Good day, and welcome to the Northwest Natural first quarter 2014 results conference call and webcast. (Operator Instructions) I would now like to turn the conference over to Mr. Bob Hess, Director, Investor Relations. Please go ahead.

Thank you, Nicky. Good morning, everybody, and welcome to our first quarter earnings call for 2014. 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 to our SEC filings for additional information. We do expect to file our 10-Q later today. As previously mentioned this call is being recorded and will be available on our website later today. Please note that these calls are designed for the financial community. If you are an individual investor and have questions, please contact me directly at area code 503-220-2388. Media can 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, who are available to answer any questions you may have. We look forward to seeing many of you at the upcoming American Gas Association Financial Forum. If you have any questions about that event, please contact me as soon as you are able, especially regarding scheduling and meeting or attending our dinner. With that, let me turn it over to Gregg.

Thanks Bob. Good morning, everyone, welcome to our first quarter earnings call. I'll begin today with highlights from the quarter. I'll then turn it over to Steve to cover the financial details for the period. And I'll wrap it up with brief comments about our priorities for the remainder of the year. Our operational performance in the first quarter was as expected and comparable to last year. However, a key highlight in the period was a receipt of $91 million from our insurance carriers for settlements we finalized in January, related to our environmental claims. Those proceeds coupled with previous settlements bring our total recovery for environmental cleanup activities to approximately $150 million, an outcome we view as very positive. Another key development in the quarter was the announcement we made at the end of March, that we had amended our gas reserves agreement with Encana. As you know, Northwest Natural entered into an agreement with Encana in 2011 to develop gas reserves to provide long-term price protection for our Oregon utility customers. Under the original agreement, the company was expected to invest a total of $250 million over five years. To date, we have made a cumulative total investment of $178 million in the venture. These gas reserves are expected to provide a price hedge on approximately 9% of our utility gas purchase requirements for the current year and stable prices for smaller portion of our utility gas supply for years to come. The amendment to our gas reserves agreement was triggered by Encana's proposed sale of its interest in the Jonah field to an affiliate of Texas Pacific Group Capital. The amendment essentially ended the drilling of wells in the sections of Jonah field we had been acquiring ownership interest in, and it allows us to drill future…

Thank you, Gregg, and good morning everyone. We reported consolidated net income of $37.9 million or $1.40 per share for the quarter compared to net income of $37.6 million or $1.40 per share last year. During the first quarter of 2014, our utility accounted for net income of $36 million, about the same as last year on whether that was 1% warmer than a year ago or 2% colder than average. Utility net income results primarily reflect an increase in operating revenues offset by higher gas costs, higher O&M expense and an increase in the state effective rate. Utility operating revenues for the quarter included a $5.4 million increase in margins over last year, which was primarily driven by residential and commercial customer growth, an increase in industrial margins and incremental rate base returns from gas reserves, pipeline integrity and other tracked in capital investments. However, those revenue gains were partially offset by a $1.8 million loss this year as compared to a $600,000 gain last year from our gas cost incentive sharing mechanism. The sharing loss was largely due to higher spot gas prices this quarter, which were driven by record cold temperatures in other parts of the country. The average cost of gas delivered to our customers in the first quarter of 2014 was $4.52 per dekatherm as compared to $3.96 per dekatherm embedded in customer rate. As part of our regulatory gas cost sharing mechanism, we absorbed 10% of the difference between actual and embedded gas cost on volumes that are not hedged for the period. We typically hedge about 80% to 90% of our volumes during the winter months. From an operational standpoint, utility gas deliveries in the quarter were up 2% over last year with sales to residential and commercial customers up 2% on weather…

Thanks, Steve. Clearly, a key priority for us in 2014 is to work through the remaining regulatory issues carried over from our 2012 Oregon rate case. Dockets involving in environmental earnings test, recovery of prepaid pension assets and the review of our interstate storage revenue sharing. These proceedings are all underway and remain on track for completion this year. Another important priority for this year is to determine whether or not we'll be moving forward with an expansion at our Mist storage facility in Oregon. As you know, for the past year we've been working with Portland General Electric to explore how a Mist expansion to provide a flexible on-demand fuel source for their gas plants at Port Westward plants, designed to integrate wind resources into their system supply. The proposed expansion would require the development of storage wells, a compression station and additional pipeline facilities. As I mentioned on our last call, we are currently working with PGE to refine cost estimates, and we expect a decision on whether to proceed with the project by the fall. Finally this morning, let me give you an update on where we are with Oregon Senate Bill 844 opportunities. As you know, this new bill allows the OPUC to establish a voluntary greenhouse gas reduction program. To incent natural gas utilities to invest in projects that reduce emissions. We've been very supportive of the bill, believing it provides a unique proactive way for us to earn on investments that have quantifiable environmental benefits for customers. A rulemaking effort to establish project and investment criteria is currently underway at the OPUC. One important requirement already identified is that the investment opportunities need to support projects that would otherwise not move forward. Using that condition as a starting point, we have begun to evaluate a number of potential investments, so that we can have projects in hand for consideration, once the rulemaking effort is complete. For example, one project we are assessing is an oil conversion effort to target residential homes in our service area, some of which are off our existing system and may not be in a position to convert because doing so would require a long main extension. We are also evaluating the viability of including low income oil heat customers in this proposal, consumers that for financial reasons haven't been able to convert to natural gas despite more than a 60% price advantage. So lot of work left to do, but we are optimistic about the potential opportunities ahead that represent a win for the environment, our customers and the company. We'll keep you posted on how the greenhouse gas reduction program unfolds as the year progresses. Thanks again for joining us today. And with that, I'll open it up for questions.

(Operator Instructions) Our first question comes from Dan Fidel with U.S. Capital Advisors.

Just a few questions, as always you covered my questions pretty well in the script, I guess. One question I had on customer growth. Certainly positive, it's on the rise, new listings and home sales up as you mentioned, but can you just remind us what assumptions you're using in for the 2014 guidance in terms of new customer adds. And then longer-term the thoughts on where you think this may settle into future years. It's been steadily increasingly here in the last couple of years.

Customer growth, we have projected a little over -- we're currently at 1.3%, a little over that. And we are projecting somewhere in that range. We're adding somewhere between 9,000 and 10,000 customers a year, strong in both residential and commercial sectors as well as some industrial customers.

On the longer-term view of this, we, as all of us in the industry, I think and particularly who are involved with construction, we are pretty conservative going forward about the increase back. It's been slow getting to where we are. We were well below 1% for a number of years. So we've got fairly modest increases, a constant, but modest increases on our forecast going forward. We continue, though, to be optimistic about conversions. That's where we feel like we have more control over it. We've got a something similar to what we've been seeing in the way of conversions and we continue it, as I said, with Senate Bill 844 and our new portal, we continue to really target conversions and are hopeful that we can increase them.

Just switching topics quickly in terms of the storage side. Can you talk a little bit how you're viewing this space longer-term as I think as you said in your prepared remarks, talked about being kind of longer term positive on the space. Can you talk about maybe the potential opportunities that you see? I think you mentioned California, certainly an area with more renewables in the need of more storage taking the place of traditional zone, et cetera. Can you just give a little bit more color on long-term opportunities in storage?

Particularly in California, I believe its being driven by very aggressive goals around renewables. We've heard discussions that they're going to potentially go from 33% to 50%. They're already zooming in on 33%. And when you include rooftop solar, not just the utility portfolio, you're getting over 33%, maybe as high as 40% in the way of renewables. And that creates this peaking need and the need to backup those renewables when the sun isn't shining and the wind isn't blowing. And that really puts a spotlight on storage because you're really focused on trying to find a least cost way of supporting a peaking facility and it's having storage to support it versus pipeline capacity, it's usually a lot less expensive. So we continue to believe that trend will continue in California, and that storage, not just as this renewal book picture unfolds, but as they close down San Onofre, the nuclear plant and as the economy continues hopefully to comeback down there that it is really going to create an environment where storage has an opportunity to be very integrated in their system and successful for them, so very optimistic about it. In Oregon, we continue, as Steve said in his remarks, to have really good focus on Mist because of the lack of storage capacity in the Northwest overall and the needs that utilities have because of all the wind that's being produced, appear to provide peaking power as well. So as I've said in the past the storage facility in Oregon is really driven much more by utility needs, not by marketing efforts and that has kept it in good stead over the years. And I expect that that will continue into the future.

The next question comes from [ph] Matthew Levinson with Matthew Levinson & Associates.

A number of other gas utilities have made stress in their conference calls of service request from individuals who are currently using propane. And is this a factor in your customer growth as mentioned and what potential exists for this?

I don't believe it is a large factor in our customer growth. We had a fairly large propane system in Coos Bay area in North Bend Coos Bay and we went into that area maybe seven, eight years ago and replaced all of the propane that was down there with, naturally not all of it, but a great deal of it. And I think that was probably the largest area in our service territory at the time from a propane standpoint. We do have some communities that are kind of on the fringes of the urban areas that we don't serve where there is some propane. And we're actually looking at the potential for the Senate Bill 844, opportunities to get pipe out through these communities that currently don't have natural gas. And I think in the future, if we're successful at that, we could be in a position of replacing propane. But at this point, we're kind of in that early stage of figuring out, how Senate Bill 844 is going to work and whether it will be allowed to take pipe out to some of these suburban communities that don't have natural gas. But I think that could be a potential for us in the future.

Would you estimate the potential number of additional customers you would pick up by doing this?

I really can't estimate it. I am not all that familiar with some of those communities that we don't serve right now, and how much of it is driven by propane. A lot of those communities, propane is used there, but a lot of them are very reliant on electricity with baseboard heating. So very inefficient heating sources, very costly for the customer also, emissions are a big issues as well from those kinds of inefficient heating sources. But I really can't hazard a guess on how much of it is propane.

As we're showing no further questions, I would like to turn the conference back over to Mr. Kantor for any closing remarks.

Well, Thank you all again for being with us today. And look forward to seeing you all at the AGA Financial Forum later this month, see you in Miami.

That does conclude our conference. Thank you for attending today's presentation. You may now disconnect your lines.