XML 30 R19.htm IDEA: XBRL DOCUMENT v3.7.0.1
Related Party Transactions
6 Months Ended
Mar. 31, 2017
Related Party Transactions [Abstract]  
Related Party Transactions
Note 12 — Related Party Transactions

UGI provides certain financial and administrative services to UGI Utilities. UGI bills UGI Utilities monthly for all direct expenses incurred by UGI on behalf of UGI Utilities and an allocated share of indirect corporate expenses incurred or paid with respect to services provided to UGI Utilities. The allocation of indirect UGI corporate expenses to UGI Utilities utilizes a weighted, three-component formula comprising revenues, operating expenses and net assets employed and considers UGI Utilities’ relative percentage of such items to the total of such items for all UGI operating subsidiaries for which general and administrative services are provided. Management believes that this allocation method is reasonable and equitable to UGI Utilities and this allocation method has been accepted by the PUC in past rate case proceedings and management audits as a reasonable method of allocating such expenses. These billed expenses are classified as “Operating and administrative expenses — related parties” on the Condensed Consolidated Statements of Income. In addition, UGI Utilities provides limited administrative services to UGI and certain of UGI’s subsidiaries under PUC affiliated interest agreements. Amounts billed to these entities by UGI Utilities for all periods presented were not material.

From time to time, UGI Utilities is a party to SCAAs with Energy Services which have terms of up to three years. Under the SCAAs, UGI Utilities has, among other things, released certain storage and transportation contracts (subject to recall for operational purposes) to Energy Services for the terms of the SCAAs. UGI Utilities also transferred certain associated storage inventories upon the commencement of the SCAAs, receives a transfer of storage inventories at the end of the SCAAs, and makes payments associated with refilling storage inventories during the term of the SCAAs. UGI Utilities incurred costs associated with Energy Services’ SCAAs totaling $201 and $2,495 during the three and six months ended March 31, 2017, respectively, and $159 and $2,029 during the three and six months ended March 31, 2016, respectively. Energy Services, in turn, provides a firm delivery service and makes certain payments to UGI Utilities for its various obligations under the SCAAs. During the three and six months ended March 31, 2017 and 2016, these payments were not material. In conjunction with the SCAAs, UGI Utilities received security deposits from Energy Services. The amounts of such security deposits, which are included in “Other current liabilities” on the Condensed Consolidated Balance Sheets, were $11,040 at March 31, 2017 and $8,100 as of September 30, 2016 and March 31, 2016.

UGI Utilities reflects the historical cost of the gas storage inventories and any exchange receivable from Energy Services (representing amounts of natural gas inventories used but not yet replenished by Energy Services) in “Inventories” on the Condensed Consolidated Balance Sheets. The carrying values of these gas storage inventories at March 31, 2017, September 30, 2016 and March 31, 2016, comprising approximately 0.8 bcf, 4.6 bcf and 0.9 bcf of natural gas, were $1,964, $11,148 and $2,074, respectively.

UGI Utilities has gas supply and delivery service agreements with Energy Services pursuant to which Energy Services provides certain gas supply and related delivery service to Gas Utility primarily during the heating season months of November through March. The aggregate amount of these transactions (exclusive of transactions pursuant to the SCAAs) during the three and six months ended March 31, 2017 totaled $41,225 and $71,735, respectively. During the three and six months ended March 31, 2016, such purchases totaled $31,691 and $59,055, respectively.

From time to time, UGI Utilities sells natural gas or pipeline capacity to Energy Services. During the three and six months ended March 31, 2017, revenues associated with such sales to Energy Services totaled $22,310 and $33,282, respectively. During the three and six months ended March 31, 2016, revenues associated with such sales to Energy Services totaled $12,854 and $21,620, respectively. Also from time to time, UGI Utilities purchases natural gas, pipeline capacity and electricity from Energy Services (in addition to those transactions already described above) and purchases a firm storage service from UGI Storage Company, a subsidiary of Energy Services, under one-year agreements. During the three and six months ended March 31, 2017, such purchases totaled $39,085 and $61,108, respectively. During the three and six months ended March 31, 2016, such purchases totaled $14,912 and $23,104, respectively.