NW Natural’s push to buy and repair Coos County’s troubled natural gas pipeline has ignited a new fight over Oregon’s energy future, highlighting the challenges the state will likely face as it gradually phases out fossil fuels.
The utility plans to buy the pipeline from Coos County for $1 because the county can’t afford to make landslide repairs. NW Natural will then recover the repair costs from ratepayers statewide.
NW Natural leaders say acquiring the pipeline is the only way to finance the repairs – work the county can no longer afford and critical to keep gas flowing safely to homes and businesses in one of Oregon’s poorest regions.
Consumer and climate advocates counter that NW Natural, the state’s largest gas utility, should begin transitioning some Coos County residents to electric heating and appliances now rather than investing in infrastructure that’s incompatible with Oregon’s climate commitments and could soon become obsolete.
The dispute underscores a broader tension between gas utilities seeking to preserve their assets and state policies pushing a shift to renewable electricity – with rural and low‑income communities caught in the middle as they continue to rely on aging pipelines while lacking money to switch to cleaner alternatives.
Utilities in Oregon must heed state climate goals advanced by lawmakers, governors and regulators. They require gas utilities to cut emissions 50% by 2035 and 90% by 2050. Several cities in the state also have sought to curb emissions by restricting natural‑gas hookups through bans, fees and code changes.
Investor-owned electric utilities, too, must provide clean electricity by 2040 – generated from wind and solar, not natural gas or coal.
In the meantime, the region’s power grid is under mounting pressure from skyrocketing data center demand and a congested, aging transmission system — all while electricity costs continue to climb for ratepayers.
State energy officials say natural gas will play a crucial role in providing energy in the next few decades even as the state works to decrease overall reliance on it because it’s primarily methane, a potent greenhouse gas, and its combustion releases pollutants that harm air quality and respiratory health.
Leaders at the Oregon Public Utility Commission, which regulates investor-owned utilities, have said they support “doing everything possible to eliminate unnecessary investments in the gas distribution system.” In recent years, they have required gas utilities to plan for future declines in gas demand and to consider alternatives to building or upgrading pipelines.
Climate advocates point to alternatives already being tested in Oregon and other states, including natural gas companies paying customers to switch to electric heat pumps and appliances and developing geothermal heating networks for heat pumps.
NW Natural is now exploring options that don’t include paying customers to convert to electricity and has cast doubts on the state’s electrification and clean‑energy goals.
NW Natural leaders say they’re aiming to become free of fossil fuels by developing renewable natural gas made of captured methane from places like landfills and buying “green” hydrogen — even as the utility continues to expand its natural gas system.
“We expect RNG (renewable natural gas) to comprise about 4% of gas supplies to our Oregon customers in 2026, which positions NW Natural as a utility leader in renewable gas supply procurement nationally,” said spokesperson David Roy.
The utility, which currently serves 800,000 customers in Oregon and southwest Washington, has seen steady growth over the past five years, largely fueled by new gas hookups and rate increases. Portland‑based NW Natural Holdings, which owns NW Natural and several small water utilities, reported annual revenues of $1.29 billion in 2025, up roughly 50% from $860 million in 2021.
NW Natural and gas utilities nationwide face a reckoning, said Emily Moore, a senior climate director with Sightline, an independent, nonpartisan think tank that conducts research and policy analysis in Oregon and Washington.
“I think they will need to figure out if they want to be part of the solution or if they want to continue to obstruct progress toward the inevitable,” Moore said.
“We can no longer continue with business as usual for pipeline expansion and replacement” she said.
The repair-prone pipeline
The 77-mile-long, 12-inch Coos County Natural Gas Pipeline was built in the early 2000s to spur economic development after the collapse of the local timber economy.
It cost more than $50 million to build, financed through $27 million in general obligation bonds approved by county voters in 1999 and roughly $24 million in state lottery funds approved by the Legislature.
From the start, it was plagued by construction failures, mismanagement and environmental violations, including lack of erosion control, resulting in lengthy legal battles. The pipeline cuts beneath 188 streams and runs through dense forests and steep, unstable hillsides.
NW Natural has operated and maintained the line and collected customer payments as the county’s contractor since it was constructed. Coos County as the owner must cover the costs for major repairs.
The job growth largely failed to materialize. The line has never turned a profit though it has broken even, said Coos County Commissioner John Sweet.
Still, the availability of natural gas helped retain some employers, including plywood and lumber mills, a creamery and smaller specialty mills, Sweet said, in part because natural gas provides reliable, high‑temperature heat often at a lower cost.
It factored into Southport Forest Products building a large sawmill and GMA Garnet locating a garnet distribution facility in the area, he said. And it allowed the local hospital and schools to switch to natural gas from older heat sources.
In recent years, landslides and riverbank erosion have increasingly threatened the pipeline – leading the county to pay for repeated fixes, with little success, Sweet said. In 2021, a NW Natural-commissioned study identified 13 landslide sites posing safety risks, with several requiring immediate repairs. Conditions worsened after a March 2025 storm.
NW Natural filed estimates with the Oregon Public Utility Commission showing repairs for three high-risk sites would each cost about $4 million. The utility did not provide cost estimates for the nine additional sites. But at similar prices, total repair costs could reach roughly $50 million — about what the pipeline cost to construct.
In its filing, NW Natural also acknowledged that future landslide risks are difficult to predict, warning that severe storms could expose new hazards or worsen existing ones.
The county, in the meantime, has only about $2 million left in its pipeline maintenance fund, including $1.45 million in federal American Rescue Plan Act money, Sweet said. It has no other money to spare and lacks the capacity to issue another bond, he said.
Natural gas serves a small share of Coos County residents. About two‑thirds of homes rely on electricity for heating, according to state data, while most others use wood, propane or fuel oil. NW Natural serves just over 1,800 residential customers, or about 5% of county households.
But the pipeline also supplies about 500 commercial customers and nine industrial users, including the hospital, schools and forest products facilities that employ hundreds of workers — stakes that have weighed heavily on county leaders.
“It’s the most significant problem that I’ve dealt with in my 13 years as a commissioner,” Sweet said. “What would happen if we failed? I’ve had a hard time sleeping knowing that a great number of our family wage jobs, which are very precious down here, could disappear with a huge storm.”
The proposal to transfer the pipeline to NW Natural for a nominal fee has drawn support from county commissioners, the city of North Bend, Coos Bay Public Schools and the cash-strapped Bay Area Hospital, among others. The transaction isn’t yet complete, the utility said. Once it goes through, the county plans to transfer its maintenance fund to NW Natural, Sweet said.
The state Public Utility Commission doesn’t need to approve the purchase, but it must review and approve any repair costs NW Natural seeks to recover from customers to ensure they’re reasonable and necessary before customers pay them.
As part of that review, regulators can consider whether cheaper or cleaner alternatives would have made more sense than buying and repairing the pipeline, said Kandi Young, a commission spokesperson. If approved, the new rate increase, which covers the landslide repair costs, would take effect on Oct. 31, Young said.
Cost, other objections to deal
Consumer and environmental groups said they’re concerned about the long-term cost of the repairs, especially given that the utility has already raised rates by 34% for residential customers over the past five years.
Roy, NW Natural’s spokesperson, said the impact of taking over the Coos County pipeline on customers statewide would be minimal: $12 million in safety repairs would lead to a 0.1% to 0.3% increase in rates. That translates to roughly 14 cents more a month for residential customers, 54 cents to $6.16 for commercial customers and $21.49 to $31.29 for industrial customers, depending on their size.
Officials with the Citizens Utility Board, which advocates for utility ratepayers in the state, argue that NW Natural should instead collect most of the repair costs from Coos County’s industrial customers who rely on burning natural gas. Some have few viable electric alternatives and are likely to depend on the pipeline for years.
Beyond the costs, customer advocates see the moment as an opportunity to advance the state’s energy strategy and climate goals like another gas utility has in the state.
The Citizens Utility Board is urging NW Natural to shrink the local gas system by launching a targeted electrification program in Coos County – moving select streets or neighborhoods to all-electric to avoid system maintenance costs. This would entail installing heat pumps, heat pump water heaters and electric stoves.
Last year, Oregon’s second-largest gas utility, Avista, agreed to pilot a voluntary electrification program as part of its costly pipeline replacement project in southern and eastern Oregon. It will offer incentives for gas users to switch to all-electric appliances and heat pumps. It’s still in the planning stages, said the Public Utility Commission’s Young, with Avista expected to file the implementation proposal this summer.
Utilities in Colorado, New York and Washington state have adopted similar strategies.
Such programs can lower capital investments into the gas system, reducing long‑term costs for customers who remain; they can also lessen upfront barriers to electric appliances and heat pumps, said Charlotte Shuff, a spokesperson for the citizen board. The strategy can also help utilities meet emissions‑reduction requirements, she said.
Some residents in Coos County might be wary of going all-electric as average annual electricity costs in the county are much higher than average annual natural gas costs.
That gap is partly driven by widespread reliance on inefficient electric baseboard heaters, said Ashley Audycki, the South Coast regional coordinator with nonprofit Rogue Climate, which advocates for clean energy.
Audycki said efforts to expand energy‑efficient electrification in Coos County have stalled because many residents can’t afford the upfront costs of installing heat pumps — but a NW Natural-funded conversion would offer some locals a way to make their households and the region more resilient to extreme weather.
“Coos County ratepayers and residents in general deserve better solutions that make the region more economic, climate and energy resilient,” Audycki said.
NW Natural has other ideas
NW Natural has repeatedly pushed back against Oregon’s vision of a largely electrified, fossil‑fuel‑free energy system — drawing on the many challenges the state faces, including reliability of its electrical grid, not enough transmission lines and the slow build-out of wind, solar and other clean energy projects.
The utility’s central claim is that making homes all-electric doesn’t meaningfully reduce emissions because Oregon’s grid still relies on fossil fuels, including a growing share of natural gas, to generate electricity.
In 2023, the most recent year data is available, about half of Oregon’s electricity mix came from clean energy — including 34% from hydropower and 11% from wind and solar projects.
Coal‑generated electricity, mostly from the Colstrip Power Plant in Montana, accounted for another 11% of the mix while natural‑gas‑fired generation for 20%.
More recently, the utility has argued that heat pumps don’t deliver the promised efficiency benefits because they switch to inefficient electric backup heating during cold weather.
“Forced electrification of homes would mean costlier, less efficient energy for customers, requiring even more fossil fuel use in winter” when widespread electrification could lead to rolling outages as demand spikes, said Roy, the company spokesperson.
But state energy officials say heat pumps operate up to three times more efficiently than modern gas furnaces and so produce substantially fewer emissions, even if the grid uses some natural gas and coal to power electricity plants.
Modern cold‑climate heat pumps perform well in Oregon, including in freezing conditions. Older models or those that are poorly installed or incorrectly operated can lose efficiency during cold snaps — but those situations are relatively rare in Oregon’s mild climate, officials said.
Michael Freels, a senior policy analyst with the Oregon Department of Energy, said the increase in gas-powered electricity generation is driven by factors such as reduced hydropower during low water years as well as growing demand for electricity from data centers and from households during extreme weather.
But the state is “still trending down and reducing our emissions over time,” Freels said.
And while it’s unclear if Portland General Electric and Pacific Power will hit the state targets on time to cut their greenhouse gas emissions, both are planning to bring a large amount of new solar generation, battery storage and transmission lines online in 2029 and 2030. Many projects are already approved and in line to be built.
Can NW Natural transform itself?
NW Natural has a counter-answer to electrification: “energy diversification.”
Utility officials say they eventually plan to replace conventional gas with renewable natural gas and hydrogen blends to reduce emissions and meet state mandates.
Renewable natural gas is made from methane captured from landfills, wastewater treatment plants and liquid manure lagoons at dairies while hydrogen is produced by heating natural gas so it splits into hydrogen and solid carbon.
To many researchers, regulators and consumer advocates, both technologies remain long shots.
Critics say that while renewable natural gas is billed as carbon‑neutral, it’s expensive, scarce and far less effective at reducing emissions than electrification. Renewable natural gas is currently not supplying more than a small fraction of gas demand anywhere in the world — except for Denmark, where it accounts for about 40% of gas flowing through its pipeline system due to massive government subsidies. Most RNG in the U.S. is used to fuel heavy trucks, buses and other vehicles.
Environmental and climate groups also argue that blending hydrogen into gas systems, still in the experimental stage, raises health and safety concerns in homes and buildings — including increased risks of leaks, fires and explosions and potential indoor air‑quality impacts — and offers limited climate benefits.
NW Natural officials reject those assessments. In the near future, they plan to meet climate requirements largely by purchasing carbon‑reduction credits and other state‑approved compliance tools. Long term, the company projects more abundant and affordable supplies of RNG and green hydrogen.
Yet the utility won’t come close this year to meeting the 10% RNG target required by the Legislature, and the recent closure of a Nebraska beef plant, which scuttled NW Natural’s $8.3 million renewable natural gas project there, underscores just how unstable the RNG market can be.
The company also has tested hydrogen blends at its Sherwood facility but has scaled back other efforts, withdrawing a proposed hydrogen project in Eugene in 2022 after public opposition and ending a three‑year pilot in Portland early. It hasn’t shared results with the public.
NW Natural also sees potential in dual-energy systems — essentially, adding an electric heat pump to a gas furnace. The heat pump would heat most of the time while the furnace would kick in during cold snaps.
NW Natural is participating in an Energy Trust-run dual‑fuel heat pump pilot – analysis is still being completed on whether this idea is cost-effective for customers or would reduce emissions.
One potential solution both clean‑energy advocates and NW Natural officials see as promising is geothermal heat pumps, which pull heat from the ground and are significantly more energy efficient than air sourced heat pumps.
Several states, including Washington, have passed legislation to allow gas utilities to build geothermal energy networks — connected systems of pipes linking multiple buildings to a shared common source such as geothermal heat — as a move toward a long‑term transition off natural gas. Similar legislation failed to move forward in Oregon in 2025.
NW Natural is working on a geothermal pilot project in a new development in Vancouver. Geothermal networks rely on the same practice of laying pipes and connecting them to homes – though the pipes have water in them, not gas.
In the end, state requirements are pressuring NW Natural – and other energy companies – to change.
The Coos County pipeline may emerge as an early proving ground.
“We know that natural gas will play an important role in Oregon’s energy future,” said Oregon Department of Energy spokesperson Jennifer Kalez. “And we need to work with utilities, policymakers and the public to identify where natural gas is most needed and where other options make more sense for Oregon.”
©2026 Advance Local Media LLC. Visit oregonlive.com. Distributed by Tribune Content Agency, LLC.
