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
------------------------------------------
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 49,324 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 4,297 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 961
residential, commercial and industrial customers located in and around
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.
<PAGE>
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 and Gas,
Columbia Energy Services, Duke Energy, Engage Energy, LG&E Energy Marketing,
Texaco Natural Gas, and Southern Company Energy.
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. 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 seven 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 a
30,000-gallon tank. The sixth facility is located on the property of
Virginia Forging in Buchanan, Virginia and consists of a 30,000-gallon tank.
The seventh facility is located on the property of Golden West Foods in
Bedford, 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 7,456,760 MCF of gas
during the calendar year 1997. Bluefield Gas distributed at retail
903,416 MCF of gas during the calendar year 1997. Commonwealth
distributed at retail 264,389 MCF of gas during the calendar year 1997.
Neither Roanoke Gas, Bluefield Gas nor Commonwealth distributed
at retail natural gas outside the state of its incorporation.
Roanoke Gas and Commonwealth did not sell at wholesale natural
gas outside the Commonwealth of Virginia. Bluefield Gas sold 264,389
MCF of natural gas at wholesale to Commonwealth at the Virginia-West
Virginia line.
(d) Roanoke Gas purchased 7,879,446 MCF of natural gas outside
the Commonwealth of Virginia during the calendar year 1997. 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 264,389 MCF of natural gas from
Bluefield Gas at the Virginia-West Virginia State line. Bluefield Gas
purchased 1,220,855 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 20,596 MCF of natural gas to its end-users for other
marketers. Highland Gas Marketing purchased and resold 1,491,731 MCF
of natural gas to certain end-users of Roanoke Gas Company. In
addition to the above volumes of Highland Gas Marketing, Roanoke
transported 793,859 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 1997 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 23rd day of February, 1998.
ROANOKE GAS COMPANY
By: s/John B. Williamson, III
[Seal appears here] ---------------------------
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
<PAGE>
<TABLE>
<CAPTION>
Exhibit A
Roanoke Gas Company
Consolidating Statement Of Earnings
Twelve Months Ended December 31, 1997
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 $ 49,741,801 $ 6,671,948 $ (316,374) $ 56,097,375
Propane operations $ 7,334,048 7,334,048
---------- --------- --------- ------- --------- ----------
Total operating revenues 49,741,801 6,671,948 7,334,048 0 (316,374) 63,431,423
COST OF GAS:
Gas utilities 31,946,104 4,753,640 36,699,744
Propane operations 3,697,591 3,697,591
---------- --------- --------- ------- --------- ----------
Total cost of gas 31,946,104 4,753,640 3,697,591 0 0 40,397,335
OPERATING MARGIN 17,795,697 1,918,308 3,636,457 0 (316,374) 23,034,088
---------- --------- --------- ------- --------- ----------
OTHER OPERATING EXPENSES:
Gas utilities:
Other operations 7,372,109 816,974 (173,108) 8,015,975
Maintenance 1,214,759 192,916 1,407,675
Taxes - general 2,116,592 338,409 2,455,001
Taxes - income 871,688 57,997 929,685
Depreciation and amortization 2,418,926 210,693 (17,609) 2,612,010
Propane operations 3,103,887 (124,983) 2,978,904
---------- --------- --------- ------- --------- ----------
Total other operating expenses 13,994,074 1,616,989 3,103,887 0 (315,700) 18,399,250
OPERATING EARNINGS 3,801,623 301,319 532,570 0 (674) 4,634,838
OTHER INCOME AND DEDUCTIONS:
Gas utilities:
Interest Income 1,133 1,133
Merchandising and jobbing, net 133,392 4,404 137,796
Other deductions (88,723) (6,407) (95,130)
Taxes - income (27,567) (526) (28,093)
Propane operations, net 46,578 88,307 5,391 140,276
---------- --------- --------- ------- --------- ----------
Total other income and deductions 18,235 (2,529) 46,578 88,307 5,391 155,982
<PAGE>
EARNINGS BEFORE INTEREST CHARGES 3,819,858 298,790 579,148 88,307 4,717 4,790,820
INTEREST CHARGES:
Gas utilities:
Long-term debt 1,663,845 105,181 1,769,026
Other interest 312,282 108,401 (173) 420,510
Propane operations 79,409 (963) 78,446
---------- --------- --------- ------- --------- ----------
Total interest charges 1,976,127 213,582 79,409 0 (1,136) 2,267,982
NET EARNINGS $ 1,843,731 $ 85,208 $ 499,739 $ 88,307 $ 5,853 $ 2,522,838
========== ========= ========= ======= ========= ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit A(1)
ROANOKE GAS COMPANY AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1997
Roanoke Bluefield Highland Highland
Gas Gas Propane Gas Consolidated
ASSETS Company Company Company Marketing Eliminations Total
- ------ ------- ------- ------- --------- ------------ -----
<S> <C> <C> <C> <C> <C> <C>
UTILITY PLANT:
Utility Plant in Service $ 61,453,413 $ 6,342,352 $(1,636,290) $ 66,159,475
Accumulated Depreciation (22,337,694) (2,215,192) 1,544,260 (23,008,626)
----------- ---------- ---------- ---------- ---------- -----------
Utility Plant in Service, Net 39,115,719 4,127,160 - - (92,030) 43,150,849
Construction Work-In-Progress 1,024,205 261,910 1,286,115
----------- ---------- ---------- ---------- ---------- -----------
Utility Plant, Net 40,139,924 4,389,070 - - (92,030) 44,436,964
----------- ---------- ---------- ---------- ---------- -----------
NONUTILITY PROPERTY:
Propane 8,331,196 (209,764) 8,121,432
Accumulated Depreciation (3,008,803) 272,972 (2,735,831)
----------- ---------- ---------- ---------- ---------- -----------
Nonutility Property, Net - - 5,322,393 - 63,208 5,385,601
----------- ---------- ---------- ---------- ---------- -----------
Cash and Cash Equivalents (11,480) 64,047 38,578 91,145
Accounts Receivable 8,529,895 1,142,448 1,069,608 1,040,597 1,066,056 12,848,604
Inventories 5,659,509 923,486 154,066 6,737,061
Prepaid Income Taxes -
Deferred Income Taxes 2,005,521 2,005,521
Purchased Gas Adjustments (1,648,337) 486,472 1,161,865 -
Other 292,743 41,034 138,858 (1,300) 471,335
----------- ---------- ---------- ---------- ---------- -----------
Total Current Assets 12,822,330 2,657,487 1,401,110 1,040,597 4,232,142 22,153,666
----------- ---------- ---------- ---------- ---------- -----------
OTHER ASSETS 3,131,443 57,067 405,929 (2,748,106) 846,333
----------- ---------- ---------- ---------- ---------- -----------
TOTAL $ 56,093,697 $ 7,103,624 $ 7,129,432 $ 1,040,597 $ 1,455,214 $ 72,822,564
=========== ========== ========== ========== ========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit A(1)
ROANOKE GAS COMPANY AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1997
Roanoke Bluefield Highland Highland
Gas Gas Propane Gas Consolidated
LIABILITIES Company Company Company Marketing Eliminations Total
- ----------- ------- ------- ------- --------- ------------ -----
<S> <C> <C> <C> <C> <C> <C>
CAPITALIZATION:
Stockholders' Equity:
Common Stock $ 7,857,825 $ 49,704 $ 196,421 $ (246,125) $ 7,857,825
Capital in Excess of Par Value 3,795,149 257,805 833,662 952,386 5,839,002
Retained Earnings 7,776,374 1,870,406 2,447,460 205,115 (3,484,489) 8,814,866
----------- ---------- ---------- --------- ---------- -----------
Total Stockholders' Equity 19,429,348 2,177,915 3,477,543 205,115 (2,778,228) 22,511,693
Long-Term Debt (Less Current
Maturities) 15,779,000 1,300,000 1,700,000 18,779,000
----------- ---------- ---------- --------- ---------- -----------
Total Capitalization 35,208,348 3,477,915 5,177,543 205,115 (2,778,228) 41,290,693
----------- ---------- ---------- --------- ---------- -----------
CURRENT LIABILITIES:
Current Maturities of Long-Term Debt 621,958 621,958
Notes Payable 8,964,000 2,271,000 612,000 11,847,000
Dividends Payable 417,226 417,226
Accounts Payable 4,057,309 511,350 718,448 774,528 1,066,056 7,127,691
Income Taxes Payable 981,785 81,181 369,578 60,954 1,493,498
Customers' Deposits 425,070 59,241 7,129 491,440
Accrued Expenses 3,932,681 342,968 92,979 4,368,628
Refunds From Suppliers - Due Customers 311,899 1,968 313,867
Purchased Gas Adjustments 1,161,865 1,161,865
----------- ---------- ---------- --------- ---------- -----------
Total Current Liabilities 19,711,928 3,267,708 1,800,134 835,482 2,227,921 27,843,173
DEFERRED CREDITS AND OTHER LIABILITIES:
Deferred Income Taxes 707,186 341,299 151,755 2,005,521 3,205,761
Deferred Investment Tax Credits 466,235 16,702 482,937
Other Deferred Credits -
----------- ---------- ---------- --------- ---------- -----------
Total Deferred Credits and Other
Liabilities 1,173,421 358,001 151,755 - 2,005,521 3,688,698
----------- ---------- ---------- --------- ---------- -----------
TOTAL $ 56,093,697 $ 7,103,624 $ 7,129,432$ 1,040,597 $ 1,455,214 $ 72,822,564
=========== ========== ========== ========= ========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit A
Bluefield Gas Company
Consolidating Income Statement
Twelve Months Ended December 31, 1997
Bluefield Commonwealth
Gas Public Service Consolidated
Company Corporation Eliminations Total
------- ----------- ------------ -----
<S> <C> <C> <C> <C>
OPERATING REVENUES $ 6,253,205 $ 1,515,310 $ (1,096,567) $ 6,671,948
COST OF GAS 4,753,640 1,081,443 (1,081,443) 4,753,640
---------- ---------- ----------- ----------
OPERATING MARGIN 1,499,565 433,867 (15,124) 1,918,308
OTHER OPERATING EXPENSES:
Gas utilities:
Other operations 626,523 205,575 (15,124) 816,974
Maintenance 124,296 68,620 192,916
Taxes - general 276,299 62,110 338,409
Taxes - income 42,893 15,104 57,997
Depreciation and amortization 159,905 50,788 210,693
---------- ---------- ----------- ----------
Total other operating expenses 1,229,916 402,197 (15,124) 1,616,989
OPERATING EARNINGS 269,649 31,670 - 301,319
OTHER INCOME AND DEDUCTIONS:
Gas utilities:
Interest Income -
Merchandising and jobbing, net 4,404 4,404
Other deductions (6,132) (275) (6,407)
Taxes - income (620) 94 (526)
---------- ---------- ----------- ----------
Total other income and deductions (2,348) (181) - (2,529)
EARNINGS BEFORE INTEREST CHARGES 267,301 31,489 - 298,790
INTEREST CHARGES:
Gas utilities:
Long-term debt 105,181 105,181
Other interest 106,745 1,656 108,401
---------- ---------- ----------- ----------
Total interest charges 211,926 1,656 - 213,582
NET EARNINGS $ 55,375 $ 29,833 $ 0 $ 85,208
========== ========== =========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit A(1)
BLUEFIELD GAS COMPANY
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1997
Bluefield Commonwealth
Gas Public Service Consolidated
ASSETS Company Corporation Eliminations Total
- ------ ------- ----------- ------------ -----
<S> <C> <C> <C> <C>
UTILITY PLANT:
Utility Plant in Service $ 5,130,392 $ 1,211,960 $ 6,342,352
Accumulated Depreciation (1,823,628) (391,564) (2,215,192)
---------- ---------- ----------- ----------
Utility Plant in Service, Net 3,306,764 820,396 0 4,127,160
Construction Work-In-Progress 135,425 126,485 261,910
---------- ---------- ----------- ----------
Utility Plant, Net 3,442,189 946,881 0 4,389,070
---------- ---------- ----------- ----------
CURRENT ASSETS:
Cash and Cash Equivalents 64,047 64,047
Accounts Receivable 1,358,450 (216,002) 1,142,448
Inventories 923,486 923,486
Deferred Income Taxes 0
Purchased Gas Adjustments 453,304 33,168 486,472
Other 41,034 41,034
---------- ---------- ----------- ----------
Total Current Assets 2,840,321 (182,834) 0 2,657,487
---------- ---------- ----------- ----------
OTHER ASSETS 57,674 (107) (500) 57,067
---------- ---------- ----------- ----------
TOTAL $ 6,340,184 $ 763,940 $ (500) $ 7,103,624
========== ========== =========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit A(1)
BLUEFIELD GAS COMPANY
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1997
Bluefield Commonwealth
Gas Public Service Consolidated
LIABILITIES Company Corporation Eliminations Total
- ----------- ------- ----------- ------------ -----
<S> <C> <C> <C> <C>
CAPITALIZATION:
Stockholders' Equity:
Common Stock $ 49,704 $ 500 $ (500) $ 49,704
Capital in Excess of Par Value 220,564 37,241 257,805
Retained Earnings 1,380,608 489,798 1,870,406
---------- -------- ------ ----------
Total Stockholders' Equity 1,650,876 527,539 (500) 2,177,915
Long-Term Debt (Less Current Maturities) 1,300,000 1,300,000
---------- -------- ------ ----------
Total Capitalization 2,950,876 527,539 (500) 3,477,915
---------- -------- ------ ----------
CURRENT LIABILITIES:
Current Maturities of Long-Term Debt 0 0
Notes Payable 2,271,000 2,271,000
Accounts Payable 476,605 34,745 511,350
Income Taxes Payable (24,022) 105,203 81,181
Customers' Deposits 49,666 9,575 59,241
Accrued Expenses 331,337 11,631 342,968
Refunds From Suppliers - Due Customers 0 1,968 1,968
Purchased Gas Adjustments 0
---------- -------- ------ ----------
Total Current Liabilities 3,104,586 163,122 0 3,267,708
DEFERRED CREDITS AND OTHER LIABILITIES:
Deferred Income Taxes 271,139 70,160 341,299
Deferred Investment Tax Credits 13,583 3,119 16,702
Other Deferred Credits 0
---------- -------- ------ ----------
Total Deferred Credits and Other
Liabilities 284,722 73,279 0 358,001
---------- -------- ------ ----------
TOTAL $ 6,340,184 $ 763,940 $ (500) $ 7,103,624
========== ======== ====== ==========
</TABLE>
<PAGE>
EXHIBIT B
ROANOKE GAS COMPANY
FINANCIAL DATA SCHEDULE
Item No. Caption Heading
-------- ---------------
1 Total Assets $72,822,564
2 Total Operating Revenues 63,431,423
3 Net Income 2,522,838
<PAGE>
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, 1997 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-30-1998
<PERIOD-END> DEC-31-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-ASSETS> 72,822,564
<TOTAL-OPERATING-REVENUES> 63,431,423
<NET-INCOME> 2,522,838
</TABLE>
