Ch-ch-ch-Changes

Randy FriedmanDirector, Gas

Supply

July 8, 2014

2014 Natural Gas Outlook

2

Baby it’s cold outside

Jan. 6, 2014 - Ice builds up along Lake Michigan

Lower-4810 Coldest Winters Since 1950

Bank of America, special report for NW Natural, April 1, 2014

2nd coldest in the last 35 years

3

Crazy after all these years

RBC Capital Markets, Weekly Underground Storage Report, April 27, 2013

Lowest spring inventory levels in a decade Pressure on summer refill prices Concern over storage inventory levels for the winter

4

We’ll meet again some sunny day

TD Securities, Commodities Market Comment, June 26, 2014

5

Everything old is new again

Active Gas Trading Hubs Storage Plants Owned or Contracted by NW NaturalPipeline Capacity Under Contract to NW NaturalNatural Gas Reserves Owned by NW Natural

6

Back in the saddle again We went from 100% reliance

on Sumas to zero after the Western Energy Crisis of 2000-2001 Added T-South to Station 2 Added SCP, Foothills, NGTL to

AECO

T-South contract is up for renewal and current Station 2 to Sumas price spreads do not justify retaining that capacity

About ½ of our Sumas receipts will still be gas purchased at AECO and delivered through SCP

As before with Station 2, we will hedge a high percentage of our winter purchases at Sumas due to its higher volatility

T-South

NGTLFo

othi

lls

SCP

Alberta(AECO)

Station 2

Sumas

7

It’s been such a long time…• NW Natural had relied on NWP’s

Plymouth LNG Plant for firm peak day service for over 30 years.

• Service was interrupted in Dec. 2013 due to pipeline constraints through the Columbia Gorge.

• We removed Plymouth for our firm resource stack and started evaluating replacement options through the IRP process.

• March 31, 2014: an incident at Plymouth probably means Plymouth will not even be an option for us this coming winter.

• We have some concerns if a design day hits, but the problem will ease the following year due to Mist recall.

8

Ease on down the road