9 unchanged sentences
Natural gas commodity prices are subject to market fluctuations due to unpredictable factors including weather, pipeline transportation congestion, drilling technologies, market speculation, and other factors that affect supply and demand.
−Removed: Commodity price risk is managed with financial swaps and physical gas reserves from a long-term investment in working interests in gas leases operated by Jonah Energy.
−Removed: These financial hedge contracts and gas reserves volumes are generally included in NW Natural's annual PGA filing for recovery, subject to a regulatory prudence review.
+Added: Commodity price risk is hedged with financial swaps, storage and physical gas reserves from a long-term investment in working interests in gas leases operated by Jonah Energy.
+Added: These hedges are generally included in NW Natural's annual PGA filing for recovery, subject to a regulatory prudence review.
Notional amounts under financial derivative contracts were $159.9 million and $168.5 million as of December 31, 2021 and 2020, respectively.
−Removed: The fair value of financial swaps, based on market prices at December 31, 2020, was an unrealized gain of $12.8 million, which would result in cash inflows of $1.3 million in 2021 and $12.5 million in 2022, and cash outflows of $1.0 million in 2023.
+Added: The fair value of financial swaps, based on market prices at December 31, 2021, was an unrealized gain of $51.2 million, which would result in cash inflows of $21.3 million in 2022, $24.0 million in 2023, and $5.9 million in 2024.
Interest Rate Risk
7 unchanged sentences
Notional amounts under foreign currency forward contracts were $6.3 million and $5.9 million as of December 31, 2021 and 2020, respectively.
−Removed: If all of the foreign currency forward contracts had been settled on December 31, 2020, a gain of $0.3 million would have been realized.
+Added: If all of the foreign currency forward contracts had been settled on December 31, 2021, a loss of $26 thousand would have been realized.
Credit Exposure to Natural Gas Suppliers
6 unchanged sentences
Credit Exposure to Financial Derivative Counterparties
−Removed: Based on estimated fair value at December 31, 2020, NW Natural's overall credit exposure relating to commodity contracts is considered immaterial as it reflects amounts owed to financial derivative counterparties (see table below).
−Removed: However, changes in natural gas prices could result in counterparties owing NW Natural money.
−Removed: Therefore, NW Natural's financial derivatives policy requires counterparties to have at least an investment-grade credit rating at the time the derivative instrument is entered into and specific limits on the contract amount and duration based on each counterparty’s credit rating.
+Added: Based on estimated fair value at December 31, 2021, NW Natural's overall credit exposure relating to commodity contracts was $51.2 million.
+Added: We generally have credit exposure to financial derivative counterparties when forward gas prices exceed our hedge prices, which was the case with all financial swap counterparties at December 31, 2021.
+Added: NW Natural's financial derivatives policy requires counterparties to have at least an investment-grade credit rating at the time the derivative instrument is entered into and specific limits on the contract amount and duration based on each counterparty’s credit rating.
NW Natural actively monitors and manages derivative credit exposure and places counterparties on hold for trading purposes or requires cash collateral, letters of credit, or guarantees as circumstances warrant.
7 unchanged sentences
In most cases, NW Natural also mitigates the credit risk of financial derivatives by having master netting arrangements with counterparties which provide for making or receiving net cash settlements.
−Removed: Generally, transactions of the same type in the same currency that have settlement on the same day with a single counterparty are netted and a single payment is delivered or received depending on which party is due funds.
+Added: Transactions of the same type in the same currency that have settlement on the same day with a single counterparty are netted and a single payment is delivered or received depending on which party is due funds.
Additionally, NW Natural has master contracts in place with each derivative counterparty, most of which include provisions for posting or calling for collateral.
20 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.