Northwest Natural Holding Company

Good morning and thank you all for attending the Northwest Natural Holdings Company's third quarter 2025 earnings call. My name is Brika and I will be your moderator for today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would now like to pass the conference over to your host, Nicky Sparley, Head of Investor Relations. Thank you. You may proceed, Nicky.

Thank you. Good morning and welcome to our third quarter 2025 earnings call. A presentation for today's call is available on our investor relations website at irnorthwestnaturalholdings.com. And following this call, a recording will also be available on our website. Turning to slide two. 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. Additionally, our risk factors are provided in our 10Q and 10K filings. We will also refer to certain non-GAAP financial measures. For additional disclosures about these non-GAAP measures, including reconciliations to comparable GAAP measures, please see the slides that accompany today's call, which are available on the Investor Relations page of our website. Please note our guidance assumes continued customer growth, average weather conditions, and no significant changes in prevailing regulatory policies, mechanisms, or assumed outcomes or significant changes in local, state, or federal laws, legislation, or regulations. We expect to file our 10-Q later today. 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. Moving to slide three. With us today are Justin Pelfriman, President and Chief Executive Officer, and Ray Kasuba, Senior Vice President and Chief Financial Officer. Justin will provide an update on each of our businesses, and Ray will walk through our financial results, liquidity and financing, and guidance. After Justin and Ray's prepared remarks, they will be available along with other members of our executive team to answer your questions. With that, I will turn it over to Justin on slide four.

Thanks, Nikki. Good morning and welcome, everyone. I am very proud of the effort and dedication from our team so far this year, resulting in significant progress toward our strategic goals while fulfilling our mission of delivering safe, reliable, and affordable service to our nearly 1 million customers. We continue to expand our customer base, invest in our systems, drive operational excellence through cost efficiency and discipline, and achieve constructive regulatory outcomes. We are well positioned to deliver on our commitments to shareholders and create value in the future. Starting this morning with financial results, Northwest Natural Holdings continued its momentum from the first half of the year and delivered a strong third quarter. Our results reinforced my confidence in executing against our 2025 plan. That's why we are expecting full-year 2025 results to be above the midpoint of our adjusted earnings range of $2.75 per share to $2.95 per share. Through September 30th, we invested over $330 million in our gas and water systems to support customer growth, system reliability, and long-term infrastructure resilience. Our combined utility customer growth rate was 10.9% for the 12 months ended September 30th. This substantial growth was largely driven by our gas utility acquisitions in Texas. Northwest Natural Water also contributed incremental meter growth, posting a 4.1% increase. With our robust long-term capital plan and customer growth, we are reaffirming our long-term earnings growth rate of 4 to 6%. We remain highly confident in our ability to execute. I am pleased to report that in the fourth quarter, the Board approved a dividend increase, making this the 70th consecutive year of annual dividend increases. Northwest Natural Holdings is one of only three companies on the New York Stock Exchange with this outstanding record. While our growth and financial results are strong, we are executing on our strategic priorities for 2025, laying the foundation for success in the coming years. Moving to slide five. Turning first to our Northwest Natural Gas Utility and a few updates on the regulatory front. I'm happy to report Northwest Natural and parties worked collaboratively and received a constructive order from the Oregon Public Utility Commission approving our all party settlements. Under the order, Northwest Natural's revenue requirement increased $20.7 million. That consisted of a 50-50 capital structure, an ROE of 9.5%, and a cost of capital of approximately 7.12%. In addition, rate base increased $180 million since the last case for a total of $2.3 billion. New rates went into effect on October 31st. At the end of August, we filed our first Washington general rate case since 2021. As context, about 10% of our Northwest natural gas utility revenue comes from our Washington customer base. The three year rate case request has new rates beginning August 1st, 2026. The request to be spread over three years included a total revenue requirement increase of $42.4 million over current rates. The increase is based on a capital structure of 51% equity, 48% long-term debt, and 1% short-term debt, a return on equity of 10.2% by year two of the filing, and a cost of capital of approximately 7.6% by year two. This request includes an increase in average rate base of $175 million since the last rate case. We carefully considered this rate case filing and the effect on customers' bills. In parallel, our team continues to identify operational efficiencies and cost-saving opportunities while remaining focused on delivering safe, reliable service. In October, we received approval for our annual purchase gas adjustments in both Oregon and Washington. Taking into account the Oregon general rate case increase and gas costs, On average, Northwest Natural residential customers are paying about the same today for their natural gas service as they did 20 years ago. While a customer's monthly bill has not changed much over the last two decades, the value of the gas system in the Pacific Northwest has increased exponentially. Let me give you an example. During our last peak event on the coldest winter hour, Northwest Natural's system delivered 2.5 times more energy than the largest electric utility in the region. Said another way, our gas system provided the equivalent of 12 gigawatt hours of electricity, which is comparable to about 11 nuclear power units operating at full capacity. At the same time, natural gas use in our customers' homes and businesses accounts for just 6% of Oregon's annual greenhouse gas emissions. Now that's an efficient system. During that event, our system performed well. Our missed gas storage facility delivered a new record volume and provided essential support for the entire region's energy system. These facts underscore the unmatched reliability, scalability, and efficiency of our gas system, especially during critical peak events. As demand continues to grow, our investments in long-duration assets like our mist storage facility position us to meet regional energy needs. Turning to our C-Energy gas utility in Texas, C-Energy continues to provide strong customer growth and is hitting its financial targets. Perhaps most importantly, C-Energy posted a sizable increase to its customer backlog and now has signed contracts representing over 240,000 future meters. Including the Pines backlog, that's nearly a 35% increase in a year, a strong signal that developers increasingly want to work with Sea Energy and expect to build Texas housing for years to come. Turning to regulatory updates, we are pleased with Texas House Bill 4384, which became law in June of 2025. This is a highly constructive piece of legislation for sea energy, and we expect it to be particularly beneficial after our first rate case. The bill enables real-time recovery of distribution investments, essentially eliminating lag, further streamlining the regulatory process, and enhancing earned ROEs. This mechanism strengthens our ability to invest efficiently in the infrastructure build-out needed in Texas. Sea Energy currently accounts for approximately 10% of our business. We anticipate it will be an increasing portion of our business mix moving forward and are very supportive of further investment in Texas. Turning now to Northwest Natural Water. Our objective from the very beginning of our water strategy was to purchase anchor utilities in high-growth regions and then tuck in smaller utilities and grow organically around that central utility. We continue to see the benefit of this strategy playing out. Over the last 12 months, our water and wastewater utility customer base grew quite rapidly at a 4.1% clip, including three small acquisitions. And organic customer growth on its own was 2.4%. Our water capex plan for 2025 continues to be robust as our utilities replace end-of-life infrastructure, improve our wastewater treatment facilities, and support clean water and continued growth in our communities. To recover our water investments, in 2025, we completed seven rate cases at utilities in Idaho, Washington, and Oregon. On average, we received about 67% of our requested revenue increases, a constructive outcome that reflects the value of upgrades to these systems and our regulatory approach. Looking ahead to 2026, we will continue to execute on rate cases to support essential investments in these utilities. Another recent success was the approval by the Texas Public Utility Commission of our purchase of inline utilities in Houston, Texas. This is our second fair market value acquisition under the Texas rules, and I'm pleased with how our team worked with regulators to get this across the finish line. We expect to close on the 1500 connection water and wastewater utility by year end. Beyond the regulatory progress, we're expanding our water playbook to further develop our footprint organically in Texas. To do that, we're leveraging Sea Energy's approach and relationships, partnering with developers and home builders in the region, and establishing a strong reputation for building out new infrastructure reliably and on time. Our Texas business development team is now offering developers in Houston water and wastewater services. We are already seeing strong momentum here. So far, we have signed multiple contracts for 3,200 future water and wastewater connections, and the pipeline of opportunities is growing. We are just in the opening innings of this opportunity and will continue to leverage strong existing relationships with developers and homebuilders to increase the scale of our operations at both Sea Energy and our water utilities in Texas. Our renewables business also continues to deliver steady operational performance and consistent financial results, supported by disciplined execution and long-term contracts. While we are taking a cautious approach to future project investments in this space, we are pleased with the projects we have operating today and the steady earnings and cash flows those assets are generating. In conclusion, I am happy to report that all of our businesses are in a strong financial position and poised for future growth. With that, let me turn it over to Ray to cover the financials in more detail.