Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 26, 2018 | |
Document and Entity Information [Line Items] | ||
Entity Central Index Key | 73,020 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Registrant Name | NORTHWEST NATURAL GAS COMPANY | |
Entity Common Stock Shares Outstanding | 28,844,190 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Northwest Natural Holding Company [Member] | ||
Document and Entity Information [Line Items] | ||
Entity Central Index Key | 1,733,998 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Registrant Name | NORTHWEST NATURAL HOLDING COMPANY | |
Entity Common Stock Shares Outstanding | 28,844,682 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Operating revenues | $ 91,239 | $ 86,213 | $ 479,441 | $ 516,413 |
Operating expenses: | ||||
Cost of gas | 25,538 | 27,239 | 175,697 | 223,855 |
Operations and maintenance | 37,569 | 34,267 | 115,120 | 106,710 |
Environmental remediation | 1,022 | 1,355 | 7,528 | 10,920 |
General taxes | 7,589 | 7,540 | 24,792 | 23,423 |
Revenue taxes | 3,522 | 0 | 20,731 | |
Depreciation and amortization | 21,485 | 20,352 | 63,507 | 60,529 |
Other operating expenses | 625 | 0 | 2,157 | 0 |
Total operating expenses | 97,350 | 90,753 | 409,532 | 425,437 |
Income (loss) from operations | (6,111) | (4,540) | 69,909 | 90,976 |
Other income (expense), net | (312) | 139 | (1,139) | (624) |
Interest expense, net | 9,006 | 9,208 | 27,051 | 28,311 |
Income (loss) before income taxes | (15,429) | (13,609) | 41,719 | 62,041 |
Income tax (benefit) expense | (4,285) | (5,722) | 11,191 | 24,456 |
Net income (loss) from continuing operations | (11,144) | (7,887) | 30,528 | 37,585 |
Loss from discontinued operations, net of tax, | (650) | (608) | (1,783) | (3,041) |
Net income (loss) | (11,794) | (8,495) | 28,745 | 34,544 |
Other comprehensive income: | ||||
Amortization of non-qualified employee benefit plan liability, net of taxes of $55 and $98 for the three months ended and $166 and $275 for the nine months ended September 30, 2018 and 2017, respectively | 154 | 150 | 461 | 423 |
Comprehensive income (loss) | $ (11,640) | $ (8,345) | $ 29,206 | $ 34,967 |
Average common shares outstanding: | ||||
Basic (in shares) | 28,815 | 28,678 | 28,787 | 28,653 |
Diluted (in shares) | 28,815 | 28,678 | 28,846 | 28,734 |
Earnings (loss) from continuing operations per share of common stock: | ||||
Basic (in dollars per share) | $ (0.39) | $ (0.28) | $ 1.06 | $ 1.32 |
Diluted (in dollars per share) | (0.39) | (0.28) | 1.06 | 1.31 |
Loss from discontinued operations per share of common stock: | ||||
Income (Loss) Per Basic Share from Discontinued Operation, Net of Tax | (0.02) | (0.02) | (0.06) | (0.11) |
Income (Loss) Per Diluted Share from Discontinued Operation, Net of Tax | (0.02) | (0.02) | (0.06) | (0.11) |
Earnings (loss) per share of common stock: | ||||
Basic (in dollars per share) | (0.41) | (0.30) | 1 | 1.21 |
Diluted (in dollars per share) | $ (0.41) | $ (0.30) | $ 1 | $ 1.20 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Unaudited) - Parenthetical - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Other Comprehensive (Income) Loss, Defined Benefit Plan, Reclassification Adjustment from AOCI, Tax | $ 55 | $ 98 | $ 166 | $ 275 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Current assets: | |||
Cash and cash equivalents | $ 29,965 | $ 3,472 | $ 15,780 |
Accounts receivable | 25,125 | 66,236 | 21,930 |
Accrued unbilled revenue | 16,351 | 62,381 | 15,974 |
Allowance for uncollectible accounts | (394) | (956) | (459) |
Regulatory assets | 41,241 | 45,781 | 49,504 |
Derivative instruments | 2,871 | 1,735 | 2,073 |
Inventories | 53,064 | 47,577 | 59,135 |
Gas reserves | 16,916 | 15,704 | 16,218 |
Other current assets | 20,376 | 24,949 | 17,285 |
Discontinued operations current assets | 12,644 | 3,057 | 2,106 |
Total current assets | 218,159 | 269,936 | 199,546 |
Non-current assets: | |||
Property, plant, and equipment | 3,370,388 | 3,204,635 | 3,148,545 |
Less: Accumulated depreciation | 996,994 | 960,477 | 954,782 |
Total property, plant, and equipment, net | 2,373,394 | 2,244,158 | 2,193,763 |
Gas reserves | 70,556 | 84,053 | 87,876 |
Regulatory assets | 333,917 | 356,608 | 345,352 |
Derivative instruments | 861 | 1,306 | 1,555 |
Other investments | 65,113 | 66,363 | 69,245 |
Goodwill | 6,563 | 0 | 0 |
Other non-current assets | 12,844 | 6,505 | 4,192 |
Discontinued operations - non-current assets | 0 | 10,817 | 204,078 |
Total non-current assets | 2,863,248 | 2,769,810 | 2,906,061 |
Total assets | 3,081,407 | 3,039,746 | 3,105,607 |
Current liabilities: | |||
Short-term debt | 100,500 | 54,200 | 0 |
Current maturities of long-term debt | 84,940 | 96,703 | 21,995 |
Accounts payable | 80,143 | 111,021 | 87,123 |
Taxes accrued | 13,074 | 18,883 | 11,933 |
Interest accrued | 9,453 | 6,773 | 9,854 |
Regulatory liabilities | 37,504 | 34,013 | 34,659 |
Derivative instruments | 8,828 | 18,722 | 8,968 |
Other current liabilities | 35,497 | 39,942 | 27,218 |
Discontinued operations - current liabilities | 13,003 | 1,593 | 1,201 |
Total current liabilities | 382,942 | 381,850 | 202,951 |
Long-term debt | 724,654 | 683,184 | 757,429 |
Deferred credits and other non-current liabilities: | |||
Deferred tax liabilities | 274,315 | 270,526 | 572,293 |
Regulatory liabilities | 606,175 | 586,093 | 363,838 |
Pension and other postretirement benefit liabilities | 212,249 | 223,333 | 212,259 |
Derivative instruments | 3,016 | 4,649 | 3,926 |
Other non-current liabilities | 140,475 | 135,292 | 134,123 |
Discontinued operations - non-current liabilities | 0 | 12,043 | 12,106 |
Total deferred credits and other non-current liabilities | 1,236,230 | 1,231,936 | 1,298,545 |
Commitments and contingencies (Note 15) | |||
Equity: | |||
Common stock - no par value; authorized 100,000 shares; issued and outstanding 28,844, 28,713, and 28,736 at September 30, 2018 and 2017, and December 31, 2017, respectively | 455,499 | 448,865 | 447,129 |
Retained earnings | 290,059 | 302,349 | 406,081 |
Accumulated other comprehensive loss | (7,977) | (8,438) | (6,528) |
Total equity | 737,581 | 742,776 | 846,682 |
Total liabilities and equity | $ 3,081,407 | $ 3,039,746 | $ 3,105,607 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) - Parenthetical - shares shares in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Statement of Financial Position [Abstract] | |||
Common stock, shares outstanding (in shares) | 28,844 | 28,736 | 28,713 |
Common stock, shares authorized (in shares) | 100,000 | 100,000 | 100,000 |
Common stock, shares issued (in shares) | 28,844 | 28,736 | 28,713 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating activities: | ||
Net income | $ 28,745 | $ 34,544 |
Adjustments to reconcile net income to cash provided by operations: | ||
Depreciation and amortization | 63,507 | 60,529 |
Regulatory amortization of gas reserves | 12,056 | 12,036 |
Deferred income taxes | 3,954 | 17,287 |
Qualified defined benefit pension plan expense | 4,450 | 3,923 |
Contributions to qualified defined benefit pension plans | (11,690) | (15,400) |
Deferred environmental expenditures, net | (10,547) | (10,468) |
Amortization of environmental remediation | 7,528 | 10,920 |
Regulatory revenue deferral from the TCJA | 6,983 | 0 |
Other | 1,541 | 2,522 |
Changes in assets and liabilities: | ||
Receivables, net | 83,194 | 90,311 |
Inventories | (5,134) | (5,372) |
Income taxes | (5,809) | (216) |
Accounts payable | (22,929) | (29,282) |
Interest accrued | 2,680 | 3,888 |
Deferred gas costs | 2,372 | 13,419 |
Other, net | (3,588) | 28 |
Discontinued operations | 1,216 | 4,187 |
Cash provided by operating activities | 158,529 | 192,856 |
Investing activities: | ||
Capital expenditures | (158,795) | (145,274) |
Other | (1,661) | (1,131) |
Discontinued operations | (619) | (167) |
Cash used in investing activities | (161,075) | (146,572) |
Financing activities: | ||
Repurchases related to stock-based compensation | 0 | (2,034) |
Proceeds from stock options exercised | 1,368 | 3,711 |
Long-term debt issued | 50,000 | 100,000 |
Long-term debt retired | (22,000) | (40,000) |
Change in short-term debt | 46,300 | (53,300) |
Cash dividend payments on common stock | (38,387) | (40,390) |
Stock purchases related to acquisitions | (7,951) | 0 |
Other | (291) | (2,012) |
Cash provided by (used in) financing activities | 29,039 | (34,025) |
Increase in cash and cash equivalents | 26,493 | 12,259 |
Cash and cash equivalents, beginning of period | 3,472 | 3,521 |
Cash and cash equivalents, end of period | 29,965 | 15,780 |
Supplemental disclosure of cash flow information: | ||
Interest paid, net of capitalization | 22,821 | 22,859 |
Income taxes paid, net of refunds | $ 22,047 | $ 11,581 |
NW Holdings Balance Sheet (Unau
NW Holdings Balance Sheet (Unaudited) Statement $ in Thousands | Sep. 30, 2018USD ($)shares |
Cash and cash equivalents | $ 29,965 |
Total current assets | 218,159 |
Total assets | 3,081,407 |
Common stock - no par value; authorized 100,000,000 shares; 100 issued and outstanding at September 30, 2018 | 455,499 |
Total equity | $ 737,581 |
Common Stock, Shares Authorized | shares | 100,000,000 |
Common Stock, Shares, Issued | shares | 28,844,000 |
Common Stock, Shares, Outstanding | shares | 28,844,000 |
Northwest Natural Holding Company [Member] | |
Cash and cash equivalents | $ 20,000 |
Total current assets | 20,000 |
Total assets | 20,000 |
Common stock - no par value; authorized 100,000,000 shares; 100 issued and outstanding at September 30, 2018 | 20,000 |
Total equity | $ 20,000 |
Common Stock, Shares Authorized | shares | 100,000,000 |
Common Stock, Shares, Issued | shares | 100 |
Common Stock, Shares, Outstanding | shares | 100 |
NW Holdings Statement of Cash F
NW Holdings Statement of Cash Flows (Unaudited) Statement - USD ($) $ in Thousands | 7 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Cash provided by (used in) financing activities | $ 29,039 | |
Increase in cash and cash equivalents | 26,493 | |
Cash and cash equivalents, beginning of period | 3,472 | |
Cash and cash equivalents, end of period | $ 29,965 | 29,965 |
Northwest Natural Holding Company [Member] | ||
Capital contributions | 20,000 | |
Cash provided by (used in) financing activities | 20,000 | |
Increase in cash and cash equivalents | 20,000 | |
Cash and cash equivalents, end of period | $ 20,000 | $ 20,000 |
Organization and Principles of
Organization and Principles of Consolidation | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Principles of Consolidation | 1. ORGANIZATION AND PRINCIPLES OF CONSOLIDATION On October 1, 2018, Northwest Natural Gas Company (NW Natural) and Northwest Natural Holding Company (NW Holdings) completed the reorganization into a holding company structure. NW Holdings is now the parent holding company of NW Natural, NW Natural Water Company, LLC (NWN Water) and other subsidiaries previously held by NW Natural. For further discussion, see Note 17 . These financial statements and accompanying notes are for the period ending September 30, 2018 and reflect the organizational structure prior to the reorganization. The accompanying consolidated financial statements represent the consolidated results of NW Natural and all companies NW Natural directly or indirectly controlled, either through majority ownership or otherwise as of September 30, 2018. NW Natural's regulated local gas distribution business, referred to as the utility segment, is NW Natural's core operating business and serves residential, commercial, and industrial customers in Oregon and southwest Washington. The other category primarily includes the non-utility portion of the Mist gas storage facility that provides storage services for utilities, gas marketers, electric generators, and large industrial users from facilities located in Oregon. In addition, prior to the reorganization NW Natural held regulated water services, other investments, and other non-utility activities reported as other. NW Natural's direct and indirect wholly-owned subsidiaries as of September 30, 2018 include: • NW Natural Energy, LLC (NWN Energy); ◦ NW Natural Gas Storage, LLC (NWN Gas Storage); ▪ Gill Ranch Storage, LLC (Gill Ranch), which is presented as a discontinued operation; • Northwest Energy Corporation (Energy Corp); ◦ NWN Gas Reserves LLC (NWN Gas Reserves); • NNG Financial Corporation (NNG Financial); • NW Natural Water Company, LLC (NWN Water); ◦ Falls Water Co., Inc. (Falls Water); ◦ Cascadia Water, LLC (Cascadia); • Northwest Natural Holding Company (NW Holdings); and ◦ NWN Merger Sub, Inc. (NWN Holdco Sub). NW Holdings' direct and indirect wholly-owned subsidiaries as of the filing date of this report include: • Northwest Natural Gas Company (NW Natural); ◦ Northwest Energy Corporation (Energy Corp); • NWN Gas Reserves LLC (NWN Gas Reserves); • NW Natural Energy, LLC (NWN Energy); ◦ NW Natural Gas Storage, LLC (NWN Gas Storage); ▪ Gill Ranch Storage, LLC (Gill Ranch), which is presented as a discontinued operation; • NNG Financial Corporation (NNG Financial); • NW Natural Water Company, LLC (NWN Water); ◦ Falls Water Co., Inc. (Falls Water); ◦ Salmon Valley Water Company; ◦ Cascadia Water, LLC (Cascadia); ◦ NW Natural Water of Oregon, LLC (NWN Water of Oregon); ◦ NW Natural Water of Washington, LLC; and ◦ NW Natural Water of Idaho, LLC. Investments in corporate joint ventures and partnerships that the registrant does not directly or indirectly control, and for which it is not the primary beneficiary, include NWN Energy's investment in Trail West Holdings, LLC (TWH), which is accounted for under the equity method, and NNG Financial's investment in Kelso-Beaver Pipeline. The consolidated financial statements are presented after elimination of all intercompany balances and transactions. In this report, the term “ utility ” is used to describe NW Natural's regulated gas distribution business, and the term “ non-utility ” is used to describe the non-utility portion of the Mist gas storage facility and other non-utility investments and business activities. Information presented in these interim consolidated financial statements is unaudited, but includes all material adjustments management considers necessary for a fair statement of the results for each period reported including normal recurring accruals. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in NW Natural's 2017 Annual Report on Form 10-K ( 2017 Form 10-K), taking into consideration the changes mentioned below in this Note 1 and in Notes 4 and 15, as reflected in Exhibit 99.1 to the Current Report on Form 8-K (Form 8-K) filed on September 24, 2018. A significant part of NW Natural's business is of a seasonal nature; therefore, results of operations for interim periods are not necessarily indicative of full year results. During the second quarter of 2018, we moved forward with NW Natural's long-term strategic plans, which include a shift away from the California gas storage business. In June 2018, NWN Gas Storage, a wholly-owned subsidiary, entered into a Purchase and Sale Agreement that provides for the sale of all of the membership interests in its wholly-owned subsidiary, Gill Ranch, subject to various regulatory approvals and closing conditions. We have concluded that the pending sale of Gill Ranch qualifies as assets and liabilities held for sale and discontinued operations. As such, for all periods presented, the results of Gill Ranch have been presented as a discontinued operation on the consolidated statements of comprehensive income and cash flows, and the assets and liabilities associated with Gill Ranch have been classified as discontinued operations assets and liabilities on the consolidated balance sheets. See Note 16 for additional information. Additionally, we reevaluated reportable segments and concluded that the remaining gas storage activities no longer meet the requirements to be separately reported as a segment. The non-utility portion of the Mist gas storage facility is now reported as other, and all prior periods reflect this change. See Note 4, which provides segment information. These reclassifications had no effect on the prior year's consolidated results of operations, financial condition, or cash flows. NW Holdings was formed on March 7, 2018. The accompanying financial statements for NW Holdings are provided in accordance with Exchange Act Rules 13a-13 and 15d-13. There was no income statement activity for NW Holdings during the period ended September 30, 2018 and thus no income statement is provided for NW Holdings. Prior to completing the reorganization, NW Holdings received a $20.0 million capital contribution. Notes to the consolidated financial statements reflect the activity of continuing operations for all periods presented, unless otherwise noted. Note 16 provides information regarding discontinued operations. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. SIGNIFICANT ACCOUNTING POLICIES Significant accounting policies are described in Note 2 of the 2017 Form 10-K. There were no material changes to those accounting policies during the nine months ended September 30, 2018 other than those incorporated in Note 5 , Note 13 , and Note 16 relating to revenue, business combinations and goodwill, and discontinued operations, respectively. The following are current updates to certain critical accounting policy estimates and new accounting standards. Industry Regulation In applying regulatory accounting principles, NW Natural capitalizes or defers certain costs and revenues as regulatory assets and liabilities pursuant to orders of the Oregon Public Utilities Commission (OPUC), Washington Utilities and Transportation Commission (WUTC) or Idaho Public Utilities Commission (IPUC), which provide for the recovery of revenues or expenses from, or refunds to, utility customers in future periods, including a return or a carrying charge in certain cases. Amounts deferred as regulatory assets and liabilities were as follows: Regulatory Assets September 30, December 31, In thousands 2018 2017 2017 Current: Unrealized loss on derivatives (1) $ 8,828 $ 8,887 $ 18,712 Gas costs 461 1,851 154 Environmental costs (2) 5,633 6,362 6,198 Decoupling (3) 11,990 15,663 11,227 Income taxes 2,217 4,378 2,218 Other (4) 12,112 12,363 7,272 Total current $ 41,241 $ 49,504 $ 45,781 Non-current: Unrealized loss on derivatives (1) $ 3,016 $ 3,926 $ 4,649 Pension balancing (5) 72,291 57,599 60,383 Income taxes 19,267 36,591 19,991 Pension and other postretirement benefit liabilities 165,741 172,687 179,824 Environmental costs (2) 63,464 63,339 72,128 Gas costs 14 48 84 Decoupling (3) 829 1,025 3,970 Other (4) 9,295 10,137 15,579 Total non-current $ 333,917 $ 345,352 $ 356,608 Regulatory Liabilities September 30, December 31, In thousands 2018 2017 2017 Current: Gas costs $ 20,716 $ 16,459 $ 14,886 Unrealized gain on derivatives (1) 2,862 2,020 1,674 Decoupling (3) 1,697 314 322 Other (4) 12,229 15,866 17,131 Total current $ 37,504 $ 34,659 $ 34,013 Non-current: Gas costs $ 1,409 $ 1,015 $ 4,630 Unrealized gain on derivatives (1) 861 1,555 1,306 Decoupling (3) 119 — 957 Income taxes (6) 223,841 — 213,306 Accrued asset removal costs (7) 375,257 356,106 360,929 Other (4) 4,688 5,162 4,965 Total non-current $ 606,175 $ 363,838 $ 586,093 (1) Unrealized gains or losses on derivatives are non-cash items and therefore, do not earn a rate of return or a carrying charge. These amounts are recoverable through utility rates as part of the annual Purchased Gas Adjustment (PGA) mechanism when realized at settlement. (2) Refer to footnote (3) per the Deferred Regulatory Asset table in Note 15 for a description of environmental costs. (3) This deferral represents the margin adjustment resulting from differences between actual and expected volumes. (4) Balances consist of deferrals and amortizations under approved regulatory mechanisms and typically earn a rate of return or carrying charge. (5) Refer to footnote (1) of the Net Periodic Benefit Cost table in Note 8 for information regarding the deferral of pension expenses. (6) This balance represents estimated amounts associated with the Tax Cuts and Jobs Act. See Note 9 . (7) Estimated costs of removal on certain regulated properties are collected through rates. We believe all costs incurred and deferred at September 30, 2018 are prudent. All regulatory assets and liabilities are reviewed annually for recoverability, or more often if circumstances warrant. If we should determine that all or a portion of these regulatory assets or liabilities no longer meet the criteria for continued application of regulatory accounting, then NW Natural would be required to write-off the net unrecoverable balances in the period such determination is made. New Accounting Standards We consider the applicability and impact of all accounting standards updates (ASUs) issued by the Financial Accounting Standards Board (FASB). ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on NW Natural's consolidated financial position or results of operations. Recently Adopted Accounting Pronouncements STOCK COMPENSATION. On May 10, 2017, the FASB issued ASU 2017-09, "Stock Compensation - Scope of Modification Accounting." The purpose of the amendment is to provide clarity, reduce diversity in practice, and reduce the cost and complexity when applying the guidance in Topic 718, related to a change to the terms or conditions of a share-based payment award. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. The amendments in this update were effective for NW Natural beginning January 1, 2018, and will be applied prospectively to any award modified on or after the adoption date. The adoption did not have a material impact to financial statements or disclosures. RETIREMENT BENEFITS. On March 10, 2017, the FASB issued ASU 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post Retirement Benefit Cost." The ASU requires entities to disaggregate current service cost from the other components of net periodic benefit cost and present it with other current compensation costs for related employees in the income statement. Additionally, the other components of net periodic benefit costs are to be presented elsewhere in the income statement and outside of income from operations, if that subtotal is presented. Only the service cost component of the net periodic benefit cost is eligible for capitalization. The amendments in this update were effective for us beginning January 1, 2018. Upon adoption, the ASU required that changes to the income statement presentation of net periodic benefit cost be applied retrospectively, while changes to amounts capitalized must be applied prospectively. As such, the interest cost, expected return on assets, amortization of prior service costs, and other costs have been reclassified from operations and maintenance expense to other income (expense), net on the consolidated statement of comprehensive income for the three and nine months ended September 30, 2017 . NW Natural did not elect the practical expedient which would have allowed us to reclassify amounts disclosed previously in the pension and other postretirement benefits footnote disclosure as the basis for applying retrospective presentation. As mentioned above, on a prospective basis, the other components of net periodic benefit cost will not be eligible for capitalization, however, they will continue to be included in the pension regulatory balancing mechanism. The retrospective presentation requirement related to the other components of net periodic benefit cost affected the operations and maintenance expense and other income (expense), net lines on the consolidated statement of comprehensive income. For the three and nine months ended September 30, 2017 , $1.4 million and $4.0 million of expense was reclassified from operations and maintenance expense and included in other income (expense), net, respectively. GOODWILL. On January 26, 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment." The ASU removes Step 2 from the goodwill impairment test and under the amended guidance an entity should perform its annual goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount in which the carrying amounts exceeds the fair value of the reporting unit. The amendments in this standard are effective for us beginning January 1, 2020 and early adoption is permitted for interim or annual goodwill impairment tests performed after January 1, 2017. NW Natural early adopted ASU 2017-04 in the third quarter ended September 30, 2018. The adoption of this ASU did not materially affect the financial statements and disclosures. STATEMENT OF CASH FLOWS. On August 26, 2016, the FASB issued ASU 2016-15, "Classification of Certain Cash Receipts and Cash Payments." The ASU adds guidance pertaining to the classification of certain cash receipts and payments on the statement of cash flows. The purpose of the amendment is to clarify issues that have been creating diversity in practice. The amendments in this standard were effective for us beginning January 1, 2018, and the adoption did not have a material impact to financial statements or disclosures as NW Natural's historical practices and presentation were consistent with the directives of this ASU. FINANCIAL INSTRUMENTS. On January 5, 2016, the FASB issued ASU 2016-01, "Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities." The ASU enhances the reporting model for financial instruments, which includes amendments to address aspects of recognition, measurement, presentation, and disclosure. The new standard was effective for us beginning January 1, 2018, and the adoption did not materially impact financial statements or disclosures. REVENUE RECOGNITION. On May 28, 2014, the FASB issued ASU 2014-09 "Revenue From Contracts with Customers." The underlying principle of the guidance requires entities to recognize revenue depicting the transfer of goods or services to customers at amounts the entity is expected to be entitled to in exchange for those goods or services. The ASU also prescribes a five-step approach to revenue recognition: (1) identify the contract(s) with the customer; (2) identify the separate performance obligations in the contract(s); (3) determine the transaction price; (4) allocate the transaction price to separate performance obligations; and (5) recognize revenue when, or as, each performance obligation is satisfied. The guidance also requires additional disclosures, both qualitative and quantitative, regarding the nature, amount, timing and uncertainty of revenue and cash flows. The new accounting standard and all related amendments were effective for us beginning January 1, 2018. NW Natural applied the accounting standard to all contracts using the modified retrospective method. The new standard is primarily reflected in the consolidated statement of comprehensive income and Note 5 . The implementation of the new revenue standard did not result in changes to how NW Natural currently recognizes revenue, and therefore, no cumulative effect or adjustment to the opening balance of retained earnings was required. The implementation did result in changes to the disclosures and presentation of revenue and expenses. The comparative information for prior years has not been restated. There is no material impact to financial results and no significant changes to NW Natural's control environment due to the adoption of the new revenue standard on an ongoing basis. As previously discussed, the adoption of the new revenue standard did not impact the consolidated balance sheet or statement of cash flows but did result in changes to the presentation of the consolidated statements of comprehensive income. Had the adoption of the new revenue standard not occurred, operating revenues for the three and nine months ended September 30, 2018 would have been $87.7 million and $458.7 million , compared to the reported amounts of $91.2 million and $479.4 million under the new revenue standard, respectively. Similarly, absent the impact of the new revenue standard, operating expenses would have been $93.9 million and $388.8 million , compared to the reported amounts of $97.4 million and $409.5 million under the new revenue standard for the three and nine months ended September 30, 2018 , respectively. The effect of the change was an increase in both operating revenues and operating expenses of $3.5 million and $20.7 million for the three and nine months ended September 30, 2018 , respectively, due to the change in presentation of revenue taxes. As part of the adoption of the new revenue standard, we evaluated the presentation of revenue taxes under the new guidance and across NW Natural's peer group and concluded that the gross presentation of revenue taxes provides the greatest level of consistency and transparency. Prior to the adoption of the new revenue standard, a portion of revenue taxes was presented net in operating revenues and a portion was recorded directly on the balance sheet. During the three and nine months ended September 30, 2018 , NW Natural recognized $3.5 million and $20.7 million in revenue taxes in operating revenues and operating expenses, respectively. In comparison, for the three and nine months ended September 30, 2017 , NW Natural recognized $3.7 million and $23.0 million in revenue taxes, of which $2.3 million and $13.3 million were recorded in operating revenues and $1.4 million and $9.7 million were recorded on the balance sheet, respectively. The change in presentation of revenue taxes had no impact on utility margin, net income or earnings per share. Recently Issued Accounting Pronouncements CLOUD COMPUTING. On August 29, 2018, the FASB issued ASU 2018-15, "Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract." The purpose of the amendment is to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The amendments in this update are effective for us beginning January 1, 2020. Early adoption is permitted. The amended guidance can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We are currently assessing the effect of this standard on financial statements and disclosures. RETIREMENT BENEFITS. On August 28, 2018, the FASB issued ASU 2018-14, "Changes to the Disclosure Requirements for Defined Benefit Plans." The purpose of the amendment is to modify the disclosure requirements for defined benefit pension and other postretirement plans. The amendments in this update are effective for us beginning January 1, 2020. Early adoption is permitted. The amended presentation and disclosure guidance should be applied retrospectively. We are currently assessing the effect of this standard on disclosures. FAIR VALUE MEASUREMENT. On August 28, 2018, the FASB issued ASU 2018-13, "Changes to the Disclosure Requirements for Fair Value Measurement." The purpose of the amendment is to modify the disclosure requirements for fair value measurements. The amendments in this update are effective for us beginning January 1, 2020. Early adoption is permitted. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty should be applied prospectively. All other amendments should be applied retrospectively. We are currently assessing the effect of this standard on disclosures. ACCUMULATED OTHER COMPREHENSIVE INCOME. On February 14, 2018, the FASB issued ASU 2018-02, "Income Statement—Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." This update was issued in response to concerns from certain stakeholders regarding the current requirements under U.S. GAAP that deferred tax assets and liabilities are adjusted for a change in tax laws or rates, and the effect is to be included in income from continuing operations in the period of the enactment date. This requirement is also applicable to items in accumulated other comprehensive income where the related tax effects were originally recognized in other comprehensive income. The adjustment of deferred taxes due to the new corporate income tax rate enacted through the Tax Cuts and Jobs Act (TCJA) on December 22, 2017 recognized in income from continuing operations causes the tax effects of items within accumulated other comprehensive income (referred to as stranded tax effects) to not reflect the appropriate tax rate. The amendments in this update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the TCJA and require certain disclosures about stranded tax effects. The amendments in this update are effective for us beginning January 1, 2019, and should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the federal corporate income tax rate in the TCJA is recognized. The reclassification allowed in this update is elective, and we are currently assessing whether NW Natural will make the reclassification. This update is not expected to have a material impact on financial condition. DERIVATIVES AND HEDGING. On August 28, 2017, the FASB issued ASU 2017-12, "Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities." The purpose of the amendment is to more closely align hedge accounting with companies’ risk management strategies. The ASU amends the accounting for risk component hedging, the hedged item in fair value hedges of interest rate risk, and amounts excluded from the assessment of hedge effectiveness. The guidance also amends the recognition and presentation of the effect of hedging instruments and includes other simplifications of hedge accounting. The amendments in this update are effective for us beginning January 1, 2019. Early adoption is permitted. The amended presentation and disclosure guidance is required prospectively. We are currently assessing the effect of this standard on financial statements and disclosures. LEASES. On February 25, 2016, the FASB issued ASU 2016-02, "Leases," which revises the existing lease accounting guidance. Pursuant to the new standard, lessees will be required to recognize all leases, including operating leases that are greater than 12 months at lease commencement, on the balance sheet and record corresponding right-of-use assets and lease liabilities. Lessor accounting will remain substantially the same under the new standard. Quantitative and qualitative disclosures are also required for users of the financial statements to have a clear understanding of the nature of NW Natural's leasing activities. On November 29, 2017, the FASB proposed an additional practical expedient that would allow entities to apply the transition requirements on the effective date of the standard. Additionally, on January 25, 2018, the FASB issued ASU 2018-01, "Land Easement Practical Expedient for Transition to Topic 842", to address the costs and complexity of applying the transition provisions of the new lease standard to land easements. This ASU provides an optional practical expedient to not evaluate existing or expired land easements that were not previously accounted for as leases under the current lease guidance. The standard and associated ASUs are effective for us beginning January 1, 2019. We are currently assessing NW Natural's lease population and material contracts to determine the effect of this standard on financial statements and disclosures. Refer to Note 14 of the 2017 Form 10-K for NW Natural's current lease commitments. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share Text Block | 3. EARNINGS PER SHARE Basic earnings per share are computed using net income and the weighted average number of common shares outstanding for each period presented. Diluted earnings per share are computed in the same manner, except using the weighted average number of common shares outstanding plus the effects of the assumed exercise of stock options and the payment of estimated stock awards from other stock-based compensation plans that are outstanding at the end of each period presented. Antidilutive stock awards are excluded from the calculation of diluted earnings per common share. Diluted earnings (loss) from continuing operations per share are calculated as follows: Three Months Ended September 30, Nine Months Ended September 30, In thousands, except per share data 2018 2017 2018 2017 Net income (loss) from continuing operations $ (11,144 ) $ (7,887 ) $ 30,528 $ 37,585 Average common shares outstanding - basic 28,815 28,678 28,787 28,653 Additional shares for stock-based compensation plans (See Note 6) — — 59 81 Average common shares outstanding - diluted 28,815 28,678 28,846 28,734 Earnings (loss) from continuing operations per share of common stock - basic $ (0.39 ) $ (0.28 ) $ 1.06 $ 1.32 Earnings (loss) from continuing operations per share of common stock - diluted $ (0.39 ) $ (0.28 ) $ 1.06 $ 1.31 Additional information: Antidilutive shares 73 96 4 15 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information Text Block | 4. SEGMENT INFORMATION We primarily operate in one reportable business segment, which is NW Natural's local gas distribution business and is referred to as the utility s egment. During the second quarter of 2018, we moved forward with long-term strategic plans, which include a shift away from the California gas storage business, by entering into a Purchase and Sale Agreement that provides for the sale of all of the membership interests in Gill Ranch, subject to various regulatory approvals and closing conditions. As such, we reevaluated reportable segments and concluded that the gas storage activities no longer meet the requirements of a reportable segment. Ongoing, non-utility gas storage activities, which include interstate storage and asset management activities at the Mist gas storage facility, are now reported as other. NW Natural also has regulated water operations, other investments, and b usiness activities not specifically related to the utility segment, which are aggregated and reported as other. We refer to NW Natural's local gas distribution business as the utility and all other activities as non-utility. Local Gas Distribution NW Natural's local gas distribution segment is a regulated utility principally engaged in the purchase, sale, and delivery of natural gas and related services to customers in Oregon and southwest Washington. As a regulated utility, NW Natural is responsible for building and maintaining a safe and reliable pipeline distribution system, purchasing sufficient gas supplies from producers and marketers, contracting for firm and interruptible transportation of gas over interstate pipelines to bring gas from the supply basins into its service territory, and re-selling the gas to customers subject to rates, terms, and conditions approved by the OPUC or WUTC. Gas distribution also includes taking customer-owned gas and transporting it from interstate pipeline connections, or city gates, to the customers’ end-use facilities for a fee, which is approved by the OPUC or WUTC. As of December 31, 2017, approximately 89% of NW Natural's customers are located in Oregon and 11% in Washington. On an annual basis, residential and commercial customers typically account for around 60% of utility total volumes delivered and 90% of utility margin. Industrial customers largely account for the remaining volumes and utility margin. A small amount of utility margin is also derived from miscellaneous services, gains or losses from an incentive gas cost sharing mechanism, and other service fees. Industrial sectors served by NW Natural include: pulp, paper, and other forest products; the manufacture of electronic, electrochemical and electrometallurgical products; the processing of farm and food products; the production of various mineral products; metal fabrication and casting; the production of machine tools, machinery, and textiles; the manufacture of asphalt, concrete, and rubber; printing and publishing; nurseries; government and educational institutions; and electric generation. In addition to NW Natural's local gas distribution business, the utility segment also includes the utility portion of the Mist underground storage facility, the North Mist gas storage expansion in Oregon, and NWN Gas Reserves, which is a wholly-owned subsidiary of Energy Corp. Other Regulated water operations, non-utility investments, and other business activities are aggregated and reported as other. Other includes NWN Gas Storage, a wholly-owned subsidiary of NWN Energy, and the non-utility portion of the Mist facility in Oregon and third-party asset management services. Earnings from non-utility assets at the Mist facility are primarily related to firm storage capacity revenues. Earnings from the Mist facility also include revenue, net of amounts shared with utility customers, from management of utility assets at Mist and upstream pipeline capacity when not needed to serve utility customers. Under the Oregon sharing mechanism, NW Natural retains 80% of the pre-tax income from these services when the costs of the capacity have not been included in utility rates, or 33% of the pre-tax income when the costs have been included in utility rates. The remaining 20% and 67% , respectively, are recorded to a deferred regulatory account for crediting back to utility customers. Other also includes NNG Financial, non-utility appliance retail center operations, NWN Water, which consolidates the regulated water operations and is pursuing other investments in the water sector itself and through its wholly-owned subsidiaries Falls Water and Cascadia, NWN Energy's equity investment in TWH, which is pursuing development of a cross-Cascades transmission pipeline project and NW Holdings, which was used in effecting the holding company reorganization of NW Natural through its wholly-owned subsidiary NWN Holdco Sub. See Note 1 for information regarding changes to NW Natural's organizational structure subsequent to September 30, 2018. All prior period amounts have been retrospectively adjusted to reflect the change in reportable segments and the designation of Gill Ranch as a discontinued operation. Inter-segment transactions were immaterial for the periods presented. The following table presents summary financial information concerning the reportable segments of continuing operations. See Note 16 for information regarding the discontinued operation, Gill Ranch. Three Months Ended September 30, In thousands Utility Other Total 2018 Operating revenues $ 85,077 $ 6,162 $ 91,239 Depreciation and amortization 21,127 358 21,485 Income (loss) from operations (9,780 ) 3,669 (6,111 ) Net income (loss) from continuing operations (11,983 ) 839 (11,144 ) Capital expenditures 55,914 511 56,425 2017 Operating revenues $ 81,126 $ 5,087 $ 86,213 Depreciation and amortization 20,023 329 20,352 Income (loss) from operations (8,624 ) 4,084 (4,540 ) Net income (loss) from continuing operations (10,349 ) 2,462 (7,887 ) Capital expenditures 50,009 932 50,941 Nine Months Ended September 30, In thousands Utility Other Total 2018 Operating revenues $ 461,525 $ 17,916 $ 479,441 Depreciation and amortization 62,436 1,071 63,507 Income from operations 59,521 10,388 69,909 Net income from continuing operations 24,930 5,598 30,528 Capital expenditures 156,609 2,186 158,795 Total assets at September 30, 2018 (1) 2,972,066 96,697 3,068,763 2017 Operating revenues $ 503,947 $ 12,466 $ 516,413 Depreciation and amortization 59,541 988 60,529 Income from operations 81,661 9,315 90,976 Net income from continuing operations 31,980 5,605 37,585 Capital expenditures 143,128 2,146 145,274 Total assets at September 30, 2017 (1) 2,835,860 63,563 2,899,423 Total assets at December 31, 2017 (1) 2,961,326 64,546 3,025,872 (1) Total assets exclude assets related to discontinued operations of $12.6 million , $206.2 million , and $13.9 million as of September 30, 2018 , September 30, 2017 , and December 31, 2017 , respectively. Utility Margin Utility margin is a financial measure used by the chief operating decision maker (CODM) consisting of utility operating revenues, reduced by the associated cost of gas, environmental recovery revenues, and revenue taxes. The cost of gas purchased for utility customers is generally a pass-through cost in the amount of revenues billed to regulated utility customers. Environmental recovery revenues represent collections received from customers through the environmental recovery mechanism in Oregon. These collections are offset by the amortization of environmental liabilities, which is presented as environmental remediation expense in operating expenses. Revenue taxes are collected from utility customers and remitted to taxing authorities. The collections from customers are offset by the expense recognition of the obligation to the taxing authority. By subtracting cost of gas, environmental remediation expense, and revenue taxes from utility operating revenues, utility margin provides a key metric used by the CODM in assessing the performance of the utility segment. The following table presents additional segment information concerning utility margin: Three Months Ended September 30, Nine Months Ended September 30, In thousands 2018 2017 2018 2017 Utility margin calculation: Utility operating revenues $ 85,077 $ 81,126 $ 461,525 $ 503,947 Less: Utility cost of gas 25,593 27,239 175,864 223,855 Environmental remediation expense 1,022 1,355 7,528 10,920 Revenue taxes (1) 3,522 — 20,731 — Utility margin $ 54,940 $ 52,532 $ 257,402 $ 269,172 (1) The change in presentation of revenue taxes was a result of the adoption of ASU 2014-09 "Revenue From Contracts with Customers" and all related amendments on January 1, 2018. This change had no impact on utility margin results as revenue taxes were previously presented net in utility operating revenue. For additional information, see Note 2 . |
Revenue Revenue
Revenue Revenue | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | 5. REVENUE The following table presents disaggregated revenue from continuing operations: Three months ended September 30, 2018 In thousands Utility Other Total Local gas distribution revenue $ 82,358 $ — $ 82,358 Gas storage revenue, net — 2,415 2,415 Asset management revenue, net — 2,714 2,714 Appliance retail center revenue — 1,033 1,033 Revenue from contracts with customers 82,358 6,162 88,520 Alternative revenue 1,994 — 1,994 Leasing revenue 725 — 725 Total operating revenues $ 85,077 $ 6,162 $ 91,239 Nine months ended September 30, 2018 In thousands Utility Other Total Local gas distribution revenue $ 455,312 $ — $ 455,312 Gas storage revenue, net — 7,189 7,189 Asset management revenue, net — 6,974 6,974 Appliance retail center revenue — 3,753 3,753 Revenue from contracts with customers 455,312 17,916 473,228 Alternative revenue 5,285 — 5,285 Leasing revenue 928 — 928 Total operating revenues $ 461,525 $ 17,916 $ 479,441 Revenue is recognized when the obligation to customers is satisfied and in the amount we expect to receive in exchange for transferring goods or providing services. Revenue from contracts with customers contain one performance obligation that is generally satisfied over time, using the output method based on time elapsed, due to the continuous nature of the service provided. The transaction price is determined per a set price agreed upon in the contract or dependent on regulatory tariffs. Customer accounts are settled on a monthly basis or paid at time of sale and based on historical experience. It is probable that NW Natural will collect substantially all of the consideration to which it is entitled to receive. NW Natural does not have any material contract assets, as net accounts receivable and accrued unbilled revenue balances are unconditional and only involve the passage of time until such balances are billed and collected. NW Natural does not have any material contract liabilities. Revenue-based taxes are primarily franchise taxes, which are collected from utility customers and remitted to taxing authorities. Beginning January 1, 2018, revenue taxes are included in operating revenues with an equal and offsetting expense recognized in operating expenses in the consolidated statement of comprehensive income. Utility Segment Local gas distribution revenue. NW Natural's primary source of revenue is providing natural gas to customers in its service territory, which include residential, commercial, industrial and transportation customers. Gas distribution revenue is generally recognized over time upon delivery of the gas commodity or service to the customer, and the amount of consideration received and recognized as revenue is dependent on the Oregon and Washington tariffs. Customer accounts are to be paid in full each month, and there is no right of return or warranty for services provided. Revenues include firm and interruptible sales and transportation services, franchise taxes recovered from the customer, late payment fees, service fees, and accruals for gas delivered but not yet billed (accrued unbilled revenue). The accrued unbilled revenue balance is based on estimates of deliveries during the period from the last meter reading and management judgment is required for a number of factors used in this calculation, including customer use and weather factors. NW Natural applied the significant financing practical expedient and has not adjusted the consideration it expects to receive from utility customers for the effects of a significant financing component as all payment arrangements are settled annually. Due to the election of the right to invoice practical expedient, NW Natural does not disclose the value of unsatisfied performance obligations as of September 30, 2018 . Alternative revenue. Weather normalization (WARM) and decoupling mechanisms are considered to be alternative revenue programs. Alternative revenue programs are considered to be contracts between NW Natural and its regulator and are excluded from revenue from contracts with customers. Leasing revenue. Leasing revenue primarily consists of rental revenue for small leases of utility-owned property to third parties. The transactions are accounted for as operating leases and the revenue is recognized on a straight-line basis over the term of the lease agreement. Lease revenue is excluded from revenue from contracts with customers. Other Gas storage revenue. NW Natural's gas storage activity includes the non-utility portion of the Mist facility, which is used to store natural gas for customers. Gas storage revenue is generally recognized over time as the gas storage service is provided to the customer and the amount of consideration received and recognized as revenue is dependent on set rates defined per the storage agreements. Noncash consideration in the form of dekatherms of natural gas is received as consideration for providing gas injection services to gas storage customers. This noncash consideration is measured at fair value using the average spot rate. Customer accounts are generally paid in full each month, and there is no right of return or warranty for services provided. Revenues include firm and interruptible storage services, net of the profit sharing amount refunded to utility customers. Asset management revenue. Asset management revenue is generally recognized over time using a straight-line approach over the term of each contract, and the amount of consideration received and recognized as revenue is dependent on a variable pricing model. Variable revenues earned above guaranteed amounts are estimated and recognized at the end of each period using the most likely amount approach. Revenues include the optimization of the storage assets and pipeline capacity provided, net of the profit sharing amount refunded to utility customers. Asset management accounts are settled on a monthly basis. As of September 30, 2018 , unrecognized revenue for the fixed component of the transaction price related to gas storage and asset management revenue was approximately $43.8 million . Of this amount, approximately $5.1 million will be recognized during the remainder of 2018 , $11.9 million in 2019 , $9.2 million in 2020 , $8.3 million in 2021 , $4.6 million in 2022 and $4.7 million thereafter. The amounts presented here are calculated using current contracted rates. On October 12, 2018, NW Natural filed a rate petition with FERC for revised maximum cost-based rates, which incorporated the new federal corporate income tax rate as well as an updated depreciation study. NW Natural does not expect the new FERC rates to have a significant financial impact. Appliance retail center revenue. NW Natural owns and operates an appliance store that is open to the public, where customers can purchase natural gas home appliances. Revenue from the sale of appliances is recognized at the point in time in which the appliance is transferred to the third party responsible for delivery and installation services and when the customer has legal title to the appliance. It is required that the sale be paid for in full prior to transfer of legal title. The amount of consideration received and recognized as revenue varies with changes in marketing incentives and discounts offered to customers. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 6. STOCK-BASED COMPENSATION Stock-based compensation plans are designed to promote stock ownership in NW Natural, and after October 1, 2018, NW Holdings, by employees and officers of NW Natural and certain approved affiliates. These compensation plans include a Long Term Incentive Plan (LTIP), an Employee Stock Purchase Plan (ESPP), and a Restated Stock Option Plan. For additional information on stock-based compensation plans, see Note 6 in the 2017 Form 10-K and the updates provided below. Long Term Incentive Plan Performance Shares LTIP performance shares incorporate a combination of market, performance, and service-based factors. During the nine months ended September 30, 2018 , no performance-based shares were granted under the LTIP for accounting purposes. In February 2018, the 2018 LTIP was awarded to participants; however, the agreement allows for one of the performance factors to remain variable until the first quarter of the third year of the award period. As the performance factor will not be approved until the first quarter of 2020, there is not a mutual understanding of the award’s key terms and conditions between NW Natural and the participants as of September 30, 2018 , and therefore, no expense was recognized for the 2018 award. NW Natural will calculate the grant date fair value and recognize expense once the final performance factor has been approved. For the 2018 LTIP, award share payouts range from a threshold of 0% to a maximum of 200% based on achievement of pre-established goals. The performance criteria for the 2018 performance shares consists of a three-year Return on Invested Capital (ROIC) threshold that must be satisfied and a cumulative EPS factor, which can be modified by a total shareholder return factor (TSR modifier) relative to the performance of the Russell 2500 Utilities Index over the three -year performance period. If the target was achieved for the 2018 award, NW Holdings would grant 34,702 shares in the first quarter of 2020. As of September 30, 2018 , there was $1.3 million of unrecognized compensation cost associated with the 2016 and 2017 LTIP grants, which is expected to be recognized through 2019 . Restricted Stock Units During the nine months ended September 30, 2018 , 31,490 RSUs were granted under the LTIP with a weighted-average grant date fair value of $57.37 per share. Generally, the RSUs awarded are forfeitable and include a performance-based threshold as well as a vesting period of four years from the grant date. Generally, an RSU obligates us, upon vesting, to issue the RSU holder one share of common stock plus a cash payment equal to the total amount of dividends paid per share between the grant date and vesting date of that portion of the RSU. The fair value of an RSU is equal to the closing market price of common stock on the grant date. As of September 30, 2018 , there was $ 3.4 million of unrecognized compensation cost from grants of RSUs, which is expected to be recognized over a period extending through 2023 . |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | 7. DEBT Short-Term Debt At September 30, 2018 , NW Natural had short-term debt of $100.5 million , which was comprised entirely of commercial paper. The carrying cost of commercial paper approximates fair value using Level 2 inputs. See Note 2 in the 2017 Form 10-K for a description of the fair value hierarchy. At September 30, 2018 , NW Natural's commercial paper had a maximum remaining maturity of 12 days and average remaining maturity of 7 days. Long-Term Debt At September 30, 2018 , NW Natural had long-term debt of $809.6 million , which included $5.9 million of unamortized debt issuance costs. Utility long-term debt consists of first mortgage bonds (FMBs) with maturity dates ranging from 2018 through 2048 , interest rates ranging from 1.545% to 9.05% , and a weighted average coupon rate of 4.690% . In March 2018 , NW Natural retired $22.0 million of FMBs with a coupon rate of 6.60% , and in September 2018 , NW Natural issued $50.0 million of FMBs with a coupon rate of 4.110% , due in 2048 . Fair Value of Long-Term Debt NW Natural's outstanding debt does not trade in active markets. NW Natural estimates the fair value of long-term debt using utility companies with similar credit ratings, terms, and remaining maturities to NW Natural's long-term debt that actively trade in public markets. These valuations are based on Level 2 inputs as defined in the fair value hierarchy. See Note 2 in the 2017 Form 10-K for a description of the fair value hierarchy. The following table provides an estimate of the fair value of long-term debt, including current maturities of long-term debt, using market prices in effect on the valuation date: September 30, December 31, In thousands 2018 2017 2017 Gross long-term debt $ 815,534 $ 786,700 $ 786,700 Unamortized debt issuance costs (5,940 ) (7,276 ) (6,813 ) Carrying amount $ 809,594 $ 779,424 $ 779,887 Estimated fair value (1) $ 833,962 $ 847,068 $ 853,339 (1) Estimated fair value does not include unamortized debt issuance costs. |
Pension and Other Postretiremen
Pension and Other Postretirement Benefit Costs | 9 Months Ended |
Sep. 30, 2018 | |
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract] | |
Pension and Other Postretirement Benefit Costs | 8. PENSION AND OTHER POSTRETIREMENT BENEFIT COSTS NW Natural recognizes the service cost component of net periodic benefit cost for the pension and other postretirement benefit plans in operations and maintenance expense in the consolidated statements of comprehensive income. The other non-service cost components are recognized in other income (expense), net in the consolidated statements of comprehensive income. The following table provides the components of net periodic benefit cost for the pension and other postretirement benefit plans: Three Months Ended September 30, Nine Months Ended September 30, Pension Benefits Other Postretirement Benefits Pension Benefits Other Postretirement Benefits In thousands 2018 2017 2018 2017 2018 2017 2018 2017 Service cost $ 1,757 $ 1,881 $ 80 $ 98 $ 5,371 $ 5,621 $ 239 $ 295 Interest cost 4,336 4,484 241 274 12,702 13,428 723 822 Expected return on plan assets (5,143 ) (5,112 ) — — (15,444 ) (15,337 ) — — Amortization of prior service costs 11 32 (117 ) (117 ) 32 95 (351 ) (351 ) Amortization of net actuarial loss 5,650 3,656 110 138 14,697 10,899 332 415 Net periodic benefit cost 6,611 4,941 314 393 17,358 14,706 943 1,181 Amount allocated to construction (659 ) (1,581 ) (27 ) (136 ) (2,026 ) (4,660 ) (82 ) (403 ) Amount deferred to regulatory balancing account (1) (3,878 ) (1,484 ) — — (9,381 ) (4,519 ) — — Net amount charged to expense $ 2,074 $ 1,876 $ 287 $ 257 $ 5,951 $ 5,527 $ 861 $ 778 (1) The deferral of defined benefit pension plan expenses above or below the amount set in rates was approved by the OPUC, with recovery of these deferred amounts through the implementation of a balancing account. On October 26, 2018 the OPUC ordered that the balancing account be frozen as of October 31, 2018, with recovery subject to future proceedings. Effective November 1, 2018 the OPUC authorized an additional $8.1 million to be included in rates for defined benefit pension plan expenses. Deferred pension expense balances include accrued interest at the utility’s authorized rate of return, with the equity portion of the interest recognized when amounts are collected in rates. See Note 2 in the 2017 Form 10-K. The following table presents amounts recognized in accumulated other comprehensive loss (AOCL) and the changes in AOCL related to non-qualified employee benefit plans: Three Months Ended September 30, Nine Months Ended September 30, In thousands 2018 2017 2018 2017 Beginning balance $ (8,131 ) $ (6,678 ) $ (8,438 ) $ (6,951 ) Amounts reclassified from AOCL: Amortization of actuarial losses 209 248 627 698 Total reclassifications before tax 209 248 627 698 Tax (benefit) expense (55 ) (98 ) (166 ) (275 ) Total reclassifications for the period 154 150 461 423 Ending balance $ (7,977 ) $ (6,528 ) $ (7,977 ) $ (6,528 ) Employer Contributions to Company-Sponsored Defined Benefit Pension Plans For the nine months ended September 30, 2018 , NW Natural made cash contributions totaling $11.7 million to qualified defined benefit pension plans. NW Natural expects further plan contributions of $3.9 million during the remainder of 2018 . Defined Contribution Plan The Retirement K Savings Plan is a qualified defined contribution plan under Internal Revenue Code Sections 401(a) and 401(k). Employer contributions totaled $5.0 million and $4.1 million for the nine months ended September 30, 2018 and 2017 , respectively. See Note 8 in the 2017 Form 10-K for more information concerning these retirement and other postretirement benefit plans. |
Income Tax
Income Tax | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Tax | 9. INCOME TAX An estimate of annual income tax expense is made each interim period using estimates for annual pre-tax income, regulatory flow-through adjustments, tax credits, and other items. The estimated annual effective tax rate is applied to year-to-date, pre-tax income to determine income tax expense for the interim period consistent with the annual estimate. The effective income tax rate varied from the combined federal and state statutory tax rates due to the following: Three Months Ended September 30, Nine Months Ended September 30, Dollars in thousands 2018 2017 2018 2017 Income taxes at statutory rates (federal and state) $ (4,136 ) $ (5,440 ) $ 11,097 $ 24,472 Increase (decrease): Differences required to be flowed-through by regulatory commissions (266 ) (302 ) 569 1,282 Other, net 117 20 (475 ) (1,298 ) Total provision (benefit) for income taxes on continuing operations $ (4,285 ) $ (5,722 ) $ 11,191 $ 24,456 Effective tax rate for continuing operations 27.8 % 42.0 % 26.8 % 39.4 % The effective income tax rate for the three and nine months ended September 30, 2018 compared to the same periods in 2017 decreased primarily as a result of the TCJA and lower pre-tax income. See "U.S. Federal TCJA Matters" below and Note 9 in the 2017 Form 10-K for more detail on income taxes and effective tax rates. The IRS Compliance Assurance Process (CAP) examination of the 2016 tax year was completed during the first quarter of 2018. There were no material changes to the return as filed. The 2017 tax year is subject to examination under CAP and the 2018 tax year CAP application has been accepted by the IRS. U.S. Federal TCJA Matters On December 22, 2017, the TCJA was enacted and permanently lowered the U.S. federal corporate income tax rate to 21% from the previous maximum rate of 35% , effective for the tax year beginning January 1, 2018. The TCJA includes specific provisions related to regulated public utilities that provide for the continued deductibility of interest expense and the elimination of bonus depreciation on a prospective basis. Under pre-TCJA law, business interest expense was generally deductible in the determination of taxable income. The TCJA imposes a new limitation on the deductibility of net business interest expense in excess of approximately 30% of adjusted taxable income beginning January 1, 2018. Taxpayers operating in the trade or business of public regulated utilities are excluded from these new interest expense limitations. There is ongoing uncertainty with regards to the application of the new interest expense limitation to non-regulated operations, primarily with respect to the allocation of interest between regulated and non-regulated trades or businesses. See Note 9 in the 2017 Form 10-K. The TCJA generally provides for immediate full expensing for qualified property acquired and placed in service after September 27, 2017 and before January 1, 2023. This would generally provide for accelerated cost recovery for capital investments. However, the definition of qualified property excludes property used in the trade or business of a public regulated utility. The definition of utility trade or business is the same as that used by the TCJA with respect to the imposition of the net interest expense limitation discussed above. As a result, ongoing uncertainty exists with respect to the application of full expensing to non-regulated activities. See Note 9 in the 2017 Form 10-K. NW Natural had an estimated regulatory liability of $216.6 million and $213.3 million for the change in regulated utility deferred taxes as a result of the TCJA as of September 30, 2018 and December 31, 2017 , respectively. These balances included a gross-up for income taxes of $57.4 million and $56.5 million , respectively. It is possible that this estimated balance may increase or decrease in the future as additional authoritative interpretation of the TCJA becomes available, or as a result of regulatory guidance from the OPUC or WUTC. NW Natural anticipates that until such time that customers receive the direct benefit of this regulatory liability, the balance, net of the additional gross-up for income taxes, will continue to provide an indirect benefit to customers by reducing the utility rate base which is a component of customer rates. It is not yet certain when the final resolution of these regulatory proceedings will occur, and as result, this regulatory liability is classified as long-term. As noted in the 2017 Form 10-K, Note 9, the determination to exclude all assets placed in service after September 27, 2017 from bonus depreciation was provisional as provided for under Staff Accounting Bulletin (SAB) 118. During the third quarter, the Internal Revenue Service and Treasury issued Proposed Regulations addressing additional first year tax depreciation under the TCJA. These Proposed Regulations, while not definitive, indicate the IRS' initial interpretation that additional first year bonus depreciation was available for regulated utility assets placed in service after September 27, 2017 but before January 1, 2018. On the basis of these proposed regulations, NW Natural revised the provisional estimate of deferred taxes and income taxes payable. NW Natural recognized increases to prepaid income tax of $7.3 million , deferred income tax liability of $4.0 million , and regulatory liability of $3.3 million during the third quarter of 2018. Utility rates in effect include an allowance to provide for the recovery of the anticipated provision for income taxes incurred as a result of providing regulated services. As a result of the newly enacted 21% federal corporate income tax rate, NW Natural recorded an additional regulatory liability in 2018 reflecting the estimated net reduction in the provision for income taxes. This revenue deferral is based on the estimated net benefit to customers using forecasted regulated utility earnings, considering average weather and associated volumes, and includes a gross-up for income taxes. As of September 30, 2018 , a regulatory liability of $7.2 million , including accrued interest, was recorded to reflect this estimated revenue deferral. |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2018 | |
Public Utilities, Property, Plant and Equipment [Abstract] | |
Property, Plant, and Equipment | 10. PROPERTY, PLANT, AND EQUIPMENT The following table sets forth the major classifications of property, plant, and equipment and accumulated depreciation of continuing operations: September 30, December 31, In thousands 2018 2017 2017 Utility plant in service $ 3,068,234 $ 2,934,424 $ 2,975,217 Utility construction work in progress 227,200 145,148 159,924 Less: Accumulated depreciation 978,446 937,498 942,879 Utility plant, net 2,316,988 2,142,074 2,192,262 Other plant in service 69,449 64,929 65,372 Other construction work in progress 5,505 4,044 4,122 Less: Accumulated depreciation 18,548 17,284 17,598 Other plant, net (1) 56,406 51,689 51,896 Total property, plant, and equipment $ 2,373,394 $ 2,193,763 $ 2,244,158 Capital expenditures in accrued liabilities (2) $ 27,692 $ 41,675 $ 34,761 (1) Previously reported non-utility balances were restated due to the assets and liabilities associated with Gill Ranch now being classified as discontinued operations assets and liabilities on the consolidated balance sheets. See Note 16 for further discussion. (2) Previously reported capital expenditures in accrued liabilities were restated due to the assets and liabilities associated with Gill Ranch now being classified as discontinued operations assets and liabilities on the consolidated balance sheets. Capital expenditures in accrued liabilities related to Gill Ranch were approximately $0.3 million , $0.1 million , and $0.2 million as of September 30, 2018 , September 30, 2017 , and December 31, 2017 , respectively. Other plant balances include long-lived assets associated with water operations and non-regulated activities. Build-to-suit Assets In October 2017, NW Natural entered into a 20 -year operating lease agreement commencing in 2020 for the new headquarters location in Portland, Oregon. NW Natural's existing headquarters lease expires in 2020 . The search and evaluation process focused on seismic preparedness, safety, reliability, least cost to customers, and a continued commitment to employees and the communities we serve. The lease was analyzed in consideration of build-to-suit lease accounting guidance, and we concluded that NW Natural is the accounting owner of the asset during construction. As a result, NW Natural recognized $16.0 million and $0.5 million in property, plant and equipment and an obligation in other non-current liabilities for the same amount in the consolidated balance sheet at September 30, 2018 and December 31, 2017 , respectively. In 2019 , pursuant to the new lease standard issued by the FASB, NW Natural expects to de-recognize the associated build-to-suit asset and liability. See Note 14 in the 2017 Form 10-K. |
Gas Reserves
Gas Reserves | 9 Months Ended |
Sep. 30, 2018 | |
Gas Reserves [Abstract] | |
Gas Reserves | 11. GAS RESERVES NW Natural has invested approximately $188 million through the gas reserves program in the Jonah Field located in Wyoming as of September 30, 2018 . Gas reserves are stated at cost, net of regulatory amortization, with the associated deferred tax benefits recorded as liabilities in the consolidated balance sheets. The investment in gas reserves provides long-term price protection for utility customers through the original agreement with Encana Oil & Gas (USA) Inc. under which NW Natural invested approximately $178 million and the amended agreement with Jonah Energy LLC under which an approximate additional $10 million was invested. The cost of gas, including a carrying cost for the rate base investment, is included in the annual Oregon PGA filing, which allows NW Natural to recover these costs through customer rates. The investment under the original agreement, less accumulated amortization and deferred taxes, earns a rate of return. Gas produced from the additional wells is included in the Oregon PGA at a fixed rate of $0.4725 per therm, which approximates the 10 -year hedge rate plus financing costs at the inception of the investment. The following table outlines net gas reserves investment: September 30, December 31, In thousands 2018 2017 2017 Gas reserves, current $ 16,916 $ 16,218 $ 15,704 Gas reserves, non-current 170,391 171,318 171,832 Less: Accumulated amortization 99,835 83,442 87,779 Total gas reserves (1) 87,472 104,094 99,757 Less: Deferred taxes on gas reserves 19,377 29,298 22,712 Net investment in gas reserves $ 68,095 $ 74,796 $ 77,045 (1) The net investment in additional wells included in total gas reserves was $ 5.0 million , $ 6.0 million and $ 5.8 million at September 30, 2018 and 2017 and December 31, 2017 , respectively. The investment is included in the consolidated balance sheets under gas reserves with a maximum loss exposure limited to the investment balance. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2018 | |
Investments [Abstract] | |
Investments | 12. INVESTMENTS Investments in Gas Pipeline Trail West Pipeline, LLC (TWP), a wholly-owned subsidiary of TWH, is pursuing the development of a new gas transmission pipeline that would provide an interconnection with NW Natural's utility distribution system. NWN Energy, then a wholly-owned subsidiary of NW Natural, owns 50% of TWH, and 50% is owned by TransCanada American Investments Ltd., an indirect wholly-owned subsidiary of TransCanada Corporation. Variable Interest Entity (VIE) Analysis TWH is a VIE, with NW Natural's investment in TWP reported under equity method accounting. We have determined that NW Natural is not the primary beneficiary of TWH’s activities as it only has a 50% share of the entity, and there are no stipulations that allow a disproportionate influence over it. Investments in TWH and TWP are included in other investments in the balance sheet. If we do not develop this investment, the maximum loss exposure related to TWH is limited to the equity investment balance, less its share of any cash or other assets available as a 50% owner. The investment balance in TWH was $13.4 million at September 30, 2018 and 2017 and December 31, 2017 . See Note 12 in the 2017 Form 10-K. Other Investments Other investments include financial investments in life insurance policies, which are accounted for at cash surrender value, net of policy loans. See Note 12 in the 2017 Form 10-K. |
Business Combinations Business
Business Combinations Business Combinations (Notes) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | 13. BUSINESS COMBINATIONS On September 13, 2018 , NWN Water, then a wholly-owned subsidiary of NW Natural, completed the acquisition of Falls Water Co., Inc. , a privately-owned water utility in the Pacific Northwest for preliminary non-cash consideration of $8.5 million , subject to closing adjustments, in the form of 125,000 shares of NW Natural common stock. Falls Water became a wholly-owned subsidiary of NWN Water and marked its first acquisition in the regulated water utility sector. This acquisition aligns with our water sector strategy as the acquisition provides NWN Water entry into Idaho, expands service area, and opens further opportunity for growth. Falls Water is based in Idaho Falls, Idaho and serves approximately 5,300 connections . Through the purchase of all of the outstanding shares of Falls Water, NWN Water acquired the net assets and 100% control of Falls Water. We determined that the Falls Water acquisition met the criteria of a business combination, and as such performed a preliminary allocation of the consideration to the acquired assets and assumed liabilities based on their fair value as of the acquisition date, the majority of which was allocated to goodwill. The allocation is considered preliminary as we continue to evaluate working capital adjustments, certain tax positions, and goodwill. We do not expect any subsequent adjustments to be significant, and expect any such adjustments to be completed within the one-year measurement period. The acquisition costs were insignificant and were expensed as incurred. The results of Falls Water are not material to the consolidated financial results. Preliminary goodwill of $6.6 million was recognized from this acquisition and is attributable to Falls Water's regulated service territory and experienced workforce as well as the strategic benefits expected from this high-growth service territory. NW Natural has included this goodwill in other for segment reporting purposes, and it is not deductible for income tax purposes. No intangible assets aside from goodwill were acquired. We allocate goodwill to reporting units based on the expected benefit from the business combination. We perform an annual impairment assessment of goodwill at the reporting unit level, or more frequently if events and circumstances indicate that goodwill might be impaired. An impairment loss is recognized if the carrying value of a reporting unit’s goodwill exceeds its fair value. An impairment analysis has not been performed in the current year, since all goodwill was acquired in the Falls Water acquisition, which closed in the third quarter of 2018. We anticipate that an annual impairment assessment of goodwill will occur in the fourth quarter of each year, beginning in the fourth quarter of 2018. |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | 14. DERIVATIVE INSTRUMENTS NW Natural enters into financial derivative contracts to hedge a portion of the utility’s natural gas sales requirements. These contracts include swaps, options and combinations of option contracts. These derivative financial instruments are used to manage commodity price variability. A small portion of the derivative hedging strategy involves foreign currency exchange contracts. NW Natural enters into these financial derivatives, up to prescribed limits, primarily to hedge price variability related to physical gas supply contracts as well as to hedge spot purchases of natural gas. The foreign currency forward contracts are used to hedge the fluctuation in foreign currency exchange rates for pipeline demand charges paid in Canadian dollars. In the normal course of business, NW Natural also enters into indexed-price physical forward natural gas commodity purchase contracts and options to meet the requirements of utility customers. These contracts qualify for regulatory deferral accounting treatment. NW Natural also enters into exchange contracts related to the third-party asset management of its gas portfolio, some of which are derivatives that do not qualify for hedge accounting or regulatory deferral, but are subject to NW Natural's regulatory sharing agreement. These derivatives are recognized in operating revenues, net of amounts shared with utility customers. Notional Amounts The following table presents the absolute notional amounts related to open positions on derivative instruments: September 30, December 31, In thousands 2018 2017 2017 Natural gas (in therms): Financial 513,850 521,080 429,100 Physical 760,925 750,650 520,268 Foreign exchange $ 7,184 $ 6,933 $ 7,669 Purchased Gas Adjustment (PGA) Derivatives entered into by the utility for the procurement or hedging of natural gas for future gas years generally receive regulatory deferral accounting treatment. In general, commodity hedging for the current gas year is completed prior to the start of the gas year, and hedge prices are reflected in weighted-average cost of gas in the PGA filing. Hedge contracts entered into after the start of the PGA period are subject to the PGA incentive sharing mechanism in Oregon. NW Natural entered the 2017-18 and 2016-17 gas year with forecasted sales volumes hedged at 49% and 48% in financial swap and option contracts, and 26% and 27% in physical gas supplies, respectively. Hedge contracts entered into prior to the PGA filing, in September 2017 , were included in the PGA for the 2017-18 gas year. Hedge contracts entered into after the PGA filing, and related to subsequent gas years, may be included in future PGA filings and qualify for regulatory deferral. Unrealized and Realized Gain/Loss The following table reflects the income statement presentation for the unrealized gains and losses from derivative instruments: Three Months Ended September 30, 2018 2017 In thousands Natural gas commodity Foreign exchange Natural gas commodity Foreign exchange Benefit (expense) to cost of gas $ 4,473 $ 210 $ (2,566 ) $ 51 Operating revenues (286 ) — 28 — Amounts deferred to regulatory accounts on balance sheet (4,285 ) (210 ) 2,548 (51 ) Total gain (loss) in pre-tax earnings $ (98 ) $ — $ 10 $ — Nine Months Ended September 30, 2018 2017 In thousands Natural gas commodity Foreign exchange Natural gas commodity Foreign exchange Benefit (expense) to cost of gas $ 1,384 $ — $ (19,081 ) $ 275 Operating revenues (122 ) — (1,249 ) — Amounts deferred to regulatory accounts on balance sheet (1,305 ) — 19,895 (275 ) Total gain (loss) in pre-tax earnings $ (43 ) $ — $ (435 ) $ — UNREALIZED GAIN/LOSS. NW Natural's outstanding derivative instruments related to regulated utility operations are deferred in accordance with regulatory accounting standards. The cost of foreign currency forward and natural gas derivative contracts are recognized immediately in the cost of gas; however, costs above or below the amount embedded in the current year PGA are subject to a regulatory deferral tariff and therefore, are recorded as a regulatory asset or liability. REALIZED GAIN/LOSS. NW Natural realized net losses of $1.9 million and $15.6 million for the three and nine months ended September 30, 2018 , respectively, from the settlement of natural gas financial derivative contracts. Whereas, net gains of $1.0 million were realized for the three and nine months ended September 30, 2017 . Realized gains and losses are recorded in cost of gas, deferred through regulatory accounts, and amortized through customer rates in the following year. Credit Risk Management of Financial Derivatives Instruments No collateral was posted with or by counterparties as of September 30, 2018 or 2017 . NW Natural attempts to minimize the potential exposure to collateral calls by counterparties to manage liquidity risk. Counterparties generally allow a certain credit limit threshold before requiring us to post collateral against loss positions. Given NW Natural's counterparty credit limits and portfolio diversification, it was not subject to collateral calls in 2018 or 2017 . The collateral call exposure is set forth under credit support agreements, which generally contain credit limits. NW Natural could also be subject to collateral call exposure where it has agreed to provide adequate assurance, which is not specific as to the amount of credit limit allowed, but could potentially require additional collateral in the event of a material adverse change. Based upon current commodity financial swap and option contracts outstanding, which reflect unrealized losses of $9.7 million at September 30, 2018 , we have estimated the level of collateral demands, with and without potential adequate assurance calls, using current gas prices and various credit downgrade rating scenarios for NW Natural as follows: Credit Rating Downgrade Scenarios In thousands (Current Ratings) A+/A3 BBB+/Baa1 BBB/Baa2 BBB-/Baa3 Speculative With Adequate Assurance Calls $ — $ — $ — $ (2,587 ) $ (7,023 ) Without Adequate Assurance Calls — — — (2,587 ) (4,730 ) NW Natural's financial derivative instruments are subject to master netting arrangements; however, they are presented on a gross basis in the consolidated balance sheets. NW Natural and its counterparties have the ability to set-off obligations to each other under specified circumstances. Such circumstances may include a defaulting party, a credit change due to a merger affecting either party, or any other termination event. If netted by counterparty, NW Natural's physical and financial derivative position would result in an asset of $1.9 million and a liability of $10.1 million as of September 30, 2018 , an asset of $ 3.3 million and a liability of $ 12.6 million as of September 30, 2017 , and an asset of $2.9 million and a liability of $23.3 million as of December 31, 2017 . NW Natural is exposed to derivative credit and liquidity risk primarily through securing fixed price natural gas commodity swaps to hedge the risk of price increases for natural gas purchases made on behalf of customers. See Note 13 in the 2017 Form 10-K for additional information. Fair Value In accordance with fair value accounting, NW Natural includes non-performance risk in calculating fair value adjustments. This includes a credit risk adjustment based on the credit spreads of NW Natural counterparties when in an unrealized gain position, or on NW Natural's own credit spread when in an unrealized loss position. The inputs in our valuation models include natural gas futures, volatility, credit default swap spreads and interest rates. Additionally, the assessment of non-performance risk is generally derived from the credit default swap market and from bond market credit spreads. The impact of the credit risk adjustments for all outstanding derivatives was immaterial to the fair value calculation at September 30, 2018 . Using significant other observable or Level 2 inputs, the net fair value was a liability of $ 8.1 million , $ 9.3 million , and $20.3 million as of September 30, 2018 and 2017 , and December 31, 2017 , respectively. No Level 3 inputs were used in our derivative valuations, and there were no transfers between Level 1 or Level 2 during the nine months ended September 30, 2018 and 2017 . See Note 2 in the 2017 Form 10-K. |
Environmental Matters
Environmental Matters | 9 Months Ended |
Sep. 30, 2018 | |
Environmental Remediation Obligations [Abstract] | |
Environmental Matters | 15. ENVIRONMENTAL MATTERS NW Natural owns, or previously owned, properties that may require environmental remediation or action. NW Natural estimates the range of loss for environmental liabilities based on current remediation technology, enacted laws and regulations, industry experience gained at similar sites and an assessment of the probable level of involvement and financial condition of other potentially responsible parties (PRPs). When amounts are prudently expended related to site remediation, of those sites described herein, NW Natural has a recovery mechanism in place to collect 96.68% of remediation costs from Oregon customers, and is allowed to defer environmental remediation costs allocated to customers in Washington annually until they are reviewed for prudence at a subsequent proceeding. These sites are subject to the remediation process prescribed by the Environmental Protection Agency (EPA) and the Oregon Department of Environmental Quality (ODEQ). The process begins with a remedial investigation (RI) to determine the nature and extent of contamination and then a risk assessment (RA) to establish whether the contamination at the site poses unacceptable risks to humans and the environment. Next, a feasibility study (FS) or an engineering evaluation/cost analysis (EE/CA) evaluates various remedial alternatives. It is at this point in the process when NW Natural is able to estimate a range of remediation costs and record a reasonable potential remediation liability, or make an adjustment to the existing liability. From this study, the regulatory agency selects a remedy and issues a Record of Decision (ROD). After a ROD is issued, NW Natural would seek to negotiate a consent decree or consent judgment for designing and implementing the remedy. NW Natural would have the ability to further refine estimates of remediation liabilities at that time. Remediation may include treatment of contaminated media such as sediment, soil and groundwater, removal and disposal of media, institutional controls such as legal restrictions on future property use, or natural recovery. Following construction of the remedy, the EPA and ODEQ also have requirements for ongoing maintenance, monitoring and other post-remediation care that may continue for many years. Where appropriate and reasonably known, NW Natural will provide for these costs in the remediation liabilities described below. Due to the numerous uncertainties surrounding the course of environmental remediation and the preliminary nature of several site investigations, in some cases, NW Natural may not be able to reasonably estimate the high end of the range of possible loss. In those cases, the nature of the possible loss has been disclosed, as has the fact that the high end of the range cannot be reasonably estimated where a range of potential loss is available. Unless there is an estimate within the range of possible losses that is more likely than other cost estimates within that range, NW Natural records the liability at the low end of this range. It is likely changes in these estimates and ranges will occur throughout the remediation process for each of these sites due to the continued evaluation and clarification concerning responsibility, the complexity of environmental laws and regulations and the determination by regulators of remediation alternatives. In addition to remediation costs, NW Natural could also be subject to Natural Resource Damages (NRD) claims. NW Natural will assess the likelihood and probability of each claim and recognize a liability if deemed appropriate. Refer to " Other Portland Harbor " below. Environmental Sites The following table summarizes information regarding liabilities related to environmental sites, which are recorded in other current liabilities and other noncurrent liabilities in the balance sheet: Current Liabilities Non-Current Liabilities September 30, December 31, September 30, December 31, In thousands 2018 2017 2017 2018 2017 2017 Portland Harbor site: Gasco/Siltronic Sediments $ 2,471 $ 860 $ 2,683 $ 44,410 $ 43,796 $ 45,346 Other Portland Harbor 1,392 1,379 1,949 3,540 3,618 4,163 Gasco/Siltronic Upland site 8,847 7,537 13,422 44,310 48,758 47,835 Central Service Center site 25 31 25 — — — Front Street site 6,011 846 1,009 5,342 10,788 10,757 Oregon Steel Mills — — — 179 179 179 Total $ 18,746 $ 10,653 $ 19,088 $ 97,781 $ 107,139 $ 108,280 PORTLAND HARBOR SITE. The Portland Harbor is an EPA listed Superfund site that is approximately 10 miles long on the Willamette River and is adjacent to NW Natural's Gasco uplands site. NW Natural is one of over one hundred PRPs to the Superfund site. In January 2017, the EPA issued its Record of Decision, which selects the remedy for the clean-up of the Portland Harbor site (Portland Harbor ROD). The Portland Harbor ROD estimates the present value total cost at approximately $1.05 billion with an accuracy between -30% and +50% of actual costs. The potential liability is a portion of the costs of the remedy for the entire Portland Harbor Superfund site. The cost of that remedy is expected to be allocated among more than 100 PRPs. In addition, NW Natural is actively pursuing clarification and flexibility under the ROD in order to better understand its obligation under the clean-up. NW Natural is also participating in a non-binding allocation process with the other PRPs in an effort to resolve its potential liability. The Portland Harbor ROD does not provide any additional clarification around allocation of costs among PRPs and, as a result of issuance of the Portland Harbor ROD, NW Natural has not modified any of the recorded liabilities at this time. NW Natural manages the liability related to the Superfund site as two distinct remediation projects, the Gasco/Siltronic Sediments and Other Portland Harbor projects. Gasco/Siltronic Sediments. In 2009, NW Natural and Siltronic Corporation entered into a separate Administrative Order on Consent with the EPA to evaluate and design specific remedies for sediments adjacent to the Gasco uplands and Siltronic uplands sites. NW Natural submitted a draft EE/CA to the EPA in May 2012 to provide the estimated cost of potential remedial alternatives for this site. At this time, the estimated costs for the various sediment remedy alternatives in the draft EE/CA for the additional studies and design work needed before the cleanup can occur, and for regulatory oversight throughout the clean-up range from $46.9 million to $350 million . NW Natural has recorded a liability of $46.9 million for the sediment clean-up, which reflects the low end of the range. At this time, NW Natural believes sediments at this site represent the largest portion of its liability related to the Portland Harbor site discussed above. Other Portland Harbor. While NW Natural still believes liabilities associated with the Gasco/Siltronic sediments site represent its largest exposure, it does have other potential exposures associated with the Portland Harbor ROD, including NRD costs and harborwide clean-up costs (including downstream petroleum contamination), for which allocations among the PRPs have not yet been determined. NW Natural and other parties have signed a cooperative agreement with the Portland Harbor Natural Resource Trustee council to participate in a phased NRD assessment to estimate liabilities to support an early restoration-based settlement of NRD claims. One member of this Trustee council, the Yakama Nation, withdrew from the council in 2009, and in 2017, filed suit against NW Natural and 29 other parties seeking remedial costs and NRD assessment costs associated with the Portland Harbor, set forth in the complaint. The complaint seeks recovery of alleged costs totaling $0.3 million in connection with the selection of a remedial action for the Portland Harbor as well as declaratory judgment for unspecified future remedial action costs and for costs to assess the injury, loss or destruction of natural resources resulting from the release of hazardous substances at and from the Portland Harbor site. The Yakama Nation has filed two amended complaints addressing certain pleading defects and dismissing the State of Oregon. NW Natural has recorded a liability for NRD claims which is at the low end of the range of the potential liability; the high end of the range cannot be reasonably estimated at this time. The NRD liability is not included in the aforementioned range of costs provided in the Portland Harbor ROD. GASCO UPLANDS SITE. A predecessor of NW Natural, Portland Gas and Coke Company, owned a former gas manufacturing plant that was closed in 1958 (Gasco site) and is adjacent to the Portland Harbor site described above. The Gasco site has been under investigation by NW Natural for environmental contamination under the ODEQ Voluntary Clean-Up Program (VCP). It is not included in the range of remedial costs for the Portland Harbor site noted above. The Gasco site is managed in two parts, the uplands portion and the groundwater source control action. NW Natural submitted a revised Remedial Investigation Report for the uplands to ODEQ in May 2007. In March 2015, ODEQ approved the RA, enabling commencement of work on the FS in 2016. NW Natural has recognized a liability for the remediation of the uplands portion of the site which is at the low end of the range of potential liability; the high end of the range cannot be reasonably estimated at this time. In September 2013, NW Natural completed construction of a groundwater source control system, including a water treatment station, at the Gasco site. NW Natural has estimated the cost associated with the ongoing operation of the system and has recognized a liability which is at the low end of the range of potential cost. NW Natural cannot estimate the high end of the range at this time due to the uncertainty associated with the duration of running the water treatment station, which is highly dependent on the remedy determined for both the upland portion as well as the final remedy for Gasco sediment exposure. OTHER SITES. In addition to those sites above, NW Natural has environmental exposures at three other sites: Central Service Center, Front Street and Oregon Steel Mills. NW Natural may have exposure at other sites that have not been identified at this time. Due to the uncertainty of the design of remediation, regulation, timing of the remediation and in the case of the Oregon Steel Mills site, pending litigation, liabilities for each of these sites have been recognized at their respective low end of the range of potential liability; the high end of the range could not be reasonably estimated at this time. Central Service Center site. NW Natural is currently performing an environmental investigation of the property under ODEQ's Independent Cleanup Pathway. This site is on ODEQ's list of sites with confirmed releases of hazardous substances, and cleanup is necessary. Front Street site. The Front Street site was the former location of a gas manufacturing plant NW Natural operated (the former Portland Gas Manufacturing site, or PGM). At ODEQ’s request, it conducted a sediment and source control investigation and provided findings to ODEQ. In December 2015, an FS on the former Portland Gas Manufacturing site was completed. In July 2017, ODEQ issued the PGM ROD. The ROD specifies the selected remedy, which requires a combination of dredging, capping, treatment, and natural recovery. In addition, the selected remedy also requires institutional controls and long-term inspection and maintenance. NW Natural revised the liability in the second quarter of 2017 to incorporate the estimated undiscounted cost of approximately $10.5 million for the selected remedy. Further, NW Natural has recognized an additional liability of $0.9 million for additional studies and design costs as well as regulatory oversight throughout the clean-up. NW Natural plans to complete the remedial design in 2018 or early 2019 and expects to construct the remedy during 2019. Oregon Steel Mills site. Refer to the “Legal Proceedings,” below. Site Remediation and Recovery Mechanism (SRRM) NW Natural has an SRRM through which it tracks and has the ability to recover past deferred and future prudently incurred environmental remediation costs allocable to Oregon, subject to an earnings test, for those sites identified therein. See Note 15 in the 2017 Form 10-K for a description of the SRRM collection process. The following table presents information regarding the total regulatory asset deferred: September 30, December 31, In thousands 2018 2017 2017 Deferred costs and interest (1) $ 40,578 $ 52,888 $ 45,546 Accrued site liabilities (2) 116,150 117,388 126,950 Insurance proceeds and interest (87,631 ) (100,575 ) (94,170 ) Total regulatory asset deferral (1) $ 69,097 $ 69,701 $ 78,326 Current regulatory assets (3) 5,633 6,362 6,198 Long-term regulatory assets (3) 63,464 63,339 72,128 (1) Includes pre-review and post-review deferred costs, amounts currently in amortization, and interest, net of amounts collected from customers. (2) Excludes 3.32% of the Front Street site liability, or $0.4 million in 2018 and $0.3 million in 2017 , as the OPUC only allows recovery of 96.68% of costs for those sites allocable to Oregon, including those that historically served only Oregon customers. (3) Environmental costs relate to specific sites approved for regulatory deferral by the OPUC and WUTC. In Oregon, NW Natural earns a carrying charge on cash amounts paid, whereas amounts accrued but not yet paid do not earn a carrying charge until expended. It also accrues a carrying charge on insurance proceeds for amounts owed to customers. In Washington, a carrying charge related to deferred amounts will be determined in a future proceeding. Current environmental costs represent remediation costs management expects to collect from customers in the next 12 months. Amounts included in this estimate are still subject to a prudence and earnings test review by the OPUC and do not include the $5.0 million tariff rider. The amounts allocable to Oregon are recoverable through utility rates, subject to an earnings test. ENVIRONMENTAL EARNINGS TEST. To the extent the utility earns at or below its authorized Return on Equity (ROE), remediation expenses and interest in excess of the $5.0 million tariff rider and $5.0 million insurance proceeds are recoverable through the SRRM. To the extent the utility earns more than its authorized ROE in a year, the utility is required to cover environmental expenses and interest on expenses greater than the $10.0 million with those earnings that exceed its authorized ROE. Under the 2015 Order, the OPUC stated they would revisit the deferral and amortization of future remediation expenses, as well as the treatment of remaining insurance proceeds three years from the original Order, or earlier if NW Natural gains greater certainty about future remediation costs, to consider whether adjustments to the mechanism may be appropriate. NW Natural filed an update with the OPUC in March 2018 and recommended no changes. WASHINGTON DEFERRAL. In Washington, cost recovery and carrying charges on amounts deferred for costs associated with services provided to Washington customers will be determined in a future proceeding. Legal Proceedings NW Natural is subject to claims and litigation arising in the ordinary course of business. Although the final outcome of any of these legal proceedings cannot be predicted with certainty, including the matter described below, NW Natural does not expect that the ultimate disposition of any of these matters will have a material effect on financial condition, results of operations or cash flows. See also Part II, Item 1, “ Legal Proceedings" . OREGON STEEL MILLS SITE. See Note 15 in the 2017 Form 10-K. For additional information regarding other commitments and contingencies, see Note 14 in the 2017 Form 10-K. |
Discontinued Operations Discont
Discontinued Operations Discontinued Operations (Notes) | 9 Months Ended |
Sep. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | 16. DISCONTINUED OPERATIONS On June 20, 2018, NWN Gas Storage, then a wholly owned subsidiary of NW Natural, entered into a Purchase and Sale Agreement (the Agreement) that provides for the sale by NWN Gas Storage of all of the membership interests in Gill Ranch. Gill Ranch owns a 75% interest in the natural gas storage facility located near Fresno, California known as the Gill Ranch Gas Storage Facility. Pacific Gas and Electric Company (PG&E) owns the remaining 25% interest in the Gill Ranch Gas Storage Facility. The Agreement provides for an initial cash purchase price of $25.0 million (subject to a working capital adjustment), plus potential additional payments to NWN Gas Storage of up to $26.5 million in the aggregate if Gill Ranch achieves certain economic performance levels for the first three full gas storage years (April 1 of one year through March 31 of the following year) occurring after the closing and the remaining portion of the gas storage year during which the closing occurs. NW Natural expects the transaction to close within 12 months of signing and in 2019. The closing of the transaction is subject to approval by the California Public Utilities Commission (CPUC) and other customary closing conditions. In July 2018, Gill Ranch filed an application with the CPUC for approval of this transaction. As a result of NW Natural's strategic shift away from the California gas storage market and the significance of Gill Ranch's financial results in 2017, NW Natural has concluded that the pending sale of Gill Ranch qualifies as assets and liabilities held for sale and discontinued operations. As such, the assets and liabilities associated with Gill Ranch have been classified as discontinued operations assets and discontinued operations liabilities, respectively, and, the results of Gill Ranch are presented separately, net of tax, as discontinued operations from the results of continuing operations for all periods presented. The expenses included in the results of discontinued operations are the direct operating expenses incurred by Gill Ranch that may be reasonably segregated from the costs of continuing operations. The following table presents the carrying amounts of the major components of Gill Ranch that are classified as discontinued operations assets and liabilities on the consolidated balance sheets: September 30, December 31, In thousands 2018 2017 2017 Assets: Accounts receivable $ 395 $ 1,520 $ 2,126 Inventories 661 415 396 Other current assets 107 171 535 Property, plant, and equipment 11,241 235,578 10,816 Less: Accumulated depreciation 7 31,551 — Other non-current assets 247 51 1 Discontinued operations - current assets (1) 12,644 2,106 3,057 Discontinued operations - non-current assets (1) — 204,078 10,817 Total discontinued operations assets $ 12,644 $ 206,184 $ 13,874 Liabilities: Accounts payable $ 751 $ 353 $ 1,287 Other current liabilities 405 848 306 Other non-current liabilities 11,847 12,106 12,043 Discontinued operations - current liabilities (1) 13,003 1,201 1,593 Discontinued operations - non-current liabilities (1) — 12,106 12,043 Total discontinued operations liabilities $ 13,003 $ 13,307 $ 13,636 (1) The total assets and liabilities of Gill Ranch are classified as current as of September 30, 2018 because it is probable that the sale will be completed within one year. The following table presents the operating results of Gill Ranch, which was reported within the gas storage segment historically, and is presented net of tax on the consolidated statements of comprehensive income: Three Months Ended September 30, Nine Months Ended September 30, In thousands, except per share data 2018 2017 2018 2017 Revenues $ 748 $ 1,977 $ 2,831 $ 5,338 Expenses: Operations and maintenance 1,549 1,248 4,139 5,169 Depreciation and amortization 106 1,131 324 3,394 Other expenses and interest (24 ) 603 790 1,799 Total expenses 1,631 2,982 5,253 10,362 Loss from discontinued operations before income taxes (883 ) (1,005 ) (2,422 ) (5,024 ) Income tax benefit 233 397 639 1,983 Loss from discontinued operations, net of tax $ (650 ) $ (608 ) $ (1,783 ) $ (3,041 ) Loss from discontinued operations per share of common stock: Basic $ (0.02 ) $ (0.02 ) $ (0.06 ) $ (0.11 ) Diluted $ (0.02 ) $ (0.02 ) $ (0.06 ) $ (0.11 ) |
Subsequent Event (Notes)
Subsequent Event (Notes) | 1 Months Ended |
Nov. 06, 2018 | |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Subsequent Events [Text Block] | 17. SUBSEQUENT EVENTS Holding Company On October 1, 2018 , NW Holdings and NW Natural completed a reorganization into a holding company structure. NW Holdings is now the parent holding company of NW Natural, NWN Water, NWN Gas Storage and other subsidiaries previously held by NW Natural. This reorganization was approved by NW Holdings’ and NW Natural’s boards of directors, the Oregon, Washington and California public utility commissions, and NW Natural’s shareholders prior to the reorganization. As part of this reorganization, NW Natural shareholders automatically become shareholders of NW Holdings on a one-for-one share basis with the same number of shares and same relative ownership percentage as shareholders held immediately prior to the reorganization. Credit Agreements On October 2, 2018 , NW Holdings entered into a $100.0 million credit agreement, with a feature that allows NW Holdings to request increases in the total commitment amount, up to a maximum of $150.0 million . The maturity date of the agreement is October 2, 2023 . The credit agreement permits the issuance of letters of credit in an aggregate amount of up to $40.0 million . On October 2, 2018 , NW Natural entered into a new multi-year credit agreement for unsecured revolving loans totaling $300.0 million , up to a maximum of $450.0 million , with a maturity date of October 2, 2023 and an available extension of commitments for two additional one-year periods, subject to lender approval (New Credit Agreement). The prior credit agreement was terminated upon the closing of this new agreement. The New Credit Agreement permits the issuance of letters of credit in an aggregate amount of up to $ 60.0 million . The principal amount of borrowings under the credit agreements are due and payable on the maturity date. The credit agreements require NW Holdings and NW Natural to maintain a consolidated indebtedness to total capitalization ratio of 70% or less. Failure to comply with this covenant would entitle the lenders to terminate their lending commitments and accelerate the maturity of all amounts outstanding. The agreements also require NW Holdings and NW Natural to maintain credit ratings with Standard & Poor's (S&P) and Moody's Investors Service, Inc. (Moody’s) and notify the lenders of any change in the respective companies' senior unsecured debt ratings or senior secured debt ratings, as applicable, by such rating agencies, provided, however that in the event NW Holdings does not have a credit rating, its debt rating will be determined by a formula using NW Natural's credit rating. A change in debt ratings by S&P or Moody’s is not an event of default, nor is the maintenance of a specific minimum level of debt rating a condition of drawing upon the credit agreement. Rather, interest rates on any loans outstanding under the credit agreements are tied to debt ratings and therefore, a change in the debt rating would increase or decrease the cost of any loans under the credit agreements when ratings are changed. Sunriver Agreement On October 12, 2018 , NWN Water of Oregon entered into, and NW Holdings guaranteed, an agreement with Sunriver Resort LP to acquire Sunriver Water, LLC and Sunriver Environmental, LLC (Sunriver Acquisition), which are a water utility and wastewater treatment company providing a current combined 9,400 connections at the Sunriver Resort community in Central Oregon. The transaction is expected to close in the first half of 2019 . The closing of the transaction is subject to approval by the Public Utility Commission of Oregon and other customary closing conditions. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Industry Regulation Text Block | Industry Regulation In applying regulatory accounting principles, NW Natural capitalizes or defers certain costs and revenues as regulatory assets and liabilities pursuant to orders of the Oregon Public Utilities Commission (OPUC), Washington Utilities and Transportation Commission (WUTC) or Idaho Public Utilities Commission (IPUC), which provide for the recovery of revenues or expenses from, or refunds to, utility customers in future periods, including a return or a carrying charge in certain cases. |
New Accounting Standards Text Block | New Accounting Standards We consider the applicability and impact of all accounting standards updates (ASUs) issued by the Financial Accounting Standards Board (FASB). ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on NW Natural's consolidated financial position or results of operations. Recently Adopted Accounting Pronouncements STOCK COMPENSATION. On May 10, 2017, the FASB issued ASU 2017-09, "Stock Compensation - Scope of Modification Accounting." The purpose of the amendment is to provide clarity, reduce diversity in practice, and reduce the cost and complexity when applying the guidance in Topic 718, related to a change to the terms or conditions of a share-based payment award. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. The amendments in this update were effective for NW Natural beginning January 1, 2018, and will be applied prospectively to any award modified on or after the adoption date. The adoption did not have a material impact to financial statements or disclosures. RETIREMENT BENEFITS. On March 10, 2017, the FASB issued ASU 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post Retirement Benefit Cost." The ASU requires entities to disaggregate current service cost from the other components of net periodic benefit cost and present it with other current compensation costs for related employees in the income statement. Additionally, the other components of net periodic benefit costs are to be presented elsewhere in the income statement and outside of income from operations, if that subtotal is presented. Only the service cost component of the net periodic benefit cost is eligible for capitalization. The amendments in this update were effective for us beginning January 1, 2018. Upon adoption, the ASU required that changes to the income statement presentation of net periodic benefit cost be applied retrospectively, while changes to amounts capitalized must be applied prospectively. As such, the interest cost, expected return on assets, amortization of prior service costs, and other costs have been reclassified from operations and maintenance expense to other income (expense), net on the consolidated statement of comprehensive income for the three and nine months ended September 30, 2017 . NW Natural did not elect the practical expedient which would have allowed us to reclassify amounts disclosed previously in the pension and other postretirement benefits footnote disclosure as the basis for applying retrospective presentation. As mentioned above, on a prospective basis, the other components of net periodic benefit cost will not be eligible for capitalization, however, they will continue to be included in the pension regulatory balancing mechanism. The retrospective presentation requirement related to the other components of net periodic benefit cost affected the operations and maintenance expense and other income (expense), net lines on the consolidated statement of comprehensive income. For the three and nine months ended September 30, 2017 , $1.4 million and $4.0 million of expense was reclassified from operations and maintenance expense and included in other income (expense), net, respectively. GOODWILL. On January 26, 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment." The ASU removes Step 2 from the goodwill impairment test and under the amended guidance an entity should perform its annual goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount in which the carrying amounts exceeds the fair value of the reporting unit. The amendments in this standard are effective for us beginning January 1, 2020 and early adoption is permitted for interim or annual goodwill impairment tests performed after January 1, 2017. NW Natural early adopted ASU 2017-04 in the third quarter ended September 30, 2018. The adoption of this ASU did not materially affect the financial statements and disclosures. STATEMENT OF CASH FLOWS. On August 26, 2016, the FASB issued ASU 2016-15, "Classification of Certain Cash Receipts and Cash Payments." The ASU adds guidance pertaining to the classification of certain cash receipts and payments on the statement of cash flows. The purpose of the amendment is to clarify issues that have been creating diversity in practice. The amendments in this standard were effective for us beginning January 1, 2018, and the adoption did not have a material impact to financial statements or disclosures as NW Natural's historical practices and presentation were consistent with the directives of this ASU. FINANCIAL INSTRUMENTS. On January 5, 2016, the FASB issued ASU 2016-01, "Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities." The ASU enhances the reporting model for financial instruments, which includes amendments to address aspects of recognition, measurement, presentation, and disclosure. The new standard was effective for us beginning January 1, 2018, and the adoption did not materially impact financial statements or disclosures. REVENUE RECOGNITION. On May 28, 2014, the FASB issued ASU 2014-09 "Revenue From Contracts with Customers." The underlying principle of the guidance requires entities to recognize revenue depicting the transfer of goods or services to customers at amounts the entity is expected to be entitled to in exchange for those goods or services. The ASU also prescribes a five-step approach to revenue recognition: (1) identify the contract(s) with the customer; (2) identify the separate performance obligations in the contract(s); (3) determine the transaction price; (4) allocate the transaction price to separate performance obligations; and (5) recognize revenue when, or as, each performance obligation is satisfied. The guidance also requires additional disclosures, both qualitative and quantitative, regarding the nature, amount, timing and uncertainty of revenue and cash flows. The new accounting standard and all related amendments were effective for us beginning January 1, 2018. NW Natural applied the accounting standard to all contracts using the modified retrospective method. The new standard is primarily reflected in the consolidated statement of comprehensive income and Note 5 . The implementation of the new revenue standard did not result in changes to how NW Natural currently recognizes revenue, and therefore, no cumulative effect or adjustment to the opening balance of retained earnings was required. The implementation did result in changes to the disclosures and presentation of revenue and expenses. The comparative information for prior years has not been restated. There is no material impact to financial results and no significant changes to NW Natural's control environment due to the adoption of the new revenue standard on an ongoing basis. As previously discussed, the adoption of the new revenue standard did not impact the consolidated balance sheet or statement of cash flows but did result in changes to the presentation of the consolidated statements of comprehensive income. Had the adoption of the new revenue standard not occurred, operating revenues for the three and nine months ended September 30, 2018 would have been $87.7 million and $458.7 million , compared to the reported amounts of $91.2 million and $479.4 million under the new revenue standard, respectively. Similarly, absent the impact of the new revenue standard, operating expenses would have been $93.9 million and $388.8 million , compared to the reported amounts of $97.4 million and $409.5 million under the new revenue standard for the three and nine months ended September 30, 2018 , respectively. The effect of the change was an increase in both operating revenues and operating expenses of $3.5 million and $20.7 million for the three and nine months ended September 30, 2018 , respectively, due to the change in presentation of revenue taxes. As part of the adoption of the new revenue standard, we evaluated the presentation of revenue taxes under the new guidance and across NW Natural's peer group and concluded that the gross presentation of revenue taxes provides the greatest level of consistency and transparency. Prior to the adoption of the new revenue standard, a portion of revenue taxes was presented net in operating revenues and a portion was recorded directly on the balance sheet. During the three and nine months ended September 30, 2018 , NW Natural recognized $3.5 million and $20.7 million in revenue taxes in operating revenues and operating expenses, respectively. In comparison, for the three and nine months ended September 30, 2017 , NW Natural recognized $3.7 million and $23.0 million in revenue taxes, of which $2.3 million and $13.3 million were recorded in operating revenues and $1.4 million and $9.7 million were recorded on the balance sheet, respectively. The change in presentation of revenue taxes had no impact on utility margin, net income or earnings per share. Recently Issued Accounting Pronouncements CLOUD COMPUTING. On August 29, 2018, the FASB issued ASU 2018-15, "Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract." The purpose of the amendment is to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The amendments in this update are effective for us beginning January 1, 2020. Early adoption is permitted. The amended guidance can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We are currently assessing the effect of this standard on financial statements and disclosures. RETIREMENT BENEFITS. On August 28, 2018, the FASB issued ASU 2018-14, "Changes to the Disclosure Requirements for Defined Benefit Plans." The purpose of the amendment is to modify the disclosure requirements for defined benefit pension and other postretirement plans. The amendments in this update are effective for us beginning January 1, 2020. Early adoption is permitted. The amended presentation and disclosure guidance should be applied retrospectively. We are currently assessing the effect of this standard on disclosures. FAIR VALUE MEASUREMENT. On August 28, 2018, the FASB issued ASU 2018-13, "Changes to the Disclosure Requirements for Fair Value Measurement." The purpose of the amendment is to modify the disclosure requirements for fair value measurements. The amendments in this update are effective for us beginning January 1, 2020. Early adoption is permitted. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty should be applied prospectively. All other amendments should be applied retrospectively. We are currently assessing the effect of this standard on disclosures. ACCUMULATED OTHER COMPREHENSIVE INCOME. On February 14, 2018, the FASB issued ASU 2018-02, "Income Statement—Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." This update was issued in response to concerns from certain stakeholders regarding the current requirements under U.S. GAAP that deferred tax assets and liabilities are adjusted for a change in tax laws or rates, and the effect is to be included in income from continuing operations in the period of the enactment date. This requirement is also applicable to items in accumulated other comprehensive income where the related tax effects were originally recognized in other comprehensive income. The adjustment of deferred taxes due to the new corporate income tax rate enacted through the Tax Cuts and Jobs Act (TCJA) on December 22, 2017 recognized in income from continuing operations causes the tax effects of items within accumulated other comprehensive income (referred to as stranded tax effects) to not reflect the appropriate tax rate. The amendments in this update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the TCJA and require certain disclosures about stranded tax effects. The amendments in this update are effective for us beginning January 1, 2019, and should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the federal corporate income tax rate in the TCJA is recognized. The reclassification allowed in this update is elective, and we are currently assessing whether NW Natural will make the reclassification. This update is not expected to have a material impact on financial condition. DERIVATIVES AND HEDGING. On August 28, 2017, the FASB issued ASU 2017-12, "Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities." The purpose of the amendment is to more closely align hedge accounting with companies’ risk management strategies. The ASU amends the accounting for risk component hedging, the hedged item in fair value hedges of interest rate risk, and amounts excluded from the assessment of hedge effectiveness. The guidance also amends the recognition and presentation of the effect of hedging instruments and includes other simplifications of hedge accounting. The amendments in this update are effective for us beginning January 1, 2019. Early adoption is permitted. The amended presentation and disclosure guidance is required prospectively. We are currently assessing the effect of this standard on financial statements and disclosures. LEASES. On February 25, 2016, the FASB issued ASU 2016-02, "Leases," which revises the existing lease accounting guidance. Pursuant to the new standard, lessees will be required to recognize all leases, including operating leases that are greater than 12 months at lease commencement, on the balance sheet and record corresponding right-of-use assets and lease liabilities. Lessor accounting will remain substantially the same under the new standard. Quantitative and qualitative disclosures are also required for users of the financial statements to have a clear understanding of the nature of NW Natural's leasing activities. On November 29, 2017, the FASB proposed an additional practical expedient that would allow entities to apply the transition requirements on the effective date of the standard. Additionally, on January 25, 2018, the FASB issued ASU 2018-01, "Land Easement Practical Expedient for Transition to Topic 842", to address the costs and complexity of applying the transition provisions of the new lease standard to land easements. This ASU provides an optional practical expedient to not evaluate existing or expired land easements that were not previously accounted for as leases under the current lease guidance. The standard and associated ASUs are effective for us beginning January 1, 2019. We are currently assessing NW Natural's lease population and material contracts to determine the effect of this standard on financial statements and disclosures. Refer to Note 14 of the 2017 Form 10-K for NW Natural's current lease commitments. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Regulatory Assets | Amounts deferred as regulatory assets and liabilities were as follows: Regulatory Assets September 30, December 31, In thousands 2018 2017 2017 Current: Unrealized loss on derivatives (1) $ 8,828 $ 8,887 $ 18,712 Gas costs 461 1,851 154 Environmental costs (2) 5,633 6,362 6,198 Decoupling (3) 11,990 15,663 11,227 Income taxes 2,217 4,378 2,218 Other (4) 12,112 12,363 7,272 Total current $ 41,241 $ 49,504 $ 45,781 Non-current: Unrealized loss on derivatives (1) $ 3,016 $ 3,926 $ 4,649 Pension balancing (5) 72,291 57,599 60,383 Income taxes 19,267 36,591 19,991 Pension and other postretirement benefit liabilities 165,741 172,687 179,824 Environmental costs (2) 63,464 63,339 72,128 Gas costs 14 48 84 Decoupling (3) 829 1,025 3,970 Other (4) 9,295 10,137 15,579 Total non-current $ 333,917 $ 345,352 $ 356,608 (1) Unrealized gains or losses on derivatives are non-cash items and therefore, do not earn a rate of return or a carrying charge. These amounts are recoverable through utility rates as part of the annual Purchased Gas Adjustment (PGA) mechanism when realized at settlement. (2) Refer to footnote (3) per the Deferred Regulatory Asset table in Note 15 for a description of environmental costs. (3) This deferral represents the margin adjustment resulting from differences between actual and expected volumes. (4) Balances consist of deferrals and amortizations under approved regulatory mechanisms and typically earn a rate of return or carrying charge. (5) Refer to footnote (1) of the Net Periodic Benefit Cost table in Note 8 for information regarding the deferral of pension expenses. (6) This balance represents estimated amounts associated with the Tax Cuts and Jobs Act. See Note 9 . (7) Estimated costs of removal on certain regulated properties are collected through rates. |
Schedule of Regulatory Liabilities | Regulatory Liabilities September 30, December 31, In thousands 2018 2017 2017 Current: Gas costs $ 20,716 $ 16,459 $ 14,886 Unrealized gain on derivatives (1) 2,862 2,020 1,674 Decoupling (3) 1,697 314 322 Other (4) 12,229 15,866 17,131 Total current $ 37,504 $ 34,659 $ 34,013 Non-current: Gas costs $ 1,409 $ 1,015 $ 4,630 Unrealized gain on derivatives (1) 861 1,555 1,306 Decoupling (3) 119 — 957 Income taxes (6) 223,841 — 213,306 Accrued asset removal costs (7) 375,257 356,106 360,929 Other (4) 4,688 5,162 4,965 Total non-current $ 606,175 $ 363,838 $ 586,093 (1) Unrealized gains or losses on derivatives are non-cash items and therefore, do not earn a rate of return or a carrying charge. These amounts are recoverable through utility rates as part of the annual Purchased Gas Adjustment (PGA) mechanism when realized at settlement. (2) Refer to footnote (3) per the Deferred Regulatory Asset table in Note 15 for a description of environmental costs. (3) This deferral represents the margin adjustment resulting from differences between actual and expected volumes. (4) Balances consist of deferrals and amortizations under approved regulatory mechanisms and typically earn a rate of return or carrying charge. (5) Refer to footnote (1) of the Net Periodic Benefit Cost table in Note 8 for information regarding the deferral of pension expenses. (6) This balance represents estimated amounts associated with the Tax Cuts and Jobs Act. See Note 9 . (7) Estimated costs of removal on certain regulated properties are collected through rates. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Diluted earnings (loss) from continuing operations per share are calculated as follows: Three Months Ended September 30, Nine Months Ended September 30, In thousands, except per share data 2018 2017 2018 2017 Net income (loss) from continuing operations $ (11,144 ) $ (7,887 ) $ 30,528 $ 37,585 Average common shares outstanding - basic 28,815 28,678 28,787 28,653 Additional shares for stock-based compensation plans (See Note 6) — — 59 81 Average common shares outstanding - diluted 28,815 28,678 28,846 28,734 Earnings (loss) from continuing operations per share of common stock - basic $ (0.39 ) $ (0.28 ) $ 1.06 $ 1.32 Earnings (loss) from continuing operations per share of common stock - diluted $ (0.39 ) $ (0.28 ) $ 1.06 $ 1.31 Additional information: Antidilutive shares 73 96 4 15 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table presents summary financial information concerning the reportable segments of continuing operations. See Note 16 for information regarding the discontinued operation, Gill Ranch. Three Months Ended September 30, In thousands Utility Other Total 2018 Operating revenues $ 85,077 $ 6,162 $ 91,239 Depreciation and amortization 21,127 358 21,485 Income (loss) from operations (9,780 ) 3,669 (6,111 ) Net income (loss) from continuing operations (11,983 ) 839 (11,144 ) Capital expenditures 55,914 511 56,425 2017 Operating revenues $ 81,126 $ 5,087 $ 86,213 Depreciation and amortization 20,023 329 20,352 Income (loss) from operations (8,624 ) 4,084 (4,540 ) Net income (loss) from continuing operations (10,349 ) 2,462 (7,887 ) Capital expenditures 50,009 932 50,941 Nine Months Ended September 30, In thousands Utility Other Total 2018 Operating revenues $ 461,525 $ 17,916 $ 479,441 Depreciation and amortization 62,436 1,071 63,507 Income from operations 59,521 10,388 69,909 Net income from continuing operations 24,930 5,598 30,528 Capital expenditures 156,609 2,186 158,795 Total assets at September 30, 2018 (1) 2,972,066 96,697 3,068,763 2017 Operating revenues $ 503,947 $ 12,466 $ 516,413 Depreciation and amortization 59,541 988 60,529 Income from operations 81,661 9,315 90,976 Net income from continuing operations 31,980 5,605 37,585 Capital expenditures 143,128 2,146 145,274 Total assets at September 30, 2017 (1) 2,835,860 63,563 2,899,423 Total assets at December 31, 2017 (1) 2,961,326 64,546 3,025,872 (1) Total assets exclude assets related to discontinued operations of $12.6 million , $206.2 million , and $13.9 million as of September 30, 2018 , September 30, 2017 , and December 31, 2017 , respectively. |
Utility Margin | The following table presents additional segment information concerning utility margin: Three Months Ended September 30, Nine Months Ended September 30, In thousands 2018 2017 2018 2017 Utility margin calculation: Utility operating revenues $ 85,077 $ 81,126 $ 461,525 $ 503,947 Less: Utility cost of gas 25,593 27,239 175,864 223,855 Environmental remediation expense 1,022 1,355 7,528 10,920 Revenue taxes (1) 3,522 — 20,731 — Utility margin $ 54,940 $ 52,532 $ 257,402 $ 269,172 (1) The change in presentation of revenue taxes was a result of the adoption of ASU 2014-09 "Revenue From Contracts with Customers" and all related amendments on January 1, 2018. This change had no impact on utility margin results as revenue taxes were previously presented net in utility operating revenue. For additional information, see Note 2 . |
Revenue Revenue (Tables)
Revenue Revenue (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue [Table Text Block] | The following table presents disaggregated revenue from continuing operations: Three months ended September 30, 2018 In thousands Utility Other Total Local gas distribution revenue $ 82,358 $ — $ 82,358 Gas storage revenue, net — 2,415 2,415 Asset management revenue, net — 2,714 2,714 Appliance retail center revenue — 1,033 1,033 Revenue from contracts with customers 82,358 6,162 88,520 Alternative revenue 1,994 — 1,994 Leasing revenue 725 — 725 Total operating revenues $ 85,077 $ 6,162 $ 91,239 Nine months ended September 30, 2018 In thousands Utility Other Total Local gas distribution revenue $ 455,312 $ — $ 455,312 Gas storage revenue, net — 7,189 7,189 Asset management revenue, net — 6,974 6,974 Appliance retail center revenue — 3,753 3,753 Revenue from contracts with customers 455,312 17,916 473,228 Alternative revenue 5,285 — 5,285 Leasing revenue 928 — 928 Total operating revenues $ 461,525 $ 17,916 $ 479,441 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The following table provides an estimate of the fair value of long-term debt, including current maturities of long-term debt, using market prices in effect on the valuation date: September 30, December 31, In thousands 2018 2017 2017 Gross long-term debt $ 815,534 $ 786,700 $ 786,700 Unamortized debt issuance costs (5,940 ) (7,276 ) (6,813 ) Carrying amount $ 809,594 $ 779,424 $ 779,887 Estimated fair value (1) $ 833,962 $ 847,068 $ 853,339 (1) Estimated fair value does not include unamortized debt issuance costs. |
Pension and Other Postretirem_2
Pension and Other Postretirement Benefit Costs (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract] | |
Schedule of Net Benefit Costs | The following table provides the components of net periodic benefit cost for the pension and other postretirement benefit plans: Three Months Ended September 30, Nine Months Ended September 30, Pension Benefits Other Postretirement Benefits Pension Benefits Other Postretirement Benefits In thousands 2018 2017 2018 2017 2018 2017 2018 2017 Service cost $ 1,757 $ 1,881 $ 80 $ 98 $ 5,371 $ 5,621 $ 239 $ 295 Interest cost 4,336 4,484 241 274 12,702 13,428 723 822 Expected return on plan assets (5,143 ) (5,112 ) — — (15,444 ) (15,337 ) — — Amortization of prior service costs 11 32 (117 ) (117 ) 32 95 (351 ) (351 ) Amortization of net actuarial loss 5,650 3,656 110 138 14,697 10,899 332 415 Net periodic benefit cost 6,611 4,941 314 393 17,358 14,706 943 1,181 Amount allocated to construction (659 ) (1,581 ) (27 ) (136 ) (2,026 ) (4,660 ) (82 ) (403 ) Amount deferred to regulatory balancing account (1) (3,878 ) (1,484 ) — — (9,381 ) (4,519 ) — — Net amount charged to expense $ 2,074 $ 1,876 $ 287 $ 257 $ 5,951 $ 5,527 $ 861 $ 778 (1) The deferral of defined benefit pension plan expenses above or below the amount set in rates was approved by the OPUC, with recovery of these deferred amounts through the implementation of a balancing account. On October 26, 2018 the OPUC ordered that the balancing account be frozen as of October 31, 2018, with recovery subject to future proceedings. Effective November 1, 2018 the OPUC authorized an additional $8.1 million to be included in rates for defined benefit pension plan expenses. Deferred pension expense balances include accrued interest at the utility’s authorized rate of return, with the equity portion of the interest recognized when amounts are collected in rates. See Note 2 in the 2017 Form 10-K. |
Schedule of Amounts Recognized in Other Comprehensive Income (Loss) | The following table presents amounts recognized in accumulated other comprehensive loss (AOCL) and the changes in AOCL related to non-qualified employee benefit plans: Three Months Ended September 30, Nine Months Ended September 30, In thousands 2018 2017 2018 2017 Beginning balance $ (8,131 ) $ (6,678 ) $ (8,438 ) $ (6,951 ) Amounts reclassified from AOCL: Amortization of actuarial losses 209 248 627 698 Total reclassifications before tax 209 248 627 698 Tax (benefit) expense (55 ) (98 ) (166 ) (275 ) Total reclassifications for the period 154 150 461 423 Ending balance $ (7,977 ) $ (6,528 ) $ (7,977 ) $ (6,528 ) |
Income Tax (Tables)
Income Tax (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | The effective income tax rate varied from the combined federal and state statutory tax rates due to the following: Three Months Ended September 30, Nine Months Ended September 30, Dollars in thousands 2018 2017 2018 2017 Income taxes at statutory rates (federal and state) $ (4,136 ) $ (5,440 ) $ 11,097 $ 24,472 Increase (decrease): Differences required to be flowed-through by regulatory commissions (266 ) (302 ) 569 1,282 Other, net 117 20 (475 ) (1,298 ) Total provision (benefit) for income taxes on continuing operations $ (4,285 ) $ (5,722 ) $ 11,191 $ 24,456 Effective tax rate for continuing operations 27.8 % 42.0 % 26.8 % 39.4 % |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Public Utilities, Property, Plant and Equipment [Abstract] | |
Public Utility Property, Plant, and Equipment | The following table sets forth the major classifications of property, plant, and equipment and accumulated depreciation of continuing operations: September 30, December 31, In thousands 2018 2017 2017 Utility plant in service $ 3,068,234 $ 2,934,424 $ 2,975,217 Utility construction work in progress 227,200 145,148 159,924 Less: Accumulated depreciation 978,446 937,498 942,879 Utility plant, net 2,316,988 2,142,074 2,192,262 Other plant in service 69,449 64,929 65,372 Other construction work in progress 5,505 4,044 4,122 Less: Accumulated depreciation 18,548 17,284 17,598 Other plant, net (1) 56,406 51,689 51,896 Total property, plant, and equipment $ 2,373,394 $ 2,193,763 $ 2,244,158 Capital expenditures in accrued liabilities (2) $ 27,692 $ 41,675 $ 34,761 (1) Previously reported non-utility balances were restated due to the assets and liabilities associated with Gill Ranch now being classified as discontinued operations assets and liabilities on the consolidated balance sheets. See Note 16 for further discussion. (2) Previously reported capital expenditures in accrued liabilities were restated due to the assets and liabilities associated with Gill Ranch now being classified as discontinued operations assets and liabilities on the consolidated balance sheets. Capital expenditures in accrued liabilities related to Gill Ranch were approximately $0.3 million , $0.1 million , and $0.2 million as of September 30, 2018 , September 30, 2017 , and December 31, 2017 , respectively. |
Gas Reserves (Tables)
Gas Reserves (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Gas Reserves [Abstract] | |
Gas Reserves | The following table outlines net gas reserves investment: September 30, December 31, In thousands 2018 2017 2017 Gas reserves, current $ 16,916 $ 16,218 $ 15,704 Gas reserves, non-current 170,391 171,318 171,832 Less: Accumulated amortization 99,835 83,442 87,779 Total gas reserves (1) 87,472 104,094 99,757 Less: Deferred taxes on gas reserves 19,377 29,298 22,712 Net investment in gas reserves $ 68,095 $ 74,796 $ 77,045 (1) The net investment in additional wells included in total gas reserves was $ 5.0 million , $ 6.0 million and $ 5.8 million at September 30, 2018 and 2017 and December 31, 2017 , respectively. |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Amounts of Outstanding Derivative Positions | The following table presents the absolute notional amounts related to open positions on derivative instruments: September 30, December 31, In thousands 2018 2017 2017 Natural gas (in therms): Financial 513,850 521,080 429,100 Physical 760,925 750,650 520,268 Foreign exchange $ 7,184 $ 6,933 $ 7,669 |
Income Statement Presentation of Derivative Instruments | The following table reflects the income statement presentation for the unrealized gains and losses from derivative instruments: Three Months Ended September 30, 2018 2017 In thousands Natural gas commodity Foreign exchange Natural gas commodity Foreign exchange Benefit (expense) to cost of gas $ 4,473 $ 210 $ (2,566 ) $ 51 Operating revenues (286 ) — 28 — Amounts deferred to regulatory accounts on balance sheet (4,285 ) (210 ) 2,548 (51 ) Total gain (loss) in pre-tax earnings $ (98 ) $ — $ 10 $ — Nine Months Ended September 30, 2018 2017 In thousands Natural gas commodity Foreign exchange Natural gas commodity Foreign exchange Benefit (expense) to cost of gas $ 1,384 $ — $ (19,081 ) $ 275 Operating revenues (122 ) — (1,249 ) — Amounts deferred to regulatory accounts on balance sheet (1,305 ) — 19,895 (275 ) Total gain (loss) in pre-tax earnings $ (43 ) $ — $ (435 ) $ — |
Table of Estimated Collateral Calls Table | Based upon current commodity financial swap and option contracts outstanding, which reflect unrealized losses of $9.7 million at September 30, 2018 , we have estimated the level of collateral demands, with and without potential adequate assurance calls, using current gas prices and various credit downgrade rating scenarios for NW Natural as follows: Credit Rating Downgrade Scenarios In thousands (Current Ratings) A+/A3 BBB+/Baa1 BBB/Baa2 BBB-/Baa3 Speculative With Adequate Assurance Calls $ — $ — $ — $ (2,587 ) $ (7,023 ) Without Adequate Assurance Calls — — — (2,587 ) (4,730 ) |
Environmental Matters (Tables)
Environmental Matters (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Environmental Remediation Obligations [Abstract] | |
Schedule of Environmental Loss Contingencies by Site | Environmental Sites The following table summarizes information regarding liabilities related to environmental sites, which are recorded in other current liabilities and other noncurrent liabilities in the balance sheet: Current Liabilities Non-Current Liabilities September 30, December 31, September 30, December 31, In thousands 2018 2017 2017 2018 2017 2017 Portland Harbor site: Gasco/Siltronic Sediments $ 2,471 $ 860 $ 2,683 $ 44,410 $ 43,796 $ 45,346 Other Portland Harbor 1,392 1,379 1,949 3,540 3,618 4,163 Gasco/Siltronic Upland site 8,847 7,537 13,422 44,310 48,758 47,835 Central Service Center site 25 31 25 — — — Front Street site 6,011 846 1,009 5,342 10,788 10,757 Oregon Steel Mills — — — 179 179 179 Total $ 18,746 $ 10,653 $ 19,088 $ 97,781 $ 107,139 $ 108,280 |
Environmental Regulatory Table | The following table presents information regarding the total regulatory asset deferred: September 30, December 31, In thousands 2018 2017 2017 Deferred costs and interest (1) $ 40,578 $ 52,888 $ 45,546 Accrued site liabilities (2) 116,150 117,388 126,950 Insurance proceeds and interest (87,631 ) (100,575 ) (94,170 ) Total regulatory asset deferral (1) $ 69,097 $ 69,701 $ 78,326 Current regulatory assets (3) 5,633 6,362 6,198 Long-term regulatory assets (3) 63,464 63,339 72,128 (1) Includes pre-review and post-review deferred costs, amounts currently in amortization, and interest, net of amounts collected from customers. (2) Excludes 3.32% of the Front Street site liability, or $0.4 million in 2018 and $0.3 million in 2017 , as the OPUC only allows recovery of 96.68% of costs for those sites allocable to Oregon, including those that historically served only Oregon customers. (3) Environmental costs relate to specific sites approved for regulatory deferral by the OPUC and WUTC. In Oregon, NW Natural earns a carrying charge on cash amounts paid, whereas amounts accrued but not yet paid do not earn a carrying charge until expended. It also accrues a carrying charge on insurance proceeds for amounts owed to customers. In Washington, a carrying charge related to deferred amounts will be determined in a future proceeding. Current environmental costs represent remediation costs management expects to collect from customers in the next 12 months. Amounts included in this estimate are still subject to a prudence and earnings test review by the OPUC and do not include the $5.0 million tariff rider. The amounts allocable to Oregon are recoverable through utility rates, subject to an earnings test. |
Discontinued Operations Disco_2
Discontinued Operations Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Income Statement - Discontinued Operations [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Disposal Groups, Including Discontinued Operations [Table Text Block] | The following table presents the operating results of Gill Ranch, which was reported within the gas storage segment historically, and is presented net of tax on the consolidated statements of comprehensive income: Three Months Ended September 30, Nine Months Ended September 30, In thousands, except per share data 2018 2017 2018 2017 Revenues $ 748 $ 1,977 $ 2,831 $ 5,338 Expenses: Operations and maintenance 1,549 1,248 4,139 5,169 Depreciation and amortization 106 1,131 324 3,394 Other expenses and interest (24 ) 603 790 1,799 Total expenses 1,631 2,982 5,253 10,362 Loss from discontinued operations before income taxes (883 ) (1,005 ) (2,422 ) (5,024 ) Income tax benefit 233 397 639 1,983 Loss from discontinued operations, net of tax $ (650 ) $ (608 ) $ (1,783 ) $ (3,041 ) Loss from discontinued operations per share of common stock: Basic $ (0.02 ) $ (0.02 ) $ (0.06 ) $ (0.11 ) Diluted $ (0.02 ) $ (0.02 ) $ (0.06 ) $ (0.11 ) |
Balance Sheet - Assets Held for Sale [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Disposal Groups, Including Discontinued Operations [Table Text Block] | The following table presents the carrying amounts of the major components of Gill Ranch that are classified as discontinued operations assets and liabilities on the consolidated balance sheets: September 30, December 31, In thousands 2018 2017 2017 Assets: Accounts receivable $ 395 $ 1,520 $ 2,126 Inventories 661 415 396 Other current assets 107 171 535 Property, plant, and equipment 11,241 235,578 10,816 Less: Accumulated depreciation 7 31,551 — Other non-current assets 247 51 1 Discontinued operations - current assets (1) 12,644 2,106 3,057 Discontinued operations - non-current assets (1) — 204,078 10,817 Total discontinued operations assets $ 12,644 $ 206,184 $ 13,874 Liabilities: Accounts payable $ 751 $ 353 $ 1,287 Other current liabilities 405 848 306 Other non-current liabilities 11,847 12,106 12,043 Discontinued operations - current liabilities (1) 13,003 1,201 1,593 Discontinued operations - non-current liabilities (1) — 12,106 12,043 Total discontinued operations liabilities $ 13,003 $ 13,307 $ 13,636 (1) The total assets and liabilities of Gill Ranch are classified as current as of September 30, 2018 because it is probable that the sale will be completed within one year. |
Organization and Principles o_2
Organization and Principles of Consolidation Organization and Principles of Consolidation (Details) $ in Thousands | 7 Months Ended |
Sep. 30, 2018USD ($) | |
Northwest Natural Holding Company [Member] | |
Proceeds from Contributions from Parent | $ 20,000 |
Significant Accounting Polici_4
Significant Accounting Policies - Regulatory Asset Disclosure (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Regulatory Assets [Line Items] | |||
Current regulatory assets | $ 41,241 | $ 45,781 | $ 49,504 |
Non-current regulatory assets | 333,917 | 356,608 | 345,352 |
Deferred Derivative Gain (Loss) | |||
Regulatory Assets [Line Items] | |||
Current regulatory assets | 8,828 | 18,712 | 8,887 |
Non-current regulatory assets | 3,016 | 4,649 | 3,926 |
Gas costs | |||
Regulatory Assets [Line Items] | |||
Current regulatory assets | 461 | 154 | 1,851 |
Non-current regulatory assets | 14 | 84 | 48 |
Environmental Restoration Costs | |||
Regulatory Assets [Line Items] | |||
Current regulatory assets | 5,633 | 6,198 | 6,362 |
Non-current regulatory assets | 63,464 | 72,128 | 63,339 |
Decoupling | |||
Regulatory Assets [Line Items] | |||
Current regulatory assets | 11,990 | 11,227 | 15,663 |
Non-current regulatory assets | 829 | 3,970 | 1,025 |
Income taxes | |||
Regulatory Assets [Line Items] | |||
Current regulatory assets | 2,217 | 2,218 | 4,378 |
Non-current regulatory assets | 19,267 | 19,991 | 36,591 |
Other | |||
Regulatory Assets [Line Items] | |||
Current regulatory assets | 12,112 | 7,272 | 12,363 |
Non-current regulatory assets | 9,295 | 15,579 | 10,137 |
Pension balancing | |||
Regulatory Assets [Line Items] | |||
Non-current regulatory assets | 72,291 | 60,383 | 57,599 |
Pension and other postretirement benefit liabilities | |||
Regulatory Assets [Line Items] | |||
Non-current regulatory assets | $ 165,741 | $ 179,824 | $ 172,687 |
Significant Accounting Polici_5
Significant Accounting Policies - Regulatory Liability Disclosure (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Regulatory Liabilities [Line Items] | |||
Current regulatory liabilities | $ 37,504 | $ 34,013 | $ 34,659 |
Regulatory Liability, Noncurrent | 606,175 | 586,093 | 363,838 |
Gas costs | |||
Regulatory Liabilities [Line Items] | |||
Current regulatory liabilities | 20,716 | 14,886 | 16,459 |
Regulatory Liability, Noncurrent | 1,409 | 4,630 | 1,015 |
Deferred Derivative Gain (Loss) | |||
Regulatory Liabilities [Line Items] | |||
Current regulatory liabilities | 2,862 | 1,674 | 2,020 |
Regulatory Liability, Noncurrent | 861 | 1,306 | 1,555 |
Decoupling | |||
Regulatory Liabilities [Line Items] | |||
Current regulatory liabilities | 1,697 | 322 | 314 |
Regulatory Liability, Noncurrent | 119 | 957 | 0 |
Income taxes | |||
Regulatory Liabilities [Line Items] | |||
Regulatory Liability, Noncurrent | 223,841 | 213,306 | 0 |
Accrued asset removal costs | |||
Regulatory Liabilities [Line Items] | |||
Regulatory Liability, Noncurrent | 375,257 | 360,929 | 356,106 |
Other | |||
Regulatory Liabilities [Line Items] | |||
Current regulatory liabilities | 12,229 | 17,131 | 15,866 |
Regulatory Liability, Noncurrent | $ 4,688 | $ 4,965 | $ 5,162 |
Significant Accounting Polici_6
Significant Accounting Policies Retirement Benefits ASU 2017-07 (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operations and maintenance | $ 37,569 | $ 34,267 | $ 115,120 | $ 106,710 |
Accounting Standards Updates 2017-07 [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operations and maintenance | $ 1,400 | $ 4,000 |
Significant Accounting Polici_7
Significant Accounting Policies 606 Revenue Adoption (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Item Effected [Line Items] | ||||
Operating revenues | $ 91,239 | $ 86,213 | $ 479,441 | $ 516,413 |
Total operating expenses | 97,350 | 90,753 | 409,532 | 425,437 |
Revenue taxes | 3,522 | 0 | 20,731 | |
Calculated under Revenue Guidance in Effect before Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | ||||
Item Effected [Line Items] | ||||
Operating revenues | 87,700 | 458,700 | ||
Total operating expenses | 93,900 | 388,800 | ||
Calculated under Revenue Guidance in Effect after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | ||||
Item Effected [Line Items] | ||||
Operating revenues | 91,200 | 479,400 | ||
Total operating expenses | 97,400 | 409,500 | ||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | ||||
Item Effected [Line Items] | ||||
Operating revenues | 3,500 | 20,700 | ||
Total operating expenses | 3,500 | 20,700 | ||
Total Revenue Taxes [Member] | ||||
Item Effected [Line Items] | ||||
Revenue taxes | $ 3,500 | 3,700 | $ 20,700 | 23,000 |
Revenue taxes in operating revenues [Member] | ||||
Item Effected [Line Items] | ||||
Revenue taxes | 2,300 | 13,300 | ||
Revenue taxes on Balance Sheet [Member] | ||||
Item Effected [Line Items] | ||||
Revenue taxes | $ 1,400 | $ 9,700 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) from continuing operations | $ (11,144) | $ (7,887) | $ 30,528 | $ 37,585 |
Average common shares outstanding - basic (in shares) | 28,815 | 28,678 | 28,787 | 28,653 |
Additional shares for stock-based compensation plans (in shares) | 0 | 0 | 59 | 81 |
Average common shares outstanding - diluted (in shares) | 28,815 | 28,678 | 28,846 | 28,734 |
Income (Loss) from Continuing Operations, Per Basic Share | $ (0.39) | $ (0.28) | $ 1.06 | $ 1.32 |
Income (Loss) from Continuing Operations, Per Diluted Share | $ (0.39) | $ (0.28) | $ 1.06 | $ 1.31 |
Antidilutive shares (in shares) | 73 | 96 | 4 | 15 |
Segment Information Segments Su
Segment Information Segments Summary (Details) | 9 Months Ended |
Sep. 30, 2018 | |
Operating Segments | |
Segment Reporting Information [Line Items] | |
Number of Operating Segments | 1 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||||
Operating revenues | $ 91,239 | $ 86,213 | $ 479,441 | $ 516,413 | |
Depreciation and amortization | 21,485 | 20,352 | 63,507 | 60,529 | |
Income (loss) from operations | (6,111) | (4,540) | 69,909 | 90,976 | |
Net income (loss) from continuing operations | (11,144) | (7,887) | 30,528 | 37,585 | |
Capital expenditures | 158,795 | 145,274 | |||
Total Assets | 3,081,407 | 3,105,607 | 3,081,407 | 3,105,607 | $ 3,039,746 |
Utility | |||||
Segment Reporting Information [Line Items] | |||||
Operating revenues | 85,077 | 461,525 | |||
Other | |||||
Segment Reporting Information [Line Items] | |||||
Operating revenues | 6,162 | 17,916 | |||
Operating Segments | Utility | |||||
Segment Reporting Information [Line Items] | |||||
Operating revenues | 85,077 | 81,126 | 461,525 | 503,947 | |
Depreciation and amortization | 21,127 | 20,023 | 62,436 | 59,541 | |
Income (loss) from operations | (9,780) | (8,624) | 59,521 | 81,661 | |
Net income (loss) from continuing operations | (11,983) | (10,349) | 24,930 | 31,980 | |
Capital expenditures | 55,914 | 50,009 | 156,609 | 143,128 | |
Total Assets | 2,972,066 | 2,835,860 | 2,972,066 | 2,835,860 | 2,961,326 |
Operating Segments | Other | |||||
Segment Reporting Information [Line Items] | |||||
Operating revenues | 6,162 | 5,087 | 17,916 | 12,466 | |
Depreciation and amortization | 358 | 329 | 1,071 | 988 | |
Income (loss) from operations | 3,669 | 4,084 | 10,388 | 9,315 | |
Net income (loss) from continuing operations | 839 | 2,462 | 5,598 | 5,605 | |
Capital expenditures | 511 | 932 | 2,186 | 2,146 | |
Total Assets | 96,697 | 63,563 | 96,697 | 63,563 | 64,546 |
Operating Segments | Total Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating revenues | 91,239 | 86,213 | 479,441 | 516,413 | |
Depreciation and amortization | 21,485 | 20,352 | 63,507 | 60,529 | |
Income (loss) from operations | (6,111) | (4,540) | 69,909 | 90,976 | |
Net income (loss) from continuing operations | (11,144) | (7,887) | 30,528 | 37,585 | |
Capital expenditures | 56,425 | 50,941 | 158,795 | 145,274 | |
Total Assets | $ 3,068,763 | 2,899,423 | $ 3,068,763 | 2,899,423 | 3,025,872 |
Geographic Concentration Risk [Member] | Geographic Concentration Risk [Member] | OREGON | Utility | |||||
Segment Reporting Information [Line Items] | |||||
Concentration Risk, Percentage | 89.00% | ||||
Geographic Concentration Risk [Member] | Geographic Concentration Risk [Member] | WASHINGTON | Utility | |||||
Segment Reporting Information [Line Items] | |||||
Concentration Risk, Percentage | 11.00% | ||||
Residential and Commerical Customers [Member] | Volumes Delivered [Member] | Utility | |||||
Segment Reporting Information [Line Items] | |||||
Concentration Risk, Percentage | 60.00% | ||||
Residential and Commerical Customers [Member] | Gross Profit Margin [Member] | Utility | |||||
Segment Reporting Information [Line Items] | |||||
Concentration Risk, Percentage | 90.00% | ||||
Mist Gas Storage Facility Member [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Percent Of Pre Tax Income From Gas Storage Retained When The Costs Of The Capacity Are In Utility Rates | 80.00% | 80.00% | |||
Percent Of Pre Tax Income From Gas Storage Retained When The Costs Of The Capacity Are In Utility Rates | 33.00% | 33.00% | |||
Percent Of Pre Tax Income From Gas Storage Credited To Deferred Regulatory Account | 20.00% | 20.00% | |||
Percent Of Pre Tax Income From Gas Storage Credited To Deferred Regulatory Account When In Rates | 67.00% | 67.00% | |||
Gill Ranch [Member] | Discontinued Operations, Held-for-sale or Disposed of by Sale [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total Assets | $ 12,644 | 206,184 | $ 12,644 | 206,184 | 13,874 |
Gill Ranch [Member] | Discontinued Operations, Held-for-sale or Disposed of by Sale [Member] | Segment Reconciling Items [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total Assets | $ 12,600 | $ 206,200 | $ 12,600 | $ 206,200 | $ 13,900 |
Segment Information - Utility M
Segment Information - Utility Margin (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Operating revenues | $ 91,239 | $ 86,213 | $ 479,441 | $ 516,413 |
Less: Utility cost of gas | 25,538 | 27,239 | 175,697 | 223,855 |
Environmental remediation | 1,022 | 1,355 | 7,528 | 10,920 |
Revenue taxes | 3,522 | 0 | 20,731 | |
Utility | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | 85,077 | 461,525 | ||
Operating Segments | Utility | ||||
Segment Reporting Information [Line Items] | ||||
Operating revenues | 85,077 | 81,126 | 461,525 | 503,947 |
Less: Utility cost of gas | 25,593 | 27,239 | 175,864 | 223,855 |
Environmental remediation | 1,022 | 1,355 | 7,528 | 10,920 |
Revenue taxes | 3,522 | 0 | 20,731 | 0 |
Utility margin | $ 54,940 | $ 52,532 | $ 257,402 | $ 269,172 |
Revenue Disaggregation of Reven
Revenue Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Including Assessed Tax | $ 88,520 | $ 473,228 | ||
Revenues | 91,239 | $ 86,213 | 479,441 | $ 516,413 |
Local Gas Distribution [Member] | Transferred over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Including Assessed Tax | 82,358 | 455,312 | ||
Natural Gas Storage [Domain] | Transferred over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Including Assessed Tax | 2,415 | 7,189 | ||
Asset management revenue, net | Transferred over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Including Assessed Tax | 2,714 | 6,974 | ||
Appliance Center [Member] | Transferred at Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Including Assessed Tax | 1,033 | 3,753 | ||
Alternative Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,994 | 5,285 | ||
Leasing Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Leasing revenue | 725 | 928 | ||
Utility Segment [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Including Assessed Tax | 82,358 | 455,312 | ||
Revenues | 85,077 | 461,525 | ||
Utility Segment [Member] | Local Gas Distribution [Member] | Transferred over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Including Assessed Tax | 82,358 | 455,312 | ||
Utility Segment [Member] | Natural Gas Storage [Domain] | Transferred over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Including Assessed Tax | 0 | 0 | ||
Utility Segment [Member] | Asset management revenue, net | Transferred over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Including Assessed Tax | 0 | 0 | ||
Utility Segment [Member] | Appliance Center [Member] | Transferred at Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Including Assessed Tax | 0 | 0 | ||
Utility Segment [Member] | Alternative Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,994 | 5,285 | ||
Utility Segment [Member] | Leasing Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Leasing revenue | 725 | 928 | ||
Other Segments [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 6,162 | 17,916 | ||
Revenues | 6,162 | 17,916 | ||
Other Segments [Member] | Local Gas Distribution [Member] | Transferred over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | ||
Other Segments [Member] | Natural Gas Storage [Domain] | Transferred over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 2,415 | 7,189 | ||
Other Segments [Member] | Asset management revenue, net | Transferred over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 2,714 | 6,974 | ||
Other Segments [Member] | Appliance Center [Member] | Transferred at Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 1,033 | 3,753 | ||
Other Segments [Member] | Alternative Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | ||
Other Segments [Member] | Leasing Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Leasing revenue | $ 0 | $ 0 |
Revenue Remaining Performance O
Revenue Remaining Performance Obligation (Details) - Gas Storage and Asset Management Revenues [Member] $ in Millions | 3 Months Ended |
Sep. 30, 2018USD ($) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-09-30 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation | $ 43.8 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation | $ 5.1 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Year | 2,018 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation | $ 11.9 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Year | 2,019 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation | $ 9.2 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Year | 2,020 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation | $ 8.3 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Year | 2,021 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation | $ 4.7 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Year | 2,022 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - Long Term Incentive Plan - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended |
Mar. 31, 2020 | Sep. 30, 2018 | |
Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 1 year 6 months | |
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award | a three-year Return on Invested Capital (ROIC) threshold that must be satisfied and a cumulative EPS factor, which can be modified by a total shareholder return factor (TSR modifier) relative to the performance of the Russell 2500 Utilities Index | |
Award vesting period | 3 years | |
Number of shares granted (in shares) | 0 | |
Unrecognized compensation costs | $ 1.3 | |
Performance Shares | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Conversion ratio, percent of target | 0.00% | |
Performance Shares | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Conversion ratio, percent of target | 200.00% | |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 5 years 3 months | |
Number of RSUs granted in period (in shares) | 31,490 | |
Weighted-average grant date fair value (in dollars per share) | $ 57.37 | |
Unrecognized compensation costs | $ 3.4 | |
Northwest Natural Holding Company [Member] | Scenario, Forecast [Member] | Q1 2020 [Member] | Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares granted (in shares) | 34,702 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | |
Debt Instrument [Line Items] | ||||
Long-term Debt | $ 809,594 | $ 779,887 | $ 779,424 | |
Unamortized debt issuance costs | $ 5,940 | $ 6,813 | $ 7,276 | |
Maturity start date range | Mar. 16, 2018 | |||
Maturity end date range | Sep. 10, 2048 | |||
Weighted average interest rate | 4.69% | |||
Minimum | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate | 1.545% | |||
Maximum | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate | 9.05% | |||
$22 Million Series 6.60% Due 2018 | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate | 6.60% | |||
Repayments of Debt | $ 22,000 | |||
$50 Million Series 4.11% Due 2048 [Member] | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate | 4.11% | |||
Proceeds from Issuance of Debt | $ 50,000 |
Debt Short-term Debt (Details)
Debt Short-term Debt (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | |
Short-term Debt [Abstract] | |||
Short-term debt | $ 100,500 | $ 54,200 | $ 0 |
Short-term Debt Maximum Remaining Maturity | 12 days | ||
Short-term Debt Average Remaining Maturity | 7 days |
Debt Fair Value of Long Term De
Debt Fair Value of Long Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Debt Disclosure [Abstract] | |||
Gross long-term debt | $ 815,534 | $ 786,700 | $ 786,700 |
Unamortized debt issuance costs | (5,940) | (6,813) | (7,276) |
Carrying amount | 809,594 | 779,887 | 779,424 |
Estimated fair value | $ 833,962 | $ 853,339 | $ 847,068 |
Pension and Other Postretirem_3
Pension and Other Postretirement Benefit Costs - Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Nov. 06, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Pension Benefits | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Service cost | $ 1,757 | $ 1,881 | $ 5,371 | $ 5,621 | |
Interest cost | 4,336 | 4,484 | 12,702 | 13,428 | |
Expected return on plan assets | (5,143) | (5,112) | (15,444) | (15,337) | |
Amortization of net actuarial loss | 11 | 32 | 32 | 95 | |
Defined Benefit Plan, Amortization of Gain (Loss) | 5,650 | 3,656 | 14,697 | 10,899 | |
Net periodic benefit cost | 6,611 | 4,941 | 17,358 | 14,706 | |
Amount allocated to construction | (659) | (1,581) | (2,026) | (4,660) | |
Amount deferred to regulatory balancing account(1) | (3,878) | (1,484) | (9,381) | (4,519) | |
Net amount charged to expense | 2,074 | 1,876 | 5,951 | 5,527 | |
Other Postretirement Benefits | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Service cost | 80 | 98 | 239 | 295 | |
Interest cost | 241 | 274 | 723 | 822 | |
Expected return on plan assets | 0 | 0 | 0 | 0 | |
Amortization of net actuarial loss | (117) | (117) | (351) | (351) | |
Defined Benefit Plan, Amortization of Gain (Loss) | 110 | 138 | 332 | 415 | |
Net periodic benefit cost | 314 | 393 | 943 | 1,181 | |
Amount allocated to construction | (27) | (136) | (82) | (403) | |
Amount deferred to regulatory balancing account(1) | 0 | 0 | 0 | 0 | |
Net amount charged to expense | $ 287 | $ 257 | $ 861 | $ 778 | |
Subsequent Event [Member] | Scenario, Forecast [Member] | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Defined Benefit Plan, Other Cost (Credit) | $ 8,100 |
Pension and Other Postretirem_4
Pension and Other Postretirement Benefit Costs - Amounts Recognized in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss) [Abstract] | ||||
Beginning balance | $ (8,131) | $ (6,678) | $ (8,438) | $ (6,951) |
Amortization of actuarial losses | 209 | 248 | 627 | 698 |
Total reclassifications before tax | 209 | 248 | 627 | 698 |
Tax (benefit) expense | (55) | (98) | (166) | (275) |
Total reclassifications for the period | 154 | 150 | 461 | 423 |
Ending balance | $ (7,977) | $ (6,528) | $ (7,977) | $ (6,528) |
Pension and Other Postretirem_5
Pension and Other Postretirement Benefit Costs - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract] | ||
Defined benefit pension plan cash contributions | $ 11,700 | |
Estimated future employer contributions in next fiscal year | 3,900 | |
Employer contributions | $ 5,000 | $ 4,100 |
Income Tax (Details)
Income Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||
Income taxes at statutory rates (federal and state) | $ (4,136) | $ (5,440) | $ 11,097 | $ 24,472 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||||
Differences required to be flowed-through by regulatory commissions | (266) | (302) | 569 | 1,282 | |
Other, net | 117 | 20 | (475) | (1,298) | |
Total provision (benefit) for income taxes on continuing operations | $ (4,285) | $ (5,722) | $ 11,191 | $ 24,456 | |
Effective tax rate for continuing operations | 27.80% | 42.00% | 26.80% | 39.40% | |
Regulatory Liabilities [Line Items] | |||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 35.00% | |||
Regulatory Liability, Noncurrent | $ 606,175 | $ 363,838 | $ 606,175 | $ 363,838 | $ 586,093 |
Prepaid Expenses and Other Current Assets [Member] | |||||
Regulatory Liabilities [Line Items] | |||||
Tax Adjustments, Settlements, and Unusual Provisions | 7,300 | ||||
Other Noncurrent Liabilities [Member] | |||||
Regulatory Liabilities [Line Items] | |||||
Tax Adjustments, Settlements, and Unusual Provisions | 4,000 | ||||
Regulatory Liabilities [Member] | |||||
Regulatory Liabilities [Line Items] | |||||
Tax Adjustments, Settlements, and Unusual Provisions | 3,300 | ||||
TCJA Revaluation [Member] | |||||
Regulatory Liabilities [Line Items] | |||||
Regulatory Liability, Noncurrent | 216,600 | 216,600 | 213,300 | ||
Income Taxes Gross-up [Member] | |||||
Regulatory Liabilities [Line Items] | |||||
Regulatory Liability, Noncurrent | 57,400 | 57,400 | $ 56,500 | ||
Estimated Revenue Deferral Liability [Member] | |||||
Regulatory Liabilities [Line Items] | |||||
Regulatory Liability, Noncurrent | $ 7,200 | $ 7,200 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | |
Property, Plant and Equipment, Net, by Type [Abstract] | |||
Property, plant and equipment, gross | $ 3,370,388 | $ 3,204,635 | $ 3,148,545 |
Less: Accumulated depreciation | 996,994 | 960,477 | 954,782 |
Total property, plant, and equipment, net | 2,373,394 | 2,244,158 | 2,193,763 |
Capital expenditures in accrued liabilities (2) | 27,692 | 34,761 | 41,675 |
Other non-current liabilities | 140,475 | 135,292 | 134,123 |
Utility Plant | |||
Property, Plant and Equipment, Net, by Type [Abstract] | |||
Property, plant and equipment, gross | 3,068,234 | 2,975,217 | 2,934,424 |
Work in progress | 227,200 | 159,924 | 145,148 |
Less: Accumulated depreciation | 978,446 | 942,879 | 937,498 |
Total property, plant, and equipment, net | 2,316,988 | 2,192,262 | 2,142,074 |
Non Utility Plant | |||
Property, Plant and Equipment, Net, by Type [Abstract] | |||
Property, plant and equipment, gross | 69,449 | 65,372 | 64,929 |
Work in progress | 5,505 | 4,122 | 4,044 |
Less: Accumulated depreciation | 18,548 | 17,598 | 17,284 |
Total property, plant, and equipment, net | $ 56,406 | 51,896 | 51,689 |
New Headquarters Lease [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Lessee, Operating Lease, Term of Contract | 20 years | ||
Lease Expected Commencement Year | 2,020 | ||
New Headquarters Lease [Member] | Build to Suit Lease [Member] | |||
Property, Plant and Equipment, Net, by Type [Abstract] | |||
Property, plant and equipment, gross | $ 16,000 | 500 | |
Other non-current liabilities | $ 16,000 | 500 | |
Current Headquarters Lease [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Lease Expiration Date | Jan. 1, 2020 | ||
Gill Ranch [Member] | |||
Property, Plant and Equipment, Net, by Type [Abstract] | |||
Capital expenditures in accrued liabilities (2) | $ 300 | $ 200 | $ 100 |
Gas Reserves (Details)
Gas Reserves (Details) | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Reserve Quantities [Line Items] | |
Total cumulative gas reserves investment | $ 188,000,000 |
Term of hedge rate | 10 years |
Encana Oil & Gas (USA) Inc. | |
Reserve Quantities [Line Items] | |
Gas reserves investment | $ 178,000,000 |
Jonah Energy LLC | |
Reserve Quantities [Line Items] | |
Gas reserves investment | 10,000,000 |
Additional rate per therm | $ 0.4725 |
Gas Reserves - Investment (Deta
Gas Reserves - Investment (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Reserve Quantities [Line Items] | |||
Gas reserves | $ 16,916 | $ 15,704 | $ 16,218 |
Gas reserves, non-current | 170,391 | 171,832 | 171,318 |
Less: Accumulated amortization | 99,835 | 87,779 | 83,442 |
Total gas reserves | 87,472 | 99,757 | 104,094 |
Less: Deferred taxes on gas reserves | 19,377 | 22,712 | 29,298 |
Net investment in gas reserves | 68,095 | 77,045 | 74,796 |
Jonah Energy LLC | |||
Reserve Quantities [Line Items] | |||
Total Gas Reserves Investment | $ 5,000 | $ 5,800 | $ 6,000 |
Investments (Details)
Investments (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Investments [Abstract] | |||
Ownership percentage of TWH | 50.00% | ||
Investment balance in TWH | $ 13.4 | $ 13.4 | $ 13.4 |
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount | $ 13.4 | $ 13.4 | $ 13.4 |
Business Combinations Busines_2
Business Combinations Business Combinations (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 6,563 | $ 0 | $ 0 |
Falls Water Co [Member] | |||
Business Acquisition [Line Items] | |||
Business Acquisition, Effective Date of Acquisition | Sep. 13, 2018 | ||
Business Acquisition, Name of Acquired Entity | Falls Water Co., Inc. | ||
Business Acquisition, Description of Acquired Entity | a privately-owned water utility in the Pacific Northwest | ||
Business Combination, Consideration Transferred | $ 8,500 | ||
Business Combination, Consideration Transferred, Shares | 125,000 | ||
Business Combination, Reason for Business Combination | This acquisition aligns with our water sector strategy as the acquisition provides NWN Water entry into Idaho, expands service area, and opens further opportunity for growth. | ||
Customers of Acquired Business | 5,300 connections | ||
Business Combination, Control Obtained Description | Through the purchase of all of the outstanding shares of Falls Water, NWN Water acquired the net assets and 100% control of Falls Water. | ||
Goodwill | $ 6,563 | ||
Business Combination, Goodwill Recognized, Description | attributable to Falls Water's regulated service territory and experienced workforce as well as the strategic benefits expected from this high-growth service territory. |
Derivative Instruments Notional
Derivative Instruments Notional Amounts (Details) therm in Thousands, $ in Thousands | Sep. 30, 2018USD ($)therm | Dec. 31, 2017USD ($)therm | Sep. 30, 2017USD ($)therm |
Financial [Member] | Gas Year 2016 - 2017 | |||
Derivative [Line Items] | |||
TargetHedgeAchieved | 48.00% | ||
Financial [Member] | Gas Year 2017 - 2018 [Member] | |||
Derivative [Line Items] | |||
TargetHedgeAchieved | 49.00% | ||
Physical [Member] | Gas Year 2016 - 2017 | |||
Derivative [Line Items] | |||
TargetHedgeAchieved | 27.00% | ||
Physical [Member] | Gas Year 2017 - 2018 [Member] | |||
Derivative [Line Items] | |||
TargetHedgeAchieved | 26.00% | ||
Natural Gas Therms [Member] | Financial [Member] | |||
Derivative [Line Items] | |||
Derivative, Nonmonetary Notional Amount | 513,850 | 429,100 | 521,080 |
Natural Gas Therms [Member] | Physical [Member] | |||
Derivative [Line Items] | |||
Derivative, Nonmonetary Notional Amount | 760,925 | 520,268 | 750,650 |
Foreign Exchange Contract [Member] | |||
Derivative [Line Items] | |||
Foreign exchange | $ | $ 7,184 | $ 7,669 | $ 6,933 |
Derivative Instruments Fair Val
Derivative Instruments Fair Value (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Derivative, Fair Value, Net | $ (8.1) | $ (20.3) | $ (9.3) |
Unrealized and Realized Gain_Lo
Unrealized and Realized Gain/Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Financial [Member] | ||||
Derivative [Line Items] | ||||
Derivative, Loss on Derivative | $ 1,900 | $ 15,600 | ||
Derivative, Gain on Derivative | $ 1,000 | $ 1,000 | ||
Natural gas commodity | ||||
Derivative [Line Items] | ||||
Amounts deferred to regulatory accounts on balance sheet | (4,285) | 2,548 | (1,305) | 19,895 |
Total gain (loss) in pre-tax earnings | (98) | 10 | (43) | (435) |
Foreign exchange | ||||
Derivative [Line Items] | ||||
Amounts deferred to regulatory accounts on balance sheet | (210) | (51) | 0 | (275) |
Total gain (loss) in pre-tax earnings | 0 | 0 | 0 | 0 |
Benefit (expense) to cost of gas | Natural gas commodity | ||||
Derivative [Line Items] | ||||
Gain (loss) on derivative, net | 4,473 | (2,566) | 1,384 | (19,081) |
Benefit (expense) to cost of gas | Foreign exchange | ||||
Derivative [Line Items] | ||||
Gain (loss) on derivative, net | 210 | 51 | 0 | 275 |
Operating Expense [Member] | Natural gas commodity | ||||
Derivative [Line Items] | ||||
Gain (loss) on derivative, net | (286) | 28 | (122) | (1,249) |
Operating Expense [Member] | Foreign exchange | ||||
Derivative [Line Items] | ||||
Gain (loss) on derivative, net | $ 0 | $ 0 | $ 0 | $ 0 |
Derivative Instruments Credit R
Derivative Instruments Credit Rating (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | |
Derivative [Line Items] | |||
Unrealized losses on derivatives | $ 9,700,000 | ||
Derivative Asset, Fair Value, Amount Not Offset Against Collateral | 1,900,000 | $ 2,900,000 | $ 3,300,000 |
Derivative liability | 10,100,000 | $ 23,300,000 | 12,600,000 |
(Current Ratings) A/A3 | |||
Derivative [Line Items] | |||
With Adequate Assurance Calls | 0 | ||
Without Adequate Assurance Calls | 0 | ||
BBB/Baa1 | |||
Derivative [Line Items] | |||
With Adequate Assurance Calls | 0 | ||
Without Adequate Assurance Calls | 0 | ||
BBB/Baa2 | |||
Derivative [Line Items] | |||
With Adequate Assurance Calls | 0 | ||
Without Adequate Assurance Calls | 0 | ||
BBB-/Baa3 | |||
Derivative [Line Items] | |||
With Adequate Assurance Calls | (2,587,000) | ||
Without Adequate Assurance Calls | (2,587,000) | ||
Speculative | |||
Derivative [Line Items] | |||
With Adequate Assurance Calls | (7,023,000) | ||
Without Adequate Assurance Calls | (4,730,000) | ||
Financial [Member] | |||
Derivative [Line Items] | |||
Additional Collateral, Aggregate Fair Value | $ 0 | $ 0 |
Environmental Matters (Details)
Environmental Matters (Details) | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
OREGON | |||
Site Contingency [Line Items] | |||
Remediation Recovery Percentage | 96.68% | 96.68% | 96.68% |
Environmental Matters - Environ
Environmental Matters - Environmental Sites (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | ||||
Jul. 31, 2017USD ($) | Jan. 31, 2017USD ($) | May 31, 2012USD ($) | Sep. 30, 2018USD ($)propertyparty | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | |
Site Contingency [Line Items] | ||||||
Current Liabilities | $ 18,746 | $ 19,088 | $ 10,653 | |||
Non-Current Liabilities | 97,781 | 108,280 | 107,139 | |||
Gasco/Siltronic Sediments | ||||||
Site Contingency [Line Items] | ||||||
Current Liabilities | 2,471 | 2,683 | 860 | |||
Non-Current Liabilities | 44,410 | 45,346 | 43,796 | |||
Site Contingency, Environmental Remediation Costs Recognized | 46,900 | |||||
Gasco/Siltronic Sediments | Minimum | ||||||
Site Contingency [Line Items] | ||||||
Environmental Exit Costs, Anticipated Cost | $ 46,900 | |||||
Gasco/Siltronic Sediments | Maximum | ||||||
Site Contingency [Line Items] | ||||||
Environmental Exit Costs, Anticipated Cost | $ 350,000 | |||||
Portland Harbor Other [Member] | ||||||
Site Contingency [Line Items] | ||||||
Current Liabilities | 1,392 | 1,949 | 1,379 | |||
Non-Current Liabilities | 3,540 | 4,163 | 3,618 | |||
Gasco/Siltronic Upland [Member] | ||||||
Site Contingency [Line Items] | ||||||
Current Liabilities | 8,847 | 13,422 | 7,537 | |||
Non-Current Liabilities | 44,310 | 47,835 | 48,758 | |||
Central Service Center [Member] | ||||||
Site Contingency [Line Items] | ||||||
Current Liabilities | 25 | 25 | 31 | |||
Non-Current Liabilities | 0 | 0 | 0 | |||
Front Street [Member] | ||||||
Site Contingency [Line Items] | ||||||
Current Liabilities | 6,011 | 1,009 | 846 | |||
Non-Current Liabilities | 5,342 | 10,757 | 10,788 | |||
Undiscounted environmental remediation expense | $ 10,500 | |||||
Additional studies and design costs | $ 900 | |||||
Oregon Steel Mills [Member] | ||||||
Site Contingency [Line Items] | ||||||
Current Liabilities | 0 | 0 | 0 | |||
Non-Current Liabilities | $ 179 | $ 179 | $ 179 | |||
Portland Harbor [Member] | ||||||
Site Contingency [Line Items] | ||||||
Number of potentially responsible parties (more than) | party | 100 | |||||
EPA final feasibility study and proposed remediation plan, clean-up costs, portland harbor | $ 1,050,000 | |||||
Number of remediation projects | property | 2 | |||||
Portland Harbor [Member] | Minimum | ||||||
Site Contingency [Line Items] | ||||||
Percentage of clean-up costs | (30.00%) | |||||
Portland Harbor [Member] | Maximum | ||||||
Site Contingency [Line Items] | ||||||
Percentage of clean-up costs | 50.00% | |||||
Yakama Nation [Member] | Portland Harbor Other [Member] | ||||||
Site Contingency [Line Items] | ||||||
Trustee Council Members - Number of Claimants | 1 | |||||
Site Contingency, Number of Other Third-Party Defendants | 29 | |||||
NRD liability claim yakama nation | $ 300 | |||||
Number of Amended Complaints Filed | 2 |
Environmental Matters - Regulat
Environmental Matters - Regulatory Deferred Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | |
Site Contingency [Line Items] | |||
Remediation Non-recovery Percentage | 3.32% | 3.32% | 3.32% |
Regulatory assets | $ 41,241 | $ 45,781 | $ 49,504 |
Long-term regulatory assets | 333,917 | 356,608 | 345,352 |
Annual tariff rider collection | 5,000 | ||
Annual insurance proceeds to apply against remediation costs | 5,000 | ||
Total annual remediation expense and interest | 10,000 | ||
Environmental Restoration Costs | |||
Site Contingency [Line Items] | |||
Deferred costs and interest | 40,578 | 45,546 | 52,888 |
Accrued site liabilities | 116,150 | 126,950 | 117,388 |
Insurance proceeds and interest | (87,631) | (94,170) | (100,575) |
Regulatory Assets | 69,097 | 78,326 | 69,701 |
Regulatory assets | 5,633 | 6,198 | 6,362 |
Long-term regulatory assets | $ 63,464 | $ 72,128 | $ 63,339 |
OREGON | |||
Site Contingency [Line Items] | |||
Remediation Recovery Percentage | 96.68% | 96.68% | 96.68% |
Front Street [Member] | Environmental Restoration Costs | |||
Site Contingency [Line Items] | |||
Accrued site liabilities | $ 400 | $ 300 | $ 300 |
Discontinued Operations Disco_3
Discontinued Operations Discontinued Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Discontinued operations current assets | $ 12,644 | $ 2,106 | $ 12,644 | $ 2,106 | $ 3,057 |
Discontinued operations - non-current assets | 0 | 204,078 | 0 | 204,078 | 10,817 |
Total discontinued operations assets | 3,081,407 | 3,105,607 | 3,081,407 | 3,105,607 | 3,039,746 |
Discontinued operations - current liabilities | 13,003 | 1,201 | 13,003 | 1,201 | 1,593 |
Discontinued operations - non-current liabilities | 0 | 12,106 | 0 | 12,106 | 12,043 |
Total operating expenses | $ 97,350 | $ 90,753 | $ 409,532 | $ 425,437 | |
Income (Loss) Per Basic Share from Discontinued Operation, Net of Tax | $ (0.02) | $ (0.02) | $ (0.06) | $ (0.11) | |
Income (Loss) Per Diluted Share from Discontinued Operation, Net of Tax | $ (0.02) | $ (0.02) | $ (0.06) | $ (0.11) | |
Gill Ranch [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Accounts receivable | $ 395 | $ 1,520 | $ 395 | $ 1,520 | 2,126 |
Inventories | 661 | 415 | 661 | 415 | 396 |
Other current assets | 107 | 171 | 107 | 171 | 535 |
Property, Plant and Equipment, Current | 11,241 | 11,241 | |||
Property, Plant and Equipment, Noncurrent | 235,578 | 235,578 | 10,816 | ||
Discontinued Operation, Accumulated Depreciation on Property, Plant and Equipment, Current | 7 | 7 | |||
Discontinued Operation, Accumulated Depreciation on Property, Plant and Equipment, Non-Current | 31,551 | 31,551 | 0 | ||
Other non-current assets | 51 | 51 | 1 | ||
Discontinued operations current assets | 12,644 | 2,106 | 12,644 | 2,106 | 3,057 |
Discontinued operations - non-current assets | 0 | 204,078 | 0 | 204,078 | 10,817 |
Accounts payable | 751 | 353 | 751 | 353 | 1,287 |
Other current liabilities | 405 | 848 | 405 | 848 | 306 |
Other non-current liabilities | 12,106 | 12,106 | 12,043 | ||
Discontinued operations - current liabilities | 13,003 | 1,201 | 13,003 | 1,201 | 1,593 |
Discontinued operations - non-current liabilities | 0 | 12,106 | 0 | 12,106 | 12,043 |
Gill Ranch [Member] | Discontinued Operations, Held-for-sale [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Revenues | 748 | 1,977 | 2,831 | 5,338 | |
Operations and maintenance | 1,549 | 1,248 | 4,139 | 5,169 | |
Depreciation and amortization | 106 | 1,131 | 324 | 3,394 | |
Other Income | (24) | ||||
Other expenses and interest | 603 | 790 | 1,799 | ||
Total operating expenses | 1,631 | 2,982 | 5,253 | 10,362 | |
Loss from discontinued operations before income taxes | (883) | (1,005) | (2,422) | (5,024) | |
Income tax benefit | 233 | 397 | 639 | 1,983 | |
Loss from discontinued operations, net of tax | (650) | (608) | (1,783) | (3,041) | |
Gill Ranch [Member] | Non-Current Assets Held-for-Sale [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Other current assets | 247 | 247 | |||
Gill Ranch [Member] | Discontinued Operations, Held-for-sale or Disposed of by Sale [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Total discontinued operations assets | 12,644 | 206,184 | 12,644 | 206,184 | 13,874 |
Total discontinued operations liabilities | 13,003 | $ 13,307 | 13,003 | $ 13,307 | $ 13,636 |
Gill Ranch [Member] | Non-Current Liabilities Held-for-Sale [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Other current liabilities | $ 11,847 | $ 11,847 |
Discontinued Operations Agreeme
Discontinued Operations Agreement (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2019 | |
Other Ownership Interests [Line Items] | ||
Disposal Group, Including Discontinued Operation, Description and Timing of Disposal | The Agreement provides for an initial cash purchase price of $25.0 million (subject to a working capital adjustment), plus potential additional payments to NWN Gas Storage of up to $26.5 million in the aggregate if Gill Ranch achieves certain economic performance levels for the first three full gas storage years (April 1 of one year through March 31 of the following year) occurring after the closing and the remaining portion of the gas storage year during which the closing occurs. We expect the transaction to close within 12 months of signing and in 2019. The closing of the transaction is subject to approval by the California Public Utilities Commission (CPUC) and other customary closing conditions. | |
Gill Ranch [Member] | ||
Other Ownership Interests [Line Items] | ||
Percent Ownership In Joint Project | 75.00% | |
Pacific Gas and Electric Company [Member] | ||
Other Ownership Interests [Line Items] | ||
Percent Ownership In Joint Project | 25.00% | |
Minimum | Scenario, Forecast [Member] | ||
Other Ownership Interests [Line Items] | ||
Proceeds from Divestiture of Businesses | $ 25 | |
Maximum | Scenario, Forecast [Member] | ||
Other Ownership Interests [Line Items] | ||
Proceeds from Divestiture of Businesses | $ 26.5 |
Subsequent Event (Details)
Subsequent Event (Details) - Subsequent Event [Member] - USD ($) $ in Millions | 1 Months Ended | |
Nov. 06, 2018 | Oct. 02, 2018 | |
Subsequent Event [Line Items] | ||
Subsequent Event, Date | Oct. 1, 2018 | |
Holding Company Reorganization Description | NW Holdings and NW Natural completed a reorganization into a holding company structure. NW Holdings is now the parent holding company of NW Natural, NWN Water, NWN Gas Storage and other subsidiaries previously held by NW Natural. | |
Northwest Natural Holding Company [Member] | ||
Subsequent Event [Line Items] | ||
Line of Credit Facility, Initiation Date | Oct. 2, 2018 | |
Line of Credit Facility, Expiration Date | Oct. 2, 2023 | |
Line of Credit Facility, Frequency of Payment and Payment Terms | The principal amount of borrowings under the credit agreements are due and payable on the maturity date. | |
Line of Credit Facility, Covenant Terms | The credit agreements require NW Holdings and NW Natural to maintain a consolidated indebtedness to total capitalization ratio of 70% or less. Failure to comply with this covenant would entitle the lenders to terminate their lending commitments and accelerate the maturity of all amounts outstanding. | |
Line of Credit Facility, Additional Terms | The agreements also require NW Holdings and NW Natural to maintain credit ratings with Standard & Poor's (S&P) and Moody's Investors Service, Inc. (Moody’s) and notify the lenders of any change in the respective companies' senior unsecured debt ratings or senior secured debt ratings, as applicable, by such rating agencies, provided, however that in the event NW Holdings does not have a credit rating, its debt rating will be determined by a formula using NW Natural's credit rating. A change in debt ratings by S&P or Moody’s is not an event of default, nor is the maintenance of a specific minimum level of debt rating a condition of drawing upon the credit agreement. Rather, interest rates on any loans outstanding under the credit agreements are tied to debt ratings and therefore, a change in the debt rating would increase or decrease the cost of any loans under the credit agreements when ratings are changed. | |
Northwest Natural Holding Company [Member] | Line of Credit [Member] | ||
Subsequent Event [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 100 | |
Line of Credit Facility Contingent Increase To Maximum Borrowing Capacity | 150 | |
Northwest Natural Holding Company [Member] | Letter of Credit [Member] | ||
Subsequent Event [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 40 | |
Northwest Natural Gas Company [Member] | ||
Subsequent Event [Line Items] | ||
Line of Credit Facility, Initiation Date | Oct. 2, 2018 | |
Line of Credit Facility, Expiration Date | Oct. 2, 2023 | |
Line of Credit Facility, Frequency of Payment and Payment Terms | The principal amount of borrowings under the credit agreements are due and payable on the maturity date. | |
Line of Credit Facility, Covenant Terms | The credit agreements require NW Holdings and NW Natural to maintain a consolidated indebtedness to total capitalization ratio of 70% or less. Failure to comply with this covenant would entitle the lenders to terminate their lending commitments and accelerate the maturity of all amounts outstanding. | |
Line of Credit Facility, Additional Terms | The agreements also require NW Holdings and NW Natural to maintain credit ratings with Standard & Poor's (S&P) and Moody's Investors Service, Inc. (Moody’s) and notify the lenders of any change in the respective companies' senior unsecured debt ratings or senior secured debt ratings, as applicable, by such rating agencies, provided, however that in the event NW Holdings does not have a credit rating, its debt rating will be determined by a formula using NW Natural's credit rating. A change in debt ratings by S&P or Moody’s is not an event of default, nor is the maintenance of a specific minimum level of debt rating a condition of drawing upon the credit agreement. Rather, interest rates on any loans outstanding under the credit agreements are tied to debt ratings and therefore, a change in the debt rating would increase or decrease the cost of any loans under the credit agreements when ratings are changed. | |
Northwest Natural Gas Company [Member] | Line of Credit [Member] | ||
Subsequent Event [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 300 | |
Line of Credit Facility Contingent Increase To Maximum Borrowing Capacity | 450 | |
Northwest Natural Gas Company [Member] | Letter of Credit [Member] | ||
Subsequent Event [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 60 | |
NW Water of Oregon [Member] | ||
Subsequent Event [Line Items] | ||
Business Acquisition, Date of Acquisition Agreement | Oct. 12, 2018 | |
Business Acquisition, Name of Acquired Entity | Sunriver Water, LLC and Sunriver Environmental, LLC | |
Business Acquisition, Description of Acquired Entity | a water utility and wastewater treatment company providing a current combined 9,400 connections at the Sunriver Resort community in Central Oregon. | |
Expected Acquisition Close Period | the first half of 2019 |