10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

Amendment No. 1

　

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2011

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-00643

CORNING NATURAL GAS CORPORATION

(Exact name of Registrant as specified in its charter)

New York	16-0397420
(State of incorporation)	(I.R.S. Employer Identification No.)

330 West William Street, Corning, New York 14830

(Address of principal executive offices) (Zip Code)

(607) 936-3755

(Registrant's telephone number, including area code)

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 (or for 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 [X] No [_]

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes [X] No [_]

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of "large accelerated filer", "accelerated filer", "non-accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer [_] Accelerated Filer [_] Non-accelerated Filer [_] Smaller Reporting Company [X]

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [_] No [X]

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Common Stock, $5.00 par value	1,750,498
Class	Shares outstanding as of August 15, 2011

　

　

　

　

　

　

Page 2

Explanatory Note

The purpose of this Amendment No. 1 to our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011 "Form 10-Q", as filed with the Securities and Exchange Commission (SEC) on August 15, 2011, is to furnish Exhibit 101 - Interactive Data File (XBRL Exhibit).

No other changes have been made to the Form 10-Q other than furnishing of the exhibit described above. This Amendment No. 1 does not reflect any subsequent events occurring after the original filing date of the Form 10-Q or modify or update in any way disclosures made in the Form 10-Q.

Item 6. Exhibits.

31.1* Certification of the Chief Executive Officer and President pursuant to 17 CFR Section 240.13a-14 31.2* Certification of the Chief Financial Officer and Treasurer pursuant to 17 CFR Section 240.13a-14 32.1* Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101** The following materials from the Corning Natural Gas Corporation Quarterly Report on Form 10-Q for the period ended June 30, 2011, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets at June 30, 2011, June 30, 2010 and September 30 2010, (ii) the Condensed Consolidated Statements of Income for the three and nine months ended June 30, 2011 and June 30, 2010, (iii) the Condensed Consolidated Statements of Cash Flows for the none months ended June 30, 2011 and June 30 2010, and (iv) related notes to the Condensed Consolidated Financial Statements. As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under those sections.

* Previously filed with Corning Natural Gas Corporation's Quarterly Report on Form 10-Q for the period ended June 30, 2011, as filed with the Securities and Exchange Commission on August 15, 2011.

**Furnished herewith

　

　

　

　

　

　

Page 3

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CORNING NATURAL GAS CORPORATION
Date: September 6, 2011	By: /s/ Michael I. German
	Michael I. German, Chief Executive Officer and President
	(Principal Executive Officer)
Date: September 6, 2011	By: /s/ Firouzeh Sarhangi
	Firouzeh Sarhangi, Chief Financial Officer and Treasurer
	(Principal Financial and Accounting Officer)

　

　

　

　

　

　

　

Page 4

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Jun. 30, 2011	Sep. 30, 2010	Jun. 30, 2010
Current assets [Abstract]
Allowance for uncollectible accounts	$ 32,634	$ 41,390	$ 43,873
Regulatory assets [Abstract]
Accumulated amortization of debt issuance cost	$ 431,839	$ 397,071	$ 385,616
Common stockholders' equity [Abstract]
Par value per share of common stock (in dollars per share)	$ 5.00	$ 5.00	$ 5.00
Authorized shares of common stock (in shares)	3,500,000	3,500,000	3,500,000
Common stock shares issued and outstanding (in shares)	1,748,582	1,146,454	1,038,696

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Condensed Consolidated Statements of Income (Unaudited) (USD $)	3 Months Ended		9 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Condensed Consolidated Statements of Income (Unaudited) [Abstract]
Utility operating revenues	$ 4,750,563	$ 4,082,326	$ 20,175,835	$ 19,953,527
Natural gas purchased	1,861,956	1,427,410	9,134,862	9,046,301
Gross margin	2,888,607	2,654,916	11,040,973	10,907,226
Cost and expense [Abstract]
Operating and maintenance expense	1,884,517	1,637,330	5,500,405	5,307,817
Taxes other than income taxes	447,042	382,943	1,337,278	1,161,296
Depreciation	407,641	178,879	1,028,002	525,199
Other deductions, net	85,786	32,401	195,361	125,009
Total costs and expenses	2,824,986	2,231,553	8,061,046	7,119,321
Utility operating income	63,621	423,363	2,979,927	3,787,905
Other income and (expense) [Abstract]
Interest expense	(216,546)	(230,967)	(670,225)	(686,912)
Non-utility expense	(2,058)	(4,297)	(7,512)	(25,068)
Other income	1,591	5,325	12,943	6,473
Investment income	21,846	37,355	176,851	83,261
Rental income	12,138	12,138	36,414	36,414
Net income from utility operations, before income tax	(119,408)	242,917	2,528,398	3,202,073
Income tax benefit (expense), current	(1,800,484)	(99,638)	(2,617,893)	(1,453,469)
Income tax benefit (expense), deferred	1,848,227	14,833	1,699,096	151,908
Total tax benefit (expense)	47,743	(84,805)	(918,797)	(1,301,561)
Net income	(71,665)	158,112	1,609,601	1,900,512
Other comprehensive income (loss)	(148,553)	(231,057)	(406,817)	(97,589)
Total comprehensive income (loss)	$ (220,218)	$ (72,945)	$ 1,202,784	$ 1,802,923
Weighted average earnings per share [Abstract]
basic:	$ (0.04)	$ 0.10	$ 0.93	$ 1.24
diluted:	$ (0.04)	$ 0.10	$ 0.92	$ 1.23
Weighted average shares outstanding - basic	1,747,035	1,546,044	1,736,357	1,528,053
Weighted average shares outstanding - diluted	1,772,739	1,568,501	1,756,123	1,539,053

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Document And Entity Information (USD $)	9 Months Ended
	Jun. 30, 2011	Aug. 15, 2011	Mar. 31, 2010
Entity Registrant Name	CORNING NATURAL GAS CORP
Entity Central Index Key	0000024751
Current Fiscal Year End Date	--09-30
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$ 15,446,221
Entity Common Stock, Shares Outstanding		1,750,498
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q3
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2011

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Director Compensation

9 Months Ended

Jun. 30, 2011

Director Compensation [Abstract]

Director Compensation

Note 7 – Director Compensation

On December 15, 2009, the board of directors approved an increase in its compensation from 150 shares of our restricted common stock for each quarter of service to 250 restricted shares quarterly effective as of January 1, 2010. The directors' quarterly compensation was adjusted to 375 restricted shares in April 2011 due to the one for two stock dividend distributed by the Company (see Note 16 for further information). The shares awarded become unrestricted upon a director leaving the board.  Directors who also serve as officers of Corning are not compensated for their service as directors.  On November 9, 2010, directors were issued compensatory shares for service from July 2010 through September 30, 2010. Since these shares are restricted, in recording compensation expense, the expense accrued is 25% less than the closing price of the stock on the day the stock was awarded. Management of the Company believes this discount is reasonable for thinly traded stock such as that of the Company. The Company did not discount the value of the stock paid to the directors who resigned from the board since those shares became unrestricted when held by a non-affiliate for at least six months.  On April 29, 2011, shares were issued for service for the quarters ended December 31, 2010 and March 31, 2011. Joseph Mirabito, William Mirabito and John Williamson III were each paid 247 shares of common stock for the quarter ended December 31, 2010 because they served for a portion of that quarter.  Information regarding shares of stock awarded to directors in fiscal 2011 is summarized below.

	Fees Earned or Paid		11/9/2010
	in Cash		Stock Awards		Stock Awards		Total
	($)		(@ $14.99/Share)		($)		($)
3 Directors		-		750		11,243		11,243
	Fees Earned or Paid		11/9/2010
	in Cash		Stock Awards		Stock Awards		Total
	($)		(@ $19.99/Share)		($)		($)
3 Former Directors		-		656		13,113		13,113
	Fees Earned or Paid		4/29/2011
	in Cash		Stock Awards		Stock Awards		Total
	($)		(@ $18.00/Share)		($)		($)
6 Directors		-		4,116		74,088		74,088

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Rights Offering

9 Months Ended

Jun. 30, 2011

Rights Offering [Abstract]

Rights Offering

Note 12 – Rights Offering

The Company distributed one transferable subscription right for each ten shares of common stock to shareholders of record as of 5:00 pm on July 19, 2010. Each right entitled the shareholder to purchase one share of our common stock at a cash exercise price of $18.00 per share.  The rights were granted to the shareholders without additional charge to them and expired at 5:00 pm on August 27, 2010. The offering was significantly over-subscribed and the Company received $1,796,373, net of expenses of the offering, with the exercise of 104,086 shares. The Company used the proceeds to help fund capital expenditures, the retirement of debt and for future growth opportunities.

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Statement of Other Comprehensive Income (Loss)

9 Months Ended

Jun. 30, 2011

Statement of Other Comprehensive Income (Loss) [Abstract]

Statement of Other Comprehensive Income (Loss)

Note 3 – Statement of Other Comprehensive Income (Loss)

Other comprehensive income (loss) (or “OCI”) is comprised of unrealized gains or losses on securities available for sale as required by FASB ASC 320 and pension liability adjustments as required by FASB ASC 715. A drop from 6.75 percent to 5.50 percent in the discount rate as determined on an actuarial basis resulted in a projected increase in benefit funding obligations and pension liability and resulted in a $1.9 million pension liability adjustment and a related $1.9 million increase in the loss reported in September 2009 that carried through to March 2010. There was also a drop in the discount rate from 5.5% to 5.25% in 2010. That drop was offset by changes in assumptions in the rate of compensation increase from 4.5% to 3% and fund performance that resulted in a $679,023 OCI gain for the period ending September 30, 2010. The quarterly accruals for estimated annual pension liability added to the unrealized loss on securities available for sale for the current quarter resulted in an OCI loss of $406,817 for the nine months ended June 30, 2011.

	June 30,			June 30,			September 30,
	2011			2010			2010
Pension adjustment		(2,656,100	)		(3,020,510	)		(2,282,303	)
Net unrealized gain(loss) on securities available for sale		9,431			(33,764	)		42,451
Accumulated other comprehensive loss		(2,646,669	)		(3,054,274	)		(2,239,852	)

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Stock Options

9 Months Ended

Jun. 30, 2011

Stock Options [Abstract]

Stock Options

Note 9 – Stock Options

On November 5, 2007, the board of directors granted stock options to the Company's President and Chief Executive Officer totaling 75,000 shares at an exercise price of $15.00 per share. 25,000 of the stock options vested immediately and 25,000 additional options vested on each of the first and second anniversary of the grant date. The options expire if not exercised by November 5, 2011. On September 23, 2008, the board of directors approved performance based stock options for the officers totaling 19,000 shares at an exercise price of $17.00 per share. 9,000 of these options vested on the first anniversary of the grant date and 5,000 vested on the second anniversary of the grant date. The remaining 5,000 of these options vest on the third anniversary of the grant date. No additional options were granted during fiscal years ended September 30, 2009 and September 30, 2010. On December 14, 2010, the board of directors granted 9,000 compensatory stock options to certain of the Company's executive officers at an exercise price of $19.25 per share. These options are exercisable on or after December 15, 2011 and expire on the fourth anniversary of the grant date. No options were issued for the quarter ended March 31, 2011. The number of shares and exercise price of each of the option awards have been adjusted this quarter to reflect the stock dividend paid on April 20, 2011 (see Note 16 – Stock Dividend for additional information) and are shown in the next two tables.

Management has valued the 2010 options at their date of vesting and 2011 options at their grant date utilizing the Black-Scholes Option Pricing Model. The following weighted average assumptions were utilized in the fair value calculations for options granted:

	2010			2010			2011
	Options @			Options @			Options @
	$	10.00		$	11.33		$	12.83
Expected dividend yield		2.74	%		3.16	%		3.53	%
Expected stock price volatility		32.82	%		36.23	%		36.31	%
Risk-free interest rate		4.00	%		4.00	%		4.00	%
Expected life of options in years		0.4			2.25			4.5

The following summarizes the stock options outstanding as of June 30, 2011 for the fiscal year to date:

	Stock Options
					Weighted
	Number of		Weighted		Average
	Shares		Average		Remaining
	Remaining		Exercise		Contractual
	Options		Price		Term
Outstanding at October 1, 2010		90,000	$	10.42
Options granted		13,500	$	12.83	4.5 years
Options exercised during nine months ended June 30, 2011		13,500	$	10.00	.42 years
Options canceled during nine months ended June 30, 2011		-
Outstanding at June 30, 2011		90,000	$	10.85	1.61 years
Exercisable at June 30, 2010		69,000	$	10.41	.98 years

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Leatherstocking Gas Company, LLC

9 Months Ended

Jun. 30, 2011

Joint Venture [Abstract]

Leatherstocking Gas Company LLC

Note 14 – Leatherstocking Gas Company, LLC

The Company, in a joint venture with Mirabito Holdings, Incorporated, formed a limited liability corporation (LLC) in November 2010 for the purpose of providing natural gas in areas of New York and Pennsylvania that currently do not have natural gas service. This new venture, Leatherstocking Gas Company, LLC, (“Leatherstocking”) is currently moving forward on expansions to several areas in the northeast. The Company and Mirabito Holdings, Incorporated each own 50% of the joint venture and each appoint three managers to operate the new company. The seventh manager is a neutral manager agreed to by the Company and Mirabito Holdings, Incorporated who is not an officer, director, shareholder or employee of either company. The current managers are Joseph P. Mirabito, John J. Mirabito and William Mirabito from Mirabito Holdings, Incorporated; Matthew J. Cook, Michael I. German and Russell S. Miller from the Company; and Carl T. Hayden as the neutral manager. Joseph P. Mirabito and William Mirabito are stockholders and current board members of the Company. There are no significant financial transactions to report and therefore no amounts to consolidate at June 30, 2011. Leatherstocking has received a franchise from the Village of Sidney, New York, and is in the process of seeking another half dozen franchises. Leatherstocking has met with potential customers and public officials, as well as attended public hearings, and believes there is significant interest in acquiring gas service.

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311 Transportation Agreement/Compressor Station

9 Months Ended

Jun. 30, 2011

Transportation Agreement for Compressor Station [Abstract]

311 Transportation Agreement/Compressor Station

Note 10 – 311 Transportation Agreement /Compressor Station

On January 11, 2010, the Company entered into a contract (311 Transportation Agreement) with a local gas producer that provides for the building of a compressor station as well as the transfer of 6” pipeline owned by the gas producer to the Company for nominal consideration. The contract also sets forth the terms, rates and condition of the transport of the local producer gas to the interstate pipeline system. On May 21, 2010, the 311 Transportation Agreement was revised to reflect a change in the projected gas delivery schedule and delivery volumes. The previously agreed to transportation rates did not change. The contract's maximum daily delivery quantity remained the same. The schedule for attaining the maximum daily delivery quantity was altered to accommodate the project's construction schedule. The Company bought the $11 million compressor station and $2.1 million pipeline from the local producer for two dollars. The local producer has the right to repurchase these facilities for two dollars in ten years. This transaction became effective on May 12, 2011, when the station began operations. Although the Company has $13.1 million in new  plant, only two dollars was recognized in accordance with the Uniform System of Accounts (313.2) which states that in the case of gas plant contributed to the utility, gas plant accounts shall be charged only with such expenses, if any, incurred by the utility. The Company has recognized the tax impact of this transaction this quarter as a deferred tax of approximately $1 million (the New York current tax liability) that will be recoverable from customers over the life of the agreement. The Company expects no federal tax liability related to this gift because of bonus depreciation rules for the current year. This is the largest project undertaken by the Company in its history and will provide direct access to interstate markets for locally produced gas. The project will improve management of gas supply and has the potential to lower gas costs for customers throughout the southern tier of the state. The Company expects this agreement to have a significant positive impact on its cash flow and also positively impact earnings.

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Fair Value Measurements

9 Months Ended

Jun. 30, 2011

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 8 - Fair Value Measurements

The Company has determined the fair value of certain assets through application of FASB ASC 820.

Fair value of assets and liabilities measured on a recurring basis at June 30, 2011, June 30, 2010 and September 30, 2010 are as follows:

Fair Value Measurements at Reporting Date Using:
	Fair Value		Quoted Prices In Active Markets for Identical Assets/Liabilities (Level 1)		Level 2		Level 3
June 30, 2011
Available-for-sale securities	$	2,402,992	$	2,402,992		0		0
June 30, 2010
Available-for-sale securities	$	2,213,203	$	2,213,203		0		0
September 30, 2010
Available-for-sale securities	$	2,366,870	$	2,366,870		0		0

Gains and losses included in earnings for the periods reported in investment income as follows:

Investment Income
	Three Months Ended June 30,				Nine Months Ended June 30,
	2011		2010		2011		2010
Total gains or (losses) included in earnings	$	21,846	$	37,355	$	176,851	$	83,261

Financial assets and liabilities valued using level 1 inputs are based on unadjusted quoted market prices within active markets.

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Basis of Presentation

9 Months Ended

Jun. 30, 2011

Basis of Presentation [Abstract]

Basis of Presentation

Note 1 – Basis of Presentation

The information furnished herewith reflects all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the period.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to SEC rules and regulations, although the Company believes the disclosures which are made are adequate to make the information presented not misleading.

The condensed consolidated financial statements contained herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's latest annual report on Form 10-K for the fiscal year ended September 30, 2010.  These unaudited interim consolidated financial statements have not been audited by a firm of certified public accountants.

It is the Company's policy to reclassify amounts in the prior year financial statements to conform to the current year presentation.

Deferred income tax assets and liabilities are netted between short term and long term for presentation on the balance sheet.

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Pension and Other Post-Retirement Benefit Plans

9 Months Ended

Jun. 30, 2011

Pension and Other Post-Retirement Benefit Plans [Abstract]

Pension and Other Post-Retirement Benefit Plans

Note 4 - Pension and Other Post-retirement Benefit Plans

Components of Net Periodic Benefit Cost:

	Nine Months Ended Jun 30,
	Pension Benefits						Other Benefits
	2011			2010			2011			2010
Service cost	$	249,794		$	250,069		$	10,364		$	19,672
Interest cost		582,044			598,260			31,440			36,740
Expected return on plan assets		(557,278	)		(519,223	)		-			-
Amortization of prior service cost		12,604			12,604			(8,768	)		(7,824	)
Amortization of net (gain) loss		622,025			688,198			(27,054	)		(21,494	)
Net periodic benefit cost	$	909,189		$	1,029,908		$	5,982		$	27,094

Contributions

The Company expects to contribute $847,816 to its Pension Plan and $55,000 to its other Post Retirement Benefit Plan in fiscal year 2011.  A total of $648,120 has been paid to the Pension Plan for the first nine months of this fiscal year.

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Rate Cases

9 Months Ended

Jun. 30, 2011

Rate Cases [Abstract]

Rate Cases

Note 5 – Rate Cases

In August 2009, in Case 08-G-1137, the New York Public Service Commission (“NYPSC”) approved a rate increase of $1.5 million effective September 1, 2009 that was included in a gas rate joint proposal dated March 27, 2009. The order also contained a revenue decoupling mechanism (RDM), a refund or surcharge on customer bills to reflect differences between actual delivery revenue from residential customers and a revenue target. The order also contained a year two “capital tracker”. This allowed the Company to file for rate relief in 2010 for new capital projects without a full rate proceeding. In addition, the percentage of revenues from gas producers retained by the Company as an incentive was increased from 10% to 20%. On January 25, 2011, the NYPSC approved an estimated increase in rates of $164,000 associated with the “capital tracker”. The final amount will be determined based on the actual capital expenditures and additional property taxes through August 2011. On February 1, 2011, the Company filed for a re-hearing to include depreciation expense as a component in the calculation. It is unknown at this time when the NYPSC will act on the Company's request.

On May 24, 2011, the Company filed Case 11-G-0280, a base rate case that requested an increase in revenues of $1,429,281 (or 6.63% on an overall bill rate basis) in the 12 months ending April 30, 2013, (the Rate Year) and by the same dollar amount in the two succeeding 12-month periods (ending April 30, 2014, and April 30, 2015). This multi-year proposal is a leveled alternative to a single-year increase of $2,565,649 in the Rate Year and $901,464 and $583,033 for the years ending April 30, 2014, and April 30, 2015, respectively. It also asked that the Commission permit increases for certain limited expenditures (capital additions and property taxes) for the 12-month periods ending April 30, 2016, and April 30, 2017. The Company proposed to offset the annualized amount by an $844,000 surcharge credit that represents the forecasted customer share of the revenues from transportation of local production gas including operation of the associated compressor facilities. If the Company's surcharge credit proposal is adopted by the Commission the overall bill impact on customer bills will be 2.71%. The Company in the filing requested a Return on Equity Capital of 10.9 %.

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Executive Incentive Program

9 Months Ended

Jun. 30, 2011

Executive Incentive Program [Abstract]

Executive Incentive Program

Note 13 – Executive Incentive Program

On February 5, 2010 at the regularly scheduled meeting of the Company's board of directors, an Executive Incentive Plan was approved. The plan provides a mechanism for certain senior employees to receive payments for goals that are achieved during calendar year 2010.  Awards under this program were determined by the board at its regularly scheduled meeting on March 8, 2011 and paid on March 17, 2011.

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Financing Activities

9 Months Ended

Jun. 30, 2011

Financing Activities [Abstract]

Financing Activities

 Note 6 – Financing Activities

In October 2008, we obtained $1.0 million of financing in the form of a demand loan from Manufacturers and Traders Trust Company to help with the cost of our new construction. Interest on this loan was payable on a monthly basis at a rate equal to 1% above the prime rate. The initial interest rate on this loan was 5.5% and was 4.25% at the end of December 2010. The Company repaid $500,000 in December 2009 and the balance in December 2010.

On May 7, 2010, the Company entered into a credit agreement with Community Bank N.A. for a $1.05 million promissory note at a fixed interest rate of 6.25% for the purpose of funding construction projects at our new franchise location in the Town of Virgil. This agreement gives our lender a security interest in all fixtures, equipment and inventory related to the Company's franchise in the Town of Virgil as well as the Rabbi Trust account. The note also required an equity contribution of $350,000 which was accomplished by the exercise of 24,000 stock options by Michael I. German, President and CEO, at $15.00 per share or $360,000. The agreement included the following covenants to be measured at each fiscal year end starting with the September 30, 2009 financial statement:

(i)           Maintain a tangible net worth of not less than $11.0 million,

(ii)           Maintain a debt to tangible net worth of less than 3.0 to 1.0, and

(iii)           Maintain a debt service coverage ratio of 1.10 to 1.

On March 10, 2011, the interest rate on this loan was modified from a fixed interest rate to a floating rate of 30-day LIBOR plus 2.75% with a floor rate of 4.5% and a ceiling rate of 6.25%. The rate was 4.5% as of June 30, 2011.

In September 2010, we entered into an agreement with Five Star Bank to provide $750,000 to fund construction of an upgrade to existing natural gas piping to serve increased gas demands on one of our main supply lines, including three Corning Incorporated plants. Interest is payable monthly at a fixed rate of 4.25% per annum and, unless sooner accelerated or demanded, the note will mature on September 25, 2011. The Company expects this agreement to be renewed for another term.

On October 27, 2010, the Company entered into a Multiple Disbursement Term Note with Manufacturers and Traders Trust Company in the amount of $1,865,000 to refinance construction costs originally financed through internally generated funds. The interest rate of this note is 5.76% and is payable monthly for five years calculated on a ten-year amortization schedule. A final payment equal to the outstanding principal and interest will be due on the maturity date.

In February 2011, we renewed our $7.0 million revolving line of credit with Community Bank N.A. The line of credit bears interest annually at a fluctuating rate equal to the greater of 3.5% or the 30-day LIBOR plus 2.25% and expires on February 28, 2012. Under this agreement, the aggregate borrowings at any one time under the revolving line may not exceed the sum of 100% of all eligible accounts receivable plus 100% of all gas inventory plus 50% of miscellaneous eligible inventories (material and supplies on the balance sheet) plus 100% of the value of the Rabbi Trust investment account up to the $7.0 million limit. The interest rate was 3.5% as of June 30, 2011.

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Stock Dividend

9 Months Ended

Jun. 30, 2011

Stock Dividend [Abstract]

Stock Dividend

Note 16 – Stock Dividend

On March 21, 2011, the Company set April 1, 2011 as the record date for a one for two stock dividend on its outstanding common stock as authorized by the NYPSC in an order dated March 17, 2011. Each shareholder of record as of close of business on the record date was paid one share of common stock for each two shares held by such holder on April 20, 2011. Due to this stock dividend, all computations of number of shares and earnings per share have been adjusted retroactively for prior periods to reflect the change in capital structure.

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)	9 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Cash flows from operating activities [Abstract]
Net income	$ 1,609,601	$ 1,900,512
Adjustments to reconcile net income to net cash used in operating activities [Abstract]
Depreciation	1,028,002	525,199
Amortization of debt issuance costs	34,768	23,692
Regulatory Amortizations	1,309,240	1,309,697
Stock issued for services and stock option expense	118,801	91,653
Pension adjustment	(373,796)	(59,275)
Loss (Gain) on sale of marketable securities	4,753	(13,557)
Deferred income taxes	127,286	1,100,547
Bad debt expense	129,364	160,349
(Increase) decrease in [Abstract]
Accounts receivable	(861,486)	(670,687)
Gas stored underground	789,564	783,506
Materials and supplies inventories	48,108	(164,640)
Prepaid expenses	682,477	547,246
Unrecovered gas costs	1,075,879	123,099
Deferred regulatory costs	(246,938)	(40,189)
Other	(63,740)	(68,158)
Increase (decrease) in [Abstract]
Accounts payable	334,656	368,483
Accrued expenses	(161,866)	41,183
Customer deposits and accrued interest	(493,862)	(405,213)
Deferred compensation	(87,995)	(21,367)
Deferred pension costs & post-retirement benefits	(13,437)	(205,026)
Other liabilities and deferred credits	17,189	41,514
Net cash (used in) provided by operating activities	5,006,568	5,368,569
Cash flows from investing activities [Abstract]
Purchase of securities available-for-sale	(1,765,423)	(1,300,638)
Sale of securities available-for-sale	1,691,527	1,338,878
Capital expenditures	(2,519,436)	(3,222,472)
Net cash (used in) provided by investing activities	(2,593,332)	(3,184,232)
Cash flows from financing activities [Abstract]
Proceeds under lines-of-credit	10,348,509	11,676,362
Repayment of lines-of-credit	(13,130,200)	(13,765,433)
Debt issuance cost expense	(13,053)	(45,138)
Cash received from sale of stock	217,607	360,000
Dividends paid	(569,521)	(380,438)
Proceeds under long-term debt	1,878,000	1,091,912
Repayment of long-term debt	(1,053,023)	(1,084,255)
Net cash (used in) provided by financing activities	(2,321,681)	(2,146,990)
Net (decrease) increase in cash	91,555	37,347
Cash and cash equivalents at beginning of period	69,552	177,566
Cash and cash equivalents at end of period	161,107	214,913
Cash paid during the period for [Abstract]
Interest	666,663	686,354
Income taxes	$ 541,913	$ 124,073

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Subsequent Events

9 Months Ended

Jun. 30, 2011

Subsequent Events [Abstract]

Subsequent Events

Note 17 – Subsequent Events

On July 8, 2011, Bath Electric Gas & Water Systems (BEGWS), a natural gas customer of the Company, filed new testimony concerning its November 27, 2010, petition (see discussion under Regulatory Matters on page 23). In the testimony filed by its consultants, BEGWS acknowledged receipt of the amount claimed but raised new claims not in the original petition. BEGWS now asserts that the Company owes it a refund of $345,747 and that the NYPSC should allow BEGWS recovery of $451,866 from its customers. The total claim including interest is $839,907. The Company plans to contest BEGWS' testimony. The Company and BEGWS met with the staff of the NY Department of Public Service (“Staff”) on July 11, 2011, to discuss findings to date on the petition. No order has been issued by the NYPSC on this matter. The meter investigation associated with the petition is ongoing. If there were any merit to the BEGWS claims, and the Company were required to pay BEGWS a refund, the Company would attempt to recover such amounts under its gas adjustment clause in its gas rates. Currently, the Company does not believe that the BEGWS petition, whether it is granted or not, would have a material financial impact.

 On July 11, 2011, a pre-hearing conference was held in Albany, New York, before the NYPSC's Administrative Law Judges (“ALJs”) for the purpose of establishing a hearing schedule for the current rate case. The Staff, the Company and other parties presented a proposed schedule to the ALJs at that meeting. The schedule proposed by the parties was adopted by the ALJs by ruling dated July 13, 2011. A NYPSC decision is the rate case is expected by May 1, 2012.

On July 14, 2011, the Company entered into a Multiple Disbursement Term Note and Credit Agreement in the amount of $2 million with Manufacturers and Traders Trust Company to fund construction projects in our NYPSC-mandated repair/replacement program for calendar year 2011. Until October 31, 2011, the note will be payable as interest only at a rate of the greater of 3.50% above 30-day LIBOR or 4.25%. On November 1, 2011 the note will convert to a permanent loan payable monthly for five years calculated on a ten-year amortization schedule with the Company's choice of two interest rate options. The first is a fixed interest rate of the greater of the bank's five-year “cost of funds” plus 3.0%, set two business days prior to the conversion, or 5.25%. The second option is a variable rate, adjusting daily, based on the greater of 3.25 basis points above 30-day LIBOR or 4.25%.

On July 15, 2011, the Staff filed a motion to strike certain passages of Company's witness testimony in the pending rate case before the NYPSC. The Staff motion sought to exclude the prepared direct testimony and exhibits of the Company's witnesses as they pertain to the proposed transfer of certain pipeline facilities, the establishment of a holding company structure, and expenditures for the expansion of Coming's franchise in the Town of Virgil. The Company filed a response on July 25, 2011 to oppose Staff's motion on the basis that all of the issues raised by the NYPSC can be properly considered in the rate case.  A ruling from the ALJs was issued on August 2, 2011. The ruling granted the Staff's motion insofar as it pertained to the transfer of pipeline facilities and formation of a holding company on the ground that those matters should be addressed in separate proceedings. The ruling denied the Staff's motion to strike evidence on the expansion of the Virgil franchise, concluding that the consideration of the financial aspects of the expansion was appropriate in the pending rate case.

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New Accounting Standards

9 Months Ended

Jun. 30, 2011

New Accounting Standards [Abstract]

New Accounting Standards

Note 2 – New Accounting Standards

In April 2010, FASB amended FASB ASC 718-10, “Compensation-Stock Compensation”. This clarifies the denomination and classification of employee share-based payment awards in the currency of a market in which a substantial portion of an entity's equity securities trades that differs from the functional currency of the employer entity or the payroll currency of the employee. This amendment is in effect for fiscal years beginning on or after December 15, 2010. The Company does not expect FASB ASC 718-10 to have a material effect on its consolidated financial statements.

In July 2010, FASB issued FASB ASU 2010-20, “Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses”. The standard amends ASC Topic 310, “Receivables”, to enhance disclosures about the credit quality of financing receivables and the allowance for credit losses by requiring an entity to provide a greater level of disaggregated information and to disclose credit quality indicators, past due information, and modifications of its financing receivables. FASB ASU 2010-20 is effective for interim or annual fiscal years beginning after December 15, 2010 for public entities. The Company does not expect FASB ASU 2010-20 to have a material effect on its consolidated financial statements.

In May 2011, FASB issued FASB ASU 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S GAAP and IRFSs”. This standard amends ASC Topic 820, “Fair Value Measurement”, to clarify intent about the application of existing fair value measurements and standardize standard fair value measurements and disclosures. FASB ASU 2011-04 is effective for interim or annual fiscal years ending after      December 15, 2011 for public entities. The Company is evaluating the impact the adoption of FASB ASU 2010-20 will have on its consolidated financial statements.

In June 2011, FASB issued FASB ASU 2011-05, “Comprehensive Income” (Topic 220). This standard increases the prominence of items reported in other comprehensive income and dictates presentation of these items in financial statements. FASB ASU 2011-05 is effective for interim or annual fiscal years ending after December 15, 2011 for public entities. The Company is evaluating the impact the adoption of FASB ASU 2010-20 will have on its consolidated financial statements.

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Dividends

9 Months Ended

Jun. 30, 2011

Dividends [Abstract]

Dividends

Note 11 – Dividends

Dividends are accrued when declared by the Board of Directors. At its regular meeting on December 14, 2010, the Board of Directors approved an increase in the quarterly dividend from $.15 a share to $.1725 a share.  The dividend rate of $.1725 reflects the pre-stock dividend rate (see Note 16 – Stock Dividend for additional information). The Board of Directors reviewed the quarterly dividend rate at its next regularly scheduled meeting on June 14, 2011 and adjusted the dividend rate to $.115. Shareholders of record on June 30, 2011, were paid this dividend on July 15, 2011.

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Earnings Per Share

9 Months Ended

Jun. 30, 2011

Earnings Per Share [Abstract]

Earnings Per Share

Note 15 – Earnings Per Share

For the three months ended June 30, 2011, net income decreased by $229,777 compared to the same period in 2010 mainly because higher operating expense, taxes other than income taxes and depreciation expense offset higher margins. For the nine months ended June 30, 2011, net income decreased by $290,911 compared to the same period in 2010 due to in part to regulatory reconciliations, specifically Gas Adjustment Clause (“GAC”) adjustments, and a reconciliation of revenue under our revenue decoupling mechanism (RDM). These items resulted in an after-tax increase of $348,733 in operating revenue or $.20 earnings per share for the nine months ending June 30, 2010 compared to the same period ending June 30, 2011. Earnings per share have been adjusted retroactively for prior periods to reflect the stock dividend paid in April 2011 (see Note 16 – Stock Dividend).

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Condensed Consolidated Balance Sheets (USD $)	Jun. 30, 2011	Sep. 30, 2010	Jun. 30, 2010
Plant [Abstract]
Utility property, plant and equipment	$ 46,301,020	$ 43,785,340	$ 42,477,222
Less: accumulated depreciation	(14,061,321)	(13,037,075)	(13,013,295)
Total plant utility and non-utility, net	32,239,699	30,748,265	29,463,927
Investments [Abstract]
Marketable securities available-for-sale at fair value	2,402,992	2,366,870	2,213,203
Current assets [Abstract]
Cash and cash equivalents	161,107	69,552	214,913
Customer accounts receivable, (net of allowance for uncollectible accounts of $32,634, $43,873 and $41,390)	1,983,706	1,251,584	1,489,316
Gas stored underground, at average cost	1,906,831	2,696,395	1,538,872
Materials and supplies inventory	726,569	774,677	814,683
Deferred income taxes	216,380	0	0
Prepaid expenses	284,561	967,038	1,048,183
Total current assets	5,279,154	5,759,246	5,105,967
Regulatory assets [Abstract]
Unrecovered gas costs	17,150	1,093,029	746,174
Deferred regulatory costs	1,035,836	1,052,427	1,123,230
Unamortized debt issuance cost (net of accumulated amortization of $431,839, $385,616 and $397,071)	281,753	303,468	289,280
Deferred income taxes	0	0	77,484
Other	232,074	168,334	142,851
Total deferred debits and other assets	1,566,813	2,617,258	2,379,019
Total assets	41,488,658	41,491,639	39,162,116
Current liabilities [Abstract]
Current portion of long-term debt	1,145,269	971,417	978,747
Demand notes payable	750,000	1,250,000	500,000
Borrowings under lines-of-credit	2,358,958	5,140,649	4,667,490
Accounts payable	1,702,540	1,367,884	1,646,994
Accrued expenses	681,069	842,935	912,386
Customer deposits and accrued interest	589,206	1,083,068	717,973
Dividends declared	200,869	171,683	155,519
Deferred income taxes	0	359,254	96,227
Total current liabilities	7,427,911	11,186,890	9,675,336
Long-term debt, less current installments	9,807,519	8,656,394	9,121,022
Deferred credits and other liabilities [Abstract]
Deferred income taxes	733,955	31,035	0
Deferred compensation	1,850,111	1,938,106	1,999,406
Deferred pension costs & post-retirement benefits	6,855,493	5,823,219	6,984,087
Other	167,201	179,198	111,265
Total deferred credits and other liabilities	9,606,760	7,971,558	9,094,758
Common stockholders' equity [Abstract]
Common stock (common stock $5.00 par value per share. Authorized 3,500,000 shares; issued and outstanding 1,748,582 shares at June 30, 2011, 1,038,696 shares at June 30, 2010 and 1,146,454 at September 30, 2010)	8,742,910	5,732,270	5,193,480
Other paid-in capital	7,065,322	8,130,264	6,696,159
Retained earnings	1,484,905	2,054,115	2,435,635
Accumulated other comprehensive loss	(2,646,669)	(2,239,852)	(3,054,274)
Total common stockholders' equity	14,646,468	13,676,797	11,271,000
Total liabilities and capitalization	$ 41,488,658	$ 41,491,639	$ 39,162,116