Expanded use of renewable natural gas (RNG) and underground gas storage will characterize 2018 for Portland, OR-based NW Natural, as its utility rates decrease to levels not seen in more than a decade, according to CEO David Anderson.
Speaking on a quarterly earnings conference call with analysts, Anderson focused on the first nine months of this year, citing growth in customers and margins. Higher earnings to date were partially offset by lower proceeds from the company's gas storage operations. Anderson downplayed 3Q2017 results, which traditionally include red ink due to the summer effect on the gas-only utility operations.
For the third consecutive annual accounting for purchased gas costs, NW Natural has lowered gas utility rates 15% in Oregon and 18% in Washington over the past three years. "Customers are paying less for their gas now than they did 15 years ago," he said.
Commodity cost reductions strengthened NW Natural's competitive advantages in the Northwest region over electricity and oil.
The price advantage also is helping a NW Natural initiative to support the regional move to a low-carbon renewable energy future. The use of gas in homes, businesses and industry accounts for about 8% of the state's greenhouse gas emissions, Anderson said. The utility has launched a voluntary de-carbonization program centered on the use of RNG and a focus on the City of Portland.
NW Natural participates in a project through which the City of Portland is building an RNG production facility to convert biogas into pipeline quality gas that will be used to fuel the city's heavy duty vehicles, with the rest distributed through the utility's distribution pipeline network. "Currently, we are installing a fueling station for the vehicles and expect it to be operational by the end of this year," Anderson said.
At an estimated cost of $128 million, NW Natural is also expanding a storage field under an exclusive agreement with fellow Portland-based utility, Portland General Electric. "We continue to expect the majority of the construction to be completed this year," said Anderson. Plans calls for first injections into the reservoir early next year. "So far, nearly all the segments of the 13-mile connecting pipeline are connected, and in the coming weeks we'll be completing multiple pipeline tests, including hydrostatic testing and inline inspection."
NW Natural reported a net 3Q2017 loss of $8.5 million (minus 30 cents/share), compared to a loss of $8 million (minus 29 cents) for the same period last year.