Equity Method Investments

The Company has two equity method investments, Constitution Pipeline Company, LLC (Constitution) and Meade Pipeline Co LLC (Meade), which are further described below. Activity related to these equity method investments is as follows:



	Constitution									Meade									Total
	Year Ended December 31,									Year Ended December 31,									Year Ended December 31,
(In thousands)	2018			2017			2016			2018			2017			2016			2018			2017			2016
Balance at beginning of period	$	732		$	96,850		$	90,345		$	85,345		$	32,674		$	13,172		$	86,077		$	129,524		$	103,517
Contributions	500			4,350			8,975			76,763			52,689			19,509			77,263			57,039			28,484
Distributions	—			—			—			(1,296		)	—			—			(1,296		)	—			—
Earnings (loss) on equity method investments	(1,232		)	(100,468		)	(2,470		)	2,369			(18		)	(7		)	1,137			(100,486		)	(2,477		)
Balance at end of period	$	—		$	732		$	96,850		$	163,181		$	85,345		$	32,674		$	163,181		$	86,077		$	129,524

Constitution Pipeline Company, LLC

In April 2012, the Company acquired a 25 percent equity interest in Constitution, which was formed to develop, construct and operate a 124-mile large diameter pipeline to transport natural gas from northeast Pennsylvania to both the New England and New York markets. Under the terms of the agreement, the Company agreed to invest its proportionate share of costs associated with the development and construction of the pipeline and related facilities, subject to a contribution cap of $250 million.

On April 22, 2016, Constitution announced that the New York State Department of Environmental Conservation (NYSDEC) denied Constitution's application for a Section 401 Water Quality Certification (Certification) for the New York State portion of its proposed 124-mile route. Since mid-2016, Constitution has sought relief of NYSDEC’s denial of the Certification by filing petitions in the U.S. Court of Appeals for the Second Circuit, the U.S. District Court for the Northern District of New York and the Federal Energy Regulatory Commission (FERC), all of which have been unsuccessful. On October 11, 2017, Constitution filed a petition for a declaratory order requesting the FERC to find that, by operation of law, the Section 401 Water Quality Certification requirement for the New York State portion of the pipeline project was waived due to the failure of the NYSDEC to act on Constitution’s application within a reasonable period of time, as required by the Clean Water Act. On January 11, 2018, the FERC denied Constitution’s petition and later denied its subsequent rehearing request. On January 16, 2018, Constitution petitioned the U.S. Supreme Court to review the judgment of the U.S. Court of Appeals for the Second Circuit, which petition was denied on April 30, 2018. On September 14, 2018, Constitution petitioned the U.S. Court of Appeals for the D.C. Circuit to review the FERC’s denial of the petition for declaratory order. On November 5, 2018, the D.C. Circuit ordered that Constitution’s appeal be held in abeyance, pending the disposition of another case with similar issues presented, which was argued to the Court on October 1, 2018. That case, Hoopa Valley Tribe V. FERC, was decided by the D.C Circuit on January 25, 2019 in favor of the petitioner, who had asked the Court to find that a state agency had waived its Clean Water Act Section 401 authority by failing to act within a reasonable time and not within the one-year statutory period. The Court held that the petitioner's withdrawal and re-submission of Section 401 Water Quality Certification requests did not trigger new, statutory one-year periods of review for the state agencies. The Court vacated and remanded the underlying orders and ordered the FERC to proceed with its review of petitioner’s hydroelectric license application. Constitution’s appeal remains pending and the impact of the Hoopa Valley case on Constitution’s appeal has not yet been determined. Constitution has stated its intention to continue to pursue this appeal and all available legal challenges to the NYDEC’s denial of the Certification and remains committed to the project. In light of the current status of the remaining litigation and regulatory challenges, Constitution is unable to reasonably estimate its target in-service date.

The Company evaluated its investment in Constitution for other than temporary impairment (OTTI) as of December 31, 2017. The Company’s evaluation considered various factors, including but not limited to prior FERC approval and the related economic viability of the project, the other members’ continued commitment to the project and the preceding legal and regulatory actions. In light of the recent actions taken by the courts and regulators to uphold the NYDEC’s denial of the certification and the Company's estimation of the likelihood of an unfavorable outcome associated with the remaining legal and regulatory challenges, the Company recorded an OTTI of $95.9 million in December 2017, reducing its investment in Constitution to its estimated fair value. Fair value was determined using a market approach. The Company will continue to monitor the carrying value of its investment as required.

As of December 31, 2018, the Company’s carrying value of its investment in Constitution is less than its proportionate share of Constitution’s net assets by $95.9 million. This basis difference is due to the Company’s impairment recorded in the fourth quarter of 2017 and relates entirely to the pipeline assets of Constitution. The Company expects to amortize this basis difference once the related assets of Constitution are placed in service, which may or may not occur, depending on the outcome of the legal and regulatory process.

At this time, the Company remains committed to funding the project in an amount in proportion to its ownership interest for the duration of the remaining legal and regulatory challenges and if successful, the development and construction of the new pipeline.

Meade Pipeline Co LLC

In February 2014, the Company acquired a 20 percent equity interest in Meade, which was formed to participate in the development and construction of the Central Penn Line, a 177-mile pipeline operated by Transcontinental Gas Pipe Line Company, LLC (Transco) that transports natural gas from Susquehanna County, Pennsylvania to an interconnect with Transco’s mainline in Lancaster County, Pennsylvania. The Central Penn Line is owned by Transco and Meade in proportion to their respective ownership percentages of approximately 61 percent and 39 percent, respectively. The FERC authorized the construction of the new pipeline on February 3, 2017 and the Central Penn Line was placed into service on October 6, 2018.

On August 14, 2018, the Company entered into a precedent agreement with Transco for up to 250,000 Dth per day of firm transportation capacity on Transco's proposed Leidy South expansion project. The Company will also be participating as an equity owner in the expansion project through its ownership in Meade and expects to contribute approximately $17.1 million, its proportionate share of the anticipated costs of the expansion project over the next three years. The expansion project is anticipated to be in-service as early as the fourth quarter of 2021, assuming all necessary regulatory approvals are received in a timely manner and construction proceeds on schedule.