Retail Supplier: Competitive Pressure Leading to Prices Which Do Not Allow for Recovery of Direct Mass Marketing Costs

"Continued competitive pressures," in the retail electric market have challenged the recovery of marketing costs, Integrys Energy Group said in a presentation released in conjunction with quarterly earnings today.

Specifically, due to such competitive pressures, "[p]ricing did not allow for full recovery of costs for direct mass marketing [to] electric customers in Illinois," Integrys Energy Group said in providing an update on its Integrys Energy Services unit.

As a result, unit margins continue to decline

Realized per unit electric margins for Integrys Energy Services were $2.53/MWh for the quarter ending September 30, 2013, versus $6.78/MWh a year ago.

Realized per unit natural gas margins were $0.17/dekatherm for the quarter ending September 30, 2013, versus $0.22/dekatherm a year ago.

Integrys Energy Services realized retail electric margin was $15.9 million for the third quarter, versus $27.2 million a year ago. Retail electric volumes were higher for the quarter at 6,291.0 GWh, up from 4,010.6 GWh a year ago.

Realized retail natural gas margin, prior to the lower-of-cost-or-market impact, was $5.9 million for the third quarter, versus $4.2 million a year ago. Retail natural gas volumes were higher for the quarter at 34.8 bcf, up from 19.3 bcf a year ago.

Core earnings at Integrys Energy Services for the quarter were $1.3 million, down from $7.7 million a year ago, largely due to decreased retail electric margin.