RGC Resources Annual Report 2023

Plain-text annual report

2023 Annual Report PRESIDENT’S LETTER TO SHAREHOLDERS This year marked the 140th anniversary of our Company’s continuous operation in the It is a proud, successful Roanoke Valley, dating back to the founding of the City of Roanoke. history that speaks to the long-term value proposition of our business and service to our community. Our mission statement proclaims that “We create value for shareholders, employees and the communities we serve through superior customer service, prudent This statement could serve as a investments and promoting economic development.” summary of our rich history; but as this annual report tells, RGC Resources’ history continues to be written and the future of our Company and the greater Roanoke Valley is bright. Rising interest rates and inflation have pressured utility stocks, especially ours, in the last 12 months. However, 2023 marked our seventy-ninth consecutive year of paying shareholder dividends. The Board of Directors just approved the twentieth consecutive increase to the annual dividend. Earnings in 2023 topped $11.2 million. Roanoke Gas continues to execute its strategy of utility infrastructure investment to more reliably and safely serve our customers and to attract new business to the Roanoke region. Roanoke Gas installed another 4 miles of new natural gas main, adding 552 customers along the way, and continued its methane emissions reduction efforts through the SAVE renewal program by replacing almost 6 miles of main and 452 services. In March, Roanoke Gas completed construction and began operation of its $8.6 million Renewable Natural Gas (RNG) facility. This is the first RNG facility in the country to receive approval to be included in rate base. This facility is materially reducing greenhouse gas emissions, providing a reliable source of natural gas for our customers and earning an enhanced return. A win-win-win. Two extraordinary events this summer allowed the MVP to resume full construction. First, the passage of the Fiscal Responsibility Act (FRA) in early June and second, the U.S. Supreme Court decision in late July affirming the FRA. Roanoke Gas submitted an amicus brief to the Supreme Court that greatly aided in making the case for the MVP to be completed. The significance to future economic development from the potential energy delivered by MVP to this region cannot be overstated. We look forward to the MVP being completed in 2024. We appreciate your continued investment in and support of RGC Resources. We are proud to serve the Roanoke Valley and believe the long-term investments that we have made, and continue to make, are contributing to the brighter outlook for the region and our shareholders. . Sincerely, Paul W. Nester President and CEO Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549Form 10-K(Mark One)☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended September 30, 2023OR☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Commission file number 000-26591RGC Resources, Inc.(Exact name of Registrant as Specified in its Charter)Virginia54-1909697(State or Other Jurisdiction of Incorporation or Organization)(I.R.S. Employer Identification No.)519 Kimball Ave., N.E., Roanoke, VA24016(Address of Principal Executive Offices)(Zip Code)(540) 777-4427(Registrant’s Telephone Number, Including Area Code)Securities registered pursuant to Section 12(b) of the Act:Title of Each ClassTrading SymbolName of Each Exchange on Which RegisteredCommon Stock, $5 Par ValueRGCONASDAQ Global MarketSecurities registered pursuant to Section 12(g) of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐ No ☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (orfor such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of thischapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. Seedefinition of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large accelerated filer☐Accelerated filer☐Non-accelerated filer☒Smaller reporting company☒Emerging growth company☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accountingstandards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting underSection 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of anerror to previously issued financial statements. ☐Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’sexecutive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒The aggregate market value of the common equity held by non-affiliates of RGC Resources, Inc. as of March 31, 2023, the last business day of the its most recently completed secondfiscal quarter, based on the last sale price on that date, as reported by NASDAQ, was approximately $184,883,216.Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the last practicable date.ClassOutstanding at November 30, 2023Common Stock, $5 Par Value10,031,762DOCUMENTS INCORPORATED BY REFERENCE:Portions of the RGC Resources, Inc. Proxy Statement for the 2024 Annual Meeting of Shareholders are incorporated by reference into Part III hereof.Table of Contents TABLE OF CONTENTS Page Number Glossary2 Cautionary Note Regarding Forward Looking Statements5 PART I Item 1.Business6 Item 1A.Risk Factors9 Item 1B.Unresolved Staff Comments13 Item 2.Properties14 Item 3.Legal Proceedings14 Item 4.Mine Safety Disclosures14 PART II Item 5.Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities15 Item 6.[Reserved]15 Item 7.Management's Discussion and Analysis of Financial Condition and Results of Operations15 Item 7A.Quantitative and Qualitative Disclosures About Market Risk28 Item 8.Financial Statements and Supplementary Data28 Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure68 Item 9A.Controls and Procedures68 Item 9B.Other Information68 Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections68 PART III Item 10.Directors, Executive Officers and Corporate Governance69 Item 11.Executive Compensation69 Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters69 Item 13.Certain Relationships and Related Transactions, and Director Independence69 Item 14.Principal Accounting Fees and Services69 PART IV Item 15.Exhibits and Financial Statement Schedules70 Item 16.Form 10-K Summary77 Signatures78 Table of Contents GLOSSARY OF TERMS AFUDCAllowance for Funds Used During Construction AIFAnnual Information Filing AOCI/AOCLAccumulated Other Comprehensive Income (Loss) AROAsset Retirement Obligation ARPAlternative Revenue Program, regulatory or rate recovery mechanisms approved by the SCC that allow for theadjustment of revenues for certain broad, external factors, or for additional billings if the entity achieves certainperformance targets ARPAAmerican Rescue Plan Act of 2021 ASCAccounting Standards Codification ASUAccounting Standards Update as issued by the FASB ATMAt-the-market program whereby a company can incrementally offer common stock through a broker atprevailing market prices and on an as-needed basis CARES ActCoronavirus Aid, Relief, and Economic Security Act CompanyRGC Resources, Inc. or Roanoke Gas Company COVID-19 or CoronavirusA pandemic disease that causes respiratory illness similar to the flu with symptoms such as coughing, fever, andin more severe cases, difficulty in breathing CPCNCertificate of Public Convenience and Necessity D.C. CircuitU.S. Court of Appeals for the District of Columbia Diversified EnergyDiversified Energy Company, a wholly-owned subsidiary of Resources DRIPDividend Reinvestment and Stock Purchase Plan of RGC Resources, Inc. DTHDecatherm (a measure of energy used primarily to measure natural gas) EPSEarnings Per Share ERISAEmployee Retirement Income Security Act of 1974 FASBFinancial Accounting Standards Board FDICFederal Deposit Insurance Corporation FERCFederal Energy Regulatory Commission Fourth CircuitU.S. Fourth Circuit Court of Appeals FRAFiscal Responsibility Act of 2023, bi-partisan legislation containing certain provisions specific to MVP GAAPAccounting Principals Generally Accepted in the United States 2Table of Contents HDDHeating degree day, a measurement designed to quantify the demand for energy. It is the number of degrees thata day’s average temperature falls below 65 degrees Fahrenheit ICCInventory carrying cost revenue, an SCC approved rate structure that mitigates the impact of financing costs onnatural gas inventory IRSInternal Revenue Service KEYSOPRGC Resources, Inc. Key Employee Stock Option Plan LDILiability Driven Investment approach, a strategy which reduces the volatility in the pension plan's funded statusand expense by matching the duration of the fixed income investments with the duration of the correspondingpension liabilities LIBORLondon Inter-Bank Offered Rate LLCMountain Valley Pipeline, LLC, a joint venture established to design, construct and operate the Mountain ValleyPipeline and MVP Southgate LNGLiquefied natural gas, the cryogenic liquid form of natural gas. Roanoke Gas operates and maintains a plantcapable of producing and storing up to 200,000 dth of liquefied natural gas MGPManufactured gas plant MidstreamRGC Midstream, LLC, a wholly-owned subsidiary of Resources created to invest in pipeline projects includingMVP and Southgate MVPMountain Valley Pipeline, a FERC-regulated natural gas pipeline project intended to connect the Equitrans'gathering and transmission system in northern West Virginia to the Transco interstate pipeline in south centralVirginia with a planned interconnect to Roanoke Gas’ natural gas distribution system NQDC PlanRGC Resources, Inc. Non-qualified Deferred Compensation Plan Normal WeatherThe average number of heating degree days based on the most recent 30-year period PBGCPension Benefit Guaranty Corporation Pension PlanDefined benefit plan that provides pension benefits to employees hired prior to January 1, 2017 who meetcertain years of service criteria PGAPurchased Gas Adjustment, a regulatory mechanism, which adjusts natural gas customer rates to reflect changesin the forecasted cost of gas and actual gas costs Postretirement PlanDefined benefit plan that provides postretirement medical and life insurance benefits to eligible employees hiredprior to January 1, 2000 who meet years of service and other criteria R&D Tax CreditResearch and development federal tax credit defined under Internal Revenue Code section 41 and the relatedregulations ResourcesRGC Resources, Inc., parent company of Roanoke Gas, Midstream and Diversified Energy RGCOTrading symbol for RGC Resources, Inc. on the NASDAQ Global Stock Market RNGRenewable natural gas 3Table of Contents Roanoke GasRoanoke Gas Company, a wholly-owned subsidiary of Resources ROU AssetRight of Use Asset RSPDRGC Resources, Inc. Restricted Stock Plan for Outside Directors RSPORGC Resources, Inc. Restricted Stock Plan for Officers SAVESteps to Advance Virginia's Energy, a regulatory mechanism per Chapter 26 of Title 56 of the Code of Virginiathat allows natural gas utilities to recover the investment, including related depreciation and expenses andprovide return on rate base, in eligible infrastructure replacement projects on a prospective basis without thefiling of a formal base rate application SAVE PlanSteps to Advance Virginia's Energy Plan, the Company's proposed and approved operational replacement planand related spending under the SAVE regulatory mechanism SAVE RiderSteps to Advance Virginia's Energy Plan Rider, the rate component of the SAVE Plan as approved by the SCCthat is billed monthly to the Company’s customers to recover the costs associated with eligible infrastructureprojects including the related depreciation and expenses and return on rate base of the investment SCCVirginia State Corporation Commission, the regulatory body with oversight responsibilities of the utilityoperations of Roanoke Gas SCOTUSSupreme Court of the United States SECU.S. Securities and Exchange Commission SOFRSecured Overnight Financing Rate SouthgateMountain Valley Pipeline, LLC’s Southgate project, which is contemplated to extend from the MVP in southcentral Virginia to central North Carolina, of which Midstream holds less than a 1% investment S&P 500 IndexStandard & Poor’s 500 Stock Index TCJATax Cuts and Jobs Act of 2017 WNAWeather Normalization Adjustment, an ARP mechanism which adjusts revenues for the effects of weathertemperature variations as compared to the 30-year average Some of the terms above may not be included in this filing 4Table of Contents Cautionary Note Regarding Forward Looking Statements This report contains forward-looking statements that relate to future transactions, events or expectations. In addition, Resources may announce orpublish forward-looking statements relating to such matters as anticipated financial performance, business prospects, technological developments,new products, expected project completion, research and development activities and similar matters. These statements are based on management’scurrent expectations and information available at the time of such statements and are believed to be reasonable and are made in good faith. ThePrivate Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. In order to comply with the terms of the safeharbor, the Company notes that a variety of factors could cause the Company’s actual results and experience to differ materially from the anticipatedresults or expectations expressed in the Company’s forward-looking statements. The risks and uncertainties that may affect the operations,performance, development and results of the Company’s business include, but are not limited to those set forth in the following discussion and withinItem 1A “Risk Factors” of this Annual Report on Form 10-K. All of these factors are difficult to predict and many are beyond the Company’scontrol. Accordingly, while the Company believes its forward-looking statements to be reasonable, there can be no assurance that they willapproximate actual experience or that the expectations derived from them will be realized. When used in the Company’s documents or newsreleases, the words “anticipate,” “believe,” “intend,” “plan,” “estimate,” “predict,” “target,” “expect,” “objective,” “projection,” “potential,” “forecast,” “budget,” “assume,” “indicate” or similar words or future or conditional verbs such as “will,” “would,” “should,” “can,”“could”, “may” or “might” are intended to identify forward-looking statements. Forward-looking statements reflect the Company’s current expectations only as of the date they are made. The Company assumes no duty to updatethese statements should expectations change or actual results differ from current expectations except as required by applicable laws and regulations. 5Table of Contents PART I Item 1. Business. General and Historical Development Resources was incorporated in the Commonwealth of Virginia on July 31, 1998 and, effective July 1, 1999, its subsidiaries were reorganizedinto the Resources holding company structure. Resources is currently composed of the following subsidiaries: Roanoke Gas, Midstream andDiversified Energy. Roanoke Gas, originally established in 1883, was organized as a public service corporation under the laws of the Commonwealth of Virginiain 1912. The principal service of Roanoke Gas is the distribution and sale of natural gas to residential, commercial and industrial customerswithin its service territory in Roanoke, Virginia and the surrounding localities. Roanoke Gas also provides certain non-regulated serviceswhich account for less than 1% of consolidated revenues. In July 2015, the Company formed Midstream for the purpose of becoming an investor in Mountain Valley Pipeline, LLC. The LLC wascreated to construct and operate interstate natural gas pipelines. Additional information regarding this investment is provided under Note 5 ofthe Company's annual consolidated financial statements and under the Equity Investment in Mountain Valley Pipeline section of Item 7. Diversified Energy is currently inactive. Services Roanoke Gas maintains an integrated natural gas distribution system to deliver natural gas purchased from suppliers to residential, commercialand industrial users in its service territory. The schedule below is a summary of customers, delivered volumes (expressed in DTHs), revenuesand margin as a percentage of the total for each category. For the purposes of this schedule, margin for the utility operations is defined asrevenues less cost of gas. 2023 Customers Volume Revenue Margin Residential 91.3% 33.7% 58.1% 62.6%Commercial 8.6% 29.2% 34.7% 24.7%Industrial 0.1% 37.1% 5.9% 10.0%Other utility 0.0% 0.0% 1.0% 2.5%Other non-utility 0.0% 0.0% 0.3% 0.2%Total percent 100.0% 100.0% 100.0% 100.0%Total value 62,221 10,185,005 $97,439,765 $45,671,443 2022 Customers Volume Revenue Margin Residential 91.3% 34.5% 57.3% 62.6%Commercial 8.6% 29.2% 34.9% 24.3%Industrial 0.1% 36.3% 6.7% 10.9%Other utility 0.0% 0.0% 0.8% 2.0%Other non-utility 0.0% 0.0% 0.3% 0.2%Total percent 100.0% 100.0% 100.0% 100.0%Total value 62,001 10,325,336 $84,165,222 $41,640,041 Roanoke Gas’ regulated natural gas distribution business accounted for more than 99% of Resources total revenues for fiscal years endingSeptember 30, 2023 and 2022. The tables above indicate that residential customers represent over 91% of the Company’s customer total;however, they represent less than 35% of the total gas volumes delivered and more than half of the Company’s consolidated revenues andmargin. Industrial customers primarily include transportation customers that purchase their natural gas requirements directly from a supplierother than the Company and utilize Roanoke Gas’ natural gas distribution system for delivery to their operations. Most of the revenue billedfor these customers relates only to transportation service, and not to the purchase of natural gas, resulting in total revenues generated by thesedeliveries to be less than 10%, although they represent more than 35% of total natural gas volumes and approximately 10% of margin for theyears presented. 6Table of Contents The Company’s revenues are affected by changes in gas costs, changes in consumption volume due to weather and economic conditions andchanges in the non-gas portion of customer billing rates. Increases or decreases in the cost of natural gas are passed on to customers throughthe PGA mechanism as explained in Note 1 of the Company’s annual consolidated financial statements. The Company’s residential and commercial sales are primarily seasonal and subject to temperature sensitivity as the majority of the gas soldby Roanoke Gas to these customers is used for heating. For the fiscal year ended September 30, 2023, approximately 59% of theCompany’s total DTH of natural gas deliveries and 71% of the residential and commercial deliveries were made in the five-month period ofNovember through March. Roanoke Gas relies on multiple interstate pipelines, including those operated by Columbia Gas Transmission Corporation, LLC andColumbia Gulf Transmission Corporation, LLC (together “Columbia”), and East Tennessee Natural Gas, LLC (“East Tennessee”),Tennessee Gas Pipeline, Midwestern Gas Transmission Company and Saltville Gas Storage Company, LLC ("Saltville"), to transport naturalgas from the production and storage fields to Roanoke Gas’ distribution system. Roanoke Gas is currently served by two pipelines, Columbiaand East Tennessee. Columbia historically has delivered more than 65% of the Company’s required gas supply, with East Tennesseedelivering the remainder. The rates paid for interstate natural gas transportation and storage services are established by tariffs approved byFERC. The current pipeline and storage contracts expire at various times from calendar 2024 to 2028. The Company anticipates being ableto renew these contracts or enter into other contracts to meet customers’ existing demand for natural gas. In March 2023, Roanoke Gas began operation of its RNG facility. Total volume produced from RNG is expected to be less than 1% ofcurrent system needs. The Company manages its pipeline contracts and LNG facility in order to provide for sufficient capacity to meet the current natural gasdemands of its customers. The maximum daily winter capacity available for delivery into Roanoke Gas’ distribution system from the currentinterstate pipelines is 78,606 DTH per day. The LNG facility is capable of storing up to 200,000 DTH of natural gas in a liquid state for useduring peak demand. Combined, the pipelines and LNG facility may provide up to 103,606 DTH on a single winter day. Once in service,the MVP will provide Roanoke Gas with additional pipeline capacity to help meet current and future customer energy requirements. The Company currently contracts with Sequent Energy Management, L.P. to manage its pipeline transportation, storage rights, gas supplyinventories and deliveries and serve as the primary supplier of natural gas for Roanoke Gas. Natural gas purchased under the assetmanagement agreement is priced at indexed-based market prices as reported in major industry pricing publications. The current Sequentcontract expires March 31, 2025. The Company uses summer storage programs to supplement heating season gas supply requirements. The Company has contracted for 2.4million DTH of storage capacity from Columbia, Tennessee Gas Pipeline and Saltville in addition to the capacity available at the Company'sLNG facility. The balance of the Company’s annual natural gas requirements are met primarily through market purchases made by its assetmanager. Competition The Company’s natural gas utility operates in a regulated, monopolistic environment. Roanoke Gas currently holds the only franchises and/orCPCNs to distribute natural gas in its Virginia service areas. These franchises generally extend for multi-year periods and are renewable bythe municipalities, including exclusive franchises in the cities of Roanoke and Salem and the Town of Vinton, Virginia. All three franchisesare set to expire December 31, 2035. In 2019, the SCC issued an order granting a CPCN to furnish gas to all of Franklin County. Unlikethe CPCNs for the other counties served by Roanoke Gas, the Franklin County CPCN was scheduled to terminate within five years of thedate of the order if Roanoke Gas did not furnish gas service to the designated service area. In November 2023, the SCC granted RoanokeGas a three-year extension on the CPCN. Roanoke Gas plans to serve the Franklin County area with natural gas delivered through theMVP, once MVP is placed into service. Management anticipates that the Company will be able to renew all of its franchises prior to their current expiration date; however, there canbe no assurance that a given jurisdiction will not refuse to renew a franchise or will not, in connection with the renewal of a franchise, attemptto impose restrictions or conditions that could adversely affect the Company’s business operations or financial condition. CPCNs, issued bythe SCC, are generally of perpetual duration and subject to compliance with regulatory standards. 7Table of Contents Although Roanoke Gas has exclusive rights for the distribution of natural gas in its service area, the Company competes with suppliers ofother forms of energy such as fuel oil, electricity, propane, coal, wind and solar. Competition can be intense among the other energy sourceswith price being the primary consideration. This is particularly true for those industrial applications that have the ability to switch to alternativefuels. The relationship between supply and demand has the greatest impact on the price of natural gas. Greater demand for natural gas forelectric generation and other uses can provide upward pressure on the price of natural gas. Competition from renewable energy sources, such as solar and wind, is likely to increase as the political environment currently favors theseenergy sources through incentives or by placing restrictions on emissions from the burning of fossil fuels. Nevertheless, the Companycontinues to see a demand for natural gas. Growth in residential and commercial service has been steady as the Company continues toexpand its customer base through a combination of extending distribution service and converting other energy users to natural gas. Regulation In addition to the regulatory requirements generally applicable to all companies, Roanoke Gas is also subject to additional regulation at thefederal, state and local levels. At the federal level, the Company is subject to pipeline safety regulations issued by the Department ofTransportation's Pipeline and Hazardous Materials Safety Administration. At the state level, the SCC performs regulatory oversight including the approval of rates and other charges for natural gas sold to customers,the approval of agreements between or among affiliated companies involving the provision of goods and services, pipeline safety and certainother corporate activities of the Company, including mergers and acquisitions related to utility operations. At the local level, Roanoke Gas is further regulated by the municipalities and localities that grant franchises for the placement of gasdistribution pipelines and the operation of gas distribution networks within their jurisdictions. Human Capital Resources At September 30, 2023, Resources had 100 full-time employees. During fiscal 2022, Roanoke Gas notified the United Steel, Paper andForestry, Rubber, Manufacturing, Energy, Allied-Industrial International Union, Local No. 515 (the "Union") representing Companyemployees of its intent to withdraw recognition of the Union upon expiration of the current agreement. Effective August 1, 2022, thecollective bargaining agreement between the Union and Roanoke Gas expired and the Union, due to the sustained lack of majority supportby bargaining unit members, accepted the Company's withdrawal of recognition and disclaimed its interest in serving as the exclusivecollective-bargaining representative of employees of Roanoke Gas. Prior to the expiration of the contract, 16 employees were representedby the Union. Employees had been represented by a union since 1952. The Company’s business strategy and ability to serve customers relies on employing talented professionals and attracting, training, developingand retaining a skilled workforce. This is particularly relevant as the Company continues to face retirements of key personnel over the nextseveral years. Like many employers, Resources has been challenged at filling key positions, but has been successful in engaging thenecessary qualified personnel to fill vacancies by reviewing and adjusting its compensation package to remain competitive in the currentmarket environment. Website Access to Reports The Company’s website address is www.rgcresources.com. Information appearing on this website is not incorporated by reference in and isnot a part of this annual report. The Company files reports with the SEC. A copy of this annual report, as well as other recent annual andquarterly reports, are available on the Company's website or through the SEC. The SEC maintains an Internet site that contains reports,proxy and information statements, and other information regarding the Company’s filings at www.sec.gov. 8Table of Contents Item 1A. Risk Factors Please carefully consider the risks described below regarding the Company. These risks are not the only ones faced by the Company.Additional risks not presently known to the Company or that the Company currently believes are immaterial may also impair businessoperations and financial results. If any of the following risks actually occur, the Company’s business, financial condition or results ofoperations could be adversely affected. In such case, the trading price of the Company’s common stock could decline and investors couldlose all or part of their investment. The risk factors below are categorized by operational, regulatory and financial: OPERATIONAL RISKS Availability of sufficient and reliable pipeline capacity. The Company is currently served directly by two interstate pipelines. These two pipelines carry 100% of the natural gas transported to theCompany’s distribution system. Depending on weather conditions and the level of customer demand, failure of one or both of these interstatetransmission pipelines could have a major impact on the Company’s ability to meet customer demand for natural gas and adversely affect theCompany’s earnings as a result of lost revenue and the cost of service restoration. Frequent or prolonged failure could lead customers toswitch to alternative energy sources. Hurricanes, floods, fires and other natural or man-made disasters could damage or inhibit productionand/or pipeline transportation facilities, which could result in decreased natural gas supplies. Capacity limitations on existing pipeline andstorage infrastructure could impact the Company’s ability to obtain additional natural gas supplies, thereby limiting its ability to add newcustomers or meet increased customer demand and thereby limiting future earnings potential. The concerns over capacity limitations shouldbe partially mitigated assuming the MVP becomes operational. Risks associated with the operation of a natural gas distribution pipeline and LNG storage facility. Numerous potential risks are inherent in the operation of a natural gas distribution system and LNG storage facility, including unanticipated orunforeseen events that are beyond the control of the Company. Examples of such events include adverse weather conditions, acts ofterrorism or sabotage, accidents and damage caused by third parties, equipment failure, failure of upstream pipelines and storage facilities, aswell as catastrophic events such as explosions, fires, earthquakes, floods, or other similar events. These risks could result in injury or loss oflife, property damage, pollution and customer service disruption resulting in potentially significant financial losses. The Company maintainsinsurance coverage to protect against many of these risks. However, if losses result from an event that is not fully covered by insurance, theCompany’s financial condition could be significantly impacted if it were unable to recover such losses from customers through the regulatoryrate-making process. Even if the Company did not incur a direct financial loss as a result of any of the events noted above, it could encountersignificant reputational damage from a reliability, safety, integrity or similar viewpoint, potentially resulting in a longer-term negative earningsimpact or decline in share price. Security incident or cyber-attacks on the Company’s computer or information technology systems. The Company’s business operations and information technology systems may be vulnerable to an attack by individuals or organizationsintending to disrupt the operations of the Company. Such an attack or cyber-security incident on the Company’s information technologysystems could result in corruption of the Company’s financial information; disruption of services to our customers; the unauthorized release ofconfidential customer, employee or vendor information; the interruption of natural gas deliveries to our customers; and/or compromise thesafety of our distribution, transmission and storage systems. The Company has implemented policies, procedures and controls to prevent anddetect these activities; however, there are no guarantees that Company processes will adequately protect against unauthorized access. In theevent of a successful attack, the Company could be exposed to material financial and reputational risks, possible disruptions in natural gasdeliveries or a compromise of the safety of the natural gas distribution system, as well as be exposed to claims by persons harmed by such anattack, all of which could materially increase the Company's costs to protect against such risks. Resources maintains cyber-insurancecoverage, which does not protect the Company from cyber incidents but does provide some potential mitigation of the financial impactsresulting from such attacks. Volatility in the price and availability of natural gas. Natural gas purchases represent the single largest expense of the Company. Increasing demand from other areas, including electricitygeneration, combined with other factors, have placed upward pressure on natural gas commodity prices in the past. If these factors returnand continue for an extended period of time, higher natural gas prices could result in declining sales as well as increases in bad debt expenseand increased competition from other energy providers. 9Table of Contents Inability to attract and retain professional and technical employees. The ability to implement the Company’s business strategy and serve customers is dependent upon employing talented professionals andattracting, training, developing and retaining a skilled workforce. As the Company expects key personnel to retire over the next several years,failure to hire and adequately train replacement employees, including the transfer of significant internal historical knowledge and skills to newemployees, or future availability and cost of contracted labor may adversely affect the ability to manage and operate the Company. Inaddition, certain specialized knowledge is required of the Company’s technical employees for construction and operation of the natural gasdistribution facilities. If the Company is unable to attract and/or retain qualified employees, the Company could experience increasedoperating costs and expose the Company to other operational, reputational and financial risks. Increased dependence on technology may hinder the Company’s business operations and adversely affect its financial conditionand results of operations if such technologies fail. Over the last several years, the Company has implemented or acquired a variety of technological tools including both Company-ownedinformation technology and technological services provided by outside parties. Additionally, the Company expects to upgrade to new financialand customer information systems in fiscal 2024. These tools and systems support critical functions including, scheduling and dispatching ofservice technicians, automated meter reading systems, customer care and billing, revenue recognition, operational plant logistics, and externalfinancial reporting. Issues in the implementation or the failure of these or other similarly important technologies, or the Company’s inability tohave these technologies supported, updated, expanded, or integrated into other technologies, could hinder its business operations andadversely impact its financial condition and results of operations. Although the Company has, when possible, developed alternative sourcesof technology and built redundancy into its computer networks and tools, there can be no assurance that these efforts would protect againstall potential issues related to the loss of any such technologies. Inability to complete necessary or desirable pipeline expansion or infrastructure improvement projects. In order to serve new customers or expand service to existing customers, the Company installs new pipeline facilities and maintains, expandsor upgrades its existing distribution, transmission and/or storage infrastructure. Various factors may prevent or delay the completion of suchprojects or make them more costly, such as the inability to obtain required approval from local, state and/or federal regulatory andgovernmental bodies, public opposition to the projects, inability to obtain adequate financing, competition for labor and materials,construction delays, cost overruns, and an inability to negotiate acceptable agreements relating to rights-of-way, construction or other materialdevelopment components. As a result, the Company may not be able to adequately serve existing customers or expand its distribution systemto support customer growth. This could include any potential customer growth or system reliability enhancement resulting from connection tothe MVP. Any of these factors could negatively impact earnings. Geographic concentration of business activities. The Company's business activities are concentrated in the Roanoke Valley and surrounding areas. Changes in the local economy, politics,regulations and weather patterns or other factors limiting demand for natural gas could negatively impact the Company's existing customerbase, leading to declining usage patterns and financial condition of customers. Furthermore, these changes could also limit the Company'sability to serve its customers or add new customers within its service territory. Any of these factors could adversely affect earnings. Competition from other energy providers. The Company competes with other energy providers in its service territory, including those that provide electricity, propane, coal, fuel oil,wind and solar. Price is a significant competitive factor. Higher natural gas costs or decreases in the price of other energy sources mayenhance competition and encourage customers to switch to alternative energy sources, thus lowering natural gas deliveries and earnings. Priceconsiderations could also inhibit customer and revenue growth if builders and developers do not perceive, or are regulatorially preventedfrom installing, natural gas as a better value than other energy options and elect to install heating systems that use an energy source, includingthose perceived as more environmentally friendly. 10Table of Contents REGULATORY RISKS Laws or regulations associated with ESG matters. Enhanced focus on ESG matters related to, among other things, concerns raised by advocacy groups about climate change, social issues andcorporate governance may lead to increased regulatory review, which may, in turn, lead to new state and federal safety and laws, regulations,guidelines, and enforcement interpretations. The social and corporate governance initiatives have gained prominence in recent years. Inaddition, several federal and state legislative and regulatory initiatives have been proposed and enacted in recent years in an attempt to limitthe effects of climate change, including greenhouse gas emissions such as those created by the combustion of fossil fuels, including natural gas.Passage of new environmental legislation or implementation of regulations that mandate the use of electric rather than gas appliances, orreductions in greenhouse gas emissions or other similar restrictions could have a negative effect on the Company’s core operations and itsinvestment in the LLC. Such legislation could impose limitations on greenhouse gas emissions, require funding of new energy efficiencyobjectives, impose new operational requirements or lead to other additional costs to the Company. Regulations restricting or prohibiting theuse of coal as a fuel for electric power generation has increased the demand for natural gas, and could at some point potentially result innatural gas supply concerns and higher costs for natural gas. Legislation or regulations could limit the exploration and development of naturalgas reserves, making the price of natural gas less competitive and less attractive as a fuel source for consumers. Future legislation could alsoplace limitations on the amount of natural gas used by businesses and homeowners to reduce the level of emissions, resulting in reduceddeliveries and earnings or provide incentives to customers to utilize alternative energy sources not associated with fossil fuels. In addition, advocacy groups, both domestically and internationally, have campaigned for governmental and private action to influence changein the business strategies of oil and gas companies, including through the investment and voting practices of investment advisers, publicpension funds, universities and other members of the investing community. These activities include increasing attention and demands for actionrelated to climate change and energy transition matters, such as promoting the use of substitutes to fossil fuel and encouraging the divestmentof investments in the oil and gas industry, as well as pressuring lenders and other financial services companies to limit or curtail activities withoil and gas companies. If investors or financial institutions shift funding away from companies in the oil and gas industry, the Company’saccess to and costs of capital or the market for the Company’s securities may be adversely impacted. Increased compliance and pipeline safety requirements and fines. The Company is committed to the safe and reliable delivery of natural gas to its customers. Working in concert with this commitment arenumerous federal and state laws and regulations. Failure to comply with these laws and regulations could result in the levy of significant fines.There are inherent risks that may be beyond the Company’s control, including third-party actions, which could result in damage to pipelinefacilities, injury and even death. Such incidents could subject the Company to lawsuits, large fines, increased scrutiny and loss of customers,all of which could have a significant effect on the Company’s financial position and results of operations. Regulatory actions or failure to obtain timely rate relief. The Company’s natural gas distribution operations are regulated by the SCC. The SCC approves the rates that the Company charges itscustomers. During periods of enhanced inflationary pressure or the incurrence of significant additional costs, if the SCC did not timelyauthorize rates that provided for the recovery of such costs including a reasonable rate of return on investment in natural gas distributionfacilities, earnings could be negatively impacted. Furthermore, issuance of debt and equity by Roanoke Gas is also subject to SCC regulation and approval. Delays or lack of approvals couldinhibit the ability to access capital markets and negatively impact liquidity or earnings. FINANCIAL RISKS Investment in Mountain Valley Pipeline, LLC. The Company re-assesses its equity investment at least quarterly. In 2022, due to increasing uncertainty concerning the ultimate completionof the pipeline, the Company recorded pre-tax impairments totaling $55.1 million concluding that an other-than-temporary decline in fairvalue existed. Legislative action, as well as actions taken by various jurisdictions and courts, in 2023, as discussed in Note 5, have allowed the constructionof the MVP to resume. The project’s operator has publicly conveyed the LLC’s target for completing construction of the project as the firstquarter of calendar 2024. However, future circumstances and any attendant effects on the probability of ultimate completion, as well aschanges in future cash flow assumptions or changes in the discount rate, could lead to further and possibly full impairment of the Company'sinvestment in the LLC. 11Table of Contents The success of the Company's investment in the LLC is predicated on several key factors including but not limited to the ability ofcontributing members in the LLC to meet their capital calls when due, timely state and federal approvals, completing the construction of thepipeline and achieving in-service. In addition, there are numerous factors relevant to the LLC in constructing and operating the project, which can adversely affect theCompany's earnings and financial performance through its investment, including, among others, as it relates to construction, continuedavailability of contract crews to complete construction of the pipeline, physical construction conditions, including steep slopes and any furtherunexpected geological impediments, the ability to obtain or renew ancillary licenses, rights-of-way, permits or other approvals, productivityduring the winter season, and opposition from pipeline opponents. Should the LLC be unable to adequately address these issues, the LLC’sbusiness, financial condition, results of operations and prospects could be adversely affected, which could materially impact the financialcondition and results of operations of the Company. Once in operation, the LLC’s gas infrastructure facilities are subject to many operational risks. Operational risks could result in, among otherthings, lost revenues due to prolonged outages, increased expenses due to monetary penalties or fines for compliance failures, liability to thirdparties for property damage and personal injury, a failure to perform under applicable sales agreements and associated loss of revenues fromterminated agreements or liability for liquidated damages under continuing agreements. The consequences of these risks, if realized, couldadversely affect the LLC’s business, financial condition, results of operations and prospects. Uncertainties and risks inherent in operating andmaintaining the LLC's facilities include, but are not limited to, risks associated with facility start-up operations, such as whether the facility willachieve projected operating performance on schedule and otherwise as planned. The LLC’s business, financial condition, results ofoperations and prospects potentially could be adversely affected by weather conditions, including, but not limited to, the impact of severeweather. Threats of terrorism and catastrophic events resulting from terrorism, sabotage, cyber-attacks, or individuals and/or groupsattempting to disrupt the LLC’s business, or the businesses of third parties, may materially adversely affect the LLC’s business, financialcondition, results of operations and prospects. Certain obstacles discussed above, as well as other factors, such as legal and regulatory setbacks, have in the past caused delays inconstruction, and to the extent obstacles are realized, such obstacles may further result in, among other things, significantly higher projectcosts and an extended targeted in-service date for the pipeline. Moreover, new factors, such as the operational matters described above,could drive adverse operational and financial impacts. Any adverse developments, such as significant delay or cost over-run, could have a significant effect on the LLC and the Company's earningsand financial position and materially impact Resources consolidated financial position and results of operations, including Resources ability topay shareholder dividends at the current level or remain in compliance with credit agreement covenants. There is no guarantee that the LLC,and relatedly the Company and Resources, will not be subject to any adverse developments and related impacts. Access to capital to maintain liquidity. The Company relies on a variety of capital sources to operate its business and fund capital expenditures, including internally generated cashfrom operations, short-term borrowings under its line-of-credit, proceeds from the issuance of additional shares of its common stock andother sources. Access to a line-of-credit is essential to provide seasonal funding of natural gas operations and provide capital budget bridgefinancing. Access to capital markets and other long-term funding sources is important for capital outlays and funding of the LLC investment.The ability of the Company to maintain and renew its line-of-credit and to secure longer-term financing is critical to operations. Adversemarket trends, market disruptions or deterioration in the financial condition of the Company could increase the cost of borrowing, restrict theCompany's ability to issue additional shares of its common stock or otherwise limit the Company’s ability to secure adequate funding. Failure to comply with debt covenant requirements. The Company's long-term debt obligations and bank line-of-credit contain financial covenants. Noncompliance with any of these covenantscould result in an event of default which, if not cured or waived, could accelerate payment on outstanding debt obligations or causeprepayment penalties. In such an event, the Company may not be able to refinance or repay all of its indebtedness, pay dividends or havesufficient liquidity to meet operating and capital expenditure requirements. Any such acceleration would cause a material adverse change inthe Company's financial condition. 12Table of Contents The cost of providing post-retirement benefits. The Company provides certain post-retirement benefits. The costs of providing defined benefit pension and retiree medical plans aredependent on a number of factors such as the rates of return on plan assets, discount rates used in determining plan liabilities, the level ofinterest rates used to measure the required minimum funding levels of the plan, future government regulation, changes in life expectancy andrequired or voluntary contributions made to the plan. Changes in actuarial assumptions and differences between the assumptions and actualresults, as well as a significant decline in the value of investments that fund these plans, if not offset or mitigated by a decline in plan liabilities,could increase the expense of these plans and require significant additional funding. Although the Company has soft-frozen both plans to limitfuture growth in each plan's liabilities, ongoing funding obligations and expenses could have a material impact on the Company's financialposition, results of operation and cash flows should there be a material reduction in the amount of the recovery of these costs through ratescurrently charged to customers or significant delays in the timing of the recovery of such costs. Obligations for income taxes that may arise from examinations by taxing authorities. The Company is subject to federal and state income taxes as prescribed by the laws within the United States. Significant judgments arerequired in determining the provisions for income taxes. In preparing its tax provisions and returns, the Company must make calculations andassumptions regarding tax treatment of various transactions including the applicability of tax credits. The Company’s tax returns are subject toexamination by the IRS and state tax authorities. Although the Company utilizes the assistance of tax professionals in the preparation of its taxreturns, there can be no assurance as to the outcome of these examinations. If the ultimate determination from an examination results inadditional taxes above the amount reflected in its financial statements, the Company will record any additional income tax expenses as may berequired including any interest and penalties that might result. Exposure to market risks. The Company is subject to market risks that are beyond the Company’s control, such as commodity price volatility and interest rate risk. TheCompany is generally isolated from commodity price risk through the PGA mechanism. With respect to interest rate risk, there has beensignificant upward movement in interest rates. Much of the Company's outstanding debt is comprised of fixed rate notes or have interest rateswaps in place. However, these higher interest rates will impact the Company through higher borrowing costs on Roanoke Gas' line-of-credit and Midstream's variable rate credit facility as well as any future borrowings by the Company. Global pandemics have previously, continue to, and may in the future adversely impact the Company’s business, financialcondition, and results of operations, the global economy, and the demand for and prices of natural gas. Global pandemics and actions taken by third parties, including, but not limited to, governmental authorities, businesses and consumers, inresponse to such pandemics, including the COVID-19 pandemic, have adversely impacted and may from time to time in the future adverselyimpact the global, national and local economies, resulting in significant volatility in the financial markets. Previous business closures,restrictions on travel, “stay-at-home” or “shelter-in-place” orders, and other restrictions on movement within and among communities haveimpacted demand for, and the prices of, natural gas, and such restrictions may be reintroduced at any time. A continued, prolonged period ora renewed period a pandemic outbreak could significantly affect demand for natural gas, increase operational costs and limit the ability toprovide natural gas service to customer. Governmental intervention could result in additional requirements and costs to the Company inresponse to a pandemic. The failure to develop or reformulate adequate treatments, including the emergence of new variants, and otheradverse impacts from a pandemic may adversely affect the Company’s business, financial condition, cash flows, and results of operations. The Company’s operations rely on its workforce having access to its structures, offices and facilities. If a significant portion of the Company’sworkforce cannot effectively perform their responsibilities, whether resulting from a lack of physical or virtual access, quarantines, illnesses,governmental actions or restrictions (including vaccine mandates and the reactions thereto), or other restrictions or adverse impacts resultingfrom a pandemic, the Company’s business, financial condition, cash flows, and results of operations may be adversely affected. Item 1B. Unresolved Staff Comments. None. 13Table of Contents Item 2. Properties. Included in “Utility Property” on the Company’s consolidated balance sheet are storage plant, transmission plant, distribution plant andgeneral plant of Roanoke Gas as categorized by natural gas utilities. The Company has approximately 1,179 miles of transmission anddistribution pipeline with transmission and distribution plant representing 90% of the total utility property investment. The transmission anddistribution pipelines are located on or under public roads and highways or private property for which the Company has obtained the legalauthorization and rights to operate. Roanoke Gas currently owns and operates six metering stations through which it measures and regulates the gas being delivered by itssuppliers. These stations are located at various points throughout the Company’s distribution system. Roanoke Gas also owns a liquefied natural gas storage facility located in its service territory that has the capacity to store up to 200,000DTH of natural gas. Roanoke Gas also began operation of an RNG facility during fiscal 2023 as part of a cooperative agreement with the local water authority toproduce commercial quality biogas at the regional pollution control facility. The Company leases the land upon which the RNG facility islocated. The Company’s executive, accounting and business offices, along with its maintenance and service departments, are located on KimballAvenue in Roanoke, Virginia. Although the Company considers its present properties to be adequate, management continues to evaluate the adequacy of its currentfacilities as additional needs arise. Item 3. Legal Proceedings. The Company is not known to be a party to any pending legal proceedings. Item 4. Mine Safety Disclosures. Not applicable. 14Table of Contents PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Resources' common stock is listed on the NASDAQ Global Market under the trading symbol RGCO. Payment of dividends is within thediscretion of the Board of Directors and depends on, among other factors, earnings, capital requirements, and the operating and financialcondition of the Company. Range of Bid Prices CashDividends Year Ending September 30, 2023 High Low Declared First Quarter $24.54 $20.70 $0.1975 Second Quarter 24.45 22.10 0.1975 Third Quarter 23.84 18.12 0.1975 Fourth Quarter 20.40 16.70 0.1975 Year Ending September 30, 2022 First Quarter $25.00 $21.32 $0.1950 Second Quarter 23.84 20.25 0.1950 Third Quarter 22.00 18.01 0.1950 Fourth Quarter 23.35 19.18 0.1950 As of November 20, 2023, there were 950 holders of record of the Company’s common stock. This number does not include all beneficialowners of common stock who hold their shares in “street name." A summary of the Company’s equity compensation plans follows as of September 30, 2023: (a) (b) (c) Plan category Number ofsecurities to beissued uponexercise ofoutstandingoptions, warrantsand rights Weighted-average exerciseprice ofoutstandingoptions, warrantsand rights Number ofsecuritiesremainingavailable forfuture issuanceunder equitycompensationplans (excludingsecuritiesreflected incolumn (a)) Equity compensation plans approved by security holders 22,000 $20.23 589,984 Equity compensation plans not approved by security holders — — — Total 22,000 $20.23 589,984 Item 6. [Reserved]. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Overview Resources is an energy services company primarily engaged in the regulated sale and distribution of natural gas to approximately 62,200residential, commercial and industrial customers in Roanoke, Virginia, and the surrounding localities, through its Roanoke Gas subsidiary. Midstream, a wholly-owned subsidiary of Resources, is a less than 1% investor in the MVP and Southgate, respectively. More informationregarding the investment in MVP is provided below and under the Equity Investment in Mountain Valley Pipeline section. 15Table of Contents Following extended periods of delay due to actions by the Fourth Circuit, Congress passed and the President signed into law legislationto expedite the completion of the MVP. The Fourth Circuit continued to stay the necessary permits to complete the pipeline. Following apetition filed by the LLC to request relief from the stays issued by the Fourth Circuit, on July 27, 2023, the SCOTUS granted the reliefrequested and vacated the stays. Construction on the MVP resumed immediately and completion is currently expected during the firstquarter of calendar 2024. The utility operations of Roanoke Gas are regulated by the SCC, which oversees the terms, conditions and rates charged to customers fornatural gas service, safety standards, extension of service and depreciation. Nearly all of the Company’s revenues, excluding equity inearnings of MVP, are derived from the sale and delivery of natural gas to Roanoke Gas customers based on rates and fees authorized by theSCC. These rates are designed to provide the Company with the opportunity to recover its gas and non-gas expenses and to earn areasonable rate of return for shareholders based on normal weather. These rates are determined based on various rate applications filed withthe SCC. Generally, investments related to extending service to new customers are recovered through the additional revenues generated bythe non-gas base rates in place at that time. The investment in replacing and upgrading existing infrastructure, as well as recoveringincreases in non-gas expenses due to inflationary pressures, regulatory requirements or operation needs, are generally not recoverable until aformal rate application is filed to include additional investment and higher costs, and new non-gas base rates are approved. The Company is also subject to regulation from the Department of Transportation in regard to the construction, operation, maintenance,safety and integrity of its transmission and distribution pipelines, as well as the FERC, which regulates the prices for the transportation anddelivery of natural gas to the Company's distribution system and underground storage services. In addition, Roanoke Gas is subject to otherregulations which are not necessarily industry specific. Beginning January 1, 2023, Roanoke Gas implemented new, non-gas base rates designed to provide $8.55 million in additional annual non-gas revenues in response to higher operating costs and to recover its investment in non-SAVE related projects since the last non-gas baserate increase in fiscal 2019. Revenues from the SAVE Plan and Rider were incorporated into the new non-gas base rates. In September2023, Roanoke Gas and SCC staff reached a settlement agreement for $7.45 million in additional annual non-gas revenues pending finalapproval by the SCC. Roanoke Gas placed the new non-gas base rates into effect on October 1, 2023 and has established a reserve for thedifference between the rates implemented on January 1, 2023 and the new rates in the settlement agreement. The excess revenues collectedwill be refunded to customers upon receipt of the final SCC order, which is expected to be received in late calendar 2023 or early 2024. As the Company’s business is seasonal in nature, volatility in winter weather and the commodity price of natural gas can impact theeffectiveness of the Company’s rates in recovering its costs and providing a reasonable return for its shareholders. In order to mitigate theeffect of weather variations and other factors not provided for in the Company's base rates, Roanoke Gas has certain approved ratemechanisms in place that help provide stability to customer bills and earnings, adjust for volatility in the price of natural gas and provide areturn on qualified infrastructure investment. These mechanisms include the SAVE Rider, WNA, ICC, RNG and PGA. The SAVE Plan and Rider provides the Company with a mechanism through which it recovers costs related to SAVE qualified infrastructureinvestments on a prospective basis, until such time a formal rate application is filed incorporating these investments in non-gas base rates. TheSAVE Plan and Rider reset effective January 1, 2023, when the recovery of all prior SAVE Plan investment was incorporated into thenew non-gas base rates, and accordingly, SAVE Plan revenue decreased by approximately $2,182,000 from the prior year. Roanoke Gasfiled and received approval from the SCC for a new SAVE Plan and Rider with new rates placed into effect on October 1, 2023 that willresult in approximately $366,000 in SAVE related revenues during fiscal 2024. Additional information regarding the SAVE Plan and Rider isprovided under the Regulatory section below. The WNA mechanism reduces the volatility in earnings due to the variability in temperatures during the heating season. The WNA is based onthe most recent 30-year temperature average and provides the Company with a level of earnings protection when weather is warmer thannormal and provides its customers with a level of price protection when the weather is colder than normal. The WNA allows the Company torecover from customers the lost margin, excluding gas costs, from the impact of warmer than normal weather and correspondingly requiresthe Company to refund to customers the excess margin earned for colder than normal weather. The WNA mechanism used by the Companyis based on a linear regression model that determines the value of a single heating degree day and thereby estimates the revenue adjustmentbased on weather variance from normal. Any billings or refunds related to the WNA are completed following each WNA year, whichextends for the 12-month period from April to March. The Company recorded approximately $3,005,000 and $1,973,000 in additionalrevenues under the WNA for weather that was approximately 16% and 13% warmer than normal for the fiscal years ended September 30,2023 and 2022, respectively. The number of heating degree days used to determine normal can change annually as a new year is added tothe 30-year period and the oldest year is removed. As a result of adding warmer than normal years to replace colder years, the number ofheating degree days that defines normal has trended downward over the last several years. 16Table of Contents The Company also has an approved rate structure that mitigates the impact of financing costs of its natural gas inventory. Under this ratestructure, Roanoke Gas recognizes revenue by applying the ICC factor, based on the Company’s weighted-average cost of capital, includinginterest rates on short-term and long-term debt, and the Company’s authorized return on equity, to the average cost of natural gas inventoryduring the period. Total ICC revenues increased from approximately $657,000 in fiscal 2022 to $967,000 in fiscal 2023 as a result of thehigher cost of gas in storage at the beginning of the fiscal year. Monthly average inventory balances, used to calculate ICCrevenues, increased by 46%. However, as natural gas commodity prices declined significantly during the summer storage injection period,the average price of gas in storage at September 30, 2023 declined by 37% compared to the same period last year. Accordingly, fiscal2024 ICC revenues are expected to decline from current year levels. In March 2023, Roanoke Gas began the operation of the RNG facility to produce commercial quality RNG for delivery into its distributionsystem through a cooperative agreement with the Western Virginia Water Authority. With SCC approval, Roanoke Gas is allowed to recoverthe costs associated with the investment in RNG facilities and related operating costs through an RNG Rider added to customer bills. Thecustomer benefits from this program through the monetization of environmental credits generated through RNG production, in which thesecredits are returned to customers through the RNG Rider. See the Regulatory section below for more information on RNG. The cost of natural gas is a pass-through cost and is independent of the Company's non-gas rates. Accordingly, the Company's approvedbilling rates include a component designed to allow for the recovery of the cost of natural gas used by its customers. This rate component,referred to as the PGA, allows the Company to pass along to its customers increases and decreases in natural gas costs through a quarterlyfiling (or more frequent if necessary) with the SCC. Once SCC approval is received, the Company adjusts the gas cost component of itsrates. As actual costs will differ from the projections used in establishing the PGA rate, the Company will either over-recover or under-recover its actual gas costs during the period. The difference between actual costs incurred and costs recovered through the application of thePGA is recorded as a regulatory asset or liability. At the end of the annual deferral period, the balance is amortized over an ensuing 12-monthperiod as amounts are reflected in customer billings. Cyber Risk Cyber attacks are a constant threat to businesses and individuals. The Company remains focused on these threats and is committed tosafeguarding its information technology systems. These systems contain confidential customer, vendor and employee information, as well asimportant operational and financial data. There is risk associated with unauthorized access of this information with a malicious intent tocorrupt data, cause operational disruptions or compromise information. Management continuously monitors access to these systems andbelieves it has security measures in place to protect these systems from cyber attacks and similar incidents; however, there can be noguarantee that an incident will not occur. In the event of a cyber incident, the Company will execute its Security Incident Response Plan. TheCompany maintains cyber insurance to mitigate financial costs that may result from a cyber incident. Inflation and Rising Prices Natural gas commodity, delivery and storage capacity costs constitute the single largest expense of the Company, representing 65% of fiscal2023 total operating expenses. After peaking in December 2022, natural gas commodity prices decreased significantly through theremainder of fiscal 2023. The decline in prices was primarily due to improved supply availability resulting from a warm winter season. Roanoke Gas recovers natural gas costs through the PGA mechanism as noted above; however, in times where commodity prices rapidlyincrease, the timing of recovery may lag. Increasing natural gas prices, especially in relation to other energy options, may lead to reductions inenergy consumption through customer conservation or fuel switching in addition to the potential for higher bad debts related to customers'inability to pay higher natural gas bills. Inflation, due to supply chain delays, labor shortages and limited availability of critical supplies among other factors, affects the Companythrough increases in non-gas expenses such as labor, employee benefits, materials and supplies, contracted services, corporate insuranceand other areas. The Company recovers non-gas related costs through the non-gas portion of its tariff rates, which are adjusted througha non-gas base rate application. Unlike the rate adjustments for the gas portion of rates which are done administratively, the non-gas baserate application can result in an inherent lag in non-gas expense recovery. Therefore, authorized non-gas base rates may not keep pace withrising costs during inflationary periods. Management regularly evaluates the Company's operations, economic conditions and other factors toassess the need to apply for a non-gas base rate adjustment. Accordingly, management filed a non-gas rate application in early December2022 to incorporate increased expense levels and additional rate base, including both SAVE and non SAVE related plant investment, sincethe last non-gas base rate application. These new non-gas base rates were implemented effective January 1, 2023 subject to refund. Seethe Regulatory section below for more information. 17Table of Contents Results of Operations The analysis on the results of operations is based on the consolidated operations of the Company, which are primarily associated with theutility segment. Additional segment analysis is provided when Midstream's investment in affiliates represents a significant component of thecomparison. Net income increased by $43,031,884 from a net loss position of $31,732,602 to net income of $11,299,282 primarily due tothe impairment of the Company's LLC investment in fiscal 2022 and the implementation of new non-gas base rates in January 2023. Excluding the after-tax effect of the prior year's impairment, net income would have increased by approximately $2,120,000. The Company's operating revenues are affected by the cost of natural gas, as reflected in the consolidated statement of income under the lineitem cost of gas - utility. The cost of natural gas, which includes commodity price, transportation, storage, injection and withdrawal fees, withany increase or decrease offset by a correlating change in revenue through the PGA, is passed through to customers at cost. Accordingly,management believes that gross utility margin, a non-GAAP financial measure defined as utility revenues less cost of gas, is a more useful andrelevant measure to analyze financial performance. The term gross utility margin is not intended to represent or replace operating income, themost comparable GAAP financial measure, as an indicator of operating performance and is not necessarily comparable to similarly titledmeasures reported by other companies. The following results of operations analyses will reference gross utility margin. Fiscal Year 2023 Compared with Fiscal Year 2022 The table below reflects operating revenues, volume activity and heating degree days. Operating Revenues Year Ended September 30, 2023 2022 Increase (Decrease) Percentage Gas utility $97,325,307 $84,035,644 $13,289,663 16%Non utility 114,458 129,578 (15,120) (12)%Total operating revenues $97,439,765 $84,165,222 $13,274,543 16% Delivered Volumes Year Ended September 30, 2023 2022 Increase (Decrease) Percentage Regulated natural gas (DTH) Residential and commercial 6,408,436 6,577,369 (168,933) (3)%Transportation and interruptible 3,776,569 3,747,967 28,602 1%Total delivered volumes 10,185,005 10,325,336 (140,331) (1)%HDD 3,290 3,398 (108) (3)% Total gas utility operating revenues for the year ended September 30, 2023 increased by 16% from the year ended September 30, 2022primarily due to higher natural gas commodity prices during the first half of fiscal 2023, the implementation of a non-gas base rateincrease, net of a reduction in SAVE revenues, higher ICC revenues and the implementation of the RNG Rider, slightly offset by lowerdeliveries due to warmer weather. Natural gas commodity prices for fiscal 2023 purchases declined from the prior year by approximately9% per DTH; however, the total commodity component of gas costs increased by 37% per DTH due to the withdrawal of higher pricedstorage gas during the winter heating season. Total gas costs, which includes pipeline and storage fixed demand costs, increased by 26%compared to the same period last year, which corresponded to the 21% per DTH increase in the gas cost component of revenue. The non-gas base rate increase implemented in January 2023 contributed to an approximate $3.0 million increase in non-gas volumetric revenues, netof lower delivered volumes, and $1.2 million increase in customer base charge revenue. SAVE revenues declined due to the inclusion of thecumulative SAVE investment in the new non-gas base rates. As discussed in the Overview section, the SAVE Plan and Rider weretemporarily halted with the implementation of the new rates. Corresponding to the higher average price of natural gas in storage during thefirst half of fiscal 2023, ICC revenues rose 47%. Additionally, the operation of the new RNG facility has added a new revenue stream forthe Company. Residential and commercial deliveries decreased by 3% corresponding to a comparable decline in heating degree days,while transportation and interruptible volumes, primarily driven by business activity rather than weather, increased by 1%. 18Table of Contents Gross Utility Margin Year Ended September 30, 2023 2022 Increase Percentage Gas utility revenues $97,325,307 $84,035,644 $13,289,663 16%Cost of gas - utility 51,742,718 42,496,055 9,246,663 22%Gross utility margin $45,582,589 $41,539,589 $4,043,000 10% Gross utility margin increased over the prior fiscal year primarily as a result of the implementation of higher non-gas base rates, net of thereduction in SAVE revenues, combined with higher ICC revenues and the addition of RNG revenues. The reduction in the highermargin residential and commercial volumes, due to a warmer heating season, was mitigated by the WNA mechanism that provided for therecovery of lost margin related to the warmer weather. The changes in the components of the gross utility margin are summarized below: Years Ended September 30, Increase 2023 2022 (Decrease) Customer base charge $15,713,521 $14,557,492 $1,156,029 SAVE Plan 1,103,547 3,285,518 (2,181,971)Volumetric 23,925,200 20,901,637 3,023,563 WNA 3,005,249 1,972,801 1,032,448 ICC 966,851 657,042 309,809 RNG 712,362 — 712,362 Other revenues 155,859 165,099 (9,240)Total $45,582,589 $41,539,589 $4,043,000 Operations and Maintenance Expense - Operations and maintenance expense increased by $414,732, or 3%, over the prior yearprimarily due to increases in compensation costs, contracted services, corporate insurance premiums and RNG expenses, net ofgreater capitalized overheads and lower bad debt expense. Compensation costs and contracted services increased by approximately$852,000 due to increased staffing and the effects of inflation on salaries and externally provided services. Corporate insurance premiumsincreased by approximately $164,000 due to insurance market conditions and higher coverage limits. The operation of the new RNG facilitycontributed approximately $151,000 in additional operating expense. Total capitalized overheads increased by approximately $272,000 dueto a combination of higher levels of constructed assets and a higher capitalization rate, as well as increased LNG production. Bad debtexpense decreased by approximately $445,000 as customer and payment activity returned to historical, pre-COVID patterns resulting inimproved aging and lower write-offs. General Taxes - General taxes increased by $39,111, or 2%, due to increases in property taxes on greater utility plant investment andhigher payroll taxes on increased employee count and compensation. Depreciation - Depreciation expense increased by $815,755, or 9%, corresponding to a similar increase in net additions to depreciableutility property. Equity in Earnings of Unconsolidated Affiliate - The equity in earnings of the MVP investment increased by $2,011,663 related to therecognition of AFUDC as construction activities on the MVP resumed in June 2023. See the Equity Investment in Mountain Valley Pipelinesection below for additional information. 19Table of Contents Impairment of Unconsolidated Affiliates - The $55,092,303 impairment was due to two other-than-temporary write-downs of theCompany's investment in the LLC that were made during the second and fourth quarters of fiscal 2022 as a result of the Company's valuationassessment during the prior year. See Equity Investment in Mountain Valley Pipeline and Critical Accounting Policies and Estimates sectionsbelow for more information. Other Income, Net - Other income decreased by $810,455, or 56%, primarily due to an approximate $1,502,000 increase in the non-service cost components of net periodic benefit costs arising from the effect of much higher interest rates on the actuarial expense calculation. This was partially offset by an approximate $227,000 increase in AFUDC recognized on the RNG project, $169,000 in additional interestincome due to higher interest rates on available cash and $231,000 in additional revenue sharing based on the revised agreement with theCompany's asset manager. Interest Expense - Total interest expense increased by $1,120,876, or 25%, primarily due to higher interest rates on the Company'svariable rate debt and, to a lesser extent, higher borrowing levels. The weighted-average interest rate on the Company's total debt increasedfrom 3.06% during fiscal 2022 to 3.83% during fiscal 2023, representing a 25% increase in the average rate. Total average debt outstandingduring fiscal 2023 increased by less than 1% from fiscal 2022. Total borrowing levels were mitigated by the residual proceeds from the fiscal2022 equity offering and the subsequent equity issues through the ATM in fiscal 2023. Roanoke Gas' interest expense increased by $214,294, or 7%, as total average debt outstanding increased by approximately $2,500,000associated with net borrowings under the Company's line-of-credit. The average interest rate increased slightly from 3.38% in fiscal 2022 to3.51% in fiscal 2023. All of Roanoke Gas' long-term debt carry fixed rates either due to fixed rate notes or with variable rate debt that has acorresponding swap agreement. See Note 6 and 7 for more information on the Company's debt. Midstream's interest expense increased by $906,582, or 61%, as the average interest rate on Midstream's total debt increased from 2.59%to 4.32% related to rising interest rates on the variable rate credit facility, net of an approximate $1,900,000 decrease in total average debtoutstanding during the period. Income Taxes - Income tax expense increased by $14,902,556, moving from a tax benefit of $11,410,645 in fiscal 2022 to tax expense of$3,491,911 in fiscal 2023. The net tax benefit in fiscal 2022 was attributable to a net deferred tax benefit of $14,180,759 correspondingto the recognition of the impairment of the Company's investment in the LLC. The effective tax rate was 23.6% for fiscal 2023 compared to26.5% for fiscal 2022. The effective tax rate for the prior fiscal year exceeded the combined federal and state statutory rate of 25.74% dueto the combination of moving to a taxable loss position combined with deductions related to the amortization of the R&D tax credits.Excluding the impairment, the effective tax rate for fiscal 2022 would have been 23.2%. See Note 8 for the impact of tax credits on theeffective tax rate. Earnings Per Share and Dividends - Basic and diluted earnings per share were $1.14 in fiscal 2023 compared to $3.48 loss per share infiscal 2022. Dividends declared per share of common stock were $0.79 in fiscal 2023 compared to $0.78 in fiscal 2022. Capital Resources and Liquidity Due to the capital intensive nature of the utility business, as well as the impact of weather variability, the Company’s primary capital needs arethe funding of its capital projects, investment in the LLC, the seasonal funding of its natural gas inventories and accounts receivables, debtservice and payment of dividends to shareholders. The Company anticipates funding these items through its operating cash flows, creditavailability under short-term and long-term debt agreements and proceeds from the sale of its common stock. Cash and cash equivalents decreased by approximately $3.4 million in fiscal 2023 compared to a $3.4 million increase in fiscal 2022. Thefollowing table summarizes the categories of sources and uses of cash: Cash Flow Summary Years Ended September 30, 2023 2022 Net cash provided by operating activities $23,796,700 $15,551,676 Net cash used in investing activities (27,402,118) (30,615,878)Net cash provided by financing activities 218,935 18,444,799 Net increase (decrease) in cash and cash equivalents $(3,386,483) $3,380,597 20Table of Contents Cash Flows Provided by Operating Activities: The seasonal nature of the natural gas distribution business causes operating cash flows to fluctuate significantly during the year, as well asfrom year to year. Factors, including weather, energy prices, natural gas storage levels and customer collections, all contribute to workingcapital levels and related cash flows. Generally, operating cash flows are positive during the second and third fiscal quarters as a combinationof earnings, declining storage gas levels and collections on customer accounts all contribute to higher cash levels. During the first and fourthfiscal quarters, operating cash flows generally decrease due to the combination of increasing natural gas storage levels and rising customerreceivable balances. Cash flows from operating activities increased by $8.2 million from the prior year. The table below summarizes the significantcomponents operating cash flow: Years Ended September 30,Increase Cash Flows From Operating Activities: 2023 2022 (Decrease) Net income (loss) $11,299,282 $(31,732,602) $43,031,884 Non-cash adjustments: Depreciation 9,993,206 9,182,751 810,455 Equity in earnings (2,084,990) (73,327) (2,011,663)AFUDC (362,685) (75,154) (287,531)Allowance for credit losses (216,106) 129,260 (345,366)Impairment of unconsolidated affiliates — 55,092,303 (55,092,303)Changes in working capital and regulatory assets and liabilities: Accounts receivable 1,374,442 (532,630) 1,907,072 Gas in storage 5,731,050 (9,049,181) 14,780,231 Prepaid income taxes (139,789) 17,195 (156,984)Accounts payable, accrued expenses and customer credit balances (91,522) 310,700 (402,222)Deferred taxes 38,241 (14,258,294) 14,296,535 Change in over (under) collection of gas costs (66,760) 3,731,584 (3,798,344)Rate refund 652,018 — 652,018 Supplier refunds (2,209,343) 2,484,992 (4,694,335)Other (120,344) 324,079 (444,423)Net cash provided by operating activities $23,796,700 $15,551,676 $8,245,024 The primary driver for the increase in operating cash flows was the change in gas storage balance. During the fiscal 2022 summer storagerefill period, which generally extends from March through October, natural gas commodity prices rose significantly with the average price ofgas in storage increasing from $3.15 per DTH at September 30, 2021 to $7.02 per DTH at September 30, 2022, resulting in a $9 millionuse of operating cash. Subsequently, in fiscal 2023, much of the higher priced gas was withdrawn from storage to meet the energy demandsof the winter heating season. When the fiscal 2023 summer storage refill period began, natural gas commodity prices were much lower thanthe prior fiscal period resulting in a decline in the average price of gas in storage to $4.40 per DTH at September 30, 2023, therebygenerating $5.7 million in operating cash in fiscal 2023. This improvement in operating cash flow was mitigated by changes in supplierrefunds and under-collection of gas costs. In March 2022, the Company received a $2.3 million supplier refund, resulting from a FERC ratecase settlement, from one of the interstate pipelines that provides the Company with natural gas. In July 2022, the Company began refundingthis balance, along with other smaller refunds, to customers over a 12-month period. The transition from collecting supplier refunds in fiscal2022 to refunding them during fiscal 2023 resulted in a $4.7 million net reduction in operating cash between years. At September 30, 2021,Roanoke Gas was in a net under-collected gas cost position of more than $5 million due to timing in adjusting the PGA factor for rising gascosts. During fiscal 2022, Roanoke Gas collected from customers, through the ACA mechanism, nearly $3.6 million of the prior year under-collection. In fiscal 2023, Roanoke Gas collected the remaining $1.4 million through the ACA mechanism; however, Roanoke Gas alsogenerated a $1.5 million under-collection associated with current year gas costs. As a result of the aforementioned lower gas costs and theapplication of the supplier refunds to customers' accounts, as well as reduced delinquent balances, accounts receivable moved from a$500,000 use of cash in fiscal 2022 to a $1.4 million source of operating cash in fiscal 2023. The impairments on the Company's investmentin the LLC resulted in significant swings in net income, deferred taxes and the recognition of impairment charges; however, the net effect ofthe impairments did not have an impact to operating cash flow. 21Table of Contents Cash Flows Used in Investing Activities: Investing activities primarily consist of expenditures related to investment in Roanoke Gas' utility property, which includes replacing agingnatural gas pipe with new plastic or coated steel pipe, improvements to the LNG plant and gas distribution system facilities and expansion ofits natural gas system to meet the demands of customer growth, as well as Midstream's investment in the LLC. Roanoke Gas' expenditureswere approximately $25.3 million and $25.5 million in fiscal 2023 and 2022, respectively. Roanoke Gas renewed 5.7 miles of main and452 service lines and 8.3 miles of main and 605 service lines in fiscal years 2023 and 2022, respectively. The current SAVE Plan is focusedon the replacement of pre-1973 first generation plastic pipe in addition to other SAVE related infrastructure. Furthermore, Roanoke Gas’capital expenditures included costs to extend natural gas distribution mains and services to 430 customers in fiscal 2023, compared to544 customers in fiscal 2022. The RNG project, which went into service in March 2023, also accounted for $3.9 million and $3.1 million inexpenditures for fiscal 2023 and 2022, respectively. Depreciation covered approximately 39% and 36% of the current and prior year'scapital expenditures, respectively, with the balance provided from other operating cash flows and financing activities. Capital expenditures are expected to be at least $20 million annually over the next few years as Roanoke Gas continues to focus on its SAVEPlan, as well as system improvements and customer growth. The Company expects to utilize its operating cash flows and credit facilities, aswell as consider additional equity capital, to meet the funding requirements of these planned expenditures. Investing cash flows also reflects the fiscal 2023 funding of $2.1 million for Midstream's participation in the LLC, down from the $5.3 millionin fiscal 2022. Effective in May 2023, under agreement with the LLC's managing partner and primary interest owner, Midstream's futurecapital contributions to the LLC have been assumed by the primary interest owner. Accordingly, Midstream has no further capitalcontributions during the remaining construction period of the MVP. Midstream has and will remain responsible for its portion of the capitalrequirements of the Southgate project. The LLC's managing partner is currently targeting completion of the MVP during the first quarter ofcalendar 2024. More information is provided under the Equity Investment in Mountain Valley Pipeline section below. Cash Flows Provided by Financing Activities: Financing activities generally consist of borrowings and repayments under credit agreements, issuance of common stock and the payment ofdividends. Net cash flows provided by financing activities were $200,000 and $18.4 million in fiscal 2023 and 2022, respectively. Thedecrease in financing cash flows was primarily attributable to Resources' $27 million equity offering in March 2022 of which $12 million wasinvested in Roanoke Gas and $10 million in Midstream. The remaining $5 million in equity was invested in Midstream in fiscal 2023. Due tothese cash infusions from the equity issue and the issuance of Roanoke Gas' $15 million and $10 million unsecured notes and Midstream's $8million note, Roanoke Gas was able to pay down its line-of-credit balance and maturing $7 million note and Midstream applied $18 millionagainst its non-revolving credit facility during fiscal 2022. During fiscal 2023, the Company realized $3.9 million from the issuance of stockthrough the ATM program, DRIP activity and the exercise of stock options compared to the $2.0 million received from those same activitiesduring the prior year, in addition to the $27 million from the equity offering. Cash out flows for dividend payments reached $7.8 million as theannualized dividend rate increased from $0.78 to $0.79 per share and total outstanding shares increased as a result of the stock activity. TheCompany’s consolidated capitalization was 44.4% equity and 55.6% long-term debt at September 30, 2023, exclusive of unamortized debtexpense. This compares to 40.4% equity and 59.6% long-term debt at September 30, 2022. The current interest rate environment is expected to continue to result in higher interest costs associated with the Company's variable ratedebt or on the issuance of any new debt. Management regularly evaluates the Company's liquidity through a review of its available financing resources and its operating cash flows. Resources maintains the ability to raise equity capital through its ATM program, private placement or other public offerings. Managementbelieves Roanoke Gas has sufficient financing resources to meet its cash requirements for the next year, including the line-of-credit and thetwo private shelf facilities. The first shelf facility provides for the issuance of up to $40 million in unsecured notes in addition to the $28 millionpreviously issued. This shelf agreement was extended in December 2022 and is scheduled to expire on December 6, 2025. The secondfacility provides for the issuance of up to $70 million in unsecured notes during its current term, which expires September 30, 2025. Roanoke Gas may also adjust capital spending as necessary if such a need would arise. Based on the agreement with the LLC's managing partner to assume future capital contributions related to the MVP, Midstream's future cashrequirements are reduced to regular monthly operating expenses, debt service and capital contributions to Southgate. Midstream's total debtservice over the succeeding 12 months includes $11 million to retire maturing debt and approximately $2.7 million in interest expense basedon current rates. With current projections by the LLC's managing partner of MVP completion date during the first quarter of calendar 2024and the subsequent operation of the pipeline, management believes that they will be able to negotiate extensions or refinancing options on thematuring debt and Midstream will meet its cash requirements over the ensuing 12 month period. 22Table of Contents Notes 6 and 7 provide details on the Company's line-of-credit and borrowing activities. ATM Program Resources issued 127,852 shares of common stock for $2,713,020, net of $69,565 in fees, under the ATM program for the year endedSeptember 30, 2023. For the year ended September 30, 2022, Resources issued 4,872 shares of common stock for $112,500, net of$2,813 in fees, under the ATM program. Off-Balance Sheet Arrangements The Company has no off-balance sheet arrangements as defined in Regulation S-K, Item 303(a)(4)(ii). Equity Investment in Mountain Valley Pipeline The Company has a less than 1% interest in the MVP, which is accounted for as an equity investment, and a less than 1% interest in theSouthgate pipeline, which is contemplated to interconnect with the MVP. As discussed more fully in Note 5, since inception, the MVP hasencountered various legal and regulatory issues that have substantially delayed the completion of the project, including a period in 2022 wherework on the project had been halted. As required by GAAP, management assesses the fair value of its investment on a quarterly basis. As a result of the halt in construction in2022, management conducted an assessment of its investment in MVP in accordance with the provisions of ASC 323, Investments - EquityMethod and Joint Ventures. This assessment included a third-party valuation. As a result of its evaluations, management concluded that theinvestment in the LLC sustained other-than-temporary declines in fair value and recorded pre-tax impairment losses of $39.8 million and$15.3 million in its second and fourth quarters of 2022, respectively. This is described more fully in Note 5. Developments in 2023 on the legislative and legal fronts were favorable. Most notably, in June 2023, the FRA declared the completion of theMVP to be in the national interest and cleared the permitting and regulatory impediments. It also divested courts of jurisdiction to reviewagency actions on approvals necessary for MVP construction and initial operation. In July 2023, SCOTUS lifted certain stays and clearedthe judicial impediments. Construction work restarted and the current target is that the MVP will be completed in the first quarter of calendar2024. Combined, these actions have significantly increased the Company’s assessment of the probability of a successful project with aconcomitant increase to fair value. GAAP does not permit the Company to reverse previously recorded impairment charges. To date, Resources' earnings from MVP are primarily attributable to AFUDC income generated by the LLC. Once the pipeline iscommercially operational, AFUDC will cease and the Company will begin to receive its share of LLC earnings from long-term contracts toprovide gas that were previously executed by the LLC. Resources expects cash distributions from the LLC to begin three to six months aftercommercial operations begin. Although the outlook for the MVP project is more positive than a year ago, management will monitor the status of MVP and Southgate forcircumstances that could lead to future impairments. The amount and timing of further impairment, if any, would be dependent on the specificcircumstances, including changes to probabilities of completion, changes in the assumed future cash flows and discount rate at the time ofevaluation. Midstream fully borrowed $23 million under its non-revolving credit facility, which matures in December 2024. It has begun amortization of$400,000 per quarter on an additional variable rate note, as well as a note that comes fully due in June 2024. The Company is activelydiscussing and anticipates refinancing those obligations in 2024. With the expected completion of MVP in the first quarter of calendar 2024,Midstream is considering the long-term structure of its debt as it evolves from a project phase to an operating phase. See Note 7 for moreinformation on all borrowings related to Midstream. 23Table of Contents Regulatory On December 2, 2022, Roanoke Gas filed an application with the SCC seeking an $8.55 million annual increase in its non-gas base rates, ofwhich $4.05 million was being recovered through the SAVE Rider. Since the Company was seeking to recover the costs associated with itsSAVE Plan through interim non-gas base rates effective January 1, 2023, the Company discontinued its SAVE Plan and Rider for theremainder of the current fiscal year. In the fourth quarter of fiscal 2023, the Company reached a settlement with the SCC staff on alloutstanding issues in the case. Under the terms of the settlement, the Company agreed to an incremental revenue requirement of $7.45million. The Company agreed to begin billing the new rates effective October 1, 2023. The Company expects to receive the final order onthe rate application in late calendar 2023 or early 2024. The Company has recorded a provision for refund, including interest, associated with customer billings for the difference between the interimrates and the settlement rates. Roanoke Gas continues to recover the costs of its infrastructure replacement program through its SAVE Rider. The Company filed anapplication with the SCC for a new, five-year SAVE Plan and Rider on March 31, 2023, seeking recovery of costs associated with anestimated $8.5 million in SAVE eligible investment in fiscal 2024 and an estimated cumulative investment of $49.5 million over the proposedfive-year plan period ending September 30, 2028. On August 31, 2023, the SCC approved the new SAVE Plan and Rider with rateseffective October 1, 2023. On May 16, 2022, Roanoke Gas announced a cooperative agreement under which Roanoke Gas and the Western Virginia Water Authoritywould produce commercial quality RNG from biogas produced at the regional water pollution control plant. In August 2022, Roanoke Gasfiled an application with the SCC seeking approval of a rate adjustment clause to recover the costs associated with constructing, owning,operating and maintaining the renewable natural gas facility. The application was filed under Chapter 30 of Title 56 of the Code of Virginia. Chapter 30 allows the Company to accrue AFUDC on the RNG project. In connection with the RNG project, Roanoke Gas beganaccruing AFUDC in fiscal 2022 associated with construction of the facility. The Company has recognized approximately $468,000 ofAFUDC since inception of the RNG project. The Company received a final order from the SCC on January 23, 2023 approving theCompany’s application. The RNG facility became operational in March 2023. The Company began billing customers the RNG rateadjustment on March 1, 2023, at which time the Company ceased recording AFUDC. On May 30, 2023, the Company filed an application with the SCC to update the RNG Rider with an effective date of October 1, 2023. OnSeptember 1, 2023, the SCC approved the updated RNG Rider with rates effective October 1, 2023. On June 2, 2022, Roanoke Gas filed an application with the SCC to acquire certain natural gas distribution assets from a local housingauthority. Under this application, the Company requested the approval to acquire such facilities at five separate apartment complexes,located in the Company’s service territory, that were under housing authority management. Under the proposed plan, the housing authoritywould renew existing natural gas distribution facilities to include mains, services, and meter installations and then transfer ownership of thesefacilities to Roanoke Gas. In turn, Roanoke Gas would assume responsibility for the operation and maintenance of these assets andrecognize a gain related to the asset acquisition equal to the cost associated with the renewal. On July 19, 2022, the SCC approved the application and on August 4, 2022, the housing authority transferred the assets from twoapartment complexes to Roanoke Gas. Roanoke Gas recorded these assets and recognized a pre-tax gain of approximately $219,000during the fourth quarter of fiscal 2022. On September 29, 2023, the housing authority transferred the assets from one additional apartmentcomplex to Roanoke Gas and the Company recorded a pre-tax gain of approximately $311,000 during the fourth quarter of fiscal 2023. The authority is awaiting future funding to complete the two remaining apartment complexes. The timing of funding and the completion of theasset renewals for these complexes is unknown at this time. Critical Accounting Policies and Estimates The consolidated financial statements of Resources are prepared in accordance with GAAP. The amounts of assets, liabilities, revenues andexpenses reported in the Company’s financial statements are affected by accounting policies, estimates and assumptions that are necessary tocomply with generally accepted accounting principles. Estimates used in the financial statements are derived from prior experience, statisticalanalysis and management and professional judgments. Actual results may differ significantly from these estimates and assumptions. 24Table of Contents The Company considers an estimate to be critical if it is material to the financial statements and requires assumptions to be made that wereuncertain at the time the estimate was made and changes in the estimate are reasonably likely to occur from period to period. The Companyconsiders the following accounting policies and estimates to be critical. Investments - Under the provisions of ASC 323, Investments - Equity Method and Joint Ventures, the Company is required to evaluateits investment in the LLC to determine if the fair value of the investments are below the carrying amount and if this decline in fair value isconsidered other-than-temporary. If the results of the evaluation indicate that the decline in fair value is other-than-temporary, then therecognition of an impairment is required. The following events or circumstances would indicate the potential of an other-than-temporarydecline in the fair value of the investment in the LLC: • a prolonged period of time that the fair value is below the investor’s carrying value; • the current expected financial performance is significantly worse than anticipated when the investor originally invested in the investee; • adverse regulatory action is expected to substantially reduce the investee’s product demand or profitability; • the investee has lost significant customers or suppliers with no immediate prospects for replacement; • the investee’s discounted or undiscounted cash flows are below the investor’s carrying amount; and • the investee’s industry is declining and significantly lags the performance of the economy as a whole. The determination of fair value of the Company's investment in the LLC is a significant estimate. Management has conducted quarterlyevaluations of its investment in the LLC, with the assistance of a valuation specialist as needed, to determine the fair value utilizing an incomeapproach and probability scenarios of discounted cash flows. In conducting these evaluations, management made a variety of assumptionsthat it believes to be reasonable. Variations in many of these assumptions could have a significant impact on the calculation of the fair valueand the resulting level of impairment recorded. Furthermore, these assumptions are based on the facts and circumstances at the date of theevaluations and are subject to change. See the Equity Investment in Mountain Valley Pipeline section for additional information regarding theLLC valuation. Regulatory accounting - The Company’s regulated operations follow the accounting and reporting requirements of ASC 980, RegulatedOperations. The economic effects of regulation can result in a regulated company deferring costs that have been or are expected to berecovered from customers in a period different from the period in which the costs would be charged to expense by an unregulated enterprise.When this occurs, costs are deferred as regulatory assets on the consolidated balance sheet and recorded as expenses in the consolidatedstatements of income and comprehensive income when such amounts are reflected in rates. Additionally, regulators can impose regulatoryliabilities upon a regulated company for amounts previously collected from customers and for current collection in rates of costs that areexpected to be incurred in the future. If, for any reason, the Company ceases to meet the criteria for application of regulatory accounting treatment for all or part of its operations,the Company would remove the applicable regulatory assets or liabilities from the consolidated balance sheet and include them in theconsolidated statements of income and comprehensive income for the period in which the discontinuance occurred. Revenue recognition - Regulated utility sales and transportation revenues are based upon rates approved by the SCC. The non-gas costcomponent of rates may not be changed without a formal rate application and corresponding authorization by the SCC in the form of aCommission order; however, the gas cost component of rates is adjusted quarterly, or more frequently if necessary, through the PGAmechanism. When the Company files a request for a non-gas rate increase, the SCC may allow the Company to place such rates into effectsubject to refund pending a final order. Under these circumstances, the Company estimates the amount of increase it anticipates will beapproved based on the best available information. The Company has established a reserve for rate refund related for the difference in thesettlement rates approved by the SCC staff and the interim rates implemented effective January 1, 2023. Once a final order is issued by theSCC, the Company will refund the excess billings to its customers. 25Table of Contents The Company also bills customers through a SAVE Rider that provides a mechanism to recover on a prospective basis the costs associatedwith the Company’s expected investment related to the replacement of natural gas distribution pipe and other qualifying projects. Asauthorized by the SCC, the Company adjusts billed revenues monthly through the application of the WNA model. As the Company's non-gas rates are established based on the 30-year temperature average, monthly fluctuations in temperature from the 30-year average couldresult in the recognition of more or less revenue than for what the non-gas rates were designed. The WNA authorizes the Company to adjustmonthly revenues for the effects of variation in weather from the 30-year average with a corresponding entry to a WNA receivable orpayable. At the end of each WNA year, the Company refunds excess revenue collected for weather that was colder than the 30-yearaverage or bills customers for revenue short-fall resulting from weather that was warmer than normal. In a manner similar to the SAVE Rider,the Company also has an SCC approved mechanism to recover the investment and expenses for the operation of the RNG facility. Asrequired under the provisions of ASC 980, the Company recognizes billed revenue related to SAVE projects, RNG and from the WNA tothe extent such revenues have been earned under the provisions approved by the SCC. The Company bills its regulated natural gas customers on a monthly cycle. The billing cycle for most customers does not coincide with theaccounting periods used for financial reporting. The Company accrues revenue for estimated natural gas delivered to customers but not yetbilled during the accounting period. The following month, the unbilled estimate is reversed, the actual usage is billed and a new unbilledestimate is calculated. The consolidated financial statements include unbilled revenue of $1,240,097 and $1,585,062 as of September 30,2023 and 2022, respectively. Under the provisions of ASU 2014-09, Revenue from Contracts with Customers, the Company recognizes revenues when natural gas isdelivered to customers (the performance obligation) based on SCC approved tariff rates (the transaction price). The Company recognizesrevenue through both billed and unbilled customer usage. The Company also recognizes revenue through ARPs, including the WNA. Allowance for Credit Losses - The Company evaluates the collectability of its accounts receivable balances based upon a variety offactors including loss history, level of delinquent account balances, collections on previously written off accounts and general economicconditions. The historical model used in valuing reserve for bad debts has been consistently applied prior to COVID-19 and has producedreasonable estimates for valuing the potential credit losses on customer accounts receivable. With the arrival of COVID-19 and theunprecedented widespread impact deriving from the pandemic, including the 17-month disconnection moratorium which ended August 30,2021, the estimation of the Company's allowance for credit losses was more subjective with greater reliance on qualitative assessments andjudgment rather than historical patterns. This greater focus on qualitative assessments continued into fiscal 2022 as the residual impact ofCOVID and the availability of federal financial assistance through the CARES Act and ARPA that were incorporated into fiscal 2021 creditloss estimates continued to have an effect on customer payment patterns. In fiscal 2023, customer account activity returned to pre-COVIDlevels where customer payment patterns and account aging were more predictable and prior valuation techniques were again applicable. Based on management's evaluation and assessments, the total allowance for credit losses were estimated at $155,164 and $371,271 asof September 30, 2023 and 2022, respectively. Pension and Postretirement Benefits - The Company offers a pension plan and a postretirement plan to eligible employees. The expensesand liabilities associated with these plans, as disclosed in Note 9 to the consolidated financial statements, are based on numerous assumptionsand factors, including provisions of the plans, employee demographics, contributions made to the plan, return on plan assets and variousactuarial calculations, assumptions and accounting requirements. In regard to the pension plan, specific factors include assumptions regardingthe discount rate used in determining future benefit obligations, expected long-term rate of return on plan assets, compensation increases andlife expectancies. Similarly, the postretirement medical plan also requires the estimation of many of the same factors as the pension plan inaddition to assumptions regarding the rate of medical inflation and Medicare availability. Actual results may differ materially from the resultsexpected from the actuarial assumptions due to changing economic conditions, differences in actual returns on plan assets, different rates ofmedical inflation, volatility in interest rates and changes in life expectancy. Such differences may result in a material impact on the amount ofexpense recorded in future periods or the value of the obligations on the consolidated balance sheet. In selecting the discount rate to be used in determining the benefit liability, the Company utilized the FTSE Pension Discount Curve, whichincorporates the rates of return on high-quality, fixed-income investments that corresponded to the length and timing of benefit streamsexpected under both the pension plan and postretirement plan. The Company used a discount rate of 5.63% for valuing both its pension planand postretirement plan liabilities at September 30, 2023. These discount rates represent an increase from the 5.15% for the pension planand 5.16% for the postretirement plan used for valuing the corresponding liabilities at September 30, 2022. The increase in discount ratescorresponds to the market reactions to the continuing inflationary pressures on the financial markets and economy. The yield on the 30-yearTreasury increased from 2.08% at September 30, 2021 to 3.79% at September 30, 2022 and to 4.73% at September 30, 2023. Corporatebond rates experienced a smaller increase as credit spreads have narrowed. The rise in the discount rates was the primary factor in thereduction of the benefit obligations for both the pension and the postretirement plan. Mortality assumptions were based on the PRI-2012Mortality Table with improvements projected generational using Projection Scale MP-2021 for the current year valuation. 26Table of Contents Management has focused on reducing risk in the Company's defined benefit plans through different means including offering lump sumpayouts to vested terminated participants and implementing a "soft freeze" on the plans. In 2017, the Company implemented a soft freeze tothe pension plan whereby employees hired on or after January 1, 2017 would not be eligible to participate. Employees hired prior to thatdate continue to accrue benefits based on compensation and years of service. This soft freeze mirrored the strategy in 2000 when theCompany implemented a similar freeze in its postretirement plan. Each of these strategies have served to limit liability growth and reducevolatility. The Company also has focused on its asset investment strategy. With the soft freeze of both the pension and postretirement plans, futureliability growth associated with participant service and compensation has been limited. Under the pension plan, the portion of the liabilityattributable to active eligible employees continuing to accrue benefits has declined from 56% of the liability as of the date of the soft freeze to38% in fiscal 2023. The remaining 62% of the 2023 liability is set, subject to variability in the discount rate and mortality adjustments. SinceJanuary 2017, when the pension plan froze access to new employees, the asset allocation has transitioned from 60% equity and 40% fixedincome to 25% equity and 75% fixed. During the same period, the fixed income portion of the plan was transitioned to an LDI approach,with the fixed income assets invested in securities with a duration that corresponds to the duration of the corresponding liability. Thissynchronization of the pension assets with the pension liabilities has reduced volatility in the funded status of the plan. This is evidenced by therelative stability of the funded status of the pension plan at September 30, 2023 and 2022 with a funded ratio of 100% and103%, respectively. The 25% allocation to equity investments provides asset growth potential to offset increases in the pension liabilityrelated to those employees continuing to accrue benefits. Management will continue to evaluate the investment allocation as the liabilitiesmature and make adjustments as necessary. The Company has initiated a transition of the postretirement plan assets from a 50% equity and 50% fixed income allocation to a 30% equityand 70% fixed income allocation. This revision to the investment targets is in response to a greater proportion of participants thathave transitioned to retirement. As the postretirement plan implemented the soft freeze in 2000, only 25% of the plan's liability is currentlyattributable to active employees with the remaining liability associated with retired participants. Similar to the pension plan, the revision to theasset allocation will seek to reduce the volatility in funded status while still providing the opportunity for asset growth through the equityportion of the portfolio. The funded status for the postretirement plan was 116% and 98% as of September 30, 2023 and 2022,respectively. The improvement in the funded status was due to the higher equity allocation and shorter duration of the fixed income portion ofthe portfolio compared to the duration of the corresponding plan liabilities. Management will continue to monitor and evaluate the assetallocation and adjust as warranted. A summary of the funded status of both the pension and postretirement plans is provided below: Funded status - September 30, 2023 Pension Postretirement Total Benefit obligation $26,747,624 $11,248,448 $37,996,072 Fair value of assets 26,878,661 13,019,313 39,897,974 Funded status $131,037 $1,770,865 $1,901,902 Funded status - September 30, 2022 Pension Postretirement Total Benefit obligation $27,268,456 $12,416,546 $39,685,002 Fair value of assets 28,017,797 12,138,119 40,155,916 Funded status $749,341 $(278,427) $470,914 The Company annually evaluates the long-term rate of return on its targeted investment allocation model, as well as the overall assetallocation of its benefit plans, and reviews both plans' potential long-term rate of return with its investment advisors to determine the ratesused in each plan's actuarial assumptions. Management maintained the long-term rate of return assumption at 4.50% for fiscal 2023 basedon evaluation by the Company's investment advisor and management's assessment of the current market environment. The long-term rate ofreturn for the postretirement plan increased slightly from 3.95% in fiscal 2023 to 4.24% for fiscal 2024. Management will continue to re-evaluate the return assumptions and asset allocation and adjust both as market conditions warrant. 27Table of Contents Management estimates that the Company will have no minimum funding requirements next year. The Company currently does not expect tomake contributions to its pension plan and postretirement plan in fiscal 2024 due to other financing considerations and the funded position ofthe plans. The Company will continue to evaluate its benefit plan funding levels in light of funding requirements and ongoing investment returnsand make adjustments, as necessary, to avoid benefit restrictions and minimize PBGC premiums. The following schedule reflects the sensitivity of pension costs to changes in certain actuarial assumptions, assuming that the other componentsof the calculation remain constant. Actuarial Assumptions - Pension Plan Change inAssumption Increase inPension Cost Increase inProjected BenefitObligation Discount rate -0.25% $79,000 $825,000 Rate of return on plan assets -0.25% 66,000 N/A Rate of increase in compensation 0.25% 29,000 132,000 The following schedule reflects the sensitivity of postretirement benefit costs from changes in certain actuarial assumptions, while the othercomponents of the calculation remain constant. Actuarial Assumptions - Postretirement Plan Change inAssumption Increase(Decrease) inPostretirementBenefit Cost Increase inAccumulatedPostretirementBenefitObligation Discount rate -0.25% $(9,000) $323,000 Rate of return on plan assets -0.25% 29,000 N/A Medical claim cost increase 0.25% 21,000 316,000 Derivatives - The Company may hedge certain risks incurred in its operation through the use of derivative instruments. The Companyapplies the requirements of ASC 815, Derivatives and Hedging, which requires the recognition of derivative instruments as assets orliabilities in the Company’s consolidated balance sheet at fair value. In most instances, fair value is based upon quoted futures prices fornatural gas commodities and interest rate futures for interest rate swaps. Changes in the commodity and futures markets will impact theestimates of fair value in the future. Furthermore, the actual market value at the point of realization of the derivative may be significantlydifferent from the values used in determining fair value in prior financial statements. The Company had five interest-rate swaps outstanding atSeptember 30, 2023 related to its variable rate notes. See Notes 1 and 7 to the consolidated financial statements for additional informationregarding the swaps. Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Not applicable. Item 8. Financial Statements and Supplementary Data. 28Table of Contents RGC Resources, Inc. and Subsidiaries Consolidated Financial Statementsfor the Years Ended September 30, 2023 and 2022and Report of IndependentRegistered Public Accounting Firm 29Table of Contents RGC RESOURCES, INC. AND SUBSIDIARIESTABLE OF CONTENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID 423)31 Consolidated Financial Statements for the Years Ended September 30, 2023 and 2022: Consolidated Balance Sheets32 Consolidated Statements of Income34 Consolidated Statements of Comprehensive Income (Loss)35 Consolidated Statements of Stockholders’ Equity36 Consolidated Statements of Cash Flows37 Notes to Consolidated Financial Statements38 30Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and StockholdersRGC Resources, Inc.Roanoke, Virginia Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of RGC Resources, Inc. and Subsidiaries (“the Company”) as of September 30,2023 and 2022, and the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows for each of theyears in the two-year period ended September 30, 2023, and the related notes (collectively referred to as the financial statements). In our opinion,the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2023 and 2022, and theresults of its operations and its cash flows for each of the years in the two-year period ended September 30, 2023, in conformity with accountingprinciples generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on theCompany’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Accounting OversightBoard (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securitieslaws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is notrequired to have, nor were we engaged to perform an audit of its internal control over financial reporting. As part of our audits, we are required toobtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of theCompany’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts anddisclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for ouropinion. Critical Audit Matters Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to becommunicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved ourespecially challenging, subjective, or complex judgments. We determined that there were no critical audit matters. /s/ Brown Edwards & Company, L.L.P CERTIFIED PUBLIC ACCOUNTANTSWe have served as the Company's auditor since 2006. Roanoke, VirginiaDecember 1, 2023 31Table of Contents RGC RESOURCES, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSAS OF SEPTEMBER 30, 2023 AND 2022 2023 2022 ASSETS CURRENT ASSETS: Cash and cash equivalents $1,512,431 $4,898,914 Accounts receivable, net 4,194,934 5,353,270 Materials and supplies 1,674,462 1,228,554 Gas in storage 11,185,601 16,916,651 Prepaid income taxes 3,227,544 3,087,755 Regulatory assets 2,854,276 1,877,468 Interest rate swaps 1,533,057 1,218,211 Other 612,957 967,496 Total current assets 26,795,262 35,548,319 UTILITY PROPERTY: In service 318,369,891 290,940,683 Accumulated depreciation and amortization (85,752,798) (80,242,946)In service, net 232,617,093 210,697,737 Construction work in progress 14,966,458 19,163,337 Utility property, net 247,583,551 229,861,074 OTHER NON-CURRENT ASSETS: Regulatory assets 5,389,445 5,446,547 Investment in unconsolidated affiliates 17,187,093 13,773,075 Benefit plan assets 1,901,902 749,341 Deferred income taxes 1,163,594 1,057,079 Interest rate swaps 3,084,398 3,580,256 Other 624,095 293,552 Total other non-current assets 29,350,527 24,899,850 TOTAL ASSETS $303,729,340 $290,309,243 (Continued) 32Table of Contents RGC RESOURCES, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSAS OF SEPTEMBER 30, 2023 AND 2022 2023 2022 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Current maturities of long-term debt $10,975,000 $1,300,000 Line-of-credit 4,353,572 — Dividends payable 1,978,400 1,915,317 Accounts payable 5,838,643 8,600,919 Capital contributions payable — 804,506 Customer credit balances 1,972,132 1,400,770 Customer deposits 1,476,321 1,457,610 Accrued expenses 4,661,722 3,668,122 Regulatory liabilities 1,632,716 3,168,066 Other 30,281 — Total current liabilities 32,918,787 22,315,310 LONG-TERM DEBT: Notes payable 126,100,000 135,971,200 Unamortized debt issuance costs (255,272) (275,911)Long-term debt, net 125,844,728 135,695,289 DEFERRED CREDITS AND OTHER NON-CURRENT LIABILITIES: Asset retirement obligations 10,792,831 10,204,079 Regulatory cost of retirement obligations 13,029,376 12,277,796 Benefit plan liabilities 47,674 337,535 Deferred income taxes 2,008,458 3,165,454 Regulatory liabilities 18,031,693 13,223,124 Other 323,168 — Total deferred credits and other non-current liabilities 44,233,200 39,207,988 COMMITMENTS AND CONTINGENCIES (Note 12) CAPITALIZATION: Stockholders’ Equity: Common stock, $5 par value; authorized 20,000,000 shares; issued and outstanding 10,015,254and 9,820,535 shares in 2023 and 2022, respectively 50,076,270 49,102,675 Preferred stock, no par; authorized 5,000,000 shares; no shares issued and outstanding in 2023 and2022 — — Capital in excess of par value 44,430,786 41,479,459 Retained earnings 3,972,280 544,158 Accumulated other comprehensive income 2,253,289 1,964,364 Total stockholders’ equity 100,732,625 93,090,656 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $303,729,340 $290,309,243 See notes to consolidated financial statements. 33Table of Contents RGC RESOURCES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOMEYEARS ENDED SEPTEMBER 30, 2023 AND 2022 2023 2022 OPERATING REVENUES: Gas utility $97,325,307 $84,035,644 Non utility 114,458 129,578 Total operating revenues 97,439,765 84,165,222 OPERATING EXPENSES: Cost of gas - utility 51,742,718 42,496,055 Cost of sales - non utility 25,603 29,126 Operations and maintenance 15,903,972 15,489,240 General taxes 2,324,314 2,285,203 Depreciation and amortization 9,764,678 8,948,923 Total operating expenses 79,761,285 69,248,547 OPERATING INCOME 17,678,480 14,916,675 Equity in earnings of unconsolidated affiliate 2,084,990 73,327 Impairment of unconsolidated affiliates — (55,092,303)Other income, net 646,528 1,456,983 Interest expense 5,618,805 4,497,929 INCOME (LOSS) BEFORE INCOME TAXES 14,791,193 (43,143,247)INCOME TAX EXPENSE (BENEFIT) 3,491,911 (11,410,645)NET INCOME (LOSS) $11,299,282 $(31,732,602)EARNINGS (LOSS) PER COMMON SHARE: Basic $1.14 $(3.48)Diluted $1.14 $(3.48)WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 9,922,701 9,122,678 Diluted 9,927,157 9,122,678 See notes to consolidated financial statements. 34Table of Contents RGC RESOURCES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)YEARS ENDED SEPTEMBER 30, 2023 AND 2022 2023 2022 NET INCOME (LOSS) $11,299,282 $(31,732,602)Other comprehensive income (loss), net of tax: Interest rate swaps (134,419) 4,451,551 Defined benefit plans 423,344 (951,753)OTHER COMPREHENSIVE INCOME, NET OF TAX 288,925 3,499,798 COMPREHENSIVE INCOME (LOSS) $11,588,207 $(28,232,804) See notes to consolidated financial statements. 35Table of Contents RGC RESOURCES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITYYEARS ENDED SEPTEMBER 30, 2023 AND 2022 Accumulated Capital in Other Total Common Excess of Retained Comprehensive Stockholders’ Stock Par Value Earnings Income (Loss) Equity BALANCE - SEPTEMBER 30, 2021 $41,875,460 $19,705,387 $39,656,296 $(1,535,434) $99,701,709 Net loss — — (31,732,602) — (31,732,602)Other comprehensive income — — — 3,499,798 3,499,798 Exercise of stock options (8,750 shares) 43,750 83,064 — — 126,814 Stock option grants — 16,330 — — 16,330 Cash dividends declared ($0.78 per share) — — (7,379,536) — (7,379,536)Issuance costs — (54,175) — — (54,175)Issuance of common stock (1,436,693 shares) 7,183,465 21,728,853 — — 28,912,318 BALANCE - SEPTEMBER 30, 2022 $49,102,675 $41,479,459 $544,158 $1,964,364 $93,090,656 Net income — — 11,299,282 — 11,299,282 Other comprehensive income — — — 288,925 288,925 Exercise of stock options (12,500 shares) 62,500 137,500 — — 200,000 Stock option grants — 21,560 — — 21,560 Cash dividends declared ($0.79 per share) — — (7,871,160) — (7,871,160)Issuance costs — (221,618) — — (221,618)Issuance of common stock (182,219 shares) 911,095 3,013,885 — — 3,924,980 BALANCE - SEPTEMBER 30, 2023 $50,076,270 $44,430,786 $3,972,280 $2,253,289 $100,732,625 See notes to consolidated financial statements. 36Table of Contents RGC RESOURCES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSYEARS ENDED SEPTEMBER 30, 2023 AND 2022 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $11,299,282 $(31,732,602)Adjustments to reconcile net income (loss) to net cash provided by operations: Depreciation and amortization 9,993,206 9,182,751 Cost of retirement of utility property, net (824,637) (630,262)Stock option grants 21,560 16,330 Equity in earnings of unconsolidated affiliate (2,084,990) (73,327)Impairment of unconsolidated affiliates — 55,092,303 Allowance for funds used during construction (362,685) (75,154)Deferred income taxes 38,241 (14,258,294)Other noncash items, net (67,266) 317,169 Changes in assets and liabilities which provided (used) cash: Accounts receivable and customer deposits, net 1,393,153 (646,362)Inventories and gas in storage 5,285,142 (9,246,069)Regulatory and other assets (891,152) 3,949,270 Accounts payable, customer credit balances and accrued expenses, net (91,522) 310,700 Regulatory liabilities 88,368 3,345,223 Total adjustments 12,497,418 47,284,278 Net cash provided by operating activities 23,796,700 15,551,676 CASH FLOWS FROM INVESTING ACTIVITIES: Expenditures for utility property (25,306,524) (25,461,000)Investment in unconsolidated affiliates (2,133,534) (5,260,863)Proceeds from disposal of utility property 37,940 105,985 Net cash used in investing activities (27,402,118) (30,615,878)CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings under line-of-credit 33,172,013 36,871,007 Repayments under line-of-credit (28,818,441) (54,499,904)Proceeds from issuance of unsecured notes 1,103,800 39,286,000 Retirement of notes payable (1,300,000) (25,125,000)Debt issuance expenses (33,722) (58,201)Proceeds from issuance of stock 3,903,362 28,984,957 Cash dividends paid (7,808,077) (7,014,060)Net cash provided by financing activities 218,935 18,444,799 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (3,386,483) 3,380,597 BEGINNING CASH AND CASH EQUIVALENTS 4,898,914 1,518,317 ENDING CASH AND CASH EQUIVALENTS $1,512,431 $4,898,914 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the year for: Interest $5,299,959 $4,269,900 Income taxes 1,775,145 2,290,000 See notes to consolidated financial statements. 37Table of Contents RGC RESOURCES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED SEPTEMBER 30, 2023 AND 2022 1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation—RGC Resources, Inc. is an energy services company primarily engaged in the sale and distribution of naturalgas. The consolidated financial statements include the accounts of Resources and its wholly owned subsidiaries: Roanoke Gas, Midstreamand Diversified Energy. Roanoke Gas is a natural gas utility, which distributes and sells natural gas to approximately 62,200 residential,commercial and industrial customers within its service areas in Roanoke, Virginia and the surrounding localities. The Company’s business isseasonal in nature as a majority of natural gas sales are for space heating during the winter season. Roanoke Gas is regulated by the SCC.Midstream is a wholly owned subsidiary created primarily to invest in the Mountain Valley Pipeline project. Diversified Energy is inactive. The Company follows accounting and reporting standards established by the FASB and the SEC, including certain provisions allowed underthe smaller reporting company exceptions. Rate Regulated Basis of Accounting—The Company’s regulated operations follow the accounting and reporting requirements of ASC980, Regulated Operations. The economic effects of regulation can result in a regulated company deferring costs that have been or areexpected to be recovered from customers in a period different from the period in which the costs would be charged to expense by anunregulated enterprise. When this situation occurs, costs are deferred as assets in the consolidated balance sheet (regulatory assets) andrecorded as expenses when such amounts are reflected in rates. Additionally, regulators can impose liabilities upon a regulated company foramounts previously collected from customers and for current collection in rates of costs that are expected to be incurred in the future(regulatory liabilities). In the event the provisions of ASC 980 no longer apply to any or all regulatory assets or liabilities, the Company wouldwrite off such amounts and include them in the consolidated statements of income and comprehensive income in the period which ASC 980no longer applied. 38Table of Contents Regulatory assets and liabilities included in the Company’s consolidated balance sheets as of September 30, 2023 and 2022 are as follows: September 30 2023 2022 Assets: Current Assets: Regulatory assets: Accrued WNA revenues $414,689 $193,518 Under-recovery of gas costs 1,383,340 1,316,580 Under-recovery of RNG revenues 797,804 — Accrued pension 243,017 237,911 Other deferred expenses 15,426 129,459 Total current 2,854,276 1,877,468 Utility Property: In service: Other 479,647 11,945 Construction work in progress: AFUDC 356,325 461,342 Other Non-Current Assets: Regulatory assets: Premium on early retirement of debt 1,256,059 1,370,246 Accrued pension 3,786,265 3,894,561 Other deferred expenses 347,121 181,740 Total non-current 5,389,445 5,446,547 Total regulatory assets $9,079,693 $7,797,302 Liabilities and Stockholders' Equity: Current Liabilities: Regulatory liabilities: Over-recovery of SAVE Plan revenues $146,861 $158,847 Rate refund 652,018 — Deferred income taxes 527,034 363,297 Supplier refunds 275,649 2,484,992 Other deferred liabilities 31,154 160,930 Total current 1,632,716 3,168,066 Deferred Credits and Non-Current Other Liabilities: Asset retirement obligations 10,792,831 10,204,079 Regulatory cost of retirement obligations 13,029,376 12,277,796 Regulatory liabilities: Deferred income taxes 16,249,776 13,193,006 Deferred postretirement medical 1,781,917 30,118 Total non-current 41,853,900 35,704,999 Total regulatory liabilities $43,486,616 $38,873,065 Amortization of $213,450 and $156,467 of regulatory assets for the years ended September 30, 2023 and 2022, respectively, is included inoperations and maintenance expense on the consolidated statements of income. Amortization of $237,911 and $206,679 of regulatory assetsfor the years ended September 30, 2023 and 2022, respectively, is included in other income, net on the consolidated statements of income. Amortization of $114,187 of regulatory assets for both years ended September 30, 2023 and 2022 is included in interest expense on theconsolidated statements of income. As of September 30, 2023, the Company had regulatory assets in the amount of $8,600,046 on which the Company did not earn a returnduring the recovery period. 39Table of Contents Utility Property and Depreciation—Utility property is stated at original cost and includes direct labor and materials, contractor costs, andall allocable overhead charges. The Company applies the group method of accounting, where the costs of like assets are aggregated anddepreciated by applying a rate based on the average expected useful life of the assets. In accordance with Company policy, expenditures fordepreciable assets with a life greater than one year are capitalized, along with any upgrades or improvements to existing assets, when suchupgrades or improvements significantly improve or extend the original expected useful life. Expenditures for maintenance, repairs, and minorrenewals and betterments are expensed as incurred. The original cost of depreciable property retired is removed from utility property andcharged to accumulated depreciation. The cost of asset removals, less salvage, is charged to “regulatory cost of retirement obligations” or“asset retirement obligations” as explained under Asset Retirement Obligations below. Utility property is composed of the following major classes of assets: September 30 2023 2022 Distribution and transmission $286,200,652 $259,253,559 LNG storage 15,407,053 15,383,276 General and miscellaneous 16,762,186 16,303,848 Total utility property in service $318,369,891 $290,940,683 Provisions for depreciation are computed principally at composite straight-line rates over a range of periods. Rates are determined bydepreciation studies, which are required to be performed at least every 5 years on the regulated utility assets of Roanoke Gas. The lastdepreciation study was completed and approved by the SCC staff in fiscal 2019. The Company will complete a new depreciation studyduring fiscal 2024. The composite weighted-average depreciation rate was 3.30% and 3.28% for the years ended September 30, 2023 and2022, respectively. The composite rates are composed of two components, one based on average service life and one based on cost of retirement. As a result,the Company accrues the estimated cost of retirement of long-lived assets through depreciation expense. These retirement costs are not alegal obligation but rather the result of cost-based regulation and are accounted for under the provisions of ASC 980. Such amounts areclassified as a regulatory liability. The Company reviews long-lived assets and certain identifiable intangibles for impairment whenever events or changes in circumstancesindicate that the carrying amount of an asset may not be recoverable. These reviews have not identified any impairments which would have amaterial effect on the results of operations or financial condition. See Note 5 for prior year impairment related to the Company's investment inaffiliates. In fiscal 2020, Roanoke Gas implemented the application of AFUDC related to infrastructure investments associated with two gate stationsthat will interconnect with the MVP. In fiscal 2022, the SCC approved the application of AFUDC on the RNG project during its constructionphase. This treatment allows capitalizing both the equity and debt financing costs during the construction phases. For the years endedSeptember 30, 2023, and 2022, the Company capitalized $76,785 and $15,911 of debt financing costs and $285,900 and $59,243 ofequity financing costs related to these projects, respectively, thereby affecting interest expense and other income, net on the consolidatedstatements of income. See Note 3 for further information. Asset Retirement Obligations—ASC 410, Asset Retirement and Environmental Obligations, requires entities to record the fair valueof a liability for an ARO when there exists a legal obligation for the retirement of the asset. When the liability is initially recorded, the entitycapitalizes the cost, thereby increasing the carrying amount of the underlying asset. In subsequent periods, the liability is accreted, and thecapitalized cost is depreciated over the useful life of the underlying asset. The Company has recorded AROs for its future legal obligationsrelated to purging and capping its distribution mains and services upon retirement, although the timing of such retirements is uncertain. The Company’s composite depreciation rates include a component to provide for the cost of asset retirement. As a result, the Companyaccrues the estimated cost of retirement of its utility plant through depreciation expense and creates a corresponding regulatory liability. Thecosts of retirement considered in the development of the depreciation component include those costs associated with the legal liability.Therefore, the ARO is reclassified from the regulatory cost of retirement obligation. If the legal obligations were to exceed the regulatoryliability provided for in the depreciation rates, the Company would establish a regulatory asset for such difference with the anticipation offuture recovery through rates charged to customers. In 2022, the Company increased its asset retirement obligation to reflect revisions to theestimated cash flows for asset retirements due to increasing costs. 40Table of Contents The following is a summary of the AROs: Years Ended September 30 2023 2022 Beginning balance $10,204,079 $7,628,958 Liabilities incurred 91,670 236,926 Liabilities settled (180,865) (131,763)Accretion 677,947 397,692 Revisions to estimated cash flows — 2,072,266 Ending balance $10,792,831 $10,204,079 Cash, Cash Equivalents and Short-Term Investments—From time to time, the Company will have balances on deposit at banks inexcess of the amount insured by the FDIC. The Company has not experienced any losses on these accounts and does not consider theseamounts to be at risk. For purposes of the consolidated statements of cash flows, the Company considers all highly liquid debt instrumentspurchased with an original maturity of three months or less to be cash equivalents. Customer Receivables and Allowance for Credit Losses—Accounts receivable include amounts billed to customers for natural gas salesand related services and gas sales occurring subsequent to normal billing cycles but before the end of the period. The Company provides anestimate for losses on these receivables by utilizing historical information, current account balances, account aging and current economicconditions. Customer accounts are charged off annually when deemed uncollectible or when turned over to a collection agency for action. A reconciliation of changes in the allowance for credit losses is as follows: Years Ended September 30 2023 2022 Beginning balance $371,271 $242,010 Provision for credit losses 54,211 492,875 Recoveries of accounts written off 181,676 135,143 Accounts written off (451,994) (498,757)Ending balance $155,164 $371,271 Lease Accounting—The Company leases certain assets including office space and land classified as operating leases. The Companydetermines if an arrangement is a lease at inception of the agreement based on the terms and conditions in the contract. The operating leaseROU assets and operating lease liabilities are recognized as the present value of the future minimum lease payments over the lease term atcommencement date. As most of the leases do not provide an implicit rate, the Company uses an estimate of its secured incrementalborrowing rate based on the information available at commencement date in determining the present value of future payments. Theincremental borrowing rate is determined by management aided by inquiries of a third party. The operating lease ROU asset also is adjustedfor any lease payments made and excludes lease incentives and initial direct costs incurred. The Company’s lease terms may include optionsto extend or terminate the lease at certain dates, typically at the Company’s own discretion. The Company regularly evaluates the renewaloptions and when they are reasonably certain of exercise, the Company includes the renewal period in its lease term. Lease expense forminimum lease payments is recognized on a straight-line basis over the term of the agreement. The Company made an accounting policyelection that payments under agreements with an initial term of 12 months or less will not be included on the consolidated balance sheet butwill be recognized in the consolidated statements of operations on a straight-line basis over the term of the agreement. Financing Receivables—Financing receivables represent a contractual right to receive money either on demand, or on fixed ordeterminable dates, and are recognized as assets on the entity’s balance sheet. Trade receivables, resulting from the sale of natural gas andother services to customers, are the Company's primary type of financing receivables. These receivables are short-term in nature with aprovision for credit losses included in the consolidated financial statements. Inventories—Natural gas in storage and materials and supplies inventories are recorded at average cost. Natural gas storage injections arepriced at the purchase cost at the time of injection and storage withdrawals are priced at the weighted average cost of gas in storage.Materials and supplies are removed from inventory at average cost. Unbilled Revenues—The Company bills its natural gas customers on a monthly cycle; however, the billing cycle for most customers doesnot coincide with the accounting periods used for financial reporting. As the Company recognizes revenue when gas is delivered, an accrual ismade to estimate revenues for natural gas delivered to customers but not billed during the accounting period. The amounts of unbilled revenuereceivable included in accounts receivable on the consolidated balance sheets at September 30, 2023 and 2022 were $1,240,097 and$1,585,062, respectively. 41Table of Contents Income Taxes—Income taxes are accounted for using the asset and liability method. Under the asset and liability method, deferred taxassets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statementcarrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enactedtax rates in effect for the years in which those temporary differences are expected to be recovered or settled. A valuation allowance againstdeferred tax assets is provided if it is more likely than not the deferred tax asset will not be realized. The Company and its subsidiaries fileconsolidated state and federal income tax returns. Debt Expenses—Debt issuance expenses are deferred and amortized over the lives of the debt instruments. The unamortized balances areoffset against the carrying value of long-term debt. Over/Under-Recovery of Natural Gas Costs—Pursuant to the provisions of the Company’s PGA clause, the SCC provides the Companywith a method of passing along to its customers increases or decreases in natural gas costs incurred by its regulated operations, includinggains and losses on natural gas derivative hedging instruments, if utilized. On at least a quarterly basis, the Company files a PGA rateadjustment request with the SCC to increase or decrease the gas cost component of its rates, based on projected price and activity. Onceadministrative approval is received, the Company adjusts the gas cost component of its rates to reflect the approved amount. As actual costswill differ from the projections used in establishing the PGA rate, the Company may either over-recover or under-recover its actual gas costsduring the period. Any difference between actual costs incurred and costs recovered through the application of the PGA is recorded as aregulatory asset or liability. At the end of the deferral period, the balance of the net deferred charge or credit is amortized over an ensuing 12-month period as amounts are reflected in customer bills. Fair Value—Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transactionbetween willing market participants at the measurement date. The Company determines fair value based on the following fair value hierarchywhich prioritizes each input to the valuation methods into one of the following three broad levels: •Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability toaccess at the measurement date. •Level 2 – Inputs other than quoted prices in Level 1 that are either for similar assets or liabilities in active markets, quotedprices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that areobservable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data bycorrelation or other means. •Level 3 – Unobservable inputs for the asset or liability where there is little, if any, market activity which require the Companyto develop its own assumptions. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets (Level 1) and the lowest priority tounobservable inputs (Level 3). All fair value disclosures are categorized within one of the three categories in the hierarchy. See fair valuedisclosures below and in Notes 9 and 13. Use of Estimates—The preparation of consolidated financial statements in conformity with GAAP requires management to make estimatesand assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the financialstatements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Excise and Sales Taxes—Certain excise and sales taxes imposed by the state and local governments in the Company’s service territory arecollected by the Company from its customers. These taxes are accounted for on a net basis and therefore are not included as revenues in theCompany’s consolidated income statements. 42Table of Contents Earnings Per Share—Basic EPS and diluted EPS are calculated by dividing net income by the weighted-average common sharesoutstanding during the period and the weighted-average common shares outstanding during the period plus potential dilutive common shares,respectively. Potential dilutive common shares are calculated in accordance with the treasury stock method, which assumes that proceedsfrom the exercise of all options are used to repurchase common stock at market value. The amount of shares remaining after the proceedsare exhausted represents the potentially dilutive effect of the securities. A reconciliation of basic and diluted EPS is presented below: Years Ended September 30 2023 2022 Net income (loss) $11,299,282 $(31,732,602)Weighted-average common shares 9,922,701 9,122,678 Effect of dilutive securities: Options to purchase common stock 4,456 — Diluted average common shares 9,927,157 9,122,678 Earnings per share of common stock: Basic $1.14 $(3.48)Diluted $1.14 $(3.48) Stock Issue—The Company may issue common stock to increase its cash position or lower its outstanding debt, thus strengthening thebalance sheet. During fiscal 2023, 194,719 shares of common stock were issued related to the DRIP, Restricted Stock, stock option exercises and ATMactivity. In March 2022, the Company issued 1,350,000 shares of common stock in an equity offering resulting in net proceeds of nearly $27 million. The net proceeds were invested in Roanoke Gas to supplement the funding of its infrastructure improvement and replacement program and inMidstream to reduce its outstanding debt. An additional 95,443 shares of common stock were issued during fiscal 2022 related to the DRIP,Restricted Stock, stock option exercises and ATM activity. Business and Credit Concentrations—The primary business of the Company is the distribution of natural gas to residential, commercialand industrial customers in its service territories. No sales to individual customers accounted for more than 5% of total revenue in any period. No individual customer amounted to more than5% of total accounts receivable at September 30, 2023 and one customer amounted to approximately 5.1% of total accounts receivable atSeptember 30, 2022. Roanoke Gas currently holds the only franchises and CPCNs to distribute natural gas in its service area. All franchises expire December 31,2035. The Company's current CPCNs in Virginia are exclusive and are intended for perpetual duration, other than the CPCN to expand intoFranklin County, which currently expires in February 2027. Roanoke Gas is currently served by two primary pipelines that provide all of the natural gas supplied to the Company’s customers.Depending upon weather conditions and the level of customer demand, failure of one or both of these transmission pipelines could have amajor adverse impact on the Company. Derivative and Hedging Activities—ASC 815, Derivatives and Hedging, requires the recognition of all derivative instruments as assetsor liabilities in the Company’s consolidated balance sheet and measurement of those instruments at fair value. The Company’s hedging and derivatives policy allows management to enter into derivatives for the purpose of managing the commodity andfinancial market risks of its business operations. The Company’s hedging and derivatives policy specifically prohibits the use of derivatives forspeculative purposes. The key market risks that the Company may hedge against include the price of natural gas and the cost of borrowedfunds. From time to time, the Company has entered into collars, swaps and caps for the purpose of hedging the price of natural gas in order toprovide price stability during the winter months. The fair value of these instruments is recorded in the consolidated balance sheets with theoffsetting entry to either under- or over-recovery of gas costs. Net income and other comprehensive income are not affected by the change inmarket value as any cost incurred or benefit received from these instruments is recoverable or refunded through the PGA as the SCC allowsfor full recovery of prudent costs associated with natural gas purchases. At September 30, 2023 and 2022, the Company had no outstandingderivative instruments for the purchase of natural gas. 43Table of Contents The Company has five interest rate swaps associated with certain of its variable rate debt. Roanoke Gas has two variable rate term notes inthe amounts of $15 million and $10 million, with corresponding swap agreements to convert the variable interest rates into fixed ratesof 2.00% and 2.49%, respectively. Under the provisions of the $10 million note, Roanoke Gas received $5 million on April 1, 2022 and theremaining $5 million on September 30, 2022. Midstream has three swap agreements corresponding to the $14 million, $10 million, and $8million variable rate term notes. The swap agreements convert these three notes into fixed rate instruments with effective interest rates of3.24%, 3.14%, and 2.443%, respectively. The swaps qualify as cash flow hedges with changes in fair value reported in other comprehensiveincome. No portion of the swaps were deemed ineffective during the periods presented. See Notes 7 and 13 for additional information on the swaps and fair value. Other Comprehensive Income (Loss)—A summary of other comprehensive income is provided below: Tax Before Tax (Expense) Net of Tax Amount or Benefit Amount Year Ended September 30, 2023: Interest rate swaps: Unrealized gains $1,560,426 $(401,652) $1,158,774 Transfer of realized gains to interest expense (1,741,437) 448,244 (1,293,193)Net interest rate swaps (181,011) 46,592 (134,419)Defined benefit plans: Net gains arising during period 491,270 (126,453) 364,817 Amortization of actuarial losses 78,813 (20,286) 58,527 Net defined benefit plans 570,083 (146,739) 423,344 Other comprehensive income $389,072 $(100,147) $288,925 Year Ended September 30, 2022: Interest rate swaps: Unrealized gains $5,617,251 $(1,445,878) $4,171,373 Transfer of realized losses to interest expense 377,299 (97,121) 280,178 Net interest rate swaps 5,994,550 (1,542,999) 4,451,551 Defined benefit plans: Net losses arising during period (1,221,368) 314,379 (906,989)Amortization of actuarial gains (60,280) 15,516 (44,764)Net defined benefit plans (1,281,648) 329,895 (951,753)Other comprehensive income $4,712,902 $(1,213,104) $3,499,798 The amortization of actuarial gains or losses are included as a component of net periodic pension and postretirement benefit costs under otherincome, net in the consolidated statements of income. Composition of AOCI: InterestRate Swaps DefinedBenefitPlans AccumulatedOtherComprehensiveIncome (Loss) Balance September 30, 2021 $(888,210) $(647,224) $(1,535,434)Other comprehensive income (loss) 4,451,551 (951,753) 3,499,798 Balance September 30, 2022 3,563,341 (1,598,977) 1,964,364 Other comprehensive income (loss) (134,419) 423,344 288,925 Balance September 30, 2023 $3,428,922 $(1,175,633) $2,253,289 Recently Adopted Accounting Standards In January 2018, the FASB issued ASU 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842,which provides a practical expedient that allows entities the option of not evaluating existing land easements under the new lease standard forthose easements that were entered into prior to adoption. New or modified land easements will require evaluation on a prospective basis.The new guidance is effective for the Company for the annual reporting period ending September 30, 2023 and interim periods within thatannual period. The new guidance did not have a material effect on the Company's consolidated financial statements. 44Table of Contents Recently Issued Accounting Standards In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference RateReform on Financial Reporting. In combination with ASU 2021-01 and ASU 2022-06, the ASU provides temporary optional guidance toease the potential burden in accounting for and recognizing the effects of reference rate change on financial reporting. The new guidanceapplies specifically to contracts and hedging relationships that reference LIBOR, or any other referenced rate that is expected to bediscontinued due to reference rate reform. The new guidance is effective for the Company through December 31, 2024. The IntercontinentalExchange Benchmark Administration, the administrator for LIBOR and other inter-bank offered rates, announced that the LIBOR rates forone-day, one-month, six-month and one-year would cease publication in June 2023 and that no new financial contracts may use LIBOR afterDecember 31, 2021. Subsequent to June 30, 2023, the one-day, one-month, six-month, and one-year LIBOR settings will continue to bepublished under an unrepresentative synthetic methodology until the end of September 2024 in order to bridge the transition to otherreference rates. The Company has transitioned all but one LIBOR-based variable rate note to a new reference rate as of September 30,2023. Each of the revised notes has a corresponding swap that was also transitioned to align with the related notes. The last LIBOR-basedvariable rate note will mature in fiscal 2024. Other accounting standards that have been issued or proposed by the FASB or other standard–setting bodies are not currently applicable tothe Company or are not expected to have a significant impact on the Company’s financial position, results of operations and cash flows. Reclassification Certain prior year amounts have been reclassified to conform to current year presentations. 2.REVENUE The Company assesses new contracts and identifies related performance obligations for promises to transfer distinct goods or services to thecustomer. Revenue is recognized when performance obligations have been satisfied. In the case of Roanoke Gas, the Company contractswith 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: 2023 Gas utility Non utility Total operatingrevenues Natural Gas (Billed and Unbilled): Residential $54,342,435 $— $54,342,435 Commercial 33,083,485 — 33,083,485 Industrial and transportation 5,730,726 — 5,730,726 Other 1,122,710 114,458 1,237,168 Total contracts with customers 94,279,356 114,458 94,393,814 Alternative revenue programs 3,045,951 — 3,045,951 Total operating revenues $97,325,307 $114,458 $97,439,765 2022 Gas utility Non utility Total operatingrevenues Natural Gas (Billed and Unbilled): Residential $46,915,892 $— $46,915,892 Commercial 28,874,522 — 28,874,522 Industrial and transportation 5,671,884 — 5,671,884 Other 822,140 129,578 951,718 Total contracts with customers 82,284,438 129,578 82,414,016 Alternative revenue programs 1,751,206 — 1,751,206 Total operating revenues $84,035,644 $129,578 $84,165,222 45Table of Contents Gas utility revenues Substantially all of Roanoke Gas’ revenues are derived from rates authorized by the SCC through its tariffs. Based on its evaluation, theCompany 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 the cost of natural gas sold to customers (commodity) and the cost oftransporting natural gas through the Company's distribution system to customers (delivery). The delivery of natural gas to customers results inthe satisfaction of the Company’s respective performance obligations over time. All customers are billed monthly based on consumption as measured by metered usage with payments due 20 days from the rendering of thebill. Revenue is recognized as bills are issued for natural gas that has been delivered or transported. In addition, the Company utilizes thepractical expedient that allows an entity to recognize the invoiced amount as revenue, if that amount corresponds to the value received by thecustomer. Since customers are billed tariff rates, there is no variable consideration in the transaction price. Unbilled revenue is included in residential and commercial revenues in the preceding table. Natural gas consumption is estimated for theperiod subsequent to the last billed date and up through the last day of the month. Estimated volumes and approved tariff rates are utilized tocalculate unbilled revenue. The following month, the unbilled estimate is reversed, the actual usage is billed and a new unbilled estimate iscalculated. The Company obtains metered usage for industrial customers at the end of each month, thereby eliminating any unbilledconsideration 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 billingsfor non-utility activities. Customers are invoiced monthly based on services provided for these activities. The Company utilizes the practicalexpedient allowing revenue to be recognized based on invoiced amounts. The transaction price is based on a contractually predeterminedrate 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, whichadjusts revenues for the effects of weather temperature variations as compared to the 30-year average; the SAVE Plan over/under collectionmechanism, which adjusts revenues for the differences between SAVE Plan revenues billed to customers and the revenues earned, ascalculated based on the timing and extent of infrastructure replacement completed during the period; and the RNG over/under collectionmechanism, which adjusts revenues similar to the SAVE Plan, but is calculated based on the timing and costs associated with owning,operating and maintaining the RNG facility. These amounts are ultimately collected from, or returned to, customers through future ratechanges approved by the SCC. Customer accounts receivable and liabilities Accounts receivable, as reflected in the condensed consolidated balance sheets, includes both billed and unbilled customer revenues, as wellas amounts that are not related to customers. The balances of customer receivables are provided below: Current Assets Current Liabilities Tradeaccountsreceivable (1) Unbilledrevenue (1) Customercreditbalances Customerdeposits September 30, 2022 $3,697,431 $1,585,062 $1,400,770 $1,457,610 September 30, 2023 2,782,025 1,240,097 1,972,132 1,476,321 Increase (decrease) $(915,406) $(344,965) $571,362 $18,711 (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 coststo obtain contracts. 46Table of Contents 3.REGULATORY MATTERS The SCC exercises regulatory authority over the natural gas operations of Roanoke Gas. Such regulation encompasses terms, conditions andrates to be charged to customers for natural gas service, safety standards, service extension and depreciation. On December 2, 2022, Roanoke Gas filed an application with the SCC seeking an $8.55 million annual increase in its non-gas base rates, ofwhich $4.05 million was being recovered through the SAVE Rider. Since the Company was seeking to recover the costs associated with itsSAVE Plan through interim non-gas base rates effective January 1, 2023, the Company discontinued its SAVE Plan and Rider for theremainder of the current fiscal year. On December 21, 2022, the SCC issued its Order for Notice and Hearing, which authorized the Company to put its proposed rates intoeffect, on an interim basis and subject to refund, on January 1, 2023, and set the matter for hearing. In the fourth quarter of fiscal 2023, theCompany reached a settlement with the SCC staff on all outstanding issues in the case. Under the terms of the settlement, the Companyagreed to an incremental revenue requirement of $7.45 million. The Company agreed to begin billing the new rates effective October 1,2023. The Company expects to receive the final order on the rate application in late calendar 2023 or early 2024. The Company has recorded a provision for refund, including interest, associated with customer billings for the difference between the interimrates and the settlement rates. The Company filed an application with the SCC for a new, five-year SAVE Plan and Rider on March 31, 2023, seeking recovery of costsassociated with an estimated $8.5 million in SAVE eligible investment in fiscal 2024 and an estimated cumulative investment of $49.5 millionover the proposed five-year plan period ending September 30, 2028. On July 7, 2023, the SCC Staff filed its report on the Company’sSAVE Plan and Rider in which it recommended approval of the $49.5 million, five-year plan with a revenue requirement of approximately$366,000 beginning on October 1, 2023. On August 31, 2023, the SCC approved the new SAVE Plan and Rider with rates effectiveOctober 1, 2023. On May 16, 2022, Roanoke Gas announced a cooperative agreement under which Roanoke Gas and the Western Virginia Water Authoritywould produce commercial quality RNG from biogas produced at the regional water pollution control plant. In August 2022, Roanoke Gasfiled an application with the SCC seeking approval of a rate adjustment clause to recover the costs associated with constructing, owning,operating and maintaining the renewable natural gas facility. The application was filed under Chapter 30 of Title 56 of the Code of Virginia. Chapter 30 allows the Company to accrue AFUDC on the RNG project. In connection with the RNG project, Roanoke Gas beganaccruing AFUDC in fiscal 2022 associated with construction of the facility. The Company has recognized approximately $468,000 ofAFUDC since inception of the RNG project. The Company received a final order from the SCC on January 23, 2023 approving theCompany’s application. The RNG facility became operational in March 2023. The Company began billing customers the RNG rateadjustment on March 1, 2023, at which time the Company ceased recording AFUDC. On May 30, 2023, the Company filed an application with the SCC to update the RNG Rider with an effective date of October 1, 2023. OnSeptember 1, 2023, the SCC approved the updated RNG Rider with rates effective October 1, 2023. On June 2, 2022, Roanoke Gas filed an application with the SCC to acquire certain natural gas distribution assets from a local housingauthority. Under this application, the Company requested the approval to acquire such facilities at five separate apartment complexes,located in the Company’s service territory, that were under housing authority management. Under the proposed plan, the housing authoritywould renew existing natural gas distribution facilities to include mains, services, and meter installations and then transfer ownership of thesefacilities to Roanoke Gas. In turn, Roanoke Gas would assume responsibility for the operation and maintenance of these assets and recognizea gain related to the asset acquisition equal to the cost associated with the renewal. On July 19, 2022, the SCC approved the application and on August 4, 2022, the housing authority transferred the assets from two apartmentcomplexes to Roanoke Gas. Roanoke Gas recorded these assets and recognized a pre-tax gain of approximately $219,000 during the fourthquarter of fiscal 2022. On September 29, 2023, the housing authority transferred the assets from one additional apartment complex toRoanoke Gas and the Company recorded a pre-tax gain of approximately $311,000 during the fourth quarter of fiscal 2023. The authority isawaiting future funding to complete the two remaining apartment complexes. The timing of funding and the completion of the asset renewalsfor these complexes is unknown at this time. 47Table of Contents 4.SEGMENT INFORMATION Operating segments are defined as components of an enterprise for which separate financial information is available and is evaluated regularlyby the Company's executive management in deciding how to allocate resources and assess performance. The Company uses operatingincome and equity in earnings to assess segment performance. Intersegment transactions are recorded at cost. The reportable segments disclosed herein are defined as follows: Gas Utility - The natural gas distribution segment of the Company generates revenue from its tariff rates and other regulatory mechanismsthrough which it provides for the sale and distribution of natural gas to its residential, commercial and industrial customers. Investment in Affiliates - The investment in affiliates segment reflects the income generated through the activities of the Company'sinvestment in MVP and Southgate projects. Parent and Other - Parent and other include the unregulated activities of the Company as well as certain corporate reporting adjustments. Information related to the segments of the Company are provided below: Gas Utility Investment inAffiliates Parent andOther ConsolidatedTotal For the Year Ended September 30, 2023: Operating revenues $97,325,307 $— $114,458 $97,439,765 Depreciation 9,764,678 — — 9,764,678 Operating income (loss) 17,827,485 (233,067) 84,062 17,678,480 Equity in earnings — 2,084,990 — 2,084,990 Interest expense 3,216,220 2,402,585 — 5,618,805 Income (loss) before income taxes 15,260,605 (553,378) 83,966 14,791,193 As of September 30, 2023: Total assets $268,664,460 $17,882,108 $17,182,772 $303,729,340 Gross additions to utility property 25,306,524 — — 25,306,524 Gross investment in affiliates — 2,133,534 — 2,133,534 Gas Utility Investment inAffiliates Parent andOther ConsolidatedTotal For the Year Ended September 30, 2022: Operating revenues $84,035,644 $— $129,578 $84,165,222 Depreciation 8,948,923 — — 8,948,923 Operating income (loss) 15,104,946 (281,843) 93,572 14,916,675 Equity in earnings — 73,327 — 73,327 Impairment of investments in affiliates — (55,092,303) — (55,092,303)Interest expense 3,001,926 1,496,003 — 4,497,929 Income (loss) before income taxes 13,547,601 (56,784,957) 94,109 (43,143,247) As of September 30, 2022: Total assets $258,519,230 $13,838,108 $17,951,905 $290,309,243 Gross additions to utility property 25,461,000 — — 25,461,000 Gross investment in affiliates — 5,260,863 — 5,260,863 48Table of Contents 5.OTHER INVESTMENTS Midstream owns a less than 1% equity investment in the LLC constructing the MVP. Midstream is also a less than 1% investor, accountedfor under the cost method, in Southgate. Since inception, the MVP has encountered various legal and regulatory issues thathave substantially delayed the completion of the project, including a period in 2022 where work on the projected was halted. These eventshave, at various times, caused the Company to suspend/resume income accruals and/or impair its investment as described more fully below. In May 2023, Midstream agreed with the LLC’s managing partner and primary interest owner that the primary interest owner would makeMidstream’s future capital contributions to the LLC for the MVP project until MVP in-service, as a result of which Midstream's ownershipinterest percentage in the LLC as it relates to the MVP project has been and will continue to be proportionately adjusted. Legislative andlegal actions in the second half of fiscal 2023 enabled project construction to restart. While under construction, AFUDC has provided the majority of the income recognized by Midstream. The LLC temporarily suspendedaccruing AFUDC on the project for parts of 2021, 2022, and 2023. AFUDC accruals resumed in June 2023 when construction activitiesrestarted. The amount of AFUDC recognized during the current and prior year is included in the equity in earnings of unconsolidated affiliatein the tables below. Actions by the Fourth Circuit in the second quarter of fiscal 2022 led to the vacatur and remand of certain permits issued by the Bureau ofLand Management and the U.S. Forest Service to the LLC with respect to the Jefferson National Forest and a vacatur and remand of theBiological Opinion and Incidental Take Statement issued by the U.S. Fish and Wildlife Service for the MVP. Primarily due to theseunfavorable decisions, Midstream recorded an other-than-temporary decline in value of its investment due to the then increased uncertainty ofthe completion and commercial operation of MVP and Southgate. Midstream estimated the fair value of its investment in the LLC, with the assistance of a valuation specialist, using an income-based approachthat primarily considered probability-weighted scenarios of discounted future cash flows based on the estimated project costs at completionand projected revenues. These scenarios reflected assumptions and judgments regarding the ultimate outcome of further matters relating to,or resulting from the Fourth Circuit rulings, as well as various other legal and regulatory matters affecting MVP and Southgate. Suchassumptions and judgments also included certain potential additional delays and related cost increases that could result from unfavorabledecisions on these proceedings and matters. Midstream’s analysis considered probability-weighted growth expectations from additionalcompression expansion opportunities, how ongoing or new legal and regulatory matters may further delay the completion and increase thetotal costs of the project and the potential of MVP and Southgate cancellation. As a result of the assessment, Midstream recognized a pre-tax impairment loss of $39.8 million in the second quarter of fiscal 2022. Using a similar process, during the fourth quarter of fiscal 2022,Midstream recognized an additional pre-tax impairment charge of $15.3 million primarily due to increased uncertainty in the permittingprocess for the MVP project as a result of legal developments and regulatory uncertainties, as well as macroeconomic pressures primarilydue to increased interest rates impacting the discount rate. Midstream reassesses the value of its investment in the LLC on at least a quarterly basis, and no impairment indicators were identified in fiscal2023. As noted above, developments in 2023 on the legislative and legal fronts have been favorable. Most notably, in June 2023, the FRAdeclared the completion of the MVP to be in the national interest and cleared the permitting and regulatory impediments. It also divestedcourts of jurisdiction to review agency actions on approvals necessary for MVP construction and initial operation. In July 2023, SCOTUSlifted certain stays and cleared judicial impediments. Construction work was restarted and the current target from the project's managingpartner is that the MVP will be completed in the first calendar quarter of 2024. Together, these actions have significantly increased theCompany’s assessment of the probability of a successful project with a corresponding increase to fair value. While the outlook forcompletion is decidedly more favorable than a year ago, the MVP project is not yet completed and adverse developments, as well aspotential macroeconomic factors related to interest rates, cost increases, or other unanticipated events could erode fair value leading to newindicators or impairment. The fair value of the investment in the LLC in fiscal 2022 was determined under a Level 3 measurement considering the significantassumptions and judgments required in estimating the fair value of the Company's investment in the LLC. Investment balances of MVP andSouthgate, as of September 30, 2023 and 2022, are reflected in the table below. Funding for Midstream's investments has been provided through two variable rate, unsecured promissory notes which mature in June 2024,under a non-revolving credit agreement maturing in December 2024 and three additional notes as detailed in Note 7, as well as by equitycontributions from Resources. The Company expects to refinance the maturing notes in 2024. The Company will participate in the earnings generated from the transportation of natural gas through both pipelines proportionate to its levelof investment once the pipelines are placed in service. 49Table of Contents The investments in the LLC are included in the consolidated financial statements as follows: September 30 Balance Sheet location: 2023 2022 Other Assets: MVP $17,096,476 $13,689,370 Southgate 90,617 83,705 Investment in unconsolidated affiliates $17,187,093 $13,773,075 Current Liabilities: MVP $— $804,404 Southgate — 102 Capital contributions payable $— $804,506 Years Ended September 30 Income Statement location: 2023 2022 Equity in earnings of unconsolidated affiliate $2,084,990 $73,327 September 30 2023 2022 Undistributed earnings, net of income taxes, of MVP in retained earnings, excluding impairment $9,683,797 $8,135,482 The change in the investment in unconsolidated affiliates is provided below: September 30 2023 2022 Cash investment $2,133,534 $5,260,863 Change in accrued capital calls (804,506) (1,336,131)Pre-tax impairment — (55,092,303)Equity in earnings of unconsolidated affiliate 2,084,990 73,327 Change in investment in unconsolidated affiliates $3,414,018 $(51,094,244) Summary unaudited financial statements of MVP are presented below. Southgate financial statements, which are accounted for under the costmethod, are not included: Income Statements Years Ended September 30 2023 2022 AFUDC $203,721,584 $6,883,069 Net other income 2,091,886 147,154 Net income $205,813,470 $7,030,223 Balance Sheets September 30 2023 2022 Assets: Current assets $795,787,358 $76,474,981 Construction work in progress 7,499,128,254 6,667,146,408 Other assets 11,639,586 8,021,877 Total assets $8,306,555,198 $6,751,643,266 Liabilities and Equity: Current liabilities $236,947,158 $115,061,723 Capital 8,069,608,040 6,636,581,543 Total liabilities and equity $8,306,555,198 $6,751,643,266 50Table of Contents 6.LINE-OF-CREDIT On March 24, 2023, Roanoke Gas entered into an unsecured Revolving Note in the principal amount of $25 million. The Revolving Notereplaced an unsecured line-of-credit dated March 31, 2022 and will mature on March 31, 2024. The Revolving Note's variable interest isbased upon Term SOFR plus 110 basis points and provides multiple tier borrowing limits to accommodate seasonal borrowing demands. The Company's total borrowing limits during the term of the Revolving Note range from $4 million to $25 million. As of September 30,2023, the Company had an outstanding balance of $4,353,572 under the Revolving Note. The Company's total available borrowing limits for the remaining term are as follows: Available As of Line-of-Credit September 30, 2023 $13,000,000 October 1, 2023 22,000,000 December 1, 2023 25,000,000 A summary of the line-of-credit follows: September 30 2023 2022 Available line-of-credit at year-end $13,000,000 $28,000,000 Outstanding balance at year-end 4,353,572 — Highest month-end balance outstanding 9,990,114 19,636,179 Average daily balance 1,877,527 6,233,620 Average rate of interest during year on outstanding balances 5.16% 1.15%Interest rate at year-end 6.43% 4.08%Interest rate on unused line-of-credit 0.15% 0.15% 7.LONG-TERM DEBT On June 28, 2023, Midstream amended and restated its $14 million and $8 million Term Notes initially entered into on June 12, 2019 andNovember 1, 2021, respectively. The amendments revised each of the original Term Note's interest rate from LIBOR plus 115 basis pointsto Daily Simple SOFR plus 126.448 basis points, effective July 1, 2023. All other terms and requirements of the Term Notes were retained.In conjunction with the amendment of the Term Notes, Midstream also amended the corresponding interest rate swaps associated with theTerm Notes. The amendments provided for the floating rates on the interest rate swaps to continue to match the rate of the associated notesas well as retain the overall fixed interest rates of 3.24% and 2.443%, respectively. On March 24, 2023, Roanoke Gas amended and restated the $10 million Term Note originally entered into on September 24, 2021. Theamendment revised the original Term Note's interest rate from LIBOR plus 100 basis points to Term SOFR plus 100 basis points. All otherterms and requirements of the original Term Note were retained. The effective date of the Amended Term Note was April 1, 2023. Inaddition, on April 3, 2023, the interest rate swap was amended to align with the Amended Term Note and retained the fixed interest rate of2.49%. In connection with the Revolving Note as referenced in Note 6 and Amended Term Note, Roanoke Gas also amended and restatedthe Loan Agreement dated September 24, 2021. The amendment provides for borrowing limits on the Revolving Note and amends certainfinancial conditions required of Roanoke Gas and Resources. All other terms and requirements of the original Loan Agreement wereretained. On March 31, 2022, Midstream applied $10 million from a cash infusion received from Resources to pay down a corresponding amount onthe non-revolving credit facility which in turn reduced the total borrowing capacity from $33 million to $23 million. On June 30, 2022,Midstream entered into the Fourth Amendment to Credit Agreement and related Promissory Notes. The Fourth Amendment modified theoriginal Credit Agreement and prior amendments by replacing the 30-day LIBOR plus 1.35% interest on the Promissory Notes with TermSOFR plus 1.50%. On July 28, 2023, Midstream entered into the Fifth Amendment to Credit Agreement and related Promissory Notes. The Fifth Amendment revised the interest rate from Term SOFR plus 1.50% to Term SOFR plus 2.00% and extended the maturity date ofthe Promissory Notes to December 31, 2024. All other terms and requirements remain unchanged. 51Table of Contents Long-term debt consisted of the following: September 30 2023 2022 Principal UnamortizedDebtIssuanceCosts Principal UnamortizedDebtIssuanceCosts Roanoke Gas: Unsecured senior notes payable at 4.26%, due September 18,2034 $30,500,000 $106,195 $30,500,000 $115,849 Unsecured term notes payable at 3.58%, due October 2, 2027 8,000,000 19,264 8,000,000 24,080 Unsecured term notes payable at 4.41%, due March 28, 2031 10,000,000 23,495 10,000,000 26,627 Unsecured term notes payable at 3.60%, due December 6,2029 10,000,000 22,017 10,000,000 25,539 Unsecured term note payable at 30-day SOFR plus 1.20%, dueAugust 20, 2026 (swap rate at 2.00%) 15,000,000 — 15,000,000 — Unsecured term note payable at TERM SOFR plus 1.00%, dueOctober 1, 2028 (swap rate at 2.49%) 10,000,000 33,666 10,000,000 28,674 Midstream: Unsecured term notes payable at TERM SOFR plus 2.00%,due December 31, 2024 23,000,000 23,386 21,896,200 18,553 Unsecured term note payable at Daily Simple SOFR plus1.26448%, due June 12, 2026 (swap rate at 3.24%) 14,000,000 6,621 14,000,000 9,029 Unsecured term note payable at 30-day LIBOR plus 1.20%,due June 1, 2024 with monthly principal installments of $41,667that began July 1, 2022 (swap rate at 3.14%) 9,375,000 1,571 9,875,000 3,929 Unsecured term note payable at Daily Simple SOFR plus1.26448%, due January 1, 2028 with quarterly principalinstallments of $400,000 that began April 1, 2023 (swap rate at2.443%) 7,200,000 19,057 8,000,000 23,631 Total long-term debt $137,075,000 $255,272 $137,271,200 $275,911 Less: current maturities of long-term debt (10,975,000) — (1,300,000) — Total long-term debt, net current maturities $126,100,000 $255,272 $135,971,200 $275,911 Debt issuance costs are amortized over the life of the related debt. As of September 30, 2023 and 2022, the Company also had anunamortized loss on the early retirement of debt of $1,256,059 and $1,370,246, respectively, which has been deferred as a regulatory assetand is being amortized over a 20-year period. All of the debt agreements set forth certain representations, warranties and covenants to which the Company is subject, including financialcovenants that limit consolidated long-term indebtedness to not more than 65% of total capitalization. All of the debt agreements provide forpriority indebtedness to not exceed 15% of consolidated total assets. The $15 million and $10 million notes, as well as the line-of-credit,have an interest coverage ratio requirement of not less than 1.5 to 1, which excludes the effect of a non-cash impairment on the LLCinvestments up to the total investment as of December 31, 2021, as revised by the Seventh Amendment to the Credit Agreement. TheCompany was in compliance with all debt covenants as of September 30, 2023 and 2022. 52Table of Contents The aggregate annual maturities of long-term debt for the next five years ending after September 30, 2023 are as follows: Year Ending September 30 Maturities 2024 $10,975,000 2025 24,600,000 2026 30,600,000 2027 1,600,000 2028 8,800,000 Thereafter 60,500,000 Total $137,075,000 8.INCOME TAXES Under the provisions of ASC 740, the deferred tax assets and liabilities of the Company were revalued in fiscal 2018 to reflect the reductionin the corporate federal income tax rate. As a result of the revaluation, the excess deferred income taxes of the regulated operations ofRoanoke Gas were reclassified to a regulatory liability. The excess deferred taxes related to the depreciable property are being returned tocustomers over the remaining weighted average useful life of the property with a corresponding reduction in income tax expense. The excessdeferred taxes related to the other regulatory basis differences are being collected from customers over a five-year period. During fiscal 2022, the Company engaged an outside firm to conduct a study of its activities that would qualify for the Research andDevelopment ("R&D") credit under 26 U.S. Code § 41 - Credit for increasing research activities. Upon completion of the 2022 study, theCompany filed for the R&D tax credit on its fiscal 2021 federal income tax return. The total credits claimed on the fiscal 2021 income taxreturn amounted to $659,920. The Company deferred the tax credits as a regulatory liability because they related to utility plant. Thesecredits are being amortized over the 20-year tax-life of the related utility plant. The Company recognized $129,600 and $165,652 ofamortization as reduction of income tax expense on the consolidated statements of income in fiscal 2023 and 2022, respectively, related tothe federal R&D tax credits. The Company has not yet completed a study of R&D activities for fiscal 2023 given the IRS audits in process,as discussed further below. Additionally, during fiscal 2023, the Company received refunds for the 2020 and 2021 tax years, neither of whichare subject to the IRS audits. During fiscal 2022, the Company also applied for a Virginia State tax credit related to the R&D study for its fiscal 2021 tax year. The totalcredits claimed on the fiscal 2022 tax return were $58,065. Consistent with the treatment of the federal tax credits, the Company deferredthe tax credits as a regulatory liability, which are being amortized over the 20-year tax-life of the related utility plant. The Companyrecognized $2,020 and $5,212 of amortization as a reduction of income tax expense on the consolidated statements of income in fiscal 2023and 2022, respectively, related to the state R&D tax credits. The Company did not apply for a Virginia State tax credit related to R&D forfiscal 2023 given the IRS audits in process, as discussed further below. In accordance with the SCC settlement agreement in relation to the Company’s non-gas rate application, the amortization of the R&D taxcredit was halted effective August 1, 2023. After resolution of the IRS audits, the Company will proceed with refunding the R&D tax credits,net of related fees, to customers through a mechanism to be approved by the SCC. As part of the settlement, the Company grossed up thetax credit consistent with treatment of the excess deferred taxes, thereby creating a deferred tax asset of $990,219 as of September 30,2023. 53Table of Contents During fiscal 2023, the Company engaged an outside firm to conduct a study of its RNG facility to determine eligibility for the Federal EnergyInvestment Tax Credit under 26 U.S. Code § 48 – Energy credit (“RNG tax credit”). Upon completion of the study, the Companydetermined a credit in the amount of $1,892,164 to be claimed on the fiscal 2023 tax return. Similar to the treatment of the R&D tax credits,the Company deferred the RNG tax credit as a regulatory liability, which is being amortized over the 20-year tax-life of the related asset.Further, as part of the SCC order approving the RNG project and corresponding rates charged to customers, any tax credits attributable tothe RNG project are to be used to reduce the cost to customers through the RNG Rider. Accordingly, the Company grossed up the RNGtax credit consistent with treatment of the excess deferred taxes, thereby creating a deferred tax asset of $655,862, which is also beingamortized over the 20-year tax-life of the related asset. The Company recognized $74,265 of amortization as part of income tax expense onthe consolidated statement of income in fiscal 2023 related to the federal RNG tax credit. The details of income tax expense (benefit) are as follows: Years Ended September 30 2023 2022 Current income taxes: Federal $2,935,052 $2,494,942 State 650,238 523,571 Total current income taxes 3,585,290 3,018,513 Deferred income taxes: Federal (223,862) (11,160,425)State 262,103 (3,097,869)Total deferred income taxes 38,241 (14,258,294)Amortization of R&D tax credits: Federal (129,600) (165,652)State (2,020) (5,212)Total amortization of R&D tax credits (131,620) (170,864)Total income tax expense (benefit) $3,491,911 $(11,410,645) Income tax expense for the years ended September 30, 2023 and 2022 differed from amounts computed by applying the U.S. federalincome tax rate to earnings before income taxes due to the following: Years Ended September 30 2023 2022 Income (loss) before income taxes $14,791,193 $(43,143,247)Corporate federal income tax rate 21% 21%Income tax expense (benefit) computed at the federal statutory rate $3,106,151 $(9,060,082)State income taxes, net of federal income tax expense (benefit) 720,749 (2,033,695)Net amortization of excess deferred taxes on regulated operations (162,228) (162,228)Amortization of R&D tax credits (131,620) (170,864)Net amortization of RNG tax credits (58,669) — Other, net 17,528 16,224 Total income tax expense (benefit) $3,491,911 $(11,410,645) 54Table of Contents The tax effects of temporary differences that give rise to the deferred tax assets and deferred tax liabilities are as follows: September 30 2023 2022 Deferred tax assets: Allowance for credit losses $39,938 $95,564 Accrued pension and postretirement medical benefits 591,841 486,745 Regulatory effect of change in federal income tax rate 2,655,951 2,708,809 Accrued paid time off 149,087 150,075 Cost of gas held in storage 752,989 702,040 Deferred compensation 1,020,512 993,079 Accrued gas cost — 125,888 MVP impairment 14,180,759 14,180,759 Regulatory effect on tax credits 1,662,400 — Other 263,971 124,034 Total gross deferred tax assets 21,317,448 19,566,993 Deferred tax liabilities: Utility property 19,426,513 19,074,085 MVP investment 1,288,104 1,366,157 Interest rate swaps 1,188,533 1,235,126 Accrued gas cost 259,162 — Total gross deferred tax liabilities 22,162,312 21,675,368 Net deferred tax asset 1,163,594 1,057,079 Net deferred tax liability $2,008,458 $3,165,454 Deferred tax assets and liabilities are recorded on the consolidated balance sheets on a net basis by taxing jurisdictions. As of September 30,2023 and 2022, the Company's consolidated balance sheets included net deferred tax liabilities of $2,008,458 and $3,165,454, respectively,in deferred credits and other non-current liabilities and net deferred tax assets of $1,163,594 and $1,057,079, respectively, in other non-current assets. ASC 740 provides for the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recognized inthe financial statements. The Company has evaluated its tax positions and accordingly has not identified any significant uncertain taxpositions. The Company’s policy is to classify interest associated with uncertain tax positions as interest expense in the financial statements.Penalties are netted against other income. The Company files a consolidated federal income tax return and state income tax returns in Virginia and West Virginia, and thus subject toexaminations by federal and state tax authorities. The IRS is currently examining the Company's 2018 and 2019 federal tax returns. TheCompany does not have any indication at this time of the outcome. The Company believes its income tax assets and liabilities are fairlystated as of September 30, 2023 and 2022; however, these assets and liabilities could be adjusted as a result of this examination. With theamendment of the federal returns for fiscal 2017, 2018 and 2019, these years will remain open for IRS examination for one more year. Asidefrom these exceptions, the federal returns and the state returns for Virginia for the tax years ended prior to September 30, 2018 are no longersubject to examination. The state returns for West Virginia prior to September 30, 2020 are no longer subject to examination. 9.EMPLOYEE BENEFIT PLANS The Company sponsors both a noncontributory pension plan and a postretirement plan. The pension plan covers all employees hired prior toJanuary 2017 and benefits fully vest after 5 years of credited service. Benefits paid to retirees are based on age at retirement, years of serviceand average compensation. Effective January 1, 2017, a "soft freeze" to the pension plan was implemented, and employees hired on or afterthat date are no longer eligible to participate. Commensurate with the "soft freeze" in the pension plan, the Company amended its 401(k)Plan, allowing management to authorize a discretionary contribution to the 401(k) account for those employees hired on or after January 1,2017. The amount, if any, of this discretionary contribution would be determined each year and would be applied to the eligible employees inthe following calendar year. This Company contribution would be in addition to any employee elected deferrals and employer match asprovided for under the 401(k) Plan. 55Table of Contents The postretirement plan provides certain health care, supplemental retirement and life insurance benefits to retired employees who meetspecific age and service requirements. Employees hired prior to January 1, 2000 are eligible to participate in the postretirement plan.Employees must have a minimum of 10 years of service and retire after attaining the age of 55 in order to vest in the postretirement plan.Retiree contributions to the plan are based on the number of years of service to the Company as determined under the pension plan. Employers who sponsor defined benefit plans must recognize the funded status of defined benefit pension and other postretirement plans asan asset or liability in their statements of financial position and recognize changes in that funded status in the year in which the changes occurthrough comprehensive income. For pension plans, the benefit obligation is the projected benefit obligation, and for other postretirementplans, the benefit obligation is the accumulated benefit obligation. The Company established a regulatory asset for the portion of the obligationexpected to be recovered through rates in future periods. The regulatory asset is adjusted for the recognition of actuarial gains and losses.The portion of the obligation attributable to the unregulated operations of the holding company is recognized in other comprehensive income,with actuarial gains and losses recognized using the corridor method. The following table sets forth the benefit obligation, fair value of plan assets, the funded status of the plans, and amounts recognized in theCompany’s consolidated financial statements: Pension Plan Postretirement Plan 2023 2022 2023 2022 Accumulated benefit obligation $24,449,856 $24,776,968 $11,248,448 $12,416,546 Change in benefit obligation: Benefit obligation at beginning of year $27,268,456 $37,654,468 $12,416,546 $16,796,849 Service cost 366,537 648,289 45,897 97,802 Interest cost 1,372,098 1,013,115 620,622 443,721 Actuarial gain (1,031,160) (10,862,957) (1,331,541) (4,330,387)Benefit payments, net of retiree contributions (1,228,307) (1,184,459) (503,076) (591,439)Benefit obligation at end of year $26,747,624 $27,268,456 $11,248,448 $12,416,546 Change in fair value of plan assets: Fair value of plan assets at beginning of year $28,017,797 $38,914,107 $12,138,119 $15,882,342 Actual return on plan assets, net of taxes 89,171 (9,711,851) 1,384,270 (3,152,784)Employer contributions — — — — Benefit payments, net of retiree contributions (1,228,307) (1,184,459) (503,076) (591,439)Fair value of plan assets at end of year $26,878,661 $28,017,797 $13,019,313 $12,138,119 Funded status $131,037 $749,341 $1,770,865 $(278,427)Amounts recognized in the consolidated balance sheetconsist of: Non-current assets $131,037 $749,341 $1,770,865 $— Non-current liabilities — — — (278,427) Amounts recognized in accumulated other comprehensiveincome: Net actuarial loss, net of tax $1,168,687 $1,243,889 $6,946 $355,088 Total amounts included in accumulated other comprehensiveincome, net of tax $1,168,687 $1,243,889 $6,946 $355,088 Amounts deferred to a regulatory asset (liability): Net actuarial loss (gain) $4,029,282 $4,132,472 $(1,813,071) $(30,118)Amounts recognized as regulatory assets (liabilities) $4,029,282 $4,132,472 $(1,813,071) $(30,118) The Company expects that approximately $64,000, before tax, of AOCI will be recognized in net periodic benefit costs in fiscal 2024 andapproximately $243,000 of amounts deferred as regulatory assets and approximately $31,000 of amounts deferred as regulatoryliabilities will be amortized and recognized in net periodic benefit costs in fiscal 2024. 56Table of Contents The reduction in the benefit obligations for both the pension plan and postretirement plan was primarily attributed to actuarial gains resultingfrom the increase in the discount rate used to calculate the benefit obligations. The following table details the actuarial assumptions used in determining the projected benefit obligations and net benefit cost of the pensionplan and the accumulated benefit obligations and net benefit cost of the postretirement plan: Pension Plan Postretirement Plan 2023 2022 2023 2022 Assumptions used to determine benefit obligations: Discount rate 5.63% 5.15% 5.63% 5.16%Expected rate of compensation increase 4.00% 4.00% N/A N/A Assumptions used to determine benefit costs: Discount rate 5.15% 2.73% 5.16% 2.70%Expected long-term rate of return on plan assets 4.50% 4.75% 3.95% 4.24%Expected rate of compensation increase 4.00% 4.00% N/A N/A To develop the expected long-term rate of return on plan assets assumption, the Company, with input from the Plans' actuaries andinvestment advisors, considered the historical returns and the future expectations for returns for each asset class, as well as the target assetallocation of each plan’s portfolio. Components of net periodic benefit cost are as follows: Pension Plan Postretirement Plan 2023 2022 2023 2022 Service cost $366,537 $648,289 $45,897 $97,802 Interest cost 1,372,098 1,013,115 620,622 443,721 Expected return on plan assets (1,232,597) (1,831,550) (464,046) (666,167)Recognized loss 316,724 146,402 — — Net periodic benefit cost $822,762 $(23,744) $202,473 $(124,644) Service cost is included in operations and maintenance expense in the consolidated statements of income. All other components of netperiodic benefit costs are included in other income, net in the consolidated statements of income. The assumed health care cost trend rates used in measuring the accumulated benefit obligation for the postretirement plan are presentedbelow: Pre 65 Post 65 2023 2022 2023 2022 Health care cost trend rate assumed for next year 6.30% 6.00% 5.20% 5.20%Rate to which the cost trend is assumed to decline (theultimate trend rate) 3.94% 5.20% 3.94% 5.20%Year that the rate reaches the ultimate trend rate 2075 2025 2075 2022 The health care cost trend rate assumptions could have a significant effect on the amounts reported. A change of 1% would have thefollowing effects: 1% Increase 1% Decrease Effect on total service and interest cost components $89,000 $(74,000)Effect on accumulated postretirement benefit obligation 1,317,000 (1,117,000) 57Table of Contents The primary objectives of both plans' investment policies are to maintain investment portfolios that diversify risk through prudent assetallocation parameters, achieve asset returns that meet or exceed the corresponding actuarial assumptions and will provide for futurebenefits. The Company's pension plan allocation approach seeks to match the duration of the fixed income portion of the portfolio with theduration of the plan's liabilities. Such allocation is designed to reduce the overall volatility in the pension plan relative to the funded status. Infiscal 2023, the Company increased the targeted fixed income allocation for the pension investments from 70% to 75% and decreased theequity allocation from 30% to 25% to better align the assets with the duration of plan liabilities. The Company also reduced the targetedequity investment allocation in postretirement plan from 50% to 30% and increased the fixed income allocation from 50% to 70%. Theinvestment advisor is transitioning each of the investment portfolios to the updated targets as market conditions warrant. The equityallocations in both plans provide for potential returns to offset growth in the corresponding liabilities. Based on its most recent evaluation of returns for the asset classes within each plan's investment portfolio, the Company set the expectedlong-term rate of return for the pension plan and the postretirement plan for fiscal 2024 at 4.50% and 4.24%, respectively. The Company’s target and actual asset allocation in the pension and postretirement plans as of September 30, 2023 and 2022 were: Pension Plan Postretirement Plan Target 2023 2022 Target 2023 2022 Asset category: Equity securities 25% 27% 13% 30% 43% 48%Debt securities 75% 72% —% 70% 37% 51%Cash —% 1% 87% —% 20% 1% The plans assets are invested in mutual funds and common and collective investment trust ("CIT") funds that function like mutual funds. OnSeptember 30, 2022, the Company was in the process of transitioning to new investment advisors for the pension plan. The mutual funds inthe pension plan were unaffected by this change; however, the CITs were required to be re-registered and assigned new account numbers. As a result, the CIT funds were liquidated on September 30, 2022 and reinvested in the same investments on October 3, 2022. Absent there-registration process, the investment allocation would have been 29% equity, 70% fixed income and 1% cash on September 30, 2022. The Company uses the fair value hierarchy described in Note 1 to classify these assets. The mutual funds are included under Level 1 in thefair value hierarchy as their fair values are based on quoted net asset values of the shares held in the investments in the plans. The CIT fundsare included under Level 2 as these investments have observable Level 2 pricing inputs, including quoted prices for similar assets in active ornon-active markets. While the underlying asset values are quoted prices, the net asset value of a unit in these funds is not publicly quoted. The following tables contain the fair value classifications of the plans' assets: Pension Plan Fair Value Measurements - September 30, 2023 Fair Value Level 1 Level 2 Level 3 Asset Class: Cash $202,218 $202,218 $— $— Common and Collective Trust and Pooled Funds: Bonds Liability Driven Investment 16,446,813 — 16,446,813 — Mutual Funds: Domestic Fixed Income 3,000,525 3,000,525 — — Equities Domestic Large Cap Growth 2,256,767 2,256,767 — — Domestic Large Cap Value 2,222,733 2,222,733 — — Domestic Small/Mid Cap Core 1,082,801 1,082,801 — — Foreign Large Cap Growth 481,309 481,309 — — Foreign Large Cap Value 463,907 463,907 — — Foreign Large Cap Core 721,588 721,588 — — Total $26,878,661 $10,431,848 $16,446,813 $— 58Table of Contents Pension Plan Fair Value Measurements - September 30, 2022 Fair Value Level 1 Level 2 Level 3 Asset Class: Cash $24,312,969 $24,312,969 $— $— Mutual Funds: Equities Domestic Large Cap Growth 1,172,296 1,172,296 — — Domestic Large Cap Value 1,172,714 1,172,714 — — Foreign Large Cap Growth 486,184 486,184 — — Foreign Large Cap Core 873,634 873,634 — — Total $28,017,797 $28,017,797 $— $— Postretirement Plan Fair Value Measurements - September 30, 2023 Fair Value Level 1 Level 2 Level 3 Asset Class: Cash $2,640,622 $2,640,622 $— $— Mutual Funds: Bonds Domestic Fixed Income 4,841,048 4,841,048 — — Equities Domestic Large Cap Growth 1,693,422 1,693,422 — — Domestic Large Cap Value 1,570,538 1,570,538 — — Domestic Small/Mid Cap Core 588,898 588,898 — — Foreign Large Cap Growth 433,886 433,886 — — Foreign Large Cap Value 526,364 526,364 — — Foreign Large Cap Core 724,535 724,535 — — Total $13,019,313 $13,019,313 $— $— 59Table of Contents Postretirement Plan Fair Value Measurements - September 30, 2022 Fair Value Level 1 Level 2 Level 3 Asset Class: Cash $75,219 $75,219 $— $— Mutual Funds: Bonds Domestic Fixed Income 5,644,954 5,644,954 — — Foreign Fixed Income 589,284 589,284 — — Equities Domestic Large Cap Growth 1,698,421 1,698,421 — — Domestic Large Cap Value 1,793,746 1,793,746 — — Domestic Small/Mid Cap Growth 182,823 182,823 — — Domestic Small/Mid Cap Value 202,921 202,921 — — Domestic Small/Mid Cap Core 443,900 443,900 — — Foreign Large Cap Growth 469,659 469,659 — — Foreign Large Cap Value 462,196 462,196 — — Foreign Large Cap Core 574,996 574,996 — — Total $12,138,119 $12,138,119 $— $— Each mutual fund or common collective trust fund has been categorized based on its primary investment strategy. Annual funding contributions to the pension plan and postretirement plan are made under advisement from the Company's actuaries andinvestment advisor based upon ERISA funding requirements. For the years ended September 30, 2023 and 2022, no contributions weremade to the pension plan or postretirement plan. At this time, the Company is not currently anticipating making any funding contributions tothe pension plan or postretirement plan in fiscal 2024. The following table reflects expected future benefit payments: Pension Postretirement Fiscal year ending September 30 Plan Plan 2024 $1,335,133 $713,518 2025 1,400,453 707,987 2026 1,486,089 710,935 2027 1,591,928 724,277 2028 1,665,580 721,402 2029 - 2033 9,316,587 3,957,815 The Company established an NQDC Plan in fiscal 2021. The NQDC Plan is an unfunded, nonqualified benefit plan offered to selectmembers of senior management not eligible to participate in the pension plan. Under the NQDC Plan, participants have the right to defer apercentage of base salary as well as receive discretionary credits from the Company. The Company's discretionary credits vest over time. Any benefits distributed from the NQDC Plan are paid from the general assets of the Company. As the plan is unfunded, the balancereflected in the table below is a noncurrent liability included in benefit plan liabilities on the consolidated balance sheet. 2023 2022 Beginning deferred compensation balance $59,108 $35,344 Employer contributions — 33,280 Earnings (loss) 6,787 (9,516)Forfeitures (18,221) — Ending deferred compensation balance $47,674 $59,108 60Table of Contents The Company sponsors a 401(k) Plan covering all eligible employees who elect to participate. Employees may contribute from 1% to 50%of their annual compensation to the 401(k) Plan, limited to a maximum annual amount as set periodically by the IRS. The Company matches100% of the participant’s first 4% of contributions and 50% of the next 2% of contributions. The 401(k) Plan also provides for discretionarycontributions for employees hired on or after January 1, 2017. The following table reflects the Company's contributions: Years Ended September 30 2023 2022 Matching contribution $388,616 $357,293 Discretionary contribution 75,899 47,429 10.COMMON STOCK OPTIONS The KESOP provides for the issuance of common stock options to officers and certain other full-time salaried employees to acquire sharesof the Company’s common stock. As of September 30, 2023, the number of shares available for future grants was 22,000. ASC 718, Compensation-Stock Compensation, requires that compensation expense be recognized for the issuance of equity instrumentsto employees. During the fiscal year ended September 30, 2022, the Board approved stock option grants to certain officers. As required bythe KESOP, each option's exercise price per share equaled the fair value of the Company's common stock on the grant date. Pursuant to theplan, the options vest over a six-month period and are exercisable over a ten-year period from the date of issuance. No options weregranted during the fiscal year ended September 30, 2023. As the Company's stock options are not traded on the open market, the fair value of each grant is estimated on the date of grant using theBlack-Scholes option pricing model including the following assumptions: Years Ended September 30 2023 2022 Expected volatility N/A 31.79%Expected dividends N/A 2.77%Expected exercise term (years) N/A 7 Risk-free interest rate N/A 2.89% The underlying methods regarding each assumption are as follows: Expected volatility is based on the historical volatility of the daily closing price of the Company's common stock. Expected dividend rate is based on historical dividend payout trends. Expected exercise term is based on the average time historical option grants were outstanding before being exercised. Risk-free interest rate is based on the 7-year Treasury rate on the date of option grant. Forfeitures are recognized when they occur. 61Table of Contents Stock option transactions under the Company's plans are summarized below. Number ofShares Weighted-AverageExercise Price Weighted-AverageRemainingContractualTerms (years) AggregateIntrinsicValue(1) Options outstanding, September 30, 2021 45,250 $19.34 6.0 $213,898 Options outstanding, September 30, 2021 45,250 $19.34 6.0 $213,898 Options granted 6,000 19.90 Options exercised (8,750) 14.49 Options forfeited (8,000) 27.87 Options outstanding, September 30, 2022 34,500 $18.69 5.7 $121,278 Options exercised (12,500) 16.00 Options outstanding, September 30, 2023 22,000 $20.23 5.6 $18,388 Vested and exercisable at September 30, 2023 22,000 $20.23 5.6 $18,388 (1) Aggregate intrinsic value includes only those options where the exercise price is below the market price. Years Ended September 30 2023 2022 Weighted-average grant date option fair value $— $5.39 Stock option expense 21,560 16,330 Intrinsic value of options exercised 46,921 58,944 Proceeds from exercise of stock options 200,000 126,814 11.OTHER STOCK PLANS Dividend Reinvestment and Stock Purchase Plan The Company offers a DRIP Plan to shareholders of record for the reinvestment of dividends and the purchase of up to $100,000 per year inadditional shares of common stock of the Company. Under the DRIP, the Company issued 32,805 and 34,290 shares in 2023 and 2022,respectively. As of September 30, 2023, the Company had 265,624 shares of stock available for issuance under the DRIP. Restricted Stock Plan for Outside Directors The Board of Directors of the Company implemented the RSPD in 1997. Under the RSPD, each director may elect annually to have up to100% of his or her fees paid in shares of common stock ("Director Restricted Stock"); however, a minimum of 40% of the monthly retainerfee must be paid to each non-employee director of Resources in shares of Director Restricted Stock until such time as the director hasaccumulated at least 10,000 shares. The number of shares of Director Restricted Stock awarded each month is determined based on theclosing sales price of Resources' common stock on the NASDAQ Global Market on the first business day of the month. The DirectorRestricted Stock issued under the Plan vests only in the case of a participant's death, disability, retirement, or in the event of a change incontrol of Resources. The Director Restricted Stock may not be sold, transferred, assigned or pledged by the participant until the shareshave vested under the terms of the Plan. The shares of Director Restricted Stock will be forfeited to Resources by a participant's voluntaryresignation during his or her term on the Board or removal for cause as a director. The Company assumes all directors will complete their term and there will be no forfeiture of the Director Restricted Stock. Since theinception of the RSPD, no director has forfeited any shares of Director Restricted Stock. The Company recognizes as compensation themarket value of the Director Restricted Stock in the period it is issued. 62Table of Contents The following table reflects the director compensation activity pursuant to the Plan: 2023 2022 Shares Weighted-Average FairValue on Dateof Grant Shares Weighted-Average FairValue on Dateof Grant Beginning of year balance 108,127 $16.27 110,444 $15.05 Granted 14,080 21.25 13,538 21.55 Vested — — (15,855) 12.33 End of year balance 122,207 $16.84 108,127 $16.27 The fair market value of the Director Restricted Stock included in compensation during fiscal 2023 and 2022 was $299,200 and $291,767,respectively. No Director Restricted Stock was forfeited during fiscal 2023 or 2022. During fiscal 2023, an additional 200,000 shares wereregistered and added to the RSPD, as authorized and approved by shareholders at the Annual Shareholder meeting on January 23, 2023. As of September 30, 2023, the Company had 196,559 shares available for issuance under the RSPD. RGC Resources, Inc. Restricted Stock Plan The Board of Directors of the Company implemented the RSPO in 2017 as approved by shareholders. Under the RSPO, the CompensationCommittee of the Board of Directors may grant shares of common stock ("Officer Restricted Stock") that vest over time to key employeesand officers for the purpose of attracting and retaining those individuals essential to the operation and growth of the Company. The RSPOprovides for certain restrictions and non-transferability requirements until minimum levels of ownership are obtained. Such restrictions maycontinue beyond the vesting period. The Company assumes all officers will complete their requirements and there will be no forfeiture of the Officer Restricted Stock. The following table reflects the officer compensation activity pursuant to the RSPO: 2023 2022 Shares Weighted-Average FairValue on Dateof Grant Shares Weighted-Average FairValue on Dateof Grant Beginning of year balance 22,539 $23.44 11,836 $25.17 Granted — — 26,897 23.19 Vested (13,573) 23.61 (16,194) 24.29 End of year balance 8,966 $23.19 22,539 $23.44 The fair market value of the Officer Restricted Stock included as compensation during fiscal 2023 and 2022 was $169,879 and $534,710,respectively. As of September 30, 2023, the Company had 366,745 shares available for issuance under the RSPO. Stock Bonus Plan Shares from the Stock Bonus Plan may be issued to certain employees and management personnel in recognition of their performance andservice. Under the Stock Bonus Plan, the Company issued 105 shares at $23.76 per share in 2023 and no shares in 2022. As of September30, 2023, the Company had 4,680 shares of stock available for issuance under the Stock Bonus Plan. 63Table of Contents 12.COMMITMENTS AND CONTINGENCIES Long-Term Contracts Due to the nature of the natural gas distribution business, Roanoke Gas enters into agreements with suppliers and pipelines to contract fornatural gas commodity purchases, storage capacity and pipeline delivery capacity. Roanoke Gas obtains most of its natural gas supplythrough a third-party asset management contract. Roanoke Gas utilizes an asset manager to optimize the use of its transportation, storagerights and gas supply inventories, which helps to ensure a secure and reliable source of natural gas. Under the current asset managementcontract, Roanoke Gas has designated the asset manager to act as agent for its storage capacity and all gas balances in storage. RoanokeGas retains ownership of gas in storage. Under provisions of this contract, Roanoke Gas is obligated to purchase its winter storagerequirements from the asset manager during the spring and summer injection periods at market price. The table below details the volumetricobligations as of September 30, 2023 for the remainder of the contract period. The current asset management contract was renewed inSeptember 2022 for a two-year period which will expire in March 2025. The contract was renewed at essentially the same terms andconditions as the prior agreement, except the utilization fee retained by Roanoke Gas increased. Natural GasContracts Year (In DTHs) 2023-2024 2,089,220 2024-2025 295,866 Total 2,385,086 In addition to the volumetric commitment above, the Company also has fixed price agreements to purchase approximately 1.1 million DTH,from October 2023 to March 2024, at prices ranging from $2.75 to $4.57 per DTH. Roanoke Gas also has contracts for pipeline and storage capacity which extend for various periods. These capacity costs and related feesare valued at tariff rates in place as of September 30, 2023. These rates may increase or decrease in the future based upon rate filings andrate orders granting a rate change to the pipeline or storage operator. Roanoke Gas expended approximately $44,253,000 and $51,408,000under the asset management, pipeline and storage contracts in fiscal years 2023 and 2022, respectively. The table below details the pipelineand storage capacity commitments as of September 30, 2023 for the remainder of the contract period. Pipeline and Year Storage Capacity 2023 - 2024 $14,071,706 2024 - 2025 10,510,104 2025 - 2026 6,604,410 2026 - 2027 5,411,934 2027 - 2028 2,110,556 Thereafter 127,196 Total $38,835,906 Roanoke Gas maintains franchise agreements granted by the local cities and towns served by the Company. Roanoke Gas renewed itsfranchise agreements with the City of Roanoke, the City of Salem and the Town of Vinton in 2016 for 20-year terms to expire in December2035. Per these agreements, franchise fees increase at a rate of 3% annually. As of September 30, 2023, $1,942,731 in future obligationsremain under the franchise agreements. Other Contracts The Company has a contract in place for approximately $1.2 million to complete the two gate stations that interconnect with the MVP. The Company maintains other agreements in the ordinary course of business covering various maintenance, equipment, user fees and servicecontracts. These agreements currently extend through December 2031 and are not material to the Company. 64Table of Contents Environmental Matters Roanoke Gas operated an MGP as a source of fuel for lighting and heating until the early 1950’s. A by-product of operating the MGP wascoal tar, and the potential exists for tar waste contaminants at the former plant site. While the Company does not currently recognize anycommitments or contingencies related to environmental costs, should the Company ever be required to remediate the site, it will pursue allprudent and reasonable means to recover any related costs, including the use of insurance claims and regulatory approval for rate caserecognition of expenses associated with any work required. 13.FAIR VALUE MEASUREMENTS The following table summarizes the Company’s financial assets and liabilities that are measured at fair value on a recurring basis and the fairvalue measurements by level within the fair value hierarchy as defined in Note 1 as of September 30, 2023 and 2022, respectively: Fair Value Measurements - September 30, 2023 Quoted Pricesin ActiveMarkets SignificantOtherObservableInputs SignificantUnobservableInputs Fair Value Level 1 Level 2 Level 3 Assets: Interest rate swaps $4,617,455 $— $4,617,455 $— Total $4,617,455 $— $4,617,455 $— Liabilities: Natural gas purchases $1,022,662 $— $1,022,662 $— Total $1,022,662 $— $1,022,662 $— Fair Value Measurements - September 30, 2022 Quoted Pricesin ActiveMarkets SignificantOtherObservableInputs SignificantUnobservableInputs Fair Value Level 1 Level 2 Level 3 Assets: Interest rate swaps $4,798,467 $— $4,798,467 $— Total $4,798,467 $— $4,798,467 $— Liabilities: Natural gas purchases $1,295,225 $— $1,295,225 $— Total $1,295,225 $— $1,295,225 $— The fair value of the interest rate swaps are determined by using the counterparty's proprietary models that include observable quoted marketinterest rates and interest rate futures as well as certain assumptions regarding past, present and future market conditions. 65Table of Contents See Note 5 for discussion on the fair value assumptions of the Company's investment in the LLC. Under the asset management contract, a timing difference can exist between the payment for natural gas purchases and the actual receipt ofsuch purchases. Payments are made based on a predetermined monthly volume with the price based on the weighted average first of themonth index prices corresponding to the month of the scheduled payment. At September 30, 2023 and 2022, the Company had recorded inaccounts payable the estimated fair value of the liability based on the corresponding first of month quoted index prices for which the liabilitywas expected to be settled. The Company’s non-financial assets and liabilities that are measured at fair value on a nonrecurring basis consist of its AROs. The AROs aremeasured at fair value at initial recognition based on expected future cash flows to settle the obligation. The carrying value of cash and cash equivalents, accounts receivable, borrowings under line-of-credit, accounts payable (with the exceptionof the timing difference under the asset management contract), customer credit balances and customer deposits is a reasonable estimate offair value due to the short-term nature of these financial instruments. In addition, the carrying amount of the variable rate line-of-credit is areasonable approximation of its fair value. The following table summarizes the fair value of the Company’s financial assets and liabilities thatare not adjusted to fair value in the consolidated financial statements as of September 30, 2023 and 2022. Fair Value Measurements - September 30, 2023 Carrying Quoted Pricesin ActiveMarkets SignificantOtherObservableInputs SignificantUnobservableInputs Amount Level 1 Level 2 Level 3 Liabilities: Current maturities of long-term debt $10,975,000 $— $— $10,975,000 Notes payable 126,100,000 — — 120,298,658 Total $137,075,000 $— $— $131,273,658 Fair Value Measurements - September 30, 2022 Carrying Quoted Pricesin ActiveMarkets SignificantOtherObservableInputs SignificantUnobservableInputs Amount Level 1 Level 2 Level 3 Liabilities: Current maturities of long-term debt $1,300,000 $— $— $1,300,000 Notes payable 135,971,200 — — 130,266,252 Total $137,271,200 $— $— $131,566,252 The fair value of long-term debt is estimated by discounting the future cash flows of the fixed rate debt based on the underlying Treasury rateor other Treasury instrument with a corresponding maturity period and estimated credit spread extrapolated based on market conditions sincethe issuance of the debt. ASC 825, Financial Instruments, requires disclosures regarding concentrations of credit risk from financial instruments. Cash equivalentsare investments in high-grade, short-term securities (original maturity less than three months), placed with financially sound institutions.Accounts receivable are from a diverse group of customers including individuals and small and large companies in various industries. TheCompany maintains certain credit standards with its customers and requires a customer deposit if such evaluation warrants. 66Table of Contents 14.LEASES During 2023, the Company entered into a land lease in conjunction with its RNG facility that has a 20-year term with two five-year Companyrenewal options that are not considered part of the ROU asset and liability as the decision to elect options will be made in the future. TheCompany also has three other operating leases with original terms ranging from 3 to 6 years. The operating lease ROU assets of $361,724are reflected in other non-current assets in the consolidated balance sheets. The current operating lease liabilities of $30,281 and non-currentlease liabilities of $323,168 are included in other current liabilities and deferred credits and other non-current liabilities, respectively, in theconsolidated balance sheets. The cost components of the Company’s operating leases are included under operations and maintenanceexpense in the consolidated statements of income and were less than $50,000 for each period presented. Other information related to leases were as follows: 2023 2022 Supplemental Cash Flow Information: Cash paid on operating leases $48,900 $22,500 Right of use obtained in exchange for operating lease obligations 325,688 — Weighted-average remaining term (in years) 17.4 3.1 Weighted-average discount rate 5.65% N/A On September 30, 2023, the future minimum rental payments under non-cancelable operating leases were as follows: 2024 $49,065 2025 43,065 2026 30,038 2027 30,038 2028 26,400 Thereafter 369,600 Total minimum lease payments 548,206 Less imputed interest (194,757)Total $353,449 15.SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date the financial statements were issued. There were no other items nototherwise disclosed which would have materially impacted the Company’s consolidated financial statements. 67Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None. Item 9A. Controls and Procedures. The Company maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities ExchangeAct of 1934, as amended (the “Exchange Act”)) that are designed to be effective in providing reasonable assurance that information requiredto be disclosed in reports under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in therules and forms of the SEC, and that such information is accumulated and communicated to management to allow for timely decisionsregarding required disclosure. As of September 30, 2023, the Company completed an evaluation, under the supervision and with the participation of management, includingthe chief executive officer and the chief financial officer, of the effectiveness of the design and operation of the Company’s disclosure controlsand procedures. Based upon that evaluation, the chief executive officer and chief financial officer concluded that the Company’s disclosurecontrols and procedures were effective at the reasonable assurance level as of September 30, 2023. Management routinely reviews the Company’s internal control over financial reporting and makes changes, as necessary, to enhance theeffectiveness of the internal controls over financial reporting. There were no changes in the internal controls over financial reporting during thefourth quarter of the fiscal year covered by this report that have materially affected, or are reasonably likely to materially affect, theCompany’s internal control over financial reporting. MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined inRules 13a-15(f) under the Securities and Exchange Act of 1934). Internal control over financial reporting is a process designed to providereasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of financial statements for externalpurposes in accordance with GAAP and include those policies and procedures that: (i) pertain to the maintenance of records that, inreasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and thatreceipts and expenditures are being made only in accordance with authorizations of the management and directors of the Company; and (iii)provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’sassets that could have a material effect on the financial statements. Because of the inherent limitations, any system of internal control over financial reporting, no matter how well designed, may not prevent ordetect misstatements due to the possibility that a control can be circumvented or overridden or that misstatements due to error or fraud mayoccur that are not detected. Projections of the effectiveness to future periods are subject to the risk that the internal controls may becomeinadequate because of changes in conditions, or that the degree of compliance with the policies and procedures included in such controls maydeteriorate. The Company’s internal control system was designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordance with GAAP. The Company has conducted an evaluation of the design and effectiveness of the Company’s system of internal control over financialreporting as of September 30, 2023, based on the framework set forth in ”Internal Control - Integrated Framework (2013)” issued by theCommittee of Sponsoring Organizations of the Treadway Commission. Based upon such evaluation, the Company concluded that, as ofSeptember 30, 2023, the Company’s internal control over financial reporting was effective. Item 9B. Other Information. None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not Applicable. 68Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance. For information with respect to the executive officers of the registrant, see “Executive Officers" section in the Proxy Statement for the2024 Annual Meeting of Shareholders of Resources incorporated herein by reference. For information with respect to the Company’sdirectors and nominees and the Company’s Audit Committee, see Proposal 1 “Election of Directors of Resources” and “Report of the AuditCommittee”, respectively, in the Proxy Statement for the 2024 Annual Meeting of Shareholders of Resources, which information isincorporated herein by reference. In addition, the Board of Directors has determined that Abney S. Boxley, III and Jacqueline L. Archer areaudit committee financial experts under applicable SEC rules. For information regarding the process for identifying and evaluating candidates to be nominated as directors, see "Director Nominations" inthe Proxy Statement for the 2024 Annual Meeting of Shareholders of Resources, which is incorporated herein by reference. Information with respect to compliance with Section 16(a) of the Exchange Act, which is set forth under the caption "Delinquent Section16(a) Reports" in the Proxy Statement for the 2024 Annual Meeting of Shareholders of Resources, is incorporated herein by reference. The Company has adopted a Code of Ethics applicable to all of its officers, directors and employees. The Company has posted the text of itsCode of Ethics on its website at www.rgcresources.com. The Board of Directors has adopted charters for the Audit, Compensation, andGovernance and Nominating Committees of the Board of Directors. These documents may also be found on the Company’s website atwww.rgcresources.com. Item 11. Executive Compensation. The information set forth under "Compensation of Directors", "Compensation Discussion and Analysis" and "Report of the CompensationCommittee" in the Proxy Statement for the 2024 Annual Meeting of Shareholders of Resources is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. For information pertaining to securities authorized for issuance under equity compensation plans, see Part II, Item 5 above. The information pertaining to shareholders beneficially owning more than five percent of the registrant’s common stock and the securityownership of management, which is set forth under the caption “Security Ownership of Certain Beneficial Owners and Management" in theProxy Statement for the 2024 Annual Meeting of Shareholders of Resources, is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence. The information pertaining to director independence is set forth under the caption “Board of Directors and Committees of the Board ofDirectors” and pertaining to transactions with related persons is set forth under the caption "Transactions with Related Persons" in the ProxyStatement for the 2024 Annual Meeting of Shareholders of Resources, which information is incorporated herein by reference. Item 14. Principal Accounting Fees and Services. The information set forth under the caption "Report of the Audit Committee" in the Proxy Statement for the 2024 Annual Meeting ofShareholders of Resources is incorporated herein by reference. 69Table of Contents PART IV Item 15. Exhibits and Financial Statement Schedules. (a) List of documents filed as part of this report: 1. Financial statements filed as part of this report: All financial statements of the registrant as set forth under Item 8 of this Report on Form 10-K. 2. Financial statement schedules filed as part of this report: All information is inapplicable or presented in the consolidated financial statements or related notes thereto. 3. Exhibits. 1 (a) At Market Issuance Sales Agreement, dated March 5, 2020, between RGC Resources, Inc. and Janney Montgomery ScottLLC, as agent (incorporated herein by reference to Exhibit 1.1 on Form 8-K as filed March 5, 2020) 3 (a) Articles of Incorporation as amended (incorporated herein by reference to Exhibit 3.1 on Form 8-K as filed February 5, 2020) 3 (b) Amended and Restated Bylaws of RGC Resources, Inc. (incorporated herein by reference to Exhibit 3(b) on Form 8-K as filedon April 8, 2022) 4 (a) Specimen copy of certificate for RGC Resources, Inc. common stock, $5.00 par value (incorporated herein by reference toExhibit 4(a) of Registration Statement No. 33-67311, on Form S-4, filed with the Commission on November 13, 1998, andamended by Amendment No. 5, filed with the Commission on January 28, 1999) 4 (b) RGC Resources, Inc., Amended and Restated Dividend Reinvestment and Stock Purchase Plan (incorporated herein byreference to Exhibit 4(b) on Form 10-K for the year ended September 30, 2014) 4 (c) Description of RGC Resources, Inc. Common Stock (incorporated herein by reference to Exhibit 4(c) on Form 10-K for theyear ended September 30, 2020) 10 (a)PFirm Transportation Agreement between East Tennessee Natural Gas Company and Roanoke Gas Company dated November1, 1993 (incorporated herein by reference to Exhibit 10(a) of the Annual Report on Form 10-K for the fiscal year endedSeptember 30, 1994 (SEC file number reference 0-367)) 10 (b) FSS Service Agreement by and between Columbia Gas Transmission LLC and Roanoke Gas Company dated July 23, 2019(incorporated herein by reference to Exhibit 10.1 on Form 8-K as filed July 26, 2019) 10 (c) FTS Service Agreement by and between Columbia Gas Transmission LLC and Roanoke Gas Company dated July 23, 2019(incorporated herein by reference to Exhibit 10.2 on Form 8-K as filed July 26, 2019) 10 (d) SST Service Agreement by and between Columbia Gas Transmission LLC and Roanoke Gas Company dated July 23, 2019(incorporated herein by reference to Exhibit 10.3 on Form 8-K as filed July 26, 2019) 10 (e) FTS Service Agreement effective April 1, 2017 between Columbia Gas Transmission LLC and Roanoke Gas Company(incorporated herein by reference to Exhibit 10(f) on Form 10-K for the year ended September 30, 2017) 10 (f) FTS-1 Service Agreement between Columbia Gulf Transmission LLC and Roanoke Gas Company dated March 7,2022 (incorporated herein by reference to Exhibit 10.1 on Form 8-K as filed March 11, 2022) 10 (g) Negotiated Rate Letter Agreement with Columbia Gulf Transmission, LLC (incorporated herein by reference to Exhibit 10.2 onForm 8-K as filed March 11, 2022) 70Table of Contents 10 (h) Gas Transportation Agreement, for use under FT-A rate schedule, between Tennessee Gas Pipeline Company and RoanokeGas Company originally dated November 1, 1993 as amended (incorporated herein by reference to Exhibit 10(g) on Form 10-K for the year ended September 30, 2021) 10 (i)PGas Transportation Agreement, for use under IT rate schedule, between Tennessee Gas Pipeline Company and Roanoke GasCompany dated September 1, 1993 (incorporated herein by reference to Exhibit 10(l) of the Annual Report on Form 10-K forthe fiscal year ended September 30, 1994 (SEC file number reference 0-367)) 10 (j) Gas Storage Contract under rate schedule FS between Tennessee Gas Pipeline Company and Roanoke Gas Companyoriginally dated November 1, 1993 as amended (incorporated herein by reference to Exhibit 10(i) on Form 10-K for the yearended September 30, 2021) 10 (k) Gas Transportation Agreement, for use under FT-A rate schedule, between Tennessee Gas Pipeline Company and RoanokeGas Company originally dated November 1, 1993 as amended (incorporated herein by reference to Exhibit 10(j) on Form 10-K for the year ended September 30, 2021) 10 (l) FTA Gas Transportation Agreement effective November 1, 1998, between East Tennessee Natural Gas Company andRoanoke Gas Company (incorporated herein by reference to Exhibit 10(s)(s) on Form 10-K for the year ended September 30,1998 (SEC file reference number 0-367)) 10 (m) Firm Storage Service Agreement effective March 19, 1997, between Virginia Gas Storage Company and Roanoke GasCompany (incorporated herein by reference to Exhibit 10(w)(w) on Form 10-K for the year ended September 30, 1998 (SECfile reference number 0-367)) 10 (n) Firm Storage Service Agreement by and between Roanoke Gas Company and Virginia Gas Pipeline Company, dated June 1,2001 (incorporated herein by reference to Exhibit 10(b)(b)(b) on Form 10-K for the year ended September 30, 2001 (SEC filenumber reference 0-367)) 10 (o) FSS Service Agreement between Saltville Gas Storage Company L.L.C. and Roanoke Gas Company dated November 21,2012 (incorporated herein by reference to Exhibit 10(o) on Form 10-K for the year ended September 30, 2017) 10 (p) Firm Pipeline Service Agreement by and between Roanoke Gas Company and Virginia Gas Pipeline Company, dated June 1,2001 (incorporated herein by reference to Exhibit 10(c)(c)(c) on Form 10-K for the year ended September 30, 2001 (SEC filenumber reference 0-367)) 10 (q) Natural Gas Asset Management Agreement by and between Roanoke Gas Company and Sequent Energy Management LPeffective April 1, 2018 (incorporated herein by reference to Exhibit 10.1 on Form 8-K as filed on March 27, 2018) 10 (r) Amendment No. 1 to Natural Gas Asset Management Agreement dated July 31, 2020 by and between Roanoke GasCompany and Sequent Energy Management LP (incorporated herein by reference to Exhibit 10.6 on Form 10-Q as filedAugust 5, 2020) 10 (s) Amendment No. 2 to Natural Gas Asset Management Agreement dated August 5, 2021 by and between Roanoke GasCompany and Sequent Energy Management LP (incorporated herein by reference to Exhibit 10.1 on Form 10-Q as filedAugust 6, 2021) 10 (t) Amendment No. 3 to Natural Gas Asset Management Agreement dated September 23, 2022 by and between Roanoke GasCompany and Sequent Energy Management LLC (incorporated herein by reference to Exhibit 10.1 on Form 8-K as filedOctober 11, 2022) 10 (u) Parental Guaranty by RGC Resources, Inc. in favor of Sequent Energy Management LP effective April 1, 2018 (incorporatedherein by reference to Exhibit 10.2 on Form 8-K as filed on March 27, 2018) 71Table of Contents 10 (v) Gas Transportation Agreement between Tennessee Gas Pipeline Company and Roanoke Gas Company originally datedNovember 1, 1999 as amended May 17, 2016 (incorporated herein by reference to Exhibit 10.3 of Form 10-Q as filed August4, 2016) 10 (w) Amendment dated May 17, 2016 to Gas Transportation Agreement originally dated December 1, 1993 between TennesseeGas Pipeline Company and Roanoke Gas Company (incorporated herein by reference to Exhibit 10.1 of Form 10-Q as filedAugust 4, 2016) 10 (x) Amendment dated May 17, 2016 to Gas Transportation Agreement originally dated November 1, 1993 between TennesseeGas Pipeline Company and Roanoke Gas Company (incorporated herein by reference to Exhibit 10.2 of Form 10-Q as filedAugust 4, 2016) 10 (y) Gas Transportation Agreement, for use under FT-A rate schedule between Midwestern Gas Transmission Company andRoanoke Gas Company dated March 11, 2019 (incorporated herein by reference to Exhibit 10.1 on Form 10-Q as filed May6, 2019) 10 (z) Amendment dated November 29, 2021 to Gas Transportation Agreement originally dated December 1, 1993 betweenTennessee Gas Pipeline and Roanoke Gas Company (incorporated herein by reference to Exhibit 10(s)(s)(s)(s) on Form 10-Kfor the year ended September 30, 2021) 10 (a)(a) PCertificate of Public Convenience and Necessity for Bedford County dated February 21, 1966 (incorporated herein byreference to Exhibit 10(o) of Registration Statement No. 33-36605, on Form S-2, filed with the Commission on August 29,1990, and amended by Amendment No. 1, filed with the Commission on September 19, 1990) 10 (b)(b)PCertificate of Public Convenience and Necessity for Roanoke County dated October 19, 1965 (incorporated herein byreference to Exhibit 10(p) of Registration Statement No. 33-36605, on Form S-2, filed with the Commission on August 29,1990, and amended by Amendment No. 1, filed with the Commission on September 19, 1990 (SEC file number reference 0-367)) 10 (c)(c)PCertificate of Public Convenience and Necessity for Botetourt County dated August 30, 1966 (incorporated herein by referenceto Exhibit 10(q) of Registration Statement No. 33-36605, on Form S-2, filed with the Commission on August 29, 1990, andamended by Amendment No. 1, filed with the Commission on September 19, 1990 (SEC file number reference 0-367)) 10 (d)(d)PCertificate of Public Convenience and Necessity for Montgomery County dated July 8, 1985 (incorporated herein by referenceto Exhibit 10(r) of Registration Statement No. 33-36605, on Form S-2, filed with the Commission on August 29, 1990, andamended by Amendment No. 1, filed with the Commission on September 19, 1990 (SEC file number reference 0-367)) 10 (e)(e)PResolution of the Council for the Town of Fincastle, Virginia dated June 8, 1970 (incorporated herein by reference to Exhibit10(f) of Registration Statement No. 33-11383, on Form S-4, filed with the Commission on January 16, 1987 (SEC file numberreference 0-367)) 10 (f)(f)PResolution of the Council for the Town of Troutville, Virginia dated November 4, 1968 (incorporated herein by reference toExhibit 10(g) of Registration Statement No. 33-11383, on Form S-4, filed with the Commission on January 16, 1987 (SEC filenumber reference 0-367)) 10 (g)(g) Certificate of Public Convenience and Necessity for Franklin County dated March 5, 2019 (incorporated herein by reference toExhibit 10.2 on Form 10-Q as filed May 6, 2019) 10 (h)(h) Gas Franchise Agreement between the City of Roanoke, Virginia, and Roanoke Gas Company dated December 14, 2015(incorporated herein by reference to Exhibit 10.1 on Form 8-K as filed December 16, 2015) 10 (i)(i) Gas Franchise Agreement between the City of Salem, Virginia, and Roanoke Gas Company dated December 14, 2015(incorporated herein by reference to Exhibit 10.2 on Form 8-K as filed December 16, 2015) 10 (j)(j) Gas Franchise Agreement between the Town of Vinton, Virginia, and Roanoke Gas Company dated November 17, 2015(incorporated herein by reference to Exhibit 10.3 on Form 8-K as filed December 16, 2015) 72Table of Contents 10 (k)(k) RGC Resources Amended and Restated Key Employee Stock Option Plan (incorporated herein by reference to Exhibit 4(c) ofRegistration Statement No. 333-02455, Post Effective Amendment on Form S-8, filed with the Commission on July 2, 1999) 10 (l)(l) RGC Resources, Inc. Amended and Restated Stock Bonus Plan (incorporated herein by reference to Exhibit 10 on Form 8-Kfiled on January 27, 2005 (SEC file reference number 0-367)) 10 (m)(m) RGC Resources, Inc. Amended And Restated Restricted Stock Plan for Outside Directors (incorporated herein by reference toExhibit 10(i)(i) on Form 10-K for the year ended September 30, 2017) 10 (n)(n) RGC Resources, Inc. Restricted Stock Plan (incorporated herein by reference to Exhibit 10.1 of Form 8-K as filed February 9,2017) 10 (o)(o) Nonqualified Deferred Compensation Plan Document (incorporated herein by reference to Exhibit 10.1 on Form 10-Q as filedFebruary 11, 2021) 10 (p)(p) Change in Control Agreement between RGC Resources, Inc. and Mr. Paul W. Nester effective May 1, 2023 (incorporatedherein by reference to Exhibit 10.1 on Form 8-K as filed April 27, 2023) 10 (q)(q) Change in Control Agreement between RGC Resources, Inc. and Mr. Lawrence T. Oliver effective May 1, 2023 (incorporatedherein by reference to Exhibit 10.3 on Form 8-K as filed April 27, 2023) 10 (r)(r) Change in Control Agreement between RGC Resources, Inc. and Mr. Carl J. Shockley, Jr. effective May 1, 2023 (incorporatedherein by reference to Exhibit 10.4 on Form 8-K as filed April 27, 2023) 10 (s)(s) Change in Control Agreement between RGC Resources, Inc. and Mrs. C. Brooke Miles effective May 1, 2023 (incorporatedherein by reference to Exhibit 10.5 on Form 8-K as filed April 27, 2023) 10 (t)(t) Credit Agreement by and between Roanoke Gas Company and Wells Fargo Bank, N.A. dated March 31, 2016 (incorporatedherein by reference to Exhibit 10.2 on Form 8-K as filed April 4, 2016) 10 (u)(u) First Amendment to Credit Agreement by and between Roanoke Gas Company and Wells Fargo Bank, N.A. dated March 27,2017 (incorporated herein by reference to Exhibit 10.2 on Form 8-K as filed March 29, 2017) 10 (v)(v) Second Amendment to Credit Agreement by and between Roanoke Gas Company and Wells Fargo Bank, N.A. dated as ofMarch 26, 2018 (incorporated herein by reference to Exhibit 10.2 on Form 8-K as filed March 27, 2018) 10 (w)(w) Third Amendment to Credit Agreement by and between Roanoke Gas Company and Wells Fargo Bank, N.A. dated as ofMarch 26, 2019 (incorporated herein by reference to Exhibit 10.2 on Form 8-K as filed March 28, 2019) 10 (x)(x) Fourth Amendment to Credit Agreement by and between Roanoke Gas Company and Wells Fargo Bank, N.A. dated as ofMarch 25, 2020 (incorporated herein by reference to Exhibit 10.2 on Form 8-K as filed March 30, 2020) 10 (y)(y) Fifth Amendment to Credit Agreement by and between Roanoke Gas Company and Wells Fargo Bank, N.A., includingGuarantor's Consent and Reaffirmation, dated as of March 25, 2021 (incorporated herein by reference to Exhibit 10.2 on Form8-K as filed March 31, 2021) 73Table of Contents 10 (z)(z) Sixth Amendment to Credit Agreement by and between Roanoke Gas Company and Wells Fargo Bank, N.A., includingGuarantor's Consent and Reaffirmation, dated as of August 20, 2021 (incorporated herein by reference to Exhibit 10.2 on Form8-K as filed August 26, 2021) 10 (a)(a)(a) Seventh Amendment to Credit Agreement by and between Roanoke Gas Company and Wells Fargo Bank, N.A. dated March31, 2022 (incorporated herein by reference to Exhibit 10.2 on Form 8-K as filed April 1, 2022) 10 (b)(b)(b) Continuing Guaranty by RGC Resources, Inc. in favor of Wells Fargo Bank, N.A. dated March 31, 2016 (incorporated byreference to Exhibit 10.3 on Form 8-K as filed April 4, 2016) 10 (c)(c)(c) Note Purchase Agreement for 4.26% Senior Guaranteed Notes due September 18, 2034 in the original principal amount of$30,500,000 in favor of The Prudential Insurance Company of America, PAR U Hartford Life & Annuity Comfort Trust andPRUCO Life Insurance Company of New Jersey (incorporated herein by reference to Exhibit 10.1 on Form 8-K as filedAugust 4, 2014) 10 (d)(d)(d) Unconditional Parent Guaranty by RGC Resources, Inc. in favor of each of the holders of the notes: The Prudential LifeInsurance Company of America, PAR U Hartford Life & Annuity Comfort Trust and PRUCO Life Insurance Company of NewJersey (incorporated herein by reference to Exhibit 10.2 on Form 8-K as filed August 4, 2014) 10 (e)(e)(e) 4.26% Senior Guaranteed Notes due September 18, 2034 in the original principal amount of $15,250,000 in favor of ThePrudential Insurance Company of America (incorporated herein by reference to Exhibit 10.1 on Form 8-K as filed September23, 2014) 10 (f)(f)(f) 4.26% Senior Guaranteed Notes due September 18, 2034 in the original principal amount of $9,700,000 in favor of PAR UHartford Life & Annuity Comfort Trust (incorporated herein by reference to Exhibit 10.2 on Form 8-K as filed September 23,2014) 10 (g)(g)(g) 4.26% Senior Guaranteed Notes due September 18, 2034 in the original principal amount of $5,550,000 in favor of PRUCOLife Insurance Company of New Jersey (incorporated herein by reference to Exhibit 10.3 on Form 8-K as filed September 23,2014) 10 (h)(h)(h) Credit Agreement between RGC Midstream, LLC, Union Bank & Trust and Branch Banking and Trust Company datedDecember 29, 2015 (incorporated by reference to Exhibit 10.1 on Form 8-K as filed December 31, 2015) 10 (i)(i)(i) First Amendment to Credit Agreement between RGC Midstream, LLC and the lenders Union Bank & Trust and BranchBanking and Trust dated April 11, 2018 (incorporated herein by reference to Exhibit 10.1 on Form 8-K as filed April 12, 2018) 10 (j)(j)(j) Second Amendment to Credit Agreement between RGC Midstream, LLC and the lenders Union Bank & Trust and BranchBanking and Trust dated February 19, 2019 (incorporated herein by reference to Exhibit 10.1 on Form 8-K as filed February19, 2019) 10 (k)(k)(k) Third Amendment to Credit Agreement between RGC Midstream, LLC and the lenders Atlantic Union Bank and Truist Bankdated December 23, 2019 (incorporated herein by reference to Exhibit 10.1 on Form 8-K as filed December 23, 2019) 10 (l)(l)(l) Fourth Amendment to Credit Agreement between RGC Midstream, LLC and the lenders Atlantic Union Bank and Truist Bankdated June 30, 2022 (incorporated by reference to Exhibit 10.1 on Form 8-K as filed July 5, 2022) 10 (m)(m)(m) Fifth Amendment to Credit Agreement between RGC Midstream, LLC and the lenders Atlantic Union Bank and Truist Bankdated July 28, 2023 (incorporated herein by reference to Exhibit 10.1 on Form 8-K as filed July 31, 2023) 10 (n)(n)(n) Amended and Restated Note in the principal amount of $13,800,000 in favor of Atlantic Union Bank due December 31,2023 (incorporated herein by reference to Exhibit 10.2 on Form 8-K as filed July 5, 2022) 10 (o)(o)(o) Amended and Restated Note in the principal amount of $9,200,000 in favor of Truist Bank due December 31,2023 (incorporated herein by reference to Exhibit 10.3 on Form 8-K as filed July 5, 2022) 74Table of Contents 10 (p)(p)(p) Guaranty by RGC Resources, Inc. in favor of Union Bank & Trust and Branch Banking and Trust Company dated December29, 2015 (incorporated herein by reference to Exhibit 10.4 on Form 8-K as filed December 31, 2015) 10 (q)(q)(q) Private Shelf Agreement by and between Roanoke Gas Company and Prudential Investment Management, Inc. for the pre-authorization to issue notes up to $29,500,000 in total during the term of the agreement (incorporated herein by reference toExhibit 10.4 on Form 8-K as filed October 4, 2017) 10 (r)(r)(r) Second Amendment to Private Shelf Agreement dated as of December 6, 2019 (incorporated herein by reference to Exhibit10.4 on Form 8-K as filed December 9, 2019) 10 (s)(s)(s) Third Amendment to Private Shelf Agreement dated as of December 6, 2022 (incorporated by reference to Exhibit 10.1 onForm 8-K as filed December 7, 2022) 10 (t)(t)(t) Unsecured Note in the original principal amount of $4,000,000 by and between Roanoke Gas Company and PRUCO LifeInsurance Company of New Jersey, dated October 2, 2017 (incorporated herein by reference to Exhibit 10.1 on Form 8-K asfiled October 4, 2017) 10 (u)(u)(u) Unsecured Note in the original principal amount of $4,000,000 by and between Roanoke Gas Company and Prudential ArizonaReinsurance Captive Company, dated October 2, 2017 (incorporated herein by reference to Exhibit 10.2 on Form 8-K as filedOctober 4, 2017) 10 (v)(v)(v) Unconditional Parent Guaranty by RGC Resources, Inc. in favor of each of the holders of the notes: The PRUCO LifeInsurance Company of New Jersey and the Prudential Arizona Reinsurance Captive Company (incorporated herein byreference to Exhibit 10.3 on Form 8-K as filed October 4, 2017) 10 (w)(w)(w) Unsecured Note in the original principal amount of $5,000,000 by and between Roanoke Gas Company and Highmark, Inc.dated March 28, 2019 (incorporated herein by reference to Exhibit 10.1 on Form 8-K as filed March 29, 2019) 10 (x)(x)(x) Unsecured Note in the original principal amount of $3,000,000 by and between Roanoke Gas Company and Prudential ArizonaReinsurance Term Company dated March 28, 2019 (incorporated herein by reference to Exhibit 10.2 on Form 8-K as filedMarch 29, 2019) 10 (y)(y)(y) Unsecured Note in the original principal amount of $2,000,000 by and between Roanoke Gas Company and The PrudentialInsurance Company of America dated March 28, 2019 (incorporated herein by reference to Exhibit 10.3 on Form 8-K as filedMarch 29, 2019) 10 (z)(z)(z) Unconditional Guaranty Agreement by and between RGC Resources, Inc. and Prudential Investment Management and eachPrudential Affiliate which is a party to the borrowing (incorporated herein by reference to Exhibit 10.4 on Form 8-K as filedMarch 29, 2019) 10 (a)(a)(a)(a) Promissory Note in the original principal amount of $14,000,000 by and between RGC Midstream, LLC and Atlantic UnionBank, dated June 12, 2019 (incorporated herein by reference to Exhibit 10.1 on Form 8-K as filed June 17, 2019) 10 (b)(b)(b)(b) Loan Agreement between RGC Midstream, LLC and Atlantic Union Bank, dated June 12, 2019 (incorporated herein byreference to Exhibit 10.2 on Form 8-K as filed June 17, 2019) 10 (c)(c)(c)(c) Unconditional Guaranty by and between RGC Resources, Inc. and Atlantic Union Bank (incorporated herein by reference toExhibit 10.3 on Form 8-K as filed June 17, 2019) 10 (d)(d)(d)(d) Swap Agreement by and between RGC Midstream, LLC and Atlantic Union Bank, dated June 12, 2019 (incorporated hereinby reference to Exhibit 10.4 on Form 8-K as filed June 17, 2019) 10 (e)(e)(e)(e) Promissory Note in the original principal amount of $10,000,000 by and between RGC Midstream, LLC and Branch Bankingand Trust, dated June 13, 2019 (incorporated herein by reference to Exhibit 10.5 on Form 8-K as filed June 17, 2019) 10 (f)(f)(f)(f) Loan Agreement between RGC Midstream, LLC and Branch Banking and Trust Company, dated June 13, 2019 (incorporatedherein by reference to Exhibit 10.6 on Form 8-K as filed June 17, 2019) 75Table of Contents 10 (g)(g)(g)(g) Unconditional Guaranty by and between RGC Resources, Inc. and Branch Banking and Trust Company (incorporated hereinby reference to Exhibit 10.7 on Form 8-K as filed June 17, 2019) 10 (h)(h)(h)(h) Swap Agreement by and between RGC Midstream, LLC and Branch Banking and Trust Company, dated June 13, 2019(incorporated herein by reference to Exhibit 10.8 on Form 8-K as filed June 17, 2019) 10 (i)(i)(i)(i)**Third Amended and Restated Limited Liability Company Agreement of Mountain Valley Pipeline, LLC dated April 6, 2018(incorporated by reference to Exhibit 10.1 on the Quarterly Report on Form 10-Q as filed May 7, 2018) 10 (j)(j)(j)(j) Guaranty Agreement by RGC Resources, Inc. in favor of Mountain Valley Pipeline, LLC (incorporated herein by reference toExhibit 10.2 on Form 10-Q as filed May 7, 2018) 10 (k)(k)(k)(k) Letter Agreement dated May 4, 2023, between MVP Holdco, LLC and RGC Midstream, LLC (incorporated by reference toExhibit 10.1 on Form 10-Q filed on May 5, 2023) 10 (l)(l)(l)(l) Unsecured Note in the original principal amount of $5,000,000 by and between Roanoke Gas and Prudential ArizonaReinsurance Universal Company, dated December 6, 2019 (incorporated herein by reference to Exhibit 10.1 on Form 8-K asfiled December 9, 2019) 10 (m)(m)(m)(m) Unsecured Note in the original principal amount of $5,000,000 by and between Roanoke Gas and Prudential ArizonaReinsurance Universal Company, dated December 6, 2019 (incorporated herein by reference to Exhibit 10.2 on Form 8-K asfiled December 9, 2019) 10 (n)(n)(n)(n) Unconditional Guaranty Agreement by and between RGC Resources, Inc. and Prudential Investment Management and eachPrudential Affiliate which is a party to the borrowings dated December 6, 2019 (incorporated herein by reference to Exhibit10.3 on Form 8-K as filed December 9, 2019) 10 (o)(o)(o)(o) Private Shelf Agreement by and between Roanoke Gas Company and MetLife Investment Management Limited datedSeptember 30, 2020, for the pre-authorization to issue notes up to the aggregate amount of $70,000,000 in total during the termof the agreement (incorporated herein by reference to Exhibit (l)(l)(l)(l) on Form 10-K for the year ended September 30, 2020) 10 (p)(p)(p)(p) Delayed Draw Term Note in the principal amount of $15,000,000 by Roanoke Gas Company with Wells Fargo Bank, N.A.dated as of August 20, 2021 (incorporated by reference to Exhibit 10.1 on Form 8-K as filed August 26, 2021) 10 (q)(q)(q)(q) Swap Agreement by and between Roanoke Gas Company and Wells Fargo Bank, N.A., executed on August 20, 2021(incorporated herein by reference to Exhibit 10.3 on Form 8-K as filed August 26, 2021) 10 (r)(r)(r)(r) Promissory Note (Revolving Loan) in the principal amount of $25,000,000 by Roanoke Gas Company with Pinnacle Bank,dated March 24, 2023 (incorporated herein by reference to Exhibit 10.1 on Form 8-K as filed March 28, 2023) 10 (s)(s)(s)(s) Amended and Restated Promissory Note (Term Loan) in the principal amount of $10,000,000 by Roanoke Gas Company withPinnacle Bank, dated March 24, 2023 (effective as of April 1, 2023) (incorporated herein by reference to Exhibit 10.2 on Form8-K as filed March 28, 2023) 10 (t)(t)(t)(t) Amended and Restated Loan Agreement by and between Roanoke Gas Company and Pinnacle Bank, dated March 24, 2023(incorporated herein by reference to Exhibit 10.3 on Form 8-K as filed March 28, 2023) 10 (u)(u)(u)(u) Amended and Restated Guaranty Agreement by RGC Resources, Inc. with Pinnacle Bank, dated March 24, 2023(incorporated herein by reference to Exhibit 10.4 on Form 8-K as filed March 28, 2023) 10 (v)(v)(v)(v) Amended Swap Agreement by and between Roanoke Gas Company and Pinnacle Bank, dated April 3, 2023 (effective April1, 2023) (incorporated herein by reference to Exhibit 10.1 on Form 8-K as filed April 4, 2023) 10 (w)(w)(w)(w) Promissory Note in the principal amount of $8,000,000 by RGC Midstream, LLC with Atlantic Union Bank, dated as ofNovember 1, 2021 (incorporated herein by reference to Exhibit 10.1 on Form 8-K as filed November 4, 2021) 10 (x)(x)(x)(x) Loan Agreement by and between RGC Midstream, LLC and Atlantic Union Bank, dated as of November 1, 2021(incorporated herein by reference to Exhibit 10.2 on Form 8-K as filed November 4, 2021) 76Table of Contents 10 (y)(y)(y)(y) Swap Agreement by and between RGC Midstream, LLC and Atlantic Union Bank, executed on November 1, 2021(incorporated herein by reference to Exhibit 10.3 on Form 8-K as filed November 4, 2021) 10 (z)(z)(z)(z) LIBOR Transition Notice and ISDA Swap Amendment between Atlantic Union Bank and RGC Midstream, LLC, executedJune 28, 2023 (incorporated herein by reference to Exhibit 10.1 on Form 8-K as filed June 29, 2023) 10 (a)(a)(a)(a)(a) Guaranty by RGC Resources, Inc. with Atlantic Union Bank, dated as of November 1, 2021 (incorporated herein by referenceto Exhibit 10.4 on Form 8-K as filed November 4, 2021) 13 Annual Report 14 Revised Code of Ethics (incorporated herein by reference to Exhibit 14.1 on Form 8-K as filed April 27, 2023) 21 Subsidiaries of the Company 23 Consent of Brown, Edwards & Company, LLP 31.1 Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer 31.2 Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer 32.1*Section 1350 Certification of Principal Executive Officer 32.2*Section 1350 Certification of Principal Financial Officer 101.INS Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags areembedded within the Inline XBRL document)101.SCH Inline XBRL Taxonomy Extension Schema Document101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) * These certifications are being furnished solely to accompany this annual report pursuant to 18 U.S.C. Section 1350, and are not being filed forpurposes of Section 18 of the Securities Exchange Act of 1934 and are not to be incorporated by reference into any filing of the registrant, whethermade before or after the date hereof, regardless of any general incorporation language in such filing. ** Confidential treatment has been granted with respect to portions of this exhibit, indicated by asterisks, which has been filed separately with theSecurities and Exchange Commission. P These original exhibits were filed with the SEC in paper form and therefore are not hyper-linked to the original filing. Item 16. Form 10-K Summary. Not applicable. 77Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report onForm 10-K to be signed on its behalf by the undersigned, thereunto duly authorized. RGC RESOURCES, INC. By:/s/ Timothy J. MulvaneyDecember 1, 2023 Timothy J. MulvaneyDate Interim CFO and Treasurer (Principal Financial Officer) 78Table of Contents Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the followingpersons on behalf of the Registrant and in the capacities and on the dates indicated. /S/ PAUL W. NESTER December 1, 2023 President and Chief Executive Officer, DirectorPaul W. Nester Date (Principal Executive Officer) /S/ TIMOTHY J. MULVANEY December 1, 2023 Interim CFO and TreasurerTimothy J. Mulvaney Date (Principal Financial Officer) /S/ JOHN B. WILLIAMSON, III December 1, 2023 Chairman of the Board and DirectorJohn B. Williamson, III Date /S/ NANCY H. AGEE December 1, 2023 DirectorNancy H. Agee Date /S/ JACQUELINE L. ARCHER December 1, 2023 DirectorJacqueline L. Archer Date /S/ ABNEY S. BOXLEY, III December 1, 2023 DirectorAbney S. Boxley, III Date /S/ T. JOE CRAWFORD December 1, 2023 DirectorT. Joe Crawford Date /S/ MARYELLEN F. GOODLATTE December 1, 2023 DirectorMaryellen F. Goodlatte Date /S/ ROBERT B. JOHNSTON December 1, 2023 DirectorRobert B. Johnston Date /S/ J. ALLEN LAYMAN December 1, 2023 DirectorJ. Allen Layman Date /S/ ELIZABETH A. MCCLANAHAN December 1, 2023 DirectorElizabeth A. McClanahan Date 79CORPORATE INFORMATION BOARD OF DIRECTORS Nancy Howell Agee CEO – Carilion Clinic Jacqueline L. Archer President and CEO – Blue Ridge Beverage Company, Inc. Abney S. Boxley, III President – Boxley Family, LLC T. Joe Crawford Retired Vice President and General Manager – Steel Dynamics Roanoke Bar Division Maryellen F. Goodlatte Retired Attorney – Glenn, Feldmann, Darby & Goodlatte Robert B. Johnston Executive Vice President and Chief Strategy Officer – The InterTech Group, Inc. J. Allen Layman Private Investor and Retired President and CEO – Ntelos, Inc. Elizabeth A. McClanahan CEO – Virginia Tech Foundation Paul W. Nester President and CEO – RGC Resources, Inc. John B. Williamson, III Chairman – RGC Resources, Inc. ANNUAL REPORT AND 10-K This annual report, 10-K and the financial statements contained herein are submitted to the shareholders of the Company for their general information and not in connection with any sale or offer to sell, or solicitation of any offer to buy, any securities. PUBLIC INFORMATION AND SEC FILINGS Our latest news and Securities and Exchange Commission filings are available to view and print on our website, www.rgcresources.com. Send written notice to Investor Relations to request a printed copy of any Company publication. ANNUAL MEETING Our annual meeting of shareholders will be held virtually at the following URL www.virtual shareholdermeeting.com/RGCO2024 on Monday, February 5, 2024, at 11:30 a.m. Proxies will be requested from shareholders when the notice of meeting, proxy statement and form of proxy are mailed on or about December 6, 2023. Transfer Agent and Registrar: Broadridge Financial Solutions Inc. c/o RGC Resources, Inc. P.O. Box 1342, Brentwood, NY 11717 Phone: (844) 388-9273 Email: shareholder@broadridge.com Web: shareholder.broadridge.com/rgco/ Analyst and Media Inquiries: RGC Resources, Inc. c/o Analyst/Media Inquiries, P.O. Box 13007, Roanoke, VA 24030 Email: Investor_Relations@RGCResources.com Web: www.rgcresources.com/investor-financial-information/ 519 Kimball Avenue, NE P.O. Box 13007 Roanoke, Virginia 24030-3007 www.rgcresources.com Facebook.com/RoanokeGas Twitter.com/RoanokeGas Trading on NASDAQ as RGCO

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