Fixed-Income Investor Presentation

16 SUPPORTIVE MECHANISMS OREGON • Decoupling • Breaks link between earnings and consumption by removing incentive to increase usage Employs use-per-customer decoupling calculation, which adjusts margin revenues to account for the difference between actual and expected customer volumes OREGON Weather Normalization (WARM) • Stabilizes collection of fixed costs for residential and commercial customers Adjusts billings based on temperature variances compared to average weather Applied from December through mid-May of each heating season OREGON WASHINGTON Purchased Gas Adjustment (PGA) Adjusts annual rates to reflect changes in expected cost of gas commodity purchases ⚫ Includes spot purchases, contract supplies, derivatives, storage inventories, and for Oregon gas reserves • Includes temporary rate adjustments amortizing deferred regulatory account balances OREGON WASHINGTON Environmental Cost Recovery Recovers environmental costs for sites attributable to each state at a rate of 96.68% in Oregon and 3.32% in Washington • Costs are subject to an annual prudence review in both Oregon and Washington, and in Oregon an earnings test¹ • Allows for deferral of environmental costs in both Oregon and Washington, and in Oregon the accrual of carrying costs 1 To the extent the utility earns more than its authorized ROE in Oregon in a year, the utility is required to cover environmental expenses and interest on expenses greater than $10 million (plus interest from insurance proceeds) with those earnings that exceed its authorized ROE OREGON RNG Automatic Cost Recovery • Allows renewable natural gas project costs to be added to rates annually on November 1st • Provides for a mechanism for NW Natural to defer the difference between forecasted and actual RNG costs • Costs are subject to an earnings test that includes deadbands at 50 basis points below and above NW Natural's authorized ROE NW NaturalⓇ

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