Related Party Transactions

3 Months Ended

Mar. 31, 2017

Note 13. Related Party Transactions

We engage in related party transactions that are generally billed at cost and in accordance with applicable state and federal commission regulations.

Related party transactions for the three months ended March 31, 2017 and 2016, respectively, consisted of:

Three Months Ended March 31,	2017					2016
(Millions)	Sales To		Purchases From			Sales To		Purchases From
Iberdrola Canada Energy Services, Ltd	$	—	$	(10	)	$	—	$	(5	)
Iberdrola Renovables Energía, S.L.		—		(2	)		—		(3	)
Iberdrola, S.A.		—		(9	)		—		(8	)
Other		16		—			1		—

In addition to the statements of income items above, we made purchases of turbines for wind farms from Siemens-Gamesa, in which our ultimate parent, Iberdrola, has an 8.1% ownership. The amounts capitalized for these transactions were $66 million and $269 million as of March 31, 2017 and December 31, 2016, respectively. In addition, included in “Other Assets” are $62 million of safe harbor turbine payments we made to Siemens-Gamesa as of March 31, 2017.

Related party balances as of March 31, 2017 and December 31, 2016, respectively, consisted of:

As of	March 31, 2017					December 31, 2016
(Millions)	Owed By		Owed To			Owed By		Owed To
Iberdrola Canada Energy Services, Ltd.	$	—	$	(20	)	$	—	$	(14	)
Siemens-Gamesa		—		(105	)		1		(181	)
Iberdrola, S.A.		—		(9	)		—		(30	)
Iberdrola Energy Projects, Inc.		—		—			—		—
Iberdrola Renovables Energía, S.L.		—		(2	)		2		—
Other		17		(1	)		22		(3	)

Transactions with Iberdrola, our majority shareholder, relate predominantly to the provision and allocation of corporate services and management fees. Also included within the Purchases From category are charges for credit support relating to guarantees Iberdrola has provided to third parties guaranteeing our performance. All costs that can be specifically allocated, to the extent possible, are charged directly to the company receiving such services. In situations when Iberdrola corporate services are provided to two or more companies of AVANGRID any costs remaining after direct charge are allocated using agreed upon cost allocation methods designed to allocate those costs. We believe that the allocation method used is reasonable.

Transactions with Iberdrola Canada Energy Services predominantly relate to the purchase of gas for ARHI’s gas-fired cogeneration facility in Klamath, Oregon.

There have been no guarantees provided or received for any related party receivables or payables. These balances are unsecured and are typically settled in cash. Interest is not charged on regular business transactions but is charged on outstanding loan balances. There have been no impairments or provisions made against any affiliated balances.

Networks holds an approximate 20% ownership interest in the regulated New York TransCo, LLC (New York TransCo). Through New York TransCo, Networks has formed a partnership with Central Hudson Gas and Electric Corporation, Consolidated Edison, Inc., National Grid, plc and Orange and Rockland Utilities, Inc. to develop a portfolio of interconnected transmission lines and substations to fulfill the objectives of the New York energy highway initiative, which is a proposal to install up to 3,200 MW of new electric generation and transmission capacity in order to deliver more power generated from upstate New York power plants to downstate New York. As of March 31, 2017 the amount receivable from New York TransCo was $11 million.

AVANGRID manages its overall liquidity position as part of the broader Iberdrola Group and is a party to a notional cash pooling agreement with Bank Mendes Gans, N.V. (BMG), along with certain subsidiaries of Iberdrola. Cash surpluses remaining after meeting the liquidity requirements of AVANGRID and its subsidiaries may be deposited at BMG. Deposits, or credit balances, serve as collateral against the debit balances of other parties to the notional cash pooling agreement. The BMG balance at both March 31, 2017 and December 31, 2016, was zero.