NORTHWEST NATURAL GAS CO
For the period ended Jun 30, 2026. Filed Aug 5, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 5, 2026
NWN$51.75-0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0001733998-26-000087
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-05.
0001733998-26-000127
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 296 previous paragraphs and 331 current paragraphs.
210 unchanged; 64 reworded; 40 added; 21 removed; 1 previous and 17 current paragraphs rearranged.
Tables are not compared: 26 previous and 30 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (40)
Current report
•Consolidated net income increased by $3.1 million or $0.07 per diluted share.
Current report
SIX MONTHS ENDED JUNE 30, 2026 COMPARED TO JUNE 30, 2025.
Current report
•Consolidated net income increased by $12.7 million or $0.22 per diluted share.
Current report
•Consolidated net income decreased by $1.0 million.
Current report
•Net income decreased as higher margin from new rates in Oregon, which were effective October 31, 2025, were more than offset by higher operations and maintenance expenses and continued investment in the system resulting in higher interest and depreciation expenses.
Current report
SIX MONTHS ENDED JUNE 30, 2026 COMPARED TO JUNE 30, 2025.
Current report
•$3.5 million increase in operations and maintenance expenses due primarily to higher contract labor costs and payroll and benefit costs;
Current report
•$6.2 million increase in operations and maintenance expenses due primarily to an increase in regulatory deferral amortization, payroll and benefit costs, and contract labor costs.
Current report
•$0.6 million decrease in depreciation expense due to the deferral of depreciation on investments allowed by Texas House Bill 4384. Benefits to net income were partially offset by
Current report
•$0.9 million increase in operations and maintenance expenses due primarily to higher payroll and benefit costs and the acquisition of Pines.
Current report
For the three months ended June 30, 2026, total SiEnergy volumes sold and delivered decreased by 1.2 million therms compared to the same period in 2025 primarily due to lower usage from transportation customers.
Current report
•$0.9 million decrease in depreciation expense due to the deferral of depreciation on investments allowed by Texas House Bill 4384. Benefits to net income were partially offset by
Current report
•$2.0 million increase in operations and maintenance expenses due primarily to higher payroll and benefit costs and the acquisition of Pines.
Current report
THREE MONTHS ENDED JUNE 30, 2026 COMPARED TO JUNE 30, 2025. The primary factors contributing to the $0.6 million decrease in net income were as follows:
Current report
SIX MONTHS ENDED JUNE 30, 2026 COMPARED TO JUNE 30, 2025. The primary factors contributing to the $0.8 million decrease in net income were as follows:
Current report
•$3.1 million increase in operations and maintenance expenses primarily due to higher payroll and benefit costs, software and technology costs, and acquisitions; partially offset by
Current report
•$1.1 million decrease in income tax benefit due to lower pre-tax losses.
Current report
•$2.1 million decrease in income tax benefit due to lower pre-tax losses; and
Current report
WASHINGTON. On July 29, 2026, the WUTC issued a final order in the Rate Case concluding NW Natural's multi-year rate case filed in August 2025 (Order). The Order provides for an annual revenue requirement across three years, beginning on August 1, 2026.
Current report
New rates became effective on August 1, 2026.
Current report
(b)The multi-year rate order specifies a rate of return of 7.15% (Year 1), 7.18% (Year 2), 7.22% (Year 3).
Current report
MULTI-YEAR RATEMAKING. The OPUC is currently conducting a rulemaking to establish a multi-year rate plan framework for Oregon utilities. In July 2026, the OPUC completed the first phase of the proceeding, which provides a framework to inform the rules to be developed in a second phase, including a five-year rate plan term, among other considerations. The rulemaking is currently expected to conclude by the end of 2027, with NW Natural's first rate case under any adopted multi-year rate plan framework currently anticipated to be filed in 2028, with rates effective in 2029.
Current report
On June 29, 2026, NW Natural, OPUC Staff, and the Alliance of Western Energy Consumers filed a Partial Multi-Party Stipulation resolving substantially all issues in the proceeding. The stipulation supports an annual revenue requirement increase of approximately $13.0 million, subject to completion of capital projects identified as being placed in service prior to the rate effective date. A limited number of issues remain contested, with no material impact expected to the overall revenue requirement. A Commission order is expected later this year, with new rates anticipated to take effect on October 31, 2026.
Current report
Regulatory Proceeding Updates
Current report
Regulatory Proceeding Updates
Current report
In June 2026, Washington signed a carbon market linkage agreement with California and Québec which states an intent to link the CCA carbon market with the carbon markets of the latter two jurisdictions. The Washington Department of Ecology is currently in a rulemaking process to amend CCA program and greenhouse gas reporting rules to facilitate linkage between the three jurisdictions.
Current report
•$31.2 million increase in cash used by accounts payable;
Current report
•$21.4 million increase in cash used by decoupling mechanism; and
Current report
•$13.2 million increase in cash used by deferred gas costs; partially offset by
Current report
•$17.0 million increase in cash provided by changes in regulatory accounts.
Current report
•$21.4 million increase in cash used by decoupling mechanism;
Current report
•$19.1 million increase in cash used by accounts payable;
Current report
•$13.9 million increase in cash used for inventory; and
Current report
•$13.2 million increase in cash used by deferred gas costs; partially offset by
Current report
•$17.7 million increase in cash provided by changes in regulatory accounts.
Current report
The following table summarizes NWN Water's current credit ratings:
Current report
(a) Proceeds were used to support working capital needs and for general corporate purposes including repayment of debt.
Current report
(b) Proceeds were used to repay the existing indebtedness under NWN Water's Credit Agreement; any remaining proceeds were used for working capital needs and for general corporate purposes.
Current report
In June 2026, NW Holdings entered into a Note Purchase Agreement between NW Holdings and the institutional investors named as purchasers therein. The Note Purchase Agreement provided for the issuance of (i) $10.0 million in aggregate principal amount of its 5.35% Senior Notes, Series F, due August 5, 2031 (the Series F Notes) and (ii) $60.0 million in aggregate principal amount of its 5.83% Senior Notes, Series G, due August 5, 2036 (the Series G Notes) in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended. The Series F Notes and Series G Notes were issued and sold on August 5, 2026.
Current report
On June 10, 2026, NWN Water fully repaid the $55.0 million outstanding under the Credit Agreement dated as of June 10, 2021, among NWN Water Company, LLC, Northwest Natural Holding Company, as Guarantor, and Bank of America, N.A., upon its maturity.
Removed paragraphs (21)
Previous report
•Consolidated net income increased by $9.6 million or $0.15 per diluted share.
Previous report
•$3.5 million decrease in income tax expense primarily due to lower non-deductible executive compensation and higher AFUDC equity income; partially offset by
Previous report
•$2.8 million increase in operations and maintenance expenses due primarily to an increase in employee related expenses, technology, insurance and professional services expenses.
Previous report
•$1.1 million increase in operations and maintenance expenses due primarily to higher payroll and benefit costs and an increase in system maintenance expenses.
Previous report
THREE MONTHS ENDED MARCH 31, 2026 COMPARED TO MARCH 31, 2025. The primary factors contributing to the $0.3 million decrease in net income were as follows:
Previous report
Supply chains and lead times have generally returned to normalized levels. For critical equipment and materials, we do extensive planning and make purchases in advance or maintain the appropriate amount of inventory to support our businesses.
Previous report
WASHINGTON. On October 21, 2021, the WUTC issued an order concluding NW Natural's general rate case filed in December 2020 (WUTC Order). The WUTC Order provides for an annual revenue requirement increase over two years, consisting of a 6.4% or $5.0 million increase in the first year beginning November 1, 2021 (Year One), and a 3.5% or $3.0 million increase in the second year beginning November 1, 2022 (Year Two). The increase is based on the following assumptions:
Previous report
•Cost of capital of 6.814%; and
Previous report
•Average rate base of $194.7 million, an increase of $20.9 million since the last rate case for capital expenditures already expended at the time of filing, with an additional expected $31.2 million increase in Year One, and an additional expected $21.4 million increase in Year Two, with the increases in Year One and Year Two relating to expected capital expenditures in those years.
Previous report
The WUTC Order does not specify the underlying inputs to the cost of capital, including capital structure and return on equity. New rates authorized by the WUTC Order were effective November 1, 2021. In September 2023, NW Natural received a letter of compliance from the WUTC acknowledging that the Year Two rates are no longer subject to review and refund.
Previous report
2025 WASHINGTON RATE CASE. On August 29, 2025, NW Natural filed a request for a general rate increase with the WUTC under Washington's multi-year rate plan statute.
Previous report
This multi-year rate plan filing includes requested increases in the annual revenue requirement over three years, consisting of a $25.6 million revenue increase in the first year beginning August 1, 2026 (Year 1), an $8.6 million revenue increase in the second year beginning August 1, 2027 (Year 2) and an $8.3 million revenue increase in the third year beginning August 1, 2028 (Year 3).
Previous report
On March 23, 2026, NW Natural filed a settlement with the WUTC that addressed all issues but one in the Rate Case (Stipulation). The Stipulation provides for a $20.1 million revenue increase in Year 1, a $7.7 million revenue increase in Year 2 and an $8.7 million revenue increase in Year 3. The revenue requirement for Year 1 includes the addition to rate base expected to be placed in-service by the start of Rate Year 1. Rate Years 2 and 3 include additions to rate base during the rate years. Plant placed into service after March 31, 2025 is subject to review, adjustment and refund according to actual costs incurred.
Previous report
The Stipulation does not address NW Natural's line extension allowance policy, which is subject to the ongoing regulatory litigation process. The Stipulation is subject to the review and approval of the WUTC. For new rates to be effective, the WUTC must issue an order, which may approve or deny the terms of the Stipulation or be issued under the WUTC's own terms. NW Natural expects new rates to take effect on August 1, 2026.
Previous report
•$27.3 million increase in cash paid for inventories;
Previous report
•$25.2 million decrease in accounts payable; and
Previous report
•$14.4 million decrease in decoupling mechanism.
Previous report
The decrease in cash provided by operating activities at NW Holdings was primarily driven by the NW Natural factors discussed above.
Previous report
All lenders under the SiEnergy credit agreement are major financial institutions with committed balances and investment grade credit ratings as of March 31, 2026 as follows:
Previous report
There were no new debt issuances in the first quarter of 2026 at either NW Natural or NW Holdings.
Previous report
There were no significant debt retirements in the first quarter of 2026 at either NW Natural or NW Holdings.
Reworded paragraphs (64)
Previous wording
The following is management’s assessment of NW Holdings' and NW Natural's financial condition, including the principal factors that affect results of operations. The discussion refers to the consolidated results for the three months ended March 31, 2026 and 2025 of NW Holdings, the substantial majority of which consist of the operating results of NW Natural. When significant activity exists at NW Holdings that does not exist at NW Natural, additional disclosure has been provided. References in this discussion to "Notes" are to the Notes to Unaudited Consolidated Financial Statements in this report. A significant portion of the business results are seasonal in nature, and, as such, the results of operations for the three month period is not necessarily indicative of expected fiscal year results. Therefore, this discussion should be read in conjunction with NW Holdings' and NW Natural's 2025 Annual Report on Form 10-K, as applicable (2025 Form 10-K).
Current wording
The following is management’s assessment of NW Holdings' and NW Natural's financial condition, including the principal factors that affect results of operations. The discussion refers to the consolidated results for the three and six months ended June 30, 2026 and 2025 of NW Holdings, the substantial majority of which consist of the operating results of NW Natural. When significant activity exists at NW Holdings that does not exist at NW Natural, additional disclosure has been provided. References in this discussion to "Notes" are to the Notes to Unaudited Consolidated Financial Statements in this report. A significant portion of the business results are seasonal in nature, and, as such, the results of operations for the three month period are not necessarily indicative of expected fiscal year results. Therefore, this discussion should be read in conjunction with NW Holdings' and NW Natural's 2025 Annual Report on Form 10-K, as applicable (2025 Form 10-K).
Previous wording
Other activities for NW Holdings, aggregated and reported as Other, include NWN Renewables and its non-regulated renewable natural gas activities; and NNG Financial's investment in Kelso-Beaver Pipeline (KB Pipeline), which is accounted for under the equity method. See Note 4 for further discussion of our business segments and other, as well as our direct and indirect wholly-owned subsidiaries.
Current wording
Other activities for NW Holdings, aggregated and reported as Other, include NWN Renewables and its non-regulated renewable natural gas activities. See Note 4 for further discussion of our business segments and other, as well as our direct and indirect wholly-owned subsidiaries.
Previous wording
Key quarter-to-date financial highlights for NW Holdings include:
Current wording
Key financial highlights for NW Holdings include:
Previous wording
•The increase in net income is primarily driven by new NW Natural rates in Oregon, effective October 31, 2025, organic growth at SiEnergy, and the acquisition of Pines in June 2025. These benefits were partially offset by increases in interest expense and depreciation expense.
Current wording
•The increase in net income was primarily driven by new NW Natural rates in Oregon, effective October 31, 2025, organic customer growth, the acquisition of Pines in June 2025, and the implementation of House Bill 4384 in July 2025. These benefits were partially offset by increases from continued investment in our utility systems that resulted in higher interest and depreciation expenses.
Previous wording
•Customer growth was 2.8%, driven by organic growth at SiEnergy and NWN Water, and the Pines and Inline acquisitions.
Current wording
•Customer growth was 1.9%, driven by organic growth at SiEnergy and NWN Water, and the Pines and Inline acquisitions.
Previous wording
•Capital expenditures were $113.7 million, as we continue to invest in our utility systems to support safety and reliability.
Current wording
•Capital expenditures were $235.0 million, as we continue to invest in our utility systems to support safety and reliability.
Previous wording
Key quarter-to-date financial highlights for NW Natural include:
Current wording
Key financial highlights for NW Natural include:
Previous wording
•Capital expenditures were $79.6 million, due primarily to continued investments to support the safety and reliability of NW Natural.
Current wording
•Capital expenditures were $87.0 million, due primarily to continued investments to support the safety and reliability of NW Natural.
Previous wording
•Consolidated net income increased by $2.7 million and was primarily driven by new rates in Oregon, effective October 31, 2025. This benefit was partially offset by increases in depreciation expense, interest expense and operations and maintenance expenses.
Current wording
•Consolidated net income increased by $1.7 million and was primarily driven by new rates for Oregon customers, effective October 31, 2025. This benefit was partially offset by increases from continued investment in the system that resulted in higher interest and depreciation expenses, and higher operations and maintenance expenses.
Previous wording
THREE MONTHS ENDED MARCH 31, 2026 COMPARED TO MARCH 31, 2025. The primary factors contributing to the $2.7 million increase in NW Natural net income were as follows:
Current wording
THREE MONTHS ENDED JUNE 30, 2026 COMPARED TO JUNE 30, 2025. The primary factors contributing to the $1.0 million decrease in NW Natural net income were as follows:
Previous wording
•$3.4 million increase in depreciation expense due to additional capital investments; and
Current wording
•$3.0 million increase in depreciation expense due to additional capital investments; and
Previous wording
•$5.8 million increase in margin driven by new rates on October 31, 2025 for Oregon customers. See the NW Natural margin table below for additional margin detail;
Current wording
•$7.4 million increase in margin driven by new rates on October 31, 2025 for Oregon customers. See the NW Natural margin table below for additional margin detail.
Previous wording
For the three months ended March 31, 2026, total NW Natural volumes sold and delivered decreased by 42.7 million therms compared to the same period in 2025 primarily due to lower usage from residential and commercial sales customers.
Current wording
For the three months ended June 30, 2026, total NW Natural volumes sold and delivered decreased 7.7 million therms compared to the same period in 2025, primarily due to lower usage from residential and commercial sales customers.
Previous wording
THREE MONTHS ENDED MARCH 31, 2026 COMPARED TO MARCH 31, 2025. The primary factors contributing to the $3.6 million increase in SiEnergy net income were as follows:
Current wording
THREE MONTHS ENDED JUNE 30, 2026 COMPARED TO JUNE 30, 2025. The primary factors contributing to the $1.0 million increase in SiEnergy net income were as follows:
Previous wording
•$4.9 million increase in margin driven primarily by organic growth and the acquisition of Pines Holdings, LLC (Pines) on June 2, 2025. See the SiEnergy margin table below for additional margin detail. Benefits to net income were partially offset by
Current wording
•$1.6 million increase in margin driven primarily by organic customer growth and the acquisition of Pines Holdings, LLC (Pines) on June 2, 2025. See the SiEnergy margin table below for additional margin detail; and
Previous wording
For the three months ended March 31, 2026, total SiEnergy volumes sold and delivered increased by 4.1 million therms compared to the same period in 2025 primarily due to organic growth and the Pines acquisition.
Current wording
For the six months ended June 30, 2026, total SiEnergy volumes sold and delivered increased by 2.9 million therms compared to the same period in 2025 primarily due to organic growth and the Pines acquisition.
Previous wording
•$1.3 million increase in operations and maintenance expenses primarily due to higher payroll and benefit costs; partially offset by
Current wording
•$1.8 million increase in operations and maintenance expenses primarily due to higher payroll and benefit costs, software and technology costs, and acquisitions; partially offset by
Previous wording
•$1.1 million increase in operating revenues primarily driven by organic customer growth, the Inline acquisition in the fourth quarter of 2025, and new rates at our largest utility in Arizona.
Current wording
•$0.8 million increase in operating revenues primarily driven by regulated and unregulated rate increases.
Previous wording
THREE MONTHS ENDED MARCH 31, 2026 COMPARED TO MARCH 31, 2025. The primary factors contributing to the $3.5 million, decrease in net loss were as follows:
Current wording
THREE MONTHS ENDED JUNE 30, 2026 COMPARED TO JUNE 30, 2025. The primary factors contributing to the $3.6 million decrease in net loss were as follows:
Previous wording
•$5.8 million decrease in operations and maintenance expenses due primarily to lower business development and acquisition costs; partially offset by
Current wording
•$4.9 million decrease in operations and maintenance expenses due primarily to lower business development and transaction expenses; partially offset by
Previous wording
•$1.7 million increase in interest expense due primarily to higher long-term debt at NW Holdings from Junior Subordinated Debentures issued in March 2025 and higher commercial paper balances.
Current wording
•$1.9 million increase in interest expense due primarily to higher long-term debt at NW Holdings from Junior Subordinated Debentures issued in March 2025.
Previous wording
CURRENT ECONOMIC AND POLITICAL CONDITIONS. Current economic and political conditions are reviewed and monitored on an ongoing basis for potential impacts to our business. This includes changes in inflation and interest rates, tariffs or trade restrictions, geopolitical conflicts and uncertainty, supply chain disruptions, and other regulatory, physical or cyber related risks impacting our business. Further, we review U.S. federal, state and local policies, executive orders, rules, initiatives and other changes to fiscal, tax, regulation, environmental, climate and other federal policies that may impact our businesses, all of which could impact the conditions in which we operate.
Current wording
CURRENT ECONOMIC AND POLITICAL CONDITIONS. Current economic and political conditions are reviewed and monitored on an ongoing basis for potential impacts to our business. This includes changes in inflation and interest rates, tariffs or trade restrictions, geopolitical conflicts and uncertainty, supply chain disruptions, and other regulatory, physical, artificial intelligence, or cyber related risks impacting our business. Further, we review U.S. federal, state and local policies, executive orders, rules, initiatives and other changes to fiscal, tax, regulation, environmental, climate and other federal policies that may impact our businesses, all of which could impact the conditions in which we operate.
Previous wording
We continue to evaluate the effect of additional tariffs on our businesses, specifically natural gas imports at our gas utilities. SiEnergy, located in Texas, does not import natural gas. NW Natural imported approximately 60% of our natural gas from Canada in 2025. NW Natural's third-party asset manager imports the majority of NW Natural's gas each year and is not subject to tariffs because they are a United States-Mexico-Canada Agreement (USMCA) certified importer of record. NW Natural is a USMCA certified importer. We’ve evaluated tariffs across our businesses and at this time, we do not anticipate the currently implemented tariffs to have a material impact on our businesses. We continue to evaluate the potential impact of efforts to impose new or modified tariffs and the legal proceedings that may impact them.
Current wording
We continue to evaluate the effect of additional tariffs on our businesses, specifically natural gas imports at our gas utilities. SiEnergy, located in Texas, does not import natural gas. NW Natural imported approximately 60% of our natural gas from Canada in 2025. NW Natural's third-party asset manager imports the majority of NW Natural's gas each year and is not subject to tariffs because they are a United States-Mexico-Canada Agreement (USMCA) certified importer of record. NW Natural is a USMCA certified importer. We have evaluated tariffs across our businesses and at this time, we do not anticipate the currently implemented tariffs to have a material impact on our businesses. We continue to evaluate the potential impact of efforts to impose new or modified tariffs and the legal proceedings that may impact them.
Previous wording
NW Natural's natural gas distribution business is subject to regulation by the OPUC and WUTC with respect to, among other matters, rates and terms of service, systems of accounts, and issuances of securities by NW Natural. At March 31, 2026, approximately 88% of NW Natural customers were located in Oregon, with the remaining 12% in Washington. Earnings and cash flows from natural gas distribution operations are largely determined by rates set in general rate cases and other proceedings in Oregon and Washington. They are also affected by weather, the local economies in Oregon and Washington, the pace of customer growth in the residential, commercial, and industrial markets, legislation and policy, customer preferences and NW Natural's ability to remain price competitive, control expenses, and obtain reasonable and timely regulatory recovery of its natural gas distribution-related costs, including operating expenses and investment costs in plant and other regulatory assets. NW Natural continuously evaluates the need for rate cases in its jurisdictions. See "Most Recent Completed Rate Cases" below.
Current wording
NW Natural's natural gas distribution business is subject to regulation by the OPUC and WUTC with respect to, among other matters, rates and terms of service, systems of accounts, and issuances of securities by NW Natural. At June 30, 2026, approximately 88% of NW Natural customers were located in Oregon, with the remaining 12% in Washington. Earnings and cash flows from natural gas distribution operations are largely determined by rates set in general rate cases and other proceedings in Oregon and Washington. They are also affected by weather, the local economies in Oregon and Washington, the pace of customer growth in the residential, commercial, and industrial markets, legislation and policy, customer preferences and NW Natural's ability to remain price competitive, control expenses, and obtain reasonable and timely regulatory recovery of its natural gas distribution-related costs, including operating expenses and investment costs in plant and other regulatory assets. NW Natural continuously evaluates the need for rate cases and other proceedings in its jurisdictions. See "Most Recent Completed Rate Cases" below.
Previous wording
The incremental revenue requirement for each year is based upon the following assumptions:
Current wording
The incremental revenue requirement for each year is based off of the following assumptions:
Previous wording
For the subsequent two gas years, NW Natural is hedged in total between 15% and 28% for annual requirements. Hedge levels are subject to change based on actual load volumes, which depend to a certain extent on weather, economic conditions, and estimated gas reserve production. Also, gas storage inventory levels may increase or decrease with storage expansion, changes in storage contracts with third parties, variations in the heat content of the gas, and or storage recall by NW Natural. We will continue to monitor gas prices as we fill storage and look at hedging plans for future gas years. Gas purchases and hedges entered into for the upcoming PGA year will be included in the Company’s PGA filings in Oregon and Washington.
Current wording
For the subsequent two gas years, NW Natural is hedged in total between 26% and 47% for annual requirements. Hedge levels are subject to change based on actual load volumes, which depend to a certain extent on weather, economic conditions, and estimated gas reserve production. Also, gas storage inventory levels may increase or decrease with storage expansion, changes in storage contracts with third parties, variations in the heat content of the gas, and/or storage recall by NW Natural. We will continue to monitor gas prices as we fill storage and look at hedging plans for future gas years. Gas purchases and hedges entered into for the upcoming PGA year will be included in the Company’s PGA filings in Oregon and Washington.
Previous wording
EARNINGS TEST REVIEW. NW Natural is subject to an annual earnings review in Oregon to determine if the NW Natural business is earning above its authorized ROE threshold. If NW Natural business earnings exceed a specific ROE level, then 33% of the amount above that level is required to be deferred or refunded to customers. Under this provision, if NW Natural selects the 80% deferral gas cost option, then NW Natural retains all earnings up to 150 basis points above the currently authorized ROE. If NW Natural selects the 90% deferral option, then it retains all earnings up to 100 basis points above the currently authorized ROE. For the 2024-25 and 2025-26 gas years, NW Natural selected the 90% deferral option. The ROE threshold is subject to adjustment annually based on movements in long-term interest rates. For calendar years 2023, 2024, and 2025, the ROE threshold was 10.40%. NW Natural filed the 2025 earnings test in April 2026, indicating no customer credit adjustment based on results. NW Natural does not expect a customer credit adjustment for 2026 based on preliminary results of the earnings test.
Current wording
EARNINGS TEST REVIEW. NW Natural is subject to an annual earnings review in Oregon to determine if the NW Natural business is earning above its authorized ROE threshold. If NW Natural business earnings exceed a specific ROE level, then 33% of the amount above that level is required to be deferred or refunded to customers. Under this provision, if NW Natural selects the 80% deferral gas cost option, then NW Natural retains all earnings up to 150 basis points above the currently authorized ROE before earnings sharing applies. If NW Natural selects the 90% deferral option, then it retains all earnings up to 100 basis points above the currently authorized ROE. For the 2024-25 and 2025-26 gas years, NW Natural selected the 90% deferral option. The ROE threshold is subject to adjustment annually based on movements in long-term interest rates. For calendar years 2023, 2024, and 2025, the ROE threshold was 10.40%. NW Natural filed the 2025 earnings test in April 2026, indicating no customer credit adjustment based on results, which was approved by the OPUC in June 2026. Through Q2 2026, NW Natural does not expect a customer credit adjustment for 2026 based on preliminary results of the earnings test.
Previous wording
Investments in RNG facilities are recovered through an automatic adjustment clause that allows recovery of NW Natural's investments in RNG projects, including operating costs, to be added to rates annually on October 31st, following a prudence review. The RNG recovery mechanism allows NW Natural to defer for recovery or credit the differences between the forecasted and actual costs of the RNG projects, subject to an earnings test that includes deadbands at 50 basis points below and above NW Natural's authorized ROE. NW Natural has two investments that the OPUC has approved for recovery in rates. For 2025, NW Natural submitted this test to the OPUC in April 2026. No earnings test adjustment is expected for 2025. For RNG procurement contracts, NW Natural seeks recovery of the costs along with the PGA, subject to a prudence review.
Current wording
Investments in RNG facilities are recovered through an automatic adjustment clause that allows recovery of NW Natural's investments in RNG projects, including operating costs, to be added to rates annually on October 31, following a prudence review. The RNG recovery mechanism allows NW Natural to defer for recovery or credit the differences between the forecasted and actual costs of the RNG projects, subject to an earnings test that includes deadbands at 50 basis points below and above NW Natural's authorized ROE. NW Natural has two investments that the OPUC has approved for recovery in rates. NW Natural filed the 2025 earnings test in April 2026, indicating no customer credit adjustment based on results, which was approved by the OPUC in June 2026. Through Q2 2026, NW Natural does not expect a customer credit adjustment for 2026 based on preliminary results of the earnings test. For RNG procurement contracts, NW Natural seeks recovery of the costs along with the PGA, subject to a prudence review.
Previous wording
To the extent the NW Natural business earns at or below its authorized ROE as defined in the SRRM, the total amount transferred to post-review is recoverable through the SRRM. To the extent more than authorized ROE is earned in a year, the amount transferred to post-review would be reduced by those earnings that exceed its authorized ROE. For 2025, NW Natural has submitted this test to the OPUC in April 2026. No earnings test adjustment is expected for 2025.
Current wording
To the extent the NW Natural business earns at or below its authorized ROE as defined in the SRRM, the total amount transferred to post-review is recoverable through the SRRM. To the extent more than authorized ROE is earned in a year, the amount transferred to post-review would be reduced by those earnings that exceed its authorized ROE. NW Natural filed the 2025 earnings test in April 2026, indicating no customer credit adjustment based on results, which was approved by the OPUC in June 2026. Through Q2 2026, NW Natural does not expect a customer credit adjustment for 2026 based on preliminary results of the earnings test.
Previous wording
INTEGRATED RESOURCE PLAN (IRP). NW Natural generally files a full IRP biennially for Oregon and Washington with the OPUC and WUTC, respectively. NW Natural jointly filed its 2025 IRP for both Oregon and Washington on August 1, 2025. The 2025 IRP evaluates several scenarios based on a range of inputs and outlines the least-cost least-risk portfolio of resources required to meet future demand and environmental compliance obligations. With respect to IRPs generally, the WUTC issues letters of compliance and Oregon acknowledges the IRP Action Plan individually or in total. In April 2026, NW Natural received a letter of compliance from the WUTC. NW Natural anticipates that decisions from the OPUC will come in the first half of 2026.
Current wording
INTEGRATED RESOURCE PLAN (IRP). NW Natural generally files a full IRP biennially for Oregon and Washington with the OPUC and WUTC, respectively. NW Natural jointly filed its 2025 IRP for both Oregon and Washington on August 1, 2025. The 2025 IRP evaluates several scenarios based on a range of inputs and outlines the least-cost least-risk portfolio of resources required to meet future demand and environmental compliance obligations. With respect to IRPs generally, the WUTC issues letters of compliance and Oregon acknowledges the IRP Action Plan individually or in total. In April 2026, NW Natural received a letter of compliance from the WUTC and a letter of acknowledgement from the OPUC.
Previous wording
TEXAS HOUSE BILL 4384. In June 2025, Texas House Bill 4384 was signed into law, allowing gas utilities in Texas to defer, and later recover, specific costs related to property, plant and equipment placed in service, but not yet reflected in base rates, including depreciation, ad valorem taxes, and carrying cost. SiEnergy applied the new provisions to property, plant and equipment placed in service but not yet reflected in rates in the first quarter of 2026. The impact was not material for the first quarter results.
Current wording
TEXAS HOUSE BILL 4384. In June 2025, Texas House Bill 4384 was signed into law, allowing gas utilities in Texas to defer, and later recover, specific costs related to property, plant and equipment placed in service, but not yet reflected in base rates, including depreciation, ad valorem taxes, and carrying cost. SiEnergy began to apply the new provisions to property, plant and equipment placed in service but not yet reflected in rates in the third quarter of 2025.
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•Salmon Valley Water, Sunstone Water, Lakeshore Water, Seavey Loop Water, and South Coast Water, regulated water companies in Oregon, filed a consolidated general rate case in the fourth quarter of 2025. The rate case is ongoing.
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•Salmon Valley Water, Sunstone Water, Lakeshore Water, Seavey Loop Water, and South Coast Water, regulated water companies in Oregon, filed a consolidated general rate case in the fourth quarter of 2025. The filing requests an annual revenue increase of $1.5 million. On July 7, 2026, the OPUC approved a separate application to merge entities.
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•On April 1, 2026, Foothills Utilities filed a request for general rate revision with the Arizona Corporation Commission (ACC) for Foothills Yuma. On April 30, 2026, Foothills Utilities filed requests for general rate revision with the ACC for
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•On April 1, 2026, Foothills Utilities filed a request for general rate revision with the Arizona Corporation Commission (ACC) for Foothills Yuma. On April 30, 2026, Foothills Utilities filed requests for general rate revision with the ACC for Foothills Kingman West and Foothills Kingman East, respectively. The filings requested an aggregate revenue increase of $3.8 million for water and $0.7 million for wastewater. NWN Water moved to consolidate these rate cases on May 4, 2026. The ACC approved the request to consolidate the dockets on May 7, 2026.
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Historically, federal agencies have regulated GHG emissions. For example, under the Clean Air Act, our natural gas distribution businesses have been required to report system throughput to the EPA on an annual basis. The EPA also has required additional GHG reporting regulations applicable to NW Natural, requiring the annual reporting of fugitive emissions from operations. Although the EPA has revoked the endangerment findings for GHG emissions and has announced proposed rules rescinding these reporting requirements, we were subject to these reporting requirements in 2025 and remain subject to such requirements until the EPA’s rules are finalized and become effective.
Current wording
Historically, federal agencies have regulated GHG emissions. For example, under the Clean Air Act, our natural gas distribution businesses have been required to report system throughput to the EPA on an annual basis. The EPA also has required additional GHG reporting regulations applicable to NW Natural, requiring the annual reporting of fugitive emissions from operations. The EPA has revoked the endangerment finding for GHG emissions, proposed rules rescinding these reporting requirements, and extended the 2025 reporting deadline until October 30, 2026. However, we remain subject to such reporting requirements until the rescinding rule is finalized and becomes effective.
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On October 25, 2024, the OPUC issued its final order related to our 2024 Oregon General Rate Case, approving the parties’ Stipulations and resolving remaining open items. The OPUC also ordered the phase out of NW Natural’s line extension allowance and ordered a downward adjustment to rate base of undepreciated line extension costs. NW Natural filed an appeal with the Oregon Court of Appeals on December 23, 2024, challenging the determination and the authority of the OPUC to take these actions and this litigation remains pending.
Current wording
On October 25, 2024, the OPUC issued its final order related to our 2024 Oregon General Rate Case, approving the parties’ Stipulations and resolving remaining open items. The OPUC also ordered the phase out of NW Natural’s line extension allowance and ordered a downward adjustment to rate base of undepreciated line extension costs. NW Natural filed an appeal with the Oregon Court of Appeals on December 23, 2024, challenging the determination and the authority of the OPUC to take these actions. This litigation remains pending.
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In 2025, Washington comprised approximately 8% of NW Natural’s revenues, as well as 2% and 14% of new meters from commercial and residential customers, respectively.
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In 2025, Washington comprised approximately 8% of NW Natural’s revenues, as well as 2% and 13% of new meters from commercial and residential customers, respectively.
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Effective February 2021, Washington state building codes (WSEC-2018) require new residential homes to meet energy efficiency standards based on carbon emissions assumptions that consider electric appliances to have lower on-site GHG emissions than comparable gas appliances. This increases the cost of constructing new homes with natural gas depending on a number of factors including home size, equipment configurations, and building envelope measures. In March 2024, rules enacted by the Washington State Building Code Council (SBCC) (WSEC-2021) took effect that modified the 2021 codes, and collectively, these rules generally have the effect of restricting or eliminating the use of gas space and water heating in new commercial and residential construction. The SBCC rules are currently subject to pending legal challenges.
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Effective February 2021, Washington state building codes (WSEC-2018) require new residential homes to meet energy efficiency standards based on carbon emissions assumptions that consider electric appliances to have lower on-site GHG emissions than comparable gas appliances. This increases the cost of constructing new homes with natural gas depending on a number of factors including home size, equipment configurations, and building envelope measures. In March 2024, rules enacted by the Washington State Building Code Council (SBCC) (WSEC-2021) took effect that modified the 2021 codes, and collectively, these rules generally have the effect of restricting or eliminating the use of gas space and water heating in new commercial and residential construction. The SBCC rules are currently subject to pending legal challenges. Additionally, the SBCC is in the process of amending its building codes. The SBCC expects to adopt a final rule amending its building codes by September 2026, and while these amendments may impact gas space and water heating, the contents of the final rule have yet to be determined.
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In November 2024, Washington Ballot initiative I-2066 was passed. I-2066 was described on the ballot as prohibiting state and local governments from restricting access to natural gas, prohibiting the SBCC from discouraging or penalizing the use of natural gas in any building, requiring providers of natural gas to provide energy services regardless of the other energy sources available, and prohibiting the Washington Utilities and Transportation Commission (WUTC) from approving any multiyear rate plan requiring or incentivizing a natural gas company to terminate natural gas service or make such natural gas service cost-prohibitive. Although the SBCC has indicated that the current SBCC codes will remain in place while the SBCC investigates any changes necessary under I-2066, the King County Washington Superior Court recently issued a ruling declaring I-2066 invalid under the Washington state constitution. Washington State and the Building Industry Association of Washington have appealed such litigation, which is pending in the Washington Supreme Court. We cannot currently predict the ultimate outcome of such appeal, or if there will be any further changes to the SBCC codes.
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In November 2024, Washington Ballot initiative I-2066 was passed. I-2066 was described on the ballot as prohibiting state and local governments from restricting access to natural gas, prohibiting the SBCC from discouraging or penalizing the use of natural gas in any building, requiring providers of natural gas to provide energy services regardless of the other energy sources available, and prohibiting the Washington Utilities and Transportation Commission (WUTC) from approving any multiyear rate plan requiring or incentivizing a natural gas company to terminate natural gas service or make such natural gas service cost-prohibitive. Although the SBCC has previously indicated that it will investigate any changes necessary under I-2066, the King County Washington Superior Court issued a ruling in March 2025 declaring I-2066 invalid under the Washington State
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Advocacy groups have indicated a willingness to pursue municipal ordinances and ballot measures or other local activities disincentivizing gas infrastructure. A number of cities or counties across the country have taken action, and several in our service territory are considering actions such as limitations or bans on the use of natural gas in new construction or otherwise. For example, the Eugene City Council continues to develop a plan to address GHG emissions, align incentives around GHG emissions and to engage in a number of actions, including identifying potential revenue sources, like a gas supplier tax. Similarly, some jurisdictions and advocates are seeking to ban the use of natural gas and certain natural gas appliances inside homes contending that there are detrimental indoor health effects associated with the use of natural gas.
Current wording
Advocacy groups have indicated a willingness to pursue municipal ordinances and ballot measures or other local activities disincentivizing gas infrastructure. A number of cities or counties across the country have taken action, and several in our service territory are considering actions such as disincentives, limitations, or bans on the use of natural gas in new construction or otherwise. For example, the Eugene City Council continues to develop a plan to address GHG emissions, align incentives around GHG emissions and to engage in a number of actions, including identifying potential revenue sources, like a gas supplier tax. Similarly, some jurisdictions and advocates are seeking to ban the use of natural gas and certain natural gas appliances inside homes contending that there are detrimental indoor health effects associated with the use of natural gas.
Previous wording
Limitations on natural gas use, or declining line extension allowances provided in rates to cover construction costs for new services, carbon compliance costs included in rates reduce the competitiveness of our business and the demand for natural gas service. However, at the same time, other sources of energy are or will be subject to, GHG-related compliance requirements that are likely to affect their cost and competitiveness relative to natural gas. For example, Oregon’s HB 2021 and Washington’s SB 5116 require certain GHG emissions reductions from electric utilities. We expect compliance with these and other laws will increase the cost of energy for electric customers in our service territory. We are not able to determine at this time whether these developments will make natural gas use more or less competitive on a relative basis.
Current wording
Limitations on natural gas use, declining line extension allowances provided in rates to cover construction costs for new services, or carbon compliance costs included in rates reduce the competitiveness of our business and the demand for natural gas service. However, at the same time, other sources of energy are or will be subject to, GHG-related compliance requirements that are likely to affect their cost and competitiveness relative to natural gas. For example, Oregon’s HB 2021 and Washington’s SB 5116 require certain GHG emissions reductions from electric utilities. We expect compliance with these and other laws will increase the cost of energy for electric customers in our service territory. We are not able to determine at this time whether these developments will make natural gas use more or less competitive on a relative basis.
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Current report — wording carried from elsewhere
•The increase in net income was primarily driven by new NW Natural rates in Oregon, effective October 31, 2025, organic customer growth, the acquisition of Pines in June 2025, and the implementation of House Bill 4384 in July 2025. These benefits were partially offset by increases from continued investment in our utility systems that resulted in higher interest and depreciation expenses.
Current report — wording carried from elsewhere
•Capital expenditures were $166.6 million, due primarily to continued investments to support the safety and reliability of NW Natural.
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•$2.3 million increase in interest expense due primarily to higher long-term debt from first mortgage bonds issued in December 2025; partially offset by
Current report — wording carried from elsewhere
SIX MONTHS ENDED JUNE 30, 2026 COMPARED TO JUNE 30, 2025. The primary factors contributing to the $1.7 million increase in NW Natural net income were as follows:
Current report — wording carried from elsewhere
•$13.2 million increase in margin driven by new rates on October 31, 2025 for Oregon customers. See the NW Natural margin table below for additional margin detail; partially offset by
Current report — wording carried from elsewhere
•$6.4 million increase in depreciation expense due to additional capital investments; and
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For the six months ended June 30, 2026, total NW Natural volumes sold and delivered decreased by 50.4 million therms compared to the same period in 2025 primarily due to lower usage from residential and commercial sales customers.
Current report — wording carried from elsewhere
SIX MONTHS ENDED JUNE 30, 2026 COMPARED TO JUNE 30, 2025. The primary factors contributing to the $4.6 million increase in SiEnergy net income were as follows:
Current report — wording carried from elsewhere
•$6.5 million increase in margin driven primarily by organic customer growth and the acquisition of Pines Holdings, LLC (Pines) on June 2, 2025. See the SiEnergy margin table below for additional margin detail; and
Current report — wording carried from elsewhere
•$1.8 million increase in operating revenues primarily driven by regulated and unregulated rate increases.
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SIX MONTHS ENDED JUNE 30, 2026 COMPARED TO JUNE 30, 2025. The primary factors contributing to the $7.1 million decrease in net loss were as follows:
Current report — wording carried from elsewhere
•$10.7 million decrease in operations and maintenance expenses due primarily to lower business development and transaction expenses; partially offset by
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Constitution. Washington State and the Building Industry Association of Washington have appealed that ruling to the Washington Supreme Court. We cannot currently predict the ultimate outcome of such appeal, or if there will be any further changes to the SBCC codes as a result of I-2066.
Current report — wording carried from elsewhere
The significant factors contributing to the decrease in cash provided at NW Holdings were as follows:
Current report — wording carried from elsewhere
The significant factors contributing to the decrease in cash provided at NW Natural were as follows:
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During the three months ended June 30, 2026, NW Holdings issued and sold no shares of common stock pursuant to the ATM equity program.
Current report — wording carried from elsewhere
All lenders under the SiEnergy Holdings credit agreement are major financial institutions with committed balances and investment grade credit ratings as of June 30, 2026 as follows:
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Previous report — wording carried elsewhere
Foothills Kingman West and Foothills Kingman East, respectively. The filings requested an aggregate revenue increase of $3.8 million for water and $0.7 million for wastewater. NWN Water filed to seek consolidation of these rate cases on May 4, 2026.