Good morning, and welcome to RGC Resources 2023 First Quarter Earnings Call. I am Paul Nester, President and CEO of RGC Resources. Let's review a few administrative items. At the conclusion of the presentation and our remarks, we will take questions. The link to today's presentation is available on the Investor and Financial Information page of our website at www.rgcresources.com. Joining me this morning are Jason Field, Chief Financial Officer; Tommy Oliver, Senior Vice President of Regulatory and External Affairs; and Kelsey Davenport, Director of Finance. Moving on to Slide 1. This presentation does contain forecasts and projections, and Slide 1 has our forward-looking statements. The agenda for today's call is on Slide 2. As usual, we will review operational and financial highlights from the first quarter, talk about our fiscal 2023 outlook, and again, we'll be happy to take questions at the end of the call. Moving on to Slide 3. We continue to have good customer growth. You'll notice that the bar chart shows a slight decrease in customer count from 2021. You may remember, as we've discussed extensively since 2020 about the moratorium that was imposed on utility disconnects and the effect it had on our customer counts. In March of 2022, we were able to resume our collection processes for nonpay turnoffs. Consequently, as we've gotten into the colder weather this winter, we have been able to re-add some customers. Our total customer count is just under 63,000. We're really happy with that number. We fully expect to go over 63,000 here in the coming months. We had a good first quarter, adding new services and main extensions, with another 1.1 miles of main. We believe that the housing development in the Greater Reno Valley is still strong. We expect again this year to add approximately 500 to 600 new customers. Jason, walk us through our delivered volumes, financial statements, and capital spending for the first quarter.

I would be happy to, Paul. Thank you. We are on Slide 4. Our first quarter delivered volumes were up approximately 620,000 decatherms compared to the first quarter of 2022. That's a 23% increase due largely to the colder-than-normal weather compared to a year ago. Heating degrees overall were 31% greater than last year. Additionally, we continued to benefit from an increase in transportation and interruptible volumes due to our single multi-fuel customer that has continued its higher natural gas utilization during the quarter. Moving to Slide 5. Our financial results are highlighted. For the quarter, our operating income of $5.544 million was up from the previous year by approximately $166,000. Operating revenues adjusted for normal weather were up, while non-gas operating expenses for the quarter exceeded the prior year due to higher expenditures for contracted services, bad debt expense, and personnel costs. Interest expense for the quarter was higher compared to last year due to increases in rates on our variable rate debt, primarily in our midstream affiliate. Overall, we saw a reduction in net income of approximately $329,000 compared to the first quarter of last year. On an earnings per share basis, we recorded $0.33 per share, which was down about $0.10 per share, and that was a result of the dilutive effect of the equity offering, which occurred in March of 2022 and the small reduction in net income. The comparison of our 12-month operating results ending December 31, 2022, is difficult due to the impact of the impairments that we recorded in our midstream affiliate relative to the Mountain Valley Pipeline. We've adjusted for that impairment on Slide 6. If you move to Slide 6, you'll see our underlying net income, which removes the after-tax impact of those impairments and reflects the underlying net income of $8.851 million. As you recall, we recorded those in the second and fourth quarters of 2022. This result is down $112,000 compared to the 12 months here in 2022. Overall, we're pleased with that financial performance. Our management of costs in this inflationary environment was strong, and we feel like we did a good job with that. We'll discuss a little later the non-gas rate case filing which we filed in early December, which we expect to alleviate some of those cost pressures through the remainder of the year. If we transition on to Slide 7, you'll see that we experienced strong investments made by the Roanoke Gas utility for utility property in these first 3 months of the fiscal year. Overall, we invested approximately $7.5 million in utility property, which was up compared to the first quarter of last year by about $1.8 million. This increase was primarily the result of investments made in the RNG project and SAVE eligible renewal projects. Paul and Tommy will now discuss the outlook for the remainder of fiscal 2023.

Thank you, Jason. I'd just like to make one comment about the first quarter before we review the fiscal year forecast. I'm really happy with our Roanoke Gas operation and the overall quarter we had, but I'm incredibly thrilled and proud of the efforts in mid-December leading up to Christmas with the extreme cold weather event that we had in our part of Virginia. Our folks and teams performed exceptionally well. We did not lose a single customer, and that's something we are very proud of and happy about. So as we look at our 2023 forecast, we will review the capital investment projection for the full year. Tommy is going to give us some further details on our non-gas base rate case filing. We'll talk about our earnings per share projection, and Tommy will conclude with a nice update on our RNG facility project. Moving on to Slide 9. You can see we are still leading our capital investment with $6.8 million of SAVE spending. Just a little comment there: Tommy is going to talk about this in a minute, but that's renewal spending essentially. In other words, we're still renewing pre-1973 Adelaide plastic pipe. That's been about our annual spend for the last 3 or 4 years. We're going to continue on that trajectory through the remainder of this year. I actually have a couple of other noteworthy projects in addition to the RNG facility that I'd like to update you on. We're in the process of doing an Enterprise Resource Planning system upgrade. We're projected to spend about $1.4 million on that this fiscal year. Our old system is at its end of life. It's actually 30 years old. It's been very good, but it's time for us to modernize and get a new tool. Our teams in finance, IT, and operations are working on that project right now. We're going to invest about $1.7 million in the Carilion and Virginia Tech, Carilion Medical School area to support the growth that continues down there. There's a new addition to the Reno Memorial Hospital, and the medical school is also building another building. We're going to put a large 8-inch plastic main to reinforce the distribution system in that part of downtown Roanoke. We also have approximately $2 million in Virginia Department of Transportation-related projects. What those are is, our General Assembly over the last 5 years, in particular, has resumed funding for important and necessary road infrastructure projects. We have a pretty major bridge replacement occurring as well as some other road maintenance that requires us to relocate existing gas mains. We'd like to take those opportunities to make the mains either larger for more capacity or, in fact, safer. The bridge mains is an example; we're going to be putting that main underground instead of hanging on the bridge as it presently does. So again, those are good projects, good for the community in terms of transportation, but also good in terms of making our system safer and more reliable. Tommy, please give us a few details of the recent rate case filing.

All right. Thank you, Paul, and good morning, everybody. We are on Slide 10. As we mentioned in our earnings call from last quarter, the company filed for a rate increase with the Virginia Commission in December of 2022. We put those rates into effect on an interim basis on January 1, 2023. We requested an increase in non-gas base rates of approximately $8.55 million, of which approximately $4.500 million is being recovered through the SAVE. Since we are now collecting costs associated with our SAVE plan through interim rates, we did terminate our SAVE Rider effective January 1. As Paul mentioned, we continue to spend on renewals, but those costs will be recovered through our base rates. We will be filing for approval of a new SAVE plan later this year for rates to become effective October 1. The increase in non-gas base rates will result in the average monthly residential customer's bill increasing by $5.78. Since early winter, natural gas commodity prices have been declining and are currently below $2.50 per decatherm for the prompt month. We started incorporating these lower gas costs in our gas rates on January 1, and again on February 1. As a result of these adjustments, customers are now experiencing an overall decrease in their bill of approximately 19%. With the roll-in of our SAVE year capital spend of approximately $22 million, our total net rate base coming out of the rate case will be approximately $190 million. Paul will now discuss our earnings outlook for the remainder of the fiscal year.

Thank you, Tommy. And just as a reminder, we last filed for a non-gas base rate increase in October of 2018, which the commission finally ordered in January of 2020. So it's been about 3 years since the last rate case. Okay. We're on Slide 11, and we haven't changed our EPS guidance from the last quarter for fiscal 2023. And again, as a reminder, fiscal 2022, as Jason mentioned earlier, is adjusted for the non-cash impairment loss recorded in the midstream subsidiary. For 2023, we are projecting a $0.20 per share loss in the midstream subsidiary, primarily due to interest costs, which have increased greatly due to the higher interest rate environment and the lack of offsetting operating income from the Mountain Valley Pipeline. Just as an update, the MVP joint venture is presently working with the respective agencies to have the needed permits reissued so that construction can hopefully resume in the very near future. Roanoke Gas, as you can probably tell from our update, is on track to have another solid year, certainly pending the outcome of the rate case and other general economic factors. We would like to note that the dilution effect from the March 2022 equity offering approximates $0.07 per share. We'd like to conclude with what's really one of the great stories probably in the history of this company, and it will probably get greater as we continue to move toward ultimate project completion and end service, but Tommy, please give us an update on what's happening with our renewable natural gas facility project.

Sure, Paul. We're on Slide 12, and we've been discussing the RNG project for some time now, and it has finally come to fruition. We did receive commission approval of the project and approval for cost recovery through a separate Rider in January of this year. We're working on the administrative approval of the rates and tariff for the project, and we expect to have everything in place to start billing March 1. Rates will be designed to recover the costs associated with operating and maintaining the facility as well as a return on the $7.7 million investment. Construction has been progressing largely on time and on budget, and we expect that the project will go into service in March as well. As a company, we've been working on this project for about 2 years, and we are very pleased with the outcome. I believe the quote from the commission's order summarizes the project well. The commission stated that the Roanoke Gas project has the potential to achieve a rare combination of increasing local fuel supply, reducing greenhouse gas emissions, and increasing the utility's profit while also lowering customers' rates. I'll turn it back over to Paul now.

Yes. Thank you, Tommy. It really is a credit to Tommy and his team and the other folks in the company that supported the application process with the Virginia State Corporation Commission. It is, in fact, the first such approval of a project in the state of Virginia by a gas utility, and we haven't done the finite research, but possibly, it could be on the East Coast of the United States. I'm very proud of receiving that order and what it means to our company and the community. Our partner on the project, the Western Virginia Water Authority, has done a fantastic job, and we're so pleased to have them as a partner on the project and look forward to turning the switch on Tommy here in about 45 to 60 days. That concludes our prepared remarks. How are you today?

I'm seasonably warm.

It feels more like North Florida here in Southwest Virginia. Today has been very warm. In fact, as we close the books for January, it was about 240 heating degree days warmer than usual, making it one of the warmest Januarys on record. February has continued with that trend. These are not favorable gas days, but rather construction days. We strive to excel in all weather conditions.

I only really had one question: You spend a lot of time on the R&D facility. I'm just wondering, once you get past this one, which is a couple of weeks away, is there anything else out in your geographic footprint you're looking at doing in terms of renewable projects in general, not just RNG, but anything else you might see?

Mike, we've been contacted by a couple of organizations that are looking at RNG projects in the area. Some want to just inject into our system. We're in conversation with them. Others want us to run pipes to interconnect them, and we're evaluating all that and will make a decision based on the economics once we have to make that decision.

Okay. Does solar have any benefit for you given that you're in a very mountainous region? Does it make sense?

Yes. There has been some movement, Mike, in the last, I would say, 2 years, primarily by the big electric companies to site some solar facilities in this region. If you find an appropriate piece of ground that's southernly facing, it probably makes sense. But you're right; those pieces of ground are fairly precious in our area due to the mountainous terrain. We have not spent a lot of time looking into solar since we put the solar facility on our headquarters building back in 2021. But Tommy made a good comment a moment ago: now that we're coming out of this RNG project, it's going to give us some time and opportunity to explore some of those other options.

Okay. Yes, that's pretty much all I had. I hope it turns colder for you.

Well, thank you. We wouldn't mind having a little more cold weather before winter officially leaves. I'd only add one more comment to your solar question, and there's press to this. This is not per se my opinion, but like we've seen with the Mountain Valley and other infrastructure projects, the solar projects in this area that are being proposed by our electric provider are facing stiff opposition to get permitted and cited. It's almost impossible.

Well, I wish you the best on that Valley. It'd be great to see them actually get back in the field.

Yes, that's our desire too. There's no question that completing the project in a timely fashion is of utmost importance to this region and to our country at large. We need to get the right of way restored and also focus on the most environmentally responsible thing, so we're doing everything we can to advocate and help push that along.

Thank you, Mike. Thank you for being with us today. Do we have any other questions? Well, it doesn't look like we have any other questions today. We would like to thank you again for being with us. We certainly hope you have a safe and pleasant weekend. And this concludes our first quarter earnings call. We certainly look forward to being with you again in May to discuss our second quarter results. Thank you.