~~Table~~UNITED ~~of Contents~~STATES

~~UNITED~~SECURITIES ~~STATES~~AND EXCHANGE COMMISSION

~~SECURITIES~~Washington, ~~AND~~D.C. ~~EXCHANGE COMMISSION~~ 20549

~~Washington,~~FORM ~~D.C. 20549~~ 10-Q

~~FORM~~(Mark ~~10-Q~~ one)

~~(Mark~~☒ ~~one~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☒For ~~QUARTERLY~~the ~~REPORT~~quarterly ~~PURSUANT~~period TOended ~~SECTION~~June 30, 132017 ~~OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

~~For the quarterly period ended March 31, 2017~~ or

or☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐For ~~TRANSITION~~the ~~REPORT~~transition ~~PURSUANT~~period ~~TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~from to

For the transition period from to


Commission File Number	Exact name of registrant as specified in its charter	I.R.S. Employer Identification Number

333-69210	QUESTAR GAS COMPANY	87-0155877

	333 SOUTH STATE STREET SALT LAKE CITY, UTAH 84145 (801) 324-5000

Commission File Number	Exact name of registrants as specified in their charters	I.R.S. Employer Identification Number
333-69210	QUESTAR GAS COMPANY	87-0155877
	333 SOUTH STATE STREET SALT LAKE CITY, UTAH 84145 (801) 324-5000

State or other jurisdiction of incorporation or organization of the registrant: Utah

~~State~~Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or ~~other~~15(d) ~~jurisdiction~~of the Securities Exchange Act of ~~incorporation~~1934 during the preceding 12 months (or ~~organization~~for ofsuch shorter period that the registrant: ~~Utah~~was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

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 ☐ No ☒

~~Yes ☐ No ☒~~Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ☒ No ☐

~~Yes ☒ No ☐~~Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting 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.

~~Indicate~~Large ~~by check mark whether the registrant is a large~~ accelerated filer, an☐ ~~accelerated~~Accelerated filer, a☐ ~~non~~Non-accelerated filer or☒ (Do not check if a smaller reporting company.) ~~See the~~Smaller ~~definitions of “large accelerated filer,” “accelerated filer,” “smaller~~ reporting company,” ~~and~~☐ ~~“emerging~~Emerging growth company” ~~in Rule 12b-2 of the Exchange Act.~~ ☐

~~Large~~If ~~accelerated~~an ~~filer~~emerging ☐growth ~~Accelerated~~company, ~~filer~~indicate ☐by ~~Non-accelerated~~check ~~filer~~mark ☒if ~~(Do~~the registrant has elected not ~~check~~to ifuse athe ~~smaller~~extended ~~reporting~~transition ~~company)~~period ~~Smaller~~for ~~reporting~~complying ~~company~~with ☐any ~~Emerging~~new ~~growth~~or ~~company~~revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

IfIndicate ~~an emerging growth company, indicate~~ by check mark ifwhether the registrant ~~has~~is ~~elected~~a ~~not~~shell tocompany ~~use~~(as ~~the~~defined ~~extended~~by ~~transition~~Rule ~~period for~~12b-2 ~~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 by Rule 12b-2 of the Act).~~ Yes ☐ No ☒

~~Yes ☐ No ☒~~Questar Gas does not have any voting or non-voting common equity held by non-affiliates. As of July 14, 2017, Questar Gas had 9,189,626 shares of common stock outstanding.

~~Questar~~QUESTAR ~~Gas~~GAS ~~does~~COMPANY ~~not~~MEETS ~~have~~THE ~~any~~CONDITIONS ~~voting~~SET orFORTH ~~non-voting~~IN ~~common~~GENERAL ~~equity~~INSTRUCTION ~~held~~H(1)(a) byAND ~~non-affiliates.~~(b) AsOF ofFORM ~~April 14,~~10-Q ~~2017,~~AND ~~Questar~~IS ~~Gas~~FILING ~~had~~THIS ~~9,189,626~~FORM ~~shares~~10-Q ofUNDER ~~common stock~~THE ~~outstanding.~~REDUCED DISCLOSURE FORMAT.

~~QUESTAR~~Questar ~~GAS~~Gas ~~COMPANY MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b) OF FORM 10-Q AND IS FILING THIS FORM 10-Q UNDER THE REDUCED DISCLOSURE FORMAT.~~ Company

		Page Number

	Glossary of Terms	3

	PART I. Financial Information

Item 1.	Financial Statements	4

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17

Item 4.	Controls and Procedures	20


	PART II. Other Information

Item 1.	Legal Proceedings	21

Item 1A.	Risk Factors	21

Item 6.	Exhibits	22

~~Questar Gas Company~~ 2

		PageNumber
	Glossary of Terms		3
	PART I. Financial Information
Item 1.	Financial Statements		4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		16
Item 4.	Controls and Procedures		19
	PART II. Other Information
Item 1.	Legal Proceedings		20
Item 1A.	Risk Factors		20
Item 6.	Exhibits		21

GLOSSARY OF TERMS

2The following abbreviations or acronyms used in this Form 10-Q are defined below:

Abbreviation or Acronym		Definition

ARO		Asset retirement obligation

bcf		Billion cubic feet

CEO		Chief Executive Officer

CERCLA		Comprehensive Environmental Response, Compensation and Liability Act of 1980, also known as Superfund

CET		Conservation enabling tariff

CFO		Chief Financial Officer

DEQPS		Dominion Energy Questar Pipeline Services, Inc. (formerly known as QPC Services Company)

Dominion Energy		The legal entity, Dominion Energy, Inc. (formerly known as Dominion Resources, Inc.), one or more of its consolidated subsidiaries (other than Dominion Energy Questar or Questar Gas) or operating segments, or the entirety of Dominion Energy, Inc. and its consolidated subsidiaries

Dominion Energy Gas		The legal entity, Dominion Energy Gas Holdings, LLC (formerly known as Dominion Gas Holdings, LLC), one or more of its consolidated subsidiaries or operating segment, or the entirety of Dominion Energy Gas Holdings, LLC and its consolidated subsidiaries

Dominion Energy Questar		The legal entity, Dominion Energy Questar Corporation (formerly known as Dominion Questar Corporation), one or more of its consolidated subsidiaries or operating segment, or the entirety of Dominion Energy Questar Corporation and its consolidated subsidiaries

Dominion Energy Questar Combination		Dominion Energy's acquisition of Dominion Energy Questar completed on September 16, 2016 pursuant to the terms of the agreement and plan of merger entered on January 31, 2016

Dominion Energy Questar Pipeline		Dominion Energy Questar Pipeline, LLC (formerly known as Questar Pipeline, LLC), one or more of its consolidated subsidiaries, or the entirety of Dominion Energy Questar Pipeline, LLC and its consolidated subsidiaries

Dth		Dekatherm

EEP		Energy-efficiency program

EPA		Environmental Protection Agency

FERC		Federal Energy Regulatory Commission

GAAP		U.S. generally accepted accounting principles

Gas Infrastructure		Gas Infrastructure Group operating segment

GHG		Greenhouse gas

Idaho Commission		Idaho Public Utilities Commission

IRCA		Intercompany revolving credit agreement

MD&A		Management's Discussion and Analysis of Financial Condition and Results of Operations

Questar Gas		The legal entity Questar Gas Company

SEC		Securities and Exchange Commission

Utah Commission		Public Service Commission of Utah

VIE		Variable interest entity

Virginia Power		The legal entity, Virginia Electric and Power Company, one or more of its consolidated subsidiaries or operating segments, or the entirety of Virginia Power and its consolidated subsidiaries

Wexpro		The legal entity, Wexpro Company, one or more of its consolidated subsidiaries, or the entirety of Wexpro Company and its consolidated subsidiaries

Wyoming Commission		Wyoming Public Service Commission

~~GLOSSARY OF TERMS~~ 3

~~The~~PART ~~following~~I. ~~abbreviations~~FINANCIAL ~~or acronyms used in this Form 10-Q are defined below:~~ INFORMATION

Abbreviation or Acronym		Definition
ARO		Asset retirement obligation
bcf		Billion cubic feet
CEO		Chief Executive Officer
CERCLA		Comprehensive Environmental Response, Compensation and Liability Act of 1980
CET		Conservation enabling tariff
CFO		Chief Financial Officer
Dominion		The legal entity, Dominion Resources, Inc., one or more of its consolidated subsidiaries (other than Dominion Questar or Questar Gas) or operating segments, or the entirety of Dominion Resources, Inc. and its consolidated subsidiaries
Dominion Gas		The legal entity, Dominion Gas Holdings, LLC, one or more of its consolidated subsidiaries or operating segment, or the entirety of Dominion Gas Holdings, LLC and its consolidated subsidiaries
Dominion Questar		The legal entity, Dominion Questar Corporation, one or more of its consolidated subsidiaries or operating segment, or the entirety of Dominion Questar Corporation and its consolidated subsidiaries
Dominion Questar Combination		Dominion’s acquisition of Dominion Questar completed on September 16, 2016 pursuant to the terms of the agreement and plan of merger entered on January 31, 2016
Dth		Dekatherm
EEP		Energy-efficiency program
EPA		Environmental Protection Agency
FERC		Federal Energy Regulatory Commission
GAAP		U.S. generally accepted accounting principles
GHG		Greenhouse gas
Idaho Commission		Idaho Public Utilities Commission
IRCA		Intercompany revolving credit agreement
MD&A		Management’s Discussion and Analysis of Financial Condition and Results of Operations
Questar Gas		The legal entity Questar Gas Company
Questar Pipeline		Questar Pipeline, LLC, one or more of its consolidated subsidiaries, or the entirety of Questar Pipeline, LLC and its consolidated subsidiaries
SEC		Securities and Exchange Commission
Utah Commission		Public Service Commission of Utah
Virginia Power		The legal entity, Virginia Electric and Power Company, one or more of its consolidated subsidiaries or operating segments, or the entirety of Virginia Power and its consolidated subsidiaries
Wexpro		The legal entity, Wexpro Company, one or more of its consolidated subsidiaries, or the entirety of Wexpro Company and its consolidated subsidiaries
Wyoming Commission		Wyoming Public Service Commission

ITEM 1. FINANCIAL STATEMENTS

3QUESTAR GAS COMPANY

~~Table~~STATEMENTS ofOF ~~Contents~~INCOME

~~PART I. FINANCIAL INFORMATION~~ (Unaudited)

ITEM 1. FINANCIAL STATEMENTS

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2017			2016			2017		2016
(millions)
Operating Revenue⁽¹⁾	$	139.7		$	128.2		$	536.6	$	536.1
Operating Expenses
Cost of sales⁽¹⁾		75.5			67.8			316.8		324.7
Other operations and maintenance⁽¹⁾		44.6			36.3			86.3		83.9
Depreciation and amortization		16.5			15.0			32.7		29.7
Other taxes		5.6			5.3			11.4		10.6
Total Operating Expenses		142.2			124.4			447.2		448.9
Income (loss) from operations		(2.5	)		3.8			89.4		87.2
Other income		1.0			0.9			2.0		1.9
Interest expense⁽¹⁾		8.5			7.5			17.0		15.2
Income (loss) from operations before income tax expense		(10.0	)		(2.8	)		74.4		73.9
Income tax expense (benefit)		(3.8	)		(1.2	)		28.4		27.9
Net Income (Loss)	$	(6.2	)	$	(1.6	)	$	46.0	$	46.0

~~QUESTAR~~(1) ~~GAS~~See ~~COMPANY~~Note 12 for amounts attributable to related parties.

~~STATEMENTS~~The OFaccompanying ~~INCOME~~notes are an integral part of Questar Gas' Financial Statements.

~~(Unaudited)~~ 4

	Three Months Ended
	March 31,
	2017		2016
(millions)
Operating Revenue(1)	$	396.9	$	407.9
Operating Expenses
Cost of sales(1)		241.3		256.9
Other operations and maintenance(1)		41.7		47.6
Depreciation and amortization		16.2		14.7
Other taxes		5.8		5.3
Total Operating Expenses		305.0		324.5
Income from operations		91.9		83.4
Other income		1.0		1.0
Interest expense(1)		8.5		7.7
Income from operations before income tax expense		84.4		76.7
Income tax expense		32.2		29.1
Net Income	$	52.2	$	47.6

QUESTAR GAS COMPANY

~~(1)~~BALANCE ~~See Note 11 for amounts attributable to related parties.~~SHEETS

~~The accompanying notes are an integral part of Questar Gas’ Financial Statements.~~ (Unaudited)

	June 30,			December 31,
	2017			2016⁽¹⁾
(millions)
ASSETS
Current Assets
Cash and cash equivalents	$	2.1		$	7.6
Customer receivables (less allowance for doubtful accounts of $2.0 and $1.7 )		52.3			163.7
Receivable from affiliates		0.6			0.6
Inventories at lower of average cost or market:
Gas stored underground		21.8			49.3
Materials and supplies		25.7			27.6
Regulatory assets		13.4			9.6
Other		5.0			3.7
Total current assets		120.9			262.1
Property, Plant and Equipment
Property, plant and equipment		2,917.9			2,883.0
Accumulated depreciation and amortization		(727.6	)		(737.6	)
Total property, plant and equipment, net		2,190.3			2,145.4
Deferred Charges and Other Assets
Receivable from affiliates		98.6			87.8
Other noncurrent assets		12.1			11.2
Total deferred charges and other assets		110.7			99.0
Total assets	$	2,421.9		$	2,506.5

~~Table~~(1) ofQuestar ~~Contents~~Gas' Balance Sheet at December 31, 2016 has been derived from the audited Balance Sheet at that date.

~~QUESTAR~~The ~~GAS~~accompanying ~~COMPANY~~notes are an integral part of Questar Gas' Financial Statements.

~~BALANCE SHEETS~~ 5

~~(Unaudited)~~QUESTAR GAS COMPANY

	March 31,2017			December 31,2016(1)
(millions)
ASSETS
Current Assets
Cash and cash equivalents	$	10.0		$	7.6
Customer receivables (less allowance for doubtful accounts of $2.6 and $1.7)		136.7			163.7
Receivable from affiliates		1.4			0.6
Inventories at lower of average cost or market:
Gas stored underground		8.9			49.3
Materials and supplies		25.4			27.6
Regulatory assets		1.9			9.6
Other		3.0			3.7
Total current assets		187.3			262.1
Property, Plant and Equipment
Property, plant and equipment		2,879.6			2,883.0
Accumulated depreciation and amortization		(721.4	)		(737.6	)
Total property, plant and equipment, net		2,158.2			2,145.4
Deferred Charges and Other Assets
Receivable from affiliates		100.3			87.8
Other noncurrent assets		11.2			11.2
Total deferred charges and other assets		111.5			99.0
Total assets	$	2,457.0		$	2,506.5

BALANCE SHEETS—(Continued)

(1Unaudited) ~~Questar Gas’ Balance Sheet at December 31, 2016 has been derived from the audited Balance Sheet at that date.~~

The accompanying notes are an integral part of Questar Gas’ Financial Statements.

	June 30,		December 31,
	2017		2016⁽¹⁾
(millions)
LIABILITIES AND EQUITY
Current Liabilities
Securities due within one year	$	134.5	$	14.5
Short-term debt		135.0		200.0
Affiliated current borrowings		10.0		48.0
Accounts payable and accrued expenses		71.1		117.2
Accounts payable to affiliates		42.7		43.5
Customer advances		11.8		27.9
Regulatory liabilities		9.1		6.5
Other current liabilities		2.8		1.7
Total current liabilities		417.0		459.3
Long-Term Debt		496.5		616.3
Deferred Credits and Other Liabilities
Deferred income taxes		504.3		475.8
Regulatory liabilities		190.8		189.1
Payables to affiliates		12.8		13.0
Other noncurrent liabilities		96.9		95.4
Total deferred credits and other liabilities		804.8		773.3
Total liabilities		1,718.3		1,848.9
Commitments and Contingencies (see Note 9)
Equity
Common stock - par value $2.50⁽²⁾		23.0		23.0
Additional paid-in capital		272.5		272.5
Retained earnings		408.1		362.1
Total common shareholder's equity		703.6		657.6
Total liabilities and shareholder's equity	$	2,421.9	$	2,506.5

5(1) Questar Gas' Balance Sheet at December 31, 2016 has been derived from the audited Balance Sheet at that date.

~~Table~~(2) of50.0 ~~Contents~~million shares authorized; 9.2 million shares outstanding at June 30, 2017 and December 31, 2016.

~~QUESTAR~~The ~~GAS~~accompanying ~~COMPANY~~notes are an integral part of Questar Gas' Financial Statements.

~~BALANCE SHEETS—(Continued)~~ 6

~~(Unaudited)~~QUESTAR GAS COMPANY

	March 31,2017		December 31,2016(1)
(millions)
LIABILITIES AND EQUITY
Current Liabilities
Securities due within one year	$	84.5	$	14.5
Short-term debt		147.0		200.0
Affiliated current borrowings		—		48.0
Accounts payable and accrued expenses		70.3		117.2
Accounts payable to affiliates		68.9		43.5
Customer advances		9.8		27.9
Regulatory liabilities		28.7		6.5
Other current liabilities		1.7		1.7
Total current liabilities		410.9		459.3
Long-Term Debt		546.4		616.3
Deferred Credits and Other Liabilities
Deferred income taxes		491.4		475.8
Regulatory liabilities		190.8		189.1
Payables to affiliates		13.1		13.0
Other noncurrent liabilities		94.6		95.4
Total deferred credits and other liabilities		789.9		773.3
Total liabilities		1,747.2		1,848.9
Commitments and Contingencies (see Note 9)
Equity
Common stock - par value $2.50(2)		23.0		23.0
Additional paid-in capital		272.5		272.5
Retained earnings		414.3		362.1
Total common shareholder’s equity		709.8		657.6
Total liabilities and shareholder’s equity	$	2,457.0	$	2,506.5

STATEMENTS OF CASH FLOWS

(1Unaudited) ~~Questar Gas’ Balance Sheet at December 31, 2016 has been derived from the audited Balance Sheet at that date.~~

(2) 50.0 million shares authorized; 9.2 million shares outstanding at March 31, 2017 and December 31, 2016.

Six Months Ended June 30,	2017			2016
(millions)
Operating Activities
Net income	$	46.0		$	46.0
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		32.7			32.6
Deferred income taxes		28.5			12.5
Other adjustments for non-cash items		0.5			0.8
Changes in operating assets and liabilities		65.0			182.3
Net cash provided by operating activities		172.7			274.2
Investing Activities
Property, plant and equipment purchased		(75.4	)		(124.3	)
Cash used in disposition of assets		—			(1.2	)
Other		0.2			—
Net cash used in investing activities		(75.2	)		(125.5	)
Financing Activities
Repayment of short-term debt, net		(65.0	)		—
Repayment of affiliated current borrowings, net		(38.0	)		(144.3	)
Dividends paid to Dominion Energy Questar		—			(20.0	)
Other		—			5.1
Net cash used in financing activities		(103.0	)		(159.2	)
Decrease in cash and cash equivalents		(5.5	)		(10.5	)
Cash and cash equivalents at beginning of year		7.6			10.5
Cash and cash equivalents at end of year	$	2.1		$	—
Supplemental Cash Flow Information
Significant noncash investing activities:
Accrued capital expenditures	$	18.8		$	22.6

The accompanying notes are an integral part of Questar Gas’' Financial Statements.

6 7

~~Table~~NOTES ofTO ~~Contents~~FINANCIAL STATEMENTS

~~QUESTAR GAS COMPANY~~ (Unaudited)

~~STATEMENTS~~Note OF1. Nature ~~CASH~~of ~~FLOWS~~ Operations

~~(Unaudited)~~Questar Gas is a wholly-owned subsidiary of Dominion Energy Questar which, effective September 2016, is a wholly-owned subsidiary of Dominion Energy.

	Three Months Ended
	March 31,
	2017			2016
(millions)
Operating Activities
Net income	$	52.2		$	47.6
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		16.2			16.1
Deferred income taxes		15.7			1.7
Other adjustments for non-cash items		0.2			0.4
Changes in operating assets and liabilities		53.8			125.5
Net cash provided by operating activities		138.1			191.3
Investing Activities
Property, plant and equipment purchased		(35.0	)		(59.1	)
Cash used in disposition of assets		—			(0.7	)
Proceeds from disposition of assets		0.3			0.1
Net cash used in investing activities		(34.7	)		(59.7	)
Financing Activities
Repayment of short-term debt, net		(53.0	)		—
Repayment of affiliated current borrowings, net		(48.0	)		(132.8	)
Dividends paid to Dominion Questar		—			(10.0	)
Other		—			0.7
Net cash used in financing activities		(101.0	)		(142.1	)
Increase (decrease) in cash and cash equivalents		2.4			(10.5	)
Cash and cash equivalents at beginning of year		7.6			10.5
Cash and cash equivalents at end of year	$	10.0		$	—
Supplemental Cash Flow Information
Significant noncash investing activities:
Accrued capital expenditures	$	11.5		$	14.7

Questar Gas distributes natural gas as a public utility in Utah, southwestern Wyoming and a small portion of southeastern Idaho. The Utah, Wyoming and Idaho Commissions have granted Questar Gas the necessary regulatory approvals to serve these areas. Questar Gas also has long-term franchises granted by communities and counties within its service area.

Revenue generated by Questar Gas is based primarily on rates established by the Utah and Wyoming Commissions. The ~~accompanying~~Idaho ~~notes~~Commission ~~are~~has ancontracted ~~integral~~with ~~part~~the Utah Commission for rate oversight of Questar Gas’ ~~Financial~~operations ~~Statements.~~in Idaho.

7Wexpro, an affiliate, provides the majority of Questar Gas' natural gas supply and Dominion Energy Questar Pipeline, an affiliate, provides the majority of Questar Gas' transportation and storage services.

~~Table~~Note of2. Significant ~~Contents~~Accounting Policies

~~NOTES~~As TOpermitted ~~FINANCIAL~~by ~~STATEMENTS~~the rules and regulations of the SEC, Questar Gas' accompanying unaudited Financial Statements contain certain condensed financial information and exclude certain footnote disclosures normally included in annual audited financial statements prepared in accordance with GAAP. These unaudited Financial Statements should be read in conjunction with the Financial Statements and Notes in Questar Gas' Annual Report on Form 10-K for the year ended December 31, 2016.

~~(Unaudited)~~In the opinion of management, the accompanying unaudited Financial Statements contain all adjustments necessary to present fairly its financial position as of June 30, 2017, its results of operations for the three and six months ended June 30, 2017 and 2016 and its cash flows for the six months ended June 30, 2017 and 2016. Such adjustments are normal and recurring in nature unless otherwise noted.

~~Note~~Questar 1Gas makes certain estimates and assumptions in preparing its Financial Statements in accordance with GAAP. ~~Nature~~ These estimates and assumptions affect the reported amounts of ~~Operations~~ assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues, expenses and cash flows for the periods presented. Actual results may differ from those estimates.

~~Questar~~The ~~Gas~~results isof aoperations ~~wholly-owned~~for ~~subsidiary~~interim periods are not necessarily indicative of ~~Dominion~~the ~~Questar~~results ~~which,~~expected ~~effective~~for ~~September~~the ~~2016,~~full year. Information for quarterly periods is aaffected ~~wholly-owned~~by ~~subsidiary~~seasonal ofvariations ~~Dominion~~in sales, rate changes, purchased gas expenses and other factors.

Questar Gas ~~distributes~~reports ~~natural~~certain ~~gas~~contracts ~~as a public utility in Utah, southwestern Wyoming~~ and ainstruments ~~small~~at ~~portion~~fair ~~of southeastern Idaho~~value. ~~The~~See ~~Utah,~~Note ~~Wyoming~~4 ~~and Idaho~~for ~~Commissions~~further ~~have~~information ~~granted~~on ~~Questar~~fair ~~Gas~~value ~~the necessary regulatory approvals to serve these areas~~measurements. ~~Questar Gas also has long-term franchises granted by communities and counties within its service area.~~

~~Revenue~~Certain ~~generated~~amounts byin ~~Questar~~the ~~Gas~~2016 isFinancial ~~based~~Statements ~~primarily~~and onNotes ~~rates~~have ~~established~~been byreclassified to conform to the ~~Utah~~2017 ~~and~~presentation ~~Wyoming~~for ~~Commissions~~comparative purposes. The ~~Idaho~~reclassifications ~~Commission~~did ~~has~~not ~~contracted~~affect ~~with~~Questar ~~the Utah~~Gas' ~~Commission~~net ~~for~~income, ~~rate~~total ~~oversight~~assets, ofliabilities, ~~Questar~~equity ~~Gas~~or ~~operations~~cash ~~in Idaho~~flows.

~~Wexpro,~~Note ~~an affiliate, provides the majority of Questar Gas’ natural gas supply and Questar Pipeline, an affiliate, provides the majority of Questar Gas’ transportation and storage services~~3. Operating Revenue

~~Note~~Questar ~~2. Significant Accounting~~Gas' ~~Policies~~operating revenue consists of the following:

As permitted by the rules and regulations of the SEC, Questar Gas’ accompanying unaudited Financial Statements contain certain condensed financial information and exclude certain footnote disclosures normally included in annual audited financial statements prepared in accordance with GAAP. These unaudited Financial Statements should be read in conjunction with the Financial Statements and Notes in Questar Gas’ Annual Report on Form 10-K for the year ended December 31, 2016.

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
(millions)
Residential and commercial gas sales	$	122.0	$	112.9	$	500.5	$	504.6
Industrial gas sales		3.1		4.5		6.3		9.5
Gas transportation		6.3		5.7		13.2		11.7
Other⁽¹⁾		8.3		5.1		16.6		10.3
Total operating revenue	$	139.7	$	128.2	$	536.6	$	536.1

In(1) ~~the~~See ~~opinion~~Note of11 ~~management, the~~for ~~accompanying~~amounts ~~unaudited~~attributable ~~Financial Statements contain all adjustments necessary~~ to ~~present~~related fairly its financial position as of March 31, 2017, its results of operations for the three months ended March 31, 2017 and 2016 and its cash flows for the three months ended March 31, 2017 and 2016parties. ~~Such adjustments are normal and recurring in nature unless otherwise noted.~~

Questar Gas makes certain estimates and assumptions in preparing its Financial Statements in accordance with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues, expenses and cash flows for the periods presented. Actual results may differ from those estimates. 8

~~The~~Note ~~results of operations for interim periods are not necessarily indicative of the results expected for the full year~~4. Fair ~~Information~~Value ~~for quarterly periods is affected by seasonal variations in sales, rate changes, purchased gas expenses and other factors.~~ Measurements

Questar Gas' ~~reports~~fair ~~certain~~value ~~contracts~~measurements ~~and~~are ~~instruments at~~made ~~fair~~in ~~value~~accordance with the policies discussed in Note 5 to the Financial Statements in Questar Gas' Annual Report on Form 10-K for the year ended December 31, 2016. See Note 45 in this report for further information onabout ~~fair~~Questar ~~value~~Gas' ~~measurements.~~derivatives and hedge accounting activities.

~~Certain~~Questar ~~amounts~~Gas inenters ~~the~~into ~~2016~~certain ~~Financial~~physical ~~Statements~~forwards and ~~Notes~~options, which are considered Level 3 as they have ~~been reclassified~~one toor ~~conform~~more inputs that are not observable and are significant to the ~~2017~~valuation. ~~presentation~~The discounted cash flow method is used to value Level 3 physical forward contracts. An option model is used to value Level 3 physical options. The discounted cash flow model for ~~comparative~~forwards ~~purposes~~calculates mark-to-market valuations based on forward market prices, original transaction prices, volumes, risk-free rate of return, and credit spreads. The ~~reclassifications~~option ~~did~~model ~~not~~calculates ~~affect~~mark-to-market ~~Questar~~valuations ~~Gas’~~using ~~net~~variations ~~income~~of the Black-Scholes option model. The inputs into the models are the forward market prices, ~~total~~implied ~~assets~~price volatilities, ~~liabilities~~risk-free rate of return, ~~equity~~the oroption ~~cash~~expiration ~~flows~~dates, the option strike prices, the original sales prices, and volumes. For Level 3 fair value measurements, forward market prices and implied price volatilities are considered unobservable. The unobservable inputs are developed and substantiated using historical information, available market data, third-party data, and statistical analysis. Periodically, inputs to valuation models are reviewed and revised as needed, based on historical information, updated market data, market liquidity and relationships, and changes in third-party pricing sources.

~~Note~~The following table presents Questar Gas' quantitative information about Level 3. fair value measurements at June ~~Operating~~30, ~~Revenue~~2017. The range and weighted average are presented in dollars for market price inputs and percentages for price volatility.

Questar Gas’ operating revenue consists of the following:

Fair Value

(millions)

Valuation Techniques

Unobservable Input

Range

Weighted

Average⁽¹⁾

Assets

Physical options:

Natural gas

0.3

Option model

Market price (per Dth)

⁽²

⁾

3.2 - 3.4

3.3

Price volatility

⁽³

⁾

25.1% - 31.7%

27.7

Total assets

0.3

Liabilities

Physical forwards:

Natural gas⁽⁴⁾

0.5

Discounted cash flow

Market price (per Dth)

⁽²

⁾

2.3 - 3.4

2.9

Total liabilities

0.5

	Three Months Ended
	March 31,
	2017		2016
(millions)
Residential and commercial gas sales	$	378.5	$	391.7
Industrial gas sales		3.2		5.0
Gas transportation		6.9		6.0
Other(1)		8.3		5.2
Total operating revenue	$	396.9	$	407.9

(1)	Averages weighted by volume.

(12) ~~See~~Represents ~~Note~~market 11prices ~~for~~beyond ~~amounts~~defined ~~attributable~~terms tofor ~~related~~Level ~~parties~~1 and 2.

8(3) Represents volatilities unrepresented in published markets.

~~Table~~(4) ofIncludes ~~Contents~~basis.

~~Note~~Sensitivity ~~4. Fair~~of ~~Value~~the ~~Measurements~~fair value measurements to changes in the significant unobservable inputs is as follows:

~~Questar~~Significant ~~Gas’~~Unobservable ~~fair~~Inputs ~~value~~Position ~~measurements~~Change ~~are made in accordance with the policies discussed in Note 5~~ to ~~the~~Input ~~Financial~~Impact ~~Statements~~on inFair ~~Questar~~Value ~~Gas’~~Measurement ~~Annual Report~~Market onprice ~~Form~~Buy ~~10-K~~Increase ~~for~~(decrease) ~~the~~Gain ~~year~~(loss) ~~ended~~Market ~~December 31,~~price ~~2016.~~Sell ~~See~~Increase ~~Note~~(decrease) 5Loss in(gain) ~~this~~Price ~~report~~volatility ~~for~~Buy ~~further~~Increase ~~information~~(decrease) ~~about~~Gain ~~Questar~~(loss) ~~Gas’~~Price ~~derivatives~~volatility ~~and~~Sell ~~hedge~~Increase ~~accounting~~(decrease) ~~activities.~~Loss (gain)

Questar Gas enters into certain physical forwards, which are considered Level 3 as they have one or more inputs that are not observable and are significant to the valuation. The discounted cash flow method is used to value Level 3 physical forward contracts. The discounted cash flow model for forwards calculates mark-to-market valuations based on forward market prices, original transaction prices, volumes, risk-free rate of return, and credit spreads. For Level 3 fair value measurements, forward market prices are considered unobservable. The unobservable inputs are developed and substantiated using historical information, available market data, third-party data, and statistical analysis. Periodically, inputs to valuation models are reviewed and revised as needed, based on historical information, updated market data, market liquidity and relationships, and changes in third-party pricing sources. 9

~~The~~Recurring ~~following~~Fair ~~table~~Value ~~presents Questar Gas’ quantitative information about Level 3 fair value measurements at March 31, 2017. The range and weighted average are presented in dollars for market price inputs.~~ Measurements

Fair Value(millions)

Valuation Techniques

Unobservable Input

Range

WeightedAverage(1)

Liabilities

Physical and financial forwards and futures:

Natural gas(2)

1.3

Discounted cash flow

Market price (per Dth) (3)

2.2 - 3.6

2.8

Total liabilities

1.3

The following table presents Questar Gas’ assets and liabilities that are measured at fair value on a recurring basis for each hierarchy level, including both current and noncurrent portions.

(1) Averages weighted by volume.

	Level 1		Level 2		Level 3		Total
(millions)
At June 30, 2017
Assets:
Derivatives:
Commodity	$	—	$	—	$	0.3	$	0.3
Total assets	$	—	$	—	$	0.3	$	0.3
Liabilities:
Derivatives:
Commodity	$	—	$	0.1	$	0.5	$	0.6
Total liabilities	$	—	$	0.1	$	0.5	$	0.6
At December 31, 2016
Assets:
Derivatives:
Commodity	$	—	$	0.1	$	—	$	0.1
Total assets	$	—	$	0.1	$	—	$	0.1
Liabilities:
Derivatives:
Commodity	$	—	$	0.1	$	—	$	0.1
Total liabilities	$	—	$	0.1	$	—	$	0.1

~~(2)~~The ~~Includes~~following table presents the net change in Questar Gas' assets and liabilities measured at fair value on a recurring basis and included in the Level 3 fair value category.

(3) Represents market prices beyond defined terms for Levels 1 and 2.

	Three Months Ended June 30,					Six Months Ended June 30,
	2017			2016		2017			2016
(millions)
Beginning balance	$	(1.3	)	$	—	$	—		$	—
Total realized and unrealized gains (losses):
Included in earnings⁽¹⁾		—			—		(0.1	)		—
Included in regulatory assets/liabilities		1.0			—		(0.3	)		—
Settlements		—			—		0.1			—
Purchases		0.1			—		0.1			—
Ending balance	$	(0.2	)	$	—	$	(0.2	)	$	—

~~Sensitivity~~(1) ofThe ~~the~~gains ~~fair~~and ~~value~~losses ~~measurements to~~included ~~changes~~ in ~~the~~earnings ~~significant~~were ~~unobservable~~classified ~~inputs~~in iscost asof ~~follows:~~ sales.

~~Significant~~There ~~Unobservable~~were ~~Inputs~~no ~~Position~~unrealized ~~Change~~gains toor ~~Input~~losses ~~Impact~~included onin ~~Fair~~earnings ~~ValueMeasurement~~in ~~Market~~the ~~price~~Level ~~Buy~~3 ~~Increase~~fair ~~(decrease)~~value ~~Gain~~category ~~(loss)~~relating ~~Market~~to ~~price~~assets/liabilities ~~Sell~~still ~~Increase~~held ~~(decrease)~~at ~~Loss~~the ~~(gain)~~reporting date for the three and six months ended June 30, 2017.

~~Recurring Fair Value Measurements~~ 10

~~The~~Fair ~~following~~Value ~~table~~of ~~presents~~Financial Questar Gas’ liabilities that are measured at fair value on a recurring basis for each hierarchy level, including both current and noncurrent portions. Derivative assets at March 31, 2017 were immaterial. Instruments

	Level 1		Level 2		Level 3		Total
(millions)
At March 31, 2017
Liabilities:
Derivatives:
Commodity	$	—	$	—	$	1.3	$	1.3
Total liabilities	$	—	$	—	$	1.3	$	1.3
At December 31, 2016
Assets:
Derivatives:
Commodity	$	—	$	0.1	$	—	$	0.1
Total assets	$	—	$	0.1	$	—	$	0.1
Liabilities:
Derivatives:
Commodity	$	—	$	0.1	$	—	$	0.1
Total liabilities	$	—	$	0.1	$	—	$	0.1

Substantially all of Questar Gas' financial instruments are recorded at fair value, with the exception of the instruments described below, which are reported at historical cost. Estimated fair values have been determined using available market information and valuation methodologies considered appropriate by management. The carrying amount of cash and cash equivalents, customer receivables, receivable from affiliates, short-term debt, affiliated current borrowings, accounts payable and accounts payable to affiliates are representative of fair value because of the short-term nature of these instruments. For Questar Gas' financial instruments that are not recorded at fair value, the carrying amounts and estimated fair values are as follows:

	June 30, 2017				December 31, 2016
	Carrying Amount		Estimated Fair Value⁽¹⁾		Carrying Amount		Estimated Fair Value⁽¹⁾
(millions)
Long-term debt, including securities due within one year⁽²⁾	$	631.0	$	687.1	$	630.8	$	672.6

~~Table~~(1) Fair value is estimated using market prices, where available, and interest rates currently available for issuance of ~~Contents~~debt with similar terms and remaining maturities. The fair value measurements are classified as Level 2.

~~The~~(2) ~~following~~Carrying ~~table~~amount ~~presents~~includes ~~the~~amounts ~~net~~which ~~change~~represent inthe ~~Questar~~unamortized ~~Gas’~~debt ~~assets~~issuance ~~and~~costs, ~~liabilities~~discount ~~measured~~or ~~at fair value on a recurring basis and included in the Level 3 fair value category~~premium.

	Three Months EndedMarch 31,
	2017			2016
(millions)
Beginning balance	$	—		$	—
Total realized and unrealized gains (losses):
Included in earnings(1)		(0.1	)		—
Included in regulatory assets/liabilities		(1.3	)		—
Settlements		0.1			—
Ending balance	$	(1.3	)	$	—

Note 5. Derivatives and Hedge Accounting Activities

~~(1)~~Questar ~~The~~Gas' ~~gains~~accounting policies, objectives and ~~losses~~strategies ~~included~~for using derivative instruments are discussed in ~~earnings~~Note ~~were~~2 ~~classified~~to the Financial Statements in ~~cost~~the ofQuestar ~~sales~~Gas' Annual Report on Form 10-K for the year ended December 31, 2016. See Note 4 in this report for further information about fair value measurements and associated valuation methods for derivatives.

~~There~~Derivative ~~were~~assets noand ~~unrealized~~liabilities ~~gains~~are ~~or losses~~presented ~~included~~gross inon ~~earnings~~Questar inGas' ~~the~~Balance ~~Level~~Sheets. 3Questar ~~fair~~Gas' ~~value~~derivative ~~category~~contracts ~~relating~~include toover-the-counter ~~assets/liabilities~~transactions, ~~still~~which ~~held~~are atbilateral ~~the~~contracts ~~reporting~~that ~~date~~are ~~for~~transacted ~~the~~directly ~~three~~with ~~months~~a ~~ended~~counterparty. ~~March~~At June 3130, 2017., substantially all of Questar Gas' derivative assets and liabilities were not subject to a master netting or similar arrangement.

~~Fair Value of Financial Instruments~~ Volumes

~~Substantially~~The ~~all~~following ~~of Questar~~table ~~Gas’~~presents ~~financial instruments are recorded at fair value, with~~ the ~~exception~~volume of ~~the~~Questar ~~instruments~~Gas' ~~described~~derivative ~~below,~~activity ~~which are reported~~ at ~~historical~~June 30, ~~cost~~2017. ~~Estimated~~These ~~fair~~volumes ~~values~~are ~~have~~based ~~been~~on ~~determined~~open ~~using~~derivative ~~available~~positions ~~market information~~ and ~~valuation~~ ~~methodologies~~represent ~~considered~~the ~~appropriate~~combined byabsolute ~~management.~~value ~~The carrying amount~~ of ~~cash~~its long and ~~cash equivalents, customer receivables, receivable from affiliates,~~ short~~-term~~ ~~debt~~positions, ~~account~~except ~~payable~~in tothe ~~affiliates,~~case ~~affiliated~~of ~~current~~offsetting ~~borrowings~~transactions, ~~and accounts~~for ~~payable~~which ~~are~~they ~~representative~~represent ofthe ~~fair~~absolute value ~~because~~ of the ~~short-term~~net ~~nature~~volume of ~~these~~its ~~instruments.~~long ~~For Questar Gas’ financial instruments that are not recorded at fair value, the carrying amounts~~ and ~~estimated~~short ~~fair values are as follows:~~ positions.

	March 31, 2017				December 31, 2016
	Current		Noncurrent
	CarryingAmount		Estimated FairValue(1)		CarryingAmount		Estimated FairValue(1)
Natural Gas (bcf):
(millions)
Basis		12.1		25.9
Long-term debt, including securities due within one year(2)	$	630.9	$	675.0	$	630.8	$	672.6

(1) Fair value is estimated using market prices, where available, and interest rates currently available for issuance of debt with similar terms and remaining maturities. The fair value measurements are classified as Level 2.11

~~(2)~~Fair ~~Carrying~~Value ~~amount~~and ~~includes~~Gains ~~amounts~~and ~~which~~Losses ~~represent~~on ~~the~~Derivative ~~unamortized debt issuance costs, discount or premium.~~Instruments

~~Note~~The ~~5. Derivatives~~following table presents the fair values of Questar Gas' derivatives and ~~Hedge~~where ~~Accounting~~they ~~Activities~~are presented in its Balance Sheets.

Questar Gas’ accounting policies, objectives and strategies for using derivative instruments are discussed in Note 2 to the Financial Statements in the Questar Gas’ Annual Report on Form 10-K for the year ended December 31, 2016. See Note 4 in this report for further information about fair value measurements and associated valuation methods for derivatives.

	Fair Value - Derivatives not under Hedge Accounting		Total Fair Value
(millions)
At June 30, 2017
ASSETS
Current Assets
Commodity	$	0.3	$	0.3
Total current derivative assets⁽¹⁾		0.3		0.3
Total derivative assets	$	0.3	$	0.3
LIABILITIES
Current Liabilities
Commodity	$	0.2	$	0.2
Total current derivative liabilities⁽²⁾		0.2		0.2
Noncurrent Liabilities
Commodity		0.4		0.4
Total noncurrent derivative liabilities⁽³⁾		0.4		0.4
Total derivative liabilities	$	0.6	$	0.6
At December 31, 2016
ASSETS
Current Assets
Commodity	$	0.1	$	0.1
Total current derivative assets⁽¹⁾		0.1		0.1
Total derivative assets	$	0.1	$	0.1
LIABILITIES
Current Liabilities
Commodity	$	0.1	$	0.1
Total current derivative liabilities⁽²⁾		0.1		0.1
Total derivative liabilities	$	0.1	$	0.1

~~Derivative~~(1) ~~assets~~Current ~~and~~derivative ~~liabilities~~assets are presented ~~gross~~in onother ~~Questar~~current ~~Gas’~~assets ~~Balance~~in ~~Sheets.~~ Questar Gas’' ~~derivative~~Balance ~~contracts include over-the-counter transactions, which are bilateral contracts that are transacted directly with a counterparty~~Sheets. ~~At March 31, 2017, substantially all of Questar Gas’ derivative assets and liabilities were not subject to a master netting or similar arrangement.~~

~~Volumes~~(2) Current derivative liabilities are presented in other current liabilities in Questar Gas’ Balance Sheets.

~~The~~(3) ~~following~~Noncurrent ~~table presents the volume of Questar Gas’~~ derivative ~~activity~~liabilities ~~at March 31, 2017. These volumes~~ are ~~based~~presented onin ~~open~~other ~~derivative~~noncurrent ~~positions~~liabilities ~~and represent the combined absolute value of its long and short positions, except~~ in ~~the~~Questar ~~case~~Gas' ofBalance ~~offsetting transactions, for which they represent the absolute value of the net volume of its long and short positions~~Sheets.

	Current		Noncurrent
Natural Gas (bcf):
Basis		7.7		26.4

The following table presents the gains and losses on Questar Gas' derivatives, as well as where the associated activity is presented in its Statements of Income.

	Amount of Gain (Loss) Recognized in Income on Derivatives ⁽¹⁾
	Three Months Ended June 30,				Six Months Ended June 30,
Derivatives not designated as hedging instruments	2017		2016		2017			2016
(millions)
Derivative Type and Location of Gains (Losses)
Commodity⁽²⁾	$	—	$	—	$	(0.5	)	$	—
Total	$	—	$	—	$	(0.5	)	$	—

~~Table~~(1) Includes derivative activity amortized out of ~~Contents~~regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in Questar Gas' Statements of Income.

~~Fair~~(2) ~~Value~~Amounts ~~and~~recorded ~~Gains~~in ~~and~~Questar ~~Losses~~Gas' onStatements ~~Derivative~~of ~~Instruments~~Income are classified in cost of sales.

~~The following table presents the fair values of Questar Gas’ derivatives and where they are presented in its Balance Sheets.~~ 12

	Fair Value -Derivativesnot underHedgeAccounting		TotalFairValue
(millions)
At March 31, 2017
LIABILITIES
Current Liabilities
Commodity	$	0.1	$	0.1
Total current derivative liabilities(2)		0.1		0.1
Noncurrent Liabilities
Commodity		1.2		1.2
Total noncurrent derivative liabilities(3)		1.2		1.2
Total derivative liabilities	$	1.3	$	1.3
At December 31, 2016
ASSETS
Current Assets
Commodity	$	0.1	$	0.1
Total current derivative assets(1)		0.1		0.1
Total derivative assets	$	0.1	$	0.1
LIABILITIES
Current Liabilities
Commodity	$	0.1	$	0.1
Total current derivative liabilities(2)		0.1		0.1
Total derivative liabilities	$	0.1	$	0.1

Note 6. Regulatory Assets and Liabilities

~~(1)~~Regulatory ~~Current derivative~~ assets ~~are~~and ~~presented~~liabilities ininclude ~~other~~the ~~current assets in Questar Gas’ Balance Sheets.~~following:

(2) Current derivative liabilities are presented in other current liabilities in Questar Gas’ Balance Sheets.

	June 30,		December 31,
	2017		2016
(millions)
Regulatory assets:
Purchased-gas adjustment⁽¹⁾	$	10.8	$	3.4
Contract withholding⁽²⁾		—		2.6
Pipeline integrity costs⁽³⁾		1.9		1.9
Other		0.7		1.7
Regulatory assets-current		13.4		9.6
Cost of reacquired debt⁽⁴⁾		2.9		3.2
Pipeline integrity costs⁽³⁾		1.1		2.3
Other		0.4		—
Regulatory assets-noncurrent⁽⁵⁾		4.4		5.5
Total regulatory assets	$	17.8	$	15.1
Regulatory liabilities:
Cost of plant removal and AROs⁽⁶⁾	$	5.0	$	3.5
CET⁽⁷⁾		2.3		2.9
Curtailment penalty⁽⁸⁾		1.1		—
Other		0.7		0.1
Regulatory liabilities-current		9.1		6.5
Cost of plant removal and AROs⁽⁶⁾		190.8		189.1
Regulatory liabilities-noncurrent		190.8		189.1
Total regulatory liabilities	$	199.9	$	195.6

(31) ~~Noncurrent~~Purchased-gas ~~derivative~~costs ~~liabilities~~that are ~~presented~~different infrom ~~other~~those ~~noncurrent~~provided ~~liabilities~~for in ~~Questar~~present ~~Gas’~~rates ~~Balance~~are ~~Sheets~~accumulated and recovered or credited through future rate changes.

~~The~~(2) ~~following~~Represents ~~table~~a ~~presents~~disputed ~~the~~amount ~~gains~~withheld ~~and~~from ~~losses~~a onsupplier ~~Questar~~of ~~Gas’~~storage ~~derivatives,~~services. asThe ~~well~~dispute aswas ~~where~~settled in March 2017 and the ~~associated~~amount ~~activity~~reversed, iswhich ~~presented~~resulted in ~~its~~no ~~Statements~~material impact to Questar Gas' results of ~~Income.~~ operations, financial position or cash flows.

	Amount of Gain (Loss) Recognized inIncome on Derivatives (1)
	Three months ended March 31,
Derivatives not designated as hedging instruments	2017			2016
(millions)
Derivative Type and Location of Gains (Losses)
Commodity(2)	$	(0.5	)	$	—
Total	$	(0.5	)	$	—

(3)	The costs of complying with pipeline-integrity regulations are recovered in rates subject to a Utah Commission order. Questar Gas is allowed to recover $7.0 million per year. Costs incurred in excess of this amount will be recovered in future rate changes.

(14) ~~Includes~~Gains ~~derivative~~and ~~activity~~losses on the reacquisition of debt by rate-regulated companies are deferred and amortized ~~out~~as interest expense over the would-be remaining life of ~~regulatory~~the ~~assets/liabilities~~reacquired debt. ~~Amounts~~The ~~deferred~~reacquired ~~into~~debt ~~regulatory~~costs ~~assets/liabilities~~had ~~have~~a noweighted-average ~~associated~~life ~~effect~~of inapproximately ~~Questar~~5.6 ~~Gas’~~years ~~Statements~~as of ~~Income~~June 30, 2017.

(25) ~~Amounts~~Noncurrent ~~recorded~~regulatory inassets ~~Questar~~are ~~Gas’~~presented ~~Statements~~in ofother ~~Income~~noncurrent ~~are~~assets ~~classified~~ in ~~cost~~the ofBalance ~~sales~~Sheets.

11(6) Cost of plant removal and AROs represent amounts recovered from customers for costs of future activities to remove assets that are expected to be incurred at the time of retirement.

~~Table~~(7) ofRepresents ~~Contents~~the difference between actual and allowed revenues. Any deficiency in amounts collected is recovered through periodic rate adjustments.

~~Note~~(8) 6Interruptible customers who fail to interrupt service when called upon by Questar Gas incur a curtailment penalty. ~~Regulatory~~ ~~Assets~~Penalties ~~and~~recovered ~~Liabilities~~by Questar Gas are credited to ratepayers as a reduction to the infrastructure-replacement program.

Note 7. Regulatory ~~assets and liabilities include the following:~~ Matters

	March 31,2017		December 31,2016
(millions)
Regulatory assets:
Purchased-gas adjustment(1)	$	—	$	3.4
EEP(2)		—		1.1
Contract withholding(3)		—		2.6
Pipeline integrity costs(4)		1.9		1.9
Other		—		0.6
Regulatory assets-current		1.9		9.6
Derivatives(5)		1.2		—
Pipeline integrity costs(4)		1.4		2.3
Cost of reacquired debt(6)		3.1		3.2
Regulatory assets-noncurrent(7)		5.7		5.5
Total regulatory assets	$	7.6	$	15.1
Regulatory liabilities:
Purchased-gas adjustment(1)	$	20.1	$	—
EEP(2)		2.0		—
CET(8)		2.0		2.9
Cost of plant removal and AROs(9)		4.5		3.5
Other		0.1		0.1
Regulatory liabilities-current		28.7		6.5
Cost of plant removal and AROs(9)		190.8		189.1
Regulatory liabilities-noncurrent		190.8		189.1
Total regulatory liabilities	$	219.5	$	195.6

As a public utility, Questar Gas is subject to the jurisdiction of the Utah Commission and the Wyoming Commission. Natural gas sales and transportation services are provided under rate schedules approved by the two regulatory commissions.

~~(1)~~There ~~Purchased-gas~~have ~~costs~~been ~~that~~no ~~are~~significant ~~different~~developments ~~from~~regarding ~~those~~the ~~provided~~pending ~~for~~regulatory matters disclosed in ~~present~~Note ~~rates~~10 ~~are~~to ~~accumulated~~the ~~and~~Financial ~~recovered~~Statements orin ~~credited~~Questar ~~through~~Gas' ~~future~~Annual ~~rate~~Report ~~changes~~on Form 10-K for the year ended December 31, 2016.

~~(2)~~Note ~~The EEP relates to funds expended for promoting the conservation of natural gas through advertising, rebates for efficient homes and appliances and home energy audits~~8. Variable ~~Costs~~Interest ~~are recovered from customers through periodic rate adjustments. Costs incurred in excess of recoveries result in an asset; recoveries in excess of costs incurred result in a liability.~~Entity

~~(3)~~The ~~Represents~~primary beneficiary of a ~~disputed~~VIE ~~amount~~is ~~withheld~~required ~~from~~to aconsolidate ~~supplier~~the ofVIE ~~storage~~and ~~services~~to disclose certain information about its significant variable interest in the VIE. The ~~dispute~~primary ~~was~~beneficiary ~~settled~~of ina ~~March~~VIE ~~2017~~is ~~and~~the entity that has both: (1) the ~~amount~~power ~~reversed,~~to ~~which~~direct ~~resulted~~activities inthat nomost ~~material~~significantly impact tothe ~~Questar Gas~~entity’s ~~results~~economic ofperformance ~~operations,~~and ~~financial~~(2) ~~position~~the obligation to absorb losses or ~~cash~~receive ~~flows~~benefits from the entity that could potentially be significant to the VIE.

(4) The costs of complying with pipeline-integrity regulations are recovered in rates subject to a Utah Commission order. Questar Gas is allowed to recover $7.0 million per year. Costs incurred in excess of this amount will be recovered in future rate changes.13

~~(5)~~Questar ~~Changes~~Gas inpurchased ~~the~~shared ~~fair~~services ~~value~~from DEQPS of ~~derivative~~$0.3 ~~instruments~~million ~~result~~for inthe three months ended June 30, 2017 and $0.7 million for the ~~recognition~~six ofmonths ~~regulatory~~ended ~~assets~~June or30, ~~regulatory~~2017. DEQPS ~~liabilities~~provides operational services to certain Dominion Energy subsidiaries, including Questar Gas, as ~~they~~a ~~are~~subsidiary ~~expected~~service tocompany. beThe ~~recovered~~Balance ~~from~~Sheet orat ~~refunded~~June 30, 2017 included amounts due to ~~customers~~DEQPS of $0.1 million.

~~(6)~~Questar ~~Gains~~Gas ~~and~~determined ~~losses~~that onit is not the ~~reacquisition~~primary beneficiary of ~~debt~~DEQPS byas ~~rate-regulated~~it ~~companies~~does ~~are~~not ~~deferred~~have ~~and~~both ~~amortized~~the aspower ~~interest~~to ~~expense~~direct ~~over~~ the ~~would-be~~activities ~~remaining~~that ~~life~~most ofsignificantly ~~the~~impact ~~reacquired~~their ~~debt.~~economic ~~The~~performance ~~reacquired~~as ~~debt~~well ~~costs~~as ~~had~~the aobligation ~~weighted-average~~to ~~life~~absorb oflosses ~~approximately~~and 5benefits which could be significant to it.8 Questar ~~years~~Gas ashas ofno ~~March~~obligation ~~31,~~to ~~2017~~absorb more than its allocated share of DEQPS costs.

~~(7)~~Note ~~Noncurrent~~9. Significant ~~regulatory~~Financing ~~assets are presented in other noncurrent assets in the Balance Sheets.~~Transactions

~~(8)~~Questar ~~Represents~~Gas ~~the~~uses ~~difference~~short-term ~~between~~debt ~~actual~~to fund working capital requirements and ~~allowed~~as ~~revenues~~a bridge to long-term debt financings. ~~Any~~The ~~deficiency~~levels inof ~~amounts~~borrowing ~~collected~~may ~~are~~vary ~~recovered~~significantly ~~through~~during ~~periodic~~the ~~rate~~course ~~adjustments~~of the year, depending upon the timing and amount of cash requirements not satisfied by cash from operations.

~~(9)~~Questar ~~Cost~~Gas’ ofshort-term ~~plant~~financing ~~removal~~is ~~and~~supported ~~AROs~~by ~~represent~~the ~~amounts~~two ~~recovered~~joint ~~from~~revolving ~~customers~~credit ~~for~~facilities ~~costs~~with ofDominion ~~future~~Energy, ~~activities~~Virginia toPower ~~remove~~and ~~assets~~Dominion ~~that~~Energy ~~are~~Gas. ~~expected~~These tocredit facilities can be ~~incurred~~used atfor working capital, as support for the ~~time~~combined commercial paper programs of ~~retirement~~Dominion Energy, Virginia Power, Dominion Energy Gas and Questar Gas and for other general corporate purposes.

~~Note~~At 7.June ~~Regulatory~~30, ~~Matters~~2017, Questar Gas' commercial paper and letters of credit outstanding under its joint credit facilities with Dominion Energy, Virginia Power and Dominion Energy Gas, were as follows:

	Facility Limit⁽¹⁾		Outstanding Commercial Paper		Outstanding Letters of Credit
(millions)
Joint revolving credit facility⁽¹⁾	$	500.0	$	135.0	$	—
Joint revolving credit facility⁽¹⁾		500.0		—		—
Total	$	1,000.0	$	135.0	$	—

~~There~~(1) ~~have~~A ~~been~~maximum noof ~~significant~~a ~~developments~~combined ~~regarding~~$1.0 billion of the ~~pending~~facilities ~~regulatory~~is ~~matters~~available ~~disclosed~~to inQuestar ~~Note~~Gas, 10assuming adequate capacity is available after giving effect to uses by co-borrowers Dominion Energy, Virginia Power and Dominion Energy Gas. Sub-limits for Questar Gas are set within the ~~Financial~~facility ~~Statements~~limit inbut can be changed at the option of the borrowers multiple times per year. At June 30, 2017, the sub-limit for Questar Gas~~’ Annual~~ ~~Report~~was onan ~~Form~~aggregate 10$250 million. If Questar Gas has liquidity needs in excess of its sub-Klimit, the sub-limit may be changed or such needs may be satisfied through short-term intercompany borrowings from Dominion Energy. The maturity date for these facilities is April 2020. These credit facilities can be used to support bank borrowings and the ~~year~~issuance ~~ended~~of ~~December 31~~commercial paper, ~~2016~~as well as to support up to $1.0 billion (or the sub-limit, whichever is less) of letters of credit.

12Note 10. Commitments and Contingencies

~~Table~~As a result of ~~Contents~~issues generated in the ordinary course of business, Questar Gas is involved in legal proceedings before various courts and is periodically subject to governmental examinations (including by regulatory authorities), inquiries and investigations. Certain legal proceedings and governmental examinations involve demands for unspecified amounts of damages, are in an initial procedural phase, involve uncertainty as to the outcome of pending appeals or motions, or involve significant factual issues that need to be resolved, such that it is not possible for Questar Gas to estimate a range of possible loss. For such matters for which Questar Gas cannot estimate a range of possible loss, a statement to this effect is made in the description of the matter. Other matters may have progressed sufficiently through the litigation or investigative processes such that Questar Gas is able to estimate a range of possible loss. For legal proceedings and governmental examinations for which Questar Gas is able to reasonably estimate a range of possible losses, an estimated range of possible loss is provided, in excess of the accrued liability (if any) for such matters. Any accrued liability is recorded on a gross basis with a receivable also recorded for any probable insurance recoveries. Estimated ranges of loss are inclusive of legal fees and net of any anticipated insurance recoveries. Any estimated range is based on currently available information and involves elements of judgment and significant uncertainties. Any estimated range of possible loss may not represent Questar Gas' maximum possible loss exposure. The circumstances of such legal proceedings and governmental examinations will change from time to time and actual results may vary significantly from the current estimate. For current proceedings not specifically reported below, management does not anticipate that the liabilities, if any, arising from such proceedings would have a material effect on the financial position, liquidity or results of operations of Questar Gas.

~~Note~~The 8CERCLA, as amended, provides for immediate response and removal actions coordinated by the EPA in the event of threatened releases of hazardous substances into the environment and authorizes the U. ~~Significant~~S. ~~Financing~~government ~~Transactions~~either to clean up sites at which hazardous substances have created actual or potential environmental hazards or to order persons responsible for the situation to do so. Under the CERCLA, as amended, generators and transporters of hazardous substances, as well as past and present owners and operators of

Questar Gas uses short-term debt to fund working capital requirements and as a bridge to long-term debt financings. The levels of borrowing may vary significantly during the course of the year, depending upon the timing and amount of cash requirements not satisfied by cash from operations. 14

~~Questar Gas’~~contaminated ~~short-term~~sites, ~~financing~~can isbe ~~supported~~jointly, byseverally ~~the~~and ~~two~~strictly ~~joint~~liable ~~revolving~~for ~~credit~~the ~~facilities~~cost ~~with~~of ~~Dominion,~~cleanup. ~~Virginia~~These ~~Power~~potentially ~~and~~responsible ~~Dominion~~parties ~~Gas.~~can ~~These~~be ~~credit~~ordered ~~facilities~~to ~~can~~perform a cleanup, be ~~used~~sued for ~~working~~costs ~~capital~~associated with an EPA-directed cleanup, asvoluntarily ~~support~~settle ~~for~~with the ~~combined~~U.S. ~~commercial~~government ~~paper~~concerning ~~programs of~~their ~~Dominion,~~liability ~~Virginia~~for ~~Power~~cleanup costs, ~~Dominion~~or ~~Gas~~voluntarily ~~and~~begin ~~Questar~~a ~~Gas~~site investigation and ~~for~~site ~~other~~remediation ~~general~~under ~~corporate~~state ~~purposes~~oversight.

AtQuestar ~~March 31,~~Gas ~~2017,~~has ~~Questar~~determined ~~Gas’~~that ~~commercial paper~~it is associated with two former manufactured gas plant sites that contain coal tar and ~~letters~~other potentially harmful materials. None of ~~credit~~the ~~outstanding~~former sites with which Questar Gas is associated is under ~~its~~investigation ~~joint~~by ~~credit~~any ~~facilities~~state ~~with~~or ~~Dominion,~~federal ~~Virginia~~environmental ~~Power~~agency. ~~and~~Due ~~Dominion~~to ~~Gas~~the uncertainty surrounding the sites, ~~were~~Questar asGas ~~follows:~~is unable to make an estimate of the potential financial statement impacts.

	FacilityLimit(1)		OutstandingCommercialPaper		OutstandingLetters ofCredit
(millions)
Joint revolving credit facility(1)	$	500.0	$	147.0	$	—
Joint revolving credit facility(1)		500.0		—		—
Total	$	1,000.0	$	147.0	$	—

Note 11. Credit Risk

~~(1) A maximum of a combined $1.0 billion of the facilities is available to~~ Questar Gas,' ~~assuming~~accounting ~~adequate~~policies ~~capacity is available after giving effect to uses by co-borrowers Dominion, Virginia Power and Dominion Gas. Sub-limits~~ for ~~Questar~~credit ~~Gas~~risk are ~~set~~discussed ~~within~~in ~~the~~Note ~~facility~~17 ~~limit~~to ~~but can be changed at~~ the ~~option~~Financial ofStatements ~~the~~in ~~borrowers multiple times per year. At March 31, 2017, the sub-limit for~~ Questar Gas' ~~was~~Annual anReport ~~aggregate~~on ~~$250~~Form ~~million. If Questar Gas has liquidity needs in excess of its sub~~10-~~limit,~~K ~~the sub-limit may be changed or such needs may be satisfied through short-term intercompany borrowings from Dominion. The maturity date~~ for ~~these facilities is April 2020. These credit facilities can be used to support bank borrowings and~~ the ~~issuance~~year ofended ~~commercial paper~~December 31, ~~as well as to support up to $1~~2016.~~0 billion (or the sub-limit, whichever is less) of letters of credit.~~

~~Note~~Questar 9Gas maintains a provision for credit losses based on factors surrounding the credit risk of its customers, historical trends and other information. ~~Commitments~~ Management believes, based on credit policies and ~~Contingencies~~the June 30, 2017 provision for credit losses, that it is unlikely that a material adverse effect on financial position, results of operations or cash flows would occur as a result of counterparty nonperformance.

AsNote a result of issues generated in the ordinary course of business, Questar Gas is involved in legal proceedings before various courts and is periodically subject to governmental examinations (including by regulatory authorities), inquiries and investigations12. ~~Certain~~ Related-Party legal proceedings and governmental examinations involve demands for unspecified amounts of damages, are in an initial procedural phase, involve uncertainty as to the outcome of pending appeals or motions, or involve significant factual issues that need to be resolved, such that it is not possible for Questar Gas to estimate a range of possible loss. For such matters for which Questar Gas cannot estimate a range of possible loss, a statement to this effect is made in the description of the matter. Other matters may have progressed sufficiently through the litigation or investigative processes such that Questar Gas is able to estimate a range of possible loss. For legal proceedings and governmental examinations for which Questar Gas is able to reasonably estimate a range of possible losses, an estimated range of possible loss is provided, in excess of the accrued liability (if any) for such matters. Any accrued liability is recorded on a gross basis with a receivable also recorded for any probable insurance recoveries. Estimated ranges of loss are inclusive of legal fees and net of any anticipated insurance recoveries. Any estimated range is based on currently available information and involves elements of judgment and significant uncertainties. Any estimated range of possible loss may not represent Questar Gas’ maximum possible loss exposure. The circumstances of such legal proceedings and governmental examinations will change from time to time and actual results may vary significantly from the current estimate. For current proceedings not specifically reported below, management does not anticipate that the liabilities, if any, arising from such proceedings would have a material effect on the financial position, liquidity or results of operations of the Questar Gas. Transactions

~~The~~Questar ~~CERCLA,~~Gas asengages ~~amended, provides for immediate response and removal actions coordinated by the EPA~~ in ~~the~~related ~~event~~party-transactions ofprimarily ~~threatened~~with ~~releases~~affiliates ofWexpro, hazardous substances into the environment and authorizes the U.S. government either to clean up sites at which hazardous substances have created actual or potential environmental hazards or to order persons responsible for ~~the~~cost-of-service ~~situation~~natural togas ~~do so. Under the CERCLA~~supply, ~~as amended, generators~~ and ~~transporters~~Dominion ofEnergy ~~hazardous~~Questar ~~substances~~Pipeline, asfor ~~well~~transportation ~~as past~~ and ~~present~~storage ~~owners~~services. ~~and~~Questar ~~operators~~Gas' ofreceivables ~~contaminated sites, can be jointly, severally~~ and ~~strictly~~payables ~~liable~~balances ~~for~~with ~~the~~affiliates ~~cost~~are ofsettled ~~cleanup.~~based ~~These~~on ~~potentially~~contractual ~~responsible~~terms ~~parties~~or ~~can~~on ~~be ordered to perform~~ a ~~cleanup,~~monthly ~~be sued for costs associated with an EPA-directed cleanup~~basis, ~~voluntarily~~depending ~~settle~~on ~~with~~ the ~~U.S.~~nature ~~government concerning~~of ~~their~~the ~~liability~~underlying ~~for~~transactions. ~~cleanup~~A ~~costs,~~discussion orof ~~voluntarily~~significant ~~begin~~related aparty ~~site~~transactions ~~investigation and site remediation under state oversight~~follows.

Dominion Energy Questar ~~Gas~~and ~~has determined~~other ~~that~~affiliates itprovide isaccounting, ~~associated~~legal, ~~with~~finance ~~two~~and ~~former~~certain ~~manufactured~~administrative ~~gas~~and ~~plant~~technical ~~sites~~services ~~that~~to ~~contain~~Questar ~~coal~~Gas. ~~tar~~These ~~and~~costs are included in other ~~potentially~~operations ~~harmful~~and ~~materials.~~maintenance ~~None~~in the Statements of ~~the~~Income. ~~former~~The ~~sites~~administrative ~~with~~charges ~~which~~are ~~Questar~~generally ~~Gas~~allocated isbased ~~associated~~on iseach ~~under~~affiliated ~~investigation~~company's byproportional ~~any~~share ~~state~~of orrevenues ~~federal environmental~~less ~~agency~~product costs; property, plant and equipment; and labor costs. ~~Due~~Management tobelieves that the ~~uncertainty~~allocation ~~surrounding~~method ~~the~~is ~~sites,~~reasonable. Questar Gas isprovides ~~unable~~certain services to ~~make~~related anparties, ~~estimate~~including technical services. The billed amounts of these services are allocated based on the ~~potential~~specific ~~financial~~nature ~~statement~~of ~~impacts~~the charges. Management believes that the allocation methods are reasonable. The amounts of these services follow:

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
(millions)
Affiliated operator service fee⁽¹⁾	$	79.7	$	78.9	$	155.6	$	158.7
Transportation and storage services from affiliates⁽¹⁾		17.3		17.3		36.9		36.5
Services provided by related parties		11.1		12.6		21.9		26.1
Services provided to related parties		1.4		0.5		2.9		1.0

~~Table~~(1) The costs of ~~Contents~~these services were included in cost of sales in Questar Gas' Statements of Income.

Questar Gas participates in certain Dominion Energy Questar benefit plans as described in Note 15 to the Financial Statements in Questar Gas' Annual Report on Form 10-K for the year ended December 31, 2016. At June ~~Credit~~30, ~~Risk~~2017 and December 31, 2016, amounts due from Dominion Energy Questar associated with the Questar Corporation Retirement Plan and included in receivables from affiliates in the Balance Sheets were $98.6 million and $87.8 million, respectively. Questar Gas recorded a pension expense (credit) related to this plan of $(4.4) million and $2.8 million for the six months ended June 30, 2017 and 2016, respectively. At June 30, 2017 and December 31, 2016, Questar Gas' amounts due to Dominion Energy Questar associated with the Questar Corporation Umbrella Health Plan and included in payables to affiliates in the Balance Sheets were $12.8 million and $13.0 million, respectively.

The Dominion Energy Questar ~~Gas’~~Combination ~~accounting~~resulted ~~policies~~in ~~for~~merger ~~credit~~and ~~risk~~restructuring ~~are~~costs ~~discussed~~of in$6.4 ~~Note~~million 17and to$6.7 million for the ~~Financial~~three ~~Statements~~and insix months ended June 30, 2017, respectively, charged from Dominion Energy Questar. ~~Gas’~~There ~~Annual~~were ~~Report~~no onmerger ~~Form~~and ~~10-K~~restructuring costs for the ~~year~~three and six months ended ~~December~~June 3130, 2016. These costs primarily consist of employee related costs allocated to Questar Gas and are included in other operations and maintenance in Questar Gas' Statements of Income.

Questar Gas’ ~~maintains~~borrowings aunder ~~provision~~the ~~for~~IRCA ~~credit~~with ~~losses~~Dominion ~~based~~Energy ontotaled ~~factors~~$10.0 ~~surrounding~~million ~~the~~as ~~credit risk~~ of ~~its customers~~June 30, ~~historical~~ ~~trends~~2017 and ~~other information~~$48.0 ~~Management~~million ~~believes,~~at ~~based on credit policies and the March~~December 31, ~~2017~~2016. ~~provision~~The ~~for~~weighted-average ~~credit~~interest ~~losses,~~rate ~~that~~for itthese isborrowing ~~unlikely~~was ~~that~~1.36% aas ~~material~~of ~~adverse effect on financial position~~June 30, ~~results~~2017. ofInterest ~~operations~~charges orrelated ~~cash flows~~to ~~would occur as a result of counterparty nonperformance.~~

~~Note 11. Related-Party Transactions~~ 15

Questar Gas' ~~engages~~total inborrowings ~~related~~from ~~party-transactions~~Dominion ~~primarily~~Energy ~~with~~and ~~affiliates~~Dominion ~~Wexpro,~~Energy ~~for~~Questar ~~cost-of-service~~were ~~natural~~less ~~gas~~than ~~supply,~~$0.1 ~~and~~million ~~Questar~~for ~~Pipeline,~~the ~~for transportation~~three and ~~storage~~six ~~services.~~months ~~Questar~~ended ~~Gas’~~June 30, ~~receivables~~2017 and ~~payables~~$0.2 ~~balances~~million ~~with~~and ~~affiliates~~$0.5 ~~are~~million ~~settled~~for ~~based~~the onthree ~~contractual~~and ~~terms~~six ormonths onended aJune 30, ~~monthly basis~~2016, ~~depending on the nature of the underlying transactions~~respectively. ~~A discussion of significant related party transactions follows.~~

~~Dominion~~In ~~Questar~~March ~~and other affiliates provide accounting~~2017, ~~legal, finance and certain administrative and technical services to~~ Questar Gas. ~~These~~entered ~~costs~~into ~~are~~agreements, ~~included~~at inrates ~~other operations~~ and ~~maintenance~~on interms ~~the~~and ~~Statements~~conditions ofthat ~~Income. The administrative charges~~ are ~~generally~~subject ~~allocated~~to ~~based~~regulation onby ~~each affiliated company’s proportional share of revenues less product costs; property~~FERC, ~~plant~~with ~~and~~Dominion ~~equipment;~~Energy ~~and labor costs. Management believes that the allocation method is reasonable.~~ Questar ~~Gas~~Pipeline ~~provides certain services~~ to ~~related~~extend ~~parties,~~transportation ~~including~~services ~~technical~~through ~~services~~2027. ~~The~~Under ~~billed amounts of~~ these ~~services~~ ~~are~~agreements, ~~allocated~~Questar ~~based~~Gas onwill ~~the~~pay ~~specific~~Dominion ~~nature~~Energy ofQuestar ~~the~~Pipeline ~~charges.~~approximately ~~Management~~$55 ~~believes~~million ~~that the allocation methods are reasonable~~annually. ~~The amounts of these services follow:~~

	Three Months Ended
	March 31,
	2017		2016
(millions)
Affiliated operator service fee(1)	$	75.9	$	79.8
Transportation and storage services from affiliates(1)		19.6		19.2
Services provided by related parties		10.8		13.5
Services provided to related parties		1.5		0.5

Also in March 2017, Questar Gas extended a storage contract, at rates and on terms and conditions that are subject to regulation by FERC, with Dominion Energy Questar Pipeline through 2022. Under this extension, Questar Gas will pay Dominion Energy Questar Pipeline approximately $2 million annually.

~~(1)~~Note ~~The costs of these services were included in cost of sales in Questar Gas’ Statements of Income~~13. Operating Segment

~~Questar Gas~~The ~~participates~~Corporate inand ~~certain~~Other ~~Dominion~~Segment ~~Questar~~primarily ~~benefit~~includes ~~plans~~specific asitems ~~described~~attributable ~~in Note 15~~ to ~~the Financial Statements in~~ Questar Gas’' ~~Annual~~operating ~~Report on Form 10-K for the year ended December 31~~segment, ~~2016.~~Gas AtInfrastructure ~~March 31,~~(previously ~~2017~~named ~~and~~Questar ~~December 31~~Gas), ~~2016,~~ ~~amounts~~that ~~due~~are ~~from~~not ~~Dominion Questar associated with the Dominion Questar Corporation Retirement Plan and~~ included in ~~receivables~~profit ~~from~~measures ~~affiliates~~evaluated inby ~~the~~executive ~~Balance~~management ~~Sheets~~in ~~were~~assessing ~~$100.3 million and $87.8 million, respectively. At March 31, 2017 and December 31, 2016, Questar Gas’ amounts due to Dominion Questar associated with~~ the ~~Dominion~~segment's ~~Questar~~performance ~~Corporation~~or ~~Umbrella Health Plan and included~~ in ~~payables~~allocating ~~to affiliates in the Balance Sheets were $13~~resources.~~1 million and $13.0 million, respectively.~~

The ~~Dominion~~net ~~Questar~~expense ~~Combination~~for ~~resulted~~specific items in ~~merger~~2017 ~~and~~primarily ~~restructuring~~related ~~costs~~to ofan $011.34 million ~~charged~~($7.1 ~~from~~million ~~Dominion~~after-tax) ~~Questar~~charge for ~~the three months ended March 31, 2017. There were no~~ merger and restructuring costs ~~for~~associated with the ~~same~~Dominion ~~prior~~Energy ~~year~~Questar ~~periods~~Combination. These costs ~~primarily~~include ~~consist of~~ employee related costs allocated to Questar Gas and are included in other operations and maintenance in Questar Gas’' Statements of Income.

~~Questar Gas had no balance under the IRCA with Dominion as of March 31, 2017 and a $48.0 million balance at December 31, 2016.~~ The ~~weighted-average~~following ~~interest~~table ~~rate~~presents ~~for~~segment ~~these~~information ~~borrowing~~pertaining ~~was 1.04% as of December 31, 2016. Interest charges related~~ to Questar Gas’' ~~total borrowings from Dominion and Dominion Questar were immaterial for the three months ended March 31, 2017 and $0.3 million for the three months ended March 31, 2016.~~ operations:

In March 2017, Questar Gas entered into agreements, at rates and on terms and conditions that are subject to regulation by FERC, with Questar Pipeline to extend transportation services through 2027. Under these agreements, Questar Gas will pay Questar Pipeline approximately $55 million annually.

	Gas Infrastructure			Corporate and Other			Consolidated Total
(millions)
Three Months Ended June 30, 2017
Operating revenue	$	139.7		$	—		$	139.7
Net income (loss)		0.7			(6.9	)		(6.2	)
Three Months Ended June 30, 2016
Operating revenue	$	128.2		$	—		$	128.2
Net loss		(1.6	)		—			(1.6	)
Six Months Ended June 30, 2017
Operating revenue	$	536.6		$	—		$	536.6
Net income (loss)		53.1			(7.1	)		46.0
Six Months Ended June 30, 2016
Operating revenue	$	536.1		$	—		$	536.1
Net income		46.0			—			46.0

14 16

~~Table~~ITEM 2. ofMANAGEMENT’S ~~Contents~~DISCUSSION AND ANALYSIS

~~Also~~OF inFINANCIAL ~~March~~CONDITION ~~2017,~~AND ~~Questar~~RESULTS ~~gas~~OF extended a storage contract, at rates and on terms and conditions that are subject to regulation by FERC, with Questar Pipeline through 2022. Under this extension, Questar Gas will pay Questar Pipeline approximately $2 million annually. OPERATIONS

~~Note~~MD&A 12discusses Questar Gas' results of operations and general financial condition. ~~Operating~~ ~~Segment~~MD&A should be read in conjunction with Questar Gas' Financial Statements. Questar Gas meets the conditions to file under the reduced disclosure format, and therefore has omitted certain sections of MD&A.

~~The~~Contents ~~Corporate~~of and Other Segment primarily includes specific items attributable to Questar Gas’ operating segment that are not included in profit measures evaluated by executive management in assessing the segment’s performance or in allocating resources. MD&A

~~The~~MD&A ~~net~~consists ~~expense~~of ~~for specific items in 2017 primarily related to a $0.3 million ($0.2 million after-tax) charge for transaction costs associated with~~ the ~~Dominion~~following ~~Questar Combination. These costs primarily consist of employee related costs allocated to Questar Gas and are included in other operations and maintenance in Questar Gas’ Statements of Income.~~ information:

~~The~~• ~~following~~Forward-Looking ~~table presents segment information pertaining to Questar Gas’ operations:~~ Statements

	QuestarGas		Corporateand Other		ConsolidatedTotal
(millions)
Three Months Ended March 31, 2017
Operating revenue	$	396.9	$	—	$	396.9
Net income (loss)		52.4		(0.2)		52.2
Three Months Ended March 31, 2016
Operating revenue	$	407.9	$	—	$	407.9
Net income		47.6		—		47.6

•	Results of Operations

15• Analysis of Operations

~~Table~~Forward-Looking ~~of Contents~~Statements

~~ITEM~~This 2report contains statements concerning Questar Gas' expectations, plans, objectives, future financial performance and other statements that are not historical facts. ~~MANAGEMENT’S~~These ~~DISCUSSION~~statements ~~AND~~are ~~ANALYSIS~~“forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In most cases, the reader can identify these forward-looking statements by such words as “anticipate,” “estimate,” “forecast,” “expect,” “believe,” “should,” “could,” “plan,” “may,” "continue," “target” or other similar words.

OFQuestar ~~FINANCIAL~~Gas ~~CONDITION~~makes ~~AND~~forward-looking ~~RESULTS~~statements OFwith ~~OPERATIONS~~full knowledge that risks and uncertainties exist that may cause actual results to differ materially from predicted results. Factors that may cause actual results to differ are often presented with the forward-looking statements themselves. Additionally, other factors may cause actual results to differ materially from those indicated in any forward-looking statement. These factors include but are not limited to:

~~MD&A~~• ~~discusses~~Unusual ~~Questar~~weather ~~Gas’~~conditions ~~results of operations~~ and ~~general~~their ~~financial~~effect ~~condition.~~on ~~MD&A~~energy ~~should~~sales ~~be read in conjunction with Questar Gas’ Financial Statements. Questar Gas meets the conditions~~ to ~~file~~customers ~~under the reduced disclosure format,~~ and ~~therefore~~energy ~~has~~commodity ~~omitted certain sections of MD&A.~~ prices;

~~Contents~~• ofExtreme ~~MD&A~~weather events and other natural disasters, including, but not limited to, severe storms, earthquakes and flooding that can cause system disruptions and property damage to facilities;

~~MD&A~~• ~~consists~~Federal, ofstate ~~the~~and ~~following information:~~local legislative and regulatory developments, including changes in federal and state tax laws and regulations;

• ~~Forward-Looking~~Changes ~~Statements~~to federal, state and local environmental laws and regulations, including those related to climate change, the tightening of emission or discharge limits for GHGs and other emissions, more extensive permitting requirements and the regulation of additional substances;

• ~~Results~~Cost of ~~Operations~~environmental compliance, including those costs related to climate change;

• ~~Analysis~~Changes in implementation and enforcement practices of ~~Operations~~regulators relating to environmental standards and litigation exposure for remedial activities;

~~Forward-Looking~~• ~~Statements~~Difficulty in anticipating mitigation requirements associated with environmental and other regulatory approvals and/or associated appeals;

~~This~~• ~~report~~Fluctuations ~~contains~~in ~~statements~~energy-related ~~concerning~~commodity ~~Questar~~prices ~~Gas’ expectations, plans, objectives, future financial performance~~ and ~~other statements that are not historical facts. These statements are “forward-looking statements” within~~ the ~~meaning~~effect ~~of the Private Securities Litigation Reform Act of 1995. In most cases, the reader can identify~~ these ~~forward-looking~~could ~~statements~~have byon ~~such~~Questar ~~words~~Gas' ~~as “anticipate~~earnings,” ~~“estimate,”~~liquidity ~~“forecast,”~~position ~~“expect,”~~and ~~“believe,”~~the ~~“should,”~~underlying ~~“could,”~~value ~~“plan,”~~of ~~“may,”~~its ~~“continue,” “target” or other similar words.~~ assets;

~~Questar~~• ~~Gas~~Unplanned ~~makes~~system ~~forward-looking~~disruptions ~~statements~~at ~~with~~Questar ~~full~~Gas knowledge that risks and uncertainties exist that may cause actual results to differ materially from predicted results. Factors that may cause actual results to differ are often presented with the forward-looking statements themselves. Additionally, other factors may cause actual results to differ materially from those indicated in any forward-looking statement. These factors include but are not limited to: facilities;

• ~~Unusual~~Counterparty ~~weather~~credit ~~conditions~~ and ~~their~~performance ~~effect on energy sales to customers and energy commodity prices~~risk;

• ~~Extreme~~Global ~~weather~~capital ~~events~~market ~~and other natural disasters~~conditions, including, ~~but~~the ~~not~~availability ~~limited~~of ~~to,~~credit ~~severe storms, earthquakes~~ and ~~flooding~~the ~~that~~ability ~~can~~to ~~cause~~obtain ~~system~~financing ~~disruptions~~on ~~and~~reasonable ~~property damage to facilities~~terms;

• ~~Federal,~~Fluctuations ~~state and local legislative and regulatory developments, including changes~~ in ~~federal~~interest ~~and state tax laws and regulations~~rates;

• Changes toin ~~federal,~~rating ~~state~~agency ~~and~~requirements ~~local environmental laws and regulations, including those related to climate change, the tightening of emission~~ or ~~discharge~~credit ~~limits~~ratings ~~for GHGs~~ and ~~other~~their ~~emissions,~~effect ~~more~~on ~~extensive~~availability ~~permitting requirements~~ and ~~the~~cost ~~regulation~~ of ~~additional substances~~capital;

• ~~Cost~~Changes ofin ~~environmental~~financial ~~compliance,~~or ~~including~~regulatory ~~those~~accounting ~~costs~~principles ~~related~~or topolicies ~~climate~~imposed ~~change~~by governing bodies;

• ~~Changes~~Employee inworkforce ~~implementation and enforcement practices of regulators relating to environmental standards and litigation exposure for remedial activities~~factors;

• ~~Difficulty~~Risks inof ~~anticipating~~operating ~~mitigation~~businesses ~~requirements~~in ~~associated~~regulated ~~with~~industries ~~environmental~~that ~~and~~are ~~other~~subject ~~regulatory~~to ~~approvals~~changing ~~and/or~~regulatory ~~associated appeals~~structures;

~~• Fluctuations in energy-related commodity prices and the effect these could have on Questar Gas’ earnings, liquidity position and the underlying value of its assets;~~17

• ~~Unplanned~~Political ~~system~~and ~~disruptions~~economic atconditions, ~~Questar~~including ~~Gas~~inflation ~~facilities~~and deflation;

• ~~Counterparty~~Domestic ~~credit~~terrorism and ~~performance~~other ~~risk~~threats to Questar Gas' physical and intangible assets, as well as threats to cybersecurity;

• ~~Global~~Changes ~~capital~~in ~~market~~demand ~~conditions~~for Questar Gas' services, including ~~the~~industrial, ~~availability~~commercial ofand ~~credit~~residential ~~and~~growth ~~the~~or ~~ability~~decline in Questar Gas' service areas, failure to ~~obtain~~maintain ~~financing~~or replace customer contracts on ~~reasonable~~favorable terms, changes in customer growth or usage patterns, including as a result of energy conservation programs and the availability of energy efficient devices;

• ~~Fluctuations~~Changes into ~~interest~~regulated gas distribution and transportation rates collected by Questar Gas;

• Changes in ~~rating~~operating, ~~agency~~maintenance ~~requirements or credit ratings~~ and ~~their~~construction ~~effect on availability and cost of capital~~costs;

• ~~Changes~~Timing inand ~~financial~~receipt orof regulatory ~~accounting~~approvals ~~principles~~necessary orfor ~~policies~~planned ~~imposed~~projects byand ~~governing~~compliance ~~bodies~~with conditions associated with such regulatory approvals;

• ~~Employee~~The ~~workforce~~inability ~~factors~~to complete planned projects within the terms and time frames initially anticipated;

• ~~Risks~~Adverse ofoutcomes ~~operating businesses~~ in ~~regulated~~litigation ~~industries~~matters ~~that~~or ~~are subject to changing~~ regulatory ~~structures~~proceedings; and

• ~~Political~~The ~~and~~impact ~~economic~~of ~~conditions~~operational hazards, including ~~inflation~~adverse developments with respect to pipeline safety or integrity, equipment loss, malfunction or failure, operator error, and ~~deflation;~~other catastrophic events.

•Additionally, ~~Domestic~~other ~~terrorism~~risks ~~and~~that ~~other~~could ~~threats~~cause actual results to differ from predicted results are set forth in Item 1A. Risk Factors in Questar Gas’' ~~physical~~Annual ~~and~~Report ~~intangible~~on ~~assets,~~Form as10-K ~~well~~for asthe ~~threats~~year toended ~~cybersecurity;~~December 31, 2016.

•Questar ~~Changes~~Gas' inforward-looking ~~demand~~statements ~~for~~are ~~Questar~~based ~~Gas’~~on ~~services,~~beliefs ~~including~~and ~~industrial,~~assumptions ~~commercial~~using ~~and~~information ~~residential~~available ~~growth~~at orthe ~~decline~~time inthe statements are made. Questar Gas’ ~~service~~cautions ~~areas,~~the ~~failure~~reader not to ~~maintain~~place orundue ~~replace~~reliance ~~customer~~on ~~contracts~~its onforward-looking ~~favorable~~statements ~~terms~~because the assumptions, ~~changes~~beliefs, inexpectations ~~customer~~and ~~growth~~projections orabout ~~usage~~future ~~patterns~~events may, ~~including~~and asoften ado, ~~result~~differ ofmaterially ~~energy~~from ~~conservation~~actual ~~programs~~results. ~~and~~Questar ~~the~~Gas ~~availability~~undertakes ofno ~~energy~~obligation ~~efficient~~to ~~devices;~~update any forward-looking statement to reflect developments occurring after the statement is made.

•Results ~~Changes~~of ~~to regulated gas distribution and transportation rates collected by Questar Gas;~~Operations

•Presented ~~Changes~~below inis ~~operating,~~a ~~maintenance~~summary ~~and~~of ~~construction~~Questar ~~costs;~~Gas' results:

• Timing and receipt of regulatory approvals necessary for planned projects and compliance with conditions associated with such regulatory approvals;

	Second Quarter									Year-To-Date
	2017			2016			$ Change			2017		2016		$ Change
(millions)
Net income (loss)	$	(6.2	)	$	(1.6	)	$	(4.6	)	$	46.0	$	46.0	$	—

16 Overview

~~Table~~Second ofQuarter ~~Contents~~2017 vs. 2016

•Net ~~The~~loss ~~inability~~increased $4.6 million, primarily due to ~~complete~~merger ~~planned~~and ~~projects~~restructuring ~~within~~costs ~~the~~partially ~~terms~~offset ~~and~~by ~~time~~lower ~~frames~~employee ~~initially~~related ~~anticipated;~~costs.

•Year-To-Date ~~Adverse~~2017 ~~outcomes~~vs. ~~in litigation matters or regulatory proceedings; and~~2016

•Net ~~The~~income ~~impact~~was ofconsistent ~~operational~~as ~~hazards~~customer growth, ~~including~~higher ~~adverse~~infrastructure-replacement ~~developments~~cost ~~with~~recovery ~~respect~~and tolower ~~pipeline~~employee ~~safety~~related orcosts ~~integrity,~~were ~~equipment~~offset ~~loss,~~by ~~malfunction~~merger ~~or failure, operator error,~~ and ~~other~~restructuring ~~catastrophic events~~costs.

Additionally, other risks that could cause actual results to differ from predicted results are set forth in Item 1A. Risk Factors in Questar Gas’ Annual Report on Form 10-K for the year ended December 31, 2016. 18

~~Questar~~Analysis ~~Gas’~~of forward-looking statements are based on beliefs and assumptions using information available at the time the statements are made. Questar Gas cautions the reader not to place undue reliance on its forward-looking statements because the assumptions, beliefs, expectations and projections about future events may, and often do, differ materially from actual results. Questar Gas undertakes no obligation to update any forward-looking statement to reflect developments occurring after the statement is made. Operations

~~Results~~Presented below are selected amounts related to Questar Gas' results of ~~Operations~~operations:

Presented below is a summary of Questar Gas’ results:

	Second Quarter									Year-To-Date
	2017			2016			$ Change			2017		2016		$ Change
(millions)
Operating revenue	$	139.7		$	128.2		$	11.5		$	536.6	$	536.1	$	0.5
Cost of sales		75.5			67.8			7.7			316.8		324.7		(7.9	)
Net revenue		64.2			60.4			3.8			219.8		211.4		8.4
Other operations and maintenance		44.6			36.3			8.3			86.3		83.9		2.4
Depreciation and amortization		16.5			15.0			1.5			32.7		29.7		3.0
Other taxes		5.6			5.3			0.3			11.4		10.6		0.8
Other income		1.0			0.9			0.1			2.0		1.9		0.1
Interest expense		8.5			7.5			1.0			17.0		15.2		1.8
Income tax expense (benefit)		(3.8	)		(1.2	)		(2.6	)		28.4		27.9		0.5

	First Quarter
	2017		2016		$ Change
(millions)
Net income	$	52.2	$	47.6	$	4.6

An analysis of Questar Gas' results of operations follows:

~~Overview~~Second Quarter 2017 vs. 2016

~~First Quarter~~Net ~~2017~~revenue vsincreased 6%, primarily reflecting a $1.2 ~~2016~~million increase in infrastructure-replacement cost recovery, a $1.0 million increase from customer growth, and a $1.4 million increase in revenues from affiliates.

~~Net~~Other ~~income~~operations and maintenance increased 1023%, primarily ~~due~~reflecting tomerger ~~customer~~and ~~growth,~~restructuring ~~higher~~costs ~~infrastructure-replacement~~($11.1 ~~cost~~million), ~~recovery~~partially ~~and~~offset by lower employee related costs ($3.9 million).

~~Analysis~~Depreciation ofand ~~Operations~~amortization increased 10%, primarily due to infrastructure growth and replacement projects placed into service.

~~Presented~~Interest ~~below~~expense ~~are~~increased ~~selected~~13%, ~~amounts~~primarily ~~related~~due to ~~Questar~~interest ~~Gas’~~on ~~results~~debt issued in the fourth quarter of ~~operations:~~2016 ($0.9 million) and increased short-term debt ($0.4), partially offset by lower interest on the gas balancing account ($0.4 million).

	First Quarter
	2017		2016		$ Change
(millions)
Operating revenue	$	396.9	$	407.9	$	(11.0	)
Cost of sales		241.3		256.9		(15.6	)
Net revenue		155.6		151.0		4.6
Other operations and maintenance		41.7		47.6		(5.9	)
Depreciation and amortization		16.2		14.7		1.5
Other taxes		5.8		5.3		0.5
Other income		1.0		1.0		—
Interest expense		8.5		7.7		0.8
Income tax expense		32.2		29.1		3.1

Income tax benefit increased $2.6 million, primarily due to larger pre-tax loss.

AnYear-To-Date ~~analysis~~2017 ofvs. ~~Questar Gas’ results of operations follows:~~ 2016

~~First~~Net ~~Quarter~~revenue ~~2017~~increased vs4%, primarily reflecting a $4.8 ~~2016~~million increase in infrastructure-replacement cost recovery, a $3.8 million increase from customer growth, and a $2.8 million increase in revenues from affiliates, partially offset by a $3.1 million decrease in EEP cost recovery.

~~Net~~Other ~~revenue~~operations ~~increased 3%,~~and ~~primarily~~maintenance ~~reflecting~~increased ~~a $~~3.6% ~~million~~due ~~increase~~to inmerger ~~infrastructure-replacement~~and ~~cost~~restructuring ~~recovery,~~costs a ($211.54 million) ~~increase~~and ~~from~~increased ~~customer~~related-party ~~growth,~~expenses ~~and a~~ ($1.42 million), ~~increase~~substantially inoffset ~~revenues~~by ~~from~~lower ~~affiliates;~~employee ~~partially~~related ~~offset~~costs ~~by a~~ ($27.68 million) ~~decrease~~and in EEP ~~cost~~ ~~recovery~~costs ($3.1 million).

~~Other~~Depreciation ~~operations~~ and ~~maintenance~~amortization ~~decreased~~increased 1210%, primarily ~~reflecting~~due ~~lower~~to ~~employee~~infrastructure ~~related~~growth ~~costs ($4.9 million)~~ and ~~lower~~replacement ~~EEP~~projects ~~costs~~placed ~~($2.6~~into ~~million); partially offset by merger and restructuring costs ($0~~service.~~3 million).~~

17Interest expense increased 12%, primarily due to interest on debt issued in the fourth quarter 2016 ($1.8 million) and increased short-term debt ($0.9), partially offset by lower interest on the gas balancing account ($0.6 million) and decreased affiliated borrowings ($0.4 million).

~~Table~~Income oftax ~~Contents~~expense increased 2%, primarily due to higher pre-tax income.

~~Depreciation and amortization increased 10%, primarily due to plant additions driven by customer growth and feeder-line replacements.~~ 19

~~Interest expense increased 10%, primarily due to interest on debt issued in the fourth quarter of 2016 ($1~~ITEM 4.2 ~~million),~~CONTROLS ~~partially~~AND ~~offset by lower interest expense on affiliated borrowings ($0.3 million).~~ PROCEDURES

~~Income~~Senior ~~tax expense~~management ~~increased~~of ~~11%~~Questar Gas, ~~primarily~~including ~~due~~Questar toGas' ~~higher~~CEO ~~pre-tax~~and ~~income~~CFO, evaluated the effectiveness of Questar Gas' disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation process, Questar Gas' CEO and CFO have concluded that Questar Gas' disclosure controls and procedures are effective.

18There were no changes in Questar Gas' internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, Questar Gas' internal control over financial reporting.

~~Table of Contents~~20

~~ITEM~~PART 4II. ~~CONTROLS~~OTHER ~~AND PROCEDURES~~INFORMATION

Senior management of Questar Gas, including Questar Gas’ CEO and CFO, evaluated the effectiveness of Questar Gas’ disclosure controls and procedures as of the end of the period covered by this reportITEM 1. ~~Based~~LEGAL ~~on this evaluation process, Questar Gas’ CEO and CFO have concluded that Questar Gas’ disclosure controls and procedures are effective.~~ PROCEEDINGS

~~There~~From ~~were~~time noto ~~changes~~time, in Questar Gas’ ~~internal~~is ~~control~~alleged ~~over~~to ~~financial~~be ~~reporting~~in ~~that~~violation ~~occurred~~or ~~during~~in default under orders, statutes, rules or regulations relating to the ~~last~~environment, ~~fiscal~~compliance ~~quarter~~plans ~~that~~imposed ~~have~~upon ~~materially affected~~or agreed to by Questar Gas, or ~~are~~permits ~~reasonably~~issued ~~likely~~by tovarious ~~materially~~local, ~~affect~~state and/or federal agencies for the construction or operation of facilities. Administrative proceedings may also be pending on these matters. In addition, in the ordinary course of business, Questar Gas’ ~~internal~~is ~~control~~involved ~~over~~in ~~financial~~various ~~reporting.~~legal proceedings.

19See the following for discussions on various environmental and other regulatory proceedings to which Questar Gas is a party, which information is incorporated herein by reference:

~~Table~~• ofNotes ~~Contents~~10 and 16 to the Financial Statements in the Questar Gas' Annual Report on Form 10-K for the year ended December 31, 2016.

~~PART~~• ~~II.~~Notes ~~OTHER~~7 ~~INFORMATION~~and 9 to the Financial Statements in the Questar Gas’ Form 10-Q for the quarter ended March 31, 2017.

~~ITEM~~• 1.Notes ~~LEGAL~~7 ~~PROCEEDINGS~~and 10 to the Financial Statements in this report.

From time to time, Questar Gas is alleged to be in violation or in default under orders, statutes, rules or regulations relating to the environment, compliance plans imposed upon or agreed to by Questar Gas, or permits issued by various local, state and/or federal agencies for the construction or operation of facilitiesITEM 1A. ~~Administrative~~RISK ~~proceedings may also be pending on these matters. In addition, in the ordinary course of business, Questar Gas is involved in various legal proceedings.~~ FACTORS

~~See~~Questar ~~the~~Gas’ ~~following~~business ~~for~~is ~~discussions~~influenced onby ~~various environmental~~many ~~and~~factors ~~other~~that ~~regulatory~~are ~~proceedings~~difficult to ~~which~~predict, involve uncertainties that may materially affect actual results and are often beyond Questar Gas' iscontrol. aA ~~party~~number of these factors have been identified in Questar Gas' Annual Report on Form 10-K for the year ended December 31, 2016, which should be taken into consideration when reviewing the information iscontained ~~incorporated~~in ~~herein~~this byreport. ~~reference:~~There have been no material changes with regard to the risk factors previously disclosed in Questar Gas' Annual Report on Form 10-K for the year ended December 31, 2016. For other factors that may cause actual results to differ materially from those indicated in any forward-looking statement or projection contained in this report, see Forward-Looking Statements in MD&A in this report.

~~• Notes 10 and 16 to the Financial Statements in the Questar Gas’ Annual Report on Form 10-K for the year ended December 31, 2016.~~21

~~• Notes 7 and 9 to the Financial Statements in this report~~ITEM 6. EXHIBITS

ITEM 1A. RISK FACTORS

Exhibit Number		Description

3.1		Amended and Restated Consolidated Articles of Incorporation of Questar Gas Company (Exhibit 3.1, Form 8-K filed May 14, 2012, File No. 333-69210).

3.2		Amended and Restated Bylaws of Questar Gas Company, effective as of October 17, 2016 (Exhibit 3.2, Form 10-Q for the quarter ended September 30, 2016 filed November 9, 2016, File No. 333-69210).

31.a		Certification by Chief Executive Officer of Questar Gas Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

31.b		Certification by Chief Financial Officer of Questar Gas Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

32		Certification to the Securities and Exchange Commission by Chief Executive of Officer and Chief Financial Officer of Questar Gas Company as required by Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

101		The following financial statements from Questar Gas Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed on August 3, 2017, formatted in XBRL: (i) Statements of Income, (ii) Balance Sheets, (iii) Statements of Cash Flows, and (iv) the Notes to Financial Statements.

Questar Gas’ business is influenced by many factors that are difficult to predict, involve uncertainties that may materially affect actual results and are often beyond Questar Gas’ control. A number of these factors have been identified in Questar Gas’ Annual Report on Form 10-K for the year ended December 31, 2016, which should be taken into consideration when reviewing the information contained in this report. There have been no material changes with regard to the risk factors previously disclosed in Questar Gas’ Annual Report on Form 10-K for the year ended December 31, 2016. For other factors that may cause actual results to differ materially from those indicated in any forward-looking statement or projection contained in this report, see Forward-Looking Statements in MD&A in this report. 22

20 SIGNATURE

~~Table~~Pursuant to the requirements of ~~Contents~~the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ITEM 6. EXHIBITS

		QUESTAR GAS COMPANY (Registrant)

August 3, 2017		/s/ Michele L. Cardiff
		Michele L. Cardiff
		Vice President, Controller and Chief Accounting Officer

ExhibitNumber		Description
3.1		Amended and Restated Consolidated Articles of Incorporation of Questar Gas Company (Exhibit 3.1, Form 8-K filed May 14, 2012, File No. 333-69210).
3.2		Bylaws of Questar Gas Company, effective as of October 17, 2016 (Exhibit 3.2, Form 10-Q for the quarter ended September 30, 2016 filed November 9, 2016, File No. 333-69210).
31.a		Certification by Chief Executive Officer of Questar Gas Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.b		Certification by Chief Financial Officer of Questar Gas Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32		Certification to the Securities and Exchange Commission by Chief Executive of Officer and Chief Financial Officer of Questar Gas Company as required by Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
101		The following financial statements from Questar Gas Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, filed on May 4, 2017, formatted in XBRL: (i) Statements of Income, (ii) Balance Sheets, (iii) Statements of Cash Flows, and (iv) the Notes to Financial Statements.

21EXHIBIT INDEX

Exhibit Number		Description

3.1		Amended and Restated Consolidated Articles of Incorporation of Questar Gas Company (Exhibit 3.1, Form 8-K filed May 14, 2012, File No. 333-69210).

3.2		Amended and Restated Bylaws of Questar Gas Company, effective as of October 17, 2016 (Exhibit 3.2, Form 10-Q for the quarter ended September 30, 2016 filed November 9, 2016, File No. 333-69210).

31.a		Certification by Chief Executive Officer of Questar Gas Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

31.b		Certification by Chief Financial Officer of Questar Gas Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

32		Certification to the Securities and Exchange Commission by Chief Executive of Officer and Chief Financial Officer of Questar Gas Company as required by Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

101		The following financial statements from Questar Gas Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed on August 3, 2017, formatted in XBRL: (i) Statements of Income, (ii) Balance Sheets, (iii) Statements of Cash Flows, and (iv) the Notes to Financial Statements.

~~SIGNATURE~~ 24

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

QUESTAR GAS COMPANY (Registrant) May 4, 2017 /s/ Michele L. Cardiff Michele L. Cardiff Vice President, Controller and Chief Accounting Officer

EXHIBIT INDEX

ExhibitNumber		Description
3.1		Amended and Restated Consolidated Articles of Incorporation of Questar Gas Company (Exhibit 3.1, Form 8-K filed May 14, 2012, File No. 333-69210).
3.2		Bylaws of Questar Gas Company, effective as of October 17, 2016 (Exhibit 3.2, Form 10-Q for the quarter ended September 30, 2016 filed November 9, 2016, File No. 333-69210).
31.a		Certification by Chief Executive Officer of Questar Gas Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.b		Certification by Chief Financial Officer of Questar Gas Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32		Certification to the Securities and Exchange Commission by Chief Executive of Officer and Chief Financial Officer of Questar Gas Company as required by Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
101		The following financial statements from Questar Gas Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, filed on May 4, 2017, formatted in XBRL: (i) Statements of Income, (ii) Balance Sheets, (iii) Statements of Cash Flows, and (iv) the Notes to Financial Statements.

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