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With that, let me turn you over to Gregg.Gregg Kantor Thank you, Bob. Good morning, everyone and welcome to our 2010 second quarter earnings call. As we usually do, I will start the call off with an overview of the quarter and where we stand for the first six months of the year. Then I will turn it over to David to cover the financial details for the period. First, we reported strong second quarter earnings of $0.26 per share. This was due primarily to weather that was 25% colder than average and 49% colder than last year. Our year-to-date performance has also been good. In fact it has matched last year's results which benefited from record gas cost savings. Colder weather gave us a big boost, but we also continue to see positive benefits from our cost management efforts in operations. During the quarter, O&M expenses were down 6% compared to the second quarter of last year and 8% year-to-date. Part of that is due to the lower payroll expenses resulting from the downsizing efforts we initiated over the last few years. While those reductions were tough on our organization, it's clear today that it was the responsible action to take and it has put us in a much stronger position to navigate these challenging economic times. Also in the period, we were pleased to see a drop in bad debt expenses, whether it's creating flexible payment plans or finding appropriate energy and systems funding for customers. Our proactive and consistent outreach seems to be making a difference in this area. On the growth front, new customer additions increased slightly to 1% over the trailing 12 months period compared to 0.7% at the end of the first quarter, and we are now serving more than 669,000 customers. While this uptick is modest, there are some positive developments to mention that should continue to support new customer additions that contribute to revenue. In May-June, we announced to our regulators that we expect natural gas rates to be flat or slightly lower for the upcoming heating season. Barring any unusual movements in the gas markets, that's still the expectations for our August 31st file.
With lots of rates rising in many Northwest communities, we remain optimistic about our competitive position in growth opportunities. During the quarter, we also saw industrial volumes and margins trend up, predominantly in the manufacturing sector. Three consecutive months of positive movement is certainly encouraging signs, but will have to wait and see if it's a sustainable improvement.Before I turn it over to David to cover the financials, I also want to give you an update on the Palomar pipeline in our joint project with France and Canada. During our last call, we discussed the news that Northern Star Natural Gas, the company that was pursuing the Bradwood Landing L&G terminal, had suspended work on the project and filed for CapEx having bankruptcy. Bankruptcy trustees' decision to assume or reject the Precedent Agreement Northern Star has with Palomar was originally scheduled for July. However, the bankruptcy trustees move for a 120-day extension and the bankruptcy court has not yet ruled on the motion. In the mean time, we continue to evaluate the potential impact of the bankruptcy and the project team is actually moving forward with efforts to secure shippers for Palomar East. Now the Northern Star bankruptcy will likely cause us to modify the project, we believe there remains a critical need for Palomar East. Today when the region hits big usage, the existing interstate pipeline is at maximum use. In our view it's a question of when, not if, additional pipeline infrastructure is needed to surf Willamette Valley and the rest of the Pacific Northwest. With the growing dependency on natural gas, the transition of a coal and the backup renewables in the Northwest, the reliability of the gas system becomes absolutely essential. Read the rest of this transcript for free on seekingalpha.com