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Note 3 - Revenue
 6 Months Ended
Mar. 31, 2022
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]

3.

Revenue

 

The Company assesses new contracts and identifies related performance obligations for promises to transfer distinct goods or services to the customer. Revenue is recognized when performance obligations have been satisfied. In the case of Roanoke Gas, the Company contracts with its customers for the sale and/or delivery of natural gas.

 

The following tables summarize revenue by customer, product and income statement classification:

 

  

Three Months Ended March 31, 2022

  

Three Months Ended March 31, 2021

 
  

Gas utility

  

Non utility

  

Total operating revenues

  

Gas utility

  

Non utility

  

Total operating revenues

 

Natural Gas (Billed and Unbilled):

                        

Residential

 $18,104,512  $—  $18,104,512  $17,402,552  $—  $17,402,552 

Commercial

  9,487,312   —   9,487,312   9,264,611   —   9,264,611 

Industrial and Transportation

  1,352,161   —   1,352,161   1,252,343   —   1,252,343 

Other

  138,035   30,464   168,499   95,092   32,388   127,480 

Total contracts with customers

  29,082,020   30,464   29,112,484   28,014,598   32,388   28,046,986 

Alternative Revenue Programs

  417,199   —   417,199   206,676   —   206,676 

Total operating revenues

 $29,499,219  $30,464  $29,529,683  $28,221,274  $32,388  $28,253,662 

 

  

Six Months Ended March 31, 2022

  

Six Months Ended March 31, 2021

 
  

Gas utility

  

Non utility

  

Total operating revenues

  

Gas utility

  

Non utility

  

Total operating revenues

 

Natural Gas (Billed and Unbilled):

                        

Residential

 $31,317,001  $—  $31,317,001  $28,648,746  $—  $28,648,746 

Commercial

  16,873,030   —   16,873,030   15,254,631   —   15,254,631 

Industrial and Transportation

  2,665,252   —   2,665,252   2,476,144   —   2,476,144 

Other

  361,863   61,889   423,752   256,169   65,905   322,074 

Total contracts with customers

  51,217,146   61,889   51,279,035   46,635,690   65,905   46,701,595 

Alternative Revenue Programs

  1,513,728   —   1,513,728   1,069,084   —   1,069,084 

Total operating revenues

 $52,730,874  $61,889  $52,792,763  $47,704,774  $65,905  $47,770,679 

 

Gas utility revenues

 

Substantially all of Roanoke Gas' revenues are derived from rates authorized by the SCC through its tariffs. Based on its evaluation, the Company has concluded that these tariff-based revenues fall within the scope of ASC 606. Tariff rates represent the transaction price. Performance obligations created under these tariff-based sales include commodity (the cost of natural gas sold to customers) and delivery (transporting natural gas through the Company’s distribution system to customers). The delivery of natural gas to customers results in the satisfaction of the Company’s respective performance obligations over time.

 

All customers are billed monthly based on consumption as measured by metered usage. Revenue is recognized as bills are issued for natural gas that has been delivered or transported. In addition, the Company utilizes the practical expedient that allows an entity to recognize the invoiced amount as revenue, if that amount corresponds to the value received by the customer. Since customers are billed tariff rates, there is no variable consideration in the transaction price.

 

Unbilled revenue is included in residential and commercial revenues in the preceding table. Natural gas consumption is estimated for the period subsequent to the last billed date and up through the last day of the month. Estimated volumes and approved tariff rates are utilized to calculate unbilled revenue. The following month, the unbilled estimate is reversed, the actual usage is billed and a new unbilled estimate is calculated. The Company obtains metered usage for industrial customers at the end of each month, thereby eliminating any unbilled consideration for these rate classes.

 

Other revenues

 

Other revenues primarily consist of miscellaneous fees and charges, utility-related revenues not directly billed to utility customers and billings for non-utility activities. Regarding these activities, the customer is invoiced monthly based on services provided. The Company utilizes the practical expedient allowing revenue to be recognized based on invoiced amounts. The transaction price is based on a contractually predetermined rate schedule; therefore, the transaction price represents total value to the customer and no variable price consideration exists.

 

Alternative Revenue Program revenues

 

ARPs, which fall outside the scope of ASC 606, are SCC approved mechanisms that allow for the adjustment of revenues for certain broad, external factors, or for additional billings if the entity achieves certain performance targets. The Company's ARPs include its WNA, which adjusts revenues for the effects of weather temperature variations as compared to the 30-year average, and the SAVE Plan over/under collection mechanism, which adjusts revenues for the differences between SAVE Plan revenues billed to customers and the revenue earned, as calculated based on the timing and extent of infrastructure replacement completed during the period. These amounts are ultimately collected from, or returned to, customers through future rate changes as approved by the SCC.

 

Customer AccountsReceivable and Liabilities 

 

Accounts receivable, as reflected in the condensed consolidated balance sheets, includes both billed and unbilled customer revenues, as well as amounts that are not related to customers. The balances of customer receivables are provided below:

 

  

Current Assets

  

Current Liabilities

 
  

Trade accounts receivable(1)

  

Unbilled revenue(1)

  

Customer credit balances

  

Customer deposits

 

Balance at September 30, 2021

 $3,722,916  $1,191,227  $1,539,680  $1,571,342 

Balance at March 31, 2022

  7,872,022   3,057,298   682,959   1,583,542 

Increase (decrease)

 $4,149,106  $1,866,071  $(856,721) $12,200 

(1) Included in accounts receivable in the condensed consolidated balance sheet. Amounts shown net of reserve for credit losses. 

 

The Company had no significant contract assets or liabilities during the period. Furthermore, the Company did not incur any significant costs to obtain contracts.