Revenues

12 Months Ended

Dec. 31, 2023

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.

Other revenue is derived from contracts with customers through the provision of wireless and other services and the sale of wireless equipment.

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
	Years ended December 31, 2023						Years ended December 31, 2022						Years ended December 31, 2021
	Retail Electricity (c)		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	$	115,129	$	8,937	$	124,066	$	111,332	$	10,284	$	121,616	$	100,819	$	9,402	$	110,221
Mid-Atlantic	111,599		39,860		151,459		114,994		49,626		164,620		107,307		28,070		135,377
Midwest	31,353		18,578		49,931		39,658		22,436		62,094		41,974		20,602		62,576
Southwest	70,385		43,519		113,904		86,766		27,719		114,485		72,494		17,060		89,554
	$	328,466	$	110,894	$	439,360	$	352,750	$	110,065	$	462,815	$	322,594	$	75,134	$	397,728
Customer type
Commercial	$	40,356	$	60,111	$	100,467	$	42,439	$	53,504	$	95,943	$	49,159	$	25,610	$	74,769
Residential	288,482		59,175		347,657		309,503		51,465		360,968		280,065		49,483		329,548
Unbilled revenue (b)	(372)		(8,392)		(8,764)		808		5,096		5,904		(6,630)		41		(6,589)
	$	328,466	$	110,894	$	439,360	$	352,750	$	110,065	$	462,815	$	322,594	$	75,134	$	397,728
Customer credit risk
POR	$	191,355	$	50,439	$	241,794	$	212,374	$	62,962	$	275,336	$	195,120	$	40,541	$	235,661
Non-POR	137,111		60,455		197,566		140,376		47,103		187,479		127,474		34,593		162,067
	$	328,466	$	110,894	$	439,360	$	352,750	$	110,065	$	462,815	$	322,594	$	75,134	$	397,728

(a) The primary markets include the following states:

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

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

•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.

(c) Retail Electricity includes services.

Reconciliation to Consolidated Financial Information

A reconciliation of the reportable segment operating revenues to consolidated revenues is as follows:

	Year Ended December 31,
	2023		2022		2021
Total Reportable Segments Revenue	$	439,360	$	462,815	$	397,728
Net asset optimization expense	(7,326)		(2,322)		(4,243)
Other Revenue	3,158		—		—
Total Revenues	$	435,192	$	460,493	$	393,485

We record gross receipts taxes on a gross basis in retail revenues and retail cost of revenues. During the year ended December 31, 2023, 2022 and 2021 our retail revenues included gross receipts taxes of $1.0 million, $1.3 million and $1.1 million respectively. During the year ended December 31, 2023, 2022 and 2021, our retail cost of revenues included gross receipts taxes of $5.2 million, $5.2 million and $4.4 million, respectively.

Accounts Receivables and Allowance for Credit Losses

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 credit losses 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 credit losses 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 credit losses accounts when the accounts receivable is deemed to be uncollectible.

We assess the adequacy of the allowance for credit losses through review of an aging of customer accounts receivable and general economic conditions in the markets that we serve. Bad debt expense of $3.4 million, $6.9 million and $0.4 million was recorded in general and administrative expense in the consolidated statements of operations for the years ended December 31, 2023, 2022 and 2021, respectively.

A rollforward of our allowance for credit losses for the year ended December 31, 2023 is presented in the table below (in thousands):

Balance at December 31, 2022	$	(4,335)
Bad debt provision	(3,442)
Write-offs	3,376
Recovery of previous write offs	(95)
Balance at December 31, 2023	$	(4,496)