NW Natural Buys Out JV Partner in Renewables Unit

Ticker: NWN · Form: 8-K · Filed: 2024-07-25T00:00:00.000Z

Sentiment: neutral

Topics: acquisition, joint-venture, renewables

Related Tickers: NWN, BEP, BEPC

TL;DR

NW Natural is buying out its partner to own 100% of its renewables business.

AI Summary

Northwest Natural Holding Company announced on July 24, 2024, that it has entered into a definitive agreement to acquire the remaining 50% interest in NW Natural Renewables Holdings, LLC from its joint venture partner, an affiliate of Brookfield Renewable Partners. This transaction will result in Northwest Natural Holding Company owning 100% of NW Natural Renewables Holdings, LLC.

Why It Matters

This move consolidates full ownership of the company's renewable natural gas business, potentially streamlining operations and strategic direction for future growth in the renewable energy sector.

Risk Assessment

Risk Level: medium — Acquisitions and consolidation can introduce integration risks and may require significant capital investment, impacting financial stability.

Key Numbers

Key Players & Entities

FAQ

What is the specific name of the joint venture partner being bought out?

The filing states the joint venture partner is an affiliate of Brookfield Renewable Partners.

What is the effective date of this ownership change?

The earliest event reported is July 24, 2024, indicating the agreement was made on this date.

What is the name of the subsidiary whose ownership is being consolidated?

The subsidiary is NW Natural Renewables Holdings, LLC.

What percentage of the subsidiary did Northwest Natural Holding Company previously own?

The filing indicates Northwest Natural Holding Company is acquiring the remaining 50%, implying they previously owned 50%.

What is the primary business of NW Natural Renewables Holdings, LLC?

Based on its name and the context of the filing, it is involved in renewable energy, specifically renewable natural gas.

Filing Stats: 1,371 words · 5 min read · ~5 pages · Grade level 16.4 · Accepted 2024-07-25 14:10:36

Key Financial Figures

Filing Documents

01 Other Events

Item 8.01 Other Events On December 29, 2023, Northwest Natural Gas Company (NW Natural), a wholly owned subsidiary of Northwest Natural Holding Company (NW Holdings), filed a request for a general rate case (Rate Case) with the Public Utility Commission of Oregon (OPUC). The filing requested a $154.9 million annual revenue requirement increase, which included $34.0 million related to an updated depreciation study. On July 24, 2024, NW Natural, the OPUC staff, the Oregon Citizens' Utility Board (CUB), the Alliance of Western Energy Consumers (AWEC), the Coalition of Communities of Color, Climate Solutions, Verde, Columbia Riverkeeper, Oregon Environmental Council, Community Energy Project, and Sierra Club (Coalition), which comprise all of the parties to the rate case, filed a stipulation (Second Stipulation) with the OPUC which addresses the majority of issues in the Rate Case. Prior to the Second Stipulation, NW Natural, the OPUC staff, CUB and AWEC reached a partial settlement on the cost of long-term debt of 4.712% (First Stipulation and together with the Second Stipulation, the Stipulations). The Second Stipulation provides for a total revenue requirement increase of $95.0 million over revenues from existing rates, which includes $9.6 million related to an updated depreciation study, subject to completion of capital projects identified as being placed in service prior to the rate effective date. The revenue requirement is based on the following assumptions: Capital structure of 50% common equity and 50% long-term debt; Return on equity of 9.4%; Cost of capital of 7.056%; and Average rate base of $2.11 billion or an increase of $357 million since the last rate case. The Stipulations do not address all aspects of the Rate Case. We expect the remaining items of the original request to be subject to the ongoing regulatory litigation process, including, among other items, NW Natural's line extension allowance policy, other remaining contested issues, a

Forward-Looking Statements

Forward-Looking Statements This report, and other presentations made by NW Holdings or NW Natural from time to time, may contain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "anticipates," "assumes," "continues," "could," "intends," "plans," "seeks," "believes," "estimates," "expects," "will" and similar references to future periods. Examples of forward-looking statements include, but are not limited to, statements regarding the following: plans, objectives, assumptions, expectations, estimates, timing, goals, strategies, commitments, expenses, future events, investments, targeted capital structure, cost of capital, return on equity, rate base, financial results, financial position, revenue requirement, technology upgrades, cybersecurity, meter modernization, system and infrastructure reinforcement, expansion or reliability, gas storage investments, costs, timing or benefits, customer growth, customer rates and the timing and magnitude of any rate changes, renewable natural gas, revenues and earnings, performance, timing, outcome, or effects of rate cases or other regulatory proceedings, mechanisms, approvals or recoveries, regulatory prudence reviews, anticipated regulatory actions or filings, and other statements that are other than statements of historical facts. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy, geopolitical factors, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual results may differ materially from those contemplated by the forward-looking statements. You are therefore cautioned against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or

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