Northwest Natural Holding Co (NYSE: NWN)

Northwest Natural Holding Co, commonly known by its stock symbol NWN, is a company that operates primarily in the natural gas distribution industry. Its largest subsidiary, NW Natural, distributes natural gas to residential, commercial, and industrial customers in Oregon and southwest Washington.

NW Natural's business is divided into two main segments: Natural Gas Distribution (NGD) and Water and Wastewater Utilities. The NGD segment is the largest and most significant segment, providing natural gas service through approximately 799,000 meters in Oregon and southwest Washington. This segment serves a diverse customer base of residential, commercial, and industrial customers, with no individual customer accounting for more than 10% of NW Natural's or NW Holdings' revenues. The NGD segment is seasonal in nature, with higher gas usage by residential and commercial customers during the cold winter heating months.

NW Natural competes with other forms of energy in each customer class, including electricity, fuel oil, and propane. The company has a diverse portfolio of short-, medium-, and long-term firm gas supply contracts and a variety of contract types, including firm and interruptible supplies, as well as supplemental supplies from gas storage facilities. NW Natural purchases gas supplies primarily from the Alberta and British Columbia provinces of Canada and multiple receipt points in the U.S. Rocky Mountains to protect against regional supply disruptions and to take advantage of price differentials. The company also has a strategy to reduce the carbon content and environmental impacts of the energy it delivers, including purchasing renewable natural gas (RNG) and investing in RNG facilities.

The NGD segment is subject to regulation by the Oregon Public Utility Commission (OPUC) and Washington Utilities and Transportation Commission (WUTC), which authorize rates and allow recovery mechanisms to provide the opportunity to recover prudently incurred capital and operating costs from customers, while also earning a reasonable return on investment for investors. NW Natural files general rate cases and rate tariff requests periodically with the OPUC and WUTC to establish approved rates and other revenue/cost deferral and recovery mechanisms.

NW Natural Water Company, LLC (NWN Water) is a subsidiary of NW Natural that provides water and wastewater utility operations and water services to approximately 180,000 people across five states. NWN Water continues to grow through customer additions within or near its service territories and pursues acquisitions.

NW Natural has a strong competitive position in the natural gas distribution market, with an exclusive service territory in Oregon and southwest Washington. The company's diverse portfolio of gas supply contracts and its strategy to reduce the carbon content and environmental impacts of its energy deliveries provide a competitive advantage. Additionally, NW Natural's regulated rate structure and recovery mechanisms provide a stable source of revenue.

The company's customers are primarily located in Oregon and southwest Washington, with a smaller portion located in Washington. NW Natural serves residential, commercial, and industrial customers, with no individual customer accounting for more than 10% of NW Natural's or NW Holdings' revenues. NW Natural's NGD margin, earnings, and cash flow may be negatively affected if the company is unable to sustain customer growth rates due to building codes and increased competition.