Last December Northwest Natural Water Company, a subsidiary of the state’s oldest gas company, Northwest Natural, acquired an ownership stake in Avion Water, the state’s largest private public utility. NW Natural delivers gas to over 600,000 residential customers in Oregon, which is about 80% of all natural gas deliveries in the state.
NW Natural got into the water utility business on December 21, 2017, when it acquired Salmon Valley based out of Welches, Oregon, and Falls Water in Idaho Falls, Idaho. The two privately owned public utilities had about 5,600 combined customers, and have since expanded across the Pacific Northwest, Arizona and Texas.
“The water utility sector is an excellent strategic fit for our company,” stated David H. Anderson, president and chief executive officer of NW Natural in a press release after the acquisition.
NW Natural said the aspects of business it excels at, such as managing distribution infrastructure, customer service, working in a highly regulated market and environmental stewardship, are applicable to the water utility sector it entered. Anderson also noted that the 2017 purchase is part of a long-term plan to diversify its services. NW Natural believed Oregon’s smaller water utilities could benefit from the resources it could bring as a large company. “The water sector is extremely fragmented, and many water systems suffer from lack of scale and a limited ability to invest in infrastructure. We knew we could bring that investment capacity, as well,” said David Roy, spokesperson for NW Natural. “We can provide operational capacity. Some small utilities are operated by one person or a handful of people, and it’s difficult for them to have the same level of operational expertise, training on water quality, water efficiency, and safety.”
About 95% of Oregon’s municipal water systems are government run, and Avion Water Systems in Bend is the state’s largest privately owned public utility, with about 15,000 customer connections. Avion is regulated by the Oregon Public Utility Commission, a regulator that sets rates and establishes rules of operations for investor-owned utility companies.
Avion accounts for about half of Oregon’s regulated private water customers, which in total includes about 32,000 customers. When NW Natural purchased Avion in December, it said the sale would support Avion’s growth. Avion is set to provide water to a good portion of new developments in Bend.
“Given rapid population growth in Bend and Central Oregon, there is going to be a need for significant investments in water system infrastructure,” Roy said. “We have a strategic investment in Avion and we are helping to fund growth-related infrastructure investment so that Avion can meet the needs of its customers in the region.”
It’s not 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 utilities to 9,400 connections. Another private utility company, SouthWest Water Company out 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 advocating for safe food, clean water and climate protection, found privately owned water systems charged 59% more than publicly-owned systems in a 2016 study. A year before it raised alarm over the lack of transparency in privately-owned water utilities.
“Almost all private water companies did not reply to requests for information about their number of shutoffs. Of the 11 privately owned water utilities surveyed, only 1 (Suez Idaho) responded — representing a 9 percent response rate. In comparison, the response rate among public sector providers was 93 percent,” Food and Water Watch wrote in a study called America’s Secret Water Crisis.
When the Source Weekly requested records of the top residential water users in Central Oregon, Avion sued to keep its largest water users confidential. That was after Deschutes District Attorney John Hummel ordered Avion to fulfill the request. Both Bend and Redmond’s water departments complied with the records request in a timely manner. The Source Weekly is now represented by the Reporter’s Committee for the Freedom of the Press in regard to Avion’s suit.
Oregon’s Citizens Utility Board, a watchdog group monitoring utility rates in Oregon, told Streetroots it wasn’t too concerned with NW Natural buying up private water utilities.
“If they were buying public utilities, we’d view it differently,” Bob Jenks, Oregon’s CUB executive director, told Streetroots in 2018.
The watchdog butted heads with NW Natural in March over a proposed 12% rate hike for natural gas services, less than a year after the Oregon Public Utility Commission approved a 13% rate increase. The 12% increase would contribute to $11 million in executive and employee bonuses, increase shareholder profits by $1.1 million and fund a 30% increase in NW Natural’s advertising budget, according to Oregon CUB.
CUB also voiced concern over NW Natural, Avista and Cascade Natural Gas suing the state to avoid reducing greenhouse gas emissions as outlined in Oregon’s Department of Environmental Quality’s Climate Protection Program — 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. “This suit demonstrates the wide gulf between their rhetoric and their reality.”
NW Natural denies that it acts any less transparently than a public utility, and points to the regulatory oversite it has to adhere to under state laws.
“Both our gas business and NW Natural Water are very transparent as regulated utilities. Regulatory oversight includes the rate-setting process overseen by the Oregon Public Utilities Commission,” Roy said. “NW Natural as a publicly traded company is also subject to SEC filings and other mechanisms that require transparency.”
This article appears in Aug 24, 2022 – Aug 30, 2023.
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pretty sure I’ve seen a movie about this: https://en.wikipedia.org/wiki/Quantum_of_S…
After reading the other article where The Source blames Avion for not being able to publicly shame residents of Deschutes County. I decided to do some digging into this 2nd article. As it seems there is now a vendetta, because The Source didn’t get what they wanted. Like a toddler throwing a tantrum. Four pages plus the editor’s note is a ton of real estate in your issue this week. Get over it and move on. Northwest Natural has an ownership stake as an investor, that does not mean they are owned by them. If you are going to report on things, do it as it happens not 9 months later and get the facts straight. Many articles on this can be found, I don’t think Avion or Northwest Natural are trying to deceive their patrons. Here is a link to the Yahoo article from December 2021 about the stakeholder investment to get the real story, not the vendetta one The Source is putting out.
https://finance.yahoo.com/news/nw-natural-water-announces-strategic-224200276.html
Yeah rmt, or China Town with Faye Dunaway and Jack Nicholson (1974). Water wars are coming, just remember who owns the water – the people of Oregon, not these companies. If you believe water companies are transparent, as their spokesman Mr. Roy states, you need to take a closer look.
@Charofthelake There haven’t been many articles written about this. In fact there’s been no news coverage, local or otherwise, of the acquisition. The link to Yahoo you pasted here is a press release, and is quoted in this article.
@jackharvel -While I admit that I have limited to no knowledge about the journalistic terminology for the actual difference between an article and press release. When I a commonly educated individual types Northwest Natural and Avion Water into the Google search bar together and on the first page 10 options come up and 8 are taking about the investment/partnership (depending on which one you look at) and the other two are each companies respective websites, it would appear to us that “many” would have be written. Now, onto the bigger concern. For you as a journalist, isn’t it your job to find the news and report on it. Not wait for it to be handed to you? Why doesn’t The Source keep an eye out for Press Releases if it is that big of a deal? I am sure that the information would have been available if it was looked for. But wait, that’s right in December, Avion Water didn’t matter. But, now that they have done the right thing a BIG DEAL must be made. Like I said before get over it and move on.
@Charofthelake Sure, I get understand the criticism on timing. The sale flew under my radar when it happened, but I became aware of it when Avion sued us and I looked into the company a bit out of curiosity. We’ve been sitting on the story since then because anything published could complicate the ongoing lawsuit against us. Writing it now is mostly because it’s the only time it’d be timely for us ever again.
We do keep an eye out for press releases, they’re usually written by a company and sent directly to the press who either repost it (for the record we don’t do this at the Source), write their own content using just the information in the press release or use it as a springboard to research and source an original story. I’m assuming this one didn’t make the rounds locally because we didn’t receive it and it’s not on KTVZ’s press release page and they repost just about every release they get. If this sale had been covered in any local media it’d likely not be in this paper.
As for the timing I don’t think there should be a 8-month statute of limitations for reporting, especially if something hasn’t been covered yet.
@jackharvel- I am going to use part of your reply as a direct quote, “The sale flew under my radar when it happened, but I became aware of it when Avion sued us and I looked into the company a bit out of curiosity.” You reveal in this statement that if, The Source would have gotten the information it wanted, this article would never have been written. In addition, I believe that it is misleading at the least to portray this article was written for the purpose of informing area residents on the investment of a local company. When you throw in the paragraph on the lawsuit in the middle of it all. What is the purpose of that paragraph in this article? While I do not disagree that statue of limitations shouldn’t apply. If the article was really intended to be for informational purposes you should have left Avion v Source information out of it. To me it still feels as if the vendetta is the biggest factor in the publishing and timeline of this article.
@Charofthelake That paragraph is right after a quote from a study that found privately-owned public water utilities are on average less transparent than their publicly-owned counterparts. Having an example of the subject of the article, Avion, engaging in less transparent behavior than other local publicly owned water utilities made sense to me. Similarly, in Hanna’s story when it brings up Avion’s lawsuit it’s to explain the methodology and why 15% of Bend households aren’t accounted for. It seems to me that leaving out the fact of the matter in either of these stories would be a glaring omission.
You’re right that the article probably wouldn’t exist if Avion didn’t sue us, but it’d be because of our ignorance on the topic rather than a news value judgement. The state’s largest private water utility selling to the state’s largest gas utility is a story worth reporting and I was honestly shocked that no local media ran anything on it.
@jackharvel- At this point we should agree to disagree on the purpose of the article. From my research, I have found that J. Wick is still the owner of Avion Water. Your article and all press releases, confirm that Northwest Natural acquired an ownership stake in Avion Water. They did not purchase Avion Water. Let’s remember what the lawsuit is all about anyways. It is about a private business trying to keep the names and addresses of residents and how much they pay for water and what they use confidential. I am sure no one would want there names published in such a way. How is that Journalism?
Great move @charofthelake.. attack the person exposing something, right out of the playbook from the fearless leader who will not be named.
Why does a private company sue, when public companies have to produce data? What are they hiding?
Private companies want to be unregulated so they can run amok without oversight. Gouge residential rates and keep golf courses’ rates low, oh and support massive building… Because you know we need affordable housing (how many of the new builds in east side will actually be affordable??). Rates will be movin’ on up for the foreseeable future to offset all the new overhead.
Great.
I wonder who this @charofthelake character is — seems to have a real axe to grind.