Gas Reserves and Other Investments	6 Months Ended
Jun. 30, 2010
Gas Reserves And Other Investments [Abstract]
Gas Reserves And Other Investments [Text Block]	12. Gas Reserves and Other Investments Our gas reserves are stated at cost, net of regulatory amortization, with the associated deferred tax benefits recorded as liabilities on the balance sheet. Other investments include financial investments in life insurance policies, which are accounted for at fair value, and equity investments in certain partnerships and limited liability companies, which are accounted for under the equity or cost methods. See Part II, Item 8., Note 12, in the 2010 Form 10-K for more detail on our investments. Gas Reserves We signed agreements with Encana Oil & Gas (USA) Inc. (Encana) to develop physical gas reserves that are expected to supply a portion of our utility customers' requirements over the next 30 years. The volume of gas produced and allocated to NW Natural under the agreements will increase in the early years as we continue to invest in drilling, with volumes expected to peak at about 13 percent of our utility's gas supply requirement in gas year 2015-2016. Over the first 10 years of the agreement (2011-2020), volumes are expected to average approximately 8 to 10 percent of the annual requirements of our utility customers. Under the agreements, we expect to invest approximately $45 million to $55 million per year for five years, and our total investment is expected to be about $250 million. In approving the agreements, the OPUC determined that our Company's costs under the agreements will be recovered on an ongoing basis through its annual Purchased Gas Adjustment (PGA) mechanism, including the deferral and incentive sharing process for the commodity cost of gas. Annually, we will forecast the amounts related to gas reserve costs and volumes expected, and variances between forecast and actual up to $10 million will be subject to the normal PGA incentive sharing mechanism, which currently is set at 10 percent of the variance amount that would be recognized in earnings. Variances in excess of $10 million, both negative and positive, will be entirely deferred and passed through to customer rates. As part of the decision by the OPUC to approve the agreements, we have agreed to file a general rate case in Oregon no later than December 31, 2011. Encana began drilling in May 2011 under our agreements, and we are currently receiving gas from our interests in a section of the gas field. Our net investment at June 30, 2011 is $12.1 million, net of deferred taxes totaling $4 million. Variable Interest Entity Analysis. As of June 30, 2011, we have determined that the arrangements with Encana qualify as a VIE and that we are not the primary beneficiary of these activities as defined by the authoritative guidance related to consolidations. We account for our investment in the VIE on the cost basis and it is included under gas reserves on our balance sheet. Our maximum loss exposure related to the VIE is limited to our investment balance. Palomar PGH is a development stage variable interest entity. Palomar, a wholly-owned subsidiary of PGH, is pursuing the development of a new gas transmission pipeline that would provide an interconnection with our utility distribution system. PGH is owned 50 percent by NWN Energy and 50 percent by TransCanada American Investments Ltd., an indirect wholly-owned subsidiary of TransCanada Corporation. Variable Interest Entity Analysis. As of June 30, 2011, we updated our VIE analysis and determined that we are not the primary beneficiary of PGH's activities as defined by the authoritative guidance related to consolidations. Therefore, we account for our investment in PGH and the Palomar project under the equity method, which is included in other investments on our balance sheet. Our maximum loss exposure related to PGH is limited to our equity investment balance, less our share of any cash or other assets available to us as a 50 percent owner. Impairment Analysis. Our investments in nonconsolidated entities accounted for under the equity method are reviewed for impairment when circumstances or events indicate a potential loss in value may have occurred, and on an annual basis following updates to our corporate planning assumptions. When it is determined that a loss in value is other than temporary, an impairment charge is recognized for the difference between the investment's carrying value and its estimated fair value. Fair value is based on quoted market prices when available, or on the present value of expected discounted future cash flows. Differing assumptions could affect the timing and amount of an impairment recorded in any period. In March 2011, our investment in PGH was reviewed for impairment when Palomar withdrew its original application with the Federal Energy Regulatory Commission (FERC) for a proposed natural gas pipeline in Oregon. At the same time, Palomar informed FERC that it intended to re-file an application later this year or in 2012 to reflect changes in the project scope, which was expected to eliminate the western portion of the proposed pipeline and align the revised project with the region's current and future gas infrastructure needs. Palomar is working with customers in the Pacific Northwest to further understand their gas transportation needs. Palomar expects to obtain commercial support for its revised pipeline proposal, and then file a new FERC certificate application by the end of next year. During the second quarter of 2011, we re-assessed our equity investment in Palomar assets related to the western portion of the pipeline and determined that these costs were impaired, and as a result we recorded a pre-tax charge of $0.3 million for our share of the project. Our remaining investment balance in Palomar consists of costs related to the east zone, of which the investment balance at June 30, 2011 is $14.4 million. We reviewed these east zone costs for impairment based on the current status of the project, including Palomar's plans to conduct an open season and re-file a revised application with FERC later this year or in 2012. Based on our review, we determined that our remaining equity investment was not impaired because the fair value of expected cash flows from planned development of the eastern portion of the pipeline project exceeds our equity investment. However, if we learn later that the project is not viable or will not go forward, then we could be required to recognize an impairment charge of up to approximately $14.2 million based on the current amount of our equity investment net of cash and working capital at Palomar. We will continue to monitor and update our impairment analysis as needed.

Gas Reserves and Other Investments

6 Months Ended

Jun. 30, 2010

Gas Reserves And Other Investments [Abstract]

Gas Reserves And Other Investments [Text Block]

12. Gas Reserves and Other Investments

Our gas reserves are stated at cost, net of regulatory amortization, with the associated deferred tax benefits recorded as liabilities on the balance sheet. Other investments include financial investments in life insurance policies, which are accounted for at fair value, and equity investments in certain partnerships and limited liability companies, which are accounted for under the equity or cost methods. See Part II, Item 8., Note 12, in the 2010 Form 10-K for more detail on our investments.

Gas Reserves

We signed agreements with Encana Oil & Gas (USA) Inc. (Encana) to develop physical gas reserves that are expected to supply a portion of our utility customers' requirements over the next 30 years. The volume of gas produced and allocated to NW Natural under the agreements will increase in the early years as we continue to invest in drilling, with volumes expected to peak at about 13 percent of our utility's gas supply requirement in gas year 2015-2016. Over the first 10 years of the agreement (2011-2020), volumes are expected to average approximately 8 to 10 percent of the annual requirements of our utility customers. Under the agreements, we expect to invest approximately $45 million to $55 million per year for five years, and our total investment is expected to be about $250 million.

In approving the agreements, the OPUC determined that our Company's costs under the agreements will be recovered on an ongoing basis through its annual Purchased Gas Adjustment (PGA) mechanism, including the deferral and incentive sharing process for the commodity cost of gas. Annually, we will forecast the amounts related to gas reserve costs and volumes expected, and variances between forecast and actual up to $10 million will be subject to the normal PGA incentive sharing mechanism, which currently is set at 10 percent of the variance amount that would be recognized in earnings. Variances in excess of $10 million, both negative and positive, will be entirely deferred and passed through to customer rates. As part of the decision by the OPUC to approve the agreements, we have agreed to file a general rate case in Oregon no later than December 31, 2011.

Encana began drilling in May 2011 under our agreements, and we are currently receiving gas from our interests in a section of the gas field. Our net investment at June 30, 2011 is $12.1 million, net of deferred taxes totaling $4 million.

Variable Interest Entity Analysis. As of June 30, 2011, we have determined that the arrangements with Encana qualify as a VIE and that we are not the primary beneficiary of these activities as defined by the authoritative guidance related to consolidations. We account for our investment in the VIE on the cost basis and it is included under gas reserves on our balance sheet. Our maximum loss exposure related to the VIE is limited to our investment balance.

Palomar

PGH is a development stage variable interest entity. Palomar, a wholly-owned subsidiary of PGH, is pursuing the development of a new gas transmission pipeline that would provide an interconnection with our utility distribution system. PGH is owned 50 percent by NWN Energy and 50 percent by TransCanada American Investments Ltd., an indirect wholly-owned subsidiary of TransCanada Corporation.

Variable Interest Entity Analysis. As of June 30, 2011, we updated our VIE analysis and determined that we are not the primary beneficiary of PGH's activities as defined by the authoritative guidance related to consolidations. Therefore, we account for our investment in PGH and the Palomar project under the equity method, which is included in other investments on our balance sheet. Our maximum loss exposure related to PGH is limited to our equity investment balance, less our share of any cash or other assets available to us as a 50 percent owner.

Impairment Analysis. Our investments in nonconsolidated entities accounted for under the equity method are reviewed for impairment when circumstances or events indicate a potential loss in value may have occurred, and on an annual basis following updates to our corporate planning assumptions. When it is determined that a loss in value is other than temporary, an impairment charge is recognized for the difference between the investment's carrying value and its estimated fair value. Fair value is based on quoted market prices when available, or on the present value of expected discounted future cash flows. Differing assumptions could affect the timing and amount of an impairment recorded in any period.

In March 2011, our investment in PGH was reviewed for impairment when Palomar withdrew its original application with the Federal Energy Regulatory Commission (FERC) for a proposed natural gas pipeline in Oregon. At the same time, Palomar informed FERC that it intended to re-file an application later this year or in 2012 to reflect changes in the project scope, which was expected to eliminate the western portion of the proposed pipeline and align the revised project with the region's current and future gas infrastructure needs. Palomar is working with customers in the Pacific Northwest to further understand their gas transportation needs. Palomar expects to obtain commercial support for its revised pipeline proposal, and then file a new FERC certificate application by the end of next year.

During the second quarter of 2011, we re-assessed our equity investment in Palomar assets related to the western portion of the pipeline and determined that these costs were impaired, and as a result we recorded a pre-tax charge of $0.3 million for our share of the project. Our remaining investment balance in Palomar consists of costs related to the east zone, of which the investment balance at June 30, 2011 is $14.4 million. We reviewed these east zone costs for impairment based on the current status of the project, including Palomar's plans to conduct an open season and re-file a revised application with FERC later this year or in 2012. Based on our review, we determined that our remaining equity investment was not impaired because the fair value of expected cash flows from planned development of the eastern portion of the pipeline project exceeds our equity investment. However, if we learn later that the project is not viable or will not go forward, then we could be required to recognize an impairment charge of up to approximately $14.2 million based on the current amount of our equity investment net of cash and working capital at Palomar. We will continue to monitor and update our impairment analysis as needed.