The components of regulatory assets and liabilities include the effects of deferred taxes on equity funds used during construction, AROs, shipper imbalance activity, fuel and power cost differentials, depreciation, negative salvage, pension and other postretirement benefits, trackers, customer tax refunds, and rate allowances for deferred income taxes at a historically higher federal income tax rate.

Williams


	December 31,
	2024		2023
	(Millions)
Current assets reported within Other current assets and deferred charges	$	84	$	95
Noncurrent assets reported within Regulatory assets, deferred charges, and other	582		527
Total regulatory assets	$	666	$	622


Current liabilities reported within Other current liabilities	$	85	$	77
Noncurrent liabilities reported within Regulatory liabilities, deferred income, and other	1,300		1,288
Total regulatory liabilities	$	1,385	$	1,365


	December 31,
	2024		2023
	(Millions)
Current regulatory assets:
Fuel recovery	$	47	$	60

ARO	16		16
Deferred cash out	6		6
ARO - Eminence	5		5
Total current regulatory assets	74		87
Long-term regulatory assets:
ARO	243		209
Grossed-up deferred taxes on equity AFUDC	29		31
ARO - Eminence	15		20
Slug catcher	6		6
Deferred cash out	—		11
Other	27		22
Total long-term regulatory assets	320		299
Total regulatory assets	$	394	$	386

Current regulatory liabilities:
Deferred taxes - liability	$	31	$	31
Postretirement benefits other than pension	—		8
Electric power cost	26		7
Pension	—		2
Other	1		1
Total current regulatory liabilities	58		49
Long-term regulatory liabilities:
Negative salvage	632		605
Deferred taxes - liability	252		283
Postretirement benefits other than pension	31		23
Pension	30		24
Sentinel meter station depreciation	7		7
Other	24		14
Total long-term regulatory liabilities	976		956
Total regulatory liabilities	$	1,034	$	1,005

Fuel recovery: This amount represents the value of the cumulative volumetric difference between the gas retained from customers and the gas consumed in operations. These amounts are not included in the rate base, but assets and liabilities are expected to be recovered or refunded, respectively, in subsequent annual fuel tracker filings.

Electric power cost: This amount represents the value of the difference between the electric power costs recovered from our customers and the electric power costs incurred in operations. These amounts are expected to be recovered by changing the electric power reimbursement rate in subsequent annual electric power tracker filings.

ARO: This regulatory asset balance includes the uncollected ARO depreciation expense and accretion expense. The regulatory asset is being recovered through rates, and is being amortized to expense consistent with the amounts collected in rates (see AROs in Note 9 – Property, Plant, and Equipment).

Deferred cash out: This amount represents the deferral of gains or losses on the purchases and sales of gas imbalances with shippers. These assets and liabilities amounts will be recovered or refunded, respectively, under terms provided for in Transco’s FERC tariff.

Asset retirement costs - Eminence: This regulatory asset balance is associated with the Eminence Storage Field retirement costs. The regulatory asset is being recovered through rates and is being amortized to expense consistent with the amounts collected in rates.

Grossed-up deferred taxes on equity AFUDC: This regulatory asset balance is established to offset the deferred tax for the equity component of the allowance for funds used during the construction of long-lived assets. All amounts were generated during the period that Transco was a taxable entity. Taxes on capitalized funds used during construction and the offsetting deferred income taxes are included in the rate base and are recovered over the depreciable lives of the long-lived assets to which they relate.

Slug catcher: This amount represents certain costs associated with the replacement of a component of a slug catcher which was included in the Docket No. RP18-1126 rate case settlement. A regulatory asset has been established to recognize the recovery of Transco’s investment in the slug catcher as it is collected through Transco’s depreciation rates and is being amortized at the prescribed depreciation rate for onshore transmission facilities (see Note 1 – General, Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies).

Negative salvage: Transco’s rates include a component designed to recover certain future retirement costs for which it is not required to record an ARO. Transco records a regulatory liability representing the cumulative residual amount of recoveries through rates, net of expenditures associated with these retirement costs.

Deferred taxes - liability: This regulatory liability balance was established as a result of a decrease to rate base deferred taxes due to a decrease to the effective federal income tax rate. The timing of the refund of the regulatory liability to rate payers is stated in the Docket No. RP18-1126 rate case settlement. Additionally, as of December 31, 2024, Transco has $13 million of rate base deferred taxes established as a result of a decrease to the effective state income tax rate. This amount and timing of the refund is being addressed in Transco’s ongoing rate case.

Postretirement benefits other than pension: Transco recovers the actuarially determined cost of postretirement benefits through rates that are set through periodic general rate filings. Any differences between the annual actuarially determined cost and the amounts recovered in rates are recorded as regulatory assets or liabilities to be collected or refunded through future rate adjustments. These amounts are not included in the rate base. Effective with the Docket No. RP18-1126 rate case settlement, the other postretirement benefits regulatory liability balance as of March 1, 2019, was fully amortized in 2024 (see Note 7 – Employee Benefit Plans).

Pension: Transco recovers the actuarially determined pension cash contributions through rates that are set through periodic general rate filings. Effective with the Docket No. RP18-1126 rate case settlement, any amounts of annual contributions that fall below the threshold are recorded as adjustments to income and refunded through future rate adjustments. Also effective with the Docket No. RP18-1126 rate case settlement, the pension regulatory liability balance as of March 1, 2019, was fully amortized in 2024 (see Note 7 – Employee Benefit Plans).

Sentinel meter station depreciation: This amount reflects the incremental depreciation being recorded related to the meter station modifications made for three of the Sentinel shippers. These modifications will be recovered through a surcharge over a defined period of time as stated in the Sentinel FERC order. The incremental depreciation represents the difference between the FERC granted depreciation rate for such facilities in the last rate case as compared to the depreciation rates in the Sentinel order which are based on the contractual terms in the surcharge agreements. The incremental depreciation will be recorded through the end of the contractual term and then will be amortized.

NWP


	December 31,
	2024		2023
	(Millions)
Current regulatory assets:
Fuel recovery	$	4	$	—
Levelized depreciation	2		2
Total current regulatory assets	6		2
Long-term regulatory assets:
Levelized depreciation	7		10
Grossed-up deferred taxes on equity AFUDC	4		4
Washington State Carbon and Greenhouse Gas Tax	38		22
Total long-term regulatory assets	49		36
Total regulatory assets	$	55	$	38

Current regulatory liabilities:

Deferred taxes - liability	$	20	$	20

Fuel recovery	—		1
Total current regulatory liabilities	20		21
Long-term regulatory liabilities:
Deferred taxes - liability	160		179
Postretirement benefits other than pension	43		42
Negative salvage - net	30		31

Total long-term regulatory liabilities	233		252
Total regulatory liabilities	$	253	$	273

Levelized depreciation: Levelized depreciation allows contract revenue streams to remain constant over the primary contract terms by recognizing lower than book depreciation in the early years and higher than book depreciation in later years. The depreciation component of the levelized incremental rates will equal the accumulated book depreciation by the end of the primary contract terms. The difference between levelized depreciation and straight-line book depreciation is recorded as a FERC approved regulatory asset or liability and is eliminated over the levelization period.

Grossed-up deferred taxes on equity AFUDC: This regulatory asset balance is established to offset the deferred tax for the equity component of the allowance for funds used during the construction of long-lived assets. All amounts were generated during the period that NWP was a taxable entity. Taxes on capitalized funds used during construction and the offsetting deferred income taxes are included in the rate base and are recovered over the depreciable lives of the long-lived assets to which they relate.

Washington State Carbon and Greenhouse Tax: This amount represents the cost of emission allowances and the associated accumulated interest as a result of the passage of the state of Washington Climate Commitment Act

Deferred taxes - liability: This regulatory liability balance was established as a result of a decrease to rate base deferred taxes due to a decrease to the effective federal and state income tax rates. The timing of the refund of the regulatory liability to rate payers is stated in the Docket No. RP22-1155 rate case settlement.

Postretirement benefits other than pension: NWP seeks to recover the actuarially determined cost of postretirement benefits through rates that are set through periodic general rate filings. Any differences between the annual actuarially determined cost and amounts currently being recovered in rates are recorded as regulatory assets or liabilities and collected or refunded through future rate adjustments. These amounts are not included in the rate base, and NWP is not currently recovering postretirement benefit costs in its rates (see Note 7 – Employee Benefit Plans).

Negative salvage, net of ARO asset: This regulatory liability balance reflects the amount that NWP has recovered in rates related to future retirement costs offset by depreciation of the ARO asset and accretion expense of the ARO liability due to the passage of time. AROs are expected to be fully recovered through the net negative salvage component of depreciation included in rates (see AROs in Note 9 – Property, Plant, and Equipment).