Northwest Natural Holding Company

What they do

NW Natural distributes natural gas to residential, commercial and industrial customers through roughly 810,000 meters in Oregon and southwest Washington, where about 88% of customers are in Oregon and 12% in southwest Washington. The company also owns SiEnergy, a Texas gas distribution and transmission utility acquired January 7, 2025, and NWN Water, a regulated water and wastewater utility operating in Oregon, Washington, Idaho, Arizona and Texas. NWN Renewables pursues non-regulated renewable natural gas activities. NW Holdings reports three segments: NWN Gas Utility, SiEnergy, and NWN Water, with remaining activities in NW Holdings Other.

Revenue drivers

• NWN Gas Utility — The dominant segment: 809,597 meters as of December 31, 2025, with residential customers 66% of margin, commercial 25%, industrial 5% and other items 4%. Gas commodity cost is largely a pass-through, so margins depend on rates and delivery volumes.
• SiEnergy — Acquired January 7, 2025 for Texas gas distribution and transmission near Houston, Dallas and Austin; contributed $0.33 of 2025 diluted EPS and $0.27 in the first half of 2026.
• NWN Water — Regulated water and wastewater utility plus non-regulated services in the Pacific Northwest and Southwest; contributed $0.35 of 2025 EPS and $0.09 in the first half of 2026.
• NW Holdings Other — Non-regulated renewable natural gas, interstate storage and asset management, and equity method investments; a drag on EPS at $(0.60) in 2025 and $(0.35) in the first half of 2026.

Recent performance

Second quarter 2026 net income was $0.6 million, or $0.01 per share, versus a $2.5 million net loss, or $(0.06) per share, in the second quarter of 2025. First-half 2026 net income was $98.1 million, or $2.33 per share, compared with $85.4 million, or $2.11 per share, a year earlier. Full-year 2025 net income was $113.3 million, or $2.77 per diluted share, versus $78.9 million, or $2.03, in 2024, driven by new Oregon rates effective November 1, 2024 and October 31, 2025, the SiEnergy acquisition, and new rates at the largest Arizona water utility, partly offset by higher interest, operations and maintenance, and depreciation expense. The company added nearly 18,000 gas and water connections over the twelve months ended June 30, 2026, a 1.9% growth rate.

Strategy

Management is investing in utility systems for safety and reliability, spending $466.9 million of capital in 2025 and $235 million in the first six months of 2026, with planned capital expenditures of $2.6-$2.9 billion from 2026-2030. It targets 6%-8% rate base growth through 2030 and a long-term EPS growth rate of 4%-6%, potentially 5%-7% if the MX3 gas storage project is in service before the end of 2029. Growth is being pursued through rate cases, the SiEnergy and Pines Gas acquisitions, organic water growth, and regulated renewable natural gas procurement. The company filed a multi-party settlement in NW Natural's Oregon alternative rate mechanism docket and received a Washington rate order.

Risks

• Regulatory risk — The OPUC, WUTC, Railroad Commission of Texas and state water commissions control rates, authorized returns and cost recovery, so unfavorable outcomes in rate cases or proceedings could hurt results.
• Earnings concentration in NWN Gas Utility — NWN Gas Utility produced $2.69 of 2025 diluted EPS while NW Holdings Other lost $0.60, so consolidated results are heavily dependent on a single regulated segment.
• Cost and interest expense pressure — Management attributed part of the 2025 earnings offset to increases in interest expense, operations and maintenance expense, and depreciation expense.
• Seasonality and weather sensitivity — The filings state a significant portion of results is seasonal, so quarterly results are not necessarily indicative of expected fiscal year results.

Outlook

Management expects full-year 2026 EPS in the upper half of its $2.95-$3.15 guidance range, after first-half EPS of $2.33 and results that exceeded expectations. It reaffirmed long-term targets of 6%-8% rate base growth through 2030 and 4%-6% EPS growth, with potential for 5%-7% if MX3 is in service before the end of 2029. New Washington rates took effect August 1, 2026, adding a $20.1 million first-year revenue requirement, followed by $7.5 million in year two and $7.4 million in year three.