RGC Resources Inc.

Good morning and thank you for joining us as we discuss RGC Resources, Inc.' 's 2024 second quarter results. I am Tommy Oliver, Senior Vice President, Regulatory and External Affairs for RGC Resources. I am joined this morning by Paul Nestor, President and CEO of RGC Resources, and Tim Mulvaney, our Treasurer and CFO. Before we get started, I wanted to review a few administrative items. We have muted all lines and ask that all participants remain muted. The link to today's presentation is available on the investor and financial information page on our website at www.rgcresources.com. At the conclusion of the presentation and our remarks, we will take questions. So let's start on slide one. This presentation contains forecasts and projections Slide one has information about risks and uncertainty, including forward-looking statements that should be understood in the context of our public violence. Slide two contains our agenda. We will review our quarterly operational and financial results, provide an update on our rate case and the MDP, and discuss the outlook for the full year fiscal 2024, with time allotted for questions at the end. So turning to slide three, total billed customers at the end of April were 63,660. This reflects our continued steady growth within our historic footprint. Main extensions for the first six months of the 2024 fiscal year totaled 1.2 miles, and we connected 317 new services during that same period. Slide four shows our delivered gas volumes for the quarter. Volumes overall were 9% higher compared to last year's second quarter. to colder weather in the second quarter of the 2024 fiscal year. Gas volumes were up in total. Residential and commercial volumes were higher as a result of more heating degree days. It was enhanced by a year-over-year increase in industrial throughput as natural gas prices are at historic levels. Slide 5 shows the same two charts for the year to date. Total volumes were up modestly for the first half of fiscal 2024, despite fewer heating degree days. As in the quarter, delivered gas volumes were lower. Now we're on slide six. Our capex spending totaled $11.3 million for the first six months of fiscal 2024, compared to $12.9 million last year at the same time. This decrease is attributable to the $3.1 million spent in 2023 related to the RNG facility offset by current year spending for the MVP interconnections. Excluding the RNG spend, our overall capital spend is up $1.7 million over last fiscal year's comparable period spending. And Paul will discuss the full year's capital spending projection short-links. But now I'm going to turn it over to Tim Mulvaney, our treasurer and CFO, who will discuss our financial results. Tim?

Thank you, Tommy. We're moving on to slide seven. We had a steady quarter against inflationary headwinds. Second quarter operating income decreased 960,000 or approximately 10% to 8.6 million compared to the second quarter of 2023. We continue to experience cost pressures across the board, but particularly in personnel and IT-related costs. We expect this pressure to continue in the third quarter with rates under the February 2nd filed rate case taking effect July 1. Tommy will discuss the rate case in more detail shortly. Equity in the earnings of unconsolidated affiliates was 1.2 million pre-tax due to non-cash AFUDC, which resulted from our investment in the MVP. This AFUDC will taper off as the construction on various sections is completed and ultimately cease as the pipeline goes into service. Interest expense increased 170,000 due to higher interest rate environment, which is impacting our floating rate debt, which supports our investment in the Mountain Valley pipeline, as well as the Roanoke gas line of credit. Our net income was 6.4 million in the second quarter of this year, compared to 6.3 million in the same quarter a year ago. The presence of the AFU DC from the MVP this year drove the strong results. EPS was 63 cents per diluted share for the second quarter of this year compared to 64 cents per diluted share in the quarter a year ago. The year-to-date numbers are also on slide seven. The story, while similar to the second quarter, is more favorable. Net income was $11.5 million or $1.13 per diluted share through six months of fiscal 2024 compared to $9.6 million or $0.97 per diluted share in fiscal 23. While the inflationary pressures and higher interest rates were present as they were in the second quarter of fiscal 2024, revenues from the prior year rate case were present for all six months of fiscal 24 but only for three months in fiscal 23. An additional note related to the balance sheet. We had nearly $34 million in debt supporting our investment in the MVP coming due in 2024 that we refinanced in two pieces with new maturities at the end of 2025 and in 2026. The details are in our form 10Q that we filed on Friday. Finally, we renewed our operating line of credit at Roanoke Gas in March. I will now turn the presentation back to Tommy to discuss our latest rate case. Tommy?

Thank you, Tim. Roanoke Gas, like most consumers and businesses, continue to experience upward expense pressure. Accordingly, as we discussed in our prior earnings call, on February 2nd, we filed a general rate case with the Virginia State Corporation Commission. in which we are seeking an increase in base rates of approximately $4.3 million, or about a 5% increase in total revenues. The increase includes a projected rate base through June 30, 2025, and an increase in our authorized ROE to 10.35, which reflects current capital market conditions. The Commission has authorized the new rates to go into effect July 1 subject to refund. The $4.3 million in incremental revenue does not include the roll-in of SAVE or RNG capital and revenues, as we had received authority for a new five-year SAVE plan this past October. Since the RNG facility by statute qualifies for a 100 basis point adder to our ROE, we do not expect the RNG facility to be ever rolled into base rates. The SEC staff review of our eight cases underway and a hearing with the Commission is set for November 7th. We do not expect final resolution until the second quarter of 2025. I will now pass the presentation to Paul Nestor, President and CEO of RGC Resources, to discuss the MVP.