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What changed in Northwest Natural Holding Co's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Northwest Natural Holding Co's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+654 added−648 removedSource: 10-K (2026-02-27) vs 10-K (2025-02-28)

Top changes in Northwest Natural Holding Co's 2025 10-K

654 paragraphs added · 648 removed · 451 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

72 edited+55 added−14 removed43 unchanged
Biggest changeMist Gas Storage The Mist gas storage facility began operations in 1989. It is a 17.5 Bcf facility with 12.8 Bcf used to provide gas storage for the NGD business. The remaining 4.7 Bcf of the facility is contracted with other utilities, third-party marketers, and electric generators with these results reported in other.
Biggest changeCurrently, our Mist Storage Operations has a total of 21.6 Bcf with the following customers: • Gas Utility Storage: 13.1 Bcf used to provide gas storage for the NWN Gas Utility business and included in the NWN Gas Utility segment. • Interstate Storage: 4.4 Bcf serving Interstate customers and contracted with other utilities, and third-party marketers with these results reported in other. • North Mist Storage: 4.1 Bcf contracted solely to Portland General Electric to fuel its gas-fired electric power generation facilities and included in the NWN Gas Utility segment.
Costs to comply with Washington's Climate Commitment Act (CCA) are included in the cost of gas for Washington customers. We expect that costs to comply with Oregon's Climate Protection Program (CPP) and any similar program that may be enacted in our service territory will also be included in the cost of gas.
Costs to comply with Washington's Climate Commitment Act (CCA) are included in the cost of gas for Washington customers. We expect costs to comply with Oregon's Climate Protection Program (CPP) and any similar program that may be enacted in our service territory will also be included in the cost of gas.
For further discussion on our most recent general rate cases, see Part II, Item 7, "Results of Operations—Regulatory Matters— Regulation and Rates ." 9 Gas Supply NW Natural strives to secure sufficient, reliable supplies of natural gas to meet the needs of customers at the lowest reasonable cost, while maintaining price stability, managing gas purchase costs prudently and supporting our core value of environmental stewardship.
For further discussion on our most recent general rate cases, see Part II, Item 7, "Results of Operations—Regulatory Matters— Regulation and Rates ." Gas Supply NW Natural strives to secure sufficient, reliable supplies of natural gas to meet the needs of customers at the lowest reasonable cost, while maintaining price stability, managing gas purchase costs prudently and supporting our core value of environmental stewardship.
Under NW Natural's interstate storage certificate with FERC, NW Natural is required to file either a petition for rate approval or a cost and revenue study every five years to change or justify maintaining the 13 existing rates for the interstate storage service.
Under NW Natural's interstate storage certificate with FERC, NW Natural is required to file either a petition for rate approval or a cost and revenue study every five years to change or justify maintaining the existing rates for the interstate storage service.
When such services involve regulated entities, those entities receiving services are generally 15 charged rates pursuant to shared services agreements that are filed with the applicable state regulatory commission, as applicable. Safety Safety is one of our greatest responsibilities to employees.
When such services involve regulated entities, those entities receiving services are generally charged rates pursuant to shared services agreements that are filed with the applicable state regulatory commission, as applicable. Safety Safety is one of our greatest responsibilities to employees.
In addition, we make available, free of charge, on our website ( www.nwnaturalholdings.com ), our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) and proxy materials filed under Section 14 of the Securities Exchange Act of 1934, as amended (Exchange Act), as soon as reasonably practicable after we electronically 16 file such material with, or furnish it to, the SEC.
In addition, we make available, free of charge, on our website ( www.nwnaturalholdings.com ), our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, 19 and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) and proxy materials filed under Section 14 of the Securities Exchange Act of 1934, as amended (Exchange Act), as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
To that end, NW Natural developed and implemented an emissions screening tool that uses Environmental Protection Agency (EPA) data to calculate the relative emissions intensity of gas producer operations and prioritize purchases from lower emitting producers. In 2019, we began using this emissions intensity screening tool alongside other purchasing criteria such as price, credit worthiness and geographic diversity.
To that end, NW Natural developed and implemented an emissions screening tool that uses Environmental Protection Agency (EPA) data to calculate the relative emissions intensity of gas producer operations and prioritize purchases from lower emitting producers. In 2019, we implemented this emissions intensity screening tool alongside other purchasing criteria such as price, credit worthiness and geographic diversity.
Benefits available to employees during 2024 included, among others: healthcare and other insurance coverages, wellness resources, retirement and savings plans, paid time off programs, and flexible and hybrid work schedules, where possible, employee resource groups, and culture and community-focused resources and opportunities, and employee recognition programs and discounts.
Benefits available to employees during 2025 included, among others: healthcare and other insurance coverages, wellness resources, retirement and savings plans, paid time off programs, and flexible and hybrid work schedules, where possible, employee resource groups, and culture and community-focused resources and opportunities, and employee recognition programs and discounts.
Although dependent on a single pipeline, the pipeline ’ s gas flows into the Portland metropolitan market from two directions: (1) the north, which brings supplies from the British Columbia and Alberta supply basins; and (2) the east, which brings supplies from Alberta as well as the U.S. Rocky Mountain supply basins.
Although dependent on a single pipeline, the pipeline’s gas flows into the Portland metropolitan market from two directions: (1) the north, which brings supplies from the British Columbia and Alberta supply basins; and (2) the east, which brings supplies from Alberta as well as the U.S. Rocky Mountain supply basins.
Competitive Conditions In its service areas, the NGD business has no direct competition from other natural gas distributors. However, it competes with other forms of energy in each customer class. This competition among energy suppliers is based on price, efficiency, reliability, performance, preference, perceptions, market conditions, building codes, technology, federal, state, and local energy policy, and environmental impacts.
Competitive Conditions In its service areas, the NWN Gas Utility business has no direct competition from other natural gas distributors. However, it competes with other forms of energy in each customer class. This competition among energy suppliers is based on price, efficiency, reliability, performance, preference, perceptions, market conditions, building codes, technology, federal, state, and local energy policy, and environmental impacts.
These programs currently include: (i) a culturally relevant mentoring program that creates opportunities for career growth by building relationships; (ii) a tuition assistance program for qualified educational pursuits; (iii) an internal class that provides participants with a big-picture understanding of the industry and company operations, equipping them to see how they contribute to NW Natural’s success and identify opportunities for career growth; (iv) internal and external continuing educational courses relevant to areas of expertise; and (v) ongoing management and leadership training programs.
These programs currently include: (i) a culturally relevant mentoring program that creates opportunities for career growth by building relationships; (ii) a tuition assistance program for qualified educational pursuits; (iii) an internal class that provides participants with a big-picture understanding of the industry and company operations, equipping them to see how they contribute to NW Natural and NW Holdings' subsidiaries success and identify opportunities for career growth; (iv) internal and external continuing educational courses relevant to areas of expertise; and (v) ongoing management and leadership training programs.
We currently estimate RNG volumes to be sold pursuant to this agreement to be approximately 2,430,000 MMbtu over the life of the agreement, provided that such amounts of RNG are produced by the EDL Facilities during that period.
We currently estimate RNG volumes to be sold pursuant to this agreement to be approximately 2,370,000 MMbtu over the life of the agreement, provided that such amounts of RNG are produced by the EDL Facilities during that period.
NW Natural also contracts with an independent energy marketing company to capture opportunities regarding storage and pipeline capacity when those assets are not serving the needs of NGD business customers. Asset management activities provide opportunities for cost of gas savings for customers and incremental revenues for NW Natural through regulatory incentive-sharing mechanisms.
NW Natural also contracts with an independent energy marketing company to capture opportunities regarding storage and pipeline capacity when those assets are not serving the needs of NWN Gas Utility business customers. Asset management activities provide opportunities for cost of gas savings for customers and incremental revenues for NW Natural through regulatory incentive-sharing mechanisms.
The benefits package options vary depending on type of employee and date of hire. NW Natural continuously looks for ways to support employees’ work-life balance and well-being and this is reflected in physical, mental and financial wellness programs to meet the needs of our employees and help them care for their families.
The benefits package options vary depending on type of employee and date of hire. NW Holdings and NW Natural continuously look for ways to support employees’ work-life balance and well-being and this is reflected in physical, mental and financial wellness programs to meet the needs of our employees and help them care for their families.
Under regulatory agreements with the OPUC and WUTC, gas storage at Mist can be developed in advance of NGD customer needs but is subject to recall when needed to serve such customers as their demand increases. When storage capacity is recalled for NGD purposes it becomes part of the NGD segment.
Under regulatory agreements with the OPUC and WUTC, gas storage at Mist can be developed in advance of NWN Gas Utility customer needs but is subject to recall when needed to serve such customers as their demand increases. When storage capacity is recalled for NWN Gas Utility purposes it becomes part of the NWN Gas Utility segment.
Ohio Renewables additionally has contracted to sell a fixed-volume of RNG under a long-term agreement with an investment-grade utility beginning in 2025 and extending through 2042.
Ohio Renewables additionally has contracted to sell a fixed-volume of RNG under a long-term agreement with an investment-grade utility beginning in 2025 and extending through 2044.
We view this as a cost-neutral way to reduce carbon emissions associated with our natural gas supply. NW Natural is focused on taking steps to lower its emissions on behalf of customers by purchasing environmental attributes that are generated by the production of renewable natural gas (RNG).
We view this as a cost-effective way to reduce carbon emissions associated with our natural gas supply. NW Natural is focused on taking steps to lower emissions on behalf of customers by purchasing environmental attributes that are generated by the production of renewable natural gas (RNG).
During calendar year 2024, NW Natural did not incur any work stoppages (strikes or lockouts), and therefore, experienced zero idle days for the year. Certain subsidiaries may receive services from employees of other subsidiaries. Those services are generally charged to the entity receiving those services.
During calendar year 2025, NW Natural did not incur any work stoppages (strikes or lockouts), and therefore, experienced zero idle days for the year. 18 Certain subsidiaries may receive services from employees of other subsidiaries. Those services are generally charged to the entity receiving those services.
To help manage gas supplies, tariffs are designed to provide some certainty regarding industrial and commercial customers' volumes by requiring an annual service election, special rates or possible restrictions for changes between elections. We estimate natural gas was in approximately 63% of single-family residential homes in NW Natural's service territory in 2024.
To help manage gas supplies, tariffs are designed to provide some certainty regarding industrial and commercial customers' volumes by requiring an annual service election, special rates or possible restrictions for changes between elections. We estimate natural gas was in approximately 64% of single-family residential homes in NW Natural's service territory in 2025.
For residential and small to mid-size commercial customers, the NGD business competes primarily with providers of electricity, fuel oil, and propane. In the industrial and large commercial markets, the NGD business competes with all forms of energy, including competition from wholesale natural gas marketers.
For residential and small to mid-size commercial customers, the NWN Gas Utility business competes primarily with providers of electricity, fuel oil, and propane. In the industrial and large commercial markets, the NWN Gas Utility business competes with all forms of energy, including competition from wholesale natural gas marketers.
Gas Cost Management The cost of gas sold to NGD customers primarily consists of the following items, which are included in annual Purchased Gas Adjustment (PGA) rates: gas purchases from suppliers; charges from pipeline companies to transport gas to our distribution 11 system; gas storage costs; gas reserves costs; gas commodity derivative contracts; and renewable natural gas and its attributes, including renewable thermal certificates.
Gas Cost Management The cost of gas sold to NWN Gas Utility customers primarily consists of the following items, which are included in annual Purchased Gas Adjustment (PGA) rates: gas purchases from suppliers; charges from pipeline companies to transport gas to our distribution system; gas storage costs; gas reserves costs; gas commodity derivative contracts; and renewable natural gas and its attributes, including renewable thermal certificates.
Generally, residential and commercial customers purchase both their natural gas commodity (gas sales) and natural gas delivery services from the NGD business. Industrial and some large commercial customers also purchase the gas commodity either from NW Natural or directly from a third-party gas marketer or supplier.
Generally, residential and commercial customers purchase both their natural gas commodity (gas sales) and natural gas delivery services from the NWN Gas Utility business. Industrial and some large commercial customers also purchase the gas commodity either from NW Natural or directly from a third-party gas marketer or supplier.
Reliability To support system reliability, the NGD business has developed a risk-based methodology in which it uses a planning standard to serve the highest firm sales demand day in any year with 99% certainty. The projected maximum design day firm NGD customer sales is approximately 10 million therms.
Reliability To support system reliability, the NWN Gas Utility business has developed a risk-based methodology in which it uses a planning standard to serve the highest firm sales demand day in any year with 99% certainty. The projected maximum design day firm NWN Gas Utility customer sales is approximately 10 million therms.
For those segments with acceptable reliability, segmentation provides a shipper with increased flexibility and potential cost savings compared to traditional pipeline service. The NGD business relies on segmentation of firm pipeline transportation capacity that flows from Stanfield, Oregon to various points south of Molalla, Oregon.
For those segments with acceptable reliability, segmentation provides a shipper with increased flexibility and potential cost savings compared to traditional pipeline service. The NWN Gas Utility business relies on segmentation of firm pipeline transportation capacity that flows from Stanfield, Oregon to various points south of Molalla, Oregon.
We also have a learning management system that provides virtual training options and more efficiency and flexibility in how we train. Employee Benefits and Support To attract employees and meet the needs of our workforce, NW Natural strives to offer competitive compensation and benefits packages to employees.
We also have a learning management system that provides virtual training options and more efficiency and flexibility in how we train. Employee Benefits and Support To attract employees and meet the needs of our workforce, NW Natural and NW Holdings' subsidiaries strive to offer competitive compensation and benefits packages to employees.
The following table presents the storage facilities available for NGD business supply: Maximum Daily Deliverability (therms in millions) Designed Storage Capacity (Bcf) Gas Storage Facilities Owned Facility Mist, Oregon (Mist Facility) (1) 3.3 12.8 Mist, Oregon (North Mist Facility) (2) 1.3 4.1 Contracted Facility Jackson Prairie, Washington (3) 0.5 1.1 LNG Facilities Owned Facilities Newport, Oregon 0.8 1.0 Portland, Oregon 1.0 0.6 Total 6.9 19.6 (1) The Mist gas storage facility has a total maximum daily deliverability of 5.3 million therms and a total designed storage capacity of about 17.5 Bcf, of which 3.3 million therms of daily deliverability and 12.8 Bcf of storage capacity are reserved for NGD business customers.
The following table presents the storage facilities available for NWN Gas Utility business supply: Maximum Daily Deliverability (therms in millions) Designed Storage Capacity (Bcf) Gas Storage Facilities Owned Facility Mist, Oregon (Mist Facility) (1) 3.4 13.1 Mist, Oregon (North Mist Facility) (2) 1.3 4.1 Contracted Facility Jackson Prairie, Washington (3) 0.5 1.1 LNG Facilities Owned Facilities Newport, Oregon 0.8 1.0 Portland, Oregon 1.0 0.6 Total 7.0 19.9 (1) The Mist gas storage facility has a total maximum daily deliverability of 5.3 million therms and a total designed storage capacity of about 17.5 Bcf, of which 3.4 million therms of daily deliverability and 13.1 Bcf of storage capacity are reserved for NWN Gas Utility business customers.
Major businesses located in NW Natural's service territory include retail, manufacturing, and high-technology industries. Customers The NGD business serves residential, commercial, and industrial customers with no individual customer accounting for more than 10% of NW Natural's or NW Holdings' revenues.
Major businesses located in NW Natural's service territory include retail, manufacturing, and high-technology industries. Customers The NWN Gas Utility business serves residential, commercial, and industrial customers with no individual customer accounting for more than 10% of NW Natural's or NW Holdings' revenues.
The following table shows the sources of supply projected to be used to satisfy the design day sales for the 2024-25 winter heating season: Therms in millions Therms Percent Sources of NGD supply: Firm supply purchases 3.4 34 % Mist underground storage (NGD only) 3.3 33 % Company-owned LNG storage 1.8 18 % Pipeline segmentation capacity 0.6 6 % Off-system storage contract 0.5 5 % Recall agreements 0.3 3 % Peak day citygate deliveries 0.1 1 % Total 10.0 100 % The OPUC and WUTC have Integrated Resource Planning (IRP) processes in which utilities define different future scenarios and corresponding resource and compliance strategies in an effort to evaluate supply and demand resource and compliance requirements, consider uncertainties in the planning process and the need for flexibility to respond to changes, and establish a plan for providing reliable service while meeting carbon compliance obligations within frameworks that emphasize least cost and risk.
The following table shows the sources of supply projected to be used to satisfy the design day sales for the 2025-26 winter heating season: Therms in millions Therms Percent Sources of NWN Gas Utility supply: Firm supply purchases 3.4 34 % Mist underground storage (NWN Gas Utility only) 3.4 34 % Company-owned LNG storage 1.8 18 % Pipeline segmentation capacity 0.6 6 % Off-system storage contract 0.5 5 % Recall agreements 0.3 3 % Total 10.0 100 % The OPUC and WUTC have Integrated Resource Planning (IRP) processes in which utilities define different future scenarios and corresponding resource and compliance strategies in an effort to evaluate supply and demand resource and compliance 10 requirements, consider uncertainties in the planning process and the need for flexibility to respond to changes, and establish a plan for providing reliable service while meeting carbon compliance obligations within frameworks that emphasize least cost and risk.
We believe gas supplies would be sufficient to meet existing NGD firm customer demand in the event of maximum design day weather conditions.
We believe gas supplies would be sufficient to meet existing NWN Gas Utility firm customer demand in the event of maximum design day weather conditions.
Of this total, the NGD business is currently capable of meeting approximately 55% of the requirements with gas from storage located within or adjacent to its service territory, while the remaining supply requirements would come from gas purchases under firm gas purchase contracts and recall agreements.
Of this total, the NWN Gas Utility business is currently capable of meeting approximately 57% of the requirements with gas from storage located within or adjacent to its service territory, while the remaining supply requirements would come from gas purchases under firm gas purchase contracts and recall agreements.
Our efforts in recruiting, promoting, and retaining diverse talent, building inclusive teams, and creating a culture that embraces differences are elements of our workforce strategy. INFORMATION ABOUT OUR EXECUTIVE OFFICERS For information concerning executive officers, see Part III, Item 10.
Our efforts in recruiting, promoting, and retaining talent with a wide range of backgrounds, building inclusive teams, and creating a culture that embraces differences are elements of our workforce strategy. INFORMATION ABOUT OUR EXECUTIVE OFFICERS For information concerning executive officers, see Part III, Item 10.
NW Natural’s health and safety policies and procedures are designed to comply with all applicable regulations, but we also work to go beyond compliance by striving to incorporate information we learn from benchmarking, peer reviews, and industry best practices.
NW Natural and NW Holdings' subsidiaries health and safety policies and procedures are designed to comply with applicable regulations, but we also work to go beyond compliance by striving to incorporate information we learn from benchmarking, peer reviews, and industry best practices.
The results of these activities are included in other, except for the asset management revenues allocated to NGD business customers pursuant to regulatory agreements, which are reported in the NGD segment.
The results of these activities are included in other, except for the asset management revenues allocated to NWN Gas Utility business customers pursuant to regulatory agreements, which are reported in the NWN Gas Utility segment.
NW Natural has been allocated an exclusive service territory by the Oregon Public Utility Commission (OPUC) and Washington Utilities and Transportation Commission (WUTC), which includes the major population centers in western Oregon, including the Portland metropolitan area, most of the Willamette Valley, the Coastal area from Astoria to Coos Bay, and portions of Washington along the Columbia River.
Approximately 88% of customers are located in Oregon and 12% are located in southwest Washington. 8 NW Natural has been allocated an exclusive service territory by the Oregon Public Utility Commission (OPUC) and Washington Utilities and Transportation Commission (WUTC), which includes the major population centers in western Oregon, including the Portland metropolitan area, most of the Willamette Valley, the Coastal area from Astoria to Coos Bay, and portions of Washington along the Columbia River.
See Part II, Item 7, "Results of Operations— Regulatory Matters " and "Results of Operations—Business Segment—Natural Gas Distribution Operations— Cost of Gas " . Environmental Stewardship Part of our gas supply strategy is working to reduce the carbon content and the environmental impacts of the energy we deliver.
See Part II, Item 7, "Results of Operations— Regulatory Matters ". Environmental Stewardship Part of our gas supply strategy is working to reduce the carbon content and the environmental impacts of the energy we deliver.
NW Natural distributes natural gas to residential, commercial, and industrial customers in Oregon and southwest Washington. NW Natural and its predecessors have supplied gas service to the public since 1859, was incorporated in Oregon in 1910, and began doing business as NW Natural in 1997. NW Natural's natural gas distribution activities are reported in the natural gas distribution (NGD) segment.
NW Natural distributes natural gas to residential, commercial, and industrial customers in Oregon and southwest Washington. NW Natural and its predecessors have supplied gas service to the public since 1859, was incorporated in Oregon in 1910, and began doing business as NW Natural in 1997.
The NGD business employs a number of strategies to mitigate the cost of gas sold to customers.
The NWN Gas Utility business employs a number of strategies to mitigate the cost of gas sold to customers.
NW Natural seeks to provide its employees with growth and development opportunities through programs designed to build skills and relationships.
NW Natural and NW Holdings subsidiaries seek to provide its employees with growth and development opportunities through programs designed to build skills and relationships.
As of May 1, 2024, 0.2 million therms per day of deliverability and 1.15 Bcf of associated non-utility Mist gas storage capacity was recalled to serve core customers. Customer rate increases related to this recall began on November 1, 2024.
As of May 1, 2025, 0.2 million therms per day of deliverability and 0.3 Bcf of associated non-utility Mist gas storage capacity was recalled to serve core customers. Customer rate increases related to this recall began for Oregon customers on October 31, 2025, and November 1, 2025 for Washington customers..
See Part II, Item 7, "Results of Operations— Regulatory Matters ". In addition to purchases of RNG, NW Natural has piloted a hydrogen blend in pipelines serving its Sherwood Operations and Training Center. NW Natural has successfully tested a blend of up to 20% hydrogen. The tests met the safety protocols established by PHMSA Part 192.
See Part II, Item 7, "Results of Operations— Regulatory Matters ". In addition to purchases of RNG, NW Natural has piloted a hydrogen blend in pipelines serving its Sherwood Operations and Training Center. NW Natural has successfully tested a blend of up to 20% hydrogen.
NW Holdings These include the following businesses and activities aggregated under NW Holdings: • NW Natural Water Company, LLC (NWN Water) and its water and wastewater utility operations and water services business; • NWN Water's equity investment in Avion Water Company, Inc.; • NW Natural Renewables Holdings, LLC and its non-regulated renewable natural gas activities; • a minority interest in the Kelso-Beaver Pipeline held by our wholly-owned subsidiary NNG Financial Corporation (NNG Financial); and • holding company and corporate activities, including business development activities, as well as adjustments made in consolidation.
NW Holdings These include the following businesses and activities aggregated under NW Holdings: • NW Natural Renewables Holdings, LLC and its non-regulated renewable natural gas activities; • a minority interest in the Kelso-Beaver Pipeline held by NW Holdings' wholly-owned subsidiary NNG Financial Corporation (NNG Financial); and • holding company and corporate activities, including business development activities, as well as adjustments made in consolidation.
While costs associated with each possible compliance pathway differ, we intend to pursue recovery of the costs associated with these programs in rates. Transportation of Gas Supplies NW Natural's gas distribution system is reliant on a single, bi-directional interstate transmission pipeline to bring gas supplies into the natural gas distribution system.
While costs associated with each possible compliance pathway differ, we are recovering costs associated with compliance with the current CCA and CPP in rates. Transportation of Gas Supplies NW Natural's gas distribution system is reliant on a single, bi-directional interstate transmission pipeline to bring gas supplies into the natural gas distribution system.
Ohio Renewables has contracted to sell RNG produced by the EDL Facilities up to certain specified volumes in each of calendar years 2024 through 2026 to an investment-grade counterparty.
Ohio Renewables has contracted to sell the supply obtained from the EDL Facilities at primarily fixed prices to investment grade counterparties. Ohio Renewables has contracted to sell some of the RNG produced by the EDL Facilities up to certain specified volumes in each of the calendar years 2024 through 2026 to an investment-grade counterparty.
Alongside these development agreements, Ohio Renewables and the subsidiary of EDL executed agreements for Ohio Renewables to purchase up to an annual specified amount of RNG produced by the EDL Facilities over a 20-year period at a contractually specified price. Ohio Renewables has contracted to sell the supply obtained from EDL at fixed-prices to investment grade counterparties.
Alongside these development agreements, Ohio Renewables and the subsidiary of EDL executed agreements for Ohio Renewables to purchase up to an annual specified amount of RNG produced by the EDL Facilities over a 20-year period at a contractually specified price.
The North Mist facility is contracted for the exclusive use of Portland General Electric, a local electric utility, and may not be used to serve other NGD customers. See " North Mist Gas Storage Facility " below.
(2) The North Mist facility is contracted to exclusively serve Portland General Electric, a local electric utility, and is not used to serve other NWN Gas Utility customers. See " North Mist Gas Storage Facility " below for more information.
Storage facilities are generally injected with natural gas during the off-peak months in the spring and summer, and the gas is withdrawn for use during peak demand months in the winter.
NW Natural supplements firm gas supply purchases with gas withdrawals from gas storage facilities, including underground reservoirs and LNG storage facilities. Storage facilities are generally injected with natural gas during the off-peak months in the spring and summer, and the gas is withdrawn for use during peak demand months in the winter.
We regularly monitor employee engagement and satisfaction through a variety of tools, including our annual engagement survey that is designed to enable company leaders to gather valuable feedback and guidance from employees.
We regularly monitor employee engagement and satisfaction through a variety of tools, including our annual engagement survey that is designed to enable company leaders to gather valuable feedback and guidance from employees. Creating a diverse and inclusive culture and workforce that reflects and supports the communities we serve contributes to long-term success.
Under the current contract, if less than 75% of the contracted volumes of RNG are not delivered on an annual basis, Ohio Renewables is obligated to pay the per MMbtu price for volumes between the amount delivered and 75% of the contracted volumes on an annual basis. 14 ENVIRONMENTAL MATTERS Properties and Facilities NW Natural owns, or previously owned, properties and facilities that are currently being investigated that may require environmental remediation and are subject to federal, state, and local laws and regulations related to environmental matters.
Amounts to be delivered under this agreement are estimated to be 375,000 MMbtu in 2026, 1,950,000 MMbtu annually in 2027 through 2030, and 2,325,000 MMbtu annually in years 2031 through 2034 and 2,775,000 MMbtu annually in years 2035 through 2043 and 1,513,770 MMbtu in 2044.Under the current contract, if less than 75% of the contracted volumes of RNG are delivered annually, Ohio Renewables is obligated to pay the per MMbtu price for volumes between the amount delivered and 75% of the contracted volumes on an annual basis. 17 ENVIRONMENTAL MATTERS Properties and Facilities NW Natural owns, or previously owned, properties and facilities that are currently being investigated that may require environmental remediation and are subject to federal, state, and local laws and regulations related to environmental matters.
Employees At December 31, 2024, our workforce consisted of the following: NW Natural: Unionized employees (1) 626 Non-unionized employees 649 Total NW Natural 1,275 Other Entities: Water and wastewater company employees 172 Other 5 Total other entities 177 Total Employees 1,452 (1) Members of the Office and Professional Employees International Union (OPEIU) Local No. 11, AFL-CIO.
Employees At December 31, 2025, our workforce consisted of the following: NW Natural: Unionized employees (1) 638 Non-unionized employees 660 Total NW Natural 1,298 Other Entities: SiEnergy employees 134 Water and wastewater company employees 184 Other 3 Total other entities 321 Total Employees 1,619 (1) Members of the Office and Professional Employees International Union (OPEIU) Local No. 11, AFL-CIO.
Industrial customers largely account for the remaining volumes and margin. 8 The following table presents summary meter information for the NGD segment as of December 31, 2024: Number of Meters % of Volumes % of Margin Residential 735,117 38 % 65 % Commercial 69,362 23 % 25 % Industrial 1,050 39 % 6 % Other (1) N/A N/A 4 % Total 805,529 100 % 100 % (1) NGD margin is also affected by other items, including miscellaneous revenues, gains or losses from NW Natural's gas cost incentive sharing mechanism, other margin adjustments, and other regulated services.
The following table presents summary meter information for the NWN Gas Utility segment as of December 31, 2025: Number of Meters % of Volumes % of Margin Residential 739,337 37 % 66 % Commercial 69,214 23 % 25 % Industrial 1,046 40 % 5 % Other (1) N/A N/A 4 % Total 809,597 100 % 100 % (1) NWN Gas Utility margin is also affected by other items, including miscellaneous revenues, gains or losses from NW Natural's gas cost incentive sharing mechanism, other margin adjustments, and other regulated services.
NW Natural has one of the most modern distribution systems in the country with no identified cast iron pipe or bare steel main. Since the 1980s, NW Natural has taken a proactive approach to replacement programs and partnered with the OPUC and WUTC on progressive regulation to further safety and reliability efforts for the distribution system.
Since the 1980s, NW Natural has taken a proactive approach to replacement programs and partnered with the OPUC and WUTC on progressive regulation to further safety and reliability efforts for the distribution system.
The facility is included in rate base under an established tariff schedule with revenues recognized consistent with the schedule. Billing rates are updated annually to the forecasted depreciable asset level and forecasted operating expenses. There are additional expansion opportunities in the Mist storage field.
The facility is included in rate base under an established tariff schedule with revenues recognized consistent with the schedule. Billing rates are updated annually to the forecasted depreciable asset level and forecasted operating expenses. Mist Additional Expansion Potential Mist has a number of depleted reservoirs that have not been developed into storage at this time.
Seasonality of Business The NGD business is seasonal in nature due to higher gas usage by residential and commercial customers during the cold winter heating months. Other categories of customers experience similar seasonality in their usage but to a lesser extent. Regulation and Rates The NGD business is subject to regulation by the OPUC and WUTC.
Other categories of customers experience similar seasonality in their usage but to a lesser extent. 9 Regulation and Rates The NWN Gas Utility business is subject to regulation by the OPUC and WUTC.
On an annual basis, residential and commercial customers typically account for approximately 60% of NGD volumes delivered and approximately 90% of NGD margin.
On an annual basis, residential and commercial customers typically account for approximately 60% of NWN Gas Utility volumes delivered and approximately 91% of NWN Gas Utility margin. Industrial customers largely account for the remaining volumes and margin.
Asset Management Activities NW Natural contracts with an independent energy marketing company to provide asset management services, primarily through the use of natural gas commodity exchange agreements and natural gas pipeline capacity release transactions.
See "Interstate Storage Facility" section above in our descriptions of Mist Gas Storage Operations. The financial results of this business are included in NW Natural Other. Asset Management Activities NW Natural contracts with an independent energy marketing company to provide asset management services, primarily through the use of natural gas commodity exchange agreements and natural gas pipeline capacity release transactions.
All other business activities, including certain gas storage activities, water and wastewater businesses, non-regulated renewable natural gas activities and other investments and activities are aggregated and reported as "other" at their respective registrant. Our mission is to provide safe, reliable and affordable utility services and renewable energy in a sustainable way to better the lives of the communities we serve.
NW Holdings and NW Natural also have investments and business activities not specifically related to the NWN Gas Utility, SiEnergy, and NWN Water segments, which are aggregated and reported as NW Holdings Other. Our mission is to provide safe, reliable and affordable utility services and renewable energy in a sustainable way to better the lives of the communities we serve.
During 2024, a total of 822 million therms were purchased under contracts with durations as follows: Contract Duration (primary term) Percent of Purchases Long-term (one year or longer) 31 % Short-term (more than one month, less than one year) 45 Spot (one month or less) 24 Total 100 % During 2024, there was one supplier that provided 10% or more of the NGD business gas supply requirements.
We also maintain options to call on additional daily supplies during the winter heating season. 11 During 2025, a total of 784 million therms were purchased under contracts with durations as follows: Contract Duration (primary term) Percent of Purchases Long-term (one year or longer) 40 % Short-term (more than one month, less than one year) 41 Spot (one month or less) 19 Total 100 % During 2025, there was no individual supplier that provided 10% or more of the NWN Gas Utility business gas supply requirements.
Rocky Mountains to protect against regional supply disruptions and to take advantage of price differentials. For 2024, 60% of gas supply came from Canada, with the balance primarily coming from the U.S. Rocky Mountain region. We believe gas supplies available in the western United States and Canada are adequate to serve NGD customer requirements for 10 the foreseeable future.
Rocky Mountains to protect against regional supply disruptions and to take advantage of price differentials. For 2025, approximately 60% of gas supply came from Canada, with the balance primarily coming from the U.S. Rocky Mountain region.
In September 2021, a subsidiary of NW Natural Renewables, Ohio Renewables, and a subsidiary of EDL, a global producer of sustainable distributed energy, executed agreements to secure RNG supply from two production facilities that are designed to convert landfill waste gases to RNG (EDL Facilities).
NWN Renewables NWN Renewables is an unregulated subsidiary of NW Natural Holdings established to pursue unregulated RNG activities. Ohio Renewables, a subsidiary of NWN Renewables, has agreements with a subsidiary of EDL, a global producer of sustainable distributed energy, to secure RNG supply from two EDL facilities that convert landfill waste gases to RNG (EDL Facilities).
We support our mission by following our core values of service ethic, integrity, safety, caring, and environmental stewardship. NATURAL GAS DISTRIBUTION (NGD) SEGMENT Both NW Holdings and NW Natural have one reportable segment, the NGD segment, which is operated by NW Natural. NGD provides natural gas service through approximately 806,000 meters in Oregon and southwest Washington.
We support our mission by following our core values of service ethic, integrity, safety, caring, and environmental stewardship. SEGMENT INFORMATION NWN Gas Utility NW Natural operates a regulated gas distribution utility servicing customers through approximately 810,000 meters in Oregon and southwest Washington.
NW Natural The following businesses and activities are aggregated and reported as other under NW Natural, a wholly-owned subsidiary of NW Holdings: • 4.7 Bcf of the Mist gas storage facility contracted to other utilities, third-party marketers, and electric generators; • natural gas asset management activities; and • appliance retail center operations.
OTHER Certain businesses and activities of NW Holdings and NW Natural are aggregated and reported as other for segment reporting purposes. NW Natural The following businesses and activities are aggregated and reported as other under NW Natural, a wholly-owned subsidiary of NW Holdings: • Interstate storage; • natural gas asset management activities; and • appliance retail center operations.
NW Natural incurs monthly demand charges related to firm pipeline transportation contracts. These contracts have expiration dates ranging from 2025 to 2061. The largest pipeline agreements are with Northwest Pipeline.
NW Natural incurs monthly demand charges related to firm pipeline transportation contracts. These contracts have expiration dates ranging from 2026 to 2061. The largest pipeline agreements are with Northwest Pipeline. NW Natural actively works with Northwest Pipeline and others to renew contracts in advance of expiration to ensure gas transportation capacity is sufficient to meet customer needs.
ITEM 1. BUSINESS OVERVIEW NW Holdings is a holding company headquartered in Portland, Oregon and owns NW Natural, NW Natural Water Company, LLC (NWN Water), NW Natural Renewables Holdings, LLC, a non-regulated subsidiary established to pursue non-regulated renewable natural gas activities, and other businesses and activities. NW Natural is NW Holdings’ largest subsidiary.
ITEM 1. BUSINESS OVERVIEW NW Holdings is a holding company headquartered in Portland, Oregon and owns NW Natural, SiEnergy Operating, LLC (SiEnergy Gas Utility or SiEnergy), NW Natural Water Company, LLC (NWN Water Utility or NWN Water), and NW Natural Renewables Holdings, LLC (NWN Renewables).
The Mist facility serves NGD segment customers and is also used for non-NGD purposes, primarily for contracts with gas storage customers, including utilities, third-party marketers, and electric generators.
(3) The storage facility is located near Chehalis, Washington and is contracted from Northwest Pipeline, a subsidiary of The Williams Companies. The Mist facility serves NWN Gas Utility segment customers and is also used for non-NWN Gas Utility purposes, primarily for contracts with gas storage customers, including utilities, and third-party marketers.
NW Natural continues to evaluate the long-term supply mix based on projections of gas production and pricing in the U.S. Rocky Mountain region as well as other regions in North America. NW Natural supplements firm gas supply purchases with gas withdrawals from gas storage facilities, including underground reservoirs and LNG storage facilities.
We believe gas supplies available in the western United States and Canada are adequate to serve NWN Gas Utility customer requirements for the foreseeable future. NW Natural continues to evaluate the long-term supply mix based on projections of gas production and pricing in the U.S. Rocky Mountain region as well as other regions in North America.
Intrastate firm storage services in Oregon are offered under an OPUC-approved rate schedule as an optional service to certain eligible customers. Gas storage revenues from the 4.7 Bcf are derived primarily from firm service customers who provide energy-related services, including natural gas distribution, electric generation, and energy marketing.
Intrastate firm storage services in Oregon are offered under an OPUC-approved rate schedule as an optional service to certain eligible customers. North Mist Gas Storage Facility The North Mist gas storage facility began operations in 2019.
Additionally, NW Natural is focused on developing several hydrogen pilots for industrial and commercial customers to support their decarbonization goals. NW Natural is subject to the requirements of the Washington CCA cap-and-invest program, and will be subject to Oregon's CPP. NW Natural has modeled pathways to compliance with the CCA and CPP in its most recent IRP.
The tests met the safety protocols established by PHMSA Part 192. 12 NW Natural is subject to the requirements of the Washington CCA cap-and-invest program, and is also subject to Oregon's CPP. NW Natural has modeled pathways to compliance with the CCA and CPP in its most recent IRP.
Gas Distribution Safety and the protection of employees, customers, and our communities are, and will remain, top priorities. NW Natural constructs, operates, and maintains its pipeline distribution system and storage operations with the goal of ensuring natural gas is delivered and stored safely, reliably, and efficiently.
NW Natural constructs, operates, and maintains its pipeline distribution system and storage operations with the goal of ensuring natural gas is delivered and stored safely, reliably, and efficiently. NW Natural has one of the most modern distribution systems in the country with no identified cast iron pipe or bare steel main.
The Mist facility benefits from limited competition as there are few storage facilities in the Pacific Northwest region. Therefore, NW Natural has the ability to acquire high-value, multi-year contracts.
The first expansion in 2001 (Interstate Storage Facility) and again in 2019 (North Mist Gas Storage Facility). The Mist facility benefits from limited competition as there are few storage facilities in the Pacific Northwest region.
NW Natural does not foresee a significant impact of these rulemakings on our business given the modern materials used in our system. North Mist Gas Storage Facility The North Mist gas storage facility began operations in 2019.
In May 2025, PHMSA published an Advance Notice of Proposed Rulemaking (ANPRM) on Repair Criteria for Hazardous Liquid and Gas Transmission Pipelines and proposed amendments to Liquefied Natural Gas (LNG) facility safety standards. NW Natural does not foresee a significant impact of these rulemakings on our business given the modern materials used in our system.
The overall facility consists of seven depleted natural gas reservoirs, 21 injection and withdrawal wells, a compressor station, dehydration and control equipment, gathering lines, and other related facilities. The capacity at Mist provides multi-cycle gas storage services to customers in the interstate and intrastate markets. The interstate storage services are offered under a limited jurisdiction blanket certificate issued by FERC.
Gas Utility Storage The overall Gas Utility and Interstate Storage facility with 17.5 Bcf of storage consists of seven depleted natural gas reservoirs, 21 injection and withdrawal wells, a compressor station, injection and withdrawal lines, and other related facilities. Of the 17.5 Bcf storage facility, 13.1 Bcf serves NWN Gas Utility customers.
NW Natural actively works with Northwest Pipeline and others to renew contracts in advance of expiration to ensure gas transportation capacity is sufficient to meet customer needs. 12 Rates for interstate pipeline transportation services are established by FERC within the U.S. and by Canadian authorities for services on Canadian pipelines.
Rates for interstate pipeline transportation services are established by FERC within the U.S. and by Canadian authorities for services on Canadian pipelines. Gas Distribution Safety and the protection of employees, customers, and our communities are, and will remain, top priorities.
Removed
Approximately 88% of customers are located in Oregon and 12% are located in southwest Washington.
Added
Prior to the first quarter of 2025, NW Natural's natural gas distribution activities were reported in the natural gas distribution (NGD) segment. All other business activities, including certain gas storage activities, water and wastewater businesses, non-regulated renewable natural gas activities and other investments and activities are aggregated and reported as "other" at their respective registrant.
Removed
(2) The North Mist facility is contracted to exclusively serve Portland General Electric, a local electric utility, and may not be used to serve other NGD customers. See " North Mist Gas Storage Facility " below for more information. (3) The storage facility is located near Chehalis, Washington and is contracted from Northwest Pipeline, a subsidiary of The Williams Companies.
Added
SiEnergy owns and operates SiEnergy Holdings, which includes SiEnergy Gas and Terra Transmission, a gas distribution and a transmission utility, respectively, and provides gas distribution and transmission to customers in Texas. NWN Water provides regulated water and wastewater services and unregulated wastewater and operations services to customers in Oregon, Washington, Idaho, Arizona, and Texas.
Removed
We also maintain options to call on additional daily supplies during the winter heating season.
Added
NWN Renewables is a non-regulated business established to pursue non-regulated renewable natural gas activities. During the first quarter of 2025, we evaluated the reportable business segments of NW Holdings and concluded that SiEnergy and NWN Water were also reportable business segments. In addition, the NGD segment was renamed to NWN Gas Utility.
Removed
No other individual supplier provided 10% or more of the NGD business gas supply requirements.
Added
NW Holdings primarily operates in three reportable business segments, which are NWN Gas Utility, SiEnergy, and NWN Water. NW Natural primarily operates in one reportable business segment, which is NWN Gas Utility.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

132 edited+19 added−26 removed139 unchanged
Biggest changeAlthough the water businesses are not currently expected to materially contribute to the results of operations of NW Holdings, these businesses are subject to risks, in addition to those described above, including: • contamination of water supplies, including water provided to customers with naturally occurring or human-made substances or other hazardous materials, or disruptions to water treatment processes; • interruptions in water supplies and service, weather conditions, natural disasters and droughts; • insufficient water supplies, limitations on or disputes with respect to water rights or supplies, or the inability to secure water rights or supplies at a reasonable cost; • disruptions to the wastewater collection and treatment process, including spills, overflows or system failures; • wastewater discharges by third parties that contain unanticipated levels of chemical or other pollutants; • reliance on third parties for water supplies and transportation of such water supplies; • the ability to attract and retain customers to our water services business and competition for customers’ business; • conservation efforts by customers; • regulatory and legal requirements, including environmental, health and safety laws and regulations; • operational risks, including customer and employee safety; and • the outcome of rate cases and other regulatory proceedings.
Biggest changeOur water businesses are subject to risks, in addition to those described above, including: • Contamination of water supplies, including water provided to customers with naturally occurring or human-made substances or other hazardous materials such as perfluoroalkyl substances (PFAS), or disruptions to water treatment processes; ▪ Wastewater discharges by third parties that contain unanticipated levels of chemical or other pollutants; ▪ Interruptions in water supplies and service, weather conditions, natural disasters and droughts; ▪ Insufficient water supplies, overuse of sources of water, protection of threatened species or habitats, limitations on or disputes with respect to water rights or supplies, or the inability to secure water rights or supplies at a reasonable cost ▪ reliance on third parties for water supplies and transportation of such water supplies; ◦ Disruptions to the wastewater collection and treatment process, including spills, overflows or system failures; ▪ Regulatory and legal requirements, including environmental, health and safety laws and regulations and related compliance costs, such as the EPA’s regulation of PFAS; ▪ The outcome of rate cases and other regulatory proceedings; ▪ Operational risks, including customer and employee safety; ▪ The ability to attract and retain customers to our water services business and competition for customers’ business; and ▪ Conservation efforts by customers.
Increased competition in the natural gas storage business could reduce the demand for our natural gas storage services, drive prices down for our storage business, and adversely affect our ability to renew or replace existing contracts at rates sufficient to maintain current revenues and cash flows, which could adversely affect NW Holdings’ and NW Natural’s financial condition, results of operations and cash flows.
Increased competition in the natural gas storage business could reduce the demand for our gas storage services, drive prices down for our storage business, and adversely affect our ability to renew or replace existing contracts at rates sufficient to maintain current revenues and cash flows, which could adversely affect NW Holdings’ and NW Natural’s financial condition, results of operations and cash flows.
WORKFORCE RISK. NW Holdings’ and NW Natural’s businesses are heavily dependent on being able to attract and retain qualified employees and maintain a competitive cost structure with market-based salaries and employee benefits, and workforce disruptions could adversely affect NW Holdings’ or NW Natural’s operations and results.
WORKFORCE RISK. NW Holdings’ and NW Natural’s businesses are heavily dependent on being able to attract and retain qualified employees and maintain a competitive cost structure with market-based salaries and employee benefits. Workforce disruptions could adversely affect NW Holdings’ or NW Natural’s operations and results.
If we are unable to claim this exemption, we could be subject to higher costs for our derivatives activities, and such higher costs could have a negative impact on NW Holdings’ and NW Natural’s operating costs and financial results. GAS PRICE RISK.
If we are unable to claim this exemption, we could be subject to higher costs for our derivatives activities, and such costs could have a negative impact on NW Holdings’ and NW Natural’s operating costs and financial results. GAS PRICE RISK.
Any of these initiatives, or our unsuccessful response to them, could result in us incurring additional costs to comply with the imposed policies, regulations, restrictions or programs, provide a cost or other competitive advantage to energy sources other than natural gas, reduce demand for natural gas, restrict our customer growth, impose costs or restrictions on end users of natural gas, impact the prices we charge our customers, increase the likelihood of litigation, reduce our access to capital, impose increased costs on us associated with the adoption of new infrastructure and technology to respond to such requirements which may or may not be recoverable in customer rates, and could negatively impact public perception of our services or products that negatively diminishes the value of our brand, all of which could adversely affect NW Holdings’ or NW Natural’s business operations, financial condition and results of operations.
Any of these initiatives, or our unsuccessful response to them, could result in us incurring additional costs to comply 28 with the imposed policies, regulations, restrictions or programs, provide a cost or other competitive advantage to energy sources other than natural gas, reduce demand for natural gas, restrict our customer growth, impose costs or restrictions on end users of natural gas, impact the prices we charge our customers, increase the likelihood of litigation, reduce our access to capital, impose increased costs on us associated with the adoption of new infrastructure and technology to respond to such requirements which may or may not be recoverable in customer rates, and could negatively impact public perception of our services or products that negatively diminishes the value of our brand, all of which could adversely affect NW Holdings’ or NW Natural’s business operations, financial condition and results of operations.
However, it is difficult to estimate such costs due to uncertainties surrounding the course of environmental remediation, the preliminary nature of certain site investigations, natural recovery of the site, unavoidable limitations associated with environmental investigations and remedial technologies, evolving science, the application of environmental laws that impose joint and several liabilities on all 23 potentially responsible parties, and changes in federal, state or local environmental statutes, regulations or policies.
However, it is difficult to estimate such costs due to uncertainties surrounding the course of environmental remediation, the preliminary nature of certain site investigations, natural recovery of the site, unavoidable limitations associated with environmental investigations and remedial technologies, evolving science, the application of environmental laws that impose joint and several liabilities on all potentially responsible parties, and changes in federal, state or local environmental statutes, regulations or policies.
In addition, we are dependent on a continuing flow of important components and appropriately skilled individuals to maintain and upgrade our information technology systems. Our suppliers have previously faced disruptions, such as during the COVID-19 pandemic, and may face additional production or import delays due to natural disasters, strikes, lock-outs, political unrest, pandemics or other such circumstances.
In addition, we are dependent on a continuing flow of important components and appropriately skilled individuals to maintain and upgrade our technology systems. Our suppliers have previously faced disruptions, such as during the COVID-19 pandemic, and may face additional production or import delays due to natural disasters, strikes, lock-outs, political unrest, pandemics or other circumstances.
Additionally, to the extent that climate change adversely impacts the economic health or weather conditions of our service territory directly, it could adversely impact customer demand or our customers’ ability to pay. Such physical risks could have an adverse effect on NW Holdings’ or NW Natural’s financial condition, results of operations, and cash flows. PUBLIC PERCEPTION AND POLICY RISK.
Additionally, to the extent that climate change adversely impacts the economic health or weather conditions of our service territory directly, it could adversely impact customer demand or ability to pay. Such physical risks could have an adverse effect on NW Holdings’ or NW Natural’s financial condition, results of operations, and cash flows. PUBLIC PERCEPTION AND POLICY RISK.
Fire risk is also significant in the western United States, including in our service territory, and may be elevated by warmer air temperatures, drought, wind and land management practices. Climate change may increase the likelihood and magnitude of damages that may be caused by fires, which may adversely affect our financial condition, results of operations, and cash flows.
Fire risk is also significant in the western United States, 27 including in our service territory, and may be elevated by warmer air temperatures, drought, wind and land management practices. Climate change may increase the likelihood and magnitude of damages that may be caused by fires, which may adversely affect our financial condition, results of operations, and cash flows.
Any modifications, upgrades, system maintenance or replacements subject us to inherent costs and risks, including potential disruption of our internal control structure, substantial capital expenditures, additional administrative and operating expenses, retention of sufficiently skilled personnel to implement and operate the new systems, and other risks and costs of delays or difficulties in transitioning to new systems or of integrating new systems into our current systems.
Any modifications, upgrades, system maintenance or replacements subject us to inherent costs and risks, including disruption of our internal control structure, substantial capital expenditures, additional administrative and operating expenses, retention of sufficiently skilled personnel to implement and operate the new systems, and other risks and costs of delays or difficulties in transitioning to new systems or of integrating new systems into our current systems.
NW Holdings or NW Natural may now, or in the future, own other properties that require environmental remediation or other action. NW Natural and NW Holdings accrue all material loss contingencies relating to these properties. A regulatory asset at NW Natural has been recorded for estimated costs pursuant to a deferral order from the OPUC and WUTC.
NW Holdings or NW Natural may now, or in the future, own other properties that require environmental remediation or other action. NW Natural and 26 NW Holdings accrue all material loss contingencies relating to these properties. A regulatory asset at NW Natural has been recorded for estimated costs pursuant to a deferral order from the OPUC and WUTC.
NW Holdings’ and NW Natural’s business development projects may not be successful or may encounter unanticipated obstacles, costs, changes or delays that could result in a project being unsuccessful or becoming impaired, which could negatively impact NW Holdings’ or NW Natural’s financial condition, results of operations and cash flows. Business development projects involve many risks.
BUSINESS DEVELOPMENT RISK. NW Holdings’ and NW Natural’s business development projects may not be successful or may encounter unanticipated obstacles, costs, changes or delays that could result in a project being unsuccessful or becoming impaired, which could negatively impact NW Holdings’ or NW Natural’s financial condition, results of operations and cash flows. Business development projects involve many risks.
Such restrictions could adversely impact customer growth or usage and could adversely impact our ability to recover costs and maintain reasonable customer rates. In addition, certain states, cities, local jurisdictions and private parties have initiated lawsuits against companies related to climate change impacts, GHG emissions or climate-related disclosures.
Such restrictions could adversely impact customer growth or usage and could adversely impact our ability to recover costs and maintain reasonable customer rates. In addition, certain states, cities, local jurisdictions and private parties have initiated lawsuits against companies related to alleged climate change impacts, GHG emissions or climate-related disclosures.
Our access to funds under committed 28 credit facilities, which are currently provided by a number of banks, is dependent on the ability of the participating banks to meet their funding commitments. Those banks may not be able to meet their funding commitments if they experience shortages of capital and liquidity.
Our access to funds under committed credit facilities, which are currently provided by a number of banks, is dependent on the ability of the participating banks to meet their funding commitments. Those banks may not be able to meet their funding commitments if they experience shortages of capital and liquidity.
While we have risk management procedures for hedging in place, they may not always work as planned and cannot entirely eliminate the risks associated with hedging. Additionally, our hedging activities may cause 27 us to incur additional expenses to obtain the hedge.
While we have risk management procedures for hedging in place, they may not always work as planned and cannot entirely eliminate the risks associated with hedging. Additionally, our hedging activities may cause us to incur additional expenses to obtain the hedge.
If NW Holdings' 30 expectations regarding the financial results of its investments in water, wastewater or water services operations prove to be inaccurate, it may adversely affect NW Holdings' financial position or results of operations. Non-Regulated RNG Risks INVESTMENT RISK.
If NW Holdings' expectations regarding the financial results of its investments in water, wastewater or water services operations prove to be inaccurate, it may adversely affect NW Holdings' financial position or results of operations. Non-Regulated RNG Risks INVESTMENT RISK.
RELIANCE ON TECHNOLOGY RISK. NW Holdings’ and NW Natural’s efforts to integrate, consolidate and streamline each of their operations has resulted in increased reliance on technology, the failure of which could adversely affect NW Holdings’ or NW Natural’s financial condition and results of operations.
NW Holdings’ and NW Natural’s efforts to integrate, consolidate and streamline each of their operations has resulted in increased reliance on technology, the failure of which could adversely affect NW Holdings’ or NW Natural’s financial condition and results of operations.
These public utility commissions have broad regulatory authority, including: the rates charged to customers; authorized rates of return on rate base, including ROE; the amounts and types of securities that may be issued by our regulated utility companies, like NW Natural; services our regulated utility companies provide and the manner in which they provide them; the nature of investments our utility companies make; deferral and recovery of various expenses, including, but not limited to, pipeline replacement, environmental remediation and compliance costs, capital, information technology and other investments, commodity hedging expense, and certain employee benefit expenses such as pension costs; transactions with affiliated interests; regulatory adjustment mechanisms such as weather adjustment mechanisms, and other matters.
These public utility commissions have broad regulatory authority, which may include, among other things: the rates charged to customers; authorized rates of return on rate base, including ROE; the amounts and types of securities that may be issued by our regulated utility companies, like NW Natural; services our regulated utility companies provide and the manner in which they provide them; the nature of investments our utility companies make; deferral and recovery of various expenses, including, but not limited to, pipeline replacement, environmental remediation and compliance costs, capital, information technology and other investments, commodity hedging expense, and certain employee benefit expenses such as pension costs; transactions with affiliated interests; regulatory adjustment mechanisms such as weather adjustment mechanisms, and other matters.
If these assumptions and determinations prove to be incorrect, the recorded results may not be realized, which may negatively impact the financial results of NW Holdings and NW Natural. REPUTATIONAL RISKS.
If these assumptions and determinations prove to be incorrect, the recorded results may not be realized, which may negatively impact the financial results of NW Holdings and NW Natural. 21 REPUTATIONAL RISKS.
Although the effects of warmer or colder weather on utility margin in Oregon are expected to be mitigated through the operation of NW Natural’s weather normalization mechanism, weather variations from normal could adversely affect utility margin because NW Natural may be required to purchase more or less gas at spot rates, which may be higher or lower than the rates assumed in its PGA.
Although the effects of warmer or colder weather on utility margin in Oregon are expected to be mitigated through the operation of NW Natural’s weather normalization mechanism, weather variations from normal, or extreme weather events, could adversely affect utility margin because NW Natural may be required to purchase more or less gas at spot rates, which may be higher or lower than the rates assumed in its PGA.
Additionally, any failure to comply with existing or new laws and regulations could result in fines, penalties or injunctive measures. For example, under the Energy Policy Act of 2005, the FERC may assess civil penalties under the Natural Gas Act for violations of FERC’s requirements up to nearly $1.6 million per day for each violation.
Additionally, any failure to comply with existing or new laws and regulations could result in fines, penalties or injunctive measures. For example, under the Energy Policy Act of 2005, the FERC may assess civil penalties under the Natural Gas Act for violations of FERC’s requirements up to approximately $1.6 million per day for each violation.
Such climate-related claims or actions could be costly to defend and could negatively impact our business, reputation, financial condition, and results of operations. NW Natural believes natural gas has an important role in moving the Pacific Northwest to a lower carbon future, and to that end is developing programs and measures to reduce carbon emissions.
Such climate-related claims or actions could be costly to defend and could negatively impact our business, reputation, financial condition, and results of operations. NW Natural believes natural gas has an important role in moving the Pacific Northwest to a lower carbon future and is developing programs and measures to reduce carbon emissions.
Our ability to secure natural gas, RNG and environmental attributes or credits depends upon its ability to purchase and receive delivery of them from third parties.
Our ability to secure natural gas, RNG and environmental attributes or credits depends upon our ability to purchase and receive delivery of them from third parties.
Significant losses, liabilities or impairments arising from these businesses may adversely affect NW Holdings' financial position or results of operations. INVESTMENT RISK.
Significant losses, liabilities or impairments arising from these businesses may adversely affect NW Holdings' financial position or results of operations. 33 INVESTMENT RISK.
We rely on third parties to supply or optimize natural gas, RNG, storage or pipeline capacity, and environmental attributes or credits in our NGD segment, and limitations on our ability to obtain supplies, engage in effective optimization, or failure to receive expected supplies, could have an adverse impact on NW Holdings’ or NW Natural’s financial results.
We rely on third parties to supply or optimize natural gas, RNG, storage or pipeline capacity, and environmental attributes or credits, and limitations on our ability to obtain supplies, engage in effective optimization, or failure to receive expected supplies, could have an adverse impact on NW Holdings’ or NW Natural’s financial results.
For example, TC Pipelines, LP (TC Pipelines) has identified the presence of a chemical substance, dithiazine, at several facilities on the system of its subsidiary, Gas Transmission Northwest (GTN), and those of some upstream and downstream connecting pipeline facilities. A portion of NW Natural’s gas supplies from Canada are transported on GTN’s pipelines.
For example, TC Pipelines, LP (TC Pipelines) previously identified the presence of a chemical substance, dithiazine, at several facilities on the system of its subsidiary, Gas Transmission Northwest (GTN), and those of some upstream and downstream connecting pipeline facilities. A portion of NW Natural’s gas supplies from Canada are transported on GTN’s pipelines.
If we can no longer apply regulatory accounting, we could be required to write off our regulatory assets and precluded from the future deferral of costs not recovered through rates at the time such amounts are incurred, even if we are expected to recover these amounts from customers in the future.
If we can no longer apply regulatory accounting, we could be required to write off our regulatory assets and be precluded from the future deferral of costs not recovered through rates at the time such amounts are incurred, even if we expect to recover these amounts from customers in the future.
If NW Holdings’ expectations regarding the financial results of its investments in non-regulated RNG prove to be inaccurate, it may adversely affect NW Holdings’ financial position or results of operations. RENEWABLES BUSINESS RISK. NW Natural Renewables is an unregulated subsidiary of NW Holdings established to pursue unregulated renewable natural gas activities.
If NW Holdings’ expectations regarding the financial results of its investments in non-regulated RNG prove to be inaccurate, it may adversely affect NW Holdings’ financial position or results of operations. RENEWABLES BUSINESS RISK. NW Natural Renewables is an unregulated subsidiary of NW Holdings established to pursue unregulated RNG activities.
The OPUC also regulates actions investors may take with respect to our utility companies, NW Natural and NW Holdings. Similarly, FERC has regulatory authority over NW Natural’s interstate storage services. Expansion of our businesses generally results in regulation by other regulatory authorities.
The OPUC also regulates actions investors may take with respect to NW Natural and NW Holdings. Similarly, FERC has regulatory authority over NW Natural’s interstate storage services. Expansion of our businesses generally results in regulation by other regulatory authorities.
NW Holdings and NW Natural are subject to regulation by federal, state and local governmental authorities. We are required to comply with a variety of laws and regulations and to obtain authorizations, permits, approvals and certificates from governmental agencies in various aspects of our business.
NW Holdings, NW Natural and their subsidiaries are subject to regulation by federal, state and local governmental authorities. We are required to comply with a variety of laws and regulations and to obtain authorizations, permits, approvals and certificates from governmental agencies in various aspects of our business.
Local or national disasters (including but not limited to earthquakes, wildfires, floods, storms, landslides), pandemics, political unrest, terrorist activities, cyber-attacks and data breaches, power outages, and other extreme events are a threat to our assets and operations.
Local or national disasters (including but not limited to earthquakes, wildfires, floods, storms, freezes, landslides, hurricanes), pandemics, political unrest, terrorist activities, cyber-attacks and data breaches, power outages, and other extreme events are a threat to our assets and operations.
Our business development activities are subject to uncertainties and changed circumstances and may not reach the scale expected, 19 be successful or perform as anticipated. Additionally, we may not be able to obtain required governmental permits and approvals to complete our projects in a cost-efficient or timely manner, potentially resulting in delays or abandonment of the projects.
Moreover, all of our business development activities are subject to uncertainties and changed circumstances and may not reach the scale expected, be successful or perform as anticipated. Additionally, we may not be able to obtain required governmental permits and approvals to complete our projects in a cost-efficient or timely manner, potentially resulting in delays or abandonment of the projects.
Our Renewables business is subject to risks, in addition to those described above, including: • unpredictable production levels or performance or gas quality below expected levels, which may impact our ability to accept or deliver RNG under our contractual agreements; • construction risks or delays, including due to inclement weather, supply chain or labor disruptions or otherwise; • cost overruns and the need to commit more capital than initially budgeted as a result of environmental, construction, technological or other complications; • weather conditions; • changes in energy commodity prices, including pricing of, and volatility in markets for, RNG and its associated attributes; • equipment failure, difficulties or delays in repairing or replacing equipment, technical difficulties or otherwise higher than expected operating costs; • regulatory, policy, and legal requirements, including environmental, health and safety laws and regulations or regulations that may impact the value of RNG and its associated attributes or our ability to deliver RNG in the manner contemplated under our contractual arrangements; • changes to laws or policies that may reduce demand for, or desirability of, RNG or its associated attributes; • reliance on third parties, including for pipeline interconnection and for a sufficient supply of waste for conversion to RNG; • catastrophic events such as fires, explosions, earthquakes, droughts, acts of terrorism and other force majeure events that may impact the Renewables business, its customers, suppliers, or other business partners; and • failures or delays in obtaining necessary land rights, permits, approvals or other consents required to construct and operate projects.
Our Renewables business is subject to risks, in addition to those described above, including: • unpredictable production levels or performance or gas quality below expected levels, which may impact our ability to accept or deliver RNG under our contractual agreements; • construction risks or delays, including due to inclement weather, supply chain or labor disruptions or otherwise; • cost overruns and the need to commit more capital than initially budgeted as a result of environmental, construction, technological or other complications; • changes in energy commodity prices, including pricing of, and volatility in markets for, RNG and its associated attributes; • equipment failure, difficulties or delays in repairing or replacing equipment, technical difficulties or otherwise higher than expected operating costs; • regulatory, policy, and legal requirements, including environmental, health and safety laws and regulations or regulations that may impact the value of RNG and its associated attributes or our ability to deliver RNG in the manner contemplated under our contractual arrangements; 34 • changes to laws or policies that may reduce demand for, or desirability of, RNG or its associated attributes; • reliance on third parties, including for pipeline interconnection or for a sufficient supply of waste for conversion to RNG; • catastrophic events such as fires, explosions, earthquakes, freezes, droughts, hurricanes, acts of terrorism and other events that may impact the Renewables business, its customers, suppliers, or other business partners; and • failures or delays in obtaining necessary land rights, permits, approvals or other consents required to construct and operate projects or supporting infrastructure, such as pipeline interconnections.
Technological improvements such as electric heat pumps, batteries or other alternative technologies, or building code or other regulations or restrictions affecting the cost or ability to use certain gas appliances, could erode our competitive advantage.
Technological developments such as electric heat pumps, batteries or other alternative technologies, or building code or other regulations or restrictions affecting the cost or ability to use certain gas appliances, could erode our competitive advantage.
We have previously acquired, and from time to time may make further investments in unregulated businesses on the water platform, including wastewater and water services businesses, which may result in additional uncertainty or volatility of earnings from these businesses.
We have previously acquired, and may make further investments in unregulated businesses on the water platform, including wastewater and water services businesses, which may result in additional uncertainty or volatility of earnings from these businesses.
State utility regulators have the authority to disallow recovery of costs they find imprudently incurred or otherwise disallowed, and rates that regulators allow may be insufficient for recovery of costs we incur.
State utility regulators have the authority to disallow recovery of costs they find imprudently incurred or otherwise disallowable, and rates that regulators allow may be insufficient for recovery of costs we incur.
For example, the RNG purchase contract between Ohio Renewables and a subsidiary of EDL is on a volumes-produced basis, whereas Ohio Renewables’ contract for the sale of RNG from 2025 through 2042 is a fixed-volume contract.
For example, the RNG purchase contract between Ohio Renewables and a subsidiary of EDL is on a volumes-produced basis, whereas Ohio Renewables’ contract for the sale of RNG from 2025 through 2044 is a fixed-volume contract.
Federal, state, or local governments may provide tax advantages and other subsidies to support alternative energy sources, withdraw funding from fossil fuel sources, mandate the use of specific fuels or technologies, prohibit the use of natural gas, or promote research into new technologies to reduce the cost and increase the scalability of alternative energy sources.
Federal, state, or local governments may provide tax advantages and other subsidies to support alternative energy sources, withdraw funding from fossil fuel sources, mandate or restrict the use of specific fuels or technologies (including natural gas), or promote research into new technologies to reduce the cost and increase the scalability of alternative energy sources.
We could also experience issues such as: technological challenges; ineffective scalability; failure to achieve expected outcomes; unsuccessful business models; startup and construction delays; construction cost overruns; reliance on or inability to direct third parties; disputes with contractors or other third parties; the inability to negotiate acceptable agreements such as rights-of-way, easements, construction, gas supply or other material contracts; failure or delay in receiving applicable permits; changes in customer demand, perception or commitment; public opposition to projects; marketing risk and changes in market regulation, behavior or prices, market volatility or unavailability, including markets for RNG and its associated attributes or other environmental attributes; the inability to receive expected tax or regulatory treatment (including any applicable tax incentives or credits for renewable fuels); and operating cost increases.
We could also experience issues such as: technological challenges; ineffective scalability; failure to achieve expected outcomes; unsuccessful business models; startup and construction delays; construction cost overruns; challenges in attracting customers or partners or increased competition for new projects; reliance on or inability to direct third parties; disputes with contractors or other third parties; the inability to negotiate acceptable agreements such as rights-of-way, easements, construction, gas supply or other material contracts; failure or delay in receiving applicable permits; changes in customer demand, perception or commitment; public opposition to projects; changes in market conditions; marketing risk and changes in market regulation, behavior or prices, market volatility or unavailability, including markets for RNG and its associated attributes or other environmental attributes; the inability to receive expected tax or regulatory treatment (including any applicable tax incentives or credits for renewable fuels); and operating cost increases.
These efforts have resulted in greater reliance on technological tools such as, at NW Natural: an enterprise resource planning system, technology associated with gas operations, a digital dispatch system, an automated meter reading system, a web-based ordering and tracking system, and other similar technological tools and initiatives.
These efforts have resulted in greater reliance on technological tools such as: an enterprise resource planning system, technology associated with gas operations, a digital dispatch system, an automated meter reading system, a web-based ordering and tracking system, and other similar technological tools and initiatives.
Similarly, business disruptions may limit, delay or block public utility commissions’ ability to approve or authorize applications or other requests we may make with respect to our regulated businesses. Any of these occurrences, or the resulting economic effects could have a material adverse effect on our business, outlook, financial condition, and results of operations and cash flows.
Similarly, business disruptions may limit, delay or block public utility commissions’ ability to approve or authorize applications or other requests we may make with respect to our regulated businesses. Any of these occurrences, or the resulting effects could have a material adverse effect on our business, outlook, financial condition, and results of operations and cash flows. RELIANCE ON TECHNOLOGY RISK.
We are also required to reduce emissions of GHGs over time in accordance with the recently issued Oregon Climate Protection Program (CPP) and the Washington Climate Commitment Act (CCA). We expect that compliance with any form of regulation of GHG emissions will require additional resources and legislative or regulatory tools and will increase costs.
We are also required to reduce emissions of GHGs over time in accordance with the recently issued Oregon Climate Protection Program (CPP) and the Washington Climate Commitment Act (CCA). We expect that compliance with GHG emissions regulations will require additional resources and legislative or regulatory tools and will increase costs.
NW Holdings or NW Natural currently has and may further acquire or develop part-ownership interests in other projects in the future, including but not limited to, natural gas, water, wastewater, water services, RNG, or hydrogen projects.
NW Holdings or NW Natural currently has and may further acquire or develop part-ownership interests in other projects in the future, including but not limited to, natural gas, water, wastewater, water services, renewables or other projects.
Other businesses we acquire may also have pension plans.
Other 30 businesses we acquire may also have pension plans.
Further, based on current interpretations, each of NW Holdings, NW Natural and NWN Water is not considered a "swap dealer" or "major swap participant" in 2024, so we are exempt from certain requirements under the Dodd-Frank Act.
Further, based on current interpretations, each of NW Holdings, NW Natural and NWN Water is not considered a "swap dealer" or "major swap participant" as of 2025, so we are exempt from certain requirements under the Dodd-Frank Act.
NW Holdings' credit profile is largely supported by NW Natural’s credit ratings and any negative change in NW Natural’s credit ratings would likely negatively impact NW Holdings’ access to sources of liquidity and capital and cost of borrowing.
NW Holdings' credit profile is largely supported by NW Natural’s credit ratings and any negative change in NW Natural’s credit ratings could negatively impact NW Holdings’ access to sources of liquidity and capital and cost of borrowing.
Any such transactions involve substantial risks, including the following: • such transactions that are contracted for may fail to close for a variety of reasons; • the result of such transactions may not produce revenues, earnings or cash flow at anticipated levels, which could, among other things, result in the impairment of any investments or goodwill associated with such transactions; • acquired businesses or assets could have environmental, permitting, or other problems for which contractual protections prove inadequate; • our forecasts and projections regarding customer and business growth, financial performance, or economic and market conditions may prove to be incorrect; • there may be difficulties in integration or higher than expected operation costs of new businesses; • there may exist liabilities that were not disclosed to us, that exceed our estimates, or for which our rights to indemnification from the seller are limited; • we may be unable to obtain the necessary regulatory or governmental approvals to close a transaction or receive approvals granted subject to terms that are unacceptable to us; • we may be unable to achieve the anticipated regulatory treatment of any such transaction as part of the transaction approval or subsequent to closing the transaction; or • we may be unable to avoid a disposition of assets for a price that is less than the book value of those assets.
Any strategic transactions involve substantial risks, including the following: • such transactions that are contracted for may fail to close for a variety of reasons; • the result of such transactions may not produce revenues, earnings or cash flow at anticipated levels, which could, among other things, result in the impairment of any investments or goodwill associated with such transactions; • acquired businesses or assets could have environmental, permitting, or other problems for which contractual protections prove inadequate; • our forecasts and projections regarding customer and business growth, financial performance, or economic and market conditions may prove to be incorrect; • there may be difficulties in integration or higher than expected operation costs of new businesses; • there may exist liabilities (including, legal, tax, environmental, financial or other liabilities) that were not disclosed to us, that exceed our estimates, or for which our rights to indemnification from the seller are limited; • we may be unable to obtain the necessary regulatory or governmental approvals to close a transaction or receive approvals granted subject to terms that are unacceptable to us; • we may be unable to achieve the anticipated regulatory treatment of any such transaction as part of the transaction approval or subsequent to closing the transaction; or • we may be unable to avoid a disposition of assets for a price that is less than the book value of those assets. 22 One or more of these risks could affect NW Holdings’ and NW Natural’s financial condition, results of operations, and cash flows.
SiEnergy, our gas utility in Texas similarly maintains a weather normalization mechanism, however, this mechanism may not fully mitigate the impact of warmer or colder than expected weather in Texas. These effects could have an adverse effect on NW Holdings’ and NW Natural’s financial condition, results of operations and cash flows. Water Business Risks WATER SECTOR BUSINESS.
SiEnergy, our gas utility in Texas similarly maintains a weather normalization mechanism, however, this mechanism may not fully mitigate the impact of unexpected or extreme weather in Texas. These effects could have an adverse effect on NW Holdings’ and NW Natural’s financial condition, results of operations and cash flows. Water Business Risks WATER SECTOR BUSINESS.
Further, new gas reserves arrangements have not been approved for inclusion in rates, and regulators may ultimately determine to not include all or a portion of future transactions in rates. The realization of any of these situations could adversely impact NW Holdings’ or NW Natural’s financial condition, results of operations and cash flows. CUSTOMER GROWTH RISK.
Further, regulators may ultimately determine to not include all or a portion of new gas reserves arrangements or future transactions in rates. The realization of any of these situations could adversely impact NW Holdings’ or NW Natural’s financial condition, results of operations and cash flows. 23 CUSTOMER GROWTH RISK.
Although NW Holdings expects its water and wastewater utility operations and water services businesses will result in various benefits, including expanding customer bases, providing investment opportunities through infrastructure development and enhancing regulatory relationships within the local communities served, NW Holdings may not be able to realize these or other benefits.
Although NW Holdings expects its water and wastewater utility operations and water services businesses will provide various benefits, including expanding customer bases, providing investment opportunities through infrastructure development and enhancing regulatory relationships in communities served, NW Holdings may not be able to realize these or other anticipated benefits.
Threatened or actual national disasters, pandemics or terrorist activities may also disrupt capital or bank markets and our ability to raise capital or obtain debt financing, or impact our suppliers or our customers directly, including increasing volatility in the price of natural gas or reducing demand for natural gas or water.
Threatened or actual national disasters, pandemics or terrorist activities may also increase economic instability and volatility, disrupt capital or bank markets and our ability to raise capital or obtain debt financing, or impact our suppliers or our customers directly, including increasing volatility in the price of natural gas and other commodities or reducing customer demand for natural gas or water.
These attacks could, among other things, target or impact our technology or mechanical systems that operate our distribution, transmission or storage facilities and result in a disruption in our operations, damage to our system and inability to meet customer requirements.
These attacks could, among other things, target or impact our technology or mechanical systems that operate our distribution, transmission or storage facilities, or the safety and security of our employees, and result in a disruption in our operations, damage to our system and inability to meet customer requirements.
There is also risk that we may not be able to recover all costs associated with projects to improve our technological capabilities, which may adversely affect NW Holdings’ or NW Natural’s financial condition and results of operations. CYBERSECURITY RISK.
Additionally, we may not be able to recover all costs associated with projects to improve our technological capabilities, which may adversely affect NW Holdings’ or NW Natural’s financial condition and results of operations. CYBERSECURITY RISK.
In addition, as we expand our businesses and the regulatory environment for our businesses increases in complexity, the risk of inadvertent noncompliance may also increase. Changes in regulations, the imposition of additional regulations, and the failure to comply with laws and regulations could negatively influence NW Holdings’ or NW Natural’s operating environment and results of operations.
In addition, as we expand our businesses and the regulatory environment for our businesses increases in complexity, the risk of inadvertent noncompliance may also increase. New or amended laws and regulations or failure to comply with such laws or regulations could negatively influence NW Holdings’ or NW Natural’s operating environment and results of operations.
NW Holdings and NW Natural are subject to all of the risks and hazards inherent in the businesses of gas and liquid transmission, distribution and storage, water distribution, and water and wastewater services including: • earthquakes, wildfires, floods, storms, landslides and other severe weather incidents and natural hazards; • leaks or losses of gases or liquids, or contamination of gases or liquids by chemicals or compounds, as a result of the malfunction of equipment or facilities or otherwise; • operator errors or damages from third parties; • negative performance by our storage reservoirs, facilities, or wells that could cause us to fail to meet expected or forecasted operational levels or contractual commitments to our customers or other third parties; • problems maintaining, or the malfunction of, pipelines, biodigester facilities, wellbores and related equipment and facilities that form a part of the infrastructure that is critical to the operation of our facilities; • presence of chemicals or other compounds in the gases or liquids we deliver that could adversely affect the performance of the system or end-use equipment; • failure of gas or water storage reservoirs; • inadequate supplies of RNG, natural gas or water or contamination of water supplies; • operating costs that are substantially higher than expected; • supply chain disruptions, including unexpected price increases, or supply restrictions beyond the control of our suppliers; • migration of gas through faults in the rock or to some area of the reservoir where existing wells cannot drain the gas effectively, resulting in loss of the gas; • blowouts (uncontrolled escapes of gas from a pipeline or well) or other accidents, fires and explosions; and • risks and hazards inherent in the drilling operations associated with the development of gas storage facilities, and wells.
NW Holdings and NW Natural are subject to all of the risks and hazards inherent in the businesses of gas and liquid transmission, distribution and storage, water distribution, and water and wastewater services including: • earthquakes, wildfires, floods, storms, freezes, landslides, hurricanes, and other severe weather incidents and natural hazards; • leaks or losses of gases or liquids, or contamination of gases or liquids by chemicals or compounds, as a result of the malfunction of equipment or facilities or otherwise; • operator errors or damages from third parties; • negative performance by our storage reservoirs, facilities, or wells that could cause us to fail to meet expected or forecasted operational levels or contractual commitments to our customers or other third parties; • problems maintaining, or the malfunction of, pipelines, biodigester facilities, wellbores and related equipment and facilities that form a part of the infrastructure that is critical to the operation of our facilities; • presence of chemicals or other compounds in the gases or liquids we deliver that could adversely affect the performance of the system or end-use equipment; 24 • failure of gas or water storage reservoirs; • inadequate supplies of RNG, natural gas or water or contamination of water supplies; • operating costs that are substantially higher than expected; • higher maintenance costs or service disruption due to the need to replace or repair aging infrastructure; • failure to secure or maintain necessary rights-of-way, easements, property rights, permits and other rights necessary to operate or business or complete projects; • supply chain disruptions, including unexpected price increases, or supply restrictions beyond the control of our suppliers; • migration of gas through faults in the rock or to some area of the reservoir where existing wells cannot drain the gas effectively, resulting in loss of the gas; • blowouts (uncontrolled escapes of gas from a pipeline or well) or other accidents, fires and explosions; and • risks and hazards inherent in the drilling operations associated with the development of gas storage facilities, and wells.
In addition, the difficulties with implementing new technology systems may cause disruptions in our business operations and have an adverse effect on our business and operations, if not anticipated and appropriately mitigated.
In addition, the difficulties with implementing 29 new technology systems may disrupt our operations and have an adverse effect on our business, if not anticipated and appropriately mitigated.
Although we take precautions to protect our technology systems and are not aware of any material security breaches to date, there is no guarantee that the procedures we have implemented to protect against unauthorized access to secured data and systems, including our operational technology and information technology systems, are adequate to safeguard against all security breaches or other cyberattacks.
Although we take precautions to protect our technology systems, there is no guarantee that the procedures we have implemented to protect against unauthorized access to secured data and systems, including our operational technology and information technology systems, are adequate to safeguard against all security breaches or other cyberattacks.
We are currently engaged in several business development projects, including, but not limited to, several water, wastewater, water services and RNG projects, non-regulated investments in RNG projects, and purchasing, marketing and reselling of RNG and its associated attributes.
We have recently or are currently engaged in several business development projects, including, but not limited to, several gas, gas storage, water, wastewater, water services and RNG projects, non-regulated investments in RNG projects, and purchasing, marketing and reselling of RNG and its associated attributes.
We also contract with an independent energy marketing company to provide asset management services regarding storage and pipeline capacity when those assets are not serving the needs of NGD business customers.
We also contract with an independent energy marketing company to provide asset management services regarding storage and pipeline capacity when those assets are not serving the needs of NWN Gas Utility customers.
Additionally, approximately half of NW Natural workers are represented by the OPEIU Local No. 11 AFL-CIO and are covered by a collective bargaining agreement that extends to May 31, 2028.
Additionally, approximately half of NW Natural workers comprising approximately 39% of NW Holdings’ total workforce, are represented by the OPEIU Local No. 11 AFL-CIO and are covered by a collective bargaining agreement that extends to May 31, 2028.
In addition, anticipated costs, level of management’s attention and internal resources to achieve the integration of or operate the acquired businesses may differ significantly from our current estimates resulting in failures or delays in achieving expected returns or performance.
In addition, our costs, level of management’s attention and internal resources to achieve the integration of or operate the acquired businesses may differ significantly from expectations resulting in failures or delays in achieving expected performance.
As companies with regulated utility businesses, we frequently have dockets open with our regulators, including NW Natural’s general rate case filed with the OPUC in December 2024. The regulatory proceedings for these dockets typically involve multiple parties, including governmental agencies, consumer, environmental, and other advocacy groups, and other third parties.
As companies with regulated utility businesses, we frequently have dockets open with our regulators, including NW Natural’s general rate case filed with the WUTC in August 2025. The regulatory proceedings for these dockets typically involve multiple 20 parties, including governmental agencies, consumer, environmental, and other advocacy groups, and other third parties.
A majority of NW Natural’s gas volume is driven by gas sales to space heating residential and small commercial customers during the winter heating season. Current NW Natural rates are based on an assumption of average weather. Warmer than average weather typically results in lower gas sales. Colder weather typically results in higher gas sales.
We are exposed to weather risk in our natural gas businesses. A majority of NW Natural’s gas volume is driven by gas sales to space heating residential and small commercial customers during the winter heating season. Current NW Natural rates are based on an assumption of average weather. Warmer than average weather typically results in lower gas sales.
For example, Jonah Energy, the counterparty in NW Natural’s gas reserves arrangement, no longer maintains any company credit ratings. Although NW Natural intends to continue monitoring Jonah Energy’s financial condition and take appropriate actions to preserve NW Natural’s interests, it does not control Jonah Energy’s financial condition or continued performance under the gas reserves arrangement.
For example, Jonah Energy, the counterparty in NW Natural’s gas reserves arrangement, no longer maintains any company credit ratings. While NW Natural monitors Jonah Energy’s financial condition and may take appropriate actions to preserve NW Natural’s interests, it does not control Jonah Energy’s financial condition or continued performance under the gas reserves arrangement.
Achieving the anticipated benefits is subject to a number of uncertainties, including whether the investments can be made at an expected scale, whether the investments can be monetized in the manner intended, and whether costs to finance the investments will be consistent with expectations.
Achieving the anticipated benefits is subject to a number of uncertainties, including whether the investments can be monetized in the manner intended, and whether costs to finance the investments will be consistent with expectations.
We review the carrying value of goodwill annually or whenever events or changes in circumstances indicate that such carrying value may not be recoverable. A goodwill impairment analysis begins with a qualitative analysis of events and circumstances.
NW Holdings reviews the carrying value of goodwill annually or whenever events or changes in circumstances indicate that such carrying value may not be recoverable. A goodwill impairment analysis begins with a qualitative analysis of events and circumstances.
Further, because our pipeline, storage and distribution facilities are in or near populated areas, including residential areas, commercial business centers, and industrial sites, any loss of human life or adverse financial outcomes resulting from such events could be significant. We could be subject to lawsuits, claims, and criminal and civil enforcement actions.
Further, because our pipeline, storage and distribution facilities are in or near populated areas any loss of human life or property or adverse financial outcomes resulting from such events could be significant. We could be subject to lawsuits, claims, and criminal and civil enforcement actions.
The failure of any regulatory commission to approve requested rate increases on a timely basis to recover costs or to allow an adequate return could adversely impact NW Holdings’ or NW Natural’s financial condition, results of operations and liquidity.
The failure of any regulatory commission to approve requested rate increases on a timely basis could adversely impact NW Holdings’ or NW Natural’s financial condition, results of operations and liquidity.
Higher natural gas commodity prices and volatility in the price of gas may adversely affect our NGD business, whereas lower gas price volatility may adversely affect NW Natural’s gas storage business, negatively affecting NW Holdings’ and NW Natural’s results of operations and cash flows.
Higher natural gas commodity prices and volatility in the price of gas may adversely affect our NWN Gas Utility business, whereas lower gas price volatility may adversely affect NW Natural’s interstate gas storage business and optimization portfolio, negatively affecting NW Holdings’ and NW Natural’s results of operations and cash flows.
Although we cannot predict the impact, if any, of these changes to our businesses, they could adversely affect NW Holdings’ or NW Natural’s financial condition and results of operations.
Although we cannot predict the impact, if any, of these changes to our businesses, they could adversely affect NW Holdings’ or NW Natural’s financial condition and results of operations. We cannot predict changes in laws, regulations, interpretations or enforcement or the impact of such changes.
Additionally, notwithstanding NW Natural’s current rate structure, higher gas costs could result in increased pressure on the OPUC or the WUTC to seek other means to reduce NW Natural’s rates, which also could adversely affect NW Holdings’ and NW Natural’s results of operations and cash flows.
Additionally, notwithstanding our gas businesses' current rate structure, higher gas costs could 31 result in increased pressure on our regulators to seek other means to reduce rates, which also could adversely affect NW Holdings’ and NW Natural’s results of operations and cash flows.
NW Holdings’ expectations with respect to the financial results of its investments in water, wastewater and water services operations are based on various assumptions and beliefs that may not prove accurate, resulting in failures or delays in achieving expected returns or performance. NW Holdings’ expansion into the water sector is an important component of its growth strategy.
NW Holdings’ expectations with respect to the financial results of its investments in water, wastewater and water services operations are based on various assumptions and beliefs that may not prove accurate, resulting in failures or delays in achieving expected returns or performance.
Moreover, the 2024 election resulted in Republican control of the presidency and both houses of Congress, which may result in a wide range of new policies, executive orders, rules, initiatives and other changes to fiscal, tax, regulation, trade, environmental, climate and other federal policies, many of which have components that affect the energy and utilities sectors.
Moreover, the 2024 election has resulted in in a wide range of new policies, executive orders, rules, initiatives and other changes to fiscal, tax, regulation, trade, environmental, climate and other federal policies, many of which have components that affect the energy and utilities sectors.
NW Holdings’ expectations with respect to the financial results of its investments in non-regulated RNG investments are based on various assumptions and beliefs that may not prove accurate, resulting in failures or delays in achieving expected returns. NW Holdings’ expansion into the non-regulated RNG business is an important component of its growth strategy.
NW Holdings’ expectations with respect to the financial results of its investments in non-regulated RNG investments are based on various assumptions and beliefs that may not prove accurate, resulting in failures or delays in achieving expected returns.
Although NW Holdings expects this expansion will result in various benefits, including providing renewable fuels to support decarbonization in the utility, commercial, industrial and transportation sectors, NW Holdings may not be able to realize these or other benefits.
Although NW Holdings expects that its non-regulated RNG business will result in various benefits, including providing renewable fuels to support decarbonization in the utility, commercial, industrial and transportation sectors, NW Holdings may not be able to realize these or other benefits.
The integration of newly acquired water, wastewater or water services businesses, particularly over noncontiguous geographic regions, may be unpredictable, subject to delays or changed circumstances, and such businesses may not perform in accordance with our expectations.
The integration of newly acquired water, wastewater or water services businesses, particularly over noncontiguous geographic regions, may be unpredictable, subject to delays or changed circumstances, and such businesses may not perform as expected.
Insufficient customer growth, for economic, political, public perception, policy, or other reasons could adversely affect NW Holdings’ or NW Natural’s utility margin, earnings and cash flows. 20 RISK OF COMPETITION. Our NGD business is subject to increased competition which could negatively affect NW Holdings’ or NW Natural’s results of operations.
Insufficient customer growth, for economic, political, public perception, policy, cost competitiveness or other reasons could adversely affect NW Holdings’ or NW Natural’s utility margin, earnings and cash flows. RISK OF COMPETITION. Our businesses are subject to competition which could negatively affect NW Holdings’ or NW Natural’s results of operations.
NW Natural’s NGD margins and earnings growth have largely depended upon the sustained growth of its residential and commercial customer base due, in part, to the new construction housing market, conversions of customers to natural gas from other energy sources and growing commercial use of natural gas.
For example, our gas businesses' margins and earnings growth have largely depended upon the sustained growth of their residential and commercial customer base due, in part, to the new construction housing market, conversions of customers to natural gas from other energy sources and growing commercial use of natural gas.
For example, certain of NW Holdings’ water companies are regulated in Idaho, Texas and Arizona, and in 2025, we acquired SiEnergy, a gas utility located in Texas. In addition, foreign governments may implement changes to their policies, in response to changes to U.S. policy or otherwise.
For example, certain of NW Holdings’ water companies are regulated in Idaho, Texas and Arizona, and in 2025, we expanded our gas business to Texas with the acquisition of SiEnergy. In addition, foreign governments may implement changes to their policies, in response to changes to U.S. policy or otherwise.
NW Natural’s gas reserves arrangements, which operate as a hedge backed by physical gas supplies, involve a number of risks, including: gas production that is significantly less than the expected volumes, or no gas volumes; operating costs that are higher than expected; inherent risks of gas production, including disruption to operations or a complete shut-in of the field; and one or more participants in one of these gas reserves arrangements becoming financially insolvent or acting contrary to NW Natural’s interests.
NW Natural’s gas reserves arrangements, which operate as a hedge backed by physical gas supplies, involve several risks, including: lower than expected or no gas production volumes; higher than expected operating costs; operational disruptions or a complete shut-in of the field; and one or more participants in one of these gas reserves arrangements becoming financially insolvent or acting contrary to NW Natural’s interests.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn the event of an incident, we intend to utilize our ICT and follow our detailed incident program and processes, which outlines the steps to be followed from incident detection to mitigation, recovery and notification, including notifying relevant functional areas, as well as senior leadership and the Board, as appropriate. 33
Biggest changeOur VP, CIO and CISO receives regular updates on cybersecurity matters, results of mitigation efforts and cybersecurity incident response and remediation. 36 In the event of an incident, we intend to utilize our ICT and follow our detailed incident program and processes, which outlines the steps to be followed from incident detection to mitigation, recovery and notification, including notifying relevant functional areas, as well as senior leadership and the Board, as appropriate.
We conduct regular reviews and tests of our information security program and also utilize audits by our internal audit team and third-party consultants, table-top exercises, penetration and vulnerability testing, data recovery testing, simulations, and other exercises to evaluate the effectiveness of our information security program 32 and improve our security measures and planning.
We conduct regular reviews and tests of our information security program and also utilize audits by our internal audit team and third-party consultants, table-top exercises, penetration and vulnerability testing, data recovery testing, simulations, and other exercises to evaluate the effectiveness of our information security program and improve our security measures and planning.
ITEM 1C. CYBERSECURITY Processes of Addressing Cybersecurity Threats Cybersecurity is critical to our business. As an energy infrastructure company, we face a variety of cybersecurity threats that range from attacks common to most industries, such as ransomware and denial-of-service, to attacks from more advanced and persistent, highly organized adversaries, including nation state actors, that target critical infrastructure sectors.
ITEM 1C. CYBERSECURITY Processes of Addressing Cybersecurity Threats Cybersecurity is critical to our business. As a critical infrastructure company, we face a variety of cybersecurity threats that range from attacks common to most industries, such as ransomware and denial-of-service, to attacks from more advanced and persistent, highly organized adversaries, including nation state actors, that target critical infrastructure sectors.
Our Cybersecurity management team is led by Brian Fellon, our Vice President, Chief Information Officer and Chief Information Security Officer (VP, CIO and CISO). Mr. Fellon joined NW Natural and was appointed to his role by the Board of Directors in September 2024. Mr. Fellon reports to our Chief Financial Officer. He has 28 years of experience in information technology.
Our Cybersecurity management team is led by Brian Fellon, our Vice President, Chief Information Officer and Chief Information Security Officer (VP, CIO and CISO). Mr. Fellon joined NW Natural and was appointed to his role by the Board of Directors in September 2024. Mr. Fellon reports to our Chief Financial Officer. He has 29 years of experience in information technology.
We are continuously working to evolve our oversight processes to mature how we identify and manage cybersecurity risks, and we perform periodic maturity assessments to measure our progress. As a regulated energy infrastructure company, for decades we have used an incident command system (ICS) as a standardized approach to the command, control and coordination of a variety of emergency situations.
We are continuously working to evolve our oversight processes to mature how we identify and manage cybersecurity risks, and we perform periodic maturity assessments to measure our progress. As a regulated utility, for decades we have used an incident command system (ICS) as a standardized approach to the command, control and coordination of a variety of emergency situations.
Key components of our cybersecurity risk management program include: • risk assessments designed to help identify cybersecurity risks to our critical systems, information, services, and our broader technology environment; • the use of external service providers with specific expertise, where appropriate, to assess, test or otherwise assist with aspects of our security processes; • cybersecurity awareness training of our employees, incident response personnel and senior management, as well as periodic experiential learning through “phishing simulations”; • segmentation of, and back-ups for, certain of our sensitive systems and data; • third-party cyber risk management process for vendors including, among other things, a security assessment, contracting program, and ongoing monitoring for vendors based on their risk profile; and • physical security around our sensitive infrastructure and cybersystems.
We utilize multilayered defenses and continuous monitoring with data analytics to detect anomalies and search for cyber threats in our system. 35 Key components of our cybersecurity risk management program include: • risk assessments designed to help identify cybersecurity risks to our critical systems, information, services, and our broader technology environment; • the use of external service providers with specific expertise, where appropriate, to assess, test or otherwise assist with aspects of our security processes; • cybersecurity awareness training of our employees, incident response personnel and senior management, as well as periodic experiential learning through “phishing simulations”; • segmentation of, and back-ups for, certain of our sensitive systems and data; • third-party cyber risk management process for vendors including, among other things, a security assessment, contracting program, and ongoing monitoring for vendors based on their risk profile; and • physical security around our sensitive infrastructure and cybersystems.
Our cybersecurity and compliance team regularly collects data on cybersecurity threats and risk areas, monitors our systems, and conducts testing to assess our processes and procedures and the threat landscape. Our VP, CIO and CISO receives regular updates on cybersecurity matters, results of mitigation efforts and cybersecurity incident response and remediation.
Our cybersecurity and compliance team regularly collects data on cybersecurity threats and risk areas, monitors our systems, and conducts testing to assess our processes and procedures and the threat landscape.
Our cybersecurity program has several fundamental tenants, including security governance, cybersecurity risk management, compliance, defensibility, zero-trust architecture and cloud security. We utilize multilayered defenses and continuous monitoring with data analytics to detect anomalies and search for cyber threats in our system.
Our cybersecurity program has several fundamental tenants, including security governance, cybersecurity risk management, compliance, defensibility, zero-trust architecture and cloud security.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeNW Natural owns LNG storage facilities in Portland and near Newport, Oregon. A portion of these properties are used in the NGD segment. NWN Water's Distribution Properties NWN Water owns and maintains water distribution pipes, storage, wells and other infrastructure and wastewater treatment facilities, and holds related leases and other property interests in Oregon, Washington, Idaho, Texas, Arizona and California.
Biggest changeNWN Water's Properties NWN Water owns and maintains water distribution pipes, storage, wells and other infrastructure and wastewater treatment facilities, and holds related leases and other property interests in Oregon, Washington, Idaho, Texas, Arizona.
NW Natural's Mortgage and Deed of Trust (Mortgage) is a first mortgage lien on certain gas properties owned from time to time by NW Natural, including substantially all of the property constituting NW Natural's natural gas distribution plant balances. These properties are used in the NGD segment.
NW Natural's Mortgage and Deed of Trust (Mortgage) is a first mortgage lien on certain gas properties owned from time to time by NW Natural, including substantially all of the property constituting NW Natural's natural gas distribution plant balances. These properties are used in the NWN Gas Utility segment.
ITEM 2. PROPERTIES NW Natural's Natural Gas Distribution Properties NW Natural's natural gas pipeline system consists of approximately 14,400 miles of distribution mains, approximately 700 miles of transmission mains and approximately 10,300 miles of service lines located in its territory in Oregon and southwest Washington.
ITEM 2. PROPERTIES NW Natural's NWN Gas Utility Properties NW Natural's natural gas pipeline system consists of approximately 14,500 miles of distribution mains, approximately 700 miles of transmission mains and approximately 10,400 miles of service lines located in its territory in Oregon and southwest Washington.
Pipelines are located in municipal streets or alleys pursuant to franchise or occupation ordinances, in county roads or state highways pursuant to agreements or permits granted pursuant to statute, or on lands of others pursuant to easements obtained from the owners of such lands. These properties are used by entities that are aggregated and reported as other under NW Holdings.
Pipelines are located in municipal streets or alleys pursuant to franchise or occupation ordinances, in county roads or state highways pursuant to agreements or permits granted pursuant to statute, or on lands of others pursuant to easements obtained from the owners of such lands.
We consider all of our properties currently used in our operations, both owned and leased, to be well maintained, in good operating condition, and, along with planned additions, adequate for our present and foreseeable future needs.
NWN Water also holds leases in various locations within Oregon, Washington, Idaho and Arizona to support its business. We consider all of our properties currently used in our operations, both owned and leased, to be well maintained, in good operating condition, and, along with planned additions, adequate for our present and foreseeable future needs. 37
Added
NW Natural owns LNG storage facilities in Portland and near Newport, Oregon. A portion of these properties are used in the NWN Gas Utility segment. SiEnergy’s Distribution Properties SiEnergy owns and maintains natural gas pipeline systems that consist of distribution mains, transmission mains, and service lines located in its territory in Texas.
Added
In addition, the pipeline system includes service regulators and meters, as well as district regulators and metering stations. Natural gas pipelines are located in public rights-of-way pursuant to franchise agreements, ordinances, or other legal rights, or on lands of others pursuant to easements obtained from the owners of such lands.
Added
SiEnergy also holds permits for the crossing of numerous railroads throughout our service territory. SiEnergy also holds leases in various locations within Texas to support its business.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+1 added−7 removed3 unchanged
Biggest changeIssuer Purchases of Equity Securities The following table provides information about purchases of NW Holdings' equity securities that are registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, during the quarter ended December 31, 2024: Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) Balance forward 2,124,528 $ 150,000,000 10/01/24-10/31/24 — $ — — — 11/01/24-11/30/24 — $ — — — 12/01/24-12/31/24 — $ — — — Total — 2,124,528 $ 150,000,000 (1) During the quarter ended December 31, 2024, no shares of common stock were purchased on the open market to meet the requirements of NW Holdings' Dividend Reinvestment and Direct Stock Purchase Plan.
Biggest changeIssuer Purchases of Equity Securities The following table provides information about purchases of NW Holdings' equity securities that are registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, during the quarter ended December 31, 2025: Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) Balance forward 2,124,528 $ 150,000,000 10/01/24-10/31/24 — $ — — — 11/01/24-11/30/24 — $ — — — 12/01/24-12/31/24 — $ — — — Total — 2,124,528 $ 150,000,000 1.
During the quarter ended December 31, 2024, no shares of NW Holdings common stock were purchased on the open market to meet the requirements of share-based compensation programs. (2) During the quarter ended December 31, 2024, no shares of NW Holdings common stock were repurchased pursuant to the Board approved share repurchase program.
During the quarter ended December 31, 2025, no shares of NW Holdings common stock were purchased on the open market to meet the requirements of share-based compensation programs. 2. During the quarter ended December 31, 2025, no shares of NW Holdings common stock were repurchased pursuant to the Board approved share repurchase program.
The repurchase program replaces the Company’s previously authorized share repurchase program, which commenced in 2000 and authorized the repurchase of up to 2.8 million shares, or an amount not to exceed $100 million, in the aggregate. For more information on our share repurchase program, see Note 5.
The repurchase program replaces the Company’s previously authorized share repurchase program, which commenced in 2000 and authorized the repurchase of up to 2.8 million shares, or an amount not to exceed $100 million, in the aggregate. For more information on our share repurchase program, see Note 5. ITEM 6. RESERVED Not applicable.
As of February 18, 2025, there were 3,808 holders of record of NW Holdings' common stock and NW Holdings was the sole holder of NW Natural's common stock.
As of February 12, 2026, there were 3,544 holders of record of NW Holdings' common stock and NW Holdings was the sole holder of NW Natural's common stock.
Removed
Unregistered Sales of Equity Securities On October 2, 2024, NW Holdings issued a total of 11,182 unregistered shares of NW Holdings common stock as holdback consideration payable to the sellers in connection with the acquisition of Rose Valley Water Company in Arizona.
Added
During the quarter ended December 31, 2025, no shares of common stock were purchased on the open market to meet the requirements of NW Holdings' Dividend Reinvestment and Direct Stock Purchase Plan.
Removed
On December 16, 2024, NW Holdings issued a total of 2,179 unregistered shares to the sellers as an earnout payment in connection with the same transaction.
Removed
On October 2, 2023 and December 22, 2023, NW Holdings issued a total of 175,674 and 141 unregistered shares of common stock, respectively, to the sellers as closing consideration and post-closing purchase price adjustment payment in connection with the acquisition of Rose Valley Water Company.
Removed
In aggregate, NW Holdings has issued 189,176 unregistered shares of common stock in 2023 and 2024 in connection with its acquisition of Rose Valley Water Company.
Removed
On December 30, 2024, NW Holdings issued a total of 22,965 unregistered shares of NW Holdings common stock as holdback consideration payable to the sellers in connection with the acquisition of Hiland Water Corp. in Oregon.
Removed
On October 31, 2023 and December 29, 2023, NW Holdings issued a total of 9,158 and 142,292 unregistered shares of common stock, respectively, to the sellers as closing consideration in connection with the acquisition of Hiland Water Corp.
Removed
In aggregate, NW Holdings has issued 174,415 unregistered shares of common stock in 2023 and 2024 in connection with the acquisition of Hiland Water Corp. These transactions were exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as transactions not involving a public offering.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

211 edited+123 added−149 removed102 unchanged
Biggest changeConsolidated net income increased $13.2 million at NW Natural primarily due to the following factors: • $69.1 million increase in NGD segment margin driven by new rates in Oregon and Washington, actual gas prices that were lower than what was estimated in the 2022-2023 PGA, amortization of deferred balances (which is mostly offset in operations and maintenance expenses and interest expense), and customer growth; and • $15.8 million increase in other income, net primarily due to interest income from invested cash and the equity portion of AFUDC, and lower pension costs; partially offset by • $39.8 million increase in operations and maintenance expenses due to higher payroll costs, higher contract labor, the amortization of deferred balances (which is mostly offset in revenues), information technology costs and amortization expense related to cloud computing arrangements; • $14.3 million increase in interest expense, net primarily due to higher long-term debt balances; 37 • $6.5 million increase in depreciation expense due to additional capital investments; • $4.8 million increase in general taxes primarily driven by higher property and payroll taxes; and • $4.6 million increase in income tax expense due to higher pre-tax income.
Biggest changeThe primary factors contributing to the $4.4 million increase in net income were as follows: • $13.2 million increase in operating revenues primarily driven by new rates at our largest utility in Arizona, organic customer growth, and additional revenues from the water acquisitions; and • $2.2 million decrease in interest expense due primarily to lower long-term debt balances as $50.0 million of NWN Water debt matured in March 2024 and was not replaced at NWN Water; partially offset by • $7.2 million increase in operations and maintenance expenses primarily due to acquisitions; • $2.2 million increase in depreciation expense due primarily to acquisitions; and • $1.6 million increase in income tax expense due primarily to higher pre-tax income. 46 NW HOLDINGS OTHER RESULTS.
In the event senior unsecured long-term debt ratings are downgraded, or outstanding derivative positions exceed a certain credit threshold, counterparties under derivative contracts could require NW Natural to post cash, a letter of credit, or other forms of collateral, which could expose NW Natural to additional cash requirements and may trigger increases in short-term borrowings while in a net loss position.
In the event NW Natural senior unsecured long-term debt ratings are downgraded, or outstanding derivative positions exceed a certain credit threshold, counterparties under derivative contracts could require NW Natural to post cash, a letter of credit, or other forms of collateral, which could expose NW Natural to additional cash requirements and may trigger increases in short-term borrowings while in a net loss position.
Interest Rate Swap Agreement In January 2023, NWN Water entered into an interest rate swap agreement with a major financial institution for $55.0 million that effectively converted variable-rate debt to a fixed rate of 3.80%. Interest payments made between the effective date and expiration date are hedged by the swap agreement.
NWN Water Interest Rate Swap Agreement In January 2023, NWN Water entered into an interest rate swap agreement with a major financial institution for $55.0 million that effectively converted variable-rate debt to a fixed rate of 3.80%. Interest payments made between the effective date and expiration date are hedged by the swap agreement.
Cash Flows Operating Activities Changes in our operating cash flows are primarily affected by net income or loss, changes in working capital requirements, and other cash and non-cash adjustments to operating results.
Operating Activities Changes in our operating cash flows are primarily affected by net income or loss, changes in working capital requirements, and other cash and non-cash adjustments to operating results.
If certain regulatory conditions are met, then the derivative instrument fair value is recorded together with an offsetting entry to a regulatory asset or liability account pursuant to 64 regulatory accounting, and no unrealized gain or loss is recognized in current income or loss. See " Regulatory Accounting " above for additional information.
If certain regulatory conditions are met, then the derivative instrument fair value is recorded together with an offsetting entry to a regulatory asset or liability account pursuant to regulatory accounting, and no unrealized gain or loss is recognized in current income or loss. See " Regulatory Accounting " above for additional information.
Amounts recorded for environmental contingencies take numerous factors into consideration, including, among other variables, changes in enacted laws, regulatory orders, estimated remediation costs, interest rates, insurance proceeds, participation by other parties, timing of payments, and the input of legal counsel and third-party experts.
Amounts recorded for environmental contingencies take numerous factors into consideration, including, among other variables, changes in enacted laws, regulatory orders, estimated remediation costs, interest rates, insurance proceeds, participation by other parties, timing of 71 payments, and the input of legal counsel and third-party experts.
The model considers current investment-grade yields for fixed income investments, and the same plus a risk premium for riskier assets such as common stocks. NW Natural believes its pension assumptions are appropriate based on plan design and an assessment of market conditions.
The model considers current investment-grade yields for fixed income investments, and the same plus a risk premium for riskier assets such as common stocks. 70 NW Natural believes its pension assumptions are appropriate based on plan design and an assessment of market conditions.
Washington ECRM The ECRM established by the WUTC order effective November 1, 2019 permits NW Natural’s recovery of environmental remediation expenses allocable to Washington customers. These expenses represent 3.32% of costs associated with 42 remediation of sites that historically served both Oregon and Washington customers.
Washington ECRM The ECRM established by the WUTC order effective November 1, 2019 permits NW Natural’s recovery of environmental remediation expenses allocable to Washington customers. These expenses represent 3.32% of costs associated with remediation of sites that historically served both Oregon and Washington customers.
FERC. NW Natural is required under its Mist interstate storage certificate authority and rate approval orders to file every five years either a petition for rate approval or a cost and revenue study to change or justify maintaining the existing rates for its interstate storage services.
NW Natural is required under its Mist interstate storage certificate authority and rate approval orders to file every five years either a petition for rate approval or a cost and revenue study to change or justify maintaining the existing rates for its interstate storage services.
NW HOLDINGS DIVIDENDS. Quarterly dividends have been paid on common stock each year since NW Holdings’ predecessor’s stock was first issued to the public in 1951. Annual common stock dividend payments per share, adjusted for stock splits, have increased each year since 1956.
Quarterly dividends have been paid on common stock each year since NW Holdings’ predecessor’s stock was first issued to the public in 1951. Annual common stock dividend payments per share, adjusted for stock splits, have increased each year since 1956.
Gas Sale Agreements Ohio Renewables has contracted to sell RNG produced by the EDL Facilities up to certain specified volumes in each of calendar years 2024 through 2026 to an investment-grade counterparty.
NWN Renewables Gas Sale Agreements Ohio Renewables has contracted to sell RNG produced by the EDL Facilities up to certain specified volumes in each of calendar years 2024 through 2026 to an investment-grade counterparty.
If NW Natural’s long-term 55 secured credit ratings are below A- for S&P and A3 for Moody’s, dividends may be issued so long as NW Natural’s common equity ratio is 45% or more.
If NW Natural’s long-term secured credit ratings are below A- for S&P and A3 for Moody’s, dividends may be issued so long as NW Natural’s common equity ratio is 45% or more.
In making such a determination, available positive and negative evidence is considered, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. NW Holdings and NW Natural have determined that all recorded deferred tax assets are more likely than not to be realized as of December 31, 2024. See Note 11.
In making such a determination, available positive and negative evidence is considered, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. NW Holdings and NW Natural have determined that all recorded deferred tax assets are more likely than not to be realized as of December 31, 2025. See Note 11.
NW Holdings and NW Natural participate in the Compliance Assurance Process (CAP) with the Internal Revenue Service (IRS). Under the CAP program companies work with the IRS to identify and resolve material tax matters before the federal income tax return is filed each year. No reserves for uncertain tax benefits were recorded during 2024, 2023, or 2022. See Note 11.
NW Holdings and NW Natural participate in the Compliance Assurance Process (CAP) with the Internal Revenue Service (IRS). Under the CAP program companies work with the IRS to identify and resolve material tax matters before the federal income tax return is filed each year. No reserves for uncertain tax benefits were recorded during 2025, 2024, or 2023. See Note 11.
The following shows the sensitivity of retirement benefit costs and benefit obligations to changes in certain actuarial assumptions: Dollars in millions Change in Assumption Impact on 2024 Retirement Benefit Costs Impact on Retirement Benefit Obligations at Dec. 31, 2024 Discount rate: (0.25) % Qualified defined benefit plans $ 1.1 $ 9.7 Non-qualified plans — 0.1 Other postretirement benefits — 0.5 Expected long-term return on plan assets: (0.25) % Qualified defined benefit plans 0.8 N/A Income Taxes Valuation Allowances Deferred tax assets are recognized to the extent that these assets are believed to be more likely than not to be realized.
The following shows the sensitivity of retirement benefit costs and benefit obligations to changes in certain actuarial assumptions: Dollars in millions Change in Assumption Impact on 2025 Retirement Benefit Costs Impact on Retirement Benefit Obligations at Dec. 31, 2025 Discount rate: (0.25) % Qualified defined benefit plans $ 1.1 $ 9.7 Non-qualified plans — 0.1 Other postretirement benefits — 0.5 Expected long-term return on plan assets: (0.25) % Qualified defined benefit plans 0.7 N/A Income Taxes Valuation Allowances Deferred tax assets are recognized to the extent that these assets are believed to be more likely than not to be realized.
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 2024, NW Natural has performed this test, which is anticipated to be submitted to the OPUC in May 2025. No earnings test adjustment is expected for 2024.
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 performed this test, which is anticipated to be submitted to the OPUC in May 2026. No earnings test adjustment is expected for 2025.
This condition is designed to ensure NW Natural continues to be adequately capitalized under the holding company structure. Under the WUTC order, the average common equity ratio must not exceed 56%. At December 31, 2024 and 2023, NW Natural satisfied the ring-fencing provisions described above.
This condition is designed to ensure NW Natural continues to be adequately capitalized under the holding company structure. Under the WUTC order, the average common equity ratio must not exceed 56%. At December 31, 2025 and 2024, NW Natural satisfied the ring-fencing provisions described above.
NW Natural was in compliance with both of these ring-fencing provisions as of December 31, 2024 and 2023. NW Natural may file a voluntary petition for bankruptcy only if approved unanimously by the Board of Directors of NW Natural, including the independent director, and by the holder of the preferred share.
NW Natural was in compliance with both of these ring-fencing provisions as of December 31, 2025 and 2024. NW Natural may file a voluntary petition for bankruptcy only if approved unanimously by the Board of Directors of NW Natural, including the independent director, and by the holder of the preferred share.
Derivative contracts outstanding at December 31, 2024, 2023 and 2022 were measured at fair value using models or other market accepted valuation methodologies derived from observable market data. Estimates of fair value may change significantly from period-to-period depending on market conditions, notional amounts, and prices.
Derivative contracts outstanding at December 31, 2025, 2024 and 2023 were measured at fair value using models or other market accepted valuation methodologies derived from observable market data. Estimates of fair value may change significantly from period-to-period depending on market conditions, notional amounts, and prices.
The discussion covers the years ended December 31, 2024, 2023, and 2022 and refers to the consolidated results 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.
The discussion covers the years ended December 31, 2025, 2024, and 2023 and refers to the consolidated results 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.
In addition, NW Natural has entered into long-term agreements to release firm pipeline capacity. NW Natural also enters into short-term and long-term gas purchase agreements. Refer to Note 16 for gas and pipeline capacity purchase commitments. NW Natural Renewables is an unregulated subsidiary of NW Natural Holdings established to pursue unregulated RNG activities.
In addition, NW Natural 61 has entered into long-term agreements to release firm pipeline capacity. NW Natural also enters into short-term and long-term gas purchase agreements. Refer to Note 16 for gas and pipeline capacity purchase commitments. NWN Renewables is an unregulated subsidiary of NW Holdings established to pursue unregulated RNG activities.
A qualitative assessment was performed during the fourth quarter of 2024 which indicated a quantitative assessment was not required; thus, no goodwill impairment was recorded. See Note 2 and Note 14 for additional information. Business combinations are accounted for using the acquisition method.
A qualitative assessment was performed during the fourth quarter of 2025 which indicated a quantitative assessment was not required; thus, no goodwill impairment was recorded. See Note 2 and Note 14 for additional information. Business combinations are accounted for using the acquisition method.
Based on several factors, including current credit ratings, NW Natural's commercial paper program, current cash reserves, committed credit facilities, and an expected ability to issue long-term debt and receive equity contributions from NW Holdings, 56 NW Natural believes its liquidity is sufficient to meet anticipated near-term cash requirements, including all contractual obligations, and investing and financing activities as discussed in " Cash Flows " below.
Based on several factors, including current credit ratings, NW Natural's commercial paper program, current cash reserves, committed credit facilities, and an expected ability to issue long-term debt and receive equity contributions from NW Holdings, NW Natural believes its liquidity is sufficient to meet anticipated near-term cash requirements, including all contractual obligations, and investing and financing activities as discussed in " Cash Flows " above.
When NW Natural acquires a business, it assesses the financial assets acquired and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as of the acquisition date.
When NW Holdings acquires a business, it assesses the financial assets acquired and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as of the acquisition date.
We currently estimate RNG volumes to be sold pursuant to this agreement to be approximately 2,430,000 MMbtu over the life of the agreement, provided that such amounts of RNG are produced by the EDL Facilities during that period.
We currently estimate RNG volumes to be sold pursuant to this agreement to be approximately 2,370,000 MMbtu over the life of the agreement, provided that such amounts of RNG are produced by the EDL Facilities during that period.
If it is determined that all or a portion of these regulatory assets or liabilities no longer meet the criteria for continued application of regulatory accounting, then NW Natural would be required to write-off the net unrecoverable balances against earnings in the period such determination is made.
If it is determined that all or a portion of these regulatory assets or liabilities no longer meet the criteria for continued application of regulatory accounting, then NW Natural SiEnergy, or NWN Water would be required to write-off the net unrecoverable balances against earnings in the period such determination is made.
When there is substantial judgment or uncertainty around the fair value of acquired assets, we may engage a third party expert to assist in determining the fair values of certain assets or liabilities. 67
When there is substantial judgment or uncertainty around the fair value of acquired assets, we may engage a third party expert to assist in determining the fair values of certain assets or liabilities. 72
The significant factors contributing to the $51.1 million decrease at NW Natural cash flow provided by operating activities were as follows: • $64.8 million decrease in accounts receivable due to comparatively warmer weather in the current year; • $20.5 million increase in contributions to our defined benefit pension plan; • $18.4 million increase in asset optimization revenue sharing bill credits to customers; and • $15.7 million decrease in net income; partially offset by • $22.8 million decrease in accounts payable resulting from payments of higher priced gas in the prior year; • $21.6 million decrease in inventories due to higher priced gas and more gas withdrawn from storage in the prior year; and • $16.6 million increase in the decoupling mechanism primarily due to lower usage driven by comparatively warmer weather. 61 The $79.7 million decrease in cash provided by operating activities at NW Holdings was primarily driven by the factors discussed above.
The significant factors contributing to the $51.1 million decrease at NW Natural cash flow provided by operating activities were as follows: • $64.8 million decrease in accounts receivable due to comparatively warmer weather in the current year; • $20.5 million increase in contributions to our defined benefit pension plan; • $18.4 million increase in asset optimization revenue sharing bill credits to customers; and • $15.7 million decrease in net income; partially offset by • $22.8 million decrease in accounts payable resulting from payments of higher priced gas in the prior year; • $21.6 million decrease in inventories due to higher priced gas and more gas withdrawn from storage in the prior year; and • $16.6 million increase in the decoupling mechanism primarily due to lower usage driven by comparatively warmer weather.
GAAP are used. However, authoritative guidance for regulated operations (regulatory accounting) requires different accounting treatment for regulated companies to show the effects of such regulation. For example, NW Natural accounts for the cost of gas using a PGA deferral and cost recovery mechanism, which is submitted for approval annually to the OPUC and WUTC.
However, authoritative guidance for regulated operations (regulatory accounting) requires different accounting treatment for regulated companies to show the effects of such regulation. For example, NW Natural accounts for the cost of gas using a PGA deferral and cost recovery mechanism, which is submitted for approval annually to the OPUC and WUTC.
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 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.
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.
NW Natural was not required to post collateral at December 31, 2024. See Note 15 below. Other items that may have a significant impact on NW Natural's liquidity and capital resources include NW Natural's pension contribution requirements and environmental expenditures. PENSION CONTRIBUTIONS.
NW Natural was not required to post collateral at December 31, 2025. See Note 15. Other items that may have a significant impact on NW Natural's liquidity and capital resources include NW Natural's pension contribution requirements and environmental expenditures. PENSION CONTRIBUTIONS.
The PGA filings include costs for gas purchases, gas commodity derivative contracts, gas storage costs, gas reserves costs, pipeline demand costs, renewable natural gas and its environmental attributes, including renewable thermal certificates, and temporary rate adjustments, which amortize balances of deferred regulatory accounts.
The PGA filings include costs for gas purchases, gas commodity deriv ative contracts, gas storage costs, gas reserves costs, pipeline demand costs, renewable natural gas and its environmental attributes, including renewable thermal certificates, and temporary rate adjustments, which amortize balances of deferred regulatory accounts.
Daily average temperatures and 25-year average temperatures are based on a set point temperature of 59 degrees Fahrenheit for 41 residential customers and 58 degrees Fahrenheit for commercial customers. The collections of any unbilled WARM amounts due to tariff caps and floors are deferred and earn a carrying charge until collected, or returned, in the PGA the following year.
Daily average temperatures and 25-year average temperatures are based on a set point temperature of 59 degrees Fahrenheit for residential customers and 58 degrees Fahrenheit for commercial customers. The collections of any unbilled WARM amounts due to tariff caps and floors are deferred and earn a carrying charge until collected, or returned, along with the PGA the following year.
Short-term liquidity for the NGD business is primarily provided by cash balances, internal cash flow from operations, proceeds from the sale of commercial paper notes, as well as available cash from multi-year credit facilities, short-term credit facilities, company-owned life insurance policies, the sale of long-term debt, and equity contributions from NW Holdings.
Short-term liquidity for the NWN Gas Utility business is primarily provided by cash balances, internal cash flow from operations, proceeds from the sale of commercial paper notes, as well as available cash from multi-year credit facilities, short-term credit facilities, company-owned life insurance policies, the sale of long-term debt, and equity contributions from NW Holdings.
INDUSTRIAL TARIFFS . The OPUC and WUTC have approved tariffs covering NGD service to major industrial customers, which are intended to give NW Natural certainty in the level of gas supplies needed to serve this customer group.
The OPUC and WUTC have approved tariffs covering NWN Gas Utility service to major industrial customers, which are intended to give NW Natural certainty in the level of gas supplies needed to serve this customer group.
NW Natural For the NGD business segment, short-term borrowing requirements typically peak during colder winter months when the NGD business borrows money to cover the lag between natural gas purchases and bill collections from customers.
NW Natural For the NWN Gas Utility business segment, short-term borrowing requirements typically peak during colder winter months when NWN Gas Utility borrows money to cover the lag between natural gas purchases and bill collections from customers.
Revenue Recognition Revenues, which are derived primarily from the sale, transportation, and storage of natural gas, are recognized upon the delivery of gas commodity or services rendered to customers. Accrued Unbilled Revenue For a description of the policy regarding accrued unbilled revenue, most of which relates to the NGD business at NW Natural, see Note 2.
Revenue Recognition Revenues, which are derived primarily from the sale, transportation, storage of natural gas, and sale of water are recognized upon the delivery of commodity or services rendered to customers. Accrued Unbilled Revenue For a description of the policy regarding accrued unbilled revenue, most of which relates to the NWN Gas Utility business at NW Natural, see Note 2.
Oregon Senate Bill 98 (SB 98) enables natural gas utilities to procure or develop RNG on behalf of their Oregon customers.
Oregon Senate Bill 98 (SB 98) enables natural gas utilities to procure or develop RNG, including hydrogen, on behalf of their Oregon customers.
NW Natural has historically targeted a regulatory capital structure of 50% common equity and 50% long-term debt, which is consistent with approved regulatory allocations in Oregon, which has an allocation of 50% common equity and 50% long-term debt without recognition of short-term debt.
NW Natural targets a regulatory capital structure of 50% common equity and 50% long-term debt, which is consistent with approved regulatory allocations in Oregon, which has an allocation of 50% common equity and 50% long-term debt without recognition of short-term debt.
The vested benefit obligation for the defined benefit pension plan is the actuarial present value of the vested benefits to which the employee is entitled based on the employee's expected date of separation or retirement based on valuation assumptions.
See Note 10. The vested benefit obligation for the defined benefit pension plan is the actuarial present value of the vested benefits to which the employee is entitled based on the employee's expected date of separation or retirement based on valuation assumptions.
For the 2024-25 and 2023-24 gas years, NW Natural selected the 90% deferral option. Under the Washington PGA mechanism, NW Natural defers 100% of the higher or lower actual gas costs, and those gas cost differences are passed on to customers through the annual PGA rate adjustment.
For the 2025-26 and 2024-25 gas years, NW Natural selected the 90% deferral option. Under the Washington PGA mechanism, NW Natural defers 100% of the higher or lower actual gas costs, and those gas cost differences are passed on to customers through the annual PGA rate adjustment.
EARNINGS TEST REVIEW . NW Natural is subject to an annual earnings review in Oregon to determine if the NGD business is earning above its authorized ROE threshold. If NGD business earnings exceed a specific ROE level, then 33% of the amount above that level is required to be deferred or refunded to customers.
EARNINGS TEST REVIEW . NW Natural is subject to an annual earnings review in Oregon to determine if the NWN Gas Utility business is earning above its authorized ROE threshold. If NWN Gas Utility business earnings exceed a specific ROE level, then 33% of the amount above that level is required to be deferred or refunded to customers.
Letters of Credit Facility In January 2024, NW Natural entered into an Uncommitted Letter of Credit and Reimbursement Agreement (LC Reimbursement Agreement), pursuant to which NW Natural agreed to reimburse each Lender acting as an issuing bank (Issuing Bank) thereunder for disbursements in respect of letters of credit (Letters of Credit) issued pursuant to the LC Reimbursement Agreement from time to time.
See " Credit Ratings " below. 64 Letters of Credit Facility In January 2024, NW Natural entered into an Uncommitted Letter of Credit and Reimbursement Agreement (LC Reimbursement Agreement), pursuant to which NW Natural agreed to reimburse each Lender acting as an issuing bank (Issuing Bank) thereunder for disbursements in respect of letters of credit (Letters of Credit) issued pursuant to the LC Reimbursement Agreement from time to time.
Ohio Renewables additionally has contracted to sell a fixed-volume of RNG under a long-term agreement with an investment-grade utility beginning in 2025 and extending through 2042.
Ohio Renewables additionally has contracted to sell a fixed-volume amount of RNG under a long-term agreement with an investment-grade utility beginning in 2025 and extending through 2044.
The negative amount is carried over to offset annual spend in the following year. (2) Deferred interest is added to annual spend to the extent the spend is recoverable. To the extent the NGD 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.
The negative amount is carried over to offset annual spend in the following year. (2) Deferred interest is added to annual spend to the extent the spend is recoverable. To the extent the NWN Gas Utility 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.
All lenders under the NW Holdings credit agreement are major financial institutions with committed balances and investment grade credit ratings as of December 31, 2024 as follows: In millions Lender rating, by category Loan Commitment AA/Aa $ 200 Total $ 200 Based on credit market conditions, it is possible one or more lending commitments could be unavailable to NW Holdings if the lender defaulted due to lack of funds or insolvency; however, NW Holdings does not believe this risk to be imminent due to the lenders' strong investment-grade credit ratings.
All lenders under the NW Holdings credit agreement are major financial institutions with committed balances and investment grade credit ratings as of December 31, 2025 as follows: In millions Lender rating, by category Loan Commitment AA/Aa $ 194 A/A1 56 Total $ 250 Based on credit market conditions, it is possible one or more lending commitments could be unavailable to NW Holdings if the lender defaulted due to lack of funds or insolvency; however, NW Holdings does not believe this risk to be imminent due to the lenders' strong investment-grade credit ratings.
ATM Equity Program In August 2021, NW Holdings initiated an at-the-market (ATM) equity program by entering into an equity distribution agreement under which NW Holdings may issue and sell from time to time shares of common stock, no par value, having an aggregate gross sales price of up to $200 million.
ATM Equity Program In August 2021, NW Holdings initiated an at-the-market (ATM) equity program by entering into an equity distribution agreement under which NW Holdings issued and sold from time to time shares of common stock, no par value, having an aggregate gross sales price of up to $200 million.
Non-union and union employees hired or re-hired after December 31, 2006 and 2009, respectively, and employees of certain NW Holdings subsidiaries are provided an enhanced Retirement K Savings Plan benefit. The postretirement Welfare Benefit Plan for non-union employees was also closed to new participants several years ago.
The qualified defined benefit retirement plan for union and non-union employees was closed to new participants several years ago. Non-union and union employees hired or re-hired after December 31, 2006 and 2009, respectively, and employees of certain NW Holdings subsidiaries are provided an enhanced Retirement K Savings Plan benefit.
However, the retirement benefit costs related to qualified defined benefit pension and postretirement benefit plans are generally recovered in rates charged to NGD customers, which are set based on accounting standards for pensions and postretirement benefit expenses.
However, the retirement benefit costs related to qualified defined benefit pension and postretirement benefit plans are generally recovered in rates charged to NWN Gas Utility customers, which are set based on accounting standards for pensions and postretirement benefit expenses.
Short-Term Debt The primary source of short-term liquidity for NW Holdings is cash balances, dividends from its operating subsidiaries, in particular NW Natural, available cash from a multi-year credit facility, and short-term credit facilities it may enter into from time to time.
Short-Term Debt The primary source of short-term liquidity for NW Holdings is cash balances, dividends from its operating subsidiaries, in particular NW Natural, proceeds from the sale of commercial paper notes, available cash from a multi-year credit facility, and short-term credit facilities it may enter into from time to time.
Other Purchase Agreements Other purchase commitments primarily consist of remaining balances under existing purchase orders and gas storage agreements. At December 31, 2024, the amount due over the duration of the purchase agreements totaled $22.5 million. Except for these certain purchase commitments, NW Holdings and NW Natural have no material off-balance sheet financing arrangements.
Other Purchase Agreements Other purchase commitments primarily consist of remaining balances under existing purchase orders and gas storage agreements. At December 31, 2025, the amount due over the duration of the purchase agreements totaled $50.0 million at NW Holdings. Except for these certain purchase commitments, NW Holdings and NW Natural have no material off-balance sheet financing arrangements.
In January 2025, the OPUC approved the annual 2025 bill credit for Oregon customers' share of interstate storage and asset management activities totaling approximately $15.5 million, which was credited to customers' bills in February 2025. This includes revenue generated for the November 2023 through October 2024 PGA year.
In January 2026, the OPUC approved the annual 2026 bill credit for Oregon customers' share of interstate storage and asset management activities totaling approximately $23.2 million, which was credited to customers' bills in February 2026. This includes revenue generated for the November 2024 through October 2025 PGA year.
These balances include a gross up for income taxes of $44.9 million and $46.1 million, respectively. These regulatory liabilities are currently being amortized as a reduction in customer rates.
These balances include a gross up for income taxes of $43.6 million and $44.9 million, respectively. These regulatory liabilities are currently being amortized as a reduction in customer rates.
(2) Heating degree days are units of measure reflecting temperature-sensitive consumption of natural gas, calculated by subtracting the average of a day's high and low temperatures from 59 degrees Fahrenheit. (3) Average weather represents the 25-year average of heating degree days.
(4) Heating degree days are units of measure reflecting temperature-sensitive consumption of natural gas, calculated by subtracting the average of a day's high and low temperatures from 59 degrees Fahrenheit. 43 (5) Average weather represents the 25-year average of heating degree days.
Commercial paper, when outstanding, is sold through two commercial banks under an issuing and paying agency agreement and is supported by one or more unsecured revolving credit facilities.
Commercial paper, when outstanding, is sold through two commercial banks under an issuing and paying agency agreement and is supported by one or more unsecured revolving credit facilities. See “Credit Agreements” below.
When the recovery of these regulatory assets from, or refund of regulatory liabilities to, customers is approved, NW Natural recognizes the expense or revenue on the income statement at the same time the adjustment to amounts is included in rates charged to customers.
When the recovery of these regulatory assets from, or refund of regulatory liabilities to, customers is approved, NW Natural, SiEnergy, or NWN Water recognize the expense or revenue on the income statement at the same time the adjustment to amounts is included in rates charged to customers.
Residential and commercial customers in Oregon are allowed to opt out of the weather normalization mechanism, and as of December 31, 2024, approximately 7% of total eligible customers had opted out. NW Natural does not have a weather normalization mechanism approved for Washington customers, which account for about 12% of total customers.
Residential and small commercial customers in Oregon are allowed to opt out of the weather normalization mechanism, and as of December 31, 2025, 7% of total eligible customers had opted out. NW Natural does not have a weather normalization mechanism approved for Washington customers, which account for about 12% of total customers. INDUSTRIAL TARIFFS .
Pension expense for NW Natural's qualified defined benefit plan, which is allocated between operations and maintenance expenses and capital expenditures, totaled $4.1 million in 2024, a change of $6.5 million from 2023. The fair market value of pension assets in this plan increased to $284.1 million at December 31, 2024 from $283.4 million at December 31, 2023.
Pension expense for NW Natural's qualified defined benefit plan, which is allocated between operations and maintenance expenses and capital expenditures, totaled $10.4 million in 2025, a change of $6.3 million from 2024. The fair market value of pension assets in this plan increased to $302.3 million at December 31, 2025 from $284.1 million at December 31, 2024.
The gain or loss from the fair value of a derivative instrument subject to regulatory deferral is included in the recovery from, or refund to, NGD business customers in future periods.
The gain or loss from the fair value of a derivative instrument subject to regulatory deferral is included in the recovery from, or refund to, NWN Gas Utility business customers in future periods.
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, federal, state and local energy, 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.
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 policy, customer preferences and NWN Gas Utility'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.
The NW Natural credit agreement permits the issuance of letters of credit in an aggregate amount of up to $60 million. The principal amount of borrowings under the credit agreement is due and payable on the maturity date. There were no outstanding balances under this credit agreement at December 31, 2024 or 2023.
There was no outstanding balances under the NW Natural agreement at December 31, 2025 and 2024. The NW Natural credit agreement permits the issuance of letters of credit in an aggregate amount of up to $60 million. The principal amount of borrowings under the credit agreement is due and payable on the maturity date.
This would require the write-off of those regulatory assets and liabilities that would no longer be probable of recovery from or refund to customers. Based on current accounting and regulatory competitive conditions, NW Natural believes it is reasonable to expect continued application of regulatory accounting for NGD activities.
This would require the write-off of those regulatory assets and liabilities that would no longer be probable of recovery from or refund to customers. 68 Based on current accounting and regulatory competitive conditions, NW Natural believes it is reasonable to expect continued application of regulatory accounting for NWN Gas Utility, SiEnergy Gas Utility, and NWN Water activities.
The following table summarizes the amount of gains (losses) realized from commodity price transactions for the last three years: In millions 2024 2023 2022 NGD business net gain (loss) on commodity swaps $ (119.2) $ 125.5 $ 107.8 Realized gains and losses from commodity hedges shown above were recorded in cost of gas and were, or will be, included in annual PGA rates.
The following table summarizes the amount of gains (losses) realized from commodity price transactions for the last three years: In millions 2025 2024 2023 NWN Gas Utility business net gain (loss) on commodity swaps $ (91.7) $ (119.2) $ 125.5 Realized gains and losses from commodity hedges shown above were recorded in cost of gas and were, or will be, included in annual PGA rates.
For information on cash flow requirements related to leases and other purchase commitments, see Note 7 and Note 16. Investing Activities In millions 2024 2023 2022 NW Natural cash used in investing activities $ (357.6) $ (290.5) $ (320.3) NW Holdings cash used in investing activities (429.0) (335.5) (435.5) 2024 COMPARED TO 2023 .
For information on cash flow requirements related to leases and other purchase commitments, see Note 7 and Note 16. Investing Activities In millions 2025 2024 2023 NW Holdings cash used in investing activities $ (808.9) $ (429.0) $ (335.5) NW Natural cash used in investing activities (357.5) (357.6) (290.5) 2025 COMPARED TO 2024 .
A number of cities across the country, and several in our service territory are taking action or currently considering actions such as limitations or bans on the use of natural gas in new construction or otherwise.
A number of cities or counties across the country have taken action, and several in our service territory are considering actions such as limitations, penalties, or bans on the use of natural gas in new construction or otherwise.
Beginning November 1, 2024, average weather is calculated over the period June 1, 1998 through May 31, 2023, as determined in NW Natural's 2024 Oregon general rate case. From November 1, 2022 through October 31, 2024, average weather was calculated over the period June 1, 1996 through May 31, 2021, as determined in NW Natural's 2022 Oregon general rate case.
Beginning October 31, 2025, average weather is calculated over the period June 1, 1999 through May 31, 2024, as determined in NW Natural's 2025 Oregon general rate case. From November 1, 2024 through October 30, 2025, average weather was calculated over the period June 1, 1998 through May 31, 2023, as determined in NW Natural's 2024 Oregon general rate case.
See Note 17 for more information on our environmental matters. The SRRM earnings test is an annual review of adjusted NGD ROE compared to authorized NGD ROE.
See Note 17 for more information on our environmental matters. 51 The SRRM earnings test is an annual review of adjusted NWN Gas Utility ROE compared to authorized NWN Gas Utility ROE.
APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES In preparing financial statements in accordance with U.S. GAAP, management exercises judgment to assess the potential outcomes and related accounting impacts in the selection and application of accounting principles, including making estimates and assumptions that affect reported amounts of assets, liabilities, revenues, expenses, and related disclosures in the financial statements.
GAAP, management exercises judgment to assess the potential outcomes and related accounting impacts in the selection and application of accounting principles, including making estimates and assumptions that affect reported amounts of assets, liabilities, revenues, expenses, and related disclosures in the financial statements.
At December 31, 2024 and 2023, NW Natural had net regulatory income tax assets of $5.8 million and $8.0 million, respectively, representing future rate recovery of deferred tax liabilities resulting from differences in NGD plant financial statement and tax bases and NGD plant removal costs. These regulatory assets are currently being recovered through customer rates.
At December 31, 2025 and 2024, NW Natural had net regulatory income tax assets of $3.6 million and $5.8 million, respectively, representing future rate recovery of deferred tax liabilities resulting from differences in NWN Gas Utility plant financial statement and tax bases and NWN Gas Utility plant removal costs. These regulatory assets are currently being recovered through customer rates.
NW Natural earns a carrying cost equal to the amortization rate determined annually by the OPUC, which approximates a short-term borrowing rate. NW Natural included $8.8 million and $9.6 million of deferred remediation expense approved by the OPUC for collection during the 2024-25 and 2023-24 PGA years, respectively.
NW Natural earns a carrying cost equal to the amortization rate determined annually by the OPUC, which approximates a short-term borrowing rate. NW Natural included $10.2 million and $8.8 million of deferred remediation expense approved by the OPUC for collection during the 2025-26 and 2024-25 PGA years, respectively.
This increases the cost of new home construction incorporating natural gas depending on a number of factors including home size, equipment configurations, and building envelope measures.
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.
As of May 1, 2024, 0.2 million therms per day of deliverability and 1.15 Bcf of associated non-utility Mist gas storage capacity was recalled to serve core customers. Customer rate increases related to this recall began on November 1, 2024. CLIMATE COMMITMENT ACT.
As of May 1, 2025, 0.2 million therms per day of deliverability and 0.3 Bcf of associated non-utility Mist gas storage capacity was recalled to serve core customers. Customer rate increases related to this recall began for Oregon customers on October 31, 2025, and November 1, 2025 for Washington customers. CLIMATE COMMITMENT ACT.
As of December 31, 2024 and 2023, NW Natural's consolidated capital structure included common equity of 46.9% and 47.2%, long-term debt of 47.2% and 52.2%, and short-term debt including current maturities of long-term debt of 5.9% and 0.6%, respectively. During 2024, NW Natural's capital structure changed primarily due to the increase in short-term debt and capital contributions from NW Holdings.
As of December 31, 2025 and 2024, NW Natural's consolidated capital structure included common equity of 49.4% and 46.9%, long-term debt of 48.5% and 47.2%, and short-term debt including current maturities of long-term debt of 2.1% and 5.9%, respectively. During 2025, NW Natural's capital structure changed primarily due to the increase in long-term debt and capital contributions from NW Holdings.
The wholly-owned regulated water businesses of NWN Water, a wholly-owned subsidiary of NW Holdings, are subject to regulation by the utility commissions in the states in which they are located, which currently includes Oregon, Washington, Arizona, Idaho, and Texas.
The wholly-owned regulated wastewater businesses of NWN Water are subject to regulation by the utility commissions in the states in which they are located, which currently includes Texas and Arizona. In addition, NWN Water includes wholly-owned unregulated wastewater businesses in Oregon, Washington, and Idaho.
The increase is based on the following assumptions: • Cost of capital of 6.814%; and • 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.
The increase is based on the following assumptions: • Cost of capital of 6.814%; and • 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. 48 The WUTC Order does not specify the underlying inputs to the cost of capital, including capital structure and return on equity.
Business Segment - Natural Gas Distribution (NGD) NGD margin results are primarily affected by customer growth, revenues from rate-base additions, and, to a certain extent, by changes in delivered volumes due to weather and customers’ gas usage patterns.
NWN Gas Utility margin results are primarily affected by customer growth, revenues from rate-base additions, and, to a certain extent, by changes in delivered volumes due to weather and customers’ gas usage patterns.
The credit agreement requires NW Holdings to maintain a consolidated indebtedness to total capitalization ratio of 70% or less. Failure to comply with this covenant would entitle the lenders to terminate their lending commitments and accelerate the maturity of all amounts outstanding.
The principal amount of borrowings under the credit agreement is due and payable on the maturity date. The credit agreement requires NW Holdings to maintain a consolidated indebtedness to total capitalization ratio of 70% or less. Failure to comply with this covenant would entitle the lenders to terminate their lending commitments and accelerate the maturity of all amounts outstanding.
NW Holdings was in compliance with this covenant at December 31, 2024 and 2023, with consolidated indebtedness to total capitalization ratios of 57.6% and 56.5%, respectively.
NW Holdings was in compliance with this covenant at December 31, 2025 and 2024, with consolidated indebtedness to total capitalization ratios of 60.7% and 57.6%, respectively.
NW Natural was in compliance with this covenant at December 31, 2024 and 2023, with consolidated indebtedness to total capitalization ratios of 53.1% and 52.8%, respectively.
NW Natural was in compliance with this covenant at December 31, 2025 and 2024, with consolidated indebtedness to total capitalization ratios of 50.6% and 53.1%, respectively.
NW Natural jointly filed its 2022 IRP for both Oregon and Washington on September 23, 2022. The 2022 IRP evaluates several varying scenarios based on a range of inputs and outlines the least-cost resources required to meet future demand and environmental compliance obligations.
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeSince most of NW Natural's commodity supply contracts are priced at the daily or monthly market index price tied to liquid exchange points, and NW Natural has adequate storage flexibility, NW Natural believes it is unlikely a supplier default would have a material adverse effect on its financial condition or results of operations.
Biggest changeSince most of NW Natural's commodity supply contracts are priced at the daily or monthly market index price tied to liquid exchange points, and NW Natural has adequate storage flexibility, NW Natural believes it is unlikely a supplier default would have a material adverse effect on its financial condition or results of operations. 73 Credit Exposure to Financial Derivative Counterparties NW Natural did not have any counterparty credit exposure related to commodity swap counterparties based on their estimated fair value at December 31, 2025.
Commodity price risk is primarily hedged with financial swaps, storage and physical gas reserves from a long-term investment in working interests in gas leases operated by Jonah Energy. These hedges are generally included in NW Natural's annual PGA filing for recovery, subject to a regulatory prudence review.
For NW Natural, commodity price risk is primarily hedged with financial swaps, storage and physical gas reserves from a long-term investment in working interests in gas leases operated by Jonah Energy. These hedges are generally included in NW Natural's annual PGA filing for recovery, subject to a regulatory prudence review.
NW Natural actively monitors and manages derivative credit exposure and places counterparties on hold for trading purposes or requires cash collateral, letters of credit, or guarantees as circumstances warrant. 68 The following table summarizes NW Natural's overall financial swap and option credit exposure, based on estimated fair value, and the corresponding counterparty credit ratings.
NW Natural actively monitors and manages derivative credit exposure and places counterparties on hold for trading purposes or requires cash collateral, letters of credit, or guarantees as circumstances warrant. The following table summarizes NW Natural's overall financial swap and option credit exposure, based on estimated fair value, and the corresponding counterparty credit ratings.
In the event of a supplier’s failure to deliver contracted volumes of gas, the NGD business would need to replace those volumes at prevailing market prices, which may be higher or lower than the original transaction prices. NW Natural expects these costs would be subject to its PGA sharing mechanism discussed above.
In the event of a supplier’s failure to deliver contracted volumes of gas, the NWN Gas Utility business would need to replace those volumes at prevailing market prices, which may be higher or lower than the original transaction prices. NW Natural expects these costs would be subject to its PGA sharing mechanism discussed above.
NW Natural's long-term gas supply contracts are primarily index-based and subject to monthly re-pricing, a strategy that is intended to substantially mitigate credit exposure to physical gas counterparties. Absolute notional amounts under physical gas contracts related to open positions on derivative instruments were 561 million therms and 572 million therms as of December 31, 2024 and 2023, respectively.
NW Natural's long-term gas supply contracts are primarily index-based and subject to monthly re-pricing, a strategy that is intended to substantially mitigate credit exposure to physical gas counterparties. Absolute notional amounts under physical gas contracts related to open positions on derivative instruments were 692 million therms and 561 million therms as of December 31, 2025 and 2024, respectively.
NW Natural’s credit exposure also includes interest rate swap and foreign exchange forward counterparties, neither of which were significant at December 31, 2024.
NW Natural’s credit exposure also includes interest rate swap and foreign exchange forward counterparties, neither of which were significant at December 31, 2025.
NW Natural's weather normalization mechanism in Oregon is for residential and small commercial customers, which is intended to stabilize the recovery of NGD business fixed costs and reduce fluctuations in customers’ bills due to colder or warmer than average weather. Customers in Oregon are allowed to opt out of the weather normalization mechanism.
NW Natural's weather normalization mechanism in Oregon is for residential and small commercial customers, which is intended to stabilize the recovery of NWN Gas Utility business fixed costs and reduce fluctuations in customers’ bills due to colder or warmer than average weather. Customers in Oregon are allowed to opt out of the weather normalization mechanism.
Weather Risk NW Natural has a weather normalization mechanism in Oregon; however, it is exposed to weather risk primarily from NGD business operations. A large percentage of NGD margin is volume driven, and current rates are based on an assumption of average weather.
Weather Risk NW Natural has a weather normalization mechanism in Oregon; however, it is exposed to weather risk primarily from NWN Gas Utility business operations. A large percentage of NWN Gas Utility margin is volume driven, and current rates are based on an assumption of average weather.
The table uses credit ratings from S&P and Moody’s, reflecting the higher of the S&P or Moody’s rating or a middle rating if the entity is split-rated with more than one rating level difference: Financial Derivative Position by Credit Rating Unrealized Fair Value Gain (Loss) In millions 2024 2023 AA/Aa $ (71.9) $ (100.7) A/A (10.8) (14.8) Total $ (82.7) $ (115.5) In most cases, NW Natural also mitigates the credit risk of financial derivatives by having master netting arrangements with counterparties which provide for making or receiving net cash settlements.
The table uses credit ratings from S&P and Moody’s, reflecting the higher of the S&P or Moody’s rating or a middle rating if the entity is split-rated with more than one rating level difference: Financial Derivative Position by Credit Rating Unrealized Fair Value Gain (Loss) In millions 2025 2024 AA/Aa $ (58.0) $ (71.9) A/A (13.1) (10.8) Total $ (71.1) $ (82.7) In most cases, NW Natural also mitigates the credit risk of financial derivatives by having master netting arrangements with counterparties which provide for making or receiving net cash settlements.
Foreign currency forward contracts are used to hedge against fluctuations in exchange rates for NW Natural's commodity-related demand and reservation charges paid in Canadian dollars. Notional amounts under foreign currency forward contracts were $10.3 million and $11.9 million as of December 31, 2024 and 2023, respectively.
Foreign currency forward contracts are used to hedge against fluctuations in exchange rates for NW Natural's commodity-related demand and reservation charges paid in Canadian dollars. Notional amounts under foreign currency forward contracts were $8.6 million and $10.3 million as of December 31, 2025 and 2024, respectively.
As of December 31, 2024, approximately 7% of Oregon customers had opted out. In addition to the Oregon customers opting out, Washington customers account for approximately 12% of our total customer base and are not covered by weather normalization. The combination of Oregon and Washington customers not covered by a weather normalization mechanism is 18% o f all customers.
As of December 31, 2025, approximately 7% of Oregon customers had opted out. In addition to the Oregon customers opting out, Washington customers account for approximately 12% of our total customer base and are not covered by weather normalization. The combination of Oregon and Washington customers not covered by a weather normalization mechanism is 19% of all customers.
At December 31, 2024, financial derivative commodity credit risk on a volumetric basis was geographically concentrated 17% in the United States and 83% in Canada, based on counterparties' location. At December 31, 2023, financial derivative commodity credit risk on a volumetric basis was geographically concentrated 24% in the United States and 76% in Canada with our counterparties.
At December 31, 2025, financial derivative commodity credit risk on a volumetric basis was geographically concentrated 20% in the United States and 77% in Canada, based on counterparties' location. At December 31, 2024, financial derivative commodity credit risk on a volumetric basis was geographically concentrated 17% in the United States and 83% in Canada with our counterparties.
If all of the foreign currency forward contracts had been settled on December 31, 2024, a loss of $0.5 million would have been realized. See Note 15. Credit Risk Credit Exposure to Natural Gas Suppliers Certain gas suppliers have either relatively low credit ratings or are not rated by major credit rating agencies.
If all of the foreign currency forward contracts had been settled on December 31, 2025, an immaterial gain would have been realized. See Note 15. Credit Risk Credit Exposure to Natural Gas Suppliers Certain gas suppliers have either relatively low credit ratings or are not rated by major credit rating agencies.
Notional amounts under financial derivative contracts were $303.7 million and $405.7 million as of December 31, 2024 and 2023, respectively.
Notional amounts under financial derivative contracts were $279.9 million and $303.7 million as of December 31, 2025 and 2024, respectively.
Unrealized gains related to these interest rate swap agreements totaled $0.2 million and $0.2 million, net of tax, as of December 31, 2024 and 2023, respectively. Foreign Currency Risk The costs of certain pipeline fees are subject to changes in the value of the Canadian currency in relation to the U.S. currency.
Unrealized gains related to these interest rate swap agreements were immaterial as of December 31, 2025 and December 31, 2024. Foreign Currency Risk The costs of certain pipeline fees are subject to changes in the value of the Canadian currency in relation to the U.S. currency.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK NW Holdings and NW Natural are exposed to various forms of market risk including commodity supply risk, commodity price risk, interest rate risk, foreign currency risk, credit risk and weather risk. The following describes NW Holdings' and NW Natural's exposure to these risks, as applicable.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK NW Holdings and NW Natural are exposed to various forms of market risk including commodity supply risk, commodity price risk, interest rate risk, foreign currency risk, credit risk and weather risk.
Commodity Supply Risk NW Natural enters into spot, short-term, and long-term natural gas supply contracts, along with associated pipeline transportation contracts, to manage commodity supply risk. NW Natural has arranged for physical delivery of an adequate supply of gas, including gas in its Mist storage facility and other off-system storage facilities, to meet expected requirements of core NGD customers.
NW Natural has arranged for physical delivery of an adequate supply of gas, including gas in its Mist storage facility and other off-system storage facilities, to meet expected requirements of core NWN Gas Utility customers.
The fair value of financial swaps, based on market prices at December 31, 2024, was an unrealized loss of $82.7 million, which would result in cash outflows of $71.3 million in 2025, $10.0 million in 2026, and $1.4 million in 2027.
The fair value of financial swaps, based on market prices at December 31, 2025, was an unrealized loss of $71.1 million, which would result in cash outflows of $61.0 million in 2026, $7.2 million in 2027, and $2.9 million in 2028. For SiEnergy, fluctuations in commodity gas prices are included in the PGA and passed onto customers.
See "Results of Operations—Regulatory Matters—Rate Mechanisms— WARM " above. 69
SiEnergy also has a weather normalization mechanism. See "Results of Operations—Regulatory Matters—Rate Mechanisms— WARM " above. 74
Removed
Credit Exposure to Financial Derivative Counterparties NW Natural did not have any counterparty credit exposure related to commodity swap counterparties based on their estimated fair value at December 31, 2024.
Added
Management monitors and manages these financial exposures as an integral part of NW Holdings' and NW Natural's overall risk management program. The following describes NW Holdings' and NW Natural's exposure to these risks, as applicable.
Added
Commodity Supply Risk NW Natural enters into spot, short-term, and long-term natural gas supply contracts, along with associated pipeline transportation contracts, to manage commodity supply risk.

Other NWN 10-K year-over-year comparisons