Earnings call transcript Q2 2023

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Operator

Good morning, everyone, and welcome to the NW Natural Holdings Company Q2 2023 Earnings. [Operator Instructions]

I'd now like to hand over to Nikki Sparley to begin. Nikki, please go ahead.

Nikki Sparley

Thank you, Sach. to quarter welcome earnings and morning, our XXXX second call. Good

which will reminder, are this assumptions, not some a be based or occur. statements management's They As statements. that said may forward-looking morning on may contain

a the at to release. the statements, press language our complete list of For cautionary refer of end

XX-Q file We expect our to today. later

these available financial following the website mentioned, teleconference being is our the this for recorded Please on calls note, As community. designed and will be are call.

and have contact investor questions after (XXX) If please an you additional the call, me XXX-XXXX. are at directly

media XXX-XX-XX. contact News may David Roy (XXX) at

Speaking Chief and team, along members of Wilson, Chief questions. Brody answer are then have this Controller David with CFO, other your Officer. and morning available, Brody and David Executive Officer; to be executive Accounting Treasurer, our prepared Anderson, Vice President, remarks and will

With David. over that, it will I to turn

David Anderson

morning, Nikki, you, and thank Well, welcome, good everybody. and

Renewables are and earlier We Brody here results financial with the detailed moment. that continue our in indicators provided Company walk we I'll up line that economic results a expectations gas on a an few utility, decarbonization see to Company. wrap this go guidance some This morning, update at through I'll in our will strong and initiatives our year. the through then and and with the Water

available ninth the GDP XXXX, the X.X% which Oregon's a among rate is data. saw Oregon's Turning latest we was and GDP quarter X.X%. territory, real states. X.X% of on rate unemployment to this of the down on X.X% the service the the growth the of few utility was for highest had from Oregon comments June, our to local national par with real economy. in growth gas Related now year, is in March first coming

interest a risen, as average prices and home bit. have home Over little have rates months declined permits, sales XX the last

rate a which XX Yet, customers new of during despite last to added we factors, equates the X.X%. growth these months, nearly X,XXX

We approximately Portland building positive in up these We'll movement single-family are recent X.X% closely. housing, in last about monitor permits year. seeing picked trends to the have over some area continue

operate water in and have footing. growth range continue areas in from service highest Unemployment water wastewater to economic territories in rates Our X.X% in our X.X% utilities solid Idaho Texas. to that

consolidated customer a water grew the added basis, X.X% approximately XX,XXX an months. last gas utilities excludes the our basis base on last X.X% On by over through wastewater and grew over our water XX acquisitions. That utility we and meters Collectively, organic XX months.

utility to decarbonization Turning gas activities. update on an the

got existing gas greenhouse commercial both the for to several As and to months. pilot focused project emissions. studying projects heat pilot carbon results uses be We'll industrial on of boilers last we this quarter, we the and energy several use reduce designed our reported customers. from next One capture equipment and

our Sherwood to We're in a engineering hydrogen hydrogen blend We'll work groundbreaking turn and tests turquoise this operations facility hydrogen coming to also on operations hydrogen a technology team solid towards at carbon. blending, and blend project be working XX% our Portland continuing to at Related completed testing clean our soon. methane months. are the center into testing XX%

who his new minute, solution. several until a a As position. we to the like from next to to weeks for would moment you'll transition. in CFO personally will you've a have probably as Frank a with service his permanent in his thank be transition. we best seen, take a will and Frank us Brody, figure We I more Frank be leadership. CFO filling in hear ensure out smooth for the wish

comments. you to Brody, I'll that, for With over financial turn it the

Brody Wilson

morning, and David, good everyone. you, Thank

tax an discussing quarter with I'll guidance rate a earnings conclude for the drivers of year-to-date the by on statutory XX.X%. for and describe I year. basis and the will begin highlights results, using after-tax

interstate clarification, segment primary Natural our Water, is third-party management The Natural. Natural Gas to as housed our activities Renewables, Northwest Distribution and business and referred our other. Northwest outside from are subsidiary, Northwest primary combined the For storage segment Natural in asset revenues

the of in revenues majority heating earnings reminder, months. utilities earnings are and seasonal winter gas first quarters with a the the As the generated during fourth and

operating million offset reported For At and from Washington. of new compared per of the in rates by XXXX. net same reflected in net $X.XX second to quarter, share the $X.X utility, we million earnings income the or income per period share expenses, $X.XX higher partially Oregon $X.X gas or

rates majority in of costs. of from the deferrals, recovered our labor margin gain $X.X were gas payroll, The these contract and and technology increased Oregon costs. segment million, O&M Utility Distribution on and Gas reflecting costs information million, being incremental rates higher through are new new Utility Washington. anticipated a from increases amortization mainly $XX.X increased and the in

lower increased from and capital year. Depreciation million from higher million the and general additional from Other pension $X.X million expense $X.X Interest debt $X.X expense. collectively taxes increased primarily investments income increased balances rates. in last

the XXXX, period This $XX net income for of compared related Washington. other new million the from Oregon per XXXX. $X.XX The earnings in is months both $X.XX net per result we offset For reported a largely income to $XX.X from and expense. our higher per $X.XX a of utility or or due million rates our six $X.XX share increase mainly to share same the was by interest decline $X.XX to increase businesses, share gas of share in of per in

million. gas results. growth contributed A million $X.X and million, utility million. $X.X Gains few customer Washington, Utility the in the added $XX.X gas related more provided margin increased primarily to details costs which rates new on and on $XX.X Oregon

million, increased Oregon is costs. in reflecting amortizations utility regulatory contract of Gas excuse amortization information but reflecting increased - those or deferrals utility deferral higher rate in case, payroll, along The $X.X margin - expense. and Oregon $XX.X the $X.XX, by or offset O&M approved million me, with XX%, labor technology O&M

million property, plant increases new O&M investments. and taxes equipment these recovered of due are being increased higher depreciation Utility majority rates. the to Again, and through $X.X general

increased debt higher-cost long-term income financing, primarily increased and million interest debt. million, decreased lower by $X.X expense pension Other to income. which driven incremental $X.X costs due Interest short-term

other income net which expense. interest $X.X of higher lower primarily year, Our to due million, last provided was than business

For million invested Related most equity. financings, our provided been and in into the activities by cash year, active for We last XXXX, to expenditures. million. which $XXX gas business, $XXX capital operating both was of issuing was debt the utility we've the

We to XXXX continue balance be with sheet our in objective liquidity. remaining strong in ample keep cash to position with our strong a

weather significant changes regulatory continued range income changes The laws, or in policies, company reaffirmed outcomes in and net for of or to share. legislation growth, $X.XX conditions today mechanisms no prevailing average earnings the XXXX per in $X.XX regulations. Guidance guidance significant or assumes

to David. I'll turn that, back the With over call

David Anderson

Thanks, Brody.

to update Natural an Moving Renewables. on now Northwest

As and existing focused we're sources. you renewable that energy cost-effective waste through of on solutions providing decarbonize using know, a streams to business, help sectors variety

on line first finish the nearing We're our project.

has are to As approximately being began by remember, Natural facility, Northwest $XX developed fall. for invest you come Ohio. may the two the EDL contracted first Operations facilities online Renewables to in and that second facility this expect million in we

full contracts for the RMT we commercial counterparties to facilities XX achieve have the those next years. sell investment-grade to When operations, volumes

continue focus investment our we'll this thesis pleased to opportunities in and growth are on play see and space. renewables to We out, company our

we in growth execute to we states, - now acquisitions strategy. on Arizona. our turn last water including year, the Let's continue continue Water acquisition to we largest completed our In the to Company. today execute four in When

Northwest Western pleased are service Oregon. to and connections signed We a customers services X,XXX X,XXX across agreements includes particularly that about Water, which year. we've water business launched Natural this approximately Hiland acquire utility earlier owned Water

transaction Water nearly Washington King the in April, adding XX,XXX connections. closed We in

the expect years. be that first in we We acquisitions believe can two the scaled the acquisition to a business strong provide These Hiland by end coming XXXX. close of platform service

Sunriver another On to it's to project able utility clean through want like utilities wastewater in treatment our provide these, services largest a I Oregon. investments reliable and July single into to we and We're wastewater is our new This for announce X-year our we're that that in $XX.X customers put capital and upgrade, Central plant for service safe, front, there. pleased million a wastewater today. water our

I'm based the same to finally, utility the to couldn't XXXX pleased environmental survey. as Cogent we on Northwest reputation. in but performance natural quality, were say And to We gas highest we customer scored of to values all bring proud effectiveness, dedication a Natural has over the country morning, utility is related trusted our focus, of support, and This these highest reliable Escalent. syndicated that in our of businesses. that course, one to community and by strive dedication result, this be announce this West, I'm prouder most XXX brand the study of been communications I and, recognized among

Sach, and morning, anybody this us up joining questions questions. open for thanks if has for that, With we'll it

Operator

Selman question first our from go Akyol Stifel. from So Please Instructions] ahead. [Operator comes today

Selman Akyol

you. Good Thank morning.

me. Just a ones couple for of quick

sort talked you just then might you're and is, you expecting you the when hydrogen, So on place? have And mentioned and $XX.X about out take it you investment some talk the sort you expand of And wastewater, could be million, you to of, you testing that? at results? how maybe it made be? going what And largest is other first actionable? And long could date to when that returns to just in, and turquoise your about of of expect maybe

Kimberly Heiting

I'll Kim a talk bit is our morning. Hi pilot. Selman. This little Rush. hydrogen Good about

That is mentioned a pilot hydrogen asphalt, secondary hydrogen. we're salt with methane be It's that precombustion clean byproduct used is working into you that modern carbon a in material. turns carbon that one then first production. basically the technology capture The can uses on a tire like solid carbon solid and

where sequester seal We, was carbon carbon And sort hydrogen our Sherwood used very of solid in facility small a but that in byproduct. modern using test, it fact, that it small a we and this test completed facility. was slurry a to way took a basically from just at we

be kind year. technology really here And the at that the facility about so product in excited pilot. phase in construction the We're And online or of this later central expecting we're to Portland. our we're

carbon. couple other Carbon X, large experimenting boilers as customers' uses ash that with and ash that is one, existing pearl used partnering our have can it's both we energy again, materials way other emissions. byproduct. a products, to One cleaning pearl technology And a The customers that that technology we're of be And on secondary commercial technologies in reduce sequester called creates the basically a with. and a to the

it company CarbonQuest. concrete And technology technology then blue have final through that we're is like in XX% looking called converts that be carbon at processes can a That The production. facility. captures used gas particular product at a or better manufacturing an COX reduction and to liquid that can

So in all the of piloting phase. these of are sort

when is our capture hydrogen that turquoise believe the other teams have we we've also production. low-emission hydrogen the the a hydrogen analysis, exploring done And analysis, turquoise mimic low-cost carbon the We could reason solution. the cost be that very technologies for

about they're And I've FortisBC in excited we - Canada, also talked hydrogen. turquoise to very

So projects that's get - really update, come. but a These take bit more online excited the and to about progress. the we're to

at is of blending other XX% facility only blending we're the up been our comment our No Maybe fall. pipe hydrogen the own sort our We've or consistently Sherwood stepping equipment XX%. other anomalies fittings I'll equipment. make this own on or to

happy So testing there there surprises the us, nothing to well. and we're going is see that that is

Justin Palfreyman

Good water and returns. This question to the happy answer is morning. on Justin your Palfreyman, wastewater

utilities. just wastewater wastewater investments we that examples projects plant are is an making So and of the of treatment example, across water our one many and Sunriver

roughly the range general, and of XX%. is between In ROEs allowed X.X%

So businesses and business. most maturing cover, getting utility focused our regulated scale consistent on to with water are that you we other

get So ROEs have have under-invested to through out years. takes cases, many in, been the the for cases and with other many us range. line been of time we some then systems earned get been recover these process and in and in in In some situations, making investments, of ROEs those they that regulatory allowed and have rate it our

Selman Akyol

much. Got it. you Thank so

Justin Palfreyman

Thanks Selman.

Operator

questions We any remarks. on hand closing line. I'd David to have no the back for further like to

David Anderson

Selman. appreciate Well, on today, Sach. everybody the joining thank really you call thank for the us and do question, I you,

please if conclude call will material, out. and contact you the additional review you That she'll help have you Thank you. As Nikki questions, directly today. the

Operator

This call. does conclude today's

now may you. your Thank and enjoy disconnect lines, the of You rest your day.

Northwest Natural Holding (NWN) 3 Aug 232023 Q2 Earnings call transcript