Good morning and welcome to the Northwest Natural Gas Company Second Quarter Teleconference and Webcast. All participants will be in a listen-only mode. (Operator Instructions) After today’s presentation, there will be an opportunity to ask questions. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Mr. Bob Hess, Director of Investor Relations. Please go ahead sir.

Yes. Thank you, Dennis. Good morning everybody and welcome to our second quarter earnings call for 2013. 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 come true, and you should refer to the language at the end of our press release for the appropriate cautionary statements and also our SEC filings for additional information. We do expect to file our 10-Q later today. As previously mentioned, this teleconference is being recorded and will be available on our website following the call. Please note that these conference calls are designed for financial community. If you’re an individual investor and have questions, please contact me directly at area code 503-220-2388, media should contact Kim Heiting directly at area code 503-220-2366. Speaking this morning are Gregg Kantor, President and Chief Executive Officer, and Steve Feltz, Senior Vice President and Chief Financial Officer. Gregg and Steve have some opening remarks and then will be available to answer your questions. Also joining us today are other members of our executive team, are available to help answer any questions you may have. With that, let me turn you over to Gregg. Gregg?

Good morning, everyone. Thanks for joining us for our second quarter earnings call. I’m going to start with a brief overview of the period and turn it over to Steve to cover the financial details before I wrap up for the look forward. Performance in the second quarter was on target, a $900,000 increase in net income quarter-over-quarter, was primarily due to an increase in utility margins from two changes coming out of last year’s rate case; one relating to our decoupling adjustment and the other an increase to our fixed monthly customer charge. Those changes to base rates smooth out the seasonality of our earnings, and we will continue to see positive variances on these items during the warmer months ahead. In the second quarter, customer growth held steady at about 1% with housing starts continuing to show solid improvement. For example, in June, Oregon housing permits were up nearly 50% over 2012 levels, Portland home sales are up about 16%, and home prices are up about 14% year-over-year. Unemployment in the metro area inched down to 7.3% in June and the local construction industry added 2,500 jobs twice as many as expected and really another good indication that things are moving in the right direction. In the period, we also saw modest gains from our gas reserves investment and gas storage operations, which Steve will touch on in a moment, but clearly, the big news since our last earnings call, was the annoucment of two All-Party regulatory settlements that addressed important issues carried over from last year’s rate case. In November, when the Oregon Commission approved our environmental cost recovery mechanism, they also directed a new docket to be open to address several implementation issues. Those issues included a prudency review of remediation expenses to date as well…

Thank you, Gregg, and good morning, everyone. As we discuss the results for the quarter, please remember that a significant portion of our business is seasonal and therefore results are lower in the second and third quarters of the year due to the warmer weather impact on customer use for natural gas heating. For the second quarter of 2013, consolidated net income was $2.1 million or $0.08 per share, compared to net income of $1.2 million or $0.05 per share last year. As Gregg mentioned, earnings were in line with the company’s expectation, including an increase in utility results from timing differences that were driven by changes from the 2012 Oregon rate case. As you may recall, these rate case changes relating to fixed monthly charges and average monthly usage resulted in margin decreases in both the fourth quarter of 2012 and the first quarter of 2013. This quarter, margins increased by $3 million or $0.07 a share. Overall, these rate changes were designed to more appropriately recover the utilities annual fixed costs from customers, with the result being a more even distribution of revenues and earnings throughout the year. Again, these are timing differences only and are not expected to impact annual earnings after the first full-year following the rate case. Turning now to a more complete discussion of the second quarter results, the utility contributed $650,000 to net income this quarter, up from $100,000 last year, primarily reflecting a $3.4 million increase in margin revenues, which were partly offset by a $1.6 million increase in O&M expenses and an $800,000 increase in depreciation expenses. As noted previously, the utility benefited from $3 million of margin timing differences in the quarter. The remaining increase was attributable to $1.4 million from customer growth and gas reserve investment, partly offset by…

Thanks, Steve. While a write-off of any size is disappointing, moving toward closure on these regulatory matters is an important and positive step forward. The costs associated with state and federally mandate environmental clean up activities can be significant, but we believe the settlement provides a reasonable outcome to a complex and difficult issue. Also in the quarter, we made progress on one other regulatory item. We filed a tariff with the Oregon commission to provide high pressure gas service for CNG vehicle refueling. If approved, the tariff allows us to provide this service to fleet owners interested in the cost and environmental benefits of natural gas, benefits that aren’t accessible today due to a lack of refueling infrastructure. : The fact is our CNG tariff provides local businesses, the option of using natural gas for fleets that’s just isn’t available in our market today. For that reason, we are hoping for OPUC approval in the near future. From our perspective, the CNG tariff and the adoption of cleaner transportation alternatives is a tangible way to advance Oregon’s greenhouse gas reduction goals and the governor’s tenure energy plan that was released last year. In that plan, the governor calls out the beneficial role of natural gas that it can play in driving Oregon to a cleaner energy future. : We believe this first of its kind bill provides a new proactive way for Northwest Natural to invest in projects that have quantifiable environmental benefits for customers, projects that would otherwise not move forward. The bill takes effect in January and the interim, the OPUC will be opening a lawmaking docket to establish project and investment criteria. But at this point, we have the framework, but there is a great deal that still must be done on the details. In my…

We will now begin the question-and-answer session. (Operator Instructions) We have a question from Dan Fidell from U.S. Capital Advisors. Please go ahead, sir. Daniel M. Fidell – U.S. Capital Advisors LLC: Good morning, everyone.

Good morning, Dan. Daniel M. Fidell – U.S. Capital Advisors LLC: Just a couple of questions on the regulatory side, I guess the first one, would you expect any tweaking to the settlements you’ve got in place by Oregon regulators ultimately or do you think that’s going to be a fairly smooth approval process. and then secondarily, a separate question, can you give us a little bit of color on the remaining issues, lingering from the 12-K, so the recovery of pension carrying costs and the storage sharing items, anything you can provide there in terms of sort of where that lies and what you’re hoping for ultimately, that would be very helpful? Thanks.

Yeah. On the, do we expect any tweaking, generally, you file all-party settlements; you don’t end up with tweaking going on. this is a pretty complex settlement on a big issue for customers. So it is possible, I think it’s a low probability, but there is, you got to, on this one say, there is some probability that it could be tweaked. We’re hopeful that it won’t be, and again, I think it’s very complex, a settlement, and I think when you begin to pull on one piece of it, other pieces of it begin to get more complex. So again, I think there’s some small probability, but we’re hopeful that it won’t be. and then the color on the other part of the question, yeah, the pension docket is really taking a long time. We had kind of a long discussion about schedules and how the docket would proceed. That’s now completed and the first milestone on the schedule is our filing in late September. and that’s really the only milestone that we’ve got on the docket so far. So this is the one where I expect it to go into 2014, probably at least the first quarter of 2014. again, this is also pension’s as you know, very complex issue. We’ve got two other utilities or three other utilities, basically, all the utilities we stayed involved in it, which I think can also work to extend that that the timeline on that. So it’s going to take a while. On the interstate storage sharing docket, we’re getting started right now. This is one that it’s not quite as complex; I think we could probably get to a decision by the end of the year on it. and our hope is that we can really help people understand, how this is benefitting customers, the incentive mechanisms and that tinkering with it, it’s been very successful for customers. Customers have benefitted in very, very big ways and our belief is that it is delivering what’s expected for customers and really it shouldn’t be offered. But again, we’ve got some education work to do, and on both sides, we’ll be sitting down, listening to customer advocates as well to their issues. and again, I think this is one that we can hopefully resolve before the end of the year. That helps, Dan? Daniel M. Fidell – U.S. Capital Advisors LLC: Yeah, very helpful. Thank you on that color. Just one other quick question from me, and I’ll step back and let someone else to have some questions. but on Senate Bill 844, can you just sort of talk a little bit about the growth opportunities after the first for the year. Are those environmental related projects? Is that kind of renewable focused, just any kind of color you can give in terms of what kind of a future growth opportunity that might present for you? Thanks.

Yeah. Thanks for the question actually. this was a bill that was really proposed by one of our commissioners and the governors. So, John Savage, he was very interested in this issue and it got passed. I think the opportunities here are pretty broad and what we’re expecting to do is to produce some brainstorming around what are the range of investments we might make, that would help through our using natural gas to reduce carbon emissions, and there’s lots of opportunities, ranging from enhanced CNG or LNG vehicle infrastructure, which reduces greenhouse gas emissions by 30% over gasoline and diesel, it could relate, we’ve talked in the past about programs that would help eliminate old furnaces that are out there and particularly, in low income homes that we would subsidize those through investments that would go into rate base. So that’s kind of the range, but just about anything you can think of, that would have a significant and cost-effective carbon emission reduction, I think will be on the table as I say, we’re right now internal to the company going through kind of a brainstorming process about programs, and initiatives that might provide some greenhouse gas emissions might be interesting. and we’re going to present those two to commission, again, Biogas is another option, we have done some investment in Biogas through our Smart Energy program and there maybe some ways to enhance that as well. So it’s really kind of an exciting bill from my perspective, it really allows us to do some great brainstorming and offer up some programs that the governor and I think the commission will be interested in. Daniel M. Fidell – U.S. Capital Advisors LLC: Very interesting, thanks for the color, Gregg.

Sure.

Thanks, Dan.

(Operator Instructions)

We don’t have any other questions. Everybody probably wants to get out and enjoy the summer. have a great rest of the summer and we’ll talk to you in the fall. Thanks for coming.