1. 2017 Natural Gas Outlook Natural Gas Prices are Low What Could Change That?
Randy Friedman
Senior Director, Gas Supply
July 13, 2017

2. Henry Hub Prices Remain Low2

3. And Closer to Home the Same
First-of-the-month index prices through July 2017 3

4. Storage inventories are strong
All-time peak storage inventory level was set last November (week ending 11/11/2016) at 4,047 Bcf, beating the record set just one year earlier. 4

5. Importance of Storage Gas consumption is highly seasonal
Gas well production is not
U.S. natural gas monthly data through April 2017
Source: EIA website at 5

6. Speaking of Seasonality…
The U.S. just had its 2nd Warmest Winter on record (warm everywhere EXCEPT here!)
October 2015-March 2016 was the Warmest Winter on record 6

7. Trumponomics – Supply Side
Drill Baby Drill
Interior Dept. to review hundreds of millions of acres of Federal Lands and Waters that were protected from development under previous executive orders
Issued permits for Keystone XL and Dakota Access pipelines
Regulatory Freeze/Review
Vow to cut federal regulations by 75%
FERC lacks a quorum, $20 billion in energy infrastructure projects are stalled
PHMSA safety rulemakings drag on
Mandate to use U.S. produced materials
Commerce Dept. directed to develop plan
Could hinder new pipeline projects 7

8. Trumponomics – Demand Side
Coal resurgence?
Rescinding the Clean Power Plan
More coal means less natural gas for power generation…
LNG Exports a top Priority
White House support for Jordan Cove (Coos Bay) project
Tax Code Overhaul
Trickle down economics to boost demand
Border Adjustment Tax could hit Pacific Northwest hard but not part of plan unveiled in late April
No Depreciation for foreign made materials?
“Even if natural gas prices doubled, those high prices would have to hold steady for a long period of time before capital markets started getting re-interested in coal…“
- Tom Sanzillo, Institute for Energy Economics and Financial Analysis, in Bloomberg BNA, April 26, 2017 8

9. Gas taking Market Share from Coal
Source: Macquarie Natural Gas Weekly Report issued April 27, 2017 9

10. Trumponomics – Other International trade International tensions
The Wall and its effect on trade with Mexico
Renegotiation of NAFTA
Withdrawal from the Trans-Pacific Partnership
Backed off from naming China a currency manipulator
New import tariffs
International tensions
Immigration bans…Healthcare reform…
which of your favorites did I miss? 10

11. Which Changes will affect the Big Picture?
Source: EIA website at 11

12. NW Natural Update Load Growth fairly flat Resource Plan Review
Last two winters gave us more “cold” days (< 38OF) for recalibrating our peak load modeling
Customer growth offset by declining usage per customer
Resource Plan Review
Segmented capacity from Sumas was used last winter and worked as anticipated
Mist recall decisions are made in the summer for a May 1st effective date
 No new Mist recall is the decision this summer
T-South Expansion Project in British Columbia
No impact until 2020
Details forthcoming in our 2016 IRP Update filing 12

13. The Plan for this Winter… will look like last Winter13

14. Whither WACOG? 14