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Flash: Just Energy Sees Decline in Mass Market Customer Base; Gross Additions Slower on Margin Discipline
Just Energy saw a net decline in its number of mass market energy marketing accounts from June 30, 2013 to September 30, 2013, it reported in releasing quarterly earnings.
Specifically, as of September 30, 2013, Just Energy was serving 1.977 million mass market (consumer) energy marketing Residential Customer Equivalents, down from 1.992 million mass market energy marketing RCEs as of June 30, 2013, and 1.990 million a year ago.
The net decline of 15,000 mass market energy marketing RCEs from June 30, 2013 to September 30, 2013 compares to a net increase of 3,000 mass market energy marketing RCEs from March 31, 2013 to June 30, 2013.
From June 30, 2013 to September 30, 2013, Just Energy saw gross mass market energy marketing RCE additions of 164,000, offset by attrition of 139,000 mass market energy marketing RCEs, and 40,000 mass market energy marketing RCEs which failed to renew.
The net loss of 15,000 mass market energy marketing RCEs was offset by an increase in commercial energy marketing RCEs.
Specifically, as of September 30, 2013, Just Energy was serving 2.345 million commercial energy marketing RCEs, up from 2.310 million commercial energy marketing RCEs as of June 30, 2013, and 2.034 million a year ago.
The net increase of 35,000 commercial energy marketing RCEs from June 30, 2013 to September 30, 2013 compares to a net increase of 77,000 commercial energy marketing RCEs from March 31, 2013 to June 30, 2013.
Just Energy said that it slowed the number of gross additions in its energy marketing business, particularly in the commercial business, "in an attempt to ensure that customers meet the Company's margin expectations."
"This has resulted in redeployment of resources toward markets with a stronger customer value proposition. The Company is currently reviewing its active customer base to ensure that profitability levels of products support our earnings profile, which may lead to a period of lower renewal rates and gross additions," Just Energy said.
For the three months ended September 30, 2013, 31% of total consumer and commercial energy marketing customer additions were generated from door-to-door sales, 40% from commercial brokers and 29% from Internet based and other non-door-to-door channels.
Just Energy's total energy marketing customer base as of September 30, 2013 was 4.322 million RCEs, up from 4.302 million RCEs as of June 30, 2013, and 4.024 million RCEs a year ago.
Just Energy also reported that its smart thermostat RCEs were 19,000 as of September 30, 2013, versus 15,000 as of June 30, 2013. Included in the consumer energy customer base is 9,000 smart thermostat customers bundled with a commodity contract. "This is a growing segment of Just Energy's business and represents increased economic value to the Company with lower attrition profile. The sale of this product is currently being marketed in Texas and Ontario," Just Energy said.
Just Energy's new U.K. energy marketing operations generated 15,000 customer additions in the quarter ending September 30, 2013, the highest number of customers added since the market entry in July 2012.
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November 8, 2013
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Copyright 2010-13 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com
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