Revenue

12 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenue

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:

	2020
	Gas utility		Non-utility		Total operating revenues
Natural Gas (Billed and Unbilled):
Residential	$	37,022,219	$	—	$	37,022,219
Commercial	18,387,674		—		18,387,674
Industrial and Transportation	5,188,069		—		5,188,069
Other	489,943		666,466		1,156,409
Total contracts with customers	61,087,905		666,466		61,754,371
Alternative Revenue Programs	1,321,020		—		1,321,020
Total operating revenues	$	62,408,925	$	666,466	$	63,075,391
	2019
	Gas utility		Non-utility		Total operating revenues
Natural Gas (Billed and Unbilled):
Residential	$	39,519,618	$	—	$	39,519,618
Commercial	22,562,265		—		22,562,265
Industrial and Transportation	4,770,657		—		4,770,657
Revenue reductions (TCJA) (1)	(523,881)		—		(523,881)
Other	592,156		720,265		1,312,421
Total contracts with customers	66,920,815		720,265		67,641,080
Alternative Revenue Programs	385,445		—		385,445
Total operating revenues	$	67,306,260	$	720,265	$	68,026,525
(1) Accrued refund associated with excess revenue collected in tariff rates associated with the reduction in federal income tax rates.

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 above. 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. Non-utility (unregulated) activities provided by the Company include contract paving and other similar services. 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 revenues 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 approved by the SCC.

Customer Accounts Receivable

Accounts receivable, as reflected in the 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, 2019	$	2,590,702	$	1,236,384	$	880,295	$	1,432,031
September 30, 2020	2,343,492		1,041,518		1,587,061		1,611,476
Increase (decrease)	$	(247,210)	$	(194,866)	$	706,766	$	179,445
(1) Included in "Accounts receivable, net" in the consolidated balance sheet. Amounts shown net of reserve for bad debts.

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