Northwest Natural Holding Company

Good morning and welcome to the NW Natural Holdings Company Q2 2021 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Nikki Sparley, Director of Investor Relations. Please go ahead.

Thank you, Danielle. Good morning and welcome to our second quarter 2021 earnings call. As a reminder, some things that will be said this morning contain forward-looking statements. They are based on management's assumptions, which may or may not occur. For a complete list of cautionary statements, refer to the language at the end of our press release. We expect to file our 10Q later today. As mentioned, this teleconference is being recorded and will be available on our website following the call. Please note these calls are designed for the financial community. If you are an investor and have additional questions after the call, please contact me directly at 503-721-2530. News media may also contact me. Speaking this morning are David Anderson, President and Chief Executive Officer and Frank Burkartsmeyer, Senior Vice President and Chief Financial Officer. David and Frank have prepared remarks and then will be available along with other members of our executive team to answer your questions. With that, I will turn it over to David.

Well, thanks, Nikki, and good morning and welcome. We're halfway through the year and have posted strong financial results and continue to make good progress on our growth initiatives. We reported net income of $1.92 per share for the first six months of this year. compared to net income from continuing operations last year of $1.41 per share. New rates in Oregon drove results at the natural gas utility along with continued healthy customer growth, lower negative COVID financial impacts, and higher revenues at our interstate storage business. Reports. for our region show a continued steady recovery and growth in several areas. Unemployment rates in the Portland metro area have declined to 5.3% for the 12 months ended May, 2021. A level last seen in 2015. That's lower than the national unemployment rate of 5.9%. We're also seeing recovery in some of the sectors hardest hit by COVID restrictions. For example, in the food service sector, Oregon has regained about half of the jobs lost through June, 2020. In the accommodation or lodging sector, we've regained nearly a third of those jobs. Single-family housing activity remains very strong. In the Portland metro region, home sales were up 39% for the first five months of 2021 compared to 2020, with the median sales price up over 20%. New single-family permits issued were up 26% in the Portland metro area through May this year compared to the prior period. And recently released population growth data showed positive net migration to Oregon and the Portland metro area through July 1, 2020. This, coupled with strong price signals and a relatively stable demand for single-family homes, are expected to continue spurring development activity in our region. For the quarter, these trends translated into solid customer growth. New construction plus conversions translated into connecting over 12,000 meters during the 12 months into June 30th. which equates to a growth rate of 1.6 percent. Our water and wastewater utilities also continue to grow. Strong residential housing construction permits, construction primarily in Idaho, Texas, and Washington, translated into a 4 percent customer growth rate. We also closed tuck-in acquisitions this year, leading to an overall customer growth rate of 6 percent. Now, an update on Northwest Central's general rate case in Washington. As you may remember, our Washington service territory covers about 12% of our overall customers and represents about 10% of revenues for the company. In July, we filed a multi-party settlement with the commission, reflecting our agreement on all items in the case. Under the multi-year settlement, Northwest Nashville's revenue requirement would increase $5 million beginning this November 1st and increase an additional $3 million on November 1st, 2022. The settlement includes several items that mitigate the impact of customer bills as all parties recognize this remains a very challenging time for customers. Both years are based on a cost of capital of about 6.8%. Rate base would increase a total of almost $53 million and equate now to $247.3 million. We expect an order from the Commission this fall with rates that will go into effect, as I mentioned, November 1st. With that, let me turn it over to Frank to go over some more details of the quarter and the year-to-date financial information. Frank? Thank you, David, and good morning, everyone.