In Oregon, 2020 began with the first confirmed U.S. COVID-19 case in nearby Snohomish County, Washington. The killings of Breonna Taylor and George Floyd unleashed more than 100 days of racial protests in Portland in late summer. Then the devastating wildfires hit, burning more than 1 million acres across the state.
In a year rife with adverse events, “We’re ready for any challenge,” said David Anderson, who is the American Gas Association’s board chair for 2021 and CEO of NW Natural, which is headquartered in Portland.
2020 is a historic moment in time—both for the world at large, but also for the gas industry, which is grappling with its own specific challenges, such as increased interest in decarbonization, ensuring gas availability 24/7/365 during a raging pandemic, while also facing what needs to be done in the fight against systemic racism.
The son of a rocket engineer who worked in the U.S. defense industry and helped craft the F-16 fighter, Anderson was born in Denver, moved to San Diego, then landed in Fort Worth, Texas, his mother’s hometown.
The young Anderson’s original college plan was to follow his father’s footsteps and become a mechanical engineer. “In school, I changed, like most of us do,” he said, and he chose instead to go into accounting and become a CPA.
He’d always liked numbers, but the career also appealed to Anderson’s knack for mathematical analysis and problemsolving. Then, by chance, he took an internal audit job at Texas Utilities, later TXU, “and I haven’t looked back.”
Finance is the backbone of every business, and the numbers guy found that he liked getting involved in the general business side of things. Like his dad, Anderson loves knowing how things work. “I’ve always been fascinated by how we do our business. Understanding the operations side has always allowed me to understand the financial side better.
“The utility was attractive to me, too,” he said. “I love what utilities do in terms of serving customers. It’s a requirement whether you’re electric, gas or water—it’s a 24/7, 365-day-ayear job. What I saw throughout my career was unbelievable planning, a true focus on making sure customers always have this essential product, delivered to them safely and reliably.”
And when things don’t go right, as in the many events of the past year, “the way that teams and utilities rally together to solve the problem—with the customer at the forefront—gives the job purpose and meaning, as opposed to a job where you’re just getting a paycheck,” he said. “At the utility, you’re doing something greater for the communities in which you live.”
Anderson rose to the position of senior vice president and chief financial officer at TXU, then was recruited for the CFO position at Portland’s NW Natural, which gave him the opportunity to serve in that role at a public company. While TXU at that point had acquired a natural gas business, Anderson appreciated the challenge inherent in a gas-only utility in promoting gas as a fuel of choice, rather than of obligation, as electricity is often deemed. “We have to earn the business and convince the customer that natural gas is the right product for them,” he said, reiterating again that customer focus.
After eight years as NW Natural’s CFO, Anderson was tapped as its executive vice president of operations and regulation. Then, in rapid succession, he was named EVP and chief operating officer, and president and COO, before assuming the role of president and CEO in 2016. Over that period, he says, he honed his leadership style. “It’s easy to manage things,” he said. “It’s difficult to lead people. A strong leader is someone who can get people to want to follow them versus be forced. I’ve always tried to grow in that area, and serving in all of these positions, and now as CEO, I’ve hopefully become a good leader for our team.”
He describes his leadership style as collaborative: "I believe more heads in the room make for better decisions. I try to put the best team possible around me. In fact, my goal is to have the people on my team smarter than I am. I’m not only very comfortable with that, I think that’s what drives to the best possible outcomes and what makes for a successful organization.
“Every CEO in this world—past, present and future—is going to have situations that are beyond their personal capabilities to handle,” he said. “Having a strong team that challenges you and wants to be challenged back is the sign of a good leader. It’s also important that employees believe in the management team and the company because that shines through in how they treat the customer.”
As CEO, Anderson says he has a North Star that he is striving to achieve, a clear strategy and vision understood by customers, investors and regulators. As such, he is keeping a close eye on both the past and the future. In 2020, NW Natural celebrated 162 years in existence—eight weeks older than Oregon and the third-oldest locally owned company in the state. He takes the company’s tagline, “We grew up here,” to heart: “When you’re put in a position to steward the assets forward, you want to make sure you’re preserving the legacy for future generations.”
There are three things he didn’t want to change: NW Natural’s customer-centric culture, evidenced by it scoring in the nation’s top 10 in residential customer satisfaction for the past decade and the best in the West in business customer satisfaction for four consecutive years by J.D. Power; its commitment to its employees, whether they are union or non-union, natural gas or water, someone just starting a career or a lifer looking at 48 years of service; and its commitment to fixed-income and shareholder investors to provide a fair return year in, year out. “There are three constituency groups; my job is to balance the needs of them all,” he said.
Likewise, there are three things he wants for the company’s future. As workforce dynamics change, Anderson is working strategically to ensure the company continues to attract and retain talent, particularly people of diverse backgrounds and different perspectives in order to better reflect the changing demographics of the community NW Natural serves. In addition, for the company to continue to grow, it should have the ability to add other earning streams to its portfolio that are complementary to natural gas—hence NW Natural’s entrance into the water distribution and wastewater business, which began in 2017.
Finally, Anderson is solving perhaps the biggest problem of them all: how to ensure the benefits of natural gas and renewable natural gas continue to be realized in a day and age when some communities are looking to exclude them. And that’s where the past comes back in: The original NW Natural manufactured gas contained high hydrogen content, and renewable hydrogen is now being heavily discussed as the next step in natural gas’s decarbonized future. Environmental stewardship has been one of the company’s five core values for decades, and Anderson points to the work NW Natural—and utilities across the nation—have already done: “Number one is make our system as tight as possible. We’ve heard a lot about pipeline replacement, to make sure we’re keeping this essential product in the pipes and it’s not lost. The good news about NW Natural is that we’re one of the first companies to remove all of our bare-steel and cast-iron pipe. We literally have one of the tightest systems in the country, which I’m very pleased with.
“The next thing for us and the industry is to continue to do all we can to decarbonize the product that’s going through our distribution network.”
NW Natural is accomplishing that through RNG, from sources such as landfills, wastewater treatment plants and dairy farms, but also biomass—“using product off the forest floors and turning that into RNG. We’re in the early stages of that,” said Anderson. With year after year of wildfires, “there could be synergistic opportunities to help the forest and create RNG.”
Last, and newest in that category, is hydrogen that can be blended with natural gas in the system. Hydrogen is a green fuel when renewable electricity produced by hydroelectric or wind turbines—which Oregon often has in excess during certain times of the year—is used to create it. All of these forms of decarbonization, says Anderson, are being added to the entire value chain to ensure it is as climate focused as possible.
NW Natural also successfully advocated for Senate Bill 98, the most aggressive RNG bill in the country, which allows utilities like NW Natural to purchase or invest in the fuel, bring that product into the system and make recovery part of the equation—allowing utilities to get 30% of their throughput by 2050. “The Oregon Legislature and the governor saw the benefit of doing all we can to address climate change, which includes helping the gas company put RNG on the system. This is the right thing for the industry, too,” said Anderson.
When it comes to AGA, Anderson’s history with the association and the natural gas industry goes back to his time at TXU. The electric utility had just acquired a natural gas business, and Anderson was tasked to visit AGA’s offices in Washington, D.C., “to go find out what AGA was and, just to be blunt, whether we should stay in AGA.”
Jay Copan, AGA’s then-vice president, corporate affairs, gave Anderson a tour. When he returned to Texas, Anderson answered his CEO with a resounding yes that still echoes today: “To have an advocate like that in D.C., at the state level and at the regulatory level is paramount. Now that I’m with a natural gas LDC, it’s even more important to me to have a voice in Washington. There will be more challenges and opportunities at the federal level, and I hope AGA can help with both.”
Some of his other favorite moments with AGA include being asked to lead the policy arm of certain tax activities on the Hill, such as tax reform and dividend tax rates, and to co-lead the association’s first carbon policy task force—both before he became a board member.
Now, as AGA’s board chair for 2021, he’s looking forward to continuing that early work, supporting AGA President and CEO Karen Harbert, and furthering the goals he’s outlined together with 2020 Chair Diane Leopold, executive vice president and COO of Dominion Energy, and First Vice Chair Kimberly Greene, chair, president and CEO of Southern Company Gas. Their Bold Action for a Clean Energy Future platform includes these goals:
“This is the time to think big and think differently,” said Anderson. The first two are clear directives: Ensuring the safe and reliable delivery of gas to end-use customers is the ultimate critical goal that’s woven in with anything a natural gas utility does, while climate change is undoubtably a key focus in this day and age.
But the last item on that list is one that is becoming increasingly important, says Anderson. Like many people in the gas industry, he’s focused on reimagining the natural gas industry for the future—one that’s likely to be decarbonized. “Natural gas is going to continue to be important for a very long period of time, but companies have to think about a carbon-neutral future,” he said. Several utilities, in fact, are already setting goals for 100% or close to 100% carbon neutrality by 2050, including NW Natural.
He’s asking all the questions: What will the future look like? What will it look like in terms of our product? How are we going to innovate? What will the workforce look like? “I think it’s going to be completely different,” he said. “In the end, I’m here to do what I can to help our industry remain relevant and to thrive and be successful.
“You’re going to be the winner if you innovate and if you change. How much you change, that’s still unclear in the big scheme of things, but I think if there’s ever an industry ripe to succeed in this, it’s our industry. We’ve handled so many challenges over time, and our customer base loves our product. It’s reliable, affordably priced and it already has an environmental advantage, so this is all about making it better,” he said. “Being a part of the effort to evolve the product going through our pipes to be even lower carbon—that’s exciting.”
A Personal Best
There’s never a bad day on the golf course, said David Anderson, whose favorite pastime—other than spending time with his wife, Susan, and adult sons Reid and Ragen—is hitting balls at Oswego Lake Country Club in Lake Oswego, Oregon, just eight miles south of Portland.
About three years ago, Anderson hit his first—“and only”—hole in one, straight down 175 yards on a par -3 hole. As luck would have it, he was playing alone that day—“but there was another green close to it, and there were a couple of 18-year-olds playing golf, and they saw it go in and yelled. I told them, ‘Get down here, take my picture, I want your phone number so I can prove I had a witness,’” said Anderson with a laugh.