What changed in this filing

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Item 1. Business

2020-12-03 compared with 2019-12-03 · 29 added, 19 removed, 74 unchanged (39% of the section changed)

14 unchanged sentences

For the purposes of this schedule, margin for the utility operations is defined as revenues less cost of gas.

Other Utility

Other Non-Utility

Total Percent

Customers Volume Revenue Margin

Residential 91.3 % 35 % 60 % 63 %

Commercial 8.6 % 27 % 30 % 23 %

Industrial 0.1 % 38 % 8 % 12 %

Other Utility 0.0 % 0 % 1 % 1 %

1 unchanged sentence

Total Percent 100.0 % 100 % 100 % 100 %

Total Value 61,964 10,357,174 $ 63,075,391 $ 38,783,925

Customers Volume Revenue Margin

Residential 91.2 % 39 % 58 % 60 %

Commercial 8.7 % 31 % 33 % 26 %

Industrial 0.1 % 30 % 7 % 11 %

Other Utility 0.0 % 0 % 1 % 2 %

1 unchanged sentence

Total Percent 100.0 % 100 % 100 % 100 %

Total Value 60,741 9,876,493 $ 68,026,525 $ 35,205,551

Roanoke Gas’ regulated natural gas distribution business accounted for approximately 98% of Resources total revenues for fiscal years ending September 30, 2020 and 2019.

1 unchanged sentence

however, they represent less than 40% of the total gas volumes delivered and more than half of the Company’s consolidated revenues and margin.

Industrial customers include primarily transportation customers that purchase their natural gas requirements directly from a supplier other than the Company and utilize Roanoke Gas’ natural gas distribution system for delivery to their operations.

Most of the revenue billed for these customers relates only to transportation service, and not to the purchase of natural gas, causing total revenues generated by these deliveries to be approximately 7% of total revenues, even though they represent 30% of total natural gas deliveries for the year ended September 30, 2019 and approximately 10% to 11% of margin for each of the years presented.

Industrial customers include primarily transportation customers that purchase their natural gas requirements directly from a supplier other than the Company

and utilize Roanoke Gas’ natural gas distribution system for delivery to their operations.

Most of the revenue billed for these customers relates only to transportation service, and not to the purchase of natural gas, causing total revenues generated by these deliveries to be approximately 8% of total revenues, although they represent 38% of total natural gas deliveries for the year ended September 30, 2020 and approximately 11% to 12% of margin for each of the years presented.

The Company’s revenues are affected by changes in gas costs as well as by changes in consumption volume due to weather and economic conditions and changes in the non-gas portion of customer billing rates.

2 unchanged sentences

For the fiscal year ended September 30, 2020, approximately 59% of the Company’s total DTH of natural gas deliveries and 72% of the residential and commercial deliveries were made in the five-month period of November through March.

Total natural gas deliveries were approximately 9.9 million DTH in fiscal 2019 and 2018 and 8.6 million DTH in fiscal 2017 .

Total natural gas deliveries were approximately 10.4 million DTH in fiscal 2020 and 9.9 million DTH in fiscal 2019.

Roanoke Gas relies on multiple interstate pipelines including those operated by Columbia Gas Transmission Corporation, LLC and Columbia Gulf Transmission Corporation, LLC (together “Columbia”), and East Tennessee Natural Gas, LLC (“East Tennessee”), Tennessee Gas Pipeline, Midwestern Gas Transmission Company and Saltville Gas Storage Company, LLC ("Saltville") to transport natural gas from the production and storage fields to Roanoke Gas’ distribution system.

2 unchanged sentences

The rates paid for natural gas transportation and storage services purchased from the interstate pipeline companies are established by tariffs approved by FERC.

These tariffs contain flexible pricing provisions, which, in some instances, authorize these transporters to reduce rates and charges to meet price competition.

The current pipeline contracts expire at various times from 2022 to 2027.

8 unchanged sentences

Natural gas purchased under the asset management agreement is priced at indexed-based market prices as reported in major industry pricing publications .

The Company renewed its contract with the asset manager in March 2018.

The new agreement expires March 31, 2021.

The current contract was extended to March 31, 2022.

The Company uses summer storage programs to supplement gas supply requirements during the winter months.

5 unchanged sentences

These franchises generally extend for multi-year periods and are renewable by the municipalities, including exclusive franchises in the cities of Roanoke and Salem and the Town of Vinton, Virginia.

All three franchise agreements were recently renewed for a term of 20 years and will expire December 31, 2035.

All three franchise agreements were renewed for a 20-year term, set to expire December 31, 2035.

In 2019, the SCC issued a final order granting a CPCN to furnish gas to all of Franklin County.

Unlike the CPCNs for the other counties served by Roanoke Gas, the Franklin County CPCN will be terminated within five years of the date of the order if Roanoke Gas does not furnish gas service to the designated service area.

Roanoke Gas plans to serve the Franklin County area with natural gas delivered through the MVP once that pipeline goes in service.

Management anticipates that the Company will be able to renew all of its franchises when they expire.

There can be no assurance, however, that a given jurisdiction will not refuse to renew a franchise or will not, in connection with the renewal of a franchise, attempt to impose restrictions or conditions that could adversely affect the Company’s business operations or financial condition.

Roanoke Gas plans to serve the Franklin County area with natural gas delivered through the MVP once it is placed into service.

Management anticipates that the Company will be able to renew all of its franchises prior to their current expiration date;

however, there can be no assurance that a given jurisdiction will not refuse to renew a franchise or will not, in connection with the renewal of a franchise, attempt to impose restrictions or conditions that could adversely affect the Company’s business operations or financial condition.

CPCNs, issued by the SCC, are generally of perpetual duration and subject to compliance with regulatory standards.

12 unchanged sentences

At the local level, Roanoke Gas is further regulated by the municipalities and localities that grant franchises for the placement of gas distribution pipelines and the operation of gas distribution networks within their jurisdictions.

At September 30, 2019 , Resources had 106 full-time employees and 107 total employees.

As of that date, 26 employees, or 24% , belonged to the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied-Industrial International Union, Local No.

Human Capital Resources

At September 30, 2020, Resources had 101 full-time employees, of which 18 employees, or 18%, belonged to the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied-Industrial International Union, Local No.

515 and were represented under a collective bargaining agreement.

The union has been

in place at the Company since 1952.

The current collective bargaining agreement will expire on July 31, 2020.

The union has been in place at the Company since 1952.

The union and the Company agreed to a new collective bargaining agreement effective August 1, 2020 and expiring on July 31, 2022.

Management maintains an amicable relationship with the union.

The Company’s business strategy and ability to serve customers relies on employing talented professionals and attracting, training, developing and retaining a skilled workforce.

This is particularly relevant as the Company is facing retirements of key personnel over the next several years.

With respect to the current COVID-19 pandemic, the Company has updated and implemented its pandemic plan to ensure the continuation of safe and reliable service to customers and to maintain the safety of the Company's employees, as well as to incorporate any new governmental guidance and rules and regulations regarding workplace safety.

Since the beginning of the pandemic, the Company has been deemed an essential entity by virtue of the utility services provided through Roanoke Gas.

Website Access to Reports

4 unchanged sentences

You may read and copy these filings with the SEC at the SEC public reference room at 100 F Street, NE, Washington, D.C.

Information on the operation of the Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330.

Due to COVID-19, the SEC public reference room is closed until further notice.

Questions about information available from the public reference room should be directed to SEC staff at library@sec.gov or by calling 1-202-551-5450.

The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding the Company’s filings at www.sec.gov.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business