UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, ~~2009~~2010

[str10k4q2010001.jpg]

QUESTAR PIPELINE COMPANY


Exact name of registrant as specified in its charter	State or other jurisdiction of incorporation or organization	Commission File Number	(I.R.S. Employer Identification No.)
Questar Corporation	Utah	001-08796	87-0407509
Questar Pipeline Company	Utah	000-14147	87-0307414
Questar Gas Company	Utah	333-69210	87-0155877

~~(Exact~~180 ~~name~~East of100 ~~registrant~~South, asP.O. ~~specified~~Box in45433, ~~its~~Salt ~~charter)~~Lake City, Utah 84145-0433

STATE OF UTAH	000-14147	87-0307414
(State or other jurisdiction of incorporation or organization)	(Commission File No.)	(I.R.S. Employer Identification No.)

(Address of principal executive offices)

~~180~~Registrant's ~~East~~telephone ~~100 South, P~~number: 801.O324. ~~Box 45360, Salt Lake City, Utah 84145-0360~~5000

~~Phone:~~ Securities registered pursuant to Section 12(~~801~~b) ~~324-2400~~of the Act:

~~Securities~~Questar ~~registered~~Corporation ~~pursuant~~Common tostock ~~Section~~without ~~12(b)~~par ofvalue, listed on the ~~Act:~~New York Stock Exchange Questar Pipeline Company None Questar Gas Company None

Securities registered pursuant to Section 12(g) of the Act: ~~None~~

~~Indicate~~Questar byCorporation ~~check~~None ~~mark~~Questar ifPipeline ~~the~~Company ~~registrant~~None isQuestar aGas ~~well-known~~Company ~~seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]~~None

Indicate by check mark if the registrant is ~~not~~a ~~required~~well-known toseasoned ~~file~~issuer, ~~reports~~as ~~pursuant~~defined toin ~~Section~~Rule 13405 ~~or Section 15(d)~~ of the Securities Act. ~~Yes [ ] No [X]~~

~~Indicate~~Questar byCorporation ~~check~~Yes ~~mark~~[X] ~~whether~~No ~~the~~[ ~~registrant~~] ~~(1)~~Questar ~~has~~Pipeline ~~filed~~Company ~~all~~Yes ~~reports~~[ ~~required~~] toNo be[X] ~~filed~~Questar byGas ~~Section~~Company 13Yes or[ ~~15(d)~~] ofNo 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.[X]

~~Yes [X] No [ ]~~Indicate by check mark whether the registrant (1) has filed all reports required 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.

~~Indicate~~Questar byCorporation ~~check~~Yes ~~mark~~[X] ~~whether~~No ~~the~~[ ~~registrant~~] ~~has~~Questar ~~submitted~~Pipeline ~~electronically~~Company ~~and~~Yes ~~posted~~[X] onNo ~~its~~[ ~~corporate~~] ~~web~~Questar ~~site,~~Gas ifCompany any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 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 [ X] No [ ]

Indicate by check mark ifwhether ~~disclosure~~the ofregistrant ~~delinquent~~has ~~filers~~submitted ~~pursuant~~electronically toand ~~Item~~posted ~~405~~on ofits ~~Regulation~~corporate ~~S-K~~Web issite, ~~not~~if ~~contained~~any, ~~herein~~every ~~and~~Interactive ~~will~~Data ~~not~~File required to be ~~contained,~~submitted and posted pursuant to ~~the~~Rule ~~best~~405 of ~~registrant’s~~Regulation ~~knowledge,~~S-T in(Section ~~definitive~~232.405 ~~proxy~~of orthis ~~information~~chapter) ~~statements~~during ~~incorporated~~the bypreceding ~~reference~~12 inmonths ~~Part~~(or ~~III~~for ofsuch ~~this~~shorter ~~Form~~period ~~10-K~~that orthe ~~any~~registrant ~~amendment~~was required to ~~this~~submit ~~Form~~and ~~10-K~~post such files). ~~[ ]~~

~~Indicate~~Questar byCorporation ~~check~~Yes ~~mark~~[X] ~~whether~~No ~~the~~[ ~~registrant~~] isQuestar aPipeline ~~large~~Company ~~accelerated~~Yes ~~filer,~~[ an] ~~accelerated~~No ~~filer,~~[ a] ~~non-accelerated~~Questar ~~filer,~~Gas orCompany aYes ~~smaller~~[ ~~reporting~~] ~~company.~~No ~~See~~[ ~~definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):~~]

~~Large~~Indicate ~~accelerated~~by ~~filer~~check [mark ]if ~~Accelerated~~disclosure ~~filer~~of [delinquent ]filers ~~Non-accelerated~~pursuant ~~filer~~to ~~[X]~~Item 405 of Regulation S-K (DoSection 229.405 of this chapter) is not ~~check~~contained ifherein, aand ~~smaller~~will ~~reporting~~not ~~company)~~be ~~Smaller~~contained, ~~reporting~~to ~~company~~the [best ]of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.


Questar Corporation	[ ]
Questar Pipeline Company	[ ]
Questar Gas Company	[ ]

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 definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. Do not check non-accelerated filer if a smaller reporting company (Check one):


Questar Corporation	Large accelerated filer [X]	Accelerated filer [ ]	Non-accelerated filer [ ]	Smaller reporting company [ ]
Questar Pipeline Company	Large accelerated filer [ ]	Accelerated filer [ ]	Non-accelerated filer [X]	Smaller reporting company [ ]
Questar Gas Company	Large accelerated filer [ ]	Accelerated filer [ ]	Non-accelerated filer [X]	Smaller reporting company [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Questar Corporation Yes [ ] No [X] Questar Pipeline Company Yes [ ] No [X] Questar Gas Company Yes [ ] No [X]

~~State~~Indicate the ~~aggregate~~number ~~market value~~ of ~~the~~shares ~~voting~~outstanding ~~and~~of ~~non-voting~~each ~~common~~of ~~equity held by non-affiliates computed by reference to~~ the ~~price~~issuers’ atclasses ~~which the common equity was last sold, or the average bid and asked price~~ of ~~such~~ common ~~equity~~stock, as of ~~the~~January ~~last business day of the registrant’s most recently completed second fiscal quarter. (June 30~~31, ~~2009)~~2011: ~~$0.~~

At February 28, 2010, there were 6,550,843 shares of the registrant’s $1.00 par value common stock outstanding. All shares are owned by Questar Corporation.


Questar Corporation	without par value	176,775,524
Questar Pipeline Company	$1.00 per share par value	6,550,843
Questar Gas Company	$2.50 per share par value	9,189,626

~~Registrant~~State ~~meets~~the aggregate market value of the ~~conditions~~voting ~~set~~and ~~forth~~non-voting incommon ~~General~~equity ~~Instructions~~held ~~(I)(1)(a)~~by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter (bJune 30, 2010). ofThe ~~Form~~aggregate ~~10-K~~market value was calculated by excluding all shares held by directors and isexecutive ~~therefore~~officers ~~filing~~of ~~this~~the ~~Form~~registrant ~~with~~and three nonprofit foundations established by the ~~reduced~~registrant ~~disclosure~~without ~~format~~conceding that all such persons are affiliates for purposes of federal securities laws.


Questar Corporation	$7.8 billion
Questar Pipeline Company	None
Questar Gas Company	None

Documents Incorporated by Reference:

Portions of the registrant's definitive Proxy Statement (the "Proxy Statement"), to be filed in connection with its May 10, 2011, Annual Meeting of Stockholders, are incorporated by reference into Part III of this Annual Report.

Questar Pipeline Company and Questar Gas Company, as wholly-owned subsidiaries of a reporting company, meet the conditions set forth in General Instruction I (1) (a) and (b) of Form 10-K and are therefore filing this form with the reduced disclosure format.

TABLE OF CONTENTS

Page No.

Where You Can Find More Information

Forward-Looking Statements

Glossary of Commonly Used Terms

Gas and Oil Development and Production – Wexpro

Interstate Gas Transportation – Questar Pipeline

~~Environmental~~Retail ~~Matters~~Gas Distribution – Questar Gas

UNRESOLVED STAFF COMMENTS

1013

Item 2.

PROPERTIES

10Gas and Oil Development and Production – Wexpro

Interstate Gas Transportation – Questar Pipeline

Retail Gas Distribution – Questar Gas

Item 3.

LEGAL PROCEEDINGS

1115

Item 4.

(REMOVED AND RESERVED).

1115

PART II

Item 5.

MARKET FOR REGISTRANT’'S COMMON EQUITY, RELATED STOCKHOLDER

~~STOCKHOLDER~~ MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

~~SECURITIES~~15

Item 6.

SELECTED FINANCIAL DATA ~~(omitted)~~

1117

Item 7.

MANAGEMENT’'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

1118

Item 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~MARKET RISK~~28

Item 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

1630

Item 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

ON ACCOUNTING AND FINANCIAL DISCLOSURE

3180

Item 9A~~(T)~~.

CONTROLS AND PROCEDURES

3280

3282

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

~~GOVERNANCE (omitted)~~82

Item 11.

EXECUTIVE COMPENSATION ~~(omitted)~~

3282

Item 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS ~~AND~~

AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS ~~(omitted)~~

3282

Item 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, ~~AND~~

AND DIRECTOR INDEPENDENCE ~~(omitted)~~

3282

Item 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES

3282

PART IV

Item 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

3383

SIGNATURES

3486

FILING FORMAT

This Annual Report on Form 10-K is a combined report being filed by three separate registrants: Questar Corporation, Questar Pipeline Company and Questar Gas Company. Questar Pipeline Company and Questar Gas Company are wholly-owned subsidiaries of Questar Corporation. Information contained herein related to any individual registrant is filed by such registrant solely on its own behalf. Each registrant makes no representation as to information relating exclusively to the other registrants.

Part IV - Financial information in this Annual Report on Form 10-K includes separate financial statements (i.e. balance sheets, statements of income, statements of equity and statements of cash flows) for Questar Corporation, Questar Pipeline Company and Questar Gas Company. The Notes Accompanying the Financial Statements are presented on a combined basis for all three registrants. Only Questar Corporation of the three registrants named herein is required to attach XBRL exhibits.

Where You Can Find More Information

Questar ~~Pipeline~~Corporation ~~Company~~ (Questar ~~Pipeline~~ or the Company), isand atwo ~~wholly~~of ~~owned~~its ~~subsidiary~~subsidiaries, of Questar ~~Corporation~~Pipeline Company (Questar Pipeline). ~~Both~~and Questar ~~and~~Gas Company (Questar ~~Pipeline~~Gas), each file annual, quarterly, and current reports with the Securities and Exchange Commission (SEC). ~~The~~Questar ~~public~~also ~~may~~regularly ~~read~~files proxy statements and ~~copy~~other ~~these~~documents with the SEC. These reports and ~~any~~ other ~~materials~~information ~~filed~~can ~~with~~be read and copied at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C., 20549-0213. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. The SEC also maintains an internet site at http://www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC, including Questar ~~Pipeline~~.

Investors can also access financial and other information via Questar’'s ~~Web~~internet site at www.questar.com. Questar and ~~Questar~~each ~~Pipeline~~of its reporting subsidiaries make available, free of charge, through the ~~Web~~internet site, copies of Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to such reports and all reports filed by executive officers and directors under Section 16 of the Exchange Act reporting transactions in Questar securities. Access to these reports is provided as soon as reasonably practical after such reports are electronically filed with the SEC. Information contained on or connected to Questar’'s ~~Web~~internet site, which is not directly incorporated by reference into the Company’'s Annual Report on Form 10-K should not be considered part of this report or any other filing made with the SEC.

Questar’'s ~~Web~~internet site also contains copies of Statements of Responsibility for ~~Board~~various ~~Committees~~board committees, including the Finance and Audit Committee, Corporate Governance Guidelines and ~~the~~Questar's Business Ethics and Compliance Policy.

Finally, you may request a copy of filings, other than an exhibit to a filing unless that exhibit is specifically incorporated by reference into that filing, at no cost by writing or calling Questar ~~Pipeline~~, 180 East 100 South Street, P.O. Box ~~45360~~45433, Salt Lake City, ~~Utah~~UT, 84145-~~0360~~0433 (telephone number (801) -324-~~2400~~5000).

Forward-Looking Statements

This Annual Report on Form 10-K may contain or incorporate by reference information that includes or is based upon “"forward-looking statements”" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements give expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as “"anticipate,”" “"estimate,”" “"expect,”" “"project,”" “"intend,”" “"plan,”" “"believe,”" and other words and terms of similar meaning in connection with a discussion of future operating or financial performance. In particular, these include statements relating to future actions, prospective services or products, future performance or results of current and anticipated services or products, development efforts, expenses, the outcome of contingencies such as legal proceedings, trends in operations and financial results.

Any or all forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining actual future results. These statements are based on current expectations and the current economic environment. They involve a number of risks and uncertainties that are difficult to predict. These statements are not guarantees of future performance. Actual results could differ materially from those expressed or implied in the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to the following:

the risk factors discussed in Part I, Item 1A of this Annual Report on Form 10-K;

general economic conditions, including the performance of financial markets and interest rates;

changes in industry trends;

changes in laws or regulations; and

other factors, most of which are beyond the Company’'s control.

Questar ~~Pipeline~~ undertakes no obligation to publicly correct or update the forward-looking statements in this Annual Report, in other documents, or on the ~~Web~~internet site to reflect future events or circumstances. All such statements are expressly qualified by this cautionary statement.

~~Questar Pipeline Company 2009 Form 10-K~~1

Glossary of Commonly Used Terms

B Billion.

~~Btu One~~bbl Barrel, ~~British~~which ~~thermal~~is ~~unit~~equal –to a42 ~~measure~~U.S. ofgallons ~~the~~and ~~amount~~is ofa ~~energy~~common ~~required~~measure ~~to raise the temperature~~ of avolume ~~one-pound mass~~ of ~~water~~crude ~~one~~oil ~~degree~~and ~~Fahrenheit~~other atliquid ~~sea level~~hydrocarbons.

~~cf Cubic~~Btu One ~~foot~~British isthermal ~~a common~~ unit of- ~~gas~~a ~~measurement.~~measure ~~One~~of ~~standard cubic foot equals~~ the ~~volume~~amount of ~~gas~~energy inrequired ~~one~~to ~~cubic~~raise ~~foot~~the ~~measured at standard conditions – a~~ temperature of ~~60 degrees Fahrenheit and~~ a ~~pressure~~one-pound ofmass ~~30 inches~~ of ~~mercury~~water ~~(approximately~~one ~~14.7~~degree ~~pounds~~Fahrenheit ~~per~~at ~~square~~sea ~~inch)~~level.

~~dewpoint A~~CET Conservation ~~specific~~enabling ~~temperature~~tariff - a rate mechanism in Utah and ~~pressure~~Wyoming atthat ~~which~~decouples ~~hydrocarbons~~customer ~~condense~~usage toof ~~form~~natural gas from the non-gas revenues received by Questar Gas by specifying a ~~liquid~~margin for each customer per month. Differences between the CET margin and actual usage are deferred and recovered from or refunded to customers through future rate changes.

~~dth Decatherms~~cf Cubic orfoot ~~ten~~is ~~therms~~a common unit of gas measurement. One ~~dth~~standard cubic foot equals the volume of gas in one ~~million~~cubic ~~Btu~~foot ormeasured at standard conditions - a temperature of 60 degrees Fahrenheit and a pressure of 30 inches of mercury (approximately ~~one~~14.7 ~~Mcf~~pounds per square inch).

cfe Cubic foot of natural gas equivalents.

developed reserves Reserves of any category that can be expected to be recovered through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well. See 17 C.F.R. Section 210.4-10(a)(6).

development well A well drilled into a known producing formation in a previously discovered field.

DSM Demand-side management - costs incurred by Questar Gas to promote energy conservation in the form of rebates and promotions. These DSM costs are recovered from customers through periodic rate adjustments.

dry hole A well drilled and found to be incapable of producing hydrocarbons in sufficient quantities such that proceeds from the sale of production exceed expenses and taxes.

dth Decatherm or ten therms. One dth equals one million Btu or approximately one Mcf.

exploratory well A well drilled into a previously untested geologic prospect to determine the presence of natural gas or oil.

FERC Federal Energy Regulatory Commission.

gal U.S. gallon.

gas All references to “gas” in this report refer to natural gas.

gross Gross natural gas and oil wells or gross acres are the total number of wells or acres in which the Company has a working interest.

heating degree days A measure of the number of degrees the average daily outside temperature is below 65 degrees Fahrenheit.

M Thousand.

MM Million.

natural gas ~~liquids~~equivalents Oil (and NGL~~) Liquid~~ ~~hydrocarbons~~volumes ~~that~~ are ~~extracted~~converted ~~and~~to ~~separated~~natural ~~from~~gas equivalents using the ~~natural~~ratio ~~gas~~of ~~stream.~~one ~~NGL~~barrel ~~products~~of ~~include~~crude ~~ethane~~oil, ~~propane,~~condensate ~~butane~~or NGL to 6,000 ~~natural~~cubic ~~gasoline~~feet ~~and~~of ~~heavier~~natural ~~hydrocarbons~~gas.

NGL Natural gas liquids - liquid hydrocarbons that are extracted and separated from the natural gas stream. NGL products include ethane, propane, butane, natural gasoline and heavier hydrocarbons.

net Net gas and oil wells or net acres are determined by the sum of the fractional ownership working interest the Company has in those gross wells or acres.

proved reserves Those quantities of natural gas, oil, condensate and NGL which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from known reservoirs under existing economic conditions, operating methods and government regulations. See 17 C.F.R. Section 210.4-10(a)(22).

PSCU Public Service Commission of Utah.

PSCW Wyoming Public Service Commission.

reserves Estimated remaining quantities of natural gas, oil and related substances anticipated to be economically producible by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable expectation that there will exist, the legal right to produce. See 17 C.F.R. 210.Section 4-10(a)(26).

reservoir A porous and permeable underground formation containing a natural accumulation of producible natural gas and/or oil that is confined by impermeable rock or water barriers and is individual and separate from other reservoirs.

~~Questar~~royalty An ~~Pipeline~~economic ~~Company~~interest ~~2009~~in ~~Form~~a ~~10-K~~gas and oil lease that gives the owner the right to receive a portion of the production from the leased acreage or of the proceeds of the sale thereof, but generally does not require the owner to pay any portion of the costs of drilling or operating the wells on the leased acreage. Royalties may be either landowner's royalties, which are reserved by the owner of the leased acreage at the time the lease is granted, or overriding royalties, which are usually reserved by an owner of the leasehold in connection with a transfer to a subsequent owner.

6SEC Securities and Exchange Commission.

undeveloped reserves Reserves of any category that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion. See 17 C.F.R. Part 210. Section 4-10(a)(31).

Wexpro Agreement A long-standing comprehensive agreement with the states of Utah and Wyoming. The agreement was effective August 1, 1981, and sets forth the rights of Questar Gas to receive certain benefits from Wexpro's operations. The agreement was approved by the PSCU and PSCW in 1981 and affirmed by the Supreme Court of Utah in 1983.

working interest An economic interest in a gas and oil lease that gives the owner the right to drill, produce and conduct operating activities on the leased acreage and receive a share of any production.

workover Operations on a producing well to restore or increase production.

FORM 10-K

ANNUAL REPORT, ~~2009~~2010

PART I

ITEM 1. BUSINESS.

Nature of Business

Questar ~~Pipeline~~is ~~provides natural gas transportation and underground storage services in Utah, Wyoming and Colorado. As~~ a ~~“natural~~Rockies-based ~~gas~~integrated ~~company” under the Natural Gas Act of 1938, Questar Pipeline and certain subsidiary pipeline companies are regulated by the FERC as to rates and charges for storage and transportation of~~ natural gas inholding ~~interstate~~company ~~commerce,~~with ~~construction~~three ofcomplementary ~~new~~lines ~~facilities, and extensions or abandonments~~ of ~~service~~business ~~and~~operated ~~facilities,~~through ~~accounting~~wholly ~~and~~owned ~~other~~subsidiaries: ~~activities.~~

General: Questar Pipeline and its subsidiaries own 2,568 miles of interstate pipeline with total firm capacity commitments of 4,243 Mdth per day. Questar Pipeline’s core-transportation system is strategically located near large reserves of natural gas in six major Rocky Mountain producing areas. Questar Pipeline transports natural gas from these producing areas to other major pipeline systems and to the Questar Gas distribution system. In addition to this core system, Questar Pipeline, through wholly owned subsidiaries, owns and operates the Overthrust Pipeline in southwestern Wyoming and the eastern segment of Southern Trails Pipeline, a 487-mile line that extends from the Blanco hub in the San Juan Basin to just inside the California state line. An additional 96 miles of Southern Trails Pipeline in California is not in service. Questar Pipeline owns 50% of the White River Hub in western Colorado, which was placed in service in the fourth quarter of 2008. These facilities connect with six interstate pipeline systems and a major processing plant near Meeker, Colorado.·

~~Questar~~Wexpro ~~Pipeline~~develops ~~owns~~ and ~~operates~~produces ~~the~~natural ~~Clay~~gas ~~Basin~~on ~~storage~~behalf ~~facility,~~of ~~the largest underground-storage reservoir in the Rocky Mountain region. Through a subsidiary,~~ Questar ~~Pipeline also owns gathering lines and processing facilities near Price, Utah, which provide gas-processing services for third parties~~Gas.

Customers, Growth and Competition: Questar Pipeline’s transportation system is nearly fully subscribed. The weighted-average remaining life of firm contracts on Questar Pipeline was 12.4 years as of December 31, 2009. All of Questar Pipeline storage capacity is fully contracted with a weighted-average remaining life of 7.3 years as of December 31, 2009.·

Questar ~~Gas, an affiliated company, remains Questar~~ Pipeline's ~~largest~~operates ~~transportation~~interstate ~~customer.~~natural ~~During~~gas ~~2009,~~pipelines ~~Questar~~and ~~Pipeline~~storage ~~transported~~facilities ~~112.9 MMdth for Questar Gas compared to 120.9 MMdth~~ in ~~2008.~~the ~~Questar~~western ~~Gas~~United ~~has~~States ~~reserved~~and ~~firm-transportation~~provides ~~capacity~~other ofenergy ~~901 Mdth per day under long-term contracts~~services. ~~Questar Pipeline's primary transportation agreement with Questar Gas will expire on June 30, 2017.~~

Questar Pipeline transported 614.8 MMdth during 2009, up 1% over 2008, for nonaffiliated customers to pipelines owned by Kern River Pipeline, Northwest Pipeline, Colorado Interstate Gas, TransColorado, Wyoming Interstate Company, Rockies Express Pipeline and other systems. Rocky Mountain producers, marketers and end-users seek capacity on interstate pipelines that move gas to California, the Pacific Northwest, Midwestern or Northeastern markets. Questar Pipeline provides access for many producers to these third-party pipelines. ·

Questar ~~Pipeline~~Gas ~~competes~~provides ~~for~~retail ~~market growth with other~~ natural gas ~~transmission~~distribution ~~companies~~ in ~~the~~Utah, ~~Rocky~~Wyoming ~~Mountain region~~ and ~~with other companies providing natural gas storage services~~Idaho. ~~Some parties, including Questar Gas Management, an affiliate of Questar, are building gathering lines that allow producers to make direct connections to competing pipeline systems.~~

~~Regulation:~~Questar ~~The~~is ~~FERC~~headquartered ~~regulates~~in ~~interstate~~Salt ~~natural~~Lake ~~gas~~City, ~~transportation and oversees natural gas marketing~~Utah. ~~Questar~~Shares ~~Pipeline’s natural gas transportation and storage operations are regulated by the FERC under the Natural Gas Act~~ of ~~1938~~Questar ~~and~~common ~~the~~stock ~~Natural~~trade ~~Gas~~on ~~Policy Act of 1978. The FERC has authority to: set rates for natural gas transportation, storage and related services; set rules governing business relationships between~~ the ~~pipeline~~New ~~subsidiary~~York ~~and~~Stock ~~its~~Exchange ~~affiliates; approve new pipeline and storage-facility construction; and establish policies and procedures for accounting, purchase, sale, abandonment and other activities~~(NYSE:STR). ~~FERC policies may adversely affect Questar Pipeline profitability.~~

~~The~~Questar ~~FERC~~is ~~issued~~ a ~~final~~holding ~~rule~~company, onas ~~Standards~~that ofterm ~~Conduct~~is defined in ~~October~~the ~~2008.~~Public ~~The~~Utility ~~final~~Holding ~~rule,~~Company ~~Order~~Act ~~No.~~of ~~717,~~2005 ~~eliminates~~(PUHCA ~~the~~2005), ~~concept~~because ofQuestar ~~energy~~Gas, ~~affiliates~~its ~~and~~subsidiary, ~~adopts~~is a ~~"functional~~natural ~~approach"~~gas ~~that~~utility ~~applies~~company. ~~standards~~Questar, ofhowever, ~~conduct~~has toan ~~individual~~exemption ~~officers~~ and ~~employees~~waiver ~~based~~from onprovisions ~~their~~of ~~job~~the ~~functions,~~Act ~~not~~applicable onto ~~the~~holding ~~company~~companies. orQuestar ~~division~~conducts inall ~~which~~operations ~~the~~through ~~individual works~~subsidiaries. The ~~general~~parent ~~principles~~holding ofcompany ~~Standards~~performs ofcertain ~~Conduct~~management, ~~are:~~legal, ~~Non Discrimination~~financial, ~~Independent Functioning~~tax, Noadministrative ~~Conduit~~ and ~~Transparency.~~other ~~These~~services ~~principles~~for ~~govern~~its the relationship between transportation function employees and marketing function employees conducting transactions with affiliated pipeline and storage companies regulated by the FERC (transportation providers)subsidiaries. ~~Questar Pipeline maintains a rigorous~~

~~Questar~~The ~~Pipeline~~corporate-organization ~~Company~~structure ~~2009~~and ~~10-K~~major subsidiaries are summarized below:

[str10k4q2010003.gif]

See Note 13 to the consolidated financial statements included in Item 8 of Part II of this Annual Report for financial information by line of business including, but not limited to, revenues from unaffiliated customers, operating income and identifiable assets. A discussion of the Company's lines of business follows.

Spinoff of QEP

Effective May 18, 2010, Questar Market Resources, Inc., (Market Resources) a wholly owned subsidiary of Questar Corporation, merged with and into its newly formed, wholly owned subsidiary, QEP, a Delaware corporation in order to reincorporate in the State of Delaware (Reincorporation Merger). The Reincorporation Merger was effected pursuant to an Agreement and Plan of Merger entered into between Market Resources and QEP. The Reincorporation Merger was approved by the boards of directors

of Market Resources and QEP and submitted to a vote of, and approved by, Questar, as sole shareholder of Market Resources, and by Market Resources, as sole shareholder of QEP on May 18, 2010.

Subsequently, on June 30, 2010, Questar distributed all of the shares of common stock of QEP held by Questar to Questar shareholders in a tax-free, pro rata dividend (the Spinoff). Each Questar shareholder received one share of QEP common stock for each share of Questar common stock held (including fractional shares) at the close of business on the record date. In connection therewith, QEP distributed Wexpro, a wholly owned subsidiary of QEP, to Questar. In addition, Questar contributed $250.0 million of equity to QEP prior to the Spinoff.

GAS AND OIL DEVELOPMENT AND PRODUCTION - Wexpro

General: Wexpro develops and produces cost-of-service reserves for gas utility affiliate Questar Gas under the terms of the Wexpro Agreement, a long-standing comprehensive agreement with the states of Utah and Wyoming. Wexpro generated 39% of the Company’s operating income during the year ended December 31, 2010. Pursuant to the Wexpro Agreement, Wexpro recovers its costs and receives an unlevered, after-tax return of approximately 20% on its investment base. Wexpro's investment base is its investment in commercial wells and related facilities adjusted for working capital and reduced for deferred income taxes and accumulated depreciation. The term of the Wexpro Agreement coincides with the productive life of the gas and oil properties covered therein. Wexpro's investment base totaled $456.6 million at December 31, 2010. See Note 9 to the financial statements included in Item 8 of Part II of this Annual Report for more information on the Wexpro Agreement.

Wexpro delivers natural gas production to Questar Gas at cost-of-service. Cost-of-service gas satisfied approximately 51% of Questar Gas supply requirements during 2010. Wexpro sells crude-oil production from certain oil-producing properties at market prices with the revenues used to recover operating expenses and to provide Wexpro a return on its investment. Any operating income remaining after recovery of expenses and Wexpro's return on investment is divided between Wexpro and Questar Gas, with Wexpro retaining 46%.

Wexpro’s properties are located in the Rocky Mountain region, primarily in the Pinedale, Moxa Arch, Vermillion and Uinta producing areas. Advances in technology, including increased density drilling and multi-stage hydraulic fracture stimulation, have enabled the identification of additional unexploited development potential on many of the subject properties.

Competition and Customers: Wexpro faces competition in its business, including the marketing of oil, and obtaining goods, services and labor. Its growth strategy depends, in part, on its ability to develop reserves in a low-cost and efficient manner.

In 2010, 91% of Wexpro's revenues were from its affiliate, Questar Gas.

Regulation: Wexpro operations are subject to various government controls and regulation at the federal, state and local levels. Wexpro must obtain permits to drill and produce; maintain bonding requirements to drill and operate wells; submit and implement spill-prevention plans; and file notices relating to the presence, use, and release of specified contaminants incidental to gas and oil production. Wexpro is also subject to various conservation matters, including the regulation of the size of drilling and spacing units, the number of wells that may be drilled in a unit and the unitization or pooling of gas and oil properties. In addition, the Utah Division of Public Utilities and the Staff of the PSCW have oversight responsibility and retains an outside reservoir-engineering consultant and a financial monitor to assess the prudence of Wexpro's activities.

Most Wexpro leasehold acreage in the Rocky Mountain area is held under leases granted by the federal government and administered by federal agencies, principally the Bureau of Land Management (BLM). Current federal regulations restrict activities during certain times of the year on portions of Wexpro leasehold due to wildlife activity and/or habitat. Wexpro and its third-party operator have worked with federal and state officials in Wyoming to obtain authorization for limited winter-drilling activities on the Pinedale Anticline and have developed measures, such as drilling multiple wells from a single pad location, to minimize the impact of its activities on wildlife and wildlife habitat. Various wildlife species inhabit Wexpro leaseholds at Pinedale and in other areas. The presence of wildlife, including species that are protected under the federal Endangered Species Act could limit access to leases held by Wexpro on public lands.

In September 2008, the BLM issued a Record of Decision (ROD) on the Final Supplemental Environmental Impact Statement (FSEIS) for long-term development of natural gas resources in the Pinedale Anticline Project Area (PAPA). Under the ROD, Wexpro, through its third-party operator, is allowed to drill and complete wells year round in one of five concentrated development areas defined in the PAPA. The ROD contains additional requirements and restrictions on development of the PAPA.

INTERSTATE GAS TRANSPORTATION – Questar Pipeline

General: Questar Pipeline provides natural gas-transportation and underground-storage services in Utah, Wyoming and Colorado. Questar Pipeline and subsidiaries generated approximately 38% of the Company's operating income in 2010. As a "natural gas company" under the Natural Gas Act of 1938, Questar Pipeline and certain subsidiary pipeline companies are regulated by the FERC as to rates and charges for storage and transportation of natural gas in interstate commerce, construction of new facilities, extensions or abandonments of service and facilities, and accounting and other activities.

Questar Pipeline and its subsidiaries own 2,568 miles of interstate pipeline with total firm-capacity commitments of 4,744 Mdth per day. Questar Pipeline's core-transportation system is strategically located near large reserves of natural gas in six major Rocky Mountain producing areas. Questar Pipeline transports natural gas from these producing areas to other major pipeline systems, Questar Gas’s distribution system and other utility systems. In addition to this core system, Questar Pipeline, through wholly owned subsidiaries, owns and operates the Overthrust Pipeline in southwestern Wyoming and the eastern segment of Southern Trails Pipeline, a 487-mile line that extends from the Blanco hub in the San Juan Basin to just inside the California state line near the Arizona border. An additional 96 miles of Southern Trails Pipeline in California is not in service. Questar Pipeline operates and owns 50% of the White River Hub in western Colorado. White River Hub facilities connect with six interstate-pipeline systems and a major processing plant near Meeker, Colorado.

Questar Pipeline owns and operates the Clay Basin storage facility, the largest underground-storage reservoir in the Rocky Mountain region. Through a subsidiary, Questar Pipeline also owns gathering lines and processing facilities near Price, Utah, through which it provides gas-processing services for third parties. A Questar Pipeline subsidiary also provides wellhead automation and measurement services for Rockies oil and gas producers.

Customers, Growth and Competition: Questar Pipeline's transportation system is nearly fully subscribed. The weighted-average remaining life of firm contracts on Questar Pipeline was 11.2 years as of December 31, 2010. All of Questar Pipeline’s storage capacity is fully contracted with a weighted-average remaining life of 6.7 years as of December 31, 2010. Questar Pipeline faces the risk that it may not be able to re-contract firm capacity when contract terms expire.

Questar Gas, an affiliated company, remains Questar Pipeline's largest transportation customer. During 2010, Questar Pipeline transported 112.0 MMdth for Questar Gas compared to 112.9 MMdth in 2009. Questar Gas has reserved firm-transportation capacity of 901 Mdth per day under long-term contracts. Questar Pipeline's primary transportation agreement with Questar Gas will expire on June 30, 2017.

Questar Pipeline also transported 642.4 MMdth during 2010, up 3% over 2009, for unaffiliated customers to pipelines owned by Kern River Pipeline, Northwest Pipeline, Colorado Interstate Gas, TransColorado, Wyoming Interstate Company, Rockies Express Pipeline and other systems. Rocky Mountain producers, marketers and end-users seek capacity on interstate pipelines that move gas to California, the Pacific Northwest or Midwestern markets. Questar Pipeline provides access for many producers to these third-party pipelines.

Questar Pipeline competes for market growth with other natural gas-transmission companies in the Rocky Mountain region and with other companies providing natural gas-storage services. In addition, Questar Pipeline faces growing competition from third-party gathering companies that build gathering lines to allow producers to make direct connections to competing pipeline systems.

In 2010, 27% of Questar Pipeline’s revenues were from its affiliate, Questar Gas.

Regulation: Questar Pipeline's natural gas-transportation and storage operations are regulated by the FERC under the Natural Gas Act of 1938 and the Natural Gas Policy Act of 1978, as amended. The FERC has authority to set rates for natural gas transportation, storage and related services; set rules governing business relationships between the pipeline subsidiary and its affiliates; approve new pipeline and storage-facility construction; and establish policies and procedures for accounting, purchase, sale, abandonment and other activities. FERC policies may adversely affect Questar Pipeline profitability. Questar Pipeline maintains a rigorous compliance program to address all areas of FERC compliance including standards of conduct, market manipulation, shipper-must-have-title, bidding, capacity release, reporting, filings, postings and record retention. The Company annually trains Board members, executives, senior management and functional employees on standards-of-conduct rules.

Questar Pipeline is required to comply with the Pipeline Safety Improvement Act of 2002. This Act and the rules issued by the Department of Transportation require interstate pipelines and local distribution companies to implement a 10-year program of risk analysis, pipeline assessment and remedial repair for transportation pipelines located in high-consequence areas such as densely populated locations. Questar Pipeline's annual cost to comply with the Act is approximately $1 million, not including costs of pipeline replacement, if necessary.

RETAIL GAS DISTRIBUTION - Questar Gas

General: Questar Gas distributes natural gas as a public utility in Utah, southwestern Wyoming and a small portion of southeastern Idaho. It generated approximately 26% of the Company's operating income in 2010. As of December 31, 2010, Questar Gas was serving 909,570 sales and transportation customers. Questar Gas is the only non-municipal gas-distribution utility in Utah, where 97% of its customers are located. The PSCU, the PSCW and the Public Utility Commission of Idaho 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.

Questar Gas’s growth is tied to the economic growth of Utah and southwestern Wyoming. It has a market share of over 95% of residential space and water heating in its service area. During 2010, Questar Gas added 11,012 customers, a 1.2% increase. The rate of customer growth was lower in 2009 and 2010 than recent years because of declines in housing construction.

Questar Gas faces the same risks as other local-distribution companies. These risks include revenue variations based on seasonal changes in demand, changes in natural gas prices, availability of natural gas supplies, declining residential usage per customer, adequacy of distribution facilities and adverse regulatory decisions. Questar Gas's sales to residential and commercial customers are seasonal, with a substantial portion of such sales made during the heating season. The typical residential customer in Utah (defined as a customer using 80 dth per year) consumes over 77% of total gas requirements in the coldest six months of the year. Questar Gas, however, has a weather-normalization mechanism for its general-service customers. This billing mechanism adjusts the non-gas portion of a customer's monthly bill as the actual heating-degree days in the billing cycle are warmer or colder than normal. This mechanism reduces volatility in any given customer's monthly bill from year to year and reduces volatility in Questar Gas gross margin.

In October 2006, the PSCU approved a pilot program for a CET effective January 1, 2006, to promote energy conservation. In a 2010 rate order, the PSCU approved an indefinite continuation of the CET. Under the Company's prior rate structure, non-gas revenues declined when average temperature-adjusted usage per customer declined while non-gas revenues increased when average temperature-adjusted usage per customer increased. Under the CET, Questar Gas non-gas revenues are decoupled from the temperature-adjusted usage per customer. The tariff specifies a margin per customer for each month with differences to be deferred and recovered from customers or refunded to customers through periodic rate adjustments. These adjustments are limited to 5% of distribution non-gas revenues. Under the CET, Questar Gas recorded a $2.9 million revenue increase in 2010 compared with a $4.0 million decrease in 2009, which offset changes in customer usage.

In January 2007 the PSCU approved a DSM program effective January 1, 2007. Under the DSM program, Questar Gas encourages the conservation of natural gas through advertising, rebates for efficient homes and appliances, and energy audits. The costs related to the DSM program are deferred and recovered from customers through periodic rate adjustments. Questar Gas received revenues for recovery of DSM costs amounting to $39.1 million in 2010, compared to $26.9 million in 2009 and $6.6 million in 2008. As of December 31, 2010, Questar Gas had a regulatory asset of $39.7 million for DSM costs yet to be recovered from customers.

Questar Gas’s gas-supply risk is partly mitigated by Wexpro cost-of-service gas supply. During 2010 Questar Gas satisfied 51% of its supply requirements with cost-of-service gas volumes. Wexpro produces cost-of-service gas, which is then gathered by QEP Field Services (a third party) and transported by Questar Pipeline. See Item 2 of Part I and Note 16 to the financial statements included in Item 8 of Part II of this Annual Report for more information on the Company's cost-of-service proved reserves. Questar Gas also has a balanced and diversified portfolio of gas-supply contracts for volumes produced in Wyoming, Colorado, and Utah. In addition, Questar Gas has regulatory approval to pass through in its balancing account the economic results associated with hedging activities.

Questar Gas has designed its distribution system and annual gas-supply plan to handle peak design-day demand, which is defined as the estimated volume of gas that firm customers could use when the weather is extremely cold. For the 2010-2011 heating season, Questar Gas had an estimated peak design-day demand of 1,272 MMdth.

Questar Gas has long-term contracts with Questar Pipeline for transportation and storage capacity at Clay Basin and three peak-day storage facilities. Questar Gas also has transportation contracts to take deliveries at several locations from Kern River Pipeline.

Competition, Customers and Growth: Questar Gas currently does not face direct competition from other distributors of natural gas for residential and commercial customers in its service territory. Natural gas has historically enjoyed a favorable price comparison with other energy sources used by residential and commercial customers with the notable exceptions of electricity from coal-fired power plants and occasionally fuel oil. Questar Gas provides transportation service to industrial customers who buy gas directly from other suppliers. Questar Gas earns lower margins on this transportation service than firm-sales service and faces the risk that it could lose transportation customers to a competitor, Kern River Pipeline.

~~compliance~~Regulation: ~~program~~As toa ~~address~~public ~~all~~utility ~~areas~~Questar Gas is subject to the jurisdiction of ~~FERC~~the ~~compliance~~PSCU ~~including~~and ~~standards~~PSCW. Natural gas sales and transportation services are provided under rate schedules approved by the two regulatory commissions. Questar Gas is authorized to earn a return on equity of ~~conduct,~~10.35% ~~market~~in ~~manipulation,~~Utah ~~shipper~~and 10.5% in Wyoming. Both the PSCU and PSCW permit Questar Gas to recover gas costs through a balancing-~~must~~account procedure and to reflect natural gas-~~have-title,~~price ~~bidding,~~changes ~~capacity~~on ~~release,~~a ~~reporting,~~periodic ~~filings~~basis, ~~postings~~typically twice a year in the spring and ~~record~~the ~~retention~~fall. ~~The~~Questar ~~Company~~Gas ~~annually~~has ~~trains~~also ~~Board~~received ~~members,~~permission ~~executives,~~from ~~senior~~the ~~management~~PSCU and ~~functional~~PCSW ~~employees~~to onrecover ~~standards~~as part of ~~conduct~~its ~~rules~~gas costs the specific costs associated with hedging activities.

~~Questar~~On ~~Pipeline~~April is8, ~~required~~2010, tothe ~~comply~~PSCU ~~with~~approved ~~the~~a ~~Pipeline~~settlement ~~Safety~~in ~~Improvement~~Questar ~~Act~~Gas’s ofUtah ~~2002~~general rate case. ~~This~~The ~~Act~~stipulation, ~~and~~effective ~~the~~August ~~rules~~1, ~~issued~~2010, byauthorized an increase in the ~~Department~~utility’s ofallowed ~~Transportation~~return ~~require~~on ~~interstate~~equity ~~pipelines~~from 10% to 10.35% and ~~local~~indefinitely ~~distribution~~extended ~~companies~~the toexisting ~~implement~~CET. aThe 10stipulation also approved an infrastructure cost-~~year~~tracking ~~program~~mechanism ofthat ~~risk~~allows ~~analysis,~~the ~~pipeline~~company ~~assessment~~to place into rate base and ~~remedial~~earn ~~repair~~on ~~for~~capital ~~transportation~~expenditures ~~pipelines~~associated ~~located~~with ina multi-year high-~~consequence~~pressure ~~areas~~natural ~~such~~gas ~~as densely~~feeder-~~populated~~line ~~locations.~~replacement ~~Questar~~program, ~~Pipeline's~~and ~~annual~~do ~~cost~~it toimmediately ~~comply~~upon ~~with~~ the ~~Act~~completion isof ~~approximately~~each $1project. ~~million,~~The ~~not~~stipulation ~~including~~agreement ~~costs~~increased ofcustomer ~~pipeline~~rates ~~replacement,~~by if$5.0 ~~necessary~~million annually effective August 1, 2010.

Questar ~~Pipeline~~Gas ~~has~~last ~~significant~~filed ~~business~~a ~~relationships~~general ~~with~~rate ~~affiliated~~case ~~companies:~~in ~~The~~Wyoming ~~Questar~~in ~~corporate-organization~~August ~~structure~~2008. ~~and~~The ~~major~~PSCW ~~subsidiaries~~authorized ~~are~~a ~~summarized~~10.5% ~~below:~~return on equity.

~~Environmental~~Questar ~~Matters~~Gas’s significant relationships with affiliates have allowed it to lower its costs and improve efficiency. Transactions between Questar Gas and its affiliates are subject to greater scrutiny by regulators.

~~There~~Questar ~~are~~Gas nois ~~material~~subject ~~environmental~~to ~~matters~~the requirements of the Pipeline Safety Improvement Act. Questar Gas estimates that it will cost $4 to $5 million per year to comply with the Act, not including costs of pipeline replacement if necessary. The PSCU has allowed Questar Gas to recover these costs and to record a regulatory asset for costs incurred to comply with this Act.

Corporate

Corporate employees provide compliance, legal, finance, tax, treasury, human resources, audit, information technology, purchasing, warehousing, fleet, communication and insurance services for Questar's subsidiaries.

Employees

At December 31, ~~2009~~2010, ~~Questar~~the ~~Pipeline~~Company had ~~301~~1,705 employees, ~~compared~~including ~~with~~135 ~~309~~in aWexpro, ~~year~~321 ~~earlier~~in Questar Pipeline, 920 in Questar Gas and 329 in Corporate.

Executive Officers of the Registrant

Primary Positions Held with the Company

and Affiliates, Other Business Experience

Ronald W. Jibson

President and Chief Executive Officer, Questar (2010 to present); Director Questar and subsidiaries (2010 to present). Previous titles with Questar: Senior Vice President, Questar (2008 to 2010); President, Chief Executive Officer and Director, Questar Gas (2008 to 2010); Executive Vice President, Questar Gas (2008 to 2010); Vice President, Operations Questar Gas (2004 to 2008).

Kevin W. Hadlock

Executive Vice President and Chief Financial Officer Questar (2011 to present). Prior to joining Questar: Senior Vice President and Chief Financial Officer for Baltimore Gas and Electric Company, a subsidiary of the Constellation Energy Group (2008 to 2010); Vice President of Investor Relations and Financial Planning and Analysis for Constellation Energy Group (2007 to 2008); Vice President of Investor Relations (2007); and Director Investor Relations (2004 to 2007).

Thomas C. Jepperson

Executive Vice President, General Counsel and Corporate Secretary, Questar (2010 to present). Previous titles with Questar: Vice President and General Counsel, Questar (2005 to 2010); Division Counsel (2000 to 2005).

R. Allan Bradley

Executive Vice President Questar (2010 to present); Chief Executive Officer Questar Pipeline (2006 to present); President, Chief Operating Officer and Director Questar Pipeline (2005 to present); Chairman of the White River Hub, LLC Management Committee (2008 to present). Previous titles with Questar: Senior Vice President Questar (2005 to 2010);

James R. Livsey

Executive Vice President Questar (2011 to present); Executive Vice President and General Manager Wexpro (2011 to present); Director Wexpro (2010 to present). Previous titles with Questar: Executive Vice President, Questar and General Manager, Wexpro (2010 to 2011); Vice President and General Manager, Wexpro (2003 to 2010).

Craig C. Wagstaff

Senior Vice President Questar (2011 to present); Senior Vice President and General Manager Questar Gas (2011 to present); Director Questar Gas (2010 to present). Previous titles with Questar: Vice President and General Manager, Questar Gas (2010 to 2011); General Manager, Customer Relations, Questar Gas (2006 to 2010); Manager, Customer Relations Questar Gas (2000 to 2006).

David M. Curtis

Vice President and Controller Questar (2011 to present); Vice President and Controller Wexpro (2010 to present); Vice President and Controller Questar Pipeline and Questar Gas (2003 to present).

Kimberley Heimsath

Vice President Environmental, Health and Safety (2011 to present). Previous titles with Questar: General Manager Environmental, Health and Safety (2010 to 2011), Manager Environmental and Safety Services (2008 to 2010), Director Environmental and Safety Services (2005 to 2008).

Martin H. Craven served as Questar’s Vice President and Chief Financial Officer from June 30, 2010, through December 31, 2010. He will retire from the Company on February 28, 2011.

There is no "family relationship" between any of the listed officers or between any of them and the Company's directors. The executive officers serve at the pleasure of the Board of Directors. There is no arrangement or understanding under which the officers were selected.

ITEM 1A. RISK FACTORS.

Investors should read carefully the following factors as well as the cautionary statements referred to in “"Forward-Looking Statements”" herein. If any of the risks and uncertainties described below or elsewhere in this Annual Report actually occur, ~~Questar~~the ~~Pipeline’~~Company's business, financial condition or results of operations could be materially adversely affected.

Risks Inherent in the Company's Business

~~Transportation~~Wexpro ~~and~~may ~~storage~~not ~~operations~~be ~~involve~~able ~~numerous~~to ~~risks~~economically ~~that~~find ~~might result in accidents~~ and ~~other~~develop ~~operating~~new ~~risks and costs~~reserves. ~~There~~Wexpro's ~~are~~profitability ~~inherent~~depends ~~operating~~on ~~risks~~its ~~and~~ability ~~hazards~~to indevelop ~~the~~gas ~~Questar~~reserves ~~Pipeline’s transportation and storage operations~~ that ~~could~~are ~~cause~~economically ~~substantial~~recoverable. ~~financial~~Productive ~~losses.~~natural Ingas ~~addition,~~and ~~these~~oil ~~risks~~reservoirs ~~could~~are ~~result~~generally incharacterized ~~loss~~by ofdeclining ~~human~~production ~~life,~~rates ~~significant~~that ~~damage~~vary todepending ~~property,~~on ~~environmental~~reservoir ~~pollution,~~characteristics. ~~impairment~~Because of ~~operations~~significant ~~and~~production ~~substantial~~decline ~~losses.~~rates ~~The~~in ~~location~~several of ~~pipelines~~Wexpro's ~~near~~producing ~~populated~~ areas, ~~including~~substantial ~~residential~~capital ~~areas,~~expenditures ~~commercial~~are ~~business~~required ~~centers~~to ~~and~~develop ~~industrial~~gas ~~sites~~reserves ~~could~~to ~~increase~~replace ~~the~~those ~~level~~depleted ofby ~~damages resulting from these risks~~production. ~~Certain segments of the Company’s pipelines run through such areas. In spite of the Company’s precautions, an event could cause~~

~~Questar~~Wexpro’s ~~Pipeline~~rate ~~Company~~of ~~2009~~development 10of cost-Kof-service gas may vary depending upon market conditions. Wexpro develops cost-of-service gas and oil in accordance with accepted standards and prudent field-management and engineering practices. These standards and practices are influenced by gas and oil commodity prices and other market conditions.

8Gas and oil reserve estimates are imprecise and subject to revision. Wexpro's proved natural gas and oil reserve estimates are prepared annually by its reservoir engineers. Gas and oil reserve estimates are subject to numerous uncertainties inherent in estimating quantities of proved reserves, projecting future rates of production and timing of development expenditures. The accuracy of these estimates depends on the quality of available data and on engineering and geological interpretation and judgment. Reserve estimates are imprecise and will change as additional information becomes available. Estimates of economically recoverable reserves prepared by different engineers, or by the same engineers at different times may vary significantly. Results of subsequent drilling, testing and production may cause either upward or downward revisions of previous estimates. In addition, the estimation process also involves economic assumptions relating to commodity prices, production costs, severance and other taxes, capital expenditures and remediation costs. Actual results most likely will vary from the estimates. Any significant variance from these assumptions could affect the recoverable quantities of reserves attributable to any particular property, the classifications of reserves, the estimated future net cash flows from proved reserves and the present value of those reserves.

~~considerable~~Shortages ~~harm~~of tooilfield ~~people or property~~equipment, services and qualified personnel could ~~have~~impact aresults ~~material~~of ~~adverse~~operations. ~~effect~~The ondemand ~~the~~for ~~financial~~qualified ~~position~~and experienced field personnel to drill wells and ~~results~~conduct offield operations, ~~particularly~~geologists, ifgeophysicists, ~~the~~engineers ~~event~~and isother ~~not~~professionals ~~fully~~in ~~covered~~the byoil ~~insurance.~~and ~~Accidents~~gas orindustry ~~other~~can ~~operating~~fluctuate ~~risks~~significantly, ~~could~~often ~~further~~in ~~result~~correlation inwith ~~loss~~natural ofgas ~~service~~and ~~available~~oil toprices, ~~the~~causing ~~Company’s~~periodic ~~customers~~shortages. ~~Such~~There ~~circumstances~~also ~~could~~have ~~adversely~~been ~~impact~~regional ~~Questar~~shortages ~~Pipeline’s~~of ~~ability~~drilling torigs ~~meet~~and ~~contractual~~other ~~obligations~~equipment, as demand for specialized rigs and ~~retain~~equipment ~~customers.~~has

As is customary in the pipeline industry, Questar Pipeline maintains insurance against some, but not all, of these potential risks and losses. Questar Pipeline cannot assure that insurance will be adequate to cover these losses or liabilities. Losses and liabilities arising from uninsured or underinsured events could have a material adverse effect on Questar Pipeline’s financial condition and operations.

Questar Pipeline is dependent on Questar’s bank credit facilities and continued access to capital markets to successfully execute its operating strategies. Questar Pipeline also relies on Questar’s access to short-term credit markets. Questar Pipeline is dependent on these capital sources to provide financing for certain projects. The availability and cost of these credit sources is cyclical, and these capital sources may not remain available or Questar Pipeline may not be able to obtain money at a reasonable cost in the future. In lieu of commercial paper issuance, Questar at times has utilized back-up lines of credit with banks to meet short-term funding needs. Banks may be unable or unwilling to extend back-up lines of credit in the future. The interest rates on bank loans are tied to debt credit ratings of Questar and its subsidiaries published by Standard & Poor’s and Moody’s. A downgrade of credit ratings could increase the interest cost of debt and decrease future availability of money from banks and other sources. While management believes it is important to maintain investment grade credit ratings to conduct Questar Pipeline’s businesses, Questar and Questar Pipeline may not be able to keep investment grade ratings.

The severe economic recession increases credit risk. Questar Pipeline has significant credit exposure in outstanding accounts receivable from customers. Questar Pipeline has tightened its credit procedures such as requiring deposits or prepayments to help manage this risk. Questar Pipeline also aggressively pursues collection of past-due accounts receivable.

Questar Pipeline’s revenue and cash flow is derived from assets that are concentrated in the Rocky Mountain region. Any circumstance or event that negatively impacts the natural gas operations in this area could materially reduce earnings and cash flow.

Risks Related to Regulation

Questar Pipeline is subject to complex regulations on many levels. Questar Pipeline is subject to federal, state and local environmental, health and safety laws and regulations. Environmental laws and regulations are complex, change frequently and tend to become more onerous over time. Questar Pipeline incurs significant costs to comply with federal pipeline-safety regulations. In addition to the costs of compliance, substantial costs may be incurred to take corrective actions at both owned and previously-owned facilities. Accidental spills and leaks requiring cleanup may occur in the ordinary course of business. As standards change, Questar Pipeline may incur significant costs in cases where past operations followed practices that were considered acceptable at the time but now require remedial work to meet current standards. Failure to comply with these laws and regulations may result in fines, significant costs for remedial activities, or injunctions.

Questar Pipeline must comply with numerous and complex regulations governing activities on federal and state lands in the Rocky Mountain region, notably the National Environmental Policy Act, the Endangered Species Act, the Clean Air Act, the Clean Water Act, the National Historic Preservation Act and similar state laws. The United States Fish and Wildlife Service may designate critical habitat areas for certain listed threatened or endangered species. A critical habitat designation could result in further material restrictions to federal land use and private land use and could delay or prohibit land access or development. The listing of certain species, such as the sage grouse, as threatened and endangered, could have a material impact on the Company's operations in areas where such species are found. The Clean Water Act and similar state laws regulate discharges of storm water, wastewater, oil, and other pollutants to surface water bodies, such as lakes, rivers, wetlands, and streams. Failure to obtain permits for such discharges could result in civil and criminal penalties, orders to cease such discharges, and other costs and damages. These laws also require the preparation and implementation of Spill Prevention, Control, and Countermeasure Plans in connection with on-site storage of significant quantities of oil.

Federal and state agencies frequently impose conditions on Questar Pipeline’s activities. These restrictions have become more stringent over time and can limit or prevent operations. In addition, the Company is subject to federal and state hazard communications and community right-to-know statutes and regulations such as the Emergency Planning and Community Right-to-Know Act that require certain record keeping and reporting of the use and release of hazardous substances.

Questar Pipeline Company 2009 10-K

~~generally~~increased ~~subject~~along towith the ~~Native~~number ~~American~~of ~~tribal~~wells ~~court~~being ~~system~~drilled. ~~One~~These orfactors ~~more~~also ofcause ~~these~~increases ~~factors~~in ~~may~~costs ~~increase~~for ~~Questar~~equipment, ~~Pipeline’s~~services ~~costs~~and ofpersonnel. ~~doing~~These ~~business~~cost onincreases ~~Native~~could ~~American~~restrict ~~tribal~~the ~~lands~~ability ~~and~~to ~~have~~drill anwells ~~impact~~and onconduct ~~the~~operations, ~~viability~~especially during periods of ~~its~~lower ~~transportation~~natural ~~operations~~gas onand ~~such~~oil ~~lands~~prices.

~~Questar~~Operations ~~Pipeline~~involve ~~may~~numerous berisks ~~exposed~~that tomight ~~certain~~result ~~regulatory~~in accidents and ~~financial~~other operating risks ~~related~~and ~~to climate change~~costs. ~~Federal~~Drilling ~~and~~is ~~state~~a ~~courts~~high-risk ~~and~~activity. ~~administrative~~Operating ~~agencies~~risks ~~are~~include: ~~considering~~fire, ~~the~~explosions ~~scope~~ and ~~scale of climate~~blow-~~change~~outs; ~~regulation~~unexpected ~~under~~drilling ~~various~~conditions ~~laws~~such ~~pertaining~~as toabnormally ~~the~~pressured ~~environment,~~formations; ~~energy~~abandonment ~~use~~costs; ~~and development~~pipe, ~~and~~cement ~~greenhouse~~or ~~gas~~casing ~~emissions.~~failures; ~~Rocky~~environmental ~~Mountain~~accidents ~~producers'~~such ~~ability~~as tooil ~~access~~spills, ~~and develop new~~ natural gas ~~reserves may be restricted by climate-change regulation~~leaks, ~~which~~ruptures ~~may~~or ~~reduce~~discharges the demand for transportation and storage services. There are bills pending in Congress that would regulate greenhouse gas emissions through a cap-and-trade system under which emitters would be required to buy allowances for offsets of ~~emissions~~toxic ~~of greenhouse~~ gases., ~~The~~brine ~~EPA~~or ~~has~~well ~~adopted~~fluids ~~final regulations for the measurement and reporting of greenhouse gases emitted from certain large facilities~~ (~~25,000~~including ~~tons/year~~groundwater ~~of CO2 equivalent~~contamination) ~~beginning with operations in 2010~~. The ~~first~~Company ~~report~~could isincur tosubstantial belosses ~~filed~~as ~~with~~a ~~the~~result ~~EPA~~of byinjury ~~March~~or ~~31,~~loss ~~2011. In addition, several~~ of ~~the~~life; ~~states~~pollution inor ~~which~~other ~~Questar~~environmental ~~Pipeline~~damage; ~~operates~~damage ~~are~~to ~~considering~~or ~~various~~destruction ~~greenhouse~~of ~~gas~~property ~~registration~~ and ~~reduction~~equipment; ~~programs.~~regulatory ~~Carbon~~investigation; ~~dioxide~~fines ~~regulation could increase the price of natural gas, restrict access to~~ or ~~the~~curtailment ~~use~~ of ~~natural~~operations; ~~gas, and/~~or ~~reduce~~legal ~~natural~~fees ~~gas demand. Federal, state~~ and ~~local~~other ~~governments~~expenses ~~may~~incurred ~~also~~in ~~pass~~the ~~laws~~prosecution ~~mandating~~or ~~the~~defense ~~use~~ of ~~alternative energy sources, such as wind power and solar energy, which may reduce demand for natural gas~~litigation. ~~While~~As ~~future~~a ~~climate-change~~working ~~regulation~~interest isowner ~~likely,~~in itwells isoperated ~~too~~by ~~early~~other ~~to predict how this regulation will affect Questar Pipeline's business~~companies, ~~operations or financial results. It is uncertain whether Questar Pipeline's operations and properties, located in~~ the ~~Rocky~~Company ~~Mountain~~may ~~region~~also ofbe ~~the United States, are~~ exposed to ~~possible~~the ~~physical~~ risks, ~~such~~enumerated asabove ~~severe weather patterns, due to climate change as a result of man-made greenhouse gases. However, management does not believe~~ that ~~such physical risks~~ are ~~reasonably~~not ~~likely~~within toits ~~have~~care, acustody ~~material effect on the Company's financial condition~~ or ~~results of operations~~control.

~~FERC~~There ~~regulates~~are ~~interstate~~also ~~natural~~inherent ~~gas~~operating ~~transportation~~risks and ~~oversees~~hazards ~~natural~~in ~~gas~~the ~~marketing.~~Company's ~~Questar~~gas ~~Pipeline’s~~and ~~natural~~oil ~~gas~~production, processing, transportation and ~~storage~~distribution operations ~~are~~that ~~regulated~~could bycause ~~the~~substantial ~~FERC~~financial ~~under~~losses. ~~the~~In ~~Natural~~addition, ~~Gas~~these ~~Act~~risks could result in loss of ~~1938~~human life, significant damage to property, environmental pollution, impairment of operations and ~~the~~substantial ~~Natural~~losses. ~~Gas~~Certain ~~Policy~~company ~~Act~~pipelines have been in service for a number of ~~1978~~years. ~~The~~As ~~FERC~~these ~~has~~pipelines ~~authority~~age, the risk may increase of pipeline leakage or failure due to: ~~set~~corrosion, ~~rates~~fatigue ~~for~~or ~~natural~~third-party ~~gas~~damage. ~~transportation~~The location of pipelines near populated areas, ~~storage~~including residential areas, commercial business centers and ~~related~~industrial ~~services;~~sites ~~set~~could ~~rules~~increase ~~governing~~the ~~business~~damages ~~relationships~~resulting ~~between~~from these risks. Certain segments of the ~~pipeline~~Company's ~~subsidiary~~pipelines ~~and~~run ~~its~~through ~~affiliates;~~such ~~approve~~areas. ~~new~~In ~~pipeline~~spite ~~and~~of ~~storage-facility~~the ~~construction;~~Company's precautions, an event could cause considerable harm to people or property, and ~~establish~~could ~~policies~~have a material adverse effect on the financial position and ~~procedures~~results ~~for~~of ~~accounting~~operations, ~~purchase,~~particularly ~~sale,~~if ~~abandonment~~the ~~and~~event is not fully covered by insurance. Accidents or other ~~activities~~operating risks could further result in loss of service available to the Company's customers. ~~FERC~~Such ~~policies~~circumstances ~~may~~could adversely ~~affect~~impact ~~Questar~~the ~~Pipeline~~Company's ~~profitability.~~ability to meet contractual obligations and retain customers.

~~During~~While the ~~fourth~~Company ~~quarter~~works ofto ~~2008,~~mitigate ~~FERC~~the ~~issued~~risk ~~a number~~ of ~~orders~~pipeline ~~related~~failures toby ~~market~~assessing ~~transparency that extend FERC oversight to many Questar subsidiaries. Order No. 704 requires all natural gas companies to report gas purchases~~ and ~~sales~~replacing ~~and~~sections ~~their~~of ~~relationship~~more tovulnerable ~~price~~pipelines ~~reporting indexes. Order No. 712 defines changes in capacity release~~ and ~~asset~~by ~~management.~~implementing ~~Order~~other ~~No.~~measures ~~717~~as ~~establishes~~part ~~new Standards~~ of ~~Conduct~~its ~~Rules~~pipeline ~~and~~integrity ~~Order No. 720 requires intrastate pipelines to report available transportation capacity. In addition to the new orders~~program, ~~FERC~~Questar ~~released~~cannot aassure ~~policy statement on compliance in which it states~~ that ~~companies~~these ~~must~~measures ~~have~~will abe ~~“rigorous”~~successful ~~FERC~~in ~~compliance~~avoiding ~~program~~serious ~~that extends to all subsidiaries~~accidents, ~~not just interstate pipelines. Since the enactment of the Energy Policy Act of 2005~~explosions, ~~granting FERC increased penalty authority for non compliance~~injuries, ~~FERC~~death ~~has~~or ~~targeted various issues in the natural gas industry for compliance audits and investigations~~loss.

As is customary in the natural gas development and production, transportation and distribution industries, the Company maintains insurance against some, but not all, of these potential risks and losses. Questar cannot assure that insurance will be adequate to cover these losses or liabilities. Losses and liabilities arising from uninsured or underinsured events could have a material adverse effect on the Company's financial condition and operations.

Questar is dependent on bank credit facilities and continued access to capital markets to successfully execute its operating strategies. Questar also relies on access to short-term commercial paper markets. The Company is dependent on these capital sources to provide financing for working capital and certain projects. The availability and cost of these credit sources can vary significantly; and these capital sources may not remain available or the Company may not be able to obtain capital at a reasonable cost in the future. In lieu of commercial paper issuance, the Company at times has utilized back-up lines-of-credit with banks to meet short-term funding needs. Banks may be unable or unwilling to extend back-up lines-of-credit in the future. Questar's bank credit facilities and commercial-paper program are subject to variable interest rates. From time to time the Company may use interest-rate derivatives to fix the rate on a portion of its variable-rate debt. A downgrade of credit ratings could increase the interest cost of debt and decrease future availability of capital from banks and other sources. While management believes it is important to maintain investment-grade credit ratings to conduct the Company's businesses, the Company may not be able to keep investment-grade ratings.

The economic downturn increases credit risk. Questar has significant credit exposure in outstanding accounts receivable from customers in all segments of its business. Questar has tightened its credit procedures, for example, by requiring deposits or prepayments to help manage this risk. Questar also aggressively pursues collection of past-due accounts receivable.

Questar may incur liabilities associated with the Spinoff of QEP. Questar received a Private Letter Ruling from the Internal Revenue Service that the distribution of QEP qualities for tax-free treatment. The ruling relied on certain representations, assumptions and undertakings, including those related to past and future conduct of Questar’s and QEP’s business. The Internal Revenue Service could determine that the distribution of QEP is a taxable transaction if it determines that any of the representations, assumptions and undertakings is false or has been violated. If this occurs, Questar would face significant tax liability. Questar and QEP entered into several agreements in connection with the Spinoff, including a separation agreement, a tax matters agreement and a transition service agreement. Questar and QEP continue to cooperate in the filing of tax returns, operation of certain facilities and performance of certain transition services. Questar could face additional costs or liabilities if there are disputes regarding these agreements.

Risks Related to Regulation

Questar is subject to complex federal, state and local laws and regulations that could adversely affect its cost of doing business. The Company is subject to federal, state and local environmental, health and safety laws and regulations. Environmental laws and regulations are complex, change frequently and tend to become more restrictive over time. Questar must comply with the National Environmental Policy Act, the Endangered Species Act, the Clean Air Act, the Clean Water Act, and the National Historic Preservation Act and similar state laws.

Federal and state agencies frequently impose conditions on the Company's activities. These restrictions have become more stringent over time and can limit or prevent natural gas development and production on Wexpro’s leaseholds or construction of new transmission or distribution pipelines and related facilities. The United States Fish and Wildlife Service may designate critical habitat areas for certain listed threatened or endangered species. A critical habitat designation could result in further material restrictions to federal-land use and private-land use and could delay or prohibit land access or development. The listing of certain species, such as the sage grouse, as threatened and endangered, could have a material impact on the Company's operations in areas where such species are found. The Clean Water Act and similar state laws regulate discharges of storm water, wastewater, oil, and other pollutants to surface water bodies, such as lakes, rivers, wetlands, and streams. Failure to obtain permits for such discharges could result in civil and criminal penalties, orders to cease such discharges, corrective actions, and other costs and damages. These laws also require the preparation and implementation of Spill Prevention, Control, and Countermeasure Plans in connection with on-site storage of significant quantities of oil.

Certain environmental groups oppose drilling on some of Wexpro’s federal and state leases. These groups sometimes sue federal and state agencies for alleged procedural violations in an attempt to stop, limit or delay natural gas and oil development on public lands.

All wells drilled in tight-gas-sand and shale reservoirs require hydraulic-fracture stimulation to achieve economic production rates and recoverable reserves. A significant portion of Wexpro’s current and future production and reserve potential is derived from reservoirs that require hydraulic-fracture stimulation to be commercially viable. Currently, all well-construction activities, including hydraulic-fracture stimulation, are regulated by state agencies that review and approve all aspects of gas-and oil-well design and operation. New environmental initiatives, proposed federal and state legislation, and rulemaking pertaining to hydraulic-fracture stimulation could include additional permitting and reporting requirements and potential restrictions on the use of hydraulic-fracture stimulation that could materially affect the Company's ability to develop and produce gas and oil reserves.

In addition, the Company is subject to federal and state hazard communications and community right-to-know statutes and regulations such as the Emergency Planning and Community Right-to-Know Act that require certain recordkeeping and reporting of the use and release of hazardous substances.

Various federal agencies within the U.S. Department of the Interior, particularly the Minerals Management Service and the Bureau of Indian Affairs, along with each Native American tribe, promulgate and enforce regulations pertaining to gas and oil operations on Native American tribal lands. These regulations include such matters as lease provisions, drilling and production requirements, environmental standards and royalty considerations. In addition, each Native American tribe is a sovereign nation having the right to enforce laws and regulations independent from federal, state and local statutes and regulations. These tribal laws and regulations include various taxes, fees, requirements to employ Native American tribal members and other conditions that apply to lessees, operators and contractors conducting operations on Native American tribal lands. Lessees and operators conducting operations on tribal lands are generally subject to the Native American tribal court system. One or more of these factors may increase the Company's costs of doing business on Native American tribal lands and have an impact on the viability of its natural gas development, production, gathering, processing and transportation operations on such lands.

Regulatory authorities exercise considerable discretion in the timing and scope of permit issuance. Requirements imposed by these authorities may be costly and time consuming and may result in delays in the commencement or continuation of Wexpro’s natural gas development and production operations and Questar Pipeline’s construction projects. Further, the public may comment on and otherwise engage in the permitting process, including through intervention in the courts. Accordingly, needed permits may not be issued, or if issued, may not be issued in a timely fashion, or may involve requirements that restrict Questar's ability to conduct its operations or to do so profitably.

In addition to the costs of compliance, substantial costs may be incurred to take corrective actions at both owned and previously owned facilities. Accidental spills and leaks requiring cleanup may occur in the ordinary course of business. As standards change, the Company may incur significant costs in cases where past operations followed practices that were considered acceptable at the time but now require remedial work to meet current standards. Failure to comply with these laws and regulations may result in fines, significant costs for remedial activities, or injunctions.

Questar may be exposed to certain regulatory and financial risks related to climate change. Federal and state courts and administrative agencies are considering the scope and scale of climate-change regulation under various laws pertaining to the environment, energy use and development, and greenhouse-gas emissions. It is likely that Congress will enact legislation to regulate greenhouse-gas emissions in the future, though not in 2011. The EPA has adopted regulations for the measurement and reporting of greenhouse gases emitted from combustion at large facilities (emitting more than 25,000 metric tons/year of carbon dioxide equivalent) beginning in 2010. The first report is to be filed with the EPA by March 31, 2011. Reporting under this regulation will be expanded to include measurement and reporting of greenhouse-gas emissions attributed to methane venting and leaking in 2011. This regulation will affect all Questar subsidiaries in 2011, and will require measurement and monitoring in the natural gas producing basins in which Wexpro operates, as well as in Questar Pipeline’s compressor stations, storage fields, and processing facilities. Questar Gas will be responsible for reporting combustion emissions for all of its customers, as well as for measurement and monitoring of gate-station methane emissions. EPA’s Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule, which went into effect January 1, 2011, regulates greenhouse gases as a Clean Air Act pollutant. This rule will be phased in to regulate greenhouse gas at large new sources or at existing sources undergoing major modifications. There are efforts in the current Congress to undo the Tailoring Rule; it is too early to predict whether these efforts will be successful. Analysis of near-term capital projects indicates that these permitting regulations will not inhibit development or expansion of Questar services, unless EPA reduces thresholds in the future.

While future climate-change regulation is likely, it is too early to predict how this regulation will affect Questar's business, operations, or financial results. If forthcoming regulations recognize that use of natural gas in high-efficiency residential, commercial, transportation, industrial, and electricity generation applications is essential to lower U.S. greenhouse-gas emissions, use of natural gas in these applications will increase. Similarly, natural gas will be essential in ensuring electrical- grid reliability as reliance on intermittent renewable energy increases in the future. Use of natural gas as an alternative transportation fuel continues to grow, with Questar actively involved in expanding refueling infrastructure. On the other hand, federal regulation of carbon dioxide could increase the price of natural gas, restrict access to or the use of natural gas, and/or reduce natural gas demand. Federal, state, and local governments may pass laws mandating the use of alternative-energy sources, such as wind, solar, and geothermal energy. The increased use of alternative energy could reduce the future demand for natural gas. It is uncertain whether Questar's operations and properties, all located in the Rocky Mountains, are exposed to possible physical risks, such as severe weather patterns due to climate change, as a result of man-made greenhouse gases. However, management does not believe that such physical risks are reasonably likely to have a material effect on the Company's financial condition or results of operations.

FERC regulates the transportation and storage of natural gas and natural gas markets. Questar Pipeline's natural gas transportation and storage operations are regulated by the FERC under the Natural Gas Act of 1938 and the Natural Gas Policy Act of 1978. The FERC has authority to: set rates for natural gas transportation, storage and related services; set rules governing business relationships between the pipeline subsidiary and its affiliates; approve new pipeline and storage-facility construction; and establish policies and procedures for accounting, purchase, sale, abandonment and other activities. FERC policies may adversely affect Questar Pipeline profitability. Over the past two years, FERC issued a number of orders related to market transparency that extend FERC oversight to many Questar subsidiaries. Order No. 704 requires all natural gas companies to report gas purchases and sales and their relationship to price reporting indexes. Order No. 712 defines changes in capacity release and asset management. Order No. 717 establishes new Standards of Conduct Rules and Order No. 720 requires intrastate pipelines to report available transportation capacity. In addition to the orders, FERC released a policy statement on compliance in which it states that companies must have a "rigorous" FERC compliance program that extends to all subsidiaries, not just interstate pipelines. Since the enactment of the Energy Policy Act of 2005, granting FERC increased penalty authority for non-compliance, FERC has targeted various issues in the natural gas industry for compliance audits and investigations. In late 2010 FERC issued a revised policy statement on penalty guidelines. These guidelines indentify mitigation measures companies can take to minimize or reduce the risk of a significant FERC compliance penalty.

State agencies regulate the distribution of natural gas. Questar Gas’s natural gas-distribution business is regulated by the PSCU and the PSCW. These commissions set rates for distribution services and establish policies and procedures for services, accounting, purchase, sale and other activities. PSCU and PSCW policies and decisions may adversely affect Questar Gas profitability.

Other Risks

General economic and other conditions impact Questar ~~Pipeline’~~'s results. Questar ~~Pipeline’~~'s results may also be negatively affected by: changes in ~~general~~global economic conditions; changes in regulation; ~~availability and economic viability of gas properties for sale or exploration;~~ creditworthiness of counterparties; rate of inflation and interest rates; ~~assumptions used in business combinations;~~ weather and natural disasters; changes in customers’' credit ratings; competition from other forms of energy, other pipelines and storage facilities; effects of accounting policies issued periodically by accounting standard-setting bodies; terrorist attacks or acts of war; changes in business or financial condition; changes in credit ratings; and availability of financing for Questar ~~Pipeline~~.

The underfunded status of the Company’s defined benefit pension plans may require large contributions, which may divert funds from other uses. As of December 31, 2010, the Company’s defined benefit pension plans were $132.5 million underfunded. The underfunded status of the pension plans may require large contributions, which may divert funds from other uses by the Company. Over time, periods of declining interest rates and pension asset values may result in further reduction of the funding status of the plans and require additional contributions.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

None.

ITEM 2. PROPERTIES.

~~Questar~~GAS ~~Pipeline~~AND ~~has~~OIL ~~firm-capacity~~DEVELOPMENT ofAND ~~4,243~~PRODUCTION ~~Mdth~~- per day. These commitments include 1,991 Mdth per day for Questar Pipeline, 1,151 Mdth per day for Overthrust Pipeline, 81 Mdth per day for Southern Trails Pipeline and 1,020 Mdth per day for Questar Pipeline’s 50% ownership of White River Hub. Questar Pipeline’s transportation system includes 2,568 miles of natural gas transportation pipelines that interconnect with other pipelines. Its core system includes two segments, referred to as the northern system and southern system. The northern system extends from northwestern Colorado through southwestern Wyoming into northern Utah, while the southern system extends from western Colorado to Goshen, Utah. Questar Pipeline’s 2,568 miles of natural gas transportation pipeline includes pipelines at storage fields and tap lines used to serve Questar Gas, 214 miles of Overthrust Pipeline, a wholly owned subsidiary and 487 miles of the Southern Trails Pipeline, a wholly owned subsidiary, but does Wexpro

Wexpro develops and produces cost-of-service reserves for Questar ~~Pipeline~~Gas ~~Company~~under ~~2009~~the 10terms of the Wexpro Agreement. The estimates of proved reserves were made by Wexpro's reservoir engineers as of December 31, 2010. All reported reserves are located in the United States. Wexpro sells crude oil production from certain oil-Kproducing properties at market prices. Wexpro recovers its cost and return on investment from the proceeds. Any residual operating income after recovery of Wexpro costs and return is shared 54% Questar Gas, 46% Wexpro. The following table sets forth estimated natural gas and oil reserves.


	December 31, 2010
	Natural Gas	Oil and NGL	Natural Gas Equivalents
	(Bcf)	(MMbbl)	(Bcfe)
Proved developed reserves	463.8	3.2	482.6
Proved undeveloped reserves	274.6	1.7	284.9
Total proved reserves	738.4	4.9	767.5

~~not~~Refer ~~include~~to 96Note ~~miles~~16 of ~~Southern~~the ~~Trails~~financial ~~Pipeline~~statements ~~that~~included ~~is not~~ in ~~service~~Item in8 ~~southern~~of ~~California.~~Part ~~Questar~~II ~~Pipeline’s~~of ~~system~~this ~~ranges~~Annual inReport ~~size~~for ~~from~~additional ~~lines~~information ~~that~~pertaining ~~are less than four inches in diameter~~ to the ~~36-inch~~Company's ~~Overthrust~~reserves ~~Pipeline.~~at ~~Questar Pipeline also owns large-scale compressor stations, which boost~~ the ~~pressure~~end of ~~natural~~each ~~gas~~of ~~transported~~the onlast ~~its~~three ~~pipelines for delivery to utility customers and third-party pipelines~~years.

In addition to this filing, Wexpro will file reserves estimates as of December 31, 2010, with the Energy Information Administration of the Department of Energy on Form EIA-23. Although Wexpro uses the same technical and economic assumptions when it prepares the EIA-23, it is obligated to report reserves for the wells it operates, not for all wells in which it has an interest, and to include the reserves attributable to other owners in such wells.

Production

The following table sets forth the net production volumes and the production costs per Mcfe for the years ended December 31, 2010, 2009 and 2008.


	Year Ended December 31,
	2010	2009	2008
Volumes produced
Natural gas (Bcf)	50.2	48.2	46.1
Oil and NGL (MMbbl)	0.4	0.4	0.4
Total production (Bcfe)	52.9	50.7	48.6
Lifting costs (per Mcfe)
Lease operating expense	$0.38	$0.42	$0.48
Production taxes	0.51	0.39	0.78
Total lifting costs	$0.89	$0.81	$1.26

Productive Wells

The following table summarizes the Company's productive wells as of December 31, 2010. All wells are located in the United States.


	Gas Wells	Oil Wells	Total
Gross	1,415	116	1,531
Net	592.8	38.2	631.0

Although many wells produce both gas and oil, a well is categorized as either a gas or an oil well based upon the ratio of gas to oil produced. Each gross well completed in more than one producing zone is counted as a single well. At the end of 2010, the Company had 13 gross wells with multiple completions.

Leasehold Acres

The following table summarizes developed acreage in which the Company owns a working interest as of December 31, 2010. Developed acreage is acreage assigned to productive wells. The Company does not have any undeveloped acreage. Excluded from the table is acreage in which the Company's interest is limited to royalty, overriding-royalty and other similar interests. All leasehold acres are located in the United States.


	Developed Acres
	Gross	Net
Wyoming	99,918	84,621
Colorado	29,094	25,234
Utah	14,093	13,853
Other	759	759
Total	143,864	124,467

Drilling Activity

The following table summarizes the number of development wells drilled by Wexpro during the years indicated. Wexpro did not drill any exploratory wells.


	Productive			Dry
	Year Ended December 31,
	2010	2009	2008		2010	2009	2008
Net Wells Completed
Development	28.9	35.4	38.6		1.0	4.0	-

Gross Wells Completed
Development	44	54	75		1	4	-

INTERSTATE GAS TRANSPORTATION – Questar Pipeline

Questar Pipeline has firm-transportation contracts of 4,744 Mdth per day. These commitments include 1,956 Mdth per day for Questar Pipeline; 1,687 Mdth per day for Overthrust Pipeline; 81 Mdth per day for Southern Trails Pipeline; and, 1,020 Mdth per day for Questar Pipeline's 50% ownership of White River Hub. Questar Pipeline's transportation system includes 2,568 miles of natural gas-transportation pipelines that interconnect with other pipelines. Its core system includes two segments, referred to as the northern system and southern system. The northern system extends from northwestern Colorado through southwestern Wyoming into northern Utah, while the southern system extends from western Colorado to Goshen, Utah. Questar Pipeline's natural gas-transportation-pipeline mileage includes: pipelines at storage fields and tap lines used to serve Questar Gas; 214 miles of Overthrust Pipeline, a wholly owned subsidiary; and 487 miles of the Southern Trails Pipeline, a wholly owned subsidiary; but does not include 96 miles of Southern Trails Pipeline that is not in service in southern California. Questar Pipeline's system ranges in diameter from lines that are less than four inches to 36-inches. Questar Pipeline also owns large-scale compressor stations, which boost the pressure of natural gas transported on its pipelines for delivery to utility customers and third-party pipelines.

Questar Pipeline also owns the Clay Basin storage facility in northeastern Utah, which has a certificated capacity of 117.5 Bcf, including 51.3 Bcf of working gas. Questar Pipeline also owns three smaller storage aquifers in northeastern Utah and western Wyoming. Through a subsidiary, Questar Pipeline also owns gathering lines and processing facilities near Price, Utah, which provide gas-processing services for third parties.

RETAIL GAS DISTRIBUTION - Questar Gas

Questar Gas distributes gas to customers along the Wasatch Front, the major populated area of Utah, the metropolitan Salt Lake area, Provo, and Ogden. It also serves customers throughout the state, including the cities of Price, Roosevelt, Park City, Logan, Vernal, Moab, Monticello, Fillmore, Cedar City and St. George. Questar Gas supplies natural gas to the southwestern Wyoming communities of Rock Springs, Green River, Evanston, Kemmerer and Diamondville, and the southeastern Idaho community of Preston. To supply these communities Questar Gas owns and operates distribution systems and has a total of 27,277 miles of street mains, service lines and interconnecting pipelines. Questar Gas has a major operations center in Salt Lake City, and has operations centers, field offices and service-center facilities in other parts of its service area.

ITEM 3. LEGAL PROCEEDINGS.

Questar ~~Pipeline~~ is involved in various commercial and regulatory claims and litigation and other legal proceedings that arise in the ordinary course of its business. Management does not believe any of them will have a material adverse effect on the Company's financial position, results of operations or cash flows. A liability is recorded for a loss contingency when its occurrence is probable and damages can be reasonably estimated based on the anticipated most likely outcome. Disclosures are provided for contingencies reasonably likely to occur which would have a material adverse effect on the Company's financial position, results of operations or cash flows. Some of the claims involve highly complex issues relating to liability, damages and other matters subject to substantial uncertainties and, therefore, the probability of liability or an estimate of loss cannot be reasonably determined.

~~ITEM~~Regulatory ~~4. (REMOVED AND RESERVED).~~Proceedings

~~PART~~See Note 10 to the financial statements included in Item 8 of Part II of this Annual Report for information concerning various regulatory proceedings.

ITEM 54. ~~MARKET~~(REMOVED ~~FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS~~ AND ~~ISSUER PURCHASES OF EQUITY SECURITIES~~RESERVED.)

~~The~~PART Company’s outstanding shares of common stock, $1.00 par value, are currently owned by Questar. Information concerning dividends paid on such stock and the Company’s ability to pay dividends is reported in the Consolidated Statements of Common Shareholder’s Equity and notes accompanying the consolidated financial statements included in Item 8 of Part II ~~of this Annual Report.~~

Five-Year Cumulative Total Return to Shareholders

The following graph compares the cumulative total return of the Company's common stock with the cumulative total returns of a new peer group of diversified natural gas companies selected by Questar, a prior peer group selected by the Company and of the S&P Composite-500 Stock Index. Questar selected a new peer group in 2010 because of the Spinoff of QEP. Some of the companies in the prior peer group did not match the business profile or size of Questar after the Spinoff.

[str10k4q2010005.gif]


	2005	2006	2007	2008	2009	2010
Questar	$100.00	$111.02	$146.09	$89.19	$115.14	$141.80
Current peer group	100.00	125.30	133.84	96.45	129.70	146.56
Prior peer group	100.00	120.45	153.13	78.39	109.48	128.99
S&P 500	100.00	115.79	122.16	76.97	97.33	112.00

The chart assumes $100 is invested at the close of trading on December 31, 2005, in the Company's common stock, an index of current peer companies, an index of prior peer companies and the S&P 500 Index. It also assumes all dividends are reinvested. For 2010 the Company had a total return of 23.2% compared to 12.4% for the current peer group, 17.8% for the prior peer group and 15.1% for the S&P 500 Index. For the five-year period, the Company had a compound annual total return of 7.2% compared to 7.9% for the current peer group, 5.2% for the prior peer group and 2.3% for the S&P 500 Index. The current peer group is comprised of AGL Resources, Inc., Atmos Energy Corporation, Energen Corporation, EQT Corporation, MDU Resources Group, Inc., National Fuel Gas Company, NICOR Inc., NISOURCE, Inc., Northwest Natural Gas Company, ONEOK, Inc., Piedmont Natural Gas Company, Southern Union Company, Southwest Gas Corporation, and WGL Holdings, Inc. The prior peer group is comprised of El Paso Corporation, Energen Corporation, EQT Corporation, MDU Resources Group, Inc., National Fuel Gas Company, and The Williams Companies, Inc.

The foregoing graph shall not be deemed to be filed as part of this Annual Report and does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other filing of Questar under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates the graph by reference.

Questar's common stock is listed on the New York Stock Exchange (NYSE:STR). As of January 31, 2011, Questar had 8,718 shareholders of record. Following is a summary of Questar's quarterly stock-price and dividend information:


	High price	Low price	Dividend
	(per share)
2010
First quarter	$14.89	$12.62	$0.130
Second quarter	16.94	13.57	0.130
Third quarter	17.62	14.86	0.140
Fourth quarter	$18.30	$16.52	0.140
			$0.540
2009
First quarter	$12.16	$8.01	$0.125
Second quarter	11.90	9.19	0.125
Third quarter	12.21	9.02	0.125
Fourth quarter	$14.01	$11.27	0.130
			$0.505

Stock prices for 2009 and the first and second quarters of 2010 have been recast to reflect the Spinoff of QEP. The stock prices have been bifurcated based on the ratio of the when-issued prices of Questar and QEP on June 30, 2010.

Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities

Questar had no unregistered sales of equity during the fourth quarter of 2010. Questar repurchased shares in conjunction with tax-payment elections under the Company's Long-term Stock Incentive Plan and rollover shares used in exercising stock options.

The following table sets forth the Company's purchases of common stock registered under Section 12 of the Exchange Act that occurred during the quarter ended December 31, 2010.


2010	Number of Shares Purchased	Average Price per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans	Maximum Number of Shares that May Yet Be Purchased Under the Plans
October	53,133	$17.11	-	-
November	37,552	17.14	-	-
December	67,430	17.53	-	-
Total	158,115	$17.29	-	-

ITEM 6. SELECTED FINANCIAL DATA.

~~The~~Selected ~~Company,~~financial asdata afor ~~wholly~~the ~~owned~~five ~~subsidiary~~years ofending aDecember ~~reporting~~31, ~~company~~2010, ~~under~~is ~~the~~provided ~~Securities~~in ~~Exchange~~the ~~Act,~~table isbelow. ~~entitled~~Refer to ~~omit~~Item ~~the~~7 ~~information~~and Item 8 in Part II of this ~~Item~~Annual Report for discussion of facts affecting the comparability.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.


	Year Ended December 31,
	2010	2009	2008	2007	2006
	(in millions, except per-share amounts)
*Results Of Operations*
Revenues	$1,123.6	$1,109.9	$1,201.9	$1,080.2	$1,200.1
Operating income	343.3	328.2	307.3	257.2	244.7
Income from continuing operations	192.3	180.5	172.2	145.8	138.0
Discontinued operations net of income taxes	146.9	212.8	511.6	361.6	306.1
Net income attributable to Questar	$ 339.2	$ 393.3	$ 683.8	$ 507.4	$ 444.1
Earnings per common share attributable to Questar
Basic from continuing operations	$ 1.09	$ 1.03	$ 1.00	$ 0.84	$ 0.81
Basic from discontinued operations	0.84	1.23	2.96	2.11	1.79
Basic total	$ 1.93	$ 2.26	$ 3.96	$ 2.95	$ 2.60
Diluted from continuing operations	$ 1.08	$ 1.02	$ 0.98	$ 0.83	$ 0.80
Diluted from discontinued operations	0.83	1.21	2.90	2.05	1.74
Diluted total	$ 1.91	$ 2.23	$ 3.88	$ 2.88	$ 2.54
Weighted-average common shares outstanding
Used in basic calculation	175.4	174.1	172.8	172.0	170.9
Used in diluted calculation	178.0	176.3	176.1	175.9	175.2
*Financial Position*
Total assets of continuing operations	$3,373.6	$3,189.7	$3,115.7	$2,809.7	$2,433.5
Total assets of discontinued operations	-	5,828.9	5,741.0	3,336.8	2,858.9
Total assets at December 31	$3,373.6	$9,018.6	$8,856.7	$6,146.5	$5,292.4
Total liabilities of continuing operations	$2,337.5	$2,053.1	$2,123.2	$1,824.6	$1,547.6
Total liabilities of discontinued operations	-	3,408.4	3,286.0	1,744.0	1,539.3
Total liabilities at December 31	$2,337.5	$5,461.5	$5,409.2	$3,568.6	$3,086.9
Capitalization and short-term debt of continuing operations at December 31
Short-term debt	$ 242.0	$ 221.9	$ 271.8	$ 363.8	$ 109.8
Current portion of long-term debt	182.0	-	42.0	101.3	10.0
Long-term debt (less current portion)	898.5	831.2	829.8	521.9	623.2
Total equity	$1,036.1	$1,136.6	$ 992.5	$ 985.1	$ 885.9
Book value per common share of continuing operations at December 31	$ 5.87	$ 6.51	$ 5.72	$ 5.70	$ 5.16

~~RESULT OF OPERATIONS~~17

Questar Pipeline reported 2009 net income of $58.2 million compared with $58.0 million in 2008, and $45.0 million in 2007. Operating income increased $2.3 million, or 2%, in 2009 compared to 2008 because of asset impairments recorded in 2008. Operating income increased $21.9 million, or 24%, in 2008 compared to 2007 due primarily to transportation-system expansions that were placed in service in late 2007. Following is a summary of Questar Pipeline financial and operating results:


*Cash Flow From Continuing Operations*
Net cash provided by operating activities	$ 350.9	$ 428.8	$ 271.5	$ 334.0	$ 310.2
Capital expenditures	(320.3)	(299.8)	(349.0)	(559.4)	(246.1)
Net cash used in investing activities	(525.7)	(249.8)	(357.0)	(494.7)	(177.8)
Net cash provided by (used in) financing activities	185.1	(167.5)	74.0	167.1	(136.9)
Dividends Per Share	$0.54	$0.505	$0.4925	$0.485	$0.465

	Year Ended December 31,			Change
	2009	2008	2007	2009 vs. 2008	2008 vs. 2007
	(in millions)
Operating Income
REVENUES
Transportation	$173.2	$172.4	$127.4	$ 0.8	$45.0
Storage	37.6	37.6	37.6
NGL sales	11.2	14.4	8.5	(3.2)	5.9
Energy services	13.7	15.3	16.0	(1.6)	(0.7)
Gas processing	1.2	4.6	8.7	(3.4)	(4.1)

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

~~Questar~~RESULTS ~~Pipeline~~OF ~~Company 2009 10-K~~OPERATION

11Following are comparisons of income (loss) from continuing operations by line of business:

Other	8.5	4.3	7.7	4.2	(3.4)
	Year Ended December 31,			Change
Total Revenues	245.4	248.6	205.9	(3.2)	42.7
	2010	2009	2008	2010 vs. 2009	2009 vs. 2008
OPERATING EXPENSES
	(in millions, except per-share amounts)
Operating and maintenance	40.1	37.1	33.0	3.0	4.1
Wexpro	$ 88.1	$ 80.7	$ 73.9	$ 7.4	$ 6.8
General and administrative	36.1	36.8	36.0	(0.7)	0.8
Questar Pipeline	67.4	58.2	58.0	9.2	0.2
Depreciation and amortization	44.3	42.7	35.0	1.6	7.7
Questar Gas	43.9	41.6	40.2	2.3	1.4
Impairment		14.0		(14.0)	14.0
Corporate	(7.1)	-	0.1	(7.1)	(0.1)
Other taxes	8.6	7.8	7.3	0.8	0.5
Income from continuing operations	$192.3	$180.5	$172.2	$11.8	$ 8.3
Cost of goods sold	1.6	1.8	4.0	(0.2)	(2.2)
Earnings per share - diluted	$ 1.08	$ 1.02	$ 0.98	$0.06	$0.04
Total Operating Expenses	130.7	140.2	115.3	(9.5)	24.9
Average diluted shares	178.0	176.3	176.1	1.7	0.2
Net gain from asset sales	0.5	4.5	0.4	(4.0)	4.1
Operating Income	$115.2	$112.9	$ 91.0	$ 2.3	$21.9
Operating Statistics
Natural gas-transportation volumes (MMdth)
For unaffiliated customers	614.8	608.1	352.3	6.7	255.8
For Questar Gas	112.9	120.9	113.8	(8.0)	7.1
For other affiliated customers	9.3	9.2	16.0	0.1	(6.8)
Total Transportation	737.0	738.2	482.1	(1.2)	256.1
Transportation revenue (per dth)	$0.24	$0.23	$0.26	$0.01	($0.03)
Firm daily transportation demand at December 31, (including White River Hub of 1,020 Mdth and 1,005 Mdth in 2009 and 2008, respectively)	4,243	4,155	3,112	88.0	1,043
Natural gas processing
NGL sales (MMgal)	12.1	8.5	7.2	3.6	1.3
NGL sales price (per gal)	$0.92	$1.70	$1.19	($0.78)	$0.51

~~Revenues~~WEXPRO

~~Following~~Wexpro isreported anet ~~summary~~income of ~~major~~$88.1 ~~changes~~million in ~~Questar~~2010 ~~Pipeline~~compared ~~revenues~~to ~~for~~$80.7 million in 2009 ~~compared~~and ~~with~~$73.9 ~~2008~~million ~~and~~in 2008. ~~compared~~The ~~with~~growth ~~2007~~in net income resulted from increased investment in cost-of-service gas development wells. Following is a summary of Wexpro financial and operating results:

	Change
	Year Ended December 31,			Change
	2009 vs. 2008	2008 vs. 2007
	2010	2009	2008	2010 vs. 2009	2009 vs. 2008
	(in millions)
Transportation
Operating Income
New transportation contracts	$11.7	$51.0
REVENUES
Expiration of transportation contracts	(6.3)	(8.5)
Operator service fee	$239.5	$224.9	$210.1	$14.6	$14.8
Other	(4.6)	2.5
Oil and NGL sales	25.1	17.4	30.7	7.7	(13.3)
NGL sales	(3.2)	5.9
Other	0.2	0.6	0.2	(0.4)	0.4
Energy services	(1.6)	(0.7)
Total Revenues	264.8	242.9	241.0	21.9	1.9
Gas processing	(3.4)	(4.1)
OPERATING EXPENSES
Other	4.2	(3.4)
Operating and maintenance	20.2	21.2	23.5	(1.0)	(2.3)
Increase (decrease)	($ 3.2)	$42.7
General and administrative	20.5	17.0	13.7	3.5	3.3
Depreciation, depletion and amortization	62.1	58.8	48.5	3.3	10.3
Production and other taxes	26.8	20.0	37.7	6.8	(17.7)
Oil income sharing	1.1	1.0	6.1	0.1	(5.1)
Total Operating Expenses	130.7	118.0	129.5	12.7	(11.5)
Net (loss) from asset sales	(0.4)	(0.3)	(0.2)	(0.1)	(0.1)
OPERATING INCOME	$133.7	$124.6	$111.3	$ 9.1	$13.3
--

As of December 31, 2009, Questar Pipeline had firm-transportation contracts of 4,243 Mdth per day, including 1,020 Mdth per day from Questar Pipeline's 50% ownership of White River Hub, compared with 4,155 Mdth per day as of December 31, 2008 and 3,112 Mdth per day as of December 31, 2007. Questar Pipeline has expanded its transportation system in response to growing regional natural gas production and transportation demand. In November 2007, Questar Pipeline placed an expansion of its southern system in service. The southern system expansion increased Questar Pipeline's 2008 firm-transport demand by 175 Mdth per day and revenues by $13.8 million compared to 2007. In December 2007, Questar Overthrust Pipeline placed the Wamsutter expansion project into service. The Wamsutter expansion increased Questar Overthrust Pipeline firm-transport demand by 750 18

Questar Pipeline Company 2009 10-K


*Operating Statistics*
Production volumes
Natural gas (Bcf)	50.2	48.2	46.1	2.0	2.1
Oil and NGL (MMbbl)	0.4	0.4	0.4	-	-
Oil and NGL average sales price (per bbl)	$65.55	$46.73	$82.90	$18.82	($36.17)
Investment base at year end	$456.6	$431.9	$410.6	$ 24.7	$ 21.3

12Revenues

~~Mdth~~Wexpro ~~per~~earned ~~day~~a ~~and~~19.8% ~~revenues~~after-tax byreturn ~~$31.2~~on ~~million~~average investment base in ~~2008~~2010 compared to ~~2007~~19.8% ~~Questar~~in ~~Overthrust~~2009 ~~Pipeline~~and ~~completed~~20.0% ain ~~system~~2008. ~~expansion~~Pursuant ofto ~~its~~the ~~pipeline~~Wexpro ~~between~~Agreement, ~~Rock~~Wexpro ~~Springs~~recovers ~~and~~its ~~Wamsutter~~costs inand ~~December~~receives ~~2009~~an byafter-tax ~~adding~~return aon ~~compressor at~~ its ~~existing~~investment ~~Rocks~~base. ~~Springs~~Wexpro’s ~~Station~~investment ~~and~~base ~~constructing~~includes aits ~~new~~costs ~~compressor~~of ~~station~~commercial atwells ~~Point~~and ofrelated ~~Rocks,~~facilities ~~midway~~adjusted ~~between~~for ~~Rock~~working ~~Springs~~capital and ~~Wamsutter.~~reduced ~~The Company has firm contracts~~ for ~~300~~deferred ~~Mdth~~income ~~per~~taxes ~~day~~and ~~that~~accumulated ~~begin~~depreciation. inFollowing ~~the~~is ~~first~~a ~~quarter~~summary of ~~2010~~changes ~~and~~in ~~will utilize~~ the ~~expansion~~Wexpro ~~capacity.~~investment base:

Questar Gas is Questar Pipeline's largest transportation customer with contracts for 901 Mdth per day. The majority of the Questar Gas transportation contracts extend through mid 2017. The Rockies Express Pipeline has a lease on the Questar Overthrust Pipeline for 625 Mdth per day through 2027. Wyoming Interstate Company has contracts on the Questar Overthrust Pipeline for 125 Mdth per day through 2019 and for 380 Mdth per day through 2020. In addition, Wyoming Interstate Company has three contracts on Questar Overthrust Pipeline for transportation from Wamsutter to the proposed Ruby Pipeline near Opal that ramp up to 548.5 Mdth per day by 2015. Two of the contracts start in the first quarter of 2010 and one starts in early 2011 with terms ranging from 10 to 12 years. Questar Overthrust Pipeline has filed with the FERC for authorization to construct a 43 mile, 36-inch pipeline loop of its system from Rock Springs west to its Cabin 31 facility to support the Wyoming Interstate Company contracts.


	Year Ended December 31,
	2010	2009	2008
	(in millions)
Investment base at beginning of year	$431.9	$410.6	$300.4
Successful development wells and related equipment	99.9	99.8	171.2
Depreciation, depletion and amortization	(57.9)	(54.3)	(43.9)
Change in deferred taxes	(17.3)	(24.2)	(17.1)
Investment base at end of year	$456.6	$431.9	$410.6

~~Questar~~Wexpro ~~Pipeline~~produced ~~owns~~50.2 ~~and~~Bcf ~~operates~~of ~~the~~cost-of-service ~~Clay~~natural ~~Basin~~gas ~~underground~~for ~~storage~~Questar ~~complex~~Gas induring ~~eastern~~2010, ~~Utah.~~compared ~~This~~to ~~facility~~48.2 isBcf ~~100%~~in ~~subscribed~~2009 ~~under~~and ~~long-term contracts~~46.1 InBcf ~~addition~~in to2008. ~~Clay~~The ~~Basin,~~higher ~~Questar~~production ~~Pipeline~~levels ~~also~~are ~~owns~~due ~~and~~to ~~operates~~increased ~~three~~investment ~~smaller~~in ~~aquifer~~ gas-development ~~storage facilities~~wells. ~~Questar~~Cost-of-service ~~Gas~~natural ~~has~~gas ~~contracted~~production ~~for~~provided 26approximately 51% of ~~firm-storage~~Questar ~~capacity~~Gas's atsupply ~~Clay~~requirements ~~Basin~~in ~~for~~2010 ~~terms~~compared ~~extending from three~~ to ~~eight~~51% ~~years~~in 2009 and ~~100~~49% ofin ~~the firm-storage capacity at the aquifer facilities for terms extending for eight years~~2008.

~~Questar~~Revenues ~~Pipeline~~from ~~charges~~oil ~~FERC-approved transportation~~ and ~~storage~~NGL ~~rates~~sales ~~that~~increased ~~are~~44% ~~based~~in on2010 ~~straight~~compared ~~fixed-variable~~to ~~rate~~2009 ~~design.~~after ~~Under~~decreasing ~~this~~43% ~~rate~~in ~~design,~~2009 ~~all~~compared ~~fixed~~to ~~costs~~2008. ofThe ~~providing~~variability ~~service~~in ~~including~~oil ~~depreciation~~ and ~~return~~NGL onrevenues ~~investment~~is ~~are~~due ~~recovered~~to ~~through~~changes in the ~~demand~~market ~~charge.~~price ~~About 95%~~ of ~~Questar~~oil ~~Pipeline costs are fixed~~ and ~~recovered through these demand charges~~NGLs. ~~Questar~~The ~~Pipeline's~~average ~~earnings~~selling ~~are~~price ~~driven~~for ~~primarily~~oil byand ~~demand~~NGL ~~revenues~~increased ~~from firm shippers. Since only about 5~~40% ofin ~~operating~~2010 ~~costs~~compared ~~are~~to ~~recovered~~2009 ~~through~~and ~~volumetric~~decreased ~~charges,~~44% ~~changes~~ in ~~transportation~~2009 ~~volumes~~compared doto ~~not have a significant impact on earnings~~2008.

NGL sales were 22% lower in 2009 compared to 2008 due to a 46% decrease in NGL prices offsetting a 42% increase in sales volume. NGL sales were 69% higher in 2008 over 2007 due primarily to a 43% increase in NGL prices and an 18% increase in sales volume. Expenses

~~Expenses~~Operating and maintenance expenses were $0.38 per Mcfe in 2010, $0.42 per Mcfe in 2009 and $0.48 per Mcfe in 2008. The lower amounts in 2010 and 2009 were due to reduced spending on repairs and well workovers. General and administrative expenses were $3.5 million higher in 2010 compared to 2009 and $3.3 million higher in 2009 compared to 2008. The 2010 and 2009 increases were due to higher compensation, employee benefits and allocated corporate expenses.

~~Operating~~Production and ~~maintenance~~other ~~expenses~~taxes ~~increased~~were ~~by 8% to~~ $406.18 million higher in ~~2009~~2010 compared to 2009 and $3717.17 million lower in ~~2008~~2009 ~~and~~compared ~~$33~~to 2008.0 ~~million~~These intaxes ~~2007~~were as$0.51 aper ~~result~~Mcfe ofin ~~system~~2010, ~~expansions~~$0.39 ~~and~~per ~~higher~~Mcfe ~~labor~~in 2009 and ~~service costs~~$0.78 ~~General~~per ~~and~~Mcfe ~~administrative~~in ~~expenses~~2008. ~~decreased~~The 2%variability toin ~~$36.1~~production ~~million~~and inother ~~2009~~taxes ~~compared~~is ~~with~~due ~~$36.8~~to ~~million~~changes in ~~2008~~the ~~and~~wellhead ~~$36.0~~market ~~million~~value inof ~~2007.~~natural ~~Operating~~gas, ~~maintenance,~~oil ~~general~~ and ~~administrative~~NGL ~~expenses~~production. ~~per~~The ~~dth~~average ~~transported~~price ~~declined~~of tonatural ~~$0.10~~gas inused ~~2009~~to ~~and~~calculate ~~2008~~production ~~compared~~taxes ~~with~~was $04.1448 inper ~~2007.~~Mcf ~~Operating,~~in ~~maintenance~~2010, ~~general~~$3.31 ~~and~~per ~~administrative~~Mcf ~~expenses~~in ~~include~~2009 ~~processing~~ and ~~storage~~$7.22 ~~costs~~per Mcf in 2008.

Depreciation, depletion and amortization expense ~~increased~~was 4%$1.47 per Mcfe in ~~2009~~2010, ~~compared~~$1.44 toper ~~2008~~Mcfe in 2009 and ~~increased~~$1.27 ~~22%~~per Mcfe in 2008. ~~compared~~The todepreciation, ~~2007~~depletion ~~due~~and toamortization ~~investment~~rate inhas ~~pipeline~~been ~~expansions~~increasing because of higher development costs and the depletion of older lower-cost natural gas reserves.

~~Sale~~Under the terms of ~~processing~~the ~~plant~~Wexpro Agreement, Wexpro shares 54% of its operating income from oil development with Questar Gas after recovery of expenses and ~~gathering~~a ~~lines~~return on Wexpro’s investment in successful wells. Questar Gas received oil-income sharing amounting to $1.1 million in 2010, $1.0 million in 2009 and $6.1 million in 2008.

~~Questar~~QUESTAR ~~Transportation~~PIPELINE Services, a subsidiary of Questar Pipeline, sold a carbon dioxide processing plant and some associated gathering facilities in the second quarter of 2008. The net investment in these facilities was $20.0 million. The transaction closed in April 2008 and resulted in a pre-tax gain of $3.9 million.

~~Impairment~~Questar Pipeline reported 2010 net income of $67.4 million compared to $58.2 million in 2009 and $58.0 million in 2008. The increase in 2010 was due to higher transportation revenues from system expansions and higher liquid revenues. Following is a summary of Questar Pipeline financial and operating results:

There were no impairments in 2009. Charges for asset impairment amounted to $14.0 million in 2008. Questar Pipeline impaired the entire $10.6 million investment in a potential salt cavern storage project located in southwestern Wyoming in the second quarter of 2008 based on a technical and economic evaluation of the project. In the fourth quarter of 2008, Questar Pipeline also took a $3.4 million pre-tax charge for impairment of certain costs associated with the California segment of its Southern Trails Pipeline. 19

Interest and other income


	Year Ended December 31,			Change
	2010	2009	2008	2010 vs. 2009	2009 vs. 2008
	(in millions)
*Operating Income*
REVENUES
Transportation	$188.7	$173.2	$172.4	$15.5	$ 0.8
Storage	37.6	39.4	39.1	(1.8)	0.3
NGL sales - transportation	12.3	7.0	13.9	5.3	(6.9)
NGL sales - field services	11.6	4.2	0.5	7.4	3.7
Energy services	14.0	13.7	15.3	0.3	(1.6)
Gas processing	3.3	1.2	4.6	2.1	(3.4)
Other	3.7	6.7	2.8	(3.0)	3.9
Total Revenues	271.2	245.4	248.6	25.8	(3.2)
OPERATING EXPENSES
Operating and maintenance	41.4	40.1	37.1	1.3	3.0
General and administrative	41.0	36.1	36.8	4.9	(0.7)
Depreciation and amortization	47.4	44.3	42.7	3.1	1.6
Impairment	-	-	14.0	-	(14.0)
Other taxes	9.0	8.6	7.8	0.4	0.8
Cost of sales	2.4	1.6	1.8	0.8	(0.2)
Total Operating Expenses	141.2	130.7	140.2	10.5	(9.5)
Net gain from asset sales	0.8	0.5	4.5	0.3	(4.0)
OPERATING INCOME	$130.8	$115.2	$112.9	$15.6	$ 2.3
--
*Operating Statistics*
Natural gas-transportation volumes (MMdth)
For unaffiliated customers	642.4	624.1	617.3	18.3	6.8
For Questar Gas	112.0	112.9	120.9	(0.9)	(8.0)
Total Transportation	754.4	737.0	738.2	17.4	(1.2)
Transportation revenue (per dth)	$0.25	$0.24	$0.23	$0.01	$0.01
Net-firm-daily-transportation demand at December 31, (including White River Hub of 1,020 Mdth, 1,020 Mdth and 1,005 Mdth in 2010, 2009 and 2008, respectively)	4,744	4,243	4,155	501	88
Natural gas processing
NGL sales (MMgal)	17.9	12.1	8.5	5.8	3.6
NGL sales price (per gal)	$1.33	$0.92	$1.70	$0.41	($0.78)

Questar Pipeline’s interest and other income amounted to $2.5 million in 2009, compared to $10.6 million in 2008, and $2.4 million in 2007. The 2008 amount included $3.0 million from the expiration of an option agreement and $2.8 million from the collection of a note receivable that had been previously reserved in allowance for uncollectible accounts.Revenues

~~Income~~Following ~~from~~is ~~unconsolidated~~a ~~affiliate~~summary of major changes in Questar Pipeline revenues for 2010 compared to 2009 and 2009 compared to 2008:

Questar Pipeline recognized income of $3.8 million in 2009 and $0.6 million in 2008 from its 50% investment in White River Hub that began operations in December 2008.


	Change
	2010 vs. 2009	2009 vs. 2008
	(in millions)
Transportation
New transportation contracts	$22.3	$11.7
Expiration of transportation contracts	(6.4)	(6.3)
Other	(0.4)	(4.6)
Storage	(1.8)	0.3

~~Questar Pipeline Company 2009 10-K~~20


NGL sales	12.7	(3.2)
Energy services	0.3	(1.6)
Gas processing	2.1	(3.4)
Other	(3.0)	3.9
Increase (decrease)	$25.8	($ 3.2)

~~Interest~~As ~~expense~~of December 31, 2010, Questar Pipeline had firm-transportation contracts of 4,744 Mdth per day, including 1,020 Mdth per day from Questar Pipeline's 50% ownership of White River Hub, compared with 4,243 Mdth per day as of December 31, 2009, and 4,155 Mdth per day as of December 31, 2008. Questar Pipeline has expanded its transportation system in response to growing regional natural gas production and transportation demand. Questar Overthrust Pipeline completed a system expansion of its pipeline between Rock Springs and Wamsutter in December 2009 by adding a compressor at its existing Rocks Springs Station and constructing a new compressor station at Point of Rocks, midway between Rock Springs and Wamsutter. The Company has firm contracts for 300 Mdth per day that began in the first quarter of 2010 and utilizes the expansion capacity.

~~Interest~~Questar ~~expense~~Gas ~~decreased~~is ~~10%~~Questar inPipeline's ~~2009~~largest ~~compared~~transportation tocustomer ~~2008~~with ascontracts afor ~~result~~901 Mdth per day. The majority of ~~lower~~Questar ~~commercial~~Gas ~~paper~~transportation ~~rates~~contracts extend through mid 2017. InRockies ~~September~~Express ~~2009,~~Pipeline has leased capacity on the Questar Overthrust Pipeline ~~issued~~for ~~$50~~625 Mdth per day through 2027.0 ~~million~~Wyoming ofInterstate ~~notes~~Company ~~due~~has ~~February~~contracts ~~2018~~on ~~with~~Questar aOverthrust ~~5.40%~~Pipeline ~~effective~~for ~~interest~~125 ~~rate~~Mdth per day through 2019 and ~~used~~for 380 Mdth per day through 2020. In addition, Wyoming Interstate Company has three contracts on Questar Overthrust Pipeline for transportation from Wamsutter to the ~~net~~proposed ~~proceeds~~Ruby Pipeline near Opal that ramp up to ~~repay~~548.5 ~~$42~~Mdth per day by 2015.0 ~~million~~Two of ~~long-term~~the ~~notes~~contracts ~~with~~started anin ~~effective~~the ~~interest~~first ~~rate~~quarter of ~~7.48%~~2010 ~~that~~and ~~matured~~one starts in ~~October~~early ~~2009~~2011 with terms ranging from 10 to 12 years. In February 2011, Questar Overthrust Pipeline completed a 43 mile, 36-inch-diameter pipeline loop of its system from Rock Springs west to its Cabin 31 facility near Blacksfork to support the Wyoming Interstate Company contracts.

~~Income~~Questar ~~taxes~~Pipeline owns and operates the Clay Basin underground storage complex in eastern Utah. This facility is 100% subscribed under long-term contracts. In addition to Clay Basin, Questar Pipeline also owns and operates three smaller aquifer gas storage facilities. Questar Gas has contracted for 26% of firm-storage capacity at Clay Basin for terms extending from two to eight years and 100% of the firm-storage capacity at the aquifer facilities for terms extending for seven years.

~~The~~Questar ~~effective~~Pipeline ~~combined~~charges ~~federal~~FERC-approved transportation and ~~state~~storage ~~income~~rates ~~tax~~that ~~rate~~are ~~was~~based 36on straight-fixed-variable rate design.7% inUnder ~~2009~~this ~~compared~~rate ~~with~~design, 36all fixed costs of providing service, including depreciation and return on investment, are recovered through the demand charge.5 About 95% inof ~~2008~~Questar Pipeline costs are fixed and 37recovered through these demand charges.2 Questar Pipeline's earnings are driven primarily by demand revenues from firm shippers. Since only about 5% of operating costs are recovered through volumetric charges, changes in ~~2007.~~transportation volumes do not have a significant impact on earnings.

~~Investing~~NGL ~~Activities~~sales more than doubled in 2010 compared to 2009 and were 22% lower in 2009 compared to 2008. NGL volumes were up 48% in 2010 compared to 2009 and up 42% in 2009 compared to 2008. NGL prices were $1.33 per gallon in 2010, $0.92 per gallon in 2009 and $1.70 per gallon in 2008.

~~Following is a summary of Questar Pipeline’s capital expenditures for 2009 and 2008 and a forecast for 2010:~~ Expenses

	Year Ended December 31,
	2010 Forecast	2009	2008
	(in millions)
Cash capital expenditures		$100.8	$78.3
Change in capital expenditure accruals		(6.3)	12.4
Total capital expenditures	$161.4	$94.5	$90.7

Operating and maintenance expenses increased by 3% to $41.4 million in 2010 compared to $40.1 million in 2009 and $37.1 million in 2008. The increases are a result of higher operating and maintenance costs attributable to system expansions and higher labor and outside service costs. General and administrative expenses increased to $41.0 million in 2010 compared to $36.1 million in 2009 and $36.8 million in 2008. The increase in 2010 was due to higher compensation, employee benefits and allocated corporate expenses. Operating, maintenance, general and administrative expenses per dth transported increased to $0.11 in 2010 compared to $0.10 in 2009 and 2008. Operating, maintenance, general and administrative expenses include processing and storage costs.

~~Questar~~Depreciation ~~Overthrust~~expense ~~Pipeline~~increased ~~completed~~7% ain ~~300~~2010 ~~Mdth~~compared ~~per~~to ~~day~~2009 ~~system expansion of its pipeline between Rock Springs~~ and ~~Wamsutter~~increased 4% in ~~December~~ 2009 bycompared ~~adding~~to a2008 ~~compressor~~due atto ~~its~~investment ~~Rock~~in ~~Springs~~pipeline ~~Station and constructing the new Point of Rocks compressor station~~expansions.

~~Credit~~Sale ~~Ratings~~of processing plant and gathering lines

Questar ~~issues~~Transportation ~~commercial paper rated A-2 by Standard & Poor's Corporation and P-2 by Moody's Investors~~ Services, toa ~~meet~~subsidiary ~~short-term~~of ~~financing~~Questar ~~requirements~~Pipeline, ~~and~~sold ~~may~~a ~~loan~~carbon ~~proceeds~~dioxide toprocessing ~~Questar~~plant ~~Pipeline.~~and ~~Questar~~some ~~maintains~~associated ~~committed~~gathering ~~credit~~facilities ~~lines~~in ~~with~~the ~~banks~~second toquarter ~~provide~~of ~~liquidity support~~2008. The ~~table~~net ~~below~~investment ~~sets~~in ~~forth~~these ~~credit~~facilities ~~ratings~~was ~~for~~$20.0 ~~Questar and Questar Pipeline~~million. The ~~outlook~~transaction ~~associated~~closed ~~with~~in ~~each~~April ~~rating~~2008 isand ~~deemed~~resulted ~~stable~~in bya ~~each~~pre-tax ~~rating~~gain ~~agency:~~of $3.9 million.

	Moody’s	Standard & Poor’s
Questar Pipeline	A3	BBB+
Questar commercial paper	P-2	A-2

~~Contractual Cash Obligations and Other Commitments~~Impairments

InThere ~~the~~were ~~course~~no ofimpairments ~~ordinary~~in ~~business~~2010 ~~activities,~~or 2009. Charges for asset impairment amounted to $14.0 million in 2008. Questar Pipeline ~~enters~~impaired ~~into~~the entire $10.6 million investment in a ~~variety~~potential salt cavern storage project located in southwestern Wyoming in the second quarter of ~~contractual~~2008 ~~cash~~based ~~obligations~~on a technical and ~~other~~economic ~~commitments.~~evaluation ~~The~~of ~~following~~the ~~table~~project. ~~summarizes~~In the ~~significant~~fourth ~~contractual~~quarter ~~cash~~of ~~obligations~~2008, asQuestar Pipeline also took a $3.4 million pre-tax charge for impairment of ~~December~~certain ~~31,~~costs ~~2009:~~associated with the California segment of its Southern Trails Pipeline.

	Payments Due by Year
	Total	2010	2011	2012	2013	2014	After 2014
	(in millions)
Fixed-rate long-term debt	$460.2		$180.1				$280.1
Interest on fixed-rate long-term debt	149.3	$28.9	$23.3	$16.5	$16.5	$16.5	47.6
Operating leases	1.1	0.5	0.5	0.1
Total	$610.6	$29.4	$203.9	$16.6	$16.5	$16.5	$327.7

QUESTAR GAS

~~Critical~~Questar ~~Accounting~~Gas ~~Policies,~~reported ~~Estimates~~net income of $43.9 million in 2010 compared to $41.6 million in 2009 and ~~Assumptions~~$40.2 million in 2008. The 2010 increase was primarily due to increased customers and a general rate case. Following is a summary of Questar Gas financial and operating results:

Questar Pipeline’s significant accounting policies are described in Note 1 to the consolidated financial statements included in Item 8 of Part II of this Annual Report. The Company’s consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles. The preparation of consolidated financial statements requires management to make assumptions and estimates that affect the reported results of operations and financial position. The following accounting policies may involve a higher degree of complexity and judgment on the part of management.


	Year Ended December 31,			Change
	2010	2009	2008	2010 vs. 2009	2009 vs. 2008
	(in millions)
*Operating Income*
REVENUES
Residential and commercial sales	$833.0	$874.0	$926.7	($41.0)	($52.7)
Industrial sales	26.7	8.3	12.0	18.4	(3.7)
Transportation for industrial customers	9.7	11.2	9.9	(1.5)	1.3
Service	4.8	5.4	5.6	(0.6)	(0.2)
Other	28.7	21.0	46.1	7.7	(25.1)
Total Revenues	902.9	919.9	1,000.3	(17.0)	(80.4)
Cost of natural gas sold	592.2	626.6	736.9	(34.4)	(110.3)
Margin	310.7	293.3	263.4	17.4	29.9
OTHER OPERATING EXPENSES
Operating and maintenance	114.4	106.4	87.1	8.0	19.3
General and administrative	49.9	42.9	38.7	7.0	4.2
Depreciation and amortization	43.7	43.8	41.5	(0.1)	2.3
Other taxes	14.1	13.3	11.9	0.8	1.4
Total Other Operating Expenses	222.1	206.4	179.2	15.7	27.2
OPERATING INCOME	$ 88.6	$ 86.9	$ 84.2	$ 1.7	$ 2.7
--
*Operating Statistics*
Natural gas volumes (MMdth)
Residential and commercial sales	105.8	109.4	112.3	(3.6)	(2.9)
Industrial sales	4.5	1.3	1.7	3.2	(0.4)
Transportation for industrial customers	59.3	58.0	62.2	1.3	(4.2)
Total industrial	63.8	59.3	63.9	4.5	(4.6)
Total deliveries	169.6	168.7	176.2	0.9	(7.5)
Natural gas revenue (per dth)
Residential and commercial	$7.88	$7.99	$8.25	($0.11)	($0.26)
Industrial sales	5.89	6.50	6.99	(0.61)	(0.49)
Transportation for industrial customers	0.16	0.19	0.16	(0.03)	0.03
System natural gas cost (per dth)	$5.34	$5.01	$6.14	$0.33	($1.13)
Colder (warmer) than normal temperatures	1%	5%	8%	(4%)	(3%)
Temperature-adjusted usage per customer (dth)	106.9	109.0	109.9	(2.1)	(0.9)
Customers at December 31, (in thousands)	909.6	898.6	888.6	11.0	10.0

~~Revenue Recognition~~22

~~Questar~~Margin Pipeline and subsidiaries recognize revenues in the period that services are provided. The straight fixed-variable rate design used by Questar Pipeline, which allows for recovery of substantially all fixed costs in the demand or reservation charge, reduces the earnings impact of volume changes on gas-transportation and storage operations. The Company may collect revenues subject to possible refunds and establish reserves pending final orders from the FERC. Analysis

Questar ~~Pipeline~~Gas's ~~Company~~margin (revenues less gas costs) increased $17.4 million in 2010 compared to 2009 ~~10-K~~and increased $29.9 million in 2009 compared to 2008. Following is a summary of major changes in Questar Gas's margin for 2010 compared to 2009 and 2009 compared to 2008:


	Change
	2010 vs. 2009	2009 vs. 2008
	(in millions)
New customers	$ 3.0	$ 2.6
Change in rates	3.1	6.2
Demand-side-management cost recovery	12.2	20.3
Recovery of gas-cost portion of bad-debt costs	(0.7)	(2.4)
Other	(0.2)	3.2
Increase	$17.4	$29.9

~~Regulation~~At December 31, 2010, Questar Gas served 909,570 customers, up from 898,558 at December 31, 2009, and 888,602 at December 31, 2008. New-customer growth increased the margin by $3.0 million in 2010 and $2.6 million in 2009.

~~Questar~~Temperature-adjusted ~~Pipeline~~usage isper ~~regulated~~customer bydecreased ~~the~~2% ~~FERC.~~in ~~The~~2010 ~~FERC~~compared ~~establishes~~to ~~rates~~2009 ~~for~~and ~~natural~~decreased ~~gas~~1% ~~transportation~~in ~~and~~2009 ~~storage~~compared ~~services~~to 2008. The ~~FERC~~impact ~~also~~on ~~regulates,~~the ~~among~~company ~~other~~margin ~~things,~~from ~~the~~changes ~~extension~~in ~~and~~usage ~~enlargement~~per orcustomer ~~abandonment~~has ofbeen ~~jurisdictional~~mitigated ~~natural~~by ~~gas~~a ~~facilities~~CET that was approved by the PSCU beginning 2006. ~~Regulation~~The isCET ~~intended~~adjustment toincreased ~~permit~~revenues ~~the~~by ~~recovery,~~$2.9 ~~through~~million ~~rates,~~in of2010 ~~the~~and ~~cost~~decreased ofrevenues ~~service~~by $4.0 million in 2009, ~~including~~which aoffset ~~return~~changes onin ~~investment~~customer usage.

~~The~~Weather, ~~Company~~as ~~applies~~measured ~~the~~in ~~regulatory~~degree ~~accounting~~days, ~~principles~~was ~~prescribed~~1% ~~under~~colder ~~ASC~~than ~~980~~normal ~~"Regulated~~in ~~Operations" to the rate-regulated businesses. Under ASC 980~~2010, ~~the~~5% ~~Company~~colder ~~records~~than ~~regulatory~~normal ~~assets~~in 2009 and ~~liabilities~~8% ~~that~~colder ~~would~~than ~~not~~normal bein ~~recorded under U~~2008. S.A ~~general accepted accounting principles (GAAP) for non~~weather-~~rate~~normalization ~~regulated~~adjustment ~~entities.~~on ~~Regulatory~~customer ~~assets~~bills ~~and~~generally ~~liabilities~~offsets ~~record~~financial ~~probable~~impacts ~~future~~of ~~revenues~~moderate ortemperature ~~expenses associated with certain credits or charges that will be recovered from or refunded to customers through the rate-making process~~variations.

On April 8, 2010, the PSCU approved a settlement in Questar Gas’s Utah general rate case. The stipulation, effective August 1, 2010, authorized an increase in the utility’s allowed return on equity from 10% to 10.35% and indefinitely extended the existing CET. In the stipulation, the PSCU approved an infrastructure cost-tracking mechanism that allows the company to place into rate base and earn on capital expenditures associated with a multi-year high-pressure natural gas feeder-line replacement program, and do it immediately upon the completion of each project. The stipulation agreement increased customer rates by $5.0 million annually with the changes in rates effective August 1, 2010.

In August 2008, Questar Gas filed a general rate case in Wyoming. In the second quarter of 2009, Questar Gas received an order from the PSCW increasing rates by $0.4 million effective July 2009. The PSCW allowed a return on equity of 10.5%.

Expenses

Cost of natural gas sold decreased 5% in 2010 compared to 2009 and decreased 15% in 2009 compared to 2008 due to decreases in the cost of purchased gas. Questar Gas accounts for purchased-gas costs in accordance with procedures authorized by the PSCU and the PSCW. Purchased-gas costs that are different from those provided for in present rates are accumulated and recovered or credited through future rate changes. As of December 31, 2010, Questar Gas had a $10.7 million under-collected balance in the purchased-gas adjustment account representing costs yet to be recovered from customers.

Operating and maintenance expenses increased $8.0 million in 2010 compared to 2009 due to a $12.2 million increase in DSM costs, partially offset by a $3.1 million decrease in bad-debt costs. Operating and maintenance expenses increased $19.3 million in 2009 compared to 2008 due to a $20.2 million increase in DSM costs recovered from customers. Bad-debt costs decreased $3.0 million in 2009. General and administrative costs increased $7.0 million in 2010 compared to 2009 and increased $4.2 million in 2009 compared to 2008 due to higher compensation, employee benefits and allocated corporate expenses. The sum of operating, maintenance, general and administrative expenses not including DSM costs per customer was $138 in 2010 compared to $136 in 2009 and $135 in 2008.

Depreciation expense was flat in 2010 compared to 2009 as higher depreciation expense from plant additions was offset by lower depreciation rates authorized in the last rate case. Depreciation expense increased 6% in 2009 compared to 2008 as a result of plant additions from customer growth and system expansion.

Other Consolidated Results

Separation Costs

In 2010, Questar’s share of costs directly related to the Spinoff of QEP was $11.5 million before income taxes, or $8.8 million after income taxes. These costs include legal, advisory and severance costs. The tax impact was reduced by non-deductible costs.

Interest and Other Income

Interest and other income decreased $0.8 million in 2010 compared to 2009 and decreased $10.1 million in 2009 compared to 2008 The details of interest and other income for the last three years are shown in the table below:


	Year Ended December 31,			Change
	2010	2009	2008	2010 vs. 2009	2009 vs. 2008
	(in millions)
Interest income and other earnings	$4.5	$ 4.1	$ 4.6	$0.4	($0.5)
Inventory sales	0.7	0.9	3.1	(0.2)	(2.2)
Allowance for other funds used during
construction (capitalized finance costs)	2.7	2.6	4.1	0.1	(1.5)
Return earned on working-gas inventory and
purchased-gas-adjustment account	3.8	4.9	5.0	(1.1)	(0.1)
Southern Trails option expiration	-	-	3.0	-	(3.0)
Collection of a note receivable	-	-	2.8	-	(2.8)
Total	$11.7	$12.5	$22.6	($0.8)	($10.1)

Income from unconsolidated affiliate

Income from White River Hub, Questar's sole unconsolidated affiliate, which began operations in 2008, was $3.8 million in 2010 compared to $3.8 million in 2009 and $0.6 million in 2008.

Interest expense

Interest expense decreased 4% in 2010 compared to 2009 after decreasing 7% in 2009 compared to 2008. The decreases are due to lower short-term interest rates. Interest rates on the Company's commercial-paper borrowings in 2010 and 2009 averaged less than 1% per annum after reaching the highest level in recent years in September 2008. Capitalized interest charges on construction projects amounted to $1.2 million in each of the years 2010, 2009 and 2008.

Income taxes

The effective combined federal and state income tax rate was 36.3% in 2010, 36.6% in 2009 and 35.4% in 2008. As a result of the Spinoff of QEP, the 2010 federal income tax return will include the first six months financial results from discontinued operations. The inclusion of the discontinued operations and the effects of bonus depreciation will cause Questar to incur a net operating loss (NOL) for federal income tax purposes for the tax year ending 2010. The estimated NOL is $37.5 million. It is anticipated that Questar will be able to utilize the NOL by offsetting it against future taxable income. The tax sharing agreement that was negotiated between Questar and QEP as part of the Spinoff requires a true-up between the companies for each company’s actual tax liability as the benefits from the NOL carryover are utilized.

LIQUIDITY AND CAPITAL RESOURCES

Operating Activities

Following is a summary of net cash provided by operating activities by continuing operations for 2010, 2009 and 2008:


	Year Ended December 31,			Change
	2010	2009	2008	2010 vs. 2009	2009 vs. 2008
	(in millions)
Income from continuing operations	$192.3	$180.5	$172.2	$11.8	$ 8.3
Noncash adjustments to net income	266.9	245.0	209.2	21.9	35.8
Changes in operating assets and liabilities	(108.3)	3.3	(109.9)	(111.6)	113.2
Net cash provided by operating activities by continuing operations	$350.9	$428.8	$271.5	($77.9)	$157.3

Noncash adjustments to net income consisted primarily of depreciation, depletion and amortization, and deferred income taxes. Depreciation, depletion and amortization were higher in 2010 compared to 2009 due to investment in plant and equipment. Deferred income taxes were higher in 2010 compared to 2009 due to bonus-tax depreciation. Cash sources from operating assets and liabilities were lower in 2010 compared to 2009 due to reductions in current liabilities including accounts payable and accrued expenses, federal income taxes payable and purchased-gas adjustments. Cash sources from operating assets and liabilities were higher in 2009 compared to 2008 primarily due to changes in the levels of inventories and receivables.

Investing Activities

Capital spending in 2010 amounted to $320.3 million compared to $299.8 million in 2009. The details of capital expenditures in 2010 and 2009 and a forecast for 2011 are shown in the table below:


	Year Ended December 31,
	2011 Forecast	2010	2009
	(in millions)
Wexpro	$100	$90.6	$116.2
Questar Pipeline	105	121.0	100.8
Questar Gas	132	108.6	82.6
Corporate	4	0.1	0.2
Total capital expenditures	$341	$320.3	$299.8

Wexpro

During 2010, Wexpro participated in 79 gross wells (48.1 net), resulting in 28.9 net successful gas wells and 1.0 net dry or abandoned well. The 2010 net drilling-success rate was 96.7%. There were 34 gross wells (18.2 net) in progress at year-end. Wexpro expects to spend $100 million in 2011 for developmental gas drilling.

Questar Pipeline

Questar Overthrust Pipeline, a wholly owned subsidiary of Questar Pipeline, started a system expansion in 2010 looping 43 miles of pipeline between its Cabin 31 facility near Blacksfork and Rock Springs, Wyoming. This expansion was completed in February 2011. Questar Pipeline’s 2011 capital-spending forecast is for transmission-system expansions and pipeline replacements.

Questar Gas

During 2010, Questar Gas added 243 miles of main, feeder and service lines to provide service to 11,012 additional customers and spent $39.3 million to replace high-pressure feeder lines. Questar Gas’s 2011 capital-spending forecast includes customer additions of 12,000 customers and high-pressure feeder line replacements of $45 million.

Financing Activities

Following is a summary of financing activities for 2010, 2009 and 2008:


	Year Ended December 31,			Change
	2010	2009	2008	2010 vs. 2009	2009 vs. 2008
	(in millions)
Common stock issues, net of repurchases	$ 6.8	$ 9.1	($ 8.2)	($ 2.3)	$ 17.3
Change in long-term debt	244.6	(41.2)	245.2	285.8	(286.4)
Change in short-term debt	20.1	(49.9)	(92.0)	70.0	42.1
Dividends paid	(94.8)	(87.9)	(85.4)	(6.9)	(2.5)
Other	8.4	2.4	14.4	6.0	(12.0)
Net cash provided by (used in) financing activities from continuing operations	$185.1	($167.5)	$74.0	$352.6	($241.5)

In connection with the Spinoff of QEP, Questar borrowed $250.0 million under its commercial-paper program and contributed the amount to QEP. In December 2010, Questar issued $250.0 million of 2.75% Senior Notes due 2016 to repay the commercial paper.

In September 2009, Questar Pipeline issued $50.0 million of notes due February 2018 with a 5.40% effective interest rate and used the net proceeds to repay $42.0 million of long-term notes that matured in October 2009.

Questar's consolidated capital structure consisted of 56% combined short- and long-term debt and 44% common shareholders' equity at December 31, 2010, compared to 48% combined short- and long-term debt and 52% common shareholders' equity a year earlier. The Company does not expect the level of debt in the capital structure to materially increase over the next several years.

Questar Pipeline has $180.0 million and Questar Gas has $2.0 million of long-term debt maturing in 2011. Questar Pipeline expects to refinance its maturing debt using publicly traded notes. The Company believes it will have adequate access to long-term capital based on current credit markets and its investment-grade credit ratings.

Questar issues commercial paper to meet short-term financing requirements. The bank-credit commitments provide back-up credit liquidity support for Questar’s commercial-paper program. Credit commitments under the bank lines totaled $600.0 million at December 31, 2010, with no amounts borrowed. Commitments of $250.0 million mature on June 29, 2011, and commitments of $350.0 million mature on July 1, 2013. The Company does not plan to renew the $250.0 million bank line. Commercial paper outstanding amounted to $242.0 million at December 31, 2010, compared with $169.0 million a year earlier. The Company’s short-term financing requirements are seasonal and typically peak at December 31 because of Questar Gas’s gas-purchasing requirements. The Company believes the credit commitments are adequate for its working capital and short-term financing requirements during 2011.

In June 2010, Questar entered into a lease agreement for a new headquarters building that is being constructed. The lease term is 17 years beginning when the building is ready for occupancy, which is expected in early 2012. Initial lease payments are $3.2 million per year compared to $3.9 million per year under its current building lease. Questar expects to account for this lease as a capital lease. The Company’s lease on its existing headquarters building will expire at that time.

The Company increased its dividend to common shareholders subsequent to the Spinoff of QEP because of the change in the Company’s risk and return profile. The Company expects to continue to increase its common dividend in the future as a result of visibility and growth in earnings and cash flows.

Contractual Cash Obligations and Other Commitments

In the course of ordinary business activities, Questar enters into a variety of contractual cash obligations and other commitments. The following table summarizes the significant contractual cash obligations as of December 31, 2010:


	Payments Due by Year
	Total	2011	2012	2013	2014	2015	After 2015
	(in millions)
Long-term debt
Questar Pipeline	$ 460.1	$180.0	-	-	-	$ 25.1	$ 255.0
Questar Gas	370.0	2.0	$ 91.5	$ 42.0	-	-	234.5
Questar Corporation	250.0	-	-	-	-	-	250.0
Total	1,080.1	182.0	91.5	42.0	-	25.1	739.5
Interest on fixed-rate long-term debt
Questar Pipeline	120.4	23.3	16.5	16.5	$16.5	16.2	31.4
Questar Gas	267.3	23.3	21.4	15.3	15.1	15.1	177.1
Questar Corporation	37.8	6.9	6.9	6.9	6.9	6.9	3.3
Total	425.5	53.5	44.8	38.7	38.5	38.2	211.8
Gas-purchase contracts - Questar Gas	297.7	64.8	20.7	18.3	18.3	18.3	157.3
Transportation and storage contracts - Questar Gas
With unaffiliated pipelines	235.1	27.3	27.3	27.3	27.3	27.3	98.6
With Questar Pipeline	437.4	70.9	68.0	66.1	62.6	62.6	107.2
Total	672.5	98.2	95.3	93.4	89.9	89.9	205.8


Operating leases
Questar Pipeline	1.2	0.8	0.4	-	-	-	-
Questar Gas	1.0	0.7	0.3	-	-	-	-
Questar Corporation and Wexpro	4.1	2.7	1.4	-	-	-	-
Total	6.3	4.2	2.1	-	-	-	-
Capital lease	67.5	-	2.3	3.2	3.3	3.4	55.3
Drilling-rig contracts - Wexpro	13.9	13.9	-	-	-	-	-
Less intercompany commitments	(437.4)	(70.9)	(68.0)	(66.1)	(62.6)	(62.6)	(107.2)
Total - Questar Consolidated	$2,126.1	$345.7	$188.7	$129.5	$ 87.4	$112.3	$1,262.5
Total - Questar Pipeline	$ 581.7	$204.1	$ 16.9	$ 16.5	$ 16.5	$ 41.3	$ 286.4
Total - Questar Gas	$1,608.5	$189.0	$229.2	$169.0	$123.3	$123.3	$ 774.7

Critical Accounting Policies, Estimates and Assumptions

Questar's significant accounting policies are described in Note 1 to the consolidated financial statements included in Item 8 of Part II of this Annual Report. The Company's consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles. The preparation of consolidated financial statements requires management to make assumptions and estimates that affect the reported results of operations and financial position. The following accounting policies may involve a higher degree of complexity and judgment on the part of management.

Gas and Oil Reserves

Gas and oil reserve estimates require significant judgments in the evaluation of all available geological, geophysical, engineering and economic data. The data for a given field may change substantially over time as a result of numerous factors including, but not limited to, additional development activity, production history, and economic assumptions relating to commodity prices, production costs, severance and other taxes, capital expenditures and remediation costs. The subjective judgments and variances in data for various fields make these estimates less precise than other estimates included in the financial statement disclosures. See Note 16 to the financial statements included in Item 8 of Part II of this Annual Report for more information on the Company's estimated proved reserves.

Successful Efforts Accounting for Gas and Oil Operations

The Company follows the successful efforts method of accounting for cost-of-service gas- and oil activities. Under this method, the acquisition costs of proved and unproved properties, successful exploratory wells and development wells are capitalized. Other exploration costs, including geological and geophysical costs, the delay rental and administrative costs associated with unproved property and unsuccessful exploratory well costs are expensed. Costs to operate and maintain wells and field equipment are expensed as incurred.

Capitalized proved-property-acquisition costs are amortized by field using the unit-of-production method based on proved reserves. Capitalized development and exploratory-well costs are amortized similarly by field based on proved developed reserves. The calculation takes into consideration estimated future equipment dismantlement, surface restoration and property-abandonment costs, net of estimated equipment-salvage values. Other property and equipment are generally depreciated using the straight-line method over estimated useful lives or the unit-of-production method for certain processing plants. A gain or loss is generally recognized only when an entire field is sold or abandoned, or if the unit-of-production amortization rate would be significantly affected.

Revenue Recognition

Questar Gas estimates revenues on a calendar basis even though bills are sent to customers on a cycle basis throughout the month. The company estimates unbilled revenues for the period from the date meters are read to the end of the month, using usage history and weather information. Approximately one-half month of revenues is estimated in any period. The gas costs and other variable costs are recorded on the same basis to ensure proper matching of revenues and expenses.

Questar Gas’s tariff provides for monthly adjustments to customer bills to approximate the impact of normal temperatures on non-gas revenues. Questar Gas estimates the weather-normalization adjustment for the unbilled revenue each month. The weather-normalization adjustment is evaluated each month and reconciled on an annual basis in the summer to agree with the amount billed to customers. In 2006, the PSCU approved the CET to promote energy conservation. Under the CET, Questar Gas non-gas revenues are decoupled from the volume of gas used by customers. The tariff specifies a margin per customer for each month with differences to be deferred and recovered from customers or refunded to customers through periodic rate adjustments. These adjustments are limited to 5% of non-gas revenues.

Rate Regulation

Regulatory agencies establish rates for the storage, transportation, distribution and sale of natural gas. The regulatory agencies also regulate, among other things, the extension and enlargement or abandonment of jurisdictional natural gas facilities. Regulation is intended to permit the recovery, through rates, of the cost of service, including a return on investment. Questar Gas and Questar Pipeline follow accounting standards on Regulated Operations that require the recording of regulatory assets and liabilities by companies subject to cost-based regulation. The FERC, PSCU and PSCW have accepted the recording of regulatory assets and liabilities.

Employee Benefit Plans

The Company has defined-benefit pension, postretirement medical-and life-insurance plans covering a majority of its employees. Employees hired after June 30, 2010, do not participate in the defined-benefit pension plan and employees hired after December 31, 1996, do not participate in the postretirement medical plan. The calculation of the Company's expense and liability associated with its benefit plans requires the use of assumptions that the Company deems to be critical. Changes in these assumptions can result in different expenses and liabilities and actual experience can differ from these assumptions.

Independent consultants hired by the Company use actuarial models to calculate estimates of pension and postretirement benefits expense. The models use key factors such as mortality estimations, liability discount rates, long-term rates of return on investments, rates of compensation increases, amortized gain or loss from investments and medical-cost trend rates. Management formulates assumptions based on market indicators and advice from consultants. The Company believes that the liability discount rate and the expected long-term rate of return on benefit plan assets are critical assumptions.

The assumed liability discount rate reflects the current rate at which the pension benefit obligations could effectively be settled and considers the rates of return available on a portfolio of high-quality, fixed-income investments. The Company discounted its future pension liabilities using rates of 5.75% as of December 31, 2010, and 6.50% as of December 31, 2009. A 0.25% decrease in the discount rate would increase the Company's 2011 estimated annual qualified pension expense by about $1.6 million.

The expected long-term rate of return on benefit-plan assets reflects the average rate of earnings expected on funds invested or to be invested for purposes of paying pension benefits. The Company establishes the expected long-term rate of return at the beginning of each fiscal year giving consideration to the benefit plan's investment mix and historical and forecasted rates of return on these types of securities. The expected long-term rate of return determined by the Company was 7.25% as of January 1, 2011, and January 1, 2010. Benefit plan expense typically increases as the expected long-term rate of return on plan assets decreases. A 0.25% decrease in the expected long-term rate of return causes an approximate $0.8 million increase in the 2011 qualified pension expense.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

~~Questar~~Wexpro ~~Pipeline’s~~operations ~~primary~~are ~~market~~subject ~~risk~~to ~~exposures~~various ~~arise~~government ~~from~~controls ~~changes~~and inregulation ~~demand~~at ~~for~~the ~~transportation~~federal, state and ~~storage~~local ~~services~~levels. Wexpro must obtain permits to drill and ~~competition~~produce, ~~from~~maintain ~~other~~bonding ~~pipelines.~~requirements ~~The~~to ~~demand~~drill ~~for~~and ~~transportation~~operate wells, submit and ~~storage~~implement ~~services~~spill-prevention ~~will~~plans, ~~vary~~and ~~based~~file onnotices ~~the~~relating ~~market’s~~to ~~expectations~~the ~~about~~presence, ~~future~~use, ~~volumes~~and release of ~~natural~~specified contaminants incidental to gas ~~likely~~and oil production. Wexpro is also subject to bevarious ~~produced~~conservation inmatters, including the ~~basins~~regulation ~~served~~of bythe ~~Questar~~size ~~Pipeline~~of drilling and ~~changes~~spacing inunits, ~~market~~the ~~demand~~number ~~for~~of ~~natural~~wells ~~gas.~~that Onmay ~~some~~be ~~portions~~drilled ofin ~~its~~a ~~pipeline~~unit ~~system~~and the ~~Company~~unitization ~~faces~~or ~~the~~pooling ~~risk~~of ~~that~~gas itand ~~will~~oil ~~not~~properties. beIn ~~successful~~addition, inthe ~~recontracting~~Utah ~~capacity~~Division ~~under~~of ~~favorable~~Public ~~terms~~Utilities ~~once~~has ~~existing~~oversight ~~contracts~~responsibility ~~expire.~~and ~~Revenue~~retains ~~may~~an beoutside ~~reduced~~reservoir-engineering ifconsultant ~~market~~and ~~prices~~a ~~for~~financial ~~NGL~~auditor ~~decline~~to assess the prudence of Wexpro's activities.

Questar Pipeline’s primary market-risk exposures arise from changes in demand for transportation and storage services and competition from other pipelines. The demand for transportation and storage services will vary based on the market’s expectations about future volumes of natural gas likely to be produced in the basins served by Questar Pipeline and changes in market demand for natural gas. On some portions of its pipeline system the Company faces the risk that it will not be successful in re-contracting capacity under favorable terms once existing contracts expire. Revenue may be reduced if NGL market prices or volumes decline.

Questar Gas’s primary market risk exposures arise from changes in demand for natural gas and competition from other energy sources. The demand for natural gas will vary based on economic conditions, conservation efforts and prices. The temperature-adjusted usage per residential customer has decreased due to more energy efficient appliances and homes, and behavior changes in response to higher natural gas prices. The economic impact of this decline in usage per customer has been somewhat offset by the addition of new customers and the CET.

Credit Risk

Questar Pipeline requests credit support, such as letters of credit and cash deposits, from companies that pose unfavorable credit risks. All companies posing such concerns were current on their accounts at December 31, ~~2009~~2010. Questar Pipeline's largest customers include Questar Gas, Rockies Express Pipeline, EOG Resources, XTO Energy, Wyoming Interstate Pipeline, EnCana Marketing and PacifiCorp.

Questar Gas requires deposits from customers that pose unfavorable credit risks. No single customer accounted for a significant portion of revenue in 2010.

Interest-Rate Risk

The fair value of fixed-rate debt is subject to change as interest rates fluctuate. The Company’'s ability to borrow and the rates quoted by lenders can be adversely affected by ~~the~~ illiquid credit markets ~~as described in Item 1A~~. ~~Risk Factors of Part I of this Annual Report on Form 10-K.~~ The Company had $~~461~~1,080.25 million of fixed- rate long-term debt with a fair value of $1,173.8 million at December 31, ~~2009~~2010, ~~and~~compared to $~~451~~831.82 million of fixed-rate long-term debt ~~at December 31, 2008~~ with a fair value of $~~490~~895.90 million inat ~~2009~~December ~~and~~31, ~~fair value of $457~~2009.2 ~~million in 2008.~~ If interest rates had declined 10%, fair value would ~~have~~increase ~~increased~~ to $~~501~~1,197.04 million in ~~2009~~2010 and $~~468~~920.97 million in ~~2008~~2009. The fair value calculations do not represent the cost to retire the debt securities. ~~The Company also borrows funds on a short-term basis with variable interest rates.~~

Climate-Change Risk

Federal and state courts and administrative agencies are considering the scope and scale of climate-change regulation under various laws pertaining to the environment, energy use and development, and greenhouse -gas emissions. ~~Rocky~~It ~~Mountain~~is ~~producers'~~likely ~~ability~~that toCongress ~~access~~will ~~and~~enact ~~develop~~legislation ~~new~~to ~~natural gas reserves may be restricted by climate-change regulation, which may reduce the demand for transportation and storage services. There are bills pending in Congress that would~~ regulate greenhouse -gas emissions ~~through~~in athe ~~cap-and-trade~~future, ~~system~~though ~~under~~not ~~which~~in ~~emitters~~2011. ~~would~~The beEnvironmental ~~required~~Protection toAgency ~~buy allowances for offsets of emissions of greenhouse gases. The~~ (EPA) has adopted ~~final~~ regulations for the measurement and reporting of greenhouse gases emitted from ~~certain~~combustion at large facilities (emitting more than 25,000 metric tons/year of ~~CO2~~carbon dioxide equivalent) beginning ~~with operations~~ in 2010. The first report is to be filed with the EPA by March 31, 2011. InReporting ~~addition,~~under ~~several~~this ofregulation ~~the~~will ~~states~~be inexpanded ~~which~~to ~~Questar~~include ~~Pipeline~~measurement ~~operates~~and ~~are~~reporting ~~considering~~of ~~various~~ greenhouse -gas ~~registration~~emissions attributed to methane venting and ~~reduction~~leaking ~~programs~~in 2011. ~~Carbon~~This ~~dioxide~~ regulation ~~could~~will ~~increase~~affect ~~the~~all ~~price~~Questar ofsubsidiaries ~~natural~~in ~~gas~~2011, ~~restrict~~and ~~access~~will torequire ormeasurement ~~the~~and ~~use~~monitoring ofin the natural gas producing basins in which Wexpro operates, ~~and/or~~as ~~reduce~~well ~~natural~~as ~~gas~~in ~~demand.~~Questar ~~Federal~~Pipeline’s compressor stations, ~~state~~storage fields, and ~~local~~processing ~~governments~~facilities. ~~may~~Questar ~~also~~Gas ~~pass~~will ~~laws~~be ~~mandating~~responsible ~~the~~for ~~use~~reporting ofcombustion ~~alternative~~emissions ~~energy~~for ~~sources~~all of its customers, ~~such~~as well as ~~wind~~for ~~power~~measurement and ~~solar~~monitoring ~~energy,~~of ~~which~~gate-station ~~may~~methane ~~reduce~~emissions. ~~demand~~EPA’s ~~for~~Prevention ~~natural~~of ~~gas.~~Significant ~~While~~Deterioration ~~future~~and ~~climate-change~~Title ~~regulation~~V isGreenhouse ~~likely,~~Gas itTailoring isRule, ~~too~~which ~~early~~went tointo ~~predict~~effect ~~how~~January ~~this~~1, ~~regulation~~2011, ~~will~~regulates ~~affect~~greenhouse ~~Questar~~gases ~~Pipeline's~~as ~~business,~~a ~~operations~~Clean orAir ~~financial~~Act ~~results~~pollutant. ItThis isrule ~~uncertain~~will ~~whether~~be ~~Questar~~phased ~~Pipeline's~~in ~~operations~~to ~~and~~regulate ~~properties,~~greenhouse ~~located~~gas inat ~~the~~large ~~Rocky~~new ~~Mountain~~sources ~~region~~or ofat ~~the~~existing ~~United~~sources ~~States,~~undergoing major modifications. There are ~~exposed~~efforts toin ~~possible~~the ~~physical~~current ~~risks,~~Congress ~~such~~to asundo ~~severe~~the ~~weather~~Tailoring ~~patterns,~~Rule; ~~due~~it tois ~~climate~~too ~~change~~early asto apredict ~~result~~whether ofthese ~~man-made~~efforts ~~greenhouse~~will ~~gases~~be successful. ~~However,~~Analysis ~~management~~of ~~does~~near ~~not~~term ~~believe~~capital ~~that~~projects ~~such~~indicates ~~physical~~that ~~risks~~these ~~are~~permitting ~~reasonably~~regulations ~~likely~~will tonot ~~have~~inhibit adevelopment ~~material~~or ~~effect~~expansion onof ~~the~~Questar ~~Company's~~services, ~~financial~~unless ~~condition~~EPA orreduces ~~results~~thresholds ofin ~~operations~~the future.

While future climate-change regulation is likely, it is too early to predict how this regulation will affect Questar's ~~Pipeline~~business, ~~Company~~operations, ~~2009~~or 10financial results. If forthcoming regulations recognize that use of natural gas in high-Kefficiency residential, commercial, transportation, industrial, and electricity-generation applications is essential to lower U.S. greenhouse-gas emissions, use of natural gas in these applications will increase. Similarly, natural gas will be essential in ensuring electrical-grid reliability as reliance on intermittent renewable energy increases in the future. Use of natural gas as an alternative-transportation fuel continues to grow, with Questar actively involved in expanding refueling infrastructure. On the other hand, federal regulation of carbon dioxide could increase the price of natural gas, restrict access to or the use of natural gas, and/or reduce natural gas demand. Federal, state, and local governments may pass laws mandating the use of alternative-energy sources, such as wind, solar, and geothermal energy. The increased use of alternative energy could reduce the future demand for natural gas. It is uncertain whether Questar's operations and properties, all located in the Rocky Mountains, are exposed to possible physical risks, such as severe weather patterns due to climate change, as a result of man-made greenhouse gases. However, management does not believe that such physical risks are reasonably likely to have a material effect on the Company's financial condition or results of operations.

1529

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Financial Statements

Page No.

Financial Statements:

Questar Corporation

Report of Independent Registered Public Accounting Firm

Consolidated Statements of Income, three years ended December 31, 2009

Consolidated Balance Sheets at December 31, 2009 and 2008

Consolidated Statements of Common Shareholder’s Equity, three years ended

December 31, 2009

Consolidated Statements of Cash Flows, three years ended December 31, 2009

Notes Accompanying the Consolidated Financial Statements

Financial Statement Schedule:

Valuation and Qualifying Accounts

~~All~~ Consolidated ~~other~~Statements ~~schedules~~of ~~are~~Income, ~~omitted~~three ~~because~~years ~~they~~ended ~~are~~December ~~not~~31, ~~applicable or the required information is shown in the Consolidated Financial Statements or Notes thereto.~~2010

~~Questar Pipeline Company 2009 10-K~~32

16 Consolidated Balance Sheets at December 31, 2010 and 2009

Consolidated Statements of Equity, three years ended December 31, 2010

Consolidated Statements of Cash Flows, three years ended December 31, 2010

Questar Pipeline Company

Report of Independent Registered Public Accounting Firm

Consolidated Statements of Income, three years ended December 31, 2010

Consolidated Balance Sheets at December 31, 2010 and 2009

Consolidated Statements of Shareholder’s Equity, three years ended December 31, 2010

Consolidated Statements of Cash Flows, three years ended December 31, 2010

Questar Gas Company

Report of Independent Registered Public Accounting Firm

Statements of Income, three years ended December 31, 2010

Balance Sheets at December 31, 2010 and 2009

Statements of Shareholder’s Equity, three years ended December 31, 2010

Statements of Cash Flows, three years ended December 31, 2010

Notes Accompanying the Financial Statements

Financial Statement Schedules:

Questar Corporation

Valuation and Qualifying Accounts, for the three years ended December 31, 2010

Questar Pipeline Company

Valuation and Qualifying Accounts, for the three years ended December 31, 2010

Questar Gas Company

Valuation and Qualifying Accounts, for the three years ended December 31, 2010

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of

Questar Corporation

We have audited the accompanying consolidated balance sheets of Questar Corporation as of December 31, 2010 and 2009, and the related consolidated statements of income, equity, and cash flows for each of the three years in the period ended December 31, 2010. Our audits also included the financial statement schedule listed in the Index at Item 8. These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Questar Corporation at December 31, 2010 and 2009, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2010, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Questar Corporation’s internal control over financial reporting as of December 31, 2010, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 28, 2011, expressed an unqualified opinion thereon.

/s/Ernst & Young LLP

Ernst & Young LLP

Salt Lake City, Utah

February 28, 2011


QUESTAR CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
	Year Ended December 31,
	2010		2009	2008
	(in millions, except per share amounts)
REVENUES
Questar Gas	$ 901.8	$ 918.9		$ 994.2
Questar Pipeline	197.2	173.2		176.6
Wexpro	24.6	17.8		31.1
Total Revenues	1,123.6	1,109.9		1,201.9
OPERATING EXPENSES
Cost of sales (excluding operating expenses shown separately)	280.9	331.4		457.4
Operating and maintenance	175.8	167.6		147.5
General and administrative	108.5	93.4		89.1
Separation costs	11.5	-		-
Production and other taxes	50.6	42.4		58.0
Depreciation, depletion and amortization	153.4	147.1		132.9
Impairment	-	-		14.0
Total Operating Expenses	780.7	781.9		898.9
Net gain from asset sales	0.4	0.2		4.3
OPERATING INCOME	343.3	328.2		307.3
Interest and other income	11.7	12.5		22.6
Income from unconsolidated affiliate	3.8	3.8		0.6
Interest expense	(57.1)	(59.6)		(63.9)
Income From Continuing Operations Before Income Taxes	301.7	284.9		266.6
Income taxes	(109.4)	(104.4)		(94.4)
INCOME FROM CONTINUING OPERATIONS	192.3	180.5		172.2
Discontinued operations, net of income taxes	148.2	215.4		520.6
Discontinued operations, noncontrolling interest	(1.3)	(2.6)		(9.0)
Total Discontinued Operations, Net Of Income Taxes	146.9	212.8		511.6
NET INCOME ATTRIBUTABLE TO QUESTAR	$ 339.2	$ 393.3		$ 683.8
Earnings Per Common Share Attributable To Questar
Basic from continuing operations	$ 1.09	$ 1.03		$ 1.00
Basic from discontinued operations	0.84	1.23		2.96
Basic total	$ 1.93	$ 2.26		$ 3.96
Diluted from continuing operations	$ 1.08	$ 1.02		$ 0.98
Diluted from discontinued operations	0.83	1.21		2.90
Diluted total	$ 1.91	$ 2.23		$ 3.88
Weighted average common shares outstanding
Used in basic calculation	175.4	174.1		172.8
Used in diluted calculation	178.0	176.3		176.1

See notes accompanying the financial statements


QUESTAR CORPORATION
CONSOLIDATED BALANCE SHEETS
	December 31,
	2010	2009
	(in millions)
ASSETS
Current Assets
Cash and cash equivalents	$ 21.8	$ 11.5
Notes receivable	-	39.3
Federal income taxes receivable	37.1	3.3
Accounts receivable, net	122.1	119.5
Unbilled gas accounts receivable	81.6	86.9
Inventories at lower of average cost or market:
Gas stored underground	43.7	42.9
Materials and supplies	19.0	19.9
Current regulatory assets	53.5	43.4
Prepaid expenses and other	9.0	8.6
Deferred income taxes - current	11.8	14.3
Current assets of discontinued operations	-	562.4
Total Current Assets	399.6	952.0
--
Property, Plant and Equipment
Distribution property, plant and equipment	1,817.6	1,721.9
Transportation property, plant and equipment	1,711.1	1,589.8
Cost-of-service gas and oil property, plant and equipment, successful efforts method	1,109.1	1,022.5
Other	5.0	4.7
Total property, plant and equipment	4,642.8	4,338.9
Distribution accumulated depreciation and amortization	(721.3)	(690.4)
Transportation accumulated depreciation and amortization	(545.0)	(502.5)
Cost-of-service gas and oil accumulated depreciation, depletion and amortization,	(487.8)	(428.6)
Other accumulated depreciation and amortization	(4.1)	(3.8)
Total accumulated depreciation, depletion and amortization	(1,758.2)	(1,625.3)
Property, plant and equipment of discontinued operations, net	-	5,091.3
Total Property, Plant and Equipment, net	2,884.6	7,804.9
--
Investment in unconsolidated affiliate	27.9	28.1
--
Other Assets
Goodwill	9.8	9.8
Regulatory assets	21.7	23.5
Other noncurrent assets	30.0	25.1
Noncurrent assets of discontinued operations	-	175.2
Total Other Assets	61.5	233.6
TOTAL ASSETS	$3,373.6	$9,018.6


QUESTAR CORPORATION

	December 31,
	2010	2009
	(in millions)
LIABILITIES AND EQUITY
Current Liabilities
Short-term debt	$ 242.0	$ 169.0
Notes payable	-	52.9
Accounts payable and accrued expenses	160.5	169.6
Production and other taxes	29.9	24.1
Customer advances	26.2	30.3
Interest payable	8.5	8.2
Current regulatory liabilities	6.0	30.7
Current portion of long-term debt	182.0	-
Current liabilities of discontinued operations	-	584.2
Total Current Liabilities	655.1	1,069.0
--
Long-term debt, less current portion	898.5	831.2
Deferred income taxes	474.7	377.7
Asset retirement obligations	60.9	65.0
Defined benefit pension plan	130.0	166.4
Other postretirement benefits	39.5	40.5
Customer contributions-in-aid-of-construction	45.5	52.2
Other long-term liabilities	33.3	35.3
Noncurrent liabilities of discontinued operations	-	2,824.2
Commitments and contingencies - Note 8
--
EQUITY
Common stock - without par value; 500.0 million shares authorized;
176.5 million outstanding at Dec. 31, 2010, and 174.6 million outstanding at Dec. 31, 2009	493.0	454.8
Retained earnings	647.1	3,077.7
Accumulated other comprehensive (loss)	(104.0)	(30.3)
Total Common Shareholders' Equity	1,036.1	3,502.2
Noncontrolling interest of discontinued operations	-	54.9
Total Equity	1,036.1	3,557.1
TOTAL LIABILITIES AND EQUITY	$3,373.6	$9,018.6

See notes accompanying the financial statements


QUESTAR CORPORATION
CONSOLIDATED STATEMENTS OF EQUITY
	Common Shareholders' Equity
				Accum.		Non- control Interest
	Common Stock		Retained Earnings	Other Comp			Total Equity
	Shares	Amount	Retained Earnings	Income (Loss)	Total		Total Equity
	(in millions)

Balances at December 31, 2007	172.8	$429.3	$2,173.9	($25.3)	$2,577.9	-	$2,577.9
Common stock issued	1.1	7.1	-	-	7.1	-	7.1
Common stock repurchased	(0.3)	(15.3)	-	-	(15.3)	-	(15.3)
Dividends paid ($0.4925 per share)	-	-	(85.4)	-	(85.4)	-	(85.4)
Share-based compensation	-	16.7	-	-	16.7	-	16.7
Tax benefits from share-based compensation	-	13.2	-	-	13.2	-	13.2
Consolidation of noncontrolling interest	-	-	-	-	-	$29.8	29.8
Distribution to noncontrolling interest	-	-	-	-	-	(9.3)	(9.3)
Comprehensive income
2008 net income	-	-	683.8	-	683.8	9.0	692.8
Other comprehensive income (loss):
Change in unrealized fair value of derivatives	-	-	-	494.0	494.0	-	494.0
Change in unrecognized actuarial gain	-	-	-	(132.8)	(132.8)	-	(132.8)
Change in unrecognized prior-service costs	-	-	-	(13.9)	(13.9)	-	(13.9)
Income taxes	-	-	-	(127.3)	(127.3)	-	(127.3)
Total comprehensive income	-	-	-	-	903.8	9.0	912.8

Balances at December 31, 2008	173.6	451.0	2,772.3	194.7	3,418.0	29.5	3,447.5
Common stock issued	1.2	16.3	-	-	16.3	-	16.3
Common stock repurchased	(0.2)	(7.2)	-	-	(7.2)	-	(7.2)
Dividends paid ($0.505 per share)	-	-	(87.9)	-	(87.9)	-	(87.9)
Share-based compensation	-	22.7	-	-	22.7	-	22.7
Tax benefits from share-based compensation	-	3.6	-	-	3.6	-	3.6
Noncontrolling interest equity adjustment	-	(28.5)	-	-	(28.5)	28.5	-
Tax on equity adjustment	-	(3.1)	-	-	(3.1)	-	(3.1)
Distribution to noncontrolling interest	-	-	-	-	-	(5.7)	(5.7)
Comprehensive income
2009 net income	-	-	393.3	-	393.3	2.6	395.9
Other comprehensive income (loss):
Change in unrealized fair value of derivatives	-	-	-	(405.1)	(405.1)	-	(405.1)
Change in unrecognized actuarial gain	-	-	-	44.5	44.5	-	44.5
Change in unrecognized prior-service costs	-	-	-	3.3	3.3	-	3.3
Income taxes	-	-	-	132.3	132.3	-	132.3
Total comprehensive income	-	-	-	-	168.3	2.6	170.9

Balances at December 31, 2009	174.6	454.8	3,077.7	(30.3)	3,502.2	54.9	3,557.1


Common stock issued	2.3	18.4	-	-	18.4	-	18.4
Common stock repurchased	(0.4)	(11.1)	-	-	(11.1)	-	(11.1)
Dividends paid ($0.54 per share)	-	-	(94.8)	-	(94.8)	-	(94.8)
Share-based compensation	-	22.5	-	-	22.5	-	22.5
Tax benefits from share-based compensation	-	8.4	-	-	8.4	-	8.4
Spinoff of QEP	-	-	(2,675.0)	-	(2,675.0)	(53.8)	(2,728.8)
Distribution to noncontrolling interest	-	-	-	-	-	(2.4)	(2.4)
Comprehensive income
2010 net income	-	-	339.2	-	339.2	1.3	340.5
Other comprehensive income (loss):
Change in unrealized fair value of derivatives	-	-	-	234.2	234.2	-	234.2
Unrealized fair value of derivatives
transferred to QEP	-	-	-	(372.9)	(372.9)	-	(372.9)
Change in unrecognized actuarial gain	-	-	-	17.7	17.7	-	17.7
Change in unrecognized prior-service costs	-	-	-	3.8	3.8	-	3.8
Change in fair value of long-term investment	-	-	-	0.1	0.1	-	0.1
Income taxes	-	-	-	43.4	43.4	-	43.4
Total comprehensive income	-	-	-	-	265.5	1.3	266.8

Balances at December 31, 2010	176.5	$493.0	$647.1	($104.0)	$1,036.1	-	$1,036.1

See notes accompanying the financial statements


QUESTAR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
	Year Ended December 31,
	2010	2009	2008
	(in millions)
OPERATING ACTIVITIES
Net income	$340.5	$395.9	$692.8
Discontinued operations, net of income taxes	(148.2)	(215.4)	(520.6)
Adjustments to reconcile net income to net cash
provided by operating activities by continuing operations:
Depreciation, depletion and amortization	161.8	154.3	139.6
Deferred income taxes	91.4	82.1	57.3
Impairment	-	-	14.0
Share-based compensation	15.4	9.3	6.2
Net (gain) from asset sales	(0.4)	(0.2)	(4.3)
(Income) from unconsolidated affiliate	(3.8)	(3.8)	(0.6)
Distributions from unconsolidated affiliate	4.0	3.3	-
Other operating	(1.5)	-	(3.0)
Changes in operating assets and liabilities
Accounts receivable	2.9	21.7	(34.4)
Inventories	0.1	24.1	(24.9)
Prepaid expenses	-	(0.2)	(0.6)
Accounts payable and accrued expenses	(18.4)	(16.9)	(16.1)
Federal income taxes	(33.8)	10.2	(10.0)
Regulatory assets and liabilities	(34.8)	(38.2)	(23.2)
Other	(24.3)	2.6	(0.7)
Net Cash Provided By Operating Activities By Continuing Operations	350.9	428.8	271.5
--
INVESTING ACTIVITIES
Property, plant and equipment	(320.3)	(299.8)	(322.0)
Unconsolidated affiliate	-	-	(27.0)
Equity investment in QEP	(250.0)	-	-
Cash used in disposition of assets	(2.6)	(2.0)	(3.7)
Proceeds from disposition of assets and other	0.6	1.9	27.5
Change in notes receivable	39.3	50.1	(31.8)
Distribution from QEP	7.3	-	-
Net Cash Used In Investing Activities By Continuing Operations	(525.7)	(249.8)	(357.0)
--
FINANCING ACTIVITIES
Common stock issued	17.9	16.3	7.1
Common stock repurchased	(11.1)	(7.2)	(15.3)
Long-term debt issued, net of issuance costs	244.6	50.8	346.5
Long-term debt repaid	-	(42.0)	(151.3)
Change in long-term note payable	-	(50.0)	50.0
Change in short-term debt	73.0	(62.1)	(29.5)
Change in notes payable	(52.9)	12.2	(62.5)
Checks outstanding in excess of cash balances	-	(1.2)	1.2


Dividends paid	(94.8)	(87.9)	(85.4)
Tax benefits from share-based compensation	8.4	3.6	13.2
Net Cash Provided By (Used in) Financing Activities From Continuing Operations	185.1	(167.5)	74.0
CASH PROVIDED BY (USED IN) CONTINUING OPERATIONS	10.3	11.5	(11.5)
Cash provided by operating activities of discontinued operations	475.5	1,149.4	1,224.7
Cash used in investing activities of discontinued operations	(598.6)	(1,146.4)	(2,021.0)
Cash provided by (used in) financing activities of discontinued operations	103.8	(8.8)	818.7
Effect of change in cash and cash equivalents of discontinued operations	19.3	5.8	(22.4)
Change in cash and cash equivalents	10.3	11.5	(11.5)
Beginning cash and cash equivalents	11.5	-	11.5
Ending cash and cash equivalents	$ 21.8	$ 11.5	$ -
--
Supplemental Disclosure of Cash Paid During the Year for:
Interest	$ 53.0	$ 59.0	$ 60.6
Income taxes	44.6	6.4	35.7

See notes accompanying the financial statements

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholder of

Questar Pipeline Company

We have audited the accompanying consolidated balance sheets of Questar Pipeline Company as of December 31, ~~2009~~2010 and ~~2008~~2009, and the related consolidated statements of income, shareholder’s equity, and cash flows for each of the three years in the period ended December 31, ~~2009~~2010. Our audits also included the financial statement schedule listed in the Index at Item 8. These financial statements and schedule are the responsibility of the Company’'s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit ~~also~~ includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,. An audit also includes assessing the accounting principles used and significant estimates made by management, ~~and~~as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Questar Pipeline Company at December 31, ~~2009~~2010 and ~~2008~~2009, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, ~~2009~~2010, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/Ernst & Young LLP

Ernst & Young LLP

Salt Lake City, Utah

~~March~~February 1128, ~~2010~~2011

~~Questar Pipeline Company 2009 10-K~~39


QUESTAR PIPELINE COMPANY
CONSOLIDATED STATEMENTS OF INCOME
	Year Ended December 31,
	2010	2009	2008
	(in millions)
REVENUES
From unaffiliated customers	$197.2	$173.2	$176.6
From affiliated companies	74.0	72.2	72.0
TOTAL REVENUES	271.2	245.4	248.6

OPERATING EXPENSES
Operating and maintenance	41.4	40.1	37.1
General and administrative	41.0	36.1	36.8
Depreciation and amortization	47.4	44.3	42.7
Impairment	-	-	14.0
Other taxes	9.0	8.6	7.8
Cost of goods sold (excluding operating expenses shown separately)	2.4	1.6	1.8
Total Operating Expenses	141.2	130.7	140.2
Net gain from asset sales	0.8	0.5	4.5
OPERATING INCOME	130.8	115.2	112.9
Interest and other income	0.4	2.5	10.6
Income from unconsolidated affiliate	3.8	3.8	0.6
Interest expense	(28.8)	(29.5)	(32.7)
INCOME BEFORE INCOME TAXES	106.2	92.0	91.4
Income taxes	(38.8)	(33.8)	(33.4)
NET INCOME	$ 67.4	$ 58.2	$ 58.0

QUESTAR PIPELINE COMPANY
CONSOLIDATED STATEMENTS OF INCOME
	Year Ended December 31,
	2009	2008	2007
	(in millions)
REVENUES
From unaffiliated customers	$170.1	$173.7	$127.7
From affiliated companies	75.3	74.9	78.2
TOTAL REVENUES	245.4	248.6	205.9
OPERATING EXPENSES
Operating and maintenance	40.1	37.1	33.0
General and administrative	36.1	36.8	36.0
Depreciation and amortization	44.3	42.7	35.0
Impairment		14.0
Other taxes	8.6	7.8	7.3
Cost of goods sold (excluding operating expenses shown separately)	1.6	1.8	4.0
TOTAL OPERATING EXPENSES	130.7	140.2	115.3
Net gain from asset sales	0.5	4.5	0.4
OPERATING INCOME	115.2	112.9	91.0
Interest and other income	2.5	10.6	2.4
Income from unconsolidated affiliate	3.8	0.6
Interest expense	(29.5)	(32.7)	(21.7)
INCOME BEFORE INCOME TAXES	92.0	91.4	71.7
Income taxes	(33.8)	(33.4)	(26.7)
NET INCOME	$ 58.2	$ 58.0	$ 45.0

See notes accompanying the financial statements

~~See notes accompanying the consolidated financial statements~~40

Questar Pipeline Company 2009 10-K


QUESTAR PIPELINE COMPANY
CONSOLIDATED BALANCE SHEETS
	December 31,
	2010	2009
	(in millions)
ASSETS
Current Assets
Cash and cash equivalents	$ 5.3	$ 3.8
Notes receivable from Questar	30.3	42.7
Federal income taxes receivable	1.1	1.7
Accounts receivable, net	19.1	17.6
Accounts receivable from affiliates	16.2	15.7
Materials and supplies, at lower of average cost or market	7.2	6.0
Prepaid expenses and other	5.2	4.2
Deferred income taxes – current	1.2	0.7
Total Current Assets	85.6	92.4

Property, Plant and Equipment
Transportation	1,196.8	1,152.8
Storage	281.8	274.8
Processing	25.3	22.6
General and intangible	63.4	62.1
Construction work in progress	143.8	77.5
Total Property, Plant and Equipment	1,711.1	1,589.8
Accumulated depreciation and amortization	(545.0)	(502.5)
Total Property, Plant and Equipment, net	1,166.1	1,087.3

Other Assets
Investment in unconsolidated affiliate	27.9	28.1
Goodwill	4.2	4.2
Regulatory and other noncurrent assets	9.6	11.8
Total Other Assets	41.7	44.1
TOTAL ASSETS	$1,293.4	$1,223.8

1841

QUESTAR PIPELINE COMPANY
CONSOLIDATED BALANCE SHEETS
	December 31,
	2009	2008
	2010	2009
	(in millions)
ASSETS
LIABILITIES AND COMMON SHAREHOLDER’S EQUITY
Current Assets
Current Liabilities
Cash and cash equivalents	$ 3.8	$ 1.8
Notes payable to Questar	$ -	$ 0.2
Notes receivable from Questar	42.7	40.6
Accounts payable and accrued expenses	40.0	29.2
Federal income taxes receivable	1.7
Accounts payable to affiliates	4.7	2.7
Accounts receivable, net	17.1	20.5
Regulatory liabilities	3.2	3.5
Accounts receivable from affiliates	16.2	17.2
Interest	2.4	2.4
Materials and supplies, at lower of average cost or market	6.0	6.2
Current portion of long-term debt	180.0	-
Prepaid expenses and other	4.2	3.2
Total Current Liabilities	230.3	38.0
Deferred income taxes – current	0.7	0.7
Long-term debt, less current portion	280.9	461.2
Total Current Assets	92.4	90.2
Deferred income taxes	180.1	162.4
Property, Plant and Equipment
Other long-term liabilities	15.3	15.1
Transportation	1,152.8	1,103.9
Commitments and contingencies - Note 8
Storage	274.8	269.0
COMMON SHAREHOLDER’S EQUITY
Processing	22.6	9.9
Common stock - par value $1 per share; authorized 25.0 million shares; issued and outstanding 6.6 million shares	6.6	6.6
General and intangible	62.1	56.2
Additional paid-in capital	344.0	342.7
Construction work in progress	77.5	68.7
Retained earnings	236.2	197.8
Total Property, Plant and Equipment	1,589.8	1,507.7
Total Common Shareholder’s Equity	586.8	547.1
Accumulated depreciation and amortization	(502.5)	(471.4)
TOTAL LIABILITIES AND COMMON SHAREHOLDER’S EQUITY	$1,293.4	$1,223.8
Net Property, Plant and Equipment	1,087.3	1,036.3
Investment in unconsolidated affiliate	28.1	27.6
Goodwill	4.2	4.2
Regulatory and other noncurrent assets	11.8	17.9
TOTAL ASSETS	$1,223.8	$1,176.2

~~Questar~~See ~~Pipeline~~notes ~~Company~~accompanying ~~2009~~the ~~10-K~~financial statements

1942

QUESTAR PIPELINE COMPANY
QUESTAR PIPELINE COMPANY CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDER’S EQUITY
CONSOLIDATED BALANCE SHEETS
	Common Stock	Additional Paid-in Capital	Retained Earnings	Total
	December 31,
	(in millions)
	2009	2008
Balance at December 31, 2007	$6.6	$340.9	$136.5	$484.0
	(in millions)
2008 net income	-	-	58.0	58.0
LIABILITIES AND COMMON SHAREHOLDER’S EQUITY
Dividends paid	-	-	(27.0)	(27.0)
Current Liabilities
Share-based compensation	-	0.7	-	0.7
Notes payable to Questar	$ 0.2	$ 0.2
Balance at December 31, 2008	6.6	341.6	167.5	515.7
Accounts payable and accrued expenses	29.1	42.3
2009 net income	-	-	58.2	58.2
Accounts payable to affiliates	2.8	3.1
Dividends paid	-	-	(27.9)	(27.9)
Federal income taxes		2.8
Share-based compensation	-	1.1	-	1.1
Regulatory liabilities	3.5
Balance at December 31, 2009	6.6	342.7	197.8	547.1
Interest	2.4	2.4
2010 net income	-	-	67.4	67.4
Current portion of long-term debt		42.0
Dividends paid	-	-	(29.0)	(29.0)
Total Current Liabilities	38.0	92.8
Share-based compensation	-	1.3	-	1.3
Long-term debt, less current portion	461.2	409.8
Balance at December 31, 2010	$6.6	$344.0	$236.2	$586.8
Deferred income taxes	162.4	136.1
Other long-term liabilities	15.1	21.8
Commitments and contingencies – Note 7
COMMON SHAREHOLDER’S EQUITY
Common stock - par value $1 per share; authorized 25.0 million shares; issued and outstanding 6.6 million shares	6.6	6.6
Additional paid-in capital	342.7	341.6
Retained earnings	197.8	167.5
Total Common Shareholder’s Equity	547.1	515.7
TOTAL LIABILITIES AND COMMON SHAREHOLDER’S EQUITY	$1,223.8	$1,176.2

See notes accompanying the ~~consolidated~~ financial statements

~~Questar Pipeline Company 2009 10-K~~43


QUESTAR PIPELINE COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS
		Year Ended December 31,
		2010	2009	2008
		(in millions)
OPERATING ACTIVITIES
Net income		$ 67.4	$ 58.2	$ 58.0
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization		49.9	47.1	45.2
Deferred income taxes		17.2	26.3	10.7
Share-based compensation		1.3	1.1	0.7
Impairment		-	-	14.0
Net (gain) from asset sales		(0.8)	(0.5)	(4.5)
(Income) from unconsolidated affiliate		(3.8)	(3.8)	(0.6)
Distributions from unconsolidated affiliate		4.0	3.3	-
Other		(1.5)	-	(3.0)
Changes in operating assets and liabilities
Accounts receivable		(2.0)	4.4	(11.0)
Materials and supplies		(1.2)	0.2	0.2
Prepaid expenses		(0.3)	(0.9)	(0.2)
Accounts payable and accrued expenses		8.5	(10.4)	(7.5)
Federal income taxes		0.6	(4.5)	(1.8)
Regulatory assets, liabilities and other		1.0	2.4	(3.5)
NET CASH PROVIDED BY OPERATING ACTIVITIES		140.3	122.9	96.7

INVESTING ACTIVITIES
Property, plant and equipment		(121.0)	(100.8)	(51.3)
Unconsolidated affiliate		-	-	(27.0)
Cash used in asset dispositions		(1.1)	(0.4)	(0.3)
Proceeds from asset dispositions		0.1	1.5	25.9
Affiliated-company property, plant and equipment transfers		-	(0.1)	(0.5)
Other		-	0.1	1.1
NET CASH USED IN INVESTING ACTIVITIES		(122.0)	(99.7)	(52.1)

FINANCING ACTIVITIES
Change in notes receivable from Questar		12.4	(2.1)	(26.5)
Change in notes payable to Questar		(0.2)	-	(136.7)
Dividends paid		(29.0)	(27.9)	(27.0)
Long-term debt issued, net of issuance costs		-	50.8	198.1
Long-term debt repaid		-	(42.0)	(58.3)
NET CASH USED IN FINANCING ACTIVITIES		(16.8)	(21.2)	(50.4)
Change in cash and cash equivalents		1.5	2.0	(5.8)
	Beginning cash and cash equivalents	3.8	1.8	7.6
	Ending cash and cash equivalents	$ 5.3	$ 3.8	$ 1.8

	Supplemental Disclosure of Cash Paid During the Year for:
	Interest	$ 27.0	$ 29.3	$ 31.3
	Income taxes	19.2	12.4	24.3

QUESTAR PIPELINE COMPANY CONSOLIDATED STATEMENTS OF SHAREHOLDER’S EQUITY
	Common Stock	Additional Paid-in Capital	Retained Earnings
	(in millions)
Balance at January 1, 2007	$6.6	$165.3	$118.0
Equity contribution		175.0
2007 net income			45.0
Dividends paid			(26.5)
Share-based compensation		0.6
Balance at December 31, 2007	6.6	340.9	136.5
2008 net income			58.0
Dividends paid			(27.0)
Share-based compensation		0.7
Balance at December 31, 2008	6.6	341.6	167.5
2009 net income			58.2
Dividends paid			(27.9)
Share-based compensation		1.1
Balance at December 31, 2009	$6.6	$342.7	$197.8

See notes accompanying the financial statements

~~See notes accompanying the consolidated financial statements~~44

~~Questar~~Report ~~Pipeline~~of ~~Company~~Independent ~~2009~~Registered ~~10-K~~Public Accounting Firm

21The Board of Directors and Shareholder of

QUESTAR PIPELINE COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS
	Year Ended December 31,
	2009	2008	2007
	(in millions)
OPERATING ACTIVITIES
Net income	$ 58.2	$ 58.0	$ 45.0
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization	47.1	45.2	36.9
Deferred income taxes	26.3	10.7	7.2
Share-based compensation	1.1	0.7	0.6
Impairment		14.0
Net (gain) from asset sales	(0.5)	(4.5)	(0.4)
(Income) from unconsolidated affiliate	(3.8)	(0.6)
Distributions from unconsolidated affiliate	3.3
Other		(3.0)
Changes in operating assets and liabilities
Accounts receivable	4.4	(11.0)	2.3
Materials and supplies	0.2	0.2	13.0
Prepaid expenses	(0.9)	(0.2)	0.1
Accounts payable and accrued expenses	(10.4)	(7.5)	5.2
Federal income taxes	(4.5)	(1.8)	5.3
Regulatory assets, liabilities and other	2.4	(3.5)	(4.2)
NET CASH PROVIDED BY OPERATING ACTIVITIES	122.9	96.7	111.0
INVESTING ACTIVITIES
Property, plant and equipment	(100.8)	(51.3)	(318.5)
Other investing activities		(27.0)
Total Capital Expenditures	(100.8)	(78.3)	(318.5)
Cash used in asset dispositions	(0.4)	(0.3)	(0.7)
Proceeds from asset dispositions	1.5	25.9	6.7
Affiliated-company property, plant and equipment transfers	(0.1)	(0.5)	1.9
Other	0.1	1.1	1.4
NET CASH USED IN INVESTING ACTIVITIES	(99.7)	(52.1)	(309.2)
FINANCING ACTIVITIES
Equity contribution			175.0
Long-term debt issued, net of issuance costs	50.8	198.1
Long-term debt repaid	(42.0)	(58.3)
Change in notes receivable from Questar	(2.1)	(26.5)	(5.6)
Change in notes payable to Questar		(136.7)	60.1
Dividends paid	(27.9)	(27.0)	(26.5)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	(21.2)	(50.4)	203.0
Change in cash and cash equivalents	2.0	(5.8)	4.8

Questar Gas Company

We have audited the accompanying consolidated balance sheets of Questar ~~Pipeline~~Gas Company as of December 31, 2010 and 2009, ~~10-K~~and the related consolidated statements of income, shareholder’s equity, and cash flows for each of the three years in the period ended December 31, 2010. Our audits also included the financial statement schedule listed in the Index at Item 8. These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

22We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

Beginning cash and cash equivalents	1.8	7.6	2.8
Ending cash and cash equivalents	$ 3.8	$ 1.8	$ 7.6
Supplemental Disclosure of Cash Paid During the Year for:
Interest	$29.3	$31.3	$28.0
Income taxes	12.4	24.3	15.1

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Questar Gas Company at December 31, 2010 and 2009, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2010, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

~~See~~/s/Ernst ~~notes~~& ~~accompanying~~Young ~~the consolidated financial statements~~LLP

~~Questar~~Ernst ~~Pipeline~~& ~~Company~~Young ~~2009 10-K~~LLP

23Salt Lake City, Utah

February 28, 2011


QUESTAR GAS COMPANY
STATEMENTS OF INCOME
	Year Ended December 31,
	2010	2009	2008
	(in millions)
REVENUES
From unaffiliated customers	$901.8	$918.9	$ 994.2
From affiliated companies	1.1	1.0	6.1
TOTAL REVENUES	902.9	919.9	1,000.3

OPERATING EXPENSES
Cost of natural gas sold
From unaffiliated parties	278.5	329.8	455.6
From affiliated companies	313.7	296.8	281.3
Total cost of natural gas sold (excluding operating expenses shown separately)	592.2	626.6	736.9
Operating and maintenance	114.4	106.4	87.1
General and administrative	49.9	42.9	38.7
Depreciation and amortization	43.7	43.8	41.5
Other taxes	14.1	13.3	11.9
Total Operating Expenses	814.3	833.0	916.1
OPERATING INCOME	88.6	86.9	84.2
Interest and other income	6.7	7.6	5.2
Interest expense	(26.2)	(28.5)	(25.2)
INCOME BEFORE INCOME TAXES	69.1	66.0	64.2
Income taxes	(25.2)	(24.4)	(24.0)
NET INCOME	$ 43.9	$ 41.6	$ 40.2

See notes accompanying the financial statements


QUESTAR GAS COMPANY
BALANCE SHEETS
	December 31,
	2010	2009
	(in millions)
ASSETS
Current Assets
Cash and cash equivalents	$ 4.7	$ 7.2
Accounts receivable, net	85.3	77.2
Unbilled gas accounts receivable	81.5	86.6
Accounts receivable from affiliates	4.5	3.1
Federal income taxes receivable	7.7	-
Inventories, at lower of average cost or market
Gas storage	43.3	42.5
Materials and supplies	7.9	12.1
Current regulatory assets	52.7	43.3
Prepaid expenses and other	2.9	3.4
Deferred income taxes – current	1.3	3.6
Total Current Assets	291.8	279.0

Property, Plant and Equipment
Distribution	1,490.1	1,414.1
General and other	272.4	267.5
Construction work in progress	55.1	40.3
Total Property, Plant and Equipment	1,817.6	1,721.9
Accumulated depreciation and amortization	(721.3)	(690.4)
Total Property, Plant and Equipment, net	1,096.3	1,031.5

Other Assets
Regulatory assets	15.0	16.0
Goodwill	5.6	5.6
Other noncurrent assets	2.6	7.0
Total Other Assets	23.2	28.6
TOTAL ASSETS	$1,411.3	$1,339.1


QUESTAR GAS COMPANY
BALANCE SHEETS
	December 31,
	2010	2009
	(in millions)
LIABILITIES AND COMMON SHAREHOLDER’S EQUITY
Current Liabilities
Notes payable to Questar	$ 153.6	$ 87.0
Accounts payable and accrued expenses	102.5	124.1
Accounts payable to affiliates	53.6	47.2
Customer advances	26.2	30.3
Federal income taxes payable	-	0.8
Interest payable	5.8	5.8
Current regulatory liabilities	2.8	27.2
Current portion of long-term debt	2.0	-
Total Current Liabilities	346.5	322.4

Long-term debt, less current portion	368.0	370.0
Deferred income taxes	230.3	189.0
Customer contributions-in-aid-of-construction	45.5	52.2
Other long-term liabilities	5.5	6.5
Commitments and contingencies - Note 8

COMMON SHAREHOLDER’S EQUITY
Common stock - par value $2.50 per share; authorized 50.0 million shares; 9.2 million issued and outstanding	23.0	23.0
Additional paid-in capital	150.3	148.9
Retained earnings	242.2	227.1
Total Common Shareholder’s Equity	415.5	399.0
TOTAL LIABILITIES AND COMMON SHAREHOLDER’S EQUITY	$1,411.3	$1,339.1

See notes accompanying the financial statements


QUESTAR GAS COMPANY STATEMENTS OF COMMON SHAREHOLDER’S EQUITY
	Common Stock	Additional Paid-in Capital	Retained Earnings	Total
	(in millions)
Balance at December 31, 2007	$23.0	$116.7	$201.0	$340.7
Equity contribution	-	30.0	-	30.0
2008 net income	-	-	40.2	40.2
Dividends paid	-	-	(27.5)	(27.5)
Share-based compensation	-	1.2	-	1.2
Balance at December 31, 2008	23.0	147.9	213.7	384.6
2009 net income	-	-	41.6	41.6
Dividends paid	-	-	(28.2)	(28.2)
Share-based compensation	-	1.0	-	1.0
Balance at December 31, 2009	23.0	148.9	227.1	399.0
2010 net income	-	-	43.9	43.9
Dividends paid	-	-	(28.8)	(28.8)
Share-based compensation	-	1.4	-	1.4
Balance at December 31, 2010	$23.0	$150.3	$242.2	$415.5

See notes accompanying the financial statements


QUESTAR GAS COMPANY
STATEMENTS OF CASH FLOWS
	Year Ended December 31,
	2010	2009	2008
	(in millions)
OPERATING ACTIVITIES
Net income	$ 43.9	$ 41.6	$ 40.2
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization	48.0	47.8	45.2
Deferred income taxes	43.6	34.1	30.3
Share-based compensation	1.4	1.0	1.2
Changes in operating assets and liabilities
Accounts receivable	(4.4)	7.7	(21.6)
Inventories	3.4	21.2	(23.6)
Prepaid expenses	0.5	(1.4)	0.5
Accounts payable and accrued expenses	(21.6)	0.8	4.3
Federal income taxes	(8.5)	7.9	(3.1)
Regulatory assets, liabilities and other	(37.0)	(41.4)	(20.7)
NET CASH PROVIDED BY OPERATING ACTIVITIES	69.3	119.3	52.7

INVESTING ACTIVITIES
Property, plant and equipment	(108.6)	(82.6)	(126.3)
Cash used in disposition of assets	(1.5)	(1.6)	(3.4)
Proceeds from disposition of assets	0.5	0.3	0.3
Affiliated-company property, plant and equipment transfers	-	0.1	0.5
NET CASH USED IN INVESTING ACTIVITIES	(109.6)	(83.8)	(128.9)

FINANCING ACTIVITIES
Change in notes payable to Questar	66.6	(1.3)	15.4
Dividends paid	(28.8)	(28.2)	(27.5)
Equity contribution	-	-	30.0
Long-term debt issued, net of issuance costs	-	-	148.4
Long-term debt repaid	-	-	(93.0)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	37.8	(29.5)	73.3
Change in cash and cash equivalents	(2.5)	6.0	(2.9)
Beginning cash and cash equivalents	7.2	1.2	4.1
Ending cash and cash equivalents	$ 4.7	$ 7.2	$ 1.2

Supplemental Disclosure of Cash Paid (Received) During the Year for:
Interest	$25.1	$27.9	$23.4
Income taxes	(9.7)	(18.4)	(2.4)

See notes accompanying the financial statements

QUESTAR CORPORATION

QUESTAR PIPELINE COMPANY

~~NOTES~~QUESTAR ~~ACCOMPANYING~~GAS ~~THE CONSOLIDATED FINANCIAL STATEMENTS~~COMPANY

~~Note~~NOTES 1ACCOMPANYING –THE ~~Summary~~FINANCIAL ~~of Significant Accounting Policies~~STATEMENTS

~~Nature~~Note 1 - Summary of ~~Business~~Significant Accounting Policies

~~Questar Pipeline Company (Questar Pipeline or Company) is a wholly owned subsidiary of Questar Corporation (Questar)~~A. ~~The~~Nature ~~Company is an interstate pipeline company that provides natural gas transportation and underground-storage services primarily in the Rocky Mountain States~~ of Utah, Wyoming and Colorado. It also provides processing and treatment services and other energy services. As a “natural gas company” under the Natural Gas Act of 1938, Questar Pipeline and certain subsidiary pipeline companies are regulated by the FERC as described below. Business

~~Accounting~~Questar ~~Standards~~Corporation ~~References~~(Questar or the Company) is a Rockies-based integrated natural gas company with three complementary and wholly owned lines of business:

~~In July 2009 the Financial Accounting Standards Board (FASB) completed a revision of non~~-~~governmental~~ ~~U.S.~~Wexpro ~~generally~~Company ~~accepted accounting principles~~ (~~GAAP~~Wexpro) ~~into~~develops ~~a single authoritative source~~ and ~~issued~~produces anatural ~~codification~~gas from cost-of-service ~~accounting~~reserves rules and references. Authoritative standards included in the codification are designated by their Accounting Standards Codification (ASC) topical reference, and revisions to standards are designated as Accounting Standards Updates (ASU), with a year and assigned sequence number. The codification effort, while not creating or changing accounting rules, changed how users would cite accounting regulations. Citations in financial statements must identify the sections within the new codification. The codification is effective for ~~interim~~Questar ~~and annual periods ending after September 15, 2009~~Gas. ~~The Company is complying with the new codification standards.~~

~~Principles~~- ofQuestar ~~Consolidation~~Pipeline Company (Questar Pipeline) operates interstate natural gas pipelines and storage facilities in the western

~~The~~ United ~~consolidated~~States ~~financial statements contain the accounts of Questar Pipeline~~ and ~~its~~provides ~~majority-owned~~other orenergy ~~controlled subsidiaries~~services. The consolidated financial statements were prepared in accordance with GAAP and with the instructions for annual reports on Form 10-K and Regulations S-X and S-K. All significant intercompany accounts and transactions have been eliminated in consolidation.

~~Investment~~- Questar Gas Company (Questar Gas) provides retail natural gas distribution in ~~Unconsolidated~~Utah, ~~Affiliates~~Wyoming and Idaho.

Questar ~~Pipeline~~is ~~uses~~headquartered ~~the equity method to account for investment~~ in ~~unconsolidated~~Salt ~~affiliate~~Lake ~~where it does not have control~~City, ~~but has significant influence~~Utah. ~~The~~Shares ~~investment~~of inQuestar ~~the~~common ~~unconsolidated~~stock ~~affiliate~~trade on the ~~Company's~~New ~~Consolidated~~York ~~Balance~~Stock ~~Sheets~~Exchange ~~equals the Company's proportionate share of equity reported by the unconsolidated affiliate~~(NYSE:STR). Investment is assessed for possible impairment when events indicate that the fair value of the investment may be below the Company's carrying value. When such a condition is deemed to be other than temporary, the carrying value of the investment is written down to its fair value, and the amount of the write-down is included in the determination of net income.

~~The~~B. ~~principal~~Principles ~~unconsolidated affiliate and the Company's ownership percentage as~~ of ~~December 31, 2009, was White River Hub, LLC, a limited liability company (50%) engaged in interstate natural gas transportation.~~ Consolidation

~~Use~~The consolidated financial statements contain the accounts of ~~Estimates~~Questar and its majority-owned or controlled subsidiaries. The consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles (GAAP) and with the instructions for Annual Reports on Form 10-K and Regulations S-X and S-K. All significant intercompany accounts and transactions have been eliminated in consolidation.

~~The~~Effective ~~preparation~~May 18, 2010, Questar Market Resources, Inc., (Market Resources) a wholly owned subsidiary of ~~consolidated~~Questar ~~financial~~Corporation, ~~statements~~merged with and ~~notes~~into its newly-formed, wholly owned subsidiary, QEP, a Delaware corporation in ~~conformity~~order ~~with~~to ~~GAAP~~reincorporate ~~requires~~in ~~that~~the ~~management~~State ~~formulate~~of ~~estimates~~Delaware (Reincorporation Merger). The Reincorporation Merger was effected pursuant to an Agreement and ~~assumptions~~Plan ~~that~~of ~~affect~~Merger entered into between Market Resources and QEP. The Reincorporation Merger was approved by the ~~reported~~boards ~~amounts~~of directors of ~~assets,~~Market ~~liabilities,~~Resources ~~revenues~~and QEP and ~~expenses~~submitted to a vote of, and ~~the~~approved ~~disclosure~~by, Questar, as sole shareholder of ~~contingent~~Market ~~assets~~Resources, and ~~liabilities.~~by ~~Actual~~Market ~~results~~Resources, ~~could~~as ~~differ~~sole ~~from~~shareholder ~~these~~of ~~estimates~~QEP on May 18, 2010.

~~Revenue~~On ~~Recognition~~June 30, 2010, Questar distributed all of the shares of common stock of QEP held by Questar to Questar shareholders in a tax-free, pro rata dividend (the Spinoff). Each Questar shareholder received one share of QEP common stock for each share of Questar common stock held (including fractional shares) at the close business on the record date. In connection therewith, QEP distributed Wexpro Company (Wexpro), a wholly owned subsidiary of QEP, to Questar. In addition, Questar contributed $250.0 million of equity to QEP prior to the Spinoff.

~~Questar~~The ~~Pipeline~~financial ~~and~~information ~~subsidiaries~~presented ~~recognize~~in ~~revenues~~this inAnnual ~~the~~Report ~~period~~recasts ~~that~~QEP's ~~services~~financial ~~are~~condition ~~provided.~~and ~~The~~operating ~~straight~~results ~~fixed-variable~~as ~~rate~~discontinued ~~design~~operations ~~used~~for byall ~~Questar~~periods ~~Pipeline,~~presented ~~which~~through ~~allows~~June ~~for~~30, ~~recovery~~2010, ofand ~~substantially~~reflects ~~all~~Wexpro's ~~fixed~~financial ~~costs~~condition inand ~~the~~operating ~~demand~~results oras ~~reservation~~a ~~charge,~~separate ~~reduces~~line ~~the~~of ~~earnings~~business. ~~impact~~A summary of ~~volume~~discontinued ~~changes~~operations oncan ~~gas-transportation~~be ~~and~~found ~~storage~~in ~~operations.~~Note ~~The~~2 ~~Company~~to ~~may~~the ~~collect~~accompanying ~~revenues~~the ~~subject~~financial tostatements ~~possible~~in ~~refunds~~Item ~~and~~8 ~~establish~~of ~~reserves~~this ~~pending~~Annual ~~final~~Report. ~~orders~~Questar ~~from~~incurred $11.5 million of separation costs in 2010 in connection with the ~~FERC~~Spinoff.

~~Regulation~~C. Investment in Unconsolidated Affiliate

Questar ~~Pipeline~~uses isthe ~~regulated~~equity bymethod ~~the~~to ~~FERC.~~account ~~The~~for ~~FERC~~its ~~establishes~~investment ~~rates~~in ~~for~~an ~~natural~~unconsolidated ~~gas~~affiliate ~~transportation~~where ~~and~~it ~~storage~~does ~~services~~not have control, but has significant influence. The ~~FERC~~investment ~~also~~in ~~regulates,~~the ~~among~~unconsolidated ~~other~~affiliate ~~things,~~on the ~~extension~~Company's ~~and~~consolidated ~~enlargement~~balance orsheets ~~abandonment~~equals the Company's proportionate share of ~~jurisdictional~~equity ~~natural~~reported ~~gas~~by ~~facilities~~the unconsolidated affiliate. ~~Regulation~~Investment is ~~intended~~assessed tofor ~~permit~~possible impairment when events indicate that the ~~recovery,~~fair ~~through~~value ~~rates~~of the investment may be below the Company's carrying value. When such a condition is deemed to be other than temporary, the carrying value of the ~~cost~~investment ofis ~~service~~written down to its fair value, ~~including~~and athe ~~return~~amount onof ~~investment~~the write-down is included in the determination of net income.

~~The~~White ~~Company~~River ~~applies~~Hub, ~~the regulatory accounting principles prescribed under ASC 980 "Regulated Operations" to the rate-regulated businesses. Under ASC 980~~LLC, ~~the~~a ~~Company~~limited ~~records~~liability ~~regulatory~~company ~~assets~~ and ~~liabilities that would not be recorded under GAAP for non~~FERC-~~rate~~ regulated ~~entities.~~transporter ~~Regulatory~~of ~~assets~~natural ~~and~~gas, ~~liabilities~~is ~~record probable future revenues or expenses associated with certain credits or charges that will be recovered from or refunded to customers through~~ the ~~rate-making~~single ~~process~~unconsolidated affiliate. ~~See~~Questar ~~Note~~Pipeline 6owns ~~for~~50% ~~a description and comparison~~ of ~~regulatory~~White ~~assets~~River ~~and~~Hub, ~~liabilities as of December 31~~LLC, ~~2009~~ and ~~2008~~is the operator.

~~Questar~~D. ~~Pipeline~~Use ~~Company~~of ~~2009 10-K~~Estimates

24The preparation of financial statements and notes in conformity with GAAP requires that management formulate estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. The Company also incorporates estimates of proved developed and proved gas and oil reserves in the calculation of depreciation, depletion and amortization rates of its gas and oil properties. Changes in estimated quantities of its reserves could

~~Cash and Cash Equivalents~~51

~~Cash~~impact ~~equivalents~~the ~~consist~~Company's ~~principally~~reported offinancial ~~repurchase~~results ~~agreements~~as ~~with~~well ~~maturities~~as ofdisclosures ~~three~~regarding ~~months or less. In almost all cases,~~ the ~~repurchase~~quantities ~~agreements~~of ~~are~~proved ~~highly~~gas ~~liquid~~and ~~investments~~oil inreserves. ~~overnight~~Actual ~~securities~~results ~~made~~could ~~through~~differ ~~commercial~~from ~~bank~~these ~~accounts that result in available funds the next business day~~estimates.

~~Notes~~E. ~~Receivable~~Revenue ~~from or Payable to Questar~~Recognition

Notes receivable from or payable to Questar represent interest bearing demand notes for cash loaned to or borrowed from Questar until needed in operations. The funds are centrally managed by Questar. Amounts loaned to Questar earn an interest rate that is identical to the interest rate paid by the Company for borrowings from Questar.Wexpro

~~Property~~Wexpro recognizes revenues in the period that services are provided or products are delivered. Wexpro recovers its costs and receives an unlevered, ~~Plant~~after-tax return of approximately 20% on its investment base. In accordance with the Wexpro Agreement, production from the gas properties operated by Wexpro is delivered to Questar Gas at Wexpro's cost of providing this service including a return on Wexpro's investment. Wexpro sells crude-oil production from certain oil-producing properties at market prices with the revenues used to recover operating expenses and ~~Equipment~~to provide Wexpro a return on its investment. Any operating income remaining after recovery of expenses and Wexpro's return on investment is divided between Questar Gas and Wexpro with Wexpro retaining 46%. Amounts received by Questar Gas from the sharing of Wexpro's oil income are used to reduce natural gas costs to utility customers.

~~Property,~~Wexpro's ~~plant~~investment base consists of its investment in commercial wells and ~~equipment~~related ~~balances~~facilities ~~are~~and ~~stated~~is atadjusted ~~historical~~for ~~cost.~~working ~~Maintenance~~capital and ~~repair~~reduced ~~costs~~for ~~are~~deferred ~~expensed~~income astaxes ~~incurred~~and accumulated depreciation. Revenue associated with the ~~exception~~sale of ~~compressor~~gas ~~maintenance~~and ~~costs~~oil is accounted for using the sales method, ~~which~~whereby ~~are~~revenue ~~capitalized~~is recognized as gas and ~~depreciated~~oil ~~based~~is onsold ~~hours~~to ofpurchasers. ~~usage~~Wexpro inmay ~~accordance~~collect ~~with~~revenues ~~ASC~~subject ~~360~~to possible refunds and establish reserves pending final calculation of the after-~~10-25-5.~~tax return on investments, which is adjusted annually.

~~Depreciation~~Questar ~~and~~Pipeline ~~Amortization~~

~~The~~Questar ~~provision~~Pipeline ~~for depreciation~~ and ~~amortization~~subsidiaries isrecognize ~~based~~revenues ~~upon~~in ~~rates~~the period that ~~will~~services ~~systematically~~are ~~charge~~provided. ~~the~~The ~~costs~~straight offixed-variable ~~assets~~rate ~~against~~design ~~income~~used ~~over~~by ~~the~~Questar ~~estimated~~Pipeline, ~~useful~~which ~~lives~~allows offor ~~those~~recovery ~~assets.~~of ~~Major~~substantially ~~categories~~all of fixed ~~assets~~costs in the ~~gas~~demand ~~transportation~~or ~~and~~reservation ~~storage~~charge, ~~operations~~reduces ~~are~~the ~~grouped~~earnings ~~together~~impact ~~and~~of ~~depreciated~~volume changes on ~~a straight~~gas-~~line~~transportation ~~method.~~and ~~Under~~storage ~~the group method, salvage value is not considered when determining depreciation rates~~operations. ~~Gains~~Rate-regulated ~~and~~companies ~~losses~~may oncollect ~~asset~~revenues ~~disposals~~subject ~~are~~to ~~recorded~~possible asrefunds ~~adjustments in accumulated depreciation. Average depreciation~~ and ~~amortization~~establish ~~rates~~reserves ~~for~~pending ~~the~~final ~~year~~orders ~~ended~~from ~~December~~regulatory ~~31, were 3~~agencies.5% ~~in 2009, 3.7% in 2008, and 3.4% in 2007.~~

~~Impairment~~Questar ~~of Long-Lived Assets~~Gas

~~Properties~~Questar ~~are~~Gas ~~evaluated~~records onrevenues afor ~~specific-asset~~gas ~~basis~~delivered orto inresidential ~~groups~~and ofcommercial ~~similar~~customers ~~assets,~~but not billed as ~~applicable~~of the end of the accounting period. ~~Impairment~~Unbilled isgas ~~indicated~~deliveries ~~when~~are aestimated ~~triggering~~for ~~event~~the ~~occurs~~period ~~and~~from the ~~sum~~date meters are read to the end of the month. Approximately one-half month of revenue is estimated ~~undiscounted~~in ~~future~~any ~~net~~period. ~~cash~~Gas ~~flows~~costs ofand another ~~evaluated~~variable ~~asset~~costs isare ~~less~~recorded ~~than~~on the ~~asset~~same basis to ensure proper matching of revenues and expenses. Questar Gas’s ~~carrying~~tariff ~~value~~allows for monthly adjustments to customer bills to approximate the effect of abnormal weather on non-gas revenues. IfThe ~~impairment~~weather-normalization isadjustment ~~indicated,~~significantly ~~fair~~reduces ~~value~~the isimpact ~~calculated~~of ~~using~~weather on gas-distribution earnings. The PSCU and PSCW approved a ~~discounted~~CET ~~cash~~to ~~flow~~promote ~~approach~~energy conservation. ~~Cash~~Under the CET, Questar Gas non-~~flow~~gas ~~estimates~~revenues ~~require~~are ~~forecasts~~decoupled ~~and~~from ~~assumptions~~the volume of gas used by customers. The tariff specifies a margin per customer for ~~many~~each ~~years~~month ~~into~~with differences to be deferred and recovered from customers or refunded to customers through periodic rate adjustments. Rate adjustments occur every six months under the ~~future~~CET ~~for~~program. The adjustments amortize deferred CET amounts over a ~~variety~~12-month period. These adjustments are limited to 5% of ~~factors,~~non-gas ~~including~~revenues. ~~commodity~~Questar ~~prices~~Gas ~~and~~allows ~~operating~~customers ~~costs~~the option of paying an estimated fixed monthly bill throughout the year on a budget-billing program. The estimated payments are adjusted to actual usage annually. The budget-billing option does not impact revenue recognition.

~~Goodwill~~F. ~~and Other Intangible Assets~~Regulation

~~Goodwill~~Wexpro ~~represents~~manages ~~the excess of the amount paid over the fair value of net assets acquired in a business combination~~ and isproduces ~~not subject to amortization. Intangible assets consist~~ cost-of-service ~~rights~~reserves ~~of way and are amortized over a 20 to 33 year range. Goodwill is tested~~ for ~~impairment~~gas atutility aaffiliate ~~minimum~~Questar ofGas ~~once~~under ~~a year or when a triggering event occurs. If a triggering event occurs,~~ the ~~undiscounted~~terms ~~net cash flows~~ of the ~~intangible~~Wexpro asset or entity to which the goodwill relates are evaluated. Impairment is indicated if undiscounted cash flows are less than the carrying value of the assets. The amount of the impairment is measured using a discounted cash flow model considering future revenuesAgreement, ~~operating costs,~~ a ~~risk~~long-standing ~~adjusted~~comprehensive ~~discount~~agreement ~~rate~~with ~~and other factors. Cash flow estimates require forecasts and assumptions for many years into~~ the ~~future~~states ~~for a variety~~ of ~~factors,~~Utah ~~including~~and ~~commodity~~Wyoming ~~prices~~(see ~~and~~Note ~~operating costs~~9).

~~Capitalized~~Questar ~~Interest~~Pipeline is regulated by the FERC. Questar Gas is regulated by the PSCU and ~~Allowance~~the PSCW. The Idaho Public Utilities Commission has contracted with the PSCU for ~~Funds~~rate ~~Used~~oversight ~~During~~of ~~Construction~~Questar Gas operations in a small area of southeastern Idaho. These regulatory agencies establish rates for the storage, transportation and sale of natural gas. The regulatory agencies also regulate, among other things, the extension and enlargement or abandonment of jurisdictional natural gas facilities. Regulation is intended to permit the recovery, through rates, of the cost of service, including a return on investment.

The ~~FERC~~Company ~~requires~~applies the ~~capitalization~~regulatory ofaccounting ~~allowance~~principles ~~for~~to ~~funds~~the ~~used~~rate-regulated ~~during~~businesses. ~~construction~~Under ~~(AFUDC)~~these ~~during~~principles, the ~~construction~~Company ~~period~~records ofregulatory ~~rate-regulated~~assets ~~plant~~ and ~~equipment.~~liabilities ~~AFUDC~~that onwould ~~equity~~not ~~funds~~be ~~amounted~~otherwise torecorded ~~$0.7~~under ~~million~~GAAP infor ~~2009,~~non-rate ~~2008~~regulated ~~and~~entities. ~~2007~~Regulatory ~~and~~assets ~~increased interest~~ and ~~other~~liabilities ~~income~~record inprobable ~~the~~future ~~Consolidated~~revenues ~~Statements~~or ofexpenses ~~Income.~~associated ~~Interest~~with ~~expense~~certain ~~was~~credits ~~reduced~~or ~~for~~charges ~~AFUDC~~that onwill ~~debt~~be ~~funds~~recovered byfrom ~~$0.9~~or ~~million~~refunded into ~~2009,~~customers ~~$0.4~~through ~~million~~the inrate-making ~~2008, and $7~~process.3 ~~million in 2007.~~

~~Credit~~Questar ~~Risk~~Gas accounts for purchased-gas costs in accordance with procedures authorized by the PSCU and the PSCW. Purchased-gas costs that are different from those provided for in present rates are accumulated and recovered or credited through future rate changes. Questar Gas may hedge a portion of its natural gas supply to mitigate price fluctuations for gas-distribution customers. The regulatory commissions allow Questar Gas to record periodic mark-to-market adjustments for commodity-price derivatives in the purchased-gas-adjustment account. See Note 10 for a description and comparison of regulatory assets and liabilities as of December 31, 2010 and 2009.

The Company’s primary customers are gas producers, gas marketers and local distribution companies. Questar Pipeline requests credit support, such as letters of credit and cash deposits, from those companies that pose unfavorable credit risks. Management believes that its credit review procedures, loss reserves, customer deposits and collection procedures have adequately provided for usual and customary credit related losses. Loss reserves are periodically reviewed for adequacy and may be established on a specific case basis. 52

~~Asset~~G. ~~Retirement~~Cash ~~Obligations~~and Cash Equivalents

~~Questar~~Cash ~~Pipeline~~equivalents ~~records~~consist ~~asset~~principally ~~retirement~~of ~~obligations~~repurchase ~~(ARO)~~agreements ~~when there are legal obligations associated~~ with ~~the~~maturities ~~retirement~~ of ~~tangible~~three ~~long-lived~~months ~~assets.~~or The Company has not capitalized future abandonment costs on a majority of its long-lived transportation assets because the Company does not have a legal obligation to restore the area surrounding abandoned assetsless. In ~~these~~almost all cases, the ~~regulatory~~repurchase ~~agencies~~agreements ~~have~~are ~~opted~~highly toliquid ~~leave~~investments ~~retired facilities~~ in ~~the~~overnight ~~ground~~securities ~~undisturbed~~made ~~rather~~through ~~than~~commercial-bank ~~requiring~~accounts ~~the~~that Company excavate and dispose of the assets. If recording an ARO is warranted, the fair value of retirement costs are estimated by Company personnel based on abandonment costs of similar properties available to field operations and depreciated over the life of the related assets. Revisions to ARO estimates result ~~from changes~~ in ~~expected~~available ~~cash~~funds ~~flows or material changes in estimated retirement costs. Income or expense resulting from~~ the ~~settlement~~next ofbusiness ~~ARO liabilities is included in net gain or (loss) from asset sales on the Consolidated~~ day.

~~Questar~~H. ~~Pipeline~~Notes ~~Company~~Receivable ~~2009~~and ~~10-K~~Notes Payable

25Notes receivable and notes payable represent pre-Spinoff interest bearing demand notes with former subsidiaries of Questar.

~~Statements of Income~~I. ~~The ARO liability is adjusted to present value each period through an accretion calculation using a credit-adjusted risk-free interest rate. The ARO liability balance was $3.9 million at December 31~~Property, ~~2009,~~Plant and ~~$3.7~~Equipment ~~million at December 31, 2008, and is included with other long-term liabilities.~~

~~Income~~Property, ~~Taxes~~plant and equipment balances are stated at historical cost. Maintenance and repair costs are expensed as incurred with the exception of compressor maintenance costs, which are expensed, based on hours of usage.

Questar and its subsidiaries file a consolidated federal income tax return. Questar Pipeline accounts for income tax expense on a separate return basis and records tax benefits as they are generated. Deferred income taxes are provided for the temporary timing differences arising between the bookCost- ~~and tax-carrying amounts~~ of ~~assets and liabilities. These differences create taxable or tax~~-~~deductible~~service ~~amounts~~gas for future periods. Questar Pipeline uses the deferral method to account for investment tax credits as required by regulatory commissions. The Company records interest earned on income tax refunds in interest and ~~other~~oil ~~income and records penalties and interest charged on tax deficiencies in interest expense.~~operations

~~ASC~~The ~~740~~successful ~~"Income~~efforts ~~Taxes"~~method ~~specifies~~of ~~the~~ accounting ~~for~~is ~~uncertainty~~used infor ~~income~~cost-of-service ~~taxes~~reserves bydeveloped ~~prescribing~~and aproduced ~~minimum~~by ~~recognition~~Wexpro ~~threshold~~ for agas ~~tax~~utility ~~position~~affiliate toQuestar ~~be reflected in the financial statements~~Gas. IfCost-of-service ~~recognized,~~reserves ~~the~~are ~~tax~~properties ~~benefit~~for iswhich ~~measured as~~ the ~~largest~~operations ~~amount~~and ofreturn ~~tax~~on ~~benefit~~investment ~~that~~are issubject ~~more-likely-than-not~~ to bethe ~~realized~~Wexpro ~~upon~~Agreement ~~ultimate~~(see ~~settlement~~Note 9). ~~Management~~Under ~~has considered~~ the ~~amounts~~successful ~~and~~efforts ~~the~~method, ~~probabilities~~Wexpro ofcapitalizes the ~~outcomes~~costs ~~that~~of ~~could~~acquiring beleaseholds, ~~realized~~drilling ~~upon~~development ~~ultimate~~wells, ~~settlement~~drilling ~~and~~successful ~~believes~~exploratory ~~that~~wells, itpurchasing isrelated ~~more-likely-than-not~~support ~~that~~equipment ~~the~~and ~~Company's~~facilities. ~~recorded~~Geological ~~income~~and ~~tax~~geophysical ~~benefits~~studies ~~will~~and beother ~~fully~~exploratory ~~realized.~~activities ~~There~~are ~~were~~expensed noas ~~unrecognized~~incurred. ~~tax~~Costs ~~benefits~~of atproduction ~~the~~and ~~beginning~~general-corporate oractivities atare ~~the~~expensed ~~end~~in of the ~~twelve-month~~period ~~periods~~incurred. ~~ended~~A ~~December~~gain ~~31,~~or ~~2009,~~loss ~~2008~~is ~~and~~generally ~~2007.~~recognized ~~Income~~on ~~tax~~assets ~~returns~~as ~~for~~they ~~2006 and subsequent years~~ are ~~subject~~retired tofrom ~~examination~~service.

~~Share~~Contributions-~~Based~~in-aid ~~Compensation~~of construction

~~Questar~~Customer ~~issues stock options and restricted shares to certain officers, employees and non~~contributions-~~employee directors under its Long~~in-~~Term~~aid ~~Stock~~of ~~Incentive~~construction ~~Plan~~reduce ~~(LTSIP),~~plant ~~including~~unless ~~certain~~the ~~officers~~amounts ~~and~~are ~~employees~~refundable ofto ~~Questar Pipeline~~customers. ~~Since~~Contributions ~~January~~for 1,main-line ~~2006,~~extensions ~~the~~may ~~fair~~be ~~value~~refundable ofto ~~stock~~customers ~~options~~if isadditional ~~expensed~~customers ~~during~~connect ~~the~~to ~~vesting period. Questar uses~~ the ~~Black~~main-~~Scholes-Merton~~line ~~mathematical~~segment ~~model~~within infive ~~estimating~~years. ~~the~~Refundable ~~fair~~contributions ~~value~~are ofrecorded ~~stock~~as ~~options~~liabilities ~~for~~until ~~accounting~~refunded ~~purposes.~~or ~~The~~the ~~granting~~five-year ofperiod ~~restricted~~expires ~~shares~~without ~~results~~additional incustomer ~~recognition~~connections. ofAmounts ~~compensation~~not ~~cost~~refunded ~~measured~~reduce ~~at the grant-date market price~~plant. ~~Questar~~Capital ~~uses~~expenditures ~~an accelerated method~~ in ~~recognizing~~the ~~share-based~~Consolidated ~~compensation~~Statements ~~costs~~of ~~with~~Cash ~~graded-vesting~~Flows ~~periods.~~are ~~See~~reported ~~Note~~net 8of ~~for further discussion on share~~non-~~based~~refunded ~~compensation~~contributions.

~~Reclassifications~~Depreciation, depletion and amortization

~~Certain~~Capitalized ~~reclassifications~~costs ~~were~~of ~~made~~development towells ~~prior~~are depreciated on a field-~~year~~by-field ~~consolidated~~basis ~~financial~~using ~~statements~~the unit-of-production method and the estimated proved developed gas and oil reserves. Oil and NGL volumes are converted to ~~conform~~natural ~~with~~gas equivalents using the ~~2009~~ratio ~~presentation~~of one barrel of crude oil, condensate or NGL to 6,000 cubic feet of natural gas. The Company capitalizes an estimate of the fair value of future abandonment costs associated with cost-of-service reserves and depreciates these costs using a unit-of-production method.

~~All~~Depreciation, ~~dollar~~depletion ~~amounts~~and inamortization ~~this~~for ~~annual~~the ~~report~~remaining onCompany ~~Form~~properties ~~10-K~~is ~~are~~based inupon ~~millions,~~rates ~~except~~that ~~where~~will ~~otherwise~~systematically ~~noted~~charge the costs of assets against income over the estimated useful lives of those assets using a straight-line method.

~~Note~~Major 2categories –of ~~Impairment~~fixed assets in gas-distribution, transportation and storage operations are grouped together and depreciated on a straight-line method. Gains and losses on asset disposals are recorded as adjustments in accumulated depreciation. The Company has not capitalized future-abandonment costs on a majority of its long-lived gas distribution and transportation assets due to a lack of a legal obligation to restore the area surrounding abandoned assets. In these cases, the regulatory agencies have opted to leave retired facilities in the ground undisturbed rather than excavate and dispose of the assets. The following represent average depreciation, depletion and amortization rates of the Company's capitalized costs:

Questar Pipeline impairment expense amounted to $14.0 million in 2008. Questar Pipeline impaired the entire $10.6 million investment in a potential salt cavern storage project located in southwestern Wyoming in the second quarter of 2008 based on a technical and economic evaluation of the project. In the fourth quarter of 2008, Questar Pipeline also took a $3.4 million pre-tax charge for impairment of certain costs associated with the California segment of its Southern Trails Pipeline. There were no impairments at Questar Pipeline in 2009 or 2007.


	Year Ended December 31,
	2010	2009	2008
Cost-of-service gas and oil properties, per Mcfe	$1.47	$1.44	$1.27
Questar Pipeline transportation, storage and other energy services	3.5%	3.5%	3.7%
Questar Gas distribution plant	2.9%	3.0%	3.1%

~~Note~~Questar 3Gas –depreciation ~~Fair~~rates ~~Value~~were ~~Measures~~reduced in 2010 due to an updated depreciation study that was implemented effective August 1, 2010, with the Utah general rate case. The change in rates will reduce annual depreciation expense by approximately $3.6 million.

~~Beginning in 2008, Questar Pipeline adopted the effective provisions of ASC 820 "Fair Value Measurements and Disclosures~~J." ~~ASC~~Impairment 820 defines fair value in applying GAAP, establishes a framework for measuring fair value and expands disclosures about fair-value measurements. ASC 820 does not change existing guidance as to whether or not an instrument is carried at fair value. In February 2008, the FASB delayed the effective date of ASC 820 for one year for certain nonfinancial assets and nonfinancial liabilities, except those recognized or disclosed at fair value in the financial statements on a recurring basis. On January 1, 2009, Questar Pipeline adopted, without material impact on the consolidated financial statements, the delayed provisions of ASC 820 related to nonfinancial assets and nonfinancial liabilities that are not required or permitted to be measured at fair value on a recurring basis. Questar Pipeline did not have any assets or liabilities measured at fair value on a nonLong-~~recurring~~Lived ~~basis at December 31, 2009. The following table discloses carrying value and fair value of Questar Pipeline’s financial instruments:~~Assets

	Carrying	Estimated	Carrying	Estimated
	Amount	Fair Value	Amount	Fair Value
	December 31, 2009		December 31, 2008
	(in millions)
Financial assets
Cash and cash equivalents	$3.8	$3.8	$ 1.8	$ 1.8

Proved gas and oil properties are evaluated on a field-by-field basis for potential impairment. Other properties are evaluated on a specific-asset basis or in groups of similar assets, as applicable. Impairment is indicated when a triggering event occurs and the

~~Questar Pipeline Company 2009 10-K~~53

26sum of the estimated undiscounted future net cash flows of an evaluated asset is less than the asset's carrying value. Triggering events could include, but are not limited to, an impairment of gas and oil reserves caused by mechanical problems, faster-than-expected decline of reserves, lease-ownership issues, other-than-temporary decline in gas and oil prices and changes in the utilization of pipeline assets. If impairment is indicated, fair value is calculated using a discounted-cash-flow approach. Cash flow estimates require forecasts and assumptions for many years into the future for a variety of factors, including commodity prices and operating costs. Impairment expense amounted to $14.0 million in 2008 due to Questar Pipeline impairing its entire $10.6 million in a potential salt cavern storage project located in southwestern Wyoming, and $3.4 million impairment for certain costs associated with the California segment of its Southern Trails Pipeline. There were no impairments in 2010 or 2009.

Notes receivable from Questar	42.7	42.7	40.6	40.6
Financial liabilities
Notes payable to Questar	0.2	0.2	0.2	0.2
Long-term debt	461.2	490.9	451.8	457.2

K. Goodwill and Other Intangible Assets

~~The~~Goodwill ~~carrying~~represents ~~amounts~~the excess of ~~cash~~the ~~and~~amount ~~cash~~paid ~~equivalents,~~over ~~notes~~the ~~receivable~~fair ~~from~~value ~~Questar~~of net assets acquired in a business combination and ~~notes~~is ~~payable~~not subject to ~~Questar~~amortization. ~~approximate~~Goodwill ~~fair~~and ~~value.~~indefinite ~~The~~lived ~~fair~~intangible ~~value~~assets are tested for impairment at a minimum of ~~fixed-rate~~once ~~long-term~~a ~~debt~~year isor ~~based~~when ona triggering event occurs. If a triggering event occurs, the ~~discounted~~undiscounted ~~present~~net ~~value~~cash flows of ~~future~~the intangible asset or entity to which the goodwill relates are evaluated. Impairment is indicated if undiscounted cash flows ~~using~~are less than the ~~Company's~~carrying ~~current~~value ~~borrowing~~of ~~rates~~the assets. The ~~borrowing~~amount ~~rates~~of ~~are~~the ~~credit-risk~~impairment is measured using a discounted cash flow model considering future revenues, operating costs, a risk-adjusted discount rate and other factors.

~~Note~~L. 4Capitalized –Interest ~~Debt~~and Allowance for Funds Used During Construction

~~Questar~~The ~~makes~~Company ~~loans~~capitalizes tointerest ~~Questar~~costs ~~Pipeline~~when ~~under~~applicable. aThe ~~short-term~~FERC, ~~borrowing~~PSCU ~~arrangement.~~and ~~Short-term~~PSCW ~~notes~~require ~~payable~~the tocapitalization ~~Questar~~of ~~totaled~~funds ~~$0.2~~used ~~million~~during atconstruction ~~December~~(AFUDC) ~~31,~~during ~~2009~~the ~~with~~construction anperiod ~~interest~~of rate-regulated ofplant 0and equipment.~~66%~~ ~~and~~The $0Wexpro Agreement requires capitalization of AFUDC on cost-of-service construction projects.2 ~~million~~Amounts atrecorded ~~December~~in ~~31,~~the ~~2008~~income ~~with~~statement anfor ~~interest~~the ~~rate~~capitalization of 3AFUDC and interest costs are disclosed in the table below.~~39%.~~


	Year Ended December 31,
	2010	2009	2008
	(in millions)
Capitalization of AFUDC (recorded as an increase in interest and other income)
Wexpro	$2.4	$1.9	$3.1
Questar Pipeline	0.3	0.7	0.7
Questar Gas	-	-	0.3
Total Capitalization of AFUDC	$2.7	$2.6	$4.1
--
Capitalized interest costs (recorded as a reduction of interest expense)
Questar Pipeline	$1.0	$0.9	$0.4
Questar Gas	0.2	0.3	0.8
Total Capitalized Interest Costs	$1.2	$1.2	$1.2

~~Questar Pipeline’s long-term debt before unamortized debt discounts and premiums amounted to $460~~M.2 ~~million~~Credit consisting of fixed-rate notes with interest rates ranging from 5.83% to 7.55%, due 2011 to 2018. The unamortized debt premium (net of discount) amounted to $1.0 million at December 31, 2009 and the unamortized debt discount amounted to $0.4 million at December 31, 2008. Maturities of long-term debt in the next five years include $180.0 million due in 2011. All notes are unsecured obligations and rank equally with all other unsecured liabilities. Covenants for these debt obligations do not restrict dividend payments. Risk

~~Note~~The 5Rocky –Mountain ~~Income~~region ~~Taxes~~is the Company's primary market area. Exposure to credit risk may be affected by the concentration of customers in this region due to changes in economic or other conditions. Customers include individuals and numerous commercial and industrial enterprises that may react differently to changing conditions. Management believes that its credit-review procedures, loss reserves, customer deposits and collection procedures have adequately provided for usual and customary credit-related losses. Loss reserves are periodically reviewed for adequacy and may be established on a specific-case basis.

~~Details~~Bad ofdebt ~~Questar~~expense ~~Pipeline’s~~associated ~~income~~with ~~tax~~accounts ~~expense~~receivable amounted to $0.5 million in 2010, $3.4 million in 2009 and ~~deferred~~$6.6 ~~income~~million ~~taxes~~in ~~are~~2008. ~~provided~~The 2010 bad-debt expense was reduced by $1.5 million from the settlement of a revenue dispute that had been previously accrued for in the ~~following~~allowance ~~tables~~for bad debts. The ~~components~~allowance for bad-debt expenses was $3.2 million at December 31, 2010, and $5.4 million at December 31, 2009. Questar Gas's retail-gas operations account for a majority of ~~income~~the ~~tax~~bad-debt expense. ~~were~~Questar Gas estimates bad-debt expense as ~~follows:~~a percentage of general-service revenues with periodic adjustments. Uncollected accounts are generally written off six months after gas is delivered and interest is no longer accrued.

	Year Ended December 31,
	2009	2008	2007
	(in millions)
Federal
Current	$ 6.1	$20.2	$17.9
Deferred	25.3	10.6	6.6
State
Current	1.3	2.5	1.4
Deferred	1.1	0.1	0.8
Total income tax expense	$33.8	$33.4	$26.7

N. Asset Retirement Obligations

~~The~~Questar ~~difference~~records ~~between~~asset retirement obligations (ARO) when there are legal obligations associated with the ~~statutory~~retirement ~~federal~~of ~~income~~tangible ~~tax~~long-lived ~~rate~~assets. The Company has not capitalized future abandonment costs on a majority of its long-lived transportation and distribution assets because the Company’s ~~effective~~does ~~income~~not ~~tax~~have ~~rate~~a islegal ~~explained~~obligation asto ~~follows:~~restore the area surrounding abandoned assets. In these cases, the regulatory agencies have opted to leave retired facilities in the ground undisturbed rather than requiring the Company to excavate and dispose of the assets. Cost-of-service ARO applies primarily to abandonment costs associated with gas

	Year Ended December 31,
	2009	2008	2007
Federal income taxes statutory rate	35.0%	35.0%	35.0%
Increase (decrease) as a result of:
State income taxes, net of federal income tax benefit	1.7	1.9	1.9
Other		(0.4)	0.3
Effective income tax rate	36.7%	36.5%	37.2%

~~Significant~~and ~~components~~oil ofwells and certain other properties. If recording an ARO is warranted, the fair value of retirement costs are estimated by Company’s ~~deferred~~personnel ~~income~~based ~~taxes~~on ~~were~~abandonment ascosts ~~follows:~~of similar properties available to field operations and depreciated over the life of the related assets. Revisions to ARO estimates result from changes in expected cash flows or material changes in estimated retirement costs. Income or expense resulting from the settlement of ARO liabilities is included in net gain (loss) from asset sales on the Consolidated Statements of Income. The ARO liability is adjusted to present value each period through an accretion calculation using a credit-adjusted risk-free interest rate. See Note 4 for further discussion on ARO.

~~Questar~~O. ~~Pipeline~~Income ~~Company 2009 10-K~~Taxes

27Questar and its subsidiaries file a consolidated federal income tax return. Deferred income taxes are provided for the temporary differences arising between the book and tax-carrying amounts of assets and liabilities. These differences create taxable or tax-deductible amounts for future periods. Questar Gas and Questar Pipeline use the deferral method to account for investment tax credits as required by regulatory commissions. The Company records interest earned on income tax refunds in interest and other income and records penalties and interest charged on tax deficiencies in interest expense.

	December 31,
	2009	2008
	(in millions)
Deferred income taxes - liability
Property, plant and equipment	$161.9	$135.4
Employee benefits and compensation costs	0.5	0.7
Total deferred income taxes liability	$162.4	$136.1
Deferred income taxes – current asset	$ 0.7	$ 0.7

Accounting standards for income taxes specify the accounting for uncertainty in income taxes by prescribing a minimum recognition threshold for a tax position to be reflected in the financial statements. If recognized, the tax benefit is measured as the largest amount of tax benefit that is more likely -than not to be realized upon ultimate settlement. Management has considered the amounts and the probabilities of the outcomes that could be realized upon ultimate settlement and believes that it is more-likely-than-not that the Company's recorded income tax benefits will be fully realized. There were no unrecognized tax benefits at the beginning or at the end of the years ended December 31, 2010, 2009 and 2008. The federal income tax return for 2009 is currently under examination by the Internal Revenue Service. The 2010 federal income tax return has not been filed.

As a result of the Spinoff of QEP, the 2010 federal income tax return will include the first six months of financial results from discontinued operations. The inclusion of the discontinued operations and the effects of bonus depreciation will cause Questar to incur a net operating loss (NOL) for federal income tax purposes for the tax year ending 2010. The estimated NOL is $37.5 million, which will expire in 2030. It is anticipated that Questar will be able to utilize the NOL by offsetting it against future taxable income. The tax sharing agreement that was negotiated between Questar and QEP as part of the Spinoff requires a true-up between the companies for each company’s actual tax liability as the benefits from the NOL carryover are utilized. See Note 67 –for ~~Rate~~further ~~Regulation~~discussion on income taxes.

~~Following is a description of the Company’s regulatory assets and liabilities~~P. ~~Questar~~Earnings ~~Pipeline~~Per ~~recovers~~Share ~~these costs but does not generally receive a return on these assets:~~

·Basic earnings per share (EPS) is computed by dividing net income attributable to Questar by the weighted-average number of common shares outstanding during the reporting period. Diluted EPS includes the potential increase in the number of outstanding shares that could result from the exercise of in-the-money stock options and issuance of unvested restricted stock units. See Note 3 for further discussion on EPS.

~~Gains and losses on the reacquisition of debt are deferred and amortized as interest expense over the would-be remaining life of the reacquired debt~~Q. ~~The reacquired debt costs had a weighted~~Share-~~average~~Based ~~life of approximately seven years as of December 31, 2008.~~ Compensation

·Questar issues stock options, restricted shares and restricted stock units to certain officers, employees and non-employee directors under its Long-Term Stock Incentive Plan (LTSIP). The Company uses the Black-Scholes-Merton mathematical model in estimating the fair value of stock options for accounting purposes. The granting of restricted shares and restricted stock units results in recognition of compensation cost measured at the grant-date market price. Questar uses an accelerated method in recognizing share-based compensation costs with graded-vesting periods. See Note 11 for further discussion on share-based compensation.

~~Questar Pipeline is allowed to recover certain deferred taxes from customers over the life of the related property, plant and equipment~~R. Comprehensive Income

·Comprehensive income is the sum of net income attributable to Questar as reported in the Consolidated Statements of Income and other comprehensive income (loss). As reported in the Consolidated Statements of Equity, other comprehensive income (loss) includes changes in the market value of commodity-based derivative instruments and long-term investment, recognition of the under-funded position of pension and other postretirement benefit plans and income taxes. These transactions are not the culmination of the earnings process but result from periodically adjusting historical balances to fair value. Income or loss is recognized when the pension or other postretirement benefit costs are accrued and the long-term investment is sold or otherwise realized. Accumulated other comprehensive loss is shown below:

~~Questar Pipeline has regulatory assets and liabilities for gas imbalances, fuel over or under recovered and sharing interruptible revenues with customers.~~55

Questar Pipeline has accrued a regulatory liability for the collection of postretirement medical costs allowed in rates in excess of actual charges. Regulatory assets are included with regulatory and other noncurrent assets and regulatory liabilities are included with other long-term liabilities in the Consolidated Balance Sheets. A list of long-term regulatory assets and liabilities follows:


	December 31,
	2010	2009
	(in millions)
Discontinued operations, unrealized gain on derivatives	$ -	$87.1
Pension liability	(93.2)	(104.5)
Postretirement benefits liability	(10.9)	(12.9)
Long-term investment	0.1	-
Accumulated other comprehensive loss	($104.0)	($30.3)

	December 31,
Current regulatory liabilities	2009	2008
	(in millions)
Gas imbalance	$3.2
Other	0.3
Total	$3.5	$ -

Income taxes allocated to each component of other comprehensive income (loss) for the year are shown in the table below: Expenses are in parentheses.

	December 31,
	Year Ended December 31,
Long-term regulatory assets	2009	2008
	2010	2009	2008
	(in millions)
Cost of reacquired debt	$4.2	$4.7
Discontinued operations, unrealized gain (loss) on derivatives	$51.6	$150.6	($183.4)
Income taxes recoverable from customers	1.9	2.2
Pension liability	(7.0)	(15.5)	50.8
Other	1.4	1.3
Postretirement benefits liability	(1.2)	(2.8)	5.3
Total	$7.5	$8.2
Income taxes	$43.4	$132.3	($127.3)

	December 31,
Long-term regulatory liabilities	2009	2008
	(in millions)
Postretirement medical	$6.2	$5.8
Total	$6.2	$5.8

S. Business Segments

~~Note~~Line 7of –business ~~Commitments~~information is presented according to senior management's basis for evaluating performance considering differences in the nature of products, services and ~~Contingencies~~regulation. Certain intersegment sales include intercompany profit.

~~Questar Pipeline is involved in various commercial and regulatory claims and litigation and other legal proceedings that arise in the ordinary course of its business~~T. Management does not believe any of them will have a material adverse effect on the Company's financial position, results of operations or cash flows. A liability is recorded for a loss contingency when its occurrence is probable and damages can be reasonably estimated based on the anticipated most likely outcome. Disclosures are provided for contingencies Reclassifications

~~Questar~~Certain ~~Pipeline~~reclassifications ~~Company~~were ~~2009~~made 10to prior-Kyear financial statements to conform to the 2010 presentation.

28All dollar and share amounts in this Annual Report on Form 10-K are in millions, except per-share information and where otherwise noted.

~~reasonably~~Note ~~likely~~2 to- ~~occur~~Discontinued which would have a material adverse effect on the Company's financial position, results of operations or cash flows. Some of the claims involve highly complex issues relating to liability, damages and other matters subject to substantial uncertainties and, therefore, the probability of liability or an estimate of loss cannot be reasonably determined.Operations

~~Note~~QEP 8operations –are ~~Share~~reflected as discontinued operations in this Annual Report on Form 10-~~Based~~K ~~Compensation~~and summarized below:

Questar issues stock options and restricted shares to certain officers and employees of Questar Pipeline under its LTSIP and recognizes expense over time as the stock options or restricted shares vest. Share-based compensation expense amounted to $1.1 million in 2009 compared with $0.7 million in 2008 and $0.6 million in 2007.


		Year Ended December 31,
		2010	2009	2008
		(in millions, except per share amounts)
	Revenues	$1,109.8	$1,972.5	$2,318.8
	Operating income	270.5	585.5	933.2
	--
	Discontinued operations, net of income taxes of $86.3 million in 2010, $117.6 million in 2009 and $283.6 million in 2008	148.2	215.4	520.6
	Discontinued operations, noncontrolling interest	(1.3)	(2.6)	(9.0)
	Total discontinued operations, net of income taxes	$ 146.9	$ 212.8	$ 511.6
Earnings Per Common Share Attributable To Questar
Basic from discontinued operations		$0.84	$1.23	$2.96
Diluted from discontinued operations		0.83	1.21	2.90

Note 3 - Earnings Per Share

Earnings Per Share

Basic EPS is computed by dividing net income attributable to Questar by the weighted-average number of common shares outstanding during the reporting period. Diluted EPS includes the potential increase in the number of outstanding shares that could result from the exercise of in-the-money stock options. A reconciliation of the components of basic and diluted shares used in the EPS calculation follows:


	Year Ended December 31,
	2010	2009	2008
	(in millions)
Weighted-average basic common shares outstanding	175.4	174.1	172.8
Potential number of shares issuable under the LTSIP	2.6	2.2	3.3
Average diluted common shares outstanding	178.0	176.3	176.1

In the past three years, Questar had the ability to issue shares under the terms of the Dividend Reinvestment and Stock Purchase Plan, Employee Investment Plan and Long-Term Stock Incentive Plan.

Dividend Reinvestment and Stock Purchase Plan (Reinvestment Plan)

The Reinvestment Plan allows parties interested in owning Questar common stock to reinvest dividends or invest additional funds in common stock. The Company can issue new shares or buy shares in the open market to meet shareholders' purchase requests. The Company issued 162,157 shares in 2010, 181,508 shares in 2009, 115,471 shares in 2008 and relied on open market purchases to supplement Company-issued shares in 2010 and 2008. At December 31, 2010, 1,331,210 shares were reserved for future issuance.

Long-Term Stock Incentive Plan

Questar issues stock options, restricted shares and restricted stock units to certain officers, directors and employees under its LTSIP. Stock options for participants have terms ranging from five to ten years with a majority issued with a seven to ten-year term. Options held by employees generally vest in three or four equal, annual installments. Options granted to non-employee directors generally vest in one installment six months after grant. Restricted shares and restricted stock units vest in equal installments over a specified number of years after the grant date with the majority vesting in three or four years. Nonvested restricted shares have voting and dividend rights; however, sale or transfer is restricted. Restricted stock units do not have voting rights until shares are distributed. Restricted stock units also accrue equivalent dividends, which are subject to the same vesting, distribution and voting conditions of the underlying award. For a summary of LTSIP transactions, see Note 11 - Share-Based Compensation.

Note 4 - Asset Retirement Obligations

Questar records asset retirement obligations (ARO) when there are legal obligations associated with the retirement of tangible long-lived assets. At Questar, ARO apply primarily to abandonment costs associated with gas and oil wells, production facilities and certain other properties. The Company has not capitalized future abandonment costs on a majority of its long-lived transportation and distribution assets because the Company does not have a legal obligation to restore the area surrounding abandoned assets. The fair value of retirement costs are estimated by Company personnel based on abandonment costs of similar properties available to field operations and depreciated over the life of the related assets. Revisions to ARO estimates result from changes in expected cash flows or material changes in estimated retirement costs. Income or expense resulting from the settlement of ARO liabilities is included in net gain (loss) from asset sales on the Consolidated Statements of Income. The ARO liability is adjusted to present value each period through an accretion calculation using a credit-adjusted risk-free interest rate. Changes in Questar’s ARO from the Consolidated Balance Sheets were as follows:


	2010	2009
	(in millions)
ARO liability at January 1,	$65.0	$58.9
Accretion	2.9	3.3
Liabilities incurred	1.3	0.7
Revisions	(8.3)	2.4
Liabilities settled	-	(0.3)
ARO liability at December 31,	$60.9	$65.0

Questar’s consolidated ARO by line of business is summarized in the table below:


	December 31,
	2010	2009
	(in millions)
Wexpro	$56.0	$60.3
Questar Pipeline	4.1	3.9
Questar Gas	0.8	0.8
Total	$60.9	$65.0

Wexpro collects from Questar Gas and deposits in trust certain funds related to estimated ARO costs. The funds are recorded as other noncurrent assets and used to satisfy retirement obligations as the properties are abandoned. The accounting treatment of reclamation activities associated with ARO for properties administered under the Wexpro Agreement is defined in a guideline letter between Wexpro and the Utah Division of Public Utilities and the Staff of the PSCW.

Note 5 - Fair Value Measurements

Beginning in 2008, Questar adopted the effective provisions of the accounting standards for Fair Value Measurements and Disclosures. These standards define fair value in applying GAAP, establish a framework for measuring fair value and expand disclosures about fair-value measurements. The standards do not change existing guidance as to whether or not an instrument is carried at fair value. The standards establish a fair-value hierarchy. Level 1 inputs are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability.

Questar primarily applies the market approach for recurring fair value measurements and maximizes its use of observable inputs and minimizes its use of unobservable inputs. Questar considers bid and ask prices for valuing the majority of its assets and liabilities measured and reported at fair value. In addition to using market data, Questar makes assumptions in valuing its assets and liabilities, including assumptions about risk and the risks inherent in the inputs to the valuation technique.

In February 2008, the FASB delayed the effective date of these standards for one year for certain nonfinancial assets and nonfinancial liabilities, except those recognized or disclosed at fair value in the financial statements on a recurring basis. On January 1, 2009, Questar adopted, without material impact on the Consolidated Financial Statements, the delayed provisions of these standards related to nonfinancial assets and nonfinancial liabilities that are not required or permitted to be measured at fair value on a recurring basis. Questar did not have any assets or liabilities measured at fair value on a non-recurring basis at December 31, 2010, and 2009.

The following table discloses the carrying amount and related fair value of certain financial instruments not disclosed in other notes to Questar’s Financial Statements in this Annual Report on Form 10-K:

Questar


	Carrying	Estimated	Carrying	Estimated
	Amount	Fair Value	Amount	Fair Value
	December 31, 2010		December 31, 2009
	(in millions)
*Financial assets*
Cash and cash equivalents	$ 21.8	$ 21.8	$ 11.5	$ 11.5
Notes receivable	-	-	39.3	39.3
Long-term investment	13.1	13.1	11.7	11.7
*Financial liabilities*
Short-term debt	242.0	242.0	169.0	169.0
Notes payable	-	-	52.9	52.9
Long-term debt including current portion	1,080.5	1,173.8	831.2	895.0

The carrying amounts of cash and cash equivalents, notes receivable, short-term debt and notes payable approximate fair value. The fair value of fixed-rate long-term debt is based on the discounted present value of cash flows using the Company's current credit-risk-adjusted borrowing rates. Notes receivable and notes payable represent borrowing transactions between Questar and pre-Spinoff affiliated companies. The long-term investment is recorded at fair value and consists of money market and short-term bond index mutual funds representing funds held in Wexpro's trust (see Note 4). The fair value of the long-term investment is based on quoted prices for the underlying funds, and is considered a Level 1 fair value.

The following table discloses the carrying amount and related fair value of certain financial instruments not disclosed in other notes to Questar Pipeline’s Financial Statements in this Annual Report on Form 10-K:

Questar Pipeline


	Carrying	Estimated	Carrying	Estimated
	Amount	Fair Value	Amount	Fair Value
	December 31, 2010		December 31, 2009
	(in millions)
*Financial assets*
Cash and cash equivalents	$ 5.3	$ 5.3	$ 3.8	$ 3.8
Notes receivable from Questar	30.3	30.3	42.7	42.7
*Financial liabilities*
Notes payable to Questar	-	-	0.2	0.2
Long-term debt	460.9	501.9	461.2	490.9

The carrying amounts of cash and cash equivalents, notes receivable from Questar and notes payable to Questar approximate fair value. The fair value of fixed-rate long-term debt is based on the discounted present value of cash flows using Questar Pipeline’s current credit-risk-adjusted borrowing rates.

The following table discloses the carrying amount and related fair value of certain financial instruments not disclosed in other notes to Questar Gas’s Financial Statements in this Annual Report on Form 10-K:

Questar Gas


	Carrying	Estimated	Carrying	Estimated
	Amount	Fair Value	Amount	Fair Value
	December 31, 2010		December 31, 2009
	(in millions)
*Financial assets*
Cash and cash equivalents	$ 4.7	$ 4.7	$ 7.2	$ 7.2
*Financial liabilities*
Notes payable to Questar	153.6	153.6	87.0	87.0
Long-term debt	370.0	425.3	370.0	404.1

The carrying amounts of cash and cash equivalents and notes payable to Questar approximate fair value. The fair value of fixed-rate long-term debt is based on the discounted present value of cash flows using Questar Gas’s current credit-risk-adjusted borrowing rates.

Note 6 - Debt

The Company has syndicated credit facilities under which it may borrow up to $600.0 million at December 31, 2010. These credit facilities have interest-rate options generally below the prime interest rate and carry annual commitment fees on the unused balance. Under these facilities, consolidated funded debt cannot exceed four times consolidated earnings before interest, taxes, depreciation and amortization. Questar was in compliance with this restriction at December 31, 2010. Commercial-paper borrowings are backed by these credit arrangements. The details of short-term debt are as follows:


	December 31,
	2010	2009
	(in millions)
Commercial paper with variable-interest rates	$242.0	$169.0
Weighted-average interest rate	0.38%	0.31%

Questar centrally manages cash. Notes payable represent pre-Spinoff interest-bearing-demand notes with former subsidiaries of Questar. Amounts loaned earn an interest rate that is identical to the interest rate paid on amounts borrowed. The details of notes payable are as follows:


	December 31, 2009
	(in millions)
Notes payable with variable-interest rates	$52.9
Interest rate	0.66%

Questar makes loans to Questar Pipeline and Questar Gas under a short-term borrowing arrangement. Amounts loaned earn an interest rate that is identical to the interest rate paid on amounts borrowed. The following table details the notes payable to Questar from Questar Pipeline and Questar Gas and the associated interest rate.


	December 31,
	2010	2009
	(in millions)
Questar Pipeline
Notes payable to Questar with variable-interest rates	-	$0.2
Interest rate	-	0.66%
Questar Gas
Notes payable to Questar with variable-interest rates	$153.6	$87.0
Interest rate	0.48%	0.66%

All short-term notes and the term-bank loan are unsecured obligations and rank equally with all other unsecured liabilities. The terms of the Questar Pipeline and Questar Gas long-term debt obligations do not have dividend-payment restrictions.

In December 2010, Questar Corporation issued $250.0 million of notes due February 2016 with a 2.785% effective interest rate and used the net proceeds to repay $250.0 million of commercial paper. The details of long-term debt are as follows:


	December 31,
	2010	2009
	(in millions)
*Questar Corporation*
2.75% notes due 2016	$ 250.0	$ -
*Questar Pipeline*
Medium-term notes 6.45% to 7.09%, due 2011 to 2018	210.1	210.2
5.83% notes due 2018	250.0	250.0
Total long-term debt Questar Pipeline	460.1	460.2
*Questar Gas*
Medium-term notes 5.00% to 6.91%, due 2011 to 2018	220.0	220.0
6.30% notes due 2018	50.0	50.0
7.20% notes due 2038	100.0	100.0
Total long-term debt Questar Gas	370.0	370.0
Total long-term debt outstanding	1,080.1	830.2


Less current portion	(182.0)	-
Less unamortized-debt discount	(0.7)	(0.3)
Plus unamortized-debt premium	1.1	1.3
Total long-term debt	$ 898.5	$831.2

The aggregate maturities of Questar Corporation, Questar Pipeline and Questar Gas’s long-term debt for the next five years are as follows:


	Questar Corporation	Questar Pipeline	Questar Gas	Total
	Years Ending December 31,
	(in millions)
2011	$-	$180.0	$2.0	$182.0
2012	-	-	91.5	91.5
2013	-	-	42.0	42.0
2014	-	-	-	-
2015	-	25.1	-	25.1

Note 7 - Income Taxes

Questar Corporation

Details of Questar's income tax expense and deferred income taxes from continuing operations are provided in the following tables. The components of income tax expense were as follows:


	Year Ended December 31,
	2010	2009	2008
	(in millions)
*Federal*
Current	$18.3	$19.7	$37.1
Deferred	85.6	77.5	54.2
*State*
Current	(0.2)	2.6	-
Deferred	6.1	5.0	3.5
*Deferred investment tax credits recognized*	(0.4)	(0.4)	(0.4)
Total income tax expense	$109.4	$104.4	$94.4

The difference between the statutory federal income tax rate and the Company's effective income tax rate is explained as follows:


	Year Ended December 31,
	2010	2009	2008
Federal income taxes statutory rate	35.0%	35.0%	35.0%
Increase (decrease) in rate as a result of:
State income taxes, net of federal income tax benefit	1.3	1.7	0.9
Tax benefits from dividends paid to employee stock plan	(0.4)	-	-
Other	0.4	(0.1)	(0.5)
Effective income tax rate	36.3%	36.6%	35.4%

Significant components of Questar’s deferred income taxes were as follows:


	December 31,
	2010	2009
	(in millions)
*Deferred tax liabilities*
Property, plant and equipment	$534.5	$456.7
*Deferred tax assets*
Employee benefits and compensation costs	59.8	79.0
Deferred income taxes – noncurrent	$474.7	$377.7
*Deferred income taxes - current asset*	$14.8	$ 14.3
*Deferred income taxes - current liability*	3.0	-
Deferred income taxes - current	$11.8	$14.3

Questar Pipeline

Details of Questar Pipeline's income tax expense and deferred income taxes are provided in the following tables. The components of income tax expense were as follows:


	Year Ended December 31,
	2010	2009	2008
	(in millions)
*Federal*
Current	$19.7	$6.1	$20.2
Deferred	16.7	25.3	10.6
*State*
Current	1.5	1.3	2.5
Deferred	0.9	1.1	0.1
Total income tax expense	$38.8	$33.8	$33.4

The difference between the statutory federal income tax rate and Questar Pipeline's effective income tax rate is explained as follows:


	Year Ended December 31,
	2010	2009	2008
Federal income taxes statutory rate	35.0%	35.0%	35.0%
Increase (decrease) in rate as a result of:	-	-	-
State income taxes, net of federal income tax benefit	1.5	1.7	1.9
Other	-	-	(0.4)
Effective income tax rate	36.5%	36.7%	36.5%

Significant components of Questar Pipeline's deferred income taxes were as follows:


	December 31,
	2010	2009
	(in millions)
*Deferred tax liabilities*
Property, plant and equipment	$178.1	$161.9
Employee benefits and compensation costs	2.0	0.5
Deferred income taxes - noncurrent	$180.1	$162.4
Deferred income taxes - current asset	$ 1.2	$ 0.7

Questar Gas

Details of Questar Gas's income tax expense and deferred income taxes are provided in the following tables. The components of income tax expense were as follows:


	Year Ended December 31,
	2010	2009	2008
	(in millions)
*Federal*
Current	($15.9)	($8.3)	($5.3)
Deferred	40.2	31.6	28.0
*State*
Current	(2.2)	(1.2)	(0.6)
Deferred	3.5	2.7	2.3
Deferred investment tax credit recognized	(0.4)	(0.4)	(0.4)
Total income tax expense	$25.2	$24.4	$24.0

The difference between the statutory federal income tax rate and Questar Gas's effective income tax rate is explained as follows:


	Year Ended December 31,
	2010	2009	2008
Federal income taxes statutory rate	35.0%	35.0%	35.0%
Increase (decrease) in rate as a result of:	-	-	-
State income taxes, net of federal income tax benefit	1.2	1.5	1.7
Amortize investment tax credits related to rate regulated assets	(0.5)	(0.6)	(0.6)
Other	0.8	1.1	1.3
Effective income tax rate	36.5%	37.0%	37.4%

Significant components of Questar Gas's deferred income taxes were as follows:


	December 31,
	2010	2009
	(in millions)
*Deferred tax liabilities*
Property, plant and equipment	$225.0	$190.3
Employee benefits and compensation costs	5.3	(1.3)
Deferred income taxes – noncurrent	$230.3	$189.0
*Deferred income taxes - current asset*	$ 4.3	$ 3.6
*Deferred income taxes - current liability*	3.0	-
Deferred income taxes - current	$ 1.3	$ 3.6

Note 8 - Commitments and Contingencies

Questar, Wexpro, Questar Pipeline and Questar Gas are involved in various commercial and regulatory claims and litigation and other legal proceedings that arise in the ordinary course of business. Management does not believe any of them will have a material adverse effect on the Company's financial position, results of operations or cash flows. A liability is recorded for a loss contingency when its occurrence is probable and damages can be reasonably estimated based on the anticipated most likely outcome. Disclosures are provided for contingencies reasonably likely to occur which would have a material adverse effect on the Company's financial position, results of operations or cash flows. Some of the claims involve highly complex issues relating to liability, damages and other matters subject to substantial uncertainties and, therefore, the probability of liability or an estimate of loss cannot be reasonably determined.

Commitments

The Company is committed to lease its headquarters building through January 12, 2012. Minimum future payments under the terms of this long-term operating lease are $3.9 million for 2011 and dropping to $2.0 million in 2012. Rental expense amounted to $3.4 million in 2010, $3.5 million in 2009 and $3.4 million in 2008.

In June 2010, Questar entered into a lease agreement for a new headquarters building that is being constructed. The lease term is 17 years beginning when the building is ready for occupation, which is expected in early 2012. Initial lease payments are $3.2 million per year. Questar expects to account for this lease as a capital lease. The Company’s lease on its existing headquarters building will expire at that time.

Wexpro

Wexpro has a $13.9 million drilling rig contract commitment in 2011.

Questar Gas

Historically, 40% to 50% of Questar Gas gas-supply has been provided by cost-of-service reserves developed and produced by Wexpro. In 2010, Questar Gas purchased the remainder of its gas supply from multiple third parties under index-based or fixed-price contracts. Questar Gas has commitments to purchase gas for $64.8 million in 2011, $20.7 million in 2012, $18.3 million in 2013-2015 based on current prices. Generally, at the conclusion of the heating season and after a bid process, new agreements for the next heating season are put in place. Questar Gas bought natural gas under purchase agreements amounting to $245.2 million in 2010, $225.3 million in 2009 and $395.5 million in 2008.

In addition, Questar Gas stores gas during off-peak periods (typically during the summer) and withdraws gas from storage to meet peak-gas demand (typically in the winter). The company has contracted for transportation and underground storage services with Questar Pipeline. Annual payments for these services amount to $70.9 million in 2011, $68.0 million in 2012, $66.1 million in 2013, $62.6 million in 2014 through 2015. Questar Gas has third-party transportation commitments requiring yearly payments of $27.3 million in 2011 through 2015.

Note 9 - Wexpro Agreement

Wexpro's operations are subject to the terms of the Wexpro Agreement. The agreement was effective August 1, 1981, and sets forth the rights of Questar Gas to receive certain benefits from Wexpro's operations. The agreement was approved by the PSCU and PSCW in 1981 and affirmed by the Supreme Court of Utah in 1983. Major provisions of the agreement are as follows.

a. Wexpro conducts gas-development drilling on a finite group of productive gas properties, as defined in the agreement, and bears any costs of dry holes. Natural gas produced from successful drilling on these properties is delivered to Questar Gas. Wexpro is reimbursed for the costs of producing the natural gas plus a return on its investment in successful wells. The after-tax return allowed Wexpro is adjusted annually and is approximately 20.4%.

b. Wexpro operates certain natural gas properties for Questar Gas. Wexpro is reimbursed for its costs of operating these properties, including a rate of return on any investment it makes. This after-tax rate of return is adjusted annually and is approximately 12.4%.

c. Crude-oil production from certain oil-producing properties is sold at market prices with the revenues used to recover operating expenses and to provide Wexpro a return on its investment. The after-tax rate of return on investments in these properties is adjusted annually and is approximately 12.4%. Any operating income remaining after recovery of expenses and Wexpro's return on investment is divided between Wexpro and Questar Gas, with Wexpro retaining 46%.

d. Wexpro conducts developmental-oil drilling on productive oil properties and bears any costs of dry holes. Oil discovered from these properties is sold at market prices with the revenues used to recover operating expenses and to give Wexpro a return on its investment in successful wells. The after-tax rate of return is adjusted annually and is approximately 17.4%. Any operating income remaining after recovery of expenses and Wexpro's return on investment is divided between Wexpro and Questar Gas with Wexpro retaining 46% and Questar Gas retaining 54%. Questar Gas received oil-income sharing of $1.1 million in 2010, $1.0 million in 2009 and $6.1 million in 2008.

e. Amounts received by Questar Gas from the sharing of Wexpro's oil income are used to reduce natural-gas costs to utility customers.

Wexpro's net investment base and the yearly average rate of return for 2010 and the previous two years are shown in the table below:


	2010	2009	2008
Wexpro's net investment base (in millions)	$456.6	$431.9	$410.6
Average annual rate of return (after tax)	19.8%	19.8%	20.0%

Note 10 - Rate Regulation

The following table details regulatory assets and liabilities on Questar’s Consolidated Balance Sheets:


	December 31, 2010		December 31, 2009
	($ in millions)
	Current	Noncurrent	Current	Noncurrent
Regulatory assets:
Questar Pipeline
Gas imbalance	$ 0.8	$ -	$ 0.1	$ -
Cost of reacquired debt	-	3.7	-	4.2
Income taxes recoverable from customers	-	1.6	-	1.9
Other	-	1.4	-	1.4
Total Questar Pipeline regulatory assets	0.8	6.7	0.1	7.5
Questar Gas
DSM	$39.7	$ -	$40.6	$ -
Purchased-gas adjustment	10.7	-	-	-
Deferred production taxes	2.3	-	2.7	-
Cost of reacquired debt	-	6.4	-	6.9
Pipeline integrity costs	-	5.6	-	5.8
ARO cost-of-service gas wells	-	3.0	-	3.3
Total Questar Gas regulatory assets	52.7	15.0	43.3	16.0
Total regulatory assets	$53.5	$21.7	$43.4	$23.5
Regulatory liabilities:
Questar Pipeline
Gas imbalance	$ 3.1	$ -	$ 3.2	$ -
Revenue sharing	0.1	-	0.3	-
Post-retirement medical	-	6.9	-	6.2
Total Questar Pipeline regulatory liabilities	3.2	6.9	3.5	6.2
Questar Gas
Purchased-gas adjustment	$ -	$ -	$22.1	$ -
Conservation enabling tariff	2.8	-	5.1	-
Income taxes recoverable to customers	-	0.9	-	1.1
Total Questar Gas regulatory liabilities	2.8	0.9	27.2	1.1
Total regulatory liabilities	$ 6.0	$ 7.8	$30.7	$ 7.3

Questar Pipeline and Questar Gas record regulatory assets and liabilities. They recover the costs of assets but do not generally receive a return on these assets.

Following is a description of Questar Pipeline’s regulatory assets and liabilities:

Gains and losses on the reacquisition of debt are deferred and amortized as interest expense over the would-be remaining life of the reacquired debt. The reacquired debt costs had a weighted-average life of approximately 9 years as of December 31, 2010.

Certain deferred taxes from customers over the life of the related property, plant and equipment.

Regulatory assets and liabilities for gas imbalances, fuel over or under recovered and sharing interruptible revenues with customers.

A regulatory liability for the collection of postretirement medical costs allowed in rates in excess of actual charges.

Following is a description of Questar Gas's regulatory assets and liabilities:

Gains and losses on the reacquisition of debt by rate-regulated companies are deferred and amortized as interest expense over the would-be remaining life of the reacquired debt. The reacquired debt costs had a weighted-average life of approximately 12 years as of December 31, 2010.

The DSM program asset represents funds expended for promoting the conservation of natural gas through advertising, rebates for efficient homes and appliances, and energy audits. These costs are deferred and recovered from customers through periodic rate adjustments.

The costs of complying with pipeline-integrity regulations are recovered in rates subject to a PSCU order. Questar Gas is allowed to recover $4.4 million per year. Costs incurred in excess of this amount will be recovered in future rate changes.

A regulatory asset that represents future expenses related to abandonment of Wexpro operated gas and oil wells. The regulatory asset will be reduced over an 18-year period following an amortization schedule that commenced January 1, 2003, or as cash is paid to plug and abandon wells.

Production taxes on cost-of-service gas production are recorded when the gas is produced and recovered from customers when taxes are paid, generally within 12 months.

Certain deferred taxes from customers over the life of the related property, plant and equipment.

Purchased-gas costs that are different from those provided for in present rates are accumulated and recovered or credited through future rate changes.

The CET liability represents actual revenues received that are in excess of the allowed revenues. These amounts are refunded through periodic rate adjustments.

Income taxes refundable to customers arise from adjustments to deferred taxes.

Rate Changes

On April 8, 2010, the PSCU approved a settlement in Questar Gas’s Utah general rate case. The stipulation, effective August 1, 2010, authorized an increase in the utility’s allowed return on equity from 10% to 10.35% and indefinitely extended the existing CET. In the stipulation, the PSCU approved an infrastructure cost-tracking mechanism that allows the company to place into rate base and earn on capital expenditures associated with a multiyear high-pressure natural gas feeder-line replacement program, and do it immediately upon the completion of each project. The stipulation agreement increased customer rates by $5.0 million annually with the changes in rates effective August 1, 2010.

Note 11 - Share-Based Compensation

Questar issues stock options and restricted shares to certain officers, employees and non-employee directors under its LTSIP. To generally preserve the potential benefits under the LTSIP prior to the Spinoff, stock options and restricted share awards outstanding as of June 30, 2010, were adjusted and bifurcated into stock options and restricted share awards for both Questar and QEP, respectively. The exercise price of options and the grant-day prices of restricted shares were recast using the ratio of the June 30, 2010, closing prices of Questar, $14.66 or 32.23%, and QEP, $30.83 or 67.77%.

Questar recognizes expense over time as the stock options or restricted shares vest. Share-based compensation expense amounted to $15.4 million in 2010 compared to $9.3 million in 2009 and $6.2 million in 2008. Deferred share-based compensation, representing the nonvested value of restricted share awards, amounted to $6.3 million at December 31, 2010, and $5.2 million at December 31, 2009. Deferred share-based compensation is included in common stock. Cash flow from income tax benefits in excess of recognized compensation expense amounted to $8.4 million in 2010, $3.6 million in 2009 and $13.2 million in 2008. There were 8,372,439 shares available for future grant at December 31, 2010.

The Company uses the Black-Scholes-Merton mathematical model in estimating the fair value of stock options for accounting purposes. Fair-value calculations rely upon subjective assumptions used in the mathematical model and may not be representative of future results. The Black-Scholes-Merton model was intended for measuring the value of options traded on an exchange. The calculated fair value of options granted and major assumptions used in the model at the date of grant are listed below:

			2009
			Input Variables
Fair value of options at grant date			$35.38
Risk-free interest rate			1.78%
Expected price volatility			28.1%
Expected dividend yield			1.39%
Expected life in years			5.0

There were 55,000 unvested stock options at December 31, 2009. Stock-option transactions under the terms of the LTSIP for the three years ended December 31, 2008, are summarized below:


	2010	2009	2008
	Range of Stock Option Variables	Range of Stock Option Variables	Stock Option Input Variables
Fair value of options at grant date	$13.10	$10.01 - $11.40	$17.35
Risk-free interest rate	2.30%	1.78% - 2.51%	3.20%
Expected price volatility	30.3%	28.1% - 29.9%	32.3%
Expected dividend yield	1.18%	1.39% - 1.61%	1.72%
Expected life in years	5.2	5.0 - 5.0	5.0

	Options Outstanding	Price Range	Weighted- average Price
Balance at January 1, 2007	167,170	$10.69 – $24.33	$19.32
Exercised	(4,670)	11.48 – 13.56	13.26
Employee transfer	(36,000)	10.69	10.69
Balance at December 31, 2007	126,500	11.48 – 24.33	22.00
Exercised	(27,852)	8.50 – 13.56	11.37
Employee transfer	102,820	7.50 – 14.01	12.55
Balance at December 31, 2008	201,468	7.50 – 24.33	18.65
Granted	55,000	35.38	35.38
Exercised	(23,528)	8.50 – 13.56	11.27
Employee transfer	12,500	11.48 – 13.56	12.81
Balance at December 31, 2009	245,440	$ 7.50 – $35.38	$22.81

Unvested stock options decreased by 561,470 shares to 232,862 shares in 2010. Stock-option transactions under the terms of the LTSIP and recast for the effects of the Spinoff are summarized for the year ended December 31, 2010, below:

~~Options Outstanding~~	Options Outstanding	Price Range	Weighted Average Price	~~Options Exercisable~~		~~Unvested Options~~
Range of exercise prices	Number outstanding at Dec. 31, 2009	Weighted-average remaining term in years	Weighted-average exercise price	Number exercisable at Dec. 31, 2009	Weighted-average exercise price	Number unvested at Dec. 31, 2009	Weighted- average exercise price
Balance at December 31, 2009	3,001,999	2.42 - 17.35	6.42
$ 7.50 – $14.01	90,440	2.2	$13.47	90,440	$13.47
Granted	266,000	13.10	13.10
24.33 – 35.38	155,000	5.4	28.25	100,000	24.33	55,000	$35.38
Exercised	(569,140)	2.42 - 11.40	4.30
$ 7.50 – $35.38	245,440	4.2	$22.81	190,440	$19.17	55,000	$35.38
Questar employees transferred to QEP	(138,800)	2.42 - 13.10	11.83
Balance at December 31, 2010	2,560,059	$3.70 - $17.35	$7.30

Restricted shares are valued at the grant-date market price and amortized to expense over the vesting period. Most restricted share grants vest in equal installments over a three or four year period from the grant date. The weighted average vesting period of unvested restricted shares at December 31, 2009, was 14 months. Transactions involving restricted shares under the terms of the LTSIP for the three years ended December 31, 2009, are summarized below:


Options Outstanding				Options Exercisable		Unvested Options
Range of exercise prices	Number outstanding at Dec. 31, 2010	Weighted-average remaining term in years	Weighted-average exercise price	Number exercisable at Dec. 31, 2010	Weighted-average exercise price	Number unvested at Dec. 31, 2010	Weighted- average exercise price
$3.70	508,354	1.1	$ 3.70	508,354	$ 3.70	-	-
$ 4.37 - 4.79	1,011,331	1.7	4.39	1,011,331	4.39	-	-
7.84 - 12.43	699,174	4.1	11.09	564,512	11.01	134,662	$11.40
$13.10 - $17.35	341,200	5.6	13.51	243,000	13.67	98,200	13.10
	2,560,059	2.7	$ 7.30	2,327,197	$ 6.81	232,862	$12.12

~~Questar~~Restricted ~~Pipeline~~shares ~~Company~~are ~~2009~~valued 10at the grant-Kdate market price and amortized to expense over the vesting period. Most restricted share grants vest in equal installments over a three or four year period from the grant date. The weighted average vesting period of unvested restricted shares at December 31, 2010, was 22 months. Transactions involving restricted shares under the terms of the LTSIP and recast for the effects of the Spinoff for the year ended December 31, 2010, are summarized below:


	Restricted Shares Outstanding	Price Range	Weighted Average Price
Balance at December 31, 2009	331,475	10.01 - 17.57	13.43
Granted	541,377	13.10 - 16.83	14.57
Employees transferred between Questar and QEP	(41,916)	10.91 - 20.31	9.59
Distributed	(262,229)	10.01 - 17.58	13.73
Balance at December 31, 2010	568,707	$11.40 - $20.31	$14.66

	Shares	Price Range	Weighted- average Price
Balance at January 1, 2007	36,482	$17.45 - $36.75	$27.46
Granted	11,200	41.08 – 50.30	41.90
Distributed	(10,538)	17.45 – 25.50	23.44
Balance at December 31, 2007	37,144	17.45 – 50.30	32.95
Granted	16,000	53.83	53.83
Distributed	(15,660)	17.45 – 41.08	28.73
Employee transfer	4,532	17.45 – 36.75	26.11
Balance at December 31, 2008	42,016	24.33 – 53.83	41.74
Granted	19,550	35.38	35.38
Distributed	(25,556)	24.33 – 53.83	33.98
Forfeited	(1,000)	53.83	53.83
Employee transfer	2,898	25.50 – 53.83	46.47
Balance at December 31, 2009	37,908	$35.38 – $53.83	$43.73

During 2010, Questar issued 66,767 restricted stock units with a weighted-average price of $15.25 per share and a weighted-average vesting period of 18 months.

~~Note~~As 9a –result ~~Employee~~of ~~Benefits~~the Spinoff and bifurcation of share-based awards, restricted QEP shares and QEP stock options were granted to certain officers, employees and non-employee directors of Questar. The awards include 242,761 unvested restricted shares with a weighted-average price of $29.24 per share and 232,862 unvested stock options with a weighted-average price of $25.49 per share. Questar will recognize expense in future periods for these unvested share-based awards. In addition, certain QEP officers, employees and non-employee directors hold 1,403,735 Questar stock options with a weighted-average exercise price of $10.54

~~Pension Plan~~67

~~Most~~per ~~Questar~~share ~~Pipeline~~and ~~employees~~a ~~are covered by Questar’s defined~~weighted-~~benefit~~average ~~pension~~remaining ~~plan.~~life ~~Benefits are generally based on the employee’s age at retirement, years~~ of ~~service~~4.3 ~~and highest earnings in a consecutive 72 semimonthly pay period interval during the 10~~ years ~~preceding retirement. Questar is subject to~~ and ~~complies with minimum required and maximum allowed annual contribution levels mandated by the Employee Retirement Income Security Act and by the Internal Revenue Code. Subject to the above limitations~~611,491 Questar ~~intends~~unvested torestricted ~~fund~~shares ~~the~~with ~~qualified pension plan approximately equal to the yearly expense. Questar also has~~ a ~~nonqualified pension plan that covers certain management employees in addition to the qualified pension plan. The nonqualified pension plan provides for defined~~weighted-~~benefit~~average ~~payments~~price ~~upon retirement~~ of the management employee, or to the spouse upon death of the management employee above the benefit limit defined by the Internal Revenue Service for the qualified plan. The nonqualified pension plan is unfunded. Claims are paid from the Company’s general funds. Qualified pension plan assets consist principally of equity securities and corporate and U.S. government debt obligations. A third-party consultant calculates the pension plan projected benefit obligation. Pension expense was $313.~~8 million in 2009 and $2~~68.~~5 million in 2008 and 2007.~~

Questar ~~Pipeline’s~~issues ~~portion~~stock ofoptions ~~plan~~and ~~assets~~restricted shares to certain officers and ~~benefit~~employees ~~obligations~~of ~~cannot~~Questar bePipeline ~~determined~~and ~~because~~Questar ~~the~~Gas ~~plan~~under ~~assets~~its ~~are~~LTSIP ~~not~~and ~~segregated~~recognizes orexpense ~~restricted~~over totime ~~meet~~as the ~~Company’s~~stock ~~pension~~options ~~obligations~~or restricted shares vest. IfQuestar ~~the~~Pipeline ~~Company~~share-based ~~were~~compensation expense amounted to ~~withdraw~~$1.3 ~~from~~million ~~the~~in ~~pension~~2010 ~~plan,~~compared ~~the~~with ~~pension~~$1.1 ~~obligation~~million ~~for~~in ~~the~~2009 ~~Company’s~~and ~~employees~~$0.7 ~~would~~million bein ~~retained~~2008. byQuestar ~~the~~Gas ~~pension~~share-based ~~plan.~~compensation Atexpense ~~December~~amounted ~~31,~~to ~~2009~~$1.4 ~~and~~million ~~2008,~~in ~~Questar’s~~2010 ~~projected~~compared ~~benefit~~with ~~obligation~~$1.0 ~~exceeded~~million ~~the~~in ~~fair~~2009 ~~value~~and of$1.2 ~~plan~~million ~~assets~~in 2008.

~~Postretirement~~The ~~Benefits~~following ~~Other~~table ~~Than~~summarizes ~~Pensions~~the stock options held under the LTSIP of Questar Pipeline and Questar Gas at December 31, 2010.

Eligible Questar Pipeline employees participate in Questar’s postretirement benefits other than pensions plan. Postretirement health care benefits and life insurance are provided only to employees hired before January 1, 1997. The Company pays a portion of the costs of health care benefits, based on an employee’s years of service, and generally limits payments to 170% of the 1992 contribution. Plan assets consist principally of equity securities and corporate and U.S. government debt obligations. A third party consultant calculates the projected benefit obligation. Expense amounted to $0.3 million in 2009 compared with earnings on investments exceeding costs by $0.3 million in 2008 and $0.2 million in 2007.


Options Outstanding				Options Exercisable		Unvested Options
Range of exercise prices	Number outstanding at Dec. 31, 2010	Weighted-average remaining term in years	Weighted-average exercise price	Number exercisable at Dec. 31, 2010	Weighted-average exercise price	Number unvested at Dec. 31, 2010	Weighted- average exercise price
Questar Pipeline
$ 3.70 - $13.10	268,514	3.6	$8.00	204,049	$6.69	64,465	$12.13
Questar Gas
$ 3.70 - $13.10	130,446	2.4	$5.36	116,780	$4.55	13,666	$12.27

The ~~Company’s~~following ~~portion~~table ofsummarizes ~~plan~~the ~~assets~~restricted ~~and~~shares ~~benefit~~held ~~obligations~~under ~~related~~the toLTSIP ~~postretirement~~of ~~medical~~Questar Pipeline and ~~life~~Questar ~~insurance~~Gas ~~benefits~~at ~~cannot~~December be31, ~~determined~~2010. ~~because~~The ~~the~~weighted ~~plan~~average ~~assets~~vesting ~~are~~period ~~not~~of ~~segregated~~unvested or restricted toshares ~~meet~~at ~~the Company’s obligations. At~~ December 31, ~~2009 and 2008~~2010, for Questar’s ~~accumulated~~Pipeline ~~benefit~~was ~~obligation~~19 ~~exceeded~~months, ~~the~~and ~~fair~~19 ~~value~~months offor ~~plan~~Questar ~~assets~~Gas.

Employee Investment Plan


	Restricted Shares Outstanding	Price Range	Weighted- Average Price

Questar Pipeline	102,651	$11.40 - $17.35	$14.46
Questar Gas	49,286	$11.40 - $17.35	$13.88

~~Questar~~Note ~~Pipeline~~12 ~~participates~~- ~~in Questar’s~~ Employee Investment Plan (EIP). The EIP allows eligible employees to purchase shares of Questar common stock or other investments through payroll deduction at the current fair market value on the transaction date. The Company currently contributes an overall match of 80% of employees’ pre-tax purchases up to a maximum of 6% of employee-qualifying earnings. In addition, the Company contributes $200 annually to the EIP for each eligible employee. For the year ended December 31, the Company’s expense equaled its matching contribution of $1.1 million in 2009, $1.0 million in 2008 and $0.8 million in 2007.Benefits

~~Questar~~Defined ~~Pipeline~~Benefit ~~Company~~Pension ~~2009~~Plan ~~10-K~~and Other Postretirement Benefits

As a result of the Spinoff of QEP on June 30, 2010, Questar transferred pension and postretirement assets and liabilities for active, eligible QEP employees to QEP. As of December 31, 2009, the defined benefit pension plan and other postretirement benefits assets and liabilities apply to all eligible Questar and QEP employees and retirees. The expenses for the defined benefit pension plan and other postretirement benefits for the periods 2008 through 2010, include eligible employees and retirees of both Questar and QEP.

~~Note~~The 10Company –has ~~Equity~~defined ~~Contribution~~benefit pension and life insurance plans covering a majority of its employees and a postretirement medical plan providing coverage to less than half of its employees. Employees hired after June 30, 2010 are not eligible for the defined benefit pension plan and employees hired after December 31, 1996, are not eligible for the postretirement medical plan. The Company's Employee Benefits Committee (EBC) has oversight over investment of retirement-plan and postretirement-benefit assets. The EBC uses a third-party consultant to assist in setting targeted-policy ranges for the allocation of assets among various investment categories. The majority of retirement-benefit assets were invested as follows:

In 2007, Questar Pipeline received $175.0 million of common equity from Questar and used the proceeds to repay $175.0 million of notes payable due to Questar.


	Actual Allocation		Policy Range
	Year Ended December 31,
	2010	2009	2010	2009
Total domestic equity securities	41%	41%	35-45%	35-45%
Foreign equity securities
Developed market foreign equity securities	25%	19%	-	-
Emerging market foreign equity securities	7%	7%	-	-

~~Note 11 – Related Party Transactions~~68

Questar Pipeline receives a substantial portion of its revenues from Questar Gas. Revenues received from Questar Gas were $72.1 million in 2009, $71.9 million in 2008 and $74.8 million in 2007. The Company also received revenues from other affiliated companies totaling $3.2 million in 2009, $3.0 million in 2008 and $3.4 million in 2007.


Total foreign securities	32%	26%	25-35%	25-35%
Debt securities
Investment grade intermediate term debt	4%	14%	-	-
Investment grade long-term debt	13%	11%	-	-
Below-investment grade debt	9%	7%	-	-
Total debt securities	26%	32%	25-35%	25-35%
Cash and short-term investments	1%	1%	0-3%	0-3%

~~Questar~~At ~~Gas~~the ~~provided~~end ~~administrative,~~of ~~technical~~2010, ~~accounting,~~domestic ~~legal,~~equity ~~data-processing~~assets ~~and~~were ~~communication~~invested ~~services~~in ~~plus~~a ~~regulatory~~passive ~~support~~total tostock ~~Questar~~market ~~Pipeline~~index atfund ~~its~~that ~~cost~~invests in a diversified portfolio of ~~$20~~stocks representative of the whole U.4S. ~~million~~stock market. Developed market foreign equity assets were invested in ~~2009,~~funds ~~$21.5~~that ~~million~~hold a diversified portfolio of common stocks of corporations in ~~2008~~developed countries outside the United States. These investments are benchmarked against the Morgan Stanley Capital International Europe Australasia and ~~$22~~Far East (or MSCI EAFE) index.5 ~~million~~Emerging market foreign equity assets are invested in ~~2007.~~funds ~~The~~that ~~majority~~hold a diversified portfolio of ~~these~~common ~~costs~~stocks of corporations in emerging countries outside the United States. This investment is benchmarked against the MSCI EAFE Emerging Markets index. Investment grade intermediate-term debt assets are ~~allocated~~invested in funds holding a diversified portfolio of debt of governments, corporations and ~~included~~mortgage inborrowers ~~operating~~with average maturities of 5 to 10 years and ~~maintenance~~investment-grade ~~expenses~~credit ratings. The ~~allocation~~investments ~~methods~~ are ~~based~~benchmarked onagainst the ~~specific~~Barclay's ~~nature~~Aggregate Bond index. Investment-grade long-term debt assets are invested in a diversified portfolio of debt of governments, corporations and mortgage borrowers with an average maturity of more than 10 years and investment-grade credit ratings. These assets are benchmarked against the ~~charges~~Barclay's Government/Credit Bond index. ~~Management~~Below-investment-grade ~~believes~~debt ~~that~~assets are invested in a fund holding a diversified portfolio of debt securities of corporations with an average maturity up to 10 years with below-investment-grade credit ratings. This investment is benchmarked against the ~~allocation~~Merrill ~~methods~~Lynch High Yield II Total Return Bond index. Cash and short-term investments are ~~reasonable~~held in a fund that purchases investment grade quality short-term debt issued by governments and corporations.

Questar ~~performs~~funds ~~certain~~a ~~administrative~~trust ~~functions~~ for ~~Questar~~Employee ~~Pipeline.~~Retirement ~~The~~Income ~~Company~~Security ~~was~~Act ~~charged~~(ERISA) ~~for~~qualified ~~its~~retirement-benefit ~~allocated~~obligations ~~portion~~to ofpay ~~these~~benefits ~~services~~currently ~~that~~due ~~totaled~~and ~~$4.1~~to ~~million~~build inasset ~~2009,~~balances $2over a reasonable time period to pay future obligations.7 ~~million~~Questar inis ~~2008~~subject to and $4complies with minimum-required and maximum-allowed annual contribution levels mandated by ERISA and by the Internal Revenue Code.0 ~~million~~Subject to the above limitations, the Company seeks to fund the qualified retirement plan in ~~2007~~amounts that are at a minimum equal to the yearly expense. ~~These~~The ~~costs~~Company ~~are~~also ~~included~~has a nonqualified pension plan that covers a group of management employees in ~~operating~~addition ~~and~~to ~~maintenance~~the ~~expenses~~qualified ~~and~~pension ~~are~~plan. ~~allocated~~The ~~based~~nonqualified onpension ~~each~~plan ~~affiliate’s~~provides ~~proportional~~for ~~share~~defined benefit payments upon retirement of ~~revenues~~the management employee, ~~net~~or to the spouse upon death of ~~gas~~the ~~costs;~~management ~~property,~~employee ~~plant~~above ~~and~~the ~~equipment;~~benefit ~~and~~limit ~~payroll.~~defined ~~Management~~by ~~believes~~the ~~that~~Internal Revenue Service for the ~~allocation~~qualified ~~method~~plan. The nonqualified pension plan is unfunded. Claims are paid from the Company's general funds. The Company commingles postretirement-benefit obligation assets with those of the ERISA-qualified retirement plan as permitted by section 401(h) of the Internal Revenue Code. The EBC seeks investment returns consistent with reasonable and prudent levels of liquidity and risk.

~~Questar~~The ~~Pipeline~~EBC ~~has~~allocates aqualified ~~lease~~pension-plan ~~with~~and anpostretirement-medical-plan ~~option~~assets ~~for~~among ~~renewal~~broad ~~with~~asset ancategories ~~affiliate~~and ~~for~~reviews ~~space~~the inasset anallocation ~~office~~at ~~building~~least ~~located~~annually. inAsset-allocation ~~Salt~~decisions ~~Lake~~consider ~~City,~~risk ~~Utah.~~and ~~Rent~~return, ~~expense~~future-benefit ~~was~~requirements, ~~$0.8~~participant ~~million~~growth inand ~~2009,~~other ~~2008~~expected ~~and~~cash ~~2007~~flows. ~~The~~These ~~annual~~characteristics ~~lease~~affect ~~payment~~the ~~will~~level, berisk ~~$0.8~~and ~~million~~expected ~~annually~~growth inof ~~2010~~postretirement-benefit ~~through 2011~~assets.

~~Questar~~The ~~Pipeline~~EBC ~~borrowed~~uses ~~cash~~asset-mix ~~from~~guidelines ~~Questar~~that ~~and~~include ~~incurred~~permissible ~~interest~~ranges ~~expense~~for ofeach ~~zero~~asset ~~in 2009~~category, ~~$0.3~~return ~~million~~objectives infor ~~2008~~each asset group and ~~$6.8~~the ~~million~~desired inlevel ~~2007~~of diversification and liquidity. ~~Questar~~These ~~Pipeline~~guidelines ~~loaned~~change ~~excess~~from ~~funds~~time to ~~Questar~~time ~~and~~based ~~earned~~on ~~interest~~the ~~income~~committee's ongoing evaluation of $0each plan's risk tolerance.5 ~~million~~The inEBC ~~2009,~~estimates $3an expected overall long-term rate of return on assets by weighting expected returns of each asset class by its targeted asset allocation percentage.2 ~~million~~Expected inreturn ~~2008~~estimates are developed from analysis of past performance and ~~$0.6~~forecasts ~~million~~of inlong-term ~~2007~~return expectations by third-parties.

Responsibility for individual security selection rests with each investment manager, who is subject to guidelines specified by the EBC. These guidelines are designed to ensure consistency with overall plan objectives.

The EBC sets performance objectives for each investment manager that are expected to be met over a three-year period or a complete market cycle, whichever is shorter. Performance and risk levels are regularly monitored to confirm policy compliance and that results are within expectations.

Pension-plan guidelines prohibit transactions between a fiduciary and parties in interest unless specifically provided for in ERISA. No restricted securities, such as letter stock or private placements, may be purchased for any investment fund. Questar securities may be considered for purchase at an investment manager's discretion, but within limitations prescribed by ERISA and

other laws. There was no direct investment in Questar shares for the periods disclosed. Use of derivative securities by any investment managers is prohibited except where the committee has given specific approval or where commingled funds are utilized that have previously adopted permitting guidelines.

The fair value measurement provision of accounting standards define fair value in applying generally accepted accounting principles as well as establishes a framework for measuring fair value and for making disclosures about fair-value measurements. Fair value measurement establishes a fair-value hierarchy. Level 1 inputs are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access at the measurement date Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset, either directly or indirectly. Level 3 inputs are unobservable inputs for an asset. The following is a description of the valuation methodologies used at December 31, 2010, to value pension and postretirement assets.

Bonds: Bonds are valued at the closing price reported on the active market on which each individual security is traded.

Mutual funds: Mutual funds are valued at the closing price reported on the active market on which each individual mutual fund is traded.

Commingled funds and bond trust fund: These investments are public investment vehicles valued using the Net Asset Value (NAV) of the fund. The NAV is based on the value of the underlying assets owned by the fund excluding transaction costs, and minus liabilities. No assets held by the Plan that were valued using an NAV methodology were subject to redemption restrictions on their valuation dates.

103-12 Investment Entities: 103-12 investment entities are valued based on the value of the underlying assets held by the entity minus any liabilities.

The following table sets forth by level, within the fair-value hierarchy, pension and postretirement benefit assets fair value.


	Investments at Fair Value
	December 31, 2010
	Level 1		Level 2	Level 3	Total
	(in millions)
Bonds	$ -	$5.2		$ -	$ 5.2
US equity mutual funds	2.6	-		-	2.6
Fixed income mutual funds	53.8	-		-	53.8
Commingled funds	-	-		-	-
Cash equivalent funds	-	-		3.5	3.5
US fixed income funds	-	-		45.8	45.8
US equity funds	-	-		160.9	160.9
Foreign equity funds	-	-		89.4	89.4
103-12 investment entities	-	-		37.1	37.1
Total	$56.4	$5.2		$336.7	$398.3


	Change in the Fair Value of Level 3 Investments
	2010
	Bond Trust Fund	Commingled Funds	103-12 Investment Entities	Total
	(in millions)
Balance at December 31, 2009	$ 6.9	$182.0	$54.8	$243.7
Purchases, sales, issuances and settlements, net	(7.0)	87.9	(22.8)	58.1
Realized gains and losses	0.3	1.6	3.7	5.6
Unrealized gains and losses	(0.2)	28.1	1.4	29.3
Balance at December 31, 2010	$ -	$299.6	$37.1	$336.7


	Investments at Fair Value
	December 31, 2009
	Level 1		Level 2	Level 3	Total
	(in millions)
Mutual funds	$72.1	$ -		$ -	$ 72.1
Bonds	23.7	14.6		-	38.3
Commingled funds	-	-		182.0	182.0
103-12 Investment entities	-	-		54.8	54.8
Bond trust fund	-	-		6.9	6.9
Other net current assets	0.3	-		-	0.3
Total	$96.1	$14.6		$243.7	$354.4


	Change in the Fair Value of Level 3 Investments
	2009
	Bond Trust Fund	Commingled Funds	103-12 Investment Entities	Total
	(in millions)
Balance at December 31, 2008	$ 34.1	$108.7	$32.3	$175.1
Purchases, sales, issuances and settlements, net	(28.0)	33.5	14.0	19.5
Realized gains and losses	-	24.1	(4.3)	19.8
Unrealized gains and losses	0.8	15.7	12.8	29.3
Balance at December 31, 2009	$ 6.9	$182.0	$54.8	$243.7

Pension-plan benefits are based on the employee's age at retirement, years of service and highest earnings in a consecutive 72 semimonthly pay period during the 10 years preceding retirement. Postretirement health-care and life insurance benefits are provided only to employees hired before January 1, 1997. The Company pays a portion of the costs of health-care benefits determined by an employee's years of service and generally limited to 170% of the 1992 contribution for employees who retired after January 1, 1993. The Company is amortizing its transition obligation over a 20-year period, which began in 1992.

The pension projected-benefit obligation and postretirement benefit accumulated benefit obligation were measured using a 5.75% discount rate at December 31, 2010, and a 6.50% discount rate at December 31, 2009. Plan assets reflect the fair value of assets at December 31. Questar does not expect any plan assets to be returned during 2011. The pension plan accumulated benefit obligation was $439.2 million at December 31, 2010. Plan obligations and fair value of plan assets are shown in the following table:


	Pension			Postretirement Benefits
	2010		2009	2010	2009
	(in millions)
*Change in benefit obligation*
Benefit obligation at January 1,	$486.6	$456.2		$76.3	$76.1
Service cost	9.3	9.9		0.6	0.6
Interest cost	28.7	29.6		4.4	4.6
Change in plan assumptions	70.5	0.9		4.5	-
Actuarial loss	(11.0)	8.3		1.1	0.7
Curtailment charge	(18.3)	-		(4.4)	-
Transfer to QEP due to Spinoff	(53.6)	-		-	-
Benefits paid	(19.8)	(18.3)		(4.6)	(5.7)
Benefit obligation at December 31,	492.4	486.6		77.9	76.3


*Change in plan assets*
Fair value of plan assets at January 1,	318.6	248.2	35.8	31.2
Actual gain on plan assets	43.7	65.2	4.1	7.3
Company contributions to the plan	42.6	23.5	3.1	3.0
Transfer to QEP due to Spinoff	(25.2)	-	-	-
Benefits paid	(19.8)	(18.3)	(4.6)	(5.7)
Fair value of plan assets at December 31,	359.9	318.6	38.4	35.8
Underfunded status (current and long-term)	($132.5)	($168.0)	($39.5)	($40.5)

The projected 2011 qualified pension funding is expected to be $44.0 million. Estimated benefit-plan payments for the five years following 2010 and the subsequent five years aggregated are as follows:


	Pension	Postretirement Benefits
	(in millions)
2011	$ 18.7	$ 4.7
2012	17.5	4.8
2013	19.0	4.9
2014	20.7	5.0
2015	22.5	5.2
2016 through 2020	149.9	27.0

The components of pension and postretirement benefits expense are as follows. The pension expense includes costs of both qualified and nonqualified pension plans and is not recast from the Spinoff:


	Pension			Postretirement Benefits
	Year Ended December 31,			Year Ended December 31,
	2010	2009	2008	2010	2009	2008
	(in millions)
Service cost	$9.3	$ 9.9	$ 9.6	$0.6	$0.7	$0.7
Interest cost	28.7	29.6	27.7	4.4	4.6	4.6
Expected return on plan assets	(24.4)	(25.3)	(26.7)	(2.4)	(2.2)	(3.5)
Prior service and other costs	1.1	1.2	1.2	1.9	1.9	1.9
Recognized net actuarial loss	8.2	6.6	4.4	0.6	0.9	-
Curtailment charges	2.4	-	-	0.3	-	-
Special-termination benefits	-	2.0	0.6	-	-	-
Accretion of regulatory liability	-	-	-	0.8	0.8	0.8
Periodic expense	$25.3	$24.0	$16.8	$6.2	$6.7	$4.5

Assumptions at January 1, used to calculate pension and postretirement benefits expense for the years, were as follows:


	2010 – 2^nd Half	2010 – 1^st Half	2009	2008
Discount rate	5.75%	6.50%	6.50%	6.50%
Rate of increase in compensation	4.0	4.0	4.0	4.0
Long-term return on assets	7.25	7.25	7.5	8.0
Health-care inflation rate	8.0 decreasing to 5.0% by 2013	8.0 decreasing to 5.0% by 2013	8.0 decreasing to 5.0% by 2011	7.0 decreasing to 5.0% in 2011

The 2011 estimated pension expense is $23.6 million. In 2011, $10.4 million of estimated actuarial loss and $1.1 million of prior service cost for the pension plan will be amortized from AOCI. The 2011 estimated post-retirement expense is $4.8 million excluding amortization of a regulatory liability. In 2011, $1.9 million of net transition obligation and $0.6 million of estimated actuarial loss for the postretirement benefit plans will be amortized from AOCI.

Service costs and interest costs are sensitive to changes in the health-care inflation rate. A 1% increase in the health-care inflation rate would increase the yearly service and interest costs by $0.1 million and the accumulated post-retirement benefit obligation by $1.0 million. A 1% decrease in the health-care inflation rate would decrease the yearly service costs and interest cost by $0.1 million and the accumulated post-retirement benefit obligation by $0.9 million.

Questar Pipeline and Questar Gas’s pension plan and postretirement medical and life insurance assets and benefit obligations cannot be determined because plan assets are not segregated or restricted to meet the companies’ pension and postretirement medical and life obligations. If the companies were to withdraw from the pension plan, the pension obligation for Questar Pipeline and Questar Gas employees would be retained by the pension plan.

Questar Pipeline’s pension expense was $4.1 million in 2010, $3.8 million in 2009 and $2.5 million in 2008. Questar Pipeline’s postretirement benefit expenses other than pensions were $0.8 million in 2010, $0.3 million in 2009 compared with earnings on investments exceeding costs by $0.3 million in 2008.

Questar Gas’s pension expense was $15.4 million in 2010, $13.3 million in 2009 and $9.3 million in 2008. Questar Gas’s postretirement benefit expenses other than pensions were $3.6 million in 2010, $3.8 million in 2009 and $2.4 million in 2008.

Employee Investment Plan (EIP)

The Employee Investment Plan (EIP) allows eligible employees to purchase shares of Questar common stock or other investments through payroll deduction at the current fair market value on the transaction date. The Company currently contributes an overall match of 100% of employees' pre-tax purchases up to a maximum of 6% of their qualifying earnings. The EIP trustee purchases Questar shares on the open market with cash received or Questar issues new shares. The Company recognizes expense equal to its yearly contributions. Questar's expense amounted to $5.9 million in 2010, $5.2 million in 2009, and $5.4 million in 2008.

Questar Pipeline’s EIP expense equaled its matching contribution of $1.2 million in 2010, $1.1 million in 2009 and $1.0 million in 2008. Questar Gas’s EIP expense equaled its matching contribution of $3.9 million in 2010, $3.3 million in 2009 and $3.7 million in 2008.

Note 13 - Operations by Line of Business

Questar's three complementary lines of business include Wexpro, which develops and produces natural gas on behalf of Questar Gas's customers; Questar Pipeline, which operates interstate natural gas pipelines and storage facilities; and Questar Gas, which provides retail natural gas distribution in Utah, Wyoming and Idaho. Line-of-business information is presented according to senior management's basis for evaluating performance and considering differences in the nature of products, services and regulation among other factors. The following is a summary of continuing operations by line of business for the three years ended December 31, 2010:


	Questar	Interco.		Questar		Questar
	Consol.	Trans.	Wexpro	Pipeline		Gas	Corp.
	(in millions)
*2010*
Revenues
From unaffiliated customers	$1,123.6	$ -	$24.6	$197.2	$901.8		$ -
From affiliated companies	-	(315.3)	240.2	74.0	1.1		-
Total Revenues	1,123.6	(315.3)	264.8	271.2	902.9		-
Operating expenses
Cost of sales	280.9	(313.7)	-	2.4	592.2		-
Operating and maintenance	175.8	(0.2)	20.2	41.4	114.4		-
General and administrative	108.5	(0.3)	20.5	41.0	49.9		(2.6)
Separation costs	11.5	-	-	-	-		11.5


Production and other taxes	50.6	-	26.8	9.0	14.1				0.7
Depreciation, depletion and amortization	153.4	-	62.1	47.4				43.7	0.2
Other operating expenses	-	(1.1)	1.1	-			-		-
Total Operating Expenses	780.7	(315.3)	130.7	141.2			814.3		9.8
Net gain (loss) from asset sales	0.4	-	(0.4)	0.8			-		-
Operating Income (Loss)	343.3	-	133.7	130.8			88.6		(9.8)
Interest and other income	11.7	(0.8)	3.2	0.4			6.7		2.2
Income from unconsolidated affiliate	3.8	-	-	3.8			-		-
Interest expense	(57.1)	0.8	(0.3)	(28.8)			(26.2)		(2.6)
Income taxes	(109.4)	-	(48.5)	(38.8)			(25.2)		3.1
Income (Loss) From Continuing Operations	$ 192.3	$ -	$ 88.1	$ 67.4			$ 43.9		($ 7.1)
Identifiable assets of continuing operations	$3,373.6	$ -	$667.1	$1,246.9		$1,406.8			$52.8
Goodwill	9.8	-	-	4.2		5.6			-
Investment in unconsolidated affiliate	27.9	-	-	27.9		-			-
Cash capital expenditures	320.3	-	90.6	121.0		108.6			0.1
Accrued capital expenditures	330.4	-	94.1	125.0		110.9			0.4
2009
Revenues
From unaffiliated customers	$1,109.9	$ -	$ 17.8	$ 173.2		$ 918.9			$ -
From affiliated companies	-	(298.3)	225.1	72.2		1.0			-
Total Revenues	1,109.9	(298.3)	242.9	245.4		919.9			-
Operating expenses
Cost of sales	331.4	(296.8)	-	1.6		626.6			-
Operating and maintenance	167.6	(0.1)	21.2	40.1		106.4			-
General and administrative	93.4	(0.4)	17.0	36.1		42.9			(2.2)
Production and other taxes	42.4	-	20.0	8.6		13.3			0.5
Depreciation, depletion and amortization	147.1	-	58.8	44.3		43.8			0.2
Other operating expenses	-	(1.0)	1.0	-		-			-
Total Operating Expenses	781.9	(298.3)	118.0	130.7		833.0			(1.5)
Net gain (loss) from asset sales	0.2	-	(0.3)	0.5		-			-
Operating Income	328.2	-	124.6	115.2		86.9			1.5
Interest and other income	12.5	(0.9)	3.2	2.5		7.6			0.1
Income from unconsolidated affiliate	3.8	-	-	3.8		-			-
Interest expense	(59.6)	0.9	(0.9)	(29.5)		(28.5)			(1.6)
Income taxes	(104.4)	-	(46.2)	(33.8)		(24.4)			-
Income From Continuing Operations	$ 180.5	$ -	$ 80.7	$ 58.2		$ 41.6			$ -
Identifiable assets of continuing operations	$3,189.7	$ -	$621.5	$1,165.4		$1,335.2			$67.6
Goodwill	9.8	-	-	4.2		5.6			-
Investment in unconsolidated affiliate	28.1	-	-	28.1		-			-
Cash capital expenditures	299.8	-	116.2	100.8		82.6			0.2
Accrued capital expenditures	292.4	-	110.1	94.5		87.6			0.2
2008
Revenues
From unaffiliated customers	$1,201.9	$ -	$31.1	$176.6		$ 994.2				$ -
From affiliated companies	-	(288.0)	209.9	72.0		6.1				-
Total Revenues	1,201.9	(288.0)	241.0	248.6		1,000.3				-
Operating expenses
Cost of sales	457.4	(281.3)	-	1.8		736.9			-


Operating and maintenance	147.5	(0.2)	23.5	37.1	87.1	-
General and administrative	89.1	(0.4)	13.7	36.8	38.7	0.3
Production and other taxes	58.0	-	37.7	7.8	11.9	0.6
Depreciation, depletion and amortization	132.9	-	48.5	42.7	41.5	0.2
Other operating expenses	14.0	(6.1)	6.1	14.0	-	-
Total Operating Expenses	898.9	(288.0)	129.5	140.2	916.1	1.1
Net gain (loss) from asset sales	4.3	-	(0.2)	4.5	-	-
Operating Income (Loss)	307.3	-	111.3	112.9	84.2	(1.1)
Interest and other income	22.6	(5.9)	6.6	10.6	5.2	6.1
Income from unconsolidated affiliate	0.6	-	-	0.6	-	-
Interest expense	(63.9)	5.9	(2.7)	(32.7)	(25.2)	(9.2)
Income taxes	(94.4)	-	(41.3)	(33.4)	(24.0)	4.3
Income From Continuing Operations	$ 172.2	$ -	$ 73.9	$ 58.0	$ 40.2	$ 0.1
Identifiable assets of continuing operations	$3,115.7	$ -	$583.3	$1,115.1	$1,301.7	$115.6
Goodwill	9.8	-	-	4.2	5.6	-
Investment in unconsolidated affiliate	27.6	-	-	27.6	-	-
Cash capital expenditures	349.0	-	143.8	78.3	126.3	0.6
Accrued capital expenditures	358.3	-	144.8	90.7	122.2	0.6

Note 14 - Related-Party Transactions

Questar Pipeline

Questar Pipeline receives a substantial portion of its revenues from Questar Gas. Revenues received from Questar Gas were $73.9 million in 2010, $72.1 million in 2009 and $71.9 million in 2008.

Questar Gas provided administrative, technical, accounting, legal, data-processing and communication services plus regulatory support to Questar Pipeline at its cost of $20.2 million in 2010, $20.4 million in 2009 and $21.5 million in 2008. The majority of these costs are allocated and included in operating and maintenance expenses. The allocation methods are based on the specific nature of the charges. Management believes that the allocation methods are reasonable.

Questar performs certain administrative functions for Questar Pipeline. The company was charged for its allocated portion of these services that totaled $7.0 million in 2010, $4.1 million in 2009 and $2.7 million in 2008. These costs are included in operating and maintenance expenses and are allocated based on each affiliate’s proportional share of revenues, net of gas costs; property, plant and equipment; and payroll. Management believes that the allocation method is reasonable.

Questar Pipeline has a lease with an affiliate for space in an office building located in Salt Lake City, Utah. Rent expense was $0.8 million in 2010, 2009 and 2008. The annual lease payment will be $0.9 million in 2011.

Questar Pipeline borrowed cash from Questar and incurred interest expense of $0.3 million in 2008. Questar Pipeline loaned excess funds to Questar and earned interest income of $0.3 million in 2010, $0.5 million in 2009 and $3.2 million in 2008.

Questar Gas

Questar Gas provided administrative, technical, accounting, legal, data-processing and communication services to Questar and other affiliated companies and charged $25.9 million in 2010, $25.6 million in 2009 and $25.0 million in 2008. The majority of these costs are allocated. The allocation methods are based on the specific nature of the charges. Management believes that the allocation methods are reasonable.

Questar Gas has reserved transportation capacity on Questar Pipeline for 901 Mdth per day. Questar Gas periodically releases excess capacity and receives a credit from Questar Pipeline for the released capacity revenues and a portion of Questar Pipeline’s interruptible transportation revenues. Questar Gas paid for transportation, storage and processing services provided by Questar Pipeline and a subsidiary amounting to $73.5 million in 2010, $71.8 million in 2009 and $71.5 million in 2008, which included demand charges. The costs of these services were included in cost of natural gas sold.

Under the terms of the Wexpro Agreement, the Company receives a portion of Wexpro’s income from oil operations after recovery of Wexpro’s operating expenses and a return on investment. This amount, which is included in revenues and reduces amounts billed to gas distribution customers, was $1.1 million in 2010, $1.0 million in 2009 and $6.1 million in 2008. The

amounts that Questar Gas paid Wexpro for the operation of cost-of-service gas properties were $240.0 million in 2010, $225.0 million in 2009 and $209.0 million in 2008. Questar Gas reports these amounts in cost of natural gas sold.

Questar Gas has a lease with an affiliate for space in an office building located in Salt Lake City, Utah. Rent expense was $2.5 million in 2010, 2009 and 2008. The annual lease payment will be $1.1 million in 2011.

Questar charged Questar Gas for certain administrative functions amounting to $13.2 million in 2010, $8.4 million in 2009 and $5.7 million in 2008. These costs are included in operating and maintenance expenses and are allocated based on each affiliated company’s proportional share of revenues less product costs; property, plant and equipment; and labor costs. Management believes that the allocation method is reasonable.

Questar Gas borrowed cash from Questar and incurred interest expense of $0.4 million in 2010, $0.3 million in 2009 and $2.0 million in 2008. Questar Gas loaned excess funds to Questar and earned interest income of $0.1 million in 2009.

Note 15 - Quarterly Financial Information (Unaudited)

Following is a summary of unaudited quarterly financial information:


	First	Second	Third	Fourth
	Quarter	Quarter	Quarter	Quarter	Year
	(in millions, except per-share amounts)
*2010*
Revenues	$414.6	$201.1	$145.2	$362.7	$1,123.6
Operating income	124.8	56.3	54.4	107.8	343.3
Income from continuing operations	72.2	28.7	27.7	63.7	192.3
Discontinued operations, net of income taxes	78.1	68.8	-	-	146.9
Net income attributable to Questar	150.3	97.5	27.7	63.7	339.2
Per share information attributable to Questar
Basic EPS from continuing operations	$0.41	$0.17	$0.15	$0.36	$1.09
Basic EPS attributable to Questar	0.86	0.56	0.15	0.36	1.93
Diluted EPS from continuing operations	0.41	0.16	0.15	0.36	1.08
Diluted EPS attributable to Questar	0.85	0.55	0.15	0.36	1.91
2009
Revenues	$449.4	$185.6	$130.9	$344.0	$1,109.9
Operating income	115.4	61.5	51.4	99.9	328.2
Income from continuing operations	65.3	33.0	26.8	55.4	180.5
Discontinued operations, net of income taxes	1.9	44.9	71.4	94.6	212.8
Net income attributable to Questar	67.2	77.9	98.2	150.0	393.3
Per share information attributable to Questar
Basic EPS from continuing operations	$ 0.38	$ 0.18	$ 0.16	$ 0.31	$ 1.03
Basic EPS attributable to Questar	0.39	0.44	0.57	0.86	2.26
Diluted EPS from continuing operations	0.37	0.18	0.16	0.31	1.02
Diluted EPS attributable to Questar	0.38	0.44	0.56	0.85	2.23

Note 16 - Supplemental Gas and Oil Information (Unaudited)

The Company is making the following supplemental disclosures of gas and oil producing activities, in accordance with accounting standards for Extractive Activities - Oil and Gas as amended by Oil and Gas Reserve Estimation and Disclosures standards and SEC Regulation S-X.

The Company uses the successful efforts accounting method for its cost-of-service gas and oil properties.

Cost-of-Service Activities

The following information is provided with respect to cost-of-service gas and oil properties managed and developed by Wexpro and governed by the Wexpro Agreement. Information on the standardized measure of future net cash flows has not been included for cost-of-service activities because the operations of and return on investment for such properties are regulated by the Wexpro Agreement.

Capitalized Costs of Cost-of-Service Activities

Capitalized costs for cost-of-service gas and oil properties net of the related accumulated depreciation, depletion and amortization are shown below.


	December 31,
	2010	2009
	(in millions)
Wexpro	$621.3	$593.9
Questar Gas	9.4	10.4
Total capitalized costs of cost-of-service activities	$630.7	$604.3

Costs Incurred for Cost-of-Service Activities

Total costs incurred by Wexpro for cost-of-service gas and oil-producing activities were $87.0 million in 2010, $113.2 million in 2009 and $148.0 million in 2008. The costs incurred to develop proved undeveloped reserves were $8.5 million in 2010, $27.7 million in 2009 and $45.7 million in 2008.

Results of Operation of Cost-of-Service Activities

Following are the results of operation of cost-of-service gas and oil-development activities, before corporate overhead and interest expenses:


	Year Ended December 31,
	2010	2009	2008
	(in millions)
Revenues
From unaffiliated customers	$ 24.6	$ 17.8	$ 31.1
From affiliated company(a)	240.2	225.1	209.9
Total revenues	264.8	242.9	241.0
Production costs	48.1	42.1	67.3
Depreciation, depletion and amortization	62.1	58.8	48.5
Total expenses	110.2	100.9	115.8
Revenues less expenses	154.6	142.0	125.2
Income taxes	(54.9)	(51.7)	(44.9)
Results of operation for cost-of-service producing activities excluding corporate overhead and interest expenses	$ 99.7	$ 90.3	$ 80.3

(a) Primarily represents revenues received from Questar Gas pursuant to the Wexpro Agreement. Revenues include reimbursement of general and administrative expenses amounting to $19.8 million in 2010, $16.7 million in 2009 and $13.3 million in 2008.

Estimated Quantities of Cost-of-Service Proved Gas and Oil Reserves

Estimates of cost-of-service proved gas and oil reserves have been prepared in accordance with professional engineering standards and the Company's established internal controls. The estimates set forth below were prepared by Wexpro's reservoir engineers, individuals who possess professional qualifications and demonstrated competency in reserves estimation and evaluation.

Wexpro has limited proved undeveloped reserves to acreage in areas directly offsetting a proved developed well. All of Wexpro’s proved undeveloped locations are scheduled to be developed within five years from the date such locations were initially disclosed as proved undeveloped reserves. During 2010, Wexpro reevaluated its proved undeveloped reserves in light of its five-

year development plan, resulting in a net addition to proved undeveloped reserves of 104.1 Bcfe. The initial application of the amendments to accounting standards for reserve disclosures did not have a significant effect on the Company’s reported reserve estimates.


				Natural Gas
	Natural Gas	Oil and NGL		Equivalents
	(Bcf)	(MMbbl)		(Bcfe)
Proved Reserves
Balance at December 31, 2007	615.9	4.3		641.9
Revisions-
Previous estimates	(19.6)	(0.1)		(20.2)
Pinedale increased-density	65.1	0.5		68.2
Extensions and discoveries	31.6	0.2		32.6
Production	(46.1)	(0.4)		(48.6)
Balance at December 31, 2008	646.9	4.5		673.9
Revisions - previous estimates	(27.3)	(0.2)		(28.3)
Extensions and discoveries	78.0	0.6		81.4
Production	(48.2)	(0.4)		(50.7)
Balance at December 31, 2009	649.4	4.5		676.3
Revisions - previous estimates	(202.3)	(1.3)		(210.1)
Extensions and discoveries	341.5	2.1		354.2
Production	(50.2)	(0.4)		(52.9)
Balance at December 31, 2010	738.4	4.9		767.5
--
Proved Developed Reserves
Balance at December 31, 2007	439.4	2.9	456.9
Balance at December 31, 2008	471.4	3.1	489.9
Balance at December 31, 2009	477.1	3.1	495.5
Balance at December 31, 2010	463.8	3.2	482.6
--
Proved Undeveloped Reserves
Balance at December 31, 2007	176.5	1.4	185.0
Balance at December 31, 2008	175.5	1.4	184.0
Balance at December 31, 2009	172.3	1.4	180.8
Balance at December 31, 2010	274.6	1.7	284.9

Financial Statement Schedule:

QUESTAR PIPELINE COMPANY
QUESTAR CORPORATION
Schedule of Valuation and Qualifying Accounts
				Column D	~~Column D~~
		Column C	~~Column C~~	Deductions for	~~Deductions for~~
Column A Description	Column B Beginning Balance	Amounts charged to expense	~~Amounts charged to expense~~	accounts written off and other	~~accounts written off and other~~	Column E Ending Balance	~~Column E Ending Balance~~
	(in millions)				<

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