1 unchanged sentence
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.
+Added: Management monitors and manages these financial exposures as an integral part of NW Holdings' and NW Natural's overall risk management program.
The following describes NW Holdings' and NW Natural's exposure to these risks, as applicable.
1 unchanged sentence
NW Natural enters into spot, short-term, and long-term natural gas supply contracts, along with associated pipeline transportation contracts, to manage commodity supply risk.
−Removed: NW Natural has arranged for physical delivery of an adequate supply of gas, including gas in its Mist storage facility and other off-system storage facilities, to meet expected requirements of core NGD customers.
+Added: NW Natural has arranged for physical delivery of an adequate supply of gas, including gas in its Mist storage facility and other off-system storage facilities, to meet expected requirements of core NWN Gas Utility customers.
NW Natural's long-term gas supply contracts are primarily index-based and subject to monthly re-pricing, a strategy that is intended to substantially mitigate credit exposure to physical gas counterparties.
2 unchanged sentences
Natural gas commodity prices are subject to market fluctuations due to unpredictable factors including weather, pipeline transportation congestion, drilling technologies, market speculation, governmental tariffs and other factors that affect supply and demand.
−Removed: Commodity price risk is primarily 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: For NW Natural, commodity price risk is primarily hedged with financial swaps, storage and physical gas reserves from a long-term investment in working interests in gas leases operated by Jonah Energy.
These hedges are generally included in NW Natural's annual PGA filing for recovery, subject to a regulatory prudence review.
1 unchanged sentence
The fair value of financial swaps, based on market prices at December 31, 2025, was an unrealized loss of $71.1 million, which would result in cash outflows of $61.0 million in 2026, $7.2 million in 2027, and $2.9 million in 2028.
+Added: For SiEnergy, fluctuations in commodity gas prices are included in the PGA and passed onto customers.
Interest Rate Risk
3 unchanged sentences
NW Holdings and NWN Water entered into interest rate swaps transactions for a total notional amount of $155 million to manage variable interest rate risk in December 2022.
−Removed: Unrealized gains related to these interest rate swap agreements totaled $0.2 million and $0.2 million, net of tax, as of December 31, 2024 and 2023, respectively.
+Added: Unrealized gains related to these interest rate swap agreements were immaterial as of December 31, 2025 and December 31, 2024.
Foreign Currency Risk
2 unchanged sentences
Notional amounts under foreign currency forward contracts were $8.6 million and $10.3 million as of December 31, 2025 and 2024, respectively.
−Removed: If all of the foreign currency forward contracts had been settled on December 31, 2024, a loss of $0.5 million would have been realized.
+Added: If all of the foreign currency forward contracts had been settled on December 31, 2025, an immaterial gain would have been realized.
Credit Exposure to Natural Gas Suppliers
2 unchanged sentences
NW Natural evaluates and monitors suppliers’ creditworthiness and maintains the ability to require additional financial assurances, including deposits, letters of credit, or surety bonds, in case a supplier defaults.
−Removed: In the event of a supplier’s failure to deliver contracted volumes of gas, the NGD business would need to replace those volumes at prevailing market prices, which may be higher or lower than the original transaction prices.
+Added: In the event of a supplier’s failure to deliver contracted volumes of gas, the NWN Gas Utility business would need to replace those volumes at prevailing market prices, which may be higher or lower than the original transaction prices.
NW Natural expects these costs would be subject to its PGA sharing mechanism discussed above.
30 unchanged sentences
NW Natural has a weather normalization mechanism in Oregon;
−Removed: however, it is exposed to weather risk primarily from NGD business operations.
−Removed: A large percentage of NGD margin is volume driven, and current rates are based on an assumption of average weather.
−Removed: NW Natural's weather normalization mechanism in Oregon is for residential and small commercial customers, which is intended to stabilize the recovery of NGD business fixed costs and reduce fluctuations in customers’ bills due to colder or warmer than average weather.
+Added: however, it is exposed to weather risk primarily from NWN Gas Utility business operations.
+Added: A large percentage of NWN Gas Utility margin is volume driven, and current rates are based on an assumption of average weather.
+Added: NW Natural's weather normalization mechanism in Oregon is for residential and small commercial customers, which is intended to stabilize the recovery of NWN Gas Utility business fixed costs and reduce fluctuations in customers’ bills due to colder or warmer than average weather.
Customers in Oregon are allowed to opt out of the weather normalization mechanism.
1 unchanged sentence
In addition to the Oregon customers opting out, Washington customers account for approximately 12% of our total customer base and are not covered by weather normalization.
−Removed: The combination of Oregon and Washington customers not covered by a weather normalization mechanism is 18% o f all customers.
+Added: The combination of Oregon and Washington customers not covered by a weather normalization mechanism is 19% of all customers.
+Added: SiEnergy also has a weather normalization mechanism.
See "Results of Operations—Regulatory Matters—Rate Mechanisms— WARM " above.
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.