220 NW SECOND AVENUE

PORTLAND, OR 97209

April 18, 2018

To the Shareholders of Northwest Natural Gas Company:

We cordially invite you to attend the 2018 Annual Meeting of Shareholders of Northwest Natural Gas Company (NW Natural), which will be held in the Hospitality Suite on the Fourth Floor of NW Natural’s offices, 220 NW Second Avenue, Portland, Oregon 97209 on Thursday, May 24, 2018, commencing at 2:00 p.m. Pacific Daylight Time. We look forward to greeting as many of our shareholders as are able to join us.

At the meeting you will be asked to consider and vote upon five proposals: (1) the election of three Class I directors for terms of three years; (2) the increase in shares reserved for issuance under the Company’s Employee Stock Purchase Plan; (3) an advisory vote to approve named executive officer compensation; (4) the ratification of the appointment of PricewaterhouseCoopers LLP as NW Natural’s independent registered public accountants for the fiscal year 2018; and (5) the reorganization of NW Natural into a holding company structure. Your Board of Directors unanimously recommends that you vote FOR each of Proposals 1, 2, 3, 4 and 5.

In connection with the meeting, we enclose a notice of the meeting, a Proxy Statement-Prospectus, a proxy card and, if you are a registered shareholder, an admission ticket for you and one guest to attend the meeting. If you plan to attend the Annual Meeting, please detach and retain the admission ticket attached to your proxy card. As space is limited, you may bring only one guest to the meeting. If you hold your stock through a broker, bank, or other nominee, please bring a legal proxy or other evidence to the meeting showing that you owned NW Natural common stock as of the record date, April 5, 2018, and we will provide you with an admission ticket. Please see page 11 for further instructions on attending the Annual Meeting. Detailed information relating to NW Natural’s business activities and operating performance is contained in our 2017 Annual Report, which is also enclosed.

It is important that your shares are represented and voted at the meeting. Whether or not you plan to attend, please vote your shares in one of three ways: via internet, telephone or mail. Instructions regarding internet and telephone voting are included on the proxy card or Voting Instructions Form. If you elect to vote by mail, please sign, date and return the proxy card or Voting Instructions Form in the enclosed postage-paid envelope. Your proxy may be revoked at any time before it is exercised in the manner set forth in the Proxy Statement-Prospectus.

Sincerely,
Tod R. Hamachek		David H. Anderson
Chairman of the Board		President and Chief Executive Officer

NORTHWEST NATURAL GAS COMPANY

ONE PACIFIC SQUARE

220 NW SECOND AVENUE

PORTLAND, OREGON 97209

(503) 226-4211

NOTICE OF 2018 ANNUAL MEETING OF SHAREHOLDERS

Portland, Oregon, April 18, 2018

To our Shareholders:

The 2018 Annual Meeting of Shareholders of Northwest Natural Gas Company (NW Natural) will be held in the Hospitality Suite on the Fourth Floor of NW Natural’s offices, 220 NW Second Avenue, Portland, Oregon 97209 on Thursday, May 24, 2018 at 2:00 p.m. Pacific Daylight Time, for the following purposes:

If you were a holder of record of NW Natural common stock at the close of business on April 5, 2018, the record date set for the Annual Meeting, you will be entitled to vote upon all matters properly submitted to shareholder vote at the meeting.

Our Board of Directors is soliciting the proxies of all holders of NW Natural common stock who may be unable to attend the meeting in person or who desire to vote by proxy before the meeting. These proxies also will instruct the relevant fiduciary under NW Natural’s Dividend Reinvestment and Direct Stock Purchase Plan or Retirement K Savings Plan to vote any shares held for shareholders’ benefit under those plans, as indicated on the proxies. A proxy and a stamped return envelope are enclosed for your use. No postage is needed if mailed in the United States. Instructions regarding internet and telephone voting also are included in the enclosed proxy card or Voting Instruction Form.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY

MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON

MAY 24, 2018

This Proxy Statement-Prospectus and our 2017 Annual Report are available at www.nwnatural.com.

Your vote is very important to us.

We urge you to vote by promptly marking, signing, dating, and returning the enclosed proxy card or Voting Instruction Form, or by granting a proxy by the internet or telephone in accordance with the instructions in the enclosed proxy card or Voting Instruction Form, as soon as possible. Your prompt vote will save us the additional expense of further requests to ensure the presence of a quorum. You may vote in person at the meeting whether or not you previously have returned your proxy.

By Order of the Board of Directors,
Shawn M. Filippi
Vice President, Chief Compliance Officer and Corporate Secretary

PROXY STATEMENT

of

NORTHWEST NATURAL GAS COMPANY

PROSPECTUS

of

NORTHWEST NATURAL HOLDING COMPANY

relating to

COMMON SHARES

This Proxy Statement-Prospectus contains both a Proxy Statement for the 2018 Annual Meeting of Shareholders (Annual Meeting) of Northwest Natural Gas Company (NW Natural), an Oregon corporation, to be held on May 24, 2018 and a Prospectus of Northwest Natural Holding Company (NW Holding), an Oregon corporation, relating to the issuance of common shares of NW Holding in connection with the proposed formation of a holding company for NW Natural.

Under the terms of an agreement and plan of merger (Plan of Merger) between NW Natural, NW Holding and NWN Merger Sub, Inc. (Merger Sub), Merger Sub would merge into NW Natural (Merger) and each outstanding share of common stock of NW Natural would be converted into one share of common stock of NW Holding. As a result of the Merger, the holders of NW Natural common stock immediately before the effective time of the Merger would become holders of NW Holding common stock, and NW Natural would become a subsidiary of NW Holding. Thus, NW Holding is offering and will issue a number of common shares equal to the number of shares of NW Natural common stock outstanding at the effective time of the Merger. There were 28,782,815 shares of NW Natural common stock outstanding on April 5, 2018, the record date for NW Natural’s Annual Meeting.

NW Natural common stock is currently listed on the New York Stock Exchange (NYSE), with the trading symbol “NWN.” On April 5, 2018, the high and low sales prices of NW Natural common stock, as reported in the consolidated reporting system, were $58.90 and $57.305, respectively. NW Holding intends to list its common shares on the NYSE, and such listing, upon official notice of issuance, is a condition to the completion of the Merger. After completion of the Merger, all shares of NW Natural common stock will be held by NW Holding, and NW Natural common stock will no longer be listed on the NYSE.

All NW Natural shareholders of record at the close of business on April 5, 2018 are entitled to notice of and to vote at the Annual Meeting.

This Proxy Statement-Prospectus provides detailed information about the formation of a holding company. You should read it carefully. If the holding company formation is approved and becomes effective, your shares of NW Natural common stock will be converted into shares of NW Holding common stock.

The proposed formation of the holding company involves risks. See “Risk Factors ” on page 6 of this Proxy Statement-Prospectus.

This Proxy Statement-Prospectus and the accompanying proxy, solicited on behalf of the Board of Directors of NW Natural, were first sent to shareholders of NW Natural on or about April 18, 2018.

This Proxy Statement-Prospectus may incorporate important business and financial information about NW Natural that is not included in or delivered with the document. NW Natural shareholders may obtain from NW Natural without charge copies of documents that have been or may be incorporated in this Proxy Statement-Prospectus by requesting them in writing or by telephone from:

Northwest Natural Gas Company, Attn: Shareholder Services, 220 N.W. Second Avenue, Portland, Oregon 97209, (503) 226-4211.

To obtain this information in time for the Annual Meeting, security holders must request it no later than May 17, 2018, five business days prior to the date of the Annual Meeting.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this Proxy Statement-Prospectus. Any representation to the contrary is a criminal offense.

The date of this Proxy Statement-Prospectus is April 18, 2018

PROXY STATEMENT

OF

NORTHWEST NATURAL GAS COMPANY,

AND PROSPECTUS OF NORTHWEST NATURAL HOLDING COMPANY

April 18, 2018

Table of Contents

1

2

3

4

5

Risk Factors

If the Holding Company Proposal is approved and the Merger completed, NW Holding’s ability to pay dividends on NW Holding common stock would be subject to the prior rights of holders of NW Holding indebtedness and preferred stock, if any.

At the effective time of the Merger, the only class of NW Holding securities outstanding would be NW Holding common stock. However, NW Holding may from time to time thereafter issue debt securities and preferred stock, as well as additional shares of NW Holding common stock, in order to make capital contributions to one or more of its subsidiaries, although NW Natural would likely continue to issue its own debt securities and may issue preferred stock. NW Holding could also guarantee indebtedness of non-utility subsidiaries. The issuance or guaranty of securities by NW Holding would not be subject to the prior approval of the state utility commissions. The consolidated enterprise could thus be more leveraged than NW Natural and its current subsidiaries. NW Holding’s ability to pay dividends on NW Holding common stock would be subject to the prior rights of holders of NW Holding debt securities (including guarantees) and preferred stock, if any.

In addition, the right of NW Holding, as a shareholder, to receive assets of any of its direct or indirect subsidiaries upon the subsidiary’s liquidation or reorganization would be subject to the prior rights of the holders of existing and future debt securities and preferred stock issued by such subsidiaries, and, as in the case of dividends, the rights of holders of NW Holding common stock to receive any such assets would be subject to the prior rights of the holders of NW Holding’s debt securities (including guarantees) and preferred stock.

If the Holding Company Proposal is approved and the Merger completed, NW Holding’s ability to pay dividends on NW Holding common stock would be dependent on the receipt of dividends and other payments from NW Holding’s subsidiaries.

NW Holding would be a holding company, the only significant assets of which will be the shares of common stock of its subsidiaries, and therefore NW Holding would not produce any operating income of its own. As a result, NW Holding’s ability to make payments on its indebtedness and to pay dividends on its capital stock would be dependent on the receipt of dividends and other payments from its operating subsidiaries, including NW Natural.

NW Natural and its current subsidiaries, which would become NW Holding’s direct and indirect subsidiaries, are separate and distinct legal entities, managed by their own boards of directors, and, as is currently the case, would have no obligation to pay any amounts to their respective shareholders, whether through dividends, loans or other payments. The ability of these companies to pay dividends or make other distributions on their common stock is now, and would continue to be, subject to, among other things: their results of operations, net income, cash flows and financial condition, as well as the success of their business strategies and general economic and competitive conditions; the prior rights of holders of existing and future debt securities and any future preferred stock issued by those companies; and any applicable legal restrictions.

If NW Natural ceases to comply with credit and capital structure requirements approved by the OPUC and WUTC, it will not, with limited exceptions, be permitted to pay dividends to NW Holding. See “Holding Company Proposal-Regulatory Conditions and Restrictions.”

The risks applicable to NW Natural are applicable to NW Holding.

Immediately after completion of the holding company restructuring, the risks that apply to NW Natural, including those risks describe in NW Natural’s most recent Annual Report on Form 10-K and in its subsequently filed quarterly reports on Form 10-Q, are also applicable to NW Holding.

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NW Holding may invest in activities that may prove to be riskier than the current activities of NW Natural, which could result in losses, a decline in stock price or more volatility in stock price.

The holding company structure may allow us greater opportunities to invest in regulated and unregulated businesses. These investments may involve greater risk than an investment in NW Natural. If losses are incurred in unregulated businesses, they will likely not be recoverable through utility rates and they could adversely affect our stock price. Similarly, expenses associated with the unregulated businesses will not be recoverable through utility rates.

ADDITIONAL INFORMATION ABOUT NW NATURAL AND NW HOLDING

General

NW Natural is subject to the informational reporting requirements of the Securities Exchange Act of 1934, as amended (Exchange Act). NW Natural files annual, quarterly and special reports, proxy statements and other documents with the Securities and Exchange Commission (SEC) (File No. 1-15973). You may read and copy any materials NW Natural files with the SEC at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. NW Natural’s SEC filings are also available to the public from the SEC’s website at www.sec.gov. Other than those documents incorporated by reference into this Proxy Statement-Prospectus, as discussed below, information on this website does not constitute a part of this Proxy Statement-Prospectus.

NW Holding will become subject to the same informational requirements as NW Natural following the Merger described in this Proxy Statement-Prospectus, and both NW Holding and NW Natural will file reports and other information with the SEC in accordance with the Exchange Act. Upon the completion of the Merger, NW Holding common stock will be listed on the NYSE. At the time of such listing, NW Natural’s common stock will cease to be listed and registered under Section 12 of the Exchange Act. NW Natural will, however, continue to have public reporting obligations under Section 15(d) of the Exchange Act because NW Natural registered and publicly sold first-mortgage bonds and issued deferred compensation obligations to employees and directors under deferred compensation plans.

NW Holding has filed with the SEC a registration statement on Form S-4, Registration No. 333-223549 (together with all amendments, schedules and exhibits thereto, the Registration Statement) under the Securities Act of 1933, registering the shares of NW Holding common stock to be issued upon effectiveness of the Merger. This Proxy Statement-Prospectus, which constitutes a part of the Registration Statement, does not contain all of the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the SEC. The Registration Statement and the exhibits thereto are available for inspection and copying as set forth above. Statements contained in this Proxy Statement-Prospectus or in any document incorporated by reference in this Proxy Statement-Prospectus as to the contents of any contract or other document are not necessarily complete, and in each instance reference is made to the copy of such contract or other document filed as an exhibit to the Registration Statement or such incorporated document, each such statement being qualified in all respects by such reference.

Incorporation of Documents by Reference

The SEC allows NW Natural to incorporate by reference the information that it files with the SEC under the Exchange Act. This allows NW Natural to disclose important information to you by referring you to those documents rather than repeating them in full in this Proxy Statement-Prospectus. NW Natural is incorporating into this Proxy Statement-Prospectus by reference:

7

The documents incorporated into this Proxy Statement-Prospectus by reference, which are referred to as the “Incorporated Documents,” are deemed to be part of this Proxy Statement-Prospectus from the date of filing such documents. Any statement contained in an Incorporated Document may be modified or superseded by a statement in this Proxy Statement-Prospectus (if such Incorporated Document was filed prior to the date of this Proxy Statement-Prospectus) or in any subsequently filed Incorporated Document. Any statement contained in this Proxy Statement-Prospectus may be modified or replaced by a statement in an Incorporated Document that is filed with the SEC after the date of this Proxy Statement-Prospectus.

You may request any of the Incorporated Documents, at no cost, by writing Shareholder Services, NW Natural at 220 N.W. Second Avenue, Portland, Oregon 97209 or calling (503) 226-4211 (extension 2402). NW Natural maintains an Internet site at www.nwnatural.com which contains information concerning NW Natural and its affiliates. The information contained at NW Natural’s Internet site is not incorporated by reference, and you should not consider it part of this Proxy Statement-Prospectus.

Please contact NW Natural no later than May 17, 2018 in order to receive timely delivery of the Incorporated Documents before the Annual Meeting.

FORWARD-LOOKING STATEMENTS

This Proxy Statement-Prospectus contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, which are subject to the safe harbors created by such Act. Forward-looking statements can be identified by words such as anticipates, assumes, intends, plans, seeks, believes, estimates, expects, and similar references to future periods. Examples of forward-looking statements include, but are not limited to, statements regarding the following: plans, projections and predictions; objectives, goals or strategies; assumptions, generalizations and estimates; ongoing continuation of past practices or patterns; future events or performance; trends; risks; timing and cyclicality; earnings and dividends; capital or organizational structure, including restructuring and operating as a holding company; growth; labor relations and workforce succession; project and program development, expansion, or investment; business development efforts, including acquisitions and integration thereof; rate or regulatory outcomes, recovery or refunds; outcomes, timing and effects of potential claims, litigation, regulatory actions, and other administrative matters; and effects and efficacy of regulatory mechanisms.

Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. We therefore caution you against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements are discussed in the risk factors in this Proxy Statement-Prospectus and at Item 1A., “Risk Factors” of Part I and Item 7. and Item 7A., “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Quantitative and Qualitative Disclosures About Market Risk”, respectively, of Part II of the NW Natural 2017 Form 10-K.

Any forward-looking statement made by us in this Proxy Statement-Prospectus speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

8

INFORMATION REGARDING

2018 ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD MAY 24, 2018

PROXY STATEMENT-PROSPECTUS

The Board of Directors of Northwest Natural Gas Company (NW Natural or the Company) is soliciting the proxies of all holders of NW Natural common stock who may be unable to attend in person or who desire to vote by proxy prior to the Annual Meeting of Shareholders to be held in the Hospitality Suite on the Fourth Floor of NW Natural’s offices, 220 NW Second Avenue, Portland, Oregon 97209 on Thursday, May 24, 2018, at 2:00 p.m. Pacific Daylight Time. The close of business on April 5, 2018 is the record date for the determination of shareholders entitled to notice of and to vote at the meeting. We request that you sign and return the enclosed proxy card or Voting Instruction Form promptly. Alternatively, you may grant your proxy by the internet or telephone.

NW Natural’s Annual Report for the fiscal year ended December 31, 2017, including audited financial statements, is being sent to all shareholders, together with this Proxy Statement-Prospectus and the accompanying proxy card or Voting Instruction Form, commencing April 18, 2018.

HOW TO VOTE BY PROXY AND REVOKE YOUR PROXY

Voting by Proxy

You may vote your shares either in person or by duly authorized proxy. You may use the proxy card or Voting Instruction Form accompanying this Proxy Statement-Prospectus if you are unable to attend the meeting in person or you wish to have your shares voted by proxy, even if you do attend the meeting. If you are a registered shareholder, you may vote by internet, telephone, or mail, or you may vote your shares in person at the meeting. To vote:

By internet (do not return your proxy card)

By telephone (do not return your proxy card)

By mail

9

Revoking Your Proxy

You may revoke your proxy at any time before the proxy is exercised by: (1) delivering a written notice of revocation; (2) filing with the Corporate Secretary a subsequently dated, properly executed proxy; (3) voting after the date of the proxy by the internet or telephone; or (4) attending the meeting and voting in person. Your attendance at the meeting, by itself, will not constitute a revocation of a proxy. You should address any written notices of proxy revocation to: Northwest Natural Gas Company, 220 NW Second Avenue, Portland, OR 97209, Attention: Corporate Secretary.

Shares Held by Bank or Broker

If your shares are held in nominee or street name by a bank or broker, you should follow the directions on the Voting Instruction Form you receive from your bank or broker as to how to vote, change your vote, or revoke your proxy. If you want to vote those shares in person at the Annual Meeting, you must bring a signed legal proxy from the broker, bank, or other nominee giving you the right to vote the shares. Revocation of proxies for shares held through a broker, bank, or other nominee must be made through the appropriate nominee in accordance with its instructions.

Adjournment

If an adjournment of the meeting occurs, it will have no effect on the ability of shareholders of record as of the record date to exercise their voting rights or to revoke any previously delivered proxies.

NW Natural expects that on May 24, 2018, the scheduled date of the Annual Meeting, votes will be taken and the polls closed on the proposals included in this Proxy Statement-Prospectus. It is possible, however, that the management of NW Natural may propose one or more adjournments of the Annual Meeting, either to allow the inspectors of election to count and report on the votes cast after the polls have been closed, or, without closing the polls, to permit further solicitation of proxies with respect to the proposals in this Proxy Statement-Prospectus, including the Proposal 5—the proposal to approve reorganization of NW Natural into a holding company structure, or for other reasons.

Proxies solicited by the Board of Directors will be voted in favor of any adjournment proposed by management. However, if management proposes an adjournment to permit further solicitation of proxies, proxies that direct votes against the Holding Company Proposal will not be used to vote in favor of an adjournment.

If any adjournment is properly proposed on behalf of any person other than management, the persons named as proxies, acting in such capacity, will have discretion to vote on such adjournment in accordance with their best judgment.

A majority of the votes represented at the Annual Meeting, whether or not a quorum, must be cast in favor of adjournment for any adjournment to be approved.

10

VOTING YOUR SECURITIES

The 28,782,815 shares of NW Natural common stock outstanding on April 5, 2018 were held by 5,185 shareholders residing in 50 states, the District of Columbia, and a number of foreign countries.

Each holder of NW Natural common stock of record at the close of business on April 5, 2018 will be entitled to one vote for each share of NW Natural common stock so held on all matters properly submitted at the meeting. Such holder will be entitled to cumulative voting for directors; that is, to cast as many votes for one candidate as shall equal the number of shares held of record multiplied by the number of directors to be elected, or to distribute such number of votes among any number of the nominees.

A majority of the shares of NW Natural common stock outstanding at the close of business on April 5, 2018 must be represented at the meeting, in person or by proxy, to constitute a quorum for the transaction of business.

It is important that your shares be represented at the meeting. You are urged, regardless of the number of shares held, to sign and return your proxy. Alternatively, you may grant your proxy by the internet or telephone as described above.

ATTENDING THE ANNUAL MEETING

IF YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE DETACH AND RETAIN THE ADMISSION TICKET ATTACHED TO YOUR PROXY CARD. As space is limited, you may bring only one guest to the meeting. If you hold your stock through a broker, bank, or other nominee, please bring a legal proxy or other evidence to the meeting showing that you owned NW Natural common stock as of the record date, April 5, 2018, and we will provide you with an admission ticket. If you receive your Annual Meeting materials electronically and wish to attend the meeting, please follow the instructions provided online for attendance. A form of government-issued photograph identification will be required for both you and your guest to enter the meeting. To permit as many shareholders as possible to participate, only shareholders or their valid proxy holders may submit questions at the meeting. Large bags and packages, weapons, cameras, recording equipment, and other electronic devices will not be permitted in the meeting. A map with driving directions appears on the inside cover of this Proxy Statement-Prospectus.

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PROPOSAL 1—ELECTION OF DIRECTORS

NW Natural’s Restated Articles of Incorporation (Restated Articles) provide that the Board of Directors (Board) shall be composed of not less than nine nor more than 13 directors, with the exact number of directors to be determined by the Board. The Board has fixed the number of directors at ten.

The Restated Articles also provide that the Board of Directors be divided into three classes and that the number of directors in each class be as nearly equal in number as possible. Members of each class are elected to serve a three-year term with the terms of office of each class ending in successive years. The term of the Class I directors expires at this year’s Annual Meeting. Messrs. Boyle and Dodson, and Ms. Wasson are nominees for election to the Board as Class I directors to serve until the 2021 Annual Meeting or until their successors have been duly qualified and elected. Messrs. Boyle and Dodson and Ms. Wasson were last reelected to the Board of Directors by the shareholders at the 2015 Annual Meeting. In case any of the nominees should become unavailable for election for any reason, the persons named in the proxy will have discretionary authority to vote for a substitute. Management knows of no reason why any of the nominees would be unable to serve if elected.

Vote Required

Under Oregon law, if a quorum of shareholders is present at the Annual Meeting, the three nominees who receive the greatest number of votes cast at the meeting shall be elected directors. Abstentions and broker non-votes are counted for purposes of determining whether a quorum exists at the Annual Meeting, but are not counted and have no effect on the results of the vote for directors.

The Corporate Governance Standards adopted by the Board of Directors provide that any nominee for director in an uncontested election who receives a greater number of votes “withheld” than votes “for” is required to tender his or her resignation for consideration by the Governance Committee. The Governance Committee will then determine whether to recommend acceptance of, and the Board of Directors will decide whether to accept, such resignation.

The Board of Directors recommends the election of the three nominees listed below.

INFORMATION CONCERNING NOMINEES

AND CONTINUING DIRECTORS

Set forth below is information with respect to the nominees and continuing directors, including their recent employment or principal occupation, a summary of their specific experience, qualifications, attributes or skills that led to the conclusion they are qualified to serve as a director, the names of other public companies for which they currently serve as a director or have served as a director within the past five years, their period of service as a NW Natural director, the committees on which they currently serve, and their age.

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NOMINEES FOR ELECTION TO BOARD OF DIRECTORS

Class I

(For a term ending in 2021)

		Timothy P. Boyle President and Chief Executive Officer, Columbia Sportswear Company, Portland, Oregon Age: 68 Director since: 2003 Board Committees: Public Affairs and Environmental Policy

Mr. Boyle is the President and Chief Executive Officer of Columbia Sportswear Company, an active outdoor apparel and footwear company headquartered in Portland, Oregon. He has held these positions since 1988, except he relinquished his position as President from February 2015 until June 2017. Mr. Boyle began working with Columbia Sportswear Company in 1970. Mr. Boyle is a member of the boards of directors of Columbia Sportswear Company and Craft Brew Alliance, Inc., and is a trustee of Reed College, as well as an Emeritus Trustee of the Freshwater Trust.    He also is a past trustee of the Youth Outdoor Legacy Fund, and University of Oregon Foundation, where he was past Vice Chairman of its capital campaign committee. He was also a past member of the Young Presidents’ Organization. Mr. Boyle earned a Bachelor of Science degree in Journalism from the University of Oregon.

Mr. Boyle’s professional experiences, including his service as President and Chief Executive Officer and a member of the board of directors of Columbia Sportswear Company, his service as a director of Craft Brew Alliance, Inc., as well as his service on the NW Natural Board, and his current and prior community and public service, enable Mr. Boyle to provide valuable insight to the Board and management regarding public company operations, acquisitions, human capital management, executive compensation, investor and media relations, government relations, and growth and strategic direction, all of which strengthen the Board’s collective knowledge, capabilities and experience.

		Mark S. Dodson Former Chief Executive Officer, NW Natural, Vancouver, Washington Age: 73 Director since: 2003 Board Committees: Public Affairs and Environmental Policy, and Finance

Mr. Dodson served as President and Chief Executive Officer of NW Natural from January 1, 2003 to April 30, 2007, when he relinquished his position as President and continued to serve as Chief Executive Officer until his retirement on December 31, 2008. From 2001 to January 2003, Mr. Dodson served as President, Chief Operating Officer and General Counsel of NW Natural. Mr. Dodson joined NW Natural in 1997 as Senior Vice President of Public Affairs and General Counsel, following a 17-year career with the Portland law firm Ater Wynne Hewitt Dodson & Skerritt LLP. Mr. Dodson currently serves as a member of the board of directors of Medical Teams International, and formerly served as its Chairman. He previously served as a director of the American Gas Association, the Energy Insurance Mutual, the Oregon Business Council and The Nature Conservancy of Oregon. Mr. Dodson also has worked on affordable housing issues as a board member and Chairman of the Neighborhood Partnership Fund. He was formerly the Chair of the Portland Business Alliance and the Oregon State Board of Higher Education, and headed the Oregon Governor’s Task Force on Scholarship and Student Aid. Mr. Dodson earned an undergraduate degree from Harvard University and a law degree from Boalt College of Law at the University of California, Berkeley.

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Mr. Dodson brings a seasoned perspective and comprehensive knowledge of the natural gas industry to our Board. Mr. Dodson’s 20 years of service at NW Natural, including six years as Chief Executive Officer and more than 14 years as a member of the Board of Directors, combined with a 17-year career as a regulatory attorney at a Portland law firm, allow Mr. Dodson to contribute substantial expertise to NW Natural’s Board and management. Mr. Dodson’s professional experiences enable him to provide insight on a wide variety of matters affecting NW Natural, including, but not limited to: local, state and federal regulatory matters; large project development; gas storage projects; large pipeline projects; acquisitions; public company matters; human capital management; executive compensation; investor, media and government relations; legal matters; environmental issues; and strategic direction. Mr. Dodson’s many years of experience serving at NW Natural, and his prior years serving as an outside legal advisor to NW Natural strengthen the Board’s collective knowledge, capabilities and experience.

		Malia H. Wasson President, Sand Creek Advisors LLC, Portland, Oregon Age: 59 Director since: 2014 Board Committees: Audit, and Organization and Executive Compensation

Ms. Wasson is the President of Sand Creek Advisors LLC, which provides business consulting to chief executive officers of public and private companies. Previously, Ms. Wasson was an Executive Vice President of Commercial Banking at U.S. Bank, N.A., and served as President of U.S. Bank’s Oregon and Southwest Washington operations from 2005 to 2015. She also led the U.S. Bank, N.A. Advisory Board in Portland, Oregon. Ms. Wasson is a 33-year veteran of the banking industry. Prior to joining U.S. Bank in 1989, she held various commercial lending positions with the former Oregon Bank and Security Pacific Bank of Oregon. Ms. Wasson currently serves on the board of directors of Columbia Sportswear Company, where she is the Chair of the audit committee. She is also a member of the Oregon Business Plan Steering Committee and a director of Oregon Business Council. Ms. Wasson formerly served on the boards of Oregon Health & Science University Foundation, Inc., OHSU Knight Cancer Institute, Portland Business Alliance, Greater Portland Inc., Portland Mall Management, Inc., SOLVE Founders’ Circle and the American Red Cross-Oregon Trail Chapter. She also serves as a senior fellow at American Leadership Forum. Ms. Wasson holds a Bachelor of Science and Commerce degree in finance from Santa Clara University.

Ms. Wasson brings to the NW Natural Board extensive experience in commercial banking, finance and accounting and remarkable local and regional experience. Ms. Wasson’s management and leadership roles in the banking industry as well as her strong community presence position her to provide insight and advice to NW Natural on a wide range of financial, accounting, commercial and local and regional strategic matters, including, but not limited to, regulated industry, merger and acquisitions, consumer and commercial businesses, public and government policy and relations, and human resources and diversity. In addition, Ms. Wasson’s service as Chair of the audit committee of Columbia Sportswear highlights her substantial experience in finance and accounting matters and positions Ms. Wasson to provide important guidance to the Board on matters of accounting, finance, and corporate governance, as a result of which, the Board has determined that she is an “audit committee financial expert” as defined by the SEC rules. Ms. Wasson’s extensive knowledge and experience of finance, accounting, commercial banking and regulation, and her strong community ties, strengthen the Board’s collective knowledge, capabilities and experience.

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MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE

Class II

(Term ending in 2019)

		Tod R. Hamachek Chairman of the Board, NW Natural, Ketchum, Idaho Age: 72 Director since: 1986 Board Committees: Governance (Chair) and Audit

Mr. Hamachek served as Chairman and Chief Executive Officer of Penwest Pharmaceuticals Company from October 1997 to February 2005. Penwest, which was spun off from Penford Corporation in 1998, was located in Danbury, Connecticut and was engaged in the research, development and commercialization of novel drug delivery products and technologies. From 1985 until 1998, Mr. Hamachek served as President and Chief Executive Officer of Penford Corporation, a diversified producer of specialty paper, food starches and pharmaceutical ingredients. Mr. Hamachek is a director of the Seattle Times Company, where he is also Chair of the compensation committee, and The Blethen Corporation (the majority owner of the Seattle Times Company), and is a member of the board of directors and chair of Virginia Mason Medical Center and the Virginia Mason Health System in Seattle, Washington. He is also a director and past President of the board of directors of The Sun Valley Center for The Arts in Ketchum, Idaho. Mr. Hamachek is a graduate of Williams College and Harvard Business School.

Mr. Hamachek is our longest-serving director, and he brings to the NW Natural Board a broad array of institutional knowledge and historical perspective, and has participated in a variety of our principal standing committees. Drawing on his experience as an executive and director of Penwest Pharmaceuticals Company and an executive of Penford Corporation, along with his other professional experiences, Mr. Hamachek is able to provide important insights to our management and other directors on subjects ranging from corporate governance and corporate strategy to management oversight on large project development, public company operations, acquisitions, executive compensation, and media and government relations, all of which strengthen the Board’s collective knowledge, capabilities and experience.

		Jane L. Peverett Former President and Chief Executive Officer, British Columbia Transmission Corporation, Vancouver, British Columbia, Canada Age: 59 Director since: 2007 Board Committees: Organization and Executive Compensation, and Public Affairs and Environmental Policy

From 2005 to January 2009, Ms. Peverett served as President and Chief Executive Officer of British Columbia Transmission Corporation (BCTC), an electric utility in Vancouver, British Columbia. Between 2003 and 2005, she served as Chief Financial Officer of BCTC. Prior to joining BCTC, from 1988 through 2003, Ms. Peverett held various senior positions with Westcoast Energy Ltd., including serving as President and Chief Executive Officer of Union Gas Limited, a Westcoast Energy company, between 2001 and 2003. Ms. Peverett currently serves on the board of directors of Canadian Imperial Bank of Commerce (CIBC), Hydro One Inc. and Canadian Pacific Railway Limited. She serves as Chair of the audit committees of CIBC and Canadian Pacific Railway Limited. Ms. Peverett has also previously served on the board of directors of AEGIS, Encana Corporation, Postmedia Network Canada Corp., BC Ferry Authority, BC Ferries Services, Inc. (BC Ferries), and the United

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Way of Lower Mainland, also serving as Chair of BC Ferry Authority, and as Chair of the audit committee of Encana Corporation. Ms. Peverett earned a Bachelor of Commerce degree from McMaster University and a Master of Business Administration degree from Queen’s University. She is a certified management accountant.

Ms. Peverett’s extensive senior management experience at Union Gas Limited of Chatham, Ontario, a natural gas distribution, storage and transmission company, and BCTC, the entity responsible for managing British Columbia’s publicly-owned electrical transmission system, as well as her board experience at Hydro One Inc., one of North America’s largest electricity delivery companies, and Canadian Pacific Railway Limited, and her prior board experiences at AEGIS, Encana Corporation, Postmedia Network Canada Corp., and BC Ferries, position her to advise management on a wide range of natural gas and energy industry-specific strategic and regulatory matters, including large project development and other business matters. In addition, Ms. Peverett’s other board experiences, including as Chair of the audit committees of CIBC, a leading North American financial institution with almost 11 million personal banking and business customers, and Canadian Pacific Railway Limited, a former chair of the audit committee of Encana Corporation, and a former audit committee member of Postmedia Network Canada Corp., enable her to provide effective oversight of management and insight into a wide variety of corporate governance and financial matters. Ms. Peverett also has extensive knowledge of and training in finance and accounting matters, which strengthens the Board’s collective knowledge, capabilities and experience.

		Kenneth Thrasher Chairman of the Board, Compli Corporation, Portland, Oregon Age: 68 Director since: 2005 Board Committees: Public Affairs and Environmental Policy (Chair), Audit, and Organization and Executive Compensation

Mr. Thrasher served as Chairman and Chief Executive Officer of Alternative Legal Solutions, Inc. (dba Compli), a software solution provider for management of compliance in employment, regulatory, environmental, health and safety, and corporate governance practices from 2002 through December 2009, when he relinquished his position as Chief Executive Officer and continued to serve as Chairman of the Board. Prior to joining Compli, Mr. Thrasher served 19 years in executive positions with Fred Meyer, Inc., a division of The Kroger Co., including serving as President and Chief Executive Officer from 1999 to 2001, as Executive Vice President and Chief Administrative Officer from 1997 to 1999, and as Senior Vice President and Chief Financial Officer from 1987 to 1997. Mr. Thrasher serves as Chairman of Compli, as well as serving as a member of Compli’s audit and compensation committees. He also serves on the board of directors of the Jensen Growth Fund, and is Chair of its audit committee. Mr. Thrasher is also Chairman of College Possible Portland, a director and member of the finance and audit committees of Education Northwest (formerly Institute for Youth Success and Oregon Mentors), a director of the Children’s Institute and the OSU College of Business Dean’s Council of Excellence, and is a member of the Cradle to Career Council of All Hands Raised, as well as a senior director of the Oregon Business Council. Mr. Thrasher has previously served on the board of directors of GSL Solutions, Inc., Friends of the Children, Portland State University Foundation, Albertina Kerr Centers, Portland Art Museum and the Oregon Coast Aquarium. Mr. Thrasher earned a Bachelor of Science degree in Business Administration from Oregon State University.

Mr. Thrasher brings to the NW Natural Board a wide range of leadership experiences in both the public and private sectors. Mr. Thrasher’s service as an executive at Fred Meyer, Inc. positions him to provide oversight of management on a wide variety of strategic, financial, and public company matters, including, but not limited to, large project development and acquisitions. Mr. Thrasher’s service as an executive, Chairman, member of the audit and compensation committees of Compli, and member of finance and audit committees of Education Northwest enables him to advise management on matters of compliance, regulation, human capital management,

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executive compensation and corporate governance. Mr. Thrasher’s cumulative experience has led the Board to determine that he is an “audit committee financial expert” as defined by the SEC rules. Mr. Thrasher’s other professional experiences, particularly his community and government related experience, provide insight with respect to government, community and media relations, all of which strengthen the Board’s collective knowledge, capabilities and experience.

Class III

(Term ending in 2020)

		David H. Anderson Director, President and Chief Executive Officer, NW Natural, Portland, Oregon Age: 56 Director since: 2016 Board Committees: None

Mr. Anderson is NW Natural’s President and Chief Executive Officer. He previously served as President and Chief Operating Officer from August 2015 to July 2016, as Executive Vice President and Chief Operating Officer from February 2014 to July 2015, as Executive Vice President of Operations and Regulation from February 2013 to February 2014, and as Senior Vice President and Chief Financial Officer from when he joined the Company in 2004 to February 2013. Before joining NW Natural, Mr. Anderson was Senior Vice President and Chief Financial Officer at TXU Gas. He previously held executive positions within TXU Corporation (formerly Texas Utilities) including Senior Vice President and Chief Accounting Officer, and Vice President of Investor Relations and Shareholder Services.

Mr. Anderson serves as a director on the NW Natural Board, as well as serving on the Board of Directors of the American Gas Association (AGA), American Gas Foundation, and the Portland State University (PSU) Foundation. He also is Chair of the AGA’s Audit Committee, Co-Chair of the AGA’s Carbon Policy Task Force, a board trustee of the American Gas Foundation and a director of the Oregon Business Council, Portland Business Alliance, and Greater Portland Inc. He is also a member of SOLVE Founders’ Circle. Mr. Anderson is a past board member of the Northwest Gas Association, and a past president of The Oregon Partnership, Inc. (Lines for Life). Mr. Anderson is also a past chair of AGA Finance Committee, AGA Fiscal and Tax Committee, the Associated Oregon Industries (AOI) Fiscal Policy Committee, and PSU Foundation Investment Committee, and is a past advisory board member for PSU School of Business and Oregon Department of Education Business Advisory Team. Mr. Anderson holds a BBA in Accounting from Texas Tech University and is a CPA (ret.) and CGMA.

Mr. Anderson serves a key leadership role on the NW Natural Board and provides the Board with in-depth knowledge of each area of NW Natural’s business, its finance and operations, the energy industry generally, and the Company’s challenges and opportunities. He acts as the principal intermediary between management and the independent directors of our Board, and communicates to the Board management’s perspective on important matters brought before the Board. Mr. Anderson’s 14 years with NW Natural, his over 30 years’ experience in the energy industry, and his extensive involvement with the AGA and Northwest Gas Association enable him to bring to the Board a comprehensive understanding of the Company’s business operations as well as matters relating to the energy industry generally. Mr. Anderson’s service on local business, educational, charitable and public service boards provide an important connection between NW Natural and the communities it serves. Additionally, his extensive experience in finance and operations provides important perspectives with respect to the Company’s business, operations, and financial positioning, as well as with respect to the communities the Company serves. Mr. Anderson’s combined professional skills and insights from his position as President and Chief Executive Officer, as well as his previous executive positions with NW Natural, strengthen the Board’s collective knowledge, capabilities and experience.

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		Martha L. “Stormy” Byorum Chief Executive Officer of Cori Investment Advisors, LLC, New York, New York Age: 69 Director since: 2004 Board Committees: Finance (Chair), Audit, Governance, and Public Affairs and Environmental Policy (Ex Officio)

Ms. Byorum has been the Chief Executive Officer of Cori Investment Advisors, LLC, which was spun off from Violy, Byorum & Partners (VB&P), since 2003. VB&P was a leading independent strategic advisory and investment banking firm specializing in Latin America. Ms. Byorum is also a member of the Board of Directors of the publicly-traded Tecnoglass Inc., formerly known as Andina Acquisition Corporation, a position she has held since 2011, and is currently the Chair of the Tecnoglass Inc. audit committee. Since 2014, she also has been a board member of JELD-WEN Holding, Inc., a company that became publicly-traded in January 2017; she serves on the JELD-WEN Holding, Inc. audit committee as well. Ms. Byorum was Executive Vice President of Stephens, Inc., a private investment banking firm from 2005 to 2013, and Senior Managing Director of Stephens Cori Capital Advisors, a division of Stephens, Inc. from 2005 to 2012. Prior to co-founding VB&P in 1996, Ms. Byorum had a 24-year career at Citibank, where, among other roles, she served as Chief of Staff and Chief Financial Officer for Citibank’s Latin American Banking Group from 1986 to 1990, overseeing $15 billion of loans and coordinating activities in 22 countries. She was later appointed the head of Citibank’s U.S. Corporate Banking Business and a member of the bank’s Operating Committee and a Customer Group Head with global responsibilities. In addition to Ms. Byorum’s service as a director of the publicly-traded Tecnoglass Inc. and JELD-WEN Holding, Inc., she is a Life Trustee of Amherst College, and a Trustee Emeritus of the Folger Shakespeare Library. From 2001 until May of 2010, Ms. Byorum was a board member of Aeterna-Zentaris Laboratories, Inc., a publicly-traded biopharmaceutical company, and from 2007 until December 2011, she was a board member of M&F Worldwide Corp., a holding company operating four businesses, which was publicly-traded until December 2011. Ms. Byorum is a graduate of Southern Methodist University and the Wharton School at the University of Pennsylvania.

Ms. Byorum brings to the NW Natural Board more than 39 years of extensive experience in investment banking and public and private finance. Her multiple executive leadership roles at Stephens, Inc., Stephens Cori Capital Advisors, Cori Investment Advisors, LLC, VB&P and Citibank position her to advise NW Natural on a wide range of financial, strategic and governance matters. Ms. Byorum’s experience also allows her to provide insights in areas including, but not limited to, mergers and acquisitions, human capital management and diversity, and investor and media relations. Ms. Byorum’s current and prior service on other boards, including on M&F Worldwide Corp., Aeterna-Zentaris Laboratories, Inc., and JELD-WEN Holding, Inc., as well as Chair of the audit committee of Tecnoglass Inc., enables her to provide effective oversight of management and insight into a wide variety of public company operations and governance matters. Her cumulative experience has led the Board to determine that she is an “audit committee financial expert” as defined by the SEC rules. Ms. Byorum’s extensive finance and banking experience strengthens the Board’s collective knowledge, capabilities and experience.

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		John D. Carter Chairman of the Board, Schnitzer Steel Industries, Inc., Portland, Oregon Age: 72 Director since: 2002 Board Committees: Audit (Chair), Finance, and Governance

Mr. Carter served as President and Chief Executive Officer of Schnitzer Steel Industries, Inc. from May 2005 to December 2008 when he was appointed to his current position of Chairman of the Board. From 2002 to May 2005, he was engaged in a consulting practice focused primarily on strategic planning in transportation and energy for national and international businesses, as well as other small business ventures. From 1982 to 2002, Mr. Carter served in a variety of senior management capacities at Bechtel Group, Inc., including Executive Vice President and Director, as well as President of Bechtel Enterprises, Inc., a wholly owned subsidiary of Bechtel Group, Inc., and other operating groups. Prior to his Bechtel tenure, Mr. Carter was a partner in a San Francisco law firm. He is Chairman of the Board of Schnitzer Steel Industries, Inc., and a director of FLIR Systems, Inc. Mr. Carter also previously served as a director and Chairman of the Board of privately-owned Kuni Automotive and as a director of privately-owned JELD-WEN, Inc., prior to it becoming publicly-traded in January 2017. In the United Kingdom, he served as a director of London & Continental Railways until February 2006, and, until December 2005, he served as a director of Cross London Rail Links, Ltd. Mr. Carter also serves on the board of The Nature Conservancy of Oregon and the Oregon Business Council. He is a former Chairman of the Oregon Business Plan and a former member of the board of Grow Oregon. Mr. Carter is a graduate of Stanford University and Harvard Law School.

Mr. Carter brings to the NW Natural Board a broad array of executive, leadership and board service experiences that contribute to the Board’s governance of the Company. Mr. Carter’s extensive executive senior management experiences, including his positions at Bechtel and as President and Chief Executive Officer of Schnitzer Steel Industries, Inc., as well as his other current and prior board service, including as Chairman of the Boards of Schnitzer Steel Industries, Inc. and Kuni Automotive, and as a director of FLIR Systems, Inc. and JELD-WEN, Inc., enable him to provide effective oversight of management and insight into a wide variety of strategic, corporate governance and financial matters, including, but not limited to, experience in large project development, acquisitions, human capital management, executive compensation, media and governmental relations, growth orientation, change management, and strategic direction. In addition, Mr. Carter’s tenure as General Counsel of Bechtel Group, Inc. and prior experience as a partner in a San Francisco law firm brings to the Board substantial legal and governance expertise. Mr. Carter also has extensive knowledge of finance and accounting matters, including through his service as President and Chief Executive Officer of Schnitzer Steel Industries, Inc. and Bechtel Enterprises, Inc., the finance and project development subsidiary of Bechtel Group, Inc., as a result of which, the Board has determined that he is an “audit committee financial expert” as defined by the SEC rules. Mr. Carter’s multifaceted skill set and professional experiences strengthen the Board’s collective knowledge, capabilities and experience.

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		C. Scott Gibson President, Gibson Enterprises, Jackson, Wyoming Age: 65 Director since: 2002 Board Committees: Organization and Executive Compensation (Chair), Governance, and Finance

Mr. Gibson has been President of Gibson Enterprises since its formation in 1992. In 1983, Mr. Gibson cofounded Sequent Computer Systems and served as its President from 1988 until March 1992 and as its President and Co-CEO from 1990 until March 1992. Before his tenure at Sequent, Mr. Gibson served as General Manager for the Memory Components Division of Intel Corporation. Mr. Gibson serves as a director of Qorvo, Inc., the surviving company of the TriQuint Semiconductor merger, and Pixelworks, Inc. He has previously served as a director of Radisys Corporation, Verigy Pte. Ltd. and TriQuint Semiconductor, and as a member of the Board of Trustees of Franklin W. Olin College of Engineering. Mr. Gibson also serves as a member of the Board of Trustees of the St. Johns Medical Center and the Community Foundation of Jackson Hole in Jackson Hole, Wyoming. Mr. Gibson earned a Bachelor of Science degree in Electrical Engineering and a Masters in Business degree from the University of Illinois. He is currently a National Association of Corporate Directors (NACD) Leadership Fellow, having completed the NACD’s program for corporate directors.

Mr. Gibson brings to the NW Natural Board extensive experience as a director of publicly-traded companies, including Qorvo, Inc., Pixelworks, Inc. and, formerly Radisys Corporation, TriQuint Semiconductor and Verigy Pte. Ltd. He is a professional public company and non-profit board member, dedicating all his work hours to the boards and companies on which he serves. Based on this experience and other professional experiences, Mr. Gibson is able to deliver important insights to our management and other directors on subjects ranging from management oversight to growth orientation, change management and strategic direction. In particular, Mr. Gibson’s service as an audit committee member of Qorvo, Inc., and Pixelworks, Inc., and formerly Radisys Corporation, TriQuint Semiconductor and Verigy Pte. Ltd. highlight Mr. Gibson’s substantial experience in finance and accounting matters and position Mr. Gibson to provide important guidance to the Board on matters of accounting, finance, and corporate governance. Additionally, Mr. Gibson’s current service on the governance committees of Qorvo, Inc., and Pixelworks, Inc. and formerly Radisys Corporation, as well as the compensation committees of Pixelworks, Inc. and formerly Radisys Corporation, TriQuint Semiconductor and Verigy Pte. Ltd., enables him to substantially contribute to Board matters involving executive compensation, human capital management, and general corporate governance. Mr. Gibson’s broad and varied public company leadership service strengthens the Board’s collective knowledge, capabilities and experience.

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CORPORATE GOVERNANCE

THE BOARD OF DIRECTORS AND ITS COMMITTEES

Meeting Attendance

The Board of Directors conducts its annual organization meeting on the same date as the Annual Meeting of Shareholders, which all of the directors are encouraged to attend. In 2017, all of our directors, except Mr. Dodson, attended the Annual Meeting of Shareholders.

During 2017, there were six meetings of our Board, each of which included an executive session of non-management directors. No director attended fewer than 75 percent of the aggregate meetings of our Board and Committees on which he or she served.

Independence

The Board of Directors has adopted Director Independence Standards to comply with New York Stock Exchange (NYSE) rules. The Director Independence Standards, amended September 26, 2013, are available at www.nwnatural.com and are available in print to any shareholder who requests them. No director is deemed independent unless the Board affirmatively determines that the director has no material relationship with NW Natural either directly or as a partner, shareholder or officer of an organization that has a relationship with NW Natural. The Board applies NW Natural’s Director Independence Standards as well as additional qualifications prescribed under the listing standards of the NYSE and applicable state and federal statutes. Annually, the Board determines whether each director meets the criteria of independence, including whether the members of the Governance, Audit and Organization and Executive Compensation Committees (OECC) satisfy the independence requirement for service on those committees. As of February 22, 2018, the Board determined that nine of the ten directors met the independence criteria. They are directors Boyle, Byorum, Carter, Dodson, Gibson, Hamachek, Peverett, Thrasher and Wasson.

Board Nominations

The Board is responsible for selecting candidates for Board membership and the Governance Committee has been assigned the responsibility of recommending to the Board of Directors nominees for election as directors. The Governance Committee, with recommendations and input from the Chairman of the Board, the Chief Executive Officer and other directors, evaluates the qualifications of each director candidate in accordance with the Director Selection Criteria established by the Board. Candidates for director nominees are reviewed in the context of the current composition and diversity of the Board, the operating requirements and existing and prospective business environment faced by NW Natural, NW Natural’s business strategy, and the long-term interests of shareholders. Director candidates must be able to make a significant contribution to the governance of NW Natural by virtue of their business and financial expertise, educational and professional background, and current or recent experience as a chief executive officer or other senior leader of a public company or other relevant organization. The business discipline that may be sought at any given time will vary depending on the needs and strategic direction of our Company and the disciplines represented by our incumbent directors. In addition, the Governance Committee looks at the overall composition of the Board and how a candidate would contribute to the overall synergy and collaborative process of the Board. In conducting its assessment, the Governance Committee considers a variety of criteria, including, but not limited to, the candidate’s integrity, reputation, judgment, knowledge, experience, commitment, skills, diversity and independence.

Shareholder Nominations

Shareholders’ recommendations for director-nominees may be submitted to NW Natural’s Corporate Secretary for consideration by the Governance Committee. In evaluating shareholder recommendations for director-nominees, the Governance Committee applies the same Director Selection Criteria discussed above. NW Natural’s Restated Articles of Incorporation provide that no person, except those nominated by the Board, shall be eligible for election as a director at any annual or special meeting of shareholders unless a written request that his or her name be placed in nomination, together with the written consent of the nominee, shall be received from

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a shareholder of record entitled to vote at such election by the Corporate Secretary of NW Natural on or before the later of (a) the thirtieth day prior to the date fixed for the meeting, or (b) the tenth day after the mailing of the notice of that meeting.

Diversity

As indicated above, NW Natural’s Director Selection Criteria includes a consideration of diversity as one factor in evaluating candidates for Board membership. The Board believes that diversity with respect to factors such as background, experience, skills, geographic location, race and gender are important considerations in Board composition. The Governance Committee discusses diversity considerations in connection with each director candidate, as well as on a periodic basis in connection with the composition of the Board as a whole. In addition, the Governance Committee and the Board conduct formal self-evaluations each year that include an assessment of whether the Governance Committee and the Board have adequately considered diversity, among other factors, in identifying and discussing director candidates. The Governance Committee believes that, as a group, the nominees presented for election at the 2018 Annual Meeting of Shareholders contribute to the Board’s diverse range of backgrounds, experiences and perspectives.

Board Leadership Structure

The current Board leadership structure separates the roles of Chairman and Chief Executive Officer (CEO). The Board evaluates its leadership structure and role in risk oversight on an ongoing basis. The decision to combine or separate the Chairman and CEO roles is determined on the basis of what the Board considers to be best for NW Natural at any given point in time. Currently, the independent Chair of the Board meets regularly with the CEO and the Corporate Secretary to discuss appropriate business to come before the Board and its committees and actively recommends agenda items for Board meetings. NW Natural’s Board is structured to promote independence. The directors of the Board meet regularly in executive sessions at which the independent Board Chairman presides and only the non-management directors are present. Under NW Natural’s bylaws, the Governance Committee, Audit Committee and OECC must be composed entirely of independent directors and, under its charter, the Finance Committee must have a majority of independent directors. All committees have an independent chair that works with the executive officer primarily responsible for work with that committee and the Corporate Secretary to discuss appropriate business to come before the committee, and to recommend agenda items for that committee. The Board of Directors believes its leadership structure provides for appropriate independence between the Board and management.

The Governance Committee and the Board annually review the Corporate Governance Standards, which can be accessed electronically in the “Corporate Governance” section of NW Natural’s website at www.nwnatural.com, and the performance of the Board is reviewed annually by the members of the Board. The Corporate Governance Standards describe the Board’s primary responsibilities, which include oversight of NW Natural’s mission, and key programs that enable the Board to assess and manage material risks, including, but not limited to, risks related to business continuity, operational matters, strategic planning and business development, environmental matters, business improvement and information technology, market competition, corporate organizational structure and governance, legislative and regulatory risk and compliance, financial performance, business integrity and compliance, workforce and employee benefits, compensation and CEO succession.

Committees

There are five standing committees of the Board: Audit, Finance, Governance, OECC, and Public Affairs and Environmental Policy. Each of the standing committees operates according to a formal written charter, all of which are reviewed annually and are available at www.nwnatural.com. Copies of the charters are also available in print to any shareholder upon request. The performance of each committee is reviewed annually. Each committee may obtain advice and assistance from internal or external legal, accounting or other advisors, when appropriate. Each committee has the opportunity to meet in executive session with non-management directors at the end of each committee meeting; the independent chair of the committee presides at these sessions. Each committee regularly reports to the full Board of Directors.

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Board and Committees

Audit Committee

The Audit Committee is responsible for overseeing matters relating to accounting, financial reporting, internal controls, auditing, the Company’s information technology systems, NW Natural’s Enterprise Risk Management process, business continuity and disaster planning, capital projects and contingencies, the Company’s Business Integrity Hotline, the Company’s Business Integrity Program, and material litigation. The Audit Committee is also responsible for the appointment, oversight and review of the Director of Internal Audit as well as the independent registered public accounting firm, and reviews the audit findings and other internal accounting control matters with the independent auditor. A more detailed description of the Audit Committee’s responsibilities is included in the “Report of the Audit Committee,” below.

Finance Committee

The Finance Committee is responsible for reviewing strategies and making recommendations to the Board with respect to NW Natural’s financing programs, budgets and forecasts, financial policy matters and material regulatory issues. The Finance Committee also provides oversight of the Company’s investor relations program and credit agency relationships, as well as the Company’s retirement committee.

Governance Committee

The Governance Committee is empowered, during intervals between Board meetings, to exercise all of the authority of the Board in the management of NW Natural, except as otherwise may be provided by law. The Governance Committee, which serves as the nominating committee, makes recommendations to the Board regarding nominees for election to the Board, establishes criteria for Board and committee membership and policies that govern the Board’s activities, reviews and recommends to the Board governance policies and structure including the Corporate Governance Standards discussed below, and evaluates Board and individual director performance. It also considers any questions of possible conflicts of interest of Board members and senior executives and, jointly with the OECC, considers CEO succession plans.

Organization and Executive Compensation Committee

The Organization and Executive Compensation Committee (OECC) oversees and reviews plans and preparations for talent succession and the transfer of knowledge and expertise of the Company’s workforce; with

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input from the full Board reviews the performance of the CEO; considers the performance of other executive officers; and makes recommendations to the Board relating to executive compensation programs and benefit plans, as well as monitoring risks related to such plans and programs. In addition to those matters delegated to the OECC by the Board, the OECC also makes recommendations to the Board regarding Board compensation, and organization and executive succession matters. Each member of the OECC meets the criteria for a “non-employee director” under applicable SEC rules and the criteria for “outside directors” under Section 162(m) of the Internal Revenue Code of 1986 (Internal Revenue Code), to the extent such characterization is applicable for taxable years beginning after December 31, 2017. For additional information regarding the OECC, see “Executive Compensation—Compensation Discussion and Analysis—Detailed Discussion and Analysis—Executive Compensation Roles and Responsibilities—OECC,” below, and for additional information regarding Internal Revenue Code Section 162(m), see “Executive Compensation—Compensation Discussion and Analysis—Tax Deductibility of Compensation,” below.

Public Affairs and Environmental Policy Committee

The Public Affairs and Environmental Policy Committee reviews and monitors NW Natural’s significant regulatory matters as well as NW Natural’s policies and practices relating to significant public and political issues that may impact our business operations, financial performance or public image. The Public Affairs and Environmental Policy Committee oversees our programs and policies relating to civic, charitable and community affairs, safety, diversity and equal employment opportunities. It also reviews and recommends to the Board appropriate environmental policies and informs the Board concerning our sustainability efforts and the status of our compliance with environmental regulations, as well as oversees our administrative and litigation matters related to our environmental liabilities. The Public Affairs and Environmental Policy Committee makes recommendations to the Board to ensure that we fulfill our objectives in a manner consistent with the responsibilities of good corporate citizenship.

Board’s Role in Risk Oversight

NW Natural’s management is responsible for the day-to-day management of risks faced by the Company, while the Board of Directors, collectively and through its committees, has responsibility for the oversight of risk management. The Board periodically reviews its committee oversight authority to ensure the Board has adequate visibility and oversight of the Company’s key areas of risk.

NW Natural’s independent Audit Committee, which regularly reports to the full Board, has primary responsibility for oversight and evaluation of the Company’s policies with respect to significant risks and exposures faced by the Company and the procedures for assessing, monitoring and managing those risks. Under the terms of its charter, the Audit Committee’s duties include responsibility for oversight of the independent auditor, internal audit, and financial reporting, including the Code of Ethics and its system for review and treatment of hotline complaints regarding accounting or financial irregularities as well as other compliance and integrity violations. The Audit Committee also reviews NW Natural’s annual and quarterly financial filings, including the disclosure of NW Natural’s risk factors. The Audit Committee also has oversight responsibility for the Company’s annual Enterprise Risk Management assessment process. In fulfilling its risk oversight function, the Audit Committee periodically, and as needed, discusses key risks with NW Natural’s President and Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, General Counsel, Chief Compliance Officer, legal counsel, internal auditors, and the Company’s independent registered public accounting firm.

NW Natural’s Board manages executive organization and succession planning, and executive compensation oversight risk responsibility through the independent OECC, which regularly reports to the full Board. Under the terms of its charter, the OECC is responsible for overseeing the Company’s executive organization and executive officer succession planning to manage risks associated with the transfer of knowledge and expertise of NW Natural’s workforce as aging employees retire. Additionally, under the terms of its charter, the OECC is responsible for overseeing the Company’s executive compensation programs and plans to ensure consistency with corporate objectives and its compensation philosophy. In fulfilling its compensation risk oversight function, the OECC discusses with its outside consultant key compensation design elements of the Company’s

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compensation plans and awards, including, but not limited to, whether those plans and awards properly incentivize executive performance, attract and promote retention of valuable executives, and disincent inappropriate risk-taking. For additional information regarding the OECC oversight of executive compensation, see “Executive Compensation—Compensation Discussion and Analysis—Detailed Discussion and Analysis—Executive Compensation Roles and Responsibilities—OECC” below.

In addition to receiving regular reports from the Audit Committee and the OECC with respect to its risk oversight responsibilities, the Board reviews key risks associated with the Company’s strategic plan at its annual strategic planning session and periodically throughout the year. Other committees having a significant risk oversight role include the Finance Committee, which has primary responsibility for the financial strategy and policies of the Company, including risk oversight of its capital structure and liquidity; the Public Affairs and Environmental Policy Committee, which has primary responsibility for overseeing the Company’s strategy related to the Company’s current and potential environmental liabilities, as well as legislative and regulatory risks; and the Governance Committee, which oversees risks related to corporate governance matters. In addition, management attends Board and committee meetings and regularly discusses with the Board and the committees various risks confronting the Company.

OECC Engagement of Compensation Consultant

For 2017, the OECC engaged Pay Governance, an independent compensation consulting firm (Consultant), to assist in the evaluation of the competitiveness of our executive compensation programs and to provide overall guidance to the OECC in the design and operation of executive compensation programs. The Consultant reports directly to the OECC Chair. At the direction and under the guidance of the OECC Chair, the Consultant provides data and analysis that is used by both management and the OECC to develop recommendations for executive compensation and executive programs to submit to the OECC for its consideration.

The OECC reviews the engagement of its independent executive compensation consultant on a periodic basis, and as part of that process reviews a summary of all services provided to NW Natural by the consultant, the percentage of the total fees paid by NW Natural in relation to the total revenues of consulting firm, any business or personal relationships the consulting firm or the consultant may have with any member of the OECC or any executive officer of NW Natural, NW Natural stock owned by the consultant or the consulting firm, and internal policies and procedures of the consulting firm in place to maintain the objectivity, independence and separation between compensation consulting and investment advisory services, including, but not limited to the consulting firm’s code of business conduct requirement that all the consulting firm’s associates must report any potential conflicts of interest. Pay Governance does not provide any services to NW Natural other than executive compensation consulting.

CORPORATE GOVERNANCE STANDARDS

The Board of Directors maintains Corporate Governance Standards that provide NW Natural and its Board of Directors with guidelines designed to ensure business is conducted with the highest level of integrity. The Corporate Governance Standards are reviewed annually by the Governance Committee to determine if changes should be recommended to the Board of Directors. The Corporate Governance Standards, amended December 21, 2017, are available at www.nwnatural.com, and in print to any shareholder who requests a copy. Among other matters, the Corporate Governance Standards include the following guidelines:

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The Code of Ethics is available at www.nwnatural.com. Copies are also available in print to any shareholder who requests a copy. In addition, the Board of Directors has adopted procedures for the receipt, retention and treatment of concerns of our employees, shareholders, customers and other interested parties regarding accounting, financial reporting, internal controls, auditing or other matters. Concerns may be submitted in writing to the non-management directors of NW Natural, c/o Corporate Secretary, 220 NW Second Avenue, Portland, OR 97209. Employees and other third parties may also submit concerns anonymously pursuant to the Integrity Hotline at NWNIntegrity.com or 1-866-546-3696, also located at our external and internal websites. Our Director of Internal Audit handles matters reported on the hotline in coordination with our Chief Compliance Officer and both regularly report to the Audit Committee regarding hotline activity and the Chief Compliance Officer regularly reports to the Audit Committee regarding the Business Integrity program.

The Corporate Secretary will refer concerns that come directly before the Corporate Secretary and Chief Compliance Officer relating to accounting, financial reporting, internal controls or auditing matters to the Chair of the Audit Committee. The Corporate Secretary also regularly reports to the Governance Committee regarding concerns submitted to the non-management directors of NW Natural, if any.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires NW Natural’s directors and executive officers to file initial reports of ownership and changes in ownership of NW Natural common stock with the SEC. Based solely on a review of the copies of reports furnished to us and written representations that no other such reports were required, we believe all directors and executive officers timely filed all reports required under Section 16(a) of the Securities Exchange Act of 1934, as amended, except the Form 4 filed by the Company on behalf of Mr. C. Scott Gibson, dated as of January 12, 2017. The stock distribution of 268 shares from Directors Deferred Compensation Plan was omitted on the Form 4 dated January 12, 2017 due to administrative error, resulting in the filing of an amended Form 4 on November 8, 2017.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

There are no “Compensation Committee interlocks” or “insider participation,” which SEC regulations or NYSE listing standards require to be disclosed in this Proxy Statement-Prospectus.

TRANSACTIONS WITH RELATED PERSONS

The Board adopted a written policy on the review of related person transactions (Transactions with Related Persons Policy) specifying certain transactions that involve directors, nominees, executive officers, significant shareholders and certain other related persons in which NW Natural is or will be a participant, and that are of the type required to be reported as a related person transaction under Item 404(a) of SEC Regulation S-K, must be reviewed by the Audit Committee. Pursuant to its charter, the Audit Committee is responsible for reviewing related person transactions.

Under the Transactions with Related Persons Policy, the Audit Committee reviews the material facts and circumstances of any transaction that may require reporting under Item 404(a) of SEC Regulation S-K to

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determine: (i) whether or not the transaction is on terms comparable to those that could be obtained in arm’s length dealings with an unrelated third party; or (ii) whether or not the transaction is otherwise in the best interest of the Company. Upon review of a transaction, the Audit Committee may approve or disapprove the transaction and direct the officers of the Company to take appropriate action. In the event the Audit Committee is not otherwise convening, the transaction may be approved or ratified by the majority of disinterested members of the Board of Directors. We are not aware of any transactions entered into during the last fiscal year that did not follow the procedures outlined in the policy.

Compensation to Spouse of an Executive Officer

Ted Smart, the husband of Lea Anne Doolittle, Senior Vice President and Chief Administrative Officer, has been an employee of NW Natural since February 2006. In November 2006, Mr. Smart moved from his position as a senior auditor to purchasing manager. Ms. Doolittle was not involved in decisions regarding Mr. Smart’s hiring, promotion or compensation. Compensation paid to Mr. Smart in 2017 was approximately $212,000 and is expected to be approximately $165,000 in 2018. Mr. Smart reports to the Senior Vice President and Chief Financial Officer. Compensation paid to Mr. Smart is reviewed periodically by the Audit Committee in accordance with our Transactions with Related Persons Policy.

Certain Legal Fees

Ms. Shawn M. Filippi, Vice President, Chief Compliance Officer and Corporate Secretary, is married to a Co-Managing Partner of the Portland office of Stoel Rives LLP. For many years prior to Ms. Filippi’s employment at NW Natural, the Company engaged the law firm Stoel Rives LLP as outside legal counsel. The Company continues to engage Stoel Rives LLP from time to time, and intends to do so in the future. Total fees paid to Stoel Rives LLP in 2017 were approximately $1,077,000. Ms. Filippi’s husband is not compensated by Stoel Rives LLP based on work performed for the Company and does not routinely work on Company matters. Furthermore, his interest is less than 1% of Stoel Rives’ partnership allocation and the annual fees paid by the Company to Stoel Rives LLP in 2017 represented less than 1% of Stoel Rives LLP’s annual gross revenues.

SECURITY OWNERSHIP OF COMMON STOCK OF CERTAIN

BENEFICIAL OWNERS

The following table shows ownership of common stock of NW Natural on December 31, 2017 by each person who, to our knowledge, owned beneficially more than 5 percent of NW Natural common stock, as set forth in a Schedule 13G filed with the SEC:

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BENEFICIAL OWNERSHIP OF COMMON STOCK BY DIRECTORS

AND EXECUTIVE OFFICERS

Set forth below is certain information with respect to beneficial ownership of NW Natural’s common stock as of December 31, 2017 by all directors and nominees, each of the Named Executive Officers (NEOs) included in the Summary Compensation Table below and all directors, NEOs, and executive officers as of December 31, 2017 as a group. If a person’s options are not exercisable within 60 days of December 31, 2017, or the person holds shares in a deferred compensation account and those shares are not scheduled for distribution within 60 days of December 31, 2017 in the event they terminated their service on December 31, 2017, or they hold any other rights to acquire NW Natural common stock that are not vested and will not vest by 60 days after December 31, 2017, such options, shares or rights are not included in the table, but are included in the footnotes below.

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TOTAL OWNERSHIP OF COMMON STOCK BY DIRECTORS

AND EXECUTIVE OFFICERS

Set forth below is the total number of shares of NW Natural’s common stock owned, directly or indirectly, as of December 31, 2017 by all directors and nominees, each of the NEOs included in the Summary Compensation Table below, and all directors, NEOs, and executive officers as of December 31, 2017 as a group. This supplemental table is provided to illustrate each specified individual’s total ownership in NW Natural, specifically including all shares subject to unexercised options, subject to unvested RSUs, and credited to deferred compensation plan accounts that are excluded from the above table entitled “Beneficial Ownership of Common Stock by Directors and Executive Officers,” as referenced in the footnotes to that table. Amounts included in this table are a different representation of the amounts included in the above table and footnotes entitled “Beneficial Ownership of Common Stock by Directors and Executive Officers,” and are not in addition to amounts included in that table.

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EXECUTIVE COMPENSATION

REPORT OF ORGANIZATION AND EXECUTIVE COMPENSATION COMMITTEE

The Organization and Executive Compensation Committee of the Board of Directors (OECC) is responsible for discharging the responsibilities of the Board of Directors relating to the compensation of executives by ensuring that the Chief Executive Officer and other senior executives are compensated appropriately and in a manner consistent with the stated compensation philosophy of NW Natural and the requirements of the appropriate regulatory authorities.

The OECC is responsible for producing this report and for providing input and guidance to management in the preparation of the Compensation Discussion and Analysis following this report. In fulfilling its responsibilities, the OECC has reviewed and discussed the Compensation Discussion and Analysis with management.

In reliance on the review and discussion referred to above, the OECC recommended to the Board of Directors (and it has approved and directed) that the Compensation Discussion and Analysis be included in this Proxy Statement-Prospectus and incorporated by reference into NW Natural’s Annual Report on Form 10-K for the year ended December 31, 2017.

Respectfully submitted on February 22, 2018 by the Organization and Executive Compensation Committee of the Board of Directors:

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COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis (CD&A) describes our compensation philosophy and practices, our compensation program design, the process used to evaluate performance in the context of executive pay decisions, and 2017 compensation results for each Named Executive Officer (NEO).

EXECUTIVE SUMMARY

Pay for Performance Alignment

2017 Company Performance

In 2017 NW Natural delivered strong utility results, with the highest customer growth rate in a decade and approximately 10 percent year-over-year increase in meters added. Management accomplished key growth initiatives while maintaining the Company’s focus on safety, reliability and customer service. Among other accomplishments of 2017, Management: implemented a core utility strategic plan focused on creating the platform for NW Natural to thrive in a low carbon environment and positioning natural gas to further reduce emissions in the region; effectively managed cleanup and cost recovery efforts related to the Company’s legacy environmental liabilities, including receipt of a Record of Decision from the Environmental Protection Agency with respect to the Portland Harbor; continued to collect revenues under the Company’s regulatory environmental site remediation and recovery mechanism (SRRM); successfully advanced or concluded other key regulatory dockets; prepared for and filed a general rate case in Oregon; concluded a multi-year Company headquarter evaluation project culminating in execution of a lease agreement for a more seismically resilient headquarters; rolled out important employee safety programs and improvements; advanced initiatives to attract and retain employees across the generational spectrum in anticipation of the continued trend of baby boomer retirements; completed key milestones in readying the Company’s business continuity efforts; deployed important technology and cybersecurity solutions; improved system safety, reliability and delivery capacity through completion of system reinforcement projects; progressed system improvements and upgrades at the Company’s liquefied natural gas facilities to improve performance and reliability; continued improvements in the customer acquisition process to ensure timely and smooth installation of new services; advanced the North Mist expansion project with completion of injection and withdrawal wells, major construction on the pipeline, and other key components of the project with the expectation of placing the facility into service during the fourth quarter of 2018; achieved first in the West and second in the nation for JD Power Residential Customer Satisfaction Study and first in the West for JD Power Business Customer Study; invested approximately $152 million in capital expenditures for customer growth and system improvements; and increased the dividend for the 62^nd consecutive year. All of this was accomplished while lowering customer rates by approximately 6.4 percent in Oregon and 3.1 percent in Washington.

This was also a pivotal year for NW Natural with Management’s determination that the Gill Ranch Gas Storage Facility (Facility) is no longer central to the Company’s broader utility strategy, which is focused on stable, utility-type earnings growth for investors. During 2017 the Company completed a comprehensive strategic review process that evaluated various alternatives and potential enhancements for the Facility, including a potential sale. Information learned in that process, along with continued low projected gas storage values, required Management to re-evaluate the carrying value of the Facility under accounting rules. The result of that evaluation was a non-cash impairment of $192.5 million ($141.5 million after tax) (GRS Impairment).

In 2007, Gill Ranch, a wholly owned subsidiary of NW Natural, jointly with Pacific Gas and Electric Company (PG&E) made an investment decision to build the Facility in northern California. At that time, our market analysis projected that natural gas storage would be critical in achieving California’s renewable portfolio standards and supporting the region’s drive to a lower carbon energy landscape. Construction was completed and operations began at the Facility in 2010 under multi-year storage agreements with terms that ended as the full market implications from the shale gas revolution was transforming the natural gas industry. The additional shale gas eliminated the resource constraints that were expected to exist over the long term and resulted in lower gas

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prices, decreased seasonal price spreads and volatility, and consequently, reduced the value of gas storage to customers. As a result, over the last several years, we have contracted the Facility under short-term agreements to allow us to take advantage of any rebound in storage prices or other strategies that would increase revenues.

Although we have not seen the rebound in storage prices that we originally anticipated, we have worked diligently to operate the Facility efficiently and have been pursuing various strategic alternatives to increase revenues. These efforts included working to identify higher value customers in and/or near the northern California market that the Facility serves as well as exploring the possibility of providing energy storage services. Finally in the fourth quarter of 2017, we completed our strategic evaluation of our 75% share of the Facility. The Company continues to focus on safe operations and an evaluation of all strategic options for the Facility to maximize the value of the asset.

In addition, on December 22, 2017, the federal Tax Cuts and Jobs Act was enacted (Tax Reform). While Tax Reform lowers the federal corporate income tax rate to 21% from the previous maximum rate of 35%, like many companies, accounting rules required that we recognize the impact of the tax law net changes in 2017—the year Tax Reform was enacted. As a result of this recognition, we recorded a $21.4 million net benefit to earnings.

This year also marked NW Natural’s announcement of its entry into the water utility sector—a sector that has a risk profile and business model that is similar to the core gas utility. The announced transactions include agreements to acquire two privately owned water utilities in the Northwest. NW Natural determined to pursue opportunities in the water sector after a comprehensive strategic planning process. Management believes the water utility sector to be a strong strategic fit for NW Natural’s existing capabilities of customer service, safety, environmental stewardship, reliability, and managing critical distribution infrastructure, as well as our ability to work effectively with regulators, customers and policymakers.

As described in Proposal 5 of this Proxy Statement-Prospectus, 2017 also marked the year that we obtained approval from the Public Utility Commission of Oregon (OPUC) and Washington Utilities and Transportation Commission (WUTC) to form a holding company. These approvals were a prerequisite for NW Natural’s desired move to a holding company structure—a more agile and efficient platform from which to pursue, finance and oversee new business growth opportunities, such as those in the water sector.

Combined, these events resulted in 2017 fiscal year consolidated loss per share (EPS) of $1.94, as compared to income of $2.12 per share in 2016. The results in 2017 were primarily affected by the noncash GRS Impairment and the benefit from Tax Reform. Excluding these effects, on a non-GAAP basis, EPS was $2.24 for 2017¹, compared to $2.19 in 2016², primarily due to strong utility margin benefiting from customer growth and cooler weather, offset by higher operations and maintenance (O&M) expense from payroll and benefits and costs to upgrade safety equipment. The compensation awarded for 2017 aligns pay for performance by recognizing the utility segment’s strong performance and results, Management’s execution of an important strategic growth plan by making inroads into the water sector, and achieving major milestones in the Company’s ability to form a holding company to support this new strategic avenue, while ensuring continued safe, reliable and efficient gas utility operations.

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Incentives Earned in 2017

The Company’s incentive programs generally consist of cash payments under the Company’s Executive Annual Incentive Plan (EAIP) and performance share awards and restricted stock units (RSUs) with performance threshold under the Company’s Long Term Incentive Plan (LTIP). The Company’s performance on annual performance measures in 2017 were reflected in payouts to the NEOs eligible for EAIP awards averaging 127 percent of target out of a possible 150 percent under the EAIP. This payout was due to 150 percent maximum achievement of the Net Income factor, achievement of 73.94 percent out of a possible 150 percent of the Operations factor, and an average achievement of 122.27 out of a possible 150 on the priority/individual performance factor for NEOs eligible for EAIP awards.

The Company’s three-year performance resulted in a payout of 61.07 percent of target, or 30.54 percent of a possible 200 percent total opportunity, from performance share awards under the LTIP for the 2015-2017 award cycle. The payout under this plan was below the target opportunity because the Total Shareholder Return Component factor, which comprised 40 percent of the performance share award, resulted in a 42.59 percent payout factor, due to a cumulative total shareholder return for the period of 55.71 percent, which was below all but three of the companies in the plan’s assigned peer group of nine companies, and the Three-Year Average ROIC Component, which comprised 20 percent of the performance share award, resulted in a 0 percent payout factor. The EPS Component, which comprised 20 percent of the performance share award, resulted in a 104.17 percent payout factor. The OECC assigned a rating of 116 out of a possible 200 percent for the remaining 20 percent of the performance share awards, based on specific strategic factor achievements during the three-year cycle.

In addition, the performance threshold for outstanding RSUs was met, as the Company’s adjusted return on common equity for 2017 calculated with adjustments required under the RSU agreements was 7.52 percent³, which was greater than the Company’s average cost of long-term debt for the preceding five years, which was 5.81 percent, resulting in vesting of outstanding RSUs scheduled to vest in 2018.

2017 Realized Compensation Relative to Company Performance

The OECC strives to align pay with performance. One way to measure this alignment is to compare the pay targeted and realized by our executives to the Company’s annual and long-term performance as measured by several metrics, including, but not limited to, total shareholder return. The following charts display the target total direct compensation and actual realized compensation for the CEO and as an average for the other NEOs, respectively, for each of the last five years, along with the total shareholder return over the five-year period assuming investment of $100 at the beginning of 2013. This table is not a required disclosure. It is provided only to demonstrate one way in which the OECC reviews executive compensation, and should not be used as a substitute for required disclosures.

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Results of 2017 Shareholder Advisory Vote on Executive Compensation

At the Annual Meeting of Shareholders held May 25, 2017, approximately 97 percent of the shareholder votes cast on the resolution approving the compensation of the Company’s NEOs, without regard to abstentions as provided under Oregon law, were cast in favor of the resolution. Counting abstentions as a vote against, approximately 96 percent of the shareholder votes were cast in favor of the resolution. The OECC considered the level of support indicated by that vote as reflecting favorably on the Company’s executive compensation system and determined that no changes in response to the vote were needed.

Key 2017 OECC Actions

In 2017, the OECC took the following significant actions:

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Highlighted Compensation Policies and Practices

Our executive compensation and corporate governance policies and programs are designed to closely tie executive pay to Company performance and increase long-term shareholder value, without encouraging inappropriate risk-taking. To achieve our objectives, we have adopted the following policies and practices over time:

DETAILED DISCUSSION AND ANALYSIS

Executive Compensation Roles and Responsibilities

OECC. The OECC is responsible for, among other matters, reviewing the performance of the CEO and other executive officers, making recommendations to the Board relating to executive compensation programs and benefit plans, and monitoring risk related to such programs and plans. The Board of Directors has delegated to the OECC its full authority to grant equity awards under the terms of the LTIP and to approve all aspects of executive officer compensation other than cash compensation for the CEO.

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The OECC strives to utilize best practices in executing its executive compensation responsibilities. Among other practices, the OECC:

The OECC also reviews, with the CEO and the Senior Vice President and Chief Administrative Officer, the Company’s organizational structure and recommends to the Board NW Natural’s succession planning for executive positions. In addition, the OECC makes recommendations to the Board regarding Board cash compensation, approves equity compensation for the Board, and annually reviews executive and director stock ownership guidelines and levels.

Use of Management by the OECC. Management provides support to the OECC to facilitate executive compensation decisions, including working with the Consultant and counsel on plan design changes, preparing reports and materials, communicating with outside advisors, administering plans on a day-to-day basis with oversight by the OECC, and implementing the Board’s and OECC’s decisions. The Senior Vice President and Chief Administrative Officer is the primary management contact for the OECC. The CEO makes recommendations to the OECC regarding plan design, salary increases, incentive awards and other executive compensation decisions for executives other than himself.

Use of Consultants by the OECC. For 2017 compensation decisions, the OECC engaged Pay Governance, a compensation consulting firm (Consultant), to assist in the evaluation of the competitiveness of our executive compensation programs and to provide overall guidance to the OECC in the design and operation of these programs. The Consultant reports directly to the OECC Chair, and the Chair reviews all invoices submitted by the Consultant. The OECC periodically reviews the performance, and assesses the independence, of the Consultant. At the direction and under the guidance of the OECC Chair, the Consultant provides data and analysis that is used by both management and the OECC to develop recommendations for executive compensation programs to submit to the OECC for its consideration. Among other matters, the Consultant provides advice regarding:

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OECC Compensation Philosophy and Practices

The OECC uses its total Compensation Philosophy centered on pay for performance to guide its executive compensation decisions. Each year, including 2017, the OECC reviews and adjusts, if necessary, its Compensation Philosophy. The guiding principles of this philosophy are to design executive compensation programs that:

How Compensation Decisions Are Made

Guided by its Compensation Philosophy and Company performance, the OECC generally targets each component of executive compensation near the applicable market median range for an executive’s position. However, the OECC makes compensation decisions by considering a number of other factors, all of which inform, but none of which dictate, the OECC’s decisions. Our executive compensation programs are sufficiently flexible to allow pay to vary by individual position if warranted by other factors, including the following:

Competitive Market Position

One component the OECC uses to achieve its Compensation Philosophy is to target each component of compensation at or near the median range of the applicable competitive market data provided by the Consultant. The Consultant has identified the appropriate range for the median of each component of compensation as follows:

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Though targeted at the median range of the applicable competitive market, the program contains several variable components that allow compensation to exceed median competitive pay levels when the performance expectations of the OECC are exceeded, and pay less than median competitive compensation when performance results do not meet those expectations.

We are likely to attract candidates for most of our executive positions from the energy service market, specifically, from gas and electric companies with similar revenue size in the United States. At times general industry market information may also be considered for certain executive positions that can be found in any industry. In preparing their competitive market assessment each year the Consultant evaluates the appropriate survey data comparisons for the Company. For 2017, the Consultant recommended, and the OECC approved, a new peer group of 20 gas, electric and water utilities with median annual revenues of $1.1 billion (identified in Exhibit B), and the Consultant provided compensation data from the most recent proxy statements of these peer companies. For 2017, the Consultant also presented a blend of two sets of survey data, for companies with less than $1 billion in revenues (identified in Exhibit C) and companies with between $1 billion and $3 billion in revenues (identified in Exhibit D), from the Willis Towers Watson (WTW), Energy Services Executive Compensation Database, 2016; and the WTW, General Industry Executive Compensation Database, 2016 for companies with less than $1 billion in revenue (identified in Exhibit E). Survey data is formulated based on functional responsibilities of each NEO’s position. The Consultant also used the American Gas Association Compensation Survey, 2016 as a reference (identified in Exhibit F). The Consultant selects the most appropriate market comparisons for each executive position and synthesizes that data to provide to the OECC for its review. At that time, the Consultant provides recommendations as to use of proxy data or relevant survey data, including circumstances when other data may be a more appropriate guide.

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Elements and Objectives of our Executive Compensation Program for 2017. The core of our total Compensation Philosophy is pay for performance using both annual and long-term incentives. The elements and objectives of the executive compensation program for the NEOs are described below:

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Named Executive Officers

Our NEOs for fiscal year 2017 were:

Key Executive Officer Transitions in 2017

One critical responsibility of the OECC is to develop a plan and process for CEO succession and selection, and to monitor all executive officer succession planning and development and provide reports and recommendations to the Board at least semi-annually. Over the past several years, in anticipation of retirements in key executive positions, the OECC has devoted substantial time and discussion to executive succession planning and has actively engaged with management to find, engage and retain the executive talent necessary to drive the future success of our business. The additions of a new CFO and Chief Information Officer in 2017 were part of these efforts, as was the addition of strategic responsibilities to Mr. Palfreyman in February 2017. The OECC continues to provide oversight of the effective execution of recent executive officer transitions and other key executive leadership transitions as they occur.

2017 Compensation Programs

Allocation of Current vs. At-Risk Compensation

An executive’s base salary is intended to reflect the value of the executive’s position to NW Natural and provide a competitive compensation foundation. The remainder of total direct compensation is at risk and must be earned by achieving short-term and long-term performance goals, which are designed to drive increased shareholder value. The portion of total direct compensation designed to be paid in base salary versus pay at risk depends upon the executive’s position and the ability of that position to influence outcomes, as well as market factors. The CEO has the largest portion of pay at risk. The following charts show the percentage represented by each of the four components of total direct compensation in 2017 for the CEO and for the other NEOs, as targeted by the OECC, and show that pay at risk as a percentage of total target direct compensation was 66 percent for the CEO and an average of 50 percent for the other NEOs.

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Target Total Direct Compensation by Type ^1,2,3

The following charts show the percentage represented by each of the four components of total direct compensation in 2017 for the CEO and for the other NEOs that could have been achieved if the Executive Annual Incentive Plan had paid out at the maximum of 150 percent of target and the performance shares had paid out at the maximum of 200 percent. Based on maximum potential payouts, pay at risk as a percentage of total direct compensation would be 75 percent for the CEO and an average of 62 percent for the other NEOs.

Maximum Total Direct Compensation by Type ^1,2,3

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Base Salaries

The following table shows the salaries of the NEOs before and after salary adjustments went into effect on March 1, 2017, and with subsequent extraordinary salary adjustments, as applicable, as well as the percentage increase of such adjustments compared to salary prior to March 1, 2017 and information regarding the median salary shown by market data provided by the Consultant.

The OECC set salaries for the NEOs using peer proxy data, energy service company survey data, and general industry survey data as guides. The OECC considered each NEO’s functional position and areas of responsibility and, other than Messrs. Wilson (for the position of interim CFO) and Palfreyman, determined to set their salaries within the median range of proxy data for each NEO’s position. The OECC determined to set Mr. Wilson’s salary slightly below the median range of proxy data during the time Mr. Wilson was interim CFO in recognition of the interim nature of those duties and Mr. Wilson’s experience in that position. The OECC set Mr. Wilson’s salary upon completion of those interim duties within the median range of energy survey data for his position as Controller. The OECC considered Mr. Palfreyman’s functional duties and determined to set his salary slightly below the median range to reflect his recent appointment to additional strategy responsibilities.

The following discussion and analysis contains statements regarding individual and corporate performance measures, targets and goals. These measures, targets and goals are used for purposes of executive incentive compensation programs, and in some cases incentive compensation programs that are available to all NW Natural employees. These measures, targets and goals are disclosed in the limited context of NW Natural’s compensation programs and should not be understood to be statements of management’s representations of Company financial performance for the periods covered. The results reported with respect to these incentive compensation programs are used specifically for executive incentive compensation programs, and NW Natural cautions investors not to apply these statements to other contexts. Furthermore, these prior results are not intended to be and are not indicative of the Company’s future financial performance.

Executive Annual Incentive Plan

The Executive Annual Incentive Plan (EAIP) ties executive pay to achievement of annual financial, operating and individual performance goals. Participation in the EAIP, as of December 31, 2017, was limited to 12 participants, including the NEOs. Awards approved by the OECC are paid by March 15 of the following year, and are subject to “clawback” in the event of misconduct.

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Target and actual awards in dollars and as a percent of base salary in effect on December 31, 2017, for 2017 incentive awards paid in 2018 are set forth in the table below and illustrated in the bar chart immediately following the table. The below table also displays median target total cash compensation from market data and the percentage above or below that median of each NEO’s total cash compensation (EAIP award plus base salary).

The OECC set the target amount payable under the EAIP to Mr. Anderson at the level that, when combined with base salary, placed his total target cash compensation near the 50^th percentile of peer proxy data. With respect to Mr. Burkhartsmeyer, Ms. Saathoff, Ms. Doolittle and Mr. Palfreyman, the OECC set target amounts payable under the EAIP at levels that placed total target cash compensation within the median range of peer proxy or energy survey data for their respective positions. The OECC set Mr. Wilson’s total target cash compensation for the period he served as interim CFO below the median range, reflecting the interim nature of the role and Mr. Wilson’s experience in it. The OECC set Mr. Wilson’s total target cash compensation for his role as Vice President, Controller, Treasurer and Chief Accounting Officer within the median range for that role.

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The OECC gives considerable attention to what performance measures are appropriate for the EAIP. The OECC has discretion to authorize adjustments to performance measure calculations to eliminate extraordinary, non-recurring or unplanned impacts as the OECC determines is appropriate. The OECC retains this authority as a compensation plan risk mitigation strategy to avoid circumstances where EAIP goals could incent executive actions that would not be aligned with the best interests of the Company or shareholders long-term. For example, if it were in the best interests of Company and investors to divest of certain Company assets or lines of business, and such divestiture would result in a charge in the short-term, but would strengthen the Company and its earnings long-term, the OECC desires to maintain the flexibility to adjust measure calculations to avoid penalizing executives for acting in accordance with the Company’s and shareholders’ best interests. In the OECC’s view, to retain the talent needed on the current executive team, and keep that team focused, engaged and driving to the right results for the Company, certain extraordinary, non-recurring or unplanned impacts should be excluded when calculating EAIP performance measure results. As an additional safeguard to this ability to make adjustments to performance measure calculations, the OECC has discretion to recommend an award increase up to a maximum of 150 percent of the target when goals are exceeded or to reduce an executive’s performance-based award when goals are not achieved. The OECC exercised its authority when setting the targets for the 2017 EAIP. Specifically, the OECC determined to disregard any non-recurring earnings charges due to regulatory disallowances, gains or losses due to dispositions of businesses, impairment of businesses, and dilution caused by certain corporate actions if approved by the Board, in 2017 for purposes of Net Income calculations. Therefore, in 2017 the GRS Impairment and the benefits from Tax Reform (EAIP Adjustments) were disregarded for purposes of calculating the EAIP Net Income payout factor.

The formula for the EAIP total incentive award is as follows:

The OECC sets the Net Income and Operations Factors goals, ranges and targets each year taking into account the current economic and regulatory environment, management’s annual objectives, and the way in which those annual objectives fit within the larger strategic and growth goals for the Company. Given the factors considered by the OECC, the ranges and targets may be higher or lower than in prior years.

    Net Income Factor. The Net Income Factor is used to align executives’ interests with shareholders’ interests and in recognition of the importance earnings have in influencing our future stock price. Actual Net Income results are interpolated to determine the corresponding performance factor, up to a maximum of 150 percent. For 2017, Net Income levels were:

Net Income for 2017 was a loss of $55,622,976 and as adjusted to exclude the EAIP Adjustments, on a non-GAAP basis as described above, was income of $64,482,765 resulting in a Net Income Factor equal to 150 percent.

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    Operations Factor. Operating goals of significant importance to the enhancement of our overall profitability and productivity were selected by the OECC to comprise the Operations Factor. These operating goals are chosen because they are substantially aligned with the incentive programs for all employees. While each goal can contribute a goal rating between 0 and 200 percent multiplied by the assigned goal weight based on actual results, the aggregate of the Operations Factor is limited to a maximum of 150 percent. Actual results are interpolated to determine the performance factor for each goal. The Operations Factor was determined using the following formula:

    A summary of the operating goals for 2017, the weighting of each goal to the overall factor, and the 2017 goal performance rating achieved is set forth in the following table:

Our operating performance in 2017, resulted in an Operations Factor of 73.94 percent.

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Priority/Individual Performance Factor. Thirty percent of each NEO’s annual incentive target award is based on the Priority/Individual Performance Factor determined by individual performance goals, which include some “stretch” goals. In the case of the CEO, individual goals are determined by the OECC in consultation with the CEO. Whether the CEO has attained his goals is determined largely based on the OECC’s assessment, with input from the full Board, of the CEO’s performance. The other NEOs’ individual performance goals align with the CEO’s goals and support the Company’s strategic plan. NW Natural’s 2017 priority goals from which executive Individual Performance Factors included, among other goals:

In addition to the above shared executive officer goals, Mr. Anderson identified 2017 CEO performance goals including, achieving additional financial performance goals, advancing certain utility and non-utility business opportunities and initiatives, achieving certain milestones related to our storage business, implementing key initiatives in our five-year strategic plan, and continued strengthening of alignment, development, and succession planning activities of the executive management team.

The CEO evaluated the 2017 individual performance of each NEO on a scale from 0 to 150 percent, based on priority/strategic goals specifically identified for each NEO. A rating of 100 percent indicates goals, including a particular “stretch” goal, were met, while ratings between 100 and 150 percent indicate extraordinary performance or achievement of multiple “stretch” goals. The OECC, with input from the full Board, uses this same method of assessment to establish the year-end performance rating for the CEO. The OECC determined that executives had met or exceeded their goals and assigned a rating of 118 percent for Mr. Anderson’s individual performance. Performance of the other NEOs ranged from 120 percent to 127.81 percent.

Together with the Net Income Factor of 150 percent and Operations Factor of 73.94 percent, the priority/ individual performance of the NEOs resulted in an overall average payout under the EAIP of 127 percent of target.

Long-Term Incentives

In 2017, the long-term incentive portion of our executive compensation program consisted of two components: RSUs with performance threshold and performance shares. For purposes of valuing awards, we define the expected value of each RSU as the estimated market price of the Company’s common stock near the grant date. We define the expected value of each share of performance share awards to be an estimate of the grant-date fair

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value of the awards as of the grant date. The OECC targeted an allocation of the expected value of long-term incentives for 2017 at approximately 35 percent RSUs with performance threshold and 65 percent performance share awards. The OECC believes the allocation between RSUs with performance threshold and performance shares provides a balanced performance focus for executives.

The OECC determined that, given the variability in long-term incentive plan design and weighting across industries, and across companies of various size within industries, the most appropriate guide for targeted long-term incentive opportunities was the market data provided by the Consultant. The expected value of long-term incentives granted to the NEOs in 2017 are displayed in the below table.