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Note 2 - Revenue
 12 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]

2.

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 for the years ended September 30:

 

  

2024

 
  

Gas utility

  

Non utility

  

Total operating revenues

 

Natural Gas (Billed and Unbilled):

            

Residential

 $46,472,676  $—  $46,472,676 

Commercial

  27,659,507   —   27,659,507 

Transportation and Interruptible

  5,414,157   —   5,414,157 

Other

  879,186   108,131   987,317 

Total contracts with customers

  80,425,526   108,131   80,533,657 

Alternative revenue programs

  4,107,575   —   4,107,575 

Total operating revenues

 $84,533,101  $108,131  $84,641,232 

 

  

2023

 
  

Gas utility

  

Non utility

  

Total operating revenues

 

Natural Gas (Billed and Unbilled):

            

Residential

 $54,342,435  $—  $54,342,435 

Commercial

  33,083,485   —   33,083,485 

Transportation and Interruptible

  5,730,726   —   5,730,726 

Other

  1,122,710   114,458   1,237,168 

Total contracts with customers

  94,279,356   114,458   94,393,814 

Alternative revenue programs

  3,045,951   —   3,045,951 

Total operating revenues

 $97,325,307  $114,458  $97,439,765 

 

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 include the procurement and transport of 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 with payments due 20 days from the rendering of the bill. 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 transportation and interruptible 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. Customers are invoiced monthly based on services provided for these activities. 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; the SAVE Plan over/under collection mechanism, which adjusts revenues for the differences between SAVE Plan revenues billed to customers and the revenues earned, as calculated based on the timing and extent of infrastructure replacement completed during the period; and the RNG over/under collection mechanism, which adjusts revenues similar to the SAVE Plan, but is calculated based on the timing and costs associated with owning, operating and maintaining the RNG facility. These amounts are ultimately collected from, or returned to, customers through future rate changes approved by the SCC.

 

Customer accounts receivable 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

 

September 30, 2023

 $2,782,025  $1,240,097  $1,972,132  $1,476,321 

September 30, 2024

  3,080,140   1,294,798   1,915,859   1,488,113 

Increase (decrease)

 $298,115  $54,701  $(56,273) $11,792 

 

(1) Included in "Accounts receivable, net" in the consolidated balance sheet. Amounts shown net of reserve for bad debts.

 

The Company did not incur any significant costs to obtain contracts during the period. Certain customers elect to pay even amounts monthly, giving rise to assets and liabilities that are in the table above. All amounts clear annually.