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Revenue Recognition

9 Months Ended

Sep. 30, 2018

Note 3—Revenue Recognition

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), and has since issued amendments thereto (collectively referred to as “ASC 606”). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services, and the guidance defines a five-step process to achieve this core principle. ASC 606 also mandates additional disclosure about the nature, amount, timing and uncertainty of revenues and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract.

The Company adopted ASC 606 as of January 1, 2018, using the modified retrospective method applied to those contracts that were not completed as of January 1, 2018. Results for the reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period results are not adjusted and continue to be reported in accordance with its historic accounting under ASC Topic 605. The Company determined that the new standard did not have any impact on revenue recognition and measurement in its consolidated financial statements. Variable quantities in requirements contracts are considered to be options for additional goods and services because the customer has a current contractual right to choose the amount of additional distinct goods. Revenue from the single performance obligation to deliver a unit of electricity and/or natural gas is recognized as the customer simultaneously receives and consumes the benefit. Utility companies offer purchase of receivable, or POR, programs in most of the service territories in which the Company operates, and GRE’s REPs participate in POR programs for a majority of their receivables. The Company estimates variable consideration related to its rebate programs using the expected value method and a portfolio approach. The Company’s estimates related to rebate programs are based on the terms of the rebate program, the customer’s historical electricity and natural gas consumption, the customer’s rate plan, and a churn factor. Taxes that are imposed on the Company’s sales and collected from customers are excluded from the transaction price.

Practical Expedients

The Company’s performance obligations are generally pursuant to contracts for which the estimated customer relationship periods are currently less than one year. Therefore, in accordance with ASC 606, the Company generally expenses sales commissions to acquire customers when incurred because the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses. The Company continuously monitors its customer relationship periods to ensure compliance with the application of the practical expedient.

Disaggregated Revenues

The following table shows the Company’s revenues disaggregated by pricing plans offered to customers:

(in thousands)	Electricity		Natural Gas		Other		Total
Three Months Ended September 30, 2018
Fixed rate	$	23,382	$	250	$	—	$	23,632
Variable rate		43,910		3,452		—		47,362
Other		—		—		848		848
Total	$	67,292	$	3,702	$	848	$	71,842

Three Months Ended September 30, 2017
Fixed rate	$	19,318	$	258	$	—	$	19,576
Variable rate		46,871		2,529		—		49,400
Other		—		—		497		497
Total	$	66,189	$	2,787	$	497	$	69,473

Nine Months Ended September 30, 2018
Fixed rate	$	61,572	$	2,547	$	—	$	64,119
Variable rate		119,569		31,945		—		151,514
Other		—		—		1,911		1,911
Total	$	181,141	$	34,492	$	1,911	$	217,544

Nine Months Ended September 30, 2017
Fixed rate	$	43,570	$	339	$	—	$	43,909
Variable rate		120,066		25,706		—		145,772
Other		—		—		1,445		1,445
Total	$	163,636	$	26,045	$	1,445	$	191,126

The following table shows the Company’s revenues disaggregated by non-commercial and commercial channels:

(in thousands)	Electricity		Natural Gas		Other		Total
Three Months Ended September 30, 2018
Non-Commercial Channel	$	63,904	$	3,177	$	—	$	67,081
Commercial Channel		3,388		525		—		3,913
Other		—		—		848		848
Total	$	67,292	$	3,702	$	848	$	71,842

Three Months September 30, 2017
Non-Commercial Channel	$	65,740	$	2,191	$	—	$	67,931
Commercial Channel		449		596		—		1,045
Other		—		—		497		497
Total	$	66,189	$	2,787	$	497	$	69,473

Nine Months Ended September 30, 2018
Non-Commercial Channel	$	172,819	$	30,876	$	—	$	203,695
Commercial Channel		8,322		3,616		—		11,938
Other		—		—		1,911		1,911
Total	$	181,141	$	34,492	$	1,911	$	217,544

Nine Months Ended September 30, 2017
Non-Commercial Channel	$	163,183	$	25,448	$	—	$	188,631
Commercial Channel		453		597		—		1,050
Other		—		—		1,445		1,445
Total	$	163,636	$	26,045	$	1,445	$	191,126