Northwest Natural Holding Company

Hello and welcome to NW Natural Holdings Company Q1 2022 earnings call. My name is Alex and I'll be coordinating the call today. If you'd like to ask a question at the end of the presentation, you can press star 1 on your telephone keypad. If you'd like to withdraw your question, you may press star 2. I'll now hand over to your host, Nikki Sparley, Director of Investor Relations. Over to you, Nikki.

Thank you, Alex. Good morning and welcome to our first quarter 2022 earnings call. As a reminder, some things that will be said this morning contain forward-looking statements. They're 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 10-Q 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 contact David Roy at 503-610-7157. Speaking this morning are David Anderson, President and Chief Executive Officer, and Frank Burkhartsmeyer, Senior Vice President and Chief Financial Officer. David and Frank have prepared remarks, and then we'll be available along with other members of our executive team to answer your questions. With that, I will turn it over to David.

Thanks, Nikki, and good morning, everybody, and welcome. We started off the year strong and in line with our expectations. Our financial results were solid, and we continued to make progress on all key objectives. We reported net income today of $1.80 per share in the first quarter compared to net income of $1.94 per share for the same period last year. Results for 2021 include a $0.09 per share benefit related to a severe cold weather event in February last year. Setting that aside, financial results in 2022 were driven by new rates in Washington and customer growth, as well as continued growth in expenses as we invest in our natural gas utility system. We also see positive momentum in our local Portland metro area economy. A strong labor market helped to drive unemployment down to near historic lows. Unemployment rates in Oregon declined to 3.8% in March 2022 compared to 6.1% a year ago. Single-family housing activity remains robust. The average sales price of a home was up over 10% for the first quarter of March 2022 compared to last year. Single-family permits issued were up almost 3% in Oregon through February 2022 compared to the prior period. Construction and development remain robust in our region. We continue to see a healthy pipeline of conversions to natural gas and single-family homes. In the last 12 months, 2,200 customers have converted in our service territory. These conversions, along with new construction, translated into nearly 11,000 customers connected to our gas system during the last 12 months. That equates to a growth rate of about 1.4%. Our water and wastewater utilities also continue to grow. Strong residential housing construction primarily in Idaho and Texas translated into a 3.1% organic customer growth rate over the last 12 months, ended March 31st. The combination of this organic growth and acquisitions resulted in a 27% increase in our water utility connections. Turning to our decarbonization activities, we continue to make progress under the Landmark Oregon Senate Bill 98 legislation, which supports renewable energy procurement and investment by natural gas utilities. In January this year, Northwest Natural reached an important milestone as the first R&G facility with Tyson Foods and BioCar 10 began operations. Northwest Natural is the first local gas distribution utility in the continental United States to invest in and own an R&G facility on behalf of all of its sales customers as we work to decarbonize our gas portfolio. Construction on our second facility has begun with commission slated for early 2023. To date, we've signed agreements with options to purchase or develop RNG on behalf of our customers, totaling about 3 percent of Northwest Natural's current annual sales volume in Oregon. I am very proud of the progress we've made in less than two years. To put that into perspective, today, wind and solar account for about 12 percent of our nation's electric supply, after decades of investment. In March, we also interconnected an RNG facility in Eugene, Oregon, to our system. We're excited to be flowing renewables through our own pipeline system here in Oregon. Reflecting our dedication to decarbonization, Northwest Natural was recently named environmental champion among 140 of the largest utilities in a national study by Esquilant. I'm proud of our customer's recognition of our dedication and leadership in this area and thank them greatly. Let me turn over to Frank to cover the finances of the quarter. Thank you, David, and good morning, everyone.