NWN Q1 2026 Earnings Transcript

Motley Fool Transcribing, The Motley Fool Wed, May 6, 2026 at 11:15 PM GMT+7 20 min read Image source: The Motley Fool. President and Chief Executive Officer — Justin Palfreyman Executive Vice President and Chief Financial Officer — Raymond J. Kaszuba Justin will provide highlights from the first quarter 2026, a regulatory update, and a look forward. Raymond J. Kaszuba will walk through our financial results and guidance. After Justin and Raymond J. Kaszuba’s prepared remarks, we will host a question and answer session. With that, I will turn the call over to Justin. Justin Palfreyman: Thanks, Nikki. Good morning, and welcome, everyone. Overall, the first quarter results were strong and in line with our expectations, reflecting another quarter of solid execution, putting us on solid footing for the year. As a result, we reaffirmed our 2026 and long-term guidance. Our gas utility systems performed very well over the heating season. Our team delivered strong operational performance across all our utilities and we produced healthy customer growth. Importantly, the quarter underscored the strength of the Northwest Natural Holding Company platform and the stability of having three distinct regulated utility businesses, making our results more predictable. We are well positioned to drive durable long-term growth while maintaining our core commitment to providing safe, reliable, and affordable service to our customers. Our focus remains on disciplined execution, steady earnings growth, and attractive overall shareholder returns. Related to that, we made meaningful progress on our regulatory initiatives this year. Let me highlight a few of our recent filings. In March, Northwest Natural filed a multi-party settlement with the Washington Utilities and Transportation Commission resolving all the revenue requirement aspects of our multiyear general rate case. While it remains subject to commission approval, the outcome is constructive for both customers and shareholders. The settlement provides for annual revenue requirement increases over three years, including $20.1 million in the first year beginning 08/01/2026, $7.7 million in the second year, and $8.7 million in the third year. The settlement includes a capital structure of 50% equity and 50% long-term debt and a return on equity of 9.5%. In Oregon, we remain constructively engaged with staff and parties on multiyear rate case rulemaking. As we have seen in other jurisdictions, we believe multiyear rate cases could provide greater clarity and predictability for both customers and utilities. While we await the outcome of the multiyear framework in Oregon, which could extend into 2027, we filed an alternative rate mechanism to help recover certain safety, IT, and large public works investments. The proposal contemplates a modest 1.5% rate increase beginning 10/31/2026. We have had productive conversations with staff and continue working closely with parties to reach agreement on the docket. Until the multiyear rulemaking process concludes, we have the ability to recover our investments through additional mechanisms or general rate cases. In addition, we have made progress on regulatory initiatives in our other key businesses. On May 4, 2026, C Energy filed a general rate case with the Texas Railroad Commission. The filing consolidates C Energy and the recently acquired Pines Gas entities, simplifying both our regulatory structure and operations in Texas. We are requesting a $12 million revenue requirement increase over current rates. This increase is based on a 10.75% return on equity, a cost of capital of 8.73%, and a capital structure of 60% equity and 40% long-term debt, which is consistent with other Texas gas utilities. This request includes an increase in average rate base of $176.9 million since the last rate case, for a total rate base of $343.1 million. In addition to the existing beneficial mechanisms from Texas House Bill 4384 and weather normalization, we are requesting the factors necessary to file for the Gas Reliability Infrastructure Program, or GRIP. This mechanism would further align capital investment with timely cost recovery. Even after the increase, C Energy’s rates are projected to be competitive with peers in the state. Turning to our water and wastewater business, as it scales, we are beginning to see a more consistent regulatory cadence. In 2025, we completed seven rate cases. We currently have four open rate cases in Oregon, Texas, and Arizona. Foothills, our largest water and wastewater utility, has made substantial investments over the several years. That trend continues in 2026 as we invest in water storage and treatment to support growth in the region. In Q1, we received approval for our second certificate of convenience and necessity expansion, adding to our service territory in Arizona. We are excited to serve these growing communities and are committed to making the necessary investments to provide safe, reliable water an

NWN Q1 2026 Earnings Transcript

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NWN Q1 2026 Earnings Transcript

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