Revenue Recognition

3 Months Ended

Mar. 31, 2020

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Disaggregation and Reconciliation. We disaggregate revenue from contracts with customers based upon reportable segment as well as by customer class. As our revenues are primarily earned over a period of time and we do not earn a material amount of revenues at a point in time, revenues are not disaggregated as such below. The Gas Distribution Operations segment provides natural gas service and transportation for residential, commercial and industrial customers in Ohio, Pennsylvania, Virginia, Kentucky, Maryland, Indiana and Massachusetts. The Electric Operations segment provides electric service in 20 counties in the northern part of Indiana.

The tables below reconcile revenue disaggregation by customer class to segment revenue as well as to revenues reflected on the Condensed Statements of Consolidated Income (unaudited) for the three months ended March 31, 2020 and March 31, 2019:



Three Months Ended March 31, 2020 (in millions)	Gas Distribution Operations		Electric Operations		Corporate and Other		Total
Customer Revenues⁽¹⁾
Residential	$	796.5	$	119.2	$	—	$	915.7
Commercial	269.4		120.2		—		389.6
Industrial	74.2		109.1		—		183.3
Off-system	18.7		—		—		18.7
Miscellaneous	12.5		5.9		0.2		18.6
Total Customer Revenues	$	1,171.3	$	354.4	$	0.2	$	1,525.9
Other Revenues	56.7		22.9		—		79.6
Total Operating Revenues	$	1,228.0	$	377.3	$	0.2	$	1,605.5

⁽¹⁾ Customer revenue amounts exclude intersegment revenues. See Note 21, "Business Segment Information," for discussion of intersegment revenues.



Three Months Ended March 31, 2019 (in millions)	Gas Distribution Operations		Electric Operations		Corporate and Other		Total
Customer Revenues⁽¹⁾
Residential	$	975.3	$	118.8	$	—	$	1,094.1
Commercial	330.5		119.3		—		449.8
Industrial	82.9		163.3		—		246.2
Off-system	20.1		—		—		20.1
Miscellaneous	17.2		6.9		0.2		24.3
Total Customer Revenues	$	1,426.0	$	408.3	$	0.2	$	1,834.5
Other Revenues	12.8		22.5		—		35.3
Total Operating Revenues	$	1,438.8	$	430.8	$	0.2	$	1,869.8
⁽¹⁾ Customer revenue amounts exclude intersegment revenues. See Note 21, "Business Segment Information," for discussion of intersegment revenues.

Customer Accounts Receivable. Accounts receivable on our Condensed Consolidated Balance Sheets (unaudited) includes both billed and unbilled amounts, as well as certain amounts that are not related to customer revenues. Unbilled amounts of accounts receivable relate to a portion of a customer’s consumption of gas or electricity from the date of the last cycle billing through the last day of the month (balance sheet date). Factors taken into consideration when estimating unbilled revenue include historical usage, customer rates and weather. The opening and closing balances of customer receivables for the three months ended March 31, 2020 are presented in the table below. We had no significant contract assets or liabilities during the period. Additionally, we have not incurred any significant costs to obtain or fulfill contracts.



(in millions)	Customer Accounts Receivable, Billed (less reserve)			Customer Accounts Receivable, Unbilled (less reserve)
Balance as of December 31, 2019	$	466.6		$	346.6
Balance as of March 31, 2020	449.9			233.5
Decrease	$	(16.7	)	$	(113.1	)

Utility revenues are billed to customers monthly on a cycle basis. We generally expect that substantially all customer accounts receivable will be collected within the month following customer billing, as this revenue consists primarily of monthly, tariff-based billings for service and usage. We maintain common utility credit risk mitigation practices, including requiring deposits and actively pursuing collection of past due amounts. In addition, our regulated operations utilize certain regulatory mechanisms that facilitate recovery of bad debt costs within tariff-based rates, which provides further evidence of collectibility. It is probable that substantially all of the consideration to which we are entitled from customers will be collected upon satisfaction of performance obligations.

Allowance for Credit Losses. We adopted ASC 326 effective January 1, 2020. See "Recently Adopted Accounting Pronouncements" in Note 2, "Recent Accounting Pronouncements," for more information about ASC 326.

Each of our business segments pool their customer accounts receivables based on similar risk characteristics, such as customer type, geography, payment terms, and related macro-economic risks. Expected credit loss exposure is evaluated separately for each of our accounts receivable pools. Expected credit losses are established using a model that considers historical collections experience, current information, and reasonable and supportable forecasts. Relevant and reliable internal and external inputs used in the model include, but are not limited to, gas consumption trends, revenue projections, actual charge-offs data, recoveries data, shut-off orders executed data, and final bill data. We continuously evaluate available reasonable and supportable information relevant to assessing collectability of current and future receivables. We evaluate creditworthiness of specific customers periodically or when required by changes in facts and circumstances. When we become aware of a specific customer's inability to pay, an allowance for expected credit losses is recorded for the relevant amount. We also monitor other circumstances that could affect our overall expected credit losses; these include, but are not limited to, creditworthiness of overall population in service territories, adverse conditions impacting an industry sector, and general economic conditions. At each reporting period, we record expected credit losses using an allowance for credit losses account. When deemed to be uncollectible, customer accounts are written-off.

A rollforward of our allowance for credit losses for the three months ended March 31, 2020 are presented in the table below:



Three Months Ended March 31, 2020 (in millions)	Gas Distribution Operations			Electric Operations			Corporate and Other		Total
Beginning balance⁽¹⁾	$	9.1		$	3.1		$	0.8	$	13.0
Current period provisions	9.1			1.5			—		10.6
Write-offs charged against allowance	(6.9		)	(1.0		)	—		(7.9		)
Recoveries of amounts previously written off	4.6			—			—		4.6
Ending balance of the allowance for credit losses	$	15.9		$	3.6		$	0.8	$	20.3
⁽¹⁾Total beginning balance differs from that presented in the Condensed Statements of Consolidated Balance Sheet (unaudited) as it excludes Columbia of Massachusetts. Columbia of Massachusetts' customer receivables and related allowance for credit losses are classified as held for sale at March 31, 2020.

In response to the COVID-19 pandemic, we have suspended shut-offs for nonpayment. This suspension applies to residential, commercial and industrial customers and will remain in effect until further notice. In addition, we are offering flexible payment plans to customers impacted or experiencing hardship as a result of COVID-19. For the three months ended March 31, 2020, we did not experience a material increase in our allowance for credit losses as a result of COVID-19. The adverse impact that COVID-19 will have on our customers' ability to pay is unknown and difficult to predict; however, we are monitoring changing circumstances and will adjust our allowance for credit losses as additional information becomes available.