RGC Resources, Inc. (RGCO): Business Model Canvas [Apr-2026 Updated]

You're trying to map out the core business engine of RGC Resources, Inc. (RGCO), and after two decades analyzing these infrastructure plays, I can tell you it's a textbook regulated utility model, but with a few sharp, modern twists. Honestly, their stability comes from serving over $\mathbf{62,500}$ customers in the Roanoke Valley, which generated $\mathbf{\$95.33}$ million in annual operating revenues for fiscal 2025, all while maintaining $\mathbf{1,180}$ miles of pipeline. The real intrigue, though, lies in how they balance that predictable, regulated cash flow with strategic bets, like their investment in the Mountain Valley Pipeline, all funded by a balance sheet showing $\mathbf{\$329.84}$ million in total assets. Dive into the Business Model Canvas below to see exactly how these nine pieces fit together for this essential service provider.

RGC Resources, Inc. (RGCO) - Canvas Business Model: Key Partnerships

The Key Partnerships for RGC Resources, Inc. (RGCO) in late 2025 center on infrastructure investment, regulatory compliance, and regional growth initiatives, primarily through its subsidiaries Roanoke Gas and RGC Midstream, LLC.

Mountain Valley Pipeline, LLC (MVP) via RGC Midstream, LLC Investment

RGC Midstream, LLC's investment in the Mountain Valley Pipeline (MVP) is a critical partnership driving a shift in RGC Resources, Inc.'s profile from purely stable utility to one with growth components. The MVP, operational since June 2024, has a 20-year contract life and capacity of 2 Bcf/day. RGC Midstream is also a partner in the announced MVP expansion, known as Boost, which will add 600,000 DTH of daily capacity. The financial integration of this asset is ongoing; RGC Midstream successfully refinanced debt supporting the MVP investment in September 2025, with new maturities set for the end of 2025 and 2026. The tangible cash returns are materializing, with the first cash distribution in October 2025 totaling approximately $800,000, and MVP equity earnings for fiscal year 2025 reported at $3.23M. However, Q2 2025 earnings specifically from MVP were $801,175, showing the transition from construction accounting.

Interstate Pipeline Operators and Supply Infrastructure

Roanoke Gas relies on a network of external suppliers to meet customer demand, a necessary partnership for a regulated utility.

• Total natural gas deliveries for fiscal year 2025 reached 11,493,415 DTHs.
• The company depends on multiple interstate pipelines for supply.
• An associated Liquefied Natural Gas (LNG) facility can store up to 200,000 DTH.
• This LNG facility supports peak daily deliveries of 118,606 DTH.

State and Local Regulatory Bodies for Rate Case Stipulations and Compliance

Compliance and rate recovery are managed through formal partnerships with the State Corporation Commission (SCC) in Virginia, which authorizes rates and safety standards. The company actively manages regulatory cycles to offset inflationary pressures.

Here's a look at the regulatory and infrastructure investment framework:

The company reached agreement on a second rate case in October 2024, following one completed in early fiscal 2024.

Regional Economic Development Partners to Drive Customer and Load Growth

Partnerships with regional economic drivers are key to increasing the customer base and overall load, which directly impacts the utility margin. Roanoke Gas added 712 customers in 2025, representing a 13% increase over 2024 volumes. Residential and commercial volumes specifically saw a 9% increase in 2025. The region's development attracts major energy users, which is a direct benefit to the distribution system.

The local economic development environment includes significant capital projects:

• Downtown hospital system expansion: Over $400 million+.
• New state-of-the-art facility groundbreaking: $100 million.
• The operational MVP pipeline is generating interest from various industries, including data centers, due to its energy capacity.

Local Authorities for Cooperative Agreements like the RNG Facility

The Renewable Natural Gas (RNG) facility represents a partnership in sustainable energy sourcing, initiated with local authorities' support. Roanoke Gas began operating this facility in March 2023. The capital expenditure for the RNG facility in 2023 was $3.1 million. Currently, the volume produced from RNG is less than 1% of the current system demand. Furthermore, Roanoke Gas expanded its service area by starting natural gas service in Franklin County in 2024.

Finance: draft $22 million annual capital expenditure forecast for 2026 by Friday.

RGC Resources, Inc. (RGCO) - Canvas Business Model: Key Activities

You're looking at the core functions that keep RGC Resources, Inc. (RGCO) running day-to-day, which is essentially managing a regulated utility and its midstream investments. Here's the breakdown of what they actually do to generate revenue and maintain service.

Regulated natural gas distribution and sale in the Roanoke Valley

The primary activity is delivering natural gas through Roanoke Gas, the regulated local distribution company (LDC) in Southwest Virginia. This involves selling and distributing gas to a base of approximately 62,500 customers as of March 31, 2025. It's interesting to note the customer mix: residential customers make up over 91% of the total count, but they account for less than 35% of total gas volumes delivered. Still, that residential base contributes more than 50% of the company's consolidated revenues and margin. For the full fiscal year ending September 30, 2025, Total Operating Revenues hit $95.33 million, with a Gross Utility Margin of $52.68 million. That volume activity was strong, setting a new annual record of 11.5 million DTH delivered, yet the fourth quarter was seasonally weak, resulting in a net loss of $204,000 for that period.

Utility infrastructure investment and modernization (SAVE Plan)

A major ongoing activity is the systematic investment in the distribution system, largely driven by the Virginia State Corporation Commission (SCC)-approved SAVE Plan. RGC Resources is maintaining capital expenditures of approximately $22 million annually, focusing on system reliability and growth. This isn't just abstract spending; in 2025 alone, Roanoke Gas installed 4.8 miles of new main and added 712 customers, a 13% increase in customer count over 2024. Furthermore, the SAVE plan specifically targeted renewal of aging infrastructure, where they renewed 4.2 miles of pre-73 plastic pipe and 348 related services. This methodical replacement locks in future earnings, with the SAVE Rider expected to generate roughly $2.6 million in SAVE-related revenues for fiscal 2026.

Natural gas procurement and supply management for customers

To meet that record demand, RGC Resources must actively manage supply contracts and storage. They rely on interstate pipelines and a dedicated Liquefied Natural Gas (LNG) facility to ensure capacity, especially during peak heating season. The maximum daily winter capacity available from the current interstate pipelines stands at 93,606 DTH per day. To buffer against extreme cold or supply interruptions, the LNG facility is capable of storing up to 200,000 DTH of natural gas in a liquid state. Combined, the system can provide up to 118,606 DTH on a single winter day. On the renewable side, the RNG facility, operational since March 2023, produces biogas, but its volume is currently less than 1% of total system demand.

Managing regulatory compliance and rate-making processes

Operating as a regulated utility means constant engagement with the Virginia SCC on rates and compliance. A key recent activity was securing a new non-gas base rate increase of $4.08 million in fiscal 2025, based on a 9.90% authorized Return on Equity (ROE). This helps stabilize non-gas revenues against inflation. To address continued cost pressures on personnel and insurance, management proactively filed for another $4.3 million non-gas base rate increase in December 2025. The company's exclusive right to distribute gas in its service areas is secured by franchises that are set to expire in 2035.

Operating and maintaining 1,180 miles of pipeline network

The physical network itself requires continuous operation and maintenance. Roanoke Gas operates approximately 1,179 miles of transmission and distribution pipeline, along with six metering stations. This physical asset base is the foundation for all distribution revenue. Beyond the local system, RGC Midstream's key activity involves managing its ownership stake in major interstate projects, which is a significant part of the overall business model. Here's a look at the key asset metrics and related financial flows:

The midstream segment's activity also includes managing its investment in the MVP, which transitioned from accruing non-cash Allowance for Funds Used During Construction (AFUDC) to generating tangible cash returns. The company received $3.6 million in quarterly cash distributions from MVP in fiscal 2025, which is crucial for supporting Midstream debt service.

The operational focus for the utility side can be summarized by the following key performance indicators for the fiscal year:

• Record Annual Gas Delivery Volume: 11.5 million DTH.
• New Customers Added in 2025: 712.
• Miles of New Main Installed in 2025: 4.8 miles.
• FY 2025 Net Income: $13.3 million.
• FY 2025 Diluted EPS: $1.29.

Finance: draft 13-week cash view by Friday.

RGC Resources, Inc. (RGCO) - Canvas Business Model: Key Resources

You're looking at the core assets that make RGC Resources, Inc. tick, the tangible and intangible things they absolutely must have to make their business model work. These aren't just line items on a balance sheet; they are the foundation of their operations, especially as they balance regulated utility stability with growth from interstate pipelines.

Regulated Utility Franchise Rights in the Service Territory

The most fundamental resource for Roanoke Gas Company, a key subsidiary, is its regulated status. This grants RGC Resources, Inc. the exclusive right to distribute natural gas in its service areas, which is a classic utility monopoly advantage. The Virginia State Corporation Commission (SCC) oversees the terms, conditions, and rates for this operation. You should note that these franchises are not indefinite; the rights to distribute natural gas are set to expire in 2035. This regulatory framework provides a predictable revenue base, which is crucial for a company with a long history of dividend payments.

Extensive Physical Infrastructure: Pipeline and LNG Facility

The physical network is massive, supporting the delivery of gas to approximately 62,500 customers. RGC Resources, Inc. maintains an extensive system that includes approximately 1,900km of transmission and distribution pipelines, which translates to about 1,180 miles of pipe. This infrastructure is designed to handle significant demand, especially during peak heating seasons, where about 63% of total natural gas deliveries occur between November and March. To buffer against supply interruptions or extreme cold, the Liquefied Natural Gas (LNG) facility is a key physical asset, capable of storing up to 200,000 DTH (Dekatherms) of natural gas in a liquid state. Combined with interstate pipeline capacity, the system can deliver up to 118,606 DTH on a single winter day.

Here's a snapshot of the scale of the physical plant and the balance sheet supporting it as of September 30, 2025:

Investment in the Mountain Valley Pipeline (MVP)

RGC Midstream, LLC, a wholly owned subsidiary, holds a 1% interest in the Mountain Valley Pipeline (MVP). This investment is a major growth driver, shifting the company from pure utility stability to an energy infrastructure play. The MVP became operational in June 2024, and for fiscal year 2025, equity earnings from this investment were a component of the overall financial picture, though they were lower than the prior year due to the phase-out of Allowance for Funds Used During Construction (AFUDC) accounting. The company took a strategic step to support this asset by successfully refinancing and extending the maturity of the related debt to 2032 in September 2025.

Human Capital for Specialized Utility Operations and Maintenance

The specialized knowledge of your team is non-negotiable for safe and compliant operation. This includes the engineers, technicians, and customer service staff who manage the regulated distribution system and the complex Midstream assets. The utility side focuses on serving approximately 62,500 customers, with residential customers making up over 91% of the total count. The company's capital spending in 2025, over $21 million, was deployed to support this human capital through system enhancements, including installing 4.8 miles of new main and adding 712 new customers.

Capital Structure Supporting $329.84 Million in Total Assets

The ability to fund these physical assets is rooted in the capital structure. As of the end of fiscal year 2025, total assets stood at $329.84 million. This asset base is supported by a mix of debt and equity. Specifically, long-term debt stood at $145.77 million, while stockholders' equity was $113.55 million at the close of the fiscal year. The company reported consolidated net income of $13.3 million for the year, translating to diluted Earnings Per Share (EPS) of $1.29. This performance allowed the Board of Directors to approve a 5% increase to the annual dividend rate to $0.87 per share in November 2025.

You need to keep an eye on the debt load relative to equity, but the recent refinancing of MVP-related debt shows proactive management of near-term financial risk.

RGC Resources, Inc. (RGCO) - Canvas Business Model: Value Propositions

You're looking at the core promises RGC Resources, Inc. makes to its stakeholders, which are deeply rooted in its regulated utility structure and strategic infrastructure plays. These propositions are backed by concrete operational and financial figures from the fiscal year ended September 30, 2025.

Safe and reliable delivery of natural gas service

RGC Resources, through its Roanoke Gas subsidiary, delivered gas effectively and efficiently to all customers, even during what was described as one of the coldest winters in the last decade. This reliability is supported by record volumes and targeted infrastructure spending.

The company set a new, annual natural gas delivery record of 11.5 million DTH's in fiscal 2025, surpassing the previous record by 400,000 DTH's set back in fiscal 2001. To maintain this service, Roanoke Gas installed 4.8 miles of new main and added 712 customers in 2025, representing a 13% increase in new customers over 2024.

Infrastructure investment also focused on system modernization:

• Renewed 4.2 miles of pre-73 plastic pipe through the SAVE plan.
• Replaced 348 related services under the SAVE plan.
• Maintained an LNG storage facility capacity of up to 200,000 DTH.
• Supported peak daily deliveries of 118,606 DTH from its pipeline and LNG sources.

The volume produced from the Renewable Natural Gas (RNG) facility is currently less than 1% of current system demand.

Stable and affordable energy solutions for residential and commercial users

The regulated utility business is the bedrock of stability, providing more than 99% of total revenues in 2025. For the full fiscal year 2025, RGC Resources reported Total Operating Revenues of $95.33 million and a Gross Utility Margin of $52.68 million. The company has a long history of rewarding shareholders, having raised its annual dividend for 21 straight years, with the latest increase in November 2025 setting the annual rate at $0.87 per share.

The customer base relies on this stability:

Residential users, while making up the vast majority of accounts, account for less than 35% of the total volume delivered.

Enhanced system reliability through continuous infrastructure investment

Continuous investment is explicitly tied to system reliability and customer growth, supported by regulatory mechanisms like the SAVE Plan (Steps to Advance Virginia's Energy), which allows cost recovery for eligible infrastructure replacement projects. Management reaffirmed its Full-Year Capital Spending for fiscal 2025 to be within the $21.5 million to $22 million range, with annual capital expenditures expected to be approximately $22 million over the next few years.

The focus on system enhancement is clear in the 2025 operational results:

• Customer additions in 2025 grew by 13% over 2024.
• The company executed on its strategy by deploying over $21 million of capital in the utility segment.

Long-term energy security via strategic pipeline investments like MVP

RGC Midstream, LLC, the non-regulated subsidiary, represents a key growth point through its strategic investment in the Mountain Valley Pipeline (MVP). The MVP is now operational, shifting the company from a construction phase to an active cash generation phase, which supports long-term operational earnings. The company also took steps to secure this investment by successfully refinancing and extending the maturity of RGC Midstream's debt in September 2025.

The MVP's contribution, though shifting due to the phase-out of Allowance for Funds Used During Construction (AFUDC) accounting, remains a factor:

The MVP investment is positioned to offer a major new profit stream, complementing the stable regulated utility business.

Predictable service under a regulated, monopolistic framework

Roanoke Gas operates under a framework where it holds exclusive rights to distribute natural gas in its service area, with franchises extending through 2035. This monopolistic position provides a high degree of service predictability for customers in the Roanoke Valley and surrounding localities. Regulatory oversight is managed by the Virginia State Corporation Commission (SCC) and federal agencies.

Regulatory outcomes directly impact revenue stability. For instance, a recent rate case settlement with the SCC is expected to add $4.08 million in annual revenues. The company utilizes mechanisms like the Purchased Gas Adjustment (PGA) to pass on fluctuations in gas costs directly to customers, insulating the utility margin from commodity price volatility. The seasonal nature of demand means approximately 63% of total DTH deliveries occurred between November and March in fiscal 2025.

Finance: draft 13-week cash view by Friday.

RGC Resources, Inc. (RGCO) - Canvas Business Model: Customer Relationships

Regulated, long-term service relationship with minimal churn

RGC Resources, Inc. operates Roanoke Gas, a regulated natural gas utility, which inherently implies long-term service contracts and a monopolistic environment within its service area, suggesting minimal customer churn for the core utility business. The company is projecting about 65,000 customers by mid-FY26, up from 62,527 customers served in fiscal year 2025. Infrastructure investment continues to support this base, with Roanoke Gas installing nearly five main miles and adding 712 customers in 2025, representing a 50% and 13% increase over 2024 additions, respectively. The company has a history of dividend payments every year since WWII, with 20+ years of consecutive dividend increases, reflecting stability.

Dedicated customer service for billing and outage management

System reliability is a key component of the customer relationship, evidenced by performance during extreme weather. RGC Resources' system performed exceptionally well during a January that management noted was the coldest in over a decade for Southwest Virginia, resulting in no customer outages. The company also utilizes regulatory mechanisms to manage costs passed to customers, such as the PGA (Purchased Gas Adjustment) to adjust rates for gas cost changes, and the SAVE Rider to recover costs for pre-73 plastic pipe renewal, where 4.2 miles of pipe and 348 related services were renewed in 2025.

Relationship management with large industrial/commercial customers

While residential users form the bulk of the customer count, large customers drive significant volume and revenue. In fiscal year 2025, total delivered gas volumes rose ~14% year-over-year. The relationship with a key transportation customer capable of fuel switching significantly impacted quarterly results; for instance, Q1 FY2025 volumes were up 16% YoY due to this customer's increased consumption, and Q2 FY2025 volumes were up 20% YoY for the same reason. The company reported total Operating Revenues of $95.33 million for 2025.

Here's the quick math on customer segmentation for fiscal 2025:

Community engagement and transparency in rate-making

RGC Resources' mission includes creating value for the communities it serves through superior customer service. Transparency is managed through regulatory filings and rate case outcomes. The 2024 rate case, finalized in early April 2025 by the State Corporation Commission, confirmed rates that customers had been billed since November 2024, producing an annual revenue increase of more than $4 million based on a 9.9% ROE and a 59% equity ratio. Furthermore, RGC Resources filed an expedited rate case in late 2025 seeking an approximate $4.3 million annual revenue increase, based on a 9.9% ROE, effective January 1, 2026. The company also committed to returning certain tax credits to customers over the next 12 months. The company reported Net Income of $13.3 million for fiscal year 2025.

• Annual dividend rate increased by 5% to $0.87 per share in November 2025.
• The company expects to add about 700 new customers per year on average.
• The regulated gas distribution business provided more than 99% of total revenues in 2025.

RGC Resources, Inc. (RGCO) - Canvas Business Model: Channels

The channels RGC Resources, Inc. uses to reach and serve its customer base are centered around its regulated utility operations through Roanoke Gas Company, supplemented by digital interfaces for modern account management.

Physical distribution network of pipelines directly to end-users

The core channel is the physical delivery of natural gas via an extensive utility system. The company relies on multiple interstate pipelines and an on-site liquefied natural gas (LNG) facility to ensure supply meets demand.

• Maximum daily winter capacity available from the system is 118,606 DTH per day.
• The LNG facility has storage capacity of up to 200,000 DTH.
• Total delivered gas volumes for fiscal year 2025 reflected a 14% increase year-over-year, reaching record levels.
• For the first half of fiscal year 2025, the company installed 2.7 main miles of pipeline infrastructure.
• Infrastructure renewal included 1.9 miles of Main and 159 services during the first half of fiscal year 2025.

The commitment to maintaining and expanding this physical network is reflected in capital spending plans. Total capital expenditures for fiscal year 2025 were reaffirmed at $21.6 million, with projections for approximately $22 million annually over the next few years to support system improvements and customer growth.

Direct customer service via phone and physical office locations

Direct interaction remains crucial for a regulated utility, especially for service issues or new account setups. While the exact number of physical service centers isn't specified, the service reach is defined by the customer base.

• The total customer base served by Roanoke Gas is approximately 62,500 as of fiscal year 2025.
• Residential users account for over 91% of the customer count.
• Transportation and interruptible volumes saw a 24% increase in deliveries for the year.

Online portal and website for billing and account management

RGC Resources, Inc. directs customers to its website, www.rgcresources.com, for information, which implies a digital channel for standard interactions like billing inquiries and account management, though specific usage metrics for these functions aren't publicly detailed.

Field service technicians for installations and maintenance

Field service operations are evidenced by the volume of new connections and infrastructure renewal work performed by company personnel or contractors.

• 359 new services were connected in the first six months of fiscal year 2025.
• The company connected over 700 new services in total, with expectations to reach approximately 65,000 customers by the end of the second quarter of the following fiscal year.

Finance: draft 13-week cash view by Friday.

RGC Resources, Inc. (RGCO) - Canvas Business Model: Customer Segments

RGC Resources, Inc., through its subsidiary Roanoke Gas Company, serves a defined geographic area, primarily the greater Roanoke Valley in Southwest Virginia, which includes the cities of Roanoke and Salem and the Town of Vinton, with recent expansion into adjacent Franklin County.

Residential customers form the vast majority of the customer count, though they represent a smaller portion of the total volume delivered. As of the fiscal year ended September 30, 2025, Roanoke Gas served approximately 62,527 customers in total.

Commercial customers in the Roanoke Valley and surrounding areas are a key segment, contributing significantly to the overall revenue base alongside industrial users. The combined Commercial and Industrial segments account for approximately 67% of the annual gas distribution volume.

Industrial customers, including large-volume users with fuel-switch capability, represent a critical component of the volume profile. One large transportation customer specifically saw increased consumption, contributing to the record annual gas delivery volumes achieved in fiscal 2025. However, the potential for this large customer to switch fuels introduces a degree of demand uncertainty beyond the near term.

New construction and development in the greater Roanoke Valley is translating directly into customer additions. For the first six months of fiscal 2025, Roanoke Gas connected 359 new services. The company anticipates steady customer growth, projecting a customer count of approximately 65,000 by mid-2026.

• Roanoke Gas maintains exclusive, multi-year franchises in the cities of Roanoke and Salem and the Town of Vinton.
• The company expanded its service offerings to include Franklin County.
• Total delivered volumes increased by 14% in fiscal 2025 compared to the prior year.
• Residential and small commercial volumes grew by 9% year-over-year, driven by increased heating degree days.
• Transportation and interruptible volumes saw a 24% increase in fiscal 2025.

RGC Resources, Inc. (RGCO) - Canvas Business Model: Cost Structure

You're looking at the core expenses that keep the lights on and the gas flowing for RGC Resources, Inc. (RGCO) as of late 2025. This utility business is capital-intensive, meaning a large chunk of its spending is tied up in its physical assets, not just the gas it sells.

The maintenance of the 1,180 miles of utility infrastructure represents a high fixed cost base. While the exact annual maintenance expense isn't itemized separately in the latest reports, the commitment to system upkeep is clear through planned capital spending. For instance, Roanoke Gas installed 4.8 miles of new main in fiscal 2025 as part of its strategy to deploy over $21 million of capital that year.

Significant operating expenses are driven by the cost of the commodity itself and the people needed to run the system. For the fiscal year ended September 30, 2025, RGC Resources, Inc. reported consolidated earnings of $13.3 million. This bottom line is reached after absorbing substantial costs, including inflationary pressures noted during the year.

Here's a breakdown of key operating expenses for the six months ended March 31, 2025, which gives you a clear view of the major variable and fixed operating costs:

The Cost of gas - utility is the most significant component, reflecting the procurement expense. The Operations and maintenance line item covers labor, which is a key component of running the distribution network. To be fair, the total operating revenues for the full fiscal year 2025 were $95.33 million, showing how much of the revenue is immediately consumed by these costs.

Financing costs are another critical area. The prompt suggests an amount related to long-term debt, but the latest filed balance sheet data shows a different figure for net long-term debt. As of March 31, 2025, the Long-term debt, net was reported as $115.227 million. The interest expense associated with this debt load is a recurring cost. For the six months ended March 31, 2025, the reported Interest expense was $3.410 million. The company did, however, successfully refinance and extend the maturity of debt supporting its Mountain Valley Pipeline (MVP) investment to 2032.

Capital expenditures (CapEx) are substantial, funding system modernization and expansion under the SAVE Plan (Steps to Advance Virginia's Energy Plan). This plan allows RGC Resources, Inc. to recover investments through customer rates. The company is actively investing:

• Capital expenditures for fiscal year ended September 30, 2025, totaled $20.7 million.
• The forecast for capital expenditures in the near term, including for fiscal 2026, is expected to be approximately $22 million annually.
• The SAVE Rider for fiscal 2025 was based on an estimated $9.13 million of SAVE eligible investment.
• The company installed 4.8 miles of new main and renewed 4.2 miles of pre-73 plastic pipe in 2025.

Regulatory compliance and administrative costs are embedded within operating expenses and are also addressed through specific rate mechanisms. The SAVE Plan itself is a regulatory mechanism designed for cost recovery. Furthermore, the company filed a new rate case seeking a $4.3 million increase in annual revenues for 2026, which is directly tied to regulatory approval of costs and returns. The Interest Cost (ICC) revenues, which adjust for the cost of gas, decreased from approximately $728,000 in fiscal 2024 to $587,000 in fiscal 2025 due to lower commodity prices.

Finance: draft 13-week cash view by Friday.

RGC Resources, Inc. (RGCO) - Canvas Business Model: Revenue Streams

You're looking at the core ways RGC Resources, Inc. (RGCO) brought in money for the fiscal year ending September 30, 2025. It's a story dominated by the regulated utility, but with a key, newer component from the midstream investment.

The regulated gas utility sales and distribution revenue is definitely the primary driver here. Roanoke Gas Company, the regulated subsidiary, accounted for more than 99% of RGC Resources' total revenues for fiscal year 2025. This revenue comes from selling and delivering natural gas to approximately 62,500 residential, commercial, and industrial customers in Roanoke, Virginia, and the surrounding areas.

For the full fiscal year 2025, the annual operating revenues hit $95.33 million. That's a solid jump, representing a 12.6% increase compared to the $84.64 million reported in fiscal 2024. This growth was helped by record gas delivery volumes, which hit a new annual record of 11.5 million DTH's.

A significant boost to the top line came from regulatory actions. The revenue from new non-gas base rates implemented in the fiscal year was a key factor in the revenue increase. Specifically, a rate case settlement approved an incremental increase in annual revenues of $4.08 million, which became effective during fiscal 2025. Still, to keep up with inflation, management filed for another $4.3 million non-gas base rate increase in December 2025.

The midstream investment provided a different type of revenue stream. Equity earnings from the investment in the Mountain Valley Pipeline (MVP) were reported at $3.2 million for fiscal 2025. Honestly, this was a decrease, down 16% from the $3.9 million recorded in fiscal 2024, mainly because the non-cash Allowance for Funds Used During Construction (AFUDC) capitalization stopped once the pipeline was in service. However, this investment transitioned to providing reliable quarterly cash distributions totaling $3.6 million in fiscal 2025, which supports the debt service for the Midstream segment.

The final component covers non-regulated services and other activities (Parent & Other segment), primarily channeled through the RGC Midstream, LLC subsidiary. While the regulated utility is over 99% of revenue, the Midstream segment's role is strategic, supporting debt service and future expansions like Southgate and Boost using the cash flow generated from the MVP investment.

Here's a quick look at how the key revenue drivers stacked up for the full fiscal year 2025:

You should note the seasonal nature of the core business, too. Approximately 63% of the total natural gas deliveries occurred in just five months, November through March, because most of the gas sold is for heating.

• Residential customers represent over 91% of the customer total.
• Residential customers account for more than half of the consolidated revenues and margin.
• Residential and commercial deliveries made up about 63% of total DTH deliveries.