Washington Gas Energy Services Sees Second Consecutive Quarter of Net Churn, Operating Earnings Steady

WGL Holdings' retail energy marketing segment reported non-GAAP operating earnings for the three months ended December 31, 2012 of $12.0 million, versus $13.1 million for the year-ago period.

Non-GAAP operating earnings reflect lower realized electric margins due to quarterly fluctuations in the pattern of margin recognition, partially offset by increased sales volumes versus the same quarter of the prior year. Realized natural gas margins were virtually unchanged versus the same quarter of the prior year. The pattern of margin recognition that the retail energy marketing segment realizes in a given quarter varies from year to year. Operating expenses declined due to lower customer acquisition expenses in the current quarter compared to the same quarter of the prior fiscal year.

The retail energy marketing segment's GAAP net income was $13.0 million for the quarter ended December 31, 2012, versus $800,000 a year ago.

As of December 31, 2012, Washington Gas Energy Services was serving 360,800 customers, versus 371,800 customers as of September 30, 2012 and 371,500 a year ago.

The loss of 11,000 customers from September 30, 2012 to December 31, 2012 was in line with the loss of 11,300 customers from June 30, 2012 to September 30, 2012. Previously, from March 31, 2012 to June 30, 2012, WGES had recorded customer growth of 7,100 customers.

WGES' electric customer count was 186,800 as of December 31, 2012, versus 194,300 as of September 30, 2012, and 194,400 a year ago.

WGES' natural gas customer count was 174,000 as of December 31, 2012, versus 177,500 as of September 30, 2012, and 177,100 a year ago.

Electric volumes at WGES for the quarter ending December 31, 2012 were 2,804 GWh, versus 2,513 GWh a year ago. Gas volumes at WGES were 210.9 million therms for the quarter, versus 182.7 million therms a year ago