Nikki Sparley – Investor Relations David Anderson – President and Chief Executive Officer Frank Burkhartsmeyer – Senior Vice President and Chief Financial Officer Justin Palfreyman – Vice President, Strategy and Business Development.

Aga Zmigrodzka – UBS Insoo Kim – RBC Capital Markets.

Good day, and welcome to the Northwest Natural Gas Fourth Quarter 2017 Conference Call. [Operator instructions] Please note, this event is being recorded. I would like to turn the conference over to Nikki. Please go ahead..

Thank you, Austin. Good morning, everyone, and welcome to our fourth quarter and year-end 2017 earnings call. As a reminder, some of the 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, you should refer to the language and reconciliation at the end of our press release and also our SEC filings for additional information. We expect to file our 10-K later today.

As mentioned, this teleconference is being recorded and will be available on our website following the call. Please note, these conference calls are designed for the financial community. If you are an investor and have additional questions after the call, please contact me directly at 503-721-2530. Media may contact Melissa Moore at 503-220-2436.

Speaking this morning are David Anderson, President and Chief Executive Officer; and Frank Burkhartsmeyer, Senior Vice President and Chief Financial Officer. David and Frank have some prepared remarks, and then will be available along with other members of our executive team to answer your questions.

With that, I will turn it over to David for his opening remarks..

obviously, results for the quarter and the year; the outcome of a strategic review of our Gill Ranch asset; the impact of the federal tax reform on both 2017 and 2018; and the initiation of our entry into the water sector with the pending acquisition of two small water utilities. Needless to say, 2017 was a pivotal year for Northwest Natural.

We made great progress in a number of areas while delivering on the fundamentals, providing safe, reliable and exceptional service. We added new customers at the fastest rate in the decade. We made significant progress on our largest utility capital project, the North Mist gas storage expansion.

And we filed our first Oregon general rate case in six years. And as I mentioned, we initiated a water utility strategy. We signed purchase agreements for two small water utilities in the Pacific Northwest. We also had to make difficult decisions in 2017 as we completed a strategic evaluation of our Gill Ranch storage facility in California.

Following that strategic evaluation, we determined that Gill Ranch was no longer core to our business or part of our long-term strategy. Our strategy is focused on regulated or regulated-like businesses and achieving maximum returns with the lowest possible risk for our investors.

I’ll discuss my detailed thoughts on our forward strategy in a few moments, but first, I’ll walk you through two significant non-cash items in our results this quarter. The largest item that affected results was related to our Gill Ranch evaluation and – that resulted in a non-cash accounting impairment in the fourth quarter.

As you may remember, Gill Ranch was our first storage expansion outside of our core utility storage assets in Mist, Oregon. Since the 1980s, we’ve operated and successfully expanded our Mist storage facility in an undersupplied Pacific Northwest gas storage market.

Today, we operate over 15 billion cubic feet of gas storage at Mist, which is used primarily for our core utility customers. All the experience we gained with Mist led us to investigate further storage opportunities in the early 2000s.

And based on our market research and expertise in operating storage, we finalized plans to build the Gill Ranch facility near Fresno, California in 2007. At the point we began construction, the fundamentals of independent non-utility gas storage development in Northern California were very favorable.

Gas prices were much higher, hitting $12 per MMBtu in both 2005 and 2008. And price volatility and seasonal spreads were attractive, both of which directly drive the value of gas storage assets. Our decision to build came just five years after California established its aggressive renewable portfolio standard.

Natural gas storage was projected to be even more critical to back up intermittent renewables. Gill Ranch went into service in 2010 with the majority of our capacity contracted under multiyear agreements.

But shortly after Gill Ranch began operations, new drilling technologies and practices gained widespread acceptance, and natural gas production dramatically increased in shale regions across North America.

The market implications of the shale revolution were difficult to predict in the early years, but ultimately, as we all now know, the abundant supply of natural gas resulted in substantial reduction in prices, volatility and in seasonal spreads, all of which negatively affected the value of storage in California.

Furthermore, additional storage facilities were developed in Northern California, which also negatively affected storage pricing. As our original contracts expired, subsequent contracts at Gill Ranch were at lower prices. During this time, we focused on operating the facility safely and efficiently while pursuing multiple avenues to increase revenues.

We sought to identify higher value customers in the Northern California market and adjacent regions. We also explored innovative technologies such as energy storage. All the while, we carefully monitor the financial position of the facility as you would with any underperforming asset in your portfolio.

During the fourth quarter, we completed a comprehensive strategic review process that evaluated various alternatives for Gill Ranch, including a potential sale and determined Gill Ranch was a non-core asset.

The continued low contracting prices for storage and information gained from a strategic review led us to reevaluate the carrying value of the facility. As a result, it was determined that we should recognize a non-cash accounting charge in the fourth quarter of $142 million after tax.

Now I’ve shared a lot of history with you, but I believe it’s important to understand our original investment thesis as well as our ongoing efforts to improve the performance of the asset.

As we look forward, we will continue to pursue all options for Gill Ranch, including divestiture as the asset does not fit our low-risk business profile and strategy going forward while continuing to ensure that the facility operates safely and effectively.

The other unusual items in the fourth quarter, the other unusual item was related to federal tax reform. On a consolidated basis, tax reform remeasurements resulted in an after-tax gain of $21 million, which obviously benefited earnings. Frank will provide more detail on tax reform, including the full impacts on earnings and cash flows.

On a continuing operating basis, our core utility, which, as you know, is over 95% of our earnings, continued to perform very well and added nearly 13,000 new customers. Our solid utility performance stems from strong product reference, the value of clean-burning natural gas and the strength of our region’s economy.

Oregon continues to be an attractive place to live. We have the second highest rate of inbound moves in the United States for 2017 and the highest rate in the West according to the United Van Lines’ National Movers Study. Oregon also continued to outpace much of the nation for employment growth.

Our non-foreign payroll employment increased 2.7% in 2017. That’s the second fastest rate in the country according to the Bureau of Labor Statistics. And overall employment growth was strong, averaging 3.7% over the last 12 months.

Average unemployment rates across the state of Oregon have remained low at 4% over the last 12 months, with the major population centers of the Valley of Portland and Vancouver coming in slightly lower at 3.8% over the same time period.

In 2017, these strong economic trends and targeted marketing efforts translated into a 1.8% customer growth rate, one of the highest growth rates among gas utilities and the highest rate we’ve experienced since 2007. As always, safety and reliability remain our top priority.

During 2007, we made significant progress on several infrastructure improvement projects. Over the last several years, we have been refurbishing our two liquefied natural gas storage peaking facilities that are used to supply gas to our customers during the coldest winter days.

The Newport facility upgrade was completed at the end of 2017 with a total cost of around $25 million. And we completed our initial investment of just under $10 million at our Portland facility. Our field employees invested time participating in extensive training at our state-of-the-art training center.

We also offered hands-on, scenario-based training programs to first responders, teaching them about natural gas safety and how to work with us during a gas emergency. In 2017, we hosted over 80 training sessions for more than 1,200 local firefighters.

Safety and reliability, coupled with affordability, make natural gas a very competitive energy source. In 2017, for the third year in a row, we reduced customer rates leading to a total 15% drop for Oregon residential customers on top of annual bill credits. Washington rates declined a total of 18%.

As a result, again this year, our customers are paying less for their total gas bill than they did 15 years ago. I’m also pleased to report customers continue to recognize us for our products’ outstanding value and our employees’ high-quality service.

For the fifth year in a row, Northwest Natural ranked first among gas utilities in the West for residential customer satisfaction according to the 2017 J.D. Power study. And for the 10th time in 11 years, we posted among the top two scorers in the nation. We also earned the highest score in the West for business customer satisfaction.

We appreciate this recognition by our customers, and we’re proud of our dedicated employees, whose hard work led to these accomplishments. With that, let me turn it over to Frank to cover some of the financial information.

Frank?.

Thank you, David, and good morning, everyone. Before I walk through the drivers of operating results today, I would like to summarize our reported GAAP financials. For the quarter, we reported a consolidated GAAP net loss of $90.2 million for the fourth quarter or $3.14 per share compared to net income of $28.3 million or $1 per share for 2016.

For the year, we reported a consolidated GAAP net loss of $55.6 million or $1.94 per share, compared to net income of $58.9 million or $2.12 per share for 2016.

As David discussed, the decrease in earnings primarily reflects the $192.5 million noncash pretax impairment of our Gill Ranch gas facility storage – gas storage facility in 2017, partially offset by a $21.4 million noncash benefit related to federal tax reform legislation.

In addition, our 2016 results included a $3.3 million pretax noncash regulatory environmental disallowance. In my prepared remarks, I’m going to focus on our adjusted results, which exclude the effect of these three noncash items.

For a complete reconciliation of adjusted measures to GAAP, please refer to the tables under the last page of our press release.

Also, note that I will describe the individual earnings drivers on an after-tax basis using the statutory tax rate of 39.5%, which was still in place for 2017 and is close to our adjusted effective tax rate of 39.2% for the year. Now moving to adjusted financial results.

Earnings – adjusted earnings for 2017 were $64.5 million or $2.24 per share, an increase of $3.6 million or $0.05 compared to adjusted net income of $60.9 million or $2.19 for 2016. This increase reflects strong natural gas utility segment results, partially offset by lower gas storage results. Focusing on our utility segment.

For the full year 2017, adjusted utility segment net income increased $5 million. This improvement was a result of a $9.7 million increase in utility margin from strong customer growth and from colder weather in 2017 compared to 2016.

Partially offsetting this utility margin growth was higher operations and maintenance expense as we continue to add employees to support our growing business.

While the weather normalization mechanism in Oregon provides a large degree of margin stability, weather does affect results as we do not have a weather normalization mechanism in Washington, and a portion of our Oregon customers have opted out. 2017 was colder than 2016.

Our service territory experienced 7% colder-than-average weather in 2017 as well as record-breaking precipitation in the spring. By contrast, 2016 weather was 17% warmer than average. Partially offsetting these positive margin factors were lower gains from our gas cost incentive sharing in Oregon.

The company and customers continued to benefit as the cost of gas we procured was lower than prices set in rates, although the spread has narrowed for the 2016-2017 gas year.

As I mentioned, utility margin growth was partially offset by a $5.7 million increase in O&M from payroll and benefits as well as a $2.1 million increase in depreciation expense, consistent with our higher capital investment over the last several years.

Also contributing to utility net income was a $3.2 million increase in other income, mainly due to higher equity AFUDC and life insurance gains. Now turning to the gas storage results.

For the full year 2017, adjusted net income decreased $900,000 to $3.4 million as a result of lower gas storage revenues from our Gill Ranch facility and lower asset management revenues as market conditions were more favorable in 2016. Now a few comments on our fourth quarter results.

We reported a $1.6 million increase in adjusted net income of $29.9 million for the fourth quarter of 2017 compared to $28.3 million for the same period in 2016. Results from the quarter largely reflected a $1.8 million increase in our utility segment adjusted net income. The drivers of fourth quarter results mirrored those of the annual figures.

Utility margin increased $2.3 million from customer growth and colder weather, partially offset by a $2 million increase in O&M expense from higher payroll and benefit costs. In addition, other income increased $2 million from equity AFUDC and life insurance gains. Turning to cash flow highlights.

During 2017, the company generated $207 million in operating cash flow. We reinvested these proceeds back into the business with $214 million in capital expenditures, including $62 million in the construction of the North Mist Expansion. Our balance sheet remains strong with a solid capital structure and ample liquidity.

Now I would like to spend some time discussing tax reform. In December 2017, as you know, Congress passed the federal Tax Cuts and Jobs Act or tax reform, which, among other things, lowers the federal corporate income tax rate to 21% from 35%. This is the most significant overhaul of the tax codes since 1986.

With legislation of this magnitude, we anticipate that it will take months to work through the full implications of the changes with our regulators as it relates to future rate making.

With regards to over 2017 results, we were required to remeasure our deferred tax assets and liabilities in the fourth quarter at the new combined state and federal tax rate of 26.5%.

The reevaluation of our deferred taxes that are not associated with regulated utility activities, primarily the gas storage segment, resulted in a noncash $21.4 million benefit to income tax expense. The impact of the utility portion of this remeasurement was the creation of a $213 million regulatory liability.

For our regulated gas utility operations, deferred income tax liabilities represent amounts collected from customers to be used for future tax payments. The remeasurement of the liabilities to reflect the lower tax rate, therefore, needs to be returned to customers over time, likely over the remaining life of the associated assets.

Customers will also benefit in a manner to be determined from the expenses savings that will accumulate from January 1, 2018, until new rates are put in place in November of this year. We filed deferral applications with our regulators requesting that the utility’s net benefit from tax reform be passed back to customers.

This includes both the remeasured liabilities as well as the reduced tax expense we are currently experiencing. Because we have a pending rate case in Oregon, we will also need to update that filing to reflect the reduction in tax expense.

We will begin working in the coming months with the Oregon and Washington Commission to address of the means by which all of the effects of tax reform will be passed back to utility customers. Another material aspect of the tax reform to Northwest Natural is the impact on cash flows.

The elimination of bonus depreciation for assets that go into service on or after September 27, 2017, will result in cash tax payments that are greater than would have been the case under the prior bonus depreciation phase-out schedule.

At this time, we estimate that the cash from operations will be approximately $40 million lower during the 2018 and 2019 period combined. This is really a transition matter as bonus depreciation was scheduled to expire anyway. Therefore, we do not see this as a significant change over the long term.

Notably, the elimination of bonus depreciation and the lower tax rate will lead to slightly favorable rate base growth due to lower deferred taxes, which is anticipated to be marginally beneficial to both earnings and cash flows after 2019. In summary, there is still some uncertainty around the overall impact of tax reform.

We need to work through the details with our regulators, seeking to balance our opportunities and obligations. We will consider our financing activities, capital structure and credit metrics. But at this time, we see tax reform as modestly favorable over the long-term with some near-term cash flow impacts. Moving to 2018 financial guidance.

Capital expenditures for 2018 are expected to range from $190 million to $220 million, including about $25 million associated with completing our North Mist Expansion. For the five-year period ending 2022, we estimate utility capital expenditures to range from $750 million to $850 million.

This range includes base CapEx of $650 million to $750 million for customer growth, system improvements and reliability and continued investments in technology.

In addition, the five-year range also includes the 2018 North Mist Expansion CapEx and $60 million to $70 million related to upgrades and refurbishments of our regulated storage facilities and resource centers. And finally, the company initiated 2018 earnings guidance today in the range of $2.10 to $2.30 per share.

Guidance assumes continued customer growth from our utility segment, average weather conditions and no significant changes in prevailing regulatory policies, mechanisms or outcomes or significant laws or regulations. With that, I’ll turn the call back over to David for his concluding remarks..

Thanks, Frank. And as we discussed this morning, on December 29, we filed our first Oregon general rate case in six years. The rate request comes on the heels of a – multiyear rate reductions totaling about 25% for residential customers since 2017, driven by lower commodity costs and efficient management of the system.

During that same time, we’ve invested more than $300 million in the safety and reliability of our system. We’ve also seen higher operating and maintenance expenses coming from customer growth, safety initiatives and increased federal safety regulations as well as normal inflationary cost pressures.

Our request includes a 10% return on equity to reflect current interest rate trends and the risk profile of our business. The process could take up to 10 months, with new rates expected to be effective November 1 of this year. Another area of focus last year that will also be a priority in 2018 is the rollout of our voluntary carbon savings goal.

What we refer to as our low carbon pathway is an initiative that identifies new opportunities to proactively reduce emissions using our existing infrastructure, one of the most tightest – modern tightest pipeline systems in the nation.

One project we discussed with you is a partnership with the city of Portland to bring renewable natural gas, or RNG, into our system. The city is building an RNG conditioning facility to convert biogas from Portland’s largest wastewater treatment plant to Northwest Natural’s pipeline quality standards.

Once clean, a portion of the RNG will be used to fuel heavy-duty vehicles locally, while the rest will be delivered through our existing pipeline system. The vehicle refueling station component of the project is complete, and we expect RNG to be flowing into Northwest Natural’s system by early 2019. We are proud to be part of this effort.

It’s an effort that what the city of Portland is calling its largest climate action project to date. As discussed earlier, we’ve been operating our storage facility in Mist, Oregon for nearly 30 years. The Oregon storage market is uniquely situated.

With just a single pipeline serving the region, storage is essential to support reliable service and thus is extremely valuable. Our Mist capacity is in a premium location with limited competition from other storage facilities and consistently provides high-value, long-term contracts.

The majority of the facility, around 11 Bcf, is used for our core utility customers. In 2017, we were focused on expanding this facility with the construction of the North Mist gas storage project.

As we’ve discussed before, the North Mist project will support grid reliability by supplying unique, no notice storage service to Portland General Electric that can be drawn on at any time, allowing them to balance the variability of additional renewable power on the electric grid.

The estimated cost of North Mist, which includes a development of a new 2.5 Bcf reservoir, a compressor station and a 13-mile pipeline, has increased slightly to $132 million. I’m pleased to announce that we’ve continued to be on track with the project.

We have completed the critical 16-inch pipeline connecting the North Mist facility to Portland General’s Industrial Park, where their power plants sit. We plan to begin injecting gas into the reservoir in the coming weeks and expect to install the compressor station and finish injecting base gas by mid-2018.

After the gas injection phase is complete, we’ll begin testing the facility and plan to place the facility into service during the fourth quarter of 2018. When the expansion is placed into service, the investment will immediately be rate-based under an established tariff schedule already approved by the Oregon PUC.

The facility is fully contracted for an initial 30-year period to PGE, with renewal options of up to 50 years beyond that. Before we close out the call today, I want to comment on our regulated water utility strategy. In December, we announced agreements to acquire two small regulated water utilities in Oregon and Idaho.

Combined, these companies serve nearly 6,500 customers. Both water systems have been well maintained with adequate water supply, excellent water quality and very talented employees. The Idaho system is in a fast-growing area in Eastern Idaho, which we expect to translate into strong organic growth opportunities.

I personally met with the Idaho commissioners and believe that this will be a very constructive regulatory environment. Although the financial implications of these transactions are small in the near-term, this is an exciting opportunity for the company over the long-term.

As we have discussed in the past them with all of you, we strive to provide stable, growing gas utility earnings while seeking to add earning streams that have a similar risk and cash flow profile as our regulated gas utility. We believe the regulated water utility sector not only fits this profile, but it also aligns well with our core capabilities.

Furthermore, the investment potential is promising. As the water industry is highly fragmented, and in many cases, these utilities have not been able to adequately invest in their infrastructure. The American Society of Civil Engineers projects substantial water infrastructure investment gap of nearly $400 billion over the next 20 years.

There are thousands of individual water utilities in the Pacific Northwest and across the Western region that are in need of capital and would benefit from consolidation.

We believe our access to low-cost capital are focused on customer service, our expertise in development, managing pipeline infrastructure and our ability to work constructively with regulators underscores the strategic rationale in the value we can add in this sector.

As you can see from these two initial agreements, we are taking a deliberate and measured approach. We will begin this – we will remain disciplined and focused as we continue to pursue this strategy. As I look back over my first full year as CEO, I am humbled by the exceptional work and accomplishments of our employees and this leadership team.

The company remains financially strong, with constructive regulatory relationships and continued accolades from customers. We remain focused on providing safe, reliable service to our customers and executing on the regulated growth opportunities that lay ahead.

We will look for opportunities to continue our legacy of generating low-risk, stable earnings and delivering value to our investors. Thanks again for taking the time to join us this morning. I know we covered a lot of material, but there was a lot of things to talk about.

With that, Austin, I think we’re ready to open up for questions if anybody has questions..

Thank you, sir. We will now begin the question-and-answer session. [Operator Instructions] And our first question comes from Aga Zmigrodzka with UBS. Please go ahead..

Good morning. Thank you for taking my question.

I would like to ask, what are the opportunities for Northwest expanding the water utilities business? How much do you plan to spend on the potential acquisition? And how do you think about the return profile?.

Yes. Thank you, Aga, for the question. This is David, and I might ask Justin Palfreyman to kind of adlib here a little bit for me, who’s leading the effort for us. But as I mentioned in my opening remarks, we see a lot of opportunity out there within the – in the sector to do what I call bolt-on acquisitions and to grow the business.

It’s hard to put a number on that. I can’t tell you that it’s going to be X millions of dollars per year or a certain part of our business. But we do see substantial opportunities to work with the regulators and work with these small companies to consolidate and provide the benefits that I offered.

But at this point, let me open it up to Justin a little bit more to give you a little bit more details on the Pacific Northwest and some of the things that we’re seeing..

Thanks, David. Just to echo what David said on the water strategy in the Pacific Northwest, there are literally hundreds of small investor-owned water utilities in the region. Many of them are undercapitalized and haven’t been invested in for a number of years or are just sort of maintained. And we see a substantial growth opportunity there over time.

We are starting small and being very disciplined and deliberate in our approach. But we see this as being a growth opportunity for us over the long term..

Perfect, thank you. That’s very helpful. And my second question’s related to higher operating expense into the fourth quarter.

Could you help us understand what were the drivers and what O&M expense growth you’re expecting in 2018?.

Sure, Aga. This is Frank. O&M expenses are up in the fourth quarter. Two things. One is, the primary driver has been that we have added staff over the last 1.5 years or so. So that’s been trending up, and we’ve been anticipating that.

There was also, I believe, about a $5 million, I will say, adjustment just from accounting, where we reclassed some that it offsets in the margin. So it’s not really an increase, but it does increase this amount of O&M that you’ll see in the fourth quarter by $5 million. The rest is offset up in the utility margin..

Okay, perfect. And my last question is related to the rate base growth.

What rate base of growth do you expect in 2018 and in the long term, including the potential impact of the tax reform and provided by your CapEx guidance?.

Sure. We have been – historically, we’ve grown about 3% a year on rate base. We were expecting with the higher level of investment going forward, we were anticipating that number would probably grow closer to 4% going forward. We do think the tax reform provides a little bit of uplift to that as well.

I don’t have an official forecast, but I do think it’ll be a little bit better than that 4% going forward..

Frank, you might just – say what our total CapEx requirements are for the next grid..

Sure. So we’ve put out, I think, guidance at $750 million to $850 million over the five-year period through 2022. This is consistent with our prior forecast. It’s not a change.

The only thing that’s changed we were talking about $850 million to $950 million last year, but that included about $100 million for North Mist, and that’s going to wrap up this year. So we spent most of the money on North Mist so far, so the outlook is consistent, which is an increase.

So we’re talking about $150 million a year of core utility spend and then some enhancements on top of that to our gas storage and other facilities that will bring us up closer to that $175 million per year..

Perfect. Thank you for the color..

Our next question comes from Insoo Kim with RBC Capital Markets. Please go ahead..

Good morning, Insoo..

Hi, good morning. Congrats on a good year. First question on the balance sheet. I know tax reform, there’s still ways to go in timing and implementation of giving back to customers and whatnot.

But if you assume tax reform in the recent Gill Ranch right now, how do you see your credit metrics going forward in 2018 and 2019? And how does that impact your thoughts on potential liquidity in those couple of years?.

Right. So obviously, we do have the charge from Gill Ranch, which will hit about $119 million and has and is reflected in our results. We see our credit metrics because of the expiration of – early expiration of bonus depreciation. We will have a little bit lower cash flow between 2018 and 2019.

We talked about that $14 million range, and then that recovers. We will see higher rate base growth, so this will recover. But we do see that our FFO to net debt ratio will come down to, call it, 1 point or so from over the next year or two until that recovers with the earnings growth and cash flow growth.

We don’t see it as tremendous, but it is downward pressure..

Understood.

And then given – I guess, with the planned tax reform adjustments to be made in the current Oregon rate case, is there an opportunity for you to potentially include incremental CapEx of what you originally filed but which would still result in a net moderate rate increase for customers?.

Well, yes. So what we – just to clarify, we will have to update our revenue requirement for the lower tax rate, of course. That’s a flow back to the customer, but we will then have a higher net rate base as a result of the lower deferred tax in that. So we’ll need to adjust both of those.

We will not change the basic request of the rate case in terms of what we intend to invest in, but the change in the tax law does change the – both the amount of tax that we need to flow back, but also the amount of net rate base that we need to recover..

Got it. And then finally for me. Given the past few years, you’ve consistently achieved the upper half of the guidance range. Obviously, this year, partially helped by weather.

Do you see your 2018 guidance as relatively constructive, barring any significant events?.

Yes. We absolutely feel it’s constructive. We spend a lot of time looking at the band, and we feel very good about the $2.10 to $2.30 range. You’re right, weather – volatility is always a factor that we have to build in. We do have good strong customer growth ongoing. And we’ve got the rate case and the completion of North Mist.

But you have to realize, those two things are loaded into the back end of 2018. We’ll have two months of the new rate – case rates, and we’ll have North Mist there in the last month or two of the year. And in the meantime, we’ve got O&M up.

We were going to spend all the money for 12 months, and we’re not going to start recovering at that higher level until the last 2 months, so it’s all factored into that range..

Understood. Thank you very much..

Thanks, Insoo..

And at this time, I am showing no further questions. So I’d like to turn the conference back to David Anderson for any closing remarks..

Thanks, Austin, and thanks, everybody, for joining us today. I know we covered a lot of material. If you have questions, reach out to Nikki, and we’ll be happy to help you walk through things. So with that, we’ll go ahead and conclude the call. Thanks for joining us, and have a great weekend..

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect..