Northwest Natural Gas Company (NYSE:NWN), dba NW Natural, and Encana Oil & Gas (USA) Inc., a subsidiary of Calgary-based Encana Corp. (NYSE, TSE: ECA), today announced that the Public Utility Commission of Oregon (OPUC) issued an order approving NW Natural’s investment in a joint venture to develop gas reserves on behalf of its Oregon customers, effective May 1, 2011.
Under terms of the joint venture agreement initially announced on Feb. 25, 2011, NW Natural and Encana will develop natural gas reserves in the Jonah Field in Wyoming, located north of Rock Springs. NW Natural will invest in the reserves on behalf of its customers, and the investment will be placed in the company’s rate base.
Last week a settlement agreement between NW Natural, the staff of the OPUC, the Citizens’ Utility Board of Oregon (CUB), and the Northwest Industrial Gas Users (NWIGU) was filed with the OPUC. A workshop was held on April 22 nd in front of the OPUC commissioners to present the settlement and the parties’ support of the transaction. The commissioners adopted the settlement, finding that NW Natural’s decision to enter the agreement is prudent.
“This agreement and the commission’s order represent a lot of hard work by a lot of parties over a short period of time, and we are pleased the commission approved the transaction,” said NW Natural President and Chief Executive Officer Gregg Kantor. “This is a terrific outcome for both customers and shareholders.”“This is a landmark agreement and regulatory step that we believe will open the door for future upstream investment by utilities seeking price stability for their customers – transactions that are backed by utility ratepayers and supported by regulators as prudent investments. As a leading producer, Encana has heard end-users’ requests for structures that provide long-term price security, and under this agreement, we are able to achieve both our customer’s goal and efficiently advance the development of a portion of the Jonah field,” said Renee Zemljak, Encana’s Executive Vice-President, Midstream, Marketing & Fundamentals.