Portland, OR-based NW Natural finessed its natural gas supply and storage operations to avoid excessive extra costs during February, which helped lift first quarter profits by more than 20%, the CEO said last week.
“During a widespread freeze in Oregon in February, our teams successfully managed gas operations to mitigate impacts on customers,” CEO David Anderson said during the quarterly call. “Additionally, through a third party we were able to optimize our supply portfolio, capturing asset management revenues. While many areas of the country will experience significantly elevated bills, our customers will fare quite well.”
Oregon’s freeze coincided with Winter Storm Uri, which affected Texas and the Midcontinent . While NW Natural’s utility system performed well overall, it had to purchase additional gas supplies at higher-than-anticipated prices.
“However, our third-party marketer provided incremental asset management revenues, which more than offset the cost of the incremental gas purchases. The effect of these transactions was a $6.5 million benefit for customers,” Anderson said.
The company also is focusing on decarbonization. “We believe climate change demands rapid innovation and collective action, which is why we’re committed to reimagining the role of our system and the fuel we deliver,” Anderson said. The company has set a 30% carbon reduction goal for 2035, using 2015 as the baseline.
The utility is following the lead of Oregon’s Senate Bill 98, which authorizes utilities to pursue increased production and use of renewable natural gas (RNG), commingled with natural gas. It also sets goals for renewable use statewide by 2050.
“We are ahead of our carbon reduction goal, and results through 2020 show we’re on track to meet the 2050 target,” said Anderson. Results achieved so far were driven by past efficiency and decarbonization efforts, he noted.
The long-term vision is to be a “carbon-neutral energy provider” by 2050.
Regarding RNG, Vice President Justin Palfreyman, who oversees strategy and business development, said NW Natural is “engaged in a lot of discussions at this time around both investment and procurement…We expect to continue to make both investments and purchases as we decarbonize our product.”
Net income was $59.5 million ($1.94/share) in 1Q2021, compared with $48.3 million ($1.58) for the same period last year.
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