Northwest Natural Gas (NYSE:NWN) said it expects 2026 earnings per share to land in the top half of its previously issued $2.95 to $3.15 guidance range, citing stronger-than-expected first-half performance, increased visibility into the second half and continued cost management.
Northwest Natural Holdings reported second-quarter earnings per share of $0.01, unchanged from the prior-year period and above management’s expectations. Year-to-date EPS was $2.33, compared with adjusted EPS of $2.28 in the first half of 2025.
Gas Utility Regulatory Developments
At Northwest Natural Gas, the company said it has filed a multiparty settlement in its Oregon alternative rate mechanism proceeding. The settlement would provide a $13 million revenue requirement, compared with the company’s original $15.6 million request. Management expects an Oregon Public Utility Commission order later in 2026, with new rates targeted to take effect Oct. 31, 2026.
The company is also participating in Oregon’s multiyear rate-plan rulemaking process. Phase I has concluded and addressed concepts including five-year rate plans, revenue indexing and capital-funding mechanisms. Phase II is underway and is expected to establish further details, with the full process projected to conclude before the end of 2027.
Under the current schedule, Northwest Natural expects to file its first multiyear general rate case under the prospective rules in 2028, with resulting rates effective in 2029. Palfreyman said the company has other options, including traditional rate cases, to support timely investment recovery before then.
In Washington, the company received an order in its multiyear rate case that granted more than 80% of its requested revenue-requirement increase. The order established a 50% equity and 50% long-term debt capital structure and a 9.5% return on equity. It also preserved the line-extension allowance for prospective customers. New Washington rates took effect Aug. 1.
Northwest Natural invested more than $165 million in gas-system infrastructure during the first half of 2026, supporting customer growth, system reliability and modernization, according to management.
Texas Growth and Water Business Updates
SiEnergy, the company’s Texas gas utility, reported organic customer growth of more than 15% during the quarter. Management said it has more than 260,000 future meters in its backlog and continues to expect annual customer growth of roughly 15% to 20% through 2030.
SiEnergy filed a rate case with the Railroad Commission of Texas on May 4. The company said it continues to work through the case, including elements needed to implement its GRIP mechanism, and expects new rates later in 2026.
SiEnergy generated EPS of $0.05 in the second quarter, up from $0.03 a year earlier. Chief Financial Officer Ray Kaszuba attributed the increase primarily to customer growth, deferred depreciation, interest and general taxes, as well as a full quarter of contribution from Pines, which was acquired in June 2025.
Northwest Natural Water recorded 3.4% customer growth for the 12 months ended June 30. Its second-quarter EPS was $0.05, compared with $0.07 in the year-earlier quarter. Kaszuba said higher revenue from organic growth and acquisitions was offset by higher operations and maintenance costs tied to platform integration and centralization.
The water operation has four active rate cases across Oregon, Texas and Arizona. In Arizona, the company is pursuing formula rates for Foothills to better align recovery with ongoing infrastructure investment. Management also said it continues consolidation efforts in multiple jurisdictions.
MX3 Project and Capital Plan
The company said its MX3 gas-storage expansion project remains on schedule despite an appeal of its recently approved conditional-use permit. The Columbia County Board of Commissioners unanimously approved the permit, but an appeal has been filed with the Land Use Board of Appeals.
MX3 is a $300 million, federally regulated storage expansion that is expected to add four to five billion cubic feet of capacity. The project is fully contracted under 25-year agreements and is structured with a 12.5% return on equity and a 50% equity capital structure, according to the company.
Management continues to expect a notice to proceed by the end of 2027 and an in-service date in 2029. Once notice to proceed is received, Northwest Natural expects MX3 to support an increase in its long-term earnings-growth target to 5% to 7%, from its current 4% to 6% target through 2030.
The company reaffirmed planned 2026 capital expenditures of approximately $500 million to $550 million. It expects to fund investments through operating cash flow, about $150 million of net long-term debt issuance and roughly $40 million to $50 million of equity issued through its at-the-market program.
In June, Northwest Natural completed its inaugural $75 million water bond issuance after its water debt received an investment-grade A- rating. The company ended the quarter with approximately $628 million of available liquidity.
Kaszuba said SiEnergy and the water business are still expected to contribute approximately 25% of total company EPS in 2026. He added that Northwest Natural expects its gas-utility operations and maintenance expense to come in below its original plan, while stronger second-half results are expected to benefit from new Washington rates and the planned Oregon alternative rate mechanism implementation.
About Northwest Natural Gas (NYSE:NWN)
Northwest Natural Gas (NYSE: NWN), commonly known as NW Natural, is a publicly traded energy utility primarily engaged in the distribution of natural gas to residential, commercial and industrial customers. Headquartered in Portland, Oregon, the company operates an extensive pipeline network spanning thousands of miles across Oregon and southwest Washington. Its core business activities include gas procurement, system operation and maintenance, safety inspections and customer service support.
Dating back to the mid-19th century, Northwest Natural traces its origins to the Portland Gas Light Company, which first illuminated Portland streets with manufactured gas in 1859.
