2.	Related Party Transactions

Our subsidiary, Sharyland Distribution & Transmission Services, L.L.C. (SDTS), leases all our electric transmission and distribution assets (regulated assets) through several lease agreements to Sharyland Utilities, L.P. (Sharyland), a Texas based utility and our sole tenant. Under the leases, we have agreed to fund capital expenditures for footprint projects. Our leases define “footprint projects” to be transmission or distribution projects primarily situated within our distribution service territory, or that physically hang from our existing transmission assets or that are physically located within one of our substations.

We earned lease revenues from Sharyland under these agreements of $40.4 million and $33.8 million during the three months ended June 30, 2017 and 2016, respectively. We earned lease revenues of $80.0 million and $67.5 million from Sharyland during the six months ended June 30, 2017 and 2016, respectively. In connection with our leases with Sharyland, we recorded a deferred rent liability of $23.0 million and $15.6 million as of June 30, 2017 and December 31, 2016, respectively, which is included in accounts payable and accrued liabilities on the Consolidated Balance Sheets.

In addition to rent payments that Sharyland makes to us, we and Sharyland also make payments to each other under the leases that primarily consist of payments to reimburse Sharyland for the costs of gross plant and equipment added to our regulated assets. For the six months ended June 30, 2017 and 2016, the net amount of payments we made to Sharyland was $93.9 million and $120.1 million, respectively.

As of June 30, 2017 and December 31, 2016, accounts payable and accrued liabilities on the Consolidated Balance Sheets included $9.5 million and $13.7 million, respectively, related to amounts owed to Sharyland. As of June 30, 2017 and December 31, 2016, amounts due from affiliates on the Consolidated Balance Sheets included $27.3 million and $32.6 million, respectively, related to amounts owed by Sharyland associated with our leases.

The management fee paid to Hunt Utility Services, LLC (Hunt Manager) for the six months ended June 30, 2017 and 2016 was $10.5 million and $6.8 million, respectively. As of December 31, 2016, there was $3.5 million accrued associated with management fees on the Consolidated Balance Sheets. There were no prepaid or accrued amounts associated with the management fees on the Consolidated Balance Sheets as of June 30, 2017. Additionally, during the six months ended June 30, 2017 and 2016, we paid Hunt Manager $0.2 million and less than $0.1 million, respectively, for reimbursement of annual software license and maintenance fees and other expenses in accordance with our management agreement.

Our management agreement with Hunt Manager provided for an annual base fee, or management fee, of $13.1 million from April 1, 2015 through March 31, 2016. Effective as of April 1, 2016, the annual base fee was automatically adjusted to $14.0 million annually through March 31, 2017. Effective as of April 1, 2017, the annual base fee was automatically adjusted to $14.2 million annually through March 31, 2018. The base fee for each twelve month period beginning each April 1 thereafter will equal 1.50% of our total equity as of December 31 of the immediately preceding year, subject to a $30.0 million cap. The term of the management agreement expires December 31, 2019, and will automatically renew for successive five year terms unless a majority of our independent directors decides to terminate the agreement.

For information related to a new agreement (Side Letter) entered into between SDTS and Sharyland on July 21, 2017 related to certain terms and conditions to address actual or potential conflicts of interest arising between the parties in connection with a proposed transaction with Oncor Electric Delivery Company LLC (Oncor), see Note 17, Subsequent Events.