></table></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The following table represents the amounts in PNGTS’s accounts receivable for customers with accounts receivable balances greater than 10 percent of the Company’s accounts receivable as of December 31:</span></div><div style="margin-bottom:6pt;padding-left:18pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:80.654%"><tr><td style="width:1.0%"/><td style="width:60.708%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:17.350%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:1.091%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:17.351%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">(in thousands of dollars)</span></td><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Successor</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Predecessor</span></td></tr><tr><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2024</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2023</span></td></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 1.02pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Eversource Gas Company of Massachusetts</span></td><td style="background-color:#ffffff;border-top:1pt solid #000000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#ffffff;border-top:1pt solid #000000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">1,682 </span></td><td style="background-color:#ffffff;border-top:1pt solid #000000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td style="background-color:#ffffff;border-top:1pt solid #000000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#ffffff;border-top:1pt solid #000000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">1,682 </span></td><td style="background-color:#ffffff;border-top:1pt solid #000000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 1.02pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Irving Oil Terminals Operations LLC</span></td><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">1,148 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">1,147 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 1.02pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Northern Utilities, Inc</span></td><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">1,193 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">953 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 1.02pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">New Brunswick Energy Marketing Corporation</span></td><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">1,027 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">1,027 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 1.02pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">National Grid</span></td><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">1,034 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="2" style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">1,042 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="display:none"/><td colspan="3" style="display:none"/><td colspan="3" style="display:none"/><td colspan="3" style="display:none"/></tr></table></div><div style="margin-bottom:6pt;padding-left:36pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">9.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:8.84pt">Transactions with Related Parties</span></div><div style="padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Prior to the Acquisition, certain service related to PNGTS’s day-to-day operation activities were the responsibility of Northern Border-OpCo. Northern Border-OpCo utilizes the services of TC Energy and its related parties for services such as legal, tax, treasury, human resources, other administrative functions, and for other costs incurred on its behalf. These include, but are not limited to, employee benefit costs and property and liability insurance costs. These costs are based on direct assignment to the extent practicable, or by using allocation methods that are reasonable reflections of the utilization of services provided to or for the benefits received by the Company. Subsequent to the Acquisition, these entities are not considered to be related parties of the Parent or the Company. Subsequent to the Acquisition, these entities are not considered to be related parties of the Parent or the Company. Total costs incurred by the Company for services provided by its related parties prior to the Acquisition are summarized in the following table:</span></div><div style="margin-bottom:6pt;padding-left:18pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:95.982%"><tr><td style="width:1.0%"/><td style="width:40.760%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.885%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:17.504%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.420%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:17.504%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.420%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:17.507%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">(in thousands of dollars)</span></div></td><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Successor</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="9" style="background-color:#ffffff;padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Predecessor</span></td></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Period from</span></td><td colspan="3" style="background-color:#000000;border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Period from</span></td><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">August 15,</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">January 1,</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2024 through</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2024 through</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Year ended</span></td></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">December 31,</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">August 14,</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">December 31,</span></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Costs charged by TC Energy's subsidiaries:</span></td><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2024</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%"> 2024</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2023</span></td></tr><tr><td colspan="3" style="padding:2px 1pt 2px 1.02pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Capital costs</span></td><td colspan="3" style="padding:0 1pt"/><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">— </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;border-top:1pt solid #000;padding:0 1pt"/><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">80 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">337 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 1.02pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Operating costs</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">— </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">3,548 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">5,624 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr></table></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">As of December 31, 2023 (Predecessor), PNGTS had a net payable of $4.2 million to related parties. The amounts were classified as Accounts Payable to Associated Companies (234) net of Accounts Receivable from Associated Companies (146) on the Company's balance sheets.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">As of December 31, 2024 (Successor), PNGTS had an outstanding related party receivable of $7.3 million from related parties. The amount has been classified as Accounts Receivable from Associated Companies (146) on the Company's balance sheets.</span></div><div style="margin-bottom:6pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">10.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:2.73pt">Distributions</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">During the Successor Period, from August 15, 2024 through December 31, 2024, PNGTS declared and paid distributions to Beehive Loop AcquisitionCo of $15.9 million.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Prior to the Acquisition Transaction, at the direction of the Management Committee, PNGTS declared and paid quarterly distributions based on the most recently completed quarter end. During the Predecessor Periods from January 1, 2024 through August 14, 2024, and the year December 31, 2023, PNGTS paid distributions to its general partners of $76.5 million and $111.4 million, respectively.</span></div><div style="margin-bottom:6pt;padding-left:36pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">11.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%;padding-left:2.73pt">Supplemental Cash Flow Information</span></div><div style="margin-bottom:6pt;padding-left:18pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:95.982%"><tr><td style="width:1.0%"/><td style="width:47.427%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:15.489%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.420%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:15.489%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.885%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:15.490%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 3.77pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">(in thousands of dollars)</span></td><td colspan="3" style="background-color:#ffffff;padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Successor</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="9" style="background-color:#ffffff;padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Predecessor</span></td></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Period from</span></td><td colspan="3" style="background-color:#000000;border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Period from</span></td><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">August 15,</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">January 1,</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2024 through</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2024 through</span></td><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Year ended</span></td></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">December 31,</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">August 14,</span></td><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">December 31,</span></td></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2024</span></td><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2024</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2023</span></td></tr><tr><td colspan="3" style="padding:2px 1pt 2px 3.77pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Cash paid for interest, net of amount capitalized</span></td><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">3,538 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td colspan="2" style="border-top:1pt solid #000;padding:2px 3.77pt 2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">3,447</span></td><td colspan="3" style="padding:0 1pt"/><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td colspan="2" style="border-top:1pt solid #000;padding:2px 3.77pt 2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">6,897</span></td></tr><tr><td colspan="3" style="padding:2px 1pt 2px 3.77pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Cash paid for state income taxes</span></td><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">— </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="padding:2px 3.77pt 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">5,841</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 3.77pt 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">3,436</span></td></tr><tr><td colspan="3" style="padding:2px 1pt 2px 3.77pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Accruals for plant, property and equipment</span></td><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">59 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#000000;padding:0 1pt"/><td colspan="3" style="padding:2px 3.77pt 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">221</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 3.77pt 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">682</span></td></tr></table></div><div style="padding-left:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">12. Share-Based Compensation </span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Subsequent to the Acquisition, the Company has authorized Class B Profit Interest Units (PIUs) which are equity awards granted to certain employees, providing them with a stake in the appreciation of the Company's equity value. The Company has evaluated its Class B profit interest awards under ASC 718, </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Compensation – Stock Compensation</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> (ASC 718), and determined that they qualify as share-based payments. These awards provide participants with subordinated distribution rights in the event of a liquidity event, allowing them to benefit from the appreciation in the Company's equity value. The awards are based, at least in part, on the value of the Company's equity and are subject to repurchase at fair value, supporting their classification under ASC 718. The fair value of these awards is determined using a Black-Scholes model, considering factors such as market conditions and the Company's financial performance. The awards vest over a four-year period, with 80% vesting based on time and 20% based on performance conditions, contingent upon the service provider's continuous employment. In the event of a sale of the Company, any unvested awards will fully vest, provided the service provider remains employed through the sale date. Furthermore, the awards are classified as equity, as they meet the criteria outlined in ASC 718-10-25, including participation in the residual returns of the entity's net assets and retention of vested interests upon termination, unless terminated for cause. Management will reassess the classification and fair value of these awards each reporting period to ensure compliance with applicable accounting standards.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">There were 1,000,000 units authorized and 590,000 units outstanding at December 31, 2024. Of these, 50,000 were vested and 540,000 were unvested. There were no units exercised, forfeited or expired during the period from August 15, 2024 through December 31, 2024 (Successor). </span></div><div style="margin-bottom:6pt;padding-left:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:11pt;font-weight:700;line-height:120%">13. Subsequent Events</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On January 13, 2025, PNGTS drew $6.0 million on the Revolving Credit Facility.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On January 15, 2025, PNGTS paid a cash distribution in the amount of $23.4 million to the members.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On February 13, 2025, PNGTS repaid $6.0 million on the Revolving Credit Facility.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On April 10, 2025, PNGTS drew $5.0 million on the Revolving Credit Facility. </span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On April 15, 2025, PNGTS paid a cash distribution in the amount of $30.4 million to the members.</span></div><div style="margin-bottom:6pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Subsequent events have been assessed through April 16, 2025, which is the date the financial statements were issued, and management has concluded there were no events or transactions during this period that would require recognition or disclosure in the financial statements other than those already reflected here or in the preceding notes.</span></div>


entity_id: C001031
filing_name: Discovery_Gas_Transmission_LLC_form2_Q4_1744912406
publication_time: 2025-04-17 17:53:26.000000
start_date: 2024-01-01
end_date: 2024-12-31
disclosure_of_important_disclosures_regarding_the_financial_statements_text_block:
  <div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:112%">1. Organization and Description of Business</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Discovery Gas Transmission LLC (DGT), a Delaware limited liability company and a wholly owned subsidiary of Discovery Producer Services LLC (DPS), was formed on June 24, 1996, for the purpose of constructing and operating a natural gas pipeline from offshore deep water in the Gulf of Mexico to supply DPS’s gas processing plant in Larose, Louisiana.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> Prior to August 1, 2024, </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">DPS was owned 60% by Williams Field Services Group, LLC (WFSG) (a wholly owned subsidiary of Williams Companies, Inc.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">(WMB)),</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">and 40% by DCP Assets Holding, LP (DCP) (a wholly owned subsidiary of DCP Midstream, LP).</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> On August 1, 2024, WFSG acquired DCP’s 40% interest in DPS. As of December 31, 2024, DPS is 100% owned by WFSG. </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Herein, DGT is referred to in the first person as “we,” “us”, or “our” and sometimes as “the Company.”</span></div><div style="text-align:justify;text-indent:18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:112%">2. Summary of Significant Accounting Policies</span></div><div style="padding-left:18pt;text-indent:-18pt"><span><br/></span></div><div style="padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:112%">Basis of Presentation </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:700;line-height:112%"> </span></div><div style="padding-left:18pt;text-indent:-18pt"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">The financial statements have been prepared based upon the accounting regulations of the Federal Energy Regulatory Commission (FERC) pursuant to the Code of Federal Regulations, Title 18, Part 201, and The Uniform System of Accounts, which is a comprehensive basis of accounting other than U.S. Generally Accepted Accounting Principles (GAAP). Therefore, these financial statements contain certain differences from financial statements prepared in accordance with the accounting principles generally accepted in the United States, including account classification, use of FERC-prescribed depreciation rates, deferral of certain hurricane mitigation and reliability related costs, impairment of long-lived assets, and presentation of income taxes.</span></div><div style="padding-left:18pt;text-indent:-18pt"><span><br/></span></div><div style="padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:112%">Use of Estimates</span></div><div style="padding-left:18pt;text-align:justify;text-indent:-18pt"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">The preparation of financial statements in conformity with accounting regulations of the FERC 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.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Estimates and assumptions used in the calculation of asset retirement obligations and in evaluating the realizability of deferred tax assets are, in the opinion of management, significant to the underlying amounts included in the financial statements. It is reasonably possible that future events or information could change those estimates.</span></div><div style="padding-left:18pt;text-indent:-18pt"><span><br/></span></div><div style="padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:133%">Cash and Cash Equivalents</span></div><div style="padding-left:18pt;text-indent:-18pt"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Cash and cash equivalents</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> in our Consolidated Balance Sheet consist of highly liquid investments with original maturities of three months or less when acquired.</span></div><div style="padding-left:18pt;text-indent:-18pt"><span><br/></span></div><div style="padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:133%">Customer Accounts Receivable</span></div><div style="padding-left:18pt;text-indent:-18pt"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Accounts receivable are carried on a gross basis, with no discounting, less an allowance for doubtful accounts. We estimate the allowance for doubtful accounts, considering current expected credit losses using a forward-looking “expected loss” model, the financial condition of our customers, and the age of past due accounts. The majority of our trade receivable balances are due within 30 days. We monitor the credit quality of our counterparties through review of collection trends, credit ratings, and other analyses, such as bankruptcy monitoring. Financial assets from our natural gas transmission business and gathering and transportation business are segregated into separate pools for evaluation due to different counterparty risks inherent in each business. Changes in counterparty risk factors could lead to reassessment of the composition of our financial assets as separate pools or the need for additional pools. We calculate our allowance for credit losses incorporating an aging method. In estimating our expected credit losses, we utilize historical loss rates over many years, which include periods of both high and low commodity prices. Commodity prices could have a significant impact on a portion of our gathering and processing counterparties’ financial health and ability to satisfy current liabilities. Our expected credit loss estimate considers both internal and external forward-looking commodity price expectations, as well as counterparty credit ratings, and factors impacting their near-term liquidity. In addition, our expected credit loss estimate considers potential contractual, physical, and commercial protections and outcomes in the case of a counterparty bankruptcy. The physical location and nature of our services help to mitigate collectability concerns of our gathering, processing, and transportation producer customers. Our gathering lines in many cases are physically connected to the customers’ wellheads and pads, and there may not be alternative gathering lines nearby. The construction of gathering systems is capital intensive and it would be costly for others to replicate, especially considering the depletion to date of the associated reserves. As a result, we play a critical role in getting customers’ production from the wellhead to a marketable condition and location.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">This tends to reduce collectability risk as our services enable producers to generate operating cash flows. We do not offer extended payment terms and typically receive payment within one month. We consider receivables past due if full payment is not received by the contractual due date. We do not charge interest on past due receivables. Past due accounts are generally written off against the allowance for </span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">doubtful accounts only after all collection attempts have been exhausted</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%">. </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">There was no allowance for doubtful accounts at December 31, 2024 and 2023.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We do not have a material amount of significantly aged receivables at December 31, 2024 and 2023.</span></div><div><span><br/></span></div><div style="padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:133%">Gas Imbalances</span></div><div style="padding-left:18pt;text-indent:-18pt"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">In the course of providing transportation services to customers, we may receive different quantities of gas from shippers than the quantities delivered on behalf of those shippers. This results in gas transportation imbalance receivables and payables which are recovered or repaid in cash, based on market-based prices, or through the receipt or delivery of gas in the future. Imbalance receivables and payables are included in Miscellaneous Current and Accrued Assets and Other Current Liabilities in the Balance Sheets. Imbalance receivables which are recovered through receipt of gas in the future are valued based on the lower of the current market prices or weighted average cost of natural gas in the system. Imbalance payables are valued at current market prices. Settlement of imbalances requires agreement between the pipelines and shippers as to allocations of volumes to specific transportation contracts and the timing of delivery of gas based on operational conditions. Pursuant to a settlement with our shippers issued by the FERC on February 5, 2008, to streamline the process, if a cash-out refund is due and payable to a shipper during any year pursuant to our FERC Gas Tariff, shipper will be deemed to have immediately assigned its right to the refund amount to us.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">The cash-out balance on December 31, 2024, is $1.2 million; it will be held in Miscellaneous Current and Accrued Liabilities until approved by the FERC.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">The cash-out balance as of December 31, 2023, was $329,000 and filed with FERC on April 29, 2024.</span></div><div><span><br/></span></div><div style="padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:112%">Property, Plant and Equipment</span></div><div style="padding-left:18pt;text-indent:-18pt"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Property, plant, and equipment is recorded at cost. We base the carrying value of these assets on estimates, assumptions, and judgments relative to capitalized costs, useful lives, and salvage values. The natural gas and natural gas liquids maintained in the pipeline facilities necessary for their operation (line fill) are included in property, plant, and equipment. Gains or losses from the retirement of property, plant and equipment are credited or charged to accumulated depreciation. </span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">The provision for depreciation of DGT transmission and market expansion lines, respectively, is a straight-line method rate of 1.48% and 3.56%, based on the terms of the approved 2008 settlement agreement.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">The DGT junction assets were placed in service on February 1, 2015. The FERC approved levelized depreciation rates on the DGT junction assets.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">These rates were designed to have lower than straight-line depreciation in the early years and higher than straight-line depreciation in the later years. The difference between the straight-line average rate and the levelized rate, which include an allowance for negative salvage, as of December 31, 2024 and 2023 is the related regulatory asset of $36.6 million and $33.7 million, respectively.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Amortization of the regulatory asset of $2.9 million and $3.1 million was recorded to the income statement as a regulatory credit in 2024 and 2023, respectively.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">We record an asset and a liability equal to the present value of each expected future asset retirement obligation (ARO). We base the calculation of this obligation on estimates, assumptions, and judgments relative to retirement costs and dates.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">The ARO asset is depreciated in a manner consistent with the depreciation of the underlying physical asset. We measure changes in the liability due to passage of time by applying an interest method of allocation. This amount is recognized as an increase in the carrying amount of the liability and as a corresponding accretion expense included in operating income.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Relative to the DGT junction assets, the impact of depreciation expense and accretion expense is removed with a regulatory credit and offsetting regulatory asset to reflect the future recovery from shippers. The amount is amortized to expense following the negative salvage and levelized depreciation rates.</span></div><div style="padding-left:18pt;text-indent:-18pt"><span><br/></span></div><div style="padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:112%">Allowance for Funds Used During Construction</span></div><div style="padding-left:18pt;text-indent:-18pt"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Allowance for funds used during construction (AFUDC) represents the estimated cost of borrowed and equity funds applicable to utility plant in the process of construction and is included as a cost of property, plant, and equipment because it constitutes an actual cost of construction under established regulatory practices. The AFUDC is being amortized over 25 years.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">The FERC has prescribed a formula to be used in computing separate allowances for borrowed and equity AFUDC. There was no material allowance for borrowed funds or equity funds used during construction during 2024 and 2023.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span></div><div style="padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:112%">Other Regulatory Assets and Liabilities</span></div><div style="padding-left:18pt;text-indent:-18pt"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Effective January 1, 2008, we changed our utility plant depreciation method from a levelized rate depreciation to a straight-line rate depreciation method as a result of a FERC-approved 2008 rate case settlement.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Other regulatory liabilities consist of the difference between the cumulative depreciation expense using a straight-line depreciation method and the levelized rates through the date of the change.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Our regulatory assets primarily consist of the deferred tax on AFUDC (see Note 4).</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Pursuant to the 2008 rate case, these balances are amortized using a straight-line rate method over the remaining life of the asset.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Effective February 1, 2015, we began applying a levelized rate depreciation and negative salvage method related to certain assets placed into service at that time.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">The negative salvage component is intended to allow us to recover expected asset retirement costs associated with those assets.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">The levelized method serves to defer depreciation expense associated with those assets and accretion expense associated with the related asset retirement obligations.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">We record a non-current regulatory asset to account for this deferral.</span></div><div style="text-align:justify"><span><br/></span></div><div style="padding-left:18pt;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:112%">Revenue Recognition </span></div><div style="padding-left:18pt;text-indent:-18pt"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Customers for our service revenues are primarily of oil and natural gas producers. </span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">A performance obligation is a promise in a contract to transfer a distinct good or service (or integrated package of goods or services) to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue, when, or as, the performance obligation is satisfied. A performance obligation is distinct if the service is separately identifiable from other items in the integrated package of services and if a customer can benefit from it on its own or with other resources that are readily available to the customer. An integrated package of services typically represents a single performance obligation if the services are contained within the same contract or within multiple contracts entered into in contemplation with one another that are highly interdependent or highly interrelated, meaning each of the services is significantly affected by one or more of the other services in the contract. Our service revenue contracts contain a series of distinct services, with the majority of our contracts having a single performance obligation that is satisfied over time as the customer simultaneously receives and consumes the benefits provided by our performance. </span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Our revenues include contracts for natural gas transportation, and other related services with contract terms that are generally long-term in nature and may extend up to the production life of the associated reservoir. As such, revenue is recognized at the daily completion of the integrated package of services as the integrated package represents a single performance obligation. </span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">We generally earn a contractually stated fee per unit for the volume of product transported. The rates are fixed. </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">For all of our contracts, we allocate the transaction price to each performance obligation based on the relative standalone selling price.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">The Company is subject to FERC regulations, and accordingly, certain revenues collected may be subject to possible refunds upon final orders in pending rate proceedings. We record estimates of rate refund liabilities considering DGT and other third-party regulatory proceedings, advice of counsel, and estimated total exposure as discounted and risk weighted, as well as collection and other risks. There were no rate refund liabilities accrued, as of December 31, 2024 and 2023.</span></div><div style="padding-left:18pt;text-indent:-18pt"><span><br/></span></div><div style="padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:112%">Accounting for Repair and Maintenance Costs</span></div><div style="padding-left:18pt;text-indent:-18pt"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">DGT accounts for repair and maintenance costs under the guidance of FERC regulations. The FERC identifies installation, construction and replacement costs that are to be capitalized. All other costs are expensed as incurred.</span></div><div style="padding-left:18pt;text-indent:-18pt"><span><br/></span></div><div style="padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:112%">Income Taxes</span></div><div style="padding-left:18pt;text-align:justify;text-indent:-18pt"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">On June 21, 2024, The Williams Companies, Inc. executed a Purchase and Sale Agreement (PSA) to acquire DCP Assets Holding, LP’s 40% interest in Discovery Producer Services LLC (DPS). Prior to this transaction, The Williams Companies, Inc. owned a 60% stake in DPS. The transaction closed on August 1, 2024, making DPS a wholly owned subsidiary of The Williams Companies, Inc. As a limited liability company, Discovery is no longer a taxable entity for income tax purposes; however, amounts equivalent to current and deferred income tax expense based on corporate tax rates are presented in the accompanying financial statements since income taxes are a cost component for Discovery's currently effective rates. Accounting Standards Codification (ASC) No. 740, Income Taxes, requires that a deferred tax liability (asset) be recorded to reflect the tax provision expense (benefit) resulting from the recognition of temporary differences. Temporary differences are </span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">differences between the tax bases of assets and liabilities and their reported amounts in the financial statements that will result in differences between income for tax purposes and income for financial statement purposes in future years. Management’s judgment and certain income tax assumptions are used to determine the levels, if any, of valuation allowances associated with deferred tax assets.</span></div><div style="margin-top:10pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:120%">3. Related Party Transactions</span></div><div style="margin-top:10pt"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">We have a compression services agreement with DPS as part of the agreement to service our market expansion points.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">The agreement began in July 2003 with a five-year term and renews on a year-to-year basis thereafter with 90 days cancellation notice.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">The fee is adjusted annually by a labor index.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">We have a pipeline capacity agreement with DPS which began in December 2006 with initial term of 13 months and thereafter year to year with 30 days cancellation notice. </span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">We enter into natural gas purchase and sale transactions to meet pipeline and plant requirements and to settle the cash out provisions in the operating balancing agreement with DPS. In 2024 and 2023, DPS purchased $3.7 million and $1.3 million, respectively, for cash out provisions.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">This related agreement covers imbalances created between our pipeline and DPS’s Larose processing plant.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Prior to WFSG’s acquisition of DCP’s 40% interest on August 1, 2024, we paid WFSG certain fees under the terms of a pipeline operations and maintenance agreement for various services, including commercial services, accounting and financial analysis, legal services, other administrative services, </span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Following August 1, 2024, the fees charged under the operations and maintenance agreement are no longer effective. Services necessary to operate DGT are provided by Williams and certain affiliates of Williams. DGT reimburses Williams and its affiliates for all direct and indirect expenses incurred or payments made (including salary, bonus, incentive compensation and benefits) in connection with these services. Employees of Williams also provide general, administrative and management services, and DGT is charged for certain administrative expenses incurred by Williams. These charges are either directly identifiable or allocated to their assets. Direct charges are for goods and services provided by Williams upon request. Allocated charges are based on a three-factor formula, which considers revenues; property, plant and equipment; and payroll. In management’s estimation, the allocation methodologies used are reasonable and result in a reasonable allocation of costs of doing business incurred by Williams.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Following August 1, 2024, DGT participates in Williams’ cash management program, and thus makes advances to and receives advances from Williams. At December 31, 2024, DGT’s advances to Williams totaled approximately $4.6 million. These advances are represented by demand notes. Advances are stated at the historical carrying amounts. Interest expense and income are recognized when earned and the collectability is reasonably assured. The interest rate on these intercompany demand notes is based upon the daily overnight investment rate paid on Williams’ excess cash at the end of each month.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">The operating expenses and capitalized charges associated with these transactions are summarized in the following table:</span></div><div style="text-align:justify"><span><br/></span></div><div style="padding-left:36pt;text-align:justify"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:90.773%"><tr><td style="width:1.0%"/><td style="width:62.998%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:2.342%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:15.129%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:15.131%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="6" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Years Ended December 31,</span></td></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">2024</span></td><td colspan="3" style="border-bottom:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">2023</span></td></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="6" style="border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">(Thousands)</span></td></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Operation expenses:</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 10pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Payroll Costs</span></td><td colspan="3" style="padding:0 1pt"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">2,821 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">2,136 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt 2px 10pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Management and Project Fees</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="2" style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">1,590 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">2,611 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 10pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Compression Rental Expense</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">3,338 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">3,084 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt 2px 10pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Insurance Expense</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="2" style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">703 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">761 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 10pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Pipeline Capacity Rental</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">900 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">900 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt 2px 10pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Operating Expense and General and Administrative Expense Allocations</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="2" style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">1,632 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">— </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 10pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Interest Income</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">157 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">— </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr></table></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:115%">4. Provision for Income Taxes </span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Following is a reconciliation of the provision (benefit) for income taxes at the federal statutory rate to the provision (benefit) for income taxes (in thousands):</span></div><div style="padding-left:36pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:90.773%"><tr><td style="width:1.0%"/><td style="width:62.998%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:2.342%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:15.129%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:15.131%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">2024</span></td><td colspan="3" style="border-bottom:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">2023</span></td></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="6" style="border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">(Thousands)</span></td></tr><tr style="height:6pt"><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Provision at Statutory Rate:</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#bfe4ff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">332 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#bfe4ff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">1,046 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">State Income Taxes</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">(656)</span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">148 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Other</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="2" style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">1 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">1 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Change in Tax Rate</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">— </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">— </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Increases (Reductions) in Provision Resulting from:</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 14.5pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Change in Valuation Allowance</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">1,006 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">(86)</span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Provision (benefit) for Income Taxes</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td style="background-color:#bfe4ff;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#bfe4ff;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">683 </span></td><td style="background-color:#bfe4ff;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td style="background-color:#bfe4ff;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#bfe4ff;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">1,109 </span></td><td style="background-color:#bfe4ff;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr style="height:11pt"><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:3pt double #000;padding:0 1pt"/><td colspan="3" style="border-top:3pt double #000;padding:0 1pt"/></tr></table></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">The Provision for income taxes includes:</span></div><div style="padding-left:36pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:90.625%"><tr><td style="width:1.0%"/><td style="width:63.103%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:2.184%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:15.156%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:15.157%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">2024</span></td><td colspan="3" style="border-bottom:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">2023</span></td></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="6" style="border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">(Thousands)</span></td></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Current:</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 14.5pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Federal</span></td><td colspan="3" style="padding:0 1pt"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">— </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">— </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt 2px 14.5pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">State</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="2" style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">5 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">44 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">5 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">44 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Deferred:</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 14.5pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Federal</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">1,513 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">921 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt 2px 14.5pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">State</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="2" style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">(836)</span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">143 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">677 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">1,064 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Total Provision/(Benefit)</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td style="background-color:#bfe4ff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#bfe4ff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">682 </span></td><td style="background-color:#bfe4ff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td style="background-color:#bfe4ff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#bfe4ff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">1,108 </span></td><td style="background-color:#bfe4ff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr></table></div><div><span><br/></span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Significant components of deferred tax liabilities and assets as of December 31, 2024 and 2023 are as follows:</span></div><div style="padding-left:36pt;text-align:justify"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:90.029%"><tr><td style="width:1.0%"/><td style="width:63.528%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:2.444%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:15.263%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:15.265%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">2024</span></td><td colspan="3" style="border-bottom:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">2023</span></td></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="6" style="border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">(Thousands)</span></td></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Deferred Tax Liabilities:</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 10pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Property, Plant, and Equipment and HMRE</span></td><td colspan="3" style="padding:0 1pt"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">47,384 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">49,540 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt 2px 10pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Regulatory Liability</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="2" style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">168 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">196 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 37pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Total Deferred Tax Liabilities</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">47,552 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">49,736 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Deferred Tax Assets:</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 10pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Accounts Payable</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">12 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">25 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt 2px 10pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Asset Retirement Obligation</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="2" style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">8,552 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">9,754 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 10pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Deferred Revenue</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">259 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">79 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt 2px 10pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Regulatory Liability - Levelized Depreciation</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="2" style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">423 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">493 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 10pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Net Operating Loss Carryforward</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">23,297 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">24,047 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt 2px 37pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Total Deferred Tax Assets</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="2" style="background-color:#bfe4ff;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">32,543 </span></td><td style="background-color:#bfe4ff;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="background-color:#bfe4ff;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">34,398 </span></td><td style="background-color:#bfe4ff;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Valuation Allowance</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">(19,356)</span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">(18,350)</span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt 2px 10pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Net Deferred Tax Assets</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="2" style="background-color:#bfe4ff;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">13,187 </span></td><td style="background-color:#bfe4ff;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="background-color:#bfe4ff;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">16,048 </span></td><td style="background-color:#bfe4ff;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Overall Net Deferred Tax Liabilities</span></td><td colspan="3" style="padding:0 1pt"/><td style="border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">34,365 </span></td><td style="border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td style="border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">33,688 </span></td><td style="border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr></table></div><div style="text-align:justify;text-indent:36pt"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">The FERC allows recovery of certain of these temporary differences, and accordingly, DGT has recorded a regulatory asset in the amount of $44.2 million at December 31, 2024 and $40.2 million on December 31, 2023.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">As of December 31, 2024, we had federal and state NOL carryforwards of approximately $103 million and $76.5 million, respectively. Approximately $8.1 million federal and all state NOLs have an indefinite carryforward period. All other NOLs will expire between 2025 and 2034.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Valuation allowances have been established that reduce the deferred tax assets to amounts that will more likely than not be utilized. Uncertainties that may affect the utilization of the loss carryforwards include future operating results, tax law changes and expiration of carryforward periods.</span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:115%">5. Property, Plant, Equipment, and Intangible Assets </span></div><div style="padding-left:36pt"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Property, plant, and equipment consisted of the following, as of December 31, 2024 and 2023:</span></div><div style="text-align:justify"><span><br/></span></div><div style="padding-left:36pt;text-align:justify"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:92.857%"><tr><td style="width:1.0%"/><td style="width:48.739%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:2.364%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:14.765%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:14.765%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:14.767%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">2024</span></td><td colspan="3" style="border-bottom:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">2023</span></td><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:9pt;font-weight:400;line-height:120%">Depreciation % Per Year</span></td></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="6" style="border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">(Thousands)</span></td><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Property, Plant and Equipment:</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 10pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Construction Work in Progress</span></td><td colspan="3" style="padding:0 1pt"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">102 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">19,259 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt 2px 10pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Land and Land Rights</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="2" style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">816 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">816 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 10pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Transportation Lines</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">252,151 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">233,745 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">1.48-3.56</span></td></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt 2px 10pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Junction</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="2" style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">126,838 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">128,058 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">.91-2.5</span></td></tr><tr><td colspan="3" style="padding:2px 1pt 2px 10pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Equipment</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">18,715 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">17,245 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">1.48-3.56</span></td></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Total Property, Plant and Equipment</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="2" style="background-color:#bfe4ff;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">398,622 </span></td><td style="background-color:#bfe4ff;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="background-color:#bfe4ff;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">399,123 </span></td><td style="background-color:#bfe4ff;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Less Accumulated Depreciation and Amortization</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">224,033 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">215,937 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Net Property, Plant and Equipment</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td style="background-color:#bfe4ff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#bfe4ff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">174,589 </span></td><td style="background-color:#bfe4ff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td style="background-color:#bfe4ff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#bfe4ff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">183,186 </span></td><td style="background-color:#bfe4ff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/></tr></table></div><div style="margin-top:10pt;text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">A summary of our intangible assets as of December 31, 2024 and 2023 as presented below:</span></div><div style="text-align:justify"><span><br/></span></div><div style="padding-left:36pt;text-align:justify"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:92.857%"><tr><td style="width:1.0%"/><td style="width:48.739%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:2.105%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:14.765%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:14.765%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:14.126%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">2024</span></td><td colspan="3" style="border-bottom:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">2023</span></td><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Asset Life</span></td></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="6" style="border-top:1pt solid #000;padding:2px 1pt;text-align:left;vertical-align:bottom"><div style="text-align:center"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">(Thousands)</span></div></td><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Gross Intangible Assets</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#bfe4ff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">475 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#bfe4ff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">475 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">10 Years</span></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Less Accumulated Amortization</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">475</span></td><td colspan="3" style="padding:2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">443</span></td><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Net Intangible Assets</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td style="background-color:#bfe4ff;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#bfe4ff;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">— </span></td><td style="background-color:#bfe4ff;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td style="background-color:#bfe4ff;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#bfe4ff;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">32 </span></td><td style="background-color:#bfe4ff;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/></tr><tr style="height:15pt"><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:3pt double #000;padding:0 1pt"/><td colspan="3" style="border-top:3pt double #000;padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Annual Amortization Expense on a Straight Line Basis</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#bfe4ff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">32 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#bfe4ff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">76 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/></tr><tr style="height:15pt"><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Expected Amortization in Future Years:</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">2025</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">0</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Total</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td style="background-color:#bfe4ff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#bfe4ff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">— </span></td><td style="background-color:#bfe4ff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#bfe4ff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/></tr></table></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">We have asset retirement obligations related to our offshore pipelines and platform.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">At the end of the useful life, we are legally obligated to properly abandon the offshore pipelines and platform.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">A summary of our asset retirement obligation as of December 31, 2024 and 2023 is presented below.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span><br/></span></div><div style="padding-left:36pt;text-align:justify"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:78.125%"><tr><td style="width:1.0%"/><td style="width:58.138%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:1.947%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:17.757%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:17.758%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">2024</span></td><td colspan="3" style="border-bottom:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">2023</span></td></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="6" style="border-top:1pt solid #000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">(Thousands)</span></td></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Balance at January 1</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#bfe4ff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">40,707 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#bfe4ff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">36,509 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Accretion Expense</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">2,172 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">2,070 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Estimate Revisions</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td colspan="2" style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">(5,974)</span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="background-color:#bfe4ff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">2,128 </span></td><td style="background-color:#bfe4ff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">New Obligations Incurred</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">— </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">— </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#bfe4ff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">Balance at December 31</span></td><td colspan="3" style="background-color:#bfe4ff;padding:0 1pt"/><td style="background-color:#bfe4ff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#bfe4ff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">36,905 </span></td><td style="background-color:#bfe4ff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td style="background-color:#bfe4ff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#bfe4ff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:400;line-height:120%">40,707 </span></td><td style="background-color:#bfe4ff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr></table></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:115%">6. Financial Instruments and Concentrations of Credit Risk</span></div><div style="padding-left:36pt;text-indent:-18pt"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:112%">Fair Value of Financial Instruments</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Fair value is defined as the price which would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Assets and liabilities recorded or disclosed at fair value are categorized based upon the level of judgement associated with the inputs used to measure their fair values.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">These categories </span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">include (in descending order of priority):</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The carrying value of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value because of the short-term nature of these instruments.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:112%">Concentrations of Credit Risk</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Substantially all our accounts receivable result from gas transmission services provided to our largest customers as of December 31, 2024 and 2023.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">This concentration of customers may impact our overall credit risk either positively or negatively, in that these entities may be similarly affected by industry wide changes in economic or other conditions. As a general policy, collateral is not required for receivables, but customers’ financial condition and credit worthiness are evaluated regularly. Our credit policy and the relatively short duration of receivables mitigate the risk of uncollected receivables. We did not incur any credit losses on receivables during 2024 and 2023.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:133%">Major Customers</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:115%">In 2024, revenues from Anadarko, Walter and Sequent represented approximately $2.3 million (8 percent), $2.1 million (8 percent), and $1.9 million (6 percent), respectively of our total revenues.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:115%">In 2023, revenues from Walter/Superior, Anadarko and Spotlight represented approximately $3.4 million (12 percent), $3.0 million (10 percent), and $2.8 million (10 percent), respectively of our total revenues.</span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:115%">7. Rate and Regulatory Matters and Contingent Liabilities</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:133%">Rate and Regulatory Matters. </span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Pursuant to the FERC 18 CFR § 154.403, Periodic Rate Adjustments, and DGT’s Rate Schedules FT-1, FT-2 and IT in its FERC Gas Tariff, DGT has the right to file, on an annual basis, a request with the FERC for a fuel lost-and-unaccounted-for gas (FL&amp;U) percentage (“the retention rate”) to be assessed shippers for the upcoming fiscal year beginning July 1. On May 24, 2023, DGT filed to increase the FL&amp;U retention rate from 0.00 percent to 0.18 percent per Dt to be assessed on gas received into DGT’s system commencing July 1, 2023. The revised retention rate was based upon the actual fuel use, system loss and gas retained in 2022. On June 23, 2023, the FERC issued a letter order approving the requested retention rate.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">On May 24, 2024, DGT filed to decrease the FL&amp;U retention rate from .18 percent per Dt to 0.00 percent per Dt to be assessed on gas received into DGT’s system commencing July 1, 2024. The revised retention rate was based upon the actual fuel use, system loss and gas retained in 2023. On June 12, 2024, the FERC issued a letter order approving the requested retention rate. </span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Pursuant the FERC 18 CFR § 154.403, Periodic Rate Adjustments, and DGT’s FERC Tariff, GT&amp;C, Section 27, DGT has the right to file, on an annual basis, a request to recover all capital costs and related operation and maintenance expenditures associated with Hurricane Mitigation and Reliability Enhancements (“HMRE Surcharge”) to be assessed shippers each January 1. On November 15, 2023, DGT filed its annual HMRE surcharge adjustment to increase its then current rate from $0.0136 per Dt to $0.0144 per Dt effective January 1, 2024. The filing reflected an additional $1.3 million of qualifying HMRE costs to be recovered by the surcharge. As reflected in the application, the total HMRE amount to be recovered over future periods $2.0 million as of September 30, 2023. On November 15, 2024, DGT filed its annual HMRE surchage adjustment to decrease its then current rate from $0.0144 per Dt to $0.0069 per Dt effective January 1, 2025. The filing reflected an additional $1.5 million of qualifying HMRE costs to be recovered by the surcharge. As reflected in the application the total HMRE amount to be recovered over future periods $1.2 million as of September 30. 2024.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:112%">Environmental Matters.</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">We are subject to extensive federal, state, and local environmental laws and regulations which affect our operations related to the construction and operation of our facilities. Appropriate governmental authorities may enforce these laws and regulations </span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">with a variety of civil and criminal enforcement measures, including monetary penalties, assessment and remediation requirements and injunctions as to future compliance. We have not been notified and are not currently aware of any material noncompliance under the various environmental laws and regulations.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:112%">Other</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">A state government filed a claim against us alleging damages to protected marshland. It is reasonably possible that the ultimate resolution of this matter could result in a potential loss; however, we are in the early stages of the process and have no ability to reasonably estimate a range of potential exposure.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">We are party to various other claims, legal actions and complaints arising in the ordinary course of business.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">We estimate that, for all matters for which we are able to reasonably estimate a range of loss, 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.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">These estimations have been made without consideration of any potential recovery from third parties.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:112%"> </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">There are no significant matters for which we are unable to reasonably estimate a range of possible loss.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:112%">Commitments</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Commitments for construction and acquisition of property, plant, and equipment were $102,000 at December 31, 2024.</span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:115%">8. Subsequent Event</span></div><div style="padding-left:36pt;text-align:justify;text-indent:-18pt"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">We evaluated our disclosure of subsequent events through April 17, 2025 the date that our financial statements were issued.</span></div>


