Integrys Energy Services Reports Higher Electric Margins

Adjusted earnings for Integrys Energy Services increased to $11.6 million for the first quarter of 2011, from $5.7 million for the first quarter of 2010.

Earnings were lifted by a $3 million benefit due to a change in effective tax rate, driven by decreased tax expense due to the re-valuation of deferred tax assets. Additionally, Integrys Energy Services benefited from a $1.4 million decrease in employee payroll and benefit expenses, primarily related to the reduction in workforce at Integrys Energy Services as a result of its previously reported strategy change.

Realized retail electric margins were $20.3 million for the quarter, versus $17.4 million a year ago. Realized per unit retail electric margins expanded to $6.88/MWh in the quarter, from $5.52/MWh a year ago, due to customer mix and disciplined pricing.

Physical retail electric volumes were lower for the quarter at 2,952.5 GWh, versus 3,153.3 GWh a year ago.

Realized retail natural gas margins, excluding the impact of lower of cost or market accounting, were lower at $23.5 million, versus $29.3 million a year ago, due to higher supply fees under a preferred supplier agreement versus the year-ago quarter, as more gas was sourced under this agreement in the 2011 quarter.

Realized natural gas per unit margins were $0.48 per dekatherm versus $0.58 per dekatherm a year ago.

Physical natural gas volumes were 48.5 billion cubic feet in the first quarter, versus 50.4 billion cubic feet a year ago.

GAAP earnings for Integrys Energy Services were $10.8 million for the quarter, versus a loss of $48.3 million a year ago.