<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
Commission file number: 1-7196
CASCADE NATURAL GAS CORPORATION
(Exact name of registrant as specified in its charter)
Washington 91-0599090
---------- ----------
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
222 Fairview Avenue North, Seattle, WA 98109
---------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (206) 624-3900
--------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes ( X ) No ( )
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
Title Outstanding
----- -----------
Common Stock, Par Value $1 per Share 10,869,032 as of March 31, 1997
<PAGE>
CASCADE NATURAL GAS CORPORATION
Index
PAGE NO.
--------
Part I. Financial Information
Item 1. Financial Statements
Consolidated Condensed Statements of Net
Earnings Available to Common Shareholders 3
Consolidated Condensed Balance Sheets 4
Consolidated Condensed Statements of Cash Flows 5
Notes to Consolidated Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Item 3. Quantitative and qualitative Disclosures about
Market Risk 12
Part II. Other Information
Item 2. Changes in Securities 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
Signature 13
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
CASCADE NATURAL GAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF NET EARNINGS
AVAILABLE TO COMMON SHAREHOLDERS
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------ ----------------
Mar 31, 1997 Mar 31, 1996 Mar 31, 1997 Mar 31, 1996
------------ ------------ ------------ ------------
(thousands except per share data)
<S> <C> <C> <C> <C>
Operating revenues $71,174 $67,620 $136,145 $124,528
Less: Gas purchases 38,644 37,400 74,333 69,021
Revenue taxes 4,904 4,583 8,575 7,856
------- ------- -------- --------
Operating margin 27,626 25,637 53,237 47,651
------- ------- -------- --------
Cost of operations:
Operating expenses 9,321 8,358 18,306 16,075
Depreciation and amortization 3,286 3,056 6,509 6,084
Property and payroll taxes 834 1,178 1,862 2,112
------- ------- -------- --------
13,441 12,592 26,677 24,271
------- ------- -------- --------
Earnings from operations 14,185 13,045 26,560 23,380
Less interest and other
deductions - net 2,249 2,450 4,580 4,920
------- ------- -------- --------
Earnings before income taxes 11,936 10,595 21,980 18,460
Income taxes 4,336 3,825 7,933 6,491
------- ------- -------- --------
Net earnings 7,600 6,770 14,047 11,969
Preferred dividends 128 131 255 262
------- ------- -------- --------
Net earnings available to
common shareholders $ 7,472 $ 6,639 $ 13,792 $ 11,707
------- ------- -------- --------
------- ------- -------- --------
Common shares outstanding:
Weighted average 10,840 9,163 10,814 9,131
End of period 10,869 9,196 10,869 9,196
Net earnings per common share $ 0.69 $ 0.72 $ 1.28 $ 1.28
------- ------- -------- --------
------- ------- -------- --------
Cash dividends per share $ 0.24 $ 0.24 $ 0.48 $ 0.48
------- ------- -------- --------
------- ------- -------- --------
</TABLE>
See notes to consolidated condensed financial statements
3
<PAGE>
CASCADE NATURAL GAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
Mar 31, 1997 Sep 30, 1996
------------- ------------
(Dollars in Thousands)
(Unaudited)
ASSETS
Utility Plant, net after accumulated
depreciation of $154,349 and $147,599 $ 250,837 $ 236,172
Construction work in progress 5,689 19,497
------------ ------------
256,526 255,669
------------ ------------
Other Assets:
Investments 668 667
Notes receivable, less current
maturities 1,747 1,777
------------ ------------
2,415 2,444
------------ ------------
Current Assets:
Cash and cash equivalents 2,215 543
Accounts receivable, less
allowance of $580 and $439
for doubtful accounts 22,909 11,646
Current maturities of notes receivable 637 631
Materials, supplies and inventories 6,070 6,063
Prepaid expenses and other assets 2,444 5,723
------------ ------------
34,275 24,606
------------ ------------
Deferred Charges 12,780 13,662
------------ ------------
$ 305,996 $ 296,381
------------ ------------
------------ ------------
COMMON SHAREHOLDERS' EQUITY,
PREFERRED STOCKS AND LIABILITIES
Common Shareholders' Equity:
Common stock, par value $1 per share,
authorized 15,000,000 shares, issued
and outstanding 10,869,032 and
10,786,585 shares $ 10,869 $ 10,787
Additional paid-in capital 94,643 93,438
Retained earnings 13,483 4,901
------------ ------------
118,995 109,126
------------ ------------
Redeemable Preferred Stocks,
aggregate redemption amount
of $6,845 and $7,097 6,630 6,851
------------ ------------
Long-term Debt 101,550 101,850
------------ ------------
Current Liabilities:
Notes payable and commercial paper 13,000 -
Accounts payable 13,179 17,599
Property, payroll and excise taxes 5,503 3,113
Dividends and interest payable 6,610 6,570
Other current liabilities 6,466 2,931
------------ ------------
44,758 30,213
------------ ------------
Deferred Credits:
Gas cost changes 8,146 21,578
Other 25,917 26,763
------------ ------------
34,063 48,341
------------ ------------
Commitments and Contingencies - -
$ 305,996 $ 296,381
------------ ------------
------------ ------------
See notes to consolidated condensed financial statements
4
<PAGE>
CASCADE NATURAL GAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
SIX MONTHS ENDED
--------------------------
Mar 31, 1997 Mar 31, 1996
------------ ------------
(dollars in thousands)
OPERATING ACTIVITIES:
Net earnings $ 14,047 $ 11,969
Adjustments to reconcile net
earnings to net cash provided
by operating activities:
Depreciation 6,509 6,084
Amortization of gas cost changes (1,719) 2,166
Decrease in deferred income taxes (1,217) (125)
Decrease in deferred investment
tax credits (117) (150)
Cash provided (used) by changes in
operating assets and liabilities:
Current assets and liabilities (6,201) (57)
Gas cost changes (11,713) 11,869
Other deferrals and non-current
liabilities 1,147 (3,150)
------------ ------------
Net cash provided by operating activities 736 28,606
------------ ------------
INVESTING ACTIVITIES:
Capital expenditures (13,379) (20,526)
Customer contributions in aid of
construction 5,941 265
New consumer loans (697) (758)
Receipts on consumer loans 769 1,316
Purchase of securities available for sale - (2,293)
Proceeds from securities
available for sale - 4,375
------------ ------------
Net cash used by investing activities (7,366) (17,621)
------------ ------------
FINANCING ACTIVITIES:
Issuance of common stock 712 1,006
Redemption of preferred stock (216) (345)
Proceeds from issuance of long-term debt - 2,100
Repayment of long-term debt (300) (5,000)
Changes in notes payable and commercial
paper, net 13,000 (3,001)
Dividends paid (4,894) (4,123)
------------ ------------
Net cash provided (used) by
financing activities 8,302 (9,363)
------------ ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,672 1,622
CASH AND CASH EQUIVALENTS:
Beginning of period 543 718
------------ ------------
End of period $ 2,215 $ 2,340
------------ ------------
------------ ------------
See notes to consolidated condensed financial statements
5
<PAGE>
CASCADE NATURAL GAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
THREE AND SIX MONTH PERIODS ENDED MARCH 31, 1997
The preceding statements were taken from the books and records of the
Company and reflect all adjustments which are, in the opinion of management,
necessary for a fair statement of the results for the interim periods. All
adjustments were of a normal and recurring nature.
Because of the highly seasonal nature of the business, earnings or loss
for any portion of the year are disproportionate in relation to the full year.
Reference is directed to the Notes to Consolidated Financial Statements
contained in the 1996 Transition Report on Form 10-K for the period
January 1, 1996 to September 30, 1996, and comments included therein under
"Management's Discussion and Analysis of Financial Condition and
Results of Operations".
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The following is management's assessment of the Company's financial
condition and a discussion of the principal factors that affect consolidated
results of operations and cash flows for the three and six month periods
ended March 31, 1997 and March 31, 1996.
RESULTS OF OPERATIONS
Net earnings available to common shareholders for the second quarter of
fiscal 1997 were $7,472,000, or $0.69 per share, compared to $6,639,000, or
$0.72 per share, for the quarter ended March 31, 1996. For the six months
ended March 31, 1997, net earnings available to common shareholders were
$13,792,000, or $1.28 per share, compared to $11,707,000, or $1.28 per share,
for the six-month period ended March 31, 1996. The increase in earnings is
primarily attributable to improved overall operating margin, which was
partially offset by increased cost of operations for the three and six month
periods. Per share earnings are affected by the 1,487,700 new shares of
common stock issued in August, 1996.
OPERATING MARGIN
RESIDENTIAL AND COMMERCIAL MARGIN. Operating margins derived from sales to
residential and commercial customers were as set forth in the following table:
Residential and Commercial Operating Margin
(dollars in thousands)
---------------------------------------------------------------------------
Three Months Ended Six Months Ended
March 31 March 31
1997 1996 1997 1996
---- ---- ---- ----
Degree Days 2,327 2,416 4,518 4,356
Average Number of Customers
Residential 136,175 128,286 134,534 126,622
Commercial 24,925 23,913 24,664 23,629
Therms per Customer
Residential 339 339 642 612
Commercial 1,703 1,774 3,235 3,174
Operating Margin
Residential $ 12,010 $ 10,662 $ 22,521 $ 19,128
Commercial $ 8,107 $ 8,151 $ 15,306 $ 14,319
---------------------------------------------------------------------------
Operating margin from sales to residential and commercial customers
increased by $1,304,000, or 7%, quarter to quarter. Factors contributing to
this increase were an increase of 8,901 in the average number of residential
and commercial customers, and new tariff rates charged to customers in the
state of Washington effective August 1, 1996. These factors resulted in
margin increases of approximately $972,000 and $1,400,000, respectively.
Offsetting these increases were three factors. First, there was $561,000 of
gas cost increases, representing 20% of the excess of
7
<PAGE>
incurred gas cost over the base gas cost level established in the Company's
tariff for sales in the state of Oregon. The tariff provides that the Company
absorb 20% of such differences (positive or negative), while the remaining
80% is deferred for pass back to customers. Second, the number of therms used
by the average commercial customer decreased by 4%, resulting in a margin
decline of approximately $300,000. Third, rates to Oregon customers were
decreased to recognize decreased property tax expense (see "Cost of
Operations"), reducing margins by approximately $240,000. The average number
of therms used by residential customers was the same as in the March 1996
quarter even though the weather, as measured by estimated degree days, was
nearly 4% warmer than last year and 2% warmer than normal.
For the six months ended March 31, 1997, margins from residential and
commercial customers increased by $4,380,000, or 13.1%. Factors contributing
to this increase were similar to the factors which caused the net improvement
in the quarterly period. The new tariff rates in Washington contributed
approximately $2,400,000, while the increase in the number of customers
contributed approximately $1,770,000. Therm consumption per customer
increased 5% for residential and 2% for commercial over the six months ended
March 31, 1996, resulting in a margin increase of approximately $1,400,000.
Consumption per customer is driven by the mix of customers, particularly in
the commercial class, the number and type of appliances used, and by the
weather. Weather for the 1997 six-month period was approximately 4% colder
than the same period last year, and 3% colder than normal. The colder weather
occurred primarily in the quarter ended December 31, 1996. Partially
offsetting these margin increases were unrecovered gas costs in Oregon, and
Oregon rate reductions related to property tax decreases (see preceding
paragraph) of approximately $990,000 and $340,000, respectively.
INDUSTRIAL AND NON-CORE MARGIN. Operating margin from industrial and other
customers increased $685,000, or 10%, quarter to quarter, and by $1,204,000,
or 8.5%, for the six-month period. These increases are primarily due to the
addition of ten new customers, including service to a new cogeneration
customer that began commercial operation in June, 1996.
COST OF OPERATIONS
Cost of operations for the quarter ended March 31, 1997, which consists of
operating expenses, depreciation and amortization, and property and payroll
taxes, increased $849,000 or 6.7% over the quarter ended March 31, 1996. For
the-six month period, the increase was $2,406,000, or 9.9%.
OPERATING EXPENSES, which are primarily labor and benefits expenses,
increased by $963,000, or 11.5%, for the quarter, and $2,231,000, or 13.9%
for the six month period. Of these increases, $465,000 and $815,000,
respectively, are attributable to increases in amounts included therein for
postretirement benefits other than pensions (PBOP). From 1993 through
July 1996, a portion of PBOP expenses were deferred, in accordance with a
policy statement issued by the Washington Utilities and Transportation
Commission in 1992. Concurrent with the settlement of the Washington rate
case, effective August 1, 1996, ongoing PBOP expenses are no longer deferred,
and amortization of the previously deferred amounts is also included in
operating expenses, resulting in the expense increase. For the full year,
this increase is expected to be approximately $1.4 million. Labor costs
increased by $299,000 for the quarter, and by $756,000 for the six-month
period.
8
<PAGE>
DEPRECIATION AND AMORTIZATION increased by $230,000, or 7.5%, for the
quarter, and by $425,000, or 7.0%, for the six-month period. These increases
are attributable to increases in utility plant.
PROPERTY AND PAYROLL TAXES decreased by $344,000, or 29.2%, for the
quarter, and $250,000, or 11.8%, for the six-month period. These reductions
are primarily due to property tax reductions in Oregon resulting from a voter
referendum. These reductions have no significant effect on net earnings
because the effect has been deferred in accordance with the policy
established by the Oregon Public Utility Commission. These deferrals are
currently being amortized, and rates charged to Oregon customers have been
reduced accordingly (see "Operating Margin").
INTEREST AND OTHER DEDUCTIONS
Interest and other deductions for the quarter decreased $201,000, or 8.2%,
from the quarter ended March 31, 1996. For the six month period, the
reduction was $340,000, or 6.9%. The reductions are due primarily to
decreases in the amount of outstanding debt. The debt reductions are
attributed, in part, to the proceeds of the common stock offering in
August, 1996.
LIQUIDITY AND CAPITAL RESOURCES
The seasonal nature of the Company's business creates short-term cash
requirements to finance customer accounts receivable and construction
expenditures. To provide working capital for these requirements, the Company
has a five-year credit commitment for $40 million from three banks. The
committed lines also support a money market facility of a similar amount and
a regional commercial paper program. A subsidiary has a $5 million five-year
revolving credit facility used for non-regulated business, and at March 31,
1997, $1.55 million was outstanding. The Company also has $25 million of
uncommitted lines from three banks.
Longer term financing is provided by a Medium-Term Note program with $100
million outstanding at March 31, 1997, and $50 million registered under the
Securities Act of 1933 and available for issuance. Because of the
availability of short-term credit and the ability to issue long-term debt and
additional equity, management believes it has adequate financial flexibility
to meet its anticipated cash needs.
OPERATING ACTIVITIES
Net cash provided by operating activities was $736,000 for the six months
ended March 31, 1997, compared to $28,606,000 for the six months ended
March 31, 1996, primarily due to higher gas costs incurred during the
1996 - 1997 heating season. For the six months ended March 31, 1997, the
commodity cost of gas purchased exceeded the base gas cost level established
in the Company's sales tariffs by approximately $26.5 million. The effect of
these higher gas costs, except for $990,000 discussed above under "Operating
Margin", has been deferred, and thus had no effect on net earnings. The
Company will file for recovery of these deferred amounts from customers
through purchased gas rate adjustments over future periods. By the end of the
period, gas costs returned to a level approximately equivalent to the base
cost level established in the Company's tariffs.
The decrease in cash flows from operating activities was also affected by
changes in current assets and liabilities. This resulted in a use of
$6,201,000 for the six months ended March
9
<PAGE>
31, 1997, compared to $57,000 for the prior year period. This was primarily
attributable to the cash required to relieve the accounts payable balance at
September 30, 1996. This balance included amounts accrued for August, 1996
business which were not settled until after the end of September. Such
amounts are normally settled in less than 30 days.
INVESTING ACTIVITIES
Cash used by investing activities for the six months ended March 31, 1997
was $7,366,000, compared to $17,621,000 for the prior year's six-month
period. Capital expenditures for the current year period were approximately
$7.1 million lower than last year. Net cash used by investing activities was
further reduced by $5,941,000 due to contributions in aid of construction
received from customers. This compares to $265,000 for the prior year.
Capital expenditures for fiscal 1997 are budgeted at approximately $32
million. The Company expects that fiscal 1997 capital expenditures will be
financed 50% to 75% by debt financing, depending on internally generated cash
flow.
FINANCING ACTIVITIES
The principal financing activity for the six months ended March 31, 1997,
was the net increase in short term borrowing of $13,000,000 in the form of
notes payable and commercial paper. This was due primarily to the negative
pressure on operating cash flow resulting from the increased gas costs
discussed above in "Operating Activities".
REGULATORY MATTERS
The Company has consistently earned in excess of its allowed rate of
return in Oregon in recent years, and continued earnings improvement in that
state would likely result in a mandated general rate reduction under the
current regulatory system. The staff of the Oregon Public Utility Commission
(OPUC) has agreed to collaborate with the Company in exploring alternative
incentive rate mechanisms which would allow the Company and its customers to
equitably share earnings improvements resulting from improved efficiency.
These discussions are not complete, and the outcome is uncertain.
Approximately 26% of the Company's pre-tax regulated operating income is
derived from Oregon operations.
ENVIRONMENTAL MATTERS
The Company has received notice of, and is investigating allegations of
environmental contamination from a former manufactured gas plant site in
Washington previously operated by the Company. The Company has begun an
investigation, but has not yet determined the existence or extent of the
alleged contamination. To the extent the Company may be responsible for all
or part of the cost relating to such contamination, it expects to seek
contribution from other site owners and its insurers, and would seek
appropriate rate relief to the extent of remaining expense incurred.
FORWARD LOOKING STATEMENTS
Statements contained in this report which are not historical in nature are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are subject to
risks and uncertainties that may cause actual future results to differ
materially. Such risks and uncertainties with respect to the Company include,
among others,
10
<PAGE>
its ability to successfully implement internal performance goals, competition
from alternative forms of energy, performance issues with key natural gas
suppliers, the capital-intensive nature of the Company's business, regulatory
issues, including the need for adequate and timely rate relief to recover
increased capital and operating costs resulting from customer growth and to
sustain dividend levels, the weather, increasing competition brought on by
deregulation initiatives at the federal and state regulatory levels, the
potential loss of large volume industrial customers due to "bypass" or the
shift by such customers to special competitive contracts at lower per unit
margins, exposure to environmental cleanup requirements, and economic
conditions, particularly in the Company's service area.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable
11
<PAGE>
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES.
Under the terms of its bank credit agreements, the Company is required to
maintain a minimum of $84,047,000 of net worth. Under the most restrictive
agreement, approximately $34,948,000 was available for the payment of
dividends as of March 31, 1997.
ITEM 5. OTHER INFORMATION.
Ratio of Earnings to Fixed Charges:
TWELVE MONTHS ENDED
------------------------------------------------------------------------
3/31/97 9/30/96 12/31/95 12/31/94 12/31/93 12/31/92
------- ------- -------- -------- -------- --------
2.57 2.17 2.16 2.07 2.86 1.97
For purposes of this calculation, earnings include income before income
taxes plus fixed charges. Fixed charges include interest expense and the
amortization of debt issuance expenses. Refer to Exhibit 12 for the
calculation of these ratios as well as the ratio of earnings to fixed charges
including preferred dividends.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a. Exhibits:
NO. DESCRIPTION
-- -----------
12 Computation of Ratio of Earnings to Fixed Charges
27 Financial Data Schedule UT
b. Reports on Form 8-K:
No reports were filed on Form 8-K during the quarter.
12
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CASCADE NATURAL GAS CORPORATION
(Registrant)
By: /s/ J D Wessling
------------------------------------------------------------
J D Wessling
Vice President - Finance and Chief Financial Officer
(Principal Financial Officer)
Date: MAY 6, 1997
-----------
13
<PAGE>
EXHIBIT 12
<TABLE>
<CAPTION>
CASCADE NATURAL GAS CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED DIVIDEND REQUIREMENTS
Twelve Months Ended
-------------------------------------------------------------------
3/31/97 9/30/96 12/31/95 12/31/94 12/31/93 12/31/92
------- ------- -------- -------- -------- --------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest expense $ 9,590 10,101 9,938 8,090 7,038 $ 7,478
Amortization of debt
issuance expense 612 612 606 593 562 402
------- ------- -------- -------- -------- -------
Total fixed charges $10,202 10,713 10,544 8,683 7,600 $ 7,880
Earnings, as defined:
Net earnings $10,290 8,211 7,732 5,760 9,103 $ 4,843
Add (deduct):
Income taxes 5,714 4,272 4,508 3,505 5,224 2,817
Cumulative effect of change
in accounting method - - - - (209) -
Fixed charges 10,202 10,713 10,544 8,683 7,600 7,880
------- ------- -------- -------- -------- -------
Total earnings $26,206 23,196 22,784 17,948 21,718 $15,540
------- ------- -------- -------- -------- -------
Ratio of earnings to fixed charges 2.57 2.17 2.16 2.07 2.86 1.97
------- ------- -------- -------- -------- -------
Fixed charges and preferred
dividend requirements:
Fixed charges $10,202 10,713 10,544 8,683 7,600 $ 7,880
Preferred dividend requirements 804 819 853 898 913 941
------- ------- -------- -------- -------- -------
Total $11,006 11,532 11,397 9,581 8,513 $ 8,821
------- ------- -------- -------- -------- -------
Ratio of earnings to fixed charges and
preferred dividend requirements 2.38 2.01 2.00 1.87 2.55 1.76
------- ------- -------- -------- -------- -------
</TABLE>
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF CASCADE NATURAL GAS CORPORATION INCLUDED IN
THE QUARTERLY REPORT ON FORM 10-Q FOR THE SIX MONTHS ENDED MARCH 31, 1997, AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-31-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 256,526
<OTHER-PROPERTY-AND-INVEST> 2,415
<TOTAL-CURRENT-ASSETS> 34,275
<TOTAL-DEFERRED-CHARGES> 12,780
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 305,996
<COMMON> 10,869
<CAPITAL-SURPLUS-PAID-IN> 94,643
<RETAINED-EARNINGS> 13,483
<TOTAL-COMMON-STOCKHOLDERS-EQ> 118,995
6,630
0
<LONG-TERM-DEBT-NET> 101,550
<SHORT-TERM-NOTES> 12,000
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 1,000
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 65,821
<TOT-CAPITALIZATION-AND-LIAB> 305,996
<GROSS-OPERATING-REVENUE> 136,145
<INCOME-TAX-EXPENSE> 7,933
<OTHER-OPERATING-EXPENSES> 109,585
<TOTAL-OPERATING-EXPENSES> 109,585
<OPERATING-INCOME-LOSS> 26,560
<OTHER-INCOME-NET> 121
<INCOME-BEFORE-INTEREST-EXPEN> 18,748
<TOTAL-INTEREST-EXPENSE> 4,701
<NET-INCOME> 14,047
255
<EARNINGS-AVAILABLE-FOR-COMM> 13,792
<COMMON-STOCK-DIVIDENDS> 5,210
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 736
<EPS-PRIMARY> 1.28
<EPS-DILUTED> 1.28
</TABLE>