SouthStar Energy Services Narrows Seasonal EBIT Loss

AGL saw its retail energy operations segment, consisting of SouthStar Energy Services, report a seasonal EBIT loss of $5 million for the third quarter of 2011, narrowing the year-ago EBIT loss of $9 million.

Operating margin at SouthStar was $11 million for the quarter ending September 30, 2011, an increase of $1 million versus the year-ago due to reduced transportation and gas costs, partially offset by continued competitive pressure in Georgia, including lower retail price growth.

SouthStar operating expenses decreased $3 million to $16 million for the quarter ending September 30, 2011, mainly due to a prior year legal settlement, offset in part by increased marketing expenses.

SouthStar's market share in Georgia as of September 30, 2011 was 32.5%, versus 32% as of June 30, 2011 (with such data not reported to the tenths decimal space) and 32.7% a year ago.

SouthStar's average customer count in Georgia for the quarter was 482,000, versus an average of 492,000 for the quarter ending June 30, 2011 and 487,000 a year ago.

Average customer count in Ohio and Florida was 94,000 for the quarter, versus 95,000 for the quarter ending June 30, 2011 and 66,000 a year ago. A portion of the Ohio total represents customer equivalents.

Georgia volumes for SouthStar were flat at 3 Bcf for the current and year-ago quarter. Quarterly volumes for Ohio and Florida were 1 Bcf, also flat versus the year-ago.

Although the continued migration of Georgia customers to lower margin fixed price plans was cited by AGL for a reduction in SouthStar's nine month results, AGL did not report any negative incremental impact from such product selection for the quarterly comparison.