terminals is built on the Columbia River, Palomar could be extended west, allowing NW Natural customers access to additional gas supplies. We believe adding a new supply option close to our market is an important way to help mitigate future price volatility for our customers.

keeping the trust

A local utility’s success is dependent on two things: its product and its reputation. Through the years, our product’s use may have evolved from gas lights to natural gas heating, but one thing has remained constant since 1859: our desire to provide exceptional service.

And last year, we were both proud and appreciative that our customers took notice of our efforts.

In 2008, NW Natural received the highest overall score in the nation in the J.D. Power and Associates Gas Utility Residential Customer Satisfaction Survey.

It was clear from the survey that our ratings on honesty and ethics, energy education, bill management, corporate citizenship, and concern for

the environment were major factors contributing to our top customer satisfaction ranking. To us, the survey results mean we’re living up to the service standards we have inherited from generations of employees.

leadership milestones

Becoming CEO as NW Natural celebrates its 150th year is a reminder of the continuity of leadership we have enjoyed – leadership that through the years has been clear and consistent about its business principles and plans. Today, we have the strategies in place and a committed, talented team ready for what the future holds – and for this, we owe a great deal of gratitude to retiring CEO Mark Dodson. We are pleased that Mark will continue to provide the company his counsel and insights as a member of our Board of Directors.

Among his many accomplishments, Mark was a leader on climate change issues. With his retirement, Oregon continues to look to NW Natural for guidance and involvement. In December, I was appointed to Governor Ted Kulongoski’s new Oregon Energy Policy Council, which will create a comprehensive

energy plan for the state. I also continue to serve on the Governor’s Global Warming Commission and remain involved in the American Gas Association’s efforts on climate change.

we grew up here

After 150 years, our history is inseparable from that of the Pacific Northwest. We have drawn sustenance and support from this unique part of the nation, just as we have provided it with warmth and energy.

The board and officers of NW Natural are constantly aware of our responsibility to our 150-year-old heritage and to the communities of the Northwest.

Last year demonstrated the strength, stability and resilience of this company. We believe we have the strategies and resources in place to continue providing solid results and sustained value – in 2009 and beyond.

We have demonstrated that we can manage costs and grow the business profitably. Our customers value our service and our role in their communities.

We entered 2009 with new regulatory tools in place that

will continue to benefit both customers and shareholders. We have developed far-sighted, yet realistic plans to grow and diversify the company.

Above all, we continue to benefit from the unique vitality of the Pacific Northwest. We are optimistic about the future of both this region and this company.

In our 150th year, you can expect more of what you have come to rely on us for: stewardship of the infrastructure we own and the land on which it rests; a habit of looking ahead and anticipating change; and fulfillment of our commitments to shareholders, customers, communities and employees.

Once again, thank you for your confidence and trust in NW Natural. We look forward to continuing to work on your behalf.

Signed: Gregg S. Kantor
Gregg S. Kantor
President and
Chief Executive Officer

Letter to Shareholders: Page 1 | 2 | 3 | 4
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