# notes_to_financial_statements_122_1_duration

entity_id: C000594
filing_name: Rockies_Express_Pipeline_LLC_form2_Q4_1681347430
publication_time: 2023-04-13 00:57:10.000000
start_date: 2022-01-01
end_date: 2022-12-31
disclosure_of_subsequent_events_text_block:
  <div style="margin-bottom:6pt;margin-top:6pt;padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">12. Subsequent Events</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Subsequent events, which are events or transactions that occurred after December 31, 2022 through the issuance of the accompanying financial statements, have been evaluated through April 12, 2023.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Members' Equity</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">During the three months ended March 31, 2023, REX paid distributions of $141.7 million to its Members and received contributions from its Members of $1.0 million.</span></div>

disclosure_of_important_disclosures_regarding_the_financial_statements_text_block:
  <div style="margin-bottom:6pt;margin-top:6pt;padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">1. Description of Business</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Rockies Express Pipeline LLC ("REX") is a Federal Energy Regulatory Commission ("FERC") regulated natural gas transportation system with approximately 1,714 miles of natural gas pipeline, including laterals, extending from Opal, Wyoming and Meeker, Colorado to Clarington, Ohio and consisting of three zones:</span></div><div style="margin-bottom:6pt;margin-top:6pt;padding-left:36pt;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">Zone 1 - 328 miles of mainline pipeline from the Meeker Hub in Northwest Colorado, across Southern Wyoming to the Cheyenne Hub in Weld County, Colorado, which is bi-directional and capable of transporting 2.0 Bcf/d of natural gas from west-to-east and 1.0 Bcf/d of natural gas from east-to-west;</span></div><div style="margin-bottom:6pt;margin-top:6pt;padding-left:36pt;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">Zone 2 - 714 miles of mainline pipeline from the Cheyenne Hub to an interconnect in Audrain County, Missouri, which is bi-directional and capable of transporting 1.8 Bcf/d of natural gas from west-to-east and 0.9 Bcf/d of natural gas from east-to-west; and</span></div><div style="margin-bottom:6pt;margin-top:6pt;padding-left:36pt;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">Zone 3 - 643 miles of mainline pipeline from Audrain County, Missouri to Clarington, Ohio, which is bi-directional and capable of transporting 1.8 Bcf/d of natural gas from west-to-east and 2.8 Bcf/d of natural gas from east-to-west.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The member interests and voting rights in REX as of December 31, 2022 are as follows:</span></div><div style="margin-bottom:6pt;margin-top:6pt;padding-left:36pt;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">75% of the outstanding common member interest and 100% of the outstanding preferred member interest - TEP REX Holdings, LLC ("TEP REX"), an indirect subsidiary of Tallgrass Energy Partners, LP ("TEP"); and</span></div><div style="margin-bottom:6pt;margin-top:6pt;padding-left:36pt;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">25% of the outstanding common member interest - Phillips 66 Company ("P66"), a wholly owned subsidiary of Phillips 66.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Amendment No. 3 to Second Amended and Restated Limited Liability Company Agreement of Rockies Express Pipeline LLC </span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">REX intends to construct (1) certain facilities (the “New Facilities”) that will be leased to Trailblazer Pipeline Company LLC (“Trailblazer”), an indirect wholly-owned subsidiary of TEP, pursuant to a long term lease (the “Capacity Lease”) and (2) an additional compressor unit at REX’s Cheyenne Hub (“Unit 6”). TEP has recently announced plans to convert certain of the existing facilities owned by Trailblazer from natural gas service to CO2 transportation service. Trailblazer will utilize the capacity leased from REX under the Capacity Lease to continue to provide natural gas service.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Pursuant to that certain Amendment No. 3 to Second Amended and Restated Limited Liability Company Agreement of Rockies Express Pipeline LLC executed and effective as of May 17, 2022 (the “Amendment”), TEP and P66 have agreed that the total cost of constructing the New Facilities and Unit 6 and certain other costs and liabilities associated with those assets will be funded solely by capital contributions made to REX by TEP REX. TEP REX will receive a Class A Preferred Membership Interest in REX in exchange for such capital contributions (such capital contributions are referred to as the “Class A Preferred Capital Contributions”).</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Class A Preferred Membership Interest will accrue a return at an annual rate of 12%, compounded monthly, of the then outstanding Class A Preferred Pay-off Amount. The “Class A Preferred Pay-off Amount” is defined as (i) the Class A Preferred Capital Contributions, plus (ii) the accrued return on the Class A Preferred Membership Interest, less (iii) all distributions made to TEP REX in its capacity as the holder of the Class A Preferred Membership Interest. In general, the first $3,250,000 received by REX each month under the Capacity Lease will be distributed to TEP REX as the holder of the Class A Preferred Membership Interest, until the Class A Preferred Pay-off Amount is zero, at which time the Class A Preferred Membership Interest will be cancelled. The remainder of amounts received by REX under the Capacity Lease will be distributed to TEP REX and P66 in accordance with their percentage ownership in REX.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">P66 has the option, at any time prior to the Class A Preferred Pay-off Amount being reduced to zero, to purchase its pro rata portion of the Class A Preferred Membership Interest for a purchase price equal to the Class A Preferred Pay-off Amount multiplied by the P66’s sharing ratio in REX. Immediately after consummation of the transfer, the Class A Preferred Membership Interests held by each Class A preferred member shall be deemed converted to a common interest in REX and cancelled. Thereafter, each member of REX shall be obligated to contribute their respective sharing ratios of any additional capital contributions required to be made with respect to the New Facilities, Unit 6 and/or the amounts required to be paid by REX under the Capacity Lease that would have been funded by the Class A preferred members.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Class A Preferred Membership Interest will be cancelled (a “Class A Preferred Cancelation Event”): (x) if the Capacity Lease is not approved by FERC (or is withdrawn prior to FERC approval) or is terminated prior to the commencement date under the Capacity Lease; (y) if on the 16th anniversary of the commencement date under the Capacity Lease, the Class A Preferred Pay-off Amount is greater than zero; or (z) if, without the consent of P66, the portion of Trailblazer's pipeline system that is being contemplated as being converted to CO2 service in connection with the construction of the New Facilities and the Capacity Lease is thereafter converted to liquid </span></div><div style="margin-bottom:6pt;margin-top:6pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">hydrocarbon service. Upon the occurrence of a Class A Preferred Cancellation Event the Class A Preferred Pay-off Amount will be deemed to be zero.</span></div><div style="margin-bottom:6pt;margin-top:6pt;padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">2. Summary of Significant Accounting Policies</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Basis of Presentation</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><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 accordance with the accounting requirements of the FERC as set forth in its 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 ("GAAP"). </span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Use of Estimates</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Certain amounts included in or affecting these financial statements and related disclosures must be estimated, requiring management to make certain assumptions with respect to values or conditions which cannot be known with certainty at the time the financial statements are prepared. These estimates and assumptions affect the amounts reported for assets, liabilities, revenues, and expenses during the reporting period, and the disclosure of contingent assets and liabilities at the date of the financial statements. Management evaluates these estimates on an ongoing basis, utilizing historical experience, consultation with experts and other methods it considers reasonable in the particular circumstances. Nevertheless, actual results may differ significantly from these estimates. These estimates and other factors, including those outside of REX's control, such as the impact of commodity price volatility associated with global economic factors, could have a significant adverse impact on its business, financial position, or results of operations. Any impact of revisions to these estimates is recorded in the period in which the facts that give rise to the revision become known.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Cash Equivalents and Supplemental Cash Flow Information</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">REX considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. </span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Non-cash investing activities during the years ended December 31, 2022 and 2021 include accruals of property, plant, and equipment of $2.5 million and $2.6 million, respectively.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Accounts Receivable and Reserves for Credit Losses</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Accounts receivable are carried at their estimated collectible amounts. Current expected credit losses for trade receivables are estimated using a combination of the probability-of-default methodology and review of aging schedules. Trade receivables are measured collectively, with customers grouped on the basis of their credit profile and line of business, and consideration is given to individual receivables that may have different risk profiles. Probability of default rates are assigned to customers based on actual credit ratings or estimated ratings based on available financial metrics. Outstanding receivables are periodically reviewed and for any specific receivables deemed uncollectible, a reserve for current expected credit losses is recorded. REX's reserves for current expected credit losses associated with trade receivables totaled $2.0 million and $1.5 million at December 31, 2022 and 2021, respectively. REX’s reserves for current expected credit losses associated with the contract asset totaled $1.5 million and $0.9 million at December 31, 2022 and 2021, respectively.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Fuel Recovery Mechanism</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">REX obtains natural gas quantities from its shippers as reimbursement for fuel consumed at compressor stations and other locations on its system as well as for natural gas quantities lost and otherwise unaccounted for, in accordance with its tariff and applicable contract terms. REX tracks the volume and value of associated over-or under-collections of fuel and lost and unaccounted for quantities through a tracking mechanism referred to as "fuel tracker." Those amounts are recorded as an addition or reduction to a regulatory asset or liability balance representing the amounts to be recovered from or refunded to customers through the fuel tracker mechanisms. Fuel tracker volumes are valued using a weighted-average monthly index price.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Accounting for Regulatory Activities</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Regulatory assets and liabilities represent probable future revenues or expenses to REX associated with certain charges and credits that will be recovered from or refunded to customers through the ratemaking process. As of December 31, 2022 and 2021, REX's regulatory assets (Account 182.3) totaled $27.5 million and $22.5 million, respectively, and are primarily attributable to the tax gross-up on the allowance for equity funds used during construction, REX's fuel and power cost trackers, and costs associated with the FERC annual charge adjustment. As of December 31, 2022 and 2021, REX's regulatory liabilities (Account 254) totaled $16.4 million and $17.6 million, respectively, and are primarily attributable to regulatory liabilities associated with the remeasurement of REX's deferred income tax liability, and fuel and power cost trackers.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Gas Imbalances</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Gas imbalances receivable and payable represent the difference between customer nominations and actual gas receipts from and gas deliveries to interconnecting pipelines under various operational balancing agreements. Gas imbalances are made up in-kind or settled in cash, subject to the terms of the various agreements and are valued at the average monthly index prices of $3.17 and $2.66 per MMBtu as of December 31, 2022 and 2021, respectively.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Property, Plant and Equipment</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Utility Plant is stated at historical cost, which for constructed plant includes indirect costs such as payroll taxes, other employee benefits, allowance for funds used during construction and other costs directly related to the projects. Expenditures that increase capacities, improve efficiencies or extend useful lives are capitalized and depreciated over the remaining useful life of the asset or major asset component. REX also capitalizes certain costs related to the construction of assets, including internal labor costs, interest and engineering costs.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Routine maintenance, repairs and renewal costs are expensed as incurred. The cost of normal retirements of depreciable utility property, plant and equipment, plus the cost of removal less salvage value and any gain or loss recognized, is recorded in accumulated depreciation with no effect on current period earnings. Gains or losses are recognized upon retirement of utility property, plant and equipment constituting an operating unit or system, and land, when sold or abandoned and costs of removal or salvage are expensed when incurred.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">REX maintains natural gas in its pipeline, known as "line pack," which serves to maintain the necessary pressure to allow efficient transmission of natural gas. Line pack is capitalized within Utility Plant and depreciated over the estimated useful life of the pipeline.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Depreciation and Amortization</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Depreciation is computed based on the composite method over the estimated useful lives of property, plant and equipment. The annual composite rate of depreciation for the years ended December 31, 2022 and 2021 was 2.86%.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Impairment of Long-Lived Assets </span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">REX reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss results when the estimated undiscounted future net cash flows expected to result from the asset's use and its eventual disposition are less than its carrying amount. Any such impairment losses at REX would be recorded as a regulatory asset until regulatory review regarding recoverability through the rate-making process is complete, at which time REX will recognize the loss if it is determined to be unrecoverable or retain as a regulatory asset and recover through its rates.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Examples of long-lived asset impairment indicators include:</span></div><div style="margin-bottom:6pt;margin-top:6pt;padding-left:36pt;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:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:13.8pt">a significant decrease in the market value of a long-lived asset or group;</span></div><div style="margin-bottom:6pt;margin-top:6pt;padding-left:36pt;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:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:13.8pt">a significant adverse change in the extent or manner in which a long-lived asset or asset group is being used or in its physical condition;</span></div><div style="margin-bottom:6pt;margin-top:6pt;padding-left:36pt;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:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:13.8pt">a significant adverse change in legal factors or in the business climate could affect the value of a long-lived asset or asset group, including an adverse action or assessment by a regulator which would exclude allowable costs from the rate-making process;</span></div><div style="margin-bottom:6pt;margin-top:6pt;padding-left:36pt;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:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:13.8pt">an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the long-lived asset or asset group;</span></div><div style="margin-bottom:6pt;margin-top:6pt;padding-left:36pt;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:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:13.8pt">a current period operating cash flow loss combined with a history of operating cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset or asset group; and</span></div><div style="margin-bottom:6pt;margin-top:6pt;padding-left:36pt;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:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:13.8pt">a current expectation that, more likely than not, a long-lived asset or asset group will be sold or otherwise disposed of significantly before the end of its previously estimated useful life.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">When an impairment indicator is present, REX first assesses the recoverability of the long-lived assets by comparing the sum of the undiscounted future cash flows expected to result from the use and eventual disposition of the asset to the carrying amount of the asset. If the carrying amount is higher than the undiscounted future cash flows, the fair value of the asset is assessed using a discounted cash flow analysis and used to determine the amount of impairment, if any, to be recognized.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Allowance for Funds Used During Construction</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Included in the cost of construction work in progress is an allowance for funds used during construction (“AFUDC”). AFUDC represents the estimated cost of debt, from borrowed funds, or the estimated cost of capital, from equity funds, during the construction period. Total AFUDC of approximately $0.6 million and $0.2 million on borrowed funds was capitalized during the years ended December 31, 2022 and 2021, respectively. During the years ended December 31, 2022 and 2021, $1.4 million and $0.4 million, respectively, of equity funds were capitalized.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Revenue Recognition</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">REX accounts for revenue from contracts with customers in accordance with the five-step model outlined in ASC Topic 606, </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Revenue from Contracts with Customers</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> ("ASC 606"). Under the five-step model, REX identifies the contract, identifies the performance obligations, determines the transaction price, allocates the transaction price, and recognizes revenue. Revenue is recognized when (or as) the performance obligations are satisfied. For additional information see Note 7 - </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Revenue from Contracts with Customers.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Deferred Financing Costs</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Deferred financing costs are amortized to interest expense over the life of the debt using the straight-line-method, which approximates the effective interest rate method. </span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Commitments and Contingencies</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">REX recognizes liabilities for other commitments and contingencies when, after fully analyzing the available information, REX determines it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. When a range of probable loss can be estimated, REX accrues the most likely amount, or if no amount is more likely than another, REX accrues the minimum of the range of probable loss.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Environmental Costs</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">REX expenses or capitalizes, as appropriate, environmental expenditures that relate to current operations. REX expenses amounts that relate to an existing condition caused by past operations that do not contribute to current or future revenue generation. REX does not discount environmental liabilities to a net present value, and records environmental liabilities when environmental assessments and/or remedial efforts are probable and costs can be reasonably estimated. Recording of these accruals coincides with the completion of a feasibility study or a commitment to a formal plan of action. Estimates of environmental liabilities are based on currently available facts and presently enacted laws and regulations taking into consideration the likely effects of other factors including REX's prior experience in remediating contaminated sites, other companies' clean-up experience and data released by government organizations. REX estimates are subject to revision in future periods based on actual cost or new information. </span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Fair Value</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Fair value, as defined in the fair value measurement accounting guidance, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, or exit price. The fair value measurement accounting guidance requires that REX make assumptions that market participants would use in pricing an asset or liability based on the best information available. These factors include nonperformance risk (the risk that an obligation will not be fulfilled) and credit risk of the reporting entity (for liabilities) and of the counterparty (for assets). The fair value measurement guidance prohibits the inclusion of transaction costs and any adjustments for blockage factors in determining the instruments' fair value. The principal or most advantageous market should be considered from the perspective of the reporting entity. The fair value of current financial assets and liabilities approximate their reported carrying amounts as of December 31, 2022 and 2021.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Income Taxes</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Deferred income tax assets and liabilities are recognized for temporary differences between the basis of assets and liabilities for financial reporting and tax purposes. Changes in tax legislation are included in the relevant computations in the period in which such changes are effective. Deferred tax assets are reduced by a valuation allowance for the amount of any tax benefit REX does not expect to be realized. For more information regarding income taxes and the changes in tax legislation, see Note 5 - </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Income Taxes.</span></div><div style="margin-bottom:6pt;margin-top:6pt;padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">3. Financing </span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Debt</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Total outstanding debt as of December 31, 2022 and 2021 consisted of the following (in millions):</span><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:99.702%"><tr><td style="width:1.0%"/><td style="width:58.601%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.750%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.397%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.752%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="9" style="padding:2px 1pt;text-align:center;vertical-align:bottom">Year Ended December 31, </td></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;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%">2022</span></td><td colspan="3" style="border-top:1pt solid #000000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;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%">2021</span></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Revolving credit facility</span></div></td><td style="border-top:1pt solid #000000;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">$</span></td><td style="border-top:1pt solid #000000;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">— </span></td><td style="border-top:1pt solid #000000;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="3" style="padding:0 1pt"/><td style="border-top:1pt solid #000000;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">$</span></td><td style="border-top:1pt solid #000000;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">21.0 </span></td><td style="border-top:1pt solid #000000;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><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">3.60% senior notes due May 15, 2025</span></div></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%">400.0 </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%">400.0 </span></td><td style="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"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">4.95% senior notes due July 15, 2029</span></div></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%">550.0 </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%">550.0 </span></td><td style="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"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">4.80% senior notes due May 15, 2030</span></div></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%">350.0 </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%">350.0 </span></td><td style="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"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">7.50% senior notes due July 15, 2038</span></div></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%">250.0 </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%">250.0 </span></td><td style="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"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">6.875% senior notes due April 15, 2040</span></div></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%">500.0 </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%">500.0 </span></td><td style="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"><div style="padding-left:12pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Less: Unamortized debt discount</span></div></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%">(2.1)</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%">(2.3)</span></td><td style="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"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Total long-term debt, net</span></div></td><td style="border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">$</span></td><td style="border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">2,047.9 </span></td><td style="border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><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:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">$</span></td><td style="border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">2,068.7 </span></td><td style="border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr></table></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">REX Senior Notes</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The senior notes issued by REX are redeemable in whole or in part, at REX's option at any time, at redemption prices defined in the associated indenture agreements. </span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">All payments of principal and interest with respect to the fixed rate senior notes are the sole obligation of REX. Note holders have no recourse against REX's Members or their respective officers, directors, employees, shareholders, members, managers, unit holders or affiliates for any failure by REX to perform or comply with its obligations pursuant to the notes or the indenture. As of December 31, 2022, REX was in compliance with the covenants required under the senior notes.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Maturities of Debt</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The scheduled maturities of REX's outstanding debt balances as of December 31, 2022 are summarized as follows (in millions): </span><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:99.702%"><tr><td style="width:1.0%"/><td style="width:78.452%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.397%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.751%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Year</span></div></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:10pt;font-weight:400;line-height:120%">Scheduled Maturities</span></td></tr><tr><td colspan="3" style="border-top:1pt solid #000000;padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">2023</span></td><td colspan="3" style="padding:0 1pt"/><td style="border-top:1pt solid #000000;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">$</span></td><td style="border-top:1pt solid #000000;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">— </span></td><td style="border-top:1pt solid #000000;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:10pt;font-weight:400;line-height:112%">2024</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"/></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:10pt;font-weight:400;line-height:112%">2025</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%">400.0 </span></td><td style="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:10pt;font-weight:400;line-height:112%">2026</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"/></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:10pt;font-weight:400;line-height:112%">2027</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"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Thereafter</span></div></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%">1,650.0 </span></td><td style="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"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Total scheduled maturities</span></div></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:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">$</span></td><td style="border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">2,050.0 </span></td><td style="border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr></table></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">REX Revolving Credit Facility</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On November 18, 2019, REX entered into an amendment and restatement (the "Amendment and Restatement") of its existing $150 million senior unsecured revolving credit facility ("the revolving credit facility") with Wells Fargo Bank, N.A., as administrative agent, and a syndicate of lenders, which extended the maturity date of the revolving credit facility to November 18, 2024. The revolving credit facility includes a $75 million sublimit for letters of credit and a $20 million sublimit for swing line loans and may be used for working capital and general company purposes. The revolving credit facility also contains an accordion feature whereby REX can increase the size of the credit facility to an aggregate of $200 million, subject to receiving increased or new commitments from lenders and the satisfaction of certain other conditions precedent. As of December 31, 2022, there were no outstanding borrowings issued under the revolving credit facility. As of December 31, 2022, REX was in compliance with the covenants required under the revolving credit facility.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Borrowings under the revolving credit facility bear interest, at REX's option, at either (a) a base rate, which will be a rate equal to the greatest of (i) the prime rate, (ii) the U.S. federal funds rate plus 0.5% and (iii) a one-month reserve adjusted Eurodollar rate plus 1.00% or (b) a reserve adjusted Eurodollar rate, plus, in each case, an applicable margin. The applicable margin ranges from 0.375% to 1.125% for base rate borrowings and 1.375% to 2.125% for reserve adjusted Eurodollar rate borrowings, based upon REX's total leverage ratio. The unused portion of the revolving credit facility is subject to a commitment fee, which ranges from 0.20% to 0.40% based upon REX's total leverage ratio. </span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">REX has the option to have the applicable margin determined based on REX's credit ratings. If REX were to make an election to exercise this option, the applicable margin would range from 0.125% to 0.75% for base rate borrowings and 1.125% to 1.750% for reserve adjusted Eurodollar borrowings, based on REX's credit ratings. Under such an election, the commitment fee would range from 0.125% to 0.25%, also based on REX's credit ratings. </span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Covenants Under the Revolving Credit Facility</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The revolving credit facility generally requires REX to comply with various affirmative and negative covenants, including a limit on the leverage ratio (as defined in the credit agreement) of REX and restrictions on:</span></div><div style="margin-bottom:6pt;margin-top:6pt;padding-left:36pt;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">incurring secured indebtedness;</span></div><div style="margin-bottom:6pt;margin-top:6pt;padding-left:36pt;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">entering into mergers, consolidations and sales of assets;</span></div><div style="margin-bottom:6pt;margin-top:6pt;padding-left:36pt;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">granting liens;</span></div><div style="margin-bottom:6pt;margin-top:6pt;padding-left:36pt;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">entering into transactions with affiliates; and</span></div><div style="margin-bottom:6pt;margin-top:6pt;padding-left:36pt;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">making restricted payments.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Fair Value</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:115%">The long-term debt is carried at amortized cost. REX determines the estimated fair value of the senior notes based upon quoted market prices adjusted for illiquid markets. The fair value of borrowings under the revolving credit facility approximates the carrying amount of the borrowings as the interest rates are based on prevailing market interest rates. REX classifies the fair values of its outstanding debt balances within Level 2 of the fair value hierarchy. The following table sets forth the carrying amount and fair value of REX's long-term debt as of December 31, 2022 and 2021 (in millions):</span></div><div style="margin-bottom:6pt;margin-top:6pt"><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:17.947%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.691%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.395%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.691%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.395%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.691%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.395%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.695%"/><td style="width:0.1%"/></tr><tr><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:400;line-height:120%">December 31, 2022</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:400;line-height:120%">December 31, 2021</span></td></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;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:10pt;font-weight:400;line-height:120%">Carrying Amount </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:6.5pt;font-weight:400;line-height:120%;position:relative;top:-3.5pt;vertical-align:baseline">(1)</span></div></td><td colspan="3" style="border-top:1pt solid #000000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;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%">Fair Value</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;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:10pt;font-weight:400;line-height:120%">Carrying Amount </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:6.5pt;font-weight:400;line-height:120%;position:relative;top:-3.5pt;vertical-align:baseline">(1)</span></div></td><td colspan="3" style="border-top:1pt solid #000000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;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%">Fair Value</span></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Total debt</span></div></td><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">$</span></td><td style="border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">2,047.9 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="3" style="padding:0 1pt"/><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">$</span></td><td style="border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">1,841.5 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="3" style="padding:0 1pt"/><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</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%">2,068.7 </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 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%">2,239.2 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr></table></div><div style="margin-bottom:6pt;margin-top:6pt;padding-left:36pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:7.8pt;font-weight:400;line-height:120%;position:relative;top:-4.2pt;vertical-align:baseline">(1)</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:8.49pt">Net of Account 226, Unamortized Discount on Long-Term Debt.</span><span style="color:#ffffff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">on Long-Term Debt.</span></div><div style="margin-bottom:6pt;margin-top:6pt;padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">4. Members' Equity </span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">During the years ended December 31, 2022 and 2021, REX made distributions to Members of $447.7 million and $455.7 million, respectively.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">During the years ended December 31, 2022 and 2021, REX received contributions from Members of $32.6 million and $15.5 million, respectively. Contributions from Members during the year ended December 31, 2022 were primarily used to fund the construction and other costs of the Cheyenne Hub Enhancement project and expansion work on the east-end of the system. Contributions from Members during the year ended December 31, 2021 were primarily used to fund the construction and other costs of the Cheyenne Hub Enhancement project and a new interconnect.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Additional contributions and distributions were made subsequent to December 31, 2022. For details see Note 12 </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">- Subsequent Events</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">.</span></div><div style="margin-bottom:6pt;margin-top:6pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">5. Income Taxes</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%"> </span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">REX is treated as a partnership for income tax purposes and does not pay federal or state income taxes. However, since federal and state income taxes have historically been a cost component in rates allowed by the FERC, these taxes are included in the financial statements. The computation of the current and deferred income tax expense assumes the use of an accelerated method for calculating tax depreciation. REX records deferred income taxes for significant differences between book and taxable income. The Members report on their separate federal income tax returns the appropriate share of revenues and expenses. On March 15, 2018, in Docket No. PL17-1-000, the FERC issued a revised Policy Statement finding that interstate natural gas pipelines held by Master Limited Partnerships are no longer permitted to recover an income tax allowance in their cost of service. The FERC stated that it would address income tax allowances for other pass-through entities that are not Master Limited Partnerships in future proceedings.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Deferred income taxes charged to REX and assignable to the Members are reflected in the accompanying Comparative Balance Sheet as accumulated deferred income taxes (Accounts 190, 282 and 283). </span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">REX settles accrued taxes recorded in Account 236 as a deemed contribution from or deemed distribution to the Members (a credit or debit to Additional Paid-in Capital or "APIC" (Account 211)).</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Components of the income tax expense applicable to federal and state income taxes are as follows (in millions):</span><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:99.702%"><tr><td style="width:1.0%"/><td style="width:58.601%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.750%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.397%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.752%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="9" style="padding:2px 1pt;text-align:center;vertical-align:bottom">Year Ended December 31, </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:400;line-height:120%">2022</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:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">2021</span></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Deferred income tax expense</span></div></td><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="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:top"><div style="text-indent:11.25pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Federal</span></div></td><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;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:10pt;font-weight:400;line-height:112%">51.4 </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:10pt;font-weight:400;line-height:112%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">46.2 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><div style="text-indent:11.25pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">State</span></div></td><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">7.8 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">7.0 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt;text-align:left;vertical-align:top"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Total deferred income tax expense</span></div></td><td style="background-color:#ffffff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">$</span></td><td style="background-color:#ffffff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">59.2 </span></td><td style="background-color:#ffffff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td style="background-color:#ffffff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">$</span></td><td style="background-color:#ffffff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">53.2 </span></td><td style="background-color:#ffffff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr></table></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The difference between the composite federal income tax expense and REX's effective income tax expense, and its effective income tax rate, are summarized as follows (in millions, except percentages):</span></div><div style="margin-bottom:6pt;margin-top:6pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:99.702%"><tr><td style="width:1.0%"/><td style="width:58.601%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.750%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.397%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.752%"/><td style="width:0.1%"/></tr><tr><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:400;line-height:120%">Year Ended December 31, </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:400;line-height:120%">2022</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:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">2021</span></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Income tax expense at composite federal rate </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:6.47pt;font-weight:400;line-height:112%;position:relative;top:-3.48pt;vertical-align:baseline">(1)</span></div></td><td style="border-top:1pt solid #000000;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">$</span></td><td style="border-top:1pt solid #000000;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">51.8 </span></td><td style="border-top:1pt solid #000000;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="3" style="padding:0 1pt"/><td style="border-top:1pt solid #000000;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">$</span></td><td style="border-top:1pt solid #000000;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">46.7 </span></td><td style="border-top:1pt solid #000000;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><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">State income tax, net of federal benefit</span></div></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%">7.8 </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%">7.0 </span></td><td style="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"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Excess ADIT amortization</span></div></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%">(0.5)</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%">(0.5)</span></td><td style="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><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Other</span></div></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:10pt;font-weight:400;line-height:112%">0.1 </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:10pt;font-weight:400;line-height:112%">— </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><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Total tax expense</span></div></td><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">$</span></td><td style="border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">59.2 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><td colspan="3" style="padding:0 1pt"/><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">$</span></td><td style="border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">53.2 </span></td><td style="border-top:1pt solid #000;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><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Effective income tax rate</span></div></td><td colspan="2" style="border-bottom:3pt double #000;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%">24.4 </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"><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="border-bottom:3pt double #000;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%">24.4 </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"><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;margin-top:6pt;padding-left:36pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:7.8pt;font-weight:400;line-height:120%;position:relative;top:-4.2pt;vertical-align:baseline">(1)</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:8.49pt">The composite federal tax rate used was 21.4% for the years ended December 31, 2022 and 2021, respectively.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The deferred tax assets and liabilities result from the following (in millions):</span><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:99.702%"><tr><td style="width:1.0%"/><td style="width:58.601%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.750%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.397%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.752%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="9" style="padding:2px 1pt;text-align:center;vertical-align:bottom">Year Ended December 31, </td></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;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%">2022</span></td><td colspan="3" style="border-top:1pt solid #000000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;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%">2021</span></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Account 190, Accumulated Deferred Income Taxes:</span></div></td><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="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:top"><div style="text-indent:11.25pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Net operating loss carryforward</span></div></td><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;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:10pt;font-weight:400;line-height:112%">368.1 </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:10pt;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:10pt;font-weight:400;line-height:112%">334.2 </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="text-indent:11.25pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Allowance for bad debts</span></div></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%">0.8 </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%">0.6 </span></td><td style="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"><div style="text-indent:11.25pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Regulatory assets/liabilities</span></div></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%">4.0 </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%">4.2 </span></td><td style="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"><div style="text-indent:11.25pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Other</span></div></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%">1.1 </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%">0.8 </span></td><td style="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"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Total Account 190</span></div></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:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">374.0 </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"/><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%">339.8 </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="padding:2px 1pt;text-align:left;vertical-align:top"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Account 282, Accumulated Deferred Income Taxes - Other Property:</span></div></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"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><div style="text-indent:11.25pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Property, plant and equipment</span></div></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%">609.2 </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%">515.2 </span></td><td style="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"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Total Account 282</span></div></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:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">609.2 </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"/><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%">515.2 </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="padding:2px 1pt;text-align:left;vertical-align:top"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Account 283, Accumulated Deferred Income Taxes - Other:</span></div></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"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><div style="text-indent:11.25pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Regulatory assets/liabilities</span></div></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%">4.8 </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%">4.9 </span></td><td style="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><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Total Account 283</span></div></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:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">4.8 </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"/><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%">4.9 </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="padding:2px 1pt;text-align:left;vertical-align:top"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Net deferred income tax liability</span></div></td><td style="border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">$</span></td><td style="border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">240.0 </span></td><td style="border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><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:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">$</span></td><td style="border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">180.3 </span></td><td style="border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr></table></div><div style="margin-bottom:6pt;margin-top:6pt;padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">6. Related Party Transactions</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">REX has an operating agreement with Tallgrass NatGas Operator, LLC ("NatGas"), an indirect subsidiary of TEP, under which NatGas provides and bills REX for various services at cost including employee labor costs, information technology services, employee health and retirement benefits, and insurance for property and casualty risks. In addition, NatGas receives a management oversight fee in the amount of 1% of REX's earnings before interest, taxes, depreciation, and amortization. REX's practice is to settle receivable and payable balances that exist with affiliates in the following month.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Totals of significant transactions with affiliated companies are as follows (in millions):</span><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:99.702%"><tr><td style="width:1.0%"/><td style="width:58.601%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.750%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.397%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.752%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="9" style="padding:2px 1pt;text-align:center;vertical-align:bottom">Year Ended December 31, </td></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;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%">2022</span></td><td colspan="3" style="border-top:1pt solid #000000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;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%">2021</span></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Gas operating revenue</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:6.5pt;font-weight:400;line-height:112%;position:relative;top:-3.5pt;vertical-align:baseline"> (1)</span></div></td><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;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:10pt;font-weight:400;line-height:112%">4.4 </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:10pt;font-weight:400;line-height:112%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">— </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="display:none"/><td colspan="3" style="display:none"/><td colspan="3" style="display:none"/><td colspan="3" style="display:none"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Charges from TEP:</span></div></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><div style="text-indent:11.25pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Net utility plant</span></div></td><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">1.7 </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:10pt;font-weight:400;line-height:112%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">0.9 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><div style="text-indent:11.25pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Operating expenses</span></div></td><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</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%">38.3 </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:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">33.6 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Management Fees:</span></div></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><div style="text-indent:11.25pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Operation expenses</span></div><div style="text-indent:11.25pt"><span><br/></span></div></td><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</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%">5.8 </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:'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%">5.6 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr></table></div><div style="margin-bottom:6pt;margin-top:6pt;padding-left:36pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:6.5pt;font-weight:400;line-height:120%;position:relative;top:-3.5pt;vertical-align:baseline">(1)</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:10.07pt">Reflects revenue for transportation services from an affiliate of TEP and sales of natural gas to an affiliate of TEP.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Balances with affiliated companies included in the accompanying Comparative Balance Sheet include amounts payable to TEP of $3.1 million and $4.0 million as of December 31, 2022 and 2021, respectively. Gas imbalances with affiliated shippers in the accompanying Comparative Balance Sheet include amounts receivable of $7.8 million and $1.5 million, and payables of $4.6 million and $2.6 million, as of December 31, 2022 and 2021, respectively. Balances with affiliated companies included in the accompanying Comparative Balance Sheets include customer deposits from an affiliate of TEP of $5.9 million as of December 31, 2022.</span></div><div style="margin-bottom:6pt;margin-top:6pt;padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">7. Revenue from Contracts with Customers</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Disaggregated Revenue</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">A summary of REX's revenue by contract type is as follows (in millions):</span><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:99.702%"><tr><td style="width:1.0%"/><td style="width:58.601%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.750%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.397%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.752%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="9" style="padding:2px 1pt;text-align:center;vertical-align:bottom">Year Ended December 31, </td></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;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%">2022</span></td><td colspan="3" style="border-top:1pt solid #000000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;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%">2021</span></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Transportation of gas for others (489.2 &amp; 489.3)</span></div></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"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><div style="text-indent:11.25pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Firm transportation service</span></div></td><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;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:10pt;font-weight:400;line-height:112%">725.2 </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:10pt;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:10pt;font-weight:400;line-height:112%">689.6 </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="text-indent:11.25pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Interruptible transportation service</span></div></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%">0.1 </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%">0.5 </span></td><td style="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"><div style="text-indent:11.25pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Park and loan service</span></div></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%">10.4 </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%">20.3 </span></td><td style="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"><div style="text-indent:11.25pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Pooling and wheeling service</span></div></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%">2.7 </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%">1.2 </span></td><td style="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"><div style="text-indent:11.25pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Fuel recoveries</span></div></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%">94.7 </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%">52.9 </span></td><td style="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"><div style="text-indent:11.25pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Cheyenne Hub service</span></div></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%">13.1 </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%">12.9 </span></td><td style="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"><div style="text-indent:24.75pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Total Transportation of gas for others</span></div></td><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%">846.2 </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%">777.4 </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:top"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Natural gas sales (480-488)</span></div></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%">4.0 </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%">7.1 </span></td><td style="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"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Other gas revenues (490-496)</span></div></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%">0.5 </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%">0.6 </span></td><td style="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"><div style="text-indent:36pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Gas operating revenues (400)</span></div></td><td style="border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">$</span></td><td style="border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">850.7 </span></td><td style="border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/><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:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">$</span></td><td style="border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">785.1 </span></td><td style="border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr></table></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Performance Obligations</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC Topic 606. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of REX's contracts have a single performance obligation and are billed and collected monthly. These performance obligations typically include an obligation to stand ready to provide natural gas transportation service over the life of the contract, which is a series. These performance obligations are satisfied over time using each day of service to measure progress toward satisfaction of the performance obligation.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">REX also engages in commodity sales, in which the performance obligations include an obligation to deliver the specified volume of a commodity to the designated receipt point. Revenue from commodity sales is recognized at a point in time when the customer obtains control of the commodity, typically upon delivery to the designated delivery point when the customer accepts and takes possession of the commodity.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On December 31, 2022, REX had $5.4 billion of remaining performance obligations, which REX refers to as total backlog. Total backlog includes performance obligations under firm transportation contracts, and excludes variable consideration that is not estimated at contract inception, as discussed further below. REX expects to recognize the total backlog during future periods as follows (in millions):</span></div><div style="margin-bottom:6pt;margin-top:6pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:99.702%"><tr><td style="width:1.0%"/><td style="width:78.452%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.397%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.751%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Year</span></div></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Estimated Revenue</span></td></tr><tr><td colspan="3" style="border-top:1pt solid #000000;padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">2023</span></td><td colspan="3" style="padding:0 1pt"/><td style="border-top:1pt solid #000000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="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%">690.6 </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="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">2024</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%">577.4 </span></td><td style="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:10pt;font-weight:400;line-height:112%">2025</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%">509.3 </span></td><td style="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:10pt;font-weight:400;line-height:112%">2026</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%">501.3 </span></td><td style="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:10pt;font-weight:400;line-height:112%">2027</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%">477.5 </span></td><td style="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"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Thereafter</span></div></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%">2,670.0 </span></td><td style="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"><div style="text-indent:11.25pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Total</span></div></td><td colspan="3" style="padding:0 1pt"/><td style="border-bottom:3pt double #000;border-top:1pt solid #000000;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">$</span></td><td style="border-bottom:3pt double #000;border-top:1pt solid #000000;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">5,426.1 </span></td><td style="border-bottom:3pt double #000;border-top:1pt solid #000000;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr></table></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Contract Estimates</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Accounting for long-term contracts involves the use of various techniques to estimate total contract revenue. Contract estimates are based on various assumptions to project the outcome of future events that often span several years.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The nature of REX's contracts gives rise to several types of variable consideration, including volumetric charges for actual volumes delivered, overrun charges, and other fees that are contingent on the actual volumes delivered by its customers. As the amount of variable consideration is allocable to each distinct performance obligation within the series of performance obligations that comprise the single performance obligation and the uncertainty related to the consideration is resolved each month as the distinct service is provided, REX does not estimate the total variable consideration for the single overall performance obligation. Consequently, REX is able to include in the transaction price each month the actual amount of variable consideration because no uncertainty exists surrounding the services provided that month.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Contract Balances</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The timing of revenue recognition, billings, and cash collections may result in billed accounts receivable, unbilled receivables (contract assets), and deferred revenue (contract liabilities) on the Comparative Balance Sheet. Revenue is generally billed and collected monthly based on services provided or volumes sold. As of December 31, 2022 and 2021, the contract asset balance in Account 186 was $75.0 million and $95.2 million, respectively, which represents the difference between the revenue recognized and the actual cash collected from certain contracts with rates that vary throughout the term of the contract. The contract asset balance as of December 31, 2022 is presented net of the allowance for current expected credit losses as discussed in</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;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%">Note 2 –</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%"> Summary of Significant Accounting Policies.</span></div><div style="margin-bottom:6pt;margin-top:6pt;padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">8. Commitments and Contingent Liabilities </span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Leases</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">For the years ended December 31, 2022 and 2021, total rental expense under operating leases was $29.1 million. Future minimum commitments related to these leases as of December 31, 2022 are as follows (in millions):</span></div><div style="margin-bottom:6pt;margin-top:6pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:100.000%"><tr><td style="width:1.0%"/><td style="width:78.513%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.395%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.692%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Year</span></div></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><div style="text-align:center"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Future Minimum Lease Payments</span></div></td></tr><tr><td colspan="3" style="border-top:1pt solid #000000;padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">2023</span></td><td colspan="3" style="padding:0 1pt"/><td style="border-top:1pt solid #000000;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">$</span></td><td style="border-top:1pt solid #000000;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">29.1 </span></td><td style="border-top:1pt solid #000000;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:10pt;font-weight:400;line-height:112%">2024</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%">29.1 </span></td><td style="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:10pt;font-weight:400;line-height:112%">2025</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%">29.1 </span></td><td style="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:10pt;font-weight:400;line-height:112%">2026</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%">29.1 </span></td><td style="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:10pt;font-weight:400;line-height:112%">2027</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%">29.1 </span></td><td style="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"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Thereafter</span></div></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"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Total</span></div></td><td colspan="3" style="padding:0 1pt"/><td style="border-bottom:3pt double #000;border-top:1pt solid #000000;padding:2px 0 2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">$</span></td><td style="border-bottom:3pt double #000;border-top:1pt solid #000000;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">145.5 </span></td><td style="border-bottom:3pt double #000;border-top:1pt solid #000000;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr></table></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The future minimum rental commitments are primarily attributable to a 20-year capacity lease agreement with Overthrust Pipeline Company ("Overthrust") which commenced on January 1, 2008. The capacity lease provides the right to transport on a firm basis 625 MMcf/d of natural gas through Overthrust's system from either the Williams Field Services Opal Processing Plant or the TEPPCO Pioneer Processing Plant to the Wamsutter interconnect.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Other Purchase Obligations</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">At December 31, 2022, future minimum commitments under long-term non-cancelable contracts for right of way agreements not accounted for as leases, and other purchase obligations were as follows (in millions):</span></div><div style="margin-bottom:6pt;margin-top:6pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:99.702%"><tr><td style="width:1.0%"/><td style="width:78.452%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.397%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.751%"/><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-weight:400;line-height:120%">Year</span></div></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="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:10pt;font-weight:400;line-height:112%">Total</span></div></td></tr><tr><td colspan="3" style="border-top:1pt solid #000000;padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">2023</span></td><td colspan="3" style="padding:0 1pt"/><td style="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="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%">5.0 </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="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">2024</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%">3.3 </span></td><td style="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:10pt;font-weight:400;line-height:112%">2025</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%">2.7 </span></td><td style="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:10pt;font-weight:400;line-height:112%">2026</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%">2.7 </span></td><td style="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:10pt;font-weight:400;line-height:112%">2027</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%">2.7 </span></td><td style="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"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Thereafter</span></div></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%">23.4 </span></td><td style="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"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Total</span></div></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:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">$</span></td><td style="border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">39.8 </span></td><td style="border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:top"/></tr></table></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Capital Expenditures</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Approximately $16.0 million of REX's capital expenditure budget for 2023 had been committed for purchases of property, plant and equipment at December 31, 2022.</span></div><div style="margin-bottom:6pt;margin-top:6pt;padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">9. Major Customers</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">During year ended December 31, 2022, three non-affiliated shippers accounted for $150.5 million (20%), $139.3 million (18%), and $112.9 million (15%), respectively, of REX's total revenues. During year ended December 31, 2021, four non-affiliated shippers accounted for $138.5 million (18%), $137.6 million (18%), $112.4 million (14%), and $81.1 million (10%), respectively, of REX's total revenues. For the years ended December 31, 2022 and 2021, REX's top ten non-affiliated customers accounted for approximately 71% and 79% of REX's gas operating revenues, respectively. REX attempts to mitigate credit risk by seeking credit support, such as letters of credit, prepayments, or other financial guarantees from customers with specific credit concerns.</span></div><div style="margin-bottom:6pt;margin-top:6pt;padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">10. Regulatory Matters</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:700;line-height:120%">Ratemaking Process</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Transportation services on interstate natural gas pipelines are contracted under one of three rate types: recourse, discount, or negotiated. Recourse rates are calculated based on the cost of service being provided and include an allowable rate of return for the pipeline. Recourse rates are established through a FERC rate proceeding and remain effective until a subsequent rate proceeding is filed and approved by the FERC. Discount rates are offered at a discount to the then-effective maximum recourse rate, subject to a minimum rate floor set forth in the pipeline's tariff. Discount rates are typically effective for an established term and can vary based on adjustments to the underlying recourse rate. Negotiated rates can be higher or lower than the then-effective maximum recourse rate, subject to agreement between the pipeline and shipper and approval by the FERC. Negotiated rates are also entered into for a defined term but do not change based on adjustments in the applicable recourse rate for that type of service.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> The majority of services provided by REX are contracted under negotiated rate agreements. Currently, there are no regulatory proceedings challenging the transportation rates of REX.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Application for Lease of Capacity and Construction of New Facilities</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">As discussed further in Note 1 – Description of Business, REX recently entered into the Capacity Lease with Trailblazer. The commencement date for the lease of this capacity would begin following satisfaction of certain conditions precedent set forth in the Capacity Lease, including receipt of the FERC approvals necessary for (1) the lease of capacity by REX to Trailblazer under the Capacity Lease, and (2) REX to construct and operate the New Facilities. On May 27, 2022, Trailblazer and REX filed an Abbreviated Application for Certificates of Public Convenience and Necessity and Abandonment Authorizations (“Application”) with FERC in Docket No. CP22-468-000. On March 31 2023, the FERC issued its environmental assessment for the project finding that, with appropriate mitigating measures, the project would not constitute a major federal action significantly affecting the quality of the human environment. Interested parties have until May 1, 2023 to comment on the environmental assessment.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:700;line-height:120%">Other Regulatory Matters</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Consent Agreement with PHMSA</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">In September 2022, REX entered into a negotiated Consent Agreement (the “Consent Agreement”) with the Pipeline and Hazardous Materials Safety Administration ("PHMSA") to settle a Notice of Probable Violation and Proposed Compliance Order (the “NOPV”). REX operates the Rockies Express Pipeline pursuant to a special permit issued by PHMSA in July 2006 (the “2006 Special Permit”). The 2006 Special Permit expressly allows the Rockies Express Pipeline to operate at a hoop stress of 80% specified minimum yield strength (“SMYS”) in Class 1 locations.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Due to increases in population in some locations along the Rockies Express Pipeline, a total of approximately 3.5 miles in different segments of the Rockies Express Pipeline have changed from Class 1 to Class 2 locations since the issuance of the 2006 Special Permit. The NOPV alleged REX’s operation of the Rockies Express Pipeline in these Class 2 locations at 80% SMYS under the 2006 Special Permit was in violation of the 2006 Special Permit and PHMSA regulations. Until entering into the Consent Agreement, REX had contested the NOPV. In particular, REX asserted that although the 2006 Special Permit did not specifically address class location changes, REX had implemented the “one class bump” as permitted under PHMSA regulations. REX further asserted that it had provided notice to PHMSA of this practice through correspondence and annual reporting since 2009, and it had received affirmation of the practice from PHMSA.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Prior to receiving the NOPV, REX had been working with PHMSA to apply for a Class Location Special Permit which sought authority to continue to operate the Rockies Express Pipeline segments in these Class 2 locations at 80% SMYS. REX filed its application for the Class Location Special Permit in March 2022, and a decision by PHMSA on the application is pending.</span></div><div style="text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">Pursuant to the Consent Agreement, unless or until the Class Location Special Permit application is approved by PHMSA, REX is required to reduce operating pressure to 76% SMYS in certain segments that are operating above 72% SMYS in Class 2 areas by March 11, 2023. PHMSA subsequently granted REX an extension to implement the pressure reductions by May 10, 2023, and additional extensions of such implementation date may </span></div><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">be granted by PHMSA. If the Class Location Special Permit is not approved or is withdrawn, then the Consent Agreement requires REX to implement remedial measures for all Class 2 segments operating above 72% SMYS by September 12, 2024. Alternatively, REX has the option to replace the Class 2 segments of pipe to continue to operate the Rockies Express Pipeline at its existing pressure.</span></div><div style="margin-bottom:6pt;margin-top:6pt;padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">11. Legal and Environmental Matters</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Legal</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">REX is involved in various lawsuits arising from the day-to-day operations of its business. Although no assurance can be given, REX believes, based on its experiences to date, that the ultimate resolution of such matters will not have a material adverse impact on its business, financial position, results of operations, or cash flows.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">REX has evaluated claims in accordance with the accounting guidance for contingencies that it deems both probable and reasonably estimable and, accordingly, has recorded no reserve for legal claims as of December 31, 2022 and December 31, 2021. </span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Ohio Property Tax Appeal</span></div><div style="text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">REX is currently challenging the 2021 tax year assessment of its Ohio public utility personal property tax. In accordance with applicable Ohio law, REX paid the first half of the tax when due to the applicable counties in February 2022 and the second half of its payment when due to the applicable counties in June through August 2022 on the basis of the amount REX asserts it owes. REX has accrued the additional tax and potential penalties and interest that would be paid to Ohio if REX's challenge is unsuccessful. REX's Petition for Reassessment challenging the assessment for the 2021 tax year was timely filed with the Ohio Department of Taxation and remains pending. REX is also challenging the 2022 tax year assessment of its Ohio public utility personal property tax. In accordance with applicable Ohio law. REX paid the first half of the tax when due to the applicable counties in February 2023 and anticipates paying the second half of its payment when due to the applicable counties in June through August 2023 on the basis of the amount REX asserts it owes. REX will accrue the additional tax and potential penalties and interest that would be paid to Ohio if REX's challenge is unsuccessful.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Gulfport Energy Corporation </span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On November 13, 2020, Gulfport Energy Corporation ("Gulfport") and certain of its affiliates filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas. In connection with its filing, Gulfport moved the bankruptcy court for authorization to reject its firm transportation service agreements with REX for east-to-west service as of its filing date, which motion REX contested. These firm transportation service agreements with Gulfport totaled 325,000 Dth/d at a weighted average rate of approximately $0.50/Dth, or approximately $59 million annually. The transportation service agreement for 275,000 Dth/d would have expired in July 2035 and the transportation service agreements for a total of 50,000 Dth/d would have expired in January 2032. In connection with unpaid amounts outstanding under the transportation services agreements, REX made a drawing of a portion of the letter of credit supporting Gulfport's obligations under the transportation service agreements and received approximately $9.8 million in November 2020, which was used to settle outstanding accounts receivable for transportation services provided to Gulfport.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">REX, Gulfport and certain of Gulfport's affiliates entered into a settlement agreement to resolve the contested matters between REX and Gulfport, which settlement became effective March 9, 2021. The settlement modified Gulfport's transportation service agreements with REX as of the settlement effective date such that the total amount to be transported by REX equals 200,000 Dth/d at a weighted average rate of approximately $0.4625/Dth, or approximately $34 million annually. Under the amended transportation service agreements, 50,000 Dth/d will expire in January 2032, 149,000 Dth/d will expire in July 2033 and 1,000 Dth/d will expire in July 2035. As settlement of amounts unpaid by Gulfport prior to December 31, 2020, REX drew the remaining approximately $6.8 million on the existing letter of credit in March 2021. In addition, Gulfport paid REX the full amount of the existing transportation service agreements for the months of January and February 2021 pursuant to the settlement agreement, representing approximately $4.9 million per month.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Ultra Resources, Inc.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On May 14, 2020, Ultra Resources, Inc. ("Ultra") and certain of its affiliates filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas. As of its filing date, Ultra had a firm transportation service agreement with REX for west-to-east service of 0.2 Bcf/d through December 31, 2026 at a rate of approximately $0.37 per Dth/d, or approximately $26.8 million annually. Ultra moved the bankruptcy court for authorization to reject the transportation service agreement effective as of Ultra's bankruptcy filing date. On August 21, 2020, the bankruptcy court issued an order approving the rejection of the agreement. In connection with the rejection, REX made a drawing equal to the outstanding face amount on the letter of credit supporting Ultra's obligations under the transportation service agreement and received approximately $6.7 million in September 2020, which was used to settle outstanding accounts receivable for transportation services provided to Ultra. In addition, Ultra and REX agreed in September 2020 that REX's unsecured claim against the bankruptcy estate from such rejection equaled approximately $135 million for purposes of Ultra's bankruptcy plan. REX subsequently received a payment of approximately $750,000 from the Ultra bankruptcy estate in October 2020 in satisfaction of its unsecured claim under the bankruptcy plan. REX then pursued an appeal of the rejection and other rulings in the case until such appeal was ultimately dismissed in August 2022. In connection with the dismissal, REX filed a notice of contract termination with the FERC on August 16, 2022, which FERC accepted on September 16, 2022, with respect to Ultra’s transportation services agreement and REX will receive no further proceeds from Ultra’s bankruptcy estate. </span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">EM Energy Ohio, LLC</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On May 15, 2019, EM Energy Ohio, LLC ("EM Energy") and certain of its affiliates filed for protection under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. EM Energy had a firm transportation service agreement with REX for 50,000 Dth/d through January 5, 2032. REX and EM Energy have stipulated in the bankruptcy proceeding that the termination date of the transportation service agreement is June 13, 2019. Following the termination, REX made a drawing equal to the outstanding face amount on the letter of credit supporting EM Energy's obligations under the transportation service agreement and received approximately $16.2 million in June 2019. A portion of the proceeds was used to settle outstanding accounts receivable for transportation services provided to EM Energy and the remaining $13.9 million was recognized as income by REX. In December 2021, REX and EM Energy entered into a stipulation settling REX's claim against the bankruptcy estate of EM Energy for approximately $35.4 million. REX subsequently received an approximately $1.2 million cash payment in July 2022, which constitutes substantially all of the payments it expects to receive from the bankruptcy estate of EM Energy in connection with its claim.</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Environmental, Health and Safety</span></div><div style="margin-bottom:6pt;margin-top:6pt;text-indent:18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">REX is subject to a variety of federal, state and local laws that regulate permitted activities relating to air and water quality, waste disposal, and other environmental matters. REX currently believes that compliance with these laws will not have a material adverse impact on its business, cash flows, financial position or results of operations. However, there can be no assurances that future events, such as changes in existing laws, the promulgation of new laws, or the development of new facts or conditions will not cause REX to incur significant costs.</span></div>


entity_id: C001506
filing_name: CHENIERE_CREOLE_TRAIL_PIPELINE,_L.P._form2_Q4_1681332872
publication_time: 2023-04-12 20:54:32.000000
start_date: 2022-01-01
end_date: 2022-12-31
disclosure_of_important_disclosures_regarding_the_financial_statements_text_block:
  <div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">NOTE 1—ORGANIZATION AND NATURE OF OPERATIONS</span></div><div><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Cheniere Creole Trail Pipeline, L.P. (“CTPL”), a Delaware limited partnership, is a Houston-based partnership formed with one general partner, Cheniere Pipeline GP Interests, LLC, and one limited partner, Cheniere Energy Investments, LLC (“Cheniere Investments”), both of which are wholly owned subsidiaries of Cheniere Energy Partners, L.P. (“CQP”). CQP is a publicly-traded Delaware limited partnership (NYSE American: CQP) formed by Cheniere Energy, Inc. (“Cheniere”). Unless the context requires otherwise, references to “we,” “us” and “our” refer to CTPL. </span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We own a 94-mile pipeline (the “Creole Trail Pipeline”) with a capacity of up to 1.5 billion cubic feet of natural gas per day that interconnects the liquefied natural gas (“LNG”) terminal owned by CQP and located in Cameron Parish, Louisiana (the “Sabine Pass LNG Terminal”) with a number of large interstate and intrastate pipelines. CQP, through its wholly owned subsidiary Sabine Pass Liquefaction, LLC (“SPL”), owns six operational trains that have a total production capacity of approximately 30 million tonnes per annum of LNG (the “Liquefaction Project”) at the Sabine Pass LNG Terminal. </span></div><div style="text-align:justify;text-indent:24.75pt"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">SPL has entered into transportation precedent and negotiated rate agreements with us to secure firm pipeline transportation capacity, which supplement enabling agreements and long-term natural gas supply contracts SPL has executed with third parties to secure natural gas feedstock for the Liquefaction Project. </span></div><div><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Our cash needs are funded through contributions received from our limited partner and we distribute substantially all of our net cash inflows to our limited partner. </span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Basis of Presentation</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">The accompanying Financial Statements of CTPL have been prepared in accordance with the accounting requirements of the Federal Energy Regulatory Commission (“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 (“GAAP”). The most significant differences between GAAP and the Financial Statements presented herein are: (1) classification of certain accounts on the Comparative Balance Sheet, Statement of Income and Statement of Cash Flows, (2) certain assets and liabilities that result from the regulated ratemaking process are recorded that would not be recorded under GAAP for non-regulated entities and (3) the depreciation rate approved by FERC and utilized in the Financial Statements differs from the depreciation rate utilized under GAAP. </span></div><div style="text-align:justify;text-indent:27pt"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">We have evaluated subsequent events through April 12, 2023, the date the Financial Statements were available to be issued.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Use of Estimates</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The preparation of the Financial Statements in conformity with the accounting requirements of the FERC requires management to make certain estimates and assumptions that affect the amounts reported in the Financial Statements and the accompanying notes. Management evaluates its estimates and related assumptions regularly, including those related to useful lives of net utility plant, regulatory assets and liabilities and certain valuations including leases and asset retirement obligations (“AROs”) as further discussed under the respective sections within this note. Changes in facts and circumstances or additional information may result in revised estimates, and actual results may differ from these estimates.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Fair Value Measurements</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The carrying amount of accounts receivable and accounts payable reported on the Comparative Balance Sheet, including those with associated companies, approximates fair value.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Revenue Recognition</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">SPL has a transportation precedent agreement, firm transportation service agreement and a negotiated rate agreement with us to secure firm pipeline transportation capacity for the transportation of natural gas feedstock to the Sabine Pass LNG terminal. See </span><span style="color:#0000ff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline"><a style="color:#0000ff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline" href="#i9a6cab4a45de4dcf8d24d81b33f7a631_25">Note 6—Revenues from Contracts with Customers</a></span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> for further discussion of our accounting policies related to revenue recognition.</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Plant Materials and Other Operating Supplies</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Plant materials and other operating supplies, excluding capital spares, are recorded at the lower of cost and net realizable value and subsequently charged to expense when issued. Capital spares are recorded at the lower of cost or net realizable value and subsequently capitalized to net utility plant when issued.</span></div><div style="text-align:justify;text-indent:27pt"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Operational Imbalances</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Our Comparative Balance Sheet includes natural gas imbalance receivables and payables resulting from quantities of gas confirmed and scheduled by the parties to be delivered to or received from the contractually defined location (the “Location”) may be greater or lesser than the quantities of gas which are actually delivered at the Location, resulting in over- or under-deliveries relative to the scheduled quantities. Under our operational balancing agreements (“OBAs”), volumes owed to or by us are valued in accordance with the contractual requirements of the respective pipelines’ tariff and are typically settled in-kind. Upon termination of the OBAs, volumes owed to or by us that are subject to monthly cash settlement are valued according to the terms of the contract and reflect regional market index prices. Operational imbalances are reported in Account 174, Miscellaneous Current and Accrued Assets and Account 242, Miscellaneous Current and Accrued Liabilities in our Comparative Balance Sheet.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Net Utility Plant</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Net utility plant is recorded at cost. Generally, we begin capitalizing the costs as net utility plant once the individual project meets the following criteria: (1) regulatory approval has been received, (2) financing for the project is available and (3) management has committed to commence construction. Prior to meeting these criteria, certain costs associated with a project are eligible for capitalization as preliminary survey and investigation charges, including professional fees associated with preliminary front-end engineering and design work, costs of securing necessary regulatory approvals and other preliminary investigation and development activities related to our pipeline. </span></div><div style="text-align:justify;text-indent:27pt"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Generally, costs that are capitalized prior to a project meeting the criteria otherwise necessary for capitalization include land and lease option costs that are capitalized as net utility plant and certain permits that are capitalized as other non-current assets. </span></div><div style="text-align:justify;text-indent:27pt"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Expenditures for construction activities, major renewals and the excess cost of substantial betterments over the estimated cost at current price of replacement that extend the useful life of an asset are capitalized, while expenditures for maintenance and repairs (including those for planned major maintenance projects) to maintain net utility plant in operating condition are generally expensed as incurred. </span></div><div style="text-align:justify;text-indent:27pt"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We depreciate our utility plant using the straight-line depreciation method. Our Transmission Plant assets are depreciated based on the depreciation rate approved by the FERC. When assets are retired, accumulated depreciation and amortization is charged for the original cost of the assets in addition to the cost to remove, sell or dispose of the assets, less salvage value. Generally, upon retirement or other disposition of net utility plant, the cost and related accumulated depreciation are removed from the account, and the resulting gains or losses after the consideration of any proceeds are recorded in Accounts 108, 111, 115, Accumulated Provision for Depreciation, Amortization and Depletion.</span></div><div style="text-align:justify;text-indent:27pt"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Management tests net utility plant for impairment whenever events or changes in circumstances have indicated that the carrying amount of net utility plant might not be recoverable. Assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets for purposes of assessing recoverability. Recoverability generally is determined by comparing the carrying value of the asset to the expected undiscounted future cash flows of the asset. If the carrying value of the asset is not recoverable, the amount of impairment loss is measured as the excess, if any, of the carrying value of the asset over its estimated fair value. We did</span><span style="color:#ff0090;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%">not record any impairments related to net utility plant during the years ended December 31, 2022 and 2021.</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Allowance for Funds Used During Construction ("AFUDC")</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">AFUDC represents the capitalized carrying cost of debt and equity funds related to the construction of long-lived assets. AFUDC is capitalized on construction projects for all classes of property except land, general plant assets, building and equipment modifications/replacements, and projects funded by third party contributions in aid of construction. The rates used in the calculation of AFUDC are determined in accordance with guidelines established by the FERC. There was no AFUDC recorded on our Statement of Income for the years ended December 31, 2022 and 2021.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Regulated Natural Gas Pipelines</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Creole Trail Pipeline is subject to the jurisdiction of the FERC in accordance with the Natural Gas Act of 1938 and the Natural Gas Policy Act of 1978. The economic effects of regulation can result in a regulated company recording as assets those costs that have been or are expected to be approved for recovery from customers, or recording as liabilities those amounts that are expected to be required to be returned to customers, in a rate-setting process in a period different from the period in which the amounts would be recorded by an unregulated enterprise. Accordingly, we record assets and liabilities that result from the regulated rate-making process under the accounting requirements of FERC. We continually assess whether regulatory assets are probable of future recovery by considering factors such as applicable regulatory changes and recent rate orders applicable to other regulated entities. Based on this continual assessment, we believe the existing regulatory assets are probable of recovery. These regulatory assets and liabilities are classified in our Comparative Balance Sheet as Account 182.3, Other Regulatory Assets and Account 254, Other Regulatory Liabilities. See </span><span style="color:#0000ff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline"><a style="color:#0000ff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline" href="#i9a6cab4a45de4dcf8d24d81b33f7a631_19">Note </a><a style="color:#0000ff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline" href="#i9a6cab4a45de4dcf8d24d81b33f7a631_19">4</a><a style="color:#0000ff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline" href="#i9a6cab4a45de4dcf8d24d81b33f7a631_19">—Other Regulatory </a><a style="color:#0000ff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline" href="#i9a6cab4a45de4dcf8d24d81b33f7a631_19">Liabilities</a></span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> for additional details.</span></div><div style="text-align:justify"><span><br/></span></div><div style="margin-bottom:6pt;text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Items that may influence our assessment on the recovery of assets are:</span></div><div style="margin-bottom:6pt;padding-left:45pt;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">inability to recover cost increases due to rate caps and rate case moratoriums; </span></div><div style="margin-bottom:6pt;padding-left:45pt;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">inability to recover capitalized costs, including an adequate return on those costs through the rate-making process and the FERC proceedings; </span></div><div style="margin-bottom:6pt;padding-left:45pt;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">excess capacity; </span></div><div style="margin-bottom:6pt;padding-left:45pt;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">increased competition and discounting in the markets we serve; and </span></div><div style="padding-left:45pt;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">impacts of ongoing regulatory initiatives in the natural gas and pipeline industry.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Leases</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We determine if an arrangement is, or contains, a lease at inception of the arrangement. When we determine the arrangement is, or contains, a lease, we classify the lease as either an operating lease or a capital lease. We did not have any capital leases as of December 31, 2022. Operating leases have been recorded using the existing FERC balance sheet accounts for capital leases, as outlined in the Docket. Operating leases are recognized on our Comparative Balance Sheet by recording a lease liability representing the obligation to make future lease payments and a right-of-use asset representing the right to use the underlying asset for the lease term. </span></div><div style="text-align:justify;text-indent:27pt"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Operating lease right-of-use assets and liabilities are generally recognized based on the present value of minimum lease payments over the lease term. In determining the present value of minimum lease payments, we use the implicit interest rate in the lease if readily determinable. In the absence of a readily determinable implicitly interest rate, we discount our expected future lease payments using our incremental borrowing rate. The incremental borrowing rate is an estimate of the interest rate that a given subsidiary would have to pay to borrow on a collateralized basis over a similar term to that of the lease term. Options to renew a lease are included in the lease term and recognized as part of the right-of-use asset and lease liability, only to the extent they are reasonably certain to be exercised. </span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We have elected practical expedients to (1) omit leases with an initial term of 12 months or less from recognition on our Comparative Balance Sheet and (2) to combine both the lease and non-lease components of an arrangement in calculating the right-of-use asset and lease liability for all classes of leased assets. </span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. </span></div><div style="text-align:justify;text-indent:27pt"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Certain of our leases also contain variable payments, such as inflation, that are included in the right-of-use asset and lease liability only when the contract terms require the payment of a fixed amount that is unavoidable.</span></div><div style="text-align:justify;text-indent:27pt"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">See </span><span style="color:#0000ff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline"><a style="color:#0000ff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline" href="#i9a6cab4a45de4dcf8d24d81b33f7a631_22">Note 5—Leases</a></span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> for additional details about our leases.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Concentration of Credit Risk</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">SPL has entered into transportation precedent and other agreements to secure firm pipeline capacity with us, which is currently our only customer. We are dependent on SPL’s creditworthiness and its ability to perform under its agreements with us. We have mitigated this credit risk by securing agreements with creditworthy customers.</span></div><div style="text-align:justify;text-indent:27pt"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Asset Retirement Obligations</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We recognize AROs for legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and/or normal use of the asset and for conditional AROs in which the timing or method of settlement are conditional on a future event that may or may not be within our control. The fair value of a liability for an ARO is recognized in the period in which it is incurred, if a reasonable estimate of fair value can be made. The fair value of the liability is added to the carrying amount of the associated asset. This additional carrying amount is depreciated over the estimated useful life of the asset.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We have not recorded an ARO associated with the Creole Trail Pipeline. We believe that it is not feasible to predict when the natural gas transportation services provided by the Creole Trail Pipeline will no longer be utilized. In addition, our right-of-way agreements associated with the Creole Trail Pipeline have no stipulated termination dates. We intend to operate the Creole Trail Pipeline as long as supply and demand for natural gas exists in the United States and intend to maintain it regularly.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Income Taxes</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We are a disregarded entity for federal and state income tax purposes. Our taxable income or loss is included in the federal income tax return of CQP. CQP is not subject to federal or state income taxes, as its partners are taxed individually on their allocable share of CQP's taxable income. Accordingly, no provision or liability for federal or state income taxes is included in the accompanying Financial Statements.</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">NOTE 3—NET UTILITY PLANT</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> </span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Net utility plant consisted of the following (in thousands):</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:68.840%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.544%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:13.185%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.544%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:13.187%"/><td style="width:0.1%"/></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:8pt;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="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:8pt;font-weight:700;line-height:120%">2022</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:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:700;line-height:120%">2021</span></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:justify;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Natural gas pipeline costs</span></td><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: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></tr><tr><td colspan="3" style="background-color:#cceeff;padding:2px 1pt 2px 19pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Transmission</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td style="background-color:#cceeff;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%">$</span></td><td style="background-color:#cceeff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">720,607 </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#cceeff;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%">719,219 </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 19pt;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</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%">3,867 </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%">3,900 </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:#cceeff;padding:2px 1pt 2px 19pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">General plant</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;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%">2,808 </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;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%">2,931 </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 19pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Intangible plant</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%">14,800 </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%">14,825 </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:#cceeff;padding:2px 1pt 2px 19pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Construction work in progress </span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;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%">1,578 </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;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%">326 </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 19pt;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: accumulated depreciation</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%">(235,556)</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%">(217,224)</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:#cceeff;padding:2px 1pt 2px 37pt;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 utility plant</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td style="background-color:#cceeff;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:10pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#cceeff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">508,104 </span></td><td style="background-color:#cceeff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td style="background-color:#cceeff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#cceeff;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:10pt;font-weight:400;line-height:120%">523,977 </span></td><td style="background-color:#cceeff;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:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Excluding land, which is included in Transmission above, the majority of our natural gas pipeline costs are depreciated using the straight-line depreciation method with a depreciation rate of 2.5%, approved by the FERC. </span></div><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">NOTE 4—OTHER REGULATORY LIABILITIES</span></div><div><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Other regulatory liabilities consisted of the following (in thousands):</span></div><div><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:71.519%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.544%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:11.846%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.544%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:11.847%"/><td style="width:0.1%"/></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:8pt;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="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:8pt;font-weight:700;line-height:120%">2022</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:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:700;line-height:120%">2021</span></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:justify;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Other regulatory liabilities (254)</span></td><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: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></tr><tr><td colspan="3" style="background-color:#cceeff;padding:2px 1pt 2px 19pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Deferred fuel account</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td style="background-color:#cceeff;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%">$</span></td><td style="background-color:#cceeff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">4,392 </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#cceeff;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%">4,745 </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr></table></div><div style="text-indent:27pt"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Other regulatory liabilities consist of deferred fuel, representing the value of the cumulative volumetric difference between the gas retained from our customers and the gas consumed in operations. These amounts are not included in the rate base but are expected to be recovered by the shipper in subsequent annual fuel tracker filing periods.</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">NOTE 5—LEASES</span></div><div style="text-align:justify;text-indent:27pt"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Our leased assets consist primarily of land sites and office space, all of which are classified as operating leases.</span></div><div style="text-align:justify;text-indent:27pt"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The following table shows the classification and location of our right-of-use assets and lease liabilities on our Comparative Balance Sheet (in thousands):</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:33.572%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:42.798%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.544%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:8.870%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.544%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:8.872%"/><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: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:8pt;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:8pt;font-weight:700;line-height:120%">Comparative Balance Sheet Location</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:700;line-height:120%">2022</span></td><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:700;line-height:120%">2021</span></td></tr><tr><td colspan="3" style="background-color:#cceeff;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%">Right-of-use assets—operating</span></td><td colspan="3" style="background-color:#cceeff;border-top:1pt solid #000000;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%">Net utility plant</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td style="background-color:#cceeff;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%">$</span></td><td style="background-color:#cceeff;border-top:1pt solid #000000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">3,867 </span></td><td style="background-color:#cceeff;border-top:1pt solid #000000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td style="background-color:#cceeff;border-top:1pt solid #000000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#cceeff;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%">3,900 </span></td><td style="background-color:#cceeff;border-top:1pt solid #000000;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"/><td colspan="3" style="display:none"/></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"/><td colspan="3" style="display:none"/></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"/><td colspan="3" style="display:none"/></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%">Current operating lease liabilities</span></td><td colspan="3" style="background-color:#ffffff;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:10pt;font-weight:400;line-height:120%">Obligations under capital leases—current (243)</span></div></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%">157 </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%">169 </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"/><td colspan="3" style="display:none"/><td colspan="3" style="display:none"/></tr><tr><td colspan="3" style="background-color:#cceeff;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%">Non-current operating lease liabilities</span></td><td colspan="3" style="background-color:#cceeff;padding:2px 1pt;text-align:left;vertical-align:bottom"><div style="text-align:center;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Obligations under capital leases—non-current (227)</span></div></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;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%">3,644 </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;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%">3,668 </span></td><td style="background-color:#cceeff;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"/><td colspan="3" style="display:none"/></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"/><td colspan="3" style="display:none"/></tr></table></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The following table shows the classification and location of our lease cost on our Statement of Income (in thousands):</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:27.917%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:38.632%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.544%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:13.780%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.544%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:13.783%"/><td style="width:0.1%"/><td colspan="3" style="display:none"/><td colspan="3" style="display:none"/></tr><tr><td colspan="3" style="padding:0 1pt"/><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:8pt;font-weight:700;line-height:120%">Year Ended 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:8pt;font-weight:700;line-height:120%">Statement of Income Location</span></td><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:8pt;font-weight:700;line-height:120%">2022</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:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:700;line-height:120%">2021</span></td><td colspan="3" style="display:none"/><td colspan="3" style="display:none"/></tr><tr><td colspan="3" style="background-color:#cceeff;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%">Operating lease cost (1)</span></td><td colspan="3" style="background-color:#cceeff;border-top:1pt solid #000000;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%">Operating expenses (401)</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td style="background-color:#cceeff;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%">$</span></td><td style="background-color:#cceeff;border-top:1pt solid #000000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">424 </span></td><td style="background-color:#cceeff;border-top:1pt solid #000000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td style="background-color:#cceeff;border-top:1pt solid #000000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#cceeff;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%">367 </span></td><td style="background-color:#cceeff;border-top:1pt solid #000000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="display:none"/><td colspan="3" style="display:none"/></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"/><td colspan="3" style="display:none"/><td colspan="3" style="display:none"/><td colspan="3" style="display:none"/></tr></table></div><div style="text-align:justify"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:99.75pt"><tr><td style="width:1.0pt"/><td style="width:97.75pt"/><td style="width:1.0pt"/></tr><tr style="height:3pt"><td colspan="3" style="border-bottom:1pt solid #000000;padding:0 1pt"/></tr></table></div><div style="padding-left:36pt;text-align:justify;text-indent:-36pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">(1)    Includes $90 thousand and $35 thousand, respectively, of variable lease costs during the years ended December 31, 2022 and 2021.</span></div><div style="padding-left:36pt;text-align:justify;text-indent:-36pt"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Future annual minimum lease payments for operating leases as of December 31, 2022 are as follows (in thousands): </span></div><div style="text-align:justify"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:100.000%"><tr><td style="width:1.0%"/><td style="width:82.977%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:14.823%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:700;line-height:120%">Years Ending December 31,</span></td><td colspan="3" style="padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:700;line-height:120%">Operating Leases</span></td></tr><tr><td colspan="3" style="background-color:#cceeff;padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">2023</span></td><td style="background-color:#cceeff;border-top:1pt solid #000000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#cceeff;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%">319 </span></td><td style="background-color:#cceeff;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:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">2024</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%">216 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#cceeff;padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">2025</span></td><td colspan="2" style="background-color:#cceeff;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%">217 </span></td><td style="background-color:#cceeff;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:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">2026</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%">219 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#cceeff;padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">2027</span></td><td colspan="2" style="background-color:#cceeff;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%">246 </span></td><td style="background-color:#cceeff;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%">Thereafter</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%">8,987 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#cceeff;padding:2px 1pt 2px 19pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Total lease payments</span></td><td colspan="2" style="background-color:#cceeff;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%">10,204 </span></td><td style="background-color:#cceeff;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:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Less: Interest</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%">(6,403)</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:#cceeff;padding:2px 1pt 2px 19pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Present value of lease liabilities</span></td><td style="background-color:#cceeff;border-bottom:3pt double #000000;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:#cceeff;border-bottom:3pt double #000000;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%">3,801 </span></td><td style="background-color:#cceeff;border-bottom:3pt double #000000;border-top:1pt solid #000000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr></table></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The following table shows the weighted-average remaining lease term (in years) and the weighted-average discount rate for our operating leases:</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:66.310%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:14.822%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.544%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:14.824%"/><td style="width:0.1%"/></tr><tr><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:8pt;font-weight:700;line-height:120%">December 31,</span></td></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:700;line-height:120%">2022</span></td><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:700;line-height:120%">2021</span></td></tr><tr><td colspan="3" style="background-color:#cceeff;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%">Weighted-average remaining lease term (in years)</span></td><td colspan="3" style="background-color:#cceeff;border-top:1pt solid #000;padding: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%">49.2</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="3" style="background-color:#cceeff;border-top:1pt solid #000;padding: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%">50.0</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%">Weighted-average discount rate</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%">4.9 </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:#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%">4.9 </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></tr></table></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The following table includes other quantitative information for our operating leases (in thousands):</span></div><div style="text-align:justify"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:99.851%"><tr><td style="width:1.0%"/><td style="width:66.411%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:14.846%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.396%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:14.847%"/><td style="width:0.1%"/></tr><tr><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:8pt;font-weight:700;line-height:120%">Year Ended December 31,</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:8pt;font-weight:700;line-height:120%">2022</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:8pt;font-weight:700;line-height:120%">2021</span></td></tr><tr><td colspan="3" style="background-color:#cceeff;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%">Cash paid for amounts included in the measurement of lease liabilities:</span></td><td colspan="3" style="background-color:#cceeff;border-top:1pt solid #000000;padding:0 1pt"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="3" style="background-color:#cceeff;border-top:1pt solid #000000;padding:0 1pt"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 12.25pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Operating cash flows for operating leases</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%">336 </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 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%">329 </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:#cceeff;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%">Right-of-use assets obtained in exchange for operating lease liabilities</span></td><td colspan="2" style="background-color:#cceeff;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:100%">116 </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;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%">157 </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr></table></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">NOTE 6—REVENUES FROM CONTRACTS WITH CUSTOMERS</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">SPL has a firm transportation service agreement and a negotiated rate agreement with us to secure firm pipeline transportation capacity for the transportation of natural gas feedstock to the Sabine Pass LNG Terminal. These agreements have a primary term of 20 years from May 2016 and thereafter continue in effect from year to year until terminated by either party upon written notice of one year or the term of the agreements, whichever is less. In addition, SPL has the right to elect to extend the term of the agreements for up to two consecutive terms of 10 years. SPL has continuous access to its firm transportation capacity during the contract term but has no ability to defer unused capacity to future periods. SPL pays fixed fees of $81.7 million per year to reserve the right to transport natural gas up to maximum contractually specified levels, regardless of the quantities that SPL actually transports.</span></div><div><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Because we are continuously available to provide transportation service on a daily basis with the same pattern of transfer, we have concluded that we provide a single performance obligation to SPL on a continuous basis over time. Because our rights to consideration correspond directly with the value of the incremental service performed, we have elected to recognize revenue when we have the right to invoice SPL for services performed to date, which results in a substantially straight-line recognition pattern over the term of the contract.</span></div><div style="text-align:justify;text-indent:27pt"><span><br/></span></div><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Transaction Price Allocated to Future Performance Obligations</span></div><div><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Because of the long term duration of our transportation agreements with SPL, we are contractually entitled to significant future consideration which we have not yet recognized as revenue. The following table discloses the aggregate amount of the transaction price that is allocated to performance obligations that have not yet been satisfied:</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:44.138%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.544%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:11.846%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.544%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:11.846%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.544%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:11.846%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.544%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:11.848%"/><td style="width:0.1%"/></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:8pt;font-weight:700;line-height:120%">December 31, 2022</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:8pt;font-weight:700;line-height:120%">December 31, 2021</span></td></tr><tr><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:700;line-height:120%">Unsatisfied <br/>Transaction Price <br/>(in billions)</span></td><td colspan="3" style="border-top:1pt solid #000000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:700;line-height:120%">Weighted Average Recognition Timing (years) (1)</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:700;line-height:120%">Unsatisfied <br/>Transaction Price <br/>(in billions)</span></td><td colspan="3" style="border-top:1pt solid #000000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:700;line-height:120%">Weighted Average Recognition Timing (years) (1)</span></td></tr><tr><td colspan="3" style="background-color:#cceeff;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%">Revenues from Transportation of Gas of Others Through Transmission Facilities (489.2)</span></td><td colspan="3" style="background-color:#cceeff;border-top:1pt solid #000000;padding:0 1pt"/><td style="background-color:#cceeff;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:#cceeff;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%">1.1 </span></td><td style="background-color:#cceeff;border-top:1pt solid #000000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;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%">7 </span></td><td style="background-color:#cceeff;border-top:1pt solid #000000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td style="background-color:#cceeff;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:#cceeff;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%">1.2 </span></td><td style="background-color:#cceeff;border-top:1pt solid #000000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;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%">8 </span></td><td style="background-color:#cceeff;border-top:1pt solid #000000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr></table></div><div style="margin-bottom:6pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:19.791%"><tr><td style="width:1.0%"/><td style="width:98.900%"/><td style="width:0.1%"/></tr><tr style="height:3pt"><td colspan="3" style="border-bottom:1pt solid #000000;padding:0 1pt"/></tr></table></div><div style="padding-left:36pt;text-indent:-36pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">(1)</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:23.78pt">The weighted average recognition timing represents an estimate of the number of years during which we shall have recognized half of the unsatisfied transaction price.</span></div><div style="padding-left:36pt;text-align:justify;text-indent:-36pt"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We omit from the table above all variable consideration expected to be recognized through our use of the right to invoice election. </span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">NOTE 7—TRANSACTIONS WITH ASSOCIATED COMPANIES </span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Below is a summary of our transactions with associated companies as reported on our Statement of Income (in thousands):</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:6.489%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:58.721%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:14.822%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.544%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:14.824%"/><td style="width:0.1%"/></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:8pt;font-weight:700;line-height:120%">Year Ended 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:8pt;font-weight:700;line-height:120%">Line No.</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;padding:2px 1pt;text-align:center;vertical-align:middle"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:700;line-height:120%">2022</span></td><td colspan="3" style="border-top:1pt solid #000000;padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000000;padding:2px 1pt;text-align:center;vertical-align:middle"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:8pt;font-weight:700;line-height:120%">2021</span></td></tr><tr><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:700;line-height:120%">2</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:9pt;font-weight:700;line-height:120%">Gas operating revenues</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"/></tr><tr><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="3" style="background-color:#cceeff;padding:2px 1pt 2px 19pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Transportation Agreements (1)</span></td><td style="background-color:#cceeff;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:#cceeff;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%">81,901 </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td style="background-color:#cceeff;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:#cceeff;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%">81,661 </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 19pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Operational Balancing Agreements ("OBA") (2)</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%">53 </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%">— </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"/><td colspan="3" style="display:none"/></tr><tr><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="3" style="background-color:#cceeff;padding:2px 1pt 2px 37pt;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 gas operating revenues—associated companies</span></td><td colspan="2" style="background-color:#cceeff;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%">81,954 </span></td><td style="background-color:#cceeff;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;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%">81,661 </span></td><td style="background-color:#cceeff;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr style="height:12pt"><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:0 1pt"/><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/></tr><tr><td colspan="3" style="background-color:#cceeff;padding:2px 1pt;text-align:center;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:9pt;font-weight:700;line-height:120%">3</span></td><td colspan="3" style="background-color:#cceeff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:9pt;font-weight:700;line-height:120%">Operating expenses</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 19pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Services Agreements (3)</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%">9,659 </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%">10,524 </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:#cceeff;padding:0 1pt"/><td colspan="3" style="background-color:#cceeff;padding:2px 1pt 2px 19pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">OBA (2)</span></td><td colspan="2" style="background-color:#cceeff;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%">1,418 </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;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%">(522)</span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 37pt;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 operating expenses—associated companies</span></td><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%">11,077 </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%">10,002 </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:12pt"><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/></tr><tr><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:9pt;font-weight:700;line-height:120%">3</span></td><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:9pt;font-weight:700;line-height:120%">Administrative and general expenses</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:0 1pt"/></tr><tr><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="3" style="background-color:#cceeff;padding:2px 1pt 2px 19pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Services Agreements (3)</span></td><td colspan="2" style="background-color:#cceeff;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%">663 </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;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%">731 </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr></table></div><div style="margin-bottom:6pt;text-align:justify"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:19.791%"><tr><td style="width:1.0%"/><td style="width:98.900%"/><td style="width:0.1%"/></tr><tr style="height:3pt"><td colspan="3" style="border-bottom:1pt solid #000000;padding:0 1pt"/></tr></table></div><div style="margin-bottom:6pt;padding-left:36pt;text-align:justify;text-indent:-36pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">(1)</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:23.78pt">SPL has a transportation precedent agreement, firm transportation service agreement and a negotiated rate agreement with us in which they pay us $81.7 million per year to reserve the right to transport natural gas to the Sabine Pass LNG Terminal. For both years ended December 31, 2022 and 2021, we had $6.8 million of Account 146, Accounts Receivable from Associated Companies, under the transportation agreements. See </span><span style="color:#0000ff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline"><a style="color:#0000ff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline" href="#i9a6cab4a45de4dcf8d24d81b33f7a631_25">Note 6—Revenues from Contracts with Customers</a></span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> for further discussion on these agreements.</span></div><div style="margin-bottom:6pt;padding-left:36pt;text-align:justify;text-indent:-36pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">(2)</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:23.78pt">As described in </span><span style="color:#0000ff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline"><a style="color:#0000ff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline" href="#i9a6cab4a45de4dcf8d24d81b33f7a631_13">Note</a><a style="color:#0000ff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline" href="#i9a6cab4a45de4dcf8d24d81b33f7a631_13">—</a><a style="color:#0000ff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline" href="#i9a6cab4a45de4dcf8d24d81b33f7a631_13">2 Summary of </a><a style="color:#0000ff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline" href="#i9a6cab4a45de4dcf8d24d81b33f7a631_13">Sign</a><a style="color:#0000ff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline" href="#i9a6cab4a45de4dcf8d24d81b33f7a631_13">i</a><a style="color:#0000ff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline" href="#i9a6cab4a45de4dcf8d24d81b33f7a631_13">ficant Accounting P</a><a style="color:#0000ff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline" href="#i9a6cab4a45de4dcf8d24d81b33f7a631_13">olicies</a></span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">, we have OBAs with SPLNG, SPL and an associated company not under common control of Cheniere that provide for the resolution of any operational imbalances. As of December 31, 2022 and 2021, we had $23 thousand and $828 thousand of Account 174, Miscellaneous Current and Accrued Assets, respectively, under the OBAs with SPLNG and SPL. As of both December 31, 2022 and 2021, we did not have a balance in Account 174, Miscellaneous Current and Accrued Assets or Account 242, Miscellaneous Current and Accrued Liabilities under the OBA with associated companies.</span></div><div style="padding-left:36pt;text-align:justify;text-indent:-36pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">(3)</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:23.78pt">We do not have employees and thus we and our subsidiaries have various services agreements with associated companies of Cheniere in the ordinary course of business, including services required to operate and maintain the Creole Trail Pipeline, and administrative services. Our payments under the services agreements are primarily based on a cost reimbursement structure. For both years ended December 31, 2022 and 2021, we had $2.8 million of Account 234, Accounts Payable to Associated Companies related to these agreements. As of December 31, 2022 and 2021, we had $3.5 million and $3.6 million, respectively, of advances included in Account 146, Accounts Receivable from Associated Companies and $273 thousand and $362 thousand, respectively, in Account 186, Miscellaneous Deferred Debits under these agreements.</span></div><div style="text-align:justify;text-indent:27pt"><span><br/></span></div><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">State Tax Sharing Agreement</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We have a state tax sharing agreement with Cheniere. Under this agreement, Cheniere has agreed to prepare and file all state and local income or franchise tax returns which we and Cheniere are required to file on a combined basis and to timely pay the combined state and local tax liability. If Cheniere, in its sole discretion, demands payment, we will pay to Cheniere an amount equal to the state and local tax that we would be required to pay if our state and local tax liability were calculated on a separate company basis. To date there have been no state and local tax payments demanded by Cheniere under the tax sharing agreement. The agreement is effective for tax returns due on or after May 2013.</span></div><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">NOTE 8—COMMITMENTS AND CONTINGENCIES</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:112%">Commitments</span></div><div style="text-align:justify;text-indent:36pt"><span><br/></span></div><div style="text-align:justify;text-indent:36pt"><span style="background-color:#ffffff;color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">We have various commitments under executed contracts that include unconditional purchase obligations and other commitments which do not meet the definition of a liability as of </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">December 31, 2022</span><span style="background-color:#ffffff;color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:112%">, and thus are not recognized as liabilities in our Financial Statements</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:700;line-height:120%">Guarantees</span></div><div><span><br/></span></div><div style="text-align:justify;text-indent:36pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Certain subsidiaries of CQP, including us, have unconditionally guaranteed the debt obligations of CQP. See </span><span style="color:#0000ff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline"><a style="color:#0000ff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline" href="#i9a6cab4a45de4dcf8d24d81b33f7a631_37">Note 10—Guarantees</a></span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> for information regarding these guarantees.</span></div><div style="text-align:justify;text-indent:36pt"><span><br/></span></div><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:700;line-height:120%">Lease Commitments</span></div><div><span><br/></span></div><div style="text-align:justify;text-indent:36pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We have various operating lease commitments. See </span><span style="color:#0000ff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline"><a style="color:#0000ff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline" href="#i9a6cab4a45de4dcf8d24d81b33f7a631_22">Note 5—Leases</a></span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> for information regarding these agreements.</span></div><div style="text-align:justify;text-indent:36pt"><span><br/></span></div><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Environmental and Regulatory Matters</span></div><div><span><br/></span></div><div style="text-align:justify;text-indent:36pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We are subject to extensive regulation under federal, state and local statutes, rules, regulations and laws. These laws require that we engage in consultations with appropriate federal and state agencies and that we obtain and maintain applicable permits and other authorizations. Failure to comply with such laws could result in legal proceedings, which may include substantial penalties. We believe that, based on currently known information, compliance with these laws and regulations will not have a material adverse effect on our results of operations, financial condition or cash flows.</span></div><div style="text-align:justify;text-indent:36pt"><span><br/></span></div><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Legal Proceedings</span></div><div><span><br/></span></div><div style="text-align:justify;text-indent:36pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We are and may in the future be involved as a party to various legal proceedings, which are incidental to the ordinary course of business. We regularly analyze current information and, as necessary, provide accruals for probable liabilities on the eventual disposition of these matters. In the opinion of management, as of December 31, 2022, there were no threatened or pending legal matters that would have a material impact on our results of operations, financial position or cash flows.</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">NOTE 9—SUPPLEMENTAL CASH FLOW INFORMATION</span></div><div><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The balance in net utility plant funded with Account 232, Accounts Payable, Account 242, Miscellaneous Current and Accrued Liabilities and Account 234, Accounts Payable to Associated Companies was $1.4 million and $0.8 million as of December 31, 2022 and 2021, respectively. Additionally, see </span><span style="color:#0000ff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline"><a style="color:#0000ff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline" href="#i9a6cab4a45de4dcf8d24d81b33f7a631_22">Note 5</a><a style="color:#0000ff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline" href="#i9a6cab4a45de4dcf8d24d81b33f7a631_22">—</a><a style="color:#0000ff;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;text-decoration:underline" href="#i9a6cab4a45de4dcf8d24d81b33f7a631_22">Leases</a></span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> for right-of-use asset amounts obtained in exchange for lease liabilities. </span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:700;line-height:120%">NOTE 10—GUARANTEES </span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> </span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">We, along with each of CQP’s subsidiaries other than SPL, Sabine Pass LNG-LP, LLC and certain other subsidiaries (“CQP Subsidiary Guarantors”), unconditionally guarantee CQP’s credit facilities, which were entered into in May 2019 (“2019 CQP Credit Facilities”). The 2019 CQP Credit Facilities contain customary affirmative and negative covenants, including restrictions on CQP’s and the CQP Subsidiary Guarantors’ ability to incur additional indebtedness or liens, engage in asset sales, enter into hedging arrangements and engage in transactions with affiliates. The 2019 CQP Credit Facilities will mature on May 29, 2024. As of December 31, 2022, CQP had no outstanding borrowings and $750 million of available commitments under the 2019 CQP Credit Facilities.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">CQP holds a series of senior notes with maturities ranging from 2029 to 2032 and total aggregate principal outstanding of $4.2 billion as of December 31, 2022 (collectively, the “CQP Senior Notes”). The CQP Senior </span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Notes are jointly and severally guaranteed by each of CQP’s subsidiaries other than SPL and, subject to certain conditions governing its guarantee, Sabine Pass LNG-LP, LLC (collectively, the “CQP Guarantors”). The CQP Senior Notes are governed by an indenture which contains customary terms and events of default and certain covenants that, among other things, limit the ability of CQP and the CQP Guarantors to incur liens and sell assets, enter into transactions with affiliates, enter into sale-leaseback transactions and consolidate, merge or sell, lease or otherwise dispose of all or substantially all of the applicable entity’s properties or assets. The CQP Senior Notes may become secured by a first priority lien on substantially all of its assets and the assets of the CQP Subsidiary Guarantors if the aggregate outstanding secured indebtedness of CQP and the CQP Guarantors exceeds a certain threshold.</span></div><div style="text-align:justify;text-indent:27pt"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The CQP Guarantors’ guarantees are full and unconditional, subject to certain release provisions including (1) the sale, disposition or transfer (by merger, consolidation or otherwise) of the capital stock or all or substantially all of the assets of the CQP Guarantors, (2) upon the liquidation or dissolution of a Guarantor, (3) following the release of a Guarantor from its guarantee obligations and (4) upon the legal defeasance or satisfaction and discharge of obligations under the indenture governing the CQP Senior Notes. In the event of a default in payment of the principal or interest by us, whether at maturity of the CQP Senior Notes or by declaration of acceleration, call for redemption or otherwise, legal proceedings may be instituted against the CQP Guarantors to enforce the guarantee.</span></div><div style="text-align:justify;text-indent:27pt"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The rights of holders of the CQP Senior Notes against the CQP Guarantors may be limited under the U.S. Bankruptcy Code or state fraudulent transfer or conveyance law. Each guarantee contains a provision intended to limit the Guarantor’s liability to the maximum amount that it could incur without causing the incurrence of obligations under its guarantee to be a fraudulent conveyance or transfer under U.S. federal or state law. However, there can be no assurance as to what standard a court will apply in making a determination of the maximum liability of the CQP Guarantors. Moreover, this provision may not be effective to protect the guarantee from being voided under fraudulent conveyance laws. There is a possibility that the entire guarantee may be set aside, in which case the entire liability may be extinguished.</span></div><div style="text-align:justify;text-indent:27pt"><span><br/></span></div><div style="text-align:justify;text-indent:27pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">As of December 31, 2022, we have</span><span style="color:#ff0090;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%">no liability recorded related to these guarantees.</span></div>


entity_id: C000517
filing_name: North_Baja_Pipeline,_LLC_form2_Q4_1679670811
publication_time: 2023-03-24 15:13:31.000000
start_date: 2022-01-01
end_date: 2022-12-31
disclosure_of_important_disclosures_regarding_the_financial_statements_text_block:
  <div style="margin-bottom:5pt;padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:8pt">Description of Business </span></div><div style="margin-bottom:5pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">North Baja Pipeline, LLC (the Company) is a limited liability company incorporated in Delaware on September 20, 2000. The Company is a wholly owned direct subsidiary of TC PipeLines, LP (TCP). TransCanada Northern Border, Inc. (Northern Border-Opco) is the operator of the Company. TCP and Northern Border-Opco are both indirect subsidiaries of TC Energy Corporation (TC Energy).</span></div><div style="margin-bottom:5pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">On March 3, 2021, the Company's parent, TCP, merged into TC Energy through a share for unit exchange transaction whereby TC Energy issued and exchanged 0.70 TC Energy common shares for every TCP common unit not beneficially owned by TC Energy.</span></div><div style="margin-bottom:5pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">The Company’s 86-mile transmission system extends from an interconnection with El Paso Natural Gas Co. near Ehrenberg, Arizona, to a point near Ogilby, California on the Mexican border, where it connects with the Gasoducto Rosarito natural gas pipeline system (GR), a subsidiary of Sempra International. The Company’s transmission system has the capacity of delivering 500 million cubic feet of gas per day (MJCF/d) north to south and 600 MJCF/d south to north.</span></div><div style="margin-bottom:5pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">The Company’s transmission system includes the Yuma Lateral, a 3.27-mile natural gas pipeline placed in service in March 2010. The Yuma Lateral connects with GR at the U.S./Mexico border near Yuma, Arizona and provides transportation services to Arizona Public Service (APS) and Imperial Irrigation District (IID).</span></div><div style="margin-bottom:5pt;padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">2.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:8pt">Summary of Significant Accounting Policies</span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">a.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:8pt">Basis of Presentation </span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;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. </span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">b.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:7.34pt">Use of Estimates</span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;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:5pt;padding-left:18pt;padding-right:18pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">c.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:8pt">Trade Accounts Receivable</span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;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 Company maintains an allowance for doubtful accounts for estimated losses on accounts receivable and for natural gas imbalances due from shippers and operators, if it is determined the Company will not collect all or part of the outstanding receivable balance. The Company regularly reviews its allowance for doubtful accounts and establishes or adjusts the allowance as necessary using the specific identification method. Account balances are charged to the allowance after all means of collection have been exhausted and the potential for recovery is no longer considered probable. There were no accounts charged to the allowance in 2022 and 2021.</span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">d.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:7.34pt">Natural Gas Imbalances</span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;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 these imbalances due to or from shippers and operators at current index prices. Imbalances are settled in-kind, subject to the terms of the Company’s tariff. </span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;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:5pt;padding-left:18pt;padding-right:18pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">e.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:8pt">Material and Supplies</span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">The Company’s inventories primarily consist of materials and supplies and are carried at lower of weighted average cost and net realizable value. </span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">f.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:10.68pt">Property, Plant, and Equipment</span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Property, plant, and equipment are recorded at their original cost of construction. For assets the Company 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:5pt;padding-left:18pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;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. 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 original rate proceeding. Currently, the Company’s depreciation rates vary from 3.3% to 20.0% per year. Using these rates, the remaining depreciable life of these assets ranges from 3 to 27 years. 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:5pt;padding-left:18pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;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:5pt;padding-left:18pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">The Company 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.</span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;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 </span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">as other income in the statements of income. Debt amounts capitalized during the years ended December 31, 2022 and 2021 were immaterial to the financial statements. Equity amounts capitalized during the years ended December 31, 2022 and 2021 were $6.1 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:5pt;padding-left:18pt;padding-right:18pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">g.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:7.34pt">Revenue Recognition </span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;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 bundled performance obligation. Revenues earned from firm contracted capacity arrangements are recognized ratably 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. Revenues are invoiced and paid on a monthly basis. 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.</span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;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, 2022 and 2021, there are no refund provisions reflected in these financial statements. </span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">h.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:7.34pt">Accounting for Asset Retirement Obligations</span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">The Company 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:12pt;font-style:italic;font-weight:400;line-height:120%"> Asset Retirement Obligations</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">. 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:5pt;padding-left:18pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;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 </span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">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:5pt;padding-left:18pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">The Company 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, the Company believes its natural gas pipeline system assets have indeterminate lives and, accordingly, has recorded no asset retirement obligation as of December 31, 2022 and 2021. The Company continues to evaluate its asset retirement obligations and future developments that could impact amounts it records.</span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">i.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:11.34pt">Income Taxes</span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Income taxes are not normally reflected in the financial statements of limited partnerships. The FERC’s 2005 Income Tax Policy Statement allowed pass through entities, such as the Company, to recover an income tax allowance, therefore, the Company recognized pro-forma income taxes on its records. On January 1, 2018, the Company adopted FERC’s Revised Policy Statement on Treatment of Income Taxes (Revised Policy Statement) issued on March 15, 2018 along with subsequent guidance issued on July 18, 2018. As a result, effective January 1, 2018, the Company prospectively eliminated its income tax allowance, along with its Accumulated Deferred Income Taxes (ADIT) used for rate-making purposes and tax related regulatory assets and liabilities. </span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">On March 3, 2021, the Company’s parent, TCP, merged into TC Energy through a share for unit exchange taxable transaction whereby TC Energy issued and exchanged 0.70 TC Energy shares for every TCP common unit not beneficially owned by TC Energy. TCP was previously a publicly traded partnership and now the Company is indirectly wholly owned by corporate entities. As a result, the post-merger associated tax impacts applied on March 3, 2021 were recognized by the Company to reflect the difference between the book basis of the Company’s assets and their tax basis which included a step up as a result of the taxable transaction. This one-time adjustment resulted in an increase in the Company’s ADIT (190) balance amounting to $6,874,053, a decrease in ADIT-Property (282) amounting to $1,041,062, an increase in ADIT-Other (283) amounting to $38,626, and a corresponding offset to Other Paid-In Capital (211) amounting to $7,876,489.</span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Additionally, beginning March 3, 2021 the Company will record income taxes 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:5pt;padding-left:18pt;padding-right:18pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">j.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:11.34pt">Fair Value Measurements</span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">For cash equivalents, 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 Company for debt with similar terms and remaining maturities.</span></div><div style="margin-bottom:5pt;padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">3.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:8pt">Contingencies &amp; Commitments</span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">a.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:8pt">Contingencies</span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">The Company 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:12pt;font-style:italic;font-weight:400;line-height:120%">Contingencies</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">. 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 contingent liabilities that would have a material adverse effect on the Company’s financial condition, results of operations, or cash flows.</span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">b.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:7.34pt">Regulatory Matters</span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;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. The Company operates under its original proceeding approved in 2001 and has no requirement to file a new rate proceeding.</span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">c.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:8pt">Legal Proceedings</span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">The Company is not aware of any material legal liabilities as of December 31, 2022.</span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">d.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:7.34pt">Environmental Matters</span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">The Company is not aware of any material contingent liabilities with respect to compliance with applicable environmental laws and regulations.</span></div><div style="margin-bottom:5pt;padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">4.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:8pt">Income Taxes</span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">a.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:8pt">Components of Income Taxes</span></div><div style="margin-bottom:5pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">The components of income tax expense for the years ended December 31 (in thousands of dollars):</span></div><div style="margin-bottom:5pt;text-indent:36pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:54.315%"><tr><td style="width:1.0%"/><td style="width:50.406%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:21.639%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:1.913%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:21.642%"/><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:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">2022</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:12pt;font-weight:700;line-height:120%">2021</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:12pt;font-weight:400;line-height:120%">Current expense</span></td><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="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 19pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Federal</span></td><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;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:12pt;font-weight:400;line-height:120%">1,326 </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:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">2,420 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 19pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">State</span></td><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">397 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">719 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">$</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:12pt;font-weight:400;line-height:120%">1,723 </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 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:12pt;font-weight:400;line-height:120%">$</span></td><td style="border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">3,139 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Deferred expense</span></td><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 19pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Federal</span></td><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">3,114 </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:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">1,785 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 19pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">State</span></td><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">952 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">412 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">$</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:12pt;font-weight:400;line-height:120%">4,066 </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 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:12pt;font-weight:400;line-height:120%">$</span></td><td style="border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">2,197 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Total income tax expense</span></td><td style="border-bottom:1pt solid #000;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">$</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:12pt;font-weight:400;line-height:120%">5,789 </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="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:12pt;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:12pt;font-weight:400;line-height:120%">5,336 </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:5pt;padding-left:18pt;padding-right:18pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">b.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:7.34pt">Effective Tax Rate Reconciliation</span></div><div style="margin-bottom:5pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;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, 2021, and December 31, 2022. For the period ending December 31, 2021, the tax activity is reflective of ten month's activity, as discussed further in footnote 2(i). Reconciliation of the statutory U.S. federal income tax rate to the Company's effective income tax rate is as follows at December 31 (in thousands of dollars):</span></div><div style="margin-bottom:5pt;padding-left:18pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:84.672%"><tr><td style="width:1.0%"/><td style="width:69.901%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:12.256%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:2.084%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:12.259%"/><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:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">2022</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:12pt;font-weight:700;line-height:120%">2021</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:12pt;font-weight:400;line-height:120%">Book Income Before Income Taxes</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:12pt;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:12pt;font-weight:400;line-height:120%">28,496</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:12pt;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:12pt;font-weight:400;line-height:120%">26,315</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="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:0 7pt 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:12pt;font-weight:400;line-height:120%">Tax Expense at statutory federal income 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:12pt;font-weight:400;line-height:120%">5,984</span></td><td colspan="3" style="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:12pt;font-weight:400;line-height:120%">4,622</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:12pt;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="padding:0 1pt"/><td colspan="3" style="padding:0 7pt 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:12pt;font-weight:400;line-height:120%">State income taxes, net of federal income tax benefits</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:12pt;font-weight:400;line-height:120%">1,066 </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"/><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:12pt;font-weight:400;line-height:120%">893 </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 13pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">AFUDC</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:12pt;font-weight:400;line-height:120%">(1,260)</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"/><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:12pt;font-weight:400;line-height:120%">(179)</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 13pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;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:12pt;font-weight:400;line-height:120%">(1)</span></td><td colspan="3" style="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:12pt;font-weight:400;line-height:120%">—</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:12pt;font-weight:400;line-height:120%">Total Income Tax Expense</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:12pt;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:12pt;font-weight:400;line-height:120%">5,789</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:12pt;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:12pt;font-weight:400;line-height:120%">5,336</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:12pt;font-weight:400;line-height:120%">Effective tax rate</span></td><td colspan="3" style="border-top:1pt solid #000;padding:2px 7pt 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">20.3%</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:2px 7pt 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">20.3%</span></td></tr></table></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">c.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:8pt">Deferred Tax Assets and Liabilities</span></div><div style="margin-bottom:5pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">The income tax effects of temporary differences that gave rise to the net deferred income tax asset is as follows at December 31 (in thousands of dollars):</span></div><div style="margin-bottom:5pt;padding-left:18pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:57.589%"><tr><td style="width:1.0%"/><td style="width:56.005%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:19.313%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:1.867%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:19.315%"/><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:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;text-decoration:underline">2022</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:12pt;font-weight:700;line-height:120%;text-decoration:underline">2021</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:12pt;font-weight:700;line-height:120%">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:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">NonUtility Property</span></td><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;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:12pt;font-weight:400;line-height:120%">5,578 </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:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">5,939 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">$</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:12pt;font-weight:400;line-height:120%">5,578 </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 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:12pt;font-weight:400;line-height:120%">$</span></td><td style="border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">5,939 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr style="height:15pt"><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">Deferred tax liabilities</span></td><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 13pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Property, plant &amp; equipment</span></td><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">5,729 </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:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">1,699 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt 2px 13pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Regulatory Assets</span></td><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">611 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="padding:0 1pt"/><td colspan="2" style="padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">76 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:0 1pt"/><td style="border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">$</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:12pt;font-weight:400;line-height:120%">6,340 </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 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:12pt;font-weight:400;line-height:120%">$</span></td><td style="border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">1,775 </span></td><td style="border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Net Deferred Tax asset (Liability)</span></td><td style="border-bottom:1pt solid #000;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">$</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:12pt;font-weight:400;line-height:120%">(762)</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="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:12pt;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:12pt;font-weight:400;line-height:120%">4,164 </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:5pt;padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">5.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:8pt">Long-Term Debt</span></div><div style="margin-bottom:5pt;padding-right:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">On December 20, 2021, the Company repaid its $50 million outstanding balance, including immaterial amounts of accrued interest, on its unsecured variable interest term loan facility (Term Loan Facility). Funding for the repayment of the Term Loan Facility was provided by TransCanada PipeLine USA Ltd.'s (TCPL USA) cash management program (Note 8(a) Cash Management Program). Prior to the Term Loan Facility repayment, the variable interest rate was based on LIBOR plus an applicable margin, and the Company was required to maintain a Total Debt to Total GAAP Capitalization ratio of no greater than 70 percent. The weighted average interest rate for the year ended December 31, 2021 was 1.18 percent, and was 1.16 percent at December 20, 2021. Prior to December 20, 2021, the Company was in compliance with all its financial covenants. As of December 31, 2021 and December 31 2022, the Company was not subject to any financial covenants.</span></div><div style="margin-bottom:5pt;padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">6.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:8pt">Fair Value Measurements</span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">a.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:8pt">Fair Value Hierarchy</span></div><div style="margin-bottom:5pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Under ASC 820, </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:120%">Fair Value Measurement</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;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:5pt;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:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%;padding-left:13.8pt">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:5pt;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:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%;padding-left:13.8pt">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:5pt;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:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%;padding-left:13.8pt">Level 3 inputs are unobservable inputs for the asset or liability.</span></div><div style="margin-bottom:5pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;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:5pt;padding-left:18pt;padding-right:18pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">b.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:7.34pt">Fair Value of Financial Instruments</span></div><div style="margin-bottom:5pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">The carrying value of demand loan payable to related parties, accrued interest, and all current receivable and payable accounts, except for natural gas imbalances are classified as Level 1 in the "Fair Value Hierarchy". Accordingly, the carrying values approximate their fair values because of the short maturity or duration of these instruments. </span></div><div style="margin-bottom:5pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">The fair value of the Term Loan Facility approximated the carrying value since the interest rates were periodically adjusted to reflect current market condition. 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:5pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">The Company’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. 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 </span></div><div style="margin-bottom:5pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Company records these imbalances at fair value by applying the difference between the measured quantities of natural gas delivered to or received from its shippers and operators to the most recent Cal Midpoin</span><span style="background-color:#ffffff;color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">t index price. For the year ended December 31, </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">2022</span><span style="background-color:#ffffff;color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">, the total estimated fair value of our natural gas imbalance was a net </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">receivable</span><span style="background-color:#ffffff;color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%"> of approximately $0.9 million (</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">2021</span><span style="background-color:#ffffff;color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%"> - net receivable $0.4 million).</span></div><div style="margin-bottom:5pt;padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">7.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:8pt">Transactions with Major Customers</span></div><div style="margin-bottom:5pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">The following table represents the Company’s major customers providing significant operating revenues for the years ended December 31 (in thousands of dollars):</span></div><div style="margin-bottom:5pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:99.255%"><tr><td style="width:1.0%"/><td style="width:41.628%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:12.543%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:1.449%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:12.243%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:1.449%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:10.894%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:1.449%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:12.245%"/><td style="width:0.1%"/></tr><tr><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:12pt;font-weight:700;line-height:120%">2022</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:12pt;font-weight:700;line-height:120%">2021</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:12pt;font-weight:400;line-height:120%">Amount</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:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Percentage of total</span></td><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:12pt;font-weight:400;line-height:120%">Amount</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:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Percentage of total</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:12pt;font-weight:400;line-height:120%">Sempra LNG International, LLC</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:12pt;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:12pt;font-weight:400;line-height:120%">15,652 </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:12pt;font-weight:400;line-height:120%">40 </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:12pt;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:12pt;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:12pt;font-weight:400;line-height:120%">16,288 </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:12pt;font-weight:400;line-height:120%">43 </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:12pt;font-weight:400;line-height:120%">%</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:12pt;font-weight:400;line-height:120%">Shell Energy North American (US), L.P.</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:12pt;font-weight:400;line-height:120%">5,489 </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:12pt;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:12pt;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:12pt;font-weight:400;line-height:120%">7,249 </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:12pt;font-weight:400;line-height:120%">19 </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:12pt;font-weight:400;line-height:120%">%</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:12pt;font-weight:400;line-height:120%">Energia Azteca X. S.A. de C.V.</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:12pt;font-weight:400;line-height:120%">5,153 </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:12pt;font-weight:400;line-height:120%">13 </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:12pt;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:12pt;font-weight:400;line-height:120%">5,162 </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:12pt;font-weight:400;line-height:120%">13 </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:12pt;font-weight:400;line-height:120%">%</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:12pt;font-weight:400;line-height:120%">Sempra LNG Marketing, LLC</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:12pt;font-weight:400;line-height:120%">3,985 </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:12pt;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:12pt;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:12pt;font-weight:400;line-height:120%">4,013 </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:12pt;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:12pt;font-weight:400;line-height:120%">%</span></td></tr></table></div><div style="margin-bottom:5pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">The following table represents the Company’s trade accounts receivable for shippers with balances greater than 10 percent of the total trade accounts receivable for the years ended December 31 (in thousands of dollars):</span></div><div style="margin-bottom:5pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:71.428%"><tr><td style="width:1.0%"/><td style="width:58.275%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.066%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:2.091%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.068%"/><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:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">2022</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:12pt;font-weight:700;line-height:120%">2021</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:12pt;font-weight:400;line-height:120%">Sempra LNG International, LLC</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:12pt;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:12pt;font-weight:400;line-height:120%">1,354 </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 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:12pt;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:12pt;font-weight:400;line-height:120%">1,356 </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:12pt;font-weight:400;line-height:120%">Shell Energy North American (US), L.P.</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:12pt;font-weight:400;line-height:120%">440 </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:12pt;font-weight:400;line-height:120%">604 </span></td><td style="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:12pt;font-weight:400;line-height:120%">Energia Azteca X. S.A. de C.V.</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:12pt;font-weight:400;line-height:120%">428 </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:12pt;font-weight:400;line-height:120%">430 </span></td><td style="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:12pt;font-weight:400;line-height:120%">Arizona Public Service Company</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:12pt;font-weight:400;line-height:120%">350 </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:12pt;font-weight:400;line-height:120%">443 </span></td><td style="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:12pt;font-weight:400;line-height:120%">Sempra LNG Marketing, LLC</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:12pt;font-weight:400;line-height:120%">334 </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:12pt;font-weight:400;line-height:120%">334 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr></table></div><div style="margin-bottom:5pt;padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">8.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:8pt">Transactions with Related Parties</span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">a.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:8pt">Cash Management Program</span></div><div style="margin-bottom:5pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">The Company participates in TransCanada Pipeline USA Ltd's (TCPL USA), a fully owned subsidiary, Cash Management Program, 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 Company receives interest on monies advanced to TCPL USA at the rate of interest earned by TCPL USA on its short-term cash investments. The Company pays interest on monies advanced from TCPL USA based on TCPL USA's short-term borrowing costs. At December 31, 2022 and 2021, the Company had a demand loan payable to the cash management program of $62.3 million and $47.4 million, respectively, for which the net activity is treated as financing activity on the Cash Flow Statements in accordance with ASC 230 - </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:120%">Statement of Cash Flows</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">. </span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">b.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:7.34pt">Related Party Transactions</span></div><div style="margin-bottom:5pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">During the years ended December 31, 2022 and 2021, the Company was charged $7.6 million and $5.0 million, respectively, by its related parties for certain capital, operating, and administrative services provided to the Company. The impact on the Company’s income of </span></div><div style="margin-bottom:5pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">these charges was $3.0 million in 2022 (2021 - $3.3 million). At December 31, 2022 and 2021, the Company owed $0.8 million and $0.6 million, respectively, to these related parties. These amounts are reported under Accounts Payable to Associated Companies (234) net of Customer Accounts Receivable (142) on the Company's balance sheet.</span></div><div style="margin-bottom:5pt;padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">9.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:8pt">Revenues</span></div><div style="margin-bottom:5pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">On January 1, 2018, the Company adopted the 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 GAAP and FERC due to the application of the right to invoice practical expedient. The following GAAP 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:5pt;padding-left:18pt;padding-right:18pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">a.</span><span style="background-color:#ffffff;color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:8pt">Disaggregation of Revenues</span></div><div style="margin-bottom:5pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">For the years ended</span><span style="background-color:#ffffff;color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%"> December 31, </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">2022</span><span style="background-color:#ffffff;color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%"> and </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">2021, effectively all of the Company’s revenues were from capacity arrangements and transportation contracts with customers as discussed under Note 2, Summary of Significant Accounting Policies.</span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">b.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:7.34pt">Contract Balances</span></div><div style="margin-bottom:5pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">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) on the Company’s balance sheet. Additionally, the Company’s 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:5pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">A customer's letter of credit was drawn for non-renewal and is now represented as a customer security deposit that guarantees service not yet completed under a long-term revenue contract. The Company accounts for customer security deposits as a current liability on the balance sheet as this deposit can be settled upon performance by the customer at any time. The Company holds this customer deposit and records associated interest based on the posted federal fund rate. As the Company provides services under the terms of the customer contract, the deposit will be relieved.</span></div><div style="margin-bottom:5pt;padding-left:18pt;padding-right:18pt;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">c.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:8pt">Right to Invoice Practical Expedient</span></div><div style="margin-bottom:5pt;padding-left:18pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">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 or the Company's FERC tariff. 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:5pt;padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">10.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:1.33pt"> Distributions</span></div><div style="margin-bottom:5pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">The Company's distribution policy requires 100 percent distribution of its distributable cash flow based on earnings before depreciation and amortization less AFUDC and maintenance capital </span></div><div style="margin-bottom:5pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">expenditures. This defined formula is subject to management committee approval and can be modified to ensure minimum cash balances, equity balances and ratios are maintained.</span></div><div style="margin-bottom:5pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">For the years ended December 31, 2022 and 2021, the Company paid distributions of $14.2 million and $32.4 million, respectively.</span></div><div style="margin-bottom:5pt;padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">11.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:1.33pt"> Supplemental Cash Flow Information </span></div><div style="margin-bottom:5pt"><table style="border-collapse:collapse;display:inline-table;margin-bottom:5pt;vertical-align:text-bottom;width:81.696%"><tr><td style="width:1.0%"/><td style="width:60.648%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:17.297%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:1.257%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:17.298%"/><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:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">2022</span></td><td colspan="3" style="padding:0 1pt"/><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:12pt;font-weight:700;line-height:120%">2021</span></td></tr><tr><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:12pt;font-weight:400;line-height:115%">(in thousands of dollars)</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:12pt;font-weight:400;line-height:120%">Interest paid, net of capitalized interest</span></td><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:115%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:115%">— </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:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:115%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:115%">582 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Accruals for property, plant and equipment, net</span></td><td style="padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:115%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:115%">8,719 </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:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:115%">$</span></td><td style="padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:115%">5,453 </span></td><td style="padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr></table></div><div style="margin-bottom:5pt;padding-left:18pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">12.</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%;padding-left:1.33pt"> Subsequent Events</span></div><div style="margin-bottom:5pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Management of the Company has reviewed subsequent events through March 23, 2022, the date the financial statements were issued, and 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: C000161
filing_name: Cove_Point_LNG,_LP_form2_Q4_1681501704
publication_time: 2023-04-14 19:48:24.000000
start_date: 2022-01-01
end_date: 2022-12-31
disclosure_of_applicable_notes_text_block:
  <div style="margin-bottom:3pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:139%">Definition of Abbreviations and Industry Terms</span></div><div style="margin-bottom:3pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">The following abbreviations or acronyms used in Notes to Financial Statements are defined below:</span></div><div><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:30.298%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:67.502%"/><td style="width:0.1%"/></tr><tr><td colspan="3" style="border-top:1pt solid #000000;padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">Abbreviation or Acronym</span></td><td colspan="3" style="border-top:1pt solid #000000;padding:2px 1pt;text-align:center;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">Definition</span></td></tr><tr><td colspan="3" style="border-top:1pt solid #000000;padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">2005 Agreement</span></td><td colspan="3" style="border-top:1pt solid #000000;padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">An agreement effective March 1, 2005, which Cove Point entered into with the Sierra Club and the Maryland Conservation Council, Inc.</span></td></tr><tr><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">2017 Tax Reform</span></div></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">The Tax Cuts and Jobs Act enacted on December 22, 2017, effective January 1, 2018</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:12pt;font-weight:400;line-height:120%">AFUDC</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Allowance for Funds Used During Construction</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:12pt;font-weight:400;line-height:120%">AOCI</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Accumulated Other Comprehensive Income (Loss)</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:12pt;font-weight:400;line-height:120%">ARAM</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Average Rate Assumption Method</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:12pt;font-weight:400;line-height:120%">ARO</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Asset Retirement Obligation</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:12pt;font-weight:400;line-height:120%">BHE</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Berkshire Hathaway Energy Company</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:12pt;font-weight:400;line-height:120%">BHE GT&amp;S</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">BHE GT&amp;S, LLC and its subsidiaries</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:12pt;font-weight:400;line-height:120%">Brookfield</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Brookfield Super-Core Infrastructure Partners</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:12pt;font-weight:400;line-height:120%">Cove Point</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Cove Point LNG, LP</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:12pt;font-weight:400;line-height:120%">Cove Point LNG Facility</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">An LNG export/import and storage facility, including the Liquefaction Facility, located on the Chesapeake Bay in Lusby, Maryland</span></div></td></tr><tr><td colspan="3" style="padding:2px 1pt 2px 7pt;text-align:left;text-indent:-4.5pt;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Cove Point Pipeline</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Approximately 139 miles of natural gas pipelines that connect the Cove Point LNG Facility to interstate natural gas pipelines</span></div></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:12pt;font-weight:400;line-height:120%">CPCN</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Certificate of Public Convenience and Necessity</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:12pt;font-weight:400;line-height:120%">Customer Revenue</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Revenue from contracts with customers</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:12pt;font-weight:400;line-height:120%">DEI</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Dominion Energy, Inc.</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:12pt;font-weight:400;line-height:120%">DES</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Dominion Energy Services, Inc.</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:12pt;font-weight:400;line-height:120%">EDIT</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Excess Deferred Income Tax</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:12pt;font-weight:400;line-height:120%">EPA</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">U.S. Environmental Protection Agency</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:12pt;font-weight:400;line-height:120%">EPCA</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Electric Power Cost Adjustment</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:12pt;font-weight:400;line-height:120%">Export Customers</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">ST Cove Point, LLC, a joint venture of Sumitomo Corporation and Tokyo Gas Co., LTD., and GAIL Global (USA) LNG, LLC</span></div></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:12pt;font-weight:400;line-height:120%">FERC</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Federal Energy Regulatory Commission</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:12pt;font-weight:400;line-height:120%">GAAP</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Accounting principles generally accepted in the United States of America</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:12pt;font-weight:400;line-height:120%">GHG</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Greenhouse Gases</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:12pt;font-weight:400;line-height:120%">GT&amp;S Transaction</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">The acquisition of substantially all of the natural gas transmission and storage business of Dominion Energy, Inc., including 100% of the general partner interest and 25% of the common equity interest in Cove Point, by Berkshire Hathaway Energy Company on November 1, 2020</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:12pt;font-weight:400;line-height:120%">Import Shippers</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">The three LNG import shippers consisting of BP Energy Company, Shell NA LNG LLC and Equinor Natural Gas LLC</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:12pt;font-weight:400;line-height:120%">Liquefaction Facility</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">A natural gas export/liquefaction facility</span></td></tr></table></div><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:30.298%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:67.502%"/><td style="width:0.1%"/></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:12pt;font-weight:400;line-height:120%">LNG</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Liquefied Natural Gas</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:12pt;font-weight:400;line-height:120%">Maryland Commission</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Public Service Commission of Maryland</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:12pt;font-weight:400;line-height:120%">MidAmerican Energy</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">MidAmerican Energy Company </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:12pt;font-weight:400;line-height:120%">NAAQS</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">National Ambient Air Quality Standards</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:12pt;font-weight:400;line-height:120%">NSPS</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">New Source Performance Standard</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:12pt;font-weight:400;line-height:120%">OCI</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Other Comprehensive Income</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:12pt;font-weight:400;line-height:120%">SIP</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">State Implementation Plan</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:12pt;font-weight:400;line-height:120%">Storage Customers</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">The four local distribution companies that receive firm peaking services from Cove Point, consisting of Atlanta Gas Light Company, Public Service Company of North Carolina, Incorporated, Virginia Natural Gas, Inc. and Washington Gas Light Company</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:12pt;font-weight:400;line-height:120%">USofA</span></td><td colspan="3" style="padding:2px 1pt;text-align:left;vertical-align:top"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Uniform System of Accounts</span></td></tr></table><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:110%">GENERAL NOTES:</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:110%">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:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">These financial statements are prepared in accordance with the requirements of the FERC as set forth in its applicable USofA and published accounting releases which is a comprehensive basis of accounting other than GAAP. The principal differences from GAAP include:</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">a) As a pass-through entity, Cove Point is not subject to income taxes. The partners are taxed directly on their share of income without regard to distributions, and the partners may generally deduct their share of any losses. However, in accordance with FERC requirements, the accompanying financial statements include entries to reflect income taxes as if Cove Point were a corporation. As of December 31, 2022 and 2021, current income taxes accrued in the amount of $2 million and $1 million, respectively, have been reflected as an adjustment to other paid-in capital.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">b) Income tax expense is reported separately in Net Utility Operating Income and Net Other Income and Deductions rather than being reported as a single net income tax amount. Where uncertainties exist with respect to income tax positions involving temporary differences, Cove Point has recorded accumulated deferred income taxes based on the positions taken in the tax returns filed or expected to be filed.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">c) Deferred tax assets and liabilities for a jurisdiction are reported separately rather than being netted and reported as a single amount. Deferred taxes are recorded in Account 190 – </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Accumulated Deferred Income Taxes</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">, Account 282 – </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Accumulated Deferred Income Taxes-Other Property</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%"> or Account 283 – </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Accumulated Deferred Income Taxes-Other</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">, as appropriate.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">d) The provision for future cost of removal is included in accumulated depreciation and not as a regulatory liability.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">e) For GAAP purposes, regulatory assets and liabilities are classified as current and noncurrent. For FERC purposes, regulatory assets and liabilities are recorded in Account 182.3 – </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Other Regulatory Assets</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%"> and Account 254-</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Other Regulatory Liabilities</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">, respectively, with no distinction between current and noncurrent.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">f) Restricted cash balances are included in beginning and end of period cash balances for the GAAP presentation of the Statement of Cash Flows; however, restricted cash is excluded from the beginning and end of period cash balances for the FERC presentation of the Statement of Cash Flows included herein.</span></div><div style="text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">g) 2017 Tax Reform reduced the corporate income tax rate from 35% to 21% for tax years beginning after December 31, 2017. Cove Point may be required to share the reduction in accumulated deferred income tax balances under the provisions of 2017 Tax Reform with customers generally through reductions in future rates. 2017 Tax Reform includes provisions that stipulate how these excess deferred taxes are to be passed back to customers for certain accelerated tax depreciation benefits. As a pass-through entity, Cove Point is not subject to income taxes. However, in accordance with FERC requirements, Cove Point has recorded an estimated regulatory liability for EDIT expected to be returned to customers for FERC purposes.</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">h) For GAAP purposes, losses on debt extinguishment are generally recorded in interest expense immediately. For FERC, these losses are amortized over the life of the original debt. Unamortized debt extinguishment losses are recorded in Account 189 – </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Unamortized Loss on Reacquired Debt</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%"> and are amortized to Account 428.1 –</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Amortization of Loss on Reacquired Debt</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">i) For GAAP purposes, operating and capital lease assets are separately classified on the balance sheet. For FERC purposes, operating and capital lease assets are included in Account 101.1 – </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Property Under Capital Leases</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">. Also for GAAP purposes, operating and capital lease liabilities are classified as other current liabilities and operating and capital lease liabilities on the balance sheet. For FERC purposes, operating and capital lease liabilities are included in Account 227 – </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Obligations Under Capital Leases-Noncurrent</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%"> and Account 243 – </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Obligations Under Capital Leases-Current</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">. For both GAAP and FERC reporting, Cove Point recognizes lease expense on a straight-line basis. For GAAP purposes, the difference between straight line expense and cash paid is recorded as a regulatory asset or liability. For FERC reporting, this difference is included in Account 101.1 – </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Property Under Capital Lease</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">j) The accompanying financial statements do not include a reconciliation of OCI. In accordance with the requirements of FERC, the statement of AOCI and hedging activities, included on page 117, are not considered to be part of the basic financial statements.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">k) For GAAP purposes, a certain contractual agreement with a local government taxing authority related to the Liquefaction Project is recorded as property, plant and equipment. For FERC purposes, the contract is recorded to Account 186 –</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%"> Miscellaneous Deferred Debits</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%"> and is amortized to Account 408.1 – </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Taxes Other than Income Taxes </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">through 2032.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:110%">Statement of Cash Flows</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">The summary of supplemental cash flow disclosures as of and for the years ending December 31 is as follows (in millions): </span></div><div style="padding-left:324pt"><span><br/></span></div><div><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:70.923%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.544%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:11.995%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.841%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:11.997%"/><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:12pt;font-weight:700;line-height:120%">2022</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:12pt;font-weight:700;line-height:120%">2021</span></td></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:1pt solid #000;padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/></tr><tr><td colspan="3" style="background-color:#cceeff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">Supplemental disclosure of non-cash investing transactions:</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 7pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Accruals related to property, plant and equipment additions</span></td><td colspan="3" style="background-color:#ffffff;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:12pt;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:12pt;font-weight:400;line-height:120%">6 </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 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:12pt;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:12pt;font-weight:400;line-height:120%">6 </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"/><td colspan="3" style="display:none"/></tr></table></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:110%">Notes to Financial Statements</span></div><div style="text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:110%">(1)        Organization and Operations</span></div><div style="margin-top:2pt;text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:112%">Cove Point is a Delaware limited partnership and the owner and operator of the Cove Point LNG Facility, the Cove Point Pipeline and the Liquefaction Facility. Cove Point's operations primarily consist of liquefying domestically produced natural gas and exporting it as LNG, LNG import and storage services and the transmission of domestic natural gas and regasified LNG to Mid-Atlantic markets. Cove Point’s natural gas transmission, LNG import and storage services are regulated by the FERC. Cove Point provides service to approximately 30 customers, including the Export Customers, Storage Customers, marketers or end users and the Import Shippers. </span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">BHE GT&amp;S holds the non-economic general partner interest and a 25% common equity interest in Cove Point, DEI holds a 50% common equity interest in Cove Point and Brookfield holds the remaining 25% common equity interest in Cove Point. BHE GT&amp;S is a wholly owned subsidiary of BHE, a holding company based in Des Moines, Iowa that owns subsidiaries principally engaged in the energy industry. </span></div><div style="margin-top:2pt;text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:110%">(2)        Summary of Significant Accounting Policies</span></div><div style="margin-top:2pt;text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">General</span></div><div style="text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">The preparation of the financial statements in conformity with USofA requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. These estimates include, but are not limited to, the effects of regulation; recovery of long-lived assets; certain assumptions made in accounting for other postretirement benefits; AROs; and accounting for contingencies. Actual results may differ from the estimates used in preparing the financial statements.</span></div><div style="margin-top:2pt;text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Revenue Recognition</span></div><div style="margin-top:2pt;text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Cove Point uses a single five-step model to identify and recognize Customer Revenue upon transfer of control of promised goods or services in an amount that reflects the consideration to which Cove Point expects to be entitled in exchange for those goods or services. Performance obligations are primarily satisfied over time as services are provided. Cove Point records sales and excise taxes collected directly from customers and remitted directly to the taxing authorities on a net basis on the Statement of Income.</span></div><div style="margin-top:2pt;text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Cove Point's regulated revenues are derived from tariff-based sales arrangements approved by the FERC. Cove Point's revenue that is nonregulated primarily relates to LNG terminalling services. </span></div><div style="margin-top:2pt;text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">As of December 31, 2022 and 2021, customer accounts receivable on the Comparative Balance Sheets relate to Customer Revenue. Payments for amounts billed are generally due from the customer within 30 days of billing. Rates charged for energy products and services are established by regulators or contractual arrangements that establish the transaction price as well as the allocation of price amongst the separate performance obligations. When preliminary regulated rates are permitted to be billed prior to final approval by the applicable regulator, certain revenue collected may be subject to refund and a liability for estimated refunds is accrued. In the event one of the parties to a contract has performed before the other, Cove Point would recognize a contract asset or contract liability depending on the relationship between Cove Point's' performance and the customer's payment. Cove Point has recognized $56 million of contract liabilities, included in Account 253 - </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Other Deferred Credits,</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%"> as of December 31, 2022 due to Cove Point's performance on certain contracts.</span></div><div style="margin-top:2pt;text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Fair Value Measurements</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">As defined under GAAP, fair value is the price that would be received to sell an asset or paid to transfer a liability between market participants in the principal market or in the most advantageous market when no principal market exists. Adjustments to transaction prices or quoted market prices may be required in illiquid or disorderly markets in order to estimate fair value. Alternative valuation techniques may be appropriate under the circumstances to determine the value that would be received to sell an asset or paid to transfer a liability in an orderly transaction. Market participants are assumed to be independent, knowledgeable, able and willing to transact an exchange and not under duress. Nonperformance or credit risk is considered when determining fair value. Considerable judgment may be required in interpreting market data used to develop the estimates of fair value. Accordingly, estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized in a current or future market exchange. </span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">The carrying value of Cove Point's cash, certain cash equivalents, receivables, payables and accrued liabilities approximates fair value because of the short-term maturity of these instruments. Cove Point has investments in money market mutual funds that are measured at fair value using inputs from the three levels of the fair value hierarchy. When available, a readily observable quoted market price or net asset value of an identical security in an active market is used to record the fair value. A financial asset or liability classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. As of December 31, 2022, Cove Point had $17 million of money market mutual funds, included in Account 131 – </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:120%">Cash </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">on the Comparative Balance Sheets. These funds are considered to be Level 1 in the fair value hierarchy, meaning inputs are unadjusted quoted prices in active markets for identical assets or liabilities that Cove Point has the ability to access at the measurement date.</span></div><div style="margin-top:2pt;text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Cash and Cash Equivalents and Restricted Cash and Cash Equivalents</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Cash equivalents consist of funds invested in money market mutual funds, U.S. Treasury Bills and other investments with a maturity of three months or less when purchased. Cash and cash equivalents exclude amounts where availability is restricted by legal requirements, loan agreements or other contractual provisions. Restricted cash and cash equivalents consist of customer deposits as allowed under the FERC gas tariff. Restricted amounts are included in Account 134 – </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Special Deposits</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%"> on the Comparative Balance Sheets. </span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Property, Plant and Equipment</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify;text-indent:36pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">General</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Additions to property, plant and equipment are recorded at cost. Cove Point capitalizes all construction-related materials, direct labor and contract services, as well as indirect construction costs. Indirect construction costs include capitalized interest, including debt AFUDC, and equity AFUDC, as applicable. The cost of additions and betterments are capitalized, while costs incurred that do not improve or extend the useful lives of the related assets are generally expensed.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Depreciation and amortization are generally computed by applying the composite or straight-line method based on estimated useful lives. Depreciation studies are completed by Cove </span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Point to determine the appropriate group lives, net salvage and group depreciation rates. These studies are reviewed and rates are ultimately approved by the FERC. Net salvage includes the estimated future residual values of the assets and any estimated removal costs recovered through approved depreciation rates. Estimated removal costs are recorded as either accumulated depreciation or an ARO liability on the Balance Sheets, depending on whether the obligation meets the requirements of an ARO. As actual removal costs are incurred, the associated liability is reduced.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Generally when Cove Point retires or sells a component of regulated property, plant and equipment, it charges the original cost, net of any proceeds from the disposition, to accumulated depreciation. Any gain or loss on disposals of all other assets is recorded through earnings.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Debt and equity AFUDC, which represent the estimated costs of debt and equity funds necessary to finance the construction of regulated facilities, is capitalized by Cove Point as a component of property, plant and equipment, with offsetting credits to the Statements of Income. AFUDC is computed based on guidelines set forth by the FERC. After construction is completed, Cove Point is permitted to earn a return on these costs as a component of the related assets, as well as recover these costs through depreciation expense over the useful lives of the related assets. </span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify;text-indent:36pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Impairment</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Cove Point evaluates long-lived assets for impairment, including property, plant and equipment, when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable or when the assets are being held for sale. Upon the occurrence of a triggering event, the asset is reviewed to assess whether the estimated undiscounted cash flows expected from the use of the asset plus the residual value from the ultimate disposal exceeds the carrying value of the asset. If the carrying value exceeds the estimated recoverable amounts, the asset is written down to the estimated fair value and any resulting impairment loss is reflected on the Statement of Income. The impacts of regulation are considered when evaluating the carrying value of regulated assets.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Allowance for Credit Losses</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Customer accounts receivable are primarily short-term in nature and are stated at the outstanding principal amount, net of an estimated allowance for credit losses. The allowance for credit losses is based on Cove Point’s assessment of the collectability of amounts owed to Cove Point by its customers. This assessment requires judgment regarding the ability of customers to pay or the outcome of any pending disputes. In measuring the allowance for credit losses for customer accounts receivable, Cove Point primarily evaluates the financial condition of the individual customer and the nature of any disputed amount. As of December 31, 2022 and 2021, the allowance for credit losses totaled $3 million and is included in Account 144 – </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Accumulated Provision for Uncollectible Accounts</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">–</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Credit</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%"> on the Comparative Balance Sheets.</span></div><div style="margin-top:2pt;text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Inventories </span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Inventories consist mainly of materials and supplies and are determined using the average cost method.</span></div><div style="margin-top:2pt;text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Asset Retirement Obligations</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Cove Point recognizes AROs when it has a legal obligation to perform decommissioning, reclamation or removal activities upon retirement of an asset. Cove Point's AROs are primarily related to the obligations associated with its natural gas pipelines. The fair value of an ARO liability is recognized in the period in which it is incurred, if a reasonable estimate of fair value can be made, and is added to the carrying amount of the associated asset, which is then depreciated over the remaining useful life of the asset. Subsequent to the initial recognition, the ARO liability is adjusted for any revisions to the original estimate of undiscounted cash flows (with corresponding adjustments to property, plant and equipment, net) and for accretion of the ARO liability due to the passage of time. For Cove Point, the difference between the ARO liability, the corresponding ARO asset included in property, plant and equipment, net and amounts recovered in rates to satisfy such liabilities is recorded as a regulatory asset or liability.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Natural Gas Imbalances</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Natural gas imbalances occur when the physical amount of natural gas delivered from, or received by, a pipeline system or storage facility differs from the contractual amount of natural gas delivered or received. Cove Point values these imbalances due to, or from, shippers and operators at an appropriate index price at period end, subject to the terms of its tariff. Imbalances are settled in-kind. Imbalances due to Cove Point from other parties are reported in Account 174 –</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Miscellaneous Current and Accrued Assets</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%"> and imbalances that Cove Point owes to other parties are reported in Account 242 – </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Miscellaneous Current and Accrued Liabilities</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">. See Note 9 for amounts related to affiliates.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Accounting for the Effects of Certain Types of Regulation</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Cove Point prepares its financial statements in accordance with authoritative guidance for regulated operations, which recognizes the economic effects of regulation. Accordingly, Cove Point defers the recognition of certain costs or income if it is probable that, through the ratemaking process, there will be a corresponding increase or decrease in future regulated rates. Regulatory assets and liabilities are established to reflect the impacts of these deferrals, which will be recognized in earnings in the periods the corresponding changes in regulated rates occur.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Cove Point continually evaluates the applicability of the guidance for its regulated operations and whether its regulatory assets and liabilities are probable of inclusion in future regulated rates by considering factors such as a change in the regulator's approach to setting rates from cost-based ratemaking to another form of regulation, other regulatory actions or the impact of competition that could limit Cove Point's ability to recover its costs. Cove Point believes the application of the guidance for regulated operations is appropriate and its existing regulatory assets and liabilities are probable of inclusion in future regulated rates. The evaluation reflects the current political and regulatory climate at the federal level. If it becomes no longer probable that the deferred costs or income will be included in future regulated rates, the related regulatory assets and liabilities will be recognized in net income, returned to customers or re-established as AOCI.</span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Income Taxes</span></div><div style="margin-top:2pt;text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Berkshire Hathaway includes Cove Point in its consolidated U.S. federal income tax return. Consistent with established regulatory practice, Cove Point’s provision for income taxes has been computed on a stand-alone basis.</span></div><div style="margin-top:2pt;text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Deferred income tax assets and liabilities are based on differences between the financial statement and income tax basis of assets and liabilities using enacted income tax rates expected to be in effect for the year in which the differences are expected to reverse. Changes in deferred income tax assets and liabilities associated with components of OCI are charged or credited directly to OCI. Changes in deferred income tax assets and liabilities associated with certain property-related basis differences and other various differences that Cove Point's regulated businesses deems probable to be passed on to its customers are charged or credited directly to a regulatory asset or liability and will be included in regulated rates when the temporary differences reverse. Other changes in deferred income tax assets and liabilities are included as a component of income tax expense. Changes in deferred income tax assets and liabilities attributable to changes in enacted income tax rates are charged or credited to income tax expense or a regulatory asset or liability in the period of enactment. Valuation allowances are established when necessary to reduce deferred income tax assets to the amount that is more-likely-than-not to be realized.</span></div><div style="text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">In determining Cove Point’s income taxes, management is required to interpret complex income tax laws and regulations, which includes consideration of regulatory implications imposed by the FERC. Cove Point’s income tax returns are subject to continuous examinations by federal, state and local income tax authorities that may give rise to different interpretations of these complex laws and regulations. Due to the nature of the examination process, it generally takes years before these examinations are completed and these matters are resolved. Cove Point recognizes the tax benefit from an uncertain tax position only if it is more-likely-than-not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that is more-likely-than-not to be realized upon ultimate settlement. </span><span style="background-color:#ffffff;color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Uncertain tax positions associated with temporary differences are not recognized for FERC reporting. </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Although the ultimate resolution of Cove Point’s federal, state and local income tax examinations is uncertain, Cove Point believes it has made adequate provisions for these income tax positions. The aggregate amount of any additional income tax liabilities that may result from these examinations, if any, is not expected to have a material impact on Cove Point’s financial results. Estimated interest and penalties, if any, related to uncertain tax positions are included as a component of income tax expense on the Statement of Income.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:110%">(3)    Regulatory Matters</span></div><div style="text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">In January 2020, pursuant to the terms of a previous settlement, Cove Point filed a general rate case for its FERC-jurisdictional services, with proposed rates to be effective March 1, 2020. Cove Point proposed an annual cost-of-service of $182 million. In February 2020, the FERC approved suspending the changes in rates for five months following the proposed effective date, until August 1, 2020, subject to refund. In November 2020, Cove Point reached an agreement in principle with the active participants in the general rate case proceeding. </span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">The interim settlement rates were implemented November 1, 2020, and Cove Point's provision for rate refunds for August 2020 through October 2020 totaled $7 million. The agreement in principle was reflected in a stipulation and agreement filed with the FERC in January 2021. In March 2021, the FERC approved the stipulation and agreement and the rate refunds to customers were processed in late April 2021. </span></div><div style="text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:110%">(4)        Income Taxes</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Certain Cove Point operations, including the associated income taxes, are subject to cost-of-service rate regulation. For regulated operations, many of the changes in deferred taxes mandated by 2017 Tax Reform represented amounts probable of collection from or return to customers, and were recorded as either an increase to Account 182.3 – </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Other Regulatory Assets</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%"> or Account 254 – </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Other Regulatory Liabilities</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">. </span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Cove Point has recorded an estimate of the portion of EDIT amortization in 2022. The reversal of EDIT will impact the effective tax rate, and may ultimately impact rates charged to customers. Cove Point has recorded the amortization of the excess and deficient accumulated deferred income taxes recorded in Account 254 – </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Other Regulatory Liabilities</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%"> and Account 182.3 – </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Other Regulatory Assets</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%"> by recording the offsetting entries to Account 410.1 – </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Provision of Deferred Income Taxes</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%"> or Account 411.1 – </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Provision for Deferred Income Taxes-Credit</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">, as required by the USofA. 2017 Tax Reform included provisions that stipulate how plant-related, or “protected”, EDIT may be amortized, and the FERC has provided guidance on the amortization of non-plant-related, or “unprotected” differences. Cove Point is using the ARAM to calculate the amortization of its EDIT associated with plant-related temporary differences. Under the ARAM, the EDIT will reverse at the weighted average rate at which the deferred taxes were built over the remaining book life of the property to which those deferred taxes relate. These reversal periods range from one to 61 years. For non-plant-related excess or deficient accumulated deferred income taxes, the balances will reverse when the underlying book or tax item to which those deferred taxes relate has been realized or settled. These reversal periods range from one to 30 years.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">The following table illustrates EDIT amortization expense (benefit) for the current year (in millions):</span></div><div><span><br/></span></div><div><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:51.429%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:13.929%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.544%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:14.971%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.395%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:13.932%"/><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:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:120%">Protected</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:12pt;font-weight:700;line-height:120%">Unprotected</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:12pt;font-weight:700;line-height:120%">Total</span></td></tr><tr><td colspan="3" style="background-color:#cceeff;padding:2px 1pt;text-align:left;vertical-align:bottom"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">2022 EDIT Amortization – Account 411.1 – </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:120%"> Provision of Deferred Income Taxes</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:12pt;font-style:italic;font-weight:400;line-height:120%">Credit</span></div></td><td style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#cceeff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">(1)</span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#cceeff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">— </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#cceeff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">(1)</span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr></table></div><div><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Income tax expense consists of the following for the years ended December 31 (in millions):</span></div><div><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:57.233%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.841%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.840%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.544%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.842%"/><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:12pt;font-weight:700;line-height:120%">2022</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:12pt;font-weight:700;line-height:120%">2021</span></td></tr><tr><td colspan="3" style="background-color:#cceeff;padding:2px 1pt 2px 7pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Current</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="3" style="background-color:#cceeff;border-top:1pt solid #000;padding:0 1pt"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="3" style="background-color:#cceeff;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:12pt;font-weight:400;line-height:120%">Federal</span></td><td colspan="3" style="background-color:#ffffff;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:12pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#ffffff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">— </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td style="background-color:#ffffff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">$</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:12pt;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:#cceeff;padding:2px 1pt 2px 13pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">State</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">(2)</span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">1 </span></td><td style="background-color:#cceeff;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:12pt;font-weight:400;line-height:120%">Total Current</span></td><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:12pt;font-weight:400;line-height:120%">(2)</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:12pt;font-weight:400;line-height:120%">1 </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:#cceeff;padding:2px 1pt 2px 7pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Deferred</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="3" style="background-color:#cceeff;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:12pt;font-weight:400;line-height:120%">Federal</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:12pt;font-weight:400;line-height:120%">121 </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:12pt;font-weight:400;line-height:120%">113 </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:#cceeff;padding:2px 1pt 2px 13pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">State</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">— </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">1 </span></td><td style="background-color:#cceeff;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:12pt;font-weight:400;line-height:120%">Total Deferred</span></td><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:12pt;font-weight:400;line-height:120%">121 </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:12pt;font-weight:400;line-height:120%">114 </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:#cceeff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Provision for Income Taxes</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td style="background-color:#cceeff;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:12pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#cceeff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">119 </span></td><td style="background-color:#cceeff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td style="background-color:#cceeff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#cceeff;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:12pt;font-weight:400;line-height:120%">115 </span></td><td style="background-color:#cceeff;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 style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">The total statutory U.S. Federal income tax rate reconciles to the effective income tax rate for the years ended December 31:</span></div><div><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:56.935%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:1.139%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.840%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.544%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.842%"/><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:12pt;font-weight:700;line-height:120%">2022</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:12pt;font-weight:700;line-height:120%">2021</span></td></tr><tr><td colspan="3" style="background-color:#cceeff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">U.S. statutory rate</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;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:12pt;font-weight:400;line-height:120%">21 </span></td><td style="background-color:#cceeff;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:12pt;font-weight:400;line-height:120%">%</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;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:12pt;font-weight:400;line-height:120%">21 </span></td><td style="background-color:#cceeff;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:12pt;font-weight:400;line-height:120%">%</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:12pt;font-weight:400;line-height:120%">State taxes, net of federal benefit</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:12pt;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:#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:12pt;font-weight:400;line-height:120%">1 </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:#cceeff;padding:2px 1pt 2px 13pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Excess deferred income tax amortization</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">— </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">— </span></td><td style="background-color:#cceeff;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:12pt;font-weight:400;line-height:120%">AFUDC equity</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:12pt;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:#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:12pt;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:#cceeff;padding:2px 1pt 2px 13pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Other</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">— </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">— </span></td><td style="background-color:#cceeff;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:12pt;font-weight:400;line-height:120%">Effective tax rate</span></td><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="2" style="background-color:#ffffff;border-bottom:3pt double #000;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:12pt;font-weight:400;line-height:120%">21 </span></td><td style="background-color:#ffffff;border-bottom:3pt double #000;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:12pt;font-weight:400;line-height:120%">%</span></td><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td colspan="2" style="background-color:#ffffff;border-bottom:3pt double #000;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:12pt;font-weight:400;line-height:120%">22 </span></td><td style="background-color:#ffffff;border-bottom:3pt double #000;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:12pt;font-weight:400;line-height:120%">%</span></td></tr></table></div><div><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">The significant components of deferred income taxes consist of the following as of December 31 (in millions):</span></div><div style="margin-top:2pt"><span><br/></span></div><div style="margin-top:2pt"><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:67.650%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.395%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:14.227%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.395%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:13.633%"/><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:12pt;font-weight:700;line-height:120%">2022</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:12pt;font-weight:700;line-height:120%">2021</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:12pt;font-weight:700;line-height:120%">Deferred income tax assets:</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="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/></tr><tr><td colspan="3" style="background-color:#cceeff;padding:2px 1pt 2px 7pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Pension</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#cceeff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">4 </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#cceeff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">4 </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 7pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Net regulatory liability</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:12pt;font-weight:400;line-height:120%">13 </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:12pt;font-weight:400;line-height:120%">12 </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:#cceeff;padding:2px 1pt 2px 7pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Federal net operating loss</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">185 </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">266 </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 7pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Fuel tracker</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:12pt;font-weight:400;line-height:120%">1 </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:12pt;font-weight:400;line-height:120%">1 </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"/><td colspan="3" style="display:none"/></tr><tr><td colspan="3" style="background-color:#cceeff;padding:2px 1pt 2px 7pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Other</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">2 </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">2 </span></td><td style="background-color:#cceeff;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:12pt;font-weight:400;line-height:120%">Total deferred income tax assets</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:12pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">205 </span></td><td style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td style="background-color:#ffffff;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">$</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:12pt;font-weight:400;line-height:120%">285 </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:#cceeff;padding:0 1pt"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="3" style="background-color:#cceeff;border-top:3pt double #000;padding:0 1pt"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="3" style="background-color:#cceeff;border-top:3pt double #000;padding:0 1pt"/></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:12pt;font-weight:700;line-height:120%">Deferred income tax liabilities:</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:0 1pt"/><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/></tr><tr><td colspan="3" style="background-color:#cceeff;padding:2px 1pt 2px 7pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Plant and equipment, primarily deprecation method and basis differences</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#cceeff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">499 </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#cceeff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">457 </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 7pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Regulatory asset - AFUDC equity</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:12pt;font-weight:400;line-height:120%">2 </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:12pt;font-weight:400;line-height:120%">2 </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:#cceeff;padding:2px 1pt 2px 7pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Employee benefits</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">1 </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">1 </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 7pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Other</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:12pt;font-weight:400;line-height:120%">1 </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:12pt;font-weight:400;line-height:120%">1 </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:#cceeff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Total deferred income tax liabilities</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td style="background-color:#cceeff;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:12pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#cceeff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">503 </span></td><td style="background-color:#cceeff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td style="background-color:#cceeff;border-bottom:3pt double #000;border-top:1pt solid #000;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#cceeff;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:12pt;font-weight:400;line-height:120%">461 </span></td><td style="background-color:#cceeff;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 style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Federal net operating losses originating prior to 2018 will expire in 2037. Federal net operating losses originating in 2018 have an indefinite carryforward period.</span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:110%">(5)        Employee Benefit Plans</span></div><div style="margin-top:2pt;text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:115%">Defined Benefit Plans</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Cove Point is a participant in a benefit plan sponsored by MidAmerican Energy, an affiliate. The MidAmerican Energy Company Retirement Plan includes a qualified pension plan that provides pension benefits for eligible employees. Cove Point made $1 million and $2 million of contributions to the MidAmerican Energy Company Retirement Plan for the years ended December 31, 2022 and 2021, respectively. Contributions related to this plan are reflected as net periodic benefit cost in Operation expenses in the Statement of Income. Amounts attributable to Cove Point were allocated from MidAmerican Energy in accordance with the intercompany administrative service agreement. Offsetting amounts not yet recognized as a component of net periodic benefit costs are included in accumulated other comprehensive loss, net. </span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Cove Point employees are covered by the Cove Point Retiree Health and Welfare Plan, a plan sponsored by Cove Point. As of December 31, 2022 and 2021, Cove Point's liability associated with this plan was $4 million and $5 million, respectively, recorded in Account 228.3 – </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:120%">Accumulated Provision for Pension and Benefits</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">. During 2022, Cove Point made no contributions to the Cove Point Retiree Health and Welfare Plan, and no contributions to this plan are currently expected in 2023. </span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:115%">Defined Contribution Plan</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Cove Point participates in the BHE GT&amp;S defined contribution employee savings plan. Cove Point's matching contributions are based on each participant's level of contribution. Contributions cannot exceed the maximum allowable for tax purposes. Cove Point's contributions to the 401(k) plan were $1 million for both of the years ended December 31, 2022 and 2021.</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:115%">AOCI</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Cove Point’s AOCI is comprised of unrecognized amounts on retirement benefits. There were no reclassifications from AOCI to net income for the years ended December 31, 2022 or 2021.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:110%">(6)    Risk Management Activities</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Cove Point is exposed to counterparty credit risk associated with wholesale energy supply and marketing activities with other utilities, energy marketing companies, financial institutions and other market participants. Credit risk may be concentrated to the extent Cove Point's counterparties have similar economic, industry or other characteristics and due to direct or indirect relationships among the counterparties. Before entering into a transaction, Cove Point analyzes the financial condition of each significant wholesale counterparty, establishes limits on the amount of unsecured credit to be extended to each counterparty and evaluates the appropriateness of unsecured credit limits on an ongoing basis. To further mitigate counterparty credit risk, Cove Point obtains third-party guarantees, letters of credit and cash </span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">deposits recorded in Account 235 – </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Customer Deposits</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">. If required, Cove Point exercises rights under these arrangements, including calling on the counterparty's credit support arrangement.</span></div><div style="margin-top:2pt;text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">The majority of Cove Point's revenue and earnings are generated from annual reservation payments under certain terminalling, storage and transmission contracts with the Export Customers. If such agreements were terminated and Cove Point was unable to replace such agreements on comparable terms, there could be a material impact on results of operations, financial condition and/or cash flows. </span></div><div style="text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Cove Point provides service to approximately 30 customers including the Export Shippers, Storage Customers, marketers or end-users and the Import Shippers. The two largest customers comprised 80% and 82% of Cove Point's operating revenues for the years ended December 31, 2022 and 2021, respectively, with Cove Point's largest customer representing 41% and 42% of such amounts during 2022 and 2021. </span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:110%">(7)    Certificate of Public Convenience and Necessity</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">In April 2013, Cove Point filed an application with the Maryland Commission, requesting authorization to construct a generating station in connection with the Liquefaction Facility. In May 2014, the Maryland Commission granted the CPCN authorizing the construction of such generating station. The CPCN obligates Cove Point to make payments totaling approximately $48 million. These payments consisted of $40 million to the Maryland Strategic Energy Investments Fund over a five-year period beginning in 2015 and consisted of $8 million to Maryland low income energy assistance programs over a twenty-year period which began in 2018. In December 2014, upon receipt of applicable approvals to commence construction of the generating station, Cove Point recorded the present value of the obligation as an increase to property, plant and equipment and a corresponding liability for these future payments using an effective interest rate of 1.9%. </span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">As of December 31, 2022, $5 million is still outstanding and is primarily recorded in Account 253 – </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Other Deferred Credits</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">.</span></div><div style="text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:110%">(8)        Commitments and Contingencies</span></div><div style="margin-top:2pt;text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Environmental Laws and Regulations</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Cove Point is subject to federal, state and local laws and regulations regarding air quality, climate change, emissions performance standards, water quality and other environmental matters that have the potential to impact its current and future operations. Cove Point believes it is in material compliance with all applicable laws and regulations.</span></div><div style="text-align:justify"><span><br/></span></div><div style="padding-left:72pt;text-align:justify;text-indent:-36pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:120%">National Ambient Air Quality Standards</span></div><div><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">The Clean Air Act includes NAAQS. States adopt rules that ensure their air quality meets the NAAQS. In October 2015, the EPA published a rule lowering the ground level ozone NAAQS for non-attainment designations. States had until August 2021 to develop plans to address the new standard, which did not result in a material impact on EGTS' results of operations and </span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">cash flows. The EPA and environmental groups finalized a consent decree in January 2022 that sets deadlines for the agency to approve or disapprove the "good neighbor" provisions of interstate ozone plans of dozens of states. The EPA must, by April 30, 2022, propose to approve or disapprove the interstate ozone SIP of Maryland. On February 22, 2022, the EPA published a series of proposed decisions to disapprove the SIP for interstate ozone transport of 19 states, including Maryland. Until the EPA takes final action on the proposal and Maryland submits any required SIP, Cove Point cannot predict the impact to its results of operations, financial condition and/or cash flows.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-indent:36pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:120%">New Source Performance Standards for Methane Emissions </span></div><div style="padding-left:36pt;text-indent:36pt"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">In August 2020, the EPA issued two final amendments related to the reconsideration of the NSPS for the oil and natural gas sector applicable to volatile organic compound and methane emissions. Together, the two amendments have the effect of rescinding the methane portion of the NSPS for all segments of the oil and natural gas sector, rescinding all NSPS for the transmission and storage segment and modifying some of the NSPS volatile organic compound requirements for facilities in the production and processing segments. On June 30, 2021, President Biden signed into law a joint resolution of Congress, adopted under the Congressional Review Act, disapproving the August 2020 rule. The resolution reinstated the 2012 volatile organic compounds standards and the 2016 volatile organic compounds and methane standards for the oil and natural gas transmission and storage segments, as well as the methane standards for the production and processing segments of the oil and gas sector. On November 2, 2021, the EPA proposed rules that would reduce methane emissions from both new and existing sources in the oil and natural gas industry. The proposals would expand and strengthen emissions reduction requirements for new, modified and reconstructed oil and natural gas sources and would require states to reduce methane emissions from existing sources nationwide. The EPA took comment on the proposed rules through January 31, 2022. The EPA issued a supplemental proposal in November 2022 to further strengthen emission reduction requirements and intends to finalize the rules by fall 2023. Until the rules are finalized, Cove Point cannot predict the impact to its results of operations, financial condition and/or cash flows.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-indent:36pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:120%">Carbon Regulations</span></div><div style="padding-left:36pt;text-indent:36pt"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">In August 2016, the EPA issued a draft rule proposing to reaffirm that a source's obligation to obtain a prevention of significant deterioration or Title V permit for GHG is triggered only if such permitting requirements are first triggered by non-GHG, or conventional, pollutants that are regulated by the New Source Review program, and to set a significant emissions rate at 75,000 tons per year of carbon dioxide equivalent emissions under which a source would not be required to apply best available control technology for its GHG emissions. Until the EPA ultimately takes final action on this rulemaking, Cove Point cannot predict the impact to its results of operations, financial condition and/or cash flows.</span></div><div style="margin-top:2pt;text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Decommissioning Costs</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Under the terms of the 2005 Agreement, Cove Point would be responsible for certain onshore and offshore site restoration activities at the Cove Point site only if it voluntarily tenders title according to the terms of this agreement. As Cove Point is permitted to operate the Cove Point LNG Facility for an indefinite time period and currently has no plans to voluntarily tender title, Cove Point does not have sufficient information to determine a reasonable range of settlement dates for decommissioning and therefore has not recorded an ARO. </span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Cove Point Natural Heritage Trust</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Under the terms of the 2005 Agreement, Cove Point is required to make an annual contribution to the Cove Point Natural Heritage Trust, an affiliated non-profit trust focused on the preservation and protection of ecologically sensitive sites at or near Cove Point of $250,000 for each year the facility is in operation. These annual payments are recorded in Account 426.1 – </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Donations</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">. If Cove Point voluntarily tenders title according to the terms of this agreement, no contributions are required. There are no current plans to voluntarily tender title to the Cove Point site.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Legal Matters</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Cove Point is party to a variety of legal actions arising out of the normal course of business. Plaintiffs occasionally seek punitive or exemplary damages. Cove Point does not believe that such normal and routine litigation will have a material impact on its financial results.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Surety Bonds</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">As of December 31, 2022, Cove Point had purchased $3 million of surety bonds. Under the terms of the surety bonds, its parent, Eastern Energy Gas Holdings, LLC is obligated to indemnify the respective surety bond company for any amounts paid.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Lease Commitments</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Cove Point leases various vehicles, equipment, and computers primarily under operating leases, the majority of which include terms of one year or less, require payments on a monthly or annual basis and can be canceled at any time. Rental expense totaled $1 million for each of the years ended December 31, 2022 and 2021, the majority of which is reflected in Account 401 - </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Operating Expenses </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">and Account 402 - </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Maintenance Expenses.</span></div><div style="margin-top:2pt;text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:110%">(9)        Related Party Transactions</span></div><div style="margin-top:2pt;text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Transactions with DEI</span></div><div style="margin-top:2pt;text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Cove Point engages in related-party transactions with other DEI subsidiaries, including providing transmission and storage services. Cove Point's receivable and payable balances with DEI are settled based on contractual terms or on a monthly basis, depending on the nature of the underlying transactions. Subsequent to the GT&amp;S Transaction, DES and other DEI affiliates are continuing to provide and bill for services to Cove Point under the terms of the Transition Services Agreement. </span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Presented below are Cove Point’s significant transactions with DES and other DEI subsidiaries for the years ended December 31 (in millions):</span></div><div style="text-align:justify"><span><br/></span></div><div style="margin-top:2pt;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:59.167%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.544%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.096%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.395%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.098%"/><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:12pt;font-weight:700;line-height:120%">2022</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:12pt;font-weight:700;line-height:120%">2021</span></td></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:1pt solid #000;padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/></tr><tr><td colspan="3" style="background-color:#cceeff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Sales of natural gas and transmission and storage services</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#cceeff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">7 </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#cceeff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">4 </span></td><td style="background-color:#cceeff;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"><div><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Services provided by DEI subsidiaries</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:7.8pt;font-weight:400;line-height:120%;position:relative;top:-4.2pt;vertical-align:baseline">(1)</span></div></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:12pt;font-weight:400;line-height:120%">3 </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:12pt;font-weight:400;line-height:120%">3 </span></td><td style="background-color:#ffffff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr></table></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:110%">(1)    Includes capitalized expenditures.</span></div><div style="margin-top:2pt;text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Transactions with BHE</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">BHE, MidAmerican Energy, Northern Natural Gas Company, Eastern Gas Transmission and Storage, Inc. and other related parties provided accounting, human resources, information technology and certain other administrative and technical services to Cove Point, which totaled $36 million and $24 million for the years ended December 31, 2022 and 2021, respectively.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Cove Point has a $60 million intercompany credit agreement from its parent, Eastern Energy Gas Holdings, LLC, expiring in March 2024. The credit facility, which is for general corporate purposes, has a variable interest rate based on the Secured Overnight Financing Rate plus a fixed spread. There were no amounts outstanding under this agreement as of December 31, 2022 and 2021. </span></div><div style="margin-top:2pt;text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">As of December 31, 2022 and 2021, Cove Point had $5 million and $1 million, respectively, of natural gas imbalances receivable from affiliates, presented in Account 174 – </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Miscellaneous Current and Accrued Assets</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">.</span></div><div style="margin-top:2pt;text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Cove Point participates in certain MidAmerican Energy-sponsored pension plans as described in Note 5. As of December 31, 2022 and 2021, Cove Point's amount due to MidAmerican Energy associated with this plan was $3 million and $6 million, respectively, recorded in Account 234 – </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Accounts Payable to Associated Companies.</span></div><div style="margin-top:2pt;text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-style:italic;font-weight:400;line-height:110%">Subsequent Distributions to Partners</span></div><div style="margin-top:2pt;text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">In March 2023, Cove Point declared a total distribution of $165 million to DEI, Brookfield, and BHE GT&amp;S, which will be split pro-rata based on each partner’s respective ownership percentage. </span></div><div style="margin-top:2pt;text-align:justify"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:110%">(10)    Tracked Costs and Special Surcharges</span></div><div style="margin-top:2pt;text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Cove Point’s regulatory assets and liabilities include accumulated under-recovery as of December 31, 2022 and over-recovery as of December 31, 2021 of its annual EPCA. An EPCA represents a rate or surcharge charged to customers to recover the cost of the electric power to run one designated compressor station.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Cove Point had revenues and expenses related to its EPCA for the years ended December 31 (in millions):</span></div><div style="margin-top:2pt;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:59.167%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.544%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.096%"/><td style="width:0.1%"/><td style="width:0.1%"/><td style="width:0.395%"/><td style="width:0.1%"/><td style="width:1.0%"/><td style="width:18.098%"/><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:12pt;font-weight:700;line-height:120%">2022</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:12pt;font-weight:700;line-height:120%">2021</span></td></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:1pt solid #000;padding:0 1pt"/><td colspan="3" style="padding:0 1pt"/><td colspan="3" style="border-top:1pt solid #000;padding:0 1pt"/></tr><tr><td colspan="3" style="background-color:#cceeff;padding:2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Regulatory liability as of January 1,</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#cceeff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">(3)</span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#cceeff;padding:2px 0;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">(2)</span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/></tr><tr><td colspan="3" style="background-color:#ffffff;padding:2px 1pt 2px 7pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Revenues</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:12pt;font-weight:400;line-height:120%">(29)</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:12pt;font-weight:400;line-height:120%">(29)</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:#cceeff;padding:2px 1pt 2px 7pt;text-align:left;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">Costs</span></td><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">34 </span></td><td style="background-color:#cceeff;padding:2px 1pt 2px 0;text-align:right;vertical-align:bottom"/><td colspan="3" style="background-color:#cceeff;padding:0 1pt"/><td colspan="2" style="background-color:#cceeff;padding:2px 0 2px 1pt;text-align:right;vertical-align:bottom"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:120%">28 </span></td><td style="background-color:#cceeff;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:12pt;font-weight:400;line-height:120%">Regulatory asset (liability) as of December 31, </span></td><td colspan="3" style="background-color:#ffffff;padding:0 1pt"/><td style="background-color:#ffffff;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:12pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#ffffff;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:12pt;font-weight:400;line-height:120%">2 </span></td><td style="background-color:#ffffff;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:#ffffff;padding:0 1pt"/><td style="background-color:#ffffff;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:12pt;font-weight:400;line-height:120%">$</span></td><td style="background-color:#ffffff;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:12pt;font-weight:400;line-height:120%">(3)</span></td><td style="background-color:#ffffff;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"><span><br/></span></div><div style="margin-top:2pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:700;line-height:110%">(11)    Subsequent Events</span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:12pt;font-weight:400;line-height:110%">Cove Point has evaluated the impact of events occurring after December 31, 2022, up to March 30, 2023, the date that the Cove Point GAAP financial statements were issued, and has updated such evaluation for disclosure purposes through April 14, 2023. These financial statements include all necessary adjustments and disclosures resulting from these evaluations.</span></div>


