Our Conservation Tariff

Decoupling

In October 2002, NW Natural and the Public Utility Commission of Oregon agreed on an innovative rate program that is still in effect today. We call it the “Conservation Tariff,” because it allows NW Natural to encourage energy conservation while ensuring the company earns enough revenue to serve customers and operate a safe, reliable system.

In regulatory language, the rate structure is called “partial decoupling.” NW Natural's profit and operating revenue is decoupled – or separated – from the amount of natural gas customers’ use. The company is allowed to keep a fixed amount of money for each residential and commercial customer it serves. If it receives more or less than that fixed amount on an annual basis, customer rates are adjusted to true-up the difference.

That means NW Natural can promote energy-efficient appliances and conservation techniques to help its customers save money on their energy bills, without the concern that there isn’t enough revenue to operate the business. About a year after the Conservation Tariff was adopted, the Public Utility Commission of Oregon approved another innovative program that works in combination with partial decoupling, called WARM. WARM is a voluntary program that allows customer bills during the winter to be adjusted based on temperature changes in each billing month. In a colder-than-average month, customers will pay less per unit of heat than they would if they were not participating in WARM. In a warmer-than-average month, the unit price a customer pays will be slightly higher.

Together, partial decoupling and WARM fully separate NW Natural's revenues from customer usage and stabilize revenues to benefit both NW Natural and its customers. With these two programs, customers will receive the highest level of service at a reasonable price, and the company will earn enough to effectively and efficiently operate its business.