Commitments and Contigencies

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

COMMITMENTS AND CONTINGENCIES

Gas Purchase and Pipeline Capacity Purchase and Release Commitments

NW Natural has signed agreements providing for the reservation of firm pipeline capacity under which it is required to make fixed monthly payments for contracted capacity. The pricing component of the monthly payment is established, subject to change, by U.S. or Canadian regulatory bodies, or is established directly with private counterparties, as applicable. 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.

In November 2021, NW Natural and a subsidiary of Archaea Energy entered into a long-term RNG purchase and sale agreement. Under the agreement, NW Natural committed to purchase the environmental attributes generated by Archaea related to up to ten million therms of RNG annually from its portfolio of RNG production facilities for a fixed fee for a period of 21 years. The agreement will commence in 2022, with the full annual quantity beginning in 2025.

The aggregate amounts of these agreements at NW Natural were as follows at December 31, 2021:

In thousands	Gas Purchase Agreements(1)		Pipeline Capacity Purchase Agreements		Pipeline Capacity Release Agreements
2022	$	168,296	$	85,335	$	7,596
2023	6,376		87,449		4,036
2024	6,426		80,923		4,036
2025	12,076		78,449		3,363
2026	12,133		63,608		—
Thereafter	203,500		507,666		—
Total	408,807		903,430		19,031
Less: Amount representing interest	44,571		119,202		382
Total at present value	$	364,236	$	784,228	$	18,649

(1) Gas purchase agreements include environmental attributes of RNG

Total fixed charges under capacity purchase agreements were $82.9 million for 2021, $81.8 million for 2020, and $82.2 million for 2019, of which $7.7 million, $4.8 million, and $4.3 million, respectively, related to capacity releases. In addition, per-unit charges are required to be paid based on the actual quantities shipped under the agreements. In certain take-or-pay purchase commitments, annual deficiencies may be offset by prepayments subject to recovery over a longer term if future purchases exceed the minimum annual requirements.

Leases

Refer to Note 7 for a discussion of lease commitments and contingencies.

Environmental Matters

Refer to Note 17 for a discussion of environmental commitments and contingencies.