10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

OR

☐       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to____________

NORTHWEST NATURAL HOLDING COMPANY

NORTHWEST NATURAL GAS COMPANY

(Exact name of registrant as specified in its charter)

(Exact name of registrant as specified in its charter)

Commission file number

1-38681

Commission file number

1-15973

Oregon

82-4710680

Oregon

93-0256722

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

250 SW Taylor Street

250 SW Taylor Street

Portland

Oregon

97204

Portland

Oregon

97204

(Address of principal executive offices)

(Zip Code)

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code:

(503)

226-4211

Registrant’s telephone number, including area code:

(503)

226-4211

Securities registered pursuant to Section 12(b) of the Act:

Registrant

Title of each class

Trading Symbol

Name of each exchange on which registered

NORTHWEST NATURAL HOLDING COMPANY

Common Stock

NWN

New York Stock Exchange

NORTHWEST NATURAL GAS COMPANY

None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

NORTHWEST NATURAL HOLDING COMPANY

Yes

☒

No

☐

NORTHWEST NATURAL GAS COMPANY

Yes

☒

No

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

NORTHWEST NATURAL HOLDING COMPANY

Yes

☒

No

☐

NORTHWEST NATURAL GAS COMPANY

Yes

☒

No

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

NORTHWEST NATURAL HOLDING COMPANY

NORTHWEST NATURAL GAS COMPANY

Large Accelerated Filer

☒

Large Accelerated Filer

☐

Accelerated Filer

☐

Accelerated Filer

☐

Non-accelerated Filer

☐

Non-accelerated Filer

☒

Smaller Reporting Company

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

NORTHWEST NATURAL HOLDING COMPANY

Yes

☐

No

☒

NORTHWEST NATURAL GAS COMPANY

Yes

☐

No

☒

At October 26, 2023, 36,778,271 shares of Northwest Natural Holding Company's Common Stock (the only class of Common Stock) were outstanding. All shares of Northwest Natural Gas Company's Common Stock (the only class of Common Stock) outstanding were held by Northwest Natural Holding Company.

This combined Form 10-Q is separately filed by Northwest Natural Holding Company and Northwest Natural Gas Company. Information contained in this document relating to Northwest Natural Gas Company is filed by Northwest Natural Holding Company and separately by Northwest Natural Gas Company. Northwest Natural Gas Company makes no representation as to information relating to Northwest Natural Holding Company or its subsidiaries, except as it may relate to Northwest Natural Gas Company and its subsidiaries.

NORTHWEST NATURAL GAS COMPANY

NORTHWEST NATURAL HOLDING COMPANY

For the Quarterly Period Ended September 30, 2023

TABLE OF CONTENTS

PART 1.	FINANCIAL INFORMATION	Page
	Forward-Looking Statements	3
Item 1.	Unaudited Financial Statements:
	Consolidated Statements of Comprehensive Income of Northwest Natural Holding Company for the three and nine months ended September 30, 2023 and 2022	5
	Consolidated Balance Sheets of Northwest Natural Holding Company at September 30, 2023 and 2022 and December 31, 2022	6
	Consolidated Statements of Shareholders' Equity of Northwest Natural Holding Company for the three and nine months ended September 30, 2023 and 2022	8
	Consolidated Statements of Cash Flows of Northwest Natural Holding Company for the nine months ended September 30, 2023 and 2022	9
	Consolidated Statements of Comprehensive Income of Northwest Natural Gas Company for the three and nine months ended September 30, 2023 and 2022	10
	Consolidated Balance Sheets of Northwest Natural Gas Company at September 30, 2023 and 2022 and December 31, 2022	11
	Consolidated Statements of Shareholder's Equity of Northwest Natural Gas Company for the three and nine months ended September 30, 2023 and 2022	13
	Consolidated Statements of Cash Flows of Northwest Natural Gas Company for the nine months ended September 30, 2023 and 2022	14
	Notes to Unaudited Consolidated Financial Statements	15
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	42
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	68
Item 4.	Controls and Procedures	68
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	69
Item 1A.	Risk Factors	69
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	69
Item 5.	Other Information	69
Item 6.	Exhibits	70
	Signatures	72

PART I. FINANCIAL INFORMATION

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, which are subject to the safe harbors created by such Act. Forward-looking statements can be identified by words such as anticipates, assumes, may, intends, plans, projects, seeks, should, believes, estimates, expects, will, could, and similar references (including the negatives thereof) to future periods, although not all forward-looking statements contain these words. Examples of forward-looking statements include, but are not limited to, statements regarding the following:

•plans, projections and predictions;

•objectives, goals, visions or strategies;

•assumptions, generalizations and estimates;

•ongoing continuation of past practices or patterns;

•future events or performance;

•trends;

•risks;

•uncertainties;

•timing and cyclicality;

•economic conditions, including impacts of inflation and interest rates, bank failure, recessionary risk, and general economic uncertainty;

•earnings and dividends;

•capital expenditures and allocation;

•capital markets or access to capital;

•capital or organizational structure;

•matters related to climate change and our role in decarbonization or a low-carbon future;

•renewable natural gas, environmental attributes related thereto, and hydrogen;

•our strategy to reduce greenhouse gas emissions and the efficacy of communicating that strategy to shareholders, investors, stakeholders and communities;

•the policies and priorities of the current presidential administration and U.S. Congress;

•growth;

•customer rates;

•pandemic and related illness or quarantine and economic conditions related thereto or resulting therefrom;

•labor relations and workforce succession;

•commodity costs;

•desirability and cost competitiveness of natural gas;

•gas reserves;

•operational performance and costs;

•energy policy, infrastructure and preferences;

•public policy approach and involvement;

•efficacy of derivatives and hedges;

•liquidity, financial positions, and planned securities issuances;

•valuations;

•project and program development, expansion, or investment;

•business development efforts, including new business lines such as unregulated renewable natural gas, and acquisitions and integration thereof;

•implementation and execution of our water strategy;

•pipeline capacity, demand, location, and reliability;

•adequacy of property rights and operations center development;

•technology implementation and cybersecurity practices;

•competition;

•procurement and development of gas (including renewable natural gas) and water supplies;

•estimated expenditures, supply chain and third party availability and impairment;

•supply chain disruptions;

•costs of compliance, and our ability to include those costs in rates;

•customers bypassing our infrastructure;

•credit exposures and credit ratings or changes in credit ratings;

•uncollectible account amounts;

•rate or regulatory outcomes, recovery or refunds, and the availability of public utility commissions to take action;

•impacts or changes of executive orders, laws, rules and regulations, or legal challenges related thereto, including the Inflation Reduction Act or other energy climate related legislation;

•tax liabilities or refunds, including effects of tax legislation;

•levels and pricing of gas storage contracts and gas storage markets;

•outcomes, timing and effects of potential claims, litigation, regulatory actions, and other administrative matters;

•projected obligations, expectations and treatment with respect to, and the impact of new legislation on, retirement plans;

•international, federal, state, and local efforts to regulate, in a variety of ways, greenhouse gas emissions, and the effects of those efforts;

•geopolitical factors, including the ongoing conflicts in Europe and the Middle East;

•availability, adequacy, and shift in mix, of gas and water supplies;

•effects of new or anticipated changes in critical accounting policies or estimates;

•approval and adequacy of regulatory deferrals;

•effects and efficacy of regulatory mechanisms; and

•environmental, regulatory, litigation and insurance costs and recoveries, and timing thereof.

Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. We therefore caution you against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements are discussed in NW Holdings' and NW Natural's 2022 Annual Report on Form 10-K, Part I, Item 1A “Risk Factors” and Part II, Item 7 and Item 7A, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Quantitative and Qualitative Disclosures about Market Risk”, respectively, and Part I of this report, Items 2 and 3, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Quantitative and Qualitative Disclosures About Market Risk”, respectively.

Any forward-looking statement made in this report speaks only as of the date on which it is made. Factors or events that could cause actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

NORTHWEST NATURAL HOLDING COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

	Three Months Ended September 30,				Nine Months Ended September 30,
In thousands, except per share data	2023		2022		2023		2022
Operating revenues	$	141,479	$	116,839	$	841,761	$	662,100
Operating expenses:
Cost of gas	49,180		36,105		357,362		261,413
Operations and maintenance	61,524		50,745		200,160		161,405
Environmental remediation	1,032		980		8,547		7,950
General taxes	10,577		9,572		35,685		30,665
Revenue taxes	5,523		4,437		33,750		26,037
Depreciation	30,061		29,026		92,819		85,565
Other operating expenses	1,159		901		3,664		2,815
Total operating expenses	159,056		131,766		731,987		575,850
Income (loss) from operations	(17,577)		(14,927)		109,774		86,250
Other income (expense), net	5,004		1,636		13,228		908
Interest expense, net	19,406		13,054		56,676		36,156
Income (loss) before income taxes	(31,979)		(26,345)		66,326		51,002
Income tax expense (benefit)	(8,292)		(6,758)		17,098		12,635
Net income (loss)	(23,687)		(19,587)		49,228		38,367
Other comprehensive income (loss):
Amortization of non-qualified employee benefit plan liability, net of taxes of $37 and $73 for the three months ended and $111 and $215 for the nine months ended September 30, 2023 and 2022, respectively	102		202		307		596
Unrealized gain on interest rate swaps, net of taxes of $62 and $359 for the three and nine months ended September 30, 2023, respectively	174		—		999		—
Comprehensive income (loss)	$	(23,411)	$	(19,385)	$	50,534	$	38,963
Average common shares outstanding:
Basic	36,214		34,939		35,950		33,491
Diluted	36,214		34,939		35,980		33,539
Earnings (loss) per share of common stock:
Basic	$	(0.65)	$	(0.56)	$	1.37	$	1.15
Diluted	(0.65)		(0.56)		1.37		1.14

See Notes to Unaudited Consolidated Financial Statements

NORTHWEST NATURAL HOLDING COMPANY

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

	September 30,		September 30,		December 31,
In thousands	2023		2022		2022
Assets:
Current assets:
Cash and cash equivalents	$	156,616	$	108,556	$	29,270
Accounts receivable	51,999		50,850		168,906
Accrued unbilled revenue	24,626		16,857		89,048
Allowance for uncollectible accounts	(2,312)		(2,171)		(3,296)
Regulatory assets	108,525		104,830		117,491
Derivative instruments	23,454		62,710		194,412
Inventories	94,585		98,725		87,096
Other current assets	49,947		41,414		61,286
Total current assets	507,440		481,771		744,213
Non-current assets:
Property, plant, and equipment	4,468,602		4,207,328		4,261,566
Less: Accumulated depreciation	1,189,968		1,166,150		1,147,166
Total property, plant, and equipment, net	3,278,634		3,041,178		3,114,400
Regulatory assets	312,665		301,660		340,432
Derivative instruments	6,188		8,008		5,045
Other investments	104,562		96,569		95,704
Operating lease right of use asset, net	71,477		73,145		73,429
Assets under sales-type leases	130,952		135,480		134,302
Goodwill	152,399		74,732		149,283
Other non-current assets	100,801		88,169		91,518
Total non-current assets	4,157,678		3,818,941		4,004,113
Total assets	$	4,665,118	$	4,300,712	$	4,748,326

See Notes to Unaudited Consolidated Financial Statements

NORTHWEST NATURAL HOLDING COMPANY

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

	September 30,		September 30,		December 31,
In thousands, except share information	2023		2022		2022
Liabilities and equity:
Current liabilities:
Short-term debt	$	71,000	$	141,000	$	258,200
Current maturities of long-term debt	190,728		50,614		90,697
Accounts payable	99,326		118,274		180,667
Taxes accrued	17,120		18,080		15,625
Interest accrued	13,940		11,086		10,169
Regulatory liabilities	88,376		111,551		248,582
Derivative instruments	46,603		19,594		28,728
Operating lease liabilities	1,815		1,361		1,514
Other current liabilities	61,149		39,796		64,552
Total current liabilities	590,057		511,356		898,734
Long-term debt	1,424,572		1,287,006		1,246,167
Deferred credits and other non-current liabilities:
Deferred tax liabilities	375,917		349,633		366,022
Regulatory liabilities	683,262		663,547		689,578
Pension and other postretirement benefit liabilities	145,991		160,196		149,143
Derivative instruments	21,085		18,824		20,838
Operating lease liabilities	77,475		78,469		78,965
Other non-current liabilities	127,219		110,825		123,438
Total deferred credits and other non-current liabilities	1,430,949		1,381,494		1,427,984
Commitments and contingencies (Note 16)
Equity:
Common stock - no par value; authorized 100,000,000 shares; issued and outstanding 36,575,797, 35,098,437, and 35,524,590 at September 30, 2023 and 2022, and December 31, 2022, respectively	851,288		786,094		805,253
Retained earnings	373,231		345,570		376,473
Accumulated other comprehensive loss	(4,979)		(10,808)		(6,285)
Total equity	1,219,540		1,120,856		1,175,441
Total liabilities and equity	$	4,665,118	$	4,300,712	$	4,748,326

See Notes to Unaudited Consolidated Financial Statements

NORTHWEST NATURAL HOLDING COMPANY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)

In thousands, except per share amounts	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Total shareholders' equity, beginning balances	$	1,240,278	$	1,138,779	$	1,175,441	$	935,146
Common stock:
Beginning balances	831,135		767,826		805,253		590,771
Stock-based compensation	251		463		3,257		2,695
Shares issued pursuant to equity based plans, net of shares withheld for taxes	1,046		954		1,883		1,958
Issuance of common stock, net of issuance costs	18,856		16,851		40,895		190,670
Ending balances	851,288		786,094		851,288		786,094
Retained earnings:
Beginning balances	414,398		381,963		376,473		355,779
Net income (loss)	(23,687)		(19,587)		49,228		38,367
Dividends on common stock	(17,480)		(16,806)		(52,470)		(48,576)
Ending balances	373,231		345,570		373,231		345,570
Accumulated other comprehensive income (loss):
Beginning balances	(5,255)		(11,010)		(6,285)		(11,404)
Other comprehensive income	276		202		1,306		596
Ending balances	(4,979)		(10,808)		(4,979)		(10,808)
Total shareholders' equity, ending balances	$	1,219,540	$	1,120,856	$	1,219,540	$	1,120,856
Dividends per share of common stock	$	0.4850	$	0.4825	$	1.4550	$	1.4475

See Notes to Unaudited Consolidated Financial Statements

NORTHWEST NATURAL HOLDING COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Nine Months Ended September 30,
In thousands	2023		2022
Operating activities:
Net income	$	49,228	$	38,367
Adjustments to reconcile net income to cash provided by operations:
Depreciation	92,819		85,565
Regulatory amortization of gas reserves	2,532		4,527
Deferred income taxes	6,678		7,759
Qualified defined benefit pension plan (benefit) expense	(1,823)		4,013
Deferred environmental expenditures, net	(14,887)		(14,437)
Environmental remediation expense	8,547		7,950
Asset optimization revenue sharing bill credits	(10,471)		(41,102)
Other	18,079		16,640
Changes in assets and liabilities:
Receivables, net	182,297		114,755
Inventories	(6,484)		(41,463)
Income and other taxes	8,770		19,447
Accounts payable	(39,695)		(30,010)
Deferred gas costs	(8,678)		(1,785)
Asset optimization revenue sharing	18,667		17,629
Decoupling mechanism	(12,328)		7,124
Cloud-based software	(12,316)		(17,332)
Other, net	20,568		(11,686)
Cash provided by operating activities	301,503		165,961
Investing activities:
Capital expenditures	(242,747)		(251,842)
Acquisitions, net of cash acquired	(3,248)		(2,352)
Other	(4,525)		(2,810)
Cash used in investing activities	(250,520)		(257,004)
Financing activities:
Proceeds from common stock issued, net	40,955		190,929
Long-term debt issued	330,000		290,000
Long-term debt retired	(50,000)		—
Changes in other short-term debt, net	(187,200)		(248,500)
Cash dividend payments on common stock	(50,114)		(46,434)
Other	(4,108)		(1,802)
Cash provided by financing activities	79,533		184,193
Increase in cash, cash equivalents and restricted cash	130,516		93,150
Cash, cash equivalents and restricted cash, beginning of period	40,964		27,120
Cash, cash equivalents and restricted cash, end of period	$	171,480	$	120,270
Supplemental disclosure of cash flow information:
Interest paid, net of capitalization	$	51,970	$	31,774
Income taxes paid, net of refunds	18,963		2,106

See Notes to Unaudited Consolidated Financial Statements

NORTHWEST NATURAL GAS COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

	Three Months Ended September 30,				Nine Months Ended September 30,
In thousands	2023		2022		2023		2022
Operating revenues	$	129,942	$	110,426	$	812,803	$	647,301
Operating expenses:
Cost of gas	49,235		36,164		357,530		261,584
Operations and maintenance	53,494		45,858		179,121		148,614
Environmental remediation	1,032		980		8,547		7,950
General taxes	10,328		9,467		34,925		30,328
Revenue taxes	5,425		4,375		33,559		25,907
Depreciation	28,446		28,201		88,470		83,166
Other operating expenses	397		675		1,636		2,370
Total operating expenses	148,357		125,720		703,788		559,919
Income (loss) from operations	(18,415)		(15,294)		109,015		87,382
Other income (expense), net	4,818		1,161		11,095		197
Interest expense, net	15,597		11,128		45,236		32,558
Income (loss) before income taxes	(29,194)		(25,261)		74,874		55,021
Income tax expense (benefit)	(7,707)		(6,455)		19,037		13,678
Net income (loss)	(21,487)		(18,806)		55,837		41,343
Other comprehensive income (loss):
Amortization of non-qualified employee benefit plan liability, net of taxes of $37 and $73 for the three months ended and $111 and $215 for the nine months ended September 30, 2023 and 2022, respectively	102		202		307		596
Comprehensive income (loss)	$	(21,385)	$	(18,604)	$	56,144	$	41,939

See Notes to Unaudited Consolidated Financial Statements

NORTHWEST NATURAL GAS COMPANY

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

	September 30,		September 30,		December 31,
In thousands	2023		2022		2022
Assets:
Current assets:
Cash and cash equivalents	$	145,073	$	11,386	$	12,977
Accounts receivable	48,322		48,082		165,607
Accrued unbilled revenue	22,608		16,649		87,482
Receivables from affiliates	2,195		221		634
Allowance for uncollectible accounts	(2,085)		(2,114)		(3,079)
Regulatory assets	108,525		104,830		117,491
Derivative instruments	22,679		62,710		194,236
Inventories	92,803		97,633		86,207
Other current assets	38,131		32,605		57,269
Total current assets	478,251		372,002		718,824
Non-current assets:
Property, plant, and equipment	4,328,477		4,124,488		4,148,547
Less: Accumulated depreciation	1,175,283		1,157,400		1,137,231
Total property, plant, and equipment, net	3,153,194		2,967,088		3,011,316
Regulatory assets	312,640		301,596		340,407
Derivative instruments	5,430		8,008		5,045
Other investments	87,753		80,871		80,110
Operating lease right of use asset, net	70,852		73,046		72,720
Assets under sales-type leases	130,952		135,480		134,302
Other non-current assets	99,131		86,661		89,994
Total non-current assets	3,859,952		3,652,750		3,733,894
Total assets	$	4,338,203	$	4,024,752	$	4,452,718

See Notes to Unaudited Consolidated Financial Statements

NORTHWEST NATURAL GAS COMPANY

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

	September 30,		September 30,		December 31,
In thousands	2023		2022		2022
Liabilities and equity:
Current liabilities:
Short-term debt	$	—	$	53,000	$	170,200
Current maturities of long-term debt	39,997		49,938		89,942
Accounts payable	94,922		115,066		177,590
Payables to affiliates	562		1,789		9,175
Taxes accrued	16,915		17,914		15,426
Interest accrued	13,368		10,533		8,900
Regulatory liabilities	88,326		111,526		248,553
Derivative instruments	46,603		19,594		28,728
Operating lease liabilities	1,658		1,298		1,363
Other current liabilities	59,101		38,998		62,019
Total current liabilities	361,452		419,656		811,896
Long-term debt	1,364,556		1,076,533		1,035,935
Deferred credits and other non-current liabilities:
Deferred tax liabilities	366,730		346,423		362,353
Regulatory liabilities	682,315		662,565		688,599
Pension and other postretirement benefit liabilities	145,991		160,196		149,143
Derivative instruments	21,085		18,824		20,838
Operating lease liabilities	77,041		78,436		78,345
Other non-current liabilities	116,930		109,304		114,527
Total deferred credits and other non-current liabilities	1,410,092		1,375,748		1,413,805
Commitments and contingencies (Note 16)
Equity:
Common stock	644,903		614,903		614,903
Retained earnings	563,307		548,720		582,593
Accumulated other comprehensive loss	(6,107)		(10,808)		(6,414)
Total equity	1,202,103		1,152,815		1,191,082
Total liabilities and equity	$	4,338,203	$	4,024,752	$	4,452,718

See Notes to Unaudited Consolidated Financial Statements

NORTHWEST NATURAL GAS COMPANY

CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY (UNAUDITED)

In thousands	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Total shareholder's equity, beginning balances	$	1,210,296	$	1,173,676	$	1,191,082	$	977,807
Common stock:
Beginning balances	614,903		601,032		614,903		435,515
Capital contributions from parent	30,000		13,871		30,000		179,388
Ending balances	644,903		614,903		644,903		614,903
Retained earnings:
Beginning balances	601,602		583,654		582,593		553,696
Net income (loss)	(21,487)		(18,806)		55,837		41,343
Dividends on common stock	(16,808)		(16,128)		(75,123)		(46,319)
Ending balances	563,307		548,720		563,307		548,720
Accumulated other comprehensive income (loss):
Beginning balances	(6,209)		(11,010)		(6,414)		(11,404)
Other comprehensive income	102		202		307		596
Ending balances	(6,107)		(10,808)		(6,107)		(10,808)
Total shareholder's equity, ending balances	$	1,202,103	$	1,152,815	$	1,202,103	$	1,152,815

See Notes to Unaudited Consolidated Financial Statements

NORTHWEST NATURAL GAS COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Nine Months Ended September 30,
In thousands	2023		2022
Operating activities:
Net income	$	55,837	$	41,343
Adjustments to reconcile net income to cash provided by operations:
Depreciation	88,470		83,166
Regulatory amortization of gas reserves	2,532		4,527
Deferred income taxes	1,411		7,013
Qualified defined benefit pension plan (benefit) expense	(1,823)		4,013
Deferred environmental expenditures, net	(14,887)		(14,437)
Environmental remediation expense	8,547		7,950
Asset optimization revenue sharing bill credits	(10,471)		(41,102)
Other	17,331		16,665
Changes in assets and liabilities:
Receivables, net	183,116		115,915
Inventories	(6,173)		(40,881)
Income and other taxes	6,942		17,412
Accounts payable	(43,315)		(32,023)
Deferred gas costs	(8,678)		(1,785)
Asset optimization revenue sharing	18,667		17,629
Decoupling mechanism	(12,328)		7,124
Cloud-based software	(12,316)		(17,332)
Other, net	21,306		(12,604)
Cash provided by operating activities	294,168		162,593
Investing activities:
Capital expenditures	(216,368)		(236,467)
Other	(3,524)		(2,810)
Cash used in investing activities	(219,892)		(239,277)
Financing activities:
Cash contributions received from parent	30,000		179,388
Long-term debt issued	330,000		140,000
Long-term debt retired	(50,000)		—
Changes in other short-term debt, net	(170,200)		(192,500)
Cash dividend payments on common stock	(75,123)		(46,319)
Other	(3,713)		(1,617)
Cash provided by financing activities	60,964		78,952
Increase in cash, cash equivalents and restricted cash	135,240		2,268
Cash, cash equivalents and restricted cash, beginning of period	24,671		20,832
Cash, cash equivalents and restricted cash, end of period	$	159,911	$	23,100
Supplemental disclosure of cash flow information:
Interest paid, net of capitalization	$	39,911	$	28,326
Income taxes paid, net of refunds	27,745		5,990

See Notes to Unaudited Consolidated Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. ORGANIZATION AND PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements represent the respective, consolidated financial results of Northwest Natural Holding Company (NW Holdings) and Northwest Natural Gas Company (NW Natural) and all respective companies that each registrant directly or indirectly controls, either through majority ownership or otherwise. This is a combined report of NW Holdings and NW Natural, which includes separate consolidated financial statements for each registrant.

NW Natural's regulated natural gas distribution activities are reported in the natural gas distribution (NGD) segment. The NGD segment is NW Natural's core operating business and serves residential, commercial, and industrial customers in Oregon and southwest Washington. The NGD segment is the only reportable segment for NW Holdings and NW Natural. All other activities, water and wastewater businesses, and other investments are aggregated and reported as other at their respective registrant.

NW Holdings and NW Natural consolidate all entities in which they have a controlling financial interest. Investments in corporate joint ventures and partnerships that NW Holdings does not directly or indirectly control, and for which it is not the primary beneficiary, include NNG Financial's investment in Kelso-Beaver Pipeline and NWN Water's investment in Avion Water Company, Inc., which are accounted for under the equity method. NW Natural RNG Holding Company, LLC holds investments in Lexington Renewable Energy, LLC and Dakota City Renewable Energy LLC, which are also accounted for under the equity method. See Note 13 for activity related to equity method investments. NW Holdings and its direct and indirect subsidiaries are collectively referred to herein as NW Holdings, and NW Natural and its direct and indirect subsidiaries are collectively referred to herein as NW Natural. The consolidated financial statements of NW Holdings and NW Natural are presented after elimination of all intercompany balances and transactions.

Information presented in these interim consolidated financial statements is unaudited, but includes all material adjustments management considers necessary for a fair statement of the results for each period reported including normal recurring accruals. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in NW Holdings' and NW Natural's combined 2022 Annual Report on Form 10-K (2022 Form 10-K). A significant part of NW Holdings' and NW Natural's business is of a seasonal nature; therefore, NW Holdings and NW Natural results of operations for interim periods are not necessarily indicative of full year results. Seasonality affects the comparability of the results of other operations across quarters but not across years.

Notes to the consolidated financial statements reflect the activity for both NW Holdings and NW Natural for all periods presented, unless otherwise noted. Certain reclassifications have been made to conform prior period information to the current presentation. The reclassifications did not have a material effect on our consolidated financial statements.

2. SIGNIFICANT ACCOUNTING POLICIES

Significant accounting policies are described in Note 2 of the 2022 Form 10-K. There were no material changes to those accounting policies during the nine months ended September 30, 2023 other than those set forth in this Note 2. The following are current updates to certain critical accounting policy estimates and new accounting standards.

Industry Regulation  

NW Holdings' principal business is to operate as a holding company for NW Natural and its other subsidiaries. NW Natural's principal business is the distribution of natural gas, which is regulated by the OPUC and WUTC. NW Natural also has natural gas storage services, which are regulated by the FERC, and to a certain extent by the OPUC and WUTC. Additionally, certain of NW Holdings' subsidiaries own water businesses, which are regulated by the public utility commission in the state in which the water utility is located, which is currently Oregon, Washington, Idaho, Texas and Arizona. Wastewater businesses, to the extent they are regulated, are generally regulated by the public utility commissions in the state in which the wastewater utility is located, which is currently Texas and Arizona.

In applying regulatory accounting principles, NW Holdings and NW Natural capitalize or defer certain costs and revenues as regulatory assets and liabilities pursuant to orders of the applicable state public utility commission, which provide for the recovery of revenues or expenses from, or refunds to, utility customers in future periods, including a return or a carrying charge in certain cases.

Amounts deferred as regulatory assets and liabilities for NW Holdings and NW Natural were as follows:

	Regulatory Assets
	September 30,				December 31,
In thousands	2023		2022		2022
NW Natural:
Current:
Unrealized loss on derivatives(1)	$	46,603	$	19,594	$	28,728
Gas costs	11,361		52,115		61,223
Environmental costs(2)	7,047		9,461		7,392
Decoupling(3)	3,480		114		—
Pension balancing(4)	7,131		7,131		7,131
Income taxes	2,208		2,399		2,208
COVID-19 deferrals and expenses, net	11,127		—		789
Other(5)	19,568		14,016		10,020
Total current - NW Natural	$	108,525	$	104,830	$	117,491
Non-current:
Unrealized loss on derivatives(1)	$	21,085	$	18,824	$	20,838
Pension balancing(4)	29,450		34,928		32,997
Income taxes	10,540		11,168		10,943
Pension and other postretirement benefit liabilities	101,413		107,722		101,413
Environmental costs(2)	108,941		82,667		104,253
Gas costs	718		3,369		22,355
Decoupling(3)	212		—		—
Washington Climate Commitment Act compliance	12,513		—		—
COVID-19 deferrals and expenses, net	1,811		15,147		14,555
Other(5)	25,957		27,771		33,053
Total non-current - NW Natural	$	312,640	$	301,596	$	340,407
Other (NW Holdings)	25		64		25
Total non-current - NW Holdings	$	312,665	$	301,660	$	340,432

	Regulatory Liabilities
	September 30,				December 31,
In thousands	2023		2022		2022
NW Natural:
Current:
Gas costs	$	5,030	$	944	$	4,121
Unrealized gain on derivatives(1)	22,679		62,882		194,236
Decoupling(3)	8,616		13,272		14,026
Income taxes	5,946		7,318		7,166
Asset optimization revenue sharing	29,938		23,461		26,368
Washington Climate Commitment Act proceeds	9,365		—		—
Other(5)	6,752		3,649		2,636
Total current - NW Natural	$	88,326	$	111,526	$	248,553
Other (NW Holdings)	50		25		29
Total current - NW Holdings	$	88,376	$	111,551	$	248,582
Non-current:
Gas costs	$	252	$	50	$	12,644
Unrealized gain on derivatives(1)	5,430		8,008		5,045
Decoupling(3)	588		884		3,814
Income taxes(6)	171,843		179,319		174,212
Accrued asset removal costs(7)	489,006		460,666		467,742
Asset optimization revenue sharing	—		—		8,401
Washington Climate Commitment Act proceeds	654		—		—
Other(5)	14,542		13,638		16,741
Total non-current - NW Natural	$	682,315	$	662,565	$	688,599
Other (NW Holdings)	947		982		979
Total non-current - NW Holdings	$	683,262	$	663,547	$	689,578

(1)Unrealized gains or losses on derivatives are non-cash items and therefore do not earn a rate of return or a carrying charge. These amounts are recoverable through NGD rates as part of the annual Purchased Gas Adjustment (PGA) mechanism when realized at settlement.

(2)Refer to the Environmental Cost Deferral and Recovery table in Note 16 for a description of environmental costs.

(3)This deferral represents the margin adjustment resulting from differences between actual and expected volumes. 

(4)Balance represents deferred net periodic benefit costs as approved by the OPUC.

(5)Balances consist of deferrals and amortizations under approved regulatory mechanisms and typically earn a rate of return or carrying charge.

(6)Balance represents excess deferred income tax benefits subject to regulatory flow-through.

(7)Estimated costs of removal on certain regulated properties are collected through rates.

We believe all costs incurred and deferred at September 30, 2023 are prudent. All regulatory assets are reviewed annually for recoverability, or more often if circumstances warrant. If we should determine that all or a portion of these regulatory assets no longer meet the criteria for continued application of regulatory accounting, then NW Holdings and NW Natural would be required to write-off the net unrecoverable balances in the period such determination is made.

Supplemental Cash Flow Information

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand plus highly liquid investment accounts with original maturity dates of three months or less. These investments are readily convertible to cash with fair value approximating cost. As of September 30, 2023, the amount invested in money market funds was $132.6 million at NW Natural and NW Holdings. These investments are measured using net asset value per share.

Restricted Cash

Restricted cash is primarily comprised of funds from public purpose charges for programs that assist low-income customers with bill payments or energy efficiency.

The following table provides a reconciliation of the cash, cash equivalents and restricted cash balances at NW Holdings as of September 30, 2023 and 2022 and December 31, 2022:

	September 30,				December 31,
In thousands	2023		2022		2022
Cash and cash equivalents	$	156,616	$	108,556	$	29,270
Restricted cash included in other current and non-current assets	14,864		11,714		11,694
Cash, cash equivalents and restricted cash	$	171,480	$	120,270	$	40,964

The following table provides a reconciliation of the cash, cash equivalents and restricted cash balances at NW Natural as of September 30, 2023 and 2022 and December 31, 2022:

	September 30,				December 31,
In thousands	2023		2022		2022
Cash and cash equivalents	$	145,073	$	11,386	$	12,977
Restricted cash included in other current assets	14,838		11,714		11,694
Cash, cash equivalents and restricted cash	$	159,911	$	23,100	$	24,671

Intercompany Dividend

In April 2023, NW Natural made a dividend to NW Holdings for $25.0 million, returning additional equity contributed from NW Holdings to NW Natural in 2022.

Accounts Receivable and Allowance for Uncollectible Accounts

Accounts receivable consist primarily of amounts due for natural gas sales and transportation services to NGD customers, plus amounts due for gas storage services. NW Holdings and NW Natural establish allowances for uncollectible accounts (allowance) for trade receivables, including accrued unbilled revenue, based on the aging of receivables, collection experience of past due account balances including payment plans, and historical trends of write-offs as a percent of revenues. A specific allowance is established and recorded for large individual customer receivables when amounts are identified as unlikely to be partially or fully recovered. Inactive accounts are written-off against the allowance after they are 120 days past due or when deemed uncollectible. Differences between the estimated allowance and actual write-offs will occur based on a number of factors, including changes in economic conditions, customer creditworthiness, and natural gas prices. The allowance for uncollectible accounts is adjusted quarterly, as necessary, based on information currently available.

Allowance for Trade Receivables

The payment term of our NGD receivables is generally 15 days. For these short-term receivables, it is not expected that forecasted economic conditions would significantly affect the loss estimates under stable economic conditions. For extreme situations like a financial crisis, natural disaster, and the economic slowdown caused by the COVID-19 pandemic, we enhanced our review and analysis.

For the residential and commercial uncollectible provision, we primarily followed our standard methodology, which includes assessing historical write-off trends and current information on delinquent accounts. Beginning October 1, 2022, new collection rules from the OPUC applied to residential and commercial customers. This included enhanced protections for low-income customers, a return to pre-pandemic time payment arrangements terms, revised disconnection rules during the heating season, and other items. As a result of these Oregon rule changes and our recent collection process experience, we augmented our provision review for accounts in the following categories: closed or inactive accounts aged less than 120 days, accounts on payment plans, and all other open accounts not on payment plans. For industrial accounts, we continue to assess the provision on an account-by-account basis with specific reserves taken as necessary. NW Natural will continue to closely monitor and evaluate our accounts receivable and the provision for uncollectible accounts.

The following table presents the activity related to the NW Holdings provision for uncollectible accounts by pool:

	As of						As of
	December 31, 2022		Nine Months Ended September 30, 2023				September 30, 2023
In thousands	Beginning Balance		Provision recorded, net of adjustments		Write-offs recognized, net of recoveries		Ending Balance
Allowance for uncollectible accounts:
Residential	$	2,155	$	1,802	$	(2,468)	$	1,489
Commercial	400		264		(372)		292
Industrial	188		(105)		(1)		82
Accrued unbilled and other	336		2		(116)		222
Total NW Natural	3,079		1,963		(2,957)		2,085
Other - NW Holdings	217		10		—		227
Total NW Holdings	$	3,296	$	1,973	$	(2,957)	$	2,312

Allowance for Net Investments in Sales-Type Leases

NW Natural currently holds two net investments in sales-type leases, with substantially all of the net investment balance related to the North Mist natural gas storage agreement with Portland General Electric (PGE) which is billed under an OPUC-approved rate schedule. See Note 7 for more information on the North Mist lease. Due to the nature of this service, PGE may recover the costs of the lease through general rate cases. Therefore, we expect the risk of loss due to the credit of this lessee to be remote. As such, no allowance for uncollectibility was recorded for our sales-type lease receivables. NW Natural will continue monitoring the credit health of the lessees and the overall economic environment, including the economic factors closely tied to the financial health of our current and future lessees.

Greenhouse Gas Allowances

NW Natural is subject to greenhouse gas (GHG) emission reduction requirements under the Oregon Climate Protection Program (CPP) regulations and the Washington Climate Commitment Act (CCA) regulations.

Under Oregon's CPP, emission reduction compliance mechanisms include: 1) compliance instruments distributed by the state, 2) Community Climate Investment (CCI) Credits, which act similar to carbon offsets, and 3) supplying alternative gaseous fuels, such as renewable natural gas and hydrogen.

Under Washington's CCA, emission reduction compliance mechanisms include: 1) allowances distributed at no cost by the state, 2) purchasing allowances at state-run auctions or secondary markets, 3) purchasing carbon offsets, and 4) supplying alternative gaseous fuels, such as renewable natural gas and hydrogen.

NW Natural will account for all purchased Oregon CCI Credits and Washington allowances as inventory at the lower of cost or market. Any compliance instruments or allowances that are acquired through government allocations at no cost will be accounted for as inventory at no cost. As of September 30, 2023, NW Natural had $18.3 million of emissions allowances for compliance in Washington recorded as inventory and no CCI Credits in Oregon.

The compliance programs allow for the sale of the compliance instruments or allowances, and as a result, should NW Natural sell these it will recognize revenue when title to the instrument or allowance is transferred to a counterparty, and NW Natural will recognize expense at the time of recognition of the related sale. In September 2023, NW Natural consigned no-cost allowances to a Washington auction and received $10.0 million in cash, which proceeds were recorded as a regulatory liability for the benefit of customers.

We measure the compliance obligation, which is based on emissions, at the carrying value of inventory held plus the fair value of any additional CCI Credits or emission allowances NW Natural would need to purchase to satisfy the obligations. As of September 30, 2023, NW Natural has not recognized a liability under the Oregon program for the purchase of CCI Credits. Under the Washington program, NW Natural has recognized a $12.1 million liability as of September 30, 2023. We expect that the costs to comply with the Oregon and Washington programs will be recovered from utility customers through rates. As a result, NW Natural recognized $12.5 million of deferred costs as of September 30, 2023.

New Accounting Standards

NW Natural and NW Holdings consider the applicability and impact of all accounting standards updates (ASUs) issued by the Financial Accounting Standards Board (FASB). ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on consolidated financial position or results of operations.

Recently Issued Accounting Pronouncements

JOINT VENTURE FORMATIONS. In August 2023, the FASB issued ASU 2023-05, which requires a joint venture to initially measure all contributions received upon its formation at fair value. The standard is effective for all joint venture entities with a formation date on or after January 1, 2025, with early adoption permitted. The adoption of this standard is not anticipated to have a material impact on our results of operations, liquidity or capital resources.

Recent Securities and Exchange Commission (SEC) Final Rules

INSIDER TRADING ARRANGEMENTS. In December 2022, the SEC adopted the final rule under SEC Release No. 33-11138, Insider Trading Arrangements and Related Disclosures, which requires new disclosures regarding insider trading policies and procedures, the use of certain insider trading plans and director and executive compensation regarding equity compensation awards made close in time to disclosure of material nonpublic information. The adoption of this final rule is not anticipated to have a material impact on our results of operations, liquidity or capital resources.

SHARE REPURCHASES. In May 2023, the SEC adopted the final rule under SEC Release No. 34-97424, Share Repurchase Disclosure Modernization, requiring disclosures related to issuers’ share repurchases that will provide investors with enhanced information to assess the purposes and effects of the repurchases. The adoption of this final rule is not anticipated to have a material impact on our results of operations, liquidity or capital resources.

CYBERSECURITY DISCLOSURES. In July 2023, the SEC issued a final rule that requires new disclosures regarding cybersecurity risk management, strategy, governance, and incidents. The disclosures are required beginning with our annual report for the year ending December 31, 2023. The adoption of this final rule is not anticipated to have a material impact on our results of operations, liquidity or capital resources.

3. EARNINGS PER SHARE

Basic earnings or loss per share are computed using NW Holdings' net income or loss and the weighted average number of common shares outstanding for each period presented. Diluted earnings per share are computed in the same manner, except using the weighted average number of common shares outstanding plus the effects of the assumed exercise of stock options and the payment of estimated stock awards from other stock-based compensation plans that are outstanding at the end of each period presented. Anti-dilutive stock awards are excluded from the calculation of diluted earnings or loss per common share.

NW Holdings' diluted earnings or loss per share are calculated as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In thousands, except per share data	2023		2022		2023		2022
Net income (loss)	$	(23,687)	$	(19,587)	$	49,228	$	38,367
Average common shares outstanding - basic	36,214		34,939		35,950		33,491
Additional shares for stock-based compensation plans (See Note 8)	—		—		30		48
Average common shares outstanding - diluted	36,214		34,939		35,980		33,539
Earnings (loss) per share of common stock:
Basic	$	(0.65)	$	(0.56)	$	1.37	$	1.15
Diluted	$	(0.65)	$	(0.56)	$	1.37	$	1.14
Additional information:
Anti-dilutive shares	45		85		1		—

4. SEGMENT INFORMATION

We primarily operate in one reportable business segment, which is NW Natural's local gas distribution business and is referred to as the NGD segment. NW Natural and NW Holdings also have investments and business activities not specifically related to the NGD segment, which are aggregated and reported as other and described below for each entity.

Natural Gas Distribution

NW Natural's local gas distribution segment is a regulated utility principally engaged in the purchase, sale, and delivery of natural gas and related services to customers in Oregon and southwest Washington. In addition to NW Natural's local gas distribution business, the NGD segment also includes the portion of the Mist underground storage facility used to serve NGD customers, the North Mist gas storage expansion in Oregon, NWN Gas Reserves, which is a wholly-owned subsidiary of Energy Corp, and NW Natural RNG Holding Company, LLC, a holding company established to invest in the development and procurement of regulated renewable natural gas for NW Natural.

NW Natural

NW Natural's activities in Other include Interstate Storage Services and third-party asset management services, appliance retail center operations, and corporate operating and non-operating revenues and expenses that cannot be allocated to NGD operations.

Earnings from Interstate Storage Services assets are primarily related to firm storage capacity revenues. Earnings from third-party asset management services also include revenue, net of amounts shared with NGD customers, from management of NGD assets at Mist and upstream pipeline capacity when not needed to serve NGD customers. Under the Oregon sharing mechanism, NW Natural retains 80% of the pre-tax income from these services when the costs of the capacity were not included in NGD rates, or 10% of the pre-tax income when the costs have been included in these rates. The remaining 20% and 90%, respectively, are recorded to a deferred regulatory account for crediting back to NGD customers.

NW Holdings

NW Holdings' activities in Other include all remaining activities not associated with NW Natural, specifically: NW Natural Water Company, LLC (NW Natural Water or NWN Water), which consolidates the water and wastewater utility operations and is pursuing other investments in the water and wastewater sector through itself and wholly-owned subsidiaries; NW Natural Water's equity investment in Avion Water Company, Inc.; NWN Gas Storage, a wholly-owned subsidiary of NWN Energy; other pipeline assets in NNG Financial; and NW Natural Renewables Holdings, LLC (NW Natural Renewables) and its non-regulated renewable natural gas activities. Other also includes corporate revenues and expenses that cannot be allocated to other operations, including certain business development activities.

Segment Information Summary

Inter-segment transactions were immaterial for the periods presented. The following table presents summary financial information concerning the reportable segment and other.

	Three Months Ended September 30,
In thousands	NGD		Other (NW Natural)		NW Natural		Other (NW Holdings)		NW Holdings
2023
Operating revenues	$	124,624	$	5,318	$	129,942	$	11,537	$	141,479
Depreciation	28,169		277		28,446		1,615		30,061
Income (loss) from operations	(22,192)		3,777		(18,415)		838		(17,577)
Net income (loss)	(24,160)		2,673		(21,487)		(2,200)		(23,687)
Capital expenditures	86,017		1,053		87,070		10,814		97,884
2022
Operating revenues	$	103,295	$	7,131	$	110,426	$	6,413	$	116,839
Depreciation	27,937		264		28,201		825		29,026
Income (loss) from operations	(20,910)		5,616		(15,294)		367		(14,927)
Net income (loss)	(23,016)		4,210		(18,806)		(781)		(19,587)
Capital expenditures	79,847		431		80,278		3,868		84,146

	Nine Months Ended September 30,
In thousands	NGD		Other (NW Natural)		NW Natural		Other (NW Holdings)		NW Holdings
2023
Operating revenues	$	796,108	$	16,695	$	812,803	$	28,958	$	841,761
Depreciation	87,650		820		88,470		4,349		92,819
Income (loss) from operations	97,357		11,658		109,015		759		109,774
Net income (loss)	47,520		8,317		55,837		(6,609)		49,228
Capital expenditures	214,874		1,494		216,368		26,379		242,747
Total assets at September 30, 2023	4,285,309		52,894		4,338,203		326,915		4,665,118
2022
Operating revenues	$	629,327	$	17,974	$	647,301	$	14,799	$	662,100
Depreciation	82,372		794		83,166		2,399		85,565
Income (loss) from operations	75,328		12,054		87,382		(1,132)		86,250
Net income (loss)	32,531		8,812		41,343		(2,976)		38,367
Capital expenditures	235,249		1,218		236,467		15,375		251,842
Total assets at September 30, 2022	3,968,040		56,712		4,024,752		275,960		4,300,712
Total assets at December 31, 2022	4,392,699		60,019		4,452,718		295,608		4,748,326

Natural Gas Distribution Margin

NGD margin is the primary financial measure used by the Chief Operating Decision Maker (CODM), consisting of NGD operating revenues, reduced by the associated cost of gas, environmental remediation expense, and revenue taxes. The cost of gas purchased for NGD customers is generally a pass-through cost in the amount of revenues billed to regulated NGD customers. Environmental remediation expense represents collections received from customers through environmental recovery mechanisms in Oregon and Washington as well as adjustments for the Oregon environmental earnings test when applicable. This is offset by environmental remediation expense presented in operating expenses. Revenue taxes are collected from NGD customers and remitted to taxing authorities. The collections from customers are offset by the expense recognition of the obligation to the taxing authority. By subtracting cost of gas, environmental remediation expense, and revenue taxes from NGD operating revenues, NGD margin provides a key metric used by the CODM in assessing the performance of the NGD segment.

The following table presents additional segment information concerning NGD margin:

	Three Months Ended September 30,				Nine Months Ended September 30,
In thousands	2023		2022		2023		2022
NGD margin calculation:
NGD distribution revenues	$	119,892	$	98,391	$	781,941	$	614,605
Other regulated services	4,732		4,904		14,167		14,722
Total NGD operating revenues	124,624		103,295		796,108		629,327
Less: NGD cost of gas	49,235		36,258		357,530		261,678
Environmental remediation	1,032		975		8,547		7,945
Revenue taxes	5,425		4,375		33,559		25,907
NGD margin	$	68,932	$	61,687	$	396,472	$	333,797

5. COMMON STOCK

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. NW Holdings is under no obligation to offer and sell common stock under the ATM equity program, which expires in August 2024. Any shares of common stock offered under the ATM equity program are registered on NW Holdings’ universal shelf registration statement filed with the SEC. During the three months ended September 30, 2023, NW Holdings issued and sold 475,732 shares of common stock pursuant to the ATM equity program resulting in cash proceeds of $18.8 million, net of fees and commissions paid to agents of $0.3 million. During the nine months ended September 30, 2023, NW Holdings issued and sold 955,325 shares of common stock pursuant to the ATM equity program resulting in cash proceeds of $40.9 million, net of fees and commissions paid to agents of $0.7 million. As of September 30, 2023, NW Holdings had $69.5 million of equity available for issuance under the program. The ATM equity program was initiated to raise funds for general corporate purposes, including equity contributions to NW Holdings’ subsidiaries, NW Natural and NW Natural Water. We intend that contributions to NW Natural and NW Natural Water will be used for general corporate purposes.

In October 2023, NW Holdings issued 184,832 shares of common stock in connection with business combinations.

6. REVENUE

The following tables present disaggregated revenue:

	Three Months Ended September 30,
In thousands	NGD		Other (NW Natural)		NW Natural		Other (NW Holdings)		NW Holdings
2023
Natural gas sales	$	117,004	$	—	$	117,004	$	—	$	117,004
Gas storage revenue, net	—		3,014		3,014		—		3,014
Asset management revenue, net	—		1,623		1,623		—		1,623
Appliance retail center revenue	—		680		680		—		680
Other revenue	733		—		733		11,537		12,270
Revenue from contracts with customers	117,737		5,317		123,054		11,537		134,591
Alternative revenue	2,868		—		2,868		—		2,868
Leasing revenue	4,020		—		4,020		—		4,020
Total operating revenues	$	124,625	$	5,317	$	129,942	$	11,537	$	141,479
2022
Natural gas sales	$	95,784	$	—	$	95,784	$	—	$	95,784
Gas storage revenue, net	—		2,882		2,882		—		2,882
Asset management revenue, net	—		3,047		3,047		—		3,047
Appliance retail center revenue	—		1,202		1,202		—		1,202
Other revenue	624		—		624		6,413		7,037
Revenue from contracts with customers	96,408		7,131		103,539		6,413		109,952
Alternative revenue	2,589		—		2,589		—		2,589
Leasing revenue	4,298		—		4,298		—		4,298
Total operating revenues	$	103,295	$	7,131	$	110,426	$	6,413	$	116,839

	Nine Months Ended September 30,
In thousands	NGD		Other (NW Natural)		NW Natural		Other (NW Holdings)		NW Holdings
2023
Natural gas sales	$	783,506	$	—	$	783,506	$	—	$	783,506
Gas storage revenue, net	—		9,014		9,014		—		9,014
Asset management revenue, net	—		4,879		4,879		—		4,879
Appliance retail center revenue	—		2,802		2,802		—		2,802
Other revenue	2,195		—		2,195		28,958		31,153
Revenue from contracts with customers	785,701		16,695		802,396		28,958		831,354
Alternative revenue	(1,623)		—		(1,623)		—		(1,623)
Leasing revenue	12,030		—		12,030		—		12,030
Total operating revenues	$	796,108	$	16,695	$	812,803	$	28,958	$	841,761
2022
Natural gas sales	$	623,121	$	—	$	623,121	$	—	$	623,121
Gas storage revenue, net	—		8,678		8,678		—		8,678
Asset management revenue, net	—		4,941		4,941		—		4,941
Appliance retail center revenue	—		4,355		4,355		—		4,355
Other revenue	1,882		—		1,882		14,799		16,681
Revenue from contracts with customers	625,003		17,974		642,977		14,799		657,776
Alternative revenue	(8,571)		—		(8,571)		—		(8,571)
Leasing revenue	12,895		—		12,895		—		12,895
Total operating revenues	$	629,327	$	17,974	$	647,301	$	14,799	$	662,100

NW Natural's revenue represents substantially all of NW Holdings' revenue and is recognized for both registrants when the obligation to customers is satisfied and in the amount expected to be received in exchange for transferring goods or providing services. Revenue from contracts with customers contains one performance obligation that is generally satisfied over time, using

the output method based on time elapsed, due to the continuous nature of the service provided. The transaction price is determined by a set price agreed upon in the contract or dependent on regulatory tariffs. Customer accounts are settled on a monthly basis or paid at time of sale and based on historical experience. It is probable that we will collect substantially all of the consideration to which we are entitled. We evaluated the probability of collection in accordance with the current expected credit losses standard.

NW Holdings and NW Natural do not have any material contract assets, as net accounts receivable and accrued unbilled revenue balances are unconditional and only involve the passage of time until such balances are billed and collected. NW Holdings and NW Natural do not have any material contract liabilities.

Revenue taxes are included in operating revenues with an equal and offsetting expense recognized in operating expenses in the consolidated statements of comprehensive income. Revenue-based taxes are primarily franchise taxes, which are collected from NGD customers and remitted to taxing authorities.

Natural Gas Distribution

Natural Gas Sales

NW Natural's primary source of revenue is providing natural gas to customers in the NGD service territory, which includes residential, commercial, industrial and transportation customers. NGD revenue is generally recognized over time upon delivery of the gas commodity or service to the customer, and the amount of consideration received and recognized as revenue is dependent on the Oregon and Washington tariffs. Customer accounts are to be paid in full each month, and there is no right of return or warranty for services provided. Revenues include firm and interruptible sales and transportation services, franchise taxes recovered from the customer, late payment fees, service fees, and accruals for gas delivered but not yet billed (accrued unbilled revenue). The accrued unbilled revenue balance is based on estimates of deliveries during the period from the last meter reading and management judgment is required for a number of factors used in this calculation, including customer use and weather factors.

We applied the significant financing practical expedient and have not adjusted the consideration NW Natural expects to receive from NGD customers for the effects of a significant financing component as all payment arrangements are settled annually. Due to the election of the right to invoice practical expedient, we do not disclose the value of unsatisfied performance obligations.

Alternative Revenue

Weather normalization (WARM) and decoupling mechanisms are considered to be alternative revenue programs. Alternative revenue programs are considered to be contracts between NW Natural and its regulator and are excluded from revenue from contracts with customers.

Leasing Revenue

Leasing revenue primarily consists of revenues from NW Natural's North Mist Storage contract with PGE in support of PGE's gas-fired electric power generation facilities under an initial 30-year contract with options to extend, totaling up to an additional 50 years upon mutual agreement of the parties. The facility is accounted for as a sales-type lease with regulatory accounting deferral treatment. The investment is included in rate base under an established cost-of-service tariff schedule, with revenues recognized according to the tariff schedule and as such, profit upon commencement was deferred and will be amortized over the lease term. Leasing revenue also contains rental revenue from small leases of property owned by NW Natural to third parties. The majority of these transactions are accounted for as operating leases and the revenue is recognized over the term of the lease agreement. Lease revenue is excluded from revenue from contracts with customers. See Note 7 for additional information.

NW Natural Other

Gas Storage Revenue

NW Natural's other revenue includes gas storage activity, which includes Interstate Storage Services used to store natural gas for customers. Gas storage revenue is generally recognized over time as the gas storage service is provided to the customer and the amount of consideration received and recognized as revenue is dependent on set rates defined per the storage agreements. Noncash consideration in the form of dekatherms of natural gas is received as consideration for providing gas injection services to gas storage customers. This noncash consideration is measured at fair value using the average spot rate. Customer accounts are generally paid in full each month, and there is no right of return or warranty for services provided. Revenues include firm and interruptible storage services, net of the profit sharing amount refunded to NGD customers.

Asset Management Revenue

Revenues include the optimization of storage assets and pipeline capacity by a third-party and are provided net of the profit sharing amount refunded to NGD customers. Certain asset management revenues received are recognized over time using a straight-line approach over the term of each contract, and the amount of consideration received and recognized as revenue is dependent on a variable pricing model. Variable revenues earned above guaranteed amounts are estimated and recognized at the end of each period using the most likely amount approach. Additionally, other asset management revenues may be based on a fixed rate. Generally, asset management accounts are settled on a monthly basis.

As of September 30, 2023, unrecognized revenue for the fixed component of the transaction price related to gas storage and asset management revenue was approximately $83.5 million. Of this amount, approximately $5.4 million will be recognized

during the remainder of 2023, $19.9 million in 2024, $19.0 million in 2025, $14.9 million in 2026, $7.4 million in 2027 and $16.9 million thereafter. The amounts presented here are calculated using current contracted rates.

Appliance Retail Center Revenue

NW Natural owns and operates an appliance store that is open to the public, where customers can purchase natural gas home appliances. Revenue from the sale of appliances is recognized at the point in time in which the appliance is transferred to the third party responsible for delivery and installation services and when the customer has legal title to the appliance. It is required that the sale be paid for in full prior to transfer of legal title. The amount of consideration received and recognized as revenue varies with changes in marketing incentives and discounts offered to customers.

NW Holdings Other

Water and Wastewater Services

NW Holdings' primary source of other revenue is providing water and wastewater services to customers. Water and wastewater service revenue is generally recognized over time upon delivery of the water commodity or service to the customer, and the amount of consideration received and recognized as revenue is dependent on the tariffs established in the states we operate. Customer accounts are to be paid in full each month, bi-monthly, or quarterly, and there is no right of return or warranty for services provided.

We applied the significant financing practical expedient and have not adjusted the consideration we expect to receive from water distribution and wastewater collection customers for the effects of a significant financing component as all payment arrangements are settled annually. Due to the election of the right to invoice practical expedient, we do not disclose the value of unsatisfied performance obligations.

7. LEASES

Lease Revenue

Leasing revenue primarily consists of NW Natural's North Mist natural gas storage agreement with PGE, which is billed under an OPUC-approved rate schedule and includes an initial 30-year term beginning May 2019 with options to extend, totaling up to an additional 50 years upon mutual agreement of the parties. Under U.S. GAAP, this agreement is classified as a sales-type lease and qualifies for regulatory accounting deferral treatment. The investment in the storage facility is included in rate base under a separately established cost-of-service tariff, with revenues recognized according to the tariff schedule. As such, the selling profit that was calculated upon commencement as part of the sale-type lease recognition was deferred and will be amortized over the lease term. Billing rates under the cost-of-service tariff will be updated annually to reflect current information including depreciable asset levels, forecasted operating expenses, and the results of regulatory proceedings, as applicable, and revenue received under this agreement is recognized as operating revenue on the consolidated statements of comprehensive income. There are no variable payments or residual value guarantees. The lease does not contain an option to purchase the underlying assets.

NW Natural also maintains a sales-type lease for specialized compressor facilities to provide high pressure compressed natural gas (CNG) services. Lease payments are outlined in an OPUC-approved rate schedule over a 10-year term. There are no variable payments or residual value guarantees. The selling profit computed upon lease commencement was not significant.

Our lessor portfolio also contains small leases of property owned by NW Natural and NW Holdings to third parties. These transactions are accounted for as operating leases and the revenue is recognized over the term of the lease agreement.

The components of lease revenue at NW Natural were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In thousands	2023		2022		2023		2022
Lease revenue
Operating leases	$	19	$	19	$	57	$	56
Sales-type leases	4,001		4,279		11,973		12,839
Total lease revenue	$	4,020	$	4,298	$	12,030	$	12,895

Additionally, lease revenue of $0.1 million and $0.3 million was recognized for the three months ended September 30, 2023 and 2022, respectively, and lease revenue of $0.5 million and $0.4 million was recognized for the nine months ended September 30, 2023 and 2022 related to operating leases associated with non-utility property rentals. Lease revenue related to these leases was presented in other income (expense), net on the consolidated statements of comprehensive income as it is non-operating income.

Total future minimum lease payments to be received under non-cancelable leases at September 30, 2023 are as follows:

In thousands	Operating		Sales-Type		Total
NW Natural:
Remainder of 2023	$	153	$	4,100	$	4,253
2024	603		15,867		16,470
2025	599		15,306		15,905
2026	36		14,901		14,937
2027	22		14,521		14,543
Thereafter	—		222,299		222,299
Total minimum lease payments	$	1,413	$	286,994	$	288,407
Less: imputed interest			156,626
Total leases receivable			$	130,368
Other (NW Holdings):
Remainder of 2023	$	13	$	—	$	13
2024	52		—		52
2025	53		—		53
2026	56		—		56
2027	57		—		57
Thereafter	857		—		857
Total minimum lease payments	$	1,088	$	—	$	1,088
NW Holdings:
Remainder of 2023	$	166	$	4,100	$	4,266
2024	655		15,867		16,522
2025	652		15,306		15,958
2026	92		14,901		14,993
2027	79		14,521		14,600
Thereafter	857		222,299		223,156
Total minimum lease payments	$	2,501	$	286,994	$	289,495
Less: imputed interest			156,626
Total leases receivable			$	130,368

The total leases receivable above is reported under the NGD segment and the short- and long-term portions are included within other current assets and assets under sales-type leases on the consolidated balance sheets, respectively. The total amount of unguaranteed residual assets was $5.4 million, $5.0 million and $5.1 million at September 30, 2023 and 2022 and December 31, 2022, respectively, and is included in assets under sales-type leases on the consolidated balance sheets. Additionally, under regulatory accounting, the revenues and expenses associated with these agreements are presented on the consolidated statements of comprehensive income such that their presentation aligns with similar regulated activities at NW Natural.

Lease Expense

Operating Leases

We have operating leases for land, buildings and equipment. Our primary lease is for NW Natural's headquarters and operations center. Our leases have remaining lease terms of 3 months to 17 years. Many of our lease agreements include options to extend the lease, which we do not include in our minimum lease terms unless they are reasonably certain to be exercised. Short-term leases with a term of 12 months or less are not recorded on the balance sheet. As most of our leases do not provide an implicit rate and are entered into by NW Natural, we use an estimated discount rate representing the rate we would have incurred to finance the funds necessary to purchase the leased asset and is based on information available at the lease commencement date in determining the present value of lease payments.

The components of lease expense, a portion of which is capitalized, were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In thousands	2023		2022		2023		2022
NW Natural:
Operating lease expense	$	1,817	$	1,767	$	5,382	$	5,235
Short-term lease expense	198		105		556		684
Other (NW Holdings):
Operating lease expense	$	51	$	7	$	131	$	22
NW Holdings:
Operating lease expense	$	1,868	$	1,774	$	5,513	$	5,257
Short-term lease expense	198		105		556		684

Supplemental balance sheet information related to operating leases as of September 30, 2023 and 2022 and December 31, 2022 is as follows:

In thousands	September 30,				December 31,
	2023		2022		2022
NW Natural:
Operating lease right of use asset	$	70,852	$	73,046	$	72,720
Operating lease liabilities - current liabilities	$	1,658	$	1,298	$	1,363
Operating lease liabilities - non-current liabilities	77,041		78,436		78,345
Total operating lease liabilities	$	78,699	$	79,734	$	79,708
Other (NW Holdings):
Operating lease right of use asset	$	625	$	99	$	709
Operating lease liabilities - current liabilities	$	157	$	63	$	151
Operating lease liabilities - non-current liabilities	434		33		620
Total operating lease liabilities	$	591	$	96	$	771
NW Holdings:
Operating lease right of use asset	$	71,477	$	73,145	$	73,429
Operating lease liabilities - current liabilities	$	1,815	$	1,361	$	1,514
Operating lease liabilities - non-current liabilities	77,475		78,469		78,965
Total operating lease liabilities	$	79,290	$	79,830	$	80,479

The weighted-average remaining lease terms and weighted-average discount rates for the operating leases at NW Natural were as follows:

In thousands	September 30,				December 31,
	2023		2022		2022
Weighted-average remaining lease term (years)	16.5		17.5		17.2
Weighted-average discount rate	7.3	%	7.3	%	7.3	%

Headquarters and Operations Center Lease

NW Natural commenced a 20-year operating lease agreement in March 2020 for a new headquarters and operations center in Portland, Oregon. There is an option to extend the term of the lease for two additional periods of seven years. There is a material timing difference between the minimum lease payments and expense recognition as calculated under operating lease accounting rules. OPUC issued an order allowing us to align our expense recognition with cash payments for ratemaking purposes. We recorded the difference between the minimum lease payments and the aggregate of the imputed interest on the finance lease obligation and amortization of the right-of-use asset as a deferred regulatory asset on our balance sheet. The balance of the regulatory asset was $7.8 million, $6.6 million and $6.9 million as of September 30, 2023 and 2022 and December 31, 2022, respectively.

Maturities of operating lease liabilities at September 30, 2023 were as follows:

In thousands	NW Natural		Other (NW Holdings)		NW Holdings
Remainder of 2023	$	1,801	$	44	$	1,845
2024	7,307		183		7,490
2025	7,193		176		7,369
2026	7,361		153		7,514
2027	7,538		107		7,645
Thereafter	108,991		12		109,003
Total lease payments	140,191		675		140,866
Less: imputed interest	61,492		84		61,576
Total lease obligations	78,699		591		79,290
Less: current obligations	1,658		157		1,815
Long-term lease obligations	$	77,041	$	434	$	77,475

Supplemental cash flow information related to leases was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In thousands	2023		2022		2023		2022
NW Natural:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	1,809	$	1,759	$	5,374	$	5,225
Finance cash flows from finance leases	196		92		369		474
Right of use assets obtained in exchange for lease obligations
Operating leases	$	—	$	—	$	81	$	—
Finance leases	196		6		369		226
Other (NW Holdings):
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	54	$	12	$	132	$	24
Right of use assets obtained in exchange for lease obligations
Operating leases	$	—	$	61	$	—	$	61
Finance leases	11		—		101		—
NW Holdings:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	1,863	$	1,771	$	5,506	$	5,249
Finance cash flows from finance leases	196		92		369		474
Right of use assets obtained in exchange for lease obligations
Operating leases	$	—	$	61	$	81	$	61
Finance leases	207		6		470		226

Finance Leases

NW Natural also leases building storage spaces for use as a gas meter room in order to provide natural gas to multifamily or mixed use developments. These contracts are accounted for as finance leases and typically involve a one-time upfront payment with no remaining liability. The right of use assets for finance leases were $2.6 million, $2.3 million and $2.3 million at September 30, 2023 and 2022 and at December 31, 2022, respectively. As of September 30, 2023, December 31, 2022 and September 30, 2022, there were no finance lease liabilities at NW Natural.

8. STOCK-BASED COMPENSATION

Stock-based compensation plans are designed to promote stock ownership in NW Holdings by employees, including officers. These compensation plans include a Long Term Incentive Plan (LTIP) and an Employee Stock Purchase Plan (ESPP). For additional information on stock-based compensation plans, see Note 8 in the 2022 Form 10-K and the updates provided below.

Long Term Incentive Plan

Performance Shares

LTIP performance shares incorporate a combination of market, performance, and service-based factors. During the nine months ended September 30, 2023, the final performance factor under the 2021 LTIP was approved and 55,250 performance-based shares were granted under the 2021 LTIP for accounting purposes. As such, NW Natural and other subsidiaries began recognizing compensation expense. In February 2022 and 2023, LTIP shares were awarded to participants; however, the agreements allow for one of the performance factors to remain variable until the first quarter of the third year of the award period. As the performance factor will not be approved until the first quarters of 2024 and 2025, respectively, there is not a mutual understanding of the awards' key terms and conditions between NW Holdings and the participants as of September 30, 2023, and therefore, no expense was recognized for the 2022 and 2023 awards. NW Holdings will calculate the grant date fair value and NW Natural will recognize expense over the remaining service period for each award once the final performance factor has been approved.

For the 2022 and 2023 LTIP awards, share payouts range from a threshold of 0% to a maximum of 200% based on achievement of pre-established goals. The performance criteria for the 2022 and 2023 performance shares consists of a three-year Return on Invested Capital (ROIC) threshold that must be satisfied and a cumulative EPS factor, which can be modified by a total shareholder return factor (TSR modifier) relative to the performance of peer group companies over the performance period of three years for each respective award. If the targets were achieved for the 2022 and 2023 awards, NW Holdings would grant for accounting purposes 49,100 and 52,765 shares in the first quarters of 2024 and 2025, respectively.

As of September 30, 2023, there was $0.1 million of unrecognized compensation cost associated with the 2021 LTIP grant, which is expected to be recognized through 2023.

Restricted Stock Units

During the nine months ended September 30, 2023, 45,532 RSUs were granted under the LTIP with a weighted-average grant date fair value of $48.24 per share. Generally, the RSUs awarded are forfeitable and include a performance-based threshold as well as a vesting period of four years from the grant date. The majority of our RSU grants obligate NW Holdings, upon vesting, to issue the RSU holder one share of common stock. The grant may also include a cash payment equal to the total amount of dividends paid per share between the grant date and vesting date of that portion of the RSU depending on the structure of the award agreement. The fair value of an RSU is equal to the closing market price of NW Holdings' common stock on the grant date. As of September 30, 2023, there was $3.5 million of unrecognized compensation cost from grants of RSUs, which is expected to be recognized over a period extending through 2027.

9. DEBT

Short-Term Debt

At September 30, 2023, September 30, 2022 and December 31, 2022, short-term debt consisted of the following:

	September 30, 2023				September 30, 2022				December 31, 2022
In millions	Balance Outstanding		Weighted Average Interest Rate(1)		Balance Outstanding		Weighted Average Interest Rate(1)		Balance Outstanding		Weighted Average Interest Rate(1)
NW Natural:
Commercial paper	$	—	—	%	$	53.0	3.3	%	$	170.2	4.6	%
Other (NW Holdings):
Credit agreement	71.0		6.4	%	88.0		4.7	%	88.0		5.3	%
NW Holdings	$	71.0			$	141.0			$	258.2

(1) Weighted average interest rate on outstanding short-term debt

Long-Term Debt

At September 30, 2023, September 30, 2022 and December 31, 2022, NW Holdings' long-term debt consisted of the following:

	September 30, 2023				September 30, 2022				December 31, 2022
In millions	Balance Outstanding		Weighted Average Interest Rate(1)		Balance Outstanding		Weighted Average Interest Rate(1)		Balance Outstanding		Weighted Average Interest Rate(2)
NW Natural first mortgage bonds	$	1,414.7	4.7	%	$	1,134.7	4.5	%	$	1,134.7	4.5	%
NW Holdings credit agreement	100.0		5.5	%	100.0		4.1	%	100.0		4.2	%
NWN Water credit agreement	50.0		5.7	%	50.0		4.1	%	50.0		4.2	%
NWN Water term loan	55.0		4.8	%	55.0		3.5	%	55.0		2.5	%
Other long-term debt	5.8				6.3				6.2
Long-term debt, gross	$	1,625.5			$	1,346.0			$	1,345.9
Less: unamortized debt issuance costs	10.2				8.4				9.0
Less: current maturities	190.7				50.6				90.7
Total long-term debt	$	1,424.6			$	1,287.0			$	1,246.2

(1) Weighted average interest rate for the nine months ended September 30, 2023 and September 30, 2022

(2) Weighted average interest rate for the year ended December 31, 2022

NW Natural's first mortgage bonds (FMBs) have maturity dates ranging from 2023 through 2053 and interest rates ranging from 2.8% to 7.9%. The credit agreements at NW Holdings and NWN Water have maturity dates in 2024 and the NWN Water term loan is due in 2026.

In August 2023, NW Natural retired $50.0 million of FMBs with an interest rate of 3.5%. An additional $40.0 million of FMBs with an interest rate of 5.6% are set to mature in November 2023. No other debt is scheduled to mature in the next 12 months as of September 30, 2023 at NW Natural.

Issuance of Long-Term Debt

In August 2023, NW Natural issued and sold $80.0 million aggregate principal amount of its FMBs, 5.18% Series and $50.0 million aggregate principal amount of its FMBs, 5.23% Series, to certain institutional investors pursuant to the Bond Purchase Agreement. The 5.18% Bonds bear interest at the rate of 5.18% per annum, payable semi-annually on February 4 and August 4 of each year, commencing February 4, 2024, and will mature on August 4, 2034. The 5.23% Bonds bear interest at the rate of 5.23% per annum, payable semi-annually on February 4 and August 4 of each year, commencing February 4, 2024, and will mature on August 4, 2038.

In March 2023, NW Natural issued and sold $100.0 million aggregate principal amount of 5.75% Secured Medium-Term Notes, Series B due 2033 (the Notes). The Notes bear interest at the rate of 5.75% per annum, payable semi-annually on March 15 and September 15 of each year.

In January 2023, NW Natural issued and sold $100.0 million aggregate principal amount of its FMBs, 5.43% Series due January 2053, to certain institutional investors pursuant to the Bond Purchase Agreement. The 5.43% Bonds bear interest at the rate of 5.43% per annum, payable semi-annually on January 6 and July 6 of each year, commencing July 6, 2023, and will mature on January 6, 2053.

In September 2022, NW Holdings entered into an 18-month credit agreement for $100.0 million and borrowed the full amount. The interest rate is based on the Secured Overnight Financing Rate (SOFR). The loan is due and payable on March 15, 2024. The credit agreement prohibits NW Holdings from permitting consolidated indebtedness to be greater than 70% of total capitalization, each as defined therein and calculated as of the end of each fiscal quarter. Failure to comply with this financial covenant would entitle the lenders to accelerate the maturity of the amounts outstanding under the credit agreement. NW Holdings was in compliance with this financial covenant as of September 30, 2023. In December 2022, NW Holdings entered into a swap to fix the interest rate on this debt beginning in January 2023 through the loan's maturity. See "Interest Rate Swap Agreements" below for more detail.

In September 2022, NWN Water entered into an 18-month credit agreement for $50.0 million and borrowed the full amount. The interest rate is based on the SOFR. The loan is due and payable on March 15, 2024. The credit agreement prohibits NWN Water and NW Holdings from permitting consolidated indebtedness to be greater than 70% of total capitalization, each as defined therein and calculated as of the end of each fiscal quarter. Failure to comply with this financial covenant would entitle the lenders to accelerate the maturity of the amounts outstanding under the credit agreement. NWN Water and NW Holdings were in compliance with this financial covenant as of September 30, 2023.

Interest Rate Swap Agreements

NW Holdings and NWN Water entered into interest rate swap agreements with major financial institutions that effectively converted variable-rate debt to a fixed rate. Interest payments made between the effective date and expiration date are hedged by the swap agreements. The notional amount, effective date, expiration date and benchmark rate of the swap agreements are shown in the table below:

In millions	Notional Amount		Effective Date	Expiration Date	Fixed Rate
NW Holdings	$	100.0	1/17/2023	3/15/2024	4.7	%
NWN Water	$	55.0	1/19/2023	6/10/2026	3.8	%

Fair Value of Long-Term Debt

NW Holdings' and NW Natural's outstanding debt does not trade in active markets. The fair value of debt is estimated using the value of outstanding debt at natural gas distribution companies with similar credit ratings, terms, and remaining maturities to NW Holdings' and NW Natural's debt that actively trade in public markets. These valuations are based on Level 2 inputs as defined in the fair value hierarchy. See Note 2 in the 2022 Form 10-K for a description of the fair value hierarchy.

The following table provides an estimate of the fair value of long-term debt, including current maturities of long-term debt, using market prices in effect on the valuation date:

	September 30,				December 31,
In thousands	2023		2022		2022
NW Natural:
Gross long-term debt	$	1,414,700	$	1,134,700	$	1,134,700
Unamortized debt issuance costs	(10,147)		(8,229)		(8,823)
Carrying amount	$	1,404,553	$	1,126,471	$	1,125,877
Estimated fair value(1)	$	1,176,212	$	927,372	$	944,383
NW Holdings:
Gross long-term debt	$	1,625,545	$	1,345,968	$	1,345,851
Unamortized debt issuance costs	(10,245)		(8,348)		(8,987)
Carrying amount	$	1,615,300	$	1,337,620	$	1,336,864
Estimated fair value(1)	$	1,385,144	$	1,133,087	$	1,148,395

(1) Estimated fair value does not include unamortized debt issuance costs.

10. PENSION AND OTHER POSTRETIREMENT BENEFIT COSTS

NW Natural maintains a qualified non-contributory defined benefit pension plan (Pension Plan), non-qualified supplemental pension plans for eligible executive officers and other key employees, and other postretirement employee benefit plans. NW Natural also has a qualified defined contribution plan (Retirement K Savings Plan) for all eligible employees. The Pension Plan and Retirement K Savings Plan have plan assets, which are held in qualified trusts to fund retirement benefits.

The service cost component of net periodic benefit cost for NW Natural pension and other postretirement benefit plans is recognized in operations and maintenance expense in the consolidated statements of comprehensive income. The other non-service cost components are recognized in other income (expense), net in the consolidated statements of comprehensive income.

The following table provides the components of net periodic benefit cost (credit) for the pension and other postretirement benefit plans:

	Three Months Ended September 30,								Nine Months Ended September 30,
	Pension Benefits				Other Postretirement Benefits				Pension Benefits				Other Postretirement Benefits
In thousands	2023		2022		2023		2022		2023		2022		2023		2022
Service cost	$	842	$	1,022	$	27	$	34	$	2,940	$	4,450	$	83	$	145
Interest cost	5,283		4,260		247		213		15,719		10,945		743		543
Expected return on plan assets	(6,421)		(7,076)		—		—		(19,292)		(19,274)		—		—
Amortization of prior service credit	—		—		—		(15)		—		—		—		(249)
Amortization of net actuarial loss (gain)	139		(1,542)		—		57		418		9,459		—		319
Net periodic benefit cost (credit)	(157)		(3,336)		274		289		(215)		5,580		826		758
Amount allocated to construction	(326)		(496)		(9)		(14)		(1,239)		(1,965)		(29)		(57)
Net periodic benefit cost (credit) charged to expense	(483)		(3,832)		265		275		(1,454)		3,615		797		701
Amortization of regulatory balancing account	675		675		—		—		4,757		4,757		—		—
Net amount charged to expense	$	192	$	(3,157)	$	265	$	275	$	3,303	$	8,372	$	797	$	701

Net periodic benefit costs are reduced by amounts capitalized to NGD plant. In addition, net periodic benefit costs were recorded to a regulatory balancing account as approved by the OPUC and amortized accordingly.

The following table presents amounts recognized in accumulated other comprehensive loss (AOCL) and the changes in AOCL related to non-qualified employee benefit plans:

	Three Months Ended September 30,				Nine Months Ended September 30,
In thousands	2023		2022		2023		2022
Beginning balance	$	(6,209)	$	(11,010)	$	(6,414)	$	(11,404)
Amounts reclassified from AOCL:
Amortization of actuarial losses	139		275		418		811
Total reclassifications before tax	139		275		418		811
Tax benefit	(37)		(73)		(111)		(215)
Total reclassifications for the period	102		202		307		596
Ending balance	$	(6,107)	$	(10,808)	$	(6,107)	$	(10,808)

Employer Contributions to Company-Sponsored Defined Benefit Pension Plans

NW Natural made no cash contributions to its qualified defined benefit pension plans during the nine months ended September 30, 2023 or 2022. NW Natural does not expect to make any plan contributions during the remainder of 2023 as a result of adopting the American Rescue Plan Act.

Defined Contribution Plan

NW Natural's Retirement K Savings Plan is a qualified defined contribution plan under Internal Revenue Code Sections 401(a) and 401(k). NW Natural contributions totaled $8.0 million and $7.4 million for the nine months ended September 30, 2023 and 2022, respectively.

See Note 10 in the 2022 Form 10-K for more information concerning these retirement and other postretirement benefit plans.

11. INCOME TAX

An estimate of annual income tax expense is made each interim period using estimates for annual pre-tax income, regulatory flow-through adjustments, tax credits, and other items. The estimated annual effective tax rate is applied to year-to-date, pre-tax income to determine income tax expense for the interim period consistent with the annual estimate. Discrete events are recorded in the interim period in which they occur or become known.

The effective income tax rate varied from the federal statutory rate due to the following:

	Three Months Ended September 30,
	NW Holdings						NW Natural
In thousands	2023			2022			2023			2022
Income tax at statutory rate (federal)	$	(6,716)		$	(5,533)		$	(6,131)		$	(5,305)
State income tax	(2,742)			(2,376)			(2,633)			(2,306)
Increase (decrease):
Differences required to be flowed-through by regulatory commissions	1,015			1,232			1,018			1,232
Other, net	151			(81)			39			(76)
Total benefit for income taxes	$	(8,292)		$	(6,758)		$	(7,707)		$	(6,455)
Effective income tax rate	25.9		%	25.7		%	26.4		%	25.6		%

	Nine Months Ended September 30,
	NW Holdings						NW Natural
In thousands	2023			2022			2023			2022
Income tax at statutory rate (federal)	$	13,928		$	10,710		$	15,723		$	11,554
State income tax	5,618			4,298			5,990			4,497
Increase (decrease):
Differences required to be flowed-through by regulatory commissions	(2,055)			(2,003)			(2,051)			(2,003)
Other, net	(393)			(370)			(625)			(370)
Total provision for income taxes	$	17,098		$	12,635		$	19,037		$	13,678
Effective income tax rate	25.8		%	24.8		%	25.4		%	24.9		%

The NW Holdings and NW Natural effective income tax rates for the nine months ended September 30, 2023 compared to the same period in 2022 changed primarily as a result of changes in pre-tax income. See Note 11 in the 2022 Form 10-K for more detail on income taxes and effective tax rates.

The IRS Compliance Assurance Process (CAP) examination of the 2021 tax year was completed during the second quarter of 2023. There were no material changes to the return as filed. The 2022 and 2023 tax years are subject to examination under CAP.

12. PROPERTY, PLANT, AND EQUIPMENT

The following table sets forth the major classifications of property, plant, and equipment and accumulated depreciation:

	September 30,				December 31,
In thousands	2023		2022		2022
NW Natural:
NGD plant in service	$	4,096,560	$	3,888,092	$	3,992,676
NGD construction work in progress	153,231		161,658		78,897
Less: Accumulated depreciation	1,152,952		1,135,965		1,115,690
NGD plant, net	3,096,839		2,913,785		2,955,883
Other plant in service	70,363		69,626		70,368
Other construction work in progress	8,323		5,112		6,606
Less: Accumulated depreciation	22,331		21,435		21,541
Other plant, net	56,355		53,303		55,433
Total property, plant, and equipment, net	$	3,153,194	$	2,967,088	$	3,011,316
Other (NW Holdings):
Other plant in service	$	127,721	$	66,208	$	92,979
Other construction work in progress	12,404		16,632		20,040
Less: Accumulated depreciation	14,685		8,750		9,935
Other plant, net	$	125,440	$	74,090	$	103,084
NW Holdings:
Total property, plant, and equipment, net	$	3,278,634	$	3,041,178	$	3,114,400
NW Natural:
Capital expenditures in accrued liabilities	$	21,402	$	43,954	$	24,584
NW Holdings:
Capital expenditures in accrued liabilities	$	22,686	$	45,374	$	25,318

NW Natural

Other plant balances include non-utility gas storage assets at the Mist facility and other long-lived assets not related to NGD.

NW Holdings

Other plant balances include long-lived assets associated with water and wastewater operations and non-regulated activities not held by NW Natural or its subsidiaries.

13. INVESTMENTS

Investments include gas reserves, financial investments in life insurance policies, and equity method investments. The following table summarizes other investments:

	NW Holdings						NW Natural
	September 30,				December 31,		September 30,				December 31,
In thousands	2023		2022		2022		2023		2022		2022
Investments in life insurance policies	$	46,870	$	49,043	$	49,358	$	46,870	$	49,043	$	49,358
Investments in gas reserves, non-current	21,439		23,770		22,970		21,439		23,770		22,970
Investment in unconsolidated affiliates	36,253		23,756		23,376		19,444		8,058		7,782
Total other investments	$	104,562	$	96,569	$	95,704	$	87,753	$	80,871	$	80,110

Investment in Life Insurance Policies

Other investments include financial investments in life insurance policies, which are accounted for at cash surrender value, net of policy loans. See Note 13 in the 2022 Form 10-K.

NW Natural Gas Reserves

NW Natural has invested $188 million through the gas reserves program in the Jonah Field located in Wyoming as of September 30, 2023. Gas reserves are stated at cost, net of regulatory amortization, with the associated deferred tax benefits of $4.4 million, $5.5 million, and $5.2 million, which are recorded as liabilities in the September 30, 2023, September 30, 2022, and December 31, 2022 consolidated balance sheets, respectively. NW Natural's investment is included in NW Holdings' and NW Natural's consolidated balance sheets under other current assets and other investments (non-current portion) with the maximum loss exposure limited to the investment balance. The amount of gas reserves included in other current assets was $2.4 million, $3.7 million, and $3.4 million as of September 30, 2023, September 30, 2022, and December 31, 2022, respectively. See Note 13 in the 2022 Form 10-K.

Investments in Unconsolidated Affiliates

In December 2021, NW Natural Water purchased a 37.3% ownership stake in Avion Water Company, Inc. (Avion Water), an investor-owned water utility for $14.5 million. In July 2022, NW Natural Water increased its ownership stake in Avion Water to 40.3% for an additional $1.0 million. In June 2023, NW Natural Water increased its ownership stake in Avion Water to 43.1% for an additional $1.0 million. Avion Water operates in Bend, Oregon and the surrounding communities, serving approximately 15,000 customer connections and employing 35 people. The carrying value of the equity method investment is $8.8 million higher than the underlying equity in the net assets of the investee at September 30, 2023 due to equity method goodwill. NW Natural Water's share in the earnings (loss) of Avion Water is included in other income (expense), net.

In 2020, NW Natural began a partnership with BioCarbN to invest in up to four separate renewable natural gas (RNG) development projects that are designed to access biogas derived from water treatment at Tyson Foods’ processing plants, subject to approval by all parties. During the construction phase of the projects, NW Natural determined it is the primary beneficiary and fully consolidates each entity. In January 2022, commissioning of the first project, Lexington Renewable Energy LLC (Lexington), was completed. NW Natural determined it was no longer the primary beneficiary, deconsolidated the variable interest entity and recorded the investment in Lexington as an equity method investment. As of September 30, 2023, NW Natural had an investment balance in Lexington of $7.8 million. NW Natural's share in the earnings (loss) of Lexington is included in cost of gas.

In April 2023, commissioning of the second project, Dakota City Renewable Energy LLC (Dakota City), was completed. NW Natural determined it was no longer the primary beneficiary of Dakota City once the project was commissioned. The investment in the variable interest entity was deconsolidated and recorded as an equity method investment. NW Natural accounts for its interest in Dakota City using the equity method of accounting because NW Natural does not control but has the ability to exercise significant influence over Dakota City's operations after commissioning. There was no gain or loss recognized upon deconsolidation. NW Natural determined the fair value of the investment approximated the carrying value which was primarily comprised of cash and property, plant and equipment. As of September 30, 2023, NW Natural had an investment balance in Dakota City of $11.6 million. NW Natural's share in the earnings (loss) of Dakota City is included in cost of gas.

14. BUSINESS COMBINATIONS

2023 Business Combinations

During the nine months ended September 30, 2023, NWN Water and its subsidiaries acquired the assets of two businesses qualifying as business combinations. The aggregate fair value of the preliminary consideration transferred for these acquisitions was $3.6 million, most of which was preliminarily allocated to property, plant, and equipment, and goodwill. These transactions align with NW Holdings' water and wastewater sector strategy as it continues to expand its water and wastewater service territories and included:

•Pedersen Family, LLC in Washington

•King Water Corporation in Washington

In October 2023, NWN Water completed the acquisition of Rose Valley Water Company. Located in Peoria, Arizona, this water utility serves approximately 2,400 connections. Also in October 2023, NWN Water completed the water services business portion of the Hiland Water asset acquisition. This water and wastewater services business supports approximately 6,400 connections across Oregon. The preliminary allocation of consideration to the acquired assets and assumed liabilities based on their fair value is not yet complete as valuation procedures are pending. Acquisition costs were insignificant and were expensed as incurred.

2022 Business Combinations

During 2022, NWN Water and its subsidiaries acquired the assets of seven businesses qualifying as business combinations. The aggregate fair value of the preliminary consideration transferred for these acquisitions was $105.7 million, most of which was preliminarily allocated to property, plant and equipment and goodwill. These transactions align with NW Holdings' water and wastewater sector strategy as it continues to expand its service territories and included:

•Far West Water & Sewer, Inc. in Arizona

•Belle Oaks Water and Sewer Co., Inc in Texas

•Northwest Water Services, LLC in Washington

•Aquarius Utilities, LLC in Washington

•Valiant Idaho, LLC (The Idaho Club - Sewer) in Idaho

•Caney Creek in Texas

•Water Necessities, Inc. and Rural Water Co. in Texas

As each of these acquisitions met the criteria of a business combination, a preliminary allocation of the consideration to the acquired net assets based on their estimated fair value as of the acquisition date was performed. The allocation for each of these business combinations is considered preliminary as of September 30, 2023. In accordance with U.S. GAAP, the fair value determination involves management judgment in determining the significant estimates and assumptions used and was made using existing regulatory conditions for net assets. These allocations are considered preliminary as of September 30, 2023, as facts and circumstances that existed as of the acquisition date may be discovered as we continue to integrate the acquired businesses. As a result, subsequent adjustments to the preliminary valuation of tangible assets, contract assets and liabilities, tax positions, and goodwill may be required. Subsequent adjustments are not expected to be significant, and any such adjustments are expected to be completed within the one-year measurement period for all acquisitions described above.

Goodwill

NW Holdings allocates goodwill to reporting units based on the expected benefit from the business combination. We perform an annual impairment assessment of goodwill at the reporting unit level, or more frequently if events and circumstances indicate that goodwill might be impaired. An impairment loss is recognized if the carrying value of a reporting unit’s goodwill exceeds its fair value.

As a result of all acquisitions completed, total goodwill was $152.4 million, $74.7 million, and $149.3 million as of September 30, 2023, September 30, 2022, and December 31, 2022, respectively. All of our goodwill is related to water and wastewater acquisitions and is included in the other category for segment reporting purposes. The annual impairment assessment of goodwill occurs in the fourth quarter of each year. There have been no impairments recognized to date.

15. DERIVATIVE INSTRUMENTS

NW Natural

NW Natural enters into financial derivative contracts to hedge a portion of the NGD segment's natural gas sales requirements. These contracts include swaps, options, and option combinations. These derivative financial instruments are primarily used to manage commodity price variability. A small portion of NW Natural's derivative hedging strategy involves foreign currency forward contracts.

NW Natural enters into these financial derivatives, up to prescribed limits, primarily to hedge price variability related to term physical gas supply contracts. The foreign currency forward contracts are used to hedge the fluctuation in foreign currency exchange rates for pipeline demand charges paid in Canadian dollars.

In the normal course of business, NW Natural also enters into indexed-price physical forward natural gas commodity purchase contracts and options to meet the requirements of NGD customers. These contracts qualify for regulatory deferral accounting treatment.

Notional Amounts

The following table presents the absolute notional amounts related to open positions on NW Natural derivative instruments:

	September 30,				December 31,
In thousands	2023		2022		2022
Natural gas (in therms):
Financial	1,080,345		1,006,665		852,435
Physical	749,838		672,350		463,254
Foreign exchange	$	10,483	$	9,905	$	7,617

Purchased Gas Adjustment (PGA)

Rates and hedging approaches may vary between states due to different rate structures and mechanisms. Under the PGA mechanism in Oregon, derivatives entered into by NW Natural for the procurement or hedging of natural gas for future gas years generally receive regulatory deferral accounting treatment. In general, commodity hedging for the current gas year is completed prior to the start of the gas year, and hedge prices are reflected in the weighted-average cost of gas in the PGA filing. Hedge contracts entered into after the start of the PGA period are subject to the PGA incentive sharing mechanism in Oregon. Under the PGA mechanism in Washington, NW Natural incorporates a risk-responsive hedging strategy, and receives regulatory deferral accounting treatment for its Washington gas supplies.

NW Natural entered the 2022-23 gas year with forecasted sales volume hedged at approximately 84% in total, including 67% in financial hedges and 17% in physical gas supplies.The total hedged for Oregon was approximately 85%, including 67% in financial hedges and 18% in physical gas supplies. The total hedged for Washington was approximately 79%, including 66% in financial hedges and 13% in physical gas supplies.

Unrealized and Realized Gain/Loss

The following table reflects the income statement presentation for the unrealized gains and losses from NW Natural's derivative instruments:

	Three Months Ended September 30,
	2023				2022
In thousands	Natural gas commodity		Foreign Exchange		Natural gas commodity		Foreign Exchange
Benefit (expense) to cost of gas	$	14,516	$	(276)	$	(11,626)	$	(455)
Operating revenues (expense)	—		—		—		—
Amounts deferred to regulatory accounts on balance sheet	(14,516)		276		11,626		455
Total gain (loss) in pre-tax earnings	$	—	$	—	$	—	$	—

	Nine Months Ended September 30,
	2023				2022
In thousands	Natural gas commodity		Foreign exchange		Natural gas commodity		Foreign exchange
Benefit (expense) to cost of gas	$	(58,741)	$	(95)	$	32,827	$	(528)
Operating revenues (expense)	—		—		—		—
Amounts deferred to regulatory accounts on balance sheet	58,741		95		(32,827)		528
Total gain (loss) in pre-tax earnings	$	—	$	—	$	—	$	—

Unrealized Gain/Loss

Outstanding derivative instruments related to regulated NGD operations are deferred in accordance with regulatory accounting standards. The cost of foreign currency forward and natural gas derivative contracts are recognized immediately in the cost of gas; however, costs above or below the amount embedded in the current year PGA are subject to a regulatory deferral tariff and therefore, are recorded as a regulatory asset or liability.

Realized Gain/Loss

NW Natural realized net losses of $7.5 million and net gains of $145.7 million for the three and nine months ended September 30, 2023, respectively, from the settlement of natural gas financial derivative contracts, whereas, net gains of $16.9 million and $74.0 million were realized for the three and nine months ended September 30, 2022, respectively. Realized gains and losses offset the higher or lower cost of gas purchased, resulting in no incremental amounts to collect or refund to customers.

Credit Risk Management of Financial Derivatives Instruments

No collateral was posted with or by NW Natural counterparties as of September 30, 2023 or 2022. NW Natural attempts to minimize the potential exposure to collateral calls by diversifying counterparties and using credit limits to manage liquidity risk. Counterparties generally allow a certain credit limit threshold before requiring NW Natural to post collateral against unrealized loss positions. Given NW Natural's credit ratings, counterparty credit limits and portfolio diversification, it was not subject to collateral calls in 2023 or 2022. The collateral call exposure is set forth under credit support agreements, which generally contain credit limits. NW Natural could also be subject to collateral call exposure where it has agreed to provide adequate assurance, which is not specific as to the amount of credit limit allowed but could potentially require additional collateral posting by NW Natural in the event of a material adverse change.

NW Natural's financial derivative instruments are subject to master netting arrangements; however, they are presented on a gross basis in the consolidated balance sheets. NW Natural and its counterparties have the ability to set-off obligations to each other under specified circumstances. Such circumstances may include a defaulting party, a credit change due to a merger affecting either party, or any other termination event.

If netted by its counterparties, NW Natural's physical and financial derivative position would result in an asset of $10.1 million and a liability of $48.1 million as of September 30, 2023, an asset of $40.8 million and a liability of $8.5 million as of September 30, 2022, and an asset of $153.3 million and a liability of $3.6 million as of December 31, 2022.

NW Natural is exposed to derivative credit and liquidity risk primarily through securing fixed price natural gas commodity swaps and interest rate swaps with financial counterparties. NW Natural utilizes master netting arrangements with International Swaps and Derivatives Association (ISDA) contracts to minimize these risks including ISDA Credit Support Agreements with counterparties based on their credit ratings. Additionally, NW Natural uses counterparty, industry, sector and country diversification to minimize credit risk. In certain cases, NW Natural may require counterparties to post collateral, guarantees, or letters of credit to maintain its minimum credit requirement standards or for liquidity management purposes. See Note 15 in the 2022 Form 10-K for additional information.

Fair Value

In accordance with fair value accounting, NW Natural includes non-performance risk in calculating fair value adjustments. This includes a credit risk adjustment based on the credit spreads of NW Natural counterparties when in an unrealized gain position, or on NW Natural's own credit spread when it is in an unrealized loss position. The inputs in our valuation models include natural gas futures, volatility, credit default swap spreads and interest rates. Additionally, the assessment of non-performance risk is generally derived from the credit default swap market and from bond market credit spreads. The impact of the credit risk adjustment for all financial derivatives outstanding to the fair value calculation was $0.3 million, which decreased the liability at September 30, 2023. The net fair value was a liability of $38.0 million, an asset of $32.3 million, and an asset of $149.7 million as of September 30, 2023 and 2022, and December 31, 2022, respectively. No Level 3 inputs were used in our derivative valuations during the nine months ended September 30, 2023, and 2022. See Note 2 in the 2022 Form 10-K.

NW Holdings

NW Holdings and NWN Water entered into interest rate swap agreements with major financial institutions that effectively converted variable-rate debt to a fixed rate. Interest payments made between the effective date and expiration date are hedged by the swap agreements. The notional amount, effective date, expiration date and benchmark rate of the swap agreements are shown in the table below:

In millions	Notional Amount		Effective Date	Expiration Date	Fixed Rate
NW Holdings	$	100.0	1/17/2023	3/15/2024	4.7	%
NWN Water	$	55.0	1/19/2023	6/10/2026	3.8	%

Unrealized gains and losses related to these interest rate swap agreements are recorded in AOCI on the consolidated balance sheet and totaled $1.1 million and $0.1 million, net of tax, as of September 30, 2023 and December 31, 2022, respectively. There were no amounts reclassified from AOCI to net income during the nine months ended September 30, 2023.

16. ENVIRONMENTAL MATTERS

NW Natural owns, or previously owned, properties that may require environmental remediation or action. The range of loss for environmental liabilities is estimated based on current remediation technology, enacted laws and regulations, industry experience gained at similar sites, and an assessment of the probable level of involvement and financial condition of other potentially responsible parties (PRPs). When amounts are prudently expended related to site remediation of those sites described herein, NW Natural has recovery mechanisms in place to collect 96.7% of remediation costs allocable to Oregon customers and 3.3% of costs allocable to Washington customers.

These sites are subject to the remediation process prescribed by the Environmental Protection Agency (EPA) and the Oregon Department of Environmental Quality (ODEQ). The process begins with a remedial investigation (RI) to determine the nature and extent of contamination and then a risk assessment (RA) to establish whether the contamination at the site poses unacceptable risks to humans and the environment. Next, a feasibility study (FS) or an engineering evaluation/cost analysis (EE/CA) evaluates various remedial alternatives. It is at this point in the process when NW Natural is able to estimate a range of remediation costs and record a reasonable potential remediation liability, or make an adjustment to the existing liability. From this study, the regulatory agency selects a remedy and issues a Record of Decision (ROD). After a ROD is issued, NW Natural would seek to negotiate a consent decree or consent judgment for designing and implementing the remedy. NW Natural would have the ability to further refine estimates of remediation liabilities at that time.

Remediation may include treatment of contaminated media such as sediment, soil and groundwater, removal and disposal of media, institutional controls such as legal restrictions on future property use, or natural recovery. Following construction of the remedy, the EPA and ODEQ also have requirements for ongoing maintenance, monitoring and other post-remediation care that may continue for many years. Where appropriate and reasonably known, NW Natural will provide for these costs in the remediation liabilities described below.

Due to the numerous uncertainties surrounding the course of environmental remediation and the preliminary nature of several site investigations, in some cases, NW Natural may not be able to reasonably estimate the high end of the range of possible loss. In those cases, the nature of the possible loss has been disclosed, as has the fact that the high end of the range cannot be reasonably estimated where a range of potential loss is available. Unless there is an estimate within the range of possible losses that is more likely than other cost estimates within that range, NW Natural records the liability at the low end of this range. It is likely changes in these estimates and ranges will occur throughout the remediation process for each of these sites due to the continued evaluation and clarification concerning responsibility, the complexity of environmental laws and regulations and the determination by regulators of remediation alternatives. In addition to remediation costs, NW Natural could also be subject to Natural Resource Damages (NRD) claims. NW Natural will assess the likelihood and probability of each claim and recognize a liability if deemed appropriate. Refer to "Other Portland Harbor" below.

Environmental Sites

The following table summarizes information regarding liabilities related to environmental sites, which are recorded in other current liabilities and other noncurrent liabilities in NW Natural's balance sheet:

	Current Liabilities						Non-Current Liabilities
	September 30,				December 31,		September 30,				December 31,
In thousands	2023		2022		2022		2023		2022		2022
Portland Harbor site:
Gasco/Siltronic Sediments	$	18,679	$	5,556	$	9,744	$	41,392	$	40,740	$	42,120
Other Portland Harbor	3,524		2,430		2,634		9,580		8,135		11,270
Gasco/Siltronic Upland site	8,908		8,367		16,067		32,512		33,354		35,457
Front Street site	812		201		457		939		868		879
Oregon Steel Mills	—		—		—		179		179		179
Total	$	31,923	$	16,554	$	28,902	$	84,602	$	83,276	$	89,905

Portland Harbor Site

The Portland Harbor is an EPA listed Superfund site that is approximately 10 miles long on the Willamette River and is adjacent to NW Natural's Gasco uplands site. NW Natural is one of over one hundred PRPs, each jointly and severally liable, at the Superfund site. In January 2017, the EPA issued its Record of Decision, which selects the remedy for the clean-up of the Portland Harbor site (Portland Harbor ROD). The Portland Harbor ROD estimates the present value total cost at approximately $1.05 billion with an accuracy between -30% and +50% of actual costs.

NW Natural's potential liability is a portion of the costs of the remedy for the entire Portland Harbor Superfund site. The cost of that remedy is expected to be allocated among more than one hundred PRPs. NW Natural is participating in a non-binding allocation process with other PRPs in an effort to resolve its potential liability. The Portland Harbor ROD does not provide any additional clarification around allocation of costs among PRPs; accordingly, NW Natural has not modified any of the recorded liabilities at this time as a result of the issuance of the Portland Harbor ROD.

NW Natural manages its liability related to the Superfund site as two distinct remediation projects: the Gasco Sediments Site and Other Portland Harbor projects.

GASCO SEDIMENTS. In 2009, NW Natural and Siltronic Corporation entered into a separate Administrative Order on Consent with the EPA to evaluate and design specific remedies for sediments adjacent to the Gasco uplands and Siltronic uplands sites. NW Natural submitted a draft EE/CA to the EPA in May 2012 and the EE/CA estimated the cost of potential remedial alternatives for this site. In March 2020, NW Natural and the EPA amended the Administrative Order on Consent to include additional remedial design activities downstream of the Gasco sediments site and in the navigation channel. Siltronic Corporation is not a party to the amended order. In the second quarter of 2021, NW Natural began preliminary design discussions with the EPA for the Gasco sediments site. These preliminary design discussions did not include a cost estimate for cleanup. No design alternatives are more likely than the EE/CA alternatives at this time, and NW Natural expects further design discussion and iteration with the EPA.

The estimated costs for the various sediment remedy alternatives in the draft EE/CA, for the additional studies and design work needed before the cleanup can occur, and for regulatory oversight throughout the cleanup range from $60.1 million to $350 million. NW Natural has recorded a liability of $60.1 million for the Gasco sediment clean-up, which reflects the low end of the range. At this time, we believe sediments at the Gasco sediments site represent the largest portion of NW Natural's liability related to the Portland Harbor site discussed above.

In September 2023, the EPA approved the In Situ Stabilization and Solidification (ISS) Work Plan for the ISS field pilot study scheduled for the fall of 2023. Field work on the pilot study is underway. Information obtained from the pilot study will be used to support remedial design of the Gasco sediments project. This resulted in an increase to the liability of $10.1 million.

OTHER PORTLAND HARBOR. While we believe liabilities associated with the Gasco sediments site represent NW Natural's largest exposure, there are other potential exposures associated with the Portland Harbor ROD, including NRD costs and harborwide remedial design and cleanup costs (including downstream petroleum contamination), for which allocations among the PRPs have not yet been determined. 

NW Natural and other parties have signed a cooperative agreement with the Portland Harbor Natural Resource Trustee council to participate in a phased NRD assessment to estimate liabilities to support an early restoration-based settlement of NRD claims. One member of this Trustee council, the Yakama Nation, withdrew from the council in 2009, and in 2017, filed suit against NW Natural and 29 other parties seeking remedial costs and NRD assessment costs associated with the Portland Harbor site, set forth in the complaint. The complaint seeks recovery of alleged costs totaling $0.3 million in connection with the selection of a remedial action for the Portland Harbor site as well as declaratory judgment for unspecified future remedial action costs and for costs to assess the injury, loss or destruction of natural resources resulting from the release of hazardous substances at and

from the Portland Harbor site. The Yakama Nation has filed two amended complaints addressing certain pleading defects and dismissing the State of Oregon. On the motion of NW Natural and certain other defendants, the federal court has stayed the case pending the outcome of the non-binding allocation proceeding discussed above. NW Natural has recorded a liability for NRD claims which is at the low end of the range of the potential liability; the high end of the range cannot be reasonably estimated at this time. The NRD liability is not included in the aforementioned range of costs provided in the Portland Harbor ROD.

Gasco Uplands Site

A predecessor of NW Natural, Portland Gas and Coke Company, owned a former gas manufacturing plant that was closed in 1958 (Gasco site) and is adjacent to the Portland Harbor site described above. The Gasco site has been under investigation by NW Natural for environmental contamination under the ODEQ Voluntary Cleanup Program (VCP). It is not included in the range of remedial costs for the Portland Harbor site noted above. The Gasco site is managed in two parts, the uplands portion and the groundwater source control action.

NW Natural submitted a revised Remedial Investigation Report for the uplands to ODEQ in May 2007. In March 2015, ODEQ approved the Risk Assessment (RA) for this site, enabling commencement of work on the FS in 2016. NW Natural has recognized a liability for the remediation of the uplands portion of the site which is at the low end of the range of potential liability; the high end of the range cannot be reasonably estimated at this time.

In October 2016, ODEQ and NW Natural agreed to amend their VCP agreement for the Gasco uplands to incorporate a portion of the Siltronic property formerly owned by Portland Gas & Coke between 1939 and 1960 into the Gasco RA and FS. Previously, NW Natural was conducting an investigation of manufactured gas plant constituents on the entire Siltronic uplands for ODEQ. Siltronic will be working with ODEQ directly on environmental impacts to the remainder of its property.

In September 2013, NW Natural completed construction of a groundwater source control system, including a water treatment station, at the Gasco site. NW Natural has estimated the cost associated with the ongoing operation of the system and has recognized a liability which is at the low end of the range of potential cost. NW Natural cannot estimate the high end of the range at this time due to the uncertainty associated with the duration of running the water treatment station, which is highly dependent on the remedy determined for both the upland portion as well as the final remedy for the Gasco sediments site.

Other Sites

In addition to those sites above, NW Natural has environmental exposures at three other sites: Central Service Center, Front Street and Oregon Steel Mills. NW Natural may have exposure at other sites that have not been identified at this time. Due to the uncertainty of the design of remediation, regulation, timing of the remediation and in the case of the Oregon Steel Mills site, pending litigation, liabilities for each of these sites have been recognized at their respective low end of the range of potential liability; the high end of the range could not be reasonably estimated at this time.

FRONT STREET SITE. The Front Street site was the former location of a gas manufacturing plant NW Natural operated (the former Portland Gas Manufacturing site, or PGM). At ODEQ’s request, NW Natural conducted a sediment and source control investigation and provided findings to ODEQ. In December 2015, an FS on the former Portland Gas Manufacturing site was completed. 

In July 2017, ODEQ issued the PGM ROD. The ROD specifies the selected remedy, which requires a combination of dredging, capping, treatment, and natural recovery. In addition, the selected remedy also requires institutional controls and long-term inspection and maintenance. Construction of the remedy began in July 2020 and was completed in October 2020. The second year of post-construction monitoring was completed in 2022 and demonstrated that the cap was intact and performing as designed. NW Natural has recognized an additional liability of $1.8 million associated with long-term monitoring and post-construction work.

OREGON STEEL MILLS SITE. Refer to "Legal Proceedings" below.

Environmental Cost Deferral and Recovery

NW Natural has authorizations in Oregon and Washington to defer costs related to remediation of properties that are owned or were previously owned by NW Natural. In Oregon, a Site Remediation and Recovery Mechanism (SRRM) is currently in place to recover prudently incurred costs allocable to Oregon customers, subject to an earnings test. On October 21, 2019, the WUTC authorized an Environmental Cost Recovery Mechanism (ECRM) for recovery of prudently incurred costs allocable to Washington customers beginning November 1, 2019. See Note 17 in the 2022 Form 10-K for a description of SRRM and ECRM collection processes.

The following table presents information regarding the total regulatory asset deferred:

	September 30,				December 31,
In thousands	2023		2022		2022
Deferred costs and interest (1)	$	49,899	$	47,011	$	47,666
Accrued site liabilities (2)	116,469		99,795		118,763
Insurance proceeds and interest	(50,380)		(54,678)		(54,784)
Total regulatory asset deferral(1)	$	115,988	$	92,128	$	111,645
Current regulatory assets(3)	7,047		9,461		7,392
Long-term regulatory assets(3)	108,941		82,667		104,253

(1)     Includes pre-review and post-review deferred costs, amounts currently in amortization, and interest, net of amounts collected from customers.

(2)    Excludes 3.3% of the Front Street site liability as the OPUC only allows recovery of 96.7% of costs for those sites allocable to Oregon, including those that historically served only Oregon customers. Amounts excluded from regulatory assets were $57 thousand at September 30, 2023, $34 thousand at September 30, 2022, and $43 thousand at December 31, 2022.

(3)    Environmental costs relate to specific sites approved for regulatory deferral by the OPUC and WUTC. In Oregon, NW Natural earns a carrying charge on cash amounts paid, whereas amounts accrued but not yet paid do not earn a carrying charge until expended. It also accrues a carrying charge on insurance proceeds for amounts owed to customers. In Washington, neither the cash paid for insurance proceeds received accrue a carrying charge. Current environmental costs represent remediation costs management expects to collect from customers in the next 12 months. Amounts included in this estimate are still subject to a prudence and earnings test review by the OPUC and do not include the $5.0 million tariff rider. The amounts allocable to Oregon are recoverable through NGD rates, subject to an earnings test.

Environmental Earnings Test

To the extent NW Natural earns at or below its authorized Return on Equity (ROE) as defined by the SRRM, remediation expenses and interest in excess of the $5.0 million tariff rider and $5.0 million insurance proceeds are recoverable through the SRRM. To the extent NW Natural earns more than its authorized ROE in a year, it is required to cover environmental expenses and interest on expenses greater than the $10.0 million with those earnings that exceed its authorized ROE.

Legal Proceedings

NW Holdings is not currently party to any direct claims or litigation, though in the future it may be subject to claims and litigation arising in the ordinary course of business.

NW Natural is subject to claims and litigation arising in the ordinary course of business including the matters discussed above. Although the final outcome of any of these legal proceedings cannot be predicted with certainty, including the matter relating to the Oregon Steel Mills site referenced below, NW Natural and NW Holdings do not expect that the ultimate disposition of any of these matters will have a material effect on their financial condition, results of operations or cash flows. See also Part II, Item 1, “Legal Proceedings".

Oregon Steel Mills Site

See Note 17 in the 2022 Form 10-K.

For additional information regarding other commitments and contingencies, see Note 16 in the 2022 Form 10-K.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is management’s assessment of NW Holdings' and NW Natural's financial condition, including the principal factors that affect results of operations. The discussion refers to the consolidated results for the three and nine months ended September 30, 2023 and 2022 of NW Holdings, the substantial majority of which consist of the operating results of NW Natural. When significant activity exists at NW Holdings that does not exist at NW Natural, additional disclosure has been provided. References in this discussion to "Notes" are to the Notes to Unaudited Consolidated Financial Statements in this report. A significant portion of the business results are seasonal in nature, and, as such, the results of operations for the three month period is not necessarily indicative of expected fiscal year results. Therefore, this discussion should be read in conjunction with NW Holdings' and NW Natural's 2022 Annual Report on Form 10-K, as applicable (2022 Form 10-K).

NW Natural's natural gas distribution activities are reported in the natural gas distribution (NGD) segment. The NGD segment also includes NWN Gas Reserves, which is a wholly-owned subsidiary of Energy Corp, the NGD-portion of NW Natural's Mist storage facility in Oregon, and NW Natural RNG Holding Company, LLC. NW Natural RNG Holding Company, LLC holds investments in Lexington Renewable Energy, LLC and Dakota City Renewable Energy LLC, which are accounted for under the equity method. Other activities aggregated and reported as other at NW Natural include the non-NGD storage activity at Mist as well as asset management services and the appliance retail center operations. Other activities aggregated and reported as other at NW Holdings include NNG Financial's investment in Kelso-Beaver Pipeline (KB Pipeline) and NWN Water's investment in Avion Water Company, Inc., which are accounted for under the equity method, NW Natural Renewables Holdings, LLC and its non-regulated renewable natural gas activities; and NWN Water, which through itself or its subsidiaries, owns and continues to pursue investments in the water, wastewater, and water services sectors. See Note 4 for further discussion of our business segment and other, as well as our direct and indirect wholly-owned subsidiaries.

NON-GAAP FINANCIAL MEASURES. In addition to presenting the results of operations and earnings amounts in total, certain financial measures are expressed in cents per share, which are non-GAAP financial measures. All references in this section to earnings per share (EPS) are on the basis of diluted shares. We use such non-GAAP financial measures to analyze our financial performance because we believe they provide useful information to our investors, analysts and creditors in evaluating our financial condition and results of operations. Our non-GAAP financial measures should not be considered a substitute for, or superior to, measures calculated in accordance with U.S. GAAP. Moreover, these non-GAAP financial measures have limitations in that they do not reflect all the items associated with the operations of the business as determined in accordance with GAAP. Other companies may calculate similarly titled non-GAAP financial measures differently than how such measures are calculated in this report, limiting the usefulness of those measures for comparative purposes. A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure is provided below.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Diluted earnings (loss) per share - Total(1)	$	(0.65)	$	(0.56)	$	1.37	$	1.14
Diluted earnings (loss) per share - NGD segment(2)	(0.66)		(0.66)		1.32		0.97
Diluted earnings per share - NW Holdings - other(2)	0.01		0.10		0.05		0.17

(1) Total Diluted EPS is equal to the sum of Diluted EPS - NGD segment and Diluted EPS - NW Holdings – other.

(2) Non-GAAP financial measure

EXECUTIVE SUMMARY

NW Holdings' financial results and highlights include:

•Reported a net loss of $23.7 million or $0.65 per share (diluted) for the third quarter of 2023, compared to a net loss of $19.6 million or $0.56 per share (diluted) in the prior year;

•Reported net income of $49.2 million or $1.37 per share (diluted) for the first nine months of 2023, compared to net income of $38.4 million or $1.14 per share (diluted) in the prior year;

•Added more than 33,000 gas and water utility connections during the past twelve months for a growth rate of 4.0% at September 30, 2023 mainly driven by strong water acquisitions;

•Received approval in Oregon and Washington for new rates related to the Purchased Gas Adjustment (PGA) mechanism, which includes estimated gas costs for the upcoming winter heating season;

•Invested over $240 million in our utility systems in the first nine months of 2023 in an effort to achieve greater reliability and resiliency; and

•Increased our dividend for the 68th consecutive year to an annual dividend rate of $1.95 per share.

Key quarter-to-date financial highlights for NW Holdings include:

	Three Months Ended September 30,
	2023				2022				QTD
In thousands, except per share data	Amount		Per Share		Amount		Per Share		Change
Consolidated net loss	$	(23,687)	$	(0.65)	$	(19,587)	$	(0.56)	$	(4,100)

Key quarter-to-date financial highlights for NW Natural include:

	Three Months Ended September 30,
	2023		2022		QTD
In thousands	Amount		Amount		Change
Consolidated net loss	$	(21,487)	$	(18,806)	$	(2,681)
Natural gas distribution margin	$	68,932	$	61,687	$	7,245

THREE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED TO SEPTEMBER 30, 2022.

Consolidated net loss increased $2.7 million at NW Natural primarily due to the following factors:

•$7.6 million increase in operations and maintenance expenses due to higher contract labor, information technology costs, amortization expense related to cloud computing arrangements and the amortization of deferred balances (which is mostly offset in revenues);

•$4.5 million increase in interest expense, net due to higher long-term debt balances; and

•$0.9 million increase in general taxes primarily driven by higher property taxes; partially offset by

•$7.2 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 2022-23 PGA and amortization of deferred balances (which is mostly offset in operations and maintenance expenses and interest expense); and

•$3.7 million increase in other income, net primarily due to interest income from invested cash and the equity portion of Allowance for Funds Used During Construction (AFUDC) and lower pension costs.

Consolidated net loss increased $4.1 million at NW Holdings primarily due to the following factors:

•$2.7 million increase in consolidated net loss at NW Natural as discussed above; and

•$1.4 million increase in other net loss primarily reflecting higher interest expense at the holding and water companies.

Key year-to-date financial highlights for NW Holdings include:

	Nine Months Ended September 30,
	2023				2022				YTD
In thousands, except per share data	Amount		Per Share		Amount		Per Share		Change
Consolidated net income	$	49,228	$	1.37	$	38,367	$	1.14	$	10,861

Key year-to-date financial highlights for NW Natural include:

	Nine Months Ended September 30,
	2023		2022		YTD
In thousands	Amount		Amount		Change
Consolidated net income	$	55,837	$	41,343	$	14,494
Natural gas distribution margin	$	396,472	$	333,797	$	62,675

NINE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED TO SEPTEMBER 30, 2022.

Consolidated net income increased $14.5 million at NW Natural primarily due to the following factors:

•$62.7 million increase in NGD segment margin driven by new rates in Oregon and Washington, amortization of deferred balances (which is mostly offset in operations and maintenance expenses and interest expense), and actual gas prices that were lower than what was estimated in the 2022-23 PGA and customer growth; and

•$10.9 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

•$30.5 million increase in operations and maintenance expenses due to the amortization of deferred balances, higher contract labor, higher compensation costs, information technology costs, and amortization expense related to cloud computing arrangements;

•$12.7 million increase in interest expense, net due to higher long-term debt balances;

•$5.4 million increase in income tax expense due to higher pre-tax income;

•$5.3 million increase in depreciation expense due to additional capital investments; and

•$4.6 million increase in general taxes primarily driven by higher property taxes.

Consolidated net income increased $10.9 million at NW Holdings primarily due to the following factors:

•$14.5 million increase in consolidated net income at NW Natural as discussed above; partially offset by

•$3.6 million decrease in other net income primarily reflecting higher interest expense at the holding and water companies.

CURRENT ECONOMIC CONDITIONS. We are evaluating and monitoring current economic conditions, which include but are not limited to: inflation, interest rates and rising commodity costs, recessionary pressures, banking environment and risk of further bank failure, heightened cybersecurity awareness, geopolitical uncertainty, including the ongoing conflicts in Europe and the Middle East, and supply chain disruptions. We have enhanced cybersecurity monitoring in response to reports that cybersecurity attacks have increased and may continue to increase. We have experienced some longer lead times on materials, including valves and meter parts, however through advanced planning we are carrying additional levels of inventory to support our operations. Our suppliers may be subject to lack of personnel or disruption in their own supply chain for materials, which could disrupt supplier performance or deliveries, and negatively impact our business. Developers and HVAC suppliers have reported longer lead times for furnaces and other HVAC equipment, which may affect the timing of placing new meters into service particularly those converting to natural gas. However, because any supply chain issues are being experienced by vendors who supply directly to customers and not us, we do not have visibility of and are not able to quantify the number of new meters affected at this time. We are continuing to actively monitor supply chain disruptions, and have formulated and continue to evaluate contingency plans as necessary.

NW Holdings and NW Natural continue to monitor interest rates and financing options for all of its businesses. Interest rates increased in 2022 and 2023 resulting from actions taken by the U.S. Federal Reserve to increase short-term rates as inflation remains elevated. NW Natural generally recovers interest expense on its long-term debt through its authorized cost of capital. Certain working capital items, such as the cost of gas, are deferred and accrue interest in Oregon and Washington. Additionally, short-term debt is incorporated in the capital structure in Washington. NW Natural Water's regulated water and wastewater utilities recover interest expense from long-term debt through their respective authorized cost of capital.

The mid-sized regional bank failures in March 2023 have created uncertainty in the banking markets, causing many investors to look for alternative investment options. While this has had widespread impacts on the economy, neither NW Holdings nor NW Natural were directly impacted. We currently have a diverse group of eight banks that participate in our revolving credit facilities. We additionally have two banks that provide deposit services. All of our current banking counterparties currently have solid investment grade credit ratings. We will continue to monitor this situation and its impact on our business.

See the discussion in "Results of Operations", "Regulatory Matters" and "Financial Condition" below for additional detail regarding all significant activity that occurred during the third quarter of 2023.

DIVIDENDS

Dividend highlights include:  

	Three Months Ended September 30,				Nine Months Ended September 30,				QTD Change		YTD Change
Per common share	2023		2022		2023		2022
Dividends paid	$	0.4850	$	0.4825	$	1.4550	$	1.4475	$	0.0025	$	0.0075

In October 2023, the Board of Directors of NW Holdings declared a quarterly dividend on NW Holdings common stock of $0.4875 per share. The dividend is payable on November 15, 2023 to shareholders of record on October 31, 2023, reflecting an annual indicated dividend rate of $1.95 per share.

RESULTS OF OPERATIONS

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. In Oregon, NW Natural has a conservation tariff (also called the decoupling mechanism), which adjusts margin up or down each month through a deferred regulatory accounting adjustment designed to offset changes resulting from increases or decreases in average use by residential and commercial customers. NW Natural also has a weather normalization tariff in Oregon, WARM, which adjusts customer bills up or down to offset changes in margin resulting from above- or below-average temperatures during the winter heating season. Both mechanisms are designed to reduce, but not eliminate, the volatility of customer bills and natural gas distribution earnings. For additional information, see Part II, Item 7 "Results of Operations—Regulatory Matters—Rate Mechanisms" in NW Natural's 2022 Form 10-K. In addition to NW Natural's local gas distribution business, the NGD segment also includes the portion of the Mist underground storage facility used to serve NGD customers, the North Mist gas storage expansion, NWN Gas Reserves, which is a wholly owned subsidiary of Energy Corp., and NW Natural RNG Holding Company, LLC.

The NGD business is primarily seasonal in nature due to higher gas usage by residential and commercial customers during the cold winter heating months. Other categories of customers experience seasonality in their usage but to a lesser extent. Seasonality affects the comparability of the results of operations of the NGD business across quarters but not across years.

NGD segment highlights include:  

	Three Months Ended September 30,				Nine Months Ended September 30,				QTD Change		YTD Change
In thousands, except EPS data	2023		2022		2023		2022
NGD net income (loss)	$	(24,160)	$	(23,016)	$	47,520	$	32,531	$	(1,144)	$	14,989
Diluted EPS - NGD segment	$	(0.66)	$	(0.66)	$	1.32	$	0.97	$	—	$	0.35
Gas sold and delivered (in therms)	158,694		158,561		858,109		855,500		133		2,609
NGD margin(1)	$	68,932	$	61,687	$	396,472	$	333,797	$	7,245	$	62,675

(1) See Natural Gas Distribution Margin Table below for additional detail.

THREE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED TO SEPTEMBER 30, 2022. The primary factors contributing to the $1.1 million increase in NGD net loss were as follows:

•$7.5 million increase in NGD operations and maintenance expenses due to higher contract labor, information technology costs, amortization expense related to cloud computing arrangements and the amortization of deferred balances (which are mostly offset in revenues); and

•$4.5 million increase in interest expense, net primarily due to higher long-term debt balances; partially offset by

•$7.2 million increase in NGD margin due to:

•$4.5 million increase due to new customer rates in Oregon and Washington that went into effect on November 1, 2022;

•$1.1 million increase due to actual gas prices that were lower than what was estimated in the 2022-23 PGA; and

•$1.0 million increase due to the amortization of deferred balances primarily related to COVID-19, cybersecurity, and ERP upgrades (which is mostly offset in operations and maintenance expenses and interest expense); and

•$3.9 million increase in other income, net driven by interest income from invested cash and the equity portion of AFUDC and lower pension costs;

For the three months ended September 30, 2023, total NGD volumes sold and delivered were relatively flat compared to the same period in 2022 primarily due to average weather in the third quarter of 2023 and 2022.

NINE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED TO SEPTEMBER 30, 2022. The primary factors contributing to the $15.0 million, or $0.35 per share, increase in NGD net income were as follows:

•$62.7 million increase in NGD margin due to:

•$41.3 million increase due to new customer rates in Oregon and Washington that went into effect on November 1, 2022;

•$8.0 million increase due to the amortization of deferred balances primarily related to COVID-19, cybersecurity, and ERP upgrades (which is mostly offset in operations and maintenance expenses and interest expense);

•$6.6 million increase due to actual gas prices that were lower than what was estimated in the 2022-23 PGA;

•$4.2 million increase driven by customer growth; and

•$2.5 million increase due to colder than average weather for customers not covered under the weather normalization mechanism; and

•$11.0 million increase in other income, net driven by interest income from invested cash and the equity portion of AFUDC and lower pension costs; partially offset by

•$30.8 million increase in operations and maintenance expenses due to the amortization of deferred balances (which is mostly offset in revenues), higher contract labor, compensation costs, information technology costs, and amortization expense related to cloud computing arrangements;

•$12.7 million increase in interest expense, net primarily due to higher long-term debt balances;

•$5.3 million increase in income tax expense due to higher pre-tax income; and

•$5.3 million increase in depreciation expense due to additional capital investments in the distribution system, including several significant information technology projects that were placed into service in September 2022.

For the nine months ended September 30, 2023, total NGD volumes sold and delivered increased 2.6 million therms over the same period in 2022 primarily due to 2% colder than average weather in the first nine months of 2023 compared to 3% warmer than average weather in the prior period.

NATURAL GAS DISTRIBUTION MARGIN TABLE. The following table summarizes the composition of NGD gas volumes, revenues, and cost of sales:

	Three Months Ended September 30,				Nine Months Ended September 30,						Favorable/ (Unfavorable)
In thousands, except degree day and customer data	2023		2022		2023			2022			QTD Change			YTD Change
NGD volumes (therms)
Residential and commercial sales	55,555		53,929		509,197			495,303			1,626			13,894
Industrial sales and transportation	103,139		104,632		348,912			360,197			(1,493)			(11,285)
Total NGD volumes sold and delivered	158,694		158,561		858,109			855,500			133			2,609
Operating Revenues
Residential and commercial sales	$	98,327	$	78,459	$	705,016		$	552,858		$	19,868		$	152,158
Industrial sales and transportation	20,828		19,581		73,210			60,380			1,247			12,830
Other distribution revenues	737		351		3,715			1,367			386			2,348
Other regulated services	4,732		4,904		14,167			14,722			(172)			(555)
Total operating revenues	124,624		103,295		796,108			629,327			21,329			166,781
Less: Cost of gas	49,235		36,258		357,530			261,678			(12,977)			(95,852)
Less: Environmental remediation expense	1,032		975		8,547			7,945			(57)			(602)
Less: Revenue taxes	5,425		4,375		33,559			25,907			(1,050)			(7,652)
NGD margin	$	68,932	$	61,687	$	396,472		$	333,797		$	7,245		$	62,675
Margin(1)
Residential and commercial sales	$	55,260	$	49,799	$	349,575		$	296,462		$	5,461		$	53,113
Industrial sales and transportation	7,613		7,067		25,349			24,058			546			1,291
Gain (loss) from gas cost incentive sharing	649		(420)		3,723			(2,868)			1,069			6,591
Other margin	677		339		3,660			1,427			338			2,233
Other regulated services	4,733		4,902		14,165			14,718			(169)			(553)
NGD Margin	$	68,932	$	61,687	$	396,472		$	333,797		$	7,245		$	62,675
Degree days(2)
Average(3)	10		9		1,629			1,640			1			(11)
Actual	—		—		1,658			1,591			—		%	4		%
Percent colder (warmer) than average weather(4)	NM		NM		2		%	(3)		%

	As of September 30,
	2023	2022	Change	Growth
NGD Meters - end of period:
Residential meters	726,021	720,846	5,175	0.7%
Commercial meters	68,669	68,587	82	0.1%
Industrial meters	1,064	1,078	(14)	(1.3)%
Total number of meters	795,754	790,511	5,243	0.7%

(1)    Amounts reported as NGD margin for each category of meters are operating revenues less cost of gas, environmental remediation expense and revenue taxes, subject to earnings test considerations, as applicable.

(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. Beginning November 1, 2022, average weather is calculated over

the period June 1, 1996 through May 31, 2021, as determined in NW Natural's 2022 Oregon general rate case. From November 1, 2020

through October 31, 2022, average weather was calculated over the period June 1, 1994 through May 31, 2019, as determined in NW

Natural’s 2020 Oregon general rate case.

(4)    NM indicates that the calculated value is not meaningful.

Residential and Commercial Sales

Residential and commercial sales highlights include:

	Three Months Ended September 30,				Nine Months Ended September 30,				QTD Change		YTD Change
In thousands	2023		2022		2023		2022
Volumes (therms)
Residential sales	29,715		28,394		312,155		304,739		1,321		7,416
Commercial sales	25,840		25,535		197,042		190,564		305		6,478
Total volumes	55,555		53,929		509,197		495,303		1,626		13,894
Operating revenues
Residential sales	$	63,191	$	50,160	$	469,356	$	374,635	$	13,031	$	94,721
Commercial sales	35,136		28,299		235,660		178,223		6,837		57,437
Total operating revenues	$	98,327	$	78,459	$	705,016	$	552,858	$	19,868	$	152,158
NGD margin
Residential NGD margin	$	38,257	$	34,620	$	251,036	$	214,498	$	3,637	$	36,538
Commercial NGD margin	17,003		15,179		98,539		81,964		1,824		16,575
Total NGD margin	$	55,260	$	49,799	$	349,575	$	296,462	$	5,461	$	53,113

THREE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED TO SEPTEMBER 30, 2022. Residential and commercial margin increased $5.5 million compared to the prior period. The increase was primarily driven by new customer rates in Oregon and Washington that took effect on November 1, 2022 and 0.7% growth in residential meters. Volumes increased 1.6 million therms due to higher usage by residential customers.

NINE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED TO SEPTEMBER 30, 2022. Residential and commercial margin increased $53.1 million compared to the prior period. The increase was primarily driven by new customer rates in Oregon and Washington that took effect on November 1, 2022 and 0.7% growth in residential meters. Volumes increased 13.9 million therms due to higher usage driven by comparatively colder weather.

Industrial Sales and Transportation

Industrial sales and transportation highlights include:

	Three Months Ended September 30,				Nine Months Ended September 30,				QTD Change		YTD Change
In thousands	2023		2022		2023		2022
Volumes (therms)
Firm and interruptible sales	20,733		22,606		75,355		75,795		(1,873)		(440)
Firm and interruptible transportation	82,406		82,026		273,557		284,402		380		(10,845)
Total volumes - sales and transportation	103,139		104,632		348,912		360,197		(1,493)		(11,285)
NGD margin
Firm and interruptible sales	$	2,897	$	2,671	$	9,942	$	9,561	$	226	$	381
Firm and interruptible transportation	4,716		4,396		15,407		14,497		320		910
Total margin - sales and transportation	$	7,613	$	7,067	$	25,349	$	24,058	$	546	$	1,291

THREE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED TO SEPTEMBER 30, 2022. Industrial sales and transportation margin increased $0.5 million compared to the prior period primarily driven by new rates in Oregon and Washington that took effect on November 1, 2022, partially offset by lower sales volumes. Volumes decreased 1.5 million therms primarily due to lower usage from multiple customers, most notably in the glass, stone and clay, pulp and paper, chemical manufacturing, and primary metals industries.

NINE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED TO SEPTEMBER 30, 2022. Industrial sales and transportation margin increased $1.3 million compared to the prior period primarily driven by new rates in Oregon and Washington that took effect on November 1, 2022, partially offset by lower transportation volumes. Volumes decreased 11.3 million therms primarily due to lower usage from multiple customers, most notably in the chemical manufacturing, primary metals, and food processing industries, partially offset by higher usage from customers in the forest products industry.

Cost of Gas

Cost of gas highlights include:

	Three Months Ended September 30,				Nine Months Ended September 30,				QTD Change		YTD Change
In thousands	2023		2022		2023		2022
Cost of gas	$	49,235	$	36,258	$	357,530	$	261,678	$	12,977	$	95,852
Volumes sold (therms)(1)	76,288		76,535		584,552		571,098		(247)		13,454
Average cost of gas (cents per therm)	$	0.65	$	0.47	$	0.61	$	0.46	$	0.18	$	0.15
Gain (loss) from gas cost incentive sharing(2)	$	649	$	(420)	$	3,723	$	(2,868)	$	1,069	$	6,591

(1)This calculation excludes volumes delivered to industrial transportation customers.

(2)    For additional information regarding NW Natural's gas cost incentive sharing mechanism, see Part II, Item 7 "Results of Operations—Regulatory Matters—Rate Mechanisms—Gas Reserves" in NW Natural's 2022 Form 10-K.

THREE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED TO SEPTEMBER 30, 2022. Cost of gas increased $13.0 million primarily due to a 38% increase in average cost of gas with the majority of these higher gas costs embedded in the 2022-23 PGA. Volumes sold decreased 0.2 million therms driven by lower usage from industrial customers, partially offset by higher usage from residential customers.

NINE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED TO SEPTEMBER 30, 2022. Cost of gas increased $95.9 million primarily due to a 33% increase in average cost of gas and a 2% increase in volumes sold. The majority of these higher gas costs were embedded in the 2022-23 PGA. Volumes sold increased 13.5 million therms driven by comparatively colder weather and customer growth.

Other Regulated Services Margin

Other regulated services margin highlights include:

	Three Months Ended September 30,				Nine Months Ended September 30,				QTD Change		YTD Change
In thousands	2023		2022		2023		2022
North Mist storage services	$	4,662	$	4,858	$	13,987	$	14,573	$	(196)	$	(586)
Other services	71		44		178		145		27		33
Total other regulated services	$	4,733	$	4,902	$	14,165	$	14,718	$	(169)	$	(553)

THREE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED TO SEPTEMBER 30, 2022. Other regulated services margin decreased $0.2 million compared to the prior period. The decrease is due to lower depreciation rates for the North Mist facility beginning November 1, 2022. See Note 7 for information regarding North Mist expansion lease accounting.

NINE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED TO SEPTEMBER 30, 2022. Other regulated services margin decreased $0.6 million compared to the prior period. The decrease is due to lower depreciation rates for the North Mist facility beginning November 1, 2022.

Other

Other activities aggregated and reported as other at NW Holdings include NNG Financial's investment in Kelso-Beaver Pipeline (KB Pipeline); NW Natural Renewables Holdings, LLC and its non-regulated renewable natural gas activities; NWN Water, which owns and continues to pursue investments in the water, wastewater, and water services sectors; and NWN Water's investment in Avion Water Company, Inc. (Avion Water). Other activities aggregated and reported as other at NW Natural include the non-NGD storage activity at Mist as well as asset management services and the appliance retail center operations. See Note 4 for further discussion of our business segment and other, as well as our direct and indirect wholly-owned subsidiaries. See Note 13 for information on our Avion Water investment.

The following table presents the results of activities aggregated and reported as other for both NW Holdings and NW Natural:

	Three Months Ended September 30,				Nine Months Ended September 30,				QTD Change		YTD Change
In thousands, except EPS data	2023		2022		2023		2022
NW Natural other - net income	$	2,673	$	4,210	$	8,317	$	8,812	$	(1,537)	$	(495)
Other NW Holdings activity	(2,200)		(781)		(6,609)		(2,976)		(1,419)		(3,633)
NW Holdings other - net income	$	473	$	3,429	$	1,708	$	5,836	$	(2,956)	$	(4,128)
Diluted earnings per share - NW Holdings - other	$	0.01	$	0.10	$	0.05	$	0.17	$	(0.09)	$	(0.12)

THREE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED TO SEPTEMBER 30, 2022. Other net income decreased $1.5 million at NW Natural and $3.0 million at NW Holdings. The decrease at NW Natural was primarily due to lower asset management revenue from favorable market conditions in the prior period that did not recur. The decrease at NW Holdings was driven by higher interest expense at the holding and water companies.

NINE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED TO SEPTEMBER 30, 2022. Other net income decreased $0.5 million at NW Natural and $4.1 million at NW Holdings. The decrease at NW Natural was primarily due to lower sales at the appliance retail center. The decrease at NW Holdings was driven by higher interest expense at the holding and water companies, partially offset by a gain recognized from a settlement agreement.

Consolidated Operations

Operations and Maintenance

Operations and maintenance highlights include:

	Three Months Ended September 30,				Nine Months Ended September 30,				QTD		YTD
In thousands	2023		2022		2023		2022		Change		Change
NW Natural	$	53,494	$	45,858	$	179,121	$	148,614	$	7,636	$	30,507
Other NW Holdings operations and maintenance	8,030		4,887		21,039		12,791		3,143		8,248
NW Holdings	$	61,524	$	50,745	$	200,160	$	161,405	$	10,779	$	38,755

THREE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED TO SEPTEMBER 30, 2022. Operations and maintenance expense increased $7.6 million at NW Natural. The increase at NW Natural was driven by the following:

•$2.3 million increase in contract labor for safety and reliability and support for information technology system upgrades;

•$2.1 million increase in information technology licensing costs and maintenance;

•$1.4 million increase in amortization expense related to cloud computing arrangements; and

•$1.1 million increase due to the amortization of deferred balances (which is mostly offset in revenues) primarily related to COVID-19, cybersecurity and information technology system upgrades.

Operations and maintenance expense increased $10.8 million at NW Holdings primarily due to the following:

•$7.6 million increase in operations and maintenance expense at NW Natural as discussed above; and

•$3.1 million increase in other NW Holdings operations and maintenance expense due to costs associated with recently acquired water and wastewater subsidiaries and business development costs at the holding company.

NINE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED TO SEPTEMBER 30, 2022. Operations and maintenance expense increased $30.5 million at NW Natural primarily due to the following:

•$7.5 million increase due to the amortization of deferred balances (which is mostly offset in revenues) primarily related to COVID-19, cybersecurity and information technology system upgrades;

•$7.1 million increase in contract labor for safety and reliability and support for information technology system upgrades;

•$6.5 million increase related to higher compensation costs;

•$5.6 million increase in information technology licensing costs and maintenance; and

•$3.9 million increase in amortization expense related to cloud computing arrangements.

Operations and maintenance expense increased $38.8 million at NW Holdings primarily due to the following:

•$30.5 million increase in operations and maintenance expense at NW Natural as discussed above; and

•$8.2 million increase in other NW Holdings operations and maintenance expense primarily due to costs associated with recently acquired water and wastewater subsidiaries and business development costs at the holding company.

Depreciation

Depreciation highlights include:

	Three Months Ended September 30,				Nine Months Ended September 30,				QTD		YTD
In thousands	2023		2022		2023		2022		Change		Change
NW Natural	$	28,446	$	28,201	$	88,470	$	83,166	$	245	$	5,304
Other NW Holdings depreciation	1,615		825		4,349		2,399		790		1,950
NW Holdings	$	30,061	$	29,026	$	92,819	$	85,565	$	1,035	$	7,254

THREE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED TO SEPTEMBER 30, 2022. Depreciation expense increased $0.2 million at NW Natural primarily due to additional capital investments in the distribution system, such as installing new mains and services and replacing regulating equipment, as well as upgrading and improving structures.

Depreciation expense increased $1.0 million at NW Holdings, primarily due to a $0.8 million increase in other NW Holdings depreciation related to water and wastewater subsidiaries and a $0.2 million increase at NW Natural as discussed above.

NINE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED TO SEPTEMBER 30, 2022. Depreciation expense increased $5.3 million at NW Natural primarily due to additional capital investments in the distribution system, such as installing new mains and services and replacing regulating equipment, as well as upgrading and improving structures. In addition, NW Natural placed several significant information technology projects into service in September 2022.

Depreciation expense increased $7.3 million at NW Holdings, primarily due to a $2.0 million increase in other NW Holdings depreciation related to water and wastewater subsidiaries and a $5.3 million increase at NW Natural as discussed above.

Other Income (Expense), Net

Other income (expense), net highlights include:

	Three Months Ended September 30,				Nine Months Ended September 30,				QTD		YTD
In thousands	2023		2022		2023		2022		Change		Change
NW Natural other income (expense), net	$	4,818	$	1,161	$	11,095	$	197	$	3,657	$	10,898
Other NW Holdings activity	186		475		2,133		711		(289)		1,422
NW Holdings other income (expense), net	$	5,004	$	1,636	$	13,228	$	908	$	3,368	$	12,320

THREE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED TO SEPTEMBER 30, 2022. Other income, net increased $3.7 million at NW Natural primarily due to interest income from invested cash and the equity portion of AFUDC and lower pension costs. Costs related to our defined benefit pension plan for the three months ended September 30, 2023 decreased compared to the prior year due to a decrease in amortization of actuarial losses. Our 2023 pension expense does not include any amortization of losses as the unrecognized losses are within a calculated corridor.

Other income, net increased $3.4 million at NW Holdings driven by the increase at NW Natural discussed above.

Other income (expense), net primarily consists of regulatory interest, pension and other postretirement non-service costs, gains from company-owned life insurance, interest income and donations.

NINE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED TO SEPTEMBER 30, 2022. Other income, net increased $10.9 million at NW Natural primarily due to interest income from invested cash and the equity portion of AFUDC and lower pension costs. Costs related to our defined benefit pension plan for the nine months ended September 30, 2023 decreased compared to the prior year due to a decrease in amortization of actuarial losses.

Other income, net increased $12.3 million at NW Holdings driven by the increase at NW Natural discussed above and a $2.7 million gain recognized from a settlement agreement with a third party to settle outstanding receivables, partially offset by contributions to fund community outreach initiatives at NW Holdings.

Interest Expense, Net 

Interest expense, net highlights include:

	Three Months Ended September 30,				Nine Months Ended September 30,				QTD		YTD
In thousands	2023		2022		2023		2022		Change		Change
NW Natural	$	15,597	$	11,128	$	45,236	$	32,558	$	4,469	$	12,678
Other NW Holdings interest expense, net	3,809		1,926		11,440		3,598		1,883		7,842
NW Holdings	$	19,406	$	13,054	$	56,676	$	36,156	$	6,352	$	20,520

THREE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED TO SEPTEMBER 30, 2022. Interest expense, net increased $4.5 million at NW Natural primarily due to higher interest expense on a higher level of long-term debt, partially offset by a lower level of short-term debt.

Interest expense, net increased $6.4 million NW Holdings due to the increase at NW Natural discussed above and higher interest expense on a higher level of long-term debt at NW Holdings and NWN Water.

NINE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED TO SEPTEMBER 30, 2022. Interest expense, net increased $12.7 million at NW Natural primarily due to higher interest expense on a higher level of long-term debt, partially offset by a lower level of short-term debt.

Interest expense, net increased $20.5 million at NW Holdings due to the increase at NW Natural discussed above and higher interest expense on a higher level of long-term debt at NW Holdings and NWN Water.

Income Tax Expense 

Income tax expense highlights include:

	Three Months Ended September 30,				Nine Months Ended September 30,				QTD		YTD
In thousands	2023		2022		2023		2022		Change		Change
NW Natural income tax (benefit) expense	$	(7,707)	$	(6,455)	$	19,037	$	13,678	$	(1,252)	$	5,359
NW Holdings income tax (benefit) expense	$	(8,292)	$	(6,758)	$	17,098	$	12,635	$	(1,534)	$	4,463

THREE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED TO SEPTEMBER 30, 2022. Income tax benefit increased $1.3 million at NW Natural and $1.5 million at NW Holdings. The increase in income tax benefit is primarily due to a higher pre-tax loss in the current period compared to the prior year.

NINE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED TO SEPTEMBER 30, 2022. Income tax expense increased $5.4 million at NW Natural and $4.5 million at NW Holdings. The increase in income tax expense is primarily due to higher pre-tax income in the current period compared to the prior year.

Regulatory Matters

For additional information, see Part II, Item 7 "Results of Operations—Regulatory Matters" in the 2022 Form 10-K.

Regulation and Rates 

NATURAL GAS DISTRIBUTION. NW Natural's natural gas distribution business is subject to regulation by the OPUC and WUTC with respect to, among other matters, rates and terms of service, systems of accounts, and issuances of securities by NW Natural. At September 30, 2023, approximately 88% of NGD customers were located in Oregon, with the remaining 12% in Washington. Earnings and cash flows from natural gas distribution operations are largely determined by rates set in general rate cases and other proceedings in Oregon and Washington. They are also affected by weather, the local economies in Oregon and Washington, the pace of customer growth in the residential, commercial, and industrial markets, legislation and policy, customer preferences and NW Natural's ability to remain price competitive, control expenses, and obtain reasonable and timely regulatory recovery of its natural gas distribution-related costs, including operating expenses and investment costs in plant and other regulatory assets. See "Most Recent Completed Rate Cases" below.

MIST INTERSTATE GAS STORAGE. NW Natural's interstate storage activity at Mist is subject to regulation by the OPUC, WUTC, and the Federal Energy Regulatory Commission (FERC) with respect to, among other matters, rates and terms of service. The OPUC also regulates intrastate storage services at Mist, while FERC regulates interstate storage services at Mist. The FERC uses a maximum cost of service model which allows for gas storage prices to be set at or below the cost of service as approved by each agency in their last regulatory filing. The OPUC Schedule 80 rates are tied to the FERC rates, and are updated whenever NW Natural modifies FERC maximum rates.

OTHER. 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.

Most Recent Completed Rate Cases  

OREGON. On October 24, 2022, the OPUC issued an order for rates effective November 1, 2022, which authorized a return on equity of 9.4%, a cost of capital of 6.836%, and a capital structure of 50% common equity and 50% long-term debt. After adjustments provided in the order, the order increased the revenue requirement by $59.4 million, and included a rate base of $1.76 billion, or an increase of $320 million since the last rate case. The OPUC also ordered an adjustment to NW Natural’s current line extension allowance methodology to a five times margin approach (which for an average residential customer is currently approximately $2,300), declining to four times margin on November 1, 2023, and three times margin on November 1, 2024. The OPUC further ordered that the costs NW Natural sought to recover related to its Lexington RNG project were reasonable and prudently incurred under Senate Bill 98 and adopted an automatic adjustment clause that allows for NW Natural’s RNG project costs to be added to rates annually on November 1st.

From November 1, 2020 through October 31, 2022, the OPUC authorized rates to customers based on an ROE of 9.4% and a cost of capital of 6.965% with a capital structure of 50% common equity and 50% long-term debt. The OPUC also authorized NW Natural to recover the expense associated with the Oregon Corporate Activity Tax (CAT) as a component of base rates. See "Corporate Activity Tax" in the 2022 Form 10-K.

WASHINGTON. On October 21, 2021, the WUTC issued an order concluding NW Natural's general rate case filed in December 2020 (WUTC Order). The WUTC Order provides for an annual revenue requirement increase over two years, consisting of a 6.4% or $5.0 million increase in the first year beginning November 1, 2021 (Year One), and a 3.5% or $3.0 million increase in the second year beginning November 1, 2022 (Year Two). The increase is based on the following assumptions:

•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 WUTC Order does not specify the underlying inputs to the cost of capital, including capital structure and return on equity. New rates authorized by the WUTC Order were effective November 1, 2021. In September 2023, NW Natural received a letter of compliance from the WUTC acknowledging that the Year Two rates are no longer subject to review and refund. The WUTC also authorized the recovery of environmental remediation expenses allocable to Washington customers through an Environmental Cost Recovery Mechanism (ECRM) and directed NW Natural to provide federal tax reform benefits to customers. See "Rate Mechanisms - Environmental Cost Deferral and Recovery - Washington ECRM" below.

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. On October 12, 2018, NW Natural filed a rate petition with FERC for revised cost-based maximum rates, which incorporated the federal corporate income tax rate. The rates were effective beginning November 1, 2018. NW Natural filed a rate petition with the FERC on August 25, 2023 and the revised rates were effective beginning September 1, 2023.

NW Natural continuously evaluates the need for rate cases in its jurisdictions.

Rate Mechanisms

During 2023 and 2022, NW Natural's key approved rates and recovery mechanisms for each service area included:

	Oregon		Washington
	2022 Rate Case (effective 11/1/2022)	2020 Rate Case (effective 11/1/2020)	2021 Rate Case (effective 11/1/2021)
Authorized Rate Structure:
Return on Equity	9.4%	9.4%	**
Rate of Return	6.8%	7.0%	6.8%
Debt/Equity Ratio	50%/50%	50%/50%	**
Key Regulatory Mechanisms:
Purchased Gas Adjustment (PGA)	X	X	X
Gas Cost Incentive Sharing	X	X
Decoupling	X	X
Weather Normalization (WARM)	X	X
RNG Automatic Adjustment Clause	X
Environmental Cost Recovery	X	X	X
Interstate Storage and Asset Management Sharing	X	X	X

** The WUTC Order does not specify the underlying inputs to the cost of capital, including capital structure and return on equity.

PURCHASED GAS ADJUSTMENT. Rate changes are established for NW Natural each year under purchased gas adjustment (PGA) mechanisms in Oregon and Washington to reflect changes in the expected cost of natural gas commodity purchases. The PGA filings include gas costs for spot purchases, term contract supplies, financial hedges, the production of gas reserves, interstate 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.

Included in the 2022-23 PGA, the OPUC and WUTC approved a new customer rate mitigation program to address higher gas costs, which includes a temporary bill credit for NW Natural’s residential customers from November 2022 to March 2023, with deferral of the temporary bill credit to be recovered in warmer months when customers typically see lower bills. As of September 30, 2023, the amount deferred to a regulatory asset related to the bill credit that remains to be collected from customers was approximately $9.7 million. The residual balance at October 31, 2023 will be collected from customers in the 2023-24 PGA year.

In September 2023, NW Natural filed its annual PGAs and received OPUC and WUTC approval in October 2023. PGA rate changes were effective November 1, 2023. Rates may vary between states due to different rate structures, rate mechanisms and hedging policies.

Each year, NW Natural hedges gas prices on a portion of NW Natural's annual sales requirement based on normal weather, including both physical and financial hedges. As of September 30, 2023, NW Natural's forecasted sales volume was hedged at approximately 78% in total for the 2023-24 gas year, including 63% in financial hedges and 15% in physical gas supplies. The total hedged was approximately 81% in Oregon and 55% in Washington.

For the subsequent two gas years, NW Natural is hedged in total between 20% and 39% for annual requirements, which consists of between 22% and 44% in Oregon and 0% in Washington. Hedge levels are subject to change based on actual load volumes, which depend to a certain extent on weather, economic conditions, and estimated gas reserve production. Also, gas storage inventory levels may increase or decrease with storage expansion, changes in storage contracts with third parties, variations in the heat content of the gas, and/or storage recall by NW Natural. We will continue to monitor gas prices as we fill storage and look at hedging plans for future gas years. Gas purchases and hedges entered into for the upcoming PGA year will be included in the Company’s PGA filings in Oregon and Washington.

Under the current PGA mechanism in Oregon, there is an incentive sharing provision whereby NW Natural is required to select each year an 80% deferral or a 90% deferral of higher or lower actual gas costs compared to estimated PGA prices, such that the impact on NW Natural's current earnings from the incentive sharing is either 20% or 10% of the difference between actual and estimated gas costs, respectively. For the 2023-24 and 2022-23 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.

CLIMATE COMMITMENT ACT. Washington has enacted the Climate Commitment Act (CCA), which establishes a comprehensive program that includes an overall limit for GHG emissions from major sources in the state that declines yearly. The program began January 1, 2023. In October 2023, NW Natural filed a proposed tariff for a CCA cost recovery mechanism with a requested rate effective date of January 1, 2024. Under this mechanism, NW Natural would embed a forecast of CCA costs and difference between forecasted and actual costs in the following year. Additionally, under the proposed tariff, proceeds from the sale of allowances, which is required under the CCA, would be used to offset CCA compliance costs for low-income customers. Any remaining proceeds would benefit other customers through fixed bill credits or use in other carbon reduction programs.

Additionally in October 2023, NW Natural filed a request to modify its approved CCA deferral requesting interest to be accrued based on net cash for the purchase of allowance and recovery from customers. Interest would continue to be accrued on the balance for proceeds received from the sale of allowances.

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. Under this provision, if NW Natural selects the 80% deferral gas cost option, then NW Natural retains all earnings up to 150 basis points above the currently authorized ROE. If NW Natural selects the 90% deferral option, then it retains all earnings up to 100 basis points above the currently authorized ROE. For the 2023-24 and 2022-23 gas years, NW Natural selected the 90% deferral option. The ROE threshold is subject to adjustment annually based on movements in long-term interest rates. For calendar year 2022, the ROE threshold was 10.40%. NW Natural filed the 2022 earnings test in April 2023, indicating no customer refund adjustment based on results. NW Natural does not expect a customer refund adjustment for 2023 based on results of the earnings test.

GAS RESERVES. In 2011, the OPUC approved the Encana gas reserves transaction to provide long-term gas price protection for NGD business customers and determined costs under the agreement would be recovered on an ongoing basis through the annual PGA mechanism. Gas produced from NW Natural's interests is sold at then prevailing market prices, and revenues from such sales, net of associated operating and production costs and amortization, are included in cost of gas. The cost of gas, including a carrying cost for the rate base investment made under the original agreement, is included in NW Natural's annual Oregon PGA filing, which allows NW Natural to recover these costs through customer rates. The net investment under the original agreement earns a rate of return.

In 2014, NW Natural amended the original gas reserves agreement in response to Encana's sale of its interest in the Jonah field located in Wyoming to Jonah Energy. Under the amended agreement with Jonah Energy, NW Natural has the option to invest in additional wells on a well-by-well basis with drilling costs and resulting gas volumes shared at the amended proportionate working interest for each well in which NW Natural invests. Volumes produced from the additional wells drilled after the amended agreement are included in NW Natural's Oregon PGA at a fixed rate of $0.4725 per therm. NW Natural has not participated in additional wells since 2014.

DECOUPLING. In Oregon, NW Natural has a decoupling mechanism. Decoupling is intended to break the link between earnings and the quantity of gas consumed by customers, removing any financial incentive to discourage customers’ efforts to conserve energy. This mechanism employs a use-per-customer decoupling calculation, which adjusts margin revenues to account for the difference between actual and expected customer volumes. The margin adjustment resulting from differences between actual and expected volumes under the decoupling component is recorded to a deferral account, which is included in the annual PGA filing. The Oregon decoupling baseline usage per customer was reset in the 2020 Oregon general rate case.

WARM. In Oregon, NW Natural has an approved weather normalization mechanism (WARM), which is applied to residential and small commercial customer bills. This mechanism is designed to help stabilize the collection of fixed costs by adjusting residential and small commercial customer billings based on temperature variances from average weather, with rate decreases when the weather is colder than average and rate increases when the weather is warmer than average. The mechanism is applied to bills from December through mid-May of each heating season. The mechanism adjusts the margin component of customers’ rates to reflect average weather, which uses the 25-year average temperature for each day of the billing period. 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, in the PGA the following year. Residential and small commercial customers in Oregon are allowed to opt out of the weather normalization mechanism, and as of September 30, 2023, 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. See "Business Segment—Natural Gas Distribution" below.

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 approved terms include, among other things, an annual election period, special pricing provisions for out-of-cycle changes, and a requirement that industrial customers complete the term of their service election under NW Natural's annual PGA tariff.

ENVIRONMENTAL COST DEFERRAL AND RECOVERY. NW Natural has authorizations in Oregon and Washington to defer costs related to remediation of properties that are owned or were previously owned by NW Natural. In Oregon, a Site Remediation and Recovery Mechanism (SRRM) is currently in place to recover prudently incurred costs allocable to Oregon customers, subject to an earnings test. Effective beginning November 1, 2019, the WUTC authorized an Environmental Cost Recovery Mechanism (ECRM) for recovery of prudently incurred costs allocable to Washington customers.

Oregon SRRM

Under the Oregon SRRM collection process there are three types of deferred environmental remediation expense:

•Pre-review - This class of costs represents remediation spend that has not yet been deemed prudent by the OPUC. Carrying costs on these remediation expenses are recorded at NW Natural's authorized cost of capital. NW Natural anticipates the prudence review for annual costs and approval of the earnings test prescribed by the OPUC to occur by the third quarter of the following year.

•Post-review - This class of costs represents remediation spend that has been deemed prudent and allowed after applying the earnings test, but is not yet included in amortization. NW Natural earns a carrying cost on these amounts at a rate equal to the five-year treasury rate plus 100 basis points.

•Amortization - This class of costs represents amounts included in current customer rates for collection and is calculated as one-fifth of the post-review deferred balance. 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 $6.8 million and $6.3 million of deferred remediation expense approved by the OPUC for collection during the 2022-23 and 2021-22 PGA years, respectively.

In addition, the SRRM also provides for the annual collection of $5.0 million from Oregon customers through a tariff rider. As it collects amounts from customers, NW Natural recognizes these collections as revenue net of any earnings test adjustments and separately amortizes an equal and offsetting amount of the deferred regulatory asset balance through the environmental remediation operating expense line shown separately in the operating expenses section of the Consolidated Statements of Comprehensive Income (Loss). For additional information, see Note 17 in the 2022 Form 10-K.

The SRRM earnings test is an annual review of adjusted NGD ROE compared to authorized NGD ROE. To apply the earnings test NW Natural must first determine what if any costs are subject to the test through the following calculation:

Annual spend

Less: $5.0 million base rate rider

          Prior year carry-over(1)

          $5.0 million insurance + interest on insurance

Total deferred annual spend subject to earnings test

Less: over-earnings adjustment, if any

Add: deferred interest on annual spend(2)

Total amount transferred to post-review

(1)     Prior year carry-over results when the prior year amount transferred to post-review is negative. 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. To the extent more than authorized ROE is earned in a year, the amount transferred to post-review would be reduced by those earnings that exceed its authorized ROE.

NW Natural concluded there was no earnings test adjustment for 2022 based on the environmental earnings test that was submitted in April 2023.

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. The order allows for recovery of past deferred and future prudently incurred remediation costs allocable to Washington through application of insurance proceeds and collections from customers. Prudently incurred costs that were deferred from the initial deferral authorization in February 2011 through June 2019 were fully offset with insurance proceeds, with any remaining insurance proceeds to be amortized over a 10.5 year period. On an annual basis NW Natural will file for a prudence determination and a request to recover remediation expenditures in excess of insurance amortizations in the following year's customer rates. After insurance proceeds are fully amortized, if in a particular year the request to collect deferred amounts exceeds one percent of Washington normalized revenues, then the excess will be collected over three years with interest.

INTERSTATE STORAGE AND ASSET MANAGEMENT SHARING. On an annual basis, NW Natural credits amounts to Oregon and Washington customers as part of a regulatory incentive sharing mechanism related to net revenues earned from Mist gas storage for assets developed in advance of utility customer needs, and asset management revenues. In January 2023, the OPUC approved the annual 2023 bill credit for Oregon customer’s share of interstate storage and asset management activities totaling approximately $23.5 million. This includes revenue generated for the November 2021 through October 2022 PGA year. Commercial and industrial customers in Oregon received this credit in February 2023, which totaled approximately $10.5 million. Residential customers in Oregon received this credit as a reduction to the temporary rate mitigation adjustment in 2023, and totaled approximately $13.0 million. Credits are given to customers in Washington as reductions in rates through the annual PGA filing in November. Credits to Oregon and Washington customers in 2022 were approximately $41.1 million and $1.5 million, respectively.

Regulatory Proceeding Updates

During 2023, NW Natural was involved in the regulatory activities discussed below. For additional information, see Part II, Item 7 "Results of Operations—Regulatory Matters" in the 2022 Form 10-K.

COVID-19 DEFERRAL DOCKETS. During 2020, Oregon and Washington approved our applications to defer certain COVID-19 related costs. Costs that may be recoverable include, but are not limited to, the following: personal protective equipment, cleaning supplies and services, bad debt expense, financing costs to secure liquidity, and certain lost revenue, net of offsetting direct expense reductions associated with COVID-19. As part of the 2022 Oregon general rate case, NW Natural received approval from the OPUC to recover the 2020 and 2021 COVID-19 deferral totaling $10.9 million beginning November 1, 2022 over a two-year period. NW Natural is authorized to recover the 2022 COVID-19 deferral totaling $6.5 million beginning November 1, 2023 through October 31, 2024. In addition, approximately $2.5 million of forgone late fee revenue is authorized to be recognized in future periods as billed. Beginning January 2023, NW Natural is no longer deferring any COVID-19 related costs in Oregon. NW Natural expects to recover its COVID-19 deferrals in Washington in a future proceeding.

LOW INCOME DISCOUNT TARIFF. In July 2022, NW Natural received approval from the OPUC for an income-qualifying residential bill discount program in Oregon. The income threshold for program participation is at or below 60 percent of Oregon state median income (SMI). The program provides a bill discount for income-qualifying residential customers at four discount tier levels based on household income compared to SMI, with higher discounts given for lower income levels. Participating customers can self-certify their income and household size to qualify for the program directly with NW Natural or their local Community Action Agency. The program was available for qualifying customers starting November 1, 2022. Costs for the bill discount program include simultaneous recovery from all customers. Costs for the bill discount program, inclusive of start-up and administrative costs of the program, are recoverable in rates. The amount deferred to a regulatory asset as of September 30, 2023 was approximately $2.3 million.

	Total Household Income	Bill Discount Percentage
Tier 0	At or below 15% SMI	40%
Tier 1	16% - 30% of SMI	25%
Tier 2	31% - 45% of SMI	20%
Tier 3	46% - 60% of SMI	15%

RENEWABLE NATURAL GAS AND AUTOMATIC ADJUSTMENT CLAUSE. On June 19, 2019, the Oregon legislature passed Senate Bill 98 (SB 98), which enables natural gas utilities to procure or develop RNG on behalf of their Oregon customers. The bill was signed into law by the governor in July 2019, and subsequently, the OPUC adopted final rules in July 2020.

SB 98 and the rules outline the following parameters for the RNG program including: setting voluntary goals for adding as much as 30% renewable natural gas into the state’s pipeline system by 2050; enabling gas utilities to invest in and own the cleaning and conditioning equipment required to bring raw biogas and landfill gas up to pipeline quality, as well as the facilities to connect to the local gas distribution system; and allowing up to 5% of a utility’s revenue requirement to be used to cover the incremental cost or investment in renewable natural gas infrastructure.

Further, the law supports all forms of renewable natural gas including renewable hydrogen, which is made from excess wind, solar and hydro power. Renewable hydrogen can be used for the transportation system, industrial use, or blended into the natural gas pipeline system.

Pursuant to the 2022 Oregon general rate case, the OPUC ordered that the costs NW Natural sought to recover related to its investment in Lexington Renewables Energy LLC were reasonable and prudently incurred under SB 98. Furthermore, the OPUC approved an automatic adjustment clause that allows for NW Natural's investments in RNG projects, including operating costs, to be added to rates annually on November 1st, following a prudence review. The mechanism allows NW Natural to defer for recovery or credit the differences between the forecasted and actual costs of the RNG projects, subject to an earnings test that includes deadbands at 50 basis points below and above NW Natural's authorized ROE. For RNG procurement contracts, NW Natural seeks recovery of the costs in the PGA, subject to a prudence review.

In February 2023, NW Natural filed a request to include its investment in Dakota City Renewable Energy LLC in the approved RNG mechanism effective November 1, 2023. In October 2023, the OPUC approved an all-party settlement that deems the investment to be prudent and allows NW Natural to begin recovering the investment costs and expenses of the facility. The RNG facility began production in April 2023. Under the RNG mechanism, expenses incurred prior to the rate effective date are not recoverable under this rate mechanism. Additionally, recovery is subject to the earnings test requirements under the RNG recovery mechanism. The Dakota City investment is subject to a production risk-sharing mechanism based on the expected per unit of production. NW Natural is required to share 25% of the costs above this threshold.

INTEGRATED RESOURCE PLAN (IRP). NW Natural generally files a full IRP biennially for Oregon and Washington with the OPUC and WUTC, respectively. NW Natural jointly filed its 2022 IRP for both Oregon and Washington on September 23, 2022. The 2022 IRP outlines scenarios of future requirements based on a range of inputs that would provide the least-cost and least-risk resources to meet future demand and environmental compliance obligations. In our most recent filing, we included certain demand and supply side projects that resulted in an action plan which is being evaluated by the WUTC. With respect to IRPs generally, the WUTC issues letters of compliance and Oregon acknowledges the IRP. In August 2023, NW Natural received a letter of compliance from the WUTC acknowledging the 2022 IRP.

The OPUC issued their order on NW Natural's 2022 IRP in August 2023. The OPUC acknowledged key system investments including the Portland LNG cold box project and the Forest Grove reinforcement project. The OPUC declined at this time to acknowledge certain elements related to long-term analysis and selection of resources and suggested that NW Natural work with interested parties to develop and refine modeling related to these open items. We anticipate additional process, planning and engagement with the OPUC related to these matters.

PIPELINE SECURITY. In May and July 2021, the Department of Homeland Security’s (DHS) Transportation Security Administration (TSA) released two security directives applicable to certain owners and operators of natural gas pipeline facilities (including local distribution companies). The first directive requires owners and operators to implement cybersecurity incident reporting to the DHS, designate a cybersecurity coordinator, and perform a gap assessment of current entity cybersecurity practices against certain voluntary TSA security guidelines and report relevant results and proposed mitigation to applicable DHS agencies. The second directive requires entities to implement a significant number of specified cybersecurity controls and processes. The TSA released a third directive renewing the second directive as well as clarifying Operational Technology (OT) scope and providing a risk- and outcome-based framework. The third directive was effective in July 2023 and will expire in July 2024. The TSA is in the process of formulating regulations with the aim of rendering the security directives permanent. NW Natural is currently evaluating and implementing the security directives and related deliverables. NW Natural frequently updates the TSA on its progress on achieving the security directives.

NW Natural filed requests with the OPUC and WUTC to defer the costs associated with complying with the TSA's security directives. As of September 30, 2023, NW Natural has invested approximately $37.7 million in information and operational technology. A majority of the capital investment was included in rate base starting November 1, 2022 in Oregon.

NW Natural continues to evaluate the potential effect of these directives on our operations and facilities, as well as the potential total cost of implementation, and will continue to monitor for any clarifications or amendments to these directives. We may seek to request recovery from customers of any additional costs incurred to the extent that incremental expenses and capital expenditures are incurred in the future.

ERP UPGRADE. In the fourth quarter of 2020, NW Natural filed requests to defer expenses pertaining to a project to upgrade the existing ERP system with the OPUC and WUTC. A stipulation supported by all parties in the Oregon docket was filed and approved by the OPUC in the third quarter of 2021. Approval of the Washington deferral was resolved as part of the most recent

general rate case. NW Natural placed its new ERP system into service in September 2022. On November 1, 2022, NW Natural began recovering all expenses deferred and accruing interest over a 10-year period.

WATER UTILITIES. Today NW Natural Water serves more than 164,000 people through over 66,000 connections across five states. In the first quarter of 2023, NWN Water signed a purchase agreement for a water utility with approximately 1,350 connections in Arizona. The purchase agreement was approved by the ACC in September 2023 and the acquisition is expected to close in the fourth quarter of 2023. In the second quarter of 2023, NWN Water signed a purchase agreement for a water and wastewater business with approximately 2,300 connections in Oregon. The purchase agreement was approved by the OPUC in October 2023.

For our regulated water utilities, we have been executing general rate cases.

•In July 2022, Gem State Water Company filed a general rate case with the IPUC and the IPUC allowed rates to go into effect March 1, 2023.

•In February 2023, Salmon Valley Water Company filed a general rate case with the OPUC and received an order for rates to go into effect September 1, 2023.

•In May 2023, Falls Water Company filed a general rate case with the IPUC and requested rates to go into effect prior to the end of 2023.

•In October 2023, Foothills Utilities filed a general rate case with the ACC and requested rates to go into effect at the earliest possible time but no later than November 30, 2024.

Environmental Regulation and Legislation Matters

There is a growing international and domestic focus on climate change and the contribution of GHG emissions, most notably methane and carbon dioxide, to climate change. In response, there are increasing efforts at the international, federal, state, and local level to regulate GHG emissions. Legislation or other forms of regulation could take a variety of forms including, but not limited to, GHG emissions limits, reporting requirements, carbon taxes, requirements to purchase carbon credits, building codes, increased efficiency standards, additional charges to fund energy efficiency activities or other regulatory actions, incentives or mandates to conserve energy or use renewable energy sources, tax advantages and other subsidies to support alternative energy sources, a reduction in rate recovery for construction costs related to the installation of new customer services or other new infrastructure investments, mandates for the use of specific fuels or technologies, bans on specific fuels or technologies, or promotion of research into new technologies to reduce the cost and increase the scalability of alternative energy sources. These efforts could include legislation, legislative proposals, or new regulations at the federal, state, and local level, as well as private party litigation related to GHG emissions or regulation thereof. We recognize certain of our businesses, including our natural gas business, are likely to be affected by current or future regulation seeking to limit GHG emissions.

International

In early 2021, the U.S. rejoined the Paris Agreement on Climate, which establishes non-binding targets to reduce GHG emissions from both developed and developing nations. Under the Paris Agreement, signatory countries are expected to submit their nationally determined contributions to curb GHG emissions and meet the agreed temperature objectives every five years. On April 22, 2021, the United States federal administration announced the U.S. nationally determined contribution to achieve a fifty to fifty-two percent reduction from 2005 levels in economy-wide net GHG emissions by 2030.

Federal

President Biden’s administration has issued executive orders directing agencies to conduct a general review of regulations and executive actions related to the environment and reestablished a framework for considering the social cost of carbon as part of certain agency cost-benefit analyses for new regulations. President Biden’s administration continues to consider a wide range of additional policies, executive orders, rules, legislation, and other initiatives to address climate change.

The Inflation Reduction Act of 2022 (IRA) was signed into law in August 2022 and includes several climate and energy provisions. We expect that over a ten-year period, the IRA will provide approximately $415 billion of funding through grants, tax credits, and investments to support various initiatives including manufacturing, renewable energy production and consumption, transportation electrification and climate-smart agriculture. The IRA includes tax credits for RNG, hydrogen and carbon capture projects, among other investments. The IRA also includes funding for the EPA to improve GHG reporting and enforcement, as well as a methane fee applicable to activities associated with gas production and processing facilities, transmission pipelines and certain storage facilities, creates a new corporate alternative minimum tax of 15 percent that applies to corporations with average annual financial statement income in excess of one billion dollars, and creates a new 1 percent excise tax on the net stock repurchases by public companies. We are assessing effects of the IRA that are relevant to our businesses, and will continue to do so as it is implemented. The U.S. Congress may also pass federal climate change legislation in the future. We cannot predict when or if Congress will pass such legislation and in what form.

In addition, the EPA regulates GHG emissions pursuant to the Clean Air Act. For example, the EPA requires the annual reporting of GHG emissions from certain industries, specified emission sources, and facilities. Under this reporting rule, local natural gas distribution companies like NW Natural are required to report system throughput to the EPA on an annual basis. The EPA also has required additional GHG reporting regulations to which NW Natural is subject, requiring the annual reporting of fugitive emissions from operations. Other federal regulatory agencies, including the U.S. Department of Energy and Federal Energy

Regulatory Commission, are beginning to address GHG emissions that may include changes in their regulatory oversight approach, policies and rules.

Other federal agencies have taken or are expected to take actions related to climate change. For example, in March 2022, the Securities and Exchange Commission (SEC) proposed new rules relating to the disclosure of a range of climate-related matters, PHMSA is expected to prepare regulations and other actions to limit methane emissions, the Commodities Futures Trading Commission (CFTC) has indicated it intends to take actions related to oversight of climate-related financial risks as pertinent to the derivatives and underlying commodities markets. Similarly, other federal agencies and regulations, including but not limited to the Consumer Products Safety Commission, the U.S. Department of Treasury, Federal Acquisitions Regulations, and others have indicated impending regulatory actions related to climate change. To the extent these agencies adopt final rules as proposed or in modified form, we or our customers could incur increased costs. These could include internal costs as well as external costs such as the cost of independent experts to provide attestation reports on our GHG emissions data and increased audit costs.

Washington State

In 2022, Washington comprised approximately 12% of NW Natural’s revenues, as well as 1% and 18% of new meters from commercial and residential customers, respectively. Effective February 1, 2021, building codes in Washington state require new residential homes to achieve higher levels of energy efficiency based on specified carbon emissions assumptions, which calculate electric appliances to have lower on-site GHG emissions than comparable gas appliances. 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. Additionally, the Washington State Building Code Council (SBCC) voted in April 2022 to include updates in the state commercial building energy code that would restrict or eliminate the use of gas space and water heating in new commercial construction. In November 2022, the SBCC voted to include updates to the state residential building energy code that are expected to restrict the use of gas space and water heating in residential construction, with certain exceptions including for natural gas-fired heat pumps and hybrid fuel systems. The SBCC commercial and residential rules were expected to become effective July 1, 2023, but the SBCC delayed implementation and has taken steps to modify those rules. The timeline for implementation of the modified rules, if any, is currently uncertain. The rules are currently subject to legal challenge by a number of utilities, companies and organizations.

Washington has also enacted the CCA, which establishes a comprehensive program that includes an overall limit for GHG emissions from major sources in the state that declines yearly beginning January 1, 2023, resulting in an overall reduction of GHG emissions to 95% below 1990 levels by 2050. The Washington Department of Ecology has adopted rules to create a cap-and-invest program, under which entities, including natural gas and electric utilities, large manufacturing facilities, and transportation and other fuel providers, which are subject to the CCA must either reduce their emissions, purchase qualifying offsets (including RNG) or obtain allowances to cover any remaining emissions. NW Natural is subject to the CCA, has received an order authorizing deferral of CCA costs from the WUTC, and intends to pursue inclusion of CCA compliance costs in rates.

Oregon

On March 10, 2020, the governor of Oregon issued an executive order (EO) establishing GHG emissions reduction goals of at least 45% below 1990 emission levels by 2035 and at least 80% below 1990 emission levels by 2050 and directed state agencies and commissions to facilitate such GHG emission goals targeting a variety of sources and industries. Although the EO does not specifically direct actions of natural gas distribution businesses, the OPUC is directed to prioritize proceedings and activities that advance decarbonization in the utility sector, mitigate the energy burden experienced by utility customers and ensure system reliability and resource adequacy. The EO also directs other state agencies, including the Oregon Department of Environmental Quality (ODEQ), to cap and reduce GHG emissions from transportation fuels and all other liquid and gaseous fuels, including natural gas, adopt building energy efficiency goals for new building construction, reduce methane gas emissions from landfills and food waste, and submit a proposal for adoption of state goals for carbon sequestration and storage by Oregon’s forest, wetlands and agricultural lands. The OPUC is charged with carrying out the EO to the extent it is consistent with its statutory authority and duties, and in doing so to focus on equitable impacts to low-income customers.

In December 2021, the ODEQ concluded its rulemaking process and issued final cap and reduce rules for its Climate Protection Program (CPP), which became effective in January of 2022. The CPP outlines GHG emissions reduction goals of 50% by 2035 and 90% by 2050 from a 2017-2019 baseline. The first three-year compliance period is 2022 through 2024. NW Natural is subject to the CPP, and pursuant to this rule, is required to make its first compliance filing in 2025. We have received an order from the OPUC authorizing deferral of CPP compliance costs and intend to pursue inclusion of those compliance costs in rates. The CPP is currently subject to legal challenge by a number of utilities, companies and organizations, including NW Natural.

Local Jurisdictions and Other Advocacy

In addition to legislative activities at the state level, advocacy groups have indicated a willingness to pursue ballot measures and other local activities. Some local and county governments in the United States also have been proposing or passing renewable energy resolutions, restrictions, taxes, or fees seeking to accelerate climate action goals. 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. For example, in February 2023, the Eugene City Council passed an ordinance that prohibits the use of natural gas in low rise residential buildings beginning with permits submitted after June of 2023. That ordinance was initially referred to the voters on the November 2023 ballot and was subsequently rescinded by the Eugene City

Council. In connection with its recision of the ordinance, the City Council directed the Eugene City Manager to develop a plan to address GHG emissions and align incentives around GHG emissions. Similarly, some jurisdictions and advocates are seeking to ban the use of natural gas and certain natural gas appliances inside homes and contend that there are detrimental indoor public health effects associated with the use of natural gas.

NW Natural is actively engaged with federal, state and local policymakers, consumers, customers, small businesses and other business coalitions, economic development practitioners, and other advocates in our service territory and is working with these communities to communicate the role that direct use natural gas, and in the coming years, RNG and hydrogen, can play in pursuing more effective policies to reduce GHGs while supporting reliability, resiliency, energy choice, equity, and energy affordability.

NW Natural Decarbonization Initiatives & Compliance Actions

Our customers are currently paying less for their natural gas today than they did 15 years ago. We expect that compliance with any form of regulation of GHG emissions, including the CPP in Oregon and CCA in Washington as well as voluntary actions under SB 98 or otherwise, will require additional resources and compliance tools, and will increase costs. The developing and changing implementation guidance for the CCA and CPP, evolving carbon credit markets and other compliance tool options, decades-long timeframes for compliance, likely changing and evolving laws and energy policy, and evolving technological advancements, all make it difficult to accurately predict long-term tools for and costs of compliance. In September 2022, NW Natural filed its integrated resource plans (IRPs) with the OPUC and WUTC. Those IRPs comprehensively evaluate resource options available to serve NW Natural's customers' energy, capacity and environmental compliance needs. The resolution of the IRP docket informs the resources selected for compliance with the CPP and CCA. While we have modeled compliance with the CCA and CPP in our IRPs, given the recency of the adoption of the final CPP and CCA rules and changing guidance with respect to those rules, the nature of our compliance obligations, the manner in which we intend to comply, and the expected costs of compliance are uncertain and subject to significant change, particularly after the first compliance period, and especially with respect to the CPP, under which programs are still being developed. We intend to pursue inclusion of costs of compliance with the CCA in rates, and currently believe that the costs to comply could increase non-low income residential bills by an estimated 1.5% to 6% in the first year of compliance.

The CPP in Oregon is largely tied to the volume of natural gas consumed and as such, we currently expect that CPP cost impacts will be the lowest among residential customers because they generally consume less, and highest among industrial customers that use significantly higher volumes of natural gas, with cost increases for commercial customers falling between residential and industrial customers. We intend to pursue costs of compliance with the CPP in rates and currently believe those costs could increase non-low income existing customer residential bills by an estimated 1% to 11% in the first compliance period.

These projected customer bill impacts of the CCA and CPP are estimates, are likely to increase beyond the first compliance period, and are subject to change as these laws are implemented and compliance begins. The costs are also likely to vary significantly based on forecasting assumptions related to permitted levels of rate recovery, available technologies and equipment, weather patterns and gas usage, customer growth or attrition, allocation of fixed costs among classes of customers, energy efficiency levels, availability, use and cost of renewables, feasibility of broad-scale hydrogen in the natural gas system, and a number of other assumptions used in the complex analysis of integrated resource planning.

We are not currently able to quantify the extent to which limitations on natural gas use, or declining line extension allowances provided in rates to cover construction costs for new services, will affect new meter additions, or to what extent carbon compliance costs included in rates will affect the competitiveness of our business and the demand for natural gas service. All of these developments could negatively affect our gas utility customer growth. However, at the same time natural gas utilities will be subject to GHG emissions regulation, we expect that other energy source providers will be subject to similar, or in some cases stricter or more rapid, compliance requirements that are likely to affect their cost and competitiveness relative to natural gas as well. For example, President Biden has announced his intention to have a carbon-free electricity sector by 2035, 15 years before the target date of the CCA or CCP. In June 2021, the State of Oregon enacted HB 2021, a clean electricity bill that requires the state’s two largest investor-owned electric utilities and retail electricity service suppliers to reduce GHG emissions associated with electricity sold to Oregon customers to 100 percent below baseline levels by 2040 with interim steps, including an 80 percent reduction by 2030 and 90 percent reduction by 2035. This bill does not replace the separate renewable portfolio standards previously established in Oregon, which sets requirements for how much of the electricity used in Oregon must come from renewable resources. In Washington, SB 5116, the Clean Energy Transformation Act, requires all electric utilities in Washington to transition to carbon-neutral electricity by 2030 and to 100 percent carbon-free electricity by 2045. We expect compliance with these and other laws will increase the cost of energy for electric customers in our service territory. We are not able to determine at this time whether increased electricity costs will make natural gas use more or less competitive on a relative basis.

We expect these and other trends to drive innovation of, and demand for, technological developments and innovative new products that reduce GHG emissions. Research and development are occurring across the energy sector, including in the gas sector with work being conducted on gas heat pumps, higher efficiency water and space heating appliances including hybrid systems, carbon capture utilization and storage developments, continued development of technologies related to RNG, and various forms of hydrogen for different applications, among others.

NW Natural continues to take proactive steps in seeking to reduce GHG emissions in our region and is proactively communicating with local, state, and federal governments and communities about those steps. NW Natural has been a leader among gas utilities in innovative programs. Notable programs have included a decoupling rate structure designed to weaken the link between revenue and gas consumption by customers adopted in 2007, and establishment of a voluntary Smart Energy carbon offset program for customers established in 2007, and removal of all known cast iron and bare steel to create one of the tightest and most modern distribution systems in the country. We continue to believe that NW Natural has an important role in providing affordable and equitable energy to the communities we serve. NW Natural is an important provider of energy to families and businesses in Oregon and southwest Washington. Natural gas sales to our residential and commercial customers account for approximately 6% of Oregon’s GHG emissions according to the 2019 data from the State of Oregon Department of Environmental Quality In-Boundary GHG Inventory. We intend to continue to provide this necessary energy to our communities with the goal of using our modern pipeline system to help the Pacific Northwest transition to a cleaner energy future.

In 2016, NW Natural initiated a multi-pronged, multi-year strategy to accelerate and deliver greater GHG emission reductions in the communities we serve. Key components of this strategy include customer energy efficiency, continued adoption of NW Natural's voluntary Smart Energy carbon offset program, and seeking to incorporate RNG and hydrogen into our gas supply. RNG is produced from organic materials including food, agricultural and forestry waste, wastewater, or landfills. We believe RNG has the potential to significantly reduce net GHG emissions because methane that would otherwise be released to the atmosphere can be captured from these organic materials as they decompose and then conditioned to pipeline quality and distributed into our existing system. In 2019, Oregon Senate Bill 98 (SB 98) was signed into law enabling NW Natural to procure RNG on behalf of customers and provided voluntary targets that would allow us to make qualified investments and purchase RNG from third parties.

Under SB 98, NW Natural is actively working to procure RNG supply for customers and increase the amount of RNG on our system and is also exploring the development of renewable hydrogen through power to gas. To that end, in 2020 and 2021, NW Natural announced several agreements and investments to procure RNG for its customers. For example, NW Natural began a partnership with BioCarbN to invest up to an estimated $38 million in four separate RNG development projects that will access biogas derived from water treatment at Tyson Foods’ processing plants, subject to approval by all parties. The first project was commissioned in early 2022 and the second was commissioned in April 2023. To date, NW Natural has signed agreements with options to purchase or develop RNG for utility customers totaling about 3% of NW Natural’s annual sales volume in Oregon.

FINANCIAL CONDITION

Capital Structure

NW Holdings' long-term goal is to maintain a strong and balanced consolidated capital structure. 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, and Washington, which has an allocation of 50% long-term debt, 1% short-term debt, and 49% common equity.

When additional capital is required, debt or equity securities are issued depending on both the target capital structure and market conditions. These sources of capital are also used to fund long-term debt retirements and short-term commercial paper maturities. See "Liquidity and Capital Resources" below and Note 9. Achieving our target capital structure and maintaining sufficient liquidity to meet operating requirements is necessary to maintain attractive credit ratings and provide access to the capital markets at reasonable costs.

NW Holdings' consolidated capital structure, excluding short-term debt, was as follows:

	September 30,				December 31,
	2023		2022		2022
Common equity	43.0	%	45.6	%	46.8	%
Long-term debt (including current maturities)	57.0		54.4		53.2
Total	100.0	%	100.0	%	100.0	%

NW Natural's consolidated capital structure, excluding short-term debt, was as follows:

	September 30,				December 31,
	2023		2022		2022
Common equity	46.1	%	50.6	%	51.4	%
Long-term debt (including current maturities)	53.9		49.4		48.6
Total	100.0	%	100.0	%	100.0	%

As of September 30, 2023 and 2022, and December 31, 2022, NW Holdings' consolidated capital structure included common equity of 42.0%, 43.1% and 42.4%; long-term debt of 49.0%, 49.5% and 45.0%; and short-term debt including current maturities of long-term debt of 9.0%, 7.4% and 12.6%, respectively. As of September 30, 2023 and 2022, and December 31, 2022, NW

Natural's consolidated capital structure included common equity of 46.1%, 49.4%, and 47.9%; long-term debt of 52.4%, 46.2% and 41.6%; and short-term debt including current maturities of long-term debt of 1.5%, 4.4%, and 10.5%, respectively.

Liquidity and Capital Resources

At September 30, 2023 and 2022, NW Holdings had approximately $156.6 million and $108.6 million, and NW Natural had approximately $145.1 million and $11.4 million of cash and cash equivalents, respectively. In order to maintain sufficient liquidity during periods when capital markets are volatile, NW Holdings and NW Natural may elect to maintain higher cash balances and add short-term borrowing capacity. NW Holdings and NW Natural may also pre-fund their respective capital expenditures when long-term fixed rate environments are attractive. NW Holdings and NW Natural expect to have ample liquidity in the form of cash on hand and from operations and available credit capacity under credit facilities to support funding needs.

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. NW Holdings is under no obligation to offer and sell common stock under the ATM equity program, which expires in August 2024. Any shares of common stock offered under the ATM equity program are registered on NW Holdings’ universal shelf registration statement filed with the SEC. During the three months ended September 30, 2023, NW Holdings issued and sold 475,732 shares of common stock pursuant to the ATM equity program resulting in cash proceeds of $18.8 million, net of fees and commissions paid to agents of $0.3 million. During the nine months ended September 30, 2023, NW Holdings issued and sold 955,325 shares of common stock pursuant to the ATM equity program resulting in cash proceeds of $40.9 million, net of fees and commissions paid to agents of $0.7 million. As of September 30, 2023, NW Holdings had $69.5 million of equity available for issuance under the program.

NW Holdings

For NW Holdings, short-term liquidity is primarily provided by cash balances, dividends from its operating subsidiaries, in particular NW Natural, available cash from a multi-year credit facility, and short-term credit facilities. NW Holdings also has a universal shelf registration statement filed with the SEC for the issuance of debt and equity securities. NW Holdings long-term debt, if any, and equity issuances are primarily used to provide equity contributions to NW Holdings’ operating subsidiaries for operating and capital expenditures and other corporate purposes. From 2023 through 2025, we estimate NW Holdings’ and NW Natural's combined incremental capital needs to be in the range of $450 million to $550 million. NW Holdings intends to use raised capital to support NW Natural, NW Natural Water, and NW Natural Renewables operating and capital expenditure programs. NW Holdings' issuance of securities is not subject to regulation by state public utility commissions, but the dividends from NW Natural to NW Holdings are subject to regulatory ring-fencing provisions. NW Holdings guarantees the debt of its wholly-owned subsidiary, NWN Water. See "Long-Term Debt" below for more information regarding NWN Water debt.

As part of the ring-fencing conditions agreed upon with the OPUC and WUTC in connection with the holding company reorganization, NW Natural may not pay dividends or make distributions to NW Holdings if NW Natural’s credit ratings and common equity ratio, defined as the ratio of equity to long-term debt, fall below specified levels. 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. If NW Natural’s long-term secured credit ratings are below BBB for S&P and Baa2 for Moody’s, dividends may be issued so long as NW Natural’s common equity ratio is 46% or more. Dividends may not be issued if NW Natural’s long-term secured credit ratings are BB+ or below for S&P or Ba1 or below for Moody’s, or if NW Natural’s common equity ratio is below 44%, where the ratio is measured using common equity and long-term debt excluding imputed debt or debt-like lease obligations. In each case, common equity ratios are determined based on a preceding or projected 13-month average. In addition, there are certain OPUC notice requirements for dividends in excess of 5% of NW Natural’s retained earnings.

Additionally, if NW Natural’s common equity (excluding goodwill and equity associated with non-regulated assets), on a preceding or projected 13-month average basis, is less than 46% of NW Natural’s capital structure, NW Natural is required to notify the OPUC, and if the common equity ratio falls below 44%, file a plan with the OPUC to restore its equity ratio to 44%. 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 September 30, 2023, NW Natural satisfied the ring-fencing provisions described above.

Based on several factors, including current cash reserves, committed credit facilities, its ability to receive dividends from its operating subsidiaries, in particular NW Natural, and an expected ability to issue long-term debt and equity securities in the capital markets, NW Holdings believes its liquidity is sufficient to meet anticipated near-term cash requirements, including all contractual obligations, investing, and financing activities as discussed in "Cash Flows" below.

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. The declarations and amount of future dividends to shareholders will depend upon earnings, cash flows, financial condition, NW Natural’s ability to pay dividends to NW Holdings and other factors. The amount and timing of dividends payable on common stock is at the sole discretion of the NW Holdings Board of Directors.

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. 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. NW Natural's long-term debt and contributions from NW Holdings are primarily used to finance NGD capital expenditures, refinance maturing debt, and provide temporary funding for other general corporate purposes of the NGD business.

Based on its current debt ratings (see "Credit Ratings" below), NW Natural has been able to issue commercial paper and long-term debt at attractive rates. In the event NW Natural is not able to issue new long-term debt due to adverse market conditions or other reasons, NW Natural expects that near-term liquidity needs can be met using internal cash flows, issuing commercial paper, receiving equity contributions from NW Holdings, or drawing upon a committed credit facility. NW Natural also has a universal shelf registration statement filed with the SEC for the issuance of secured and unsecured debt securities.

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. NW Natural was not required to post collateral at September 30, 2023. See "Credit Ratings" below and 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. For additional information, see Part II, Item 7 "Financial Condition" in the 2022 Form 10-K.

Gas and Pipeline Capacity Purchase Agreements

NW Natural Renewables is an unregulated subsidiary of NW Natural Holdings established to pursue unregulated renewable natural gas activities. In September 2021, a subsidiary of NW Natural Renewables, NW Natural Ohio Renewable Energy, LLC (Ohio Renewables) and a subsidiary of EDL, a global producer of sustainable distributed energy, executed agreements to partially fund two production facilities that are designed to convert landfill waste gases to RNG (EDL Facilities). The EDL Facilities have been constructed, and testing and commissioning of these facilities is underway, but has been delayed. Upon each of the EDL Facilities achieving full commercial operations, Ohio Renewables is committed to make cash payments of approximately $25 million per facility to partially fund the infrastructure required to condition biogas. 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. Upon commencement of commercial operations, we currently estimate the amount of RNG purchases based on prices and quantities specified in the agreements to be as follows: approximately $0.4 million in 2023, $10.5 million in 2024, $21.0 million in 2025, $21.0 million in 2026, $27.3 million in 2027 and $589.2 million thereafter.

Gas and Pipeline Capacity Sale Agreements

Ohio Renewables has contracted to sell RNG produced by the EDL Facilities up to certain specified volumes in each of calendar years 2023 through 2026. We currently estimate RNG volumes to be sold pursuant to this agreement to be approximately 3,960,000 MMbtu over the life of the agreement, provided that such amounts of RNG are produced by the EDL Facilities during that period.

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 2042. Amounts required to be delivered under this agreement are estimated to be 112,500 MMbtu in 2025, 375,000 MMbtu in 2026, 1,950,000 MMbtu annually in 2027 through 2034, and 2,775,000 MMbtu annually in years 2035 through 2042.

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.

The primary source of short-term liquidity for NW Natural is from the sale of commercial paper, available cash from a multi-year credit facility, and short-term credit facilities it may enter into from time to time. In addition to issuing commercial paper or entering into bank loans to meet working capital requirements, including seasonal requirements to finance gas purchases and accounts receivable, short-term debt may also be used to temporarily fund capital requirements. For NW Natural, commercial paper and bank loans are periodically refinanced through the sale of long-term debt or equity contributions from NW Holdings. 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.

At September 30, 2023, September 30, 2022 and December 31, 2022, short-term debt consisted of the following:

	September 30, 2023				September 30, 2022				December 31, 2022
In millions	Balance Outstanding		Weighted Average Interest Rate(1)		Balance Outstanding		Weighted Average Interest Rate(1)		Balance Outstanding		Weighted Average Interest Rate(1)
NW Natural:
Commercial paper	$	—	—	%	$	53.0	3.3	%	$	170.2	4.6	%
Other (NW Holdings):
Credit agreement	71.0		6.4	%	88.0		4.7	%	88.0		5.3	%
NW Holdings	$	71.0			$	141.0			$	258.2

(1) Weighted average interest rate on outstanding short-term debt

Credit Agreements

NW Holdings

At September 30, 2023, NW Holdings had a $200 million sustainability-linked credit agreement, with a feature that allows it to request increases in the total commitment amount, up to a maximum of $300 million. The maturity date of the agreement is November 3, 2026, with available extensions of commitments for two additional one-year periods, subject to lender approval.

All lenders under the NW Holdings credit agreement are major financial institutions with committed balances and investment grade credit ratings as of September 30, 2023 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. At September 30, 2023, September 30, 2022 and December 31, 2022, $71.0 million, $88.0 million and $88.0 million were drawn under the NW Holdings Credit Agreement, respectively.

The NW Holdings credit agreement permits the issuance of letters of credit in an aggregate amount of up to $40 million. 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 September 30, 2023 and 2022, with consolidated indebtedness to total capitalization ratios of 58.0% and 56.9%, respectively.

The NW Holdings credit agreement also requires NW Holdings to maintain debt ratings (which are defined by a formula using NW Natural's credit ratings in the event NW Holdings does not have a credit rating) with Standard & Poor's (S&P) and Moody's Investors Service, Inc. (Moody’s) and notify the lenders of any change in its senior unsecured debt ratings or senior secured debt ratings, as applicable, by such rating agencies. A change in NW Holdings' debt ratings by S&P or Moody’s is not an event of default, nor is the maintenance of a specific minimum level of debt rating a condition of drawing upon the credit agreement. Rather, interest rates on any loans outstanding under the credit agreements are tied to debt ratings and therefore, a change in the debt rating would increase or decrease the cost of any loans under the credit agreements when ratings are changed. NW Holdings does not currently maintain ratings with S&P or Moody's.

Interest charges on the NW Holdings credit agreement were indexed to the London Interbank Offered Rate (LIBOR) through January 31, 2023. The agreement was amended to replace LIBOR with the secured overnight financing rate (SOFR) beginning February 2023. The SOFR is subject to a 10 basis point spread adjustment. The NW Holdings credit agreement also includes a mechanism that can increase or decrease the undrawn interest rate by up to 1 basis point and undrawn interest rate by up to 5 basis points in accordance with NW Holdings’ independently verified achievement of quantifiable metrics related to two goals—one related to carbon savings and one related to in-line inspections of NW Natural’s transmission pipeline. Performance against these metrics is designed to be assessed annually with pricing adjustments, if any, resetting off of primary pricing annually and not cumulatively.

NW Holdings had no letters of credit issued and outstanding at September 30, 2023 and 2022.

NW Natural

At September 30, 2023, NW Natural had a sustainability-linked multi-year credit agreement for unsecured revolving loans totaling $400 million, with a feature that allows NW Natural to request increases in the total commitment amount, up to a maximum of

$600 million. The maturity date of the agreement is November 3, 2026 with an available extension of commitments for two additional one-year periods, subject to lender approval.

All lenders under the NW Natural credit agreement are major financial institutions with committed balances and investment grade credit ratings as of September 30, 2023 as follows:

In millions
Lender rating, by category	Loan Commitment
AA/Aa	$	400
Total	$	400

Based on credit market conditions, it is possible one or more lending commitments could be unavailable to NW Natural if the lender defaulted due to lack of funds or insolvency; however, NW Natural does not believe this risk to be imminent due to the lenders' strong investment-grade credit ratings. NW Natural did not have any outstanding balances drawn under this credit facility at September 30, 2023, September 30, 2022 and December 31, 2022.

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 September 30, 2023 or 2022. The credit agreement requires NW Natural 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 Natural was in compliance with this covenant at September 30, 2023 and 2022, with consolidated indebtedness to total capitalization ratios of 53.9% and 50.6%, respectively.

The NW Natural credit agreement also requires NW Natural to maintain credit ratings with S&P and Moody’s and notify the lenders of any change in NW Natural's senior unsecured debt ratings or senior secured debt ratings, as applicable, by such rating agencies. A change in NW Natural's debt ratings by S&P or Moody’s is not an event of default, nor is the maintenance of a specific minimum level of debt rating a condition of drawing upon the credit agreement. Rather, interest rates on any loans outstanding under the credit agreement are tied to debt ratings and therefore, a change in the debt rating would increase or decrease the cost of any loans under the credit agreement when ratings are changed. See "Credit Ratings" below.

Interest charges on the NW Natural credit agreement were indexed to the LIBOR through January 31, 2023. The agreement was amended to replace LIBOR with the SOFR beginning February 2023. The SOFR is subject to a 10 basis point spread adjustment. The NW Natural credit agreement also includes a mechanism that can increase or decrease the undrawn interest rate by up to 1 basis point and undrawn interest rate by up to 5 basis points in accordance with NW Natural’s independently verified achievement of quantifiable metrics related to two goals—one related to carbon savings and one related to in-line inspections of NW Natural’s transmission pipeline. Performance against these metrics is designed to be assessed annually with pricing adjustments, if any, resetting off of primary pricing annually and not cumulatively.

NW Natural had no letters of credit issued and outstanding at September 30, 2023 and 2022. In July 2023, NW Natural issued a $15.0 million letter of credit, which expired in September 2023.

Credit Ratings

NW Holdings has not historically maintained ratings with S&P or Moody's. NW Natural's credit ratings are a factor of liquidity, potentially affecting access to the capital markets including the commercial paper market. NW Natural's credit ratings also have an impact on the cost of funds and the need to post collateral under derivative contracts. The following table summarizes NW Natural's current credit ratings:

	S&P	Moody's
Commercial paper (short-term debt)	A-1	P-2
Senior secured (long-term debt)	AA-	A2
Senior unsecured (long-term debt)	n/a	Baa1
Corporate credit rating	A+	n/a
Ratings outlook	Negative	Stable

In October 2023, S&P revised NW Natural’s ratings outlook from “stable” to “negative.” Also in October 2023, S&P initiated a rating on NW Holdings of A+ with a negative outlook.

The above credit ratings and ratings outlook are dependent upon a number of factors, both qualitative and quantitative, and are subject to change at any time. The disclosure of or reference to these credit ratings is not a recommendation to buy, sell or hold NW Holdings or NW Natural securities. Each rating should be evaluated independently of any other rating.

As part of the ring-fencing conditions agreed upon with the OPUC and WUTC in connection with the holding company reorganization, NW Holdings and NW Natural are required to maintain separate credit ratings, long-term debt ratings, and preferred stock ratings, if any.

Long-Term Debt

Issuance of Long-Term Debt

In August 2023, NW Natural issued and sold $80.0 million aggregate principal amount of its FMBs, 5.18% Series and $50.0 million aggregate principal amount of its FMBs, 5.23% Series. The 5.18% Bonds bear interest at the rate of 5.18% per annum, payable semi-annually on February 4 and August 4 of each year, commencing February 4, 2024, and will mature on August 4, 2034. The 5.23% Bonds bear interest at the rate of 5.23% per annum, payable semi-annually on February 4 and August 4 of each year, commencing February 4, 2024, and will mature on August 4, 2038.

In March 2023, NW Natural issued and sold $100.0 million aggregate principal amount of 5.75% Secured Medium-Term Notes, Series B due 2033 (the Notes). The Notes bear interest at the rate of 5.75% per annum, payable semi-annually on March 15 and September 15 of each year.

In January 2023, NW Natural issued and sold $100.0 million aggregate principal amount of its FMBs, 5.43% Series due January 6, 2053, to certain institutional investors pursuant to the Bond Purchase Agreement. The 5.43% Bonds bear interest at the rate of 5.43% per annum, payable semi-annually on January 6 and July 6 of each year, commencing July 6, 2023, and will mature on January 6, 2053.

At September 30, 2023, NW Holdings and NW Natural had long-term debt outstanding of $1,615.3 million and $1,404.6 million, respectively, which included $10.2 million and $10.1 million of unamortized debt issuance costs at NW Holdings and NW Natural, respectively. NW Natural's long-term debt consists of FMBs with maturity dates ranging from 2023 through 2053, interest rates ranging from 2.8% to 7.9%, and a weighted average interest rate of 4.7%. NW Holdings' long-term debt primarily consists of credit agreements at NW Holdings and NWN Water with maturity dates in 2024 and a term loan at NWN Water due in 2026.

$40.0 million of long-term debt is scheduled to mature over the next twelve months as of September 30, 2023 at NW Natural and $150.7 million at other NW Holdings. See Part II, Item 7, "Financial Condition—Long-Term Debt" in the 2022 Form 10-K for long-term debt maturing over the next five years.

Interest Rate Swap Agreements

NW Holdings and NWN Water entered into interest rate swap agreements with major financial institutions that effectively convert variable-rate debt to a fixed rate. Interest payments made between the effective date and expiration date are hedged by the swap agreements. The notional amount, effective date, expiration date and benchmark rate of the swap agreements are shown in the table below:

In millions	Notional Amount		Effective Date	Expiration Date	Fixed Rate
NW Holdings	$	100.0	1/17/2023	3/15/2024	4.7	%
NWN Water	$	55.0	1/19/2023	6/10/2026	3.8	%

Bankruptcy Ring-fencing Restrictions

As part of the ring-fencing conditions agreed upon with the OPUC and WUTC, NW Natural is required to have one director who is independent from NW Natural management and from NW Holdings and to issue one share of NW Natural preferred stock to an independent third party. NW Natural was in compliance with both of these ring-fencing provisions as of September 30, 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.

Cash Flows

Operating Activities

Changes in 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.

	Nine Months Ended September 30,
In thousands	2023		2022		YTD Change
NW Natural cash provided by operating activities	$	294,168	$	162,593	$	131,575
NW Holdings cash provided by operating activities	$	301,503	$	165,961	$	135,542

NINE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED TO SEPTEMBER 30, 2022. Cash provided by operating activities increased $135.5 million at NW Holdings and $131.6 million at NW Natural. The significant factors contributing to the increase at NW Natural were as follows:

•$67.2 million decrease in accounts receivable due to colder weather in December 2022 and a rate increase effective November 1, 2022;

•$34.7 million decrease in inventories due to a larger volume of gas withdrawn from storage;

•$30.6 million decrease in asset optimization revenue sharing bill credits to customers;

•$21.3 million increase in accrued asset removal obligations; and

•$14.5 million increase in net income; partially offset by

•$19.5 million decrease in the decoupling mechanism; and

•$11.3 million decrease in accounts payable resulting from payments of higher priced gas purchased in December 2022.

The increase in cash provided by operating activities at NW Holdings was primarily driven by the factors discussed above.

NW Natural did not make any cash contributions to its qualified defined benefit pension plans during the nine months ended September 30, 2023 or 2022. NW Natural does not expect to make any plan contributions during 2023. The amount and timing of future contributions will depend on market interest rates and investment returns on the plans' assets. For additional information, see Note 10.

NW Holdings and NW Natural have lease and purchase commitments relating to their operating activities that are financed with cash flows from operations. For information on cash flow requirements related to leases and other purchase commitments, see Note 7 and Note 16 in the 2022 Form 10-K.

Investing Activities

	Nine Months Ended September 30,
In thousands	2023		2022		YTD Change
NW Natural cash used in investing activities	$	(219,892)	$	(239,277)	$	19,385
NW Holdings cash used in investing activities	$	(250,520)	$	(257,004)	$	6,484

NINE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED TO SEPTEMBER 30, 2022. Cash used in investing activities decreased $6.5 million at NW Holdings and $19.4 million at NW Natural. The decrease in cash used in investing activities at NW Natural was primarily due to a decrease in capital expenditures related to two significant information technology projects that were placed into service in the prior year.

The decrease in cash used in investing activities at NW Holdings was primarily driven by lower capital expenditures at NW Natural, partially offset by higher capital expenditures at NWN Water.

NW Natural capital expenditures for 2023 are expected to be in the range of $310 million to $350 million and for the five-year period from 2023 to 2027 are expected to range from $1.3 billion to $1.5 billion. NW Natural Water is expected to invest approximately $25 million in 2023 related to maintenance capital expenditures for water and wastewater utilities owned as of December 31, 2022, and for the five-year period from 2023 to 2027 capital expenditures are expected to invest approximately $90 million to $110 million.

The timing and amount of the core capital expenditures and projects for 2023 and the next five years could change based on regulation, growth, and cost estimates. Additional investments in our infrastructure during and after 2023 that are not incorporated in the estimates provided above will depend largely on additional regulations, growth, and expansion opportunities. Required funds for the investments are expected to be internally generated or financed with long-term debt or equity, as appropriate.

Financing Activities

	Nine Months Ended September 30,
In thousands	2023		2022		YTD Change
NW Natural cash provided by financing activities	$	60,964	$	78,952	$	(17,988)
NW Holdings cash provided by financing activities	$	79,533	$	184,193	$	(104,660)

NINE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED TO SEPTEMBER 30, 2022. Cash provided by financing activities decreased $104.7 million at NW Holdings and $18.0 million at NW Natural. The decrease at NW Natural was attributable to lower cash contributions from NW Holdings and the retirement of long-term debt, partially offset by an increase in long-term debt issuances.

The decrease at NW Holdings was attributable to lower proceeds from common stock issuances, partially offset by changes in short-term debt.

Contingent Liabilities

Loss contingencies are recorded as liabilities when it is probable a liability has been incurred and the amount of the loss is reasonably estimable in accordance with accounting standards for contingencies. See “Application of Critical Accounting Policies and Estimates” in the 2022 Form 10-K. At September 30, 2023, NW Natural's total estimated liability related to environmental sites is $116.5 million. See "Results of Operations—Regulatory Matters—Rate Mechanisms—Environmental Costs" in the 2022 Form 10-K and Note 16.

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. Management considers critical accounting policies to be those which are most important to the representation of financial condition and results of operations and which require management’s most difficult and subjective or complex judgments, including accounting estimates that could result in materially different amounts if reported under different conditions or if they used different assumptions. Our most critical estimates and judgments for both NW Holdings and NW Natural include accounting for:

•regulatory accounting;

•revenue recognition;

•derivative instruments and hedging activities;

•pensions and postretirement benefits;

•income taxes;

•environmental contingencies; and

•impairment of long-lived assets and goodwill.

There have been no material changes to the information provided in the 2022 Form 10-K with respect to the application of critical accounting policies and estimates. See Part II, Item 7, "Application of Critical Accounting Policies and Estimates," in the 2022 Form 10-K.

Management has discussed its current estimates and judgments used in the application of critical accounting policies with the Audit Committees of the Boards of NW Holdings and NW Natural. Within the context of critical accounting policies and estimates, management is not aware of any reasonably likely events or circumstances that would result in materially different amounts being reported. For a description of recent accounting pronouncements that could have an impact on financial condition, results of operations or cash flows, see Note 2.

ITEM 3. 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. Management monitors and manages these financial exposures as an integral part of NW Holdings' and NW Natural's overall risk management program. No material changes have occurred related to disclosures about market risk for the nine months ended September 30, 2023. For additional information, see Part II, Item 1A, “Risk Factors” in this report and Part II, Item 7A, “Quantitative and Qualitative Disclosures about Market Risk” in the 2022 Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

NW Holdings and NW Natural management, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, completed an evaluation of the effectiveness of the design and operation of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)). Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer of each registrant have concluded that, as of the end of the period covered by this report, disclosure controls and procedures were effective to ensure that information required to be disclosed by each such registrant and included in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to management of each registrant, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in Internal Control Over Financial Reporting

NW Holdings and NW Natural management are responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).

There were no changes in NW Holdings' or NW Natural's internal control over financial reporting during the quarter ended September 30, 2023, that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting for NW Holdings and NW Natural. The statements contained in Exhibit 31.1, Exhibit 31.2, Exhibit 31.3, and Exhibit 31.4 should be considered in light of, and read together with, the information set forth in this Item 4(b). 

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Other than the proceedings disclosed in Note 16 and those proceedings disclosed and incorporated by reference in Part I, Item 3, “Legal Proceedings” in the 2022 Form 10-K, we have only nonmaterial litigation, or litigation that occurs in the ordinary course of our business.

ITEM 1A. RISK FACTORS

There were no material changes from the risk factors discussed in Part I, Item 1A, "Risk Factors” in the 2022 Form 10-K. In addition to the other information set forth in this report, you should carefully consider those risk factors, which could materially affect our business, financial condition, or results of operations.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

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 September 30, 2023:

Issuer Purchases of Equity Securities
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	$	16,732,648
07/01/23-07/31/23	—	—		—	—
08/01/23-08/31/23	—	—		—	—
09/01/23-09/30/23	—	—		—	—
Total	—	$	—	2,124,528	$	16,732,648

(1)During the quarter ended September 30, 2023, 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. During the quarter ended September 30, 2023, 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 September 30, 2023, no shares of NW Holdings common stock were repurchased pursuant to the Board-approved share repurchase program. Effective August 3, 2022, we received NW Holdings Board approval to extend the repurchase program. Such authorization will continue until the program is used, terminated or replaced. For more information on this program, refer to Note 5 in the 2022 Form 10-K.

ITEM 5. OTHER INFORMATION

The following disclosure is intended to satisfy any obligation to provide disclosures pursuant to Items 1.01 and 5.02 of Form 8-K.

On November 1, 2023, the Board of Directors of each of NW Holdings and NW Natural approved and adopted a revised form of Amended and Restated Indemnity Agreement (Revised Indemnity Agreements) to be entered into with each director and executive officer, which will supersede the existing Indemnity Agreements with each director and officer (Existing Indemnity Agreements). The Revised Indemnity Agreements were adopted in order to incorporate certain legal updates and updates that reflect current market indemnification practices. Like the Existing Indemnity Agreements, the Revised Indemnity Agreements provide for indemnification to the fullest extent permitted by law and also alter or clarify the statutory indemnity in the following respects:

•prompt advancement of litigation expenses is provided if the director or officer makes the required affirmation and undertaking;

•the director or officer is permitted to enforce the indemnity obligation in court and the burden is on NW Holdings or NW Natural, as applicable, to prove that the director or officer is not entitled to indemnification;

•indemnity is explicitly provided for judgments and settlements in derivative actions;

•prompt indemnification is provided unless a determination is made that the director or officer is not entitled to indemnification; and

•partial indemnification is permitted if the director or officer is not entitled to full indemnification.

The rights provided under the Revised Indemnity Agreements are in addition to any other rights such directors and officers may be entitled to under NW Holdings’ and NW Natural’s Amended Articles of Incorporation, NW Holdings’ and NW Natural’s Amended and Restated Bylaws, the Oregon Business Corporation Act, or otherwise.

The foregoing description of the Revised Indemnity Agreements is qualified in its entirety by the full forms of Revised Indemnity Agreements, which are filed as Exhibits 10.1 and 10.2 to this Form 10-Q and incorporated by reference herein.

ITEM 6. EXHIBITS

See the Exhibit Index below, which is incorporated by reference herein.

NORTHWEST NATURAL GAS COMPANY

NORTHWEST NATURAL HOLDING COMPANY

 Exhibit Index to Quarterly Report on Form 10-Q

For the Quarter Ended September 30, 2023

Exhibit Index
Exhibit Number	Document
4	Twenty-sixth Supplemental Indenture, providing for, among other things, First Mortgage Bonds, 5.18% Series due 2034 and 5.23% Series due 2038, dated as of July 1, 2023, by and between Northwest Natural Gas Company and Deutsche Bank Trust Company Americas (incorporated by reference to Exhibit 4.1 to the Form 8-K filed August 7, 2023, file No. 1-15973).
10.1	Revised form of Amended and Restated Indemnity Agreement, approved by the Board of Directors of Northwest Natural Gas Company on November 1, 2023.
10.2	Revised form of Amended and Restated Indemnity Agreement, approved by the Board of Directors of Northwest Natural Holding Company on November 1, 2023.
31.1	Certification of Principal Executive Officer of Northwest Natural Gas Company Pursuant to Rule 13a-14(a)/15-d-14(a), Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial Officer of Northwest Natural Gas Company Pursuant to Rule 13a-14(a)/15-d-14(a), Section 302 of the Sarbanes-Oxley Act of 2002.
31.3	Certification of Principal Executive Officer of Northwest Natural Holding Company Pursuant to Rule 13a-14(a)/15-d-14(a), Section 302 of the Sarbanes-Oxley Act of 2002.
31.4	Certification of Principal Financial Officer of Northwest Natural Holding Company Pursuant to Rule 13a-14(a)/15-d-14(a), Section 302 of the Sarbanes-Oxley Act of 2002.
*32.1	Certification of Principal Executive Officer and Principal Financial Officer of Northwest Natural Gas Company Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*32.2	Certification of Principal Executive Officer and Principal Financial Officer of Northwest Natural Holding Company Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following materials formatted in Inline Extensible Business Reporting Language (Inline XBRL): (i) Consolidated Statements of Income; (ii) Consolidated Balance Sheets; (iii) Consolidated Statements of Cash Flows; and (iv) Related notes. The instance document does not appear in the interactive data file because XBRL tags are embedded within the Inline XBRL document.
104	The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, formatted in Inline XBRL.

*    Pursuant to Item 601(b)(32)(ii) of Regulation S-K, this certification is furnished and not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature for each undersigned company shall be deemed to relate only to matters having reference to such company and its subsidiaries.

NORTHWEST NATURAL GAS COMPANY

(Registrant)

Dated:	November 3, 2023
		/s/ Brody J. Wilson
		Brody J. Wilson
		Principal Accounting Officer
		Chief Financial Officer, Vice President, Treasurer, and Chief Accounting Officer

NORTHWEST NATURAL HOLDING COMPANY

(Registrant)

Dated:	November 3, 2023
		/s/ Brody J. Wilson
		Brody J. Wilson
		Principal Accounting Officer
		Chief Financial Officer, Vice President, Treasurer, and Chief Accounting Officer

EX-10.1

EXHIBIT 10.1

AMENDED AND RESTATED INDEMNITY AGREEMENT

THIS AGREEMENT is made as of _____ ___, _____ by and between Northwest Natural Gas Company, an Oregon corporation (the “Company”) and a wholly-owned subsidiary of Northwest Natural Holding Company (“Parent”), and ________________ (“Indemnitee”), a director or officer of the Company.

RECITALS

A. It is essential to the Company to retain and attract as directors and officers the most capable persons available.

B. The increase in corporate litigation subjects directors and officers to expensive litigation risks at the same time that the availability and coverage of directors’ and officers’ liability insurance have been reduced.

C. It is now and always has been the express policy of the Company to indemnify its directors and officers so as to provide them with the maximum possible protection permitted by law.

D. The Amended and Restated Articles of Incorporation of the Company (the “Restated Articles”) require indemnification of the directors and officers of the Company to the fullest extent permitted by law. The Oregon Business Corporation Act (the “Act”) expressly provides that the indemnification provisions set forth in the Act are not exclusive, and thereby contemplates that contracts may be entered into between the Company and members of the Board of Directors and officers with respect to indemnification of directors and officers.

NOW, THEREFORE, the Company and Indemnitee agree as follows:

1. Services to the Company. Indemnitee will serve or continue to serve as a director or officer of the Company for so long as Indemnitee is duly elected or appointed or until Indemnitee tenders a resignation in writing or is removed.

2.Definitions. As used in this Agreement:

(a) A “Change in Control” shall be deemed to have occurred upon any of the following events:

(A)    The consummation of:

(1)    any consolidation, merger or plan of share exchange involving Parent (a “Merger”) as a result of which the holders of outstanding securities of Parent ordinarily having the right to vote for the election of directors (“Voting Securities”) immediately

prior to the Merger do not continue to hold at least 50% of the combined voting power of the outstanding Voting Securities of the surviving corporation or a parent corporation of the surviving corporation immediately after the Merger, disregarding any Voting Securities issued to or retained by such holders in respect of securities of any other party to the Merger;

(2)    any consolidation, merger, plan of share exchange or other transaction involving the Company as a result of which Parent does not continue to hold, directly or indirectly, at least 50% of the outstanding securities of the Company ordinarily having the right to vote for the election of directors; or

(3)    any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, the assets of Parent or the Company;

(B)    At any time during a period of two consecutive years, individuals who at the beginning of such period constituted the board of directors of Parent (“Incumbent Directors”) shall cease for any reason to constitute at least a majority thereof; provided, however, that the term “Incumbent Director” shall also include each new director elected during such two-year period whose nomination or election was approved by two-thirds of the Incumbent Directors then in office; or

(C)    Any Person (as defined below) shall, as a result of a tender or exchange offer, open market purchases or privately negotiated purchases from anyone other than Parent, have become the beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934 (the “Exchange Act”), directly or indirectly, of Voting Securities representing twenty percent (20%) or more of the combined voting power of the then outstanding Voting Securities, but disregarding any Voting Securities with respect to which that acquirer has filed a Schedule 13G with the Securities and Exchange Commission (“SEC”) indicating that the Voting Securities were not acquired and are not held for the purpose of or with the effect of changing or influencing, directly or indirectly, the Company’s management or policies, unless and until that entity or person files a Schedule 13D with the SEC, at which point this exception will not apply to such Voting Securities, including those previously subject to a Schedule 13G. For purposes of this definition, the term “Person” shall mean and include any individual, corporation, partnership, group, association or other “person,” as such term is used in Section 14(d) of the Exchange Act, other than the Company or Parent or any employee benefit plan sponsored by the Company or Parent.

Notwithstanding anything in the foregoing to the contrary, unless otherwise determined by the Board, no Change in Control shall be deemed to have occurred for purposes of this Agreement if (1) an executive officer acquires (other than on the same basis as all other holders of shares of Common Stock of Parent or the Company) an equity interest in an entity that acquires Parent or the Company in a Change in Control otherwise described under subparagraph (A) above, or (2) an executive officer is part of a group that constitutes a Person which becomes a beneficial owner of Voting Securities in a transaction that otherwise would have resulted in a Change in Control under subparagraph (C) above.

(b)The term “Expenses” means all direct and indirect expenses, including fees and expenses of attorneys, fees and expenses of accountants, court costs, transcript costs, fees and expenses of experts, witness fees and expenses, travel expenses, printing and binding costs, telephone charges, delivery service fees, the premium, security for, and other costs relating to any bond (including cost bonds, appraisal bonds, or their equivalents), together with all other disbursements or expenses incurred in connection with (i) the investigation, preparation, prosecution, defense, settlement, mediation, arbitration and appeal of a Proceeding (as defined below), (ii) serving as an actual or prospective witness, or preparing to be a witness in a Proceeding, or other participation in, or other preparation for, any Proceeding, or otherwise being asked to participate in or respond to any discovery related to a Proceeding, (iii) any compulsory interviews or depositions related to a Proceeding, (iv) any non-compulsory interviews or depositions related to a Proceeding, subject to the person receiving advance written approval by the Company to participate in such interviews or depositions, (v) responding to, or objecting to, a request to provide discovery in any Proceeding, and (vi) establishing or enforcing a right to indemnification under this Agreement, the Company’s Bylaws, the Restated Articles, other applicable law or otherwise. Expenses shall also include any federal, state, local and foreign taxes imposed on such person as a result of the actual or deemed receipt of any payments under this Agreement.

(c) “Improper Personal Benefit” means a person’s receipt of a personal gain in fact, in connection with such person’s service in an Official Capacity (as defined below), in the form of a financial profit, monies or other advantage not also accruing to the benefit of the Company or to the shareholders generally and which is unrelated to his or her usual compensation by the Company for serving as a director or officer, including, but not limited to: (1) the diversion of a corporate opportunity, and (2) the use or communication of confidential information relating to the Company or its business or affairs for the purpose of generating a profit from trading in the Company’s securities or providing a benefit to a third party, including, without the express written consent of the Board of Directors, assisting a third party who is seeking to change the composition of the Board of Directors, management of the Company or the policies or strategic direction of the Company.

(d) An “Indemnifiable Event” means any event or occurrence, whether occurring before, on or after the date of this Agreement, related to or arising out of the fact that the Indemnitee is or was serving in an Official Capacity, or by reason of an action or inaction by the Indemnitee in any such Official Capacity, whether the basis of such Proceeding is an alleged action in an Official Capacity or in any other capacity while serving in an Official Capacity and whether or not serving in any Official Capacity at the time any Losses are incurred for which indemnity or Expense Advance (as defined below) can be provided under this Agreement.

(e) “Losses” means all direct and indirect Expenses, losses, liabilities, damages, judgments, fines, penalties (whether civil, criminal or other), ERISA excise taxes assessed on a person with respect to an employee benefit plan, and amounts paid or payable in connection with any judgment, award or settlement, including any interest, assessments, and any federal, state, local or foreign taxes imposed as a result of the actual or deemed receipt of any indemnification or expense advancement payments hereunder.

(f) “Official Capacity” means any and all past, present or future service by the Indemnitee as a director, officer, employee or agent of the Company or, serving at the request of the Company as a director, officer, employee, fiduciary, trustee, agent or other representative of an Other Enterprise.

(g)References to “other enterprise” includes another corporation, partnership, limited liability company, joint venture, trust, bank, association or other enterprise, whether for profit or not-for-profit, including, but not limited to, any subsidiaries or affiliates of the Company, any entities formed by the Company and any employee benefit plans maintained or sponsored by the Company; references to “fines” includes any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Company” includes any service to an Other Enterprise by the Indemnitee at the request of, for the convenience of, or to represent the interests of, the Company or any subsidiary or affiliate of the Company. For the purposes of this Agreement, the Indemnitee’s service to an Other Enterprise shall be presumed to constitute serving at the request of the Company, unless it is conclusively determined to the contrary by a majority vote of the directors of the Company then in office, excluding from such vote any interested director. With respect to such determination, it shall not be necessary for the Indemnitee to show any actual or prior request by the Company or its Board of Directors for such service to an Other Enterprise; and a person who acted in good faith and in a manner reasonably believed to be in the best interest of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement. References to “Person” (other than in the definition of “Change in Control”) means any individual, corporation (profit or not-for-profit), firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, governmental entity or other entity.

(h)The term “Proceeding” includes any threatened, asserted, pending or completed claim, action, suit or proceeding, arbitration, mediation, inquiry, hearing, investigation (including any internal investigation), other alternative dispute mechanism or any other proceeding, whether civil, criminal, administrative, regulatory, arbitrative, legislative, investigative or otherwise and whether formal or informal, or any appeal of any kind therefrom, including an action initiated by the Indemnitee to enforce the Indemnitee’s rights to indemnification or Expense Advance (as defined below) under this Agreement or any provision of the Restated Articles, the Company’s Bylaws, or other applicable law, and whether instituted by or in the right of the Company, a governmental agency, the Board of Directors, any authorized committee thereof, a class of the Company’s security holders or any other party, and whether made pursuant to federal, state or other law, or any inquiry, hearing or investigation (including any internal investigation), whether formal or informal, whether instituted by or in the right of the Company, a governmental agency, the Board of Directors, any committee thereof, a class of the Company’s security holders, or any other party that the Indemnitee believes might lead to the institution of any such proceeding.        

3.Indemnity in Third-Party Proceedings. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is a party to or threatened to be made a party to any Proceeding (other than a Proceeding by or in the right of the Company to

procure a judgment in its favor) arising by reason of (or arising in part out of) an Indemnifiable Event, against all Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee in connection with the Proceeding, but only if Indemnitee acted in good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding, in addition, had no reasonable cause to believe that Indemnitee’s conduct was unlawful.

4.Indemnity in Proceedings by or in the Right of the Company. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 4 if Indemnitee is a party to or threatened to be made a party to any Proceeding by or in the right of the Company to procure a judgment in its favor arising by reason of (or arising in part out of) an Indemnifiable Event, against all Expenses actually and reasonably incurred by Indemnitee in connection with the defense or settlement of the Proceeding, but only if Indemnitee acted in good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Company. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity.

5.Indemnification of Expenses of Successful Party. Notwithstanding any other provisions of this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise, in defense of any Proceeding or in defense of any claim, issue or matter therein, including the dismissal of an action without prejudice, or in prosecution of any Proceeding to enforce the Company’s obligations under this Agreement pursuant to Section 11, the Company shall indemnify Indemnitee against all Losses actually and reasonably incurred in connection therewith, notwithstanding an earlier determination by the Company (including by its directors, committee members, shareholders or any Independent Counsel) that the Indemnitee is not entitled to indemnification under applicable law. For purposes of this Agreement, the term “successful on the merits or otherwise” shall include, but not be limited to, (i) any termination, withdrawal, or dismissal (with or without prejudice) of any Proceeding against the Indemnitee without any express finding of liability or guilt against the Indemnitee, (ii) the expiration of one-hundred twenty (120) calendar days after the making of any claim or threat of a Proceeding without the institution of the same and without any promise or payment made to induce a settlement, and (iii) the settlement of any Proceeding pursuant to which the Indemnitee is obligated to pay less than $100,000.

6.Additional Indemnification.

(a)The Company agrees, as set forth in this Section 6(a), to indemnify Indemnitee to the fullest extent permitted by law, notwithstanding that such indemnification may not be specifically authorized by the Restated Articles, the Company’s Bylaws, the Act or the other provisions of this Agreement. Accordingly, notwithstanding any limitation in Sections 3, 4 or 5, the Company shall indemnify Indemnitee to the fullest extent permitted by law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a

Proceeding by or in the right of the Company to procure a judgment in its favor) against all judgments, fines, amounts paid in settlement and Expenses actually and reasonably incurred by Indemnitee in connection with the Proceeding. No indemnity shall be made under this Section 6(a) on account of Indemnitee’s conduct which constitutes a breach of Indemnitee’s duty of loyalty to the Company or its shareholders or is an act or omission not in good faith or which involves intentional misconduct or a knowing violation of the law.

(b)For purposes of Section 6(a), the meaning of the phrase “to the fullest extent permitted by law” includes, but is not limited to:

(i)to the fullest extent permitted by the provision of the Act that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the Act; and

(ii)to the fullest extent authorized or permitted by any amendments to or replacements of the Act adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.

(c)The Company agrees to indemnify Indemnitee for Expenses if Indemnitee is called, in connection with a Proceeding, as a non-party witness by reason of the fact that Indemnitee is or was a director or officer of the Company.

7.Exclusions. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:

(a)for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision;

(b)for any transaction from which Indemnitee derived an Improper Personal Benefit;

(c)for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act, or similar provisions of state statutory or common law;

(d)if a court having jurisdiction in the matter shall finally determine that such indemnification is not lawful under any applicable statute or public policy (and, in this respect, both the Company and Indemnitee have been advised that the Securities and Exchange Commission believes that indemnification for liabilities arising under the federal securities laws is against public policy and is, therefore, unenforceable and that claims for indemnification should be submitted to appropriate courts for adjudication);

(e)in connection with any Proceeding (or part of any Proceeding) initiated by Indemnitee, or any Proceeding by Indemnitee against the Company and its directors, officers, employees or other indemnitees, unless (i) the Company is expressly required by law to make the indemnification, (ii) the Proceeding was authorized by the Board of Directors of the Company, (iii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law, or (iv) Indemnitee initiated the Proceeding pursuant to Section 11 of this Agreement and Indemnitee is successful in whole or in part in the Proceeding; and

(f) on account of any Proceeding for any reimbursement of the Company by the Indemnitee of any compensation as required under any incentive compensation recoupment or “clawback” policy of the Company in effect from time to time.

8.Advances of Expenses. The Company shall pay the expenses incurred by Indemnitee in any Proceeding in advance of the final disposition of such Proceeding (“Expense Advance”), at the written request of Indemnitee, if Indemnitee:

(a)furnishes the Company a written affirmation of the Indemnitee’s good faith belief that Indemnitee is entitled to be indemnified by the Company under this Agreement; and

(b)furnishes the Company a written undertaking to repay the advance to the extent that it is ultimately determined (in accordance with this Section 8 or by final judicial determination from which there is no further right to appeal, as applicable) that Indemnitee is not entitled to be indemnified by the Company.

Advances shall be made without regard to Indemnitee’s ability to repay the expenses and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement. Advances made under this Section 8 shall be paid by the Company to Indemnitee as soon as practicable but in any event within ten (10) business days after the receipt by the Company of a written request by Indemnitee to the Company, together with a reasonable accounting of such Expenses, pursuant to this Section 8. Any advances pursuant to this Section 8 shall be unsecured and interest-free. Except as expressly set forth in this Section 8, the Company shall not impose on the Indemnitee additional conditions to Expense Advance or require from the Indemnitee additional undertakings regarding repayment. Advancements shall include any and all reasonable Expenses incurred, or reasonably anticipated to be incurred, pursuing an action to enforce the Indemnitee’s right of Expense Advance pursuant to this Agreement or any provision of the Restated Articles, the Company’s Bylaws, the Act or other applicable law, including Expenses incurred preparing and forwarding statements to the Company to support the Expense Advances claimed pursuant to this Agreement.

9.Notification and Defense of Claim. Not later than thirty (30) days after receipt by Indemnitee of notice of the commencement of any Proceeding, Indemnitee will, if a claim in respect of the Proceeding is to be made against the Company under this Agreement, notify the Company of the commencement of the Proceeding, including, to the extent reasonably available to the Indemnitee, the nature of, and the facts underlying, such Proceeding or matter and such

other documentation and information as is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. Without limiting the generality of the foregoing, the Indemnitee agrees to promptly notify the Company in writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint, indictment, information, or other documents relating to any Proceeding or matter which may be subject to indemnification hereunder. The omission to notify the Company will not relieve the Company from any liability which it may have to Indemnitee otherwise than under this Agreement. With respect to any Proceeding as to which Indemnitee notifies the Company of the commencement:

(a)The Company will be entitled to participate in the Proceeding at its own expense.

(b)Except as otherwise provided below, the Company may, at its option and jointly with any other indemnifying party similarly notified and electing to assume such defense, assume the defense of the Proceeding, with legal counsel reasonably satisfactory to the Indemnitee. Indemnitee shall have the right to use separate legal counsel in the Proceeding, but the Company shall not be liable to Indemnitee under this Agreement, including Section 8 above, for the fees and expenses of separate legal counsel incurred after notice from the Company of its assumption of the defense, unless (i) Indemnitee reasonably concludes that there may be a conflict of interest between the Company and Indemnitee in the conduct of the defense of the Proceeding, (ii) the named parties in any such Proceeding (including any impleaded parties) include the Company or any subsidiary of the Company and the Indemnitee, and the Indemnitee reasonably concludes that there may be one or more legal defenses available to him or her that are different from or in addition to those available to the Company or any subsidiary of the Company, (iii) any such representation by such counsel would be precluded under the applicable standards of professional conduct then prevailing, in which case the Indemnitee shall be entitled to retain separate counsel (but not more than one law firm plus, if applicable, local counsel in respect of any particular Proceeding) at the Company’s expense or (iv) the Company does not use legal counsel to assume the defense of such Proceeding. The Company shall not be entitled to assume the defense of any Proceeding brought by or on behalf of the Company or as to which Indemnitee shall have made the conclusion provided for in (i) above.

(c)If two or more persons who may be entitled to indemnification from the Company, including the Indemnitee, are parties to any Proceeding, the Company may require Indemnitee to use the same legal counsel as the other parties. Indemnitee shall have the right to use separate legal counsel in the Proceeding, but the Company shall not be liable to Indemnitee under this Agreement, including Section 8 above, for the fees and expenses of separate legal counsel incurred after notice from the Company of the requirement to use the same legal counsel as the other parties, unless the Indemnitee reasonably concludes that there may be a conflict of interest between Indemnitee and any of the other parties required by the Company to be represented by the same legal counsel.

(d)The Company shall not be liable to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding effected without its written consent, which shall not be unreasonably withheld. Indemnitee shall permit the Company to

settle any Proceeding the defense of which it assumes, except that the Company shall not settle any action or claim in any manner which would impose any penalty or limitation on Indemnitee without Indemnitee’s written consent, which may be given or withheld in Indemnitee’s sole discretion.

10.Procedure Upon Application for Indemnification. Any indemnification under Sections 3, 4, 5 or 6 of this Agreement shall be made no later than 90 days after receipt of the written request of Indemnitee for indemnification and shall not require that a determination be made in accordance with the Act by the persons specified in the Act that indemnification is required under this Agreement. However, unless it is ordered by a court in an enforcement action under Section 11 of this Agreement, no such indemnification shall be made if a determination is made within such 90-day period by (a) the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to the Proceeding (“Disinterested Directors”), (b) if such a quorum of Disinterested Directors cannot be obtained, by majority vote of a committee duly designated by the Board of Directors (all directors, whether or not Disinterested Directors, may participate in such designation) consisting solely of two or more Disinterested Directors, (c) independent legal counsel in a written opinion (which counsel shall be appointed if such committee cannot be designated), that the Indemnitee is not entitled to indemnification under this Agreement (“Independent Counsel”), or (d) if such Independent Counsel determination cannot be obtained, by majority vote of a quorum of shareholders consisting of shareholders who are not parties to such Proceeding, or if no such quorum is obtainable, by a majority vote of shareholders who are not parties to such Proceeding, using such directors’, committee members’, Independent Counsel’s or shareholders’, as the case may be, reasonable best efforts to make such determination as promptly as is reasonably practicable under the circumstances, as to whether the Indemnitee is entitled to be indemnified under applicable law. If it is so determined that the Indemnitee is entitled to indemnification, payment to the Indemnitee shall be made within thirty (30) calendar days after such determination. The Indemnitee shall reasonably cooperate with the Person or Persons making such determination with respect to the Indemnitee’s entitlement to indemnification, including providing to such Person or Persons upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to the Indemnitee and reasonably necessary to such determination. Any costs or expenses (including attorneys’ fees and disbursements) actually and reasonably incurred by the Indemnitee in so cooperating with the Person or Persons making such determination shall be borne by the Company (irrespective of the determination as to the Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold the Indemnitee harmless therefrom. Any determination by the Company that the Indemnitee is entitled to indemnification (including by its directors, committee members, shareholders or any Independent Counsel) shall be conclusive and binding on the Company and the Indemnitee. The Company agrees that all costs incurred by the Company in making the determination under this Section 10 shall be borne solely by the Company, including, but not limited to, the costs of legal counsel (including any Independent Counsel serving under this Section 10), proxy solicitations and judicial determinations.

11.Enforcement.

(a) Indemnitee may enforce any right to indemnification or advances granted by this Agreement to Indemnitee in any court of competent jurisdiction if (a) the Company denies the claim for indemnification or advances, in whole or in part, (b) the Company does not dispose of the claim within 90 days of a written request for indemnification or advances, (c) any amount of Losses is not paid in full by the Company according to Section 3 or 4 after a determination is made pursuant to Section 10 that the Indemnitee is entitled to be indemnified or (d) any amount of Expense Advance is not paid in full by the Company according to Section 8 after a request and an undertaking pursuant to Section 8 have been received by the Company.

(b) Indemnitee, in the enforcement action, if successful in whole or in part, shall be entitled to be paid also the expense of prosecuting the claim. It shall be a defense to any such enforcement action (other than an action brought to enforce a claim for advancement of Expenses pursuant to Section 8 above, if Indemnitee has tendered to the Company the required affirmation and undertaking) that Indemnitee is not entitled to indemnification under this Agreement, but the burden of proving this defense shall be on the Company. Neither a failure of the Company (including its Board of Directors or its shareholders) to make a determination prior to the commencement of the enforcement action that indemnification of Indemnitee is proper in the circumstances, nor an actual determination by the Company (including its Board of Directors or its shareholders) that indemnification is improper shall be a defense to the action or create a presumption that Indemnitee is not entitled to indemnification under this Agreement or otherwise. The termination of any Proceeding by judgment, order of court, settlement, conviction or upon a plea of nolo-contendere, or its equivalent, shall not, of itself, create a presumption that Indemnitee is not entitled to indemnification under this Agreement or otherwise.

12. Indemnification for Expenses of the Indemnitee in Enforcing Rights. To the fullest extent allowable under the Act and other applicable law, the Company shall also indemnify, or cause the indemnification of, the Indemnitee against any and all Expenses and, if requested by the Indemnitee, shall advance such Expenses to the Indemnitee subject to and in accordance with Sections 8 and 11, which are actually and reasonably incurred by the Indemnitee in connection with any Proceeding brought by the Indemnitee for (i) indemnification or an Expense Advance by the Company under any provision of this Agreement, under any other agreement that the Indemnitee is a party to, or under any provision of the Restated Articles, the Company’s Bylaws, the Act or other applicable law now or hereafter in effect, in each case, relating to the Indemnitee’s rights to indemnification or Expense Advance, and/or (ii) recovery under any director’s and officer’s liability or other insurance policies maintained by the Company, regardless of, in the case of (i) or (ii), whether the Indemnitee ultimately is determined to be entitled to such indemnification, Expense Advance or insurance recovery, as the case may be. The Indemnitee shall be required to reimburse the Company in the event that a final judicial determination is made that any such Proceeding brought by the Indemnitee was frivolous or was not made in good faith.

13.Partial Indemnification. If Indemnitee is entitled under any provisions of this Agreement to indemnification by the Company for some or part of the Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee in the investigation, defense, appeal or settlement of any Proceeding but not, however, for the total

amount, the Company shall indemnify Indemnitee for the portion of the Expenses, judgments, fines and amounts paid in settlement to which Indemnitee is entitled.

14. Presumptions and Effect of Certain Proceedings.

    (a)    In connection with any determination concerning the Indemnitee’s right to indemnification, the Person or Persons making such determination shall presume that the Indemnitee has satisfied the applicable standard of conduct and is entitled to indemnification under this Agreement if the Indemnitee has submitted a request for indemnification in accordance with Section 10 above, and, except where any required undertaking under Section 8 has not been delivered to the Company, anyone seeking to overcome this presumption shall have the burden of proof and burden of persuasion, by clear and convincing evidence.

(b)    The Indemnitee shall be deemed to have met the applicable standard of conduct and to be entitled to indemnification under the Act for any action or omission to act undertaken (i) in good faith reliance upon the records of the Company, including its financial statements, or upon information, opinions, reports or statements furnished to the Indemnitee by the officers or employees of the Company or any of its subsidiaries in the course of their duties, or by committees of the Board of Directors, or by any other Person as to matters the Indemnitee reasonably believes are within such other Person’s professional or expert competence, or (ii) on behalf of the Company in furtherance of the interests of the Company in good faith in reliance upon, and in accordance with, the advice of legal counsel or accountants; provided, however that the Indemnitee has no reasonable cause to believe that such legal counsel or accountants were not selected with reasonable care by or on behalf of the Company. In addition, the knowledge and/or actions, or failures to act, of any director, officer, agent or employee of the Company or an Other Enterprise shall not be imputed to the Indemnitee for purposes of determining the right to indemnification or advancement of Expenses under this Agreement. Whether or not the foregoing provisions of this Section 14(b) are satisfied, it shall in any event be presumed that the Indemnitee has at all times acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion, by clear and convincing evidence.

(c)    For purposes of this Agreement, the termination of any Proceeding by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law.

    15. Failure to Act Not a Defense. Neither the failure of the Company (including by its directors, committee members, shareholders or any Independent Counsel) to have made a determination as to whether the Indemnitee has met any particular standard of conduct or had any particular belief, nor an actual determination by the Company (including by its directors, committee members, shareholders or any Independent Counsel) that the Indemnitee has not met such standard of conduct or did not have such belief, prior to the commencement of legal

proceedings by the Indemnitee to secure a judicial determination that the Indemnitee should be indemnified under applicable law, shall be a defense in any action brought under Section 11 hereof to the Indemnitee’s claim for indemnification or Expense Advance or create a presumption that the Indemnitee has not met any particular standard of conduct or did not have any particular belief.

16.Nonexclusivity and Continuity of Rights. The indemnification provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may be entitled under the Restated Articles, the Company’s Bylaws, any other agreement, any vote of shareholders or directors, the Act, or otherwise, both as to action in Indemnitee’s official capacity and as to action in another capacity while holding office. The indemnification under this Agreement shall continue as to Indemnitee even though Indemnitee ceases to be a director or officer and shall inure to the benefit of the heirs and personal representatives of Indemnitee.

17.Business Combinations. Prior to any Change in Control, the Company shall obtain a prepaid, fully-earned and non-cancellable “tail” directors’ and officers’ liability insurance policy in respect of acts or omissions occurring at or prior to the Change in Control with a claims period of six (6) years from the effective date of the Change in Control, covering the Indemnitee, to the extent that the Indemnitee is covered by directors’ and officers’ liability insurance immediately prior to the Change in Control, with the coverage and amounts and containing terms and conditions that are not less advantageous to the directors and officers of the Company and its subsidiaries than those of the directors’ and officers’ liability insurance in effect immediately prior to such Change in Control. Any such tail policy may not be amended, modified, cancelled or revoked after the Change in Control by the Company or any successor thereto in any manner that is adverse to the Indemnitee.

18. Covenant Not To Sue, Limitation of Actions and Release of Claims. To the extent permitted by applicable law, no legal action shall be brought and no cause of action shall be asserted by or in the right of the Company (or any of its subsidiaries) against the Indemnitee, the Indemnitee’s spouse, heirs, executors, or personal or legal representatives, administrators or estate after the expiration of two (2) years from the date of accrual of such cause of action, and any claim or cause of action of the Company shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such two (2) year period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action such shorter period shall govern.

19. Access to Information. The Indemnitee shall be entitled to access such information in the possession of the Company as may be reasonably necessary to enforce the Indemnitee’s rights under this Agreement.

20. Non-Exclusivity, Etc. The rights of the Indemnitee hereunder to indemnification and Expense Advance shall be in addition to, but not exclusive of, any other rights the Indemnitee may have at any time under the Company’s Bylaws or the Restated Articles, the Act, other applicable law, any insurance policy where the Indemnitee is an insured thereunder or any other agreement, vote of shareholders or directors (or a committee of directors), or otherwise,

both as to actions in the Indemnitee’s Official Capacity and as to actions in any other capacity. The right to be indemnified or to receive advancement of Expenses under this Agreement (i) is a contract right based upon good and valuable consideration, pursuant to which the Indemnitee may sue to enforce, (ii) is, and is intended to be, retroactive and shall be available as to events occurring prior to the date of this Agreement, and (iii) shall continue after any rescission or restrictive modification of this Agreement as to events occurring prior thereto.

21. Representations and Warranties of the Company. The Company hereby represents and warrants to the Indemnitee as follows:

    (a)    Authority. The Company has all necessary power and authority to enter into, and be bound by the terms of, this Agreement, and the execution, delivery and performance of the undertakings contemplated by this Agreement have been duly authorized by the Company.

(b)    Enforceability. This Agreement, when executed and delivered by the Company in accordance with the provisions hereof, shall be a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the enforcement of creditors’ rights generally.

22.Severability. If this Agreement or any portion of it is invalidated on any ground by any court of competent jurisdiction, the Company shall indemnify Indemnitee as to Expenses, judgments, fines and amounts paid in settlement with respect to any Proceeding to the full extent permitted by any applicable portion of this Agreement that is not invalidated or by any other applicable law or arrangement.

23.Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of contribution or recovery of Indemnitee against other persons. Indemnitee shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such rights.

24.Modification and Waiver. Except as provided in Section 29 with respect to changes in the Act that broaden the right of the Indemnitee to be indemnified by the Company and Section 25 which provides for the Indemnitee to be afforded the benefit of a more favorable term or terms included in other indemnification agreements, no supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both parties. No waiver of any of the provisions in this Agreement shall constitute a waiver of any other provisions of this Agreement (whether or not similar) nor shall any waiver constitute a continuing waiver, unless expressly stated in any waiver.

25. More Favorable Indemnification Agreements. In the event the Company or any of its subsidiaries enters into an indemnification agreement with another director or executive officer of the Company or any of its subsidiaries or affiliates containing a term or terms more favorable to the Indemnitee than the terms contained herein, the Indemnitee shall be afforded the

benefit of such more favorable term or terms and such more favorable term or terms shall be deemed incorporated by reference herein as if set forth in full herein.

26. Contribution.

    (a)    Whether or not the indemnification provided in Sections 3 or 4 of this Agreement is available, in respect of any Proceeding in which the Company is jointly liable with the Indemnitee (or would be if joined in the Proceeding that is the basis for the Proceeding), the Company shall pay, in the first instance, the entire amount of any judgment or settlement of such Proceeding without requiring the Indemnitee to contribute to such payment and the Company hereby waives and relinquishes any right of contribution it may have against the Indemnitee. The Company shall not enter into any settlement of any Proceeding in which the Company is jointly liable with the Indemnitee (or would be if joined in the Proceeding that is the basis for the Proceeding) unless such settlement provides for a full and final release of all claims asserted against the Indemnitee, which release shall be in form and substance reasonably satisfactory to the Indemnitee.

(b)    Without diminishing or impairing the obligations of the Company set forth in Section 26(a), if, for any reason, the Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement relating to any Proceeding in which the Company is jointly liable with the Indemnitee (or would be if joined in such Proceeding), the Company shall contribute to the amount of expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by the Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company other than the Indemnitee who are jointly liable with the Indemnitee (or would be if joined in such Proceeding), on the one hand, and the Indemnitee, on the other hand, from the transaction from which such Proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to applicable law, be further adjusted by reference to the relative fault of the Company and all officers, directors or employees of the Company other than the Indemnitee who are jointly liable with the Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and the Indemnitee, on the other hand, in connection with the events that resulted in such expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which applicable law may require to be considered. The relative fault of the Company and all officers, directors or employees of the Company other than the Indemnitee who are jointly liable with the Indemnitee (or would be if joined in such Proceeding), on the one hand, and the Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary, and the degree to which their conduct is active or passive.

(c)    The Company hereby agrees to fully indemnify and hold the Indemnitee harmless from any claims of contribution which may be brought by officers, directors or employees of the Company other than the Indemnitee who may be jointly liable with the Indemnitee.

27.Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (a) upon delivery if delivered by hand to the party to whom the notice or other communication shall have been directed or (b) if mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:

(i) If to Indemnitee, at the address indicated on the signature page of this Agreement.

(ii) If to the Company, to

Northwest Natural Gas Company

250 SW Taylor St.

Portland, Oregon 97204

Attention: Chief Executive Officer

or to any other address as may have been furnished to Indemnitee by the Company.

28.Counterparts. The parties may execute this Agreement in two counterparts, each of which shall constitute the original.

29.Applicable Law. This Agreement shall be governed by and construed in accordance with the law of the state of Oregon. To the extent that a change in the Act or the interpretation thereof (whether by statute or judicial decision) permits broader indemnification or advancement of Expenses than is provided under the terms of the Restated Articles, the Company’s Bylaws and this Agreement, it is the intent of the parties hereto that the Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change in law. In the event of any change in the Act (whether by statute or judicial decision) which narrows the right of a corporation incorporated in the State of Oregon to indemnify a member of its board of directors, an officer, or other agent, such changes, to the extent not required by applicable law to be applied to this Agreement, shall have no effect on this Agreement or the parties’ rights and obligations hereunder.

30.    Conflict With Governing Documents. To the fullest extent permitted by the Act and other applicable law, in the event of a conflict between the terms of this Agreement and the terms of the Restated Articles or the Company’s Bylaws, the terms of this Agreement shall govern and prevail.

31.    Cooperation and Intent. The Company shall cooperate in good faith with the Indemnitee and use its reasonable best efforts to ensure that, to the fullest extent permitted by the Act and other applicable law, the Restated Articles, the Company’s Bylaws and the terms of this Agreement, the Indemnitee is indemnified and/or reimbursed for Losses described herein and receives the Expense Advance.

32.    Noninterference. The Company shall not seek or agree to any order of any court or other governmental authority that would prohibit, limit, or otherwise interfere, and shall not take or fail to take any other action if such action or failure would reasonably be expected to have the effect of prohibiting, limiting, or otherwise interfering, with the performance of the Company’s indemnification, advancement of Expenses or other obligations under this Agreement.

33.    Validity of Agreement. The Company shall be precluded from asserting in any Proceeding, including, without limitation, any action under Section 11 above, that the provisions of this Agreement are not valid, binding or enforceable or that there is insufficient consideration for this Agreement and shall stipulate in any judicial proceeding that the Company is bound by all the provisions of this Agreement.

34. Services of the Indemnitee. This Agreement shall not be deemed to constitute an agreement of employment between the Company or any of its affiliates and any Indemnitee nor shall it impose any obligation on the Indemnitee or the Company or any of its affiliates to continue the Indemnitee’s service to the Company. The Indemnitee specifically acknowledges that the Indemnitee’s employment with the Company or any of its affiliates is at will, and that the Indemnitee may be discharged at any time for any reason, with or without cause, and with or without severance compensation, except as may be otherwise provided in a written employment or similar agreement between the Indemnitee and the Company or any of its affiliates or other applicable formal severance policies duly adopted by the Board of Directors or other employer of the Indemnitee. The Indemnitee, if a member of the Board of Directors, hereby agrees to serve or continue to serve as a director of the Company, for so long as the Indemnitee is duly elected or appointed or until the Indemnitee tenders his or her resignation or is removed in accordance with the Restated Articles, the Company’s Bylaws and applicable law.

35.Successors and Assigns. This Agreement shall be (a) binding upon all successors and assigns of the Company (including any transferee of all or a substantial portion of the business, stock and/or assets of the Company and any direct or indirect successor by merger or consolidation or otherwise by operation of applicable law) and (b) binding on and shall inure to the benefit of the personal and legal representatives, spouses, heirs, executors and administrators of the Indemnitee. This Agreement shall continue in effect for the benefit of the Indemnitee and such personal and legal representatives, assigns, spouses, heirs, executors and administrators regardless of whether the Indemnitee continues to serve as an officer, director or other representative or agent of the Company or any other Person at the request of the Company. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all, or a significant portion, of the business and/or assets of the Company and/or its subsidiaries, by written agreement in form and substance reasonably satisfactory to the Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. Except as otherwise provided in this Section 35, neither this Agreement nor any duties or responsibilities pursuant hereto may be assigned by the Company to any other Person without the express prior written consent of the Indemnitee.

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first written above.

NORTHWEST NATURAL GAS COMPANY	INDEMNITEE
By:	By:
Signature	Signature
Type or Print Name	Type or Print Name
Title	Address

EX-10.2

EXHIBIT 10.2

AMENDED AND RESTATED INDEMNITY AGREEMENT

THIS AGREEMENT is made as of _____ ___, _____ by and between Northwest Natural Holding Company, an Oregon corporation (the “Company”), as successor in interest to Northwest Natural Gas Company, and ________________ (“Indemnitee”), a director or officer of the Company.

RECITALS

A. It is essential to the Company to retain and attract as directors and officers the most capable persons available.

B. The increase in corporate litigation subjects directors and officers to expensive litigation risks at the same time that the availability and coverage of directors’ and officers’ liability insurance have been reduced.

C. It is now and always has been the express policy of the Company to indemnify its directors and officers so as to provide them with the maximum possible protection permitted by law.

D. The Amended and Restated Articles of Incorporation of the Company (the “Restated Articles”) require indemnification of the directors and officers of the Company to the fullest extent permitted by law. The Oregon Business Corporation Act (the “Act”) expressly provides that the indemnification provisions set forth in the Act are not exclusive, and thereby contemplates that contracts may be entered into between the Company and members of the Board of Directors and officers with respect to indemnification of directors and officers.

NOW, THEREFORE, the Company and Indemnitee agree as follows:

1. Services to the Company. Indemnitee will serve or continue to serve as a director or officer of the Company for so long as Indemnitee is duly elected or appointed or until Indemnitee tenders a resignation in writing or is removed.

2.Definitions. As used in this Agreement:

(a) A “Change in Control” shall be deemed to have occurred upon any of the following events:

(A)    The consummation of:

(1)    any consolidation, merger or plan of share exchange involving the Company (a “Merger”) as a result of which the holders of outstanding securities of the Company ordinarily having the right to vote for the election of directors (“Voting

Securities”) immediately prior to the Merger do not continue to hold at least 50% of the combined voting power of the outstanding Voting Securities of the surviving corporation or a parent corporation of the surviving corporation immediately after the Merger, disregarding any Voting Securities issued to or retained by such holders in respect of securities of any other party to the Merger;

(2)    any consolidation, merger, plan of share exchange or other transaction involving Northwest Natural Gas Company as a result of which the Company does not continue to hold, directly or indirectly, at least 50% of the outstanding securities of Northwest Natural Gas Company ordinarily having the right to vote for the election of directors; or

(3)    any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, the assets of the Company or Northwest Natural Gas Company;

(B)    At any time during a period of two consecutive years, individuals who at the beginning of such period constituted the board of directors of the Company (“Incumbent Directors”) shall cease for any reason to constitute at least a majority thereof; provided, however, that the term “Incumbent Director” shall also include each new director elected during such two-year period whose nomination or election was approved by two-thirds of the Incumbent Directors then in office; or

(C)    Any Person (as defined below) shall, as a result of a tender or exchange offer, open market purchases or privately negotiated purchases from anyone other than the Company, have become the beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934 (the “Exchange Act”), directly or indirectly, of Voting Securities representing twenty percent (20%) or more of the combined voting power of the then outstanding Voting Securities, but disregarding any Voting Securities with respect to which that acquirer has filed a Schedule 13G with the Securities and Exchange Commission (“SEC”) indicating that the Voting Securities were not acquired and are not held for the purpose of or with the effect of changing or influencing, directly or indirectly, Northwest Natural Gas Company’s management or policies, unless and until that entity or person files a Schedule 13D with the SEC, at which point this exception will not apply to such Voting Securities, including those previously subject to a Schedule 13G. For purposes of this definition, the term “Person” shall mean and include any individual, corporation, partnership, group, association or other “person,” as such term is used in Section 14(d) of the Exchange Act, other than the Company or Northwest Natural Gas Company or any employee benefit plan sponsored by the Company or Northwest Natural Gas Company.

Notwithstanding anything in the foregoing to the contrary, unless otherwise determined by the Board, no Change in Control shall be deemed to have occurred for purposes of this Agreement if (1) an executive officer acquires (other than on the same basis as all other holders of shares of Common Stock of the Company or Northwest Natural Gas Company) an equity interest in an entity that acquires the Company or Northwest Natural Gas Company in a Change in Control otherwise described under subparagraph (A) above, or (2) an executive officer is part of a group

that constitutes a Person which becomes a beneficial owner of Voting Securities in a transaction that otherwise would have resulted in a Change in Control under subparagraph (C) above.

(b)The term “Expenses” means all direct and indirect expenses, including fees and expenses of attorneys, fees and expenses of accountants, court costs, transcript costs, fees and expenses of experts, witness fees and expenses, travel expenses, printing and binding costs, telephone charges, delivery service fees, the premium, security for, and other costs relating to any bond (including cost bonds, appraisal bonds, or their equivalents), together with all other disbursements or expenses incurred in connection with (i) the investigation, preparation, prosecution, defense, settlement, mediation, arbitration and appeal of a Proceeding (as defined below), (ii) serving as an actual or prospective witness, or preparing to be a witness in a Proceeding, or other participation in, or other preparation for, any Proceeding, or otherwise being asked to participate in or respond to any discovery related to a Proceeding, (iii) any compulsory interviews or depositions related to a Proceeding, (iv) any non-compulsory interviews or depositions related to a Proceeding, subject to the person receiving advance written approval by the Company to participate in such interviews or depositions, (v) responding to, or objecting to, a request to provide discovery in any Proceeding, and (vi) establishing or enforcing a right to indemnification under this Agreement, the Company’s Bylaws, the Restated Articles, other applicable law or otherwise. Expenses shall also include any federal, state, local and foreign taxes imposed on such person as a result of the actual or deemed receipt of any payments under this Agreement.

(c) “Improper Personal Benefit” means a person’s receipt of a personal gain in fact, in connection with such person’s service in an Official Capacity (as defined below), in the form of a financial profit, monies or other advantage not also accruing to the benefit of the Company or to the shareholders generally and which is unrelated to his or her usual compensation by the Company for serving as a director or officer, including, but not limited to: (1) the diversion of a corporate opportunity, and (2) the use or communication of confidential information relating to the Company or its business or affairs for the purpose of generating a profit from trading in the Company’s securities or providing a benefit to a third party, including, without the express written consent of the Board of Directors, assisting a third party who is seeking to change the composition of the Board of Directors, management of the Company or the policies or strategic direction of the Company.

(d) An “Indemnifiable Event” means any event or occurrence, whether occurring before, on or after the date of this Agreement, related to or arising out of the fact that the Indemnitee is or was serving in an Official Capacity, or by reason of an action or inaction by the Indemnitee in any such Official Capacity, whether the basis of such Proceeding is an alleged action in an Official Capacity or in any other capacity while serving in an Official Capacity and whether or not serving in any Official Capacity at the time any Losses are incurred for which indemnity or Expense Advance (as defined below) can be provided under this Agreement.

(e) “Losses” means all direct and indirect Expenses, losses, liabilities, damages, judgments, fines, penalties (whether civil, criminal or other), ERISA excise taxes assessed on a person with respect to an employee benefit plan, and amounts paid or payable in connection with

any judgment, award or settlement, including any interest, assessments, and any federal, state, local or foreign taxes imposed as a result of the actual or deemed receipt of any indemnification or expense advancement payments hereunder.

(f) “Official Capacity” means any and all past, present or future service by the Indemnitee as a director, officer, employee or agent of the Company or, serving at the request of the Company as a director, officer, employee, fiduciary, trustee, agent or other representative of an Other Enterprise.

(g)References to “other enterprise” includes another corporation, partnership, limited liability company, joint venture, trust, bank, association or other enterprise, whether for profit or not-for-profit, including, but not limited to, any subsidiaries or affiliates of the Company, any entities formed by the Company and any employee benefit plans maintained or sponsored by the Company; references to “fines” includes any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Company” includes any service to an Other Enterprise by the Indemnitee at the request of, for the convenience of, or to represent the interests of, the Company or any subsidiary or affiliate of the Company. For the purposes of this Agreement, the Indemnitee’s service to an Other Enterprise shall be presumed to constitute serving at the request of the Company, unless it is conclusively determined to the contrary by a majority vote of the directors of the Company then in office, excluding from such vote any interested director. With respect to such determination, it shall not be necessary for the Indemnitee to show any actual or prior request by the Company or its Board of Directors for such service to an Other Enterprise; and a person who acted in good faith and in a manner reasonably believed to be in the best interest of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement. References to “Person” (other than in the definition of “Change in Control”) means any individual, corporation (profit or not-for-profit), firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, governmental entity or other entity.

(h)The term “Proceeding” includes any threatened, asserted, pending or completed claim, action, suit or proceeding, arbitration, mediation, inquiry, hearing, investigation (including any internal investigation), other alternative dispute mechanism or any other proceeding, whether civil, criminal, administrative, regulatory, arbitrative, legislative, investigative or otherwise and whether formal or informal, or any appeal of any kind therefrom, including an action initiated by the Indemnitee to enforce the Indemnitee’s rights to indemnification or Expense Advance (as defined below) under this Agreement or any provision of the Restated Articles, the Company’s Bylaws, or other applicable law, and whether instituted by or in the right of the Company, a governmental agency, the Board of Directors, any authorized committee thereof, a class of the Company’s security holders or any other party, and whether made pursuant to federal, state or other law, or any inquiry, hearing or investigation (including any internal investigation), whether formal or informal, whether instituted by or in the right of the Company, a governmental agency, the Board of Directors, any committee thereof, a class of the Company’s security holders, or any other party that the Indemnitee believes might lead to the institution of any such proceeding.        

3.Indemnity in Third-Party Proceedings. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is a party to or threatened to be made a party to any Proceeding (other than a Proceeding by or in the right of the Company to procure a judgment in its favor) arising by reason of (or arising in part out of) an Indemnifiable Event, against all Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee in connection with the Proceeding, but only if Indemnitee acted in good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding, in addition, had no reasonable cause to believe that Indemnitee’s conduct was unlawful.

4.Indemnity in Proceedings by or in the Right of the Company. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 4 if Indemnitee is a party to or threatened to be made a party to any Proceeding by or in the right of the Company to procure a judgment in its favor arising by reason of (or arising in part out of) an Indemnifiable Event, against all Expenses actually and reasonably incurred by Indemnitee in connection with the defense or settlement of the Proceeding, but only if Indemnitee acted in good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Company. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity.

5.Indemnification of Expenses of Successful Party. Notwithstanding any other provisions of this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise, in defense of any Proceeding or in defense of any claim, issue or matter therein, including the dismissal of an action without prejudice, or in prosecution of any Proceeding to enforce the Company’s obligations under this Agreement pursuant to Section 11, the Company shall indemnify Indemnitee against all Losses actually and reasonably incurred in connection therewith, notwithstanding an earlier determination by the Company (including by its directors, committee members, shareholders or any Independent Counsel) that the Indemnitee is not entitled to indemnification under applicable law. For purposes of this Agreement, the term “successful on the merits or otherwise” shall include, but not be limited to, (i) any termination, withdrawal, or dismissal (with or without prejudice) of any Proceeding against the Indemnitee without any express finding of liability or guilt against the Indemnitee, (ii) the expiration of one-hundred twenty (120) calendar days after the making of any claim or threat of a Proceeding without the institution of the same and without any promise or payment made to induce a settlement, and (iii) the settlement of any Proceeding pursuant to which the Indemnitee is obligated to pay less than $100,000.

6.Additional Indemnification.

(a)The Company agrees, as set forth in this Section 6(a), to indemnify Indemnitee to the fullest extent permitted by law, notwithstanding that such indemnification may not be specifically authorized by the Restated Articles, the Company’s Bylaws, the Act or the

other provisions of this Agreement. Accordingly, notwithstanding any limitation in Sections 3, 4 or 5, the Company shall indemnify Indemnitee to the fullest extent permitted by law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all judgments, fines, amounts paid in settlement and Expenses actually and reasonably incurred by Indemnitee in connection with the Proceeding. No indemnity shall be made under this Section 6(a) on account of Indemnitee’s conduct which constitutes a breach of Indemnitee’s duty of loyalty to the Company or its shareholders or is an act or omission not in good faith or which involves intentional misconduct or a knowing violation of the law.

(b)For purposes of Section 6(a), the meaning of the phrase “to the fullest extent permitted by law” includes, but is not limited to:

(i)to the fullest extent permitted by the provision of the Act that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the Act; and

(ii)to the fullest extent authorized or permitted by any amendments to or replacements of the Act adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.

(c)The Company agrees to indemnify Indemnitee for Expenses if Indemnitee is called, in connection with a Proceeding, as a non-party witness by reason of the fact that Indemnitee is or was a director or officer of the Company.

7.Exclusions. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:

(a)for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision;

(b)for any transaction from which Indemnitee derived an Improper Personal Benefit;

(c)for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act, or similar provisions of state statutory or common law;

(d)if a court having jurisdiction in the matter shall finally determine that such indemnification is not lawful under any applicable statute or public policy (and, in this respect, both the Company and Indemnitee have been advised that the Securities and Exchange Commission believes that indemnification for liabilities arising under the federal securities laws

is against public policy and is, therefore, unenforceable and that claims for indemnification should be submitted to appropriate courts for adjudication);

(e)in connection with any Proceeding (or part of any Proceeding) initiated by Indemnitee, or any Proceeding by Indemnitee against the Company and its directors, officers, employees or other indemnitees, unless (i) the Company is expressly required by law to make the indemnification, (ii) the Proceeding was authorized by the Board of Directors of the Company, (iii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law, or (iv) Indemnitee initiated the Proceeding pursuant to Section 11 of this Agreement and Indemnitee is successful in whole or in part in the Proceeding; and

(f) on account of any Proceeding for any reimbursement of the Company by the Indemnitee of any compensation as required under any incentive compensation recoupment or “clawback” policy of the Company in effect from time to time.

8.Advances of Expenses. The Company shall pay the expenses incurred by Indemnitee in any Proceeding in advance of the final disposition of such Proceeding (“Expense Advance”), at the written request of Indemnitee, if Indemnitee:

(a)furnishes the Company a written affirmation of the Indemnitee’s good faith belief that Indemnitee is entitled to be indemnified by the Company under this Agreement; and

(b)furnishes the Company a written undertaking to repay the advance to the extent that it is ultimately determined (in accordance with this Section 8 or by final judicial determination from which there is no further right to appeal, as applicable) that Indemnitee is not entitled to be indemnified by the Company.

Advances shall be made without regard to Indemnitee’s ability to repay the expenses and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement. Advances made under this Section 8 shall be paid by the Company to Indemnitee as soon as practicable but in any event within ten (10) business days after the receipt by the Company of a written request by Indemnitee to the Company, together with a reasonable accounting of such Expenses, pursuant to this Section 8. Any advances pursuant to this Section 8 shall be unsecured and interest-free. Except as expressly set forth in this Section 8, the Company shall not impose on the Indemnitee additional conditions to Expense Advance or require from the Indemnitee additional undertakings regarding repayment. Advancements shall include any and all reasonable Expenses incurred, or reasonably anticipated to be incurred, pursuing an action to enforce the Indemnitee’s right of Expense Advance pursuant to this Agreement or any provision of the Restated Articles, the Company’s Bylaws, the Act or other applicable law, including Expenses incurred preparing and forwarding statements to the Company to support the Expense Advances claimed pursuant to this Agreement.

9.Notification and Defense of Claim. Not later than thirty (30) days after receipt by Indemnitee of notice of the commencement of any Proceeding, Indemnitee will, if a claim in

respect of the Proceeding is to be made against the Company under this Agreement, notify the Company of the commencement of the Proceeding, including, to the extent reasonably available to the Indemnitee, the nature of, and the facts underlying, such Proceeding or matter and such other documentation and information as is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. Without limiting the generality of the foregoing, the Indemnitee agrees to promptly notify the Company in writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint, indictment, information, or other documents relating to any Proceeding or matter which may be subject to indemnification hereunder. The omission to notify the Company will not relieve the Company from any liability which it may have to Indemnitee otherwise than under this Agreement. With respect to any Proceeding as to which Indemnitee notifies the Company of the commencement:

(a)The Company will be entitled to participate in the Proceeding at its own expense.

(b)Except as otherwise provided below, the Company may, at its option and jointly with any other indemnifying party similarly notified and electing to assume such defense, assume the defense of the Proceeding, with legal counsel reasonably satisfactory to the Indemnitee. Indemnitee shall have the right to use separate legal counsel in the Proceeding, but the Company shall not be liable to Indemnitee under this Agreement, including Section 8 above, for the fees and expenses of separate legal counsel incurred after notice from the Company of its assumption of the defense, unless (i) Indemnitee reasonably concludes that there may be a conflict of interest between the Company and Indemnitee in the conduct of the defense of the Proceeding, (ii) the named parties in any such Proceeding (including any impleaded parties) include the Company or any subsidiary of the Company and the Indemnitee, and the Indemnitee reasonably concludes that there may be one or more legal defenses available to him or her that are different from or in addition to those available to the Company or any subsidiary of the Company, (iii) any such representation by such counsel would be precluded under the applicable standards of professional conduct then prevailing, in which case the Indemnitee shall be entitled to retain separate counsel (but not more than one law firm plus, if applicable, local counsel in respect of any particular Proceeding) at the Company’s expense or (iv) the Company does not use legal counsel to assume the defense of such Proceeding. The Company shall not be entitled to assume the defense of any Proceeding brought by or on behalf of the Company or as to which Indemnitee shall have made the conclusion provided for in (i) above.

(c)If two or more persons who may be entitled to indemnification from the Company, including the Indemnitee, are parties to any Proceeding, the Company may require Indemnitee to use the same legal counsel as the other parties. Indemnitee shall have the right to use separate legal counsel in the Proceeding, but the Company shall not be liable to Indemnitee under this Agreement, including Section 8 above, for the fees and expenses of separate legal counsel incurred after notice from the Company of the requirement to use the same legal counsel as the other parties, unless the Indemnitee reasonably concludes that there may be a conflict of interest between Indemnitee and any of the other parties required by the Company to be represented by the same legal counsel.

(d)The Company shall not be liable to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding effected without its written consent, which shall not be unreasonably withheld. Indemnitee shall permit the Company to settle any Proceeding the defense of which it assumes, except that the Company shall not settle any action or claim in any manner which would impose any penalty or limitation on Indemnitee without Indemnitee’s written consent, which may be given or withheld in Indemnitee’s sole discretion.

10.Procedure Upon Application for Indemnification. Any indemnification under Sections 3, 4, 5 or 6 of this Agreement shall be made no later than 90 days after receipt of the written request of Indemnitee for indemnification and shall not require that a determination be made in accordance with the Act by the persons specified in the Act that indemnification is required under this Agreement. However, unless it is ordered by a court in an enforcement action under Section 11 of this Agreement, no such indemnification shall be made if a determination is made within such 90-day period by (a) the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to the Proceeding (“Disinterested Directors”), (b) if such a quorum of Disinterested Directors cannot be obtained, by majority vote of a committee duly designated by the Board of Directors (all directors, whether or not Disinterested Directors, may participate in such designation) consisting solely of two or more Disinterested Directors, (c) independent legal counsel in a written opinion (which counsel shall be appointed if such committee cannot be designated), that the Indemnitee is not entitled to indemnification under this Agreement (“Independent Counsel”), or (d) if such Independent Counsel determination cannot be obtained, by majority vote of a quorum of shareholders consisting of shareholders who are not parties to such Proceeding, or if no such quorum is obtainable, by a majority vote of shareholders who are not parties to such Proceeding, using such directors’, committee members’, Independent Counsel’s or shareholders’, as the case may be, reasonable best efforts to make such determination as promptly as is reasonably practicable under the circumstances, as to whether the Indemnitee is entitled to be indemnified under applicable law. If it is so determined that the Indemnitee is entitled to indemnification, payment to the Indemnitee shall be made within thirty (30) calendar days after such determination. The Indemnitee shall reasonably cooperate with the Person or Persons making such determination with respect to the Indemnitee’s entitlement to indemnification, including providing to such Person or Persons upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to the Indemnitee and reasonably necessary to such determination. Any costs or expenses (including attorneys’ fees and disbursements) actually and reasonably incurred by the Indemnitee in so cooperating with the Person or Persons making such determination shall be borne by the Company (irrespective of the determination as to the Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold the Indemnitee harmless therefrom. Any determination by the Company that the Indemnitee is entitled to indemnification (including by its directors, committee members, shareholders or any Independent Counsel) shall be conclusive and binding on the Company and the Indemnitee. The Company agrees that all costs incurred by the Company in making the determination under this Section 10 shall be borne solely by the Company, including, but not limited to, the costs of legal counsel (including any Independent Counsel serving under this Section 10), proxy solicitations and judicial determinations.

11.Enforcement.

(a) Indemnitee may enforce any right to indemnification or advances granted by this Agreement to Indemnitee in any court of competent jurisdiction if (a) the Company denies the claim for indemnification or advances, in whole or in part, (b) the Company does not dispose of the claim within 90 days of a written request for indemnification or advances, (c) any amount of Losses is not paid in full by the Company according to Section 3 or 4 after a determination is made pursuant to Section 10 that the Indemnitee is entitled to be indemnified or (d) any amount of Expense Advance is not paid in full by the Company according to Section 8 after a request and an undertaking pursuant to Section 8 have been received by the Company.

(b) Indemnitee, in the enforcement action, if successful in whole or in part, shall be entitled to be paid also the expense of prosecuting the claim. It shall be a defense to any such enforcement action (other than an action brought to enforce a claim for advancement of Expenses pursuant to Section 8 above, if Indemnitee has tendered to the Company the required affirmation and undertaking) that Indemnitee is not entitled to indemnification under this Agreement, but the burden of proving this defense shall be on the Company. Neither a failure of the Company (including its Board of Directors or its shareholders) to make a determination prior to the commencement of the enforcement action that indemnification of Indemnitee is proper in the circumstances, nor an actual determination by the Company (including its Board of Directors or its shareholders) that indemnification is improper shall be a defense to the action or create a presumption that Indemnitee is not entitled to indemnification under this Agreement or otherwise. The termination of any Proceeding by judgment, order of court, settlement, conviction or upon a plea of nolo-contendere, or its equivalent, shall not, of itself, create a presumption that Indemnitee is not entitled to indemnification under this Agreement or otherwise.

12. Indemnification for Expenses of the Indemnitee in Enforcing Rights. To the fullest extent allowable under the Act and other applicable law, the Company shall also indemnify, or cause the indemnification of, the Indemnitee against any and all Expenses and, if requested by the Indemnitee, shall advance such Expenses to the Indemnitee subject to and in accordance with Sections 8 and 11, which are actually and reasonably incurred by the Indemnitee in connection with any Proceeding brought by the Indemnitee for (i) indemnification or an Expense Advance by the Company under any provision of this Agreement, under any other agreement that the Indemnitee is a party to, or under any provision of the Restated Articles, the Company’s Bylaws, the Act or other applicable law now or hereafter in effect, in each case, relating to the Indemnitee’s rights to indemnification or Expense Advance, and/or (ii) recovery under any director’s and officer’s liability or other insurance policies maintained by the Company, regardless of, in the case of (i) or (ii), whether the Indemnitee ultimately is determined to be entitled to such indemnification, Expense Advance or insurance recovery, as the case may be. The Indemnitee shall be required to reimburse the Company in the event that a final judicial determination is made that any such Proceeding brought by the Indemnitee was frivolous or was not made in good faith.

13.Partial Indemnification. If Indemnitee is entitled under any provisions of this Agreement to indemnification by the Company for some or part of the Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee in the investigation, defense, appeal or settlement of any Proceeding but not, however, for the total amount, the Company shall indemnify Indemnitee for the portion of the Expenses, judgments, fines and amounts paid in settlement to which Indemnitee is entitled.

14. Presumptions and Effect of Certain Proceedings.

    (a)    In connection with any determination concerning the Indemnitee’s right to indemnification, the Person or Persons making such determination shall presume that the Indemnitee has satisfied the applicable standard of conduct and is entitled to indemnification under this Agreement if the Indemnitee has submitted a request for indemnification in accordance with Section 10 above, and, except where any required undertaking under Section 8 has not been delivered to the Company, anyone seeking to overcome this presumption shall have the burden of proof and burden of persuasion, by clear and convincing evidence.

(b)    The Indemnitee shall be deemed to have met the applicable standard of conduct and to be entitled to indemnification under the Act for any action or omission to act undertaken (i) in good faith reliance upon the records of the Company, including its financial statements, or upon information, opinions, reports or statements furnished to the Indemnitee by the officers or employees of the Company or any of its subsidiaries in the course of their duties, or by committees of the Board of Directors, or by any other Person as to matters the Indemnitee reasonably believes are within such other Person’s professional or expert competence, or (ii) on behalf of the Company in furtherance of the interests of the Company in good faith in reliance upon, and in accordance with, the advice of legal counsel or accountants; provided, however that the Indemnitee has no reasonable cause to believe that such legal counsel or accountants were not selected with reasonable care by or on behalf of the Company. In addition, the knowledge and/or actions, or failures to act, of any director, officer, agent or employee of the Company or an Other Enterprise shall not be imputed to the Indemnitee for purposes of determining the right to indemnification or advancement of Expenses under this Agreement. Whether or not the foregoing provisions of this Section 14(b) are satisfied, it shall in any event be presumed that the Indemnitee has at all times acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interests of the Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion, by clear and convincing evidence.

(c)    For purposes of this Agreement, the termination of any Proceeding by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law.

    15. Failure to Act Not a Defense. Neither the failure of the Company (including by its directors, committee members, shareholders or any Independent Counsel) to have made a

determination as to whether the Indemnitee has met any particular standard of conduct or had any particular belief, nor an actual determination by the Company (including by its directors, committee members, shareholders or any Independent Counsel) that the Indemnitee has not met such standard of conduct or did not have such belief, prior to the commencement of legal proceedings by the Indemnitee to secure a judicial determination that the Indemnitee should be indemnified under applicable law, shall be a defense in any action brought under Section 11 hereof to the Indemnitee’s claim for indemnification or Expense Advance or create a presumption that the Indemnitee has not met any particular standard of conduct or did not have any particular belief.

16.Nonexclusivity and Continuity of Rights. The indemnification provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may be entitled under the Restated Articles, the Company’s Bylaws, any other agreement, any vote of shareholders or directors, the Act, or otherwise, both as to action in Indemnitee’s official capacity and as to action in another capacity while holding office. The indemnification under this Agreement shall continue as to Indemnitee even though Indemnitee ceases to be a director or officer and shall inure to the benefit of the heirs and personal representatives of Indemnitee.

17.Business Combinations. Prior to any Change in Control, the Company shall obtain a prepaid, fully-earned and non-cancellable “tail” directors’ and officers’ liability insurance policy in respect of acts or omissions occurring at or prior to the Change in Control with a claims period of six (6) years from the effective date of the Change in Control, covering the Indemnitee, to the extent that the Indemnitee is covered by directors’ and officers’ liability insurance immediately prior to the Change in Control, with the coverage and amounts and containing terms and conditions that are not less advantageous to the directors and officers of the Company and its subsidiaries than those of the directors’ and officers’ liability insurance in effect immediately prior to such Change in Control. Any such tail policy may not be amended, modified, cancelled or revoked after the Change in Control by the Company or any successor thereto in any manner that is adverse to the Indemnitee.

18. Covenant Not To Sue, Limitation of Actions and Release of Claims. To the extent permitted by applicable law, no legal action shall be brought and no cause of action shall be asserted by or in the right of the Company (or any of its subsidiaries) against the Indemnitee, the Indemnitee’s spouse, heirs, executors, or personal or legal representatives, administrators or estate after the expiration of two (2) years from the date of accrual of such cause of action, and any claim or cause of action of the Company shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such two (2) year period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action such shorter period shall govern.

19. Access to Information. The Indemnitee shall be entitled to access such information in the possession of the Company as may be reasonably necessary to enforce the Indemnitee’s rights under this Agreement.

20. Non-Exclusivity, Etc. The rights of the Indemnitee hereunder to indemnification and Expense Advance shall be in addition to, but not exclusive of, any other rights the Indemnitee may have at any time under the Company’s Bylaws or the Restated Articles, the Act, other applicable law, any insurance policy where the Indemnitee is an insured thereunder or any other agreement, vote of shareholders or directors (or a committee of directors), or otherwise, both as to actions in the Indemnitee’s Official Capacity and as to actions in any other capacity. The right to be indemnified or to receive advancement of Expenses under this Agreement (i) is a contract right based upon good and valuable consideration, pursuant to which the Indemnitee may sue to enforce, (ii) is, and is intended to be, retroactive and shall be available as to events occurring prior to the date of this Agreement, and (iii) shall continue after any rescission or restrictive modification of this Agreement as to events occurring prior thereto.

21. Representations and Warranties of the Company. The Company hereby represents and warrants to the Indemnitee as follows:

    (a)    Authority. The Company has all necessary power and authority to enter into, and be bound by the terms of, this Agreement, and the execution, delivery and performance of the undertakings contemplated by this Agreement have been duly authorized by the Company.

(b)    Enforceability. This Agreement, when executed and delivered by the Company in accordance with the provisions hereof, shall be a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the enforcement of creditors’ rights generally.

22.Severability. If this Agreement or any portion of it is invalidated on any ground by any court of competent jurisdiction, the Company shall indemnify Indemnitee as to Expenses, judgments, fines and amounts paid in settlement with respect to any Proceeding to the full extent permitted by any applicable portion of this Agreement that is not invalidated or by any other applicable law or arrangement.

23.Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of contribution or recovery of Indemnitee against other persons. Indemnitee shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such rights.

24.Modification and Waiver. Except as provided in Section 29 with respect to changes in the Act that broaden the right of the Indemnitee to be indemnified by the Company and Section 25 which provides for the Indemnitee to be afforded the benefit of a more favorable term or terms included in other indemnification agreements, no supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both parties. No waiver of any of the provisions in this Agreement shall constitute a waiver of any other provisions of this Agreement (whether or not similar) nor shall any waiver constitute a continuing waiver, unless expressly stated in any waiver.

25. More Favorable Indemnification Agreements. In the event the Company or any of its subsidiaries enters into an indemnification agreement with another director or executive officer of the Company or any of its subsidiaries or affiliates containing a term or terms more favorable to the Indemnitee than the terms contained herein, the Indemnitee shall be afforded the benefit of such more favorable term or terms and such more favorable term or terms shall be deemed incorporated by reference herein as if set forth in full herein.

26. Contribution.

    (a)    Whether or not the indemnification provided in Sections 3 or 4 of this Agreement is available, in respect of any Proceeding in which the Company is jointly liable with the Indemnitee (or would be if joined in the Proceeding that is the basis for the Proceeding), the Company shall pay, in the first instance, the entire amount of any judgment or settlement of such Proceeding without requiring the Indemnitee to contribute to such payment and the Company hereby waives and relinquishes any right of contribution it may have against the Indemnitee. The Company shall not enter into any settlement of any Proceeding in which the Company is jointly liable with the Indemnitee (or would be if joined in the Proceeding that is the basis for the Proceeding) unless such settlement provides for a full and final release of all claims asserted against the Indemnitee, which release shall be in form and substance reasonably satisfactory to the Indemnitee.

(b)    Without diminishing or impairing the obligations of the Company set forth in Section 26(a), if, for any reason, the Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement relating to any Proceeding in which the Company is jointly liable with the Indemnitee (or would be if joined in such Proceeding), the Company shall contribute to the amount of expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by the Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company other than the Indemnitee who are jointly liable with the Indemnitee (or would be if joined in such Proceeding), on the one hand, and the Indemnitee, on the other hand, from the transaction from which such Proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to applicable law, be further adjusted by reference to the relative fault of the Company and all officers, directors or employees of the Company other than the Indemnitee who are jointly liable with the Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and the Indemnitee, on the other hand, in connection with the events that resulted in such expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which applicable law may require to be considered. The relative fault of the Company and all officers, directors or employees of the Company other than the Indemnitee who are jointly liable with the Indemnitee (or would be if joined in such Proceeding), on the one hand, and the Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary, and the degree to which their conduct is active or passive.

(c)    The Company hereby agrees to fully indemnify and hold the Indemnitee harmless from any claims of contribution which may be brought by officers, directors or employees of the Company other than the Indemnitee who may be jointly liable with the Indemnitee.

27.Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (a) upon delivery if delivered by hand to the party to whom the notice or other communication shall have been directed or (b) if mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:

(i) If to Indemnitee, at the address indicated on the signature page of this Agreement.

(ii) If to the Company, to

Northwest Natural Holding Company

250 SW Taylor St.

Portland, Oregon 97204

Attention: Chief Executive Officer

or to any other address as may have been furnished to Indemnitee by the Company.

28.Counterparts. The parties may execute this Agreement in two counterparts, each of which shall constitute the original.

29.Applicable Law. This Agreement shall be governed by and construed in accordance with the law of the state of Oregon. To the extent that a change in the Act or the interpretation thereof (whether by statute or judicial decision) permits broader indemnification or advancement of Expenses than is provided under the terms of the Restated Articles, the Company’s Bylaws and this Agreement, it is the intent of the parties hereto that the Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change in law. In the event of any change in the Act (whether by statute or judicial decision) which narrows the right of a corporation incorporated in the State of Oregon to indemnify a member of its board of directors, an officer, or other agent, such changes, to the extent not required by applicable law to be applied to this Agreement, shall have no effect on this Agreement or the parties’ rights and obligations hereunder.

30.    Conflict With Governing Documents. To the fullest extent permitted by the Act and other applicable law, in the event of a conflict between the terms of this Agreement and the terms of the Restated Articles or the Company’s Bylaws, the terms of this Agreement shall govern and prevail.

31.    Cooperation and Intent. The Company shall cooperate in good faith with the Indemnitee and use its reasonable best efforts to ensure that, to the fullest extent permitted by the

Act and other applicable law, the Restated Articles, the Company’s Bylaws and the terms of this Agreement, the Indemnitee is indemnified and/or reimbursed for Losses described herein and receives the Expense Advance.

32.    Noninterference. The Company shall not seek or agree to any order of any court or other governmental authority that would prohibit, limit, or otherwise interfere, and shall not take or fail to take any other action if such action or failure would reasonably be expected to have the effect of prohibiting, limiting, or otherwise interfering, with the performance of the Company’s indemnification, advancement of Expenses or other obligations under this Agreement.

33.    Validity of Agreement. The Company shall be precluded from asserting in any Proceeding, including, without limitation, any action under Section 11 above, that the provisions of this Agreement are not valid, binding or enforceable or that there is insufficient consideration for this Agreement and shall stipulate in any judicial proceeding that the Company is bound by all the provisions of this Agreement.

34. Services of the Indemnitee. This Agreement shall not be deemed to constitute an agreement of employment between the Company or any of its affiliates and any Indemnitee nor shall it impose any obligation on the Indemnitee or the Company or any of its affiliates to continue the Indemnitee’s service to the Company. The Indemnitee specifically acknowledges that the Indemnitee’s employment with the Company or any of its affiliates is at will, and that the Indemnitee may be discharged at any time for any reason, with or without cause, and with or without severance compensation, except as may be otherwise provided in a written employment or similar agreement between the Indemnitee and the Company or any of its affiliates or other applicable formal severance policies duly adopted by the Board of Directors or other employer of the Indemnitee. The Indemnitee, if a member of the Board of Directors, hereby agrees to serve or continue to serve as a director of the Company, for so long as the Indemnitee is duly elected or appointed or until the Indemnitee tenders his or her resignation or is removed in accordance with the Restated Articles, the Company’s Bylaws and applicable law.

35.Successors and Assigns. This Agreement shall be (a) binding upon all successors and assigns of the Company (including any transferee of all or a substantial portion of the business, stock and/or assets of the Company and any direct or indirect successor by merger or consolidation or otherwise by operation of applicable law) and (b) binding on and shall inure to the benefit of the personal and legal representatives, spouses, heirs, executors and administrators of the Indemnitee. This Agreement shall continue in effect for the benefit of the Indemnitee and such personal and legal representatives, assigns, spouses, heirs, executors and administrators regardless of whether the Indemnitee continues to serve as an officer, director or other representative or agent of the Company or any other Person at the request of the Company. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all, or a significant portion, of the business and/or assets of the Company and/or its subsidiaries, by written agreement in form and substance reasonably satisfactory to the Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. Except as otherwise provided in this Section 35,

neither this Agreement nor any duties or responsibilities pursuant hereto may be assigned by the Company to any other Person without the express prior written consent of the Indemnitee.

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first written above.

NORTHWEST NATURAL HOLDING COMPANY	INDEMNITEE
By:	By:
Signature	Signature
Type or Print Name	Type or Print Name
Title	Address

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, David H. Anderson, certify that:

1.           I have reviewed this quarterly report on Form 10-Q for the quarterly period ended September 30, 2023 of Northwest Natural Gas Company;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:    November 3, 2023

/s/ David H. Anderson

David H. Anderson

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Brody J. Wilson, certify that:

1.           I have reviewed this quarterly report on Form 10-Q for the quarterly period ended September 30, 2023 of Northwest Natural Gas Company;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:    November 3, 2023

/s/ Brody J. Wilson

Brody J. Wilson

Chief Financial Officer, Vice President, Treasurer, and Chief Accounting Officer

EX-31.3

EXHIBIT 31.3

CERTIFICATION

I, David H. Anderson, certify that:

1.           I have reviewed this quarterly report on Form 10-Q for the quarterly period ended September 30, 2023 of Northwest Natural Holding Company;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:    November 3, 2023

/s/ David H. Anderson

David H. Anderson

Chief Executive Officer

EX-31.4

EXHIBIT 31.4

CERTIFICATION

I, Brody J. Wilson, certify that:

1.           I have reviewed this quarterly report on Form 10-Q for the quarterly period ended September 30, 2023 of Northwest Natural Holding Company;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:    November 3, 2023

/s/ Brody J. Wilson

Brody J. Wilson

Chief Financial Officer, Vice President, Treasurer, and Chief Accounting Officer

EX-32.1

EXHIBIT 32.1

NORTHWEST NATURAL GAS COMPANY

Certificate Pursuant to Section 906

of Sarbanes – Oxley Act of 2002

Each of the undersigned, DAVID H. ANDERSON, Chief Executive Officer, and BRODY J. WILSON, the Chief Financial Officer, of NORTHWEST NATURAL GAS COMPANY (the Company), DOES HEREBY CERTIFY that:

1.    The Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 (the Report) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.    Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

IN WITNESS WHEREOF, each of the undersigned has caused this instrument to be executed this 3rd day of November 2023.

/s/ David H. Anderson

David H. Anderson

Chief Executive Officer

/s/ Brody J. Wilson

Brody J. Wilson

Chief Financial Officer, Vice President, Treasurer, Chief Accounting Officer and Controller

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to Northwest Natural Gas Company and will be retained by Northwest Natural Gas Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

NORTHWEST NATURAL HOLDING COMPANY

Certificate Pursuant to Section 906

of Sarbanes – Oxley Act of 2002

Each of the undersigned, DAVID H. ANDERSON, Chief Executive Officer, and BRODY J. WILSON, the Chief Financial Officer, of NORTHWEST NATURAL HOLDING COMPANY (the Company), DOES HEREBY CERTIFY that:

1.    The Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 (the Report) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.    Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

IN WITNESS WHEREOF, each of the undersigned has caused this instrument to be executed this 3rd day of November 2023.

/s/ David H. Anderson

David H. Anderson

Chief Executive Officer

/s/ Brody J. Wilson

Brody J. Wilson

Chief Financial Officer, Vice President, Treasurer, and Chief Accounting Officer

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to Northwest Natural Holding Company and will be retained by Northwest Natural Holding Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2023	Oct. 26, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2023
Entity Registrant Name	NORTHWEST NATURAL HOLDING COMPANY
Entity File Number	1-38681
Entity Incorporation, State or Country Code	OR
Entity Tax Identification Number	82-4710680
Entity Address, Address Line One	250 SW Taylor Street
Entity Address, City or Town	Portland
Entity Address, State or Province	OR
Entity Address, Postal Zip Code	97204
City Area Code	(503)
Local Phone Number	226-4211
Title of 12(b) Security	Common Stock
Trading Symbol	NWN
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		36,778,271
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Central Index Key	0001733998
Northwest Natural Gas Company [Member]
Document Information [Line Items]
Document Type	10-Q
Document Period End Date	Sep. 30, 2023
Entity Registrant Name	NORTHWEST NATURAL GAS COMPANY
Entity File Number	1-15973
Entity Incorporation, State or Country Code	OR
Entity Tax Identification Number	93-0256722
Entity Address, Address Line One	250 SW Taylor Street
Entity Address, City or Town	Portland
Entity Address, State or Province	OR
Entity Address, Postal Zip Code	97204
City Area Code	(503)
Local Phone Number	226-4211
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Central Index Key	0000073020

XML

Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Operating revenues [Abstract]
Operating revenues	$ 141,479,000	$ 116,839,000	$ 841,761,000	$ 662,100,000
Operating expenses:
Cost of gas	49,180,000	36,105,000	357,362,000	261,413,000
Operations and maintenance	61,524,000	50,745,000	200,160,000	161,405,000
Environmental remediation	1,032,000	980,000	8,547,000	7,950,000
General taxes	10,577,000	9,572,000	35,685,000	30,665,000
Revenue taxes	5,523,000	4,437,000	33,750,000	26,037,000
Depreciation	30,061,000	29,026,000	92,819,000	85,565,000
Other operating expenses	1,159,000	901,000	3,664,000	2,815,000
Total operating expenses	159,056,000	131,766,000	731,987,000	575,850,000
Income from operations	(17,577,000)	(14,927,000)	109,774,000	86,250,000
Other income (expense), net	5,004,000	1,636,000	13,228,000	908,000
Interest expense, net	19,406,000	13,054,000	56,676,000	36,156,000
Income (loss) before income taxes	(31,979,000)	(26,345,000)	66,326,000	51,002,000
Income tax expense (benefit)	(8,292,000)	(6,758,000)	17,098,000	12,635,000
Net income (loss)	(23,687,000)	(19,587,000)	49,228,000	38,367,000
Other comprehensive income (loss):
Amortization of non-qualified employee benefit plan liability, net of taxes	102,000	202,000	307,000	596,000
Derivative, Gain (Loss) on Derivative, Net	174,000	0	999,000	0
Comprehensive income (loss)	(23,411,000)	(19,385,000)	50,534,000	38,963,000
Supplemental Income Statement Elements [Abstract]
Amortization of non-qualified employee benefit plan liability, tax	37,000	$ 73,000	111,000	$ 215,000
Unrealized Loss on Derivative, tax	$ (62)		$ (359)
Average common shares outstanding:
Basic (in shares)	36,214	34,939	35,950	33,491
Diluted (in shares)	36,214	34,939	35,980	33,539
Earnings per share of common stock:
Basic (in dollars per share)	$ (0.65)	$ (0.56)	$ 1.37	$ 1.15
Diluted (in dollars per share)	$ (0.65)	$ (0.56)	$ 1.37	$ 1.14
Northwest Natural Gas Company [Member]
Operating revenues [Abstract]
Operating revenues	$ 129,942,000	$ 110,426,000	$ 812,803,000	$ 647,301,000
Operating expenses:
Cost of gas	49,235,000	36,164,000	357,530,000	261,584,000
Operations and maintenance	53,494,000	45,858,000	179,121,000	148,614,000
Environmental remediation	1,032,000	980,000	8,547,000	7,950,000
General taxes	10,328,000	9,467,000	34,925,000	30,328,000
Revenue taxes	5,425,000	4,375,000	33,559,000	25,907,000
Depreciation	28,446,000	28,201,000	88,470,000	83,166,000
Other operating expenses	397,000	675,000	1,636,000	2,370,000
Total operating expenses	148,357,000	125,720,000	703,788,000	559,919,000
Income from operations	(18,415,000)	(15,294,000)	109,015,000	87,382,000
Other income (expense), net	4,818,000	1,161,000	11,095,000	197,000
Interest expense, net	15,597,000	11,128,000	45,236,000	32,558,000
Income (loss) before income taxes	(29,194,000)	(25,261,000)	74,874,000	55,021,000
Income tax expense (benefit)	(7,707,000)	(6,455,000)	19,037,000	13,678,000
Net income (loss)	(21,487,000)	(18,806,000)	55,837,000	41,343,000
Other comprehensive income (loss):
Amortization of non-qualified employee benefit plan liability, net of taxes	102,000	202,000	307,000	596,000
Comprehensive income (loss)	(21,385,000)	(18,604,000)	56,144,000	41,939,000
Supplemental Income Statement Elements [Abstract]
Amortization of non-qualified employee benefit plan liability, tax	$ 37,000	$ 73,000	$ 111,000	$ 215,000

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Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Current assets:
Cash and cash equivalents	$ 156,616	$ 29,270	$ 108,556
Accounts receivable	51,999	168,906	50,850
Accrued unbilled revenue	24,626	89,048	16,857
Allowance for uncollectible accounts	(2,312)	(3,296)	(2,171)
Regulatory assets	108,525	117,491	104,830
Derivative instruments	23,454	194,412	62,710
Inventories	94,585	87,096	98,725
Other current assets	49,947	61,286	41,414
Total current assets	507,440	744,213	481,771
Non-current assets:
Property, plant, and equipment	4,468,602	4,261,566	4,207,328
Less: Accumulated depreciation	1,189,968	1,147,166	1,166,150
Total property, plant, and equipment, net	3,278,634	3,114,400	3,041,178
Regulatory assets	312,665	340,432	301,660
Derivative instruments	6,188	5,045	8,008
Other investments	104,562	95,704	96,569
Operating lease right of use asset, net	71,477	73,429	73,145
Assets under sales-type leases	130,952	134,302	135,480
Goodwill	152,399	149,283	74,732
Other non-current assets	100,801	91,518	88,169
Total non-current assets	4,157,678	4,004,113	3,818,941
Total assets	4,665,118	4,748,326	4,300,712
Current liabilities:
Short-term debt	71,000	258,200	141,000
Current maturities of long-term debt	190,728	90,697	50,614
Accounts payable	99,326	180,667	118,274
Taxes accrued	17,120	15,625	18,080
Interest accrued	13,940	10,169	11,086
Regulatory liabilities	88,376	248,582	111,551
Derivative instruments	46,603	28,728	19,594
Operating lease liabilities	1,815	1,514	1,361
Other current liabilities	61,149	64,552	39,796
Total current liabilities	590,057	898,734	511,356
Long-term debt	1,424,572	1,246,167	1,287,006
Deferred credits and other non-current liabilities:
Deferred tax liabilities	375,917	366,022	349,633
Regulatory liabilities	683,262	689,578	663,547
Pension and other postretirement benefit liabilities	145,991	149,143	160,196
Derivative instruments	21,085	20,838	18,824
Operating lease liabilities	77,475	78,965	78,469
Other non-current liabilities	127,219	123,438	110,825
Total deferred credits and other non-current liabilities	1,430,949	1,427,984	1,381,494
Commitments and contingencies (Note 16)
Equity:
Common stock	$ 851,288	$ 805,253	$ 786,094
Shares Authorized (in shares)	100,000,000	100,000,000	100,000,000
Shares outstanding (in shares)	36,575,797	35,524,590	35,098,437
Shares issued (in shares)	36,575,797	35,524,590	35,098,437
Par Value (in dollars per share)	$ 0	$ 0	$ 0
Retained earnings	$ 373,231	$ 376,473	$ 345,570
Accumulated other comprehensive loss	(4,979)	(6,285)	(10,808)
Total equity	1,219,540	1,175,441	1,120,856
Total liabilities and equity	$ 4,665,118	4,748,326	4,300,712
Accounts Payable, Related Party, Type [Extensible Enumeration]	Affiliated Entity [Member]
Other Receivable, after Allowance for Credit Loss, Related Party, Type [Extensible Enumeration]	Affiliated Entity [Member]
Northwest Natural Gas Company [Member]
Current assets:
Cash and cash equivalents	$ 145,073	12,977	11,386
Accounts receivable	48,322	165,607	48,082
Accrued unbilled revenue	22,608	87,482	16,649
Other Receivables, Net, Current	2,195	634	221
Allowance for uncollectible accounts	(2,085)	(3,079)	(2,114)
Regulatory assets	108,525	117,491	104,830
Derivative instruments	22,679	194,236	62,710
Inventories	92,803	86,207	97,633
Other current assets	38,131	57,269	32,605
Total current assets	478,251	718,824	372,002
Non-current assets:
Property, plant, and equipment	4,328,477	4,148,547	4,124,488
Less: Accumulated depreciation	1,175,283	1,137,231	1,157,400
Total property, plant, and equipment, net	3,153,194	3,011,316	2,967,088
Regulatory assets	312,640	340,407	301,596
Derivative instruments	5,430	5,045	8,008
Other investments	87,753	80,110	80,871
Operating lease right of use asset, net	70,852	72,720	73,046
Assets under sales-type leases	130,952	134,302	135,480
Other non-current assets	99,131	89,994	86,661
Total non-current assets	3,859,952	3,733,894	3,652,750
Total assets	4,338,203	4,452,718	4,024,752
Current liabilities:
Short-term debt	0	170,200	53,000
Current maturities of long-term debt	39,997	89,942	49,938
Accounts payable	94,922	177,590	115,066
Accounts Payable, Other, Current	562	9,175	1,789
Taxes accrued	16,915	15,426	17,914
Interest accrued	13,368	8,900	10,533
Regulatory liabilities	88,326	248,553	111,526
Derivative instruments	46,603	28,728	19,594
Operating lease liabilities	1,658	1,363	1,298
Other current liabilities	59,101	62,019	38,998
Total current liabilities	361,452	811,896	419,656
Long-term debt	1,364,556	1,035,935	1,076,533
Deferred credits and other non-current liabilities:
Deferred tax liabilities	366,730	362,353	346,423
Regulatory liabilities	682,315	688,599	662,565
Pension and other postretirement benefit liabilities	145,991	149,143	160,196
Derivative instruments	21,085	20,838	18,824
Operating lease liabilities	77,041	78,345	78,436
Other non-current liabilities	116,930	114,527	109,304
Total deferred credits and other non-current liabilities	1,410,092	1,413,805	1,375,748
Commitments and contingencies (Note 16)
Equity:
Common stock	644,903	614,903	614,903
Retained earnings	563,307	582,593	548,720
Accumulated other comprehensive loss	(6,107)	(6,414)	(10,808)
Total equity	1,202,103	1,191,082	1,152,815
Total liabilities and equity	$ 4,338,203	$ 4,452,718	$ 4,024,752

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Consolidated Statement of Shareholders' Equity - USD ($) $ in Thousands	Total	Northwest Natural Gas Company [Member]	Common Stock Including APIC [Member]	Common Stock Including APIC [Member] Northwest Natural Gas Company [Member]	Retained Earnings [Member]	Retained Earnings [Member] Northwest Natural Gas Company [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Accumulated Other Comprehensive Income (Loss) [Member] Northwest Natural Gas Company [Member]
Beginning Balance at Dec. 31, 2021	$ 935,146	$ 977,807	$ 590,771	$ 435,515	$ 355,779	$ 553,696	$ (11,404)	$ (11,404)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Capital contributions from parent		179,388		179,388
Net income	38,367	41,343			38,367	41,343
Dividends on common stock					(48,576)	(46,319)
Other comprehensive income	38,963	41,939					596	596
Stock-based compensation			2,695
Shares issued pursuant to equity based plans, net of shares withheld for taxes			1,958
Issuances of common stock, net of issuance costs			190,670
Ending Balance at Sep. 30, 2022	$ 1,120,856	1,152,815	786,094	614,903	345,570	548,720	(10,808)	(10,808)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends per share of common stock	$ 1.4475
Beginning Balance at Jun. 30, 2022	$ 1,138,779	1,173,676	767,826	601,032	381,963	583,654	(11,010)	(11,010)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Capital contributions from parent				13,871
Net income	(19,587)	(18,806)			(19,587)	(18,806)
Dividends on common stock					(16,806)	(16,128)
Other comprehensive income	(19,385)	(18,604)					202	202
Stock-based compensation			463
Shares issued pursuant to equity based plans, net of shares withheld for taxes			954
Issuances of common stock, net of issuance costs			16,851
Ending Balance at Sep. 30, 2022	$ 1,120,856	1,152,815	786,094	614,903	345,570	548,720	(10,808)	(10,808)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends per share of common stock	$ 0.4825
Beginning Balance at Dec. 31, 2022	$ 1,175,441	1,191,082	805,253	614,903	376,473	582,593	(6,285)	(6,414)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Capital contributions from parent		30,000		30,000
Net income	49,228	55,837			49,228	55,837
Dividends on common stock					(52,470)	(75,123)
Other comprehensive income	50,534	56,144					1,306	307
Stock-based compensation			3,257
Shares issued pursuant to equity based plans, net of shares withheld for taxes			1,883
Issuances of common stock, net of issuance costs			40,895
Ending Balance at Sep. 30, 2023	$ 1,219,540	1,202,103	851,288	644,903	373,231	563,307	(4,979)	(6,107)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends per share of common stock	$ 1.4550
Beginning Balance at Jun. 30, 2023	$ 1,240,278	1,210,296	831,135	614,903	414,398	601,602	(5,255)	(6,209)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Capital contributions from parent				30,000
Net income	(23,687)	(21,487)			(23,687)	(21,487)
Dividends on common stock					(17,480)	(16,808)
Other comprehensive income	(23,411)	(21,385)					276	102
Stock-based compensation			251
Shares issued pursuant to equity based plans, net of shares withheld for taxes			1,046
Issuances of common stock, net of issuance costs			18,856
Ending Balance at Sep. 30, 2023	$ 1,219,540	$ 1,202,103	$ 851,288	$ 644,903	$ 373,231	$ 563,307	$ (4,979)	$ (6,107)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends per share of common stock	$ 0.4850

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Consolidated Statement of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Operating activities:
Net income	$ 49,228	$ 38,367
Adjustments to reconcile net income to cash provided by operations:
Depreciation	92,819	85,565
Regulatory amortization of gas reserves	2,532	4,527
Deferred income taxes	6,678	7,759
Qualified defined benefit pension plan (benefit) expense	(1,823)	4,013
Deferred environmental expenditures, net	(14,887)	(14,437)
Environmental remediation expense	8,547	7,950
Asset optimization revenue sharing bill credits	(10,471)	(41,102)
Other	18,079	16,640
Changes in assets and liabilities:
Receivables, net	182,297	114,755
Inventories	(6,484)	(41,463)
Income and other taxes	8,770	19,447
Accounts payable	(39,695)	(30,010)
Deferred gas costs	(8,678)	(1,785)
Asset optimization revenue sharing	18,667	17,629
Decoupling mechanism	(12,328)	7,124
Change in Cloud-based software Assets	(12,316)	(17,332)
Other, net	20,568	(11,686)
Cash provided by operating activities	301,503	165,961
Investing activities:
Capital expenditures	(242,747)	(251,842)
Acquisitions, net of cash acquired	(3,248)	(2,352)
Other	(4,525)	(2,810)
Cash used in investing activities	(250,520)	(257,004)
Financing activities:
Proceeds from common stock issued, net	40,955	190,929
Long-term debt issued	330,000	290,000
Long-term debt retired	(50,000)	0
Changes in other short-term debt, net	(187,200)	(248,500)
Cash dividend payments on common stock	(50,114)	(46,434)
Other	(4,108)	(1,802)
Cash used in financing activities	79,533	184,193
Cash, cash equivalents and restricted cash	171,480	120,270
Increase (decrease) in cash, cash equivalents and restricted cash	130,516	93,150
Supplemental disclosure of cash flow information:
Interest paid, net of capitalization	51,970	31,774
Income taxes paid, net of refunds	18,963	2,106
Northwest Natural Gas Company [Member]
Operating activities:
Net income	55,837	41,343
Adjustments to reconcile net income to cash provided by operations:
Depreciation	88,470	83,166
Regulatory amortization of gas reserves	2,532	4,527
Deferred income taxes	1,411	7,013
Qualified defined benefit pension plan (benefit) expense	(1,823)	4,013
Deferred environmental expenditures, net	(14,887)	(14,437)
Environmental remediation expense	8,547	7,950
Asset optimization revenue sharing bill credits	(10,471)	(41,102)
Other	17,331	16,665
Changes in assets and liabilities:
Receivables, net	183,116	115,915
Inventories	(6,173)	(40,881)
Income and other taxes	6,942	17,412
Accounts payable	(43,315)	(32,023)
Deferred gas costs	(8,678)	(1,785)
Asset optimization revenue sharing	18,667	17,629
Decoupling mechanism	(12,328)	7,124
Change in Cloud-based software Assets	(12,316)	(17,332)
Other, net	21,306	(12,604)
Cash provided by operating activities	294,168	162,593
Investing activities:
Capital expenditures	(216,368)	(236,467)
Other	(3,524)	(2,810)
Cash used in investing activities	(219,892)	(239,277)
Financing activities:
Capital contributions from parent	30,000	179,388
Long-term debt issued	330,000	140,000
Long-term debt retired	(50,000)	0
Changes in other short-term debt, net	(170,200)	(192,500)
Cash dividend payments on common stock	(75,123)	(46,319)
Other	(3,713)	(1,617)
Cash used in financing activities	60,964	78,952
Cash, cash equivalents and restricted cash	159,911	23,100
Increase (decrease) in cash, cash equivalents and restricted cash	135,240	2,268
Supplemental disclosure of cash flow information:
Interest paid, net of capitalization	39,911	28,326
Income taxes paid, net of refunds	$ 27,745	$ 5,990

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Organization and Principles of Consolidation

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Principles of Consolidation

ORGANIZATION AND PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements represent the respective, consolidated financial results of Northwest Natural Holding Company (NW Holdings) and Northwest Natural Gas Company (NW Natural) and all respective companies that each registrant directly or indirectly controls, either through majority ownership or otherwise. This is a combined report of NW Holdings and NW Natural, which includes separate consolidated financial statements for each registrant.

NW Natural's regulated natural gas distribution activities are reported in the natural gas distribution (NGD) segment. The NGD segment is NW Natural's core operating business and serves residential, commercial, and industrial customers in Oregon and southwest Washington. The NGD segment is the only reportable segment for NW Holdings and NW Natural. All other activities, water and wastewater businesses, and other investments are aggregated and reported as other at their respective registrant.

NW Holdings and NW Natural consolidate all entities in which they have a controlling financial interest. Investments in corporate joint ventures and partnerships that NW Holdings does not directly or indirectly control, and for which it is not the primary beneficiary, include NNG Financial's investment in Kelso-Beaver Pipeline and NWN Water's investment in Avion Water Company, Inc., which are accounted for under the equity method. NW Natural RNG Holding Company, LLC holds investments in Lexington Renewable Energy, LLC and Dakota City Renewable Energy LLC, which are also accounted for under the equity method. See Note 13 for activity related to equity method investments. NW Holdings and its direct and indirect subsidiaries are collectively referred to herein as NW Holdings, and NW Natural and its direct and indirect subsidiaries are collectively referred to herein as NW Natural. The consolidated financial statements of NW Holdings and NW Natural are presented after elimination of all intercompany balances and transactions.

Information presented in these interim consolidated financial statements is unaudited, but includes all material adjustments management considers necessary for a fair statement of the results for each period reported including normal recurring accruals. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in NW Holdings' and NW Natural's combined 2022 Annual Report on Form 10-K (2022 Form 10-K). A significant part of NW Holdings' and NW Natural's business is of a seasonal nature; therefore, NW Holdings and NW Natural results of operations for interim periods are not necessarily indicative of full year results. Seasonality affects the comparability of the results of other operations across quarters but not across years.

Notes to the consolidated financial statements reflect the activity for both NW Holdings and NW Natural for all periods presented, unless otherwise noted. Certain reclassifications have been made to conform prior period information to the current presentation. The reclassifications did not have a material effect on our consolidated financial statements.

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Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Significant Accounting Policies

SIGNIFICANT ACCOUNTING POLICIES

Significant accounting policies are described in Note 2 of the 2022 Form 10-K. There were no material changes to those accounting policies during the nine months ended September 30, 2023 other than those set forth in this Note 2. The following are current updates to certain critical accounting policy estimates and new accounting standards.

Industry Regulation  

NW Holdings' principal business is to operate as a holding company for NW Natural and its other subsidiaries. NW Natural's principal business is the distribution of natural gas, which is regulated by the OPUC and WUTC. NW Natural also has natural gas storage services, which are regulated by the FERC, and to a certain extent by the OPUC and WUTC. Additionally, certain of NW Holdings' subsidiaries own water businesses, which are regulated by the public utility commission in the state in which the water utility is located, which is currently Oregon, Washington, Idaho, Texas and Arizona. Wastewater businesses, to the extent they are regulated, are generally regulated by the public utility commissions in the state in which the wastewater utility is located, which is currently Texas and Arizona.

In applying regulatory accounting principles, NW Holdings and NW Natural capitalize or defer certain costs and revenues as regulatory assets and liabilities pursuant to orders of the applicable state public utility commission, which provide for the recovery of revenues or expenses from, or refunds to, utility customers in future periods, including a return or a carrying charge in certain cases.

Amounts deferred as regulatory assets and liabilities for NW Holdings and NW Natural were as follows:

	Regulatory Assets
	September 30,				December 31,
In thousands	2023		2022		2022
NW Natural:
Current:
Unrealized loss on derivatives(1)	$	46,603	$	19,594	$	28,728
Gas costs	11,361		52,115		61,223
Environmental costs(2)	7,047		9,461		7,392
Decoupling(3)	3,480		114		—
Pension balancing(4)	7,131		7,131		7,131
Income taxes	2,208		2,399		2,208
COVID-19 deferrals and expenses, net	11,127		—		789
Other(5)	19,568		14,016		10,020
Total current - NW Natural	$	108,525	$	104,830	$	117,491
Non-current:
Unrealized loss on derivatives(1)	$	21,085	$	18,824	$	20,838
Pension balancing(4)	29,450		34,928		32,997
Income taxes	10,540		11,168		10,943
Pension and other postretirement benefit liabilities	101,413		107,722		101,413
Environmental costs(2)	108,941		82,667		104,253
Gas costs	718		3,369		22,355
Decoupling(3)	212		—		—
Washington Climate Commitment Act compliance	12,513		—		—
COVID-19 deferrals and expenses, net	1,811		15,147		14,555
Other(5)	25,957		27,771		33,053
Total non-current - NW Natural	$	312,640	$	301,596	$	340,407
Other (NW Holdings)	25		64		25
Total non-current - NW Holdings	$	312,665	$	301,660	$	340,432

	Regulatory Liabilities
	September 30,				December 31,
In thousands	2023		2022		2022
NW Natural:
Current:
Gas costs	$	5,030	$	944	$	4,121
Unrealized gain on derivatives(1)	22,679		62,882		194,236
Decoupling(3)	8,616		13,272		14,026
Income taxes	5,946		7,318		7,166
Asset optimization revenue sharing	29,938		23,461		26,368
Washington Climate Commitment Act proceeds	9,365		—		—
Other(5)	6,752		3,649		2,636
Total current - NW Natural	$	88,326	$	111,526	$	248,553
Other (NW Holdings)	50		25		29
Total current - NW Holdings	$	88,376	$	111,551	$	248,582
Non-current:
Gas costs	$	252	$	50	$	12,644
Unrealized gain on derivatives(1)	5,430		8,008		5,045
Decoupling(3)	588		884		3,814
Income taxes(6)	171,843		179,319		174,212
Accrued asset removal costs(7)	489,006		460,666		467,742
Asset optimization revenue sharing	—		—		8,401
Washington Climate Commitment Act proceeds	654		—		—
Other(5)	14,542		13,638		16,741
Total non-current - NW Natural	$	682,315	$	662,565	$	688,599
Other (NW Holdings)	947		982		979
Total non-current - NW Holdings	$	683,262	$	663,547	$	689,578

(1)Unrealized gains or losses on derivatives are non-cash items and therefore do not earn a rate of return or a carrying charge. These amounts are recoverable through NGD rates as part of the annual Purchased Gas Adjustment (PGA) mechanism when realized at settlement.

(2)Refer to the Environmental Cost Deferral and Recovery table in Note 16 for a description of environmental costs.

(3)This deferral represents the margin adjustment resulting from differences between actual and expected volumes. 

(4)Balance represents deferred net periodic benefit costs as approved by the OPUC.

(5)Balances consist of deferrals and amortizations under approved regulatory mechanisms and typically earn a rate of return or carrying charge.

(6)Balance represents excess deferred income tax benefits subject to regulatory flow-through.

(7)Estimated costs of removal on certain regulated properties are collected through rates.

We believe all costs incurred and deferred at September 30, 2023 are prudent. All regulatory assets are reviewed annually for recoverability, or more often if circumstances warrant. If we should determine that all or a portion of these regulatory assets no longer meet the criteria for continued application of regulatory accounting, then NW Holdings and NW Natural would be required to write-off the net unrecoverable balances in the period such determination is made.

Supplemental Cash Flow Information

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand plus highly liquid investment accounts with original maturity dates of three months or less. These investments are readily convertible to cash with fair value approximating cost. As of September 30, 2023, the amount invested in money market funds was $132.6 million at NW Natural and NW Holdings. These investments are measured using net asset value per share.

Restricted Cash

Restricted cash is primarily comprised of funds from public purpose charges for programs that assist low-income customers with bill payments or energy efficiency.

The following table provides a reconciliation of the cash, cash equivalents and restricted cash balances at NW Holdings as of September 30, 2023 and 2022 and December 31, 2022:

	September 30,				December 31,
In thousands	2023		2022		2022
Cash and cash equivalents	$	156,616	$	108,556	$	29,270
Restricted cash included in other current and non-current assets	14,864		11,714		11,694
Cash, cash equivalents and restricted cash	$	171,480	$	120,270	$	40,964

The following table provides a reconciliation of the cash, cash equivalents and restricted cash balances at NW Natural as of September 30, 2023 and 2022 and December 31, 2022:

	September 30,				December 31,
In thousands	2023		2022		2022
Cash and cash equivalents	$	145,073	$	11,386	$	12,977
Restricted cash included in other current assets	14,838		11,714		11,694
Cash, cash equivalents and restricted cash	$	159,911	$	23,100	$	24,671

Intercompany Dividend

In April 2023, NW Natural made a dividend to NW Holdings for $25.0 million, returning additional equity contributed from NW Holdings to NW Natural in 2022.

Accounts Receivable and Allowance for Uncollectible Accounts

Accounts receivable consist primarily of amounts due for natural gas sales and transportation services to NGD customers, plus amounts due for gas storage services. NW Holdings and NW Natural establish allowances for uncollectible accounts (allowance) for trade receivables, including accrued unbilled revenue, based on the aging of receivables, collection experience of past due account balances including payment plans, and historical trends of write-offs as a percent of revenues. A specific allowance is established and recorded for large individual customer receivables when amounts are identified as unlikely to be partially or fully recovered. Inactive accounts are written-off against the allowance after they are 120 days past due or when deemed uncollectible. Differences between the estimated allowance and actual write-offs will occur based on a number of factors, including changes in economic conditions, customer creditworthiness, and natural gas prices. The allowance for uncollectible accounts is adjusted quarterly, as necessary, based on information currently available.

Allowance for Trade Receivables

The payment term of our NGD receivables is generally 15 days. For these short-term receivables, it is not expected that forecasted economic conditions would significantly affect the loss estimates under stable economic conditions. For extreme situations like a financial crisis, natural disaster, and the economic slowdown caused by the COVID-19 pandemic, we enhanced our review and analysis.

For the residential and commercial uncollectible provision, we primarily followed our standard methodology, which includes assessing historical write-off trends and current information on delinquent accounts. Beginning October 1, 2022, new collection rules from the OPUC applied to residential and commercial customers. This included enhanced protections for low-income customers, a return to pre-pandemic time payment arrangements terms, revised disconnection rules during the heating season, and other items. As a result of these Oregon rule changes and our recent collection process experience, we augmented our provision review for accounts in the following categories: closed or inactive accounts aged less than 120 days, accounts on payment plans, and all other open accounts not on payment plans. For industrial accounts, we continue to assess the provision on an account-by-account basis with specific reserves taken as necessary. NW Natural will continue to closely monitor and evaluate our accounts receivable and the provision for uncollectible accounts.

The following table presents the activity related to the NW Holdings provision for uncollectible accounts by pool:

	As of						As of
	December 31, 2022		Nine Months Ended September 30, 2023				September 30, 2023
In thousands	Beginning Balance		Provision recorded, net of adjustments		Write-offs recognized, net of recoveries		Ending Balance
Allowance for uncollectible accounts:
Residential	$	2,155	$	1,802	$	(2,468)	$	1,489
Commercial	400		264		(372)		292
Industrial	188		(105)		(1)		82
Accrued unbilled and other	336		2		(116)		222
Total NW Natural	3,079		1,963		(2,957)		2,085
Other - NW Holdings	217		10		—		227
Total NW Holdings	$	3,296	$	1,973	$	(2,957)	$	2,312

Allowance for Net Investments in Sales-Type Leases

NW Natural currently holds two net investments in sales-type leases, with substantially all of the net investment balance related to the North Mist natural gas storage agreement with Portland General Electric (PGE) which is billed under an OPUC-approved rate schedule. See Note 7 for more information on the North Mist lease. Due to the nature of this service, PGE may recover the costs of the lease through general rate cases. Therefore, we expect the risk of loss due to the credit of this lessee to be remote. As such, no allowance for uncollectibility was recorded for our sales-type lease receivables. NW Natural will continue monitoring the credit health of the lessees and the overall economic environment, including the economic factors closely tied to the financial health of our current and future lessees.

Greenhouse Gas Allowances

NW Natural is subject to greenhouse gas (GHG) emission reduction requirements under the Oregon Climate Protection Program (CPP) regulations and the Washington Climate Commitment Act (CCA) regulations.

Under Oregon's CPP, emission reduction compliance mechanisms include: 1) compliance instruments distributed by the state, 2) Community Climate Investment (CCI) Credits, which act similar to carbon offsets, and 3) supplying alternative gaseous fuels, such as renewable natural gas and hydrogen.

Under Washington's CCA, emission reduction compliance mechanisms include: 1) allowances distributed at no cost by the state, 2) purchasing allowances at state-run auctions or secondary markets, 3) purchasing carbon offsets, and 4) supplying alternative gaseous fuels, such as renewable natural gas and hydrogen.

NW Natural will account for all purchased Oregon CCI Credits and Washington allowances as inventory at the lower of cost or market. Any compliance instruments or allowances that are acquired through government allocations at no cost will be accounted for as inventory at no cost. As of September 30, 2023, NW Natural had $18.3 million of emissions allowances for compliance in Washington recorded as inventory and no CCI Credits in Oregon.

The compliance programs allow for the sale of the compliance instruments or allowances, and as a result, should NW Natural sell these it will recognize revenue when title to the instrument or allowance is transferred to a counterparty, and NW Natural will recognize expense at the time of recognition of the related sale. In September 2023, NW Natural consigned no-cost allowances to a Washington auction and received $10.0 million in cash, which proceeds were recorded as a regulatory liability for the benefit of customers.

We measure the compliance obligation, which is based on emissions, at the carrying value of inventory held plus the fair value of any additional CCI Credits or emission allowances NW Natural would need to purchase to satisfy the obligations. As of September 30, 2023, NW Natural has not recognized a liability under the Oregon program for the purchase of CCI Credits. Under the Washington program, NW Natural has recognized a $12.1 million liability as of September 30, 2023. We expect that the costs to comply with the Oregon and Washington programs will be recovered from utility customers through rates. As a result, NW Natural recognized $12.5 million of deferred costs as of September 30, 2023.

New Accounting Standards

NW Natural and NW Holdings consider the applicability and impact of all accounting standards updates (ASUs) issued by the Financial Accounting Standards Board (FASB). ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on consolidated financial position or results of operations.

Recently Issued Accounting Pronouncements

JOINT VENTURE FORMATIONS. In August 2023, the FASB issued ASU 2023-05, which requires a joint venture to initially measure all contributions received upon its formation at fair value. The standard is effective for all joint venture entities with a formation date on or after January 1, 2025, with early adoption permitted. The adoption of this standard is not anticipated to have a material impact on our results of operations, liquidity or capital resources.

Recent Securities and Exchange Commission (SEC) Final Rules

INSIDER TRADING ARRANGEMENTS. In December 2022, the SEC adopted the final rule under SEC Release No. 33-11138, Insider Trading Arrangements and Related Disclosures, which requires new disclosures regarding insider trading policies and procedures, the use of certain insider trading plans and director and executive compensation regarding equity compensation awards made close in time to disclosure of material nonpublic information. The adoption of this final rule is not anticipated to have a material impact on our results of operations, liquidity or capital resources.

SHARE REPURCHASES. In May 2023, the SEC adopted the final rule under SEC Release No. 34-97424, Share Repurchase Disclosure Modernization, requiring disclosures related to issuers’ share repurchases that will provide investors with enhanced information to assess the purposes and effects of the repurchases. The adoption of this final rule is not anticipated to have a material impact on our results of operations, liquidity or capital resources.

CYBERSECURITY DISCLOSURES. In July 2023, the SEC issued a final rule that requires new disclosures regarding cybersecurity risk management, strategy, governance, and incidents. The disclosures are required beginning with our annual report for the year ending December 31, 2023. The adoption of this final rule is not anticipated to have a material impact on our results of operations, liquidity or capital resources.

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Earnings Per Share

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Earnings Per Share

EARNINGS PER SHARE

Basic earnings or loss per share are computed using NW Holdings' net income or loss and the weighted average number of common shares outstanding for each period presented. Diluted earnings per share are computed in the same manner, except using the weighted average number of common shares outstanding plus the effects of the assumed exercise of stock options and the payment of estimated stock awards from other stock-based compensation plans that are outstanding at the end of each period presented. Anti-dilutive stock awards are excluded from the calculation of diluted earnings or loss per common share.

NW Holdings' diluted earnings or loss per share are calculated as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In thousands, except per share data	2023		2022		2023		2022
Net income (loss)	$	(23,687)	$	(19,587)	$	49,228	$	38,367
Average common shares outstanding - basic	36,214		34,939		35,950		33,491
Additional shares for stock-based compensation plans (See Note 8)	—		—		30		48
Average common shares outstanding - diluted	36,214		34,939		35,980		33,539
Earnings (loss) per share of common stock:
Basic	$	(0.65)	$	(0.56)	$	1.37	$	1.15
Diluted	$	(0.65)	$	(0.56)	$	1.37	$	1.14
Additional information:
Anti-dilutive shares	45		85		1		—

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Segment Information

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION

We primarily operate in one reportable business segment, which is NW Natural's local gas distribution business and is referred to as the NGD segment. NW Natural and NW Holdings also have investments and business activities not specifically related to the NGD segment, which are aggregated and reported as other and described below for each entity.

Natural Gas Distribution

NW Natural's local gas distribution segment is a regulated utility principally engaged in the purchase, sale, and delivery of natural gas and related services to customers in Oregon and southwest Washington. In addition to NW Natural's local gas distribution business, the NGD segment also includes the portion of the Mist underground storage facility used to serve NGD customers, the North Mist gas storage expansion in Oregon, NWN Gas Reserves, which is a wholly-owned subsidiary of Energy Corp, and NW Natural RNG Holding Company, LLC, a holding company established to invest in the development and procurement of regulated renewable natural gas for NW Natural.

NW Natural

NW Natural's activities in Other include Interstate Storage Services and third-party asset management services, appliance retail center operations, and corporate operating and non-operating revenues and expenses that cannot be allocated to NGD operations.

Earnings from Interstate Storage Services assets are primarily related to firm storage capacity revenues. Earnings from third-party asset management services also include revenue, net of amounts shared with NGD customers, from management of NGD assets at Mist and upstream pipeline capacity when not needed to serve NGD customers. Under the Oregon sharing mechanism, NW Natural retains 80% of the pre-tax income from these services when the costs of the capacity were not included in NGD rates, or 10% of the pre-tax income when the costs have been included in these rates. The remaining 20% and 90%, respectively, are recorded to a deferred regulatory account for crediting back to NGD customers.

NW Holdings

NW Holdings' activities in Other include all remaining activities not associated with NW Natural, specifically: NW Natural Water Company, LLC (NW Natural Water or NWN Water), which consolidates the water and wastewater utility operations and is pursuing other investments in the water and wastewater sector through itself and wholly-owned subsidiaries; NW Natural Water's equity investment in Avion Water Company, Inc.; NWN Gas Storage, a wholly-owned subsidiary of NWN Energy; other pipeline assets in NNG Financial; and NW Natural Renewables Holdings, LLC (NW Natural Renewables) and its non-regulated renewable natural gas activities. Other also includes corporate revenues and expenses that cannot be allocated to other operations, including certain business development activities.

Segment Information Summary

Inter-segment transactions were immaterial for the periods presented. The following table presents summary financial information concerning the reportable segment and other.

	Three Months Ended September 30,
In thousands	NGD		Other (NW Natural)		NW Natural		Other (NW Holdings)		NW Holdings
2023
Operating revenues	$	124,624	$	5,318	$	129,942	$	11,537	$	141,479
Depreciation	28,169		277		28,446		1,615		30,061
Income (loss) from operations	(22,192)		3,777		(18,415)		838		(17,577)
Net income (loss)	(24,160)		2,673		(21,487)		(2,200)		(23,687)
Capital expenditures	86,017		1,053		87,070		10,814		97,884
2022
Operating revenues	$	103,295	$	7,131	$	110,426	$	6,413	$	116,839
Depreciation	27,937		264		28,201		825		29,026
Income (loss) from operations	(20,910)		5,616		(15,294)		367		(14,927)
Net income (loss)	(23,016)		4,210		(18,806)		(781)		(19,587)
Capital expenditures	79,847		431		80,278		3,868		84,146

	Nine Months Ended September 30,
In thousands	NGD		Other (NW Natural)		NW Natural		Other (NW Holdings)		NW Holdings
2023
Operating revenues	$	796,108	$	16,695	$	812,803	$	28,958	$	841,761
Depreciation	87,650		820		88,470		4,349		92,819
Income (loss) from operations	97,357		11,658		109,015		759		109,774
Net income (loss)	47,520		8,317		55,837		(6,609)		49,228
Capital expenditures	214,874		1,494		216,368		26,379		242,747
Total assets at September 30, 2023	4,285,309		52,894		4,338,203		326,915		4,665,118
2022
Operating revenues	$	629,327	$	17,974	$	647,301	$	14,799	$	662,100
Depreciation	82,372		794		83,166		2,399		85,565
Income (loss) from operations	75,328		12,054		87,382		(1,132)		86,250
Net income (loss)	32,531		8,812		41,343		(2,976)		38,367
Capital expenditures	235,249		1,218		236,467		15,375		251,842
Total assets at September 30, 2022	3,968,040		56,712		4,024,752		275,960		4,300,712
Total assets at December 31, 2022	4,392,699		60,019		4,452,718		295,608		4,748,326

Natural Gas Distribution Margin

NGD margin is the primary financial measure used by the Chief Operating Decision Maker (CODM), consisting of NGD operating revenues, reduced by the associated cost of gas, environmental remediation expense, and revenue taxes. The cost of gas purchased for NGD customers is generally a pass-through cost in the amount of revenues billed to regulated NGD customers. Environmental remediation expense represents collections received from customers through environmental recovery mechanisms in Oregon and Washington as well as adjustments for the Oregon environmental earnings test when applicable. This is offset by environmental remediation expense presented in operating expenses. Revenue taxes are collected from NGD customers and remitted to taxing authorities. The collections from customers are offset by the expense recognition of the obligation to the taxing authority. By subtracting cost of gas, environmental remediation expense, and revenue taxes from NGD operating revenues, NGD margin provides a key metric used by the CODM in assessing the performance of the NGD segment.

The following table presents additional segment information concerning NGD margin:

	Three Months Ended September 30,				Nine Months Ended September 30,
In thousands	2023		2022		2023		2022
NGD margin calculation:
NGD distribution revenues	$	119,892	$	98,391	$	781,941	$	614,605
Other regulated services	4,732		4,904		14,167		14,722
Total NGD operating revenues	124,624		103,295		796,108		629,327
Less: NGD cost of gas	49,235		36,258		357,530		261,678
Environmental remediation	1,032		975		8,547		7,945
Revenue taxes	5,425		4,375		33,559		25,907
NGD margin	$	68,932	$	61,687	$	396,472	$	333,797

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Equity

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Stockholders' Equity Note Disclosure

COMMON STOCK

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. NW Holdings is under no obligation to offer and sell common stock under the ATM equity program, which expires in August 2024. Any shares of common stock offered under the ATM equity program are registered on NW Holdings’ universal shelf registration statement filed with the SEC. During the three months ended September 30, 2023, NW Holdings issued and sold 475,732 shares of common stock pursuant to the ATM equity program resulting in cash proceeds of $18.8 million, net of fees and commissions paid to agents of $0.3 million. During the nine months ended September 30, 2023, NW Holdings issued and sold 955,325 shares of common stock pursuant to the ATM equity program resulting in cash proceeds of $40.9 million, net of fees and commissions paid to agents of $0.7 million. As of September 30, 2023, NW Holdings had $69.5 million of equity available for issuance under the program. The ATM equity program was initiated to raise funds for general corporate purposes, including equity contributions to NW Holdings’ subsidiaries, NW Natural and NW Natural Water. We intend that contributions to NW Natural and NW Natural Water will be used for general corporate purposes.

In October 2023, NW Holdings issued 184,832 shares of common stock in connection with business combinations.

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Revenue

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer

REVENUE

The following tables present disaggregated revenue:

	Three Months Ended September 30,
In thousands	NGD		Other (NW Natural)		NW Natural		Other (NW Holdings)		NW Holdings
2023
Natural gas sales	$	117,004	$	—	$	117,004	$	—	$	117,004
Gas storage revenue, net	—		3,014		3,014		—		3,014
Asset management revenue, net	—		1,623		1,623		—		1,623
Appliance retail center revenue	—		680		680		—		680
Other revenue	733		—		733		11,537		12,270
Revenue from contracts with customers	117,737		5,317		123,054		11,537		134,591
Alternative revenue	2,868		—		2,868		—		2,868
Leasing revenue	4,020		—		4,020		—		4,020
Total operating revenues	$	124,625	$	5,317	$	129,942	$	11,537	$	141,479
2022
Natural gas sales	$	95,784	$	—	$	95,784	$	—	$	95,784
Gas storage revenue, net	—		2,882		2,882		—		2,882
Asset management revenue, net	—		3,047		3,047		—		3,047
Appliance retail center revenue	—		1,202		1,202		—		1,202
Other revenue	624		—		624		6,413		7,037
Revenue from contracts with customers	96,408		7,131		103,539		6,413		109,952
Alternative revenue	2,589		—		2,589		—		2,589
Leasing revenue	4,298		—		4,298		—		4,298
Total operating revenues	$	103,295	$	7,131	$	110,426	$	6,413	$	116,839

	Nine Months Ended September 30,
In thousands	NGD		Other (NW Natural)		NW Natural		Other (NW Holdings)		NW Holdings
2023
Natural gas sales	$	783,506	$	—	$	783,506	$	—	$	783,506
Gas storage revenue, net	—		9,014		9,014		—		9,014
Asset management revenue, net	—		4,879		4,879		—		4,879
Appliance retail center revenue	—		2,802		2,802		—		2,802
Other revenue	2,195		—		2,195		28,958		31,153
Revenue from contracts with customers	785,701		16,695		802,396		28,958		831,354
Alternative revenue	(1,623)		—		(1,623)		—		(1,623)
Leasing revenue	12,030		—		12,030		—		12,030
Total operating revenues	$	796,108	$	16,695	$	812,803	$	28,958	$	841,761
2022
Natural gas sales	$	623,121	$	—	$	623,121	$	—	$	623,121
Gas storage revenue, net	—		8,678		8,678		—		8,678
Asset management revenue, net	—		4,941		4,941		—		4,941
Appliance retail center revenue	—		4,355		4,355		—		4,355
Other revenue	1,882		—		1,882		14,799		16,681
Revenue from contracts with customers	625,003		17,974		642,977		14,799		657,776
Alternative revenue	(8,571)		—		(8,571)		—		(8,571)
Leasing revenue	12,895		—		12,895		—		12,895
Total operating revenues	$	629,327	$	17,974	$	647,301	$	14,799	$	662,100

NW Natural's revenue represents substantially all of NW Holdings' revenue and is recognized for both registrants when the obligation to customers is satisfied and in the amount expected to be received in exchange for transferring goods or providing services. Revenue from contracts with customers contains one performance obligation that is generally satisfied over time, using

the output method based on time elapsed, due to the continuous nature of the service provided. The transaction price is determined by a set price agreed upon in the contract or dependent on regulatory tariffs. Customer accounts are settled on a monthly basis or paid at time of sale and based on historical experience. It is probable that we will collect substantially all of the consideration to which we are entitled. We evaluated the probability of collection in accordance with the current expected credit losses standard.

NW Holdings and NW Natural do not have any material contract assets, as net accounts receivable and accrued unbilled revenue balances are unconditional and only involve the passage of time until such balances are billed and collected. NW Holdings and NW Natural do not have any material contract liabilities.

Revenue taxes are included in operating revenues with an equal and offsetting expense recognized in operating expenses in the consolidated statements of comprehensive income. Revenue-based taxes are primarily franchise taxes, which are collected from NGD customers and remitted to taxing authorities.

Natural Gas Distribution

Natural Gas Sales

NW Natural's primary source of revenue is providing natural gas to customers in the NGD service territory, which includes residential, commercial, industrial and transportation customers. NGD revenue is generally recognized over time upon delivery of the gas commodity or service to the customer, and the amount of consideration received and recognized as revenue is dependent on the Oregon and Washington tariffs. Customer accounts are to be paid in full each month, and there is no right of return or warranty for services provided. Revenues include firm and interruptible sales and transportation services, franchise taxes recovered from the customer, late payment fees, service fees, and accruals for gas delivered but not yet billed (accrued unbilled revenue). The accrued unbilled revenue balance is based on estimates of deliveries during the period from the last meter reading and management judgment is required for a number of factors used in this calculation, including customer use and weather factors.

We applied the significant financing practical expedient and have not adjusted the consideration NW Natural expects to receive from NGD customers for the effects of a significant financing component as all payment arrangements are settled annually. Due to the election of the right to invoice practical expedient, we do not disclose the value of unsatisfied performance obligations.

Alternative Revenue

Weather normalization (WARM) and decoupling mechanisms are considered to be alternative revenue programs. Alternative revenue programs are considered to be contracts between NW Natural and its regulator and are excluded from revenue from contracts with customers.

Leasing Revenue

Leasing revenue primarily consists of revenues from NW Natural's North Mist Storage contract with PGE in support of PGE's gas-fired electric power generation facilities under an initial 30-year contract with options to extend, totaling up to an additional 50 years upon mutual agreement of the parties. The facility is accounted for as a sales-type lease with regulatory accounting deferral treatment. The investment is included in rate base under an established cost-of-service tariff schedule, with revenues recognized according to the tariff schedule and as such, profit upon commencement was deferred and will be amortized over the lease term. Leasing revenue also contains rental revenue from small leases of property owned by NW Natural to third parties. The majority of these transactions are accounted for as operating leases and the revenue is recognized over the term of the lease agreement. Lease revenue is excluded from revenue from contracts with customers. See Note 7 for additional information.

NW Natural Other

Gas Storage Revenue

NW Natural's other revenue includes gas storage activity, which includes Interstate Storage Services used to store natural gas for customers. Gas storage revenue is generally recognized over time as the gas storage service is provided to the customer and the amount of consideration received and recognized as revenue is dependent on set rates defined per the storage agreements. Noncash consideration in the form of dekatherms of natural gas is received as consideration for providing gas injection services to gas storage customers. This noncash consideration is measured at fair value using the average spot rate. Customer accounts are generally paid in full each month, and there is no right of return or warranty for services provided. Revenues include firm and interruptible storage services, net of the profit sharing amount refunded to NGD customers.

Asset Management Revenue

Revenues include the optimization of storage assets and pipeline capacity by a third-party and are provided net of the profit sharing amount refunded to NGD customers. Certain asset management revenues received are recognized over time using a straight-line approach over the term of each contract, and the amount of consideration received and recognized as revenue is dependent on a variable pricing model. Variable revenues earned above guaranteed amounts are estimated and recognized at the end of each period using the most likely amount approach. Additionally, other asset management revenues may be based on a fixed rate. Generally, asset management accounts are settled on a monthly basis.

As of September 30, 2023, unrecognized revenue for the fixed component of the transaction price related to gas storage and asset management revenue was approximately $83.5 million. Of this amount, approximately $5.4 million will be recognized

during the remainder of 2023, $19.9 million in 2024, $19.0 million in 2025, $14.9 million in 2026, $7.4 million in 2027 and $16.9 million thereafter. The amounts presented here are calculated using current contracted rates.

Appliance Retail Center Revenue

NW Natural owns and operates an appliance store that is open to the public, where customers can purchase natural gas home appliances. Revenue from the sale of appliances is recognized at the point in time in which the appliance is transferred to the third party responsible for delivery and installation services and when the customer has legal title to the appliance. It is required that the sale be paid for in full prior to transfer of legal title. The amount of consideration received and recognized as revenue varies with changes in marketing incentives and discounts offered to customers.

NW Holdings Other

Water and Wastewater Services

NW Holdings' primary source of other revenue is providing water and wastewater services to customers. Water and wastewater service revenue is generally recognized over time upon delivery of the water commodity or service to the customer, and the amount of consideration received and recognized as revenue is dependent on the tariffs established in the states we operate. Customer accounts are to be paid in full each month, bi-monthly, or quarterly, and there is no right of return or warranty for services provided.

We applied the significant financing practical expedient and have not adjusted the consideration we expect to receive from water distribution and wastewater collection customers for the effects of a significant financing component as all payment arrangements are settled annually. Due to the election of the right to invoice practical expedient, we do not disclose the value of unsatisfied performance obligations.

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Leases

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Lessee, Operating Leases

LEASES

Lease Revenue

Leasing revenue primarily consists of NW Natural's North Mist natural gas storage agreement with PGE, which is billed under an OPUC-approved rate schedule and includes an initial 30-year term beginning May 2019 with options to extend, totaling up to an additional 50 years upon mutual agreement of the parties. Under U.S. GAAP, this agreement is classified as a sales-type lease and qualifies for regulatory accounting deferral treatment. The investment in the storage facility is included in rate base under a separately established cost-of-service tariff, with revenues recognized according to the tariff schedule. As such, the selling profit that was calculated upon commencement as part of the sale-type lease recognition was deferred and will be amortized over the lease term. Billing rates under the cost-of-service tariff will be updated annually to reflect current information including depreciable asset levels, forecasted operating expenses, and the results of regulatory proceedings, as applicable, and revenue received under this agreement is recognized as operating revenue on the consolidated statements of comprehensive income. There are no variable payments or residual value guarantees. The lease does not contain an option to purchase the underlying assets.

NW Natural also maintains a sales-type lease for specialized compressor facilities to provide high pressure compressed natural gas (CNG) services. Lease payments are outlined in an OPUC-approved rate schedule over a 10-year term. There are no variable payments or residual value guarantees. The selling profit computed upon lease commencement was not significant.

Our lessor portfolio also contains small leases of property owned by NW Natural and NW Holdings to third parties. These transactions are accounted for as operating leases and the revenue is recognized over the term of the lease agreement.

The components of lease revenue at NW Natural were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In thousands	2023		2022		2023		2022
Lease revenue
Operating leases	$	19	$	19	$	57	$	56
Sales-type leases	4,001		4,279		11,973		12,839
Total lease revenue	$	4,020	$	4,298	$	12,030	$	12,895

Additionally, lease revenue of $0.1 million and $0.3 million was recognized for the three months ended September 30, 2023 and 2022, respectively, and lease revenue of $0.5 million and $0.4 million was recognized for the nine months ended September 30, 2023 and 2022 related to operating leases associated with non-utility property rentals. Lease revenue related to these leases was presented in other income (expense), net on the consolidated statements of comprehensive income as it is non-operating income.

Total future minimum lease payments to be received under non-cancelable leases at September 30, 2023 are as follows:

In thousands	Operating		Sales-Type		Total
NW Natural:
Remainder of 2023	$	153	$	4,100	$	4,253
2024	603		15,867		16,470
2025	599		15,306		15,905
2026	36		14,901		14,937
2027	22		14,521		14,543
Thereafter	—		222,299		222,299
Total minimum lease payments	$	1,413	$	286,994	$	288,407
Less: imputed interest			156,626
Total leases receivable			$	130,368
Other (NW Holdings):
Remainder of 2023	$	13	$	—	$	13
2024	52		—		52
2025	53		—		53
2026	56		—		56
2027	57		—		57
Thereafter	857		—		857
Total minimum lease payments	$	1,088	$	—	$	1,088
NW Holdings:
Remainder of 2023	$	166	$	4,100	$	4,266
2024	655		15,867		16,522
2025	652		15,306		15,958
2026	92		14,901		14,993
2027	79		14,521		14,600
Thereafter	857		222,299		223,156
Total minimum lease payments	$	2,501	$	286,994	$	289,495
Less: imputed interest			156,626
Total leases receivable			$	130,368

The total leases receivable above is reported under the NGD segment and the short- and long-term portions are included within other current assets and assets under sales-type leases on the consolidated balance sheets, respectively. The total amount of unguaranteed residual assets was $5.4 million, $5.0 million and $5.1 million at September 30, 2023 and 2022 and December 31, 2022, respectively, and is included in assets under sales-type leases on the consolidated balance sheets. Additionally, under regulatory accounting, the revenues and expenses associated with these agreements are presented on the consolidated statements of comprehensive income such that their presentation aligns with similar regulated activities at NW Natural.

Lease Expense

Operating Leases

We have operating leases for land, buildings and equipment. Our primary lease is for NW Natural's headquarters and operations center. Our leases have remaining lease terms of 3 months to 17 years. Many of our lease agreements include options to extend the lease, which we do not include in our minimum lease terms unless they are reasonably certain to be exercised. Short-term leases with a term of 12 months or less are not recorded on the balance sheet. As most of our leases do not provide an implicit rate and are entered into by NW Natural, we use an estimated discount rate representing the rate we would have incurred to finance the funds necessary to purchase the leased asset and is based on information available at the lease commencement date in determining the present value of lease payments.

The components of lease expense, a portion of which is capitalized, were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In thousands	2023		2022		2023		2022
NW Natural:
Operating lease expense	$	1,817	$	1,767	$	5,382	$	5,235
Short-term lease expense	198		105		556		684
Other (NW Holdings):
Operating lease expense	$	51	$	7	$	131	$	22
NW Holdings:
Operating lease expense	$	1,868	$	1,774	$	5,513	$	5,257
Short-term lease expense	198		105		556		684

Supplemental balance sheet information related to operating leases as of September 30, 2023 and 2022 and December 31, 2022 is as follows:

In thousands	September 30,				December 31,
	2023		2022		2022
NW Natural:
Operating lease right of use asset	$	70,852	$	73,046	$	72,720
Operating lease liabilities - current liabilities	$	1,658	$	1,298	$	1,363
Operating lease liabilities - non-current liabilities	77,041		78,436		78,345
Total operating lease liabilities	$	78,699	$	79,734	$	79,708
Other (NW Holdings):
Operating lease right of use asset	$	625	$	99	$	709
Operating lease liabilities - current liabilities	$	157	$	63	$	151
Operating lease liabilities - non-current liabilities	434		33		620
Total operating lease liabilities	$	591	$	96	$	771
NW Holdings:
Operating lease right of use asset	$	71,477	$	73,145	$	73,429
Operating lease liabilities - current liabilities	$	1,815	$	1,361	$	1,514
Operating lease liabilities - non-current liabilities	77,475		78,469		78,965
Total operating lease liabilities	$	79,290	$	79,830	$	80,479

The weighted-average remaining lease terms and weighted-average discount rates for the operating leases at NW Natural were as follows:

In thousands	September 30,				December 31,
	2023		2022		2022
Weighted-average remaining lease term (years)	16.5		17.5		17.2
Weighted-average discount rate	7.3	%	7.3	%	7.3	%

Headquarters and Operations Center Lease

NW Natural commenced a 20-year operating lease agreement in March 2020 for a new headquarters and operations center in Portland, Oregon. There is an option to extend the term of the lease for two additional periods of seven years. There is a material timing difference between the minimum lease payments and expense recognition as calculated under operating lease accounting rules. OPUC issued an order allowing us to align our expense recognition with cash payments for ratemaking purposes. We recorded the difference between the minimum lease payments and the aggregate of the imputed interest on the finance lease obligation and amortization of the right-of-use asset as a deferred regulatory asset on our balance sheet. The balance of the regulatory asset was $7.8 million, $6.6 million and $6.9 million as of September 30, 2023 and 2022 and December 31, 2022, respectively.

Maturities of operating lease liabilities at September 30, 2023 were as follows:

In thousands	NW Natural		Other (NW Holdings)		NW Holdings
Remainder of 2023	$	1,801	$	44	$	1,845
2024	7,307		183		7,490
2025	7,193		176		7,369
2026	7,361		153		7,514
2027	7,538		107		7,645
Thereafter	108,991		12		109,003
Total lease payments	140,191		675		140,866
Less: imputed interest	61,492		84		61,576
Total lease obligations	78,699		591		79,290
Less: current obligations	1,658		157		1,815
Long-term lease obligations	$	77,041	$	434	$	77,475

Supplemental cash flow information related to leases was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In thousands	2023		2022		2023		2022
NW Natural:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	1,809	$	1,759	$	5,374	$	5,225
Finance cash flows from finance leases	196		92		369		474
Right of use assets obtained in exchange for lease obligations
Operating leases	$	—	$	—	$	81	$	—
Finance leases	196		6		369		226
Other (NW Holdings):
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	54	$	12	$	132	$	24
Right of use assets obtained in exchange for lease obligations
Operating leases	$	—	$	61	$	—	$	61
Finance leases	11		—		101		—
NW Holdings:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	1,863	$	1,771	$	5,506	$	5,249
Finance cash flows from finance leases	196		92		369		474
Right of use assets obtained in exchange for lease obligations
Operating leases	$	—	$	61	$	81	$	61
Finance leases	207		6		470		226

Finance Leases

NW Natural also leases building storage spaces for use as a gas meter room in order to provide natural gas to multifamily or mixed use developments. These contracts are accounted for as finance leases and typically involve a one-time upfront payment with no remaining liability. The right of use assets for finance leases were $2.6 million, $2.3 million and $2.3 million at September 30, 2023 and 2022 and at December 31, 2022, respectively. As of September 30, 2023, December 31, 2022 and September 30, 2022, there were no finance lease liabilities at NW Natural.

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

STOCK-BASED COMPENSATION

Stock-based compensation plans are designed to promote stock ownership in NW Holdings by employees, including officers. These compensation plans include a Long Term Incentive Plan (LTIP) and an Employee Stock Purchase Plan (ESPP). For additional information on stock-based compensation plans, see Note 8 in the 2022 Form 10-K and the updates provided below.

Long Term Incentive Plan

Performance Shares

LTIP performance shares incorporate a combination of market, performance, and service-based factors. During the nine months ended September 30, 2023, the final performance factor under the 2021 LTIP was approved and 55,250 performance-based shares were granted under the 2021 LTIP for accounting purposes. As such, NW Natural and other subsidiaries began recognizing compensation expense. In February 2022 and 2023, LTIP shares were awarded to participants; however, the agreements allow for one of the performance factors to remain variable until the first quarter of the third year of the award period. As the performance factor will not be approved until the first quarters of 2024 and 2025, respectively, there is not a mutual understanding of the awards' key terms and conditions between NW Holdings and the participants as of September 30, 2023, and therefore, no expense was recognized for the 2022 and 2023 awards. NW Holdings will calculate the grant date fair value and NW Natural will recognize expense over the remaining service period for each award once the final performance factor has been approved.

For the 2022 and 2023 LTIP awards, share payouts range from a threshold of 0% to a maximum of 200% based on achievement of pre-established goals. The performance criteria for the 2022 and 2023 performance shares consists of a three-year Return on Invested Capital (ROIC) threshold that must be satisfied and a cumulative EPS factor, which can be modified by a total shareholder return factor (TSR modifier) relative to the performance of peer group companies over the performance period of three years for each respective award. If the targets were achieved for the 2022 and 2023 awards, NW Holdings would grant for accounting purposes 49,100 and 52,765 shares in the first quarters of 2024 and 2025, respectively.

As of September 30, 2023, there was $0.1 million of unrecognized compensation cost associated with the 2021 LTIP grant, which is expected to be recognized through 2023.

Restricted Stock Units

During the nine months ended September 30, 2023, 45,532 RSUs were granted under the LTIP with a weighted-average grant date fair value of $48.24 per share. Generally, the RSUs awarded are forfeitable and include a performance-based threshold as well as a vesting period of four years from the grant date. The majority of our RSU grants obligate NW Holdings, upon vesting, to issue the RSU holder one share of common stock. The grant may also include a cash payment equal to the total amount of dividends paid per share between the grant date and vesting date of that portion of the RSU depending on the structure of the award agreement. The fair value of an RSU is equal to the closing market price of NW Holdings' common stock on the grant date. As of September 30, 2023, there was $3.5 million of unrecognized compensation cost from grants of RSUs, which is expected to be recognized over a period extending through 2027.

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Debt

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Debt

DEBT

Short-Term Debt

At September 30, 2023, September 30, 2022 and December 31, 2022, short-term debt consisted of the following:

	September 30, 2023				September 30, 2022				December 31, 2022
In millions	Balance Outstanding		Weighted Average Interest Rate(1)		Balance Outstanding		Weighted Average Interest Rate(1)		Balance Outstanding		Weighted Average Interest Rate(1)
NW Natural:
Commercial paper	$	—	—	%	$	53.0	3.3	%	$	170.2	4.6	%
Other (NW Holdings):
Credit agreement	71.0		6.4	%	88.0		4.7	%	88.0		5.3	%
NW Holdings	$	71.0			$	141.0			$	258.2

(1) Weighted average interest rate on outstanding short-term debt

Long-Term Debt

At September 30, 2023, September 30, 2022 and December 31, 2022, NW Holdings' long-term debt consisted of the following:

	September 30, 2023				September 30, 2022				December 31, 2022
In millions	Balance Outstanding		Weighted Average Interest Rate(1)		Balance Outstanding		Weighted Average Interest Rate(1)		Balance Outstanding		Weighted Average Interest Rate(2)
NW Natural first mortgage bonds	$	1,414.7	4.7	%	$	1,134.7	4.5	%	$	1,134.7	4.5	%
NW Holdings credit agreement	100.0		5.5	%	100.0		4.1	%	100.0		4.2	%
NWN Water credit agreement	50.0		5.7	%	50.0		4.1	%	50.0		4.2	%
NWN Water term loan	55.0		4.8	%	55.0		3.5	%	55.0		2.5	%
Other long-term debt	5.8				6.3				6.2
Long-term debt, gross	$	1,625.5			$	1,346.0			$	1,345.9
Less: unamortized debt issuance costs	10.2				8.4				9.0
Less: current maturities	190.7				50.6				90.7
Total long-term debt	$	1,424.6			$	1,287.0			$	1,246.2

(1) Weighted average interest rate for the nine months ended September 30, 2023 and September 30, 2022

(2) Weighted average interest rate for the year ended December 31, 2022

NW Natural's first mortgage bonds (FMBs) have maturity dates ranging from 2023 through 2053 and interest rates ranging from 2.8% to 7.9%. The credit agreements at NW Holdings and NWN Water have maturity dates in 2024 and the NWN Water term loan is due in 2026.

In August 2023, NW Natural retired $50.0 million of FMBs with an interest rate of 3.5%. An additional $40.0 million of FMBs with an interest rate of 5.6% are set to mature in November 2023. No other debt is scheduled to mature in the next 12 months as of September 30, 2023 at NW Natural.

Issuance of Long-Term Debt

In August 2023, NW Natural issued and sold $80.0 million aggregate principal amount of its FMBs, 5.18% Series and $50.0 million aggregate principal amount of its FMBs, 5.23% Series, to certain institutional investors pursuant to the Bond Purchase Agreement. The 5.18% Bonds bear interest at the rate of 5.18% per annum, payable semi-annually on February 4 and August 4 of each year, commencing February 4, 2024, and will mature on August 4, 2034. The 5.23% Bonds bear interest at the rate of 5.23% per annum, payable semi-annually on February 4 and August 4 of each year, commencing February 4, 2024, and will mature on August 4, 2038.

In March 2023, NW Natural issued and sold $100.0 million aggregate principal amount of 5.75% Secured Medium-Term Notes, Series B due 2033 (the Notes). The Notes bear interest at the rate of 5.75% per annum, payable semi-annually on March 15 and September 15 of each year.

In January 2023, NW Natural issued and sold $100.0 million aggregate principal amount of its FMBs, 5.43% Series due January 2053, to certain institutional investors pursuant to the Bond Purchase Agreement. The 5.43% Bonds bear interest at the rate of 5.43% per annum, payable semi-annually on January 6 and July 6 of each year, commencing July 6, 2023, and will mature on January 6, 2053.

In September 2022, NW Holdings entered into an 18-month credit agreement for $100.0 million and borrowed the full amount. The interest rate is based on the Secured Overnight Financing Rate (SOFR). The loan is due and payable on March 15, 2024. The credit agreement prohibits NW Holdings from permitting consolidated indebtedness to be greater than 70% of total capitalization, each as defined therein and calculated as of the end of each fiscal quarter. Failure to comply with this financial covenant would entitle the lenders to accelerate the maturity of the amounts outstanding under the credit agreement. NW Holdings was in compliance with this financial covenant as of September 30, 2023. In December 2022, NW Holdings entered into a swap to fix the interest rate on this debt beginning in January 2023 through the loan's maturity. See "Interest Rate Swap Agreements" below for more detail.

In September 2022, NWN Water entered into an 18-month credit agreement for $50.0 million and borrowed the full amount. The interest rate is based on the SOFR. The loan is due and payable on March 15, 2024. The credit agreement prohibits NWN Water and NW Holdings from permitting consolidated indebtedness to be greater than 70% of total capitalization, each as defined therein and calculated as of the end of each fiscal quarter. Failure to comply with this financial covenant would entitle the lenders to accelerate the maturity of the amounts outstanding under the credit agreement. NWN Water and NW Holdings were in compliance with this financial covenant as of September 30, 2023.

Interest Rate Swap Agreements

NW Holdings and NWN Water entered into interest rate swap agreements with major financial institutions that effectively converted variable-rate debt to a fixed rate. Interest payments made between the effective date and expiration date are hedged by the swap agreements. The notional amount, effective date, expiration date and benchmark rate of the swap agreements are shown in the table below:

In millions	Notional Amount		Effective Date	Expiration Date	Fixed Rate
NW Holdings	$	100.0	1/17/2023	3/15/2024	4.7	%
NWN Water	$	55.0	1/19/2023	6/10/2026	3.8	%

Fair Value of Long-Term Debt

NW Holdings' and NW Natural's outstanding debt does not trade in active markets. The fair value of debt is estimated using the value of outstanding debt at natural gas distribution companies with similar credit ratings, terms, and remaining maturities to NW Holdings' and NW Natural's debt that actively trade in public markets. These valuations are based on Level 2 inputs as defined in the fair value hierarchy. See Note 2 in the 2022 Form 10-K for a description of the fair value hierarchy.

The following table provides an estimate of the fair value of long-term debt, including current maturities of long-term debt, using market prices in effect on the valuation date:

	September 30,				December 31,
In thousands	2023		2022		2022
NW Natural:
Gross long-term debt	$	1,414,700	$	1,134,700	$	1,134,700
Unamortized debt issuance costs	(10,147)		(8,229)		(8,823)
Carrying amount	$	1,404,553	$	1,126,471	$	1,125,877
Estimated fair value(1)	$	1,176,212	$	927,372	$	944,383
NW Holdings:
Gross long-term debt	$	1,625,545	$	1,345,968	$	1,345,851
Unamortized debt issuance costs	(10,245)		(8,348)		(8,987)
Carrying amount	$	1,615,300	$	1,337,620	$	1,336,864
Estimated fair value(1)	$	1,385,144	$	1,133,087	$	1,148,395

(1) Estimated fair value does not include unamortized debt issuance costs.

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Pension and Other Postretirement Benefit Costs

9 Months Ended

Sep. 30, 2023

Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract]

Pension and Other Postretirement Benefit Costs

PENSION AND OTHER POSTRETIREMENT BENEFIT COSTS

NW Natural maintains a qualified non-contributory defined benefit pension plan (Pension Plan), non-qualified supplemental pension plans for eligible executive officers and other key employees, and other postretirement employee benefit plans. NW Natural also has a qualified defined contribution plan (Retirement K Savings Plan) for all eligible employees. The Pension Plan and Retirement K Savings Plan have plan assets, which are held in qualified trusts to fund retirement benefits.

The service cost component of net periodic benefit cost for NW Natural pension and other postretirement benefit plans is recognized in operations and maintenance expense in the consolidated statements of comprehensive income. The other non-service cost components are recognized in other income (expense), net in the consolidated statements of comprehensive income.

The following table provides the components of net periodic benefit cost (credit) for the pension and other postretirement benefit plans:

	Three Months Ended September 30,								Nine Months Ended September 30,
	Pension Benefits				Other Postretirement Benefits				Pension Benefits				Other Postretirement Benefits
In thousands	2023		2022		2023		2022		2023		2022		2023		2022
Service cost	$	842	$	1,022	$	27	$	34	$	2,940	$	4,450	$	83	$	145
Interest cost	5,283		4,260		247		213		15,719		10,945		743		543
Expected return on plan assets	(6,421)		(7,076)		—		—		(19,292)		(19,274)		—		—
Amortization of prior service credit	—		—		—		(15)		—		—		—		(249)
Amortization of net actuarial loss (gain)	139		(1,542)		—		57		418		9,459		—		319
Net periodic benefit cost (credit)	(157)		(3,336)		274		289		(215)		5,580		826		758
Amount allocated to construction	(326)		(496)		(9)		(14)		(1,239)		(1,965)		(29)		(57)
Net periodic benefit cost (credit) charged to expense	(483)		(3,832)		265		275		(1,454)		3,615		797		701
Amortization of regulatory balancing account	675		675		—		—		4,757		4,757		—		—
Net amount charged to expense	$	192	$	(3,157)	$	265	$	275	$	3,303	$	8,372	$	797	$	701

Net periodic benefit costs are reduced by amounts capitalized to NGD plant. In addition, net periodic benefit costs were recorded to a regulatory balancing account as approved by the OPUC and amortized accordingly.

The following table presents amounts recognized in accumulated other comprehensive loss (AOCL) and the changes in AOCL related to non-qualified employee benefit plans:

	Three Months Ended September 30,				Nine Months Ended September 30,
In thousands	2023		2022		2023		2022
Beginning balance	$	(6,209)	$	(11,010)	$	(6,414)	$	(11,404)
Amounts reclassified from AOCL:
Amortization of actuarial losses	139		275		418		811
Total reclassifications before tax	139		275		418		811
Tax benefit	(37)		(73)		(111)		(215)
Total reclassifications for the period	102		202		307		596
Ending balance	$	(6,107)	$	(10,808)	$	(6,107)	$	(10,808)

Employer Contributions to Company-Sponsored Defined Benefit Pension Plans

NW Natural made no cash contributions to its qualified defined benefit pension plans during the nine months ended September 30, 2023 or 2022. NW Natural does not expect to make any plan contributions during the remainder of 2023 as a result of adopting the American Rescue Plan Act.

Defined Contribution Plan

NW Natural's Retirement K Savings Plan is a qualified defined contribution plan under Internal Revenue Code Sections 401(a) and 401(k). NW Natural contributions totaled $8.0 million and $7.4 million for the nine months ended September 30, 2023 and 2022, respectively.

See Note 10 in the 2022 Form 10-K for more information concerning these retirement and other postretirement benefit plans.

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Income Tax

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Tax

INCOME TAX

An estimate of annual income tax expense is made each interim period using estimates for annual pre-tax income, regulatory flow-through adjustments, tax credits, and other items. The estimated annual effective tax rate is applied to year-to-date, pre-tax income to determine income tax expense for the interim period consistent with the annual estimate. Discrete events are recorded in the interim period in which they occur or become known.

The effective income tax rate varied from the federal statutory rate due to the following:

	Three Months Ended September 30,
	NW Holdings						NW Natural
In thousands	2023			2022			2023			2022
Income tax at statutory rate (federal)	$	(6,716)		$	(5,533)		$	(6,131)		$	(5,305)
State income tax	(2,742)			(2,376)			(2,633)			(2,306)
Increase (decrease):
Differences required to be flowed-through by regulatory commissions	1,015			1,232			1,018			1,232
Other, net	151			(81)			39			(76)
Total benefit for income taxes	$	(8,292)		$	(6,758)		$	(7,707)		$	(6,455)
Effective income tax rate	25.9		%	25.7		%	26.4		%	25.6		%

	Nine Months Ended September 30,
	NW Holdings						NW Natural
In thousands	2023			2022			2023			2022
Income tax at statutory rate (federal)	$	13,928		$	10,710		$	15,723		$	11,554
State income tax	5,618			4,298			5,990			4,497
Increase (decrease):
Differences required to be flowed-through by regulatory commissions	(2,055)			(2,003)			(2,051)			(2,003)
Other, net	(393)			(370)			(625)			(370)
Total provision for income taxes	$	17,098		$	12,635		$	19,037		$	13,678
Effective income tax rate	25.8		%	24.8		%	25.4		%	24.9		%

The NW Holdings and NW Natural effective income tax rates for the nine months ended September 30, 2023 compared to the same period in 2022 changed primarily as a result of changes in pre-tax income. See Note 11 in the 2022 Form 10-K for more detail on income taxes and effective tax rates.

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Property, Plant and Equipment

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

PROPERTY, PLANT, AND EQUIPMENT

The following table sets forth the major classifications of property, plant, and equipment and accumulated depreciation:

	September 30,				December 31,
In thousands	2023		2022		2022
NW Natural:
NGD plant in service	$	4,096,560	$	3,888,092	$	3,992,676
NGD construction work in progress	153,231		161,658		78,897
Less: Accumulated depreciation	1,152,952		1,135,965		1,115,690
NGD plant, net	3,096,839		2,913,785		2,955,883
Other plant in service	70,363		69,626		70,368
Other construction work in progress	8,323		5,112		6,606
Less: Accumulated depreciation	22,331		21,435		21,541
Other plant, net	56,355		53,303		55,433
Total property, plant, and equipment, net	$	3,153,194	$	2,967,088	$	3,011,316
Other (NW Holdings):
Other plant in service	$	127,721	$	66,208	$	92,979
Other construction work in progress	12,404		16,632		20,040
Less: Accumulated depreciation	14,685		8,750		9,935
Other plant, net	$	125,440	$	74,090	$	103,084
NW Holdings:
Total property, plant, and equipment, net	$	3,278,634	$	3,041,178	$	3,114,400
NW Natural:
Capital expenditures in accrued liabilities	$	21,402	$	43,954	$	24,584
NW Holdings:
Capital expenditures in accrued liabilities	$	22,686	$	45,374	$	25,318

NW Natural

Other plant balances include non-utility gas storage assets at the Mist facility and other long-lived assets not related to NGD.

NW Holdings

Other plant balances include long-lived assets associated with water and wastewater operations and non-regulated activities not held by NW Natural or its subsidiaries.

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Investments

9 Months Ended

Sep. 30, 2023

Investments [Abstract]

Investments [Text Block]

INVESTMENTS

Investments include gas reserves, financial investments in life insurance policies, and equity method investments. The following table summarizes other investments:

	NW Holdings						NW Natural
	September 30,				December 31,		September 30,				December 31,
In thousands	2023		2022		2022		2023		2022		2022
Investments in life insurance policies	$	46,870	$	49,043	$	49,358	$	46,870	$	49,043	$	49,358
Investments in gas reserves, non-current	21,439		23,770		22,970		21,439		23,770		22,970
Investment in unconsolidated affiliates	36,253		23,756		23,376		19,444		8,058		7,782
Total other investments	$	104,562	$	96,569	$	95,704	$	87,753	$	80,871	$	80,110

Investment in Life Insurance Policies

Other investments include financial investments in life insurance policies, which are accounted for at cash surrender value, net of policy loans. See Note 13 in the 2022 Form 10-K.

NW Natural Gas Reserves

NW Natural has invested $188 million through the gas reserves program in the Jonah Field located in Wyoming as of September 30, 2023. Gas reserves are stated at cost, net of regulatory amortization, with the associated deferred tax benefits of $4.4 million, $5.5 million, and $5.2 million, which are recorded as liabilities in the September 30, 2023, September 30, 2022, and December 31, 2022 consolidated balance sheets, respectively. NW Natural's investment is included in NW Holdings' and NW Natural's consolidated balance sheets under other current assets and other investments (non-current portion) with the maximum loss exposure limited to the investment balance. The amount of gas reserves included in other current assets was $2.4 million, $3.7 million, and $3.4 million as of September 30, 2023, September 30, 2022, and December 31, 2022, respectively. See Note 13 in the 2022 Form 10-K.

Investments in Unconsolidated Affiliates

In December 2021, NW Natural Water purchased a 37.3% ownership stake in Avion Water Company, Inc. (Avion Water), an investor-owned water utility for $14.5 million. In July 2022, NW Natural Water increased its ownership stake in Avion Water to 40.3% for an additional $1.0 million. In June 2023, NW Natural Water increased its ownership stake in Avion Water to 43.1% for an additional $1.0 million. Avion Water operates in Bend, Oregon and the surrounding communities, serving approximately 15,000 customer connections and employing 35 people. The carrying value of the equity method investment is $8.8 million higher than the underlying equity in the net assets of the investee at September 30, 2023 due to equity method goodwill. NW Natural Water's share in the earnings (loss) of Avion Water is included in other income (expense), net.

In 2020, NW Natural began a partnership with BioCarbN to invest in up to four separate renewable natural gas (RNG) development projects that are designed to access biogas derived from water treatment at Tyson Foods’ processing plants, subject to approval by all parties. During the construction phase of the projects, NW Natural determined it is the primary beneficiary and fully consolidates each entity. In January 2022, commissioning of the first project, Lexington Renewable Energy LLC (Lexington), was completed. NW Natural determined it was no longer the primary beneficiary, deconsolidated the variable interest entity and recorded the investment in Lexington as an equity method investment. As of September 30, 2023, NW Natural had an investment balance in Lexington of $7.8 million. NW Natural's share in the earnings (loss) of Lexington is included in cost of gas.

In April 2023, commissioning of the second project, Dakota City Renewable Energy LLC (Dakota City), was completed. NW Natural determined it was no longer the primary beneficiary of Dakota City once the project was commissioned. The investment in the variable interest entity was deconsolidated and recorded as an equity method investment. NW Natural accounts for its interest in Dakota City using the equity method of accounting because NW Natural does not control but has the ability to exercise significant influence over Dakota City's operations after commissioning. There was no gain or loss recognized upon deconsolidation. NW Natural determined the fair value of the investment approximated the carrying value which was primarily comprised of cash and property, plant and equipment. As of September 30, 2023, NW Natural had an investment balance in Dakota City of $11.6 million. NW Natural's share in the earnings (loss) of Dakota City is included in cost of gas.

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Business Combinations Business Combinations

9 Months Ended

Sep. 30, 2023

Business Combinations [Abstract]

Business Combination Disclosure

BUSINESS COMBINATIONS

2023 Business Combinations

During the nine months ended September 30, 2023, NWN Water and its subsidiaries acquired the assets of two businesses qualifying as business combinations. The aggregate fair value of the preliminary consideration transferred for these acquisitions was $3.6 million, most of which was preliminarily allocated to property, plant, and equipment, and goodwill. These transactions align with NW Holdings' water and wastewater sector strategy as it continues to expand its water and wastewater service territories and included:

•Pedersen Family, LLC in Washington

•King Water Corporation in Washington

In October 2023, NWN Water completed the acquisition of Rose Valley Water Company. Located in Peoria, Arizona, this water utility serves approximately 2,400 connections. Also in October 2023, NWN Water completed the water services business portion of the Hiland Water asset acquisition. This water and wastewater services business supports approximately 6,400 connections across Oregon. The preliminary allocation of consideration to the acquired assets and assumed liabilities based on their fair value is not yet complete as valuation procedures are pending. Acquisition costs were insignificant and were expensed as incurred.

2022 Business Combinations

During 2022, NWN Water and its subsidiaries acquired the assets of seven businesses qualifying as business combinations. The aggregate fair value of the preliminary consideration transferred for these acquisitions was $105.7 million, most of which was preliminarily allocated to property, plant and equipment and goodwill. These transactions align with NW Holdings' water and wastewater sector strategy as it continues to expand its service territories and included:

•Far West Water & Sewer, Inc. in Arizona

•Belle Oaks Water and Sewer Co., Inc in Texas

•Northwest Water Services, LLC in Washington

•Aquarius Utilities, LLC in Washington

•Valiant Idaho, LLC (The Idaho Club - Sewer) in Idaho

•Caney Creek in Texas

•Water Necessities, Inc. and Rural Water Co. in Texas

As each of these acquisitions met the criteria of a business combination, a preliminary allocation of the consideration to the acquired net assets based on their estimated fair value as of the acquisition date was performed. The allocation for each of these business combinations is considered preliminary as of September 30, 2023. In accordance with U.S. GAAP, the fair value determination involves management judgment in determining the significant estimates and assumptions used and was made using existing regulatory conditions for net assets. These allocations are considered preliminary as of September 30, 2023, as facts and circumstances that existed as of the acquisition date may be discovered as we continue to integrate the acquired businesses. As a result, subsequent adjustments to the preliminary valuation of tangible assets, contract assets and liabilities, tax positions, and goodwill may be required. Subsequent adjustments are not expected to be significant, and any such adjustments are expected to be completed within the one-year measurement period for all acquisitions described above.

Goodwill

NW Holdings allocates goodwill to reporting units based on the expected benefit from the business combination. We perform an annual impairment assessment of goodwill at the reporting unit level, or more frequently if events and circumstances indicate that goodwill might be impaired. An impairment loss is recognized if the carrying value of a reporting unit’s goodwill exceeds its fair value.

As a result of all acquisitions completed, total goodwill was $152.4 million, $74.7 million, and $149.3 million as of September 30, 2023, September 30, 2022, and December 31, 2022, respectively. All of our goodwill is related to water and wastewater acquisitions and is included in the other category for segment reporting purposes. The annual impairment assessment of goodwill occurs in the fourth quarter of each year. There have been no impairments recognized to date.

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Derivative Instruments

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

DERIVATIVE INSTRUMENTS

NW Natural

NW Natural enters into financial derivative contracts to hedge a portion of the NGD segment's natural gas sales requirements. These contracts include swaps, options, and option combinations. These derivative financial instruments are primarily used to manage commodity price variability. A small portion of NW Natural's derivative hedging strategy involves foreign currency forward contracts.

NW Natural enters into these financial derivatives, up to prescribed limits, primarily to hedge price variability related to term physical gas supply contracts. The foreign currency forward contracts are used to hedge the fluctuation in foreign currency exchange rates for pipeline demand charges paid in Canadian dollars.

In the normal course of business, NW Natural also enters into indexed-price physical forward natural gas commodity purchase contracts and options to meet the requirements of NGD customers. These contracts qualify for regulatory deferral accounting treatment.

Notional Amounts

The following table presents the absolute notional amounts related to open positions on NW Natural derivative instruments:

	September 30,				December 31,
In thousands	2023		2022		2022
Natural gas (in therms):
Financial	1,080,345		1,006,665		852,435
Physical	749,838		672,350		463,254
Foreign exchange	$	10,483	$	9,905	$	7,617

Purchased Gas Adjustment (PGA)

Rates and hedging approaches may vary between states due to different rate structures and mechanisms. Under the PGA mechanism in Oregon, derivatives entered into by NW Natural for the procurement or hedging of natural gas for future gas years generally receive regulatory deferral accounting treatment. In general, commodity hedging for the current gas year is completed prior to the start of the gas year, and hedge prices are reflected in the weighted-average cost of gas in the PGA filing. Hedge contracts entered into after the start of the PGA period are subject to the PGA incentive sharing mechanism in Oregon. Under the PGA mechanism in Washington, NW Natural incorporates a risk-responsive hedging strategy, and receives regulatory deferral accounting treatment for its Washington gas supplies.

NW Natural entered the 2022-23 gas year with forecasted sales volume hedged at approximately 84% in total, including 67% in financial hedges and 17% in physical gas supplies.The total hedged for Oregon was approximately 85%, including 67% in financial hedges and 18% in physical gas supplies. The total hedged for Washington was approximately 79%, including 66% in financial hedges and 13% in physical gas supplies.

Unrealized and Realized Gain/Loss

The following table reflects the income statement presentation for the unrealized gains and losses from NW Natural's derivative instruments:

	Three Months Ended September 30,
	2023				2022
In thousands	Natural gas commodity		Foreign Exchange		Natural gas commodity		Foreign Exchange
Benefit (expense) to cost of gas	$	14,516	$	(276)	$	(11,626)	$	(455)
Operating revenues (expense)	—		—		—		—
Amounts deferred to regulatory accounts on balance sheet	(14,516)		276		11,626		455
Total gain (loss) in pre-tax earnings	$	—	$	—	$	—	$	—

	Nine Months Ended September 30,
	2023				2022
In thousands	Natural gas commodity		Foreign exchange		Natural gas commodity		Foreign exchange
Benefit (expense) to cost of gas	$	(58,741)	$	(95)	$	32,827	$	(528)
Operating revenues (expense)	—		—		—		—
Amounts deferred to regulatory accounts on balance sheet	58,741		95		(32,827)		528
Total gain (loss) in pre-tax earnings	$	—	$	—	$	—	$	—

Unrealized Gain/Loss

Outstanding derivative instruments related to regulated NGD operations are deferred in accordance with regulatory accounting standards. The cost of foreign currency forward and natural gas derivative contracts are recognized immediately in the cost of gas; however, costs above or below the amount embedded in the current year PGA are subject to a regulatory deferral tariff and therefore, are recorded as a regulatory asset or liability.

Realized Gain/Loss

NW Natural realized net losses of $7.5 million and net gains of $145.7 million for the three and nine months ended September 30, 2023, respectively, from the settlement of natural gas financial derivative contracts, whereas, net gains of $16.9 million and $74.0 million were realized for the three and nine months ended September 30, 2022, respectively. Realized gains and losses offset the higher or lower cost of gas purchased, resulting in no incremental amounts to collect or refund to customers.

Credit Risk Management of Financial Derivatives Instruments

No collateral was posted with or by NW Natural counterparties as of September 30, 2023 or 2022. NW Natural attempts to minimize the potential exposure to collateral calls by diversifying counterparties and using credit limits to manage liquidity risk. Counterparties generally allow a certain credit limit threshold before requiring NW Natural to post collateral against unrealized loss positions. Given NW Natural's credit ratings, counterparty credit limits and portfolio diversification, it was not subject to collateral calls in 2023 or 2022. The collateral call exposure is set forth under credit support agreements, which generally contain credit limits. NW Natural could also be subject to collateral call exposure where it has agreed to provide adequate assurance, which is not specific as to the amount of credit limit allowed but could potentially require additional collateral posting by NW Natural in the event of a material adverse change.

NW Natural's financial derivative instruments are subject to master netting arrangements; however, they are presented on a gross basis in the consolidated balance sheets. NW Natural and its counterparties have the ability to set-off obligations to each other under specified circumstances. Such circumstances may include a defaulting party, a credit change due to a merger affecting either party, or any other termination event.

If netted by its counterparties, NW Natural's physical and financial derivative position would result in an asset of $10.1 million and a liability of $48.1 million as of September 30, 2023, an asset of $40.8 million and a liability of $8.5 million as of September 30, 2022, and an asset of $153.3 million and a liability of $3.6 million as of December 31, 2022.

NW Natural is exposed to derivative credit and liquidity risk primarily through securing fixed price natural gas commodity swaps and interest rate swaps with financial counterparties. NW Natural utilizes master netting arrangements with International Swaps and Derivatives Association (ISDA) contracts to minimize these risks including ISDA Credit Support Agreements with counterparties based on their credit ratings. Additionally, NW Natural uses counterparty, industry, sector and country diversification to minimize credit risk. In certain cases, NW Natural may require counterparties to post collateral, guarantees, or letters of credit to maintain its minimum credit requirement standards or for liquidity management purposes. See Note 15 in the 2022 Form 10-K for additional information.

Fair Value

In accordance with fair value accounting, NW Natural includes non-performance risk in calculating fair value adjustments. This includes a credit risk adjustment based on the credit spreads of NW Natural counterparties when in an unrealized gain position, or on NW Natural's own credit spread when it is in an unrealized loss position. The inputs in our valuation models include natural gas futures, volatility, credit default swap spreads and interest rates. Additionally, the assessment of non-performance risk is generally derived from the credit default swap market and from bond market credit spreads. The impact of the credit risk adjustment for all financial derivatives outstanding to the fair value calculation was $0.3 million, which decreased the liability at September 30, 2023. The net fair value was a liability of $38.0 million, an asset of $32.3 million, and an asset of $149.7 million as of September 30, 2023 and 2022, and December 31, 2022, respectively. No Level 3 inputs were used in our derivative valuations during the nine months ended September 30, 2023, and 2022. See Note 2 in the 2022 Form 10-K.

NW Holdings

NW Holdings and NWN Water entered into interest rate swap agreements with major financial institutions that effectively converted variable-rate debt to a fixed rate. Interest payments made between the effective date and expiration date are hedged by the swap agreements. The notional amount, effective date, expiration date and benchmark rate of the swap agreements are shown in the table below:

In millions	Notional Amount		Effective Date	Expiration Date	Fixed Rate
NW Holdings	$	100.0	1/17/2023	3/15/2024	4.7	%
NWN Water	$	55.0	1/19/2023	6/10/2026	3.8	%

Unrealized gains and losses related to these interest rate swap agreements are recorded in AOCI on the consolidated balance sheet and totaled $1.1 million and $0.1 million, net of tax, as of September 30, 2023 and December 31, 2022, respectively. There were no amounts reclassified from AOCI to net income during the nine months ended September 30, 2023.

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Environmental Matters

9 Months Ended

Sep. 30, 2023

Environmental Remediation Obligations [Abstract]

Environmental Matters

ENVIRONMENTAL MATTERS

NW Natural owns, or previously owned, properties that may require environmental remediation or action. The range of loss for environmental liabilities is estimated based on current remediation technology, enacted laws and regulations, industry experience gained at similar sites, and an assessment of the probable level of involvement and financial condition of other potentially responsible parties (PRPs). When amounts are prudently expended related to site remediation of those sites described herein, NW Natural has recovery mechanisms in place to collect 96.7% of remediation costs allocable to Oregon customers and 3.3% of costs allocable to Washington customers.

These sites are subject to the remediation process prescribed by the Environmental Protection Agency (EPA) and the Oregon Department of Environmental Quality (ODEQ). The process begins with a remedial investigation (RI) to determine the nature and extent of contamination and then a risk assessment (RA) to establish whether the contamination at the site poses unacceptable risks to humans and the environment. Next, a feasibility study (FS) or an engineering evaluation/cost analysis (EE/CA) evaluates various remedial alternatives. It is at this point in the process when NW Natural is able to estimate a range of remediation costs and record a reasonable potential remediation liability, or make an adjustment to the existing liability. From this study, the regulatory agency selects a remedy and issues a Record of Decision (ROD). After a ROD is issued, NW Natural would seek to negotiate a consent decree or consent judgment for designing and implementing the remedy. NW Natural would have the ability to further refine estimates of remediation liabilities at that time.

Remediation may include treatment of contaminated media such as sediment, soil and groundwater, removal and disposal of media, institutional controls such as legal restrictions on future property use, or natural recovery. Following construction of the remedy, the EPA and ODEQ also have requirements for ongoing maintenance, monitoring and other post-remediation care that may continue for many years. Where appropriate and reasonably known, NW Natural will provide for these costs in the remediation liabilities described below.

Due to the numerous uncertainties surrounding the course of environmental remediation and the preliminary nature of several site investigations, in some cases, NW Natural may not be able to reasonably estimate the high end of the range of possible loss. In those cases, the nature of the possible loss has been disclosed, as has the fact that the high end of the range cannot be reasonably estimated where a range of potential loss is available. Unless there is an estimate within the range of possible losses that is more likely than other cost estimates within that range, NW Natural records the liability at the low end of this range. It is likely changes in these estimates and ranges will occur throughout the remediation process for each of these sites due to the continued evaluation and clarification concerning responsibility, the complexity of environmental laws and regulations and the determination by regulators of remediation alternatives. In addition to remediation costs, NW Natural could also be subject to Natural Resource Damages (NRD) claims. NW Natural will assess the likelihood and probability of each claim and recognize a liability if deemed appropriate. Refer to "Other Portland Harbor" below.

Environmental Sites

The following table summarizes information regarding liabilities related to environmental sites, which are recorded in other current liabilities and other noncurrent liabilities in NW Natural's balance sheet:

	Current Liabilities						Non-Current Liabilities
	September 30,				December 31,		September 30,				December 31,
In thousands	2023		2022		2022		2023		2022		2022
Portland Harbor site:
Gasco/Siltronic Sediments	$	18,679	$	5,556	$	9,744	$	41,392	$	40,740	$	42,120
Other Portland Harbor	3,524		2,430		2,634		9,580		8,135		11,270
Gasco/Siltronic Upland site	8,908		8,367		16,067		32,512		33,354		35,457
Front Street site	812		201		457		939		868		879
Oregon Steel Mills	—		—		—		179		179		179
Total	$	31,923	$	16,554	$	28,902	$	84,602	$	83,276	$	89,905

Portland Harbor Site

The Portland Harbor is an EPA listed Superfund site that is approximately 10 miles long on the Willamette River and is adjacent to NW Natural's Gasco uplands site. NW Natural is one of over one hundred PRPs, each jointly and severally liable, at the Superfund site. In January 2017, the EPA issued its Record of Decision, which selects the remedy for the clean-up of the Portland Harbor site (Portland Harbor ROD). The Portland Harbor ROD estimates the present value total cost at approximately $1.05 billion with an accuracy between -30% and +50% of actual costs.

NW Natural's potential liability is a portion of the costs of the remedy for the entire Portland Harbor Superfund site. The cost of that remedy is expected to be allocated among more than one hundred PRPs. NW Natural is participating in a non-binding allocation process with other PRPs in an effort to resolve its potential liability. The Portland Harbor ROD does not provide any additional clarification around allocation of costs among PRPs; accordingly, NW Natural has not modified any of the recorded liabilities at this time as a result of the issuance of the Portland Harbor ROD.

NW Natural manages its liability related to the Superfund site as two distinct remediation projects: the Gasco Sediments Site and Other Portland Harbor projects.

GASCO SEDIMENTS. In 2009, NW Natural and Siltronic Corporation entered into a separate Administrative Order on Consent with the EPA to evaluate and design specific remedies for sediments adjacent to the Gasco uplands and Siltronic uplands sites. NW Natural submitted a draft EE/CA to the EPA in May 2012 and the EE/CA estimated the cost of potential remedial alternatives for this site. In March 2020, NW Natural and the EPA amended the Administrative Order on Consent to include additional remedial design activities downstream of the Gasco sediments site and in the navigation channel. Siltronic Corporation is not a party to the amended order. In the second quarter of 2021, NW Natural began preliminary design discussions with the EPA for the Gasco sediments site. These preliminary design discussions did not include a cost estimate for cleanup. No design alternatives are more likely than the EE/CA alternatives at this time, and NW Natural expects further design discussion and iteration with the EPA.

The estimated costs for the various sediment remedy alternatives in the draft EE/CA, for the additional studies and design work needed before the cleanup can occur, and for regulatory oversight throughout the cleanup range from $60.1 million to $350 million. NW Natural has recorded a liability of $60.1 million for the Gasco sediment clean-up, which reflects the low end of the range. At this time, we believe sediments at the Gasco sediments site represent the largest portion of NW Natural's liability related to the Portland Harbor site discussed above.

In September 2023, the EPA approved the In Situ Stabilization and Solidification (ISS) Work Plan for the ISS field pilot study scheduled for the fall of 2023. Field work on the pilot study is underway. Information obtained from the pilot study will be used to support remedial design of the Gasco sediments project. This resulted in an increase to the liability of $10.1 million.

OTHER PORTLAND HARBOR. While we believe liabilities associated with the Gasco sediments site represent NW Natural's largest exposure, there are other potential exposures associated with the Portland Harbor ROD, including NRD costs and harborwide remedial design and cleanup costs (including downstream petroleum contamination), for which allocations among the PRPs have not yet been determined. 

NW Natural and other parties have signed a cooperative agreement with the Portland Harbor Natural Resource Trustee council to participate in a phased NRD assessment to estimate liabilities to support an early restoration-based settlement of NRD claims. One member of this Trustee council, the Yakama Nation, withdrew from the council in 2009, and in 2017, filed suit against NW Natural and 29 other parties seeking remedial costs and NRD assessment costs associated with the Portland Harbor site, set forth in the complaint. The complaint seeks recovery of alleged costs totaling $0.3 million in connection with the selection of a remedial action for the Portland Harbor site as well as declaratory judgment for unspecified future remedial action costs and for costs to assess the injury, loss or destruction of natural resources resulting from the release of hazardous substances at and

from the Portland Harbor site. The Yakama Nation has filed two amended complaints addressing certain pleading defects and dismissing the State of Oregon. On the motion of NW Natural and certain other defendants, the federal court has stayed the case pending the outcome of the non-binding allocation proceeding discussed above. NW Natural has recorded a liability for NRD claims which is at the low end of the range of the potential liability; the high end of the range cannot be reasonably estimated at this time. The NRD liability is not included in the aforementioned range of costs provided in the Portland Harbor ROD.

Gasco Uplands Site

A predecessor of NW Natural, Portland Gas and Coke Company, owned a former gas manufacturing plant that was closed in 1958 (Gasco site) and is adjacent to the Portland Harbor site described above. The Gasco site has been under investigation by NW Natural for environmental contamination under the ODEQ Voluntary Cleanup Program (VCP). It is not included in the range of remedial costs for the Portland Harbor site noted above. The Gasco site is managed in two parts, the uplands portion and the groundwater source control action.

NW Natural submitted a revised Remedial Investigation Report for the uplands to ODEQ in May 2007. In March 2015, ODEQ approved the Risk Assessment (RA) for this site, enabling commencement of work on the FS in 2016. NW Natural has recognized a liability for the remediation of the uplands portion of the site which is at the low end of the range of potential liability; the high end of the range cannot be reasonably estimated at this time.

In October 2016, ODEQ and NW Natural agreed to amend their VCP agreement for the Gasco uplands to incorporate a portion of the Siltronic property formerly owned by Portland Gas & Coke between 1939 and 1960 into the Gasco RA and FS. Previously, NW Natural was conducting an investigation of manufactured gas plant constituents on the entire Siltronic uplands for ODEQ. Siltronic will be working with ODEQ directly on environmental impacts to the remainder of its property.

In September 2013, NW Natural completed construction of a groundwater source control system, including a water treatment station, at the Gasco site. NW Natural has estimated the cost associated with the ongoing operation of the system and has recognized a liability which is at the low end of the range of potential cost. NW Natural cannot estimate the high end of the range at this time due to the uncertainty associated with the duration of running the water treatment station, which is highly dependent on the remedy determined for both the upland portion as well as the final remedy for the Gasco sediments site.

Other Sites

In addition to those sites above, NW Natural has environmental exposures at three other sites: Central Service Center, Front Street and Oregon Steel Mills. NW Natural may have exposure at other sites that have not been identified at this time. Due to the uncertainty of the design of remediation, regulation, timing of the remediation and in the case of the Oregon Steel Mills site, pending litigation, liabilities for each of these sites have been recognized at their respective low end of the range of potential liability; the high end of the range could not be reasonably estimated at this time.

FRONT STREET SITE. The Front Street site was the former location of a gas manufacturing plant NW Natural operated (the former Portland Gas Manufacturing site, or PGM). At ODEQ’s request, NW Natural conducted a sediment and source control investigation and provided findings to ODEQ. In December 2015, an FS on the former Portland Gas Manufacturing site was completed. 

In July 2017, ODEQ issued the PGM ROD. The ROD specifies the selected remedy, which requires a combination of dredging, capping, treatment, and natural recovery. In addition, the selected remedy also requires institutional controls and long-term inspection and maintenance. Construction of the remedy began in July 2020 and was completed in October 2020. The second year of post-construction monitoring was completed in 2022 and demonstrated that the cap was intact and performing as designed. NW Natural has recognized an additional liability of $1.8 million associated with long-term monitoring and post-construction work.

OREGON STEEL MILLS SITE. Refer to "Legal Proceedings" below.

Environmental Cost Deferral and Recovery

NW Natural has authorizations in Oregon and Washington to defer costs related to remediation of properties that are owned or were previously owned by NW Natural. In Oregon, a Site Remediation and Recovery Mechanism (SRRM) is currently in place to recover prudently incurred costs allocable to Oregon customers, subject to an earnings test. On October 21, 2019, the WUTC authorized an Environmental Cost Recovery Mechanism (ECRM) for recovery of prudently incurred costs allocable to Washington customers beginning November 1, 2019. See Note 17 in the 2022 Form 10-K for a description of SRRM and ECRM collection processes.

The following table presents information regarding the total regulatory asset deferred:

	September 30,				December 31,
In thousands	2023		2022		2022
Deferred costs and interest (1)	$	49,899	$	47,011	$	47,666
Accrued site liabilities (2)	116,469		99,795		118,763
Insurance proceeds and interest	(50,380)		(54,678)		(54,784)
Total regulatory asset deferral(1)	$	115,988	$	92,128	$	111,645
Current regulatory assets(3)	7,047		9,461		7,392
Long-term regulatory assets(3)	108,941		82,667		104,253

(1)     Includes pre-review and post-review deferred costs, amounts currently in amortization, and interest, net of amounts collected from customers.

(2)    Excludes 3.3% of the Front Street site liability as the OPUC only allows recovery of 96.7% of costs for those sites allocable to Oregon, including those that historically served only Oregon customers. Amounts excluded from regulatory assets were $57 thousand at September 30, 2023, $34 thousand at September 30, 2022, and $43 thousand at December 31, 2022.

(3)    Environmental costs relate to specific sites approved for regulatory deferral by the OPUC and WUTC. In Oregon, NW Natural earns a carrying charge on cash amounts paid, whereas amounts accrued but not yet paid do not earn a carrying charge until expended. It also accrues a carrying charge on insurance proceeds for amounts owed to customers. In Washington, neither the cash paid for insurance proceeds received accrue a carrying charge. Current environmental costs represent remediation costs management expects to collect from customers in the next 12 months. Amounts included in this estimate are still subject to a prudence and earnings test review by the OPUC and do not include the $5.0 million tariff rider. The amounts allocable to Oregon are recoverable through NGD rates, subject to an earnings test.

Environmental Earnings Test

To the extent NW Natural earns at or below its authorized Return on Equity (ROE) as defined by the SRRM, remediation expenses and interest in excess of the $5.0 million tariff rider and $5.0 million insurance proceeds are recoverable through the SRRM. To the extent NW Natural earns more than its authorized ROE in a year, it is required to cover environmental expenses and interest on expenses greater than the $10.0 million with those earnings that exceed its authorized ROE.

Legal Proceedings

NW Holdings is not currently party to any direct claims or litigation, though in the future it may be subject to claims and litigation arising in the ordinary course of business.

NW Natural is subject to claims and litigation arising in the ordinary course of business including the matters discussed above. Although the final outcome of any of these legal proceedings cannot be predicted with certainty, including the matter relating to the Oregon Steel Mills site referenced below, NW Natural and NW Holdings do not expect that the ultimate disposition of any of these matters will have a material effect on their financial condition, results of operations or cash flows. See also Part II, Item 1, “Legal Proceedings".

Oregon Steel Mills Site

See Note 17 in the 2022 Form 10-K.

For additional information regarding other commitments and contingencies, see Note 16 in the 2022 Form 10-K.

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Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Industry Regulation

Industry Regulation  

NW Holdings' principal business is to operate as a holding company for NW Natural and its other subsidiaries. NW Natural's principal business is the distribution of natural gas, which is regulated by the OPUC and WUTC. NW Natural also has natural gas storage services, which are regulated by the FERC, and to a certain extent by the OPUC and WUTC. Additionally, certain of NW Holdings' subsidiaries own water businesses, which are regulated by the public utility commission in the state in which the water utility is located, which is currently Oregon, Washington, Idaho, Texas and Arizona. Wastewater businesses, to the extent they are regulated, are generally regulated by the public utility commissions in the state in which the wastewater utility is located, which is currently Texas and Arizona.

In applying regulatory accounting principles, NW Holdings and NW Natural capitalize or defer certain costs and revenues as regulatory assets and liabilities pursuant to orders of the applicable state public utility commission, which provide for the recovery of revenues or expenses from, or refunds to, utility customers in future periods, including a return or a carrying charge in certain cases.

New Accounting Standards

New Accounting Standards

NW Natural and NW Holdings consider the applicability and impact of all accounting standards updates (ASUs) issued by the Financial Accounting Standards Board (FASB). ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on consolidated financial position or results of operations.

Recently Issued Accounting Pronouncements

JOINT VENTURE FORMATIONS. In August 2023, the FASB issued ASU 2023-05, which requires a joint venture to initially measure all contributions received upon its formation at fair value. The standard is effective for all joint venture entities with a formation date on or after January 1, 2025, with early adoption permitted. The adoption of this standard is not anticipated to have a material impact on our results of operations, liquidity or capital resources.

Recent Securities and Exchange Commission (SEC) Final Rules

INSIDER TRADING ARRANGEMENTS. In December 2022, the SEC adopted the final rule under SEC Release No. 33-11138, Insider Trading Arrangements and Related Disclosures, which requires new disclosures regarding insider trading policies and procedures, the use of certain insider trading plans and director and executive compensation regarding equity compensation awards made close in time to disclosure of material nonpublic information. The adoption of this final rule is not anticipated to have a material impact on our results of operations, liquidity or capital resources.

SHARE REPURCHASES. In May 2023, the SEC adopted the final rule under SEC Release No. 34-97424, Share Repurchase Disclosure Modernization, requiring disclosures related to issuers’ share repurchases that will provide investors with enhanced information to assess the purposes and effects of the repurchases. The adoption of this final rule is not anticipated to have a material impact on our results of operations, liquidity or capital resources.

CYBERSECURITY DISCLOSURES. In July 2023, the SEC issued a final rule that requires new disclosures regarding cybersecurity risk management, strategy, governance, and incidents. The disclosures are required beginning with our annual report for the year ending December 31, 2023. The adoption of this final rule is not anticipated to have a material impact on our results of operations, liquidity or capital resources.

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Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Schedule of Regulatory Assets

Amounts deferred as regulatory assets and liabilities for NW Holdings and NW Natural were as follows:

	Regulatory Assets
	September 30,				December 31,
In thousands	2023		2022		2022
NW Natural:
Current:
Unrealized loss on derivatives(1)	$	46,603	$	19,594	$	28,728
Gas costs	11,361		52,115		61,223
Environmental costs(2)	7,047		9,461		7,392
Decoupling(3)	3,480		114		—
Pension balancing(4)	7,131		7,131		7,131
Income taxes	2,208		2,399		2,208
COVID-19 deferrals and expenses, net	11,127		—		789
Other(5)	19,568		14,016		10,020
Total current - NW Natural	$	108,525	$	104,830	$	117,491
Non-current:
Unrealized loss on derivatives(1)	$	21,085	$	18,824	$	20,838
Pension balancing(4)	29,450		34,928		32,997
Income taxes	10,540		11,168		10,943
Pension and other postretirement benefit liabilities	101,413		107,722		101,413
Environmental costs(2)	108,941		82,667		104,253
Gas costs	718		3,369		22,355
Decoupling(3)	212		—		—
Washington Climate Commitment Act compliance	12,513		—		—
COVID-19 deferrals and expenses, net	1,811		15,147		14,555
Other(5)	25,957		27,771		33,053
Total non-current - NW Natural	$	312,640	$	301,596	$	340,407
Other (NW Holdings)	25		64		25
Total non-current - NW Holdings	$	312,665	$	301,660	$	340,432

Schedule of Regulatory Liabilities

	Regulatory Liabilities
	September 30,				December 31,
In thousands	2023		2022		2022
NW Natural:
Current:
Gas costs	$	5,030	$	944	$	4,121
Unrealized gain on derivatives(1)	22,679		62,882		194,236
Decoupling(3)	8,616		13,272		14,026
Income taxes	5,946		7,318		7,166
Asset optimization revenue sharing	29,938		23,461		26,368
Washington Climate Commitment Act proceeds	9,365		—		—
Other(5)	6,752		3,649		2,636
Total current - NW Natural	$	88,326	$	111,526	$	248,553
Other (NW Holdings)	50		25		29
Total current - NW Holdings	$	88,376	$	111,551	$	248,582
Non-current:
Gas costs	$	252	$	50	$	12,644
Unrealized gain on derivatives(1)	5,430		8,008		5,045
Decoupling(3)	588		884		3,814
Income taxes(6)	171,843		179,319		174,212
Accrued asset removal costs(7)	489,006		460,666		467,742
Asset optimization revenue sharing	—		—		8,401
Washington Climate Commitment Act proceeds	654		—		—
Other(5)	14,542		13,638		16,741
Total non-current - NW Natural	$	682,315	$	662,565	$	688,599
Other (NW Holdings)	947		982		979
Total non-current - NW Holdings	$	683,262	$	663,547	$	689,578

(1)Unrealized gains or losses on derivatives are non-cash items and therefore do not earn a rate of return or a carrying charge. These amounts are recoverable through NGD rates as part of the annual Purchased Gas Adjustment (PGA) mechanism when realized at settlement.

(2)Refer to the Environmental Cost Deferral and Recovery table in Note 16 for a description of environmental costs.

(3)This deferral represents the margin adjustment resulting from differences between actual and expected volumes. 

(4)Balance represents deferred net periodic benefit costs as approved by the OPUC.

(5)Balances consist of deferrals and amortizations under approved regulatory mechanisms and typically earn a rate of return or carrying charge.

(6)Balance represents excess deferred income tax benefits subject to regulatory flow-through.

(7)Estimated costs of removal on certain regulated properties are collected through rates.

Schedule of Cash Flow, Supplemental Disclosures

The following table provides a reconciliation of the cash, cash equivalents and restricted cash balances at NW Holdings as of September 30, 2023 and 2022 and December 31, 2022:

	September 30,				December 31,
In thousands	2023		2022		2022
Cash and cash equivalents	$	156,616	$	108,556	$	29,270
Restricted cash included in other current and non-current assets	14,864		11,714		11,694
Cash, cash equivalents and restricted cash	$	171,480	$	120,270	$	40,964

The following table provides a reconciliation of the cash, cash equivalents and restricted cash balances at NW Natural as of September 30, 2023 and 2022 and December 31, 2022:

	September 30,				December 31,
In thousands	2023		2022		2022
Cash and cash equivalents	$	145,073	$	11,386	$	12,977
Restricted cash included in other current assets	14,838		11,714		11,694
Cash, cash equivalents and restricted cash	$	159,911	$	23,100	$	24,671

Accounts Receivable, Allowance for Credit Loss [Table Text Block]

The following table presents the activity related to the NW Holdings provision for uncollectible accounts by pool:

	As of						As of
	December 31, 2022		Nine Months Ended September 30, 2023				September 30, 2023
In thousands	Beginning Balance		Provision recorded, net of adjustments		Write-offs recognized, net of recoveries		Ending Balance
Allowance for uncollectible accounts:
Residential	$	2,155	$	1,802	$	(2,468)	$	1,489
Commercial	400		264		(372)		292
Industrial	188		(105)		(1)		82
Accrued unbilled and other	336		2		(116)		222
Total NW Natural	3,079		1,963		(2,957)		2,085
Other - NW Holdings	217		10		—		227
Total NW Holdings	$	3,296	$	1,973	$	(2,957)	$	2,312

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Earnings Per Share

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

EPS Calculation

NW Holdings' diluted earnings or loss per share are calculated as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In thousands, except per share data	2023		2022		2023		2022
Net income (loss)	$	(23,687)	$	(19,587)	$	49,228	$	38,367
Average common shares outstanding - basic	36,214		34,939		35,950		33,491
Additional shares for stock-based compensation plans (See Note 8)	—		—		30		48
Average common shares outstanding - diluted	36,214		34,939		35,980		33,539
Earnings (loss) per share of common stock:
Basic	$	(0.65)	$	(0.56)	$	1.37	$	1.15
Diluted	$	(0.65)	$	(0.56)	$	1.37	$	1.14
Additional information:
Anti-dilutive shares	45		85		1		—

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Segment Information

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

The following table presents summary financial information concerning the reportable segment and other.

	Three Months Ended September 30,
In thousands	NGD		Other (NW Natural)		NW Natural		Other (NW Holdings)		NW Holdings
2023
Operating revenues	$	124,624	$	5,318	$	129,942	$	11,537	$	141,479
Depreciation	28,169		277		28,446		1,615		30,061
Income (loss) from operations	(22,192)		3,777		(18,415)		838		(17,577)
Net income (loss)	(24,160)		2,673		(21,487)		(2,200)		(23,687)
Capital expenditures	86,017		1,053		87,070		10,814		97,884
2022
Operating revenues	$	103,295	$	7,131	$	110,426	$	6,413	$	116,839
Depreciation	27,937		264		28,201		825		29,026
Income (loss) from operations	(20,910)		5,616		(15,294)		367		(14,927)
Net income (loss)	(23,016)		4,210		(18,806)		(781)		(19,587)
Capital expenditures	79,847		431		80,278		3,868		84,146

	Nine Months Ended September 30,
In thousands	NGD		Other (NW Natural)		NW Natural		Other (NW Holdings)		NW Holdings
2023
Operating revenues	$	796,108	$	16,695	$	812,803	$	28,958	$	841,761
Depreciation	87,650		820		88,470		4,349		92,819
Income (loss) from operations	97,357		11,658		109,015		759		109,774
Net income (loss)	47,520		8,317		55,837		(6,609)		49,228
Capital expenditures	214,874		1,494		216,368		26,379		242,747
Total assets at September 30, 2023	4,285,309		52,894		4,338,203		326,915		4,665,118
2022
Operating revenues	$	629,327	$	17,974	$	647,301	$	14,799	$	662,100
Depreciation	82,372		794		83,166		2,399		85,565
Income (loss) from operations	75,328		12,054		87,382		(1,132)		86,250
Net income (loss)	32,531		8,812		41,343		(2,976)		38,367
Capital expenditures	235,249		1,218		236,467		15,375		251,842
Total assets at September 30, 2022	3,968,040		56,712		4,024,752		275,960		4,300,712
Total assets at December 31, 2022	4,392,699		60,019		4,452,718		295,608		4,748,326

NGD Margin

The following table presents additional segment information concerning NGD margin:

	Three Months Ended September 30,				Nine Months Ended September 30,
In thousands	2023		2022		2023		2022
NGD margin calculation:
NGD distribution revenues	$	119,892	$	98,391	$	781,941	$	614,605
Other regulated services	4,732		4,904		14,167		14,722
Total NGD operating revenues	124,624		103,295		796,108		629,327
Less: NGD cost of gas	49,235		36,258		357,530		261,678
Environmental remediation	1,032		975		8,547		7,945
Revenue taxes	5,425		4,375		33,559		25,907
NGD margin	$	68,932	$	61,687	$	396,472	$	333,797

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Revenue

3 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following tables present disaggregated revenue:

	Three Months Ended September 30,
In thousands	NGD		Other (NW Natural)		NW Natural		Other (NW Holdings)		NW Holdings
2023
Natural gas sales	$	117,004	$	—	$	117,004	$	—	$	117,004
Gas storage revenue, net	—		3,014		3,014		—		3,014
Asset management revenue, net	—		1,623		1,623		—		1,623
Appliance retail center revenue	—		680		680		—		680
Other revenue	733		—		733		11,537		12,270
Revenue from contracts with customers	117,737		5,317		123,054		11,537		134,591
Alternative revenue	2,868		—		2,868		—		2,868
Leasing revenue	4,020		—		4,020		—		4,020
Total operating revenues	$	124,625	$	5,317	$	129,942	$	11,537	$	141,479
2022
Natural gas sales	$	95,784	$	—	$	95,784	$	—	$	95,784
Gas storage revenue, net	—		2,882		2,882		—		2,882
Asset management revenue, net	—		3,047		3,047		—		3,047
Appliance retail center revenue	—		1,202		1,202		—		1,202
Other revenue	624		—		624		6,413		7,037
Revenue from contracts with customers	96,408		7,131		103,539		6,413		109,952
Alternative revenue	2,589		—		2,589		—		2,589
Leasing revenue	4,298		—		4,298		—		4,298
Total operating revenues	$	103,295	$	7,131	$	110,426	$	6,413	$	116,839

	Nine Months Ended September 30,
In thousands	NGD		Other (NW Natural)		NW Natural		Other (NW Holdings)		NW Holdings
2023
Natural gas sales	$	783,506	$	—	$	783,506	$	—	$	783,506
Gas storage revenue, net	—		9,014		9,014		—		9,014
Asset management revenue, net	—		4,879		4,879		—		4,879
Appliance retail center revenue	—		2,802		2,802		—		2,802
Other revenue	2,195		—		2,195		28,958		31,153
Revenue from contracts with customers	785,701		16,695		802,396		28,958		831,354
Alternative revenue	(1,623)		—		(1,623)		—		(1,623)
Leasing revenue	12,030		—		12,030		—		12,030
Total operating revenues	$	796,108	$	16,695	$	812,803	$	28,958	$	841,761
2022
Natural gas sales	$	623,121	$	—	$	623,121	$	—	$	623,121
Gas storage revenue, net	—		8,678		8,678		—		8,678
Asset management revenue, net	—		4,941		4,941		—		4,941
Appliance retail center revenue	—		4,355		4,355		—		4,355
Other revenue	1,882		—		1,882		14,799		16,681
Revenue from contracts with customers	625,003		17,974		642,977		14,799		657,776
Alternative revenue	(8,571)		—		(8,571)		—		(8,571)
Leasing revenue	12,895		—		12,895		—		12,895
Total operating revenues	$	629,327	$	17,974	$	647,301	$	14,799	$	662,100

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Leases

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Lease Revenue

The components of lease revenue at NW Natural were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In thousands	2023		2022		2023		2022
Lease revenue
Operating leases	$	19	$	19	$	57	$	56
Sales-type leases	4,001		4,279		11,973		12,839
Total lease revenue	$	4,020	$	4,298	$	12,030	$	12,895

Lessor, Operating Lease, Payments to be Received, Maturity

Total future minimum lease payments to be received under non-cancelable leases at September 30, 2023 are as follows:

In thousands	Operating		Sales-Type		Total
NW Natural:
Remainder of 2023	$	153	$	4,100	$	4,253
2024	603		15,867		16,470
2025	599		15,306		15,905
2026	36		14,901		14,937
2027	22		14,521		14,543
Thereafter	—		222,299		222,299
Total minimum lease payments	$	1,413	$	286,994	$	288,407
Less: imputed interest			156,626
Total leases receivable			$	130,368
Other (NW Holdings):
Remainder of 2023	$	13	$	—	$	13
2024	52		—		52
2025	53		—		53
2026	56		—		56
2027	57		—		57
Thereafter	857		—		857
Total minimum lease payments	$	1,088	$	—	$	1,088
NW Holdings:
Remainder of 2023	$	166	$	4,100	$	4,266
2024	655		15,867		16,522
2025	652		15,306		15,958
2026	92		14,901		14,993
2027	79		14,521		14,600
Thereafter	857		222,299		223,156
Total minimum lease payments	$	2,501	$	286,994	$	289,495
Less: imputed interest			156,626
Total leases receivable			$	130,368

Lease Expense

The components of lease expense, a portion of which is capitalized, were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In thousands	2023		2022		2023		2022
NW Natural:
Operating lease expense	$	1,817	$	1,767	$	5,382	$	5,235
Short-term lease expense	198		105		556		684
Other (NW Holdings):
Operating lease expense	$	51	$	7	$	131	$	22
NW Holdings:
Operating lease expense	$	1,868	$	1,774	$	5,513	$	5,257
Short-term lease expense	198		105		556		684

Operating Lease, Lease Asset and Liabilities

Supplemental balance sheet information related to operating leases as of September 30, 2023 and 2022 and December 31, 2022 is as follows:

In thousands	September 30,				December 31,
	2023		2022		2022
NW Natural:
Operating lease right of use asset	$	70,852	$	73,046	$	72,720
Operating lease liabilities - current liabilities	$	1,658	$	1,298	$	1,363
Operating lease liabilities - non-current liabilities	77,041		78,436		78,345
Total operating lease liabilities	$	78,699	$	79,734	$	79,708
Other (NW Holdings):
Operating lease right of use asset	$	625	$	99	$	709
Operating lease liabilities - current liabilities	$	157	$	63	$	151
Operating lease liabilities - non-current liabilities	434		33		620
Total operating lease liabilities	$	591	$	96	$	771
NW Holdings:
Operating lease right of use asset	$	71,477	$	73,145	$	73,429
Operating lease liabilities - current liabilities	$	1,815	$	1,361	$	1,514
Operating lease liabilities - non-current liabilities	77,475		78,469		78,965
Total operating lease liabilities	$	79,290	$	79,830	$	80,479

Operating Lease, Weighted Average Remaining Term and Discount Rates [Table Text Block]

The weighted-average remaining lease terms and weighted-average discount rates for the operating leases at NW Natural were as follows:

In thousands	September 30,				December 31,
	2023		2022		2022
Weighted-average remaining lease term (years)	16.5		17.5		17.2
Weighted-average discount rate	7.3	%	7.3	%	7.3	%

Lessee, Operating Lease, Liability, Maturity

Maturities of operating lease liabilities at September 30, 2023 were as follows:

In thousands	NW Natural		Other (NW Holdings)		NW Holdings
Remainder of 2023	$	1,801	$	44	$	1,845
2024	7,307		183		7,490
2025	7,193		176		7,369
2026	7,361		153		7,514
2027	7,538		107		7,645
Thereafter	108,991		12		109,003
Total lease payments	140,191		675		140,866
Less: imputed interest	61,492		84		61,576
Total lease obligations	78,699		591		79,290
Less: current obligations	1,658		157		1,815
Long-term lease obligations	$	77,041	$	434	$	77,475

Lessee, Leases, Supplemental Cash Flow Information

Supplemental cash flow information related to leases was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In thousands	2023		2022		2023		2022
NW Natural:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	1,809	$	1,759	$	5,374	$	5,225
Finance cash flows from finance leases	196		92		369		474
Right of use assets obtained in exchange for lease obligations
Operating leases	$	—	$	—	$	81	$	—
Finance leases	196		6		369		226
Other (NW Holdings):
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	54	$	12	$	132	$	24
Right of use assets obtained in exchange for lease obligations
Operating leases	$	—	$	61	$	—	$	61
Finance leases	11		—		101		—
NW Holdings:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	1,863	$	1,771	$	5,506	$	5,249
Finance cash flows from finance leases	196		92		369		474
Right of use assets obtained in exchange for lease obligations
Operating leases	$	—	$	61	$	81	$	61
Finance leases	207		6		470		226

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Debt

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments

The following table provides an estimate of the fair value of long-term debt, including current maturities of long-term debt, using market prices in effect on the valuation date:

	September 30,				December 31,
In thousands	2023		2022		2022
NW Natural:
Gross long-term debt	$	1,414,700	$	1,134,700	$	1,134,700
Unamortized debt issuance costs	(10,147)		(8,229)		(8,823)
Carrying amount	$	1,404,553	$	1,126,471	$	1,125,877
Estimated fair value(1)	$	1,176,212	$	927,372	$	944,383
NW Holdings:
Gross long-term debt	$	1,625,545	$	1,345,968	$	1,345,851
Unamortized debt issuance costs	(10,245)		(8,348)		(8,987)
Carrying amount	$	1,615,300	$	1,337,620	$	1,336,864
Estimated fair value(1)	$	1,385,144	$	1,133,087	$	1,148,395

(1) Estimated fair value does not include unamortized debt issuance costs.

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Pension and Other Postretirement Benefit Costs

9 Months Ended

Sep. 30, 2023

Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract]

Schedule of Net Benefit Costs

The following table provides the components of net periodic benefit cost (credit) for the pension and other postretirement benefit plans:

	Three Months Ended September 30,								Nine Months Ended September 30,
	Pension Benefits				Other Postretirement Benefits				Pension Benefits				Other Postretirement Benefits
In thousands	2023		2022		2023		2022		2023		2022		2023		2022
Service cost	$	842	$	1,022	$	27	$	34	$	2,940	$	4,450	$	83	$	145
Interest cost	5,283		4,260		247		213		15,719		10,945		743		543
Expected return on plan assets	(6,421)		(7,076)		—		—		(19,292)		(19,274)		—		—
Amortization of prior service credit	—		—		—		(15)		—		—		—		(249)
Amortization of net actuarial loss (gain)	139		(1,542)		—		57		418		9,459		—		319
Net periodic benefit cost (credit)	(157)		(3,336)		274		289		(215)		5,580		826		758
Amount allocated to construction	(326)		(496)		(9)		(14)		(1,239)		(1,965)		(29)		(57)
Net periodic benefit cost (credit) charged to expense	(483)		(3,832)		265		275		(1,454)		3,615		797		701
Amortization of regulatory balancing account	675		675		—		—		4,757		4,757		—		—
Net amount charged to expense	$	192	$	(3,157)	$	265	$	275	$	3,303	$	8,372	$	797	$	701

Schedule of Amounts Recognized in Other Comprehensive Income (Loss)

The following table presents amounts recognized in accumulated other comprehensive loss (AOCL) and the changes in AOCL related to non-qualified employee benefit plans:

	Three Months Ended September 30,				Nine Months Ended September 30,
In thousands	2023		2022		2023		2022
Beginning balance	$	(6,209)	$	(11,010)	$	(6,414)	$	(11,404)
Amounts reclassified from AOCL:
Amortization of actuarial losses	139		275		418		811
Total reclassifications before tax	139		275		418		811
Tax benefit	(37)		(73)		(111)		(215)
Total reclassifications for the period	102		202		307		596
Ending balance	$	(6,107)	$	(10,808)	$	(6,107)	$	(10,808)

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Income Tax

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Schedule of Effective Income Tax Rate Reconciliation

The effective income tax rate varied from the federal statutory rate due to the following:

	Three Months Ended September 30,
	NW Holdings						NW Natural
In thousands	2023			2022			2023			2022
Income tax at statutory rate (federal)	$	(6,716)		$	(5,533)		$	(6,131)		$	(5,305)
State income tax	(2,742)			(2,376)			(2,633)			(2,306)
Increase (decrease):
Differences required to be flowed-through by regulatory commissions	1,015			1,232			1,018			1,232
Other, net	151			(81)			39			(76)
Total benefit for income taxes	$	(8,292)		$	(6,758)		$	(7,707)		$	(6,455)
Effective income tax rate	25.9		%	25.7		%	26.4		%	25.6		%

	Nine Months Ended September 30,
	NW Holdings						NW Natural
In thousands	2023			2022			2023			2022
Income tax at statutory rate (federal)	$	13,928		$	10,710		$	15,723		$	11,554
State income tax	5,618			4,298			5,990			4,497
Increase (decrease):
Differences required to be flowed-through by regulatory commissions	(2,055)			(2,003)			(2,051)			(2,003)
Other, net	(393)			(370)			(625)			(370)
Total provision for income taxes	$	17,098		$	12,635		$	19,037		$	13,678
Effective income tax rate	25.8		%	24.8		%	25.4		%	24.9		%

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Property, Plant and Equipment

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

Public Utility Property, Plant, and Equipment [Table Text Block]

The following table sets forth the major classifications of property, plant, and equipment and accumulated depreciation:

	September 30,				December 31,
In thousands	2023		2022		2022
NW Natural:
NGD plant in service	$	4,096,560	$	3,888,092	$	3,992,676
NGD construction work in progress	153,231		161,658		78,897
Less: Accumulated depreciation	1,152,952		1,135,965		1,115,690
NGD plant, net	3,096,839		2,913,785		2,955,883
Other plant in service	70,363		69,626		70,368
Other construction work in progress	8,323		5,112		6,606
Less: Accumulated depreciation	22,331		21,435		21,541
Other plant, net	56,355		53,303		55,433
Total property, plant, and equipment, net	$	3,153,194	$	2,967,088	$	3,011,316
Other (NW Holdings):
Other plant in service	$	127,721	$	66,208	$	92,979
Other construction work in progress	12,404		16,632		20,040
Less: Accumulated depreciation	14,685		8,750		9,935
Other plant, net	$	125,440	$	74,090	$	103,084
NW Holdings:
Total property, plant, and equipment, net	$	3,278,634	$	3,041,178	$	3,114,400
NW Natural:
Capital expenditures in accrued liabilities	$	21,402	$	43,954	$	24,584
NW Holdings:
Capital expenditures in accrued liabilities	$	22,686	$	45,374	$	25,318

NW Natural

Other plant balances include non-utility gas storage assets at the Mist facility and other long-lived assets not related to NGD.

NW Holdings

Other plant balances include long-lived assets associated with water and wastewater operations and non-regulated activities not held by NW Natural or its subsidiaries.

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Investments

9 Months Ended

Sep. 30, 2023

Investments [Abstract]

Investment [Table Text Block]

Investments include gas reserves, financial investments in life insurance policies, and equity method investments. The following table summarizes other investments:

	NW Holdings						NW Natural
	September 30,				December 31,		September 30,				December 31,
In thousands	2023		2022		2022		2023		2022		2022
Investments in life insurance policies	$	46,870	$	49,043	$	49,358	$	46,870	$	49,043	$	49,358
Investments in gas reserves, non-current	21,439		23,770		22,970		21,439		23,770		22,970
Investment in unconsolidated affiliates	36,253		23,756		23,376		19,444		8,058		7,782
Total other investments	$	104,562	$	96,569	$	95,704	$	87,753	$	80,871	$	80,110

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Derivative Instruments

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Notional Amounts of Outstanding Derivative Positions

The following table presents the absolute notional amounts related to open positions on NW Natural derivative instruments:

	September 30,				December 31,
In thousands	2023		2022		2022
Natural gas (in therms):
Financial	1,080,345		1,006,665		852,435
Physical	749,838		672,350		463,254
Foreign exchange	$	10,483	$	9,905	$	7,617

Income Statement Presentation of Derivative Instruments

The following table reflects the income statement presentation for the unrealized gains and losses from NW Natural's derivative instruments:

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Environmental Matters

9 Months Ended

Sep. 30, 2023

Environmental Remediation Obligations [Abstract]

Schedule of Environmental Loss Contingencies by Site

The following table summarizes information regarding liabilities related to environmental sites, which are recorded in other current liabilities and other noncurrent liabilities in NW Natural's balance sheet:

	Current Liabilities						Non-Current Liabilities
	September 30,				December 31,		September 30,				December 31,
In thousands	2023		2022		2022		2023		2022		2022
Portland Harbor site:
Gasco/Siltronic Sediments	$	18,679	$	5,556	$	9,744	$	41,392	$	40,740	$	42,120
Other Portland Harbor	3,524		2,430		2,634		9,580		8,135		11,270
Gasco/Siltronic Upland site	8,908		8,367		16,067		32,512		33,354		35,457
Front Street site	812		201		457		939		868		879
Oregon Steel Mills	—		—		—		179		179		179
Total	$	31,923	$	16,554	$	28,902	$	84,602	$	83,276	$	89,905

Environmental Regulatory Table

The following table presents information regarding the total regulatory asset deferred:

	September 30,				December 31,
In thousands	2023		2022		2022
Deferred costs and interest (1)	$	49,899	$	47,011	$	47,666
Accrued site liabilities (2)	116,469		99,795		118,763
Insurance proceeds and interest	(50,380)		(54,678)		(54,784)
Total regulatory asset deferral(1)	$	115,988	$	92,128	$	111,645
Current regulatory assets(3)	7,047		9,461		7,392
Long-term regulatory assets(3)	108,941		82,667		104,253

(1)     Includes pre-review and post-review deferred costs, amounts currently in amortization, and interest, net of amounts collected from customers.

(2)    Excludes 3.3% of the Front Street site liability as the OPUC only allows recovery of 96.7% of costs for those sites allocable to Oregon, including those that historically served only Oregon customers. Amounts excluded from regulatory assets were $57 thousand at September 30, 2023, $34 thousand at September 30, 2022, and $43 thousand at December 31, 2022.

(3)    Environmental costs relate to specific sites approved for regulatory deferral by the OPUC and WUTC. In Oregon, NW Natural earns a carrying charge on cash amounts paid, whereas amounts accrued but not yet paid do not earn a carrying charge until expended. It also accrues a carrying charge on insurance proceeds for amounts owed to customers. In Washington, neither the cash paid for insurance proceeds received accrue a carrying charge. Current environmental costs represent remediation costs management expects to collect from customers in the next 12 months. Amounts included in this estimate are still subject to a prudence and earnings test review by the OPUC and do not include the $5.0 million tariff rider. The amounts allocable to Oregon are recoverable through NGD rates, subject to an earnings test.

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Significant Accounting Policies - Regulatory Asset Disclosure - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Regulatory Assets [Line Items]
Regulatory Assets, Current	$ 108,525	$ 117,491	$ 104,830
Regulatory Assets, Noncurrent	$ 312,665	340,432	301,660
Inactive Account, Period Outstanding Prior to Write-Off	120 days
General Payment Term of NGD Receivables	15 days
Age of Closed or Inactive Accounts	120 days
Other [Member]
Regulatory Assets [Line Items]
Regulatory Assets, Noncurrent	$ 25	25	64
Northwest Natural Gas Company [Member]
Regulatory Assets [Line Items]
Regulatory Assets, Current	108,525	117,491	104,830
Regulatory Assets, Noncurrent	312,640	340,407	301,596
Northwest Natural Gas Company [Member] | Deferred Derivative Gain (Loss) [Member]
Regulatory Assets [Line Items]
Regulatory Assets, Current	46,603	28,728	19,594
Regulatory Assets, Noncurrent	21,085	20,838	18,824
Northwest Natural Gas Company [Member] | Pension balancing [Member]
Regulatory Assets [Line Items]
Regulatory Assets, Current	7,131	7,131	7,131
Regulatory Assets, Noncurrent	29,450	32,997	34,928
Northwest Natural Gas Company [Member] | Income taxes [Member]
Regulatory Assets [Line Items]
Regulatory Assets, Current	2,208	2,208	2,399
Regulatory Assets, Noncurrent	10,540	10,943	11,168
Northwest Natural Gas Company [Member] | Pension and other postretirement benefit liabilities [Member]
Regulatory Assets [Line Items]
Regulatory Assets, Noncurrent	101,413	101,413	107,722
Northwest Natural Gas Company [Member] | Environmental costs [Member]
Regulatory Assets [Line Items]
Regulatory Assets, Current	7,047	7,392	9,461
Regulatory Assets, Noncurrent	108,941	104,253	82,667
Northwest Natural Gas Company [Member] | Gas costs [Member]
Regulatory Assets [Line Items]
Regulatory Assets, Current	11,361	61,223	52,115
Regulatory Assets, Noncurrent	718	22,355	3,369
Northwest Natural Gas Company [Member] | Decoupling [Member]
Regulatory Assets [Line Items]
Regulatory Assets, Current	3,480	0	114
Regulatory Assets, Noncurrent	212	0	0
Northwest Natural Gas Company [Member] | Washington Climate Commitment Act compliance
Regulatory Assets [Line Items]
Regulatory Assets, Noncurrent	12,513	0	0
Northwest Natural Gas Company [Member] | Other [Member]
Regulatory Assets [Line Items]
Regulatory Assets, Current	19,568	10,020	14,016
Regulatory Assets, Noncurrent	25,957	33,053	27,771
Northwest Natural Gas Company [Member] | COVID-19 Related Costs
Regulatory Assets [Line Items]
Regulatory Assets, Current	11,127	789	0
Regulatory Assets, Noncurrent	$ 1,811	$ 14,555	$ 15,147

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Significant Accounting Policies - Regulatory Liability Disclosure - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Regulatory Liabilities [Line Items]
Regulatory Liability, Current	$ 88,376	$ 248,582	$ 111,551
Regulatory Liability, Noncurrent	683,262	689,578	663,547
Other [Member]
Regulatory Liabilities [Line Items]
Regulatory Liability, Current	50	29	25
Regulatory Liability, Noncurrent	947	979	982
Northwest Natural Gas Company [Member]
Regulatory Liabilities [Line Items]
Regulatory Liability, Current	88,326	248,553	111,526
Regulatory Liability, Noncurrent	682,315	688,599	662,565
Northwest Natural Gas Company [Member] | Gas costs [Member]
Regulatory Liabilities [Line Items]
Regulatory Liability, Current	5,030	4,121	944
Regulatory Liability, Noncurrent	252	12,644	50
Northwest Natural Gas Company [Member] | Deferred Derivative Gain (Loss) [Member]
Regulatory Liabilities [Line Items]
Regulatory Liability, Current	22,679	194,236	62,882
Regulatory Liability, Noncurrent	5,430	5,045	8,008
Northwest Natural Gas Company [Member] | Decoupling [Member]
Regulatory Liabilities [Line Items]
Regulatory Liability, Current	8,616	14,026	13,272
Regulatory Liability, Noncurrent	588	3,814	884
Northwest Natural Gas Company [Member] | Income taxes [Member]
Regulatory Liabilities [Line Items]
Regulatory Liability, Current	5,946	7,166	7,318
Regulatory Liability, Noncurrent	171,843	174,212	179,319
Northwest Natural Gas Company [Member] | Other [Member]
Regulatory Liabilities [Line Items]
Regulatory Liability, Current	6,752	2,636	3,649
Regulatory Liability, Noncurrent	14,542	16,741	13,638
Northwest Natural Gas Company [Member] | Accrued asset removal costs [Member]
Regulatory Liabilities [Line Items]
Regulatory Liability, Noncurrent	489,006	467,742	460,666
Northwest Natural Gas Company [Member] | Asset Optimization Revenue Sharing
Regulatory Liabilities [Line Items]
Regulatory Liability, Current	29,938	26,368	23,461
Regulatory Liability, Noncurrent	0	8,401	0
Northwest Natural Gas Company [Member] | Washington Climate Commitment Act compliance
Regulatory Liabilities [Line Items]
Regulatory Liability, Current	9,365	0	0
Regulatory Liability, Noncurrent	654	$ 0	$ 0
Regulatory Liability	$ 10,000

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Supplemental Cash Flow - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2021
Restricted Cash and Cash Equivalents Items [Line Items]
Cash and cash equivalents	$ 156,616	$ 29,270	$ 108,556
Restricted Cash	14,864	11,694	11,714
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	171,480	40,964	120,270	$ 27,120
Money Market Funds, at Carrying Value	132,600
Northwest Natural Gas Company [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Cash and cash equivalents	145,073	12,977	11,386
Restricted Cash	14,838	11,694	11,714
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	159,911	$ 24,671	$ 23,100	$ 20,832
Money Market Funds, at Carrying Value	132,600
Payments of Dividends	$ 25,000

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Significant Accounting Policies - Credit Losses - ASU 2016-13 $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($) numberOfLeases	Dec. 31, 2022 USD ($)	Sep. 30, 2022 USD ($)
Accounts Receivable, Noncurrent, Credit Quality Indicator [Line Items]
Number of Net Investments in Sales-Type Leases | numberOfLeases	2
Sales-type Lease, Net Investment in Lease, Allowance for Credit Loss	$ 0
Regulatory Assets, Noncurrent	312,665	$ 340,432	$ 301,660
Other Northwest Holdings [Member]
Accounts Receivable, Noncurrent, Credit Quality Indicator [Line Items]
Accounts Receivable, Allowance for Credit Loss	227	217
Accounts Receivable, Allowance for Credit Loss, Period Increase (Decrease)	10
Accounts Receivable, Allowance for Credit Loss, Recovery	0
Northwest Holdings [Member]
Accounts Receivable, Noncurrent, Credit Quality Indicator [Line Items]
Accounts Receivable, Allowance for Credit Loss	2,312	3,296
Accounts Receivable, Allowance for Credit Loss, Period Increase (Decrease)	1,973
Accounts Receivable, Allowance for Credit Loss, Recovery	(2,957)
Northwest Natural Gas Company [Member]
Accounts Receivable, Noncurrent, Credit Quality Indicator [Line Items]
Accounts Receivable, Allowance for Credit Loss	2,085	3,079
Accounts Receivable, Allowance for Credit Loss, Period Increase (Decrease)	1,963
Accounts Receivable, Allowance for Credit Loss, Recovery	(2,957)
Regulatory Assets, Noncurrent	312,640	340,407	$ 301,596
Residential [Member] | Northwest Natural Gas Company [Member]
Accounts Receivable, Noncurrent, Credit Quality Indicator [Line Items]
Accounts Receivable, Allowance for Credit Loss	1,489	2,155
Accounts Receivable, Allowance for Credit Loss, Period Increase (Decrease)	1,802
Accounts Receivable, Allowance for Credit Loss, Recovery	(2,468)
Commercial [Member] | Northwest Natural Gas Company [Member]
Accounts Receivable, Noncurrent, Credit Quality Indicator [Line Items]
Accounts Receivable, Allowance for Credit Loss	292	400
Accounts Receivable, Allowance for Credit Loss, Period Increase (Decrease)	264
Accounts Receivable, Allowance for Credit Loss, Recovery	(372)
Industrial [Member] | Northwest Natural Gas Company [Member]
Accounts Receivable, Noncurrent, Credit Quality Indicator [Line Items]
Accounts Receivable, Allowance for Credit Loss	82	188
Accounts Receivable, Allowance for Credit Loss, Period Increase (Decrease)	(105)
Accounts Receivable, Allowance for Credit Loss, Recovery	(1)
Accrued unbilled and other [Member] | Northwest Natural Gas Company [Member]
Accounts Receivable, Noncurrent, Credit Quality Indicator [Line Items]
Accounts Receivable, Allowance for Credit Loss	222	$ 336
Accounts Receivable, Allowance for Credit Loss, Period Increase (Decrease)	2
Accounts Receivable, Allowance for Credit Loss, Recovery	$ (116)

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Greenhouse Gas Allowances $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($)
CCI Deferred Costs	$ 12,500
Washington Climate Commitment Act Allowances
Proceeds from Other Operating Activities	10,000
WASHINGTON
CCI Credits Liability	12,100
Inventory, Emissions Allowances	18,300
Oregon [Member]
Inventory, Emissions Allowances	$ 0

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Earnings Per Share - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Earnings Per Share [Abstract]
Net income	$ (23,687)	$ (19,587)	$ 49,228	$ 38,367
Average common shares outstanding:
Average common shares outstanding - basic (in shares)	36,214	34,939	35,950	33,491
Additional shares for stock-based compensation plans	0	0	30	48
Average common shares outstanding - diluted (in shares)	36,214	34,939	35,980	33,539
Earnings (loss) per share of common stock
Basic (in dollars per share)	$ (0.65)	$ (0.56)	$ 1.37	$ 1.15
Diluted (in dollars per share)	$ (0.65)	$ (0.56)	$ 1.37	$ 1.14
Antidilutive shares	45	85	1	0

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Segment Information - Narrative	9 Months Ended
	Sep. 30, 2023
Operating Segments [Member]
Segment Reporting Information [Line Items]
Number of Reportable Segments	1
Oregon [Member] | Northwest Holdings and Northwest Natural [Member] | Natural Gas Distribution [Member]
Segment Reporting Information [Line Items]
Percent Of Pre Tax Income From Gas Storage Retained When The Costs Of The Capacity Are Not In Utility Rates	80.00%
Percent Of Pre Tax Income From Gas Storage Retained When The Costs Of The Capacity Are In Utility Rates	10.00%
Percent Of Pre Tax Income From Gas Storage Credited To Deferred Regulatory Account	20.00%
Percent Of Pre Tax Income From Gas Storage Credited To Deferred Regulatory Account When In Rates	90.00%

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Segment Information - Schedule of Summarized Financial Information by Segment - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Segment Reporting Information [Line Items]
Operating revenues	$ 141,479	$ 116,839	$ 841,761	$ 662,100
Depreciation	30,061	29,026	92,819	85,565
Income from operations	(17,577)	(14,927)	109,774	86,250
Total assets	4,665,118	4,300,712	4,665,118	4,300,712	$ 4,748,326
Natural Gas Distribution [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Operating revenues	124,624	103,295	796,108	629,327
Depreciation	28,169	27,937	87,650	82,372
Income from operations	(22,192)	(20,910)	97,357	75,328
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent	(24,160)	(23,016)	47,520	32,531
Capital expenditures	86,017	79,847	214,874	235,249
Total assets	4,285,309	3,968,040	4,285,309	3,968,040	4,392,699
Other Northwest Natural [Member] | Corporate, Non-Segment [Member]
Segment Reporting Information [Line Items]
Operating revenues	5,318	7,131	16,695	17,974
Depreciation	277	264	820	794
Income from operations	3,777	5,616	11,658	12,054
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent	2,673	4,210	8,317	8,812
Capital expenditures	1,053	431	1,494	1,218
Total assets	52,894	56,712	52,894	56,712	60,019
Northwest Natural Gas Company [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Operating revenues	129,942	110,426	812,803	647,301
Depreciation	28,446	28,201	88,470	83,166
Income from operations	(18,415)	(15,294)	109,015	87,382
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent	(21,487)	(18,806)	55,837	41,343
Capital expenditures	87,070	80,278	216,368	236,467
Total assets	4,338,203	4,024,752	4,338,203	4,024,752	4,452,718
Other Northwest Holdings [Member] | Corporate, Non-Segment [Member]
Segment Reporting Information [Line Items]
Operating revenues	11,537	6,413	28,958	14,799
Depreciation	1,615	825	4,349	2,399
Income from operations	838	367	759	(1,132)
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent	(2,200)	(781)	(6,609)	(2,976)
Capital expenditures	10,814	3,868	26,379	15,375
Total assets	326,915	275,960	326,915	275,960	295,608
Northwest Natural Gas Company [Member]
Segment Reporting Information [Line Items]
Operating revenues	129,942	110,426	812,803	647,301
Depreciation	28,446	28,201	88,470	83,166
Income from operations	(18,415)	(15,294)	109,015	87,382
Total assets	4,338,203	4,024,752	4,338,203	4,024,752	4,452,718
Northwest Natural Gas Company [Member] | Natural Gas Distribution [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Operating revenues	124,625	103,295	796,108	629,327
Northwest Natural Gas Company [Member] | Other Northwest Natural [Member] | Corporate, Non-Segment [Member]
Segment Reporting Information [Line Items]
Operating revenues	5,317	7,131	16,695	17,974
Northwest Natural Gas Company [Member] | Northwest Natural Gas Company [Member]
Segment Reporting Information [Line Items]
Operating revenues	129,942	110,426	812,803	647,301
Parent Company [Member]
Segment Reporting Information [Line Items]
Operating revenues	141,479	116,839	841,761	662,100
Depreciation	30,061	29,026	92,819	85,565
Income from operations	(17,577)	(14,927)	109,774	86,250
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent	(23,687)	(19,587)	49,228	38,367
Capital expenditures	97,884	84,146	242,747	251,842
Total assets	$ 4,665,118	$ 4,300,712	$ 4,665,118	$ 4,300,712	$ 4,748,326

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Segment Information - Additional Segment Information - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Segment Reporting Information [Line Items]
Operating revenues	$ 141,479	$ 116,839	$ 841,761	$ 662,100
Cost of gas	49,180	36,105	357,362	261,413
Environmental remediation	1,032	980	8,547	7,950
Operating Segments [Member] | Natural Gas Distribution [Member]
Segment Reporting Information [Line Items]
Natural Gas Distribution revenues	119,892	98,391	781,941	614,605
Other regulated services	4,732	4,904	14,167	14,722
Operating revenues	124,624	103,295	796,108	629,327
Cost of gas	49,235	36,258	357,530	261,678
Environmental remediation	1,032	975	8,547	7,945
Revenue taxes	5,425	4,375	33,559	25,907
NGD margin	$ 68,932	$ 61,687	$ 396,472	$ 333,797

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Equity - Narrative - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2022	Oct. 02, 2023	Dec. 31, 2022
Class of Stock [Line Items]
Par Value (in dollars per share)	$ 0	$ 0	$ 0		$ 0
Shares issued (in shares)	36,575,797	36,575,797	35,098,437		35,524,590
Proceeds from common stock issued, net		$ 40,955	$ 190,929
Subsequent Event [Member]
Class of Stock [Line Items]
Shares, Issued				184,832
Shares, Issued				184,832
Avion Water | Other Northwest Holdings [Member]
Class of Stock [Line Items]
Investment balance in Avion					$ 14,500
ATM Equity Program
Class of Stock [Line Items]
Par Value (in dollars per share)	$ 0	$ 0
Sale of Stock, Consideration Received on Transaction	$ 18,800	$ 40,900
Sale of Stock, Commissions and Fees Paid	$ 300	$ 700
Stock Issued During Period, Shares, New Issues	475,732	955,325
nwn:AttheMarketEquityProgramEquityAvailableforIssuance	$ 69,500	$ 69,500
Maximum [Member] | Scenario, Plan | ATM Equity Program
Class of Stock [Line Items]
Cumulative Proceeds Received on All Transactions		$ 200,000

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Revenue - Disaggregation of Revenue - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	$ 134,591	$ 109,952	$ 831,354	$ 657,776
Revenues	141,479	116,839	841,761	662,100
Natural Gas Sales [Member] | Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	117,004	95,784	783,506	623,121
Gas Storage Revenue, Net of Regulatory Sharing [Member] | Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	3,014	2,882	9,014	8,678
Asset Management Revenue, Net of Regulatory Sharing [Member] | Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	1,623	3,047	4,879	4,941
Appliance Center Revenue [Member] | Transferred at Point in Time [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	680	1,202	2,802	4,355
Other revenue [Member] | Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	12,270	7,037	31,153	16,681
Alternative revenue [Member]
Disaggregation of Revenue [Line Items]
Revenues	2,868	2,589	(1,623)	(8,571)
Leasing revenue [Member]
Disaggregation of Revenue [Line Items]
Operating leases	4,020	4,298	12,030	12,895
Northwest Natural Gas Company [Member]
Disaggregation of Revenue [Line Items]
Revenues	129,942	110,426	812,803	647,301
Operating leases	19	19	57	56
Northwest Natural Gas Company [Member] | Northwest Natural Gas Company [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	123,054	103,539	802,396	642,977
Revenues	129,942	110,426	812,803	647,301
Northwest Natural Gas Company [Member] | Northwest Natural Gas Company [Member] | Natural Gas Sales [Member] | Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	117,004	95,784	783,506	623,121
Northwest Natural Gas Company [Member] | Northwest Natural Gas Company [Member] | Gas Storage Revenue, Net of Regulatory Sharing [Member] | Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	3,014	2,882	9,014	8,678
Northwest Natural Gas Company [Member] | Northwest Natural Gas Company [Member] | Asset Management Revenue, Net of Regulatory Sharing [Member] | Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	1,623	3,047	4,879	4,941
Northwest Natural Gas Company [Member] | Northwest Natural Gas Company [Member] | Appliance Center Revenue [Member] | Transferred at Point in Time [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	680	1,202	2,802	4,355
Northwest Natural Gas Company [Member] | Northwest Natural Gas Company [Member] | Other revenue [Member] | Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	733	624	2,195	1,882
Northwest Natural Gas Company [Member] | Northwest Natural Gas Company [Member] | Alternative revenue [Member]
Disaggregation of Revenue [Line Items]
Revenues	2,868	2,589	(1,623)	(8,571)
Northwest Natural Gas Company [Member] | Northwest Natural Gas Company [Member] | Leasing revenue [Member]
Disaggregation of Revenue [Line Items]
Operating leases	4,020	4,298	12,030	12,895
Operating Segments [Member] | Natural Gas Distribution [Member]
Disaggregation of Revenue [Line Items]
Revenues	124,624	103,295	796,108	629,327
Operating Segments [Member] | Natural Gas Distribution [Member] | Northwest Natural Gas Company [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	117,737	96,408	785,701	625,003
Revenues	124,625	103,295	796,108	629,327
Operating Segments [Member] | Natural Gas Distribution [Member] | Northwest Natural Gas Company [Member] | Natural Gas Sales [Member] | Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	117,004	95,784	783,506	623,121
Operating Segments [Member] | Natural Gas Distribution [Member] | Northwest Natural Gas Company [Member] | Gas Storage Revenue, Net of Regulatory Sharing [Member] | Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	0	0	0	0
Operating Segments [Member] | Natural Gas Distribution [Member] | Northwest Natural Gas Company [Member] | Asset Management Revenue, Net of Regulatory Sharing [Member] | Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	0	0	0	0
Operating Segments [Member] | Natural Gas Distribution [Member] | Northwest Natural Gas Company [Member] | Appliance Center Revenue [Member] | Transferred at Point in Time [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	0	0	0	0
Operating Segments [Member] | Natural Gas Distribution [Member] | Northwest Natural Gas Company [Member] | Other revenue [Member] | Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	733	624	2,195	1,882
Operating Segments [Member] | Natural Gas Distribution [Member] | Northwest Natural Gas Company [Member] | Alternative revenue [Member]
Disaggregation of Revenue [Line Items]
Revenues	2,868	2,589	(1,623)	(8,571)
Operating Segments [Member] | Natural Gas Distribution [Member] | Northwest Natural Gas Company [Member] | Leasing revenue [Member]
Disaggregation of Revenue [Line Items]
Operating leases	4,020	4,298	12,030	12,895
Operating Segments [Member] | Northwest Natural Gas Company [Member]
Disaggregation of Revenue [Line Items]
Revenues	129,942	110,426	812,803	647,301
Corporate, Non-Segment [Member] | Other Northwest Natural [Member]
Disaggregation of Revenue [Line Items]
Revenues	5,318	7,131	16,695	17,974
Corporate, Non-Segment [Member] | Other Northwest Natural [Member] | Northwest Natural Gas Company [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	5,317	7,131	16,695	17,974
Revenues	5,317	7,131	16,695	17,974
Corporate, Non-Segment [Member] | Other Northwest Natural [Member] | Northwest Natural Gas Company [Member] | Natural Gas Sales [Member] | Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	0	0	0	0
Corporate, Non-Segment [Member] | Other Northwest Natural [Member] | Northwest Natural Gas Company [Member] | Gas Storage Revenue, Net of Regulatory Sharing [Member] | Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	3,014	2,882	9,014	8,678
Corporate, Non-Segment [Member] | Other Northwest Natural [Member] | Northwest Natural Gas Company [Member] | Asset Management Revenue, Net of Regulatory Sharing [Member] | Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	1,623	3,047	4,879	4,941
Corporate, Non-Segment [Member] | Other Northwest Natural [Member] | Northwest Natural Gas Company [Member] | Appliance Center Revenue [Member] | Transferred at Point in Time [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	680	1,202	2,802	4,355
Corporate, Non-Segment [Member] | Other Northwest Natural [Member] | Northwest Natural Gas Company [Member] | Other revenue [Member] | Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	0	0	0	0
Corporate, Non-Segment [Member] | Other Northwest Natural [Member] | Northwest Natural Gas Company [Member] | Alternative revenue [Member]
Disaggregation of Revenue [Line Items]
Revenues	0	0	0	0
Corporate, Non-Segment [Member] | Other Northwest Natural [Member] | Northwest Natural Gas Company [Member] | Leasing revenue [Member]
Disaggregation of Revenue [Line Items]
Operating leases	0	0	0	0
Corporate, Non-Segment [Member] | Other Northwest Holdings [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	11,537	6,413	28,958	14,799
Revenues	11,537	6,413	28,958	14,799
Corporate, Non-Segment [Member] | Other Northwest Holdings [Member] | Natural Gas Sales [Member] | Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	0	0	0	0
Corporate, Non-Segment [Member] | Other Northwest Holdings [Member] | Gas Storage Revenue, Net of Regulatory Sharing [Member] | Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	0	0	0	0
Corporate, Non-Segment [Member] | Other Northwest Holdings [Member] | Asset Management Revenue, Net of Regulatory Sharing [Member] | Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	0	0	0	0
Corporate, Non-Segment [Member] | Other Northwest Holdings [Member] | Appliance Center Revenue [Member] | Transferred at Point in Time [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	0	0	0	0
Corporate, Non-Segment [Member] | Other Northwest Holdings [Member] | Other revenue [Member] | Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	11,537	6,413	28,958	14,799
Corporate, Non-Segment [Member] | Other Northwest Holdings [Member] | Alternative revenue [Member]
Disaggregation of Revenue [Line Items]
Revenues	0	0	0	0
Corporate, Non-Segment [Member] | Other Northwest Holdings [Member] | Leasing revenue [Member]
Disaggregation of Revenue [Line Items]
Operating leases	$ 0	$ 0	$ 0	$ 0

XML

Revenue - Revenue, Remaining Performance Obligation $ in Thousands	Sep. 30, 2023 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Lessor, Sales-type Lease, Term of Contract	30 years
Lessor, Sales-type Lease, Renewal Term	50 years
Revenue, Remaining Performance Obligation, Amount	$ 83,500
Natural Gas Distribution [Member] | Northwest Natural Gas Company [Member]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract with Customer, Refund Liability	0
Other Northwest Natural [Member] | Northwest Natural Gas Company [Member]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract with Customer, Refund Liability	0
Other Northwest Holdings [Member]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract with Customer, Refund Liability	$ 0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Year	3 months
Revenue, Remaining Performance Obligation, Amount	$ 5,400
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Year	1 year
Revenue, Remaining Performance Obligation, Amount	$ 19,900
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Year	1 year
Revenue, Remaining Performance Obligation, Amount	$ 19,000
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Year	1 year
Revenue, Remaining Performance Obligation, Amount	$ 14,900
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Year	1 year
Revenue, Remaining Performance Obligation, Amount	$ 7,400
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Year	0 years
Revenue, Remaining Performance Obligation, Amount	$ 16,900

XML

Leases - Lease Revenue - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Lessor, Lease, Description [Line Items]
Lessor, Sales-type Lease, Renewal Term	50 years		50 years
Lessor, Sales-type Lease, Term of Contract	30 years		30 years
Residual Value of Leased Asset	$ 5,400	$ 5,000	$ 5,400	$ 5,000	$ 5,100
Lease Revenue [Abstract]
Total lease revenue	100	300	500	400
Operating Leases Payment to be Received [Abstract]
Operating Lease, Payments to be Received, Remainder of Fiscal Year	166		166
Lessor, Operating Lease, Payment to be Received, Year One	655		655
Operating Lease, Payments to be Received, Two Years	652		652
Operating Lease, Payments to be Received, Three Years	92		92
Operating Lease, Payments to be Received, Four Years	79		79
Operating Lease, Payments to be Received, Thereafter	857		857
Total minimum lease payments	2,501		2,501
Total Lease Payments to be Received [Abstract]
Lease Payments to be Received, Remainder of Fiscal Year	4,266		4,266
Lease Payments to be Received, Two Years	16,522		16,522
Lease Payments to be Received, Three Years	15,958		15,958
Lease Payments to be Received, Four Years	14,993		14,993
Lease Payments to be Received, Five Years	14,600		14,600
Lease Payments to be Received, Thereafter	223,156		223,156
Total minimum lease payments	289,495		289,495
Northwest Natural Gas Company [Member]
Lease Revenue [Abstract]
Operating leases	19	19	57	56
Sales-type leases	4,001	4,279	11,973	12,839
Total lease revenue	4,020	$ 4,298	12,030	$ 12,895
Operating Leases Payment to be Received [Abstract]
Operating Lease, Payments to be Received, Remainder of Fiscal Year	153		153
Lessor, Operating Lease, Payment to be Received, Year One	603		603
Operating Lease, Payments to be Received, Two Years	599		599
Operating Lease, Payments to be Received, Three Years	36		36
Operating Lease, Payments to be Received, Four Years	22		22
Operating Lease, Payments to be Received, Thereafter	0		0
Total minimum lease payments	1,413		1,413
Total Lease Payments to be Received [Abstract]
Lease Payments to be Received, Remainder of Fiscal Year	4,253		4,253
Lease Payments to be Received, Two Years	16,470		16,470
Lease Payments to be Received, Three Years	15,905		15,905
Lease Payments to be Received, Four Years	14,937		14,937
Lease Payments to be Received, Five Years	14,543		14,543
Lease Payments to be Received, Thereafter	222,299		222,299
Total minimum lease payments	288,407		288,407
Other Northwest Holdings [Member]
Operating Leases Payment to be Received [Abstract]
Operating Lease, Payments to be Received, Remainder of Fiscal Year	13		13
Lessor, Operating Lease, Payment to be Received, Year One	52		52
Operating Lease, Payments to be Received, Two Years	53		53
Operating Lease, Payments to be Received, Three Years	56		56
Operating Lease, Payments to be Received, Four Years	57		57
Operating Lease, Payments to be Received, Thereafter	857		857
Total minimum lease payments	1,088		1,088
Total Lease Payments to be Received [Abstract]
Lease Payments to be Received, Remainder of Fiscal Year	13		13
Lease Payments to be Received, Two Years	52		52
Lease Payments to be Received, Three Years	53		53
Lease Payments to be Received, Four Years	56		56
Lease Payments to be Received, Five Years	57		57
Lease Payments to be Received, Thereafter	857		857
Total minimum lease payments	$ 1,088		$ 1,088
Compressed Natural Gas Lease [Member]
Lessor, Lease, Description [Line Items]
Lessor, Sales-type Lease, Term of Contract	10 years		10 years
Residual Value of Leased Asset	$ 0		$ 0
Variable Lease, Payment			0
North Mist Lease [Member]
Lessor, Lease, Description [Line Items]
Residual Value of Leased Asset	0		0
Variable Lease, Payment			0
Sales-type Lease [Member]
Sales-type Leases Payments to be Received [Abstract]
Sales-type Lease, Payments to be Received, Remainder of Fiscal Year	4,100		4,100
Sales-Type and Direct Financing Leases, Lease Receivable, to be Received, Year One	15,867		15,867
Sales-type Lease, Payments to be Received, Two Years	15,306		15,306
Sales-type Lease, Payments to be Received, Three Years	14,901		14,901
Sales-type Lease, Payments to be Received, Four Years	14,521		14,521
Sales-type Lease, Payments to be Received, Thereafter	222,299		222,299
Total minimum lease payments	286,994		286,994
Less: imputed interest	156,626		156,626
Total leases receivable	130,368		130,368
Sales-type Lease [Member] | Northwest Natural Gas Company [Member]
Sales-type Leases Payments to be Received [Abstract]
Sales-type Lease, Payments to be Received, Remainder of Fiscal Year	4,100		4,100
Sales-Type and Direct Financing Leases, Lease Receivable, to be Received, Year One	15,867		15,867
Sales-type Lease, Payments to be Received, Two Years	15,306		15,306
Sales-type Lease, Payments to be Received, Three Years	14,901		14,901
Sales-type Lease, Payments to be Received, Four Years	14,521		14,521
Sales-type Lease, Payments to be Received, Thereafter	222,299		222,299
Total minimum lease payments	286,994		286,994
Less: imputed interest	156,626		156,626
Total leases receivable	130,368		130,368
Sales-type Lease [Member] | Other Northwest Holdings [Member]
Sales-type Leases Payments to be Received [Abstract]
Sales-type Lease, Payments to be Received, Remainder of Fiscal Year	0		0
Sales-Type and Direct Financing Leases, Lease Receivable, to be Received, Year One	0		0
Sales-type Lease, Payments to be Received, Two Years	0		0
Sales-type Lease, Payments to be Received, Three Years	0		0
Sales-type Lease, Payments to be Received, Four Years	0		0
Sales-type Lease, Payments to be Received, Thereafter	0		0
Total minimum lease payments	$ 0		$ 0

XML

Leases - Lease Expense - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Lease Expense [Abstract]
Operating Lease, Expense	$ 1,868	$ 1,774	$ 5,513	$ 5,257
Short-term Lease, Cost	$ 198	105	$ 556	684
Lessee, Operating Lease, Maximum Term of Short-term Leases not recorded on the Balance Sheet	12 months		12 months
Minimum [Member]
Operating Lease Terms [Abstract]
Lessee, Operating Lease, Term of Contract	3 months		3 months
Maximum [Member]
Operating Lease Terms [Abstract]
Lessee, Operating Lease, Term of Contract	17 years		17 years
Northwest Natural Gas Company [Member]
Lease Expense [Abstract]
Operating Lease, Expense	$ 1,817	1,767	$ 5,382	5,235
Short-term Lease, Cost	198	105	556	684
Other Northwest Holdings [Member] | Corporate, Non-Segment [Member]
Lease Expense [Abstract]
Operating Lease, Expense	$ 51	$ 7	$ 131	$ 22

XML

Leases - Lease Asset and Liabilities - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Operating Lease Asset and Liabilities [Abstract]
Operating lease right of use asset	$ 71,477	$ 73,145	$ 71,477	$ 73,145	$ 73,429
Operating lease liabilities current liabilities	1,815	1,361	1,815	1,361	1,514
Operating lease liabilities noncurrent liabilities	77,475	78,469	77,475	78,469	78,965
Total operating lease liabilities	$ 79,290	$ 79,830	$ 79,290	$ 79,830	$ 80,479
Operating Lease, Weighted Average Remaining Lease Term	16 years 6 months	17 years 6 months	16 years 6 months	17 years 6 months	17 years 2 months 12 days
Operating Lease, Weighted Average Discount Rate, Percent	7.30%	7.30%	7.30%	7.30%	7.30%
Commencement of Significant Lease [Abstract]
Lessee, Operating Lease, Liability, Payments, Due	$ 140,866		$ 140,866
Regulatory Assets, Noncurrent	312,665	$ 301,660	312,665	$ 301,660	$ 340,432
Maturity of Operating Lease Liabilities [Abstract]
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year	1,845		1,845
Lessee, Operating Lease, Liability, to be Paid, Year One	7,490		7,490
Lessee, Operating Lease, Liability, Payments, Due Year Two	7,369		7,369
Lessee, Operating Lease, Liability, Payments, Due Year Three	7,514		7,514
Lessee, Operating Lease, Liability, Payments, Due Year Four	7,645		7,645
Lessee, Operating Lease, Liability, Payments, Due after Year Five	109,003		109,003
Lessee, Operating Lease, Liability, Payments, Due	140,866		140,866
Lessee, Operating Lease, Liability, Undiscounted Excess Amount	61,576		61,576
Total operating lease liabilities	79,290	79,830	79,290	79,830	80,479
Operating lease liabilities current liabilities	1,815	1,361	1,815	1,361	1,514
Operating lease liabilities noncurrent liabilities	77,475	78,469	77,475	78,469	78,965
Finance Lease, Liability, Payments, Due Next Twelve Months	0		0		0
Leases Cash Flow [Abstract]
Operating Lease, Payments	1,863	1,771	5,506	5,249
Finance Lease, Principal Payments	196	92	369	474
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	0	61	81	61
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability	207	6	470	226
Finance Leases [Abstract]
Finance Lease, Liability	0		0
Finance Lease, Right-of-Use Asset	2,600	2,300	2,600	2,300	2,300
Other Northwest Holdings [Member] | Corporate, Non-Segment [Member]
Operating Lease Asset and Liabilities [Abstract]
Operating lease right of use asset	625	99	625	99	709
Operating lease liabilities current liabilities	157	63	157	63	151
Operating lease liabilities noncurrent liabilities	434	33	434	33	620
Total operating lease liabilities	591	96	591	96	771
Commencement of Significant Lease [Abstract]
Lessee, Operating Lease, Liability, Payments, Due	675		675
Maturity of Operating Lease Liabilities [Abstract]
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year	44		44
Lessee, Operating Lease, Liability, to be Paid, Year One	183		183
Lessee, Operating Lease, Liability, Payments, Due Year Two	176		176
Lessee, Operating Lease, Liability, Payments, Due Year Three	153		153
Lessee, Operating Lease, Liability, Payments, Due Year Four	107		107
Lessee, Operating Lease, Liability, Payments, Due after Year Five	12		12
Lessee, Operating Lease, Liability, Payments, Due	675		675
Lessee, Operating Lease, Liability, Undiscounted Excess Amount	84		84
Total operating lease liabilities	591	96	591	96	771
Operating lease liabilities current liabilities	157	63	157	63	151
Operating lease liabilities noncurrent liabilities	434	33	434	33	620
Leases Cash Flow [Abstract]
Operating Lease, Payments	54	12	132	24
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	0	61	0	61
Northwest Natural Gas Company [Member]
Operating Lease Asset and Liabilities [Abstract]
Operating lease right of use asset	70,852	73,046	70,852	73,046	72,720
Operating lease liabilities current liabilities	1,658	1,298	1,658	1,298	1,363
Operating lease liabilities noncurrent liabilities	77,041	78,436	77,041	78,436	78,345
Total operating lease liabilities	78,699	79,734	78,699	79,734	79,708
Commencement of Significant Lease [Abstract]
Lessee, Operating Lease, Liability, Payments, Due	140,191		140,191
Regulatory Assets, Noncurrent	312,640	301,596	312,640	301,596	340,407
Maturity of Operating Lease Liabilities [Abstract]
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year	1,801		1,801
Lessee, Operating Lease, Liability, to be Paid, Year One	7,307		7,307
Lessee, Operating Lease, Liability, Payments, Due Year Two	7,193		7,193
Lessee, Operating Lease, Liability, Payments, Due Year Three	7,361		7,361
Lessee, Operating Lease, Liability, Payments, Due Year Four	7,538		7,538
Lessee, Operating Lease, Liability, Payments, Due after Year Five	108,991		108,991
Lessee, Operating Lease, Liability, Payments, Due	140,191		140,191
Lessee, Operating Lease, Liability, Undiscounted Excess Amount	61,492		61,492
Total operating lease liabilities	78,699	79,734	78,699	79,734	79,708
Operating lease liabilities current liabilities	1,658	1,298	1,658	1,298	1,363
Operating lease liabilities noncurrent liabilities	77,041	78,436	77,041	78,436	78,345
Leases Cash Flow [Abstract]
Operating Lease, Payments	1,809	1,759	5,374	5,225
Finance Lease, Principal Payments	196	92	369	474
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	0	0	81	0
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability	196	6	369	226
Other Northwest Holdings [Member] | Corporate, Non-Segment [Member]
Leases Cash Flow [Abstract]
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability	$ 11		$ 101	0
New Headquarters Lease [Member]
Commencement of Significant Lease [Abstract]
Lessee, Operating Lease, Term of Contract	20 years		20 years
Regulatory Assets, Noncurrent	$ 7,800	$ 6,600	$ 7,800	$ 6,600	$ 6,900
New Headquarters Lease Renewal Term 2 of 2 [Member] | New Headquarters Lease [Member]
Commencement of Significant Lease [Abstract]
Lessee, Operating Lease, Renewal Term	7 years		7 years
New Headquarters Lease Renewal Term 1 of 2 [Member] | New Headquarters Lease [Member]
Commencement of Significant Lease [Abstract]
Lessee, Operating Lease, Renewal Term	7 years		7 years
Maximum [Member]
Commencement of Significant Lease [Abstract]
Lessee, Operating Lease, Term of Contract	17 years		17 years

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Stock-Based Compensation - Long Term Incentive Plan $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($) $ / shares shares
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted (in shares)	55,250
Award vesting period	3 years
Unrecognized compensation costs | $	$ 100
Performance Shares | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Conversion ratio, percent of target	0.00%
Performance Shares | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Conversion ratio, percent of target	200.00%
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	4 years
Number of RSUs granted in period (in shares)	45,532
Weighted-average grant date fair value (in dollars per share) | $ / shares	$ 48.24
Unrecognized compensation costs | $	$ 3,500
A 2021 and 2022 Award | Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Payment Arrangement, Expense | $	$ 0
Target Achieved [Member] | A 2021 Award | Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share Based Compensation Award Target Share	49,100
Target Achieved [Member] | A 2022 Award | Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share Based Compensation Award Target Share	52,765

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Debt Short-term Debt - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Short-term Debt [Line Items]
Short-term debt	$ 71,000	$ 258,200	$ 141,000
Northwest Natural Gas Company [Member]
Short-term Debt [Line Items]
Short-term debt	0	170,200	53,000
Line of Credit [Member]
Short-term Debt [Line Items]
Short-term debt	$ 71,000	$ 88,000	$ 88,000
Debt, Weighted Average Interest Rate	6.40%	5.30%	4.70%
Commercial Paper [Member] | Northwest Natural Gas Company [Member]
Short-term Debt [Line Items]
Short-term debt	$ 0	$ 170,200	$ 53,000
Debt, Weighted Average Interest Rate	0.00%	4.60%	3.30%

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Long-Term Debt - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Mar. 31, 2023	Sep. 30, 2023	Sep. 30, 2022	Aug. 19, 2023	Aug. 04, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Long-term Debt		$ 1,615,300	$ 1,337,620			$ 1,336,864
Other Long-Term Debt		5,800	6,300			6,200
Unamortized debt issuance costs		10,245	8,348			8,987
Long-term Debt, Gross		1,625,545	1,345,968			1,345,851
Long-term debt, Current Maturities, Gross		190,700	50,600			90,700
Long-term debt		1,424,572	1,287,006			1,246,167
Northwest Natural Gas Company [Member]
Debt Instrument [Line Items]
Long-term Debt		1,404,553	1,126,471			1,125,877
Unamortized debt issuance costs		$ 10,147	$ 8,229			$ 8,823
Weighted average interest rate		4.70%	4.50%			4.50%
Long-term Debt, Gross		$ 1,414,700	$ 1,134,700			$ 1,134,700
Long-term debt		$ 1,364,556	1,076,533			1,035,935
Northwest Natural Gas Company [Member] | Minimum [Member]
Debt Instrument [Line Items]
Stated interest rate		2.80%
Northwest Natural Gas Company [Member] | Maximum [Member]
Debt Instrument [Line Items]
Stated interest rate		7.90%
Northwest Holdings and Northwest Natural [Member]
Debt Instrument [Line Items]
Unamortized debt issuance costs		$ 10,200	$ 8,400			$ 9,000
18 Month Credit Agreement Due March 15, 2024
Debt Instrument [Line Items]
Weighted average interest rate		5.50%	4.10%			4.20%
Long-term Debt, Term		18 months
Proceeds from Issuance of Debt	$ 100,000	$ 100,000	$ 100,000
Debt Instrument Covenant Consolidated Indebtedness to Capitalization Ratio		70.00%
Derivative, Fixed Interest Rate		4.70%
18 Month Credit Agreement Due March 15, 2024 | NWN Water
Debt Instrument [Line Items]
Weighted average interest rate		5.70%	4.10%			4.20%
Long-term Debt, Term		18 months
Proceeds from Issuance of Debt	$ 50,000	$ 50,000	$ 50,000
Debt Instrument Covenant Consolidated Indebtedness to Capitalization Ratio		70.00%
NWN Water Term Loan Due 2026
Debt Instrument [Line Items]
Derivative, Fixed Interest Rate		3.80%
NWN Water Term Loan Due 2026 | Corporate, Non-Segment [Member] | Other Northwest Holdings [Member]
Debt Instrument [Line Items]
Long-term Debt		$ 55,000
NWN Water Term Loan Due 2026 | NWN Water
Debt Instrument [Line Items]
Long-term Debt		$ 55,000	$ 55,000			$ 55,000
Weighted average interest rate		4.80%	3.50%			2.50%
Note 5430 Series Due 2053 | Northwest Natural Gas Company [Member]
Debt Instrument [Line Items]
Stated interest rate		5.43%
Proceeds from Issuance of First Mortgage Bond		$ 100,000
Note 5750 | Northwest Natural Gas Company [Member]
Debt Instrument [Line Items]
Stated interest rate		5.75%
Proceeds from Issuance of Medium-term Notes		$ 100,000
Note 5180 due 2034
Debt Instrument [Line Items]
Stated interest rate					5.18%
Note 5180 due 2034 | Northwest Natural Gas Company [Member]
Debt Instrument [Line Items]
Proceeds from Issuance of Medium-term Notes		80,000
Note 5230 due 2038
Debt Instrument [Line Items]
Stated interest rate					5.23%
Note 5230 due 2038 | Northwest Natural Gas Company [Member]
Debt Instrument [Line Items]
Secured Debt					$ 50,000
Note 3540 due 2023
Debt Instrument [Line Items]
Stated interest rate				3.50%
Note 3540 due 2023 | Northwest Natural Gas Company [Member]
Debt Instrument [Line Items]
Repayments of First Mortgage Bond		50,000
Repayments of First Mortgage Bond		$ 50,000
Note 5620 due 2023
Debt Instrument [Line Items]
Stated interest rate		5.60%
Secured Debt, Current		$ 40,000
Secured Debt, Current		$ 40,000

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Debt Fair Value of Long Term Debt - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Debt Instrument [Line Items]
Gross long-term debt	$ 1,625,545	$ 1,345,851	$ 1,345,968
Unamortized debt issuance costs	(10,245)	(8,987)	(8,348)
Long-term Debt	1,615,300	1,336,864	1,337,620
Estimated fair value	1,385,144	1,148,395	1,133,087
Northwest Natural Gas Company [Member]
Debt Instrument [Line Items]
Gross long-term debt	1,414,700	1,134,700	1,134,700
Unamortized debt issuance costs	(10,147)	(8,823)	(8,229)
Long-term Debt	1,404,553	1,125,877	1,126,471
Estimated fair value	$ 1,176,212	$ 944,383	$ 927,372

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Pension and Other Postretirement Benefit Costs - Net Periodic Benefit Cost - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Pension Benefits
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Service cost	$ 842	$ 1,022	$ 2,940	$ 4,450
Interest cost	5,283	4,260	15,719	10,945
Expected return on plan assets	(6,421)	(7,076)	(19,292)	(19,274)
Amortization of net actuarial loss	0	0	0	0
Defined Benefit Plan, Amortization of Gain (Loss)	139	(1,542)	418	9,459
Net periodic benefit cost	(157)	(3,336)	(215)	5,580
Amount allocated to construction	(326)	(496)	(1,239)	(1,965)
Defined Benefit Plan Net Periodic Benefit Cost Charged To Expense	(483)	(3,832)	(1,454)	3,615
Amortization of Regulatory Balancing Account	675	675	4,757	4,757
Net amount charged to expense	192	(3,157)	3,303	8,372
Other Postretirement Benefits
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Service cost	27	34	83	145
Interest cost	247	213	743	543
Expected return on plan assets	0	0	0	0
Amortization of net actuarial loss	0	(15)	0	(249)
Defined Benefit Plan, Amortization of Gain (Loss)	0	57	0	319
Net periodic benefit cost	274	289	826	758
Amount allocated to construction	(9)	(14)	(29)	(57)
Defined Benefit Plan Net Periodic Benefit Cost Charged To Expense	265	275	797	701
Amortization of Regulatory Balancing Account	0	0	0	0
Net amount charged to expense	$ 265	$ 275	$ 797	$ 701

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Pension and Other Postretirement Benefit Costs - Amounts Recognized in Accumulated Other Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss) [Abstract]
Beginning balance			$ (6,285)
Ending balance	$ (4,979)	$ (10,808)	(4,979)	$ (10,808)
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Accumulated other comprehensive loss	(4,979)	(10,808)	(4,979)	(10,808)
Northwest Natural Gas Company [Member]
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss) [Abstract]
Beginning balance			(6,414)
Ending balance	(6,107)	(10,808)	(6,107)	(10,808)
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Accumulated other comprehensive loss	(6,107)	(10,808)	(6,107)	(10,808)
Non-Qualified Pension Plans, Defined Benefit | Northwest Natural Gas Company [Member]
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss) [Abstract]
Beginning balance	(6,209)	(11,010)	(6,414)	(11,404)
Amortization of actuarial losses	139	275	418	811
Total reclassifications before tax	139	275	418	811
Tax benefit	(37)	(73)	(111)	(215)
Total reclassifications for the period	102	202	307	596
Ending balance	(6,107)	(10,808)	(6,107)	(10,808)
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Accumulated other comprehensive loss	(6,107)	(10,808)	(6,107)	(10,808)
Amortization of actuarial losses	139	275	418	811
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, before Tax	139	275	418	811
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, Tax, Attributable to Parent	37	73	111	215
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax	$ 102	$ 202	$ 307	$ 596

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Pension and Other Postretirement Benefit Costs - Narrative - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022	Dec. 31, 2021
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract]
Defined benefit pension plan cash contributions			$ 0
Estimated future employer contributions in next fiscal year	$ 0		0
Employer contributions			8,000	$ 7,400
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Accumulated other comprehensive loss	(4,979)	$ (10,808)	(4,979)	(10,808)		$ (6,285)
Northwest Natural Gas Company [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Accumulated other comprehensive loss	(6,107)	(10,808)	(6,107)	(10,808)		(6,414)
Non-Qualified Pension Plans, Defined Benefit | Northwest Natural Gas Company [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Accumulated other comprehensive loss	(6,107)	(10,808)	(6,107)	(10,808)	$ (6,209)	$ (6,414)	$ (11,010)	$ (11,404)
Amortization of actuarial losses	139	275	418	811
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, before Tax	139	275	418	811
Tax benefit	(37)	(73)	(111)	(215)
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax	$ 102	$ 202	$ 307	$ 596

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Income Tax - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Effective Income Tax Rate Reconciliation, Amount [Abstract]
Income taxes at statutory rates (federal and state)	$ (6,716)	$ (5,533)	$ 13,928	$ 10,710
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Amount	(2,742)	(2,376)	5,618	4,298
Differences required to be flowed-through by regulatory commissions	1,015	1,232	(2,055)	(2,003)
Other, net	151	(81)	(393)	(370)
Total provision for income taxes on continuing operations	$ (8,292)	$ (6,758)	$ 17,098	$ 12,635
Effective tax rate for continuing operations	25.90%	25.70%	25.80%	24.80%
Northwest Natural Gas Company [Member]
Effective Income Tax Rate Reconciliation, Amount [Abstract]
Income taxes at statutory rates (federal and state)	$ (6,131)	$ (5,305)	$ 15,723	$ 11,554
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Amount	(2,633)	(2,306)	5,990	4,497
Differences required to be flowed-through by regulatory commissions	1,018	1,232	(2,051)	(2,003)
Other, net	39	(76)	(625)	(370)
Total provision for income taxes on continuing operations	$ (7,707)	$ (6,455)	$ 19,037	$ 13,678
Effective tax rate for continuing operations	26.40%	25.60%	25.40%	24.90%

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Property, Plant and Equipment - USD ($)	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Property, Plant and Equipment [Line Items]
Property, plant, and equipment	$ 4,468,602,000	$ 4,261,566,000	$ 4,207,328,000
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	1,189,968,000	1,147,166,000	1,166,150,000
Total property, plant, and equipment, net	3,278,634,000	3,114,400,000	3,041,178,000
Natural Gas Distribution [Member]
Property, Plant and Equipment [Line Items]
Property, plant, and equipment	4,096,560,000	3,992,676,000	3,888,092,000
Public Utilities, Property, Plant and Equipment, Construction Work in Progress	153,231,000	78,897,000	161,658,000
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	1,152,952,000	1,115,690,000	1,135,965,000
Total property, plant, and equipment, net	3,096,839,000	2,955,883,000	2,913,785,000
Other Northwest Natural [Member]
Property, Plant and Equipment [Line Items]
Property, plant, and equipment	70,363,000	70,368,000	69,626,000
Public Utilities, Property, Plant and Equipment, Construction Work in Progress	8,323,000	6,606,000	5,112,000
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	22,331,000	21,541,000	21,435,000
Total property, plant, and equipment, net	56,355,000	55,433,000	53,303,000
Northwest Natural Gas Company [Member]
Property, Plant and Equipment [Line Items]
Total property, plant, and equipment, net	3,153,194,000	3,011,316,000	2,967,088,000
Property, Plant, Equipment non-cash	21,402,000	24,584,000	43,954,000
Other Northwest Holdings [Member]
Property, Plant and Equipment [Line Items]
Property, plant, and equipment	127,721,000	92,979,000	66,208,000
Public Utilities, Property, Plant and Equipment, Construction Work in Progress	12,404,000	20,040,000	16,632,000
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	14,685,000	9,935,000	8,750,000
Total property, plant, and equipment, net	125,440,000	103,084,000	74,090,000
Northwest Holdings [Member]
Property, Plant and Equipment [Line Items]
Property, Plant, Equipment non-cash	22,686,000	25,318,000	45,374,000
Northwest Natural Gas Company [Member]
Property, Plant and Equipment [Line Items]
Property, plant, and equipment	4,328,477,000	4,148,547,000	4,124,488,000
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	1,175,283,000	1,137,231,000	1,157,400,000
Total property, plant, and equipment, net	$ 3,153,194,000	$ 3,011,316,000	$ 2,967,088,000

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Investments $ in Thousands	3 Months Ended
	Sep. 30, 2023 USD ($) numberOfProjects numberOfConnections employee	Dec. 31, 2022 USD ($)	Sep. 30, 2022 USD ($)	Jul. 31, 2022 USD ($)	Dec. 31, 2021
Schedule of Equity Method Investments [Line Items]
Life Insurance, Corporate or Bank Owned, Amount	$ 46,870	$ 49,358	$ 49,043
Gas reserves, noncurrent	21,439	22,970	23,770
Equity Method Investment, Aggregate Cost	36,253	23,376	23,756
Other investments	104,562	95,704	96,569
Total cumulative gas reserves investment	188,000
Deferred Taxes Related To Gas Reserves	4,400	5,200	5,500
Gas reserves, current	$ 2,400	3,400	3,700
Investments, Number of RNG Development Projects | numberOfProjects	4
Northwest Natural Gas Company [Member]
Schedule of Equity Method Investments [Line Items]
Life Insurance, Corporate or Bank Owned, Amount	$ 46,870	49,358	49,043
Gas reserves, noncurrent	21,439	22,970	23,770
Equity Method Investment, Aggregate Cost	19,444	7,782	8,058
Other investments	87,753	$ 80,110	$ 80,871
Lexington | Northwest Natural Gas Company [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Aggregate Cost	7,800
Dakota City | Northwest Natural Gas Company [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Aggregate Cost	11,600
Deconsolidation, Gain (Loss), Amount	$ 0
Other Northwest Holdings [Member] | Avion Water
Schedule of Equity Method Investments [Line Items]
Ownership percentage of Avion	43.10%	40.30%			37.30%
Investment balance in Avion		$ 14,500
Equity Method Investment, Number of Customer Connections | numberOfConnections	15,000
Equity Method Investment, Number of Employees | employee	35
Equity Method Investment, Difference Between Carrying Amount and Underlying Equity	$ 8,800
Equity Method Investment, Additional Underlying Equity in Net Assets	$ 1,000			$ 1,000

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Business Combinations Business Combinations	9 Months Ended	12 Months Ended
	Sep. 30, 2023 USD ($) numberOfConnections	Dec. 31, 2022 USD ($)	Dec. 31, 2021	Sep. 30, 2022 USD ($)
Business Acquisition [Line Items]
Goodwill	$ 152,399,000	$ 149,283,000		$ 74,732,000
Goodwill, Impairment Loss	0
Business Combination, Consideration Transferred	3,600,000	105,700,000
Business Combination, Consideration Transferred	$ 3,600,000	$ 105,700,000
Other insignificant acquisitions [Member]
Business Acquisition [Line Items]
Number of Businesses Acquired	7		2

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Derivative Instruments Notional Amounts - Northwest Natural Gas Company [Member] therm in Thousands, $ in Thousands	Sep. 30, 2023 USD ($) therm	Dec. 31, 2022 USD ($) therm	Sep. 30, 2022 USD ($) therm
Gas Year 2021-2022
Derivative [Line Items]
TargetHedgeAchieved	84.00%
Gas Year 2021-2022 | Oregon [Member]
Derivative [Line Items]
TargetHedgeAchieved	85.00%
Gas Year 2021-2022 | WASHINGTON
Derivative [Line Items]
TargetHedgeAchieved	79.00%
Financial [Member] | Gas Year 2021-2022
Derivative [Line Items]
TargetHedgeAchieved	67.00%
Financial [Member] | Gas Year 2021-2022 | Oregon [Member]
Derivative [Line Items]
TargetHedgeAchieved	67.00%
Financial [Member] | Gas Year 2021-2022 | WASHINGTON
Derivative [Line Items]
TargetHedgeAchieved	66.00%
Physical [Member] | Gas Year 2021-2022
Derivative [Line Items]
TargetHedgeAchieved	17.00%
Physical [Member] | Gas Year 2021-2022 | Oregon [Member]
Derivative [Line Items]
TargetHedgeAchieved	18.00%
Physical [Member] | Gas Year 2021-2022 | WASHINGTON
Derivative [Line Items]
TargetHedgeAchieved	13.00%
Natural Gas Therms [Member] | Financial [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount	1,080,345	852,435	1,006,665
Natural Gas Therms [Member] | Physical [Member]
Derivative [Line Items]
Derivative, Nonmonetary Notional Amount	749,838	463,254	672,350
Foreign Exchange Contract [Member]
Derivative [Line Items]
Derivative, Notional Amount | $	$ 10,483	$ 7,617	$ 9,905

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Unrealized and Realized Gain/Loss - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Derivative [Line Items]
Derivative, Gain on Derivative	$ 16,900		$ 145,700	$ 74,000
Derivative, Gain (Loss) on Derivative, Net	174	$ 0	999	0
Derivative, Loss on Derivative	7,500
Financial [Member]
Derivative [Line Items]
Incremental Cost or Benefit to Collect or Refund to Customers			0
Northwest Holdings and Northwest Natural [Member] | Natural gas commodity
Derivative [Line Items]
Gain (Loss) on Derivative Instruments, Net, Pretax	0	0	0	0
Northwest Holdings and Northwest Natural [Member] | Foreign exchange
Derivative [Line Items]
Gain (Loss) on Derivative Instruments, Net, Pretax	0	0	0	0
Northwest Holdings and Northwest Natural [Member] | Benefit (expense) to cost of gas | Natural gas commodity
Derivative [Line Items]
Gain (Loss) on Derivative Instruments, Net, Pretax	14,516	11,626	(58,741)	(32,827)
Northwest Holdings and Northwest Natural [Member] | Benefit (expense) to cost of gas | Foreign exchange
Derivative [Line Items]
Gain (Loss) on Derivative Instruments, Net, Pretax	(276)	(455)	(95)	(528)
Northwest Holdings and Northwest Natural [Member] | Sales [Member] | Natural gas commodity
Derivative [Line Items]
Gain (Loss) on Derivative Instruments, Net, Pretax	0	0	0	0
Northwest Holdings and Northwest Natural [Member] | Sales [Member] | Foreign exchange
Derivative [Line Items]
Gain (Loss) on Derivative Instruments, Net, Pretax	0	0	0	0
Deferred Derivative Gain (Loss) [Member] | Northwest Holdings and Northwest Natural [Member] | Natural gas commodity
Derivative [Line Items]
Gain (Loss) on Derivative Instruments, Net, Pretax	(14,516)	11,626	58,741	(32,827)
Deferred Derivative Gain (Loss) [Member] | Northwest Holdings and Northwest Natural [Member] | Foreign exchange
Derivative [Line Items]
Gain (Loss) on Derivative Instruments, Net, Pretax	$ 276	$ 455	$ 95	$ 528

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Derivative Instruments Credit Rating - USD ($)	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Collateral Posted with NW Natural Counterparties [Member]
Derivative [Line Items]
Additional Collateral, Aggregate Fair Value	$ 0		$ 0
Northwest Natural Gas Company [Member]
Derivative [Line Items]
Derivative Asset, Fair Value, Amount Not Offset Against Collateral	10,100,000	$ 153,300,000	40,800,000
Derivative liability	$ 48,100,000	$ 3,600,000	$ 8,500,000

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Derivative Instruments Fair Value - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Derivative [Line Items]
Derivative, Fair Value, Net	$ (38,000)	$ 149,700	$ 32,300
AOCI, Cash Flow Hedge, Cumulative Gain (Loss), after Tax	1,100	$ 100
Derivative Instruments, Gain Reclassified from Accumulated OCI into Income, Effective Portion	0
Derivative Credit Risk Valuation Adjustment, Derivative Liabilities	$ 300

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Environmental Matters $ in Thousands	Sep. 30, 2023 USD ($)
Oregon [Member]
Site Contingency [Line Items]
Remediation Recovery Percentage	96.70%
Inventory, Emissions Allowances	$ 0
WASHINGTON
Site Contingency [Line Items]
Remediation Recovery Percentage	3.30%
Inventory, Emissions Allowances	$ 18,300

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Environmental Matters - Environmental Sites $ in Thousands	1 Months Ended	3 Months Ended	9 Months Ended
	Jan. 31, 2017 USD ($)	Sep. 30, 2023 USD ($) property party	Sep. 30, 2023 USD ($) party property	Dec. 31, 2022 USD ($)	Sep. 30, 2022 USD ($)
Site Contingency [Line Items]
Current Liabilities		$ 31,923	$ 31,923	$ 28,902	$ 16,554
Non-Current Liabilities		84,602	84,602	89,905	83,276
Gasco/Siltronic Sediments
Site Contingency [Line Items]
Current Liabilities		18,679	18,679	9,744	5,556
Non-Current Liabilities		41,392	41,392	42,120	40,740
Site Contingency, Environmental Remediation Costs Recognized		60,100	60,100
Accrual for Environmental Loss Contingencies, Period Increase (Decrease)		10,100
Gasco/Siltronic Sediments | Minimum [Member]
Site Contingency [Line Items]
Environmental Exit Costs, Anticipated Cost			60,100
Gasco/Siltronic Sediments | Maximum [Member]
Site Contingency [Line Items]
Environmental Exit Costs, Anticipated Cost			350,000
Portland Harbor Other [Member]
Site Contingency [Line Items]
Current Liabilities		3,524	3,524	2,634	2,430
Non-Current Liabilities		$ 9,580	$ 9,580	11,270	8,135
Gasco Uplands [Member]
Site Contingency [Line Items]
Site contingency: number of management pieces		2	2
Gasco/Siltronic Upland [Member]
Site Contingency [Line Items]
Current Liabilities		$ 8,908	$ 8,908	16,067	8,367
Non-Current Liabilities		32,512	32,512	35,457	33,354
Front Street [Member]
Site Contingency [Line Items]
Current Liabilities		812	812	457	201
Non-Current Liabilities		939	939	879	868
Additional studies and design costs			1,800
Oregon Steel Mills [Member]
Site Contingency [Line Items]
Current Liabilities		0	0	0	0
Non-Current Liabilities		$ 179	$ 179	$ 179	$ 179
Portland Harbor [Member]
Site Contingency [Line Items]
Number of potentially responsible parties (more than) | party		100	100
EPA final feasibility study and proposed remediation plan, clean-up costs, portland harbor	$ 1,050,000
Number of remediation projects | property		2	2
Portland Harbor [Member] | Minimum [Member]
Site Contingency [Line Items]
Percentage of clean-up costs	(30.00%)
Portland Harbor [Member] | Maximum [Member]
Site Contingency [Line Items]
Percentage of clean-up costs	50.00%
Yakama Nation [Member] | Portland Harbor Other [Member]
Site Contingency [Line Items]
Trustee Council Members - Number of Claimants			1
Site Contingency, Number of Other Third-Party Defendants		29	29
NRD liability claim yakama nation		$ 300	$ 300
Number of Amended Complaints Filed			2

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Environmental Matters - Regulatory Deferred Assets - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Site Contingency [Line Items]
Regulatory Assets, Current	$ 108,525	$ 117,491	$ 104,830
Regulatory Assets, Noncurrent	$ 312,665	$ 340,432	$ 301,660
Remediation Non-recovery Percentage	3.30%	3.30%	3.30%
Annual tariff rider collection	$ 5,000
Annual insurance proceeds to apply against remediation costs	5,000
Total annual remediation expense and interest	$ 10,000
Oregon [Member]
Site Contingency [Line Items]
Remediation Recovery Percentage	96.70%
Front Street [Member] | Environmental costs [Member]
Site Contingency [Line Items]
Accrued site liabilities	$ 57	$ 43	$ 34
Northwest Natural Gas Company [Member]
Site Contingency [Line Items]
Regulatory Assets, Current	108,525	117,491	104,830
Regulatory Assets, Noncurrent	312,640	340,407	301,596
Northwest Natural Gas Company [Member] | Environmental costs [Member]
Site Contingency [Line Items]
Deferred costs and interest	49,899	47,666	47,011
Accrued site liabilities	116,469	118,763	99,795
Insurance proceeds and interest	(50,380)	(54,784)	(54,678)
Regulatory Assets	115,988	111,645	92,128
Regulatory Assets, Current	7,047	7,392	9,461
Regulatory Assets, Noncurrent	$ 108,941	$ 104,253	$ 82,667

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Subsequent Events - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Subsequent Event [Line Items]
Business Combination, Consideration Transferred	$ 3,600	$ 105,700