LLast December, Northwest Natural Water Company, a subsidiary of the state’s oldest gas company, Northwest Natural, acquired a stake in Avion Water, the state’s largest private utility. NW Natural delivers gas to more than 600,000 residential customers in Oregon, approximately 80% of all natural gas deliveries in the state.
NW Natural entered the water utility business on December 21, 2017, when it acquired Welches, Oregon-based Salmon Valley and Falls Water in Idaho Falls, Idaho. The two private utilities had approximately 5,600 customers combined and have since expanded across the Pacific Northwest, Arizona and Texas.
“The water utility business is a great strategic fit for our business,” said David H. Anderson, president and CEO of NW Natural in a press release after the acquisition.
NW Natural said the aspects of the business in which it excels, such as distribution infrastructure management, customer service, working in a highly regulated market and environmental stewardship, apply to the water services sector in which it entered. Anderson also noted that the 2017 purchase is part of a long-term plan to diversify its services. NW Natural believed that small water utilities in Oregon could benefit from the resources it could bring as a large company. “The water sector is extremely fragmented and many water systems suffer from a lack of scale and limited ability to invest in infrastructure. We knew we could bring that investment capacity too” , said David Roy, spokesperson for NW Natural. “We can provide operational capability. Some small utilities are operated by one person or a handful of people, and it is difficult for them to have the same level of operational expertise, water quality training, l ‘Water Efficiency and Safety.’
About 95% of Oregon’s municipal water systems are government-operated, and Avion Water Systems in Bend is the largest private utility in the state, with about 15,000 customer connections. Avion is regulated by the Oregon Public Utility Commission, a regulatory agency that sets rates and establishes rules for the operation of investor-owned utility companies.
Avion accounts for about half of Oregon’s regulated private water customers, which altogether include about 32,000 customers. When NW Natural bought Avion in December, it said the sale would support Avion’s growth. Avion is expected to supply water to much of the new development in Bend.
“Given the rapid population growth in Bend and central Oregon, significant investments will be required in water system infrastructure,” Roy said. “We have a strategic investment in Avion and are helping fund growth-related infrastructure investments so that Avion can meet the needs of its customers in the region.”
This isn’t NW Natural’s first purchase in central Oregon. In 2019, the Public Utility Commission approved its acquisition of Sunriver Water LLC, a company that provides water and wastewater services to 9,400 connections. Another private utility company, SouthWest Water Company of California, also invested in central Oregon when it purchased Cline Butte Water, the water utility serving Eagle Crest Resort.
Food and Water Watch, a nonprofit that advocates for food safety, clean water and climate protection, found that private water systems cost 59% more than public systems in a study by 2016. A year earlier, he sounded the alarm about the lack of transparency in private water services.
“Almost all private water companies did not respond to requests for information on their number of closures. Of the 11 private water companies surveyed, only 1 (Suez Idaho) responded, representing a rate of 9% response. In comparison, the response rate among public sector providers was 93%,” wrote Food and Water Watch in a study titled America’s Secret Water Crisis.
When Source Weekly requested records of major residential water users in central Oregon, Avion sued to keep its major water users confidential. This was after Deschutes District Attorney John Hummel ordered Avion to respond to the request. Bend and Redmond Water Utilities complied with the request for records in a timely manner. The Source Weekly is now represented by the Journalists Committee for Freedom of the Press in the Avion lawsuit.
The Citizens Utility Board of Oregon, a watchdog group monitoring utility rates in Oregon, told Streetroots it isn’t overly concerned about NW Natural’s takeover of private water utilities.
“If they were buying utilities, we would see it differently,” Oregon CUB executive director Bob Jenks told Streetroots in 2018.
The watchdog clashed with NW Natural in March over a proposed 12% rate hike for natural gas services, less than a year after the Oregon Utilities Commission approved an increase 13% tariffs. The 12% increase would contribute $11 million in executive and employee bonuses, boost shareholder profits by $1.1 million and fund a 30% increase in NW Natural’s advertising budget, according to Oregon CUB. .
CUB also expressed concern about NW Natural, Avista, and Cascade Natural Gas suing the state for avoiding reductions in greenhouse gas emissions, as outlined in the Quality Department’s Climate Protection Program. Oregon Environment – which is designed to reduce emissions by 50% by 2035 and 90% by 2050. .
“Gas utilities talk a good game about their commitment to reducing carbon emissions. But they continue to invest millions in expanding their pipelines and increasing their emissions every year,” Jenks said. in a press release on March 24. between their rhetoric and their reality.”
NW Natural denies that it acts less transparently than a utility and points to the regulatory on-site it must comply with under state law.
“Our gas business and NW Natural Water are very transparent as regulated utilities. Regulatory oversight includes the rate-setting process overseen by the Oregon Utilities Commission,” Roy said. “NW Natural, as a publicly traded company, is also subject to SEC filings and other mechanisms that require transparency.”