Thank you, Tom. Good morning and welcome to our fourth quarter 2020 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.

In addition, some of our comments today, reference non-GAAP adjusted measures. For a complete reconciliation of these measures and other cautionary statements, please refer to the language and reconciliation at the end of our press release.

We expect to file our 10-K later today.

Well thanks, Nikki, and good morning everybody and welcome to our 2020 year-end call. Well, years come and go, but 2020 as we all know was unforgettable.

The pandemic affected many aspects of our daily lives, and I'm proud of the way our employees pulled together to provide our customers with superior service. We successfully navigated a number of challenges while still achieving our key financial and operational goals.

We report net income from continuing operations of $2.30 per share for 2020, that's driven by solid performance at the gas utility and a strong contribution from our new platform of water utilities. On the gas operations front, our field crews successfully handled everything from wildfires to restoring service in several towns over Christmas to navigating COVID, social unrest et cetera.

Just a few weeks ago, our employees in the natural gas system once again rose to the occasion and provide a reliable service through an extreme weather event. Our storage facilities and overall hedge positions worked to mitigate the amount of gas purchased on the spot market and help to minimize the impact to our customers’ bills.

This was incredibly important as prices as everybody knows spiked across the country from the widespread cold snap. Our balance sheet remains strong with ample liquidity.

In 2020, we also executed on one of the largest capital programs in the company's history aimed at supporting reliability. We continued to operate one of the most modern and tightest systems in the nation a system that is has no cast iron and no bare steel.

In 2020, we invested over $270 million in our natural gas infrastructure. From an economic perspective 2020 was truly unprecedented.

Prior to the pandemic, we had a very fundamentally sound sustainable growing economy with record low unemployment both nationally and in our service territories. We continue to see economic recovery and steady growth in several important areas.

Portland's unemployment right now is 6.1% actually in December actually essentially matched with the national rate that's down from a 14.9% high in April. Single-family housing activity remains strong.

In the Portland metro region home sales were up 8.3% from 2019 with price growth of about 12%. And new single-family permits issued last year were up 4% compared to 2019 levels.

Thank you, David and good morning, everyone. I will begin by discussing the financial impacts of COVID-19 and the highlights of the fourth quarter and full year 2020 results.

And then conclude with guidance for 2021. In 2020, our utility commission's approved COVID deferrals and term sheets that outline the types of revenues and costs that may be recovered.

These include PPE, bad debt expense, financing costs associated with additional liquidity and certain loss revenues. Direct expense reductions such as lower travel and meals and entertainment are to be netted against the deferral.

Prudency review and recovery of the deferral accounts will be determined in future proceedings. While our business model is resilient, we are experiencing some financial impacts related to the pandemic.

Through December 31, we incurred an estimated $10 million pre-tax of incremental costs and lower revenues due to the effects of COVID-19. Of this $4.8 million were deferred to regulatory accounts.

In addition $1.3 million of late fee revenue that has not been charged to customers since the suspension of normal collection processes will be recognized in a future period when we begin to recover the foregone rates. The remaining $3.8 million that cannot be recovered through rates are primarily due to lower natural gas utility margin from customers that stopped service and slightly lower usage from customers that are not decoupled.

In order to further mitigate the financial effects of the pandemic, we initiated temporary cost savings measures which provided approximately $3.5 million of savings in 2020. In summary, the total P&L impact of COVID in 2020 was $1.6 million.

Turning to our detailed financial results. Note I'll describe earnings drivers are on an after-tax basis using the statutory tax rate of 26.5%.

Also note that year-to-date earnings per share comparisons reflect the successful issuance of 1.4 million shares in June 2019 as we raised equity to fund investment in our gas and water utilities. As a reminder, Northwest Natural’s earnings are seasonal with a majority of revenues and earnings generated in the first and fourth quarters during the winter heating season.

For the quarter, we reported net income from continuing operations of $45.8 million or $1.50 per share compared to $38.3 million or $1.26 per share for the same period in 2019.

All right. Well, thank you, Frank.

While the past year challenges, our focus remains the same providing superior customer service maximizing returns from our strong and growing regulated natural gas utility and diversifying our business by investing in the water sector. We made progress on that last front with the sale of two investments that were no longer central to our strategy.

In August, we sold our interest in the trail west pipeline project and in December we completed the sale of the Gill Ranch Storage Facility in California.

Hey, everybody good morning. How are you?

Hey, Chris.

David, can you talk a little bit about the Texas crisis and how you think that will help with the electrification diversification, decarbonization, education process that you seemingly have to go through with municipalities and legislators today?

Yes, Chris, thanks for the question. And as you know Texas is my home state.

So I really my heart goes out to what that all the -- all that took place down there. And it's a very, very sad situation.

But with that said, I think we all need to make sure that we look at that. And we learn from that.

I think it proves a point that I've been making for a long period of time is you need to have resiliency of systems and redundancy in systems and not have all your eggs in one basket. I'm a big fan of electricity.

It's where I started my career. But the natural gas infrastructure is also a critically important aspect of that.

And I think when you apply it to even our current region Chris, we had some very severe electric outages up here. And the electric company worked very hard and diligently to get everybody on.

But if you had natural gas, you had the ability to have your gas fireplace work. You had the ability to have cooking in place.

And I know in my own household that was greatly appreciated. So it is my hope that we all learn from these.

And we understand that the infrastructure that is -- that's in place. I don't -- I'm not as close to Texas Chris anymore, as I used to be 17, 18 years ago, but I do know in our region, I want to make sure policymakers are making good decisions and ensuring that we are prepared for those events because they will happen.

If you believe in climate change it believes which I do. It shows that extreme weather events like this are going to continue to happen.

So we need to make sure that we're doing all we can to provide these services to our customers so that they stay warm on those coldest days.

In Washington, the electrification bill that failed, you probably had some kind of interaction with that group of legislators. Were they well educated at the point that they brought that bill?

Well, the bill was brought by a freshman legislator, so he was brand new to the process. And I -- I'm not going to guess whether he was educated or not, but I will tell you, like a lot of times what happens is bills are put in the hopper, and then things are figured out after they’re put in the hopper.

And once that happened, there was a tremendous amount of pushback on the bill everything from building trades, electricians, gas unions, business and industry associations, grocery stores, some buildings, restaurants, utilities that kind of pointed out that the bill as it was currently written was really probably not a good outcome for the region. And I think once more people started looking at it, then they decided not to move the bill forward at this time.

So I'm cautiously optimistic, Chris, that that will stay that way. You mentioned the word dead.

I don't think bills are ever dead. But I think at this juncture, it does look like it's not going to move forward.

Okay. David, you're also saying that Europe is much further ahead on the hydrogen side than we are.

I was going to ask you when you thought we'd get a lot of hydrogen data. So companies could start to make some decisions on the hydrogen investments.

But really, why is -- why are pilots necessary here at this point, if there's a lot of information from Europe available?

I'll start and then I want to turn it over to Kim Heiting to talk a little bit more about what she saw in Europe. But I will tell you, Chris, I'm old enough to be here when the electricity went renewable.

And we did -- we had wind and solar down in Texas. And the only way that the electricity system got to where it is today, with the amount of renewables is with policy support.

And that's what we need here in this country. And I think Europe is ahead of us, because they had policy support, I think they went down the path of electrification figured out pretty quickly or maybe not quickly, but figured out that that was not a doable path, I think they understand the value of the gas infrastructure.

So I think there's a little bit of an education process here Chris to work with policymakers to make sure that they understand the energy systems. The importance of those energy systems going forward and that these energy systems can be clean and green if you will.

But Ken anything you would like to add on to that?

No, I think you've covered it well. I mean, you had asked, why do we need pilots?

Well, part of our challenges, we need that policy overlay to accelerate bringing these technologies that are proven to scale. And that's one of the areas of focus for us in the Eugene project that we're working towards with Eugene water and electric board and Bonneville Environmental Foundation, trying to make sure we can demonstrate what the technology here the methanation technology that's already being applied in Europe and beginning to be applied in Canada, so that we can then ask for that next step, which is really that that policy overlay.

I mean, David mentioned on the federal level, there are things here on the state level that we would like to see over time treatment of methanation equipment or electrolyzers, as we do batteries, and in our rate contracts. So lots of I think possibilities and we're certainly very pleased to see the level of interest now around RNG and hydrogen for the gas networks and we expect that to only grow.

Okay, one last question. As far as the RNG announcements that you had earlier in the year, should we be expecting a stream of these types of announcements from you guys?

I had a -- Chris when we look at what we've been doing as a utility to do everything we can to decarbonize our system and we've got the tightest system in the country, we've been working with our upstream producers to lower their footprint or only buy from responsible producers. The last piece of that pie is to decarbonize the product going through our pipe and we will move aggressively on this front to do all we can along that line.

So I hope the answer is yes to your question is that we would like to get as much renewable product on the pipeline as we possibly we can.

Okay, thank you very much. Appreciate the color.

Thanks Chris. Have a good weekend.

You too.

Thank you. Hello, hope everyone is doing well.

A couple of quick things, I mean, first of all, can you just make some comments in around how the water assets performed in Texas?

Yes, I think I will start and then Justin Palfreyman, our President of Water is on. In general, we are very pleased with our Texas assets.

And we're trying to add more of those assets as we possibly can and COVID, as I mentioned in my prepared remarks has kind of slowed down the acquisition activities just for safety reasons on both sides of the table. But Justin, you want to talk a little bit I know a lot of people saw the freeze-offs and things like that and give an update on what we saw on our operations.

Yes, absolutely. Our Texas water operations were impacted similarly to many other utilities last week.

However, our team reacted very quickly, there were power outages that affected some of the service and resulted in some freezing over and bursting pipes within about half of our overall systems and affecting about half of our customers. We were able to restore water service generally within 24 to 48 hours on our systems and get customers back online very rapidly relative to most of the other utilities in the state.

So we're very pleased to see that response from our team down there.

Great, thank you for the update. In your opening comments, you referenced, I guess increased gas demand as well as prices in the first part of the quarter with the cold event, no reason for us to be anticipating anything from needing relief from a regulatory standpoint or anything in terms of incremental bad debts or anything of that nature?

No, Selman we got ahead a little bit before the rest of the country did with the system, and we did get pretty cold but not like not like Texas and Arkansas did. But we did have some additional purchases and things like that.

But we also had some things that offset that; our storage facilities worked fairly well. And so we're in good shape.

So we're not in a situation that some of my peers ran with the unprecedented liquidity issues that they've had to finance; we’re in good shape.

Glad to hear that. And then just the last one for me.

You guys referenced testing 5% hydrogen blend at your training facility. Can you just talk about how that's going on pipes leakage anything to be noteworthy coming out of that?

Kim, do you want to take that?

Yes. Yes, we're really pleased last fall and -- well, I should back up when we when we took our trip to Europe, we were really amazed at the level of specificity and kind of where they were with their testing protocol.

Fast forward, we started to build out our own blend test protocols. And we're starting in our training facility in Sherwood Oregon, we have several buildings there, that's kind of our training town we call it.

So it's a really good spot to do this kind of testing. So last fall, we began the 5% blend and we were really focused on looking at leakage detection equipment and the performance of that equipment.

We were really pleased. We also purchased a hydrogen blending leak detection piece of equipment to test that performed as expected.

We've now moved on to testing the blend on end use equipment. So fireplaces, water heaters cook top.

And that's far we haven't seen anything unexpected, we've been really pleased. So we're building out this testing plan for the rest of the year.

And our goal is to be serving the entire facility with that 5% blend by the end of the year. We're also working with others in a high deploy organization where we're sharing technical data is a huge database, really, companies internationally that are doing hydrogen blends doing some technical analysis, not just on the pipes and the components and the end use equipment, but also on the effects of different blends in the storage facility.

So we're taking all those learnings and applying those into our plan. I think the final step we see is something probably in the near-term is to begin doing system audits on our system to look at where our great locations for blends at different percentages based on the characteristics of the pipe and maybe the areas that we're serving.

So lots going on a lot of exciting work and we're staying close to our peers who are also collaborating with us.

And that's all in the blend that you might just mentioned about methanoate . But the difference between the ?

Yes, we see three dimensions there are three applications of hydrogen. Obviously blending, we think the blending will probably be kept between 20% and maybe 30% at the very high end, before you have issues with any equipment or pipe components.

Then of course dedicated hydrogen systems, think about it the two industrial facilities or even over time to two new communities which they are testing in the U.K. And in that case, you obviously have pipe and components and equipment that were built specifically to deliver in this hydrogen, you don't have any limitations on the amount of hydrogen you can put in the pipe.

But the one that I think we're really interested in the near-term is methanoation of hydrogen because you can take waste CO2 from an industrial facility or a power gen facility. Apply that to the power to gas process and methanoate that hydrogen at that point, it is interchangeable with conventional natural gas molecules.

You can also use biogenic sources. So let's pair a renewable natural gas facility with an electrolyzer and, and create methanoated hydrogen.

And so we believe that all of those applications will be in play. And there's advantages to each one of them that we see being critical paired again with renewable natural gas to get us to that carbon neutrality in 2050.

And we're right now doing some scenarios around what kind of components of those different tools will be necessary and planning around that.

Got it, and I got to apologize. I'm just going to ask one more.

But in your comments, you talked about, I guess, government policies and support. And I'm just wondering David with anything with your AGI Chairman head on is there anything you can talk about plans from there to maybe help that along?

Yes, Selman, thank you. I mean, the policy support, I think, can come in various ways.

I mean, number one, you can see what we did here in Oregon, with a renewable natural gas bill, what we call Senate Bill 98. So I think there's opportunities at the federal level to hopefully do something like that.

But yes, that is one of the reasons I agreed to serve as the AGI Chair this year is to help drive some of this support. Now support can come in the form of tax credits and things like that.

But it can also come in the support of other ways of helping the industry move forward. I'm pleased to see the Biden administration has mentioned hydrogen in some of the discussions they have had.

I was on a speech call the other day with speaker excuse me, leader and I pointed out some of the issues that we need to have to kind of transition in this system. So as Chris asked me about Texas, again, I hope this is an opportunity for all of us to kind of look forward and say how do we build the most resilient energy system we already have in this country?

How do we make it better? And how do we make it cleaner?

And I think there's just a great opportunity at the federal level. And I would argue at the state levels too.

I think we need to continue activities in all the states and specifically the states that I'm part of here to continue to move in not only the state level, but at the federal level, whatever we can to support this transition.

Thank you once again.

Thanks Selman.

Well, thanks, Tom. And thanks to everybody for joining us on a Friday.

Thanks for those great questions, by the way. But if you have any questions Nikki Sparley, which you've got her contact information as your as your point of contact and on the media side, Melissa Moore both of their information is in the press release.

And with that, we'll go ahead and sign-off and everybody have a great safe and warm weekend.