Good morning, everybody. I'm Tommy Oliver, Senior Vice President of Regulatory and External Affairs for RGC Resources, Inc. I want to thank you for joining us as we discuss RGC Resources 2023 Second Quarter Results. But before we get started, let's review a few administrative items. We have muted all lines and asked that all participants remain muted.

At the conclusion of the presentation and our remarks, we will take questions. And lastly, the link to today's presentation is available on the Investor and Financial Information page on our website at www.rgcresources.com. So turning to Slide 1. This presentation contains forecasts and projections.

So Slide 1 is the forward-looking statement disclaimer. Slide 2 contains our agenda. We will review our quarterly operational and financial results and discuss the outlook for the remainder of fiscal 2023 with time allotted for questions at the end. I would like to introduce Paul Nester, President and CEO of RGC Resources.

Paul?.

Thank you, Tommy. Good morning, and thank you to everyone for joining us. And I would also like to thank Kelsie Davenport, our Director of Finance; and Jason Field, our CFO, for putting today's presentation together. We're on Slide 3 and we're off to a good start in the first half of fiscal 2023, particularly in our operations in customer service area.

And I would like to mention our Roanoke Gas utility, in particular, has 2 main goals, first goal course is safety, and that's customer safety, employee safety, public safety. And then secondly, customer service. We are here to serve the customer as a public service corporation in the State of Virginia.

I would also like add, I know we've talked about this on previous calls and the chart indicates this with our 336 new services and our 2.7 miles of main extension, we continue to see individual and commercial interest from natural gas.

As you know, there are a lot of headlines, particularly recently with what's going on in New York State about natural gas ban, as contrary to our experience on a day-to-day basis, and we are proud to continue fulfilling that demand with affordable, reliable natural gas. Our customer count is right in line with where we expect it to be.

Of course, the chart shows a little aberration from 2022. You may recall we had the pandemic-related service disconnection moratoriums in 2020 and 2021. And we're now returning and resuming to normal activities in terms of our collection processes. But the customer count is exactly where we expect it to be.

Our main extensions are settling back into more historical norms. You may recall in 2021 and 2022, we had 2 outstanding years of main miles. This year should be tampered down a little bit from those years. But again, more in line with pre-pandemic norms. I will now hand it back over to Tommy so he can update us on our new RNG facility.

Tommy?.

Thank you, Paul. Let's move to Slide 4. As we discussed on last quarter's earnings call, in January, we did receive commission approval of the project and cost recovery through a new rider -- rider RNG. We began billing the rider in March. Construction also concluded in March of this year, at which time we put the project in service.

The project was completed on time and largely within budget. While we have spent some time since commercial operation fine-tuning and sinking the RNG facility with the Water Authority equipment, the RNG facility is operating as designed, and we're very pleased with it. I will now introduce Jason Field, our CFO and Treasurer.

Jason will review the quarterly and year-to-date financial results.

Jason?.

Thank you, Tommy. You can move to Slide 5. Our second quarter natural gas volumes were down, reflective of the mild winter we experienced in the Mid-Atlantic region. Heating degree days in the Roanoke valley were 22% lower than the second quarter of 2022, which resulted in 19% lower delivery of total volumes compared to the second quarter of last year.

Commercial and industrial volumes were similarly lower than the prior year due to the warmer weather. If you transition to Slide 6. The lower natural gas volumes in the second quarter offset the higher gas volumes we experienced in the first quarter.

Overall, our volumes for the 6 months of the fiscal year were 2% lower in line with the 2% fewer heating degree days for the same period in our region. Commercial and industrial volumes were also 2% lower year-to-year compared to last year. If you move to Slide 7, our financial results are highlighted.

For the quarter, our operating income of $9,292,000 was up over $2 million compared to the second quarter of 2022. The increase we experienced was associated with customer growth and the implementation of new non-gas rates on January 1.

Our net income for the quarter was $6,342,000 compared to the net loss we experienced in the second quarter of 2022, which reflected the noncash impairment we recorded at our midstream affiliate on the Mountain Valley Pipeline.

Today, in comparison of our quarter financials and the trailing 12-month results, we've represented our financial results on an underlying basis, which you'll find on Slide 8.

The results of our second quarter net income on an underlying basis was $1,264,000 higher than the underlying income of the second quarter of 2023 -- 2022 excuse me, and that represented a 25% increase from 2022.

The implementation of the new non-gas rates moved a portion of our customer base charge to a volume metric charge resulting in higher revenues in the second quarter. The trailing 12-month underlying net income of $10,116,000 was up $843,000, or just about 9%. Let's move to Slide 9. We experienced continued strong investment in our utility, Roanoke Gas.

Overall, we invested $12.9 million in utility property for the 2 quarters of this fiscal year, and that was up approximately $2.1 million compared to the first quarter of 2022. The increase was primarily the result of the investment we made in the RNG project and other renewal projects.

Paul will now discuss the outlook for the rest of the fiscal year..

Thank you, Jason. We, again, have had an outstanding first 6 months of the year. I'm really proud of our employees and their efforts on several of these significant projects. As Tommy mentioned, the RNG project being on schedule and on budget is a noteworthy achievement. It's obviously a very unique project. The equipment was unique.

The process is unique and -- so for that project to come in on time and on budget is an outstanding result. I would like to make one other note.

One of the things that frequently discussed at the macroeconomic level is workforce and we were no different than others coming out of the pandemic with some retirements and other things struggling to find workforce.

But I would like to complement our human resources and recruiting departments on just doing a really good job in the last 12 months of hiring fantastic quality employees and retaining the great quality employees that we have and we feel like our workforce is in an excellent shape as we move towards the second half of fiscal 2023.

We're going to talk about Roanoke Gas growth in capital. We're going to also give just a brief MVP update and then talk about our earnings per share guidance. Moving on to Slide 11. Jason just reviewed the year-to-date capital. As you can see, we plan to hit about $22 million of total spending this year.

As normal, we will be strong in our renewal efforts in the summer construction months as well as customer growth and some utility maintenance as we get through the remaining 6 months of the year. I'd like to talk about Mountain Valley before we discuss the earnings guidance.

Mountain Valley, the permitting is in progress and in fact, we had a good result at the end of February with the Fish and Wildlife Service, reissuing the biological opinion. The U.S. Forest Service issued their sedimentation analysis in mid-April.

And the managing partner, Equitrans, announced last week on their earnings call, the schedule related to the permits and the project which is exciting. We think the remaining 3 permits, the right-of-way access for the Jefferson National Forest. We hopefully should see by the end of this month, we think, the U.S.

Army Corps of Engineer permit, hopefully, by the end of June thereabout, along with the West Virginia Water Quality Certification. Again, hoping to resume construction around end of June, early July, give or take.

So again, their forecast on that was excellent and something we're much excited about running down a different track, but in the same direction is permitting reform. There's been much press about that over the last couple of weeks, and there does seem to be bipartisan support in the United States Congress for permitting reform in both houses.

It also seems the White House is supportive of that. We were particularly pleased with Secretary Grand Homes letter directly supporting the Mount Valley Pipeline just issued in the last few days. So again, we're optimistic on the project and look forward to hopefully resuming construction here in the very near future.

If you're on Slide 12 with us, that contains our earnings guidance. We haven't changed our fiscal 2023 earnings guidance. And as Jason noted earlier, 2022, that is our underlying number. The effect of the impairments in 2022 has been removed.

We're still expecting about a $2 million loss in the midstream subsidiary, primarily due to interest costs, which are still slightly rising due to the higher interest rate environment and the lack of offsetting income from the Mountain Valley. The rate case is still in progress, and we don't have any indication at this point of the result of that.

We're probably about what would you say, Tommy, about halfway through that process right now?.

Yes..

About halfway. And you may recall, we had the large equity offering in March of 2022, which is diluting us approximately $0.07 per share in fiscal 2023. We haven't issued any 2024 guidance at this point.

We're hopeful that as things again progress through the summer with Mountain Valley that will be in a place maybe by the third quarter to start getting you the investors some indication of fiscal 2024. That concludes our prepared remarks. If you have any questions, please dial pound-pound or ## to unmute your line..

Looking at the good results that you've had in the first half of the year and taking into account your comments on rising interest expenses associated with Mountain Valley and the remainder of the year.

Just wondering, I know that this is a busy -- your commercial industrial customers, one in particular is going to start getting busy probably about now. Just wondering if that could offset given -- it would seem logical they'll be burning a lot of gas through the summer months given where gas prices are..

Yes. Thank you for the question. And maybe let's talk a minute about gas prices. There was actually a large article in the Wall Street Journal today about gas prices and how the producers, in particular, are not holding back on -- on the drilling and production because they see that there's going to be a future rise.

But at the moment, gas prices are in the low-to-mid $2 per dekatherm range, which is approximately 1/3rd of where they were last year's this time. So that's fantastic for our residential and commercial customers.

But to your question, Mike, certainly, some of our commercial customers, which we have several who are in the building supplies sector and who use natural gas as a part of their process should benefit greatly from those low prices, and we do expect them to take advantage of these low-cost energy prices this summer. So we are looking forward to that.

We don't have an exact forecast on the usage at this time, but we do expect it to be pretty solid..

Okay. And then you had mentioned you're about halfway through process.

Are you expecting to wrap that up, I would think, right at the beginning of '24 then -- fiscal '24?.

Mike, it just depends on how that plays out. Staff files their testimony in late August. We follow rebuttal about 3 weeks after that. And depending on how it plays out, it's important to note that we don't have an intervener in the case this year. So I think, settlement is a good possibility.

And if that happens, hopefully resolve it well before the beginning of next year. Otherwise, if it goes to a full hearing, it will probably be early next year before it's resolved..

Great quarter, guys. Looks great..

Thank you, Michael. So nice to have you with us. Does anyone else have any questions? If so, dial ## to unmute your line? We'll stay on for just a few more seconds here to see if anyone else has any questions..

All right. Well, hearing no other questions, that does conclude our second quarter earnings call. We're so delighted to have you with us, and we hope everyone has a wonderful week. And we look forward to joining you again in August to discuss our third quarter results. Thank you..