Northwest Natural Holding Company

Good morning, ladies and gentlemen. Welcome to the NW Natural Holdings Company QY 2023 earnings call. My name is Jaquita. I will be your moderator for today's call. Our lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. I would now like to pass the conference over to your host, Nikki Sparley, with NW Natural Holdings. Nikki, please go ahead.

Thanks, Jaquita. Good morning and welcome to our first quarter 2023 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 contact David Roy at 503-610-7157. Speaking this morning are David Anderson, President and Chief Executive Officer, and Frank R. Kartsmeyer, 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.

Thanks, Nikki, and good morning, everybody. Welcome. We started off the year strong. Our financial results are solid, and we continue to make progress on all key objectives. This morning I'll walk through a few financial and economic indicators and some decarbonization initiatives at our gas utility. Frank will then go through the quarter's results. And then I'll wrap up with an update on Northwest Natural Water and our renewables company. We reported net income of $2.01 per share in the first quarter compared to net income of $1.80 per share for the same period last year. These results were largely driven by higher revenues in Oregon and Washington from our natural gas utility. along with solid customer growth from our gas and water companies. So now let me cover a little bit on the economy in our service area. Related to our gas utility service territory, Oregon's unemployment rate was 4.4% in March 2023, which is on par with the 4.5% we saw at the end of the year in December, and trending slightly above the 3.5% that we saw this time last year in March. As expected, single family housing activity in our area continues to follow national trends. Overall, our gas utility customer growth added nearly 8,100 new customers during the last 12 months for a growth rate of 1%. Our water and wastewater utilities continue to operate in areas that have strong economic footing. Unemployment rates in our highest growth water service territories range from 2.8% in Idaho to 4.6% in Texas. Population growth in 2022 was over 4% where our Texas utilities are located. The Idaho counties we do business in grew 1.1% and 1.9% last year. Overall, our Falls Water Utility provided 5.7% organic customer growth during the last 12 months. Texas remains solid market with our water and wastewater utilities. They're posting 4.8% organic growth. On a consolidated basis, our water and wastewater utilities organic customer growth rate was 3.9% over the last 12 months. Collectively, our gas and water utility, including acquisition customer base, grew 4.6% over the last 12 months. Turning to our gas utility, we continue to work on running a safe and reliable utility and on decarbonization initiatives. We continue to make progress under the landmark Oregon Senate Bill 98 legislation, which supports renewable energy procurement and investment by natural gas utilities. I'm happy to report Northwest Natural's second facility under Senate Bill 98 was recently commissioned. To date, we've invested $20 million in signed agreements with options to purchase or develop RNG on behalf of our customers, totaling about 3% of Northwest Natural's current annual sales volume in Oregon. I continue to be proud of the progress we've made and the opportunities in front of us in such a short period of time. To put it in perspective, in 2022, wind and solar accounted for about 14% of our nation's electric supply, and that's after decades of investment. So I think we're off to a good start here. As we reported last quarter, we've signed contracts with several of our commercial customers to pilot new CarbonX equipment. This equipment captures heat and carbon from existing boilers to reduce both energy use and greenhouse gas emissions. The carbon dioxide is converted to potassium carbonate, which is blended into soap products. In March, the equipment was delivered and installation is nearly complete at one key customer site here in Portland, with another installation expected to start shortly. Emission reductions are slated to begin this summer. We believe this technology has great promise and are excited to be at the forefront of bringing it to the market. Let me turn it over to Frank to cover the financial results, and I'll wrap us up after that. Frank?