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Note 2 - Revenue
 9 Months Ended
Jun. 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:

 

  

Three Months Ended June 30, 2024

  

Three Months Ended June 30, 2023

 
  

Gas utility

  

Non utility

  

Total operating revenues

  

Gas utility

  

Non utility

  

Total operating revenues

 

Natural Gas (Billed and Unbilled):

                        

Residential

 $7,333,332  $—  $7,333,332  $7,405,959  $—  $7,405,959 

Commercial

  4,706,086   —   4,706,086   4,459,667   —   4,459,667 

Transportation and interruptible

  1,317,890   —   1,317,890   1,354,678   —   1,354,678 

Other

  168,514   26,823   195,337   170,160   28,389   198,549 

Total contracts with customers

  13,525,822   26,823   13,552,645   13,390,464   28,389   13,418,853 

Alternative revenue programs

  905,557   —   905,557   241,392   —   241,392 

Total operating revenues

 $14,431,379  $26,823  $14,458,202  $13,631,856  $28,389  $13,660,245 

 

  

Nine Months Ended June 30, 2024

  

Nine Months Ended June 30, 2023

 
  

Gas utility

  

Non utility

  

Total operating revenues

  

Gas utility

  

Non utility

  

Total operating revenues

 

Natural Gas (Billed and Unbilled):

                        

Residential

 $40,001,039  $—  $40,001,039  $48,148,235  $—  $48,148,235 

Commercial

  22,946,163   —   22,946,163   28,502,754   —   28,502,754 

Transportation and interruptible

  4,047,151   —   4,047,151   4,508,997   —   4,508,997 

Other

  653,571   81,366   734,937   855,079   86,637   941,716 

Total contracts with customers

  67,647,924   81,366   67,729,290   82,015,065   86,637   82,101,702 

Alternative revenue programs

  3,807,640   —   3,807,640   2,870,535   —   2,870,535 

Total operating revenues

 $71,455,564  $81,366  $71,536,930  $84,885,600  $86,637  $84,972,237 

 

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, Revenue from Contracts with Customers. Tariff rates represent the transaction price. Performance obligations created under these tariff-based sales include the cost of natural gas sold to customers (commodity) and the cost of transporting natural gas through the Company’s distribution system to customers (delivery). 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 revenue 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 as 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

 

Balance at September 30, 2023

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

Balance at June 30, 2024

  3,783,662   1,423,346   1,075,453   1,586,618 

Increase (decrease)

 $1,001,637  $183,249  $(896,679) $110,297 

(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.