What changed in this filing

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Item 1. Business

2025-02-28 compared with 2024-02-23 · 51 added, 46 removed, 305 unchanged (24% of the section changed)

15 unchanged sentences

On an annual basis, residential and commercial customers typically account for approximately 60% of NGD volumes delivered and approximately 90% of NGD margin.

Industrial and other customers largely account for the remaining volumes and margin.

Industrial customers largely account for the remaining volumes and margin.

The following table presents summary meter information for the NGD segment as of December 31, 2024:

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Generally, residential and commercial customers purchase both their natural gas commodity (gas sales) and natural gas delivery services from the NGD business.

Industrial and some large commercial customers also purchase transportation, but may buy the gas commodity either from NW Natural or directly from a third-party gas marketer or supplier.

Industrial and some large commercial customers also purchase the gas commodity either from NW Natural or directly from a third-party gas marketer or supplier.

Gas commodity cost is primarily a pass-through cost to customers;

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Company-owned LNG storage 1.8 18 %

Off-system storage contract 0.5 5 %

Pipeline segmentation capacity 0.6 6 %

Off-system storage contract 0.5 5 %

Recall agreements 0.3 3 %

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Rocky Mountain region.

The extraction of shale gas has increased the availability of gas supplies throughout North America.

We believe gas supplies available in the western United States and Canada are adequate to serve NGD customer requirements for the foreseeable

We believe gas supplies available in the western United States and Canada are adequate to serve NGD customer requirements for

the foreseeable future.

NW Natural continues to evaluate the long-term supply mix based on projections of gas production and pricing in the U.S.

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When storage capacity is recalled for NGD purposes it becomes part of the NGD segment.

In 2023, the NGD business did not recall additional deliverability or associated storage capacity to serve customer needs.

As of May 1, 2024, 0.2 million therms per day of deliverability and 1.15 Bcf of associated non-utility Mist gas storage capacity was recalled to serve core customers.

Customer rate increases related to this recall began on November 1, 2024.

The North Mist facility is contracted for the exclusive use of Portland General Electric, a local electric utility, and may not be used to serve other NGD customers.

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gas purchases from suppliers;

charges from pipeline companies to transport gas to our distribution system;

charges from pipeline companies to transport gas to our distribution

gas storage costs;

1 unchanged sentence

gas commodity derivative contracts;

and renewable natural gas and its attributes,

including renewable thermal certificates.

We expect that costs to comply with Washington's Climate Commitment Act (CCA) and any similar program that may be enacted in our service territory will be included in the cost of gas.

and renewable natural gas and its attributes, including renewable thermal certificates.

Costs to comply with Washington's Climate Commitment Act (CCA) are included in the cost of gas for Washington customers.

We expect that costs to comply with Oregon's Climate Protection Program (CPP) and any similar program that may be enacted in our service territory will also be included in the cost of gas.

The NGD business employs a number of strategies to mitigate the cost of gas sold to customers.

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• buying physical gas supplies at a set price and injecting the gas into storage for price stability and to minimize pipeline capacity demand costs.

• investing in gas reserves for longer term price stability.

See Note 13 for additional information about our gas reserves.

NW Natural also contracts with an independent energy marketing company to capture opportunities regarding storage and pipeline capacity when those assets are not serving the needs of NGD business customers.

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See Part II, Item 7, "Results of Operations— Regulatory Matters ".

In addition to purchases of RNG, NW Natural is currently piloting a hydrogen blend in pipelines serving its Sherwood Operations and Training Center.

NW Natural has tested a blend of 15% hydrogen and is now testing a blend of 20% hydrogen at that location.

In addition to purchases of RNG, NW Natural has piloted a hydrogen blend in pipelines serving its Sherwood Operations and Training Center.

NW Natural has successfully tested a blend of up to 20% hydrogen.

The tests met the safety protocols established by PHMSA Part 192.

Additionally, NW Natural is focused on developing several hydrogen pilots for industrial and commercial customers to support their decarbonization goals.

NW Natural is subject to the requirements of the Washington CCA cap-and-invest program, and could be subject to additional programs currently under consideration in Oregon.

NW Natural has modeled pathways to compliance with the CCA in its most recent IRP.

NW Natural is subject to the requirements of the Washington CCA cap-and-invest program, and will be subject to Oregon's CPP.

NW Natural has modeled pathways to compliance with the CCA and CPP in its most recent IRP.

While costs associated with each possible compliance pathway differ, we intend to pursue recovery of the costs associated with these programs in rates.

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The largest pipeline agreements are with Northwest Pipeline.

NW Natural actively works with

Northwest Pipeline and others to renew contracts in advance of expiration to ensure gas transportation capacity is sufficient to meet customer needs.

NW Natural actively works with Northwest Pipeline and others to renew contracts in advance of expiration to ensure gas transportation capacity is sufficient to meet customer needs.

Rates for interstate pipeline transportation services are established by FERC within the U.S.

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Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) are currently under development.

In May 2023, PHMSA issued a notice of proposed rulemaking:

In January 2025, PHMSA released the final rulemaking:

Gas Pipeline Leak Detection and Repair.

The proposed rulemaking includes congressional mandates from the PIPES (Protecting our Infrastructure of Pipelines and Enhancing Safety) Act of 2020 to reduce methane emissions from new and existing gas transmission, distribution, gathering, underground storage, and LNG facilities.

The rulemaking includes congressional mandates from the PIPES (Protecting our Infrastructure of Pipelines and Enhancing Safety) Act of 2020 to reduce methane emissions from new and existing gas transmission, distribution, gathering, underground storage, and LNG facilities.

The unpublished rulemaking was placed on a regulatory freeze by the new presidential administration and is expected to undergo additional review and amendment.

In September 2023, PHMSA issued a notice of proposed rulemaking:

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The proposed rulemaking requires operators to update distribution integrity management programs, emergency response plans, operations and maintenance manuals, and other safety practices.

NW Natural does not foresee a significant impact of these rulemakings on our business given the modern materials used in our system.

North Mist Gas Storage Facility

5 unchanged sentences

Billing rates are updated annually to the forecasted depreciable asset level and forecasted operating expenses.

While there are additional expansion opportunities in the Mist storage field, any expansion would be based on market demand, cost effectiveness, available financing, receipt of future permits, and other rights.

There are additional expansion opportunities in the Mist storage field.

Any expansion would be based on market demand, cost effectiveness, available financing, receipt of future permits, and other rights.

Certain businesses and activities of NW Holdings and NW Natural are aggregated and reported as other for segment reporting purposes.

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The interstate storage services are offered under a limited jurisdiction blanket certificate issued by FERC.

Under NW Natural's interstate storage certificate with FERC, NW Natural is

required to file either a petition for rate approval or a cost and revenue study every five years to change or justify maintaining the existing rates for the interstate storage service.

Under NW Natural's interstate storage certificate with FERC, NW Natural is required to file either a petition for rate approval or a cost and revenue study every five years to change or justify maintaining the

existing rates for the interstate storage service.

Intrastate firm storage services in Oregon are offered under an OPUC-approved rate schedule as an optional service to certain eligible customers.

12 unchanged sentences

NW Natural Water

NWN Water currently serves an estimated 180,000 people through approximately 73,000 water and wastewater connections across five states.

NWN Water currently serves an estimated 190,000 people through approximately 76,000 water and wastewater connections across six states.

NWN Water continues to grow though customer additions within or near its service territories, and continues to pursue acquisitions.

6 unchanged sentences

This business provides operations and maintenance services to water and wastewater system owners and works to create value by leveraging shared personnel, technology and expertise to support delivery of clean, reliable water at a reasonable cost.

Today, NWN Water provides operations and maintenance services to nearly 20,000 connections.

Today, NWN Water provides operations and maintenance services to approximately 25,000 connections.

NW Natural Renewables

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 EDL Facility achieving full commercial operations, Ohio Renewables is committed to make cash payments of approximately $25 million for each facility to partially fund the infrastructure required to condition biogas.

Alongside these development agreements, Ohio Renewables and a 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.

The agreements provide that either party may terminate the agreements and related transactions with respect to the subject facility if it does not reach commercial operations and the funding does not close by December 31, 2023, provided the terminating party has not failed to fulfill its obligations under such agreements, including with respect to achieving commercial operations.

NW Natural Renewables is an unregulated subsidiary of NW Natural Holdings established to pursue unregulated RNG activities.

In September 2021, a subsidiary of NW Natural Renewables, Ohio Renewables, and a subsidiary of EDL, a global producer of sustainable distributed energy, executed agreements to secure RNG supply from two production facilities that are designed to convert landfill waste gases to RNG (EDL Facilities).

The first facility was completed and commenced delivery of RNG to Ohio Renewables in September 2024.

Upon reaching this milestone, Ohio Renewables paid $ 26.0 million to the EDL subsidiary.

The second facility was completed and commenced delivery of RNG to Ohio Renewables in December 2024 at which time Ohio Renewables made an additional payment of $ 25.4 million to the EDL subsidiary.

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 at a contractually specified price.

Ohio Renewables has contracted to sell the supply obtained from EDL at fixed-prices to investment grade counterparties.

Ohio Renewables has contracted to sell RNG produced by the EDL Facilities up to certain specified volumes in each of calendar years 2024 through 2026 to an investment-grade counterparty.

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.

We currently estimate RNG volumes to be sold pursuant to this agreement to be approximately 2,430,000 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 of RNG under a long-term agreement with an investment-grade utility beginning in 2025 and extending through 2042.

Amounts 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.

Under the current contract, if less than 75% of the contracted volumes of RNG are not delivered on an annual basis, Ohio Renewables is obligated to pay the per MMbtu price for volumes between the amount delivered and 75% of the contracted volumes on an annual basis.

ENVIRONMENTAL MATTERS

14 unchanged sentences

Oregon recoveries are subject to an earnings test.

See Part II, Item 7, "Results of Operations—Regulatory Matters—Rate Mechanisms— Environmental Cost Deferral and Recovery ", and Note 2 and Note 17 of the Consolidated Financial Statements in Item 8 of this report for more information.

See Part II, Item 7, "Results of Operations—Regulatory Matters—Rate Mechanisms— Environmental Cost Deferral and Recovery ", and Note 2 and Note 17 to the Consolidated Financial Statements in Item 8 of this report for more information.

Greenhouse Gas Matters

14 unchanged sentences

NW Natural's labor agreement with members of OPEIU covers wages, benefits, and working conditions.

In November 2019, NW Natural's unionized employees ratified a collective bargaining agreement that took effect on December 1, 2019 and extends to May 31, 2024, and thereafter from year to year unless either party serves notice of its intent to negotiate modifications to the collective bargaining agreement.

In September 2023, OPEIU provided a notice of intent to negotiate, and negotiations are currently underway.

In May 2024, NW Natural's unionized employees ratified a collective bargaining agreement that is in effect June 1, 2024 through May 31, 2028, and is effective thereafter from year to year unless either party serves notice of its intent to negotiate modifications to the collective bargaining agreement.

The terms of the collective bargaining agreement include the following items:

a 6% wage increase effective June 1, 2024 and scheduled wage increases effective December 1 in the first year and each subsequent year of 4%;

a 401(k) contribution of 4% for employees hired after our pension plan was closed on December 31, 2009;

and a 401(k) match of 50% of the first 8% of savings.

During calendar year 2024, NW Natural did not incur any work stoppages (strikes or lockouts), and therefore, experienced zero idle days for the year.

1 unchanged sentence

Those services are generally charged to the entity receiving those services.

When such services involve regulated entities, those entities receiving services are generally charged rates pursuant to shared services agreements that are filed with the applicable state regulatory commission, as applicable.

When such services involve regulated entities, those entities receiving services are generally

charged rates pursuant to shared services agreements that are filed with the applicable state regulatory commission, as applicable.

Safety is one of our greatest responsibilities to employees.

6 unchanged sentences

We also host natural gas safety training events for ﬁrst responders, which are designed to prepare those first responders and NW Natural field employees to deliver an integrated, seamless response in the event of an emergency that involves or affects the natural gas system.

We also implemented a new learning management system that went live in early 2021 and provides more efficiency and flexibility in how we train.

We also have a learning management system that provides virtual training options and more efficiency and flexibility in how we train.

Employee Benefits and Support

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Talent Attraction and Development

In order to implement our business strategy and serve our customers, we depend upon our continuing ability to attract and retain diverse, talented professionals and a technically skilled workforce, and being able to transfer the knowledge and expertise of our workforce to new and increasingly diverse employees as our older workforce retires.

In order to implement our business strategy and serve our customers, we depend upon our continuing ability to attract and retain talented professionals and a technically skilled workforce, and being able to transfer the knowledge and expertise of our workforce to new and increasingly diverse employees as our older workforce retires.

A significant portion of our workforce is currently eligible or will reach retirement eligibility within the next five years, and therefore, we are focused on efforts to attract, train, and retain appropriately qualified and skilled workers to prevent loss of institutional knowledge or skills gaps.

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We have a longstanding commitment to creating a diverse and inclusive culture that reflects and supports the communities we serve, and believe a diverse, equitable, and inclusive workforce at all levels contributes to long-term success.

Our efforts in recruiting, promoting, and retaining diverse talent, building inclusive teams, and creating a culture that embraces differences are at the core of our workforce strategy.

To attract diverse candidates, we work with community partners to help promote awareness of job opportunities within diverse communities.

We have employee-led groups that develop programs and activities that build awareness around issues important to their co-workers, families, customers, and our community.

Groups include the Diversity, Equity & Inclusion Council, Women's Network, African American, Rainbow Alliance (LGBTQ+), Veterans, Somos Unidos (Latinx), Asian American, and Neurodiversity employee resource groups, Wellness Advisory Committee, and Sustainability and Equity Engagement Team.

We also continue to emphasize diversity, equity and inclusion values through employee training and education, including expanded diversity training as part of new hire onboarding and other diversity, equity, and inclusion education that occurs throughout the year.

An area of focus going forward is to understand and increase awareness of internal systems and structures that could limit representation and equity for underrepresented employees.

To that end, we are working toward revising and refocusing new manager and new hire training to include implicit bias, diversity, equity and inclusion, and anti-racism education.

Our efforts in recruiting, promoting, and retaining diverse talent, building inclusive teams, and creating a culture that embraces differences are elements of our workforce strategy.

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

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The SEC maintains an Internet site where reports, proxy statements, and other information filed can be read, copied, and requested online at its website ( www.sec.gov ).

In addition, we make available, free of charge, on our website ( www.nwnaturalholdings.com ), our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) and proxy materials filed under Section 14 of the Securities Exchange Act of 1934, as amended (Exchange Act), as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

file such material with, or furnish it to, the SEC.

We intend to use our website as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.

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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.

What changed 10-K

Item 1. Business