ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Tuesday, January 28, 1997 TAG: 9701280051
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
ROANOKE GAS CO. earned about 10 cents less a share during this fiscal year's first quarter than it did last year.
Roanoke Gas Co. makes its profits during the winter when there's greatest demand for its heating fuels and how much it makes depends on the weather.
The winter of 1995-96 was the fifth coldest in the 68 years Roanoke Gas has kept records, leading the company to set a gas sales record of 11.2 billion cubic feet, company officials told shareholders Monday.
However, when the utility reported its first-quarter earnings last week, profits were about 7 percent below those for the same period last year. The earnings dropped, the company said, because this winter's weather so far has been warmer.
The first quarter of the utility's fiscal year begins Oct. 31. During the current year's first quarter, Roanoke Gas earned $1.33million or 90 cents per share, compared with a previous first quarter of $1.44million or $1 per share.
In his annual report to shareholders, Roanoke Gas President Frank Farmer said the number of natural-gas customers was up 3 percent during fiscal 1996 and propane installations were up 14 percent.
In a separate matter, the State Corporation Commission said Monday it has scheduled a public hearing for June 25 on Roanoke Gas Co.'s request to raise its base rates by 1.99 percent, which would yield $959,277 a year in additional revenue. The SCC allowed the company to begin charging the higher rate on Jan. 1, subject to refunds if the commission eventually denies all or part of the increase.
The company has said it needs the additional money to cover improvements it is making to its transmission system and depreciation. Anyone wishing to comment on the rate increase should write by April 25 to Clerk of the Commission, in care of the Document Control Center, P.O. Box 2118, Richmond, Va. 23218-1197.
The 1.99 percent increase was included in a 27 percent increase in customers' bills in January. The bulk of the January increase was caused by increases in the wholesale rates Roanoke Gas pays its gas suppliers. The SCC allows utilities to pass along their fuel cost-increases to customers.
Because wholesale prices have recently declined, however, Roanoke Gas will be dropping its rates by 6 percent from $7.48 per 1000 cubic feet in January to $7.03 in February. That will mean the average winter residential bill will drop from $139.65 in January to $131.98 in February, said John Williamson III, vice president for rates and finance.
The company has continued its efforts at cutting costs by employing new technology and contracting out work that was formerly done by company workers, Farmer said.
Roanoke Gas also has a long-term goal of replacing old steel and cast-iron transmission lines with plastic pipes, he said. During fiscal 1996 the company replaced 8.7 miles of main pipeline, and over the past six years has rebuilt an average of 7.2 miles annually, said Art Pendleton, vice president of operations.
The company also replaced 800 service lines last year and remains on schedule to replace all remaining cast-iron and bare-steel mains and service lines by 2017, he said. Roanoke Gas expects to spend $5.8million on major projects this year.
Included among the utility's new industrial gas customers are R.R. Donnelley & Sons Co., which is building a book factory in Roanoke County, and two new Botetourt County industries - York International, a cooling-equipment manufacturer, and A.O. Smith, an auto-parts maker.
The company also added three residential subdivisions to its service area - Hunters Green in Botetourt County and Wexford Estates and Nottingham Park, both in Roanoke County.
LENGTH: Medium: 71 linesby CNB