HIGHER GAS RATE IN VIEW ROANOKE GAS ENDS ITS WORST YEAR EVER

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, January 28, 1992                   TAG: 9201280106
SECTION: BUSINESS                    PAGE: A3   EDITION: METRO 
SOURCE: GEORGE KEGLEY BUSINESS EDITOR
DATELINE:                                 LENGTH: Medium
HIGHER GAS RATE IN VIEW ROANOKE GAS ENDS ITS WORST YEAR EVER
Roanoke Gas Co. on Monday said 1991 was its worst earnings year ever, due to unseasonably warm weather last winter and the recession's impact on industrial customers.
Last winter was the mildest in 52 years of record-keeping, with temperatures 20 percent warmer than normal, the utility's president, Frank Farmer, told the annual shareholders meeting. The company's fiscal year ended on Sept. 30.
The factors combined to create an 8 percent drop in the volume of gas sales and a decline of 5.6 percent in propane sales last year. Net earnings came to $1.6 million, but about half of that was due to an accounting change, Farmer said.
The company is preparing a rate increase request to be filed with the State Corporation Commission in late February or March, he said in an interview.
In June, Roanoke Gas took the unusual step of withdrawing a rate increase request for $1.2 million after the SCC's figures showed the company could earn its allowed rate of return without raising rates.
Farmer said his staff has not decided how much of an increase it will seek. However, he said, a year of normal weather and prompt SCC action on a rate application "hopefully . . . will bring the company's net earnings to an acceptable level for fiscal year 1992."
Small rate increases of less than 2 percent were approved last year for the company's two Bluefield subsidiaries.
Results for the first quarter, ending Feb. 1, will show a 10 percent rise in sales volume because the November-January quarter was 16 percent colder than a year ago, Farmer said. But temperatures are still about 12 percent warmer than normal. The company has difficulty meeting its dividend payment when temperatures are more than 10 percent warmer, he said.
To minimize the impact of lower sales last year, Farmer said, Roanoke Gas curtailed expenses by cutting its work force by attrition, running its trucks longer and postponing capital expenditures.
In the first quarter, Farmer said, the number of natural gas customers grew by 2.6 percent and the number of propane customers rose by 11.7 percent.
Farmer recognized the 42 years of service of A.W. Buckley, retired company president, who did not stand for re-election to the board. E.C. Dunbar, chairman and retired president; Farmer; and nine other directors were re-elected. They include J. Allen Layman, president of Botetourt Communications.

by Archana Subramaniam by CNB