RGC Resources, Inc. reported a significant increase in financial performance for the second quarter of fiscal 2026, with total operating revenues reaching $45.5 million, a 25% increase from $36.5 million in the same period last year. The gas utility segment contributed $45.4 million, up from $36.4 million, primarily driven by higher non-gas base rates implemented on January 1, 2026, which are expected to generate an additional $4.3 million annually. Net income for the quarter was $8.7 million, compared to $7.7 million in the prior year, resulting in basic earnings per share of $0.85, up from $0.74.
The company experienced a 44% increase in the cost of gas, totaling $24.6 million, which was attributed to rising pipeline capacity charges and higher natural gas commodity prices. Despite this, the gross utility margin increased by 7% to $20.8 million, supported by increased revenues from the SAVE Plan and Renewable Natural Gas (RNG) initiatives. The SAVE Plan revenues rose by approximately $261,000, reflecting ongoing investments in infrastructure projects, while RNG revenues increased to $450,000 from $429,000 year-over-year.
Operationally, RGC Resources serves approximately 63,900 customers in Roanoke, Virginia, and surrounding areas. The company reported a slight decline in delivered volumes, with total regulated natural gas deliveries decreasing by 5% to 4.3 million DTH, attributed to warmer weather conditions. The heating degree days (HDD) for the quarter were 1,975, a 2% decrease from the previous year. The company continues to focus on expanding its infrastructure to meet customer demand, with capital expenditures for the first half of fiscal 2026 totaling approximately $9.8 million.
In terms of strategic developments, RGC Resources is actively involved in regulatory matters, having filed for an expedited rate application with the Virginia State Corporation Commission (SCC) to increase non-gas base rates. The new rates went into effect on January 1, 2026, and a hearing is scheduled for July 2026. The company is also addressing damage to its LNG facility, which is expected to be unavailable for the upcoming winter heating season, and is developing plans to ensure service continuity.
Looking ahead, RGC Resources anticipates continued revenue growth driven by the implementation of new rates and ongoing investments in infrastructure. The company remains focused on managing operational costs amid inflationary pressures and is committed to maintaining its regulatory compliance while enhancing service delivery to its customers.
About RGC RESOURCES INC
RGC Resources, Inc. is a Virginia-based energy company primarily engaged in the regulated distribution and sale of natural gas to residential, commercial, and industrial customers. Through its subsidiary Roanoke Gas, it operates an integrated pipeline system, including a liquefied natural gas facility and renewable natural gas production. The company serves its local markets with a focus on safety, regulatory compliance, and infrastructure investment.
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