RGC Resources, Inc. operates as an energy services company.
The company engages in the sale and distribution of natural gas. The company's wholly owned subsidiary, Roanoke Gas Company (Roanoke Gas) is a natural gas utility, which distributes and sells natural gas to approximately 62,500 residential, commercial, and industrial customers within its service areas in Roanoke, Virginia and the surrounding localities. The company's business is seasonal in nature as a majority of natural gas sales are...
RGC Resources, Inc. operates as an energy services company.
The company engages in the sale and distribution of natural gas. The company's wholly owned subsidiary, Roanoke Gas Company (Roanoke Gas) is a natural gas utility, which distributes and sells natural gas to approximately 62,500 residential, commercial, and industrial customers within its service areas in Roanoke, Virginia and the surrounding localities. The company's business is seasonal in nature as a majority of natural gas sales are for space heating during the winter season. Roanoke Gas is regulated by the SCC. RGC Midstream, LLC (Midstream) is a wholly owned subsidiary created primarily to invest in the Mountain Valley Pipeline, LLC (LLC).
Services
Roanoke Gas maintains an integrated natural gas distribution system to deliver natural gas purchased from suppliers to residential, commercial, and industrial users in its service territory.
The company’s residential and commercial sales are primarily seasonal and subject to temperature sensitivity as the majority of the gas sold by Roanoke Gas to these customers is used for heating. For the fiscal year ended September 30, 2024, approximately 60% of the company’s total DTH of natural gas deliveries and 72% of the residential and commercial deliveries were made in the five-month period of November through March.
Roanoke Gas relies on multiple interstate pipelines, including those operated by Columbia Gas Transmission Corporation, LLC and Columbia Gulf Transmission Corporation, LLC (together Columbia), East Tennessee Natural Gas, LLC (East Tennessee), Tennessee Gas Pipeline, Midwestern Gas Transmission Company, Saltville Gas Storage Company, LLC (Saltville) and Mountain Valley Pipeline, LLC (Mountain Valley), to transport natural gas from production and storage fields to Roanoke Gas’ distribution system. Roanoke Gas is directly served by Columbia, East Tennessee and Mountain Valley. Columbia historically has delivered more than 65% of the company’s required gas supply, with East Tennessee delivering the remainder. The Mountain Valley Pipeline began operations in June 2024. The rates paid for interstate natural gas transportation and storage services are established by tariffs approved by Federal Energy Regulatory Commission (FERC). The pipeline and storage contracts expire at various times from calendar 2027 to 2044. The company anticipates being able to renew these contracts or enter into other contracts to meet customers’ existing demand for natural gas.
The company manages its pipeline contracts and Liquefied natural gas (LNG) facility in order to provide for sufficient capacity to meet the natural gas demands of its customers. The maximum daily winter capacity available for delivery into Roanoke Gas’ distribution system from the interstate pipelines is 93,606 DTH per day. The LNG facility is capable of storing up to 200,000 DTH of natural gas in a liquid state for use during peak demand. Combined, the pipelines and LNG facility may provide up to 118,606 DTH on a single winter day.
The company contracts with Sequent Energy Management, L.P. to manage its pipeline transportation, storage rights, gas supply inventories and deliveries and serve as the primary supplier of natural gas for Roanoke Gas. Natural gas purchased under the asset management agreement is priced at indexed-based market prices as reported in major industry pricing publications. The Sequent contract expires March 31, 2025. The company also contracts with Tenaska Marketing Ventures to manage its pipeline transportation and deliveries on Mountain Valley Pipeline. The Tenaska contract also expires March 31, 2025.
The company uses summer storage programs to supplement heating season gas supply requirements. The company has contracted for 2.4 million Decatherm (DTH) of storage capacity from Columbia, Tennessee Gas Pipeline and Saltville in addition to the capacity available at the company's LNG facility.
Properties
The company has approximately 1,180 miles of transmission and distribution pipeline representing 91% of the total utility property. The transmission and distribution pipelines are located on or under public roads, highways, or private property for which the company has obtained the legal authorization and rights to operate.
Roanoke Gas owns and operates eleven metering stations through which it measures and regulates the gas being delivered by its suppliers. These stations are located at various points throughout the company’s distribution system.
Roanoke Gas also owns a liquefied natural gas storage facility located in its service territory that has the capacity to store up to 200,000 DTH of natural gas.
Regulation
At the federal level, the company is subject to pipeline safety regulations issued by the Department of Transportation's Pipeline and Hazardous Materials Safety Administration.
At the state level, the Virginia State Corporation Commission (SCC) performs regulatory oversight, including the approval of rates and other charges for natural gas sold to customers, the approval of agreements between or among affiliated companies involving the provision of goods and services, pipeline safety and certain other corporate activities of the company, including mergers and acquisitions related to utility operations.
History
RGC Resources, Inc. was founded in 1883. The company was incorporated in 1998 in the state of Virginia.
The Analyst Price Target shows the analysts’ low, high, and average target at a glance.
