FORM U-3A-2 RGC RESOURCES, INC.
FILE NO.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
Statement By Holding Company Claiming Exemption
Under Rule U-3A-2 From the Provisions of the
Public Utility Holding Company Act of 1935
RGC Resources, Inc. hereby files with the Securities and Exchange
Commission (the Commission), pursuant to Rule 2, its statement claiming
exemption as a holding company from the provisions of the Public Utility Holding
Company Act of 1935 (the "Act"), and submits the following information:
1. The Claimant RGC Resources, Inc., a Virginia corporation, is a
holding company which directly or indirectly holds interests in the following
subsidiaries, each of which is organized under the laws of the Commonwealth of
Virginia or the State of West Virginia:
a. Roanoke Gas Company ("Roanoke Gas"), a public service corporation
organized under the laws of the Commonwealth of Virginia;
b. Diversified Energy Company, a Virginia corporation, d/b/a
Highland Propane Company ("Highland Propane") and d/b/a Highland
Gas Marketing;
c. Bluefield Gas Company ("Bluefield Gas"), a public
service corporation organized under the laws of the State of West
Virginia.
<PAGE>
The business address of the Claimant and each of its subsidiaries is:
RGC Resources, Inc., Roanoke Gas Company and Diversified
Energy Company
519 Kimball Avenue, N.E.
Roanoke, VA 24016
Bluefield Gas Company
4699 East Cumberland Road
Bluefield, WV 24701
Roanoke Gas is a public service corporation organized and existing in
good standing under the laws of the Commonwealth of Virginia. Roanoke Gas
distributes natural gas to some 51,315 residential, commercial and industrial
customers located in the City of Roanoke and environs and Bluefield, Virginia
pursuant to certificates of convenience and necessity at rates and charges
issued and prescribed by the State Corporation Commission of Virginia ("Virginia
Commission"). Diversified Energy Company, a Virginia corporation, operates as
Highland Propane Company ("Highland Propane"), and Highland Gas Marketing.
Highland Propane, which is not a public utility, is operated under two (2)
divisions, Highland Propane-Roanoke and Highland Propane-Bluefield. Highland
Propane-Roanoke is engaged in the business of selling liquefied petroleum gas
(propane) in bulk to residential, commercial and industrial customers in and
around Roanoke, Virginia and Southwest Virginia. Roanoke Gas provides managerial
and other direct labor, goods and services to Highland Propane-Roanoke under
agreement approved by the Virginia Commission. Highland Propane is not otherwise
subject to the regulatory jurisdiction of the Virginia Commission. Highland
Propane-Bluefield is engaged in the business of selling liquefied petroleum gas
(propane) in bulk to residential, commercial and industrial customers in
Southern West Virginia and has offices in Bluefield
<PAGE>
and Rainelle, West Virginia. Highland Gas Marketing is a purchasing and
marketing entity that buys fuels on the spot and short-term market and resells
to certain end-users.
Bluefield Gas Company ("Bluefield Gas"), a West Virginia public service
corporation, is regulated as to rates and service by the Public Service
Commission of the State of West Virginia ("West Virginia Commission"). Bluefield
Gas provides natural gas service to some 4,326 residential, commercial and
industrial customers located in and around Bluefield, West Virginia. Bluefield
first claimed exemption under Section 3(a)(2) of the Public Utility Holding
Company Act of 1935 ("The Act") in February 1952. After July 1, 1999, Bluefield
will no longer be a holding company as its former subsidiary, Commonwealth
Public Service Corporation, will have been merged into Roanoke Gas Company.
2. Columbia Gas Transmission Corporation ("Columbia") is Roanoke Gas'
primary transporter of natural gas. Columbia historically has transported
approximately two-thirds of Roanoke Gas' gas supply and 100% of Bluefield Gas'
gas supply. Prior to Federal Energy Regulatory Commission Order 636, Roanoke Gas
and Bluefield Gas purchased their core market requirements through Demand
Purchases, Firm Transportation Service and Firm Storage Service. Additional
requirements were met through the use of spot and short-term purchases under
contracts with producers and brokers. Under Order 636 the responsibility for
obtaining dependable natural gas supplies shifts from the pipeline companies to
the local distribution companies and to other "shippers" of natural gas. The
Company purchases gas supplies from a variety of producers and marketers. Recent
examples of suppliers or marketers include Amoco Energy Trading Corporation,
Cabot Oil
<PAGE>
and Gas, Columbia Energy Services, Coral Energy, Engage Energy, and
Southern Company Energy Marketing.
Roanoke Gas' other major transporter is East Tennessee Natural Gas
Company ("East Tennessee"), an El Paso Energy Company. Historically, East
Tennessee has delivered approximately one-third of Roanoke Gas' natural gas
supply.
Roanoke Gas receives its gas supply from Columbia at two city gate
stations. Each station is connected by a thirty-three mile transmission line to
Columbia's system at Gala, Virginia. Roanoke Gas receives its gas supply from
East Tennessee at four city gate stations located on East Tennessee's
transmission line. The city gate stations are located on the perimeter of a
network of distributions mains located in the Cities of Roanoke and Salem, the
Towns of Vinton, Fincastle and Troutville, and the Counties of Bedford,
Botetourt, Montgomery and Roanoke, Virginia. Also, located on our transmission
line in Botetourt County, Virginia is a liquefied natural gas storage facility
which has the capacity to hold 200 million cubic feet of natural gas.
Bluefield Gas owns a transmission line extending from Princeton, West
Virginia to Bluefield, West Virginia, and a distribution system within the City
of Bluefield, West Virginia and the immediate surrounding area of Mercer County,
West Virginia. In December 1998, Bluefield Gas Company completed approximately
two miles of 4" steel distribution lines to connect to facilities owned by
Phoenix Energy Sales Company that provides for the delivery of natural gas from
Consolidated Natural Gas Company. A portion of the gas transported by Bluefield
Gas is sold at the West Virginia-Virginia state line to Roanoke Gas for resale
to its customers through a distribution network in Bluefield, Virginia and the
immediate surrounding area of Tazewell County, Virginia.
<PAGE>
Highland Propane-Bluefield's principal bulk storage facility, located at
its Bluefield, West Virginia facility, is comprised of two 30,000-gallon storage
tanks and one 18,000-gallon storage tank. Two 18,000-gallon storage tanks are
located at its Rainelle, West Virginia facility and one 30,000-gallon tank is
located at Ansted, WV.
Highland Propane-Roanoke owns and operates nine storage facilities. A
facility at Thirlane Road, N.W. in Roanoke, Virginia consists of two
30,000-gallon tanks. A second facility at Fort Chiswell, Virginia consists of
two 35,000-gallon tanks. The third facility is located on the property of
Consolidated Glass in Galax, Virginia and consists of one 30,000- gallon tank.
The fourth facility is located in Craig County, near the town of New Castle,
Virginia and consists of one 30,000-gallon tank. The fifth facility, located
near the intersection of Routes 221 and 679 in Floyd County, consists of one
30,000-gallon tank. The sixth facility is located on the property of Virginia
Forging in Botetourt County, near the Town of Buchanan, Virginia, and consists
of one 30,000-gallon tank. The seventh facility is located on the property of
Golden West Foods in Bedford, Virginia and consists of one 30,000-gallon tank.
The eighth facility is located in the City of Buena Vista, Virginia and consists
of two 30,000-gallon tanks. The ninth facility is located in Allegheny County
near the Town of Low Moor and consists of one 30,000-gallon tank.
3. The following information for the last calendar year with respect to
Roanoke Gas and Bluefield Gas is submitted:
(a) Roanoke Gas distributed at retail 6,654,927 MCF of gas during the
calendar year 1998 for total revenues of $41,420,398. Bluefield
Gas distributed at retail 781,305 MCF of gas in the State of West
Virginia during the calendar year 1998 for total revenues of
$4,990,862.
<PAGE>
(b) Neither Roanoke Gas nor Bluefield Gas distributed at retail
natural gas outside the state of its incorporation.
(c) Roanoke Gas did not sell at wholesale natural gas outside the
Commonwealth of Virginia. Bluefield Gas sold 220,192 MCF of
natural gas at wholesale to Roanoke Gas at the Virginia-West
Virginia line for $861,103.
(d) Roanoke Gas purchased 6,787,194 MCF of natural gas outside the
Commonwealth of Virginia during the calendar year 1998 for
$26,171,488. All such gas was transported to Roanoke Gas for
resale as system supply by Columbia Gas Transmission Corporation,
East Tennessee Natural Gas Company, and Bluefield Gas. Bluefield
Gas purchased 1,059,514 MCF of natural gas for $4,093,069 outside
the State of West Virginia. All such gas was transported to
Bluefield Gas for resale as system supply by Columbia Gas
Transmission Corporation and Phoenix Energy Sales Company.
Bluefield Gas transported 57,535 MCF of natural gas to its
end-users for other marketers for $40,601 in transportation fees.
Highland Gas Marketing purchased and resold 1,758,579 MCF of
natural gas to certain end-users of Roanoke Gas Company for
$5,630,192. In addition to the above volumes of Highland Gas
Marketing, Roanoke transported 984,111 MCF of natural gas to its
end-users for other marketers for $1,668,195 in total
transportation fees.
4. (a through e) Not applicable. The Company holds no interest, directly
or indirectly in an exempt wholesale generator (EWG) or foreign utility company.
A consolidating statement of income and surplus and a consolidating
balance sheet of RGC Resources, Inc. and its subsidiaries for the 1998 calendar
year is attached as Exhibit A and Exhibit A(1). The reorganization by which RGC
Resources became the
<PAGE>
holding company of Roanoke Gas Company, Bluefield Gas Company and
Diversified Energy Company became effective after the close of business on July
1, 1999. Accordingly, the financial statements presented are based on the
financial statements of Roanoke Gas and its former subsidiaries for the calendar
year ended December 31, 1998.
<PAGE>
The above-named claimant has caused this statement to be duly executed
on its behalf by its authorized officer on this day 2nd of July, 1999.
RGC RESOURCES, INC.
By: s/John B. Williamson, III
-------------------------
Its President
(SEAL)
ATTEST:
s/Roger L. Baumgardner
- --------------------------
Secretary
Notices and correspondence regarding this statement should be addressed to:
Roger L. Baumgardner
Vice President-Secretary & Treasurer
RGC Resources, Inc.
Post Office Box 13007
Roanoke, VA 24030
<PAGE>
<TABLE>
<CAPTION>
Exhibit A
RGC Resources, Inc.
Consolidating Statement Of Earnings
Twelve Months Ended December 31, 1998
Roanoke Bluefield Highland Highland
RGC Gas Gas Propane Gas Consolidated
Resources Company Company Company Marketing Eliminations Total
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES:
Gas utilities $0 $43,324,283 $5,448,238 $(969,371) $47,803,150
Propane operations $7,232,113 7,232,113
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Total operating revenues 0 43,324,283 5,448,238 7,232,113 0 (969,371) 55,035,263
COST OF GAS:
Gas utilities 26,149,746 3,923,188 (861,103) 29,211,831
Propane operations 3,388,347 3,388,347
--------------------------------------------------------------------------------------------
Total cost of gas 0 26,149,746 3,923,188 3,388,347 0 (861,103) 32,600,178
OPERATING MARGIN 0 17,174,537 1,525,050 3,843,766 0 (108,268) 22,435,085
--------------------------------------------------------------------------------------------
OTHER OPERATING EXPENSES:
Gas utilities:
Other operations 7,019,876 629,144 (43,832) 7,605,188
Maintenance 1,334,938 93,933 1,428,871
Taxes - general 1,985,252 276,180 2,261,432
Taxes - income 808,775 58,812 867,587
Depreciation and amortization 2,662,756 202,969 (17,609) 2,848,116
Propane operations 3,380,947 (46,851) 3,334,096
--------------------------------------------------------------------------------------------
Total other operating expenses 0 13,811,597 1,261,038 3,380,947 0 (108,292) 18,345,290
OPERATING EARNINGS 0 3,362,940 264,012 462,819 0 24 4,089,795
OTHER INCOME AND DEDUCTIONS:
Gas utilities:
Interest Income 30,719 32 (1,879) 28,872
Merchandising and jobbing, net 183,183 4,271 187,454
Other deductions (118,016) (4,324) (122,340)
Taxes - income (50,010) (1,648) (51,658)
Propane operations, net (23,301) 73,947 5,760 56,406
--------------------------------------------------------------------------------------------
Total other income and deductions 0 45,876 (1,669) (23,301) 73,947 3,881 98,734
EARNINGS BEFORE INTEREST CHARGES 0 3,408,816 262,343 439,518 73,947 3,905 4,188,529
INTEREST CHARGES:
Gas utilities:
Long-term debt 1,456,640 96,909 1,553,549
Other interest 222,732 91,308 (103) 313,937
Propane operations 183,485 (1,846) 181,639
--------------------------------------------------------------------------------------------
Total interest charges 0 1,679,372 188,217 183,485 0 (1,949) 2,049,125
NET EARNINGS $0 $1,729,444 $74,126 $256,033 $73,947 $5,854 $2,139,404
============================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
RGC RESOURCES, INC. Exhibit A(1)
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1998
Roanoke Bluefield Highland Highland
RGC Gas Gas Propane Gas Consolidated
ASSETS Resources Company Company Company Marketing Eliminations Total
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<S> <C> <C> <C> <C> <C> <C>
UTILITY PLANT:
Utility Plant in Service $67,661,174 $5,464,394 $(1,636,290) $71,489,278
Accumulated Depreciation (24,842,914) (1,873,215) 1,561,869 (25,154,260)
--------------------------------------------------------------------------------------------
Utility Plant in Service, Net 0 42,818,260 3,591,179 0 0 (74,421) 46,335,018
Construction Work-In-Progress 1,152,400 170,847 1,323,247
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Utility Plant, Net 0 43,970,660 3,762,026 0 0 (74,421) 47,658,265
--------------------------------------------------------------------------------------------
NONUTILITY PROPERTY:
Propane 11,743,480 (209,764) 11,533,716
Accumulated Depreciation (3,542,940) 261,216 (3,281,724)
--------------------------------------------------------------------------------------------
Nonutility Property, Net 0 0 0 8,200,540 0 51,452 8,251,992
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Cash and Cash Equivalents 102,992 46,282 (85,359) 63,915
Accounts Receivable 4,804,876 1,235,664 938,272 815,202 2,063,158 9,857,172
Inventories 5,851,079 1,025,860 193,457 7,070,396
Prepaid Income Taxes -
Deferred Income Taxes 2,109,341 2,109,341
Purchased Gas Adjustments (1,336,456) (16,750) 1,353,206 -
Other 280,098 42,072 197,920 (1,300) 518,790
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Total Current Assets 0 9,702,589 2,333,128 1,244,290 815,202 5,524,405 19,619,614
--------------------------------------------------------------------------------------------
OTHER ASSETS 80,035 3,102,959 31,134 412,699 (2,748,656) 878,171
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TOTAL $80,035 $56,776,208 $6,126,288 $9,857,529 $815,202 $2,752,780 $76,408,042
============================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
RGC RESOURCES, INC. Exhibit A(1)
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1998
Roanoke Bluefield Highland Highland
RGC Gas Gas Propane Gas Consolidated
LIABILITIES Resources Company Company Company Marketing Eliminations Total
- ----------- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CAPITALIZATION:
Stockholders' Equity:
Common Stock $50 $9,017,170 $49,704 $196,421 $(246,675) $9,016,670
Capital in Excess of Par Value 7,032,442 220,564 833,662 952,386 9,039,054
Retained Earnings 8,094,110 1,454,735 2,703,493 279,062 (3,478,636) 9,052,764
--------------------------------------------------------------------------------------------
Total Stockholders' Equity $50 $24,143,722 $1,725,003 $3,733,576 $279,062 $(2,772,925) $27,108,488
Long-Term Debt (Less Current Maturities) 17,700,000 1,300,000 1,700,000 20,700,000
--------------------------------------------------------------------------------------------
Total Capitalization 50 41,843,722 3,025,003 5,433,576 279,062 (2,772,925) 47,808,488
--------------------------------------------------------------------------------------------
CURRENT LIABILITIES:
Current Maturites of Long-Term Debt
Notes Payable 5,746,000 2,012,000 2,416,000 10,174,000
Dividends Payable 487,352 487,352
Accounts Payable 79,985 3,475,701 362,822 1,410,231 464,442 2,063,158 7,856,339
Income Taxes Payable (373,387) 209,284 115,233 71,698 22,828
Customers' Deposits 494,240 58,248 845 553,333
Accrued Expenses 3,597,491 326,218 143,274 4,066,983
Refunds From Suppliers - Due Customers 85,121 85,121
Purchased Gas Adjustments 1,353,206 1,353,206
--------------------------------------------------------------------------------------------
Total Current Liabilities 79,985 13,512,518 2,968,572 4,085,583 536,140 3,416,364 24,599,162
DEFERRED CREDITS AND OTHER LIABILITIES:
Deferred Income Taxes 989,444 119,929 338,370 2,109,341 3,557,084
Deferred Investment Tax Credits 430,524 12,784 443,308
--------------------------------------------------------------------------------------------
Total Deferred Credits and Other Liabilities 0 1,419,968 132,713 338,370 0 2,109,341 4,000,392
TOTAL $80,035 $56,776,208 $6,126,288 $9,857,529 $815,202 $2,752,780 $76,408,042
============================================================================================
</TABLE>
<PAGE>
EXHIBIT B
RGC RESOURCES, INC.
FINANCIAL DATA SCHEDULE
Item No. Caption Heading
-------- ---------------
1 Total Assets $76,408,042
2 Total Operating Revenues 55,035,263
3 Net Income 2,139,404
<PAGE>
EXHIBIT C
NOT APPLICABLE
<TABLE> <S> <C>
<ARTICLE> OPUR3
<LEGEND>
??THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATING INCOME STATEMENTS OF ROANOKE GAS CO. AND SUBSIDIARIES AND OF
BLUEFIELD GAS CO. AND THE CONSOLIDATING BALANCE SHEETS OF ROANOKE GAS CO. AND
SUBSIDIARIES AND OF BLUEFIELD GAS CO. FOR THE YEAR ENDED DEC. 31, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.??
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> DEC-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-ASSETS> 76,408,042
<TOTAL-OPERATING-REVENUES> 55,035,263
<NET-INCOME> 2,139,404
</TABLE>
