NW Natural Files Pipeline Integrity Settlement with Public Utility Commission of Oregon

Northwest Natural Gas Company, dba NW Natural (NYSE: NWN) today reported the company has filed a stipulated agreement with the Public Utility Commission of Oregon (OPUC) to create a new, consolidated natural gas pipeline system integrity program (SIP). The new SIP would integrate older programs into a single program and provide customers with enhanced safety and system reliability. It is subject to approval by the OPUC.

Parties to the stipulation are NW Natural, OPUC staff, the Citizens’ Utility Board of Oregon, and the Northwest Industrial Gas Users.

Previously implemented separately, NW Natural’s bare steel and transmission integrity programs are requested to be approved as a single program by the OPUC. The SIP also includes a component for a distribution integrity management program, which would be implemented following issuance of new federal regulations. Costs would be tracked annually, with recovery to be sought after the first $3.25 million of capital costs are incurred by the company. An annual cap for expenditures per year would be approximately $12 million, with any extraordinary costs above the cap to be approved with written consent of all parties.

If approved, the settlement will apply to costs incurred during the period from Sept. 30, 2008 to Oct. 31, 2011, or until the effective date of new rates adopted in the company’s next general rate case.

About NW Natural

NW Natural is headquartered in Portland, Ore., and serves about 655,000 residential and business customers in Oregon and Southwest Washington. It is the largest independent natural gas utility in the Pacific Northwest. NW Natural has approximately $2.1 billion in total assets, which includes about 16 billion cubic feet (Bcf) of underground gas storage capacity within its service territory at Mist, Ore., and plans to build a 20 Bcf underground gas storage facility near Fresno, Calif., as well as a proposed 220-mile pipeline to potentially serve customers in Oregon and the West Coast. For more information about NW Natural, please visit www.nwnatural.com.