Revenues

12 Months Ended

Dec. 31, 2021

Revenue from Contract with Customer [Abstract]

Revenues

3. Revenues

Our revenues are derived primarily from the sale of natural gas and electricity to customers, including affiliates. Revenue is measured based upon the quantity of gas or power delivered at prices contained or referenced in the customer's contract, and excludes any sales incentives (e.g. rebates) and amounts collected on behalf of third parties (e.g. sales tax).

Our revenues also include asset optimization activities. Asset optimization activities consist primarily of purchases and sales of gas that meet the definition of trading activities per FASB ASC Topic 815, Derivatives and

Hedging. They are therefore excluded from the scope of FASB ASC Topic 606, Revenue from Contracts with Customers.

Revenues for electricity and natural gas sales are recognized under the accrual method when our performance obligation to a customer is satisfied, which is the point in time when the product is delivered and control of the product passes to the customer. Electricity and natural gas products may be sold as fixed-price or variable-price products. The typical length of a contract to provide electricity and/or natural gas is 12 months. Customers are billed and typically pay at least monthly, based on usage. Electricity and natural gas sales that have been delivered but not billed by period end are estimated and recorded as accrued unbilled revenues based on estimates of customer usage since the date of the last meter read provided by the utility. Volume estimates are based on forecasted volumes and estimated residential and commercial customer usage. Unbilled revenues are calculated by multiplying these volume estimates by the applicable rate by customer class (residential or commercial). Estimated amounts are adjusted when actual usage is known and billed.

The following table discloses revenue by primary geographical market, customer type, and customer credit risk profile (in thousands). The table also includes a reconciliation of the disaggregated revenue to revenue by reportable segment (in thousands).

Reportable Segments
	Year Ended December 31, 2021						Year Ended December 31, 2020						Year Ended December 31, 2019
	Retail Electricity		Retail Natural Gas		Total Reportable Segments		Retail Electricity		Retail Natural Gas		Total Reportable Segments		Retail Electricity		Retail Natural Gas		Total Reportable Segments
Primary markets (a)
New England	$	100,819	$	9,402	$	110,221	$	166,982	$	14,846	$	181,828	$	284,909	$	19,289	$	304,198
Mid-Atlantic	107,307		28,070		135,377		166,157		32,769		198,926		242,556		42,469		285,025
Midwest	41,974		20,602		62,576		57,314		26,368		83,682		79,188		39,200		118,388
Southwest	72,494		17,060		89,554		70,940		20,171		91,111		81,798		21,545		103,343
	$	322,594	$	75,134	$	397,728	$	461,393	$	94,154	$	555,547	$	688,451	$	122,503	$	810,954
Customer type
Commercial	$	49,159	$	25,610	$	74,769	$	128,874	$	31,205	$	160,079	$	249,730	$	40,466	$	290,196
Residential	280,065		49,483		329,548		341,382		66,305		407,687		449,900		83,455		533,355
Unbilled revenue (b)	(6,630)		41		(6,589)		(8,863)		(3,356)		(12,219)		(11,179)		(1,418)		(12,597)
	$	322,594	$	75,134	$	397,728	$	461,393	$	94,154	$	555,547	$	688,451	$	122,503	$	810,954
Customer credit risk
POR	$	195,120	$	40,541	$	235,661	$	308,010	$	47,470	$	355,480	$	479,011	$	64,416	$	543,427
Non-POR	127,474		34,593		162,067		153,383		46,684		200,067		209,440		58,087		267,527
	$	322,594	$	75,134	$	397,728	$	461,393	$	94,154	$	555,547	$	688,451	$	122,503	$	810,954

(a) The primary markets include the following states:

•New England - Connecticut, Maine, Massachusetts, New Hampshire;

•Mid-Atlantic - Delaware, Maryland (including the District of Colombia), New Jersey, New York and Pennsylvania;

•Midwest - Illinois, Indiana, Michigan and Ohio; and

•Southwest - Arizona, California, Colorado, Florida, Nevada, and Texas.

(b) Unbilled revenue is recorded in total until it is actualized, at which time it is categorized between commercial and residential customers.

We record gross receipts taxes on a gross basis in retail revenues and retail cost of revenues. During the year ended December 31, 2021, 2020 and 2019 our retail revenues included gross receipts taxes of $1.1 million, $1.3 million and $1.5 million respectively. During the year ended December 31, 2021, 2020 and 2019, our retail cost of revenues included gross receipts taxes of $4.4 million, $5.9 million and $8.4 million, respectively.

Accounts receivables and Allowance for Credit Losses

As discussed in Note 2, “Basis of Presentation and Summary of Significant Accounting Policies”, we adopted the new accounting standards for measuring credit losses effective January 1, 2020.

The Company conducts business in many utility service markets where the local regulated utility purchases our receivables, and then becomes responsible for billing the customer and collecting payment from the customer (“POR programs”). These POR programs result in substantially all of the Company’s credit risk being linked to the applicable utility, which generally has an investment-grade rating, and not to the end-use customer. The Company monitors the financial condition of each utility and currently believes its receivables are collectible.

In markets that do not offer POR programs or when the Company chooses to directly bill its customers, certain receivables are billed and collected by the Company. The Company bears the credit risk on these accounts and records an appropriate allowance for doubtful accounts to reflect any losses due to non-payment by customers. The Company’s customers are individually insignificant and geographically dispersed in these markets. The Company writes off customer balances when it believes that amounts are no longer collectible and when it has exhausted all means to collect these receivables.

For trade accounts receivables, the Company accrues an allowance for doubtful accounts by business segment by pooling customer accounts receivables based on similar risk characteristics, such as customer type, geography, aging analysis, payment terms, and related macroeconomic factors. Expected credit loss exposure is evaluated for each of our accounts receivables pools. Expected credits losses are established using a model that considers historical collections experience, current information, and reasonable and supportable forecasts. The Company writes off accounts receivable balances against the allowance for doubtful accounts when the accounts receivable is deemed to be uncollectible.

We assess the adequacy of the allowance for doubtful accounts through review of an aging of customer accounts receivable and general economic conditions in the markets that we serve. Bad debt expense of $0.4 million, $4.7 million and $13.5 million was recorded in general and administrative expense in the consolidated statements of operations for the years ended December 31, 2021, 2020 and 2019, respectively.

A rollforward of our allowance for credit losses for the year ended December 31, 2021 is presented in the table below (in thousands):

Balance at December 31, 2020	$	(3,942)
Bad debt provision	(205)
Write-offs	2,192
Recovery of previous write offs	(413)
Balance at December 31, 2021	$	(2,368)