Property Plant & Equipment

12 Months Ended

Dec. 31, 2014

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure

Note 15 – Property Plant & Equipment

Components of property, plant, and equipment were as follows:

	December 31,
	2014		2013
Gas transmission & distribution facilities	$	163,138,652	$	138,812,125
Land		3,773,998		3,773,998
Buildings & leasehold improvements		11,212,860		11,241,104
Transportation equipment		3,735,809		3,449,615
Computer equipment		3,876,106		3,844,776
Other equipment		11,150,519		10,065,908
Producing natural gas properties		3,900,455		3,900,455
Construction work in progress		8,646,219		10,762,535
Property, plant & equipment		209,434,618		185,850,516
Accumulated depreciation, depletion & amortization		(58,049,321)		(52,301,885)
		151,385,297		133,548,631
Assets held for sale		(407,247)		-
Discontinued operations		(8,966,965)		(8,960,986)
Property, plant & equipment, net	$	142,011,085	$	124,587,645

Producing Natural Gas Properties

In order to provide a stable source of natural gas for a portion of its requirements, EWR and EWD own two natural gas production properties and three gathering systems located in north central Montana. The Company is depleting the cost of the gas properties using the units-of-production method. As of December 31, 2014 and 2013, management of the Company, considering reserve estimates provided by an independent reservoir engineer, estimated the net gas reserves at 2.1 Bcf (unaudited) and 2.3 Bcf (unaudited), respectively, and with net present values of $2.7 million and $2.1 million, respectively, after applying a 10% discount (unaudited). The net book value of the gas properties totals $0.9 million and $1.0 million at December 31, 2014 and 2013, respectively.

The wells are depleted based upon production at approximately 10% and 10% per year as of December 31, 2014 and 2013, respectively. For the years ended December 31, 2014, 2013  and 2012, EWR’s portion of the daily gas production was 395 Mcf, 422 Mcf and 461 Mcf per day, or 20.0%, 19.0% and 15.5% of EWR’s volume requirements, respectively.

EWD owns working interests in a group of approximately 50 producing natural gas properties and a 75% ownership interest in a gathering system located in northern Montana. For the years ended December 31, 2014, 2013 and 2012, EWD’s portion of the daily gas production was 107 Mcf, 129 Mcf and 132 Mcf per day, or 5.5%, 5.8% and 4.4% of EWR’s volume requirements, respectively.

For the years ended December 31, 2014, 2013 and 2012, EWR and EWD’s combined portion of the estimated daily gas production from the reserves was 502 Mcf, 550 Mcf and 593 Mcf, or 26.0%, 25.0% and 19.9% of our volume requirements in our Montana market, respectively. The wells are operated by an independent third party operator who also has an ownership interest in the properties.

Build-to-suit Lease

Included as a component of Construction work in progress is a $6.5 million asset that represents the Company’s new build-to-suit lease enterprise resource planning (“ERP”) system. The Company has determined that during the application development stage it possesses substantially all of the project’s risk and as such should be considered the owner of the asset during this period. In addition, the Company has recorded a $5.6 million liability included in the Build-to-suit liability line item on its Condensed Consolidated Balance Sheet dated December 31, 2014 related to this project. Upon completion of the ERP project, the Company will assess whether the lease qualifies for sales recognition under sale-leaseback accounting guidance.