NWN: Initiating at Underweight, $50 PT

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NWN: Initiating at Underweight, $50 PT

the group’s average

of 7.4%, which we discuss in our industry note. Put more simply, the stock is already capturing a good

portion of the “what if Texas and Water get bigger?” argument before those businesses have fully

moved the consolidated needle.

Regulatory cadence is also better than the current sentiment gives it credit for, particularly

in Oregon. The most recent Oregon gas case, UG 520, is fully resolved and should be framed as

constructive. NW Natural’s revised request of $59.3M in revenue, was approved at $21.315M –

we note a muted earnings impact vs. the headline. The order adopted stipulations that included a

9.5% ROE and a 50% common equity / 50% long-term debt capital structure. The commission did

not appear to reject the core capital program. Even in the June stipulation, before final true-ups rate

base was $2.234B, up $144M since the prior case, and the final order moved that figure higher as

additional capital projects were completed. A lower revenue outcome can still be constructive so long

as the commission supports the capital structure, allowed return, and rate base tied to the core utility

investment plan (vs. pass through or controllable items). We think that is a positive read-through for

NWN’s Oregon regulatory backdrop and supports the argument that Oregon is more workable today

than bears often assume.

Washington is the more immediate gas catalyst for 2026, but it is not final yet. In UG-250610, NW

Natural filed its first three-year rate plan under Washington’s MYRP framework, originally requesting ~

$25.6M in rate year 1, $8.6M in rate year 2, and $8.3M in rate year 3. On March 23, 2026, NW Natural,

Staff, The Energy Project, and AWEC filed a Partial Multiparty Settlement Stipulation proposing, ~86%