Exhibit 99.1



Contact:          John B. Williamson, III
                  Chairman, President and CEO
Telephone:        (540) 777-3810

FOR IMMEDIATE RELEASE


                    RGC RESOURCES, INC. SELLS PROPANE ASSETS
                            DECLARES SPECIAL DIVIDEND

ROANOKE, VA. (JULY 12, 2004)--Today RGC Resources, Inc. (Nasdaq: RGCO) announced
that its subsidiary, Diversified Energy Company, d/b/a Highland Propane Company,
has sold its propane assets to Inergy Propane, L.L.C., the operating subsidiary
of Inergy, L.P. (Nasdaq: NRGY), for approximately $28 million in cash. The
Company also announced the declaration of a special dividend of $4.50 per share
for shareholders of record on September 30, 2004, payable on December 8, 2004.

     The Company's CEO, John B. Williamson, III, stated that "this transaction
provides the Company with additional capital to retire debt and to grow and
enhance our natural gas distribution operations in addition to providing a
return to our shareholders." He also stated that "I am very pleased that Inergy
has hired all of our Highland Propane employees, demonstrating a commitment to
continued excellent customer and community service. This is a win-win situation
for our local communities as well. Not only will we increase the level of
investment in our natural gas operations, but the Roanoke area will be home to a
division of one of the ten largest and fastest growing propane distributors in
the country."

     RGC Resources, Inc. provides energy products and services to customers in
Virginia and West Virginia through its operating subsidiaries including Roanoke
Gas Company, Bluefield Gas Company, Diversified Energy Company, and RGC Ventures
of Virginia, Inc.

     From time to time, the Company may publish forward-looking statements
relating to such matters as anticipated financial performance, business
prospects, technological developments, new products, research and development
activities and similar matters. The Private Securities Litigation Reform Act of
1995 provides a safe harbor for forward-looking statements. In order to comply
with the terms of the safe harbor, the Company notes that a variety of factors
could cause the Company's actual results and experience to differ materially
from the anticipated results or other expectations expressed in the Company's
forward-looking statements.