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

DATE: MONDAY, August 23, 1993                   TAG: 9310280304
SECTION: EDITORIAL                    PAGE: A6   EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Medium

THINK TWICE BEFORE TAKING OVER

Recent changes in federal energy policy have made the natural gas business much more complex and competitive. Companies such as Roanoke Gas are having to renegotiate contracts with all their pipeline suppliers and facing other free- market challenges. Investor-owned companies typically operate efficiently in this type of a competitive environment. A takeover at this time would make it more difficult for Roanoke to best serve its customers.

Roanoke Gas Co., headquartered in Roanoke, has 110 years of experience and has served its 43,000 natural gas customers well. In fact, their rates are as low as any gas utility in Virginia.

Taking over Roanoke Gas would raise serious questions and could lead to additional costs to both Roanoke's customers and its many shareholders in the area:

What reliability and convenience problems might customers face with restructuring the gas firm's distribution system? Will the forecasted tax and other savings from the takeover really be sufficient to offset the millions of dollars to reconfigure the gas company's operations? Why change a system that is already working well? Why should customers be faced with additional costs brought about by the takeover, such as appraisals, hearings and legal expenses? Will the uncertainty caused by a takeover result in higher debt and equity costs for the company, which customers will have to bear?

These are just some of the questions that should be answered before any further steps to take over this well-run company are taken by the City Council.

MICHAEL BALY III

President

American Gas Association

Arlington, Va.