Good morning. Thank you for joining us as we discuss RGC Resources' 2023 Third Quarter Results. I am Tommy Oliver, Senior Vice President of Regulatory and External Affairs for RGC Resources, Inc. I am joined this morning by Paul Nester, President and CEO of RGC Resources; and Kelsie Davenport, our Director of Finance.

Before we get started, I want to review a few administrative items. We have muted all lines and asked that all participants remain muted. The link to today's presentation is available on the Investor and Financial Information page on our Web site at www.rgcresources.com.

And lastly, at the conclusion of the presentation and our remarks, we will take questions. So, let's transition over to slide one. And all note that this presentation contains forecasts and projections. So, slide one is the forward-looking statement disclaimer.

On to slide two, which contains our agenda; during the presentation, 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.

Over to slide three, our main extensions for the year have totaled 3.1 miles, and we have added, which is really reflective of the great construction weather we've experienced in the Roanoke area, and we have added 464 customers through the first nine months of the fiscal year.

Our customer counts in the graph on the right-side of the slide represent a steady increase in total customers since 2020. You've got to be mindful that customer counts for 2021 and 2022 were impacted by the state-mandated service disconnection moratoriums that occurred during parts of 2020 and 2021.

Overall, our collections have improved, and we are experiencing collection activity which largely resembles pre-pandemic results. Our bad debt expense for the nine-months is approximately $223,000 less than this time last year.

So, we're on slide four, which shows our delivered gas volumes, which were lower than last year largely due to warmer weather compared to third quarter of 2022. Heating degree days were 6% lower, which resulted in 3% lower delivery of total volumes compared to third quarter of last year.

Slide five, for the first nine months of the current fiscal year, gas volumes are lower, again, largely due to fewer heating degree days. And commercial and industrial volumes were also 2% lower than year-to-date last year. I'm now going to turn it over to Paul Nester, President and CEO of RGC Resources, who will discuss our financial results..

Thank you, Tommy, and good morning and thanks to everyone for joining us today. We are on slide six. The third quarter operating income increased $158,000 or 9.6% to $1,798,000.

This [isn't] (ph) obviously an improvement over the third quarter of 2022, this increase was primarily driven by the interim base rates that we implemented, on January 1, in addition to our investment in the RNG project, and Mountain Valley Pipeline AFUDC. We're going to talk about Mountain Valley a little bit later in the presentation.

One thing to note on slide six, our interest expense is under pressure due to the rising interest rate environment. We still have a floating rate debt supporting our Mountain Valley investment, and it is subject to rising interest rates. Our net income for the quarter was $687,000, up approximately $94,000 compared to the third quarter of 2022.

And this did include $519,000 of the non-cash AFUDC related to Mountain Valley returning to full construction, in June, 2023. To aid in the comparison of our trailing 12-month results, which includes impairments recorded on our MVP investment in fiscal 2022, we have represented our financial results on an underlying basis, on slide seven.

The 10% increase that we see on slide seven for trailing 12 results of $955,000 really reflects two things. First, it's execution on the Roanoke Gas organic growth strategy. Tommy just covered our volume deliveries and our main miles, and our customer additions. We just continue to have excellent results in our operation on all those fronts.

We're still investing in rate base; Tommy is going to cover that in just a minute, and customer growth. And again, we had a nice strategic investment in a new technology which is reducing emissions in our RNG facility. And then the second piece of that earnings change is the non-cash equity earnings from the Mountain Valley investment.

Tommy is now going to review Roanoke Gas' year-to-date capital spending, as well as our capital spending projection for the remainder of fiscal 2023..

Thank you, Paul. And we're on slide eight. We continue to execute our 2023 Roanoke Gas capital investment plan with $19.4 million in utility property, which represents an increase of $1.9 million compared to 2022. The increase is primarily the result in the investments we made in the RNG facilities completed, and to make it operational.

Turning to slide nine, where we're going to review the outlook for the remainder of the fiscal year, including Roanoke Gas' capital budget forecast, provide an outlook for RGC Midstream, and provide updated guidance for 2023, as well as provide initial guidance for 2024.

So, on to slide 10, we anticipate approximately $4.5 million of additional spending on utility plant for the remainder of the fiscal year, for a total of approximately $23.9 million for the fiscal year.

You may notice that amount is higher than the second quarter forecast, in May, due to anticipated spending in the fourth quarter for the Roanoke Gas interconnections to the Mountain Valley Pipeline. I'm going to turn it over to Paul now..

Yes, thank you, Tommy. Due to the passage of the Fiscal Responsibility Act, in early June, and all the permits that were completed and issued, subsequent to that, Mountain Valley did resume full project construction at the end of June for the first time in several years.

As you all know, the Fourth Circuit issued a couple of stays, in early July, but the Supreme Court of the United States, on July 27, granted MVP's application to vacate those stays and forward construction resumed immediately. We are grateful for the Supreme Court's swift action and assistance in this matter.

So, as a result, we have revised our midstream forecast for 2023 and '24 as shown on slide 11.

These numbers do reflect AFUDC related to project construction, which we expect to see each month, beginning in July and concluding with in service Equitrans Midstream, the MVP is managing partner, is still projecting that the pipe will be completed and in service by the end of calendar 2023.

I do want to follow-up on Tommy's comment about the Roanoke Gas interconnections. Those have been on hold with the various permit and construction delays.

But now that the project we believe is going to be completed in the next four months, we are resuming our construction of those interconnects and really look forward to having to those in service and delivering gas into the Roanoke Valley.

Before we conclude with our earnings per share guidance, Tommy, would you mind giving us a few updates on what's been happening in the Roanoke Gas regulatory environment?.

Certainly, Paul, and as you've made -- remember we've been fairly active on the regulatory front. We have three formal proceedings going on. And I'll with the SAVE plan. You may recall, we discontinued billing the SAVE rider effective January 1, 2023. We rolled in the investment we were making through the SAVE plan in the base rates.

And, we are recovering these investments or the return on those investments through the interim rates that went into effect January 1. From the first quarter -- second quarter -- I am sorry, this fiscal year, we filed a new SAVE plan with the Commission. And on July 7, the Staff filed its report.

In which, it recommend approval of our five-year plan which includes about $1.50 million in capital spend. We expect the final order in that case in September of this year. We will start billing that October 1, 2023. The RNG proceeding, we began billing our initial rate on March 1, 2023 at the same month it went operational.

But we had to file for an update of the rate. And we did that I believe it was May 2023 for a rate that will become effective 10/01/2023. And that's to align it with our fiscal year. This past Friday, August 4, Staff recommended approval of that rider update. So, we expect [indiscernible] as well in September.

And the rate case, we filed at December of 2022. And that's still progressing through the audit phase. Staff has been very through and diligent in asking a lot of good questions. And we are expecting their testimony August 23 and will address it either with rebuttal and/or a settlement perhaps.

And we will have a final order -- I am sorry, the hearing is scheduled for October 4 and a final order sometime after that..

Yes, thank you, Tommy, just really outstanding results coming out of the regulatory area this year. And again, we think that's again a reflection of just the way the utility has conducted itself and does business over a long period of time. And so, we are pleased with those outcomes.

So, our earnings guidance on slide 12 does reflect the change in the Mountain Valley status certainly in 2023, as well as again assuming essentially a January 1, 2024 in service, so 2024 forecast has AFUDC for the fiscal first quarter [indiscernible] November–December. And then, operating income from the joint venture January through September.

The range is a little wider than maybe you have seen in the past. But we think that's appropriate again based on the outcome of the rate case in particular. We are on track particularly in the utility. The utility as we've discussed at length today is doing wonderful. So, we are on track to have another solid if not great year.

With that, that concludes our prepared remarks..

[Operator Instructions] Okay, we'll wait just a few more seconds to see if anyone has any questions..

Good morning, everyone..

Okay, it sounds like we've got one coming through. Go head..

Hey, Paul, it's Mike Gaugler with Janney Montgomery Scott..

Hi, good morning. How are you? Thank you for joining us..

I am doing well, sir. I'd ask how you're doing, but I think I already know. Just one question, and look, I realize it's early days and I'll probably ask this question next quarter.

But with all the positive developments on gas supply now, just wondering are you getting any inbounds from either real estate developers or potential new industrial or commercial customers, just in general, about locating to Roanoke now that the good news is out?.

Yes, Mike, thank you for the question. Yes, I would broadly characterize your question as economic development. And I would say, in a general sense, there is slightly more inbound. And what we mean by that, we've actually had good inbounds historically for the last six to 18 months.

One of the limitations on those inbounds has been the lack of certainty around Mountain Valley completion.

So, with the recent bipartisan support in Congress and the signature by President Biden, and the FRA, and the Supreme Court's very quick and decisive action, we do feel like we have certainty now on the completion, and that is giving a boost to our economic development, both in terms of their ability to pinpoint when we believe the gas in Mountain Valley will in fact arrive.

So, it's a great question. I think there's going to be more inbound to come, particularly with the certainty of the supply. The pricing is low; it's the cheapest gas, certainly in the United States, maybe even the world. And again, it's going to be plentiful coming through that 42-inch pipe, delivering two billion cubic feet a day.

So, we are very excited about the future economic development front here in the Greater Roanoke Valley, and Franklin County..

All right, gentlemen, well, that's all I had. And congrats on the MVP decisions..

Well, thank you. Thank you very much. Do we have any other questions? [Operator Instructions].

Okay, hearing none, this concludes our third quarter earnings call. We again really appreciate you taking the time to join us, and we really look forward to being with you again, in early December, to talk about our full fiscal 2023 results, and hopefully be very, very precise on when the Mountain Valley is going to pulling gas at that point in time.

We hope everyone has a great day, a great week, and safe end to their summer. Thank you..