WGES Reverses Customer Attrition, Reports Growth

WGL Holdings' retail energy marketing segment reported operating earnings of $13.1 million for the quarter ended December 31, 2011, up from $6.8 million in the year-ago quarter.

Operating earnings reflect adjustments to eliminate unrealized mark-to-market gains and losses attributable to certain wholesale energy supply and retail sales contracts.

The increase in operating earnings reflects higher realized natural gas and electricity margins. The increase in natural gas sales margins for the quarter is primarily attributed to favorable spreads between retail prices and storage withdrawals and a more favorable pattern of margin recognition in the current quarter versus the same quarter of the prior year. These favorable impacts were partially offset by lower retail sales volumes resulting from warmer weather and less profitable portfolio optimization activity.

Electric sales margins were higher due to favorable price conditions and a more favorable pattern of margin recognition in the current quarter versus the same quarter of the prior year.

GAAP earnings for the quarter were $800,000, versus $24.9 million a year ago.

Washington Gas Energy Services had 371,500 customers as of December 31, 2011, up from 354,700 as of September 30, 2011, and 337,700 of December 31, 2010.

The net increase of 16,800 customers from September 30, 2011 to December 31, 2011 reverses two consecutive quarters of marginal customer attrition. WGES had lost a net of 1,300 customers from June 30, 2011 to September 30, 2011, and had lost a net of 1,100 customers from March 31, 2011 to June 30, 2011.

As of December 31, 2011, WGES electric customers numbered 194,400, up from 182,500 as of September 30, 2011 and 168,300 a year ago.

As of December 31, 2011, WGES natural gas customers numbered 177,100, up from 172,200 as of September 30, 2011 and 169,400 a year ago.

Electric volumes at WGES for the quarter ending December 30, 2011 were 2,513 GWh, versus 2,446 GWh a year ago. Gas volumes at WGES were 182.7 million therms for the quarter, versus 216.5 million therms a year ago.