South Jersey Energy Company Reports Higher Adjusted Earnings

South Jersey Energy Company reported adjusted earnings of $400,000 for the third quarter of 2010, versus break-even results in the year-ago quarter.

Gains were from a previously reported electric aggregation contract for New Jersey schools, as well as from contributions from its EnergyMark partnership (which purchased certain Constellation retail gas books early this year), which was not in operation in the year-ago quarter.

The adjusted metric excludes unrealized gains and losses. Including these impacts, the income contribution from South Jersey Energy Company for the three months ended September 30, 2010 decreased $4.2 million to a net loss of $4.7 million.

Gross margin from South Jersey Energy Company's retail gas sales increased $700,000 compared with the same period in 2009 due mainly to incremental margins from new customers acquired in Pennsylvania, which was partially offset by the impact of lower New Jersey customer counts. South Jersey Energy Company was able to secure higher margins on most of its new customers.

Gross margin from South Jersey Energy Company's retail electricity sales decreased $7.6 million for the three months ended September 30, 2010 compared with the same period in 2009. Excluding the impact of the net change in unrealized gains and losses recorded on forward financial contracts, gross margin increased $500,000 versus the year-ago quarter. The gain was largely due to the previously cited school aggregation that South Jersey Energy Company won, as well as the addition of several commercial and industrial customers.

South Jersey Energy Company's retail gas customer count at period end was as follows:

September 30 2010 2009
Residential 7,649 9,184
Commercial & Large Volume 970 928

Natural gas sales volumes for the comparative periods were as follows (in decatherms):

September 30 2010 2009
Residential 42,057 52,688
Commercial & Large Volume 3,986,300 3,548,570

South Jersey Energy Company affirmed that it expects to receive license approvals for New England retail gas marketing by the end of the year, and will begin cross-selling to its New England electric customers.

Retail electric revenue at South Jersey Energy Company was $42.1 million for the quarter, versus $33.1 million a year ago.

South Jersey Energy Company said that it is "rapidly" expanding in New Jersey largely due to small business electric offerings. Additionally, South Jersey Energy Company said that it is finalizing steps necessary to become an approved supplier in Pennsylvania to begin supplying electricity in the state in 2011.