Here are 1-3 brief analogies for RGC Resources (RGCO):

• The Dominion Energy of southwestern Virginia, but exclusively for natural gas.
• Imagine a tiny, single-state version of a large natural gas distributor like Atmos Energy, serving customers in southwestern Virginia.

• Natural Gas Distribution: Provides regulated delivery of natural gas to residential, commercial, and industrial customers within its service territory.
• Natural Gas Appliance Sales and Service: Offers natural gas appliances for purchase and provides maintenance, repair, and installation services for these appliances.

RGC Resources (RGCO) Major Customers

RGC Resources, Inc. (symbol: RGCO) is a holding company whose primary operating subsidiary, Roanoke Gas Company, is a natural gas distribution utility. As such, it sells natural gas directly to end-users within its service territory, primarily serving individuals and businesses rather than selling to other companies for resale.

The company serves the following categories of customers:

• Residential Customers: These include individual households and multi-family dwellings that use natural gas for heating, water heating, cooking, and other domestic purposes.
• Commercial Customers: This category encompasses a wide range of businesses, such as offices, retail establishments, restaurants, hospitals, schools, and other institutions that utilize natural gas for space heating, water heating, and various commercial processes.
• Industrial Customers: This segment includes manufacturing facilities and other industrial operations that use natural gas as a fuel for their processes, as well as for heating their facilities.

• TC Energy Corporation (TRP)
• The Williams Companies, Inc. (WMB)

Paul W. Nester President & CEO

Paul W. Nester was appointed President & CEO of RGC Resources in February 2020. He also serves as President and CEO of Roanoke Gas Company, the company's largest subsidiary. His total yearly compensation is comprised of 41.8% salary and 58.2% bonuses, including company stock and options. He directly owns 1.15% of the company's shares.

Timothy J. Mulvaney Vice President, Chief Financial Officer and Treasurer

Timothy J. Mulvaney was elected Vice President, CFO and Treasurer in 2025. He also holds the same positions at Roanoke Gas Company.

Lawrence T. Oliver Sr. Vice President, Regulatory and External Affairs

Lawrence T. Oliver serves as Senior Vice President of Regulatory and External Affairs and Secretary for RGC Resources. He also holds these roles for Roanoke Gas Company.

C. James Shockley, Jr. Vice President and Chief Operating Officer, Roanoke Gas Company

C. James Shockley, Jr. (Jim Shockley) holds the position of Vice President and Chief Operating Officer of Roanoke Gas Company, the largest subsidiary of RGC Resources.

C. Brooke Miles Vice President, Human Resources and Community Engagement

C. Brooke Miles is the Vice President of Human Resources and Community Engagement for RGC Resources. She also holds this position for Roanoke Gas Company.

The key risks to RGC Resources (RGCO) primarily revolve around its financial structure, pervasive inflationary pressures, and the evolving regulatory landscape.

1. Financial Health and Debt Management: RGC Resources faces significant risks related to its financial health, particularly its debt levels and the impact of rising interest rates. The company's Altman Z-Score, a measure of corporate distress, was reported at a low 1.25 as of late 2025, placing it in a distress zone. Furthermore, interest payments on its debt are not well covered by earnings, making profitability crucial to watch. The company had a significant challenge with $26.6 million of midstream debt supporting the Mountain Valley Pipeline (MVP) investment maturing on December 31, 2025, though refinancing efforts were underway or completed. While some refinancing has occurred, the overall Debt-to-Equity ratio remains higher than some utility sector benchmarks.
2. Inflationary Pressures: RGC Resources continues to experience substantial cost pressures across various operational categories, including personnel and IT-related expenses. These inflationary pressures are expected to persist and could impact profitability. Although the company has implemented rate cases to address some of these issues, the effectiveness of these adjustments in fully offsetting rising costs is a continuous consideration for fiscal year 2025.
3. Regulatory and ESG Risks: As a regulated natural gas utility, RGC Resources is exposed to regulatory oversight at federal, state, and local levels. Potential changes in laws or regulations related to Environmental, Social, and Governance (ESG) matters could lead to increased operational costs and impact the company's core operations. The focus on ESG matters by advocacy groups could also result in new safety laws, regulations, guidelines, and enforcement interpretations, potentially imposing additional burdens.

The primary clear emerging threat for RGC Resources is the accelerating national and state-level push towards electrification and decarbonization of heating and cooking. This trend is driven by evolving environmental regulations, significant government incentives for technologies like electric heat pumps and other electric appliances, and a broader societal shift away from fossil fuels. This development poses a direct long-term risk to the demand for natural gas, which is RGC Resources' core product and revenue source, as customers transition to electric alternatives.

RGC Resources (RGCO) is expected to drive future revenue growth over the next 2-3 years through several key initiatives and market trends:

1. Regulatory Approved Rate Increases: The company has benefited from positive regulatory developments, including the finalization of the 2024 rate case. These new rates, effective July 1, 2024, are projected to add over $4 million in annual revenue and have already positively impacted Roanoke Gas margins. This favorable regulatory environment supports infrastructure development and cost recovery.
2. Customer Growth and Market Expansion: RGC Resources is experiencing steady customer growth, with 541 new services connected and 3.9 miles of new main installed through June 30, outpacing the previous year. The company is expanding its service territories, particularly into Franklin County, leveraging the availability of the Mountain Valley Pipeline (MVP). Additionally, increased gas usage is anticipated from the Carilion expansion and significant local economic development, including manufacturing expansions, healthcare projects, and the announcement of a large Google data center, which is expected to boost demand. Sustained housing growth in the region also provides a positive backdrop for organic customer additions.
3. Infrastructure Modernization and Expansion Projects: RGC Resources is committed to ongoing capital investments in modernizing and expanding its natural gas infrastructure. Planned capital expenditures for fiscal year 2025 are approximately $21.6 million, allocated for continued investment in the existing distribution system in the Roanoke Valley to ensure safety and reliability, as well as for growth opportunities in Franklin County. These investments, including main extensions and service renewals, align with the long-term need for utility infrastructure upgrades and expansions.
4. Contributions from Mountain Valley Pipeline (MVP) Operations: The Mountain Valley Pipeline is now operational, and its transition to operation is expected to result in comparable earnings for RGC Resources' unconsolidated affiliate in the fourth quarter of fiscal 2025. The company anticipates continued growth from the MVP and associated system expansion, particularly in fiscal year 2026, driven by new customer connections enabled by the pipeline's availability.

1. Share Issuance
   • RGC Resources issued 129,164 shares of common stock for $2,635,200, net of fees, under an At-The-Market (ATM) program for the fiscal year ended September 30, 2024.
   • For the fiscal year ended September 30, 2023, the company issued 127,852 shares of common stock for $2,713,020, net of fees, also through the ATM program.
   • As of January 2022, the company had $37 million available on an equity shelf for potential future share issuances.
2. Outbound Investments
   • RGC Resources is a partner in the Mountain Valley Pipeline (MVP) and the proposed MVP Southgate project.
   • The company's investment in the MVP transitioned to an operational phase in June 2024.
   • In the fiscal year ended September 30, 2022, RGC Midstream, LLC's investment in MVP resulted in total after-tax impairment charges of approximately $40.9 million.
3. Capital Expenditures
   • Total capital expenditures for the first quarter of fiscal year 2025 were $5.7 million, representing an 8.4% increase year-over-year from $5.3 million in the first quarter of fiscal year 2024.
   • The capital spending forecast for the full fiscal year 2025 remains at $21.6 million, with an expected range of $21.5 million to $22 million.
   • Capital expenditures for the first six months of fiscal year 2024 totaled $11.3 million, a decrease from $12.9 million in the same period of fiscal year 2023, largely due to a $3.1 million expenditure in 2023 on the Renewable Natural Gas (RNG) facility. Capital expenditures are primarily focused on utility infrastructure to enhance system reliability, support customer growth, and include efforts such as installing new main, adding customers, and replacing plastic pipes through programs like SAVE and RNG.