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Segment Reporting | 9 Months Ended
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Sep. 30, 2022
Segment Reporting [Abstract] |
Segment Reporting | 14. Segment Reporting Our determination of reportable business segments considers the strategic operating units under which we make financial decisions, allocate resources and assess performance of our business. Our reportable business segments are retail electricity and retail natural gas. The retail electricity segment consists of electricity sales and transmission to residential and commercial customers, and related services. The retail natural gas segment consists of natural gas sales to, and natural gas transportation and distribution for, residential and commercial customers. Corporate and other consists of expenses and assets of the retail electricity and natural gas segments that are managed at a consolidated level such as general and administrative expenses. Asset optimization activities are also included in Corporate and other. For the three months ended September 30, 2022 and 2021, we recorded asset optimization revenues of $22.6 million and $9.6 million and asset optimization cost of revenues of $20.9 million and $9.9 million, respectively, and for the nine months ended September 30, 2022 and 2021, we recorded asset optimization revenues of $68.4 million and $43.1 million and asset optimization cost of revenues of $68.9 million and $43.6 million, respectively, which are presented on a net basis in asset optimization revenues. We use retail gross margin to assess the performance of our operating segments. We define retail gross margin as gross profit less (i) net asset optimization (expenses) revenues, (ii) net (losses) gains on non-trading derivative instruments, (iii) net current period cash settlements on non-trading derivative instruments, and (iv) gains (losses) from non-recurring events (including non-recurring market volatility). We deduct net (losses) gains on non-trading derivative instruments, excluding current period cash settlements, from the retail gross margin calculation in order to remove the non-cash impact of net gains and losses on these derivative instruments. We deduct net gains (losses) from non-recurring events (including non-recurring market volatility) to ensure retail gross margin reflects operating performance that is not distorted by non-recurring events or extreme market volatility. Retail gross margin should not be considered an alternative to, or more meaningful than, gross profit, its most directly comparable financial measure calculated and presented in accordance with GAAP. Below is a reconciliation of retail gross margin to gross profit (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Reconciliation of Retail Gross Margin to Gross Profit |  |  |  |  |  |  |
Total Revenue | $ | 118,859 |  |  | $ | 97,979 |  |  | $ | 343,112 |  |  | $ | 293,179 |
Less: |  |  |  |  |  |  |
Retail cost of revenues | 102,212 |  |  | 40,298 |  |  | 232,621 |  |  | 198,642 |
Gross Profit | 16,647 |  |  | 57,681 |  |  | 110,491 |  |  | 94,537 |
Less: |  |  |  |  |  |  |
Net asset optimization revenue (expense) | 1,672 |  |  | (288) |  |  | (480) |  |  | (542) |
Net, (loss) gain on non-trading derivative instruments | (1,413) |  |  | 32,262 |  |  | 54,570 |  |  | 58,214 |
Net, Cash settlements on non-trading derivative instruments | (14,068) |  |  | (5,660) |  |  | (36,067) |  |  | (6,054) |
Non-recurring event - Winter Storm Uri | — |  |  | 497 |  |  | 9,565 |  |  | (64,403) |
Retail Gross Margin | $ | 30,456 |  |  | $ | 30,870 |  |  | $ | 82,903 |  |  | $ | 107,322 |
Financial data for business segments are as follows (in thousands):
Three Months Ended September 30, 2022
| Retail Electricity (a) |  | Retail Natural Gas |  | Corporate and Other |  | Eliminations |  | Consolidated
Total revenues | $ | 104,970 |  |  | $ | 12,217 |  |  | $ | 1,672 |  |  | $ | — |  |  | $ | 118,859 |
Retail cost of revenues | 92,816 |  |  | 9,396 |  |  | — |  |  | — |  |  | 102,212 |
Gross Profit | $ | 12,154 |  |  | $ | 2,821 |  |  | $ | 1,672 |  |  | $ | — |  |  | $ | 16,647 |
Less: |  |  |  |  |  |  |  |  |
Net asset optimization revenue | — |  |  | — |  |  | 1,672 |  |  | — |  |  | 1,672 |
Net, (loss) gain on non-trading derivative instruments | (5,290) |  |  | 3,877 |  |  | — |  |  | — |  |  | (1,413) |
Current period settlements on non-trading derivatives | (11,063) |  |  | (3,005) |  |  | — |  |  | — |  |  | (14,068) |
Retail Gross Margin | $ | 28,507 |  |  | $ | 1,949 |  |  | $ | — |  |  | $ | — |  |  | $ | 30,456 |
Total Assets at September 30, 2022 | $ | 1,743,817 |  |  | $ | 84,612 |  |  | $ | 314,672 |  |  | $ | (1,814,947) |  |  | $ | 328,154 |
Goodwill at September 30, 2022 | $ | 117,813 |  |  | $ | 2,530 |  |  | $ | — |  |  | $ | — |  |  | $ | 120,343 |
(a) Retail Electricity includes related services.
Three Months Ended September 30, 2021
| Retail Electricity |  | Retail Natural Gas |  | Corporate and Other |  | Eliminations |  | Consolidated
Total revenues | $ | 92,104 |  |  | $ | 6,163 |  |  | $ | (288) |  |  | $ | — |  |  | $ | 97,979 |
Retail cost of revenues | 41,035 |  |  | (737) |  |  | — |  |  | — |  |  | 40,298 |
Gross Profit | $ | 51,069 |  |  | $ | 6,900 |  |  | $ | (288) |  |  | $ | — |  |  | $ | 57,681 |
Less: |  |  |  |  |  |  |  |  |
Net asset optimization expense | — |  |  | — |  |  | (288) |  |  | — |  |  | (288) |
Net, gain on non-trading derivative instruments | 27,558 |  |  | 4,704 |  |  | — |  |  | — |  |  | 32,262 |
Current period settlements on non-trading derivatives | (5,199) |  |  | (461) |  |  | — |  |  | — |  |  | (5,660) |
Non-recurring event - Winter Storm Uri | 497 |  |  | — |  |  | — |  |  | — |  |  | 497 |
Retail Gross Margin | $ | 28,213 |  |  | $ | 2,657 |  |  | $ | — |  |  | $ | — |  |  | $ | 30,870 |
Total Assets at December 31, 2021 | $ | 1,527,456 |  |  | $ | 7,320 |  |  | $ | 311,556 |  |  | $ | (1,491,056) |  |  | $ | 355,276 |
Goodwill at December 31, 2021 | $ | 117,813 |  |  | $ | 2,530 |  |  | $ | — |  |  | $ | — |  |  | $ | 120,343 |
Nine Months Ended September 30, 2022
| Retail Electricity |  | Retail Natural Gas |  | Corporate and Other |  | Eliminations |  | Consolidated
Total revenues | $ | 275,301 |  |  | $ | 68,291 |  |  | $ | (480) |  |  | $ | — |  |  | $ | 343,112 |
Retail cost of revenues | 189,092 |  |  | 43,529 |  |  | — |  |  | — |  |  | 232,621 |
Gross Profit | $ | 86,209 |  |  | $ | 24,762 |  |  | $ | (480) |  |  | $ | — |  |  | $ | 110,491 |
Less: |  |  |  |  |  |  |  |  |
Net asset optimization expense | — |  |  | — |  |  | (480) |  |  | — |  |  | (480) |
Net gain on non-trading derivatives | 42,557 |  |  | 12,013 |  |  | — |  |  | — |  |  | 54,570 |
Current period settlements on non-trading derivatives | (28,317) |  |  | (7,750) |  |  | — |  |  | — |  |  | (36,067) |
Non-recurring event - Winter Storm Uri | 9,565 |  |  | — |  |  | — |  |  | — |  |  | 9,565 |
Retail Gross Margin | $ | 62,404 |  |  | $ | 20,499 |  |  | $ | — |  |  | $ | — |  |  | $ | 82,903 |
Total Assets at September 30, 2022 | $ | 1,743,817 |  |  | $ | 84,612 |  |  | $ | 314,672 |  |  | $ | (1,814,947) |  |  | $ | 328,154 |
Goodwill at September 30, 2022 | $ | 117,813 |  |  | $ | 2,530 |  |  | $ | — |  |  | $ | — |  |  | $ | 120,343 |
Nine Months Ended September 30, 2021
| Retail Electricity |  | Retail Natural Gas |  | Corporate and Other |  | Eliminations |  | Consolidated
Total revenues | $ | 242,548 |  |  | $ | 51,173 |  |  | $ | (542) |  |  | $ | — |  |  | $ | 293,179 |
Retail cost of revenues | 179,762 |  |  | 18,880 |  |  | — |  |  | — |  |  | 198,642 |
Gross Profit | $ | 62,786 |  |  | $ | 32,293 |  |  | $ | (542) |  |  | $ | — |  |  | $ | 94,537 |
Less: |  |  |  |  |  |  |  |  |
Net asset optimization expense | — |  |  | — |  |  | (542) |  |  | — |  |  | (542) |
Net gain on non-trading derivatives | 51,957 |  |  | 6,257 |  |  | — |  |  | — |  |  | 58,214 |
Current period settlements on non-trading derivatives | (5,246) |  |  | (808) |  |  | — |  |  | — |  |  | (6,054) |
Non-recurring event - Winter Storm Uri | (64,403) |  |  | — |  |  | — |  |  | — |  |  | (64,403) |
Retail Gross Margin | $ | 80,478 |  |  | $ | 26,844 |  |  | $ | — |  |  | $ | — |  |  | $ | 107,322 |
Total Assets at December 31, 2021 | $ | 1,527,456 |  |  | $ | 7,320 |  |  | $ | 311,556 |  |  | $ | (1,491,056) |  |  | $ | 355,276 |
Goodwill at December 31, 2021 | $ | 117,813 |  |  | $ | 2,530 |  |  | $ | — |  |  | $ | — |  |  | $ | 120,343 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI https://asc.fasb.org/topic&trid=2134510 + Details
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