History

Roanoke Gas Company was organized in 1883, one year after Roanoke became a city, and was founded by a number of key leaders of their time.

The first President of the Gas Company, Peyton L. Terry, was truly a distinguished leader in Roanoke and was probably named after Colonel William Madison Peyton, a very wealthy and cultured person who owned the seven-acre tract known as Elmwood. Peyton Terry acquired Elmwood following the Civil War in 1868 and married Mary Shaver Trout, the daughter of prominent citizen John Trout.

The citizens of Big Lick Depot decided to incorporate as a town in 1874, and John Trout was appointed the first mayor along with six councilmen, including Peyton Terry. In addition to Peyton Terry, the new gas company was fortunate to have as investors and directors an outstanding group of leading businessmen that included John H. Dunston, who served Secretary-Treasurer, J.B. Austin, Alexander S. Asbury, Mortimer M. Rogers, John P. Pettyjohn, and William Welch. Throughout the early history of Roanoke, the names of these gentlemen appear frequently in positions of much importance in the development of the new city.

Rogers and Terry were among a group of businessmen that formed a guaranty company to purchase land for securing an entrance for the Roanoke and Southern Railroad into town. Rogers was also a founder of the Virginia Brewing Company in Roanoke. John P. Pettyjohn was founder of John P. Pettyjohn and Company, a contracting firm located in Lynchburg. Pettyjohn constructed the N&W Depot that replaced the Union Station and also constructed Roanoke Country Club. Later, he would build the N&W office building.

William Welch, a Canadian, was employed by the railroad as the master mechanic. Welch was also a builder and developer, and ultimately resigned from the railroad, took out naturalization papers, and became a permanent citizen of Roanoke.

Roanoke Gas can trace its roots to a strong leadership among the leading businessmen of their day. Such a proud tradition is very enviable and serves to further define the heritage the Company has enjoyed as one of the oldest business concerns in Roanoke.

Gas Lighting Enchants the Magic City

As Roanoke began to grow, it was time to replace the old oil and kerosene lamps with gas.

Due to Hotel Roanoke, the railroad offices, Union Depot and many homes being located in the northwest section, the first gas plant and mains were located nearby.

Gas lights were installed in the Hotel Roanoke, then to the railroad depot, which became the most well lighted place in Roanoke. Inside the Hotel, three large chandeliers of eight gas lights each illuminated the handsome wood paneled lobby inside the south entrance. Gas lights were also installed in the newly completed railroad office building.

Roanoke endured a severe depression in 1884, and gas was slow to replace the kerosene lights. In 1884, the City Council ordered 16 gas lamps to be placed at key intersections, no doubt to alleviate the growing concerns about poorly lit streets and the congregation of people and crime it caused.

The agreement with the City called for the gas lights to be lit at 6:00 p.m. and extinguished at 11:00 p.m. A young boy, J.R. Williams, was employed at $5 per week to care for these lamps. He carried a ladder and lit each lamp with a match. A second round was required to put them out later that night. During the day, he would make a third round to clean the soot from the large glass globes. At nightfall, the process would begin all over again.

In 1889, the Roanoke Electric Light and Power Company, the successor to Home Electric, received a franchise to supply the City with electric street lights. Also in 1889, a big merger occurred for the two leading utilities in Roanoke: the water company and the gas company. The Roanoke Gas Company and the Roanoke Water Works sold their assets to the Roanoke Gas and Water Company, whose stock was controlled by Philadelphia capitalists. Frederick J. Kimball of Philadelphia was President of the combined gas and water company until his death in 1902. He was a noted public servant to Roanoke.

In 1893, the Gas Company enlarged its plant and installed many lines of new mains. The Roanoke Electric Light and Power Company was absorbed into the new Roanoke Street Railway and Electric Company. After less than 10 years, gas lights were considered "old," and the City awarded a contract to the Electric Company for 2,000 electric lights.

In 1898, the Roanoke Gas and Water Company moved its offices to the corner of Church Avenue and First Street. Competition for water came into being as the Roanoke-Vinton Water Company was formed and supplied water to some businesses, including N&W, at a cheaper price than the Roanoke Gas and Water Company. In order for the Company to receive its franchise from the City, it had to agree to provide water at no cost to the schools, city buildings and charitable institutions.

No gas cooking was done in Roanoke until 1891. The first gas range was installed in the home of E.H. Stewart on South Jefferson Street, which was at the time known as the Lorraine Apartments.

The stockholders of the Gas and Water Company had become disenchanted and were willing to sell for virtually any price. A group of Roanoke businessmen, believing in the future of Roanoke and the Gas and Water Company, purchased the majority of the stock in 1893. The group even dispatched an agent, Harry M. Darnall, to England in order to attempt to secure some of the stock held by British syndicates. There is no record of his success, but the Roanoke group was soon in possession of the Roanoke Gas and Water Company. This group included S.D. Ferguson, E.M. Funkhouser, W.S. Battle, James R. Terry, and D.L. Bottomley. E.M. Funkhouser would serve as President and General Manager until 1912.

The original September 25, 1883, 25 year franchise with the City of Roanoke was set to expire in 1908 and its provisions included authorization for the City to purchase the gas property. However, the City chose to extend the franchise, this time for 30 years.

The new local management group provided dynamic leadership and guided the Company as it greatly improved its equipment. The gas plant included 42 retorts, three gas holders with a capacity of 375,000 cubic feet, and a Lowe Water Set. The Company had a total of 35 miles of mains serving its customers.

Coke was a by-product of the manufactured gas process and was given away free to anyone who would haul it away until 1910, when the Company began to charge a nominal fee for its coke. In addition, the Company also sold large quantities of its coal tar every year.

In 1910, Roanoke Gas and Water Company moved its offices to the Anchor Building on Shenandoah Avenue, where it would stay for 21 years.

On May 15, 1912, the assets and franchises of the Roanoke Gas and Water Company were sold to C.H. Geist and Associates of Philadelphia and Roanoke Gas Light Company was formed. It was at this juncture that the gas company and water company assets were divided into two separate companies once again. The new Roanoke Gas Light Company had three managers between the years 1912 an 1917, two of them were Marshall Milton and W.J. McCorkindale.

In 1912, the Gas Company had 2,982 customers and was manufacturing approximately 250,000 cubic feet per day at its gas plant. Over the next 10 years, the business had grown so much that there was a concern that the gas plant could not manufacture enough gas. To alleviate this problem, a larger unit, consisting of a seven-foot water gas unit, was added in 1923 at a cost of $50,000. The next year, in 1924, a new coal gas plant was constructed in order to provide the Gas Company with the most modern and efficient gas plant design available. The new holder was capable of storing 1,500,000 cubic feet and was, at the time, one of the largest anywhere in Virginia.

In November of 1927, the Gas Company was sold to Central Public Service Corporation, but kept the same Roanoke Gas Light Company name.

During the rapid growth of the 1920s, gas mains were extended in 1928 to Salem and Vinton and other outlying suburbs at the time, including South Roanoke. A branch office was opened in Salem upon the completion of the gas main extension and the securing of a franchise with the City of Salem. In 1928, the first gas refrigerator came to Roanoke.

On January 1, 1931, the Company moved into new quarters at 121 Church Avenue. The primary reason for the move to new offices was to accommodate the new District Accounting Office, which was to provide economies of scale for approximately 30 gas, transportation and ice companies. Services included billing and general accounting, and Roanoke was to be the headquarters for the district that included Virginia and Tennessee.

In 1933, the Gas Company stock was acquired by the Consolidated Electric and Gas Company of New York, following financial difficulties that overcame the Central Public Service Corporation. In 1935, Congress enacted the Public Utility Holding Company Act, PUHCA, which vested the responsibility of regulating the operation of holding companies to the Securities and Exchange Commission. The PUHCA forced fragmentation of large monopolies, such as Consolidated Electric and Gas of New York, that had been controlling the gas, electric, water, telephone and transportation systems, such as the Roanoke gas system.

In 1939, the name of the gas company was changed from Roanoke Gas Light Company to Roanoke Gas Company. As of 1940, the Gas Company had approximately 12,500 customers and more than 200 miles of gas mains. Headquartered in New York, Stone & Webster moved a number of key managers through the Roanoke Gas system from 1933 to 1943. In 1936, R.C. Hoffman, Jr. served as President, succeeded by E.J. Meade in 1940, Duncan A. Crawford in 1942, and H.A. Murphy in 1943.

As a result of the Public Utility Holding Company Act, actions taken by the SEC caused many of the holding companies to sell their public utility stock and relinquish control. Such was the case in 1944 with Consolidated Electric and Gas when the Roanoke Gas Company stock was sold to Scott, Horner & Mason, Inc. and made available to the public, exclusively to the residents of the state of Virginia. Roanoke Gas Company, originally founded by local business leaders, later repurchased by local business leaders, and having undergone various name and ownership changes along the way, was once again available for purchase by local business leaders, residents, and customers and was to be know as Roanoke Gas Company. During this time a former employee, Michael E. Shea, became the new President.

Growth of the Gas Company continued throughout the 1940s as plans were developed to bring natural gas to Roanoke. In 1950, Roanoke Gas received its certificate from the Federal Power Commission and organized the Roanoke Pipe Line Company to build a 30-mile pipeline from Gala, Virginia to Roanoke. The pipeline was completed during the late summer of 1950 and natural gas was first introduced to Roanoke homes and businesses on August 26, 1950. Shea resigned as President of Roanoke Gas and John C. Parrott became President of the merged companies of Roanoke Gas and Roanoke Pipe Line Company, which was to be called Roanoke Gas. (The merger actually took place in 1957.)

The new natural gas rates were approximately 20 percent lower than manufactured gas rates that were in effect in 1950 for Roanoke Gas. Also, the BTU content of natural gas was nearly double that of manufactured gas, so the customers were getting significantly more for their heating dollar with natural gas. In the early 50s gas sales rose considerably and in 1955 Roanoke Electric Steel, GE, Virginia Railway and the new N&W Shops came on line.

Roanoke Gas Company received several important awards from the American Gas Association in 1959. E.V. Bowyer was elected to the "Hall of Fame" for his outstanding sales work, and the Company received two awards. One was for achievement in commercial sales, and the other was for excellence in advertising.

Growth continued in the early 60s to 20,387 customers and net income topped $300,000. To help alleviate its dependence on the one Atlantic Seaboard Corporation pipeline, the Company entered into discussions with East Tennessee Natural Gas Company about extending a pipeline from Bristol to Roanoke. The benefits of this pipeline would be significant to Roanoke Gas. Gas consumption passed 4,000,000 thousand cubic feet for the first time in 1964. Dividends rose to $1.10 and a five percent stock dividend was approved by the Board.

The Company continued to win awards from the American Gas Association for its advertising programs. In 1966, AGA presented its "Best Advertising Campaign" award to the Company for its newspaper ads that promoted gas and the importance of service to its residential customers.

During 1970, the Company entered into a 20-year lease with the Industrial Development Authority of Botetourt County for the location of a new gas liquefaction and storage facility. The contract was signed with Chicago Bridge and Iron to construct the LNG plant to be operational by 1972. The LNG plant would enable the Company to move away from its reliance on propane air for natural gas peak shaving. Such a project had been studied before, but was not considered to be economically feasible until a deal was struck with Lynchburg Gas to purchase LNG during peak periods. The additional revenue from outside LNG sales made the numbers work.

In 1972, John Parrott was elected as Chairman and CEO and Albert W. Buckley became President.

In 1974, as the energy crisis continued to affect the nation, the Company was forced to adopt a no-growth posture to protect existing customers until such time as the gas supply situation improved. In 1975, operating revenues surpassed $13 million, and the dividend rose to $1.46. The Company experienced the fifth consecutive year of warmer than normal winter weather.

The Company believed that improvement in the gas supply outlook was expected. In 1977, the Company asked the State Corporation Commission for approval to add customers to replace those lost through attrition, and this request was granted. This action ended the moratorium that had existed since 1972.

More than any other event in the history of the natural gas industry, the moratorium that affected the entire nation did more to diminish natural gas marketing efforts and to curb the strong growth the industry had enjoyed until the early 1970s.

Beginning in 1978, the aggressive sales campaigns were restored, and efforts were made to recapture lost market opportunities from the moratorium. The Company’s advertising program was having a beneficial effect, and the Company boasted that 90 percent of all new homes were using gas.

By 1980, there had been some improvement in the gas supply situation, and the benefits were obvious. Operating revenues were up more than $29 million, and the dividend was increased to $1.15. The weather was essentially normal and the customer count was once again over 30,000.

The 100^th anniversary of Roanoke Gas was celebrated in 1983. The annual report cover was titled "Burning Bright Since 1983." The outlook for the future was greatly dependent on just one major factor – the stabilization and/or reduction of gas costs.

In 1984, the consolidated revenues rose to more than $46 million, which were five percent above those of 1983. The Company attributed the rise to several factors, including colder than normal weather, increased LNG sales and a noticeable reversal in conservation trends by its customers, which numbered 32,504.

On July 31, 1986, Al Buckley retired and Edward C. Dunbar became President. During the Buckley years, revenues had quadrupled, profits doubled, and the dividend had been increased from $0.55 to $1.80.

In 1991, Edward Dunbar retired and Frank A Farmer, Jr. became President and CEO.

Weather continued to play a very important role in the overall earnings picture for the Company. With only 3,458 heating degree days during the 1991 fiscal year, it was a full five percent warmer than the previous warmest winter on record, which occurred in 1974. With the large percent of gas sales devoted to residential heating, the Company had always remained very dependent on winter weather for good earnings.

In July of 1993, the City of Roanoke attempted a hostile takeover of the Company as the franchise expired. By calling for citizen and customer support, the Company promptly defeated the attempt and won a public relations award from the American Gas Association for its efforts.

The HeatShare Program continued to be a major help to needy families during the winter of 1994. After 12 winters, the Company estimated that nearly three-quarters of a million dollars had been contributed to assist more than 5,100 families.

The year 1996 produced record revenues and earnings. Revenues were $69 million, up 35 percent as weather was 11 percent colder than normal. The Company surpassed the 50,000 customer mark during the year, and ended the year with a total of 51,904 natural gas customers.

In February 1998, John B. Williamson, III became President. In 1999, with the company reorganization and the establishment of the holding company RGC Resources, Inc., John Williamson became President & CEO of RGC Resources and Art Pendleton was appointed President and COO of Roanoke Gas. Currently, John Williamson is President, Chairman, and CEO of RGC Resources and Roanoke Gas Company. John Williamson is currently President, Chairman and CEO of RGC Resources and Roanoke Gas Company.