SouthStar Sees Increased Margins; Marginal Attrition in Georgia Book

AGL Resources' retail operations, consisting of SouthStar Energy Services and the Nicor retail businesses, contributed EBIT of $5 million for the third quarter of 2012, an increase of $10 million compared to the EBIT loss of $5 million for the same period in 2011.

The increase was primarily the result of the addition of Nicor's retail businesses, as well as increased margins resulting from reduced transportation and gas costs and lower bad debt expense at SouthStar.

Specifically, the addition of Nicor's retail businesses resulted in a $6 million increase in EBIT, while SouthStar's EBIT was favorable by $4 million year-over-year on the drivers noted above.

SouthStar Energy Services' average customer count in Georgia was 477,000 for the three months ended September 30, 2012, versus 488,000 for the three months ended June 30, 2012, and 482,000 a year ago.

SouthStar's market share in Georgia for the three months ended September 30, 2012 was 32%, which was even with the market share as of June 30, 2012, and marginally down from a year ago (32.5%).

SouthStar's average customer count in Ohio & Florida for the three months ended September 30, 2012 was 63,000, versus 73,000 for the three months ended June 30, 2012 and 94,000 as of September 30, 2011. For the period prior to April 1, 2012, the Ohio totals included 50,000 in customer equivalents acquired through the prior SSO auctions, with such contracts ending April 1, 2012.

AGL Resources' competitive retail business's average customer count in Illinois for the three months ended September 30, 2012 was 414,000, versus 429,000 for the three months ended June 30, 2012. A year-ago comparison for Illinois, as well as the additional states cited below, was not provided.

AGL Resources' competitive retail business's average customer count in Indiana for the three months ended September 30, 2012 was 37,000, versus 40,000 for the three months ended June 30, 2012.

AGL Resources' competitive retail business's average customer count for "other" markets was 6,000 for the three months ended September 30, 2012, up from 3,000 for the three months ended June 30, 2012.

Total average customer count for the competitive retail business for the three months ending September 30, 2012 was 997,000, versus 1.033 million for the three months ending June 30, 2012 and 576,000 for the three months ending September 30, 2011 (the year-ago total does not include any Nicor retail customers).

SouthStar's Georgia firm volumes for the three months ended September 30, 2012 were 3 Bcf, flat versus the year ago. Ohio & Florida firm volumes were flat at 1 Bcf for the quarter ended September 30, 2012.