Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, August 18, 1993                   TAG: 9308180190
SECTION: VIRGINIA                    PAGE: A-1   EDITION: METRO 
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE:                                 LENGTH: Medium

GAS GOOD FOR OTHER CITIES, BUT RATES?

Richmond's municipal gas system contributed $9.5 million to the city's treasury in fiscal 1992.

Charlottesville made more than $1 million from its gas sales that year.

Danville made $2.5 million.

By comparison, Roanoke Gas' 1992 annual report showed profits of $1.3 million.

Officials in each of the three cities can't recall their gas systems ever losing money. But Charlottesville intentionally operated at a loss for a couple of years after it accumulated too much money in its gas account, Director of Finance Rita Scott said.

The city of Roanoke is considering taking over ownership of Roanoke Gas Co.'s operations within the city limits. The city sees gas sales as a potential source of revenue that could help pay for such things as schools, garbage collection or a reduction in the property tax rate.

Roanoke Gas - which opposes a takeover - says that if the city gets into the business, gas bills could go up in the city, Salem, Roanoke County and other areas where Roanoke Gas operates.

A city consultant, however, claims the city could operate the company cheaper than Roanoke Gas because of the city's tax-exempt status.

Roanoke Gas' rates for residential customers are lower than any of Virginia's three municipally owned gas companies, according to figures provided by the companies and Roanoke Gas.

Roanoke Gas' $6 monthly residential service charge is also lower than the $8 charged in Charlottesville and Richmond. Danville residential customers pay a $4.15 monthly service charge.

Including monthly gas and service charges, residents in Richmond would pay $45.77 for 6,500 cubic feet of gas; in Charlottesville $49.96; and in Roanoke $40.88.

An exact comparison with Danville's rates was not readily available because Danville bases its rates on heat units rather than cubic feet of gas. But its customers pay slightly more than those in Roanoke.

Two of Virginia's three municipal gas companies were once privately owned companies - those in Charlottesville and Danville.

Charlottesville's gas operation is one of the oldest in the nation. It was started in 1856 and was not taken over by the city until the early 1900s. Like most older companies, it originally manufactured its gas by burning coal.

The Charlottesville company has 53 employees and 13,700 customers in the city and Albemarle County. The company has never been subsidized by the city, Scott said. It pays for all its own construction projects.

The Richmond gas company was started by the city shortly after the Civil War and has 80,000 customers in Richmond and in Henrico and Chesterfield counties.

The money the company contributes to Richmond's general fund varies from year to year, Utilities Director George Kolb said. The $9.5 million the company made for the city in the 1992 fiscal year represented "a very good year" due to an expansion of the system, Kolb said.

The privately owned Danville Water and Gas Co. was founded in 1875 and was bought by the city in 1876, when the city had 50 gas lights and 20 gas customers.

The Danville system now has roughly 17,000 customers, including a few in Pittsylvania County.