10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-2921

PANHANDLE EASTERN PIPE LINE COMPANY, LP

(Exact name of registrant as specified in its charter)

Delaware	44-0382470
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

8111 Westchester Drive, Suite 600, Dallas, Texas 75225

(Address of principal executive offices) (zip code)

(214) 981-0700

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes x  No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	☐
Non-accelerated filer	ý	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐   No x

Panhandle Eastern Pipe Line Company, LP meets the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q and is therefore filing this Form 10-Q with the reduced disclosure format.

FORM 10-Q

PANHANDLE EASTERN PIPE LINE COMPANY, LP

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (Unaudited)
Consolidated Balance Sheets	4
Consolidated Statements of Operations and Comprehensive Income	5
Consolidated Statements of Partners’ Capital	6
Consolidated Statements of Cash Flows	7
Notes to Consolidated Financial Statements	8
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	10
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	11
ITEM 4. CONTROLS AND PROCEDURES	12
PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS	13
ITEM 1A. RISK FACTORS	13
ITEM 6. EXHIBITS	13
SIGNATURE	14

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Definitions

The following is a list of certain acronyms and terms used throughout this document:

Energy Transfer	Energy Transfer LP, the parent company of PEPL
Exchange Act	Securities Exchange Act of 1934, as amended
FERC	Federal Energy Regulatory Commission
GAAP	accounting principles generally accepted in the United States of America
Sea Robin	Sea Robin Pipeline Company, LLC
SEC	Securities and Exchange Commission
Southwest Gas	Pan Gas Storage LLC (d.b.a. Southwest Gas)
TBtu	Trillion British thermal units
Trunkline	Trunkline Gas Company, LLC

Forward-Looking Statements

Certain matters discussed in this report, excluding historical information, as well as some statements by Panhandle Eastern Pipe Line Company, LP and its subsidiaries (“PEPL” or the “Company”) in periodic press releases and some oral statements of PEPL officials during presentations about the Company, include forward-looking statements. These forward-looking statements are identified as any statement that does not relate strictly to historical or current facts. Statements using words such as “anticipate,” “project,” “expect,” “plan,” “goal,” “forecast,” “estimate,” “intend,” “continue,” “believe,” “may,” “will” or similar expressions help identify forward-looking statements. Although the Company believes such forward-looking statements are based on reasonable assumptions and current expectations and projections about future events, no assurance can be given that such assumptions, expectations, or projections will prove to be correct. Forward-looking statements are subject to a variety of risks, uncertainties and assumptions. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, the Company’s actual results may vary materially from those anticipated, projected, forecasted, estimated or expressed in forward-looking statements since many of the factors that determine these results are subject to uncertainties and risks that are difficult to predict and beyond management’s control. For additional discussion of risks, uncertainties and assumptions, see “Part I — Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 18, 2022.

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PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PANHANDLE EASTERN PIPE LINE COMPANY, LP

CONSOLIDATED BALANCE SHEETS

(Dollars in millions)

(unaudited)

	June 30, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	—
Accounts receivable, net	42		50
Accounts receivable from related companies	8		8
Exchanges receivable	17		7
Inventories	85		57
Other current assets	4		5
Total current assets	156		127
Property, plant and equipment	3,474		3,421
Accumulated depreciation	(892)		(813)
Property, plant and equipment, net	2,582		2,608
Operating lease right-of-use assets	3		4
Other non-current assets, net	200		192
Total assets	$	2,941	$	2,931

LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities:
Accounts payable	$	4	$	39
Accounts payable to related companies	108		25
Exchanges payable	40		22
Other current liabilities	83		62
Total current liabilities	235		148
Long-term debt	242		243
Note payable to related company	29		221
Non-current operating lease liabilities	3		3
Other non-current liabilities	347		312
Commitments and contingencies
Partners’ capital:
Partners’ capital	2,077		2,001
Accumulated other comprehensive income	8		3
Total partners’ capital	2,085		2,004
Total liabilities and partners’ capital	$	2,941	$	2,931

The accompanying notes are an integral part of these consolidated financial statements.

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PANHANDLE EASTERN PIPE LINE COMPANY, LP

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Dollars in millions)

(unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
OPERATING REVENUES:
Transportation and storage of natural gas	$	109	$	111	$	241	$	250
Operational gas sales	—		—		—		67
Other	6		4		11		9
Total operating revenues	115		115		252		326
OPERATING EXPENSES:
Operating and maintenance	46		47		91		87
General and administrative	9		9		19		18
Depreciation and amortization	27		26		52		52
Total operating expenses	82		82		162		157
OPERATING INCOME	33		33		90		169
OTHER EXPENSE:
Interest expense, net	(4)		(3)		(8)		(7)
Interest expense — related company	(1)		(4)		(3)		(10)
Other, net	(2)		—		(3)		—
INCOME BEFORE INCOME TAX EXPENSE	26		26		76		152
Income tax expense	—		—		1		—
NET INCOME	26		26		75		152
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Actuarial gain relating to postretirement benefit plans	1		—		5		6
COMPREHENSIVE INCOME	$	27	$	26	$	80	$	158

The accompanying notes are an integral part of these consolidated financial statements.

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PANHANDLE EASTERN PIPE LINE COMPANY, LP

CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021

(Dollars in millions)

(unaudited)

	Partners’ Capital		Accumulated Other Comprehensive Income		Total
Balance, December 31, 2021	$	2,001	$	3	$	2,004
Net income	49		—		49
Other comprehensive income, net of tax	—		4		4
Other	1		—		1
Balance, March 31, 2022	2,051		7		2,058
Net income	26		—		26
Other comprehensive income, net of tax	—		1		1
Balance, June 30, 2022	$	2,077	$	8	$	2,085

	Partners’ Capital		Accumulated Other Comprehensive Loss		Total
Balance, December 31, 2020	$	1,803	$	(9)	$	1,794
Net income	126		—		126
Other comprehensive income, net of tax	—		6		6
Other	1		(1)		—
Balance, March 31, 2021	1,930		(4)		1,926
Net income	26		—		26
Balance, June 30, 2021	$	1,956	$	(4)	$	1,952

The accompanying notes are an integral part of these consolidated financial statements.

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PANHANDLE EASTERN PIPE LINE COMPANY, LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in millions)

(unaudited)

	Six Months Ended June 30,
	2022		2021
OPERATING ACTIVITIES:
Net income	$	75	$	152
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization	52		52
Amortization of deferred financing fees	(1)		(1)
Other non-cash	2		5
Changes in operating assets and liabilities	95		62
Net cash flows provided by operating activities	223		270
INVESTING ACTIVITIES:
Capital expenditures	(31)		(26)
Net cash flows used in investing activities	(31)		(26)
FINANCING ACTIVITIES:
Related company note activity	(192)		(244)
Net cash flows used in financing activities	(192)		(244)
Net change in cash and cash equivalents	—		—
Cash and cash equivalents, beginning of period	—		—
Cash and cash equivalents, end of period	$	—	$	—
SUPPLEMENTAL INFORMATION:
Non-cash activity - Accrued capital expenditures	$	4	$	4
Cash paid for interest	$	8	$	8

The accompanying notes are an integral part of these consolidated financial statements.

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PANHANDLE EASTERN PIPE LINE COMPANY, LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular dollar amounts are in millions)

(unaudited)

1.ORGANIZATION AND BASIS OF PRESENTATION

Organization

PEPL and its subsidiaries primarily operate interstate pipelines that transport natural gas from the Gulf of Mexico, South Texas and the Panhandle region of Texas and Oklahoma to major United States markets in the Midwest and Great Lakes regions, as well as natural gas storage assets. These operations are subject to the rules and regulations of the FERC. PEPL’s subsidiaries are Trunkline, Sea Robin and Southwest Gas.

Southern Union Panhandle LLC, an indirect wholly-owned subsidiary of Energy Transfer, owns a 1% general partner interest in PEPL, and Energy Transfer indirectly owns a 99% limited partner interest in PEPL.

Basis of Presentation

The unaudited financial information included in this Form 10-Q has been prepared on the same basis as the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. In the opinion of the Company’s management, such financial information reflects all adjustments necessary for a fair presentation of the financial position and the results of operations for such interim periods in accordance with GAAP. All intercompany items and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP have been omitted pursuant to the rules and regulations of the SEC.

Use of Estimates

The unaudited consolidated financial statements have been prepared in conformity with GAAP, which includes the use of estimates and assumptions made by management that affect the reported amounts of assets, liabilities, revenues, expenses and disclosure of contingent assets and liabilities that exist at the date of the consolidated financial statements. Although these estimates are based on management’s available knowledge of current and expected future events, actual results could be different from those estimates.

2.RELATED PARTY TRANSACTIONS

The following table provides a summary of the related party activity included in our consolidated statements of operations:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Operating revenues	$	23	$	22	$	45	$	45
Operating and maintenance	3		5		8		8
General and administrative	6		7		13		13
Interest expense — related company	1		4		3		10

As of June 30, 2022 and December 31, 2021, the Company had $29 million and $221 million, respectively, outstanding under a note payable to its parent. The note payable accrues interest monthly with an annual interest rate of 4.99% as of June 30, 2022 and matures on July 31, 2027.

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3.FAIR VALUE MEASURES

As of June 30, 2022 and December 31, 2021, other non-current assets included $36 million and $39 million, respectively, of investments carried at fair value. At June 30, 2022, $23 million in equity securities were valued at Level 1 and $13 million in fixed income securities were valued at Level 2. At December 31, 2021, $26 million in equity securities were valued at Level 1 and $13 million in fixed income securities were valued at Level 2. During the three months ended June 30, 2022 and 2021, the Company recognized $4 million in unrealized losses and $1 million in unrealized gains, respectively, on equity securities. During the six months ended June 30, 2022 and 2021, the Company recognized $6 million in unrealized losses and $3 million in unrealized gains, respectively, on equity securities. Unrealized gains and losses on equity securities are reflected in other, net in our consolidated statements of operations. The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair value. Based on the estimated borrowing rates currently available to the Company and its subsidiaries for loans with similar terms and average maturities, the aggregate fair value of the Company’s consolidated debt obligations (excluding related company balances) was $227 million and $253 million at June 30, 2022 and December 31, 2021, respectively. The fair value of the Company’s consolidated debt obligations is a Level 2 valuation based on the observable inputs used for similar liabilities. The Company did not have any Level 3 instruments measured at fair value at June 30, 2022 or December 31, 2021, and there were no transfers between hierarchy levels during the periods presented.

4.REGULATORY MATTERS, COMMITMENTS, CONTINGENCIES AND ENVIRONMENTAL LIABILITIES

Contingent Residual Support Agreement with ET

Under a contingent residual support agreement with Energy Transfer and Citrus ETP Finance LLC, the Company provides contingent, residual support to Citrus ETP Finance LLC with respect to Citrus ETP Finance LLC’s obligations to Energy Transfer to support the payment of certain ET senior notes. As of June 30, 2022, $1 billion in principal amount of such supported Energy Transfer senior notes remains outstanding.

FERC Proceedings

By the Order issued January 16, 2019, the FERC initiated a review of PEPL’s existing rates pursuant to Section 5 of the NGA to determine whether the rates currently charged by PEPL are just and reasonable and set the matter for hearing. On August 30, 2019, PEPL filed a general rate proceeding under Section 4 of the NGA. The NGA Section 5 and Section 4 proceedings were consolidated by order of the Chief Judge on October 1, 2019. A hearing in the combined proceedings commenced on August 25, 2020 and adjourned on September 15, 2020. The initial decision by the administrative law judge was issued on March 26, 2021. On April 26, 2021, PEPL filed its brief on exceptions to the initial decision. On May 17, 2021, PEPL filed its brief opposing exceptions in this proceeding. This matter remains pending before FERC.

Environmental Matters

The Company’s operations are subject to federal, state and local laws, rules and regulations regarding water quality, hazardous and solid waste management, air quality control and other environmental matters. These laws, rules and regulations require the Company to conduct its operations in a specified manner and to obtain and comply with a wide variety of environmental regulations, licenses, permits, inspections and other approvals. Failure to comply with environmental laws, rules and regulations may expose the Company to significant fines, penalties and/or interruptions in operations. The Company’s environmental policies and procedures are designed to achieve compliance with such applicable laws and regulations. These evolving laws and regulations and claims for damages to property, employees, other persons and the environment resulting from current or past operations may result in significant expenditures and liabilities in the future. The Company engages in a process of updating and revising its procedures for the ongoing evaluation of its operations to identify potential environmental exposures and enhance compliance with regulatory requirements.

The Company is responsible for environmental remediation at certain sites on its natural gas transmission systems for contamination resulting from the past use of lubricants containing polychlorinated biphenyls (“PCBs”) in compressed air systems; the past use of paints containing PCBs; and the prior use of wastewater collection facilities and other on-site disposal areas. The Company has implemented a program to remediate such contamination. The primary remaining remediation activity on the Company’s systems is associated with past use of paints containing PCBs or PCB impacts to equipment surfaces and to a building at one location. The PCB assessments are ongoing and the related estimated remediation costs are subject to further change. Other remediation typically involves the management of contaminated soils and may involve remediation of groundwater. Activities vary with site conditions and locations, the extent and nature of the contamination, remedial requirements, complexity and sharing of responsibility. The ultimate liability and total costs associated with these sites will depend upon many factors. If remediation activities involve statutory joint and several

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liability provisions, strict liability, or cost recovery or contribution actions, the Company could potentially be held responsible for contamination caused by other parties. In some instances, the Company may share liability associated with contamination with other potentially responsible parties. The Company may also benefit from contractual indemnities that cover some or all of the cleanup costs. These sites are generally managed in the normal course of business or operations.

The Company’s environmental remediation activities are undertaken in cooperation with and under the oversight of appropriate regulatory agencies, enabling the Company under certain circumstances to take advantage of various voluntary cleanup programs in order to perform the remediation in the most effective and efficient manner.

The Company had accrued $1 million in non-current liabilities as of June 30, 2022 and December 31, 2021 to cover environmental remediation actions where management believes a loss is probable and reasonably estimable. The Company is not able to estimate the possible loss or range of loss in excess of amounts accrued. The Company does not have any material environmental remediation matters assessed as reasonably possible.

Liabilities for Litigation and Other Claims

The Company records accrued liabilities for litigation and other claim costs when management believes a loss is probable and reasonably estimable. When management believes there is at least a reasonable possibility that a material loss or an additional material loss may have been incurred, the Company discloses (i) an estimate of the possible loss or range of loss in excess of the amount accrued; or (ii) a statement that such an estimate cannot be made. As of June 30, 2022 and December 31, 2021, the Company had accrued liabilities for litigation and other contingencies of $107 million and $73 million, respectively, included in other non-current liabilities on the consolidated balance sheets. The Company does not have any material litigation or other claim contingency matters assessed as probable or reasonably possible that would require disclosure in the financial statements.

Other Commitments and Contingencies

The Company is subject to the laws and regulations of states and other jurisdictions concerning the identification, reporting and escheatment (the transfer of property to the state) of unclaimed or abandoned funds, and is subject to audit and examination for compliance with these requirements. The Company is currently being examined by a third party auditor on behalf of nine states for compliance with unclaimed property laws, and there are no material claim contingencies associated with the examination.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

(Tabular dollar amounts are in millions)

The information in Item 2 has been prepared pursuant to the reduced disclosure format permitted by General Instruction H to Form 10-Q. Accordingly, this Item 2 includes only management’s narrative analysis of the results of operations and should be read in conjunction with (i) our historical consolidated financial statements and accompanying notes thereto included elsewhere in this Quarterly Report on Form 10-Q and (ii) our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 18, 2022.

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RESULTS OF OPERATIONS

	Six Months Ended June 30,
	2022		2021
OPERATING REVENUES:
Transportation and storage of natural gas	$	241	$	250
Operational gas sales	—		67
Other	11		9
Total operating revenues	252		326
OPERATING EXPENSES:
Operating and maintenance	91		87
General and administrative	19		18
Depreciation and amortization	52		52
Total operating expenses	162		157
OPERATING INCOME	90		169
OTHER EXPENSE:
Interest expense, net	(8)		(7)
Interest expense — related company	(3)		(10)
Other, net	(3)		—
INCOME BEFORE INCOME TAX EXPENSE	76		152
Income tax expense	1		—
NET INCOME	$	75	$	152
Natural gas volumes transported (TBtu):
PEPL	377		363
Trunkline	255		257
Sea Robin	23		34

Transportation and storage of natural gas. Transportation and storage of natural gas decreased for the six months ended June 30, 2022 compared to the same period in the prior year primarily due to less capacity sold.

Operational gas sales. Operational gas sales for the six months ended June 30, 2021 were due to the impact of Winter Storm Uri in February 2021.

Operating and Maintenance. Operating and maintenance expenses increased for the six months ended June 30, 2022 compared to the same period in the prior year primarily due to higher ad valorem taxes and increased direct costs due to level of activity and price increases.

Interest expense — related company. Interest expense — related company decreased for the six months ended June 30, 2022 compared to the same period in the prior year primarily due to lower average borrowings outstanding under a note payable due to the Company’s parent.

Other, net. Other, net decreased for the six months ended June 30, 2022 compared to the same period in the prior year primarily due to unrealized losses on equity securities, partially offset by a reduction of non-service cost components of the Company’s postretirement benefit plan.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Item 3, Quantitative and Qualitative Disclosures About Market Risk, has been omitted from this report pursuant to the reduced disclosure format permitted by General Instruction H to Form 10-Q.

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ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We have established disclosure controls and procedures to ensure that information required to be disclosed by us, including our consolidated entities, in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Under the supervision and with the participation of senior management, including the Co-Chief Executive Officers and the Chief Financial Officer of our General Partner, we evaluated our disclosure controls and procedures, as such term is defined under Rule 13a–15(e) promulgated under the Exchange Act. Based on this evaluation, the Co-Chief Executive Officers and the Chief Financial Officer of our General Partner concluded that our disclosure controls and procedures were effective as of June 30, 2022 to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act (1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (2) is accumulated and communicated to management, including the Co-Chief Executive Officers and Chief Financial Officer of our General Partner, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rule 13(a)-15(f) or Rule 15d-15(f) of the Exchange Act) during the three months ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is a party to or has property subject to litigation and other proceedings, including matters arising under provisions relating to the protection of the environment, as described in Note 4 in “Part I - Item 1. Financial Statements” in this Quarterly Report on Form 10-Q and in Note 8 in “Part II - Item 8. Financial Statements and Supplementary Data” in the Company’s Form 10-K for the year ended December 31, 2021.

The Company is subject to federal and state requirements for the protection of the environment, including those for the discharge of hazardous materials and remediation of contaminated sites. As a result, the Company is a party to or has property subject to various other lawsuits or proceedings involving environmental protection matters. For information regarding these matters, see Note 4 in “Part I - Item 1. Financial Statements” in this Quarterly Report on Form 10-Q and Note 8 in “Part II - Item 8. Financial Statements and Supplementary Data” in the Company’s Form 10-K for the year ended December 31, 2021.

ITEM 1A. RISK FACTORS

There have been no material changes from the risk factors described in “Part I - Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 18, 2022.

ITEM 6. EXHIBITS

The exhibits listed below are filed or furnished, as indicated, as part of this report:

Exhibit Number	Description
31.1*	Certification of Co-Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Co-Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.3*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**	Certification of Co-Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**	Certification of Co-Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.3**	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101*	Interactive data files pursuant to Rule 405 of Regulation S-T: (i) our Consolidated Balance Sheets; (ii) our Consolidated Statements of Operations and Comprehensive Income; (iii) our Consolidated Statements of Partners’ Capital; (iv) our Consolidated Statements of Cash Flows; and (v) the notes to our Consolidated Financial Statements
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
*	Filed herewith
**	Furnished herewith

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, Panhandle Eastern Pipe Line Company, LP has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		PANHANDLE EASTERN PIPE LINE COMPANY, LP
Date:	August 4, 2022	By:	/s/ A. Troy Sturrock
			A. Troy Sturrock
			Vice President and Controller (duly authorized to sign on behalf of the registrant)

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EX-31.1

Exhibit 31.1

CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER

PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Marshall S. McCrea, III, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Panhandle Eastern Pipe Line Company, LP (the “registrant”);

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 4, 2022     

/s/ Marshall S. McCrea, III

Marshall S. McCrea, III

Co-Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER

PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Thomas E. Long, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Panhandle Eastern Pipe Line Company, LP (the “registrant”);

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 4, 2022     

/s/ Thomas E. Long

Thomas E. Long

Co-Chief Executive Officer

EX-31.3

Exhibit 31.3

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Bradford D. Whitehurst, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Panhandle Eastern Pipe Line Company, LP (the “registrant”);

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 4, 2022    

/s/ Bradford D. Whitehurst

Bradford D. Whitehurst

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Panhandle Eastern Pipe Line Company, LP (the “Company”) on Form 10-Q for the quarter ended June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Marshall S. McCrea, III, Co-Chief Executive Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 4, 2022

/s/ Marshall S. McCrea, III

Marshall S. McCrea, III

Co-Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to and will be retained by Panhandle Eastern Pipe Line Company, LP and furnished to the Securities and Exchange Commission upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Panhandle Eastern Pipe Line Company, LP (the “Company”) on Form 10-Q for the quarter ended June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas E. Long, Co-Chief Executive Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 4, 2022

/s/ Thomas E. Long

Thomas E. Long

Co-Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to and will be retained by Panhandle Eastern Pipe Line Company, LP and furnished to the Securities and Exchange Commission upon request.

EX-32.3

Exhibit 32.3

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Panhandle Eastern Pipe Line Company, LP (the “Company”) on Form 10-Q for the quarter ended June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Bradford D. Whitehurst, Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 4, 2022

/s/ Bradford D. Whitehurst

Bradford D. Whitehurst

Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to and will be retained by Panhandle Eastern Pipe Line Company, LP and furnished to the Securities and Exchange Commission upon request.

XML

Document And Entity Information	6 Months Ended
	Jun. 30, 2022 shares
Document and Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Amendment Flag	false
Entity Registrant Name	PANHANDLE EASTERN PIPE LINE COMPANY, LP
Entity Central Index Key	0000076063
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Document Period End Date	Jun. 30, 2022
Entity File Number	1-2921
Entity Address, Address Line One	8111 Westchester Drive
Entity Address, Address Line Two	Suite 600
Entity Address, City or Town	Dallas
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75225
City Area Code	214
Local Phone Number	981-0700
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Shell Company	false
Entity Tax Identification Number	44-0382470
Entity Incorporation, State or Country Code	DE
Entity Common Stock, Shares Outstanding	0

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Jun. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 0	$ 0
Accounts receivable, net	42	50
Accounts receivable from related companies	8	8
Exchanges receivable	17	7
Inventories	85	57
Other current assets	4	5
Total current assets	156	127
Property, Plant and Equipment, Net
Property, plant and equipment	3,474	3,421
Accumulated depreciation	(892)	(813)
Property, Plant and Equipment, Net, Total	2,582	2,608
Operating lease right-of-use assets	3	4
Other non-current assets, net	200	192
Total assets	2,941	2,931
Current liabilities:
Accounts payable	4	39
Accounts payable to related companies	108	25
Exchanges payable	40	22
Other current liabilities	83	62
Total current liabilities	235	148
Long-term debt	242	243
Note payable to related company	29	221
Non-current operating lease liabilities	3	3
Other non-current liabilities	347	312
Commitments and contingencies
Partners’ capital:
Partners’ capital	2,077	2,001
Accumulated other comprehensive income	8	3
Partners' Capital, Total	2,085	2,004
Liabilities and Equity, Total	$ 2,941	$ 2,931

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
OPERATING REVENUES:
Total operating revenues	$ 115	$ 115	$ 252	$ 326
OPERATING EXPENSES:
Operating and maintenance	46	47	91	87
General and administrative	9	9	19	18
Depreciation and amortization	27	26	52	52
Total operating expenses	82	82	162	157
OPERATING INCOME	33	33	90	169
OTHER INCOME (EXPENSE):
Interest expense, net	(4)	(3)	(8)	(7)
Interest expense — related company	(1)	(4)	(3)	(10)
Other, net	(2)	0	(3)	0
INCOME BEFORE INCOME TAX EXPENSE	26	26	76	152
Income tax expense	0	0	1	0
NET INCOME	26	26	75	152
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Actuarial gain relating to postretirement benefit plans	1	0	5	6
COMPREHENSIVE INCOME	27	26	80	158
Natural Gas, US Regulated [Member]
OPERATING REVENUES:
Transportation and storage of natural gas	109	111	241	250
Product and Service, Other [Member]
OPERATING REVENUES:
Transportation and storage of natural gas	6	4	11	9
Operational Gas Sales
OPERATING REVENUES:
Transportation and storage of natural gas	$ 0	$ 0	$ 0	$ 67

XML

CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL - USD ($) $ in Millions	Total	Limited partner	Accumulated Other Comprehensive Loss
Stockholders' Equity, Balance	$ 1,794	$ 1,803	$ (9)
Other Comprehensive Income (Loss), Net of Tax	6	0	6
Net income	126	126	0
Stockholders' Equity, Other	0	(1)	1
Net income	152
Payments to Acquire Property, Plant, and Equipment	(26)
Stockholders' Equity, Balance	1,926	1,930	(4)
Net income	26	26	0
Stockholders' Equity, Balance	1,952	1,956	(4)
Stockholders' Equity, Balance	2,004	2,001	3
Other Comprehensive Income (Loss), Net of Tax	4	0	4
Net income	49	49	0
Stockholders' Equity, Other	1	(1)	0
Net income	75
Payments to Acquire Property, Plant, and Equipment	(31)
Stockholders' Equity, Balance	2,058	2,051	7
Other Comprehensive Income (Loss), Net of Tax	1	0	1
Net income	26	26	0
Stockholders' Equity, Balance	$ 2,085	$ 2,077	$ 8

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
OPERATING ACTIVITIES:
Net income	$ 26	$ 26	$ 75	$ 152
Reconciliation of net income to net cash provided by operating activities:
Net income	26	26	75	152
Depreciation and amortization	27	26	52	52
Other Noncash Income (Expense)			(2)	(5)
Increase (Decrease) in Other Operating Assets and Liabilities, Net			(95)	(62)
Net Cash Provided by (Used in) Operating Activities			223	270
Other non-cash			2	5
Changes in operating assets and liabilities			95	62
Net Cash Provided by (Used in) Operating Activities			223	270
INVESTING ACTIVITIES:
Capital expenditures			(31)	(26)
Net cash flows used in investing activities			(31)	(26)
FINANCING ACTIVITIES:
Related company note activity			192	244
Net cash flows used in financing activities			(192)	(244)
Net change in cash and cash equivalents			0	0
Cash and cash equivalents, beginning of period			0	0
Cash and cash equivalents, end of period	$ 0	$ 0	0	0
SUPPLEMENTAL INFORMATION:
Non-cash activity - Accrued capital expenditures			4	4
Cash paid for interest			8	8
Amortization of deferred financing fees			$ (1)	$ (1)

XML

Operations and Organization (Notes)

6 Months Ended

Jun. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Operations and Organization

ORGANIZATION AND BASIS OF PRESENTATION

Organization

PEPL and its subsidiaries primarily operate interstate pipelines that transport natural gas from the Gulf of Mexico, South Texas and the Panhandle region of Texas and Oklahoma to major United States markets in the Midwest and Great Lakes regions, as well as natural gas storage assets. These operations are subject to the rules and regulations of the FERC. PEPL’s subsidiaries are Trunkline, Sea Robin and Southwest Gas.

Southern Union Panhandle LLC, an indirect wholly-owned subsidiary of Energy Transfer, owns a 1% general partner interest in PEPL, and Energy Transfer indirectly owns a 99% limited partner interest in PEPL.

Basis of Presentation

The unaudited financial information included in this Form 10-Q has been prepared on the same basis as the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. In the opinion of the Company’s management, such financial information reflects all adjustments necessary for a fair presentation of the financial position and the results of operations for such interim periods in accordance with GAAP. All intercompany items and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP have been omitted pursuant to the rules and regulations of the SEC.

Use of Estimates

The unaudited consolidated financial statements have been prepared in conformity with GAAP, which includes the use of estimates and assumptions made by management that affect the reported amounts of assets, liabilities, revenues, expenses and disclosure of contingent assets and liabilities that exist at the date of the consolidated financial statements. Although these estimates are based on management’s available knowledge of current and expected future events, actual results could be different from those estimates.

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Related Party Transactions (Notes)

6 Months Ended

Jun. 30, 2022

Related Party Transactions [Abstract]

Related Party Transactions

RELATED PARTY TRANSACTIONS

The following table provides a summary of the related party activity included in our consolidated statements of operations:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Operating revenues	$	23	$	22	$	45	$	45
Operating and maintenance	3		5		8		8
General and administrative	6		7		13		13
Interest expense — related company	1		4		3		10

As of June 30, 2022 and December 31, 2021, the Company had $29 million and $221 million, respectively, outstanding under a note payable to its parent. The note payable accrues interest monthly with an annual interest rate of 4.99% as of June 30, 2022 and matures on July 31, 2027.

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FAIR VALUE MEASURES (Notes)	6 Months Ended
	Jun. 30, 2022
Fair Value Disclosures [Abstract]
Fair Value Disclosures [Text Block]	FAIR VALUE MEASURESAs of June 30, 2022 and December 31, 2021, other non-current assets included $36 million and $39 million, respectively, of investments carried at fair value. At June 30, 2022, $23 million in equity securities were valued at Level 1 and $13 million in fixed income securities were valued at Level 2. At December 31, 2021, $26 million in equity securities were valued at Level 1 and $13 million in fixed income securities were valued at Level 2. During the three months ended June 30, 2022 and 2021, the Company recognized $4 million in unrealized losses and $1 million in unrealized gains, respectively, on equity securities. During the six months ended June 30, 2022 and 2021, the Company recognized $6 million in unrealized losses and $3 million in unrealized gains, respectively, on equity securities. Unrealized gains and losses on equity securities are reflected in other, net in our consolidated statements of operations. The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair value. Based on the estimated borrowing rates currently available to the Company and its subsidiaries for loans with similar terms and average maturities, the aggregate fair value of the Company’s consolidated debt obligations (excluding related company balances) was $227 million and $253 million at June 30, 2022 and December 31, 2021, respectively. The fair value of the Company’s consolidated debt obligations is a Level 2 valuation based on the observable inputs used for similar liabilities. The Company did not have any Level 3 instruments measured at fair value at June 30, 2022 or December 31, 2021, and there were no transfers between hierarchy levels during the periods presented.

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Regulatory Matters, Commitments, Contingencies and Environmental (Notes)

6 Months Ended

Jun. 30, 2022

Regulatory Matters, Commitments, Contingencies And Environmental Liabilities [Abstract]

Commitments and Contingencies Disclosure

REGULATORY MATTERS, COMMITMENTS, CONTINGENCIES AND ENVIRONMENTAL LIABILITIES

Contingent Residual Support Agreement with ET

Under a contingent residual support agreement with Energy Transfer and Citrus ETP Finance LLC, the Company provides contingent, residual support to Citrus ETP Finance LLC with respect to Citrus ETP Finance LLC’s obligations to Energy Transfer to support the payment of certain ET senior notes. As of June 30, 2022, $1 billion in principal amount of such supported Energy Transfer senior notes remains outstanding.

FERC Proceedings

By the Order issued January 16, 2019, the FERC initiated a review of PEPL’s existing rates pursuant to Section 5 of the NGA to determine whether the rates currently charged by PEPL are just and reasonable and set the matter for hearing. On August 30, 2019, PEPL filed a general rate proceeding under Section 4 of the NGA. The NGA Section 5 and Section 4 proceedings were consolidated by order of the Chief Judge on October 1, 2019. A hearing in the combined proceedings commenced on August 25, 2020 and adjourned on September 15, 2020. The initial decision by the administrative law judge was issued on March 26, 2021. On April 26, 2021, PEPL filed its brief on exceptions to the initial decision. On May 17, 2021, PEPL filed its brief opposing exceptions in this proceeding. This matter remains pending before FERC.

Environmental Matters

The Company’s operations are subject to federal, state and local laws, rules and regulations regarding water quality, hazardous and solid waste management, air quality control and other environmental matters. These laws, rules and regulations require the Company to conduct its operations in a specified manner and to obtain and comply with a wide variety of environmental regulations, licenses, permits, inspections and other approvals. Failure to comply with environmental laws, rules and regulations may expose the Company to significant fines, penalties and/or interruptions in operations. The Company’s environmental policies and procedures are designed to achieve compliance with such applicable laws and regulations. These evolving laws and regulations and claims for damages to property, employees, other persons and the environment resulting from current or past operations may result in significant expenditures and liabilities in the future. The Company engages in a process of updating and revising its procedures for the ongoing evaluation of its operations to identify potential environmental exposures and enhance compliance with regulatory requirements.

The Company is responsible for environmental remediation at certain sites on its natural gas transmission systems for contamination resulting from the past use of lubricants containing polychlorinated biphenyls (“PCBs”) in compressed air systems; the past use of paints containing PCBs; and the prior use of wastewater collection facilities and other on-site disposal areas. The Company has implemented a program to remediate such contamination. The primary remaining remediation activity on the Company’s systems is associated with past use of paints containing PCBs or PCB impacts to equipment surfaces and to a building at one location. The PCB assessments are ongoing and the related estimated remediation costs are subject to further change. Other remediation typically involves the management of contaminated soils and may involve remediation of groundwater. Activities vary with site conditions and locations, the extent and nature of the contamination, remedial requirements, complexity and sharing of responsibility. The ultimate liability and total costs associated with these sites will depend upon many factors. If remediation activities involve statutory joint and several

liability provisions, strict liability, or cost recovery or contribution actions, the Company could potentially be held responsible for contamination caused by other parties. In some instances, the Company may share liability associated with contamination with other potentially responsible parties. The Company may also benefit from contractual indemnities that cover some or all of the cleanup costs. These sites are generally managed in the normal course of business or operations.

The Company’s environmental remediation activities are undertaken in cooperation with and under the oversight of appropriate regulatory agencies, enabling the Company under certain circumstances to take advantage of various voluntary cleanup programs in order to perform the remediation in the most effective and efficient manner.

The Company had accrued $1 million in non-current liabilities as of June 30, 2022 and December 31, 2021 to cover environmental remediation actions where management believes a loss is probable and reasonably estimable. The Company is not able to estimate the possible loss or range of loss in excess of amounts accrued. The Company does not have any material environmental remediation matters assessed as reasonably possible.

Liabilities for Litigation and Other Claims

The Company records accrued liabilities for litigation and other claim costs when management believes a loss is probable and reasonably estimable. When management believes there is at least a reasonable possibility that a material loss or an additional material loss may have been incurred, the Company discloses (i) an estimate of the possible loss or range of loss in excess of the amount accrued; or (ii) a statement that such an estimate cannot be made. As of June 30, 2022 and December 31, 2021, the Company had accrued liabilities for litigation and other contingencies of $107 million and $73 million, respectively, included in other non-current liabilities on the consolidated balance sheets. The Company does not have any material litigation or other claim contingency matters assessed as probable or reasonably possible that would require disclosure in the financial statements.

Other Commitments and Contingencies

The Company is subject to the laws and regulations of states and other jurisdictions concerning the identification, reporting and escheatment (the transfer of property to the state) of unclaimed or abandoned funds, and is subject to audit and examination for compliance with these requirements. The Company is currently being examined by a third party auditor on behalf of nine states for compliance with unclaimed property laws, and there are no material claim contingencies associated with the examination.

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OPERATIONS AND ORGANIZATION (Policies)

6 Months Ended

Jun. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and Significant Accounting Policies [Text Block]

Basis of Presentation

The unaudited financial information included in this Form 10-Q has been prepared on the same basis as the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. In the opinion of the Company’s management, such financial information reflects all adjustments necessary for a fair presentation of the financial position and the results of operations for such interim periods in accordance with GAAP. All intercompany items and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP have been omitted pursuant to the rules and regulations of the SEC.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The unaudited consolidated financial statements have been prepared in conformity with GAAP, which includes the use of estimates and assumptions made by management that affect the reported amounts of assets, liabilities, revenues, expenses and disclosure of contingent assets and liabilities that exist at the date of the consolidated financial statements. Although these estimates are based on management’s available knowledge of current and expected future events, actual results could be different from those estimates.

XML

Related Party Transactions (Tables)

6 Months Ended

Jun. 30, 2022

Related Party Transactions [Abstract]

Related Party Transactions [table text block]

The following table provides a summary of the related party activity included in our consolidated statements of operations:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Operating revenues	$	23	$	22	$	45	$	45
Operating and maintenance	3		5		8		8
General and administrative	6		7		13		13
Interest expense — related company	1		4		3		10

XML

Operations and Organization (Details) - Panhandle [Member]	6 Months Ended
	Jun. 30, 2022
Description of the Business
General partnership interest	1.00%
Limited partnership interest	99.00%

XML

Related Party Transactions (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Related Party Transactions [Abstract]
Operating revenues	$ 23	$ 22	$ 45	$ 45
Operating and maintenance	3	5	8	8
General and administrative	6	7	13	13
Interest Expense, Related Party	$ 1	$ 4	$ 3	$ 10

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Related Party (Narrative) (Details) - USD ($) $ in Millions	Jun. 30, 2022	Dec. 31, 2021
Related Party Transaction [Line Items]
Note payable to related company	$ 29	$ 221
ETO [Member]
Related Party Transaction [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.99%

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FAIR VALUE MEASURES (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Investments, Fair Value Disclosure	$ 36		$ 36		$ 39
Debt Instrument, Fair Value Disclosure	227		227		253
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net			0	$ 0
Equity Securities [Member]
Investments, Fair Value Disclosure	23		23		26
Fixed Income Securities [Member]
Investments, Fair Value Disclosure	13		13		$ 13
Available-for-sale Securities
Equity Securities, FV-NI, Unrealized Gain (Loss)	$ 4	$ (1)	$ 6	$ (3)

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Regulatory Matters, Commitments, Contingencies and Environmental (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2022	Dec. 31, 2021
Regulatory Matters, Commitments, Contingencies And Environmental Liabilities [Abstract]
Accrued Environmental Loss Contingencies, Noncurrent	$ 1	$ 1
Estimated litigation liability	107	73
Other Commitments [Line Items]
Accrued Environmental Loss Contingencies, Noncurrent	1	$ 1
Contingent Residual Support Agreement, Amount	$ 1,000