Northwest Natural Holding Company (NWN): ANSOFF MATRIX [Dec-2025 Updated]

As an analyst who has mapped out growth strategies for decades, I can tell you Northwest Natural Holding Company (NWN) has laid out a very clear, multi-pronged plan for expansion right now, and this Ansoff Matrix breaks down exactly where their focus is for 2025. You are looking at a company doubling down on its core business-investing $450 million to $500 million in capital expenditures for system reliability-while aggressively moving into new markets, like establishing a major presence in Texas via the SiEnergy acquisition. But the real story is their move into future fuels, scaling up Renewable Natural Gas (RNG) procurement and piloting clean hydrogen projects, so you need to see the concrete actions driving their Market Penetration, Market Development, Product Development, and Diversification strategies below.

Northwest Natural Holding Company (NWN) - Ansoff Matrix: Market Penetration

Market Penetration for Northwest Natural Holding Company (NWN) centers on deepening its presence within its established gas and water utility service territories. This strategy relies heavily on infrastructure investment, regulatory mechanisms to support cost recovery and returns, and organic customer acquisition.

Capital Investment for Reliability: Northwest Natural Holding Company expects capital expenditures for 2025 to be in the range of $\mathbf{\$450 \text{ million} \text{ to } \$500 \text{ million}}$ to enhance system reliability. For the first nine months of 2025, the company invested $\mathbf{\$333 \text{ million}}$ in its gas and water systems to support growth and greater reliability and resiliency. This included $\mathbf{\$102 \text{ million}}$ invested in the first quarter of 2025 alone.

Organic Customer Growth Metrics: The drive for organic customer growth within existing service territories showed strength. The annualized organic customer growth rate in Q1 2025 was a strong $\mathbf{2.2\%}$ on a consolidated basis. This contributed to adding nearly $\mathbf{84,000}$ gas and water utility connections in the 12 months ending March 31, 2025, resulting in a combined growth rate of $\mathbf{9.6\%}$ at that time. By September 30, 2025, the total connections added in the last 12 months reached over $\mathbf{95,000}$, with a combined growth rate of $\mathbf{10.9\%}$.

Regulatory Rate Adjustments: Securing regulatory approval for rate increases is key to realizing returns on capital investments. In Oregon, regulators approved a revenue requirement increase of $\mathbf{\$20.7 \text{ million}}$, with new rates taking effect on October 31, 2025. This Oregon increase translates to a residential rate hike of $\mathbf{5.4\%}$, or an average of $\mathbf{\$4.38}$ more on a typical monthly bill based on $\mathbf{54}$ therms of usage. Separately, Northwest Natural Holding Company filed for multi-year rate plans in Washington on August 29, 2025, seeking a revenue increase of approximately $\mathbf{\$25.6 \text{ million}}$ in the first year (RY1) starting August 2026.

Gas Supply Management Benefits: Strong gas supply management provided direct financial benefits to customers. Customer bill credits totaling over $\mathbf{\$15 \text{ million}}$ were provided in early 2025, stemming from optimization of storage assets and pipeline capacity. Over the last 20 years, Northwest Natural Holding Company has credited customers' bills with cumulative savings of over $\mathbf{\$280 \text{ million}}$.

You can see a snapshot of the 2025 financial targets and recent operational metrics below:

The execution of these market penetration activities is tied to the company's longer-term financial goals:

• Long-term EPS growth rate target compounded annually: $\mathbf{4\%} \text{ to } \mathbf{6\%}$.
• Q1 2025 Adjusted EPS: $\mathbf{\$2.28}$.
• Q1 2025 GAAP EPS: $\mathbf{\$2.18}$.
• Net Income for first nine months of 2025: $\mathbf{\$1.36}$ per share.
• Return on Equity approved in Oregon rate case: $\mathbf{9.5\%}$.
• Overall Cost of Capital approved in Oregon rate case: $\mathbf{7.12\%}$.

The Washington multi-year rate plan filing seeks specific annual revenue increases over three years:

• Year 1 (starting August 2026): $\mathbf{\$25.6 \text{ million}}$ ($\mathbf{22.8\%}$).
• Year 2: $\mathbf{\$8.6 \text{ million}}$ ($\mathbf{6.2\%}$).
• Year 3: $\mathbf{\$8.3 \text{ million}}$ ($\mathbf{5.7\%}$).

For you, the investor, this focus on existing markets means capital is being deployed for system hardening and customer base retention/growth, supported by recent rate case outcomes. Finance: draft 13-week cash view by Friday.

Northwest Natural Holding Company (NWN) - Ansoff Matrix: Market Development

Northwest Natural Holding Company (NWN) is actively pursuing Market Development by expanding its regulated gas utility presence into new geographic territories, primarily Texas, and growing its water utility footprint through strategic tuck-in acquisitions across existing states.

The integration of the SiEnergy acquisition, completed on January 7, 2025, established a major regulated gas utility presence in the high-growth Texas Triangle, encompassing the greater metropolitan areas of Houston, Dallas, and Austin. The cash portion of this acquisition was approximately $271.1 million, with an assumption of approximately $156.1 million of debt, subject to adjustments. At the time of acquisition, SiEnergy was serving approximately 70,000 residential and commercial customers and had an expected rate base of approximately $247 million as of Dec. 31, 2024. SiEnergy demonstrated a compounded annual growth rate of 26% in rate base and 22% in customer numbers over the five years ending in 2024.

Further scale in the Texas utility platform was added via the June 2025 acquisition of Hughes Gas Resources, Inc. The purchase price for Hughes Gas Resources was $60 million, completed through the SiEnergy subsidiary. This transaction added approximately 6,900 connections across 12 communities northeast of Houston. Hughes is expected to have a rate base of approximately $46 million by the end of 2025. This move capitalized on a contracted customer backlog of approximately 11,000 connections gained through the Hughes acquisition in Texas, aligning with SiEnergy's model of providing infrastructure to new developments.

To fund further expansion and support its growing asset base, Northwest Natural Holding Company issued new debt. In August 2025, the company successfully issued $185 million of inaugural, investment-grade bonds at SiEnergy, which was used to refinance existing debt of approximately $150 million.

The NW Natural Water utility business is expanding through tuck-in acquisitions in new, high-growth communities across existing states like Texas, Arizona, and California. As of the context surrounding the third quarter of 2025, NW Natural Water served over 189,000 people through approximately 76,100 meters.

The scale of the utility platform expansion in Texas through these recent acquisitions is summarized below:

The strategic moves in the regulated gas utility space are complemented by the water utility's continued pursuit of market development:

• Expand NW Natural Water utility business through tuck-in acquisitions.
• Target new, high-growth communities across existing states.
• Existing service states include Texas, Arizona, and California.
• NW Natural Water serves approximately 76,100 meters.

Northwest Natural Holding Company (NWN) - Ansoff Matrix: Product Development

Northwest Natural Holding Company (NWN) is actively developing new low-carbon gas products and the necessary infrastructure to support them. You see this commitment reflected in capital deployment and technology testing.

The company invested $333 million in its gas and water systems through the first nine months of 2025 to bolster growth, reliability, and resiliency. For the full year 2025, consolidated capital expenditures are still projected to be in the range of $450 million to $500 million, anchoring modernization projects like end-of-life meter replacement and system reinforcement.

To scale up clean hydrogen production, Northwest Natural Holding Company is running a pilot project in Portland using methane pyrolysis to create hydrogen for blending. This project, which is the first utility-distributed pyrolysis system, is a three-year effort expected to conclude in 2026. Separately, the company continued extensive testing of hydrogen blends, evaluating performance in its existing system ranging from 5% to 20% hydrogen content.

Exploring synthetic methane production, which combines clean hydrogen with waste carbon dioxide for pipeline injection, is a key part of the long-term Integrated Resource Plan outlook extending to 2040. For existing gas customers, meeting state mandates like Oregon's Senate Bill 98 (SB 98) drives the increase in Renewable Natural Gas (RNG) procurement. The law allows up to 5% of a utility's revenue requirement to cover the incremental cost of RNG infrastructure investments.

The voluntary volumetric goals established under SB 98 are quite specific:

• 5% by 2020
• 10% by 2025
• 15% by 2030
• 20% by 2035
• 30% by 2050

Finance: draft 13-week cash view by Friday.

Northwest Natural Holding Company (NWN) - Ansoff Matrix: Diversification

You're looking at how Northwest Natural Holding Company (NWN) is building out its non-regulated side, which is classic diversification strategy. This isn't just about the pipes and meters anymore; it's about creating new revenue streams to complement the regulated utility base.

Grow the NW Natural Renewables subsidiary as a non-utility business focused on renewable fuel projects outside the core regulated gas utility.

The NW Natural Renewables business is actively building out its low-carbon fuel portfolio. This subsidiary began operation of two renewable natural gas (RNG) facilities in partnership with EDL, which are expected to generate stable revenues and cash flows. This move positions the subsidiary to capture value from organic waste streams, turning them into clean fuels for various sectors.

Commercialize the solid carbon captured from the hydrogen pyrolysis project as an additive for performance-enhancing asphalt products.

The methane pyrolysis technology being piloted at the Central Portland facility is designed to produce clean hydrogen while simultaneously capturing solid carbon. This captured solid carbon isn't just waste; it is incorporated directly into Modern Hydrogen's proprietary, performance-enhancing asphalt products. These products are then used in paving and road repair projects, creating a tangible, non-fuel byproduct revenue stream.

Pursue Carbon Capture, Utilization, and Sequestration (CCUS) projects, leveraging favorable geology in Oregon and Washington with third-party partners.

The regulatory environment is clearly signaling support for CCUS, which Northwest Natural Holding Company is monitoring and planning around. For context on the potential value of sequestration, the existing 45Q tax credit currently incentivizes CCUS at a rate of $85 per metric ton of CO₂ permanently sequestered in geologic storage. The company is using its 2025 Draft Integrated Resource Plan to model potential resource integration futures, which includes assessing clean hydrogen and carbon capture projects.

Develop and sell renewable thermal credits (RTCs) in new markets as a non-regulated revenue stream.

The push for decarbonization requires securing environmental attributes, often tracked via RTCs. Northwest Natural Gas Company is actively soliciting proposals to purchase RNG and associated environmental attributes to meet compliance requirements. For the 2025-2026 Price Gas Adjustment (PGA) year, which runs from November 2025 to October 2026, NW Natural seeks to procure a total of 1,350,000 additional Dth of RNG. Remember, one Renewable Thermal Certificate (RTC) verifies the environmental attributes associated with the production of one Dth of renewable energy. Furthermore, the Oregon Climate Protection Program has a target of 10% RNG or hydrogen in the system by 2029. Here's a quick look at the procurement target:

Target new, non-regulated infrastructure investments that support the energy transition, like midstream RNG processing facilities.

The overall capital plan reflects this diversification and growth focus. Northwest Natural Holding Company expects total capital expenditures for 2025 to be in the range of $450 - $500 million. A significant part of this strategy involves the expansion outside the core regulated gas utility, exemplified by the acquisition of SiEnergy, which closed in January 2025. Management expects both the SiEnergy Gas Utility and the NWN Water Utility to each contribute between $0.25 to $0.30 to the annual adjusted 2025 EPS. The company also has a long-term capital expenditure expectation ranging from $2.5 billion to $2.7 billion from 2025 to 2030 to support this expanding operating capacity.

• Total expected capital expenditures for 2025: $450 - $500 million.
• Estimated contribution to annual adjusted 2025 EPS from SiEnergy: $0.25 to $0.30 per share.
• Estimated contribution to annual adjusted 2025 EPS from NWN Water: $0.25 to $0.30 per share.
• Total expected capital expenditures from 2025 to 2030: $2.5 billion to $2.7 billion.
• The company has a long-term goal for its Funds From Operations (FFO) to debt ratio of approximately 14%.

Finance: draft 13-week cash view by Friday.