ROANOKE GAS COMPANY
FILE NO. 69-331
FORM U-3A-2
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
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 50,312 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
<PAGE>
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 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 4,326 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 1,003 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.
2. Columbia Gas Transmission Corporation ("Columbia") is Roanoke Gas'
primary transporter of natural gas. Columbia historically has transported
approximately
<PAGE>
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, 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.
<PAGE>
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 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 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
<PAGE>
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, Bluefield Gas and Commonwealth is submitted:
(a) Roanoke Gas distributed at retail 6,434,735 MCF of gas during the
calendar year 1998 for total revenues of $40,061,762. 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. Commonwealth distributed at retail
220,192 MCF of gas in the Commonwealth of Virginia during the calendar year 1998
for total revenues of $1,358,636.
(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 220,192 MCF of
natural gas at wholesale to Commonwealth at the Virginia-West Virginia line for
$861,103.
(d) Roanoke Gas purchased 6,566,002 MCF of natural gas outside the
Commonwealth of Virginia during the calendar year 1998 for $25,310,385. 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 220,192 MCF of natural gas from Bluefield Gas at the Virginia-West
Virginia State line for $861,103. Bluefield Gas purchased 1,059,514
<PAGE>
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 Roanoke Gas and its subsidiaries for the 1998 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 26th day of February, 1999.
ROANOKE GAS COMPANY
By: s/John B. Williamson, III
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, 1998
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 $ 42,012,391 $ 5,884,761 $ (94,002) $ 47,803,150
Propane operations $ 7,232,113 7,232,113
-------------------------------------------------------------------------------------------
Total operating revenues 42,012,391 5,884,761 7,232,113 0 (94,002) 55,035,263
COST OF GAS:
Gas utilities 25,288,643 3,923,188 29,211,831
Propane operations 3,388,347 3,388,347
-------------------------------------------------------------------------------------------
Total cost of gas 25,288,643 3,923,188 3,388,347 0 0 32,600,178
OPERATING MARGIN 16,723,748 1,961,573 3,843,766 0 (94,002) 22,435,085
-------------------------------------------------------------------------------------------
OTHER OPERATING EXPENSES:
Gas utilities:
Other operations 6,882,934 751,819 (29,565) 7,605,188
Maintenance 1,297,298 131,573 1,428,871
Taxes - general 1,927,603 333,829 2,261,432
Taxes - income 758,168 109,419 867,587
Depreciation and amortization 2,593,765 271,960 (17,609) 2,848,116
Propane operations 3,380,947 (46,851) 3,334,096
-------------------------------------------------------------------------------------------
Total other operating expenses 13,459,768 1,598,600 3,380,947 0 (94,025) 18,345,290
OPERATING EARNINGS 3,263,980 362,973 462,819 0 23 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 (117,564) (4,776) (122,340)
Taxes - income (50,164) (1,494) (51,658)
Propane operations, net (23,301) 73,947 5,760 56,406
-------------------------------------------------------------------------------------------
Total other income and deductions 46,174 (1,967) (23,301) 73,947 3,881 98,734
EARNINGS BEFORE INTEREST CHARGES 3,310,154 361,006 439,518 73,947 3,904 4,188,529
INTEREST CHARGES:
Gas utilities:
Long-term debt 1,456,640 96,909 1,553,549
Other interest 221,962 92,078 (103) 313,937
Propane operations 183,485 (1,846) 181,639
-------------------------------------------------------------------------------------------
Total interest charges 1,678,602 188,987 183,485 0 (1,949) 2,049,125
NET EARNINGS $ 1,631,552 $ 172,019 $ 256,033 $ 73,947 $ 5,853 $ 2,139,404
===========================================================================================
</TABLE>
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<TABLE>
<CAPTION>
Exhibit A(1)
ROANOKE GAS COMPANY AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1998
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 $ 66,281,583 $ 6,843,985 $ (1,636,290) $ 71,489,278
Accumulated Depreciation (24,454,675) (2,261,454) 1,561,869 (25,154,260)
-------------------------------------------------------------------------------------------
Utility Plant in Service, Net 41,826,908 4,582,531 - - (74,421) 46,335,018
Construction Work-In-Progress 862,947 460,300 1,323,247
-------------------------------------------------------------------------------------------
Utility Plant, Net 42,689,855 5,042,831 - - (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 - - 8,200,540 - 51,452 8,251,992
-------------------------------------------------------------------------------------------
Cash and Cash Equivalents 102,992 46,282 (85,359) 63,915
Accounts Receivable 5,179,582 860,958 938,272 815,202 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 (1,316,464) (36,742) 1,353,206 -
Other 280,098 42,072 197,920 (1,300) 518,790
-------------------------------------------------------------------------------------------
Total Current Assets 10,097,287 1,938,430 1,244,290 815,202 5,524,405 19,619,614
-------------------------------------------------------------------------------------------
OTHER ASSETS 3,164,577 49,001 412,699 (2,748,106) 878,171
-------------------------------------------------------------------------------------------
TOTAL $ 55,951,719 $ 7,030,262 $ 9,857,529 $ 815,202 $ 2,753,330 $ 76,408,042
===========================================================================================
</TABLE>
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<TABLE>
<CAPTION>
ROANOKE GAS COMPANY AND SUBSIDIARIES Exhibit A(1)
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1998
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 $ 9,016,670 $ 49,704 $ 196,421 $ (246,125) $ 9,016,670
Capital in Excess of Par Value 6,995,201 257,805 833,662 952,386 9,039,054
Retained Earnings 7,506,421 2,042,424 2,703,493 279,062 (3,478,636) 9,052,764
--------------------------------------------------------------------------------------------
Total Stockholders' Equity 23,518,292 2,349,933 3,733,576 279,062 (2,772,375) 27,108,488
Long-Term Debt (Less Current Maturities) 17,700,000 1,300,000 1,700,000 20,700,000
--------------------------------------------------------------------------------------------
Total Capitalization 41,218,292 3,649,933 5,433,576 279,062 (2,772,375) 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 3,486,912 431,596 1,410,231 464,442 2,063,158 7,856,339
Income Taxes Payable (517,948) 353,845 115,233 71,698 22,828
Customers' Deposits 481,193 71,295 845 553,333
Accrued Expenses 3,594,202 329,507 143,274 4,066,983
Refunds From Suppliers - Due Customers 82,181 2,940 85,121
Purchased Gas Adjustments 1,353,206 1,353,206
--------------------------------------------------------------------------------------------
Total Current Liabilities 13,359,892 3,201,183 4,085,583 536,140 3,416,364 24,599,162
DEFERRED CREDITS AND OTHER LIABILITIES:
Deferred Income Taxes 945,959 163,414 338,370 2,109,341 3,557,084
Deferred Investment Tax Credits 427,576 15,732 443,308
--------------------------------------------------------------------------------------------
Total Deferred Credits and
Other Liabilities 1,373,535 179,146 338,370 - 2,109,341 4,000,392
TOTAL $ 55,951,719 $ 7,030,262 $ 9,857,529 $ 815,202 $ 2,753,330 $ 76,408,042
============================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit A
Bluefield Gas Company
Consolidating Income Statement
Twelve Months Ended December 31, 1998
Bluefield Commonwealth
Gas Public Service Consolidated
Company Corporation Eliminations Total
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES $ 5,448,239 $ 1,311,892 $ (875,370) $ 5,884,761
COST OF GAS 3,923,188 861,103 (861,103) 3,923,188
------------------------------------------------------------------------------
OPERATING MARGIN 1,525,051 450,789 (14,267) 1,961,573
OTHER OPERATING EXPENSES:
Gas utilities:
Other operations 629,144 136,942 (14,267) 751,819
Maintenance 93,933 37,640 131,573
Taxes - general 276,180 57,649 333,829
Taxes - income 58,812 50,607 109,419
Depreciation and amortization 202,969 68,991 271,960
------------------------------------------------------------------------------
Total other operating expenses 1,261,038 351,829 (14,267) 1,598,600
OPERATING EARNINGS 264,013 98,960 - 362,973
OTHER INCOME AND DEDUCTIONS:
Gas utilities:
Interest Income 32 32
Merchandising and jobbing, net 4,271 4,271
Other deductions (4,324) (452) (4,776)
Taxes - income (1,648) 154 (1,494)
------------------------------------------------------------------------------
Total other income and deductions (1,669) (298) - (1,967)
EARNINGS BEFORE INTEREST CHARGES 262,344 98,662 - 361,006
INTEREST CHARGES:
Gas utilities:
Long-term debt 96,909 96,909
Other interest 91,308 770 92,078
------------------------------------------------------------------------------
Total interest charges 188,217 770 - 188,987
NET EARNINGS $ 74,127 $ 97,892 $ 0 $ 172,019
==============================================================================
</TABLE>
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<TABLE>
<CAPTION>
Exhibit A(1)
BLUEFIELD GAS COMPANY
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1998
Bluefield Commonwealth
Gas Public Service Consolidated
ASSETS Company Corporation Eliminations Total
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
UTILITY PLANT:
Utility Plant in Service $ 5,464,394 $ 1,379,591 $ 6,843,985
Accumulated Depreciation (1,873,215) (388,239) (2,261,454)
------------------------------------------------------------------------------
Utility Plant in Service, Net 3,591,179 991,352 0 4,582,531
Construction Work-In-Progress 170,848 289,452 460,300
------------------------------------------------------------------------------
Utility Plant, Net 3,762,027 1,280,804 0 5,042,831
------------------------------------------------------------------------------
CURRENT ASSETS:
Cash and Cash Equivalents 46,282 46,282
Accounts Receivable 1,235,664 (374,706) 860,958
Inventories 1,025,860 1,025,860
Deferred Income Taxes 0
Purchased Gas Adjustments (16,750) (19,992) (36,742)
Other 42,072 42,072
------------------------------------------------------------------------------
Total Current Assets 2,333,128 (394,698) 0 1,938,430
------------------------------------------------------------------------------
OTHER ASSETS 31,134 18,367 (500) 49,001
------------------------------------------------------------------------------
TOTAL $ 6,126,289 $ 904,473 $ (500) $ 7,030,262
==============================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit A(1)
BLUEFIELD GAS COMPANY
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1998
Bluefield Commonwealth
Gas Public Service Consolidated
LIABILITIES Company Corporation Eliminations Total
------------------------------------------------------------------------------
<S> <C> <C> <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 1,454,734 587,690 2,042,424
------------------------------------------------------------------------------
Total Stockholders' Equity 1,725,002 625,431 (500) 2,349,933
Long-Term Debt (Less Current Maturities) 1,300,000 1,300,000
------------------------------------------------------------------------------
Total Capitalization 3,025,002 625,431 (500) 3,649,933
------------------------------------------------------------------------------
CURRENT LIABILITIES:
Current Maturities of Long-Term Debt 0 0
Notes Payable 2,012,000 2,012,000
Accounts Payable 362,822 68,774 431,596
Income Taxes Payable 209,284 144,561 353,845
Customers' Deposits 58,249 13,046 71,295
Accrued Expenses 326,219 3,288 329,507
Refunds From Suppliers - Due Customers 0 2,940 2,940
Purchased Gas Adjustments 0
------------------------------------------------------------------------------
Total Current Liabilities 2,968,574 232,609 0 3,201,183
DEFERRED CREDITS AND OTHER LIABILITIES:
Deferred Income Taxes 119,929 43,485 163,414
Deferred Investment Tax Credits 12,784 2,948 15,732
Other Deferred Credits 0
------------------------------------------------------------------------------
Total Deferred Credits and Other
Liabilities 132,713 46,433 0 179,146
------------------------------------------------------------------------------
TOTAL $ 6,126,289 $ 904,473 $ (500) $ 7,030,262
==============================================================================
</TABLE>
<PAGE>
EXHIBIT B
ROANOKE GAS COMPANY
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>
