NW Natural Proposes 11% Rate Hike to Cover Advertising, Shareholder Benefits

Grab your wallets and hold them tight – NW Natural is trying to propose an 11% hike in gas rates. 

Generally, when a public utility company plans to increase its rates, they present the plan to the Oregon Public Utility Commission and explain the justification for the increase in price. Things like infrastructure improvements and streamlining of the process are justified. Sometimes, the costs catch the eye of groups that disagree with the justification. 

One such group, the Oregon Citizens’ Utility Board (CUB), has taken issue with the proposed hike for NW Natural and is currently arguing against the increase.  

“We have economists and experts that look at this case, we get to ask for data and for information from the company, we looked at all of the company surveys, we did look at the advertising, we can look at anything that they are asking customers to pay for, and say – is this appropriate or not?” said Bob Jenks, CUB executive director, to KGW 

The Public Utility Commission (PUC) estimated the increase to come out to roughly $73.5 million or 9.9%, though NW Natural is also attempting to recover other costs, such as its Lexington renewable natural gas project. In total, the full rate increase comes out to roughly $81.8 million, or 11.05%. 

Most residential customers use roughly 52.5 therms a month, leading to a monthly bill increase of $7.42 beginning on Nov. 1, 2022. An NW Natural spokesperson said in a statement that the rate increase would be used, “to recover increased operating costs and investments in the distribution system, resources for replacing end-of-life technology infrastructure, seismic resiliency work, inflationary pressures, and other costs incurred since 2021.” 

The issue, though, is that this increase doesn’t just cover “operating” cost increases, but also brings a boost to advertising and promotion budgets, as well as a hefty bump to shareholder benefits. 

Jenks later added that the seven-dollar cost being quoted just isn’t realistic, saying, “Gas bills are really a winter bill – it’s primarily about heating your house in the winter. So most of your gas costs go between November and February in those months. You’re not going to get a seven dollar increase, you’re going to get a $15 or $20 increase because it’s coming on $150 or $200 bills.” 

More evidence and testimony from both parties is expected over the upcoming months as they argue their cases to the PUC. After negotiations, the rates proposed may drop, though that decision remains solely on the shoulders of the PUC in October. 

By Ethan Hauck