330 West William Street, Corning, New York  14830

Via Fax and Edgar

April 2, 2009

H. Christopher Owings

Assistant Director

Securities and Exchange Commission

Re: Corning Natural Gas Corporation Form 10-K for the Fiscal Year Ended September 30, 2008 Filed December 19, 2008 Amendment No. 1 to Form 10-K for the Fiscal Year Ended September 30, 2008 Filed January 28, 2009 File No. 000-00643

Dear Mr. Owings:

On behalf of Corning Natural Gas Corporation, a New York corporation, please find below Corning’s response to the comment of the staff of the Securities and Exchange Commission contained in your letter to Michael I. German dated March 19, 2009.  For your convenience we have repeated your comments before our responses.

Form 10-K for the fiscal year ended September 30, 2008

Utilities Operating Revenue, page 8

1.   We note your response to comment one of our letter dated February 27, 2009 and the proposed revised disclosure to be made in the future filings.  Regarding the proposed revisions to the Consolidated Statements of Cash Flows we note the following:

·   You have added additional line items Contributed Fixed Asset in the amount of ($649,900) and Customer deposit liability and accrued interest in the amount of ($561,196) however the net cash provided by operating activities previously disclosed did not change and is still $2,513,972.  Based on the amounts reflected in your response, it appears the amount should now be $1,864,073 reflecting a decrease in cash flows from operating activities of over 25 percent from the amount you previously reported.

H. Christopher Owings

Securities and Exchange Commission

Page 2

·   The contributed fixed asset of $649,900 had previously been netted against capital expenditures and the amount is now ($3,524,263) versus ($4,174,163) representing a decrease of over 15 percent.  Given the revised amount for capital expenditures, please explain why the net cash used in investing activities of ($4,998,853) has not changed from that previously disclosed.  Based on the amounts reflected as cash flows from investing activities in your response, it appears that amount should now be ($4,348,953).

Please confirm net cash provided by operating activities should be $1,864,073 and net cash used in investing activities should be ($4,348,953) or advise us accordingly.

Due to an Edgar conversion error, it appears the “Customer deposit liability and accrued interest” line was inadvertently left out of the Consolidated Statements of Cash Flows filed with the Company’s September 30, 2008 Form 10-K.  However, the $(561,196) was included in the calculation of net cash provided by operating activities.  Therefore, the absence of the customer deposit line item did not impact net cash provided by operating activities.

You are correct, the addition of the $(649,900) “Contributed fixed asset” line does require net cash provided by operating activities be decreased from $2,513,972 to $1,864,072.  As you point out, the $649,900 adjustment to capital expenditures also requires that net cash used in investing activities be decreased from $(4,998,853) to $(4,348,953).  We apologize for not making these adjustments to the Consolidated Statements of Cash Flow attached to our March 12, 2009 letter.  A corrected statement is attached as Exhibit A.

2.   You propose to revise the amounts reported for year ended September 30, 2008 in future filings.  Please tell us what factors you considered in determining that the misstated amounts were immaterial not requiring an amendment to your Form 10-K and restatement of the amounts reported.  Refer to SAB Topic 1:M.

We do not feel the revisions to the Company’s Consolidated Statements of Cash Flows rise to the level of materiality that would require an amendment to our 2008 Form 10-K and restatement of our financials.  In coming to this conclusion, we have considered primarily the impact of the revisions to our financials taken as a whole.  Although we propose to make internal adjustments to our 2008 statement of cash flows, our balance sheet, statement of income and statement of shareholders’ equity remain unaltered.  The misstatements in cash flows do not cause our financial statements as a whole to be materially misstated.  Critically, our key performance indicators — net income and stockholders’ equity — are unaffected by the adjustments to cash flows.

H. Christopher Owings

Securities and Exchange Commission

Page 3

Although we recognize that the percentage changes in cash flows from operating and investing activities may at first blush appear material due to their size, SAB Topic 1:M makes clear that “magnitude by itself, without regard to the nature of the item and the circumstances in which the judgment has to be made, will not generally be a sufficient basis for a materiality judgment.”  See FASB Concepts Statement No. 2, Qualitative Characteristics of Accounting Information, paragraph 125.  We believe the impact of the contributed pipeline is clearly disclosed in our 2008 10-K in MD&A.  In light of these circumstances, we do not believe the misstatement in cash flows would have changed or influenced the judgment of a reasonable person relying on the report, and therefore that the revision is not material.  We feel this conclusion is bolstered by the fact that the revision does not involve the factors described in SAB Topic 1:M that can contribute to the materiality of a misstatement.  For example, the misstatement:

§ does not mask a change in earnings or other trends;

§ does not hide a failure to meet analysts’ expectations for Corning;

§  does not affect our compliance with regulatory compliance, loan covenants or other contractual requirements;

§ does not increase management’s compensation; and

§ does not involve concealment of an unlawful transaction.

Based on all of these considerations, we concluded that the cash flow revisions are not material and that amending our 10-K and restating the financials is not necessary.

I trust that the foregoing is responsive to the comments of the staff. If you have any questions regarding the responses by Corning Natural Gas set forth in this letter, please do not hesitate to contact me at 607-936-3755, extension 239 or Christopher J. Hubbert at 216-736-7215.

/s/  Michael I German

Michael I. German

Chief Executive Officer and President

cc:   Catherine Brown, Staff Attorney Andrew Mew, Accounting Branch Chief Donna DiSilvio, Staff Accountant Audit Committee of the Board of Directors Christopher J. Hubbert, Esq.

Exhibit A 

CORNING NATURAL GAS CORPORATION AND SUBSIDIARY

Consolidated Statements of Cash Flows

For Years Ended September 30, 2008, 2007, and 2006

	2008			2007			2006
Cash flows from operating activities:
Net income		1,006,349			259,545			(3,615,952	)
Adjustments to reconcile net income to net cash used in operating activities:
Contributed Fixed Asset		(649,900	)		-			-
Depreciation and amortization		694,251			625,498			517,123
Unamortized debt issuance cost		24,006			24,006			18,063
Loss (Gain) on sale of marketable securities		(44,345	)		(157,367	)		(246,229	)
Deferred income taxes		(404,802	)		(60,733	)		279,106
Bad debt expense		294,837			234,737			25,396
(Gain) loss on sale of discontinued operations		-			-			984,550
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable		320,190			141,664			(402,108	)
Gas stored underground		(1,367,108	)		(3,823,451	)		3,734,795
Materials and supplies inventories		(71,480	)		(139,271	)		(71,326	)
Prepaid expenses		61,756			(1,114	)		(58,166	)
Unrecovered gas costs		338,149			(273,243	)		698,531
Deferred regulatory costs		934,701			(197,392	)		-
Deferred pension and other		-			202,448			192,158
Other		(5,998	)		86,127			955,093
Increase (decrease) in:
Accounts payable		(92,351	)		843,281			1,063,801
Accrued expenses		(12,384	)		(122,187	)		439,498
Customer deposit liability and accrued interest		(561,196	)		62,781			73,404
Deferred Compensation		10,247			13,558			246,721
Deferred pension costs & post-retirement benefits		1,227,238			305,663			(1,809,454	)
Other liabilities and deferred credits		161,912			(322,264	)		(187,903	)
Net cash (used in) provided by operating activities		1,864,072			(2,297,714	)		2,837,101
Cash flows from investing activities:
Purchase of securities available-for-sale		(3,666,053	)		(956,200	)		(406,580	)
Sale of securities available-for-sale		2,841,363			1,847,021			431,037
Capital expenditures		(3,524,263	)		(1,732,767	)		(1,654,229	)
Cash received from sale of discontinued operations		-			-			908,113
Net cash (used in) provided by investing activities		(4,348,953	)		(841,946	)		(721,659	)
Cash flows from financing activities:
Proceeds under lines-of-credit		18,065,225			11,728,908			7,937,919
Repayments under lines-of credit		(16,257,251	)		(13,763,908	)		(7,987,919	)
Debt Issuance Cost Expense		(106,999	)		-			-
Cash received from sale of stock		75,000			4,711,402			-
Proceeds under long-term debt		694,292			206,251			-
Repayment of long-term debt		-			(898,449	)		(1,150,409	)
Net cash (used in) provided by financing activities		2,470,267			1,984,204			(1,200,409	)
Net (decrease) increase in cash		(14,614	)		(1,155,456	)		915,033
Cash and cash equivalents at beginning of period		14,614			1,170,070			255,037
Cash and cash equivalents at end of period	$	0		$	14,614		$	1,170,070
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	1,047,405		$	764,895		$	1,216,278
Income taxes	$	6,182		$	6,000		$	3,000
Non-cash investment activities-retirement of assets	$	102,389			-			-

See accompanying notes to consolidated financial statements