WGES Again Sees Marginal Net Decline in Customers

For the fourth fiscal quarter of 2011, WGL Holdings' retail energy-marketing segment reported operating earnings of $11.7 million, up from $5.9 million for the same quarter of the prior fiscal year.

GAAP net income for the fourth quarter, ending September 30, 2011, was $6.0 million for the retail marketing segment, versus a year-ago net loss of $5.7 million.

For the full fiscal year 2011, the retail energy-marketing segment reported operating earnings of $34.1 million, up from $22.8 million a year ago. GAAP net income for the full fiscal year was $48.8 million, up from $11.1 million a year ago.

For both the fiscal year and quarterly comparisons, the increase in non-GAAP operating earnings reflects higher realized natural gas and electricity margins, partially offset by higher general and administrative expenses.

The increase in natural gas sales margins for the fiscal year was primarily attributed to higher gas sales volumes driven by customer growth and higher unit margins related to colder weather and higher wholesale deliveries. For the quarter, natural gas margin improvements were driven by customer growth and favorable timing on the recognition of margins compared to the prior year.

Electric sales margins increased for the full year and fourth quarter primarily due to higher sales volumes driven by customer growth as well as favorable weather and pricing conditions in 2011.

Washington Gas Energy Services customer count stood at 354,700 as of September 30, 2011, down marginally from 356,000 as of June 30, 2011 but up versus the year-ago 315,800.

It's the second consecutive quarter of a marginal net customer loss versus the total as of three months ago. WGES lost a net of 1,300 customers from June 30, 2011 to September 30, 2011, and lost a net of 1,100 customers from March 31, 2011 to June 30, 2011. In contrast, WGES added nearly 20,000 customers during the period from December 31, 2010 to March 31, 2011.

Unlike in the three months ended June 30, 2011, where the net customer attrition was solely on the gas side, the net loss of customers for the three months ended September 30, 2011 was solely on the electric side, with a marginal increase in gas customer count.

WGES' electric customer count was 182,500 as of September 30, 2011, versus 183,900 as of June 30, 2011 and 154,900 a year ago.

WGES' natural gas customer count was 172,200 as of September 30, 2011, up from 172,100 as of June 30, 2011 and 160,900 a year ago.

Electric volumes at WGES for the quarter ending September 30, 2011 were 3,048 GWh, versus 2,910 GWh a year ago. Gas volumes at WGES were 68.2 million therms for the quarter, versus 63.2 million therms a year ago.