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What changed in RGC RESOURCES INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of RGC RESOURCES INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+125 added−137 removedSource: 10-K (2025-12-04) vs 10-K (2024-12-05)

Top changes in RGC RESOURCES INC's 2025 10-K

125 paragraphs added · 137 removed · 100 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

11 edited+1 added−3 removed22 unchanged
Biggest changeThe Company has contracted for 2.4 million DTH of storage capacity from Columbia, Tennessee Gas Pipeline and Saltville in addition to the capacity available at the Company's LNG facility. The balance of the Company’s annual natural gas requirements are met primarily through market purchases made by its asset managers. In March 2023, Roanoke Gas began operation of its RNG facility.
Biggest changeT he current asset management agreement expires March 31, 2028. The Company uses summer storage programs to supplement heating season gas supply requirements. The Company has contracted for 2.4 million DTH of storage capacity from Columbia, Tennessee Gas Pipeline and Saltville in addition to the capacity available at the Company's LNG facility.
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 relies on multiple interstate pipelines and gas storage, 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 now serving the Franklin County area with natural gas delivered through the MVP. 7 Table of Contents Management anticipates that the Company will be able to renew all of its franchises prior to their current expiration date; however, there can be no assurance that a given jurisdiction will not refuse to renew a franchise or will not, in connection with the renewal of a franchise, attempt to impose restrictions or conditions that could adversely affect the Company’s business operations or financial condition.
Roanoke Gas is serving the Franklin County area with natural gas delivered through the MVP. 7 Table of Contents Management anticipates that the Company will be able to renew all of its franchises prior to their current expiration date; however, there can be no assurance that a given jurisdiction will not refuse to renew a franchise or will not, in connection with the renewal of a franchise, attempt to impose restrictions or conditions that could adversely affect the Company’s business operations or financial condition.
At the local level, Roanoke Gas is further regulated by the municipalities and localities that grant franchises for the placement of gas distribution pipelines and the operation of gas distribution networks within their jurisdictions. Human Capital Resources At September 30, 2024, Resources had 104 full-time employees.
At the local level, Roanoke Gas is further regulated by the municipalities and localities that grant franchises for the placement of gas distribution pipelines and the operation of gas distribution networks within their jurisdictions. Human Capital Resources At September 30, 2025, Resources had 106 full-time employees.
The Company currently 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 Company currently contracts with an asset manager 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 .
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 FERC.
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 and Mountain Valley delivering the remainder. The rates paid for interstate natural gas transportation and storage services are established by tariffs approved by FERC.
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.
For the fiscal year ended September 30, 2025, approximately 63% of the Company’s total DTH of natural gas deliveries and 76% of the residential and commercial deliveries were made in the five-month period of November through March.
For the purposes of this schedule, margin is defined as revenues less cost of gas. 2024 Customers Volume Revenue Margin Residential 91.3 % 32.7 % 58.5 % 63.1 % Commercial 8.6 % 29.5 % 34.0 % 25.3 % Industrial 0.1 % 37.8 % 6.4 % 9.8 % Other 0.0 % 0.0 % 1.1 % 1.8 % Total percent 100.0 % 100.0 % 100.0 % 100.0 % Total value 62,510 10,048,770 $ 84,533,101 $ 48,565,114 2023 Customers Volume Revenue Margin Residential 91.3 % 33.7 % 58.1 % 62.8 % Commercial 8.6 % 29.2 % 34.8 % 24.8 % Industrial 0.1 % 37.1 % 5.9 % 10.0 % Other 0.0 % 0.0 % 1.2 % 2.4 % Total percent 100.0 % 100.0 % 100.0 % 100.0 % Total value 62,221 10,185,005 $ 97,325,307 $ 45,582,589 Roanoke Gas’ regulated natural gas distribution business accounted for more than 99% of Resources total revenues for fiscal years ending September 30, 2024 and 2023.
For the purposes of this schedule, margin is defined as revenues less cost of gas. 2025 Customers Volume Revenue Margin Residential 91.3 % 31.3 % 58.0 % 62.2 % Commercial 8.6 % 27.9 % 35.0 % 26.3 % Industrial 0.1 % 40.8 % 6.2 % 10.0 % Other 0.0 % 0.0 % 0.8 % 1.5 % Total percent 100.0 % 100.0 % 100.0 % 100.0 % Total value 62,527 11,493,415 $ 95,231,943 $ 52,680,989 2024 Customers Volume Revenue Margin Residential 91.3 % 32.7 % 58.5 % 63.1 % Commercial 8.6 % 29.5 % 34.0 % 25.3 % Industrial 0.1 % 37.8 % 6.4 % 9.8 % Other 0.0 % 0.0 % 1.1 % 1.8 % Total percent 100.0 % 100.0 % 100.0 % 100.0 % Total value 62,510 10,048,770 $ 84,533,101 $ 48,565,114 Roanoke Gas’ regulated natural gas distribution business accounted for more than 99% of Resources total revenues for fiscal years ended September 30, 2025 and 2024.
These franchises generally extend for multi-year periods and are renewable by the municipalities, including exclusive franchises in the cities of Roanoke and Salem and the Town of Vinton, Virginia. All three franchises are set to expire December 31, 2035. In 2019, the SCC issued an order granting a CPCN to furnish gas to all of Franklin County, Virginia.
Roanoke Gas currently holds the only franchises and/or CPCNs to distribute natural gas in its Virginia service areas. These franchises generally extend for multi-year periods and are renewable by the municipalities, including exclusive franchises in the cities of Roanoke and Salem and the Town of Vinton, Virginia. All three franchises are set to expire December 31, 2035.
Competition from renewable energy sources for generating electricity, such as solar and wind, is likely to increase as the political environment currently favors these energy sources through incentives or by placing restrictions on emissions from the burning of fossil fuels.
Greater demand for natural gas for electric generation and other uses can exert upward pressure on the price of natural gas. Competition from renewable energy sources for generating electricity, such as solar and wind, is likely to increase as certain laws currently favor these energy sources or place restrictions on emissions from the burning of fossil fuels.
Total volume produced from RNG is expected to be less than 1% of current system demand. Competition The Company’s natural gas utility operates in a regulated, monopolistic environment. Roanoke Gas currently holds the only franchises and/or CPCNs to distribute natural gas in its Virginia service areas.
The balance of the Company’s annual natural gas requirements are met primarily through market purchases made by its asset manager. In March 2023, Roanoke Gas began operation of its RNG facility. Total volume produced from RNG is less than 1% of current system demand. Competition The Company’s natural gas utility operates in a regulated, monopolistic environment.
Removed
The current 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 current Tenaska contract also expires March 31, 2025. The Company uses summer storage programs to supplement heating season gas supply requirements.
Added
The SCC issued an order granting a CPCN to furnish gas to all of Franklin County, Virginia.
Removed
Unlike the CPCNs for the other counties served by Roanoke Gas, the Franklin County CPCN was scheduled to terminate within five years of the date of the order if Roanoke Gas did not furnish gas service to the designated service area. In November 2023, the SCC granted Roanoke Gas a three-year extension on the CPCN.
Removed
Greater demand for natural gas for electric generation and other uses can exert upward pressure on the price of natural gas.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe Company is subject to federal and state income taxes as prescribed by the laws within the United States. Significant judgments are required in determining the provisions for income taxes. In preparing its tax provisions and returns, the Company must make calculations and assumptions regarding tax treatment of various transactions including the applicability of tax credits.
Biggest changeObligations for income taxes that may arise from examinations by taxing authorities. The Company is subject to federal and state income taxes as prescribed by the laws within the United States. Significant judgments are required in determining the provisions for income taxes.
In the event of a successful attack, the Company could be exposed to material financial and reputational risks, possible disruptions in natural gas deliveries or a compromise of the safety of the natural gas distribution system, as well as be exposed to claims by persons harmed by such an attack, all of which could materially increase the Company's costs to protect against such risks.
In the event of an attack, the Company could be exposed to material financial and reputational risks, possible disruptions in natural gas deliveries or a compromise of the safety of the natural gas distribution system, as well as be exposed to claims by persons harmed by such an attack, all of which could materially increase the Company's costs to protect against such risks.
Future legislation could also place limitations on the amount of natural gas used by businesses and homeowners to reduce the level of emissions, resulting in reduced deliveries and earnings or provide incentives to customers to utilize alternative energy sources not associated with fossil fuels.
Future legislation could also place limitations on the amount of natural gas used by businesses and homeowners to reduce the level of greenhouse gas emissions, resulting in reduced deliveries and earnings or provide incentives to customers to utilize alternative energy sources not associated with fossil fuels.
Passage of environmental legislation or implementation of regulations that mandate the use of electric rather than gas appliances, or reductions in greenhouse gas emissions or other similar restrictions could have a negative effect on the Company’s core operations and its investment in the LLC.
Full implementation and/or passage of environmental legislation or implementation of regulations that mandate the use of electric rather than gas appliances, or reductions in greenhouse gas emissions or other similar restrictions could have a negative effect on the Company’s core operations and its investment in the LLC.
Price considerations could also inhibit customer and revenue growth if builders and developers do not perceive, or are regulatorially prevented from installing, natural gas as a better value than other energy options and elect to install heating systems that use energy sources, including those perceived as more environmentally friendly. 10 Table of Contents REGULATORY RISKS Laws or regulations associated with ESG matters.
Price considerations could also inhibit customer and revenue growth if builders and developers do not perceive, or are regulatorily prevented from installing, natural gas as a better value than other energy options and elect to install heating systems that use energy sources, including those perceived as more environmentally friendly. 10 Table of Contents REGULATORY RISKS Laws or regulations associated with ESG matters.
In addition, advocacy groups, both domestically and internationally, have campaigned for governmental and private action to influence change in the business strategies of oil and gas companies, including through the investment and voting practices of investment advisers, public pension funds, universities and other members of the investing community.
In addition, advocacy groups, both domestically and internationally, have campaigned for governmental and private action to influence change in the business strategies of oil and gas companies, including through the investment and voting practices of investment advisors, public pension funds, universities and other members of the investing community.
The Company relies on a variety of capital sources to operate its business and fund capital expenditures, including internally generated cash from operations, short-term borrowings under its line-of-credit, proceeds from the issuance of additional shares of its common stock and other sources.
The Company relies on a variety of capital sources to operate its business and fund capital expenditures, including internally generated cash from operations, borrowings under its line-of-credit, proceeds from the issuance of additional shares of its common stock and other sources.
Focus on ESG matters related to, among other things, concerns raised by advocacy groups about climate change, social issues and corporate governance may lead to increased regulatory review, which in turn may lead to new state and federal safety and laws, regulations, guidelines, and enforcement interpretations. Social and corporate governance initiatives retain prominence.
Focus on ESG matters related to, among other things, concerns raised by advocacy groups about climate change, social issues and corporate governance may lead to increased regulatory review, which in turn may lead to new state and federal safety laws, regulations, guidelines, and enforcement interpretations. Social, corporate and environmental governance initiatives retain importance.
Failure to comply with debt covenant requirements. The Company's long-term debt obligations and bank line-of-credit contain financial covenants. Noncompliance with any of these covenants could result in an event of default which, if not cured or waived, could accelerate payment on outstanding debt obligations or cause prepayment penalties.
The Company's long-term debt obligations and bank line-of-credit contain financial covenants. Noncompliance with any of these covenants could result in an event of default which, if not cured or waived, could accelerate payment on outstanding debt obligations or cause prepayment penalties.
Much of the Company's outstanding debt is comprised of fixed rate notes or have interest rate swaps in place. However, higher interest rates do impact the Company through higher borrowing costs on Roanoke Gas' line-of-credit and Midstream's variable rate credit facilities as well as any future borrowings by the Company. 12 Table of Contents Item 1B. Unresolved Staff Comments. None.
Much of the Company's outstanding debt is comprised of fixed rate notes or have interest rate swaps in place. However, higher interest rates do impact the Company through higher borrowing costs on Roanoke Gas' line-of-credit and Midstream's variable rate credit facilities as well as any future borrowings by the Company. 12 Table of Contents
Over the last several years, the Company has implemented or acquired a variety of technological tools including both Company-owned information technology and technological services provided by outside parties. Additionally, the Company is currently upgrading its new financial and customer information systems.
Over the last several years, the Company has implemented or acquired a variety of technological tools including both Company-owned information technology and technological services provided by outside parties. Additionally, the Company upgraded its financial system and is in the process of updating its customer information system.
Adverse market trends, market disruptions or deterioration in the financial condition of the Company could increase the cost of borrowing, restrict the Company's ability to issue additional shares of its common stock or otherwise limit the Company’s ability to secure adequate funding. 11 Table of Contents Investment in Mountain Valley Pipeline, LLC. The MVP went into service in June 2024.
Adverse market trends, market disruptions or deterioration in the financial condition of the Company could increase the cost of borrowing, restrict the Company's ability to issue additional shares of its common stock or otherwise limit the Company’s ability to secure adequate funding. 11 Table of Contents Failure to comply with debt covenant requirements.
Furthermore, issuance of debt and equity by Roanoke Gas is also subject to SCC regulation and approval. Delays or lack of approvals could inhibit the ability to access capital markets and negatively impact liquidity or earnings. FINANCIAL RISKS Access to capital to maintain liquidity.
Furthermore, issuance of debt and equity by Roanoke Gas is also subject to SCC regulation and approval. Delays or lack of approvals could inhibit the ability to access capital markets and negatively impact liquidity or earnings. Increased compliance and pipeline safety requirements and fines. The Company is committed to the safe and reliable delivery of natural gas to its customers.
In such an event, the Company may not be able to refinance or repay all of its indebtedness, pay dividends or have sufficient liquidity to meet operating and capital expenditure requirements. Any such acceleration would cause a material adverse change in the Company's financial condition. Obligations for income taxes that may arise from examinations by taxing authorities.
In such an event, the Company may not be able to refinance or repay all of its indebtedness, pay dividends or have sufficient liquidity to meet operating and capital expenditure requirements. Any such acceleration would cause a material adverse change in the Company's financial condition. Investment in Mountain Valley Pipeline, LLC. The MVP went into service in June 2024.
The Company’s tax returns are subject to examination by the IRS and state tax authorities as disclosed in Note 9 of the consolidated financial statements. Although the Company utilizes the assistance of tax professionals in the preparation of its tax returns, there can be no assurance as to the outcome of these examinations.
The Company’s tax returns are subject to examination by the IRS and state tax authorities as disclosed in Note 9 of the consolidated financial statements.
Such incidents could subject the Company to lawsuits, large fines, increased scrutiny and loss of customers, all of which could have a significant effect on the Company’s financial position and results of operations. Regulatory actions or failure to obtain timely rate relief. The Company’s natural gas distribution operations are regulated by the SCC.
Such incidents could subject the Company to lawsuits, large fines, increased scrutiny and loss of customers, all of which could have a significant effect on the Company’s financial position and results of operations. FINANCIAL RISKS Access to capital to maintain liquidity.
If investors or financial institutions shift funding away from companies in the oil and gas industry, the Company’s access to and costs of capital or the market for the Company’s securities may be adversely impacted. Increased compliance and pipeline safety requirements and fines. The Company is committed to the safe and reliable delivery of natural gas to its customers.
If investors or financial institutions shift funding away from companies in the oil and gas industry, the Company’s access to and costs of capital or the market for the Company’s securities may be adversely impacted. Regulatory actions or failure to obtain timely rate relief. The Company’s natural gas distribution operations are regulated by the SCC.
The consequences of these risks, if realized, could adversely affect the LLC’s business, cash flows, financial condition, results of operations and prospects.
The consequences of these risks, if realized, could adversely affect the LLC’s business, cash flows, financial condition, results of operations and prospects. Uncertainties and risks inherent in operating and maintaining the LLC's facilities include, but are not limited to, risks associated with the success of new projects to generate additional cash flows.
Removed
Uncertainties and risks inherent in operating and maintaining the LLC's facilities include, but are not limited to, risks associated with facility start-up operations, such as whether the facility will achieve projected operating performance on schedule and otherwise as planned.
Added
Our total income tax expense could be affected by changes in tax rates in various jurisdictions, changes in the valuation of deferred tax assets and liabilities or changes in tax laws or their interpretation. In preparing its tax provisions and returns, the Company must make calculations and assumptions regarding tax treatment of various transactions, including the applicability of tax credits.
Removed
If the ultimate determination from an examination results in additional taxes above the amount reflected in its financial statements, the Company may record any additional income tax expenses as may be required including any interest and penalties that might result. The cost of providing post-retirement benefits. The Company provides certain pension and post-retirement benefits.
Added
Although the Company utilizes the assistance of tax professionals in the preparation of its tax returns, the final determination of tax examinations and any related litigation could be materially different than what is reflected in historical income tax provisions and accruals.
Added
If a taxing authority disagrees with the positions we have taken, the Company could face additional tax liability, including interest and penalties, which could adversely affect our financial results. The cost of providing post-retirement benefits. The Company provides certain pension and post-retirement benefits.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed5 unchanged
Biggest changeItem 2. Properties. Included in “Utility Property” on the Company’s consolidated balance sheet are storage plant, transmission plant, distribution plant and general plant of Roanoke Gas consistent with other natural gas utilities. The Company has approximately 1,180 miles of transmission and distribution pipeline representing 91% of the total utility property.
Biggest changeItem 2. Properties. Included in “Utility Property” on the Company’s consolidated balance sheet are storage plant, transmission plant, distribution plant and general plant of Roanoke Gas consistent with other natural gas utilities. The Company has approximately 1,184 miles of transmission and distribution pipeline representing 89% of the total utility property.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−0 removed2 unchanged
Biggest changeRange of Bid Prices Cash Dividends Year Ending September 30, 2024 High Low Declared First Quarter $ 21.69 $ 15.42 $ 0.2000 Second Quarter 21.34 18.08 0.2000 Third Quarter 21.51 18.90 0.2000 Fourth Quarter 22.92 19.20 0.2000 Year Ending September 30, 2023 First Quarter $ 24.54 $ 20.70 $ 0.1975 Second Quarter 24.45 22.10 0.1975 Third Quarter 23.84 18.12 0.1975 Fourth Quarter 20.40 16.70 0.1975 As of November 29, 2024, there were 927 holders of record of the Company’s common stock.
Biggest changeRange of Bid Prices Cash Dividends Year Ending September 30, 2025 High Low Declared First Quarter $ 23.49 $ 19.62 $ 0.2075 Second Quarter 21.52 19.37 0.2075 Third Quarter 23.28 20.27 0.2075 Fourth Quarter 23.09 19.68 0.2075 Year Ending September 30, 2024 First Quarter $ 21.69 $ 15.42 $ 0.2000 Second Quarter 21.34 18.08 0.2000 Third Quarter 21.51 18.90 0.2000 Fourth Quarter 22.92 19.20 0.2000 As of November 28, 2025, there were 884 holders of record of the Company’s common stock.
This number does not include all beneficial owners of common stock who hold their shares in “street name." A summary of the Company’s equity compensation plans follows as of September 30, 2024: (a) (b) (c) Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) Equity compensation plans approved by security holders 28,000 $ 18.98 495,729 Equity compensation plans not approved by security holders — — — Total 28,000 $ 18.98 495,729
This number does not include all beneficial owners of common stock who hold their shares in “street name." A summary of the Company’s equity compensation plans follows as of September 30, 2025: (a) (b) (c) Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) Equity compensation plans approved by security holders 28,000 $ 18.98 437,348 Equity compensation plans not approved by security holders — — — Total 28,000 $ 18.98 437,348

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

68 edited+21 added−32 removed50 unchanged
Biggest changeThe changes in the components of the gross utility margin are summarized below: Years Ended September 30, Increase 2024 2023 (Decrease) Customer base charge $ 16,235,406 $ 15,713,521 $ 521,885 SAVE Plan 460,758 1,103,547 (642,789 ) Volumetric 25,600,298 23,925,200 1,675,098 WNA 3,760,540 3,005,249 755,291 ICC 727,825 966,851 (239,026 ) RNG 1,628,926 712,362 916,564 Other revenues 151,361 155,859 (4,498 ) Total $ 48,565,114 $ 45,582,589 $ 2,982,525 19 Table of Contents Reconciliation between gross utility margin and gross margin is presented below: Gas Utility Investment in Affiliates Consolidated Total For the Year Ended September 30, 2024: Operating revenues Gas utility $ 84,533,101 $ — $ 84,533,101 Non utility 108,131 — 108,131 Total operating revenues 84,641,232 — 84,641,232 Cost of sales Cost of gas - utility (35,967,987 ) — (35,967,987 ) Cost of sales - non utility (24,003 ) — (24,003 ) Depreciation and amortization (10,518,094 ) — (10,518,094 ) Operations and maintenance (18,215,354 ) (133,486 ) (18,348,840 ) Corporate and other — — (5,896 ) Total operations and maintenance (18,215,354 ) (133,486 ) (18,354,736 ) Total cost of sales (64,725,438 ) (133,486 ) (64,864,820 ) Gross margin (GAAP) 19,915,794 (133,486 ) 19,776,412 Corporate and other, net (84,128 ) — (78,232 ) Depreciation and amortization 10,518,094 — 10,518,094 Operations and maintenance 18,215,354 133,486 18,348,840 Gross utility margin (Non-GAAP) $ 48,565,114 $ — $ 48,565,114 Gas Utility Investment in Affiliates Consolidated Total For the Year Ended September 30, 2023: Operating revenues Gas utility $ 97,325,307 $ — $ 97,325,307 Non utility 114,458 — 114,458 Total operating revenues 97,439,765 — 97,439,765 Cost of sales Cost of gas - utility (51,742,718 ) — (51,742,718 ) Cost of sales - non utility (25,603 ) — (25,603 ) Depreciation and amortization (9,764,678 ) — (9,764,678 ) Operations and maintenance (15,669,677 ) (229,650 ) (15,899,327 ) Corporate and other — — (4,645 ) Total operations and maintenance (15,669,677 ) (229,650 ) (15,903,972 ) Total cost of sales (77,202,676 ) (229,650 ) (77,436,971 ) Gross margin (GAAP) 20,237,089 (229,650 ) 20,002,794 Corporate and other, net (88,855 ) — (84,210 ) Depreciation and amortization 9,764,678 — 9,764,678 Operations and maintenance 15,669,677 229,650 15,899,327 Gross utility margin (Non-GAAP) $ 45,582,589 $ — $ 45,582,589 Operations and Maintenance Expense - Operations and maintenance expense increased by $2,450,764, or 15%, over the prior year primarily due to inflationary effects on personnel costs, professional services, costs associated to operate and maintain the RNG facility and lower capitalized overheads.
Biggest changeThe changes in the components of the gross utility margin are summarized below: Years Ended September 30, Increase 2025 2024 (Decrease) Customer base charge $ 16,334,578 $ 16,235,406 $ 99,172 SAVE Plan 1,588,240 460,758 1,127,482 Volumetric 31,151,138 25,600,298 5,550,840 WNA 1,055,552 3,760,540 (2,704,988 ) ICC 586,759 727,825 (141,066 ) RNG 1,760,287 1,628,926 131,361 Other revenues 204,435 151,361 53,074 Total $ 52,680,989 $ 48,565,114 $ 4,115,875 19 Table of Contents Reconciliation between gross utility margin and gross margin is presented below: Gas Utility Investment in Affiliates Consolidated Total For the Year Ended September 30, 2025: Operating revenues Gas utility $ 95,231,943 $ — $ 95,231,943 Non utility 102,269 — 102,269 Total operating revenues 95,334,212 — 95,334,212 Cost of sales Cost of gas - utility (42,550,954 ) — (42,550,954 ) Cost of sales - non utility (19,919 ) — (19,919 ) Depreciation and amortization (11,470,641 ) — (11,470,641 ) Operations and maintenance (19,729,415 ) (181,995 ) (19,911,410 ) Total cost of sales (73,770,929 ) (181,995 ) (73,952,924 ) Gross margin (GAAP) 21,563,283 (181,995 ) 21,381,288 Corporate and other, net (82,350 ) — (82,350 ) Depreciation and amortization 11,470,641 — 11,470,641 Operations and maintenance 19,729,415 181,995 19,911,410 Gross utility margin (Non-GAAP) $ 52,680,989 $ — $ 52,680,989 Gas Utility Investment in Affiliates Consolidated Total For the Year Ended September 30, 2024: Operating revenues Gas utility $ 84,533,101 $ — $ 84,533,101 Non utility 108,131 — 108,131 Total operating revenues 84,641,232 — 84,641,232 Cost of sales Cost of gas - utility (35,967,987 ) — (35,967,987 ) Cost of sales - non utility (24,003 ) — (24,003 ) Depreciation and amortization (10,518,094 ) — (10,518,094 ) Operations and maintenance (18,215,354 ) (133,486 ) (18,348,840 ) Corporate and other — — (5,896 ) Total operations and maintenance (18,215,354 ) (133,486 ) (18,354,736 ) Total cost of sales (64,725,438 ) (133,486 ) (64,864,820 ) Gross margin (GAAP) 19,915,794 (133,486 ) 19,776,412 Corporate and other, net (84,128 ) — (78,232 ) Depreciation and amortization 10,518,094 — 10,518,094 Operations and maintenance 18,215,354 133,486 18,348,840 Gross utility margin (Non-GAAP) $ 48,565,114 $ — $ 48,565,114 Operations and Maintenance Expense - Operations and maintenance expense increased by $1,556,674, or 8%, over the prior year primarily due to inflationary effects on personnel costs and contracted services, RNG-related costs and bad debt expense.
These mechanisms include the SAVE Rider, WNA, ICC, RNG and PGA. The SAVE Plan and Rider provides the Company with a mechanism through which it recovers costs related to SAVE qualified infrastructure investments on a prospective basis, until such time a formal rate application is filed incorporating these investments in non-gas base rates.
These mechanisms include the SAVE Rider, WNA, ICC, RNG Rider and PGA. The SAVE Plan and Rider provides the Company with a mechanism through which it recovers costs related to SAVE qualified infrastructure investments on a prospective basis, until such time a formal rate application is filed incorporating these investments in non-gas base rates.
With SCC approval, Roanoke Gas is allowed to recover the costs associated with the investment in RNG facilities and related operating costs through an RNG Rider added to customer bills. The customer benefits from this program through the monetization of environmental credits generated through RNG production, in which these credits are returned to customers through the RNG Rider.
With SCC approval, Roanoke Gas is allowed to recover the costs associated with the investment in RNG facilities and related operating costs through an RNG Rider added to customer bills. The customer benefits from this program through the monetization of environmental credits generated through RNG production, which are returned to customers through the RNG Rider.
With the MVP now in operation, the Company recognizes its share of earnings from the LLC, favorably adjusted for a basis difference between the Company's proportional share of assets and its carrying value that arose when the Company recorded an other-than-temporary impairment of its investment in 2022.
With the MVP in operation, the Company recognizes its share of earnings from the LLC, favorably adjusted for a basis difference between the Company's proportional share of assets and its carrying value that arose when the Company recorded an other-than-temporary impairment of its investment in 2022.
Since January 2017, when the pension plan froze access to new employees, the asset allocation has transitioned from 60% equity and 40% fixed income to 25% equity and 75% fixed.
Since January 2017, when the pension plan froze access to new employees, the target asset allocation has transitioned from 60% equity and 40% fixed income to 25% equity and 75% fixed.
The rise in the discount rates through 2023 was the primary factor in the reduction of the benefit obligations for both the pension and the postretirement plan. Mortality assumptions were based on the PRI-2012 Mortality Table with improvements projected generational using Projection Scale MP-2021 for the curr ent year valuation.
The rise in the discount rates was the primary factor in the reduction of the benefit obligations for both the pension and the postretirement plan. Mortality assumptions were based on the PRI-2012 Mortality Table with improvements projected generational using Projection Scale MP-2021 for the curr ent year valuation.
The Company accounts for its interest in the LLC under the equity method of accounting given the LLC maintains specific ownership accounts for each investor, and also considering the Company's rights under the LLC management agreement and the Company's involvement as a customer of the MVP.
The Company accounts for its interest in the LLC under the equity method of accounting given the LLC maintains specific ownership accounts for each investor, and also considering the Company's rights under the LLC management agreement and the Company's involvement as a stakeholder of the MVP.
Midstream, a wholly owned subsidiary of Resources, is a less than 1% investor in both the MVP and Southgate. More information regarding the investment in MVP is provided below and under the Equity Investment in Mountain Valley Pipeline section.
Midstream, a wholly owned subsidiary of Resources, is a less than 1% investor in the MVP, Southgate and Boost. More information regarding the investment in MVP is provided below and under the Equity Investment in Mountain Valley Pipeline section.
The following results of operations analyses will reference gross utility margin. Fiscal Year 2024 Compared with Fiscal Year 2023 The tables below reflect operating revenues, volume activity and heating degree days.
The following results of operations analyses will reference gross utility margin. Fiscal Year 2025 Compared with Fiscal Year 2024 The tables below reflect operating revenues, volume activity and heating degree days.
At the end of the annual deferral period, the balance is amortized over an ensuing 12-month period as amounts are reflected in customer billings. Inflation and Rising Prices Natural gas commodity, delivery and storage capacity costs constitute the single largest expense of the Company, representing 53% of fiscal 2024 total operating expenses.
At the end of the annual deferral period, the balance is amortized over an ensuing 12-month period as amounts are reflected in customer billings. Inflation and Rising Prices Natural gas commodity, delivery and storage capacity costs constitute the single largest expense of the Company, representing 55% of fiscal 2025 total operating expenses.
This is evidenced by the relative stability of the funded status of the pension plan at September 30, 2024 and 2023 with a funded ratio o f 104 % and 100%, respectively. The 25% allocation to equity investments provides asset growth potential to offset increases in the pension liability related to those employees continuing to accrue benefits.
This is evidenced by the relative stability of the funded status of the pension plan at September 30, 2025 and 2024 with a funded ratio o f 103% and 104 %, respectively. The 25% allocation to equity investments provides asset growth potential to offset increases in the pension liability related to those employees continuing to accrue benefits.
After peaking in December 2022, natural gas commodity prices decreased significantly through the remainder of fiscal 2023 and fiscal 2024. The decline in prices was primarily due to improved supply availability resulting from a warm winter season.
After peaking in December 2022, natural gas commodity prices decreased significantly for the remainder of fiscal 2023 and through fiscal 2025. The decline in prices was primarily due to improved supply availability resulting from a warm winter season.
Off-Balance Sheet Arrangements The Company has no off-balance sheet arrangements as defined in Regulation S-K, Item 303(a)(4)(ii). 23 Table of Contents Equity Investment in Mountain Valley Pipeline Midstream owns a less than 1% equity investment in the LLC that owns and operates the MVP.
Off-Balance Sheet Arrangements The Company has no off-balance sheet arrangements as defined in Regulation S-K, Item 303(a)(4)(ii). 23 Table of Contents Equity Investment in Mountain Valley Pipeline The Company owns a less than 1% interest in the LLC that owns and operates the MVP, as defined in its operating agreement.
Total ICC revenues decreased from approximately $967,000 in fiscal 2023 to $728,000 in fiscal 2024 due to lower natural gas commodity prices during the 2023 summer storage injection season resulting in a lower average cost of natural gas in storage.
Total ICC revenues decreased from approximately $728,000 in fiscal 2024 to $587,000 in fiscal 2025 due to lower natural gas commodity prices during the 2024 summer storage injection season resulting in a lower average cost of natural gas in storage.
Roanoke Gas filed and received approval from the SCC for an updated annual SAVE Rider rate to become effective October 1, 2024 that will result in approximately $1,389,000 of SAVE-related revenues during fiscal 2025.
Roanoke Gas filed and received approval from the SCC for an updated annual SAVE Rider rate to become effective October 1, 2025 that will result in approximately $2,610,000 of SAVE-related revenues during fiscal 2026.
The funded status for the postretirement plan was 139% a nd 116% as of September 30, 2024 and 2023, respecti vely. The improvement in the funded status was due to stronger-than-expected market performance only partially offset by higher liabilities as the Company is effectively matching durations within the portfolio.
The funded status for the postretirement plan was 147% and 139% as of September 30, 2025 and 2024, respecti vely. The improvement in the funded status was due to stronger-than-expected market performance only partially offset by higher liabilities as the Company is effectively matching durations within the portfolio.
The Company expects to utilize its operating cash flows and credit facilities, as well as to consider additional long-term debt and equity capital, to meet the funding requirements of these planned expenditures. 22 Table of Contents Investing cash flows also reflects the fiscal 2024 funding of approximately $18,000 for Midstream's participation in the LLC, down from the $2.1 million in fiscal 2023.
The Company expects to utilize its operating cash flows and credit facilities, as well as to consider additional long-term debt and equity capital, to meet the funding requirements of these planned expenditures. 22 Table of Contents Investing cash flows also reflects the fiscal 2025 funding of approximately $76,000 for Midstream's participation in the LLC, up from approximately $18,000 in fiscal 2024.
Corporate insurance premiums accounted for much of the remaining cost increase. 20 Table of Contents Taxes Other Than Income Taxes - Taxes other than income taxes increased by $370,338, or 16%, primarily due to higher property tax rates and growth in utility property, as well as increases in payroll taxes related to increased staffing and compensation.
Increased corporate insurance premiums accounted for much of the remaining increase. 20 Table of Contents Taxes Other Than Income Taxes - Taxes other than income taxes increased by $239,135, or 9%, primarily due to higher property tax rates and growth in utility property, as well as increases in payroll taxes related to increased staffing and compensation.
During the first and fourth fiscal quarters, operating cash flows generally decrease due to the combination of increasing natural gas storage levels and rising customer receivable balances. Cash flows from operating activities decreased by $6.4 million from the prior year.
During the first and fourth fiscal quarters, operating cash flows generally decrease due to the combination of increasing natural gas storage levels and rising customer receivable balances. Cash flows from operating activities increased by $11.5 million from the prior year.
The Company had four interest-rate swaps outstanding at September 30, 2024 related to its variable rate notes. The corresponding fair value of these swaps is reflected on the consolidated balance sheets as of September 30, 2024 and 2023.
The Company had six interest-rate swaps outstanding at September 30, 2025 related to its variable rate notes, compared to four at September 31, 2024. The corresponding fair value of the swaps is reflected on the consolidated balance sheets as of September 30, 2025 and 2024.
The following month, the unbilled estimate is reversed, the actual usage is billed and a new unbilled estimate is calculated. The consolidated financial statements include unbilled revenue of $1,294,798 and $1,240,097 as of September 30, 2024 and 2023, respectively.
The following month, the unbilled estimate is reversed, the actual usage is billed and a new unbilled estimate is calculated. The consolidated financial statements include unbilled revenue of $1,373,512 and $1,294,798 as of September 30, 2025 and 2024, respectively.
This compares to 44.4% equity and 55.6% long-term debt at September 30, 2023. The current interest rate environment may result in lower interest costs associated with the Company's variable rate debt. Management regularly evaluates the Company’s liquidity through a review of its available financing resources and its cash flows.
This compares to 44.1% equity and 55.9% long-term debt at September 30, 2024. Current interest rate trends may result in lower interest costs associated with the Company's variable rate debt in 2026. Management regularly evaluates the Company’s liquidity through a review of its available financing resources and its cash flows.
The Company recorded approximately $3,761,000 and $3,005,000 in additional revenues under the WNA for weather that was approximately 20% and 16% warmer than normal for the fiscal years ended September 30, 2024 and 2023, respectively.
The Company recorded approximately $1,056,000 and $3,761,000 in additional revenues under the WNA for weather that was approximately 4% and 20% warmer than normal for the fiscal years ended September 30, 2025 and 2024, respectively.
Actuarial Assumptions - Pension Plan Change in Assumption Increase in Pension Cost Increase in Projected Benefit Obligation Discount rate -0.25 % $ 106,000 $ 981,000 Rate of return on plan assets -0.25 % 76,000 N/A Rate of increase in compensation 0.25 % 46,000 212,000 The following schedule reflects the sensitivity of postretirement benefit costs from changes in certain actuarial assumptions, while the other components of the calculation remain constant.
Actuarial Assumptions - Pension Plan Change in Assumption Increase in Pension Cost Increase in Projected Benefit Obligation Discount rate -0.25 % $ 102,000 $ 946,000 Rate of return on plan assets -0.25 % 74,000 N/A Rate of increase in compensation 0.25 % 48,000 225,000 The following schedule reflects the sensitivity of postretirement benefit costs from changes in certain actuarial assumptions, while the other components of the calculation remain constant.
Actuarial Assumptions - Postretirement Plan Change in Assumption Increase (Decrease) in Postretirement Benefit Cost Increase in Accumulated Postretirement Benefit Obligation Discount rate -0.25 % $ 11,000 $ 291,000 Rate of return on plan assets -0.25 % 37,000 N/A Medical claim cost increase 0.25 % 37,000 281,000 Derivatives - The Company may hedge certain risks incurred in its operation through the use of derivative instruments.
Actuarial Assumptions - Postretirement Plan Change in Assumption Increase in Postretirement Benefit Cost Increase in Accumulated Postretirement Benefit Obligation Discount rate -0.25 % $ 5,000 $ 266,000 Rate of return on plan assets -0.25 % 38,000 N/A Medical claim cost increase 0.25 % 31,000 262,000 Derivatives - The Company may hedge certain risks incurred in its operation through the use of derivative instruments.
A 25 basis point decrease and increase on the yield curve would result in a $228,248 decrease and $226,748 increase, respectively, in the fair value of the interest rate swaps on the balance sheet. See Notes 1 and 8 to the consolidated financial statements for additional information regarding the swaps. Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
A 25 basis point decrease or increase on the yield curve would result in an approximately $600,000 corresponding decrease or increase in the fair value of the interest rate swaps on the balance sheet. See Notes 1 and 8 to the consolidated financial statements for additional information regarding the swaps. Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
ATM Program Resources issued 129,164 shares of common stock for $2,635,200, net of $67,569 in fees, under the ATM program for the year ended September 30, 2024. For the year ended September 30, 2023, Resources issued 127,852 shares of common stock for $2,713,020, net of $69,565 in fees, under the ATM program.
Resources issued 129,164 shares of common stock for $2,635,200, net of $67,569 in fees, under the ATM program for the year ended September 30, 2024.
The cost of natural gas is a pass-through cost and is independent of the Company's non-gas rates. Accordingly, the Company's approved billing rates include a component designed to allow for the recovery of the cost of natural gas used by its customers.
Accordingly, the Company's approved billing rates include a component designed to allow for the recovery of the cost of natural gas used by its customers.
Cash outflows for dividend payments were $8.0 million as the annualized dividend rate increased from $0.79 to $0.80 per share and total outstanding shares increased as a result of the stock issuance activity. The Company’s consolidated capitalization was 44.1% equity and 55.9% long-term debt at September 30, 2024, exclusive of unamortized debt expense.
Cash outflows for dividend payments were $8.5 million as the annualized dividend rate increased from $0.80 to $0.83 per share and total outstanding shares increased as a result of the stock issuance activity. The Company’s consolidated capitalization was 43.7% equity and 56.3% long-term debt at September 30, 2025, exclusive of unamortized debt expense.
The Company anticipates funding these items through its operating cash flows, credit availability under short-term and long-term debt agreements and proceeds from the sale of its common stock. Cash and cash equivalents decreased by approximately $618,000 in fiscal 2024 compared to $3.4 million in fiscal 2023.
The Company anticipates funding these items through its operating cash flows, credit availability under short-term and long-term debt agreements and proceeds from the sale of its common stock. Cash and cash equivalents increased by approximately $1,426,000 in fiscal 2025 compared to a decrease of approximately $618,000 in fiscal 2024.
Now that the MVP is in service, Midstream will incur normal periodic capital investment related to ongoing MVP operations requirements and system improvements, in which it will again participate. Midstream has and will continue to make capital investments in Southgate. The targeted timing for completion of the Southgate project is 2028.
Now that the MVP is in service, Midstream will be required to make periodic capital investment related to ongoing MVP operations requirements and system improvements. Midstream has and will continue to make capital investments in Southgate and Boost. The targeted timing for completion of the Southgate project is 2028 and the Boost project is 2029.
Cash Flows Provided by Financing Activities: Financing activities generally consist of borrowings and repayments under credit agreements, issuance of common stock and the payment of dividends. Net cash flows provided by financing activities were approximately $4.0 million and $200,000 in fiscal 2024 and 2023, respectively.
Cash Flows Provided by Financing Activities: Financing activities generally consist of borrowings and repayments under credit agreements, issuance of common stock and the payment of dividends. Net cash flows used in financing activities were approximately $6.8 million in fiscal 2025, compared to $4.0 million in net cash flows provided by financing activities in fiscal 2024.
The Company used a discount rate of 4.83% for valuing both its pension plan and postretirement plan liabilities at September 30, 2024. These discount rates represent a decrease from the 5.63% for the pension plan and postretirement plan used for valuing the corresponding liabilities at September 30, 2023.
The Company used a discount rate of 5.29% and 5.16% for valuing its pension plan liability and postretirement plan liability, respectively, at September 30, 2025. These discount rates represent an increase from the 4.83% rate used for valuing the corresponding liabilities for both the pension plan and postretirement plan at September 30, 2024.
See the Equity Investment in Mountain Valley Pipeline section for additional information on the MVP. As the Company’s business is seasonal in nature, volatility in winter weather and the commodity price of natural gas can impact the effectiveness of the Company’s rates in recovering its costs and providing a reasonable return for its shareholders.
As the Company’s business is seasonal in nature, volatility in winter weather and the commodity price of natural gas can impact the effectiveness of the Company’s rates in recovering its costs and providing a reasonable return for its shareholders.
In regard to the pension plan, specific factors include assumptions regarding the discount rate used in determining future benefit obligations, expected long-term rate of return on plan assets, compensation increases and life expectancies.
Demographic assumptions include projections of future mortality rates, pay increases and retirement patterns, as well as projected health care costs. In regard to the pension plan, specific factors include assumptions regarding the discount rate used in determining future benefit obligations, expected long-term rate of return on plan assets, compensation increases and life expectancies.
The following table summarizes the categories of sources and uses of cash: Cash Flow Summary Years Ended September 30, 2024 2023 Net cash provided by operating activities $ 17,433,625 $ 23,796,700 Net cash used in investing activities (22,033,632 ) (27,402,118 ) Net cash provided by financing activities 3,981,761 218,935 Net decrease in cash and cash equivalents $ (618,246 ) $ (3,386,483 ) 21 Table of Contents Cash Flows Provided by Operating Activities: The seasonal nature of the natural gas distribution business causes operating cash flows to fluctuate significantly during the year, as well as from year to year.
The following table summarizes the categories of sources and uses of cash: Cash Flow Summary Years Ended September 30, 2025 2024 Net cash provided by operating activities $ 28,948,149 $ 17,433,625 Net cash used in investing activities (20,733,615 ) (22,033,632 ) Net cash provided by (used in) financing activities (6,788,350 ) 3,981,761 Net increase (decrease) in cash and cash equivalents $ 1,426,184 $ (618,246 ) 21 Table of Contents Cash Flows Provided by Operating Activities: The seasonal nature of the natural gas distribution business causes operating cash flows to fluctuate significantly during the year, as well as from year to year.
Under the terms of the settlement, the Company agreed to an annual incremental revenue requirement increase of $4.08 million based on a return on equity of 9.90%.
Under the terms of the settlement, the Company agreed to an annual incremental revenue requirement increase of $4.08 million based on a return on equity of 9.90%. On April 10, 2025, the SCC issued a final order approving the settlement in its entirety.
A summary of the funded status of both the pension and postretirement plans is provided below: Funded status - September 30, 2024 Pension Postretirement Total Benefit obligation $ 29,873,428 $ 10,842,455 $ 40,715,883 Fair value of assets 31,054,138 15,078,281 46,132,419 Funded status $ 1,180,710 $ 4,235,826 $ 5,416,536 Funded status - September 30, 2023 Pension Postretirement Total Benefit obligation $ 26,747,624 $ 11,248,448 $ 37,996,072 Fair value of assets 26,878,661 13,019,313 39,897,974 Funded status $ 131,037 $ 1,770,865 $ 1,901,902 25 Table of Contents The Company annually evaluates the long-term rate of return on its targeted investment allocation model, as well as the overall asset allocation of its benefit plans, and reviews both plans' potential long-term rate of return assumptions with its investment advisors to determine the rates used in each plan's actuarial calculations.
A summary of the funded status of both the pension and postretirement plans is provided below: Funded status - September 30, 2025 Pension Postretirement Total Benefit obligation $ 29,480,020 $ 10,462,318 $ 39,942,338 Fair value of assets 30,487,401 15,390,822 45,878,223 Funded status $ 1,007,381 $ 4,928,504 $ 5,935,885 Funded status - September 30, 2024 Pension Postretirement Total Benefit obligation $ 29,873,428 $ 10,842,455 $ 40,715,883 Fair value of assets 31,054,138 15,078,281 46,132,419 Funded status $ 1,180,710 $ 4,235,826 $ 5,416,536 25 Table of Contents The Company annually evaluates the long-term rate of return on its targeted investment allocation model, as well as the overall asset allocation of its benefit plans, and reviews both plans' potential long-term rate of return assumptions with its investment advisors to determine the rates used in each plan's actuarial calculations.
Refunds to customers, which were accrued in fiscal 2023 and reflected in regulatory liabilities, were made in February 2024. On February 2, 2024, primarily in response to continued inflationary pressures, Roanoke Gas filed for a non-gas base rate increase of $4.33 million. The filing also reflected an increase in the Company's authorized return on equity from 9.44% to 10.35%.
In addition, Roanoke Gas is subject to other regulations which are not necessarily industry specific. On February 2, 2024, primarily in response to continued inflationary pressures, Roanoke Gas filed for a non-gas base rate increase of $4.33 million. The filing also reflected an increase in the Company's authorized return on equity from 9.44% to 10.35%.
This basis difference amortization is a favorable non-cash adjustment over the operational life of the MVP, or 40 years. For fiscal 2024 and 2023, the Company recorded equity in earnings of consolidated affiliates of $3.9 million and $2.1 million, respectively, which included $3.0 million and $2.1 million from AFUDC.
This basis difference amortization is a favorable non-cash adjustment over the operational life of the MVP, or 40 years. During fiscal 2025 and 2024, the Company recorded equity in earnings of consolidated affiliates of approximately $3.2 million and $3.9 million, respectively, with the 2024 amounts being primarily derived from AFUDC. The LLC began to return excess cash in fiscal 2025.
The $3.8 million increase in financing cash flows is primarily attributable to net borrowings of $6.8 million under Roanoke Gas' line-of-credit during fiscal 2024 compared to $4.3 million in net borrowings in the prior year.
The $10.8 million decrease in financing cash flows is primarily attributable to net borrowings of approximately $751,000 under Roanoke Gas' line-of-credit during fiscal 2025 compared to net borrowings of $6.8 million in the same period last year.
With the MVP in service, the Company now recognizes its share of operational earnings from the MVP, favorably adjusted for the amortization of a basis difference that arose when the Company recorded an other-than-temporary impairment of its investment in 2022. See Note 5 of the consolidated financial statements for additional information related to the MVP.
Equity in Earnings of Unconsolidated Affiliate - The equity in earnings of the MVP investment decreased by $617,239, or 16%. With the MVP in service, the Company now recognizes its share of operational earnings from the MVP, favorably adjusted for the amortization of a basis difference that arose when the Company recorded an other-than-temporary impairment of its investment in 2022.
The long-term rates of return increased slightly from 4.50% in fiscal 2024 to 4.95% for fiscal 2025 for the pension plan and from 4.21% in fiscal 2024 to 4.95% for fiscal 2025 for the postretirement plan. Management will continue to evaluate the return assumptions and asset allocation and adjust both as market conditions warrant.
The long-term rates of return increased slightly from 4.95% in fiscal 2024 to 5.75% for fiscal 2025 for both the pension plan and the postretirement plan. Management evaluates the return assumptions and asset allocation and adjusts both as market conditions warrant. Management estimates that the Company will have no minimum funding requirements next year.
The Company recovers non-gas related costs through the non-gas portion of its tariff rates, which are adjusted through a non-gas base rate application. Unlike the rate adjustments for the gas portion of rates which are done administratively, the non-gas base rate application process can result in an inherent lag in non-gas expense recovery.
Unlike the rate adjustments for the gas portion of rates which are done administratively, the non-gas base rate application process can result in an inherent lag in non-gas expense recovery. Therefore, authorized non-gas base rates may not keep pace with rising costs during inflationary periods.
Earnings Per Share and Dividends - Basic and diluted earnings per share were $1.16 in fiscal 2024 compared to $1.14 per share in fiscal 2023. Dividends declared per share of common stock were $0.80 in fiscal 2024 compared to $0.79 in fiscal 2023.
Dividends declared per share of common stock were $0.83 in fiscal 2025 compared to $0.80 in fiscal 2024.
New customer demand for natural gas continues to be strong and therefore extending the natural gas distribution system within its service territory is also a priority. Roanoke Gas’ capital expenditures included costs to extend natural gas distribution mains and services to 521 customers in fiscal 2024, compared to 430 customers in fiscal 2023.
New customer demand for natural gas continues to be steady and therefore extending the natural gas distribution system within its service territory is also a priority. Roanoke Gas' expenditures were approximately $20.7 million and $22.1 million in fiscal 2025 and 2024, respectively.
In addition, total heating degree days decreased by 6% from the same period last year, resulting in a 2% decline in the weather-sensitive residential and commercial volumes, while transportation and interruptible volumes, primarily driven by business activity rather than weather, increased by 1%.
In addition, total heating degree days increased by 18% from the prior fiscal year, resulting in a 9% increase in the weather-sensitive residential and commercial volumes, while transportation and interruptible volumes increased 24%, primarily driven by business activity of a single, multi-fuel customer during the period.
Roanoke Gas filed and received approval from the SCC for a new SAVE Plan and Rider with new rates placed into effect on October 1, 2023, and as a result, SAVE Plan revenues declined to approximately $461,000 in fiscal 2024 from approximately $1,104,000 in fiscal 2023.
Roanoke Gas filed and received approval from the SCC for an updated annual SAVE Rider rate which became effective October 1, 2024. As a result of the updated SAVE Rider, SAVE Plan revenues increased to approximately $1,588,000 in fiscal 2025 from approximately $461,000 in fiscal 2024.
The average price of gas in storage at September 30, 2024 declined by 23% compared to the same period last year. Accordingly, fiscal 2025 ICC revenues are expected to continue to remain below the prior year's levels.
The average price of gas in storage during fiscal 2025 declined by 12% compared to fiscal 2024, while the average price of gas in storage at September 30, 2025 increased by 5% compared to the same period last year.
The decrease in discount rates reflect the Federal Reserve's easing of interest rates in 2024 and general long-term rate decline. The yield on the 30-year Treasury increased from 3.79% at September 30, 2022 to 4.73% at September 30, 2023 and decreased to 4.14% at September 30, 2024. Corporate bond rates experienced a smaller increase as credit spreads have narrowed.
The increase in discount rates corresponds to the market reactions to the continuing inflationary pressures on the financial markets and economy . The yield on the 30-year Treasury increased from 4.14% at September 30, 2024 to 4.73% at September 30, 2025. Corporate bond rates experienced a smaller increase as credit spreads have narrowed.
The Company will continue to evaluate its benefit plan funding levels in light of funding requirements and ongoing investment returns and make adjustments, as necessary, to avoid benefit restrictions and minimize PBGC premiums. The following schedule reflects the sensitivity of pension costs to changes in certain actuarial assumptions, assuming that the other components of the calculation remain constant.
The Company currently does not expect to make contributions to its pension plan and postretirement plan in fiscal 2026 due to the funded position of the plans. The Company will continue to evaluate its benefit plan funding levels in light of funding requirements and ongoing investment returns and make adjustments, as necessary, to avoid benefit restrictions and minimize PBGC premiums.
Gross Utility Margin Year Ended September 30, 2024 2023 Increase Percentage Gas utility revenues $ 84,533,101 $ 97,325,307 $ (12,792,206 ) (13 )% Cost of gas - utility 35,967,987 51,742,718 (15,774,731 ) (30 )% Gross utility margin $ 48,565,114 $ 45,582,589 $ 2,982,525 7 % Gross utility margin increased over the prior fiscal year primarily as a result of the implementation of new non-gas base rates, net of SAVE, WNA and RNG revenue, offset by the reductions in ICC revenues.
Gross Utility Margin Year Ended September 30, 2025 2024 Increase Percentage Gas utility revenues $ 95,231,943 $ 84,533,101 $ 10,698,842 13 % Cost of gas - utility 42,550,954 35,967,987 6,582,967 18 % Gross utility margin $ 52,680,989 $ 48,565,114 $ 4,115,875 8 % Gross utility margin increased over the prior fiscal year primarily as a result of the implementation of new non-gas base rates and increases in SAVE revenues, slightly offset by the reduction in ICC revenues.
Roanoke Gas may also adjust capital spending as necessary, if such a need would arise. With the MVP now in service, Midstream's future cash requirements will relate to regular monthly operating expenses, debt service and capital contributions. The Company received its first cash distribution from MVP of approximately $800,000 in October 2024, and should receive similar distributions quarterly.
With the MVP now in service, Midstream's future cash requirements will relate to regular monthly operating expenses, debt service and capital contributions. The Company received four quarterly cash distributions from MVP in fiscal 2025 totaling approximately $3.6 million, and should receive similar quarterly distributions going forward.
Total RNG revenue increased from approximately $712,000 in fiscal 2023 to $1,629,000 in fiscal 2024 as the facility was operational for a full twelve months in the current year compared to seven months in the prior year. See Note 4 of the consolidated financial statements for more information on RNG.
Total RNG revenue increased from approximately $1,629,000 in fiscal 2024 to $1,760,000 in fiscal 2025. See Note 4 of the consolidated financial statements for more information on RNG. The cost of natural gas is a pass-through cost and is independent of the Company's non-gas rates.
Roanoke Gas' expenditures were approximately $22.1 million and $25.3 million in fiscal 2024 and 2023, respectively. The $3.2 million decrease in expenditures is primarily due to higher prior-year investment for the RNG project, which was placed in service in March 2023.
The $1.4 million decrease in expenditures is primarily due to higher prior-year investment for the MVP gate stations, which were placed into service in fiscal 2024. Roanoke Gas renewed 4.2 miles of main and 311 service lines and 5.4 miles of main and 412 service lines in fiscal years 2025 and 2024, respectively.
Management believes that it will be able to meet Midstream's cash requirements over the ensuing 12-month period with its quarterly cash distributions from MVP. Notes 6 and 7 of the consolidated financial statements provide details on the Company's line-of-credit and borrowing activities.
With the establishment of the new term note, Midstream's total debt principal payments over the succeeding 12 months is $2,846,018. Management believes that it will be able to meet Midstream's cash requirements over the ensuing 12-month period with availability on the Southgate and Boost Loan Agreements and its quarterly cash distributions from MVP.
Therefore, authorized non-gas base rates may not keep pace with rising costs during inflationary periods. Management regularly evaluates the Company's operations, economic conditions and other factors to assess the need to apply for a non-gas base rate adjustment.
Management regularly evaluates the Company's operations, economic conditions and other factors to assess the need to apply for a non-gas base rate adjustment. Accordingly, on December 2, 2025, the Company filed a non-gas base rate application with the SCC to increase revenues by $4.3 million annually.
The current interest rate environment may result in lower interest costs associated with the Company's variable rate debt. Income Taxes - Income tax expense increased by $204,700, or 6%, corresponding to an increase in pre-tax income. The effective tax rate was 23.9% and 23.6% for fiscal 2024 and 2023, respectively.
Income Taxes - Income tax expense increased by $394,924, or 11%, corresponding to an increase in pre-tax income. The effective tax rate was 23.6% and 23.9% for fiscal 2025 and 2024, respectively. The effective tax rate is below the combined statutory state and federal rate due to the amortization of excess deferred taxes and tax credits.
Roanoke Gas renewed 5.4 miles of main and 412 service lines and 5.7 miles of main and 452 service lines in fiscal years 2024 and 2023, respectively. With the recent approval of its new SAVE Plan and Rider, the Company is continuing its focus on SAVE infrastructure replacement projects, including the replacement of pre-1973 first generation plastic pipe.
Under the SCC approved SAVE Plan and Rider, the Company is continuing its focus on SAVE infrastructure replacement projects, including the replacement of pre-1973 first generation plastic pipe. Roanoke Gas’ capital expenditures included costs to extend natural gas distribution mains and services to 594 new customers in fiscal 2025, compared to 521 new customers in fiscal 2024.
Resources maintains the ability to raise equity capital through its ATM program, private placement or other public offerings. Management believes Roanoke Gas has access to sufficient financing resources to meet its cash requirements for the next year, including the line of credit and the two private shelf facilities.
Management believes Roanoke Gas has access to sufficient financing resources to meet its cash requirements for the next year, including cash from operations and the line of credit. Roanoke Gas may also adjust capital spending as necessary, if such a need would arise.
The Company participates in quarterly cash distributions by the LLC, the first of which was in October 2024. The Company's share was approximately $800,000. Regulatory See Note 4 of the consolidated financial statements for discussion on Regulatory matters. Critical Accounting Estimates The consolidated financial statements of Resources are prepared in accordance with GAAP.
The Company refinanced all of the debt supporting its investment in the MVP in September 2025, as described in the liquidity section above. Regulatory See Note 4 of the consolidated financial statements for discussion on Regulatory matters. Critical Accounting Estimates The consolidated financial statements of Resources are prepared in accordance with GAAP.
Operating Revenues Year Ended September 30, 2024 2023 Increase / (Decrease) Percentage Gas utility $ 84,533,101 $ 97,325,307 $ (12,792,206 ) (13 )% Non utility 108,131 114,458 (6,327 ) (6 )% Total operating revenues $ 84,641,232 $ 97,439,765 $ (12,798,533 ) (13 )% Delivered Volumes Year Ended September 30, 2024 2023 Increase / (Decrease) Percentage Regulated natural gas (DTH) Residential and commercial 6,252,546 6,408,436 (155,890 ) (2 )% Transportation and interruptible 3,796,224 3,776,569 19,655 1 % Total delivered volumes 10,048,770 10,185,005 (136,235 ) (1 )% HDD 3,094 3,290 (196 ) (6 )% 18 Table of Contents Total gas utility operating revenues for the year ended September 30, 2024 decreased by 13% from the year ended September 30, 2023 primarily due to significantly lower natural gas commodity prices and lower deliveries due to warmer weather more than offsetting the implementation of a non-gas base rate increase and increases in WNA and RNG revenues.
Operating Revenues Year Ended September 30, 2025 2024 Increase / (Decrease) Percentage Gas utility $ 95,231,943 $ 84,533,101 $ 10,698,842 13 % Non utility 102,269 108,131 (5,862 ) (5 )% Total operating revenues $ 95,334,212 $ 84,641,232 $ 10,692,980 13 % Delivered Volumes Year Ended September 30, 2025 2024 Increase Percentage Regulated natural gas (DTH): Residential and commercial 6,804,489 6,252,546 551,943 9 % Transportation and interruptible 4,688,926 3,796,224 892,702 24 % Total delivered volumes 11,493,415 10,048,770 1,444,645 14 % HDD 3,655 3,094 561 18 % 18 Table of Contents Total gas utility operating revenues for the year ended September 30, 2025 increased by 13% from the year ended September 30, 2024 primarily due to the implementation of a non-gas base rate increase, along with higher delivered volumes, gas costs and SAVE revenues, partially offset by a decrease in WNA revenue.
The non-gas base rate increases implemented in 2023 and 2024 were the main contributing factors to an approximate $1.7 million increase in non-gas volumetric revenues, net of lower delivered volumes, and a $522,000 increase in customer base charge revenue.
The non-gas base rate increase implemented in July 2024 was the main contributing factor to an approximate $5.6 million increase in non-gas volumetric revenues.
Net income increased by $461,614 from the prior year primarily due to AFUDC and earnings from the MVP and the implementation of new non-gas base rates effective July 1, 2024, partially offset by increased inflationary pressures on operating expenses and higher interest rates.
Net income increased by $1,519,074 from the prior year primarily due to the implementation of higher non-gas base rates and record natural gas deliveries, as well as lower post-retirement benefit costs, partially offset by lower WNA revenues and lower equity earnings from the MVP as the project transitioned from construction into service.
The effective tax rate is below the combined statutory state and federal rate due to the amortization of excess deferred taxes and tax credits. See Note 9 of the consolidated financial statements for the impact of tax credits on the effective tax rate.
See Note 9 of the consolidated financial statements for the impact of tax credits on the effective tax rate. Earnings Per Share and Dividends - Basic and diluted earnings per share were $1.29 in fiscal 2025 compared to $1.16 per share in fiscal 2024.
In addition, there is potential for higher bad debts related to customers' inability to pay higher natural gas bills. 17 Table of Contents Inflation, due to supply chain delays, labor shortages and limited availability of critical supplies, among other factors, affects the Company through increases in non-gas expenses such as labor, employee benefits, materials and supplies, contracted services, corporate insurance and other areas.
In addition, there is potential for higher bad debts related to customers' inability to pay higher natural gas bills. 17 Table of Contents The Company continues to experience inflation over the 2% level targeted by the Federal Reserve.
During fiscal 2024, the Company realized $4.7 million from the issuance of 234,645 shares through the ATM program and DRIP activity compared to $3.9 million received from the issuance of 194,719 shares from those same activities, as well as the exercise of stock options, during the prior year.
In addition, during fiscal 2025, Resources issued a total of 88,409 shares of common stock, primarily from DRIP activity, resulting in net proceeds of approximately $1.8 million. No shares were issued through the ATM program during fiscal 2025. During fiscal 2024, the Company realized $4.7 million from the issuance of 234,645 shares through the ATM program and DRIP activity.
Revenues from the SAVE Plan and Rider were incorporated into the interim, non-gas base rates. On December 19, 2023, the SCC issued a final order approving a non-gas base rate increase of $7.45 million. The order also directed Roanoke Gas to refund the excess revenues collected during the time the interim rates were in effect with interest.
The order also directed Roanoke Gas to refund the excess revenues collected during the time the interim rates were in effect with interest. The refunds to customers, which had previously been accrued as a regulatory liability, were made to customers in May 2025.
Removed
In addition, Roanoke Gas is subject to other regulations which are not necessarily industry specific. Beginning January 1, 2023, Roanoke Gas implemented interim, non-gas base rates designed to provide $8.55 million in additional annual revenues in response to higher operating costs and to recover its investment in non-SAVE related projects since the prior non-gas base rate increase in fiscal 2019.
Added
If natural gas prices remain at or higher than the prior year, the average dollar balance of gas in storage may increase based on current storage levels and due to an increased ICC factor from the prior year may lead to higher ICC revenues in fiscal 2026.
Removed
Following extended periods of regulatory and judicial delays, as well as receipt of authorization from the FERC, the MVP entered into service on June 14, 2024 and became available for interruptible or short-term firm transportation service. On July 1, 2024, the MVP commenced long-term firm capacity obligations.
Added
Inflation levels in health care spending, certain types of insurance, contracted services and IT service costs, as well as other items, continue to put upward pressure on the Company's expenses. The Company recovers non-gas related costs through the non-gas portion of its tariff rates, which are adjusted through a non-gas base rate application.
Removed
The SAVE Plan and Rider were reset effective January 1, 2023, when the recovery of all prior SAVE Plan investment was incorporated into the new non-gas base rates.
Added
Total gas costs also increased over the prior year primarily due to pipeline capacity charges increasing over $4.0 million as a result of higher rates and MVP capacity. SAVE Plan revenues increased as Roanoke Gas continues to invest in qualified SAVE infrastructure projects, resulting in approximately $1,127,000 more revenue compared to the same period in the prior year.
Removed
Accordingly, management filed a non-gas rate application in February 2024 to incorporate increased expense levels from continued inflationary pressures since the last non-gas base rate application. These new non-gas base rates were implemented effective July 1, 2024, subject to refund. See Note 4 of the consolidated financial statements for more information, including reaching settlement with SCC staff.
Added
WNA revenues declined approximately $2.7 million from the prior fiscal year as weather was only 4% warmer than normal during the current year compared to 20% warmer than normal during the prior year.
Removed
Natural gas commodity prices for fiscal 2024 purchases declined by 43% per DTH from the prior year and the total commodity component of gas costs decreased by 44% per DTH from the prior year.
Added
The volumetric margin, net of the WNA, increased by approximately $2.8 million primarily due to the new non-gas base rates and increases in transportation and interruptible volumes. As previously discussed, the SAVE Plan contributed an additional $1,127,000 to margin, while ICC revenues decreased by approximately $141,000 due to lower cost and volumes of gas in storage.
Removed
Total gas costs, including pipeline and storage demand charges, decreased by 29% compared to a year ago, which corresponds to a 31% decline in the gas cost component included in total customer billing rate. Corresponding to the lower average price of natural gas in storage during 2024, ICC revenues declined 25%.
Added
Personnel costs and contracted services increased by approximately $969,000 due to increased staffing and the inflationary impact on salaries and benefits. RNG expenses increased approximately $231,000 primarily due to increases in electric and telemetering charges. Bad debt expense increased by approximately $170,000 due to higher bills from colder weather and more inactive accounts resulting from non-pay customer turnoffs.

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