SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
NOVEMBER 12, 1999
Date of Report (Date of earliest event reported)
[NORTHWEST NATURAL GAS COMPANY LOGO]
NORTHWEST NATURAL GAS COMPANY
(Exact name of registrant as specified in its charter)
Commission File No. 0-994
OREGON 93-0256722
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
220 N.W. SECOND AVENUE, PORTLAND, OREGON 97209
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code: (503) 226-4211
Part II. OTHER INFORMATION
Item 5. Other Events
The Oregon Public Utility Commission (OPUC or Commission), in an order
issued Nov. 12, has authorized a net revenue increase from NW Natural's Oregon
operations of $0.2 million per year. The revenue increase will come from rate
increases averaging about 1.3 percent for Oregon residential customers,
partially offset by rate decreases for certain commercial and large industrial
customers.
In its Oregon general rate case, filed in October 1998, the Company
had proposed a revenue increase of $14.7 million per year through rate increases
averaging 3.8 percent. The OPUC Staff in March 1999 had recommended a net
revenue reduction of $19.9 million per year.
The Commission's decision authorizes a return on common shareholders'
equity (ROE) of 10.25 percent. This compares to the Company's proposed ROE of
11.25 percent and the OPUC Staff's originally proposed ROE of 8.5 percent. The
Company's previously authorized ROE of 13.25 percent was adopted by the OPUC in
NW Natural's prior general rate case in Oregon in 1989.
The Commission confirmed that the 10.25 percent ROE determined in this
case will be used as the baseline return under a new mechanism adopted in April
1999 for use in prospective Purchased Gas Adjustment (PGA) proceedings. Under
the Commission's order adopting the mechanism, NW Natural will be authorized to
retain all of its earnings, on a weather-normalized basis, up to a threshold
level equal to the authorized ROE plus 300 basis points, or 13.25 percent.
One-third of any "excess" earnings above that level would be refunded to
customers. The Commission had provisionally set the threshold at 12.6 percent
until it made a decision in the general rate case.
The Commission authorized NW Natural to implement new rates within
three days after it files tariffs consistent with the order. The Company has 60
days to decide whether to seek rehearing or reconsideration of the order, and it
has the right to seek judicial review thereafter.
Among its decisions on contested issues in the order, the Commission
disallowed $7.8 million of rate base from the Company's investment of
$40.3 million in a new residential and commercial customer information system
(CIS) that went into service in November 1997. The Company is analyzing the
Commission's decision with respect to ratemaking treatment of the customer
information system to determine whether the decision will require immediate
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write-downs of its CIS assets. The Company estimates that a write-down
consistent with the $32 million rate base allowance for the CIS, if required in
the quarter ending Dec. 31, 1999, would be equivalent to 16 cents a share.
NOTE: This report contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended. The
Company's future operating results will be affected by various uncertainties and
risk factors, many of which are beyond the Company's control, including
governmental policy and regulatory action, the competitive environment and
economic factors, as well as weather conditions. For a more complete description
of these uncertainties and risk factors, see the Company's filings with the
Securities and Exchange Commission on Form 10-K for the year ended Dec. 31,
1998, and on Form 10-Q for the quarters ended March 31, June 30 and Sept. 30,
1999.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NORTHWEST NATURAL GAS COMPANY
(Registrant)
Dated: November 15, 1999 /s/ Bruce R. DeBolt
---------------------------------------
Senior Vice President and
Chief Financial Officer
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