Just Energy Mass Market Customer Count Surges

Just Energy reported a 44,000 increase in the number of mass market Residential Customer Equivalents (RCEs) from the period September 30, 2014 to December 31, 2014, bringing its mass market customer total to nearly pre-polar vortex levels.

Specifically, Just Energy was serving 1.991 million mass market RCEs as of December 31, 2014, versus 1.947 million as of September 30, 2014, and 1.994 million a year ago.

The net growth of 44,000 mass market RCEs from September 30, 2014 to December 31, 2014 compares to net growth of 5,000 mass market RCEs from June 30, 2014 to September 30, 2014, and losses of 3,000 mass market RCEs from March 31 to June 30, and a net loss of 15,000 mass market RCEs from December 31, 2013 to March 31, 2014

The growth of 44,000 mass market RCEs reflects gross additions of 187,000, attrition of 117,000, and 26,000 RCEs which failed to renew.

Just Energy commercial RCEs increased to 2.671 million RCEs as of December 31, 2014, from 2.657 million RCEs as of September 30, 2014 and 2.366 million RCEs a year ago

The net growth of 14,000 commercial RCEs since September 30, 2014 compares to net growth of 62,000 commercial RCEs from June 30, 2014 to September 30, 2014.

Total Just Energy customer count was 4.662 million as of December 31, 2014, versus 4.604 million RCEs as of September 30, 2014 and 4.360 million a year ago.

For the three months ended December 31, 2014, 18% of total customer additions were generated from door-to-door sales, 48% from commercial brokers and 34% through online and other non-door-to-door sales channels. In the prior comparable period, 26% of new customers were generated using door-to-door sales channels.

The combined attrition rate for Just Energy was 16% for the trailing 12 months ended December 31, 2014, an increase from the 14% overall rate reported a year prior. Mass market attrition was 27%.

Annual gross margin per customer for customers added and lost during the three months ended December 31, 2014 were as follows (number of customers in brackets):

Mass Market Customers Added/Renewed    $191   [209,000]
Mass Market Customers Lost             $187   [144,000]
C&I Customers Added/Renewed             $85   [240,000]
C&I Customers Lost                      $71   [162,000]

For the three months ended December 31, 2014, the average gross margin per RCE for the customers added and renewed by the mass market division was $191/RCE, an increase from $160/RCE in the prior comparable quarter. Higher new customer margins reflect increased JustGreen participation and strong margins on price-protected product offerings.

For C&I customers, the Company has pursued a plan where focus in the commercial market will be on higher margin segments while those with traditionally low margins are allowed to attrite.

Just Energy gross margin for the quarter ending December 31, 2014 was $150.1 million, versus $148.6 million a year ago (all $ Canadian)

Base EBITDA from continuing operations was $50.6 million for the quarter, down 19% from $62.1 million in the prior comparable period, due to higher administrative costs including legal costs (such as the recent Massachusetts settlement).