Residential customers of Oregon’s largest gas utility will see an increase on their energy bills starting Friday.
This will be the one of the first major utility rate hikes since lawmakers passed a set of laws that seek to prevent rate hikes during winter months.
NW Natural, which serves about 2.5 million people in Oregon and Southwest Washington, will increase residential rates in Oregon by 5.4%. That’s an average of $4.38 more on a typical customer’s monthly utility bill.
A blue flame burns on a natural gas stove.
Cassandra Profita / OPB
The increase comes a day before a ban on “winter months” rate hikes goes into effect. Utilities are no longer allowed to raise rates Nov. 1 through March 31 — when gas and electricity use is at its highest.
Gov. Tina Kotek signed the Fairness & Affordability in Residential Energy Act, or FAIR Energy Act, which limits how frequently a utility can increase rates, approve smaller rate increases over a period of time and move rate hikes out of winter months, earlier this year.
In the past, gas rate increases have been implemented on Nov. 1, according to the Oregon Public Utility Commission, which regulates utilities and approves rates.
Now, NW Natural will have to wait 18 months before it can request another rate increase.
The Public Utility Commission says customers can expect rates to remain unchanged during the winter heating season to minimize impact moving forward.
“The approved increase balances the utility’s need to recover the cost of providing safe service with the Commission’s obligation to protect customers — particularly the most vulnerable customers — from unnecessary rate impacts,” Oregon Public Utility Commission Chair Letha Tawney said in a statement.
“Thanks to House Bill 3179 [the FAIR Energy Act], customers can be assured their bills moving forward will not increase during the winter heating season, giving families more predictability when they need it most.”
Related: Oregon lawmakers approve limits on utility rate hikes
NW Natural’s rate increase will cover the cost of purchasing natural gas, and will pay for capital investments that include modernizing technical systems, upgrading distribution systems and storage operations.
For the past five years, NW Natural customers’ bills have increased year after year. Customers are paying 50% more for gas than they did in 2020. Those increases have led to a record number of households who have been disconnected for nonpayment.
According to the Oregon Citizens’ Utility Board, NW Natural disconnected more than 9,000 customers in 2024.
And that’s after the utility was forced to lower its proposed 18% increase to 4% last year.
NW Natural officials noted that, although rates have climbed over the past five years, customers have paid more in the past.
“Given the various inflationary pressures and other factors all of us are experiencing right now, we are proud that our customers on average are paying slightly less for their natural gas bills than they did 20 years ago,” NW Natural spokesperson David Roy said.
This year, the utility initially wanted to raise rates by about 7%. But by the end of July, that proposal was cut down by nearly half.
Oregon Citizens’ Utility Board, along with other nonprofit groups focused on energy affordability and climate justice, reviewed the initial rate request and determined that about two-thirds of the company’s $59.4 million increase would have gone toward profits.
The Public Utility Commission approved a settlement between NW Natural and these groups that cut those allowed profits by $38 million.
“After years of back-to-back rate increases, NW Natural customers are seeing their first break,” Oregon Citizens’ Utility Board executive director Bob Jenks said in a statement. “Oregonians have had too many major increases in our gas and electric bills over the last five years. The outcry over unaffordable energy bills has been growing.”
Even with the lower rate hike resulting from cuts to allowed NW Natural profits, some advocates lamented the commission’s choice to reject two policies that would have addressed electrification, which is the push to move away from fossil-fuel based appliances like furnaces to electric appliances that can be fueled by renewable power.
Related: Climate advocates push for passage of Energy Affordability and Resilience legislative package
One of those rejected policies would have removed customer payments NW Natural receives from gas infrastructure no longer in use due to homes switching from gas to electric appliances. The other rejected policy would have allowed funding from the Oregon Low-Income Home Energy Assistance program to replace old or broken gas furnaces with energy-efficient heat pumps.
“This result means NW Natural will go several more years without taking any meaningful actions to reduce its emissions in a cost-effective manner,” Green Energy Institute staff attorney Cole Souder said in a statement.
“With the federal government intent on increasing carbon emissions, we hoped Oregon would be proactive in directing NW Natural to support customers seeking to electrify, just as Commissions across the country have done. Customers deserve a utility and a Commission that keeps up with peers doing more to meet the moment.”
The advocacy groups said the utility commission also rejected a proposal that would have required NW Natural to provide its customers in certain areas financial incentive to switch from gas appliances to electric. According to Oregon CUB, the commission did adopt a similar proposal for Avista customers earlier this year.
