FORM U-3A-2 ROANOKE GAS COMPANY
FILE NO. 69-331
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
Statement By Holding Company Claiming Exemption
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Under Rule U-3A-2 From the Provisions of the
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Public Utility Holding Company Act of 1935
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Roanoke Gas Company ("Roanoke Gas") hereby files with the Securities
and Exchange 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. In support of such claim for exemption, the following
information is submitted:
1. 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 48,099 residential, commercial
and industrial customers located in the City of Roanoke and environs pursuant
to certificates of convenience and necessity at rates and charges issued and
prescribed by the State Corporation Commission of Virginia ("Virginia
Commission"). Roanoke Gas owns all of the issued and outstanding voting
securities of Diversified Energy Company, a Virginia corporation, d/b/a
Highland Propane Company ("Highland Propane"), and d/b/a 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 all 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 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.
Roanoke Gas also owns all of the issued and outstanding securities of
Bluefield Gas Company ("Bluefield Gas"), a West Virginia public service
corporation, which 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 4,197 residential,
commercial and industrial customers located in and around Bluefield, West
Virginia. Bluefield Gas, in turn, owns all of the issued and outstanding
voting securities of Commonwealth Public Service Corporation
("Commonwealth"). Commonwealth is a small Virginia public service
corporation which provides natural gas service to approximately 910
residential, commercial and industrial customers located in and around
<PAGE>
Bluefield, Virginia, under rates and charges prescribed by the Virginia
Commission. Bluefield first claimed exemption under Section 3(a)(2) of the
Public Utility Holding Company Act of 1935 ("The Act") in February 1952.
2. Columbia Gas Transmission Corporation ("Columbia") is Roanoke
Gas' primary transporter of natural gas. Columbia historically has
transported 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, Ashland Exploration, Inc., Coastal Gas Marketing Company,
Columbia Energy Services, Conoco, Inc., LG&E Natural Inc. and Vastar Gas
Marketing, Inc.
Roanoke Gas' other major transporter is East Tennessee Natural Gas
Company ("East Tennessee"). Historically, East Tennessee has delivered 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. A portion of the gas transported by Bluefield Gas is
sold at the West Virginia-Virginia state line to Commonwealth for resale to
its customers through a distribution network in Bluefield, Virginia and the
immediate surrounding area of Tazewell County, Virginia.
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 six 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
30,000 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 a
30,000 gallon tank. The sixth facility is located on the property of
Meadesville Forging in Buchanan, Virginia and consists of a 30,000 gallon
tank.
<PAGE>
3. The following information for the last calendar year with respect
to Roanoke Gas, Bluefield Gas and Commonwealth is submitted:
(a) Roanoke Gas distributed at retail 8,405,381 MCF of gas
during the calendar year 1996. Bluefield Gas distributed at retail
906,212 MCF of gas during the calendar year 1996. Commonwealth
distributed at retail 278,584 MCF of gas during the calendar year 1996.
(b) Neither Roanoke Gas, Bluefield Gas nor Commonwealth
distributed at retail natural gas outside the state of its
incorporation.
(c) Roanoke Gas and Commonwealth did not sell at wholesale
natural gas outside the Commonwealth of Virginia. Bluefield Gas sold
278,584 MCF of natural gas at wholesale to Commonwealth at the
Virginia-West Virginia line.
(d) Roanoke Gas purchased 8,721,613 MCF of natural gas outside
the Commonwealth of Virginia during the calendar year 1996. All such
gas was transported to Roanoke Gas for resale as system supply by
Columbia Gas Transmission Corporation and East Tennessee Natural Gas
Company. Commonwealth purchased 278,584 MCF of natural gas from
Bluefield Gas at the Virginia-West Virginia state line. Bluefield Gas
purchased 1,218,368 MCF of natural gas outside the State of West
Virginia. All such gas was transported to Bluefield Gas for resale as
system supply by Columbia Gas Transmission Corporation. Bluefield Gas
transported 23,063 MCF of natural gas to its end-users for other
marketers. Highland Gas Marketing purchased and resold 859,812 MCF of
natural gas to certain end-users of Roanoke Gas Company. In addition
to the above volumes of Highland Gas Marketing, Roanoke transported
636,034 MCF of natural gas to its end-users for other marketers.
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 Roanoke Gas and its subsidiaries for the 1996 calendar year
is attached as Exhibit A and Exhibit A(1).
The above-named claimant has caused this statement to be duly executed
on its behalf by its authorized officer on this 24th day of February, 1997.
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ROANOKE GAS COMPANY
By: s/F. A. Farmer
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Its President
(SEAL)
ATTEST:
s/Roger L. Baumgardner
---------------------------------
Secretary
<PAGE>
Notices and correspondence regarding this statement should be addressed to:
Roger L. Baumgardner
Vice President-Secretary & Treasurer
Roanoke Gas Company
Post Office Box 13007
Roanoke, VA 24030
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<TABLE>
<CAPTION>
Exhibit A
Roanoke Gas Company
Consolidating Statement Of Earnings
Twelve Months Ended December 31, 1996
Roanoke Bluefield Highland Highland
Gas Gas Propane Gas Consolidated
Company Company Company Marketing Eliminations Total
------- ------- ------- --------- ------------ -----
<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES:
Gas utilities $56,974,628 $6,920,701 ($283,886) $63,611,443
Propane operations $6,578,095 6,578,095
----------- ---------- ---------- --------- ---------- -----------
Total operating revenues 56,974,628 6,920,701 6,578,095 0 (283,886) 70,189,538
COST OF GAS:
Gas utilities 39,274,256 5,062,904 44,337,160
Propane operations 3,720,662 3,720,662
----------- ---------- ---------- --------- ---------- -----------
Total cost of gas 39,274,256 5,062,904 3,720,662 0 0 48,057,822
OPERATING MARGIN 17,700,372 1,857,797 2,857,433 0 (283,886) 22,131,716
----------- ---------- ---------- --------- ---------- -----------
OTHER OPERATING EXPENSES:
Gas utilities:
Other operations 7,416,461 775,857 (62,786) 8,129,532
Maintenance 1,585,269 219,004 1,804,273
Taxes - general 2,158,594 307,800 2,466,394
Taxes - income 795,568 87,015 882,583
Depreciation and
amortization 2,170,489 191,038 (17,609) 2,343,918
Propane operations 2,700,341 (205,658) 2,494,683
----------- ---------- ---------- --------- ---------- -----------
Total other operating expenses 14,126,381 1,580,714 2,700,341 0 (286,053) 18,121,383
OPERATING EARNINGS 3,573,991 277,083 157,092 0 2,167 4,010,333
OTHER INCOME AND DEDUCTIONS:
Gas utilities:
Interest Income 10,519 274 (3,448) 7,345
Merchandising and jobbing,
net 107,770 7,833 115,603
Other deductions (112,212) (7,551) (119,763)
Taxes - income (29,862) (1,799) (31,661)
Propane operations, net 67,075 49,007 3,687 119,769
----------- ---------- ---------- --------- ---------- -----------
Total other income and
deductions (23,785) (1,243) 67,075 49,007 239 91,293
EARNINGS BEFORE INTEREST 3,550,206 275,840 224,167 49,007 2,406 4,101,626
<PAGE>
INTEREST CHARGES:
Gas utilities:
Long-term debt 1,486,303 82,880 1,569,183
Other interest 381,600 52,726 (1,133) 433,193
Propane operations 8,388 (2,314) 6,074
----------- ---------- ---------- --------- ---------- -----------
Total interest charges 1,867,903 135,606 8,388 0 (3,447) 2,008,450
NET EARNINGS $ 1,682,303 $ 140,234 $ 215,779 $49,007 $ 5,853 $ 2,093,176
=========== ========== ========== ========= =========== ===========
</TABLE>
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<TABLE>
<CAPTION>
Exhibit A(1)
ROANOKE GAS COMPANY AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1996
Roanoke Bluefield Highland Highland
Gas Gas Propane Gas Consolidated
Company Company Company Marketing Eliminations Total
------- ------- ------- --------- ------------ -----
ASSETS
- ------
<S> <C> <C> <C> <C> <C> <C>
UTILITY PLANT:
Utility Plant in Service $57,587,011 $5,923,030 ($1,636,290) $61,873,751
Accumulated Depreciation 20,677,698 2,098,043 (1,526,651) 21,249,090
----------- ---------- ---------- --------- ---------- -----------
Utility Plant in Service, Net 36,909,313 3,824,987 0 0 (109,639) 40,624,661
Construction Work-In-Progress 959,026 184,546 1,143,572
----------- ---------- ---------- --------- ---------- -----------
Utility Plant, Net 37,868,339 4,009,533 0 0 (109,639) 41,768,233
----------- ---------- ---------- --------- ---------- -----------
NONUTILITY PROPERTY:
Propane 5,482,908 (209,764) 5,273,144
Accumulated Depreciation 2,480,122 (284,728) 2,195,394
----------- ---------- ---------- --------- ---------- -----------
Nonutility Property, Net 0 0 3,002,786 0 74,964 3,077,750
----------- ---------- ---------- --------- ---------- -----------
CURRENT ASSETS:
Cash and Cash Equivalents 113,310 399,980 (324,229) 189,061
Accounts Receivable 11,215,474 947,229 1,234,075 151,145 279,493 13,827,416
Inventories 5,360,988 903,057 239,345 6,503,390
Deferred Income Taxes 867,728 867,728
Purchased Gas Adjustments 233,191 545,205 778,396
Other 517,658 42,769 70,612 13,144 644,183
----------- ---------- ---------- --------- ---------- -----------
Total Current Assets 17,440,621 2,838,240 1,219,803 151,145 1,160,365 22,810,174
----------- ---------- ---------- --------- ---------- -----------
OTHER ASSETS 2,756,656 98,348 (2,130,400) 724,604
----------- ---------- ---------- --------- ---------- -----------
TOTAL $58,065,616 $6,946,121 $4,222,589 $151,145 ($1,004,710) $68,380,761
=========== ========== ========== ========= ========== ===========
</TABLE>
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<TABLE>
<CAPTION>
ROANOKE GAS COMPANY AND SUBSIDIARIES Exhibit A(1)
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1996
Roanoke Bluefield Highland Highland
Gas Gas Propane Gas Consolidated
Company Company Company Marketing Eliminations Total
------- ------- ------- --------- ------------ -----
LIABILITIES
- -----------
<S> <C> <C> <C> <C> <C> <C>
CAPITALIZATION:
Stockholders' Equity:
Common Stock $ 7,424,630 $ 49,704 $ 196,421 ($246,125) $ 7,424,630
Capital in Excess of Par
Value 2,717,217 257,805 215,956 1,570,092 4,761,070
Retained Earnings 7,533,768 1,785,197 1,947,723 116,808 (3,490,342) 7,893,154
----------- ---------- ---------- --------- ---------- -----------
Total Stockholders' Equity 17,675,615 2,092,706 2,360,100 116,808 (2,166,375) 20,078,854
Long-Term Debt (Less Current
Maturities) 18,900,973 1,300,000 20,200,973
----------- ---------- ---------- --------- ---------- -----------
Total Capitalization 36,576,588 3,392,706 2,360,100 116,808 (2,166,375) 40,279,827
----------- ---------- ---------- --------- ---------- -----------
CURRENT LIABILITIES:
Current Maturities of Long-
Term Debt 632,587 50,000 682,587
Notes Payable 7,714,000 2,310,000 490,000 10,514,000
Dividends Payable 386,746 386,746
Accounts Payable 6,782,272 653,829 984,171 128 279,493 8,699,893
Income Taxes Payable 735,576 (77,494) 222,593 34,209 914,884
Customers' Deposits 402,598 61,752 8,341 472,691
Accrued Expenses 2,600,475 263,107 32,386 2,895,968
Refunds From Suppliers -
Due Customers (6,970) (7,474) 14,444 0
Purchased Gas Adjustments 0 0 0
----------- ---------- ---------- --------- ---------- -----------
Total Current Liabilities 19,247,284 3,253,720 1,737,491 34,337 293,937 24,566,769
DEFERRED CREDITS AND OTHER
LIABILITIES:
Deferred Income Taxes 1,737,045 282,023 124,998 867,728 3,011,794
Deferred Investment Tax
Credits 504,699 17,672 522,371
0
----------- ---------- ---------- --------- ---------- -----------
Total Deferred Credits and
Other Liabilities 2,241,744 299,695 124,998 0 867,728 3,534,165
----------- ---------- ---------- --------- ---------- -----------
TOTAL $58,065,616 $6,946,121 $4,222,589 $151,145 ($1,004,710) $68,380,761
=========== ========== ========== ========= ========== ===========
</TABLE>
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EXHIBIT B
<TABLE>
<CAPTION>
ROANOKE GAS COMPANY
FINANCIAL DATA SCHEDULE
<S> <C> <C>
Item No. Caption Heading
-------- ---------------
1 Total Assets $68,380,761
2 Total Operating Revenues 70,189,538
3 Net Income 2,093,176
</TABLE>
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EXHIBIT C
NOT APPLICABLE
<PAGE>
<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, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SUBSIDIARY>
<NUMBER> 2
<NAME> DIVERSIFIED ENERGY CO. & COMMONWEALTH PUBLIC SERVICE CORP.
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> DEC-31-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-ASSETS> 68,380,761
<TOTAL-OPERATING-REVENUES> 70,189,538
<NET-INCOME> 2,093,176
</TABLE>
