Performance of CenterPoint Competitive Retail Unit Continues to be Masked by Wholesale Losses

CenterPoint Energy's competitive natural gas sales and services business reported an operating loss of $10 million for the third quarter of 2011 compared to operating income of $7 million for the same period of 2010, largely due to the continuing unfavorable climate for the wholesale side of the business.

The competitive retail segment, "continues to perform well," CenterPoint said.

At the competitive sales and services unit, third quarter 2011 results included gains of $6 million resulting from mark-to-market accounting for derivatives associated with certain forward natural gas purchases and sales used to lock in economic margins, compared to gains of $19 million for the same period of 2010. The third quarter of 2011 also included a $7 million write-down of natural gas inventory to the lower of average cost or market compared to a $6 million write-down in the same period of 2010.

Basis spreads on pipeline transportation opportunities remain depressed and continue to negatively impact the competitive segment's results, CenterPoint said.

CenterPoint's competitive natural gas sales and services business had 12,650 customers as of September 30, 2011, versus 12,152 customers as of June 30, 2011, and 11,883 customers a year ago.

CenterPoint said that the focus for the competitive sales unit, "is on expanding our commercial and industrial base and increasing our product and service offerings."

After reporting earnings, CenterPoint today said that its competitive unit has acquired gas marketer Asgard Energy (see related story).

Overall throughput for the competitive segment (retail and other business lines) was 126 Bcf for the quarter, versus 135 Bcf a year ago

Revenues for the competitive sales and services segment were $584 million for the quarter, versus $647 million a year ago