Northwest Natural Holding Company

Good morning, everyone, and welcome to the NW Natural Holdings Company Q2 2023 earnings call. My name is Chach, and I'll be the coordinator for today. During the presentation, you can register to ask a question by pressing star 1 on your telephone keypad. If you change your mind, please press star 4 by 2 to remove your question. I'd now like to hand over to Nikki Farley to begin. Nikki, please go ahead.

Thank you, Chach. Good morning and welcome to our second 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 10-Q later today. As mentioned, this teleconference is being recorded and will be available on our website following the fall. 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, Chief Executive Officer and Brody Wilson, CFO, Vice President, Treasurer, Controller, and Chief Accounting Officer. David and Brody 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, thank you, Nikki, and good morning and welcome, everybody. We continue to see strong financial results that are in line with our expectations and the guidance that we provided earlier this year. Brody will go through the detailed results here in a moment. This morning, I'll walk through a few economic indicators and some decarbonization initiatives at the gas utility, and then I'll wrap up with an update on our water company and our renewables company. Turning to a few comments on the local economy, related to our gas utility service territory, Oregon's unemployment rate was 3.5% in June, coming down from the 4.4% we saw in March of this year. and is now on par with the national rate of 3.6%. Oregon's real GDP growth was 3.8% for the first quarter of 2023, which is the latest available data. Oregon had the ninth highest real GDP growth among the states. Over the last 12 months, as interest rates have risen, permits, home sales, and average home prices have declined a little bit. Yet, despite these factors, we added nearly 6,400 new customers during the last 12 months, which equates to a growth rate of 0.8%. We are seeing some recent positive movement in housing. Single family building permits in the Portland area have picked up approximately about 1.5% over last year. We'll continue to monitor these trends closely. Our water and wastewater utilities continue to operate in areas that have solid economic footing. Unemployment rates in our highest growth water service territories range from 2.3% in Idaho to 4.1% in Texas. On a consolidated basis, our water and wastewater utilities grew 3.1% on an organic basis over the last 12 months. That excludes approximately 30,000 meters we added through acquisitions. Collectively, our gas and water utility customer base grew by 4.4% over the last 12 months. Turning to an update on the gas utilities decarbonization activities, As we reported last quarter, we got several pilot projects focused on our industrial and commercial customers. One project uses equipment designed to capture heat and carbon from existing boilers to reduce both energy use and greenhouse gas emissions. We'll be studying the results of this pilot for the next several months. We're also continuing to work on a turquoise hydrogen project to turn methane into clean hydrogen and solid carbon. We'll be testing this groundbreaking technology at our Portland operations facility in the coming months. Related to hydrogen blending, our engineering team completed 15% hydrogen blend tests at our Sherwood Operations Center and are working toward testing a 20% blend soon. As you've probably seen, we have a CFO transition. I would like to take a moment to personally thank Frank for his service and his leadership. We wish Frank the best in his new position. Frank will be with us for the next several weeks to ensure a smooth transition. Brody, who you'll hear from in a minute, will be filling in the CFO until we figure out a more permanent solution. With that, Brody, I'll turn it over to you for the financial comments.