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What changed in Via Renewables, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Via Renewables, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+226 added−296 removedSource: 10-K (2025-03-06) vs 10-K (2024-02-29)

Top changes in Via Renewables, Inc.'s 2024 10-K

226 paragraphs added · 296 removed · 200 edited across 5 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

77 edited+7 added−41 removed128 unchanged
Biggest changeThe Change of Control Conversion Right of the Series A Preferred Stock provided in the Certificate of Designation may have the effect of discouraging a third party from making an acquisition proposal for us or of delaying, deferring or preventing certain of our change of control transactions under circumstances that otherwise could provide the holders of our Series A Preferred Stock with the opportunity to realize a premium over the then-current market price of such equity securities or that stockholders may otherwise believe is in their best interests. 40 Table of Contents Changes in the method of determining the Three-Month CME Term SOFR, or the replacement of Three-Month CME Term SOFR with an alternative reference rate, may adversely affect interest rates under the floating dividend rate of our Series A Preferred Stock.
Biggest changeChanges in the method of determining the Three-Month CME Term SOFR, or the replacement of Three-Month CME Term SOFR with an alternative reference rate, may adversely affect interest rates under the floating dividend rate of our Series A Preferred Stock.
Debt we incur under our Senior Credit Facility, Subordinated Facility or otherwise could have negative consequences, including: • increasing our vulnerability to general economic and industry conditions; • requiring cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing or eliminating our ability to pay dividends to holders of our Class A common stock and Series A Preferred Stock, or to use our cash flow to fund our operations, capital expenditures and future business opportunities; • limiting our ability to fund future acquisitions or engage in other activities that we view as in our long-term best interest; • restricting our ability to make certain distributions with respect to our capital stock and the ability of our subsidiaries to make certain distributions to us, in light of restricted payment and other financial covenants, including requirements to maintain certain financial ratios, in our credit facilities and other financing agreements; • exposing us to the risk of increased costs due to changes in interest rates because certain of our borrowings are at variable rates of interest; • limiting our ability to obtain additional financing for working capital including collateral postings, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes; and • limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors who have less debt.
Debt we incur under our Senior Credit Facility, Subordinated Facility or otherwise could have negative consequences, including: • increasing our vulnerability to general economic and industry conditions; • requiring cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing or eliminating our ability to pay dividends to holders of our Series A Preferred Stock, or to use our cash flow to fund our operations, capital expenditures and future business opportunities; • limiting our ability to fund future acquisitions or engage in other activities that we view as in our long-term best interest; 29 Table of Contents • restricting our ability to make certain distributions with respect to our capital stock and the ability of our subsidiaries to make certain distributions to us, in light of restricted payment and other financial covenants, including requirements to maintain certain financial ratios, in our credit facilities and other financing agreements; • exposing us to the risk of increased costs due to changes in interest rates because certain of our borrowings are at variable rates of interest; • limiting our ability to obtain additional financing for working capital including collateral postings, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes; and • limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors who have less debt.
We may also in the future sell additional shares of preferred stock, including shares of Series A Preferred Stock, on terms that may differ from those we have previously issued.
We may in the future sell additional shares of preferred stock, including shares of Series A Preferred Stock, on terms that may differ from those we have previously issued.
Risk Factors Our business, financial condition, cash flows, results of operations and ability to pay dividends on our Class A common stock and Series A Preferred Stock could be materially and adversely affected by, and the price of our Class A common stock and Series A Preferred Stock could decline due to a number of factors, whether currently known or unknown, including but not limited to those described below.
Risk Factors Our business, financial condition, cash flows, results of operations and ability to pay dividends on our Series A Preferred Stock could be materially and adversely affected by, and the price of our Series A Preferred Stock could decline due to a number of factors, whether currently known or unknown, including but not limited to those described below.
Even if we were a creditor of any of our subsidiaries, our rights as a creditor would be subordinate to any security interest in the assets of that subsidiary and any indebtedness of that subsidiary senior to that held by us. Numerous factors may affect the trading price of the Class A common stock and Series A Preferred Stock.
Even if we were a creditor of any of our subsidiaries, our rights as a creditor would be subordinate to any security interest in the assets of that subsidiary and any indebtedness of that subsidiary senior to that held by us. Numerous factors may affect the trading price of the Series A Preferred Stock.
Accordingly, our right to receive assets from any of our subsidiaries upon our bankruptcy, liquidation or reorganization, and the right of holders of shares of Class A common stock and Series A Preferred Stock to participate in those assets, is also structurally subordinated to claims of that subsidiary’s creditors, including trade creditors.
Accordingly, our right to receive assets from any of our subsidiaries upon our bankruptcy, liquidation or reorganization, and the right of holders of shares of Series A Preferred Stock to participate in those assets, is also structurally subordinated to claims of that subsidiary’s creditors, including trade creditors.
Inaccurate or untimely information, which may be outside of our direct control, could result in: • inaccurate and/or untimely bills sent to customers; 30 Table of Contents • incorrect tax remittances; • reduced effectiveness and efficiency of our operations; • inability to adequately hedge our portfolio; • increased overhead costs; • inaccurate accounting and reporting of customer revenues, gross margin and accounts receivable activity; • inaccurate measurement of usage rates, throughput and imbalances; • customer complaints; and • increased regulatory scrutiny.
Inaccurate or untimely information, which may be outside of our direct control, could result in: • inaccurate and/or untimely bills sent to customers; • incorrect tax remittances; • reduced effectiveness and efficiency of our operations; • inability to adequately hedge our portfolio; • increased overhead costs; • inaccurate accounting and reporting of customer revenues, gross margin and accounts receivable activity; • inaccurate measurement of usage rates, throughput and imbalances; • customer complaints; and • increased regulatory scrutiny.
As a result of these and other factors, investors holding our Class A common stock and Series A Preferred Stock may experience a decrease in the value of their securities, which could be substantial and rapid, and could be unrelated to our financial condition, performance or prospects.
As a result of these and other factors, investors holding our Series A Preferred Stock may experience a decrease in the value of their securities, which could be substantial and rapid, and could be unrelated to our financial condition, performance or prospects.
Further, we could be prevented from paying cash dividends under Delaware law if certain capital requirements are not met, and may be further restricted by covenants in our Senior Credit Facility. The amount of cash available for distribution depends primarily on our cash flow, and is not solely a function of profitability, which is affected by non-cash items.
Further, we could be prevented from paying cash dividends under Delaware law if certain capital requirements are not met, and may be further restricted by covenants in our Senior Credit Facility. 30 Table of Contents The amount of cash available for distribution depends primarily on our cash flow, and is not solely a function of profitability, which is affected by non-cash items.
Alternatively, if a court were to find these provisions of our amended and restated certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition or results of operations. 38 Table of Contents Future sales of our Class A common stock and Series A Preferred Stock in the public market could reduce the price of the Class A common stock and Series A Preferred Stock, and may dilute your ownership in us.
Alternatively, if a court were to find these provisions of our amended and restated certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition or results of operations. 33 Table of Contents Future sales of Series A Preferred Stock in the public market could reduce the price of the Series A Preferred Stock, and may dilute your ownership in us.
In some regulatory programs or under some contracts, this capacity may be subject to recall by the utilities, which could have the effect of us being required to access the spot market to cover such a recall. ESCOs face risks due to increased and rapidly changing regulations and increasing monetary fines by the state regulatory agencies.
In some regulatory programs or under some contracts, this capacity may be subject to recall by the utilities, which could have the effect of us being required to access the spot market to cover such a recall. 22 Table of Contents ESCOs face risks due to increased and rapidly changing regulations and increasing monetary fines by the state regulatory agencies.
The trading price of the Class A common stock and Series A Preferred Stock may depend on many factors, some of which are beyond our control. Additionally, the market price of our Class A common stock and Series A Preferred Stock may be highly volatile and may fluctuate substantially as a result of a number of factors.
The trading price of the Series A Preferred Stock may depend on many factors, some of which are beyond our control. Additionally, the market price of our Series A Preferred Stock may be highly volatile and may fluctuate substantially as a result of a number of factors.
A further reduction in benefits received by local regulated utilities from production tax credits in respect of renewable energy may adversely impact the availability to us, and marketability by us, of renewable energy under our brands. Our access to marketing channels may be contingent upon the viability of our telemarketing and door-to-door agreements with our vendors.
A further reduction in benefits received by local regulated utilities from production tax credits in respect of renewable energy may adversely impact the availability to us, and marketability by us, of renewable energy under our brands. 28 Table of Contents Our access to marketing channels may be contingent upon the viability of our telemarketing and door-to-door agreements with our vendors.
The liquidity of any market for the Class A common stock and Series A Preferred Stock depends upon the number of stockholders, our results of operations and financial condition, the market for similar securities, the interest of securities dealers in making a market in the Class A common stock and Series A Preferred Stock, and other factors.
The liquidity of any market for the Series A Preferred Stock depends upon the number of stockholders, our results of operations and financial condition, the market for similar securities, the interest of securities dealers in making a market in the Series A Preferred Stock, and other factors.
We are also subject to disruptions in our information management systems arising out of events beyond our control, such as natural disasters, pandemics, epidemics, failures in hardware or software, power fluctuations, telecommunications and other similar disruptions. Cyberattacks and data security breaches could adversely affect our business.
We are also subject to disruptions in our information management systems arising out of events beyond our control, such as natural disasters, pandemics, epidemics, failures in hardware or software, power fluctuations, telecommunications and other similar disruptions. 27 Table of Contents Cyberattacks and data security breaches could adversely affect our business.
Our vendors may fail to operate in accordance with the terms of the outsourcing agreement or a bankruptcy or other event may prevent them from performing under our outsourcing agreement. 32 Table of Contents Risks Related to Our Capital Structure and Capital Stock Our indebtedness could adversely affect our ability to raise additional capital to fund our operations or pay dividends.
Our vendors may fail to operate in accordance with the terms of the outsourcing agreement or a bankruptcy or other event may prevent them from performing under our outsourcing agreement. Risks Related to Our Capital Structure and Capital Stock Our indebtedness could adversely affect our ability to raise additional capital to fund our operations or pay dividends.
There can be no assurance that we may be subject to significant damages as a result of a class action lawsuit for actions of our vendors that we may not be able to control. We are, and in the future may become, involved in legal and regulatory proceedings and, as a result, may incur substantial costs.
There can be no assurance that we may be subject to significant damages as a result of a class action lawsuit for actions of our vendors that we may not be able to control. 23 Table of Contents We are, and in the future may become, involved in legal and regulatory proceedings and, as a result, may incur substantial costs.
Our Senior Credit Facility will mature in June 30, 2025, and we cannot assure that we will be able to negotiate a new credit arrangement on commercially reasonable terms.
Our Senior Credit Facility will mature in June 30, 2027, and we cannot assure that we will be able to negotiate a new credit arrangement on commercially reasonable terms.
Further, we may have difficulty addressing possible differences in corporate cultures and management philosophies. 27 Table of Contents In many of our acquisition agreements, we are entitled to indemnification from the counterparty for various matters, including breaches of representations, warranties and covenants, tax matters, and litigation proceedings.
Further, we may have difficulty addressing possible differences in corporate cultures and management philosophies. In many of our acquisition agreements, we are entitled to indemnification from the counterparty for various matters, including breaches of representations, warranties and covenants, tax matters, and litigation proceedings.
Ratings only reflect the views of the issuing rating agency or agencies and such ratings could at any time be revised downward or withdrawn entirely at the discretion of the issuing rating agency. A rating is not a recommendation to purchase, sell or hold any particular security, including the Series A Preferred Stock.
Ratings only reflect the views of the issuing rating agency or agencies and such ratings could at any time be revised downward or withdrawn entirely at the discretion of the issuing rating agency. 34 Table of Contents A rating is not a recommendation to purchase, sell or hold any particular security, including the Series A Preferred Stock.
We bear direct credit risk related to customers located in markets that have not implemented POR programs as well as indirect credit risk in those POR markets that pass collection efforts along to us after a specified non-payment period. For the year ended December 31, 2023, customers in non-POR markets represented approximately 45% of our retail revenues.
We bear direct credit risk related to customers located in markets that have not implemented POR programs as well as indirect credit risk in those POR markets that pass collection efforts along to us after a specified non-payment period. For the year ended December 31, 2024, customers in non-POR markets represented approximately 40% of our retail revenues.
To the extent that an active trading market is not maintained, the liquidity and trading prices for the Class A common stock and Series A Preferred Stock may be harmed.
To the extent that an active trading market is not maintained, the liquidity and trading prices for the Series A Preferred Stock may be harmed.
As a result, the Class A common stock and Series A Preferred Stock effectively rank junior to all existing and future indebtedness and other liabilities of our subsidiaries, including our operating subsidiaries, and any capital stock of our subsidiaries not held by us.
As a result, the Series A Preferred Stock effectively ranks junior to all existing and future indebtedness and other liabilities of our subsidiaries, including our operating subsidiaries, and any capital stock of our subsidiaries not held by us.
We may be unable to obtain new customers or maintain our existing customers due to competition or otherwise. 29 Table of Contents Increased collateral requirements in connection with our supply activities may restrict our liquidity.
We may be unable to obtain new customers or maintain our existing customers due to competition or otherwise. Increased collateral requirements in connection with our supply activities may restrict our liquidity.
These liquidity requirements may be greater than we anticipate or are able to meet. We face risks related to health epidemics, pandemics and other outbreaks.
These liquidity requirements may be greater than we anticipate or are able to meet. 26 Table of Contents We face risks related to health epidemics, pandemics and other outbreaks.
Spark HoldCo or its subsidiaries may be restricted from making distributions to us under applicable law or regulation or under the terms of their financing arrangements, or may otherwise be unable to provide such funds. 34 Table of Contents The Class A common stock and Series A Preferred Stock are subordinated to our existing and future debt obligations.
Spark HoldCo or its subsidiaries may be restricted from making distributions to us under applicable law or regulation or under the terms of their financing arrangements, or may otherwise be unable to provide such funds. The Series A Preferred Stock is subordinated to our existing and future debt obligations.
We may be unable to manage our growth and development successfully. 28 Table of Contents Our financial results fluctuate on a seasonal, quarterly and annual basis.
We may be unable to manage our growth and development successfully. Our financial results fluctuate on a seasonal, quarterly and annual basis.
The Class A common stock and Series A Preferred Stock are subordinated to all of our existing and future indebtedness (including indebtedness outstanding under the Senior Credit Facility).
The Series A Preferred Stock is subordinated to all of our existing and future indebtedness (including indebtedness outstanding under the Senior Credit Facility).
Under NASDAQ Global Select Market rules, a company of which more than 50% of the voting power is held by an individual, a group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements.
Under NASDAQ Global Select Market rules, a company of which more than 50% of the voting power is held by an individual, a group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements. Our company does not have a nominating and corporate governance committee or a compensation committee of independent directors.
Active trading markets for the Series A Preferred Stock may not exist at such times, in which case the trading price of your shares of our Series A Preferred Stock could be reduced and your ability to transfer such shares could be limited. Mr. Maxwell holds a substantial majority of the voting power of our common stock.
Active trading markets for the Series A Preferred Stock may not exist at such times, in which case the trading price of your shares of our Series A Preferred Stock could be reduced and your ability to transfer such shares could be limited. Mr.
The Board of Directors may be required to reduce or eliminate quarterly cash distributions, including the dividends to the holders of the Series A Preferred Stock.
The Board of Directors may be required to reduce or eliminate the dividends to the holders of the Series A Preferred Stock.
The following factors are beyond our control and could affect our stock price: • the pending merger, and if it is completed; • the impact of our reverse stock split on our common stock; • the announcement of the elimination, suspension, reduction or reinstatement of dividends on Class A common stock and Series A Preferred Stock; • the public reaction to our press releases, our other public announcements and our filings with the SEC; • trading volumes of the Class A common stock and Series A Preferred Stock; • prevailing interest rates; • the market for similar securities; • general economic and financial market conditions; • our issuance of debt or other preferred equity securities; and • our financial condition, results of operations and prospects.
The following factors are beyond our control and could affect our stock price: 31 Table of Contents • the announcement of the elimination, suspension, reduction or reinstatement of dividends on Series A Preferred Stock; • the public reaction to our press releases, our other public announcements and our filings with the SEC; • trading volumes of the Series A Preferred Stock; • prevailing interest rates; • the market for similar securities; • general economic and financial market conditions; • our issuance of debt or other preferred equity securities; and • our financial condition, results of operations and prospects.
Additionally, regulations that do not directly relate to ESCOs could impact us. For example, we have historically used third-party lead generators to identify potential customers for our telemarketing sales channel. In December 2023, the FCC adopted rules that could limit the ability of third-party lead generators to identify large numbers of potential customers.
For example, we have historically used third-party lead generators to identify potential customers for our telemarketing sales channel. In December 2023, the FCC adopted rules that could limit the ability of third-party lead generators to identify large numbers of potential customers.
Increases in market interest rates, which have been at low levels relative to historical rates, may lead prospective purchasers of shares of Class A common stock or Series A Preferred Stock to expect a higher distribution yield, and cause them to sell their Class A common stock or Series A Preferred Stock.
Increases in market interest rates, which have been at low levels relative to historical rates, may lead prospective purchasers of Series A Preferred Stock to expect a higher distribution yield, and cause them to sell their Series A Preferred Stock. Accordingly, higher market interest rates could cause the market price of the Series A Preferred Stock to decrease.
We may incur other expenses or liabilities during a period that could significantly reduce or eliminate our cash available for distribution and, in turn, impair our ability to pay dividends to holders of our Series A Preferred Stock during the period. Each new share of Series A Preferred Stock issued increases the cash required to continue to pay cash dividends.
We may incur other expenses or liabilities during a period that could significantly reduce or eliminate our cash available for distribution and, in turn, impair our ability to pay dividends to holders of our Series A Preferred Stock during the period. The shares of Series A Preferred Stock require the payment of cash dividends.
Maxwell or certain of our affiliates that might otherwise constitute breaches of fiduciary duty. Our amended and restated certificate of incorporation contains provisions that we renounce any interest in existing and future investments in other entities by, or the business opportunities of, NuDevco Partners, LLC, NuDevco Partners Holdings, LLC and Mr.
Our amended and restated certificate of incorporation contains provisions that we renounce any interest in existing and future investments in other entities by, or the business opportunities of, NuDevco Partners, LLC, NuDevco Partners Holdings, LLC and Mr.
As of April 15, 2022, we have the option to redeem our Series A Preferred Stock. We have engaged in transactions with our affiliates in the past and expect to do so in the future. The terms of such transactions and the resolution of any conflicts that may arise may not always be in our or our stockholders’ best interests.
Holders of the Series A Preferred Stock generally have no voting rights. We have engaged in transactions with our affiliates in the past and expect to do so in the future. The terms of such transactions and the resolution of any conflicts that may arise may not always be in our or our stockholders’ best interests.
As of December 31, 2023, approximately 59% of our RCEs were located in five states. Specifically, 21%, 11%, 11%, 8% and 7% of our customers on an RCE basis were located in PA, TX, NY, NJ, and MA, respectively.
As of December 31, 2024, approximately 59% of our RCEs were located in five states. Specifically, 24%, 9%, 9%, 9% and 8% of our customers on an RCE basis were located in PA, TX, CO, NJ, and NY, respectively.
We have $97.0 million of indebtedness outstanding and $24.3 million in issued letters of credit under our Senior Credit Facility, and no indebtedness outstanding under our Subordinated Facility as of December 31, 2023.
We have $106.0 million of indebtedness outstanding and $25.6 million in issued letters of credit under our Senior Credit Facility, and no indebtedness outstanding under our Subordinated Facility as of December 31, 2024.
Our financial results may be adversely impacted by weather conditions and changes in consumer demand. Weather conditions directly influence the demand for and availability of natural gas and electricity and affect the prices of energy commodities. Generally, on most utility systems, demand for natural gas peaks in the winter and demand for electricity peaks in the summer.
Weather conditions directly influence the demand for and availability of natural gas and electricity and affect the prices of energy commodities. Generally, on most utility systems, demand for natural gas peaks in the winter and demand for electricity peaks in the summer.
There may not be an active trading market for the Class A common stock or Series A Preferred Stock, which may in turn reduce the market value and your ability to transfer or sell your shares of Class A common stock or Series A Preferred Stock.
There may not be an active trading market for Series A Preferred Stock, which may in turn reduce the market value and your ability to transfer or sell your Series A Preferred Stock. There are no assurances that there will be an active trading market for our Series A Preferred Stock.
We are required to fill our allocated storage capacity with natural gas, which creates commodity supply and price risk. Sometimes we cannot hedge the volumes associated with these assets because they are too small compared to the much larger bulk transaction volumes required for trades in the wholesale market or it is not economically feasible to do so.
Sometimes we cannot hedge the volumes associated with these assets because they are too small compared to the much larger bulk transaction volumes required for trades in the wholesale market or it is not economically feasible to do so.
Our ability to grow at levels experienced historically may be constrained if the market for acquisition candidates is limited and we are unable to make acquisitions of portfolios of customers and retail energy companies on commercially reasonable terms.
Our ability to grow at levels experienced historically may be constrained if the market for acquisition candidates is limited and we are unable to make acquisitions of portfolios of customers and retail energy companies on commercially reasonable terms. 24 Table of Contents We have historically distributed a significant portion of our cash through dividends, and our ability to grow and make acquisitions with cash on hand could be limited.
Less extreme price fluctuations can also occur as a result of routine winter weather fluctuations. In the event of price fluctuations, we may not be able to pass along changes to the prices we pay to acquire commodities to our customers as such pricing fluctuations can attract consumer class actions as well as state and federal regulatory actions.
In the event of price fluctuations, we may not be able to pass along changes to the prices we pay to acquire commodities to our customers as such pricing fluctuations can attract consumer class actions as well as state and federal regulatory actions. Our financial results may be adversely impacted by weather conditions and changes in consumer demand.
(or any successor administrator), plus a tenor spread adjustment of 0.26161%.
(or any successor administrator), plus a tenor spread adjustment of 0.26161%. Following the cessation of the publication of U.S.
These and other factors may cause the market price and demand for our Class A common stock and Series A Preferred Stock to fluctuate substantially, which may adversely affect the trading price of our Class A common stock and Series A Preferred Stock.
These and other factors may cause the market price and demand for our Series A Preferred Stock to fluctuate substantially, which may adversely affect the trading price of our Series A Preferred Stock. In the past, when the market price of a stock has been volatile, holders of common stock have at times instituted securities class action litigation.
When demand is below anticipated levels due to weather patterns, we may be forced to sell excess supply at prices below our acquisition cost, which could result in reduced margins or even losses. 24 Table of Contents Conversely, when winters are colder or summers are warmer, consumption may outpace the volumes of natural gas and electricity against which we have hedged, and we may be unable to meet increased demand with storage or swing supply.
Conversely, when winters are colder or summers are warmer, consumption may outpace the volumes of natural gas and electricity against which we have hedged, and we may be unable to meet increased demand with storage or swing supply. In these circumstances, we may experience reduced margins or even losses if we are required to purchase additional supply at higher prices.
Over the last several years, companies have been subject to significant liabilities as a result of violations of the TCPA, including penalties, fines and damages under class action lawsuits.
Our outbound telemarketing efforts and use of mobile messaging to communicate with our customers, which has increased in recent years, subjects us to regulation under the TCPA. Over the last several years, companies have been subject to significant liabilities as a result of violations of the TCPA, including penalties, fines and damages under class action lawsuits.
Our commodity risk management strategy is designed to hedge substantially all of our forecasted volumes on our fixed-price customer contracts, as well as a portion of the near-term volumes on our variable-price customer contracts. We use both physical and financial products to hedge our exposure.
To provide energy to our customers, we purchase commodities in the wholesale energy markets, which are often highly volatile. Our commodity risk management strategy is designed to hedge substantially all of our forecasted volumes on our fixed-price customer contracts, as well as a portion of the near-term volumes on our variable-price customer contracts.
If a state increases its renewable portfolio standards, the demand for RECs within that state will increase and therefore the market price for RECs could increase.
In addition, we have contracts with certain customers that require us to purchase RECs or carbon offsets. If a state increases its renewable portfolio standards, the demand for RECs within that state will increase and therefore the market price for RECs could increase.
Trading prices and corresponding market value of Class A common stock and Series A Preferred Stock may also impact our ability to satisfy continued listing standards of The Nasdaq Global Select Market, or a particular tier of The Nasdaq exchanges. 35 Table of Contents One of the factors that will influence the price of the Class A common stock and Series A Preferred Stock will be the distribution yield of the securities (as a percentage of the then market price of the securities) relative to market interest rates.
Trading prices and corresponding market value of Series A Preferred Stock may also impact our ability to satisfy continued listing standards of The Nasdaq Global Select Market, or a particular tier of The Nasdaq exchanges.
Such a lawsuit could also divert the time and attention of our management from our business.
If any stockholders brought a lawsuit against us, we could incur substantial defense costs. Such a lawsuit could also divert the time and attention of our management from our business.
We may be unable to fully pass the higher cost of ancillary reserves and reliability services through to our customers, and increases in the cost of these ancillary reserves and reliability services could negatively impact our results of operations. 25 Table of Contents Many of the natural gas utilities we serve allocate a share of transportation and storage capacity to us as a part of their competitive market operations.
We may be unable to fully pass the higher cost of ancillary reserves and reliability services through to our customers, and increases in the cost of these ancillary reserves and reliability services could negatively impact our results of operations.
Additionally, we enter into a variety of financial derivative and physical contracts to manage commodity price risk, and we use mark-to-market accounting to account for this hedging activity. Under the mark-to-market accounting method, changes in the fair value of our hedging instruments that are not qualifying or not designated as hedges under accounting rules are recognized immediately in earnings.
Under the mark-to-market accounting method, changes in the fair value of our hedging instruments that are not qualifying or not designated as hedges under accounting rules are recognized immediately in earnings.
Any such variation could negatively impact the retail energy business, including our business, could substantially increase costs to achieve compliance or otherwise could have a material adverse effect on our cash flow, results of operations and financial condition. For example, many electricity markets have rate caps, and changes to these rate caps by regulators can impact future price exposure.
Changes under a new president, administration and Congress in the U.S. are also difficult to predict. Any such variation could negatively impact the retail energy business, including our business, could substantially increase costs to achieve compliance or otherwise could have a material adverse effect on our cash flow, results of operations and financial condition.
If the number of potential customers is reduced, or if it becomes more difficult or costly to identify potential telemarketing targets, our ability to maintain our RCE count based on our telemarketing sales could be impacted.
If the number of potential customers is reduced, or if it becomes more difficult or costly to identify potential telemarketing targets, our ability to maintain our RCE count based on our telemarketing sales could be impacted. Please see “Regulatory Environment—Other Regulations.” Liability under the TCPA has increased significantly in recent years, and we face risks if we fail to comply.
Accordingly, higher market interest rates could cause the market price of the Class A common stock and Series A Preferred Stock to decrease. In addition, over the last several years, prices of equity securities in the U.S. trading markets have been experiencing extreme price fluctuations.
In addition, over the last several years, prices of equity securities in the U.S. trading markets have been experiencing extreme price fluctuations.
Furthermore, as a result of the seasonality of our business, we may reserve a portion of our excess cash available for distribution in the first and fourth quarters in order to fund our second and third quarter distributions.
Furthermore, as a result of the seasonality of our business, we may reserve a portion of our excess cash available for distribution in the first and fourth quarters in order to fund our second and third quarter distributions. 25 Table of Contents Additionally, we enter into a variety of financial derivative and physical contracts to manage commodity price risk, and we use mark-to-market accounting to account for this hedging activity.
The states that contain a large percentage of our customers could reverse regulatory restructuring or change the regulatory environment in a manner that causes us to be unable to operate economically in that state. 31 Table of Contents Increases in state renewable portfolio standards or an increase in the cost of renewable energy credit and carbon offsets may adversely impact the price, availability and marketability of our products.
The states that contain a large percentage of our customers could reverse regulatory restructuring or change the regulatory environment in a manner that causes us to be unable to operate economically in that state.
Pursuant to state renewable portfolio standards, we must purchase a specified amount of RECs based on the amount of electricity we sell in a state in a year.
Increases in state renewable portfolio standards or an increase in the cost of renewable energy credit and carbon offsets may adversely impact the price, availability and marketability of our products. Pursuant to state renewable portfolio standards, we must purchase a specified amount of RECs based on the amount of electricity we sell in a state in a year.
Moreover, this concentration of stock ownership may also adversely affect the trading price of our Class A common stock or Series A Preferred Stock to the extent investors perceive a disadvantage in owning stock of a company with a controlling shareholder. 36 Table of Contents Holders of Series A Preferred Stock have extremely limited voting rights.
Maxwell continues to hold all our common stock, he will continue to be able to control all matters requiring shareholder approval. This concentration of stock ownership may also adversely affect the trading price of our Series A Preferred Stock to the extent investors perceive a disadvantage in owning stock of a company with a controlling shareholder.
Additionally, none of our subsidiaries have guaranteed or otherwise become obligated with respect to the Class A common stock or Series A Preferred Stock.
If any of these events were to occur, there may be insufficient assets remaining to make any payments to holders of the Series A Preferred Stock. Additionally, none of our subsidiaries have guaranteed or otherwise become obligated with respect to the Series A Preferred Stock.
If you are a non-U.S. holder, any deemed dividend may be subject to U.S. federal withholding tax at a 30% rate, or such lower rate as may be specified by an applicable treaty, which may be set off against subsequent payments on the Series A Preferred Stock. 41 Table of Contents We are a “controlled company” under NASDAQ Global Select Market rules, and as such we are entitled to an exemption from certain corporate governance standards of the NASDAQ Global Select Market, and you may not have the same protections afforded to shareholders of companies that are subject to all of the NASDAQ Global Market corporate governance requirements.
We are a “controlled company” under NASDAQ Global Select Market rules, and as such we are entitled to an exemption from certain corporate governance standards of the NASDAQ Global Select Market, and you may not have the same protections afforded to shareholders of companies that are subject to all of the NASDAQ Global Market corporate governance requirements.
In addition, affiliates are able to determine the outcome of all matters requiring Class A common stock and Class B common stock shareholder approval, including mergers and other material transactions, and are able to cause or prevent a change in the composition of our board of directors or a change in control of our company that could deprive our stockholders of an opportunity to receive a premium for their Class A common stock as part of a sale of our company.
Maxwell is able to determine the outcome of all matters requiring shareholder approval, including mergers and other material transactions, and is able to cause or prevent a change in the composition of our board of directors or a change in control of our company. 32 Table of Contents So long as Mr.
Similarly, regulatory changes can result in new fees or charges that may not have been anticipated when existing retail contracts were drafted, which can create financial exposure. Our ability to manage cost increases that result from regulatory changes will depend, in part, on how the “change in law provisions” of our contracts are interpreted and enforced, among other factors.
Our ability to manage cost increases that result from regulatory changes will depend, in part, on how the “change in law provisions” of our contracts are interpreted and enforced, among other factors. Additionally, regulations that do not directly relate to ESCOs could impact us.
The Conversion Rate as defined in the Certificate of Designation for the Series A Preferred Stock is subject to adjustment in certain circumstances. A failure to adjust (or to adjust adequately) the Conversion Rate after an event that increases your proportionate interest in us could be treated as a deemed taxable dividend to you.
The Conversion Rate as defined in the Certificate of Designation for the Series A Preferred Stock is subject to adjustment in certain circumstances.
The failure to obtain additional capital from time to time may have a material adverse effect on its business and operations. 33 Table of Contents Our ability to pay dividends depends on many factors, including the performance of our business, cash flows, RCE counts and the margins we receive, as well as restrictions under our Senior Credit Facility.
Our ability to pay dividends depends on many factors, including the performance of our business, cash flows, RCE counts and the margins we receive, as well as restrictions under our Senior Credit Facility. We cannot assure you that we will be able to continue paying dividends to the holders of our Series A Preferred Stock in the future.
In addition, new laws and regulations, including executive orders, or changes to or new interpretations of existing laws and regulations by courts or regulatory authorities occur regularly, but are difficult to predict. Changes under a new president, administration and Congress in the U.S. are also difficult to predict.
Many governmental bodies regulate aspects of our operations, and our failure to comply with these legal requirements can result in substantial penalties. In addition, new laws and regulations, including executive orders, or changes to or new interpretations of existing laws and regulations by courts or regulatory authorities occur regularly, but are difficult to predict.
Affiliated owners are entitled to act separately with respect to their investment in us, and they have the ability to elect all of the members of our board of directors, and thereby to control our management and affairs.
Maxwell has the ability to elect all of the members of our board of directors, and thereby to control our management and affairs. In addition, Mr.
Typically, when winters are warmer or summers are cooler, demand for energy is lower than expected, resulting in less natural gas and electricity consumption than forecasted.
Typically, when winters are warmer or summers are cooler, demand for energy is lower than expected, resulting in less natural gas and electricity consumption than forecasted. When demand is below anticipated levels due to weather patterns, we may be forced to sell excess supply at prices below our acquisition cost, which could result in reduced margins or even losses.
Similarly, the repurchase or redemption rights or liquidation preferences we might assign to holders of preferred stock, such as the Series A Preferred Stock, could affect the residual value of the Class A common stock. 39 Table of Contents Our amended and restated certificate of incorporation limits the fiduciary duties of one of our directors and certain of our affiliates and restricts the remedies available to our stockholders for actions taken by Mr.
Our amended and restated certificate of incorporation limits the fiduciary duties of one of our directors and certain of our affiliates and restricts the remedies available to our stockholders for actions taken by Mr. Maxwell or certain of our affiliates that might otherwise constitute breaches of fiduciary duty.
We may not be successful in obtaining additional capital for these or other reasons.
We may not be successful in obtaining additional capital for these or other reasons. The failure to obtain additional capital from time to time may have a material adverse effect on its business and operations.
Further, extreme weather conditions such as hurricanes, droughts, heat waves, winter storms and severe weather associated with climate change could cause these seasonal fluctuations to be more pronounced. Destruction caused by severe weather events, such as hurricanes, tornadoes, severe thunderstorms, snow and ice storms, can result in lost operating revenues.
We may fail to accurately anticipate demand due to fluctuations in weather or to effectively manage our supply in response to a fluctuating commodity price environment. 21 Table of Contents Further, extreme weather conditions such as hurricanes, droughts, heat waves, winter storms and severe weather associated with climate change could cause these seasonal fluctuations to be more pronounced.
Although our board of directors has established a nominating and corporate governance committee and a compensation committee of independent directors, it may determine to eliminate these committees at any time. If these committees were eliminated, you may not have the same protections afforded to shareholders of companies that are subject to all of NASDAQ Global Select Market corporate governance requirements.
As a result, you may not have the same protections afforded to shareholders of companies that are subject to all of NASDAQ Global Select Market corporate governance requirements. Item 1B. Unresolved Staff Comments None.
Our risk management policies and hedging procedures may not mitigate risk as planned, and we may fail to fully or effectively hedge our commodity supply and price risk. To provide energy to our customers, we purchase commodities in the wholesale energy markets, which are often highly volatile.
Destruction caused by severe weather events, such as hurricanes, tornadoes, severe thunderstorms, snow and ice storms, can result in lost operating revenues. Our risk management policies and hedging procedures may not mitigate risk as planned, and we may fail to fully or effectively hedge our commodity supply and price risk.
We have historically distributed a significant portion of our cash through dividends, and our ability to grow and make acquisitions with cash on hand could be limited. We have historically distributed a significant portion of our cash through dividends to holders of our Class A common stock and dividends on our Series A Preferred Stock.
We distribute a signification portion of our cash through dividends to holders of Series A Preferred Stock.
Voting rights of holders of shares of Series A Preferred Stock are extremely limited. Our Class A common stock and our Class B common stock are the only classes of our securities carrying full voting rights. Holders of the Series A Preferred Stock generally have no voting rights.
Maxwell, our founder, sole common stock shareholder and Chief Executive Officer, holds all the voting power of our common stock, and holders of Series A Preferred Stock have extremely limited voting rights. Mr. Maxwell beneficially indirectly owns all the combined voting power of the company's common stock. Mr.
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For example, in February 2021, the U.S. experienced winter storm Uri, an unprecedented storm bringing extreme cold temperatures to the central U.S., including Texas.
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We use both physical and financial products to hedge our exposure.
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As a result of increased power demand for customers across the state of Texas and power generation disruptions during the weather event, power and ancillary costs in the Electric Reliability Counsel of Texas (“ERCOT”) service area experienced extreme volatility and price increases beyond the maximum allowed clearing prices.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Audit Committee is composed of board members with diverse expertise including, risk management, technology, and finance, equipping them to oversee cybersecurity risks effectively. Management’s Role Managing Risk The Chief Operating Officer plays a pivotal role in informing the Audit Committee on cybersecurity risks.
Biggest changeBoard of Directors Oversight The Audit Committee is central to the Board’s oversight of cybersecurity risks and bears the primary responsibility for this domain. The Audit Committee is composed of board members with diverse expertise including, risk management, technology, and finance, equipping them to oversee cybersecurity risks effectively.
With over 26 years of experience in the field of cybersecurity, the Director of Infrastructure brings a wealth of expertise to his role. His in-depth knowledge and experience are instrumental in developing and executing our cybersecurity strategies. Our Director of Infrastructure oversees our governance programs, tests our compliance with standards, remediates known risks, and leads our employee training program.
With over 27 years of experience in the field of cybersecurity, the Director of Infrastructure brings a wealth of expertise to his role. His in-depth knowledge and experience are instrumental in developing and executing our cybersecurity strategies. Our Director of Infrastructure oversees our governance programs, tests our compliance with standards, remediates known risks, and leads our employee training program.
The Board has established a robust oversight mechanism to ensure effective governance in managing risks associated by cybersecurity threats because we recognize the significant of these threats to our operations integrity and stakeholder confidence. Board of Directors Oversight The Audit Committee is central to the Board’s oversight of cybersecurity risks and bears the primary responsibility for this domain.
Governance The Board of Directors is acutely aware of the critical nature of managing risks associated with cybersecurity threats. The Board has established a robust oversight mechanism to ensure effective governance in managing risks associated by cybersecurity threats because we recognize the significant of these threats to our operations integrity and stakeholder confidence.
Furthermore, significant cybersecurity mattes, and strategic risk management decisions are escalated to the Board of Directors, ensuring that they have comprehensive oversight and can provide guidance on critical cybersecurity issues.
This ensures that the highest levels of management are kept abreast of the cybersecurity posture and potential risks facing Via Renewables, Inc. Furthermore, significant cybersecurity mattes, and strategic risk management decisions are escalated to the Board of Directors, ensuring that they have comprehensive oversight and can provide guidance on critical cybersecurity issues.
The Chief Operating Officer provides comprehensive briefings to the Audit Committee on a regulatory basis, with a minimum frequency of once per year.
Management’s Role Managing Risk The Chief Operating Officer plays a pivotal role in informing the Audit Committee on cybersecurity risks. The Chief Operating Officer provides comprehensive briefings to the Audit Committee on a regulatory basis, with a minimum frequency of once per year.
This includes the deployment of advanced security measures and regular system audits to identify potential vulnerabilities. In the event of a cybersecurity incident, the Director of Infrastructure is equipped with a well-defined incident response plan.
This includes the deployment of advanced security measures and regular system audits to identify potential vulnerabilities. 37 Table of Contents In the event of a cybersecurity incident, the Director of Infrastructure is equipped with a well-defined incident response plan. This plan includes immediate actions to mitigate the impact and long-term strategies for remediation and prevention of future incidents.
We conduct thorough security assessments of all third-party providers before engagement and maintain ongoing monitoring to ensure compliance with our cybersecurity standards. This approach is designed to mitigate risks related to data breaches or other security incidents originating from third parties.
We conduct thorough security assessments of all third-party providers before engagement and maintain ongoing monitoring to ensure compliance with our cybersecurity standards.
This plan includes immediate actions to mitigate the impact and long-term strategies for remediation and prevention of future incidents. 43 Table of Contents Reporting to the Board of Directors The Director of Infrastructure, in his capacity, regularly informs the Chief Financial Officer (CFO) and Chief Operating Officer (COO) of all aspects related to cybersecurity risks and incidents.
Reporting to the Board of Directors The Director of Infrastructure, in his capacity, regularly informs the Chief Financial Officer (CFO) and Chief Operating Officer (COO) of all aspects related to cybersecurity risks and incidents. The CFO and COO regularly inform the Chief Executive Officer (CEO) of such risk and incidents.
Risks from Cybersecurity Threats We have not encountered cybersecurity challenges that have materially impaired our operations or financial standing. 42 Table of Contents Governance The Board of Directors is acutely aware of the critical nature of managing risks associated with cybersecurity threats.
This approach is designed to mitigate risks related to data breaches or other security incidents originating from third parties. 36 Table of Contents Risks from Cybersecurity Threats We have not encountered cybersecurity challenges that have materially impaired our operations or financial standing.
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The CFO and COO regularly inform the Chief Executive Officer (CEO) of such risk and incidents. This ensures that the highest levels of management are kept abreast of the cybersecurity posture and potential risks facing Via Renewables, Inc.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDividends We have historically paid a cash dividend each quarter to holders of our Class A common stock to the extent we have cash available for distribution and are permitted to do so under the terms of our Senior Credit Facility, as well as paid dividends to the holders of our Series A Preferred Stock.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities All our common equity is indirectly owned by Mr. Maxwell. Dividends We have historically paid a cash dividend each quarter to holders of our Series A Preferred Stock.
In April 2023, we announced a suspension of the dividend on the Class A common stock. Our ability to pay dividends depends on certain factors, including the terms of our Senior Credit Facility, the performance of our business, cash flows, RCE counts and the margins we receive.
Our ability to pay dividends depends on certain factors, including the terms of our Senior Credit Facility, the performance of our business, cash flows, RCE counts and the margins we receive. Please see “Item 1A – Risk Factors” in this Annual Report for risks related to our ability to pay dividends.
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Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our Class A common stock is traded on the NASDAQ Global Select Market under the symbol “VIA." There is no public market for our Class B common stock.
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Recent Sales of Unregistered Equity Securities We have not sold any unregistered equity securities other than as previously reported. Issuer Purchases of Equity Securities The following table sets forth information regarding purchase of our Series A Preferred Stock by us during the three months ended December 31, 2024 pursuant to our tender offer.
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On February 27, 2024, we had we had three holders of record of our Class A common stock and two holders of record of our Class B common stock, excluding the Company, and stockholders for whom shares are held in “nominee” or “street name.” Shareholders of record, excluding Cede & Co. and the Company, held an aggregate of 94 shares.
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Period (a) Total Number of Shares Purchased (b) Average Price Paid per Share (c ) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) (d) Maximum Number (or Approximate Dollar Value) of Shares that May yet be Purchased Under the Plans or Programs October 1 - October 31, 2024 — $ — — — November 1 - November 30, 2024 — — — — December 1 - December 31, 2024 187,103 22.50 187,103 — Total 187,103 $ 22.50 187,103 — (1) On November 15, 2024, we initiated a tender offer to purchase up to 800,000 shares of our Series A Preferred Stock.
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Please see “Item 1A – Risk Factors” in this Annual Report for risks related to our ability to pay dividends. Recent Sales of Unregistered Equity Securities We have not sold any unregistered equity securities other than as previously reported. Issuer Purchases of Equity Securities We did not repurchase any equity securities between October 1, 2023 and December 31, 2023.
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In December 2024, we accepted for purchase of 187,103 shares of Series A Preferred Stock at a purchase price of $22.50, for an aggregate purchase price of approximately $4.2 million. Stock Performance Graph The company does not have a class of common stock registered under section 12 of the Securities Exchange Act of 1934. 39 Table of Contents
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Stock Performance Graph The following graph compares the quarterly performance of our Class A common stock to the NASDAQ Composite Index ("NASDAQ Composite") and the Dow Jones U.S. Utilities Index ("IDU").
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The chart assumes that the value of the investment in our Class A common stock and each index was $100 at December 31, 2018 and that all dividends were reinvested.
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The stock performance shown on the graph below is not indicative of future price performance. 45 Table of Contents The performance graph above and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate it by reference. 46 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

98 edited+16 added−48 removed59 unchanged
Biggest changeThe low customer acquisition cost in 2021 was primarily due to a limitation on our ability to use door-to-door marketing as a result of COVID-19 and a reduction in targeted organic customer acquisitions as we focused our efforts to improve our organic sales channels, including vendor selection and sales quality. 61 Table of Contents Operating Segment Results Year Ended December 31, 2023 2022 2021 (in thousands, except volume and per unit operating data) Retail Electricity Segment Total Revenues $ 328,466 $ 352,750 $ 322,594 Retail Cost of Revenues 240,979 275,701 284,794 Less: Net (Losses) Gains on non-trading derivatives, net of cash settlements (79) (15,265) 6,194 Non-recurring event - winter storm Uri — 9,565 (64,403) Retail Gross Margin (1) —Electricity $ 87,566 $ 82,749 $ 96,009 Volumes—Electricity (MWhs) (3) 2,008,947 2,433,906 2,677,681 Retail Gross Margin (2) (4) —Electricity per MWh $ 43.59 $ 34.00 $ 35.86 Retail Natural Gas Segment Total Revenues $ 110,894 $ 110,065 $ 75,134 Retail Cost of Revenues 68,202 81,395 38,425 Less: Net (Losses) Gains on non-trading derivatives, net of cash settlements (4,797) (3,396) 184 Retail Gross Margin (1) —Gas $ 47,489 $ 32,066 $ 36,525 Volumes—Gas (MMBtus) 11,252,862 11,558,952 8,611,285 Retail Gross Margin (2) —Gas per MMBtu $ 4.22 $ 2.77 $ 4.24 (1) Reflects the Retail Gross Margin attributable to our Retail Electricity Segment or Retail Natural Gas Segment, as applicable.
Biggest changeThis increase was primarily due to increased sales activity in 2023 as compared to 2022. 52 Table of Contents Operating Segment Results Year Ended December 31, 2024 2023 2022 (in thousands, except volume and per unit operating data) Retail Electricity Segment Total Revenues $ 300,347 $ 328,466 $ 352,750 Retail Cost of Revenues 186,246 240,979 275,701 Less: Net Gains (Losses) on non-trading derivatives, net of cash settlements 20,432 (79) (15,265) Non-recurring event - winter storm Uri — — 9,565 Retail Gross Margin (1) —Electricity $ 93,669 $ 87,566 $ 82,749 Volumes—Electricity (MWhs) 2,035,597 2,008,947 2,433,906 Retail Gross Margin (2) —Electricity per MWh $ 46.02 $ 43.59 $ 34.00 Retail Natural Gas Segment Total Revenues $ 99,071 $ 110,894 $ 110,065 Retail Cost of Revenues 43,231 68,202 81,395 Less: Net Gains (Losses) on non-trading derivatives, net of cash settlements 7,975 (4,797) (3,396) Retail Gross Margin (1) —Gas $ 47,865 $ 47,489 $ 32,066 Volumes—Gas (MMBtus) 11,603,745 11,252,862 11,558,952 Retail Gross Margin (2) —Gas per MMBtu $ 4.12 $ 4.22 $ 2.77 (1) Reflects the Retail Gross Margin attributable to our Retail Electricity Segment or Retail Natural Gas Segment, as applicable.
During these same periods, we paid these local regulated utilities a weighted average discount of approximately 1.0%, 0.9% and 0.9%, respectively, of total revenues for customer credit risk protection. Weather Conditions Weather conditions directly influence the demand for natural gas and electricity and affect the prices of energy commodities.
During these same periods, we paid these local regulated utilities a weighted average discount of approximately 1.2%, 1.0% and 0.9%, respectively, of total revenues for customer credit risk protection. Weather Conditions Weather conditions directly influence the demand for natural gas and electricity and affect the prices of energy commodities.
This decrease was primarily due to lower electricity volumes sold as a result of a smaller electricity customer book during 2023 as compared to 2022, offset by a increase in electricity supply costs due to higher electricity commodity price environment in 2023.
This decrease was primarily due to lower electricity volumes sold as a result of a smaller electricity customer book during 2023 as compared to 2022, offset by an increase in electricity supply costs due to higher electricity commodity price environment in 2023.
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. 69 Table of Contents 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.
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. 60 Table of Contents 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.
Cash flows provided by operating activities for the year ended December 31, 2023 increased by $33.1 million compared to the year ended December 31, 2022. The increase was primarily the result of higher net income in 2023 coupled with other changes in working capital.
Cash flows provided by operating activities for the year ended December 31, 2023 increased by $33.1 million compared to the year ended December 31, 2022. The increase was primarily the result of higher net income in 2023 coupled with other changes in working capital. Cash Flows Used in Investing Activities .
See "— Sources of Liquidity and Capital Resources — Amended and Restated Subordinated Debt Facility." Borrowings and related posting of letters of credit under our Senior Credit Facility are subject to material variations on a seasonal basis due to the timing of commodity purchases to satisfy natural gas inventory requirements and to meet customer demands during periods of peak usage.
See "— Sources of Liquidity and Capital Resources — Amended and Restated Subordinated Debt Facility." 55 Table of Contents Borrowings and related posting of letters of credit under our Senior Credit Facility are subject to material variations on a seasonal basis due to the timing of commodity purchases to satisfy natural gas inventory requirements and to meet customer demands during periods of peak usage.
In this segment, we purchase natural gas supply through physical and financial transactions with market counterparties and supply natural gas to residential and commercial consumers pursuant to fixed-price and variable-price contracts. For the years ended December 31, 2023, 2022 and 2021, approximately 25%, 24% and 19%, respectively, of our retail revenues were derived from the sale of natural gas.
In this segment, we purchase natural gas supply through physical and financial transactions with market counterparties and supply natural gas to residential and commercial consumers pursuant to fixed-price and variable-price contracts. For the years ended December 31, 2024, 2023 and 2022, approximately 25%, 25% and 24%, respectively, of our retail revenues were derived from the sale of natural gas.
On October 31, 2023, we performed a quantitative assessment of goodwill in accordance with guidance from ASC 350, in which we compared our estimate of the fair value of our reporting units with their carrying values, including goodwill.
On October 31, 2024, we performed a quantitative assessment of goodwill in accordance with guidance from ASC 350, in which we compared our estimate of the fair value of our reporting units with their carrying values, including goodwill.
We have entered into other energy-related contracts that do not meet the definition of a derivative instrument or for which we made a normal purchase, normal sale election and are therefore not accounted for at fair value. Goodwill As noted above, Goodwill represents the excess of cost over fair value of the assets of businesses.
We have entered into other energy-related contracts that do not meet the definition of a derivative instrument or for which we made a normal purchase, normal sale election and are therefore not accounted for at fair value. Goodwill Goodwill represents the excess of cost over fair value of the assets of businesses.
For the years ended December 31, 2023, 2022 and 2021, approximately 55%, 59% and 59%, respectively, of our retail revenues were collected through POR programs where substantially all of our credit risk was with local regulated utility companies. As of December 31, 2023, 2022 and 2021, all of these local regulated utility companies had investment grade ratings.
For the years ended December 31, 2024, 2023 and 2022, approximately 60%, 55% and 59%, respectively, of our retail revenues were collected through POR programs where substantially all of our credit risk was with local regulated utility companies. As of December 31, 2024, 2023 and 2022, all of these local regulated utility companies had investment grade ratings.
(Refer to Note 9 "Debt" in the Company’s audited consolidated financial statements for discussion of the material terms of our Senior Credit Facility, including the covenant requirements for our Minimum Fixed Charge Coverage Ratio, Maximum Total Leverage Ratio, and Maximum Senior Secured Leverage Ratio.) The GAAP measures most directly comparable to Adjusted EBITDA are net income (loss) and net cash provided by (used in) operating activities.
(Refer to Note 9 "Debt" in the Company’s audited consolidated financial statements for discussion of the material terms of our Senior Credit Facility, including the covenant requirements for our Minimum Fixed Charge Coverage Ratio and Maximum Total Leverage Ratio) 46 Table of Contents The GAAP measures most directly comparable to Adjusted EBITDA are net income (loss) and net cash provided by (used in) operating activities.
For a discussion of the status of current legal and regulatory matters, see Note 13 "Commitments and Contingencies" in the Company’s audited consolidated financial statements. 71 Table of Contents
For a discussion of the status of current legal and regulatory matters, see Note 13 "Commitments and Contingencies" in the Company’s audited consolidated financial statements. 62 Table of Contents
The goodwill on our consolidated balance sheet as of December 31, 2023 is associated with both our Retail Natural Gas and Retail Electricity reporting units.
The goodwill on our consolidated balance sheet as of December 31, 2024 is associated with both our Retail Natural Gas and Retail Electricity reporting units.
Retail Electricity Segment Total revenues for the Retail Electricity Segment for the year ended December 31, 2023 were approximately $328.5 million, a decrease of approximately $24.3 million, or 7%, from approximately $352.8 million for the year ended December 31, 2022. This decrease was largely due to lower volumes sold, resulting in a decrease of $60.6 million.
Total revenues for the Retail Electricity Segment for the year ended December 31, 2023 decreased approximately $24.3 million, or 7%, from approximately $352.8 million for the year ended December 31, 2022. This decrease was largely due to lower volumes sold, resulting in a decrease of $60.6 million.
A dividend penalty event would occur if dividends on the Series A Preferred Stock are in arrears for six or more quarterly dividend periods, in which case the dividend rate on the Series A Preferred Stock would increase by 2.00% per annum, and the holders of the Series A Preferred Stock would be entitled to elect two members to our Board of Directors, until the dividend penalty event is cured. 67 Table of Contents Summary of Contractual Obligations The following table discloses aggregate information about our contractual obligations and commercial commitments as of December 31, 2023 (in millions): Total 2024 2025 2026 2027 2028 > 5 years Purchase obligations: Pipeline transportation agreements $ 9.2 $ 5.9 $ 1.6 $ 0.9 $ 0.6 $ 0.2 $ — Other purchase obligations (1) 16.4 6.0 5.1 5.3 — — — Total purchase obligations $ 25.6 $ 11.9 $ 6.7 $ 6.2 $ 0.6 $ 0.2 $ — Senior Credit Facility $ 97.0 $ — $ 97.0 $ — $ — $ — $ — Debt $ 97.0 $ — $ 97.0 $ — $ — $ — $ — (1) The amounts presented here include contracts for billing services and other software agreements to support our operations.
A dividend penalty event would occur if dividends on the Series A Preferred Stock are in arrears for six or more quarterly dividend periods, in which case the dividend rate on the Series A Preferred Stock would increase by 2.00% per annum, and the holders of the Series A Preferred Stock would be entitled to elect two members to our Board of Directors, until the dividend penalty event is cured. 58 Table of Contents Summary of Contractual Obligations The following table discloses aggregate information about our contractual obligations and commercial commitments as of December 31, 2024 (in millions): Total 2025 2026 2027 2028 2029 > 5 years Purchase obligations: Pipeline transportation agreements $ 5.6 $ 3.9 $ 0.9 $ 0.6 $ 0.2 $ — $ — Other purchase obligations (1) 7.8 5.3 2.3 0.2 — — — Total purchase obligations $ 13.4 $ 9.2 $ 3.2 $ 0.8 $ 0.2 $ — $ — Senior Credit Facility $ 106.0 $ — $ — $ 106.0 $ — $ — $ — Debt $ 106.0 $ — $ — $ 106.0 $ — $ — $ — (1) The amounts presented here include contracts for billing services and other software agreements to support our operations.
The Series A Preferred Stock will accrue dividends at an annual rate equal to the sum of (a) Three-Month LIBOR (if it then exists), or an alternative reference rate as of the applicable determination date and (b) 6.578%, based on the $25.00 liquidation preference per share of the Series A Preferred Stock. Following the cessation of the publication of U.S.
The Series A Preferred Stock will accrue dividends at an annual rate equal to the sum of (a) Three-Month LIBOR (if it then exists), or an alternative reference rate as of the applicable determination date and (b) 6.578%, based on the $25.00 liquidation preference per share of the Series A Preferred Stock.
For the years ended December 31, 2023, 2022 and 2021, approximately 75%, 76% and 81%, respectively, of our retail revenues were derived from the sale of electricity. • Retail Natural Gas Segment .
For the years ended December 31, 2024, 2023 and 2022, approximately 75%, 75% and 76%, respectively, of our retail revenues were derived from the sale of electricity. • Retail Natural Gas Segment .
Net asset optimization resulted in a loss of $7.3 million, $2.3 million of $4.2 million for the years ended December 31, 2023, 2022 and 2021, respectively. 53 Table of Contents Non-GAAP Performance Measures We use the Non-GAAP performance measures of Adjusted EBITDA and Retail Gross Margin to evaluate and measure our operating results.
Net asset optimization resulted in a loss of $2.3 million, $7.3 million and $2.3 million for the years ended December 31, 2024, 2023 and 2022, respectively. 45 Table of Contents Non-GAAP Performance Measures We use the Non-GAAP performance measures of Adjusted EBITDA and Retail Gross Margin to evaluate and measure our operating results.
This decrease was primarily due to lower volumes sold, resulting in a decrease of $46.4 million and a decrease of $15.2 million due to a change in the value of our retail derivative portfolio used in hedging and a credit of $9.6 million related to Winter Storm Uri received in 2022 that did not reoccur in 2023.
This decrease was primarily due to lower volumes sold, resulting in a decrease of $46.4 million and a decrease of $15.2 million due to a change in the value of our retail derivative portfolio used in hedging and a credit of $9.6 million related to winter storm Uri received in 2022 from ERCOT which did not reoccur again in 2023).
As of December 31, 2023, we had no material "off-balance sheet arrangements." 68 Table of Contents Related Party Transactions For a discussion of related party transactions, see Note 14 "Transactions with Affiliates" in the Company’s audited consolidated financial statements.
As of December 31, 2024, we had no material "off-balance sheet arrangements." 59 Table of Contents Related Party Transactions For a discussion of related party transactions, see Note 14 "Transactions with Affiliates" in the Company’s audited consolidated financial statements.
We completed our annual assessment of goodwill impairment at October 31, 2023, and the test indicated no impairment. 70 Table of Contents Deferred tax assets and liabilities The Company recognizes the amount of taxes payable or refundable for each tax year.
We completed our annual assessment of goodwill impairment at October 31, 2024, and the test indicated no impairment. 61 Table of Contents Deferred tax assets and liabilities The Company recognizes the amount of taxes payable or refundable for each tax year.
The decrease in cash flows used in financing activities was primarily due to a decrease in net paydown of our Senior Credit Facility of $32.0 million, a decrease in dividends paid to Class A common stockholders of $8.6 million, a decrease in distribution to non-controlling unitholders of $10.2 million, offset by net paydown of sub-debt of $20.0 million for the year ended December 31, 2023 compared to net borrowing of sub-debt of $20.0 million for the year ended December 31, 2022.
This was primarily due to a decrease in net paydown of our Senior Credit Facility of $32.0 million, a decrease in dividends paid to Class A common stockholders of $8.6 million, a decrease in distribution to non-controlling unitholders of $10.2 million, offset by net paydown of sub-debt of $20.0 million for the year ended December 31, 2023 compared to net borrowing of sub-debt of $20.0 million for the year ended December 31, 2022.
As of December 31, 2023, we operated in 104 utility service territories across 20 states and the District of Columbia. Our business consists of two operating segments: • Retail Electricity Segment .
As of December 31, 2024, we operated in 102 utility service territories across 20 states and the District of Columbia. Our business consists of two operating segments: • Retail Electricity Segment .
General and administrative expense for the year ended December 31, 2023 was approximately $68.9 million, an increase of approximately $7.0 million, or 11%, as compared to $61.9 million for the year ended December 31, 2022. This increase was primarily attributable to higher employee costs and an increase in sales and marketing due to increased sales activity.
General and administrative expense for the year ended December 31, 2023 increased approximately $7.0 million, or 11%, as compared to $61.9 million for the year ended December 31, 2022. This increase was primarily attributable to higher employee costs and an increase in sales and marketing due to increased sales activity. 51 Table of Contents Depreciation and Amortization Expense .
Our bad debt expense on non-POR revenues was as follows: Year Ended December 31, 2023 2022 2021 Total Non-POR Bad Debt as Percent of Revenue 1.7 % 3.0 % 0.2 % During the year ended December 31, 2023, we experienced lower credit loss expense versus 2022.
Our credit loss expense on non-POR revenues was as follows: Year Ended December 31, 2024 2023 2022 Total Non-POR Credit Loss as Percent of Revenue 1.3 % 1.7 % 3.0 % During the year ended December 31, 2024, we experienced lower credit loss expense versus 2023.
For each of the three years ended December 31, 2023, customer acquisition costs were as follows: Year Ended December 31, (In thousands) 2023 2022 2021 Customer Acquisition Costs $ 6,736 $ 5,870 $ 1,415 We strive to maintain a disciplined approach to recovery of our customer acquisition costs within a 12 month period.
For each of the three years ended December 31, 2024, customer acquisition costs were as follows: Year Ended December 31, (In thousands) 2024 2023 2022 Customer Acquisition Costs $ 9,508 $ 6,736 $ 5,870 We strive to maintain a disciplined approach to recovery of our customer acquisition costs within a 12 month period.
Amended and Restated Subordinated Debt Facility In connection with entering into the Senior Credit Facility, we entered into an amended and restated subordinated promissory note (the “Subordinated Debt Facility”), which allows us to draw advances in increments of no less than $1.0 million per advance up to $25.0 million through January 31, 2026. Borrowings are at the discretion of Retailco.
Amended and Restated Subordinated Debt Facility In connection with entering into the Senior Credit Facility, we entered into an amended and restated subordinated promissory note (the “Subordinated Debt Facility”), which allows us to draw advances in increments of no less than $1.0 million per advance up to $25.0 million through January 31, 2028.
Customer acquisition cost for the year ended December 31, 2023 was approximately $6.7 million, an increase of approximately $0.8 million, or 14%, from approximately $5.9 million for the year ended December 31, 2022. This increase was primarily due to increased sales activity in 2023 as compared to 2022.
Customer acquisition cost for the year ended December 31, 2024 was approximately $9.5 million, an increase of approximately $2.8 million, or 41%, from approximately $6.7 million for the year ended December 31, 2023. This increase was primarily due to increased sales activity in 2024 as compared to 2023.
(5) Retail Gross Margin for year ended December 31, 2022 includes a deduction of $9.6 million related to proceeds received under an ERCOT (winter storm Uri) securitization mechanism in June 2022. See further discussion below. Adjusted EBITDA .
(3) Retail Gross Margin for year ended December 31, 2022 includes a deduction of $9.6 million related to proceeds received under an ERCOT (winter storm Uri) securitization mechanism in June 2022. Adjusted EBITDA .
Depreciation and amortization expense for the year ended December 31, 2023 was approximately $9.1 million, a decrease of approximately $7.6 million, or 46%, from approximately $16.7 million for the year ended December 31, 2022. This decrease was primarily due to the decreased amortization expense associated with customer relationship intangibles.
Depreciation and amortization expense for the year ended December 31, 2023 decreased approximately $7.6 million, or 46%, from approximately $16.7 million for the year ended December 31, 2022. This decrease was primarily due to the decreased amortization expense associated with customer relationship intangibles. Customer Acquisition Cost .
Our marketing team continuously evaluates the effectiveness of each customer acquisition channel and makes adjustments in order to achieve desired targets. During the year ended December 31, 2023, we added approximately 140,000 RCEs through our various organic sales channels.
Our marketing team continuously evaluates the effectiveness of each customer acquisition channel and makes adjustments in order to achieve desired targets. 42 Table of Contents During the year ended December 31, 2024, we added approximately 127,000 RCEs through our various organic sales channels.
As a result, during the year ended December 31, 2023, Spark HoldCo made distributions of $3.6 million to our non-controlling interest holders related to the dividend payments to our Class A shareholders. In April 2023, we announced that our Board of Directors elected to temporarily suspend the quarterly cash dividend on the Class A common stock.
As a result, during the year ended December 31, 2024, Spark HoldCo made distributions of zero to our non-controlling interest holders related to the dividend payments to our Class A shareholders. 57 Table of Contents In April 2023, we announced that our Board of Directors elected to temporarily suspend the quarterly cash dividend on the Class A common stock.
Analysis of the impact of changes in prices and volumes between the years ended December 31, 2023, 2022, and 2021 are as follows: 2023 vs. 2022 2022 vs. 2021 Change in electricity volumes sold $ (46.4) $ (21.4) Change in natural gas volumes sold (2.1) 13.2 Change in electricity unit cost per MWh 17.3 65.6 Change in electricity unit cost per MWh - winter storm Uri 9.6 (74.8) Change in natural gas unit cost per MMBtu (12.5) 26.2 Change in value of retail derivative portfolio (13.8) 25.1 Change in other costs 1.5 — Change in retail cost of revenues $ (46.4) $ 33.9 General and Administrative Expense .
Analysis of the impact of changes in prices and volumes between the years ended December 31, 2024, 2023, and 2022 are as follows: 2024 vs. 2023 2023 vs. 2022 Change in electricity volumes sold $ 3.2 $ (46.4) Change in natural gas volumes sold 2.0 (2.1) Change in electricity unit cost per MWh (37.5) 17.3 Change in electricity unit cost per MWh - winter storm Uri — 9.6 Change in natural gas unit cost per MMBtu (14.2) (12.5) Change in value of retail derivative portfolio (33.3) (13.8) Change in other costs (0.1) 1.5 Change in retail cost of revenues $ (79.9) $ (46.4) General and Administrative Expense .
However, market conditions and regulatory constraints are making this increasingly difficult, and we are unable to predict future organic sales volumes at this time We also acquire companies and portfolios of customers through both external and affiliated channels. During the year ended December 31, 2023, we did not add any RCEs through acquisitions or asset purchase agreements.
However, market conditions and regulatory constraints are making this increasingly difficult, and we are unable to predict future organic sales volumes at this time. We also acquire companies and portfolios of customers through both external and affiliated channels. During the year ended December 31, 2024, we added 82,000 RCEs through acquisitions or asset purchase agreements.
Average monthly attrition rates during 2023, 2022 and 2021 were as follows: Year Ended Quarter Ended December 31 December 31 September 30 June 30 March 31 2021 3.3% 3.4% 2.4% 3.3% 4.2% 2022 3.8% 4.2% 4.0% 3.1% 3.7% 2023 3.4% 3.3% 3.1% 3.1% 3.9% Customer attrition during the year ended December 31, 2022 was higher than the year ended December 31, 2021 due to the sharp increase in commodity prices across the industry.
Average monthly attrition rates during 2024, 2023 and 2022 were as follows: Year Ended Quarter Ended December 31 December 31 September 30 June 30 March 31 2022 3.8% 4.2% 4.0% 3.1% 3.7% 2023 3.4% 3.3% 3.1% 3.1% 3.9% 2024 3.9% 4.0% 4.1% 3.4% 3.9% Customer attrition during the year ended December 31, 2023 was lower than the year ended December 31, 2022 due to a decrease in commodity prices across the industry.
Capital expenditures for the year ended December 31, 2023 included approximately $1.4 million related to information systems improvements. Dividends and Distributions For the year ended December 31, 2023, we paid $2.9 million in dividends to holders of our Class A common stock.
Capital expenditures for the year ended December 31, 2024 included approximately $1.6 million related to information systems improvements. Dividends and Distributions For the year ended December 31, 2024 , we paid $0.5 million in dividends to holders of our Class A common stock.
Total retail cost of revenues for the year ended December 31, 2023 was approximately $310.7 million, a decrease of approximately $46.4 million, or 13%, from approximately $357.1 million for the year ended December 31, 2022.
Total retail cost of revenues for the year ended December 31, 2023 decreased approximately $46.4 million, or 13%, from approximately $357.1 million for the year ended December 31, 2022.
During the year ended December 31, 2023, we paid $10.3 million of dividends to holders of our Series A Preferred Stock, and as of December 31, 2023, we had accrued $2.7 million related to dividends to holders of our Series A Preferred Stock, which we paid on January 16, 2024.
During the year ended December 31, 2024, we paid $10.9 million of dividends to holders of our Series A Preferred Stock, and as of December 31, 2024, we had accrued $2.4 million related to dividends to holders of our Series A Preferred Stock, which we paid on January 15, 2025.
This decrease was primarily due to a smaller customer book in 2023 compared to 2022. The volumes of natural gas sold increased from 8,611,285 MMBtu for the year ended December 31, 2021 to 11,558,952 MMBtu for the year ended December 31, 2022. This increase was primarily due to a larger customer book in 2022 compared to 2021.
This increase was primarily due to a larger customer book in 2024 compared to 2023. The volumes of natural gas sold decreased from 11,558,952 MMBtu for the year ended December 31, 2022 to 11,252,862 MMBtu for the year ended December 31, 2023. This decrease was primarily due to a smaller customer book in 2023 compared to 2022.
During the years ended December 31, 2023 and 2022, we spent a total of $6.7 million and $5.9 million, respectively, on organic customer acquisitions. Capital Expenditures Our capital requirements each year are relatively low and generally consist of minor purchases of equipment or information system upgrades and improvements.
During the years ended December 31, 2024 and 2023, we spent a total of 3.2 million and zero, respectively, on customer book acquisitions. Capital Expenditures Our capital requirements each year are relatively low and generally consist of minor purchases of equipment or information system upgrades and improvements.
This increase was primarily due to an increase in electricity unit revenue per MWh and higher natural gas volumes sold as a result of a larger natural gas customer book in 2022 as compared to 2021. 59 Table of Contents Analysis of the impact of changes in prices and volumes between the years ended December 31, 2023, 2022 and 2021 are as follows: 2023 vs. 2022 2022 vs. 2021 Change in electricity volumes sold $ (60.6) $ (30.5) Change in natural gas volumes sold (2.9) 25.6 Change in electricity unit revenue per MWh 36.3 61.4 Change in electricity unit revenue per MWh - winter storm Uri — (0.9) Change in natural gas unit revenue per MMBtu 3.7 9.5 Change in net asset optimization (expense) revenue (5.0) 1.9 Change in other revenue 3.2 — Change in total revenues $ (25.3) $ 67.0 Retail Cost of Revenues .
This decrease was primarily due to lower electricity volumes sold as a result of a smaller electricity customer book during 2023 as compared to 2022 offset by an increase in electricity unit revenue per MWh. 50 Table of Contents Analysis of the impact of changes in prices and volumes between the years ended December 31, 2024, 2023 and 2022 are as follows: 2024 vs. 2023 2023 vs. 2022 Change in electricity volumes sold $ 4.4 $ (60.6) Change in natural gas volumes sold 3.5 (2.9) Change in electricity unit revenue per MWh (32.6) 36.3 Change in natural gas unit revenue per MMBtu (15.3) 3.7 Change in net asset optimization (expense) revenue 5.0 (5.0) Change in other revenue (1.3) 3.2 Change in total revenues $ (36.3) $ (25.3) Retail Cost of Revenues .
(In thousands) Retail Electricity Retail Natural Gas Total % Net Annual Increase (Decrease) December 31, 2020 303 97 400 Additions 110 47 157 Attrition (115) (34) (149) December 31, 2021 298 110 408 2% Additions 40 46 86 Attrition (137) (26) (163) December 31, 2022 201 130 331 (19)% Additions 118 22 140 Attrition (102) (34) (136) December 31, 2023 217 118 335 1% 50 Table of Contents Customer attrition occurs primarily as a result of: (i) customer initiated switches; (ii) residential moves (iii) disconnection resulting from customer payment defaults and (iv) pro-active non-renewal of contracts.
(In thousands) Retail Electricity Retail Natural Gas Total % Net Annual Increase (Decrease) December 31, 2021 298 110 408 2% Additions 40 46 86 Attrition (137) (26) (163) December 31, 2022 201 130 331 (19)% Additions 118 22 140 Attrition (102) (34) (136) December 31, 2023 217 118 335 1% Additions 129 80 209 Attrition (114) (42) (156) December 31, 2024 232 156 388 16% Customer attrition occurs primarily as a result of: (i) customer initiated switches; (ii) residential moves (iii) disconnection resulting from customer payment defaults and (iv) pro-active non-renewal of contracts.
Retail Natural Gas Segment Total revenues for the Retail Natural Gas Segment for the year ended December 31, 2023 were approximately $110.9 million, an increase of approximately $0.8 million, or 1%, from approximately $110.1 million for the year ended December 31, 2022.
Total revenues for the Retail Natural Gas Segment for the year ended December 31, 2023 increased by approximately $0.8 million, or 1%, from approximately $110.1 million for the year ended December 31, 2022.
This decrease was primarily due to a smaller customer book during 2023. The volumes of electricity sold decreased from 2,677,681 MWh for the year ended December 31, 2021 to 2,433,906 MWh for the year ended December 31, 2022. This decrease was primarily due to a smaller customer book in 2022 as compared to 2021.
This increase was primarily due to a larger customer book during 2024. The volumes of electricity sold decreased from 2,433,906 MWh for the year ended December 31, 2022 to 2,008,947 MWh for the year ended December 31, 2023. This decrease was primarily due to a smaller customer book in 2023.
The decrease was primarily due to lower supply costs of $12.5 million, lower volumes of $2.1 million, offset by an increase of $1.4 million due to change in the fair value of our retail derivative portfolio used for hedging.
The decrease was primarily due to lower supply costs of $14.2 million, decrease of $12.8 million due to change in the fair value of our retail derivative portfolio used for hedging, offset by higher volumes of $2.0 million.
Cash Flows Our cash flows were as follows for the respective periods (in thousands): Year Ended December 31, 2023 2022 2021 Net cash provided by operating activities $ 49,315 $ 16,207 $ 12,702 Net cash used in by investing activities $ (1,435) $ (6,871) $ (6,510) Net cash used in financing activities $ (40,636) $ (49,305) $ (2,556) Cash Flows Provided by Operating Activities .
Cash Flows Our cash flows were as follows for the respective periods (in thousands): Year Ended December 31, 2024 2023 2022 Net cash provided by operating activities $ 50,484 $ 49,315 $ 16,207 Net cash used in by investing activities $ (4,727) $ (1,435) $ (6,871) Net cash used in financing activities $ (18,093) $ (40,636) $ (49,305) Cash Flows Provided by Operating Activities .
Retail gross margin for the Retail Natural Gas Segment for the year ended December 31, 2023 was approximately $47.5 million, an increase of approximately $15.4 million, or 48% from approximately $32.1 million for the year ended December 31, 2022, and 2022 decreased approximately $4.4 million or 12% from approximately $36.5 million for the year ended December 31, 2021 as indicated in the table below (in millions). 2023 vs. 2022 2022 vs. 2021 Change in volumes sold $ (0.8) $ 12.4 Change in unit margin per MMBtu 16.2 (16.8) Change in retail natural gas segment retail gross margin $ 15.4 $ (4.4) Natural Gas unit margins improved in 2023 compared to prior year primarily as a result of the lower natural cost supply costs in 2023.
The decrease was primarily due to lower supply costs of $12.5 million, lower volumes of $2.1 million, offset by an increase of $1.4 million due to change in the fair value of our retail derivative portfolio used for hedging. 54 Table of Contents Retail gross margin for the Retail Natural Gas Segment for the year ended December 31, 2024 was approximately $47.9 million, an increase of approximately $0.4 million, or 1% from approximately $47.5 million for the year ended December 31, 2023, and 2023 increased approximately $15.4 million or 48% from approximately $32.1 million for the year ended December 31, 2022 as indicated in the table below (in millions). 2024 vs. 2023 2023 vs. 2022 Change in volumes sold $ 1.5 $ (0.8) Change in unit margin per MMBtu (1.1) 16.2 Change in retail natural gas segment retail gross margin $ 0.4 $ 15.4 Natural Gas unit margins decreased in 2024 compared to prior year primarily as a result of the lower natural gas prices in 2024.
Cash flows used in investing activities decreased by $5.4 million for the year ended December 31, 2023. The decrease was primarily the result of customer acquisitions during the year ended December 31, 2022 that did not re-occur in 2023. Cash flows used in investing activities increased by $0.4 million for the year ended December 31, 2022.
The decrease was primarily the result of customer acquisitions during the year ended December 31, 2022 that did not reoccur in 2023. Cash Flows Used in Financing Activities . Cash flows used in financing activities decreased by $22.5 million for the year ended December 31, 2024.
Retail gross margin for the Retail Electricity Segment for the year ended December 31, 2023 was approximately $87.6 million, an increase of approximately $4.8 million, or 6%, as compared to the year ended December 31, 2022, and 2022 decreased approximately $13.3 million or 14% as compared to December 31, 2021 as indicated in the table below (in millions). 2023 vs. 2022 2022 vs. 2021 Change in volumes sold $ (14.2) $ (3.0) Change in gross margin - winter storm Uri — (64.4) Change in unit margin per MWh 19.0 54.1 Change in retail electricity segment retail gross margin $ 4.8 $ (13.3) Electricity unit margin improved in 2023 compared to prior year as a result of higher electricity prices resulting in higher unit margin per MWh sold.
Retail gross margin for the Retail Electricity Segment for the year ended December 31, 2024 was approximately $93.7 million, an increase of approximately $6.1 million, or 7%, as compared to the year ended December 31, 2023, and 2023 increased approximately $4.8 million or 6% as compared to December 31, 2022 as indicated in the table below (in millions). 2024 vs. 2023 2023 vs. 2022 Change in volumes sold $ 1.2 $ (14.2) Change in unit margin per MWh 4.9 19.0 Change in retail electricity segment retail gross margin $ 6.1 $ 4.8 Electricity unit margin improved in 2024 compared to prior year as a result of lower electricity cost resulting in higher unit margin per MWh sold.
Year Ended December 31, (in thousands) 2023 2022 2021 Reconciliation of Adjusted EBITDA to net cash provided by operating activities: Net cash provided by operating activities $ 49,315 $ 16,207 $ 12,702 Amortization of deferred financing costs (825) (1,125) (997) Bad debt expense (3,442) (6,865) (445) Interest expense 9,334 7,204 4,926 Income tax expense 11,142 6,483 5,266 Non-recurring event - winter storm Uri — (5,162) 60,000 Non-recurring legal settlement — — (2,225) Merger agreement expense 752 — — Changes in operating working capital Accounts receivable, prepaids, current assets (17,159) 34,731 (5,117) Inventory (1,281) 2,423 486 Accounts payable, accrued liabilities, current liabilities 15,206 (884) 11,253 Other (6,187) (1,219) (5,192) Adjusted EBITDA $ 56,855 $ 51,793 $ 80,657 Cash Flow Data: Cash flows provided by operating activities $ 49,315 $ 16,207 $ 12,702 Cash flows used in investing activities $ (1,435) $ (6,871) $ (6,510) Cash flows used in financing activities $ (40,636) $ (49,305) $ (2,556) Retail Gross Margin.
Year Ended December 31, (in thousands) 2024 2023 2022 Reconciliation of Adjusted EBITDA to net cash provided by operating activities: Net cash provided by operating activities $ 50,484 $ 49,315 $ 16,207 Amortization of deferred financing costs (852) (825) (1,125) Bad debt expense (2,469) (3,442) (6,865) Interest expense 6,943 9,334 7,204 Income tax expense 16,259 11,142 6,483 Non-recurring event - winter storm Uri — — (5,162) Merger agreement expense 2,383 752 — Changes in operating working capital Accounts receivable, prepaids, current assets (734) (17,159) 34,731 Inventory (987) (1,281) 2,423 Accounts payable, accrued liabilities, current liabilities (3,380) 15,206 (884) Other (9,066) (6,187) (1,219) Adjusted EBITDA $ 58,581 $ 56,855 $ 51,793 Cash Flow Data: Cash flows provided by operating activities $ 50,484 $ 49,315 $ 16,207 Cash flows used in investing activities $ (4,727) $ (1,435) $ (6,871) Cash flows used in financing activities $ (18,093) $ (40,636) $ (49,305) Retail Gross Margin.
Management compensates for the limitations of Adjusted EBITDA and Retail Gross Margin as analytical tools by reviewing the comparable GAAP measures, understanding the differences between the measures and incorporating these data points into management’s decision-making process. 58 Table of Contents Consolidated Results of Operations (In Thousands) Year Ended December 31, 2023 2022 2021 Revenues: Retail revenues $ 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 Operating Expenses: Retail cost of revenues 310,744 357,096 323,219 General and administrative expense 68,874 61,933 44,279 Depreciation and amortization 9,102 16,703 21,578 Total Operating Expenses 388,720 435,732 389,076 Operating income 46,472 24,761 4,409 Other (expense)/income: Interest expense (9,334) (7,204) (4,926) Interest and other income 109 129 370 Total Other (Expenses)/Income (9,225) (7,075) (4,556) Income (loss) before income tax expense 37,247 17,686 (147) Income tax expense 11,142 6,483 5,266 Net income (loss) $ 26,105 $ 11,203 $ (5,413) Other Performance Metrics: Adjusted EBITDA (1) (2) (5) $ 56,855 $ 51,793 $ 80,657 Retail Gross Margin (1) (3)(4) $ 136,650 $ 114,815 $ 132,534 Customer Acquisition Costs $ 6,736 $ 5,870 $ 1,415 RCE Attrition 3.4 % 3.8 % 3.3 % Distributions paid to Class B non-controlling unit holders and dividends paid to Class A common shareholders $ (7,182) $ (26,014) $ (28,423) (1) Adjusted EBITDA and Retail Gross Margin are non-GAAP financial measures.
Management compensates for the limitations of Adjusted EBITDA and Retail Gross Margin as analytical tools by reviewing the comparable GAAP measures, understanding the differences between the measures and incorporating these data points into management’s decision-making process. 49 Table of Contents Consolidated Results of Operations (In Thousands) Year Ended December 31, 2024 2023 2022 Revenues: Retail revenues $ 399,418 $ 439,360 $ 462,815 Net asset optimization expense (2,326) (7,326) (2,322) Other revenue 1,776 3,158 — Total Revenues 398,868 435,192 460,493 Operating Expenses: Retail cost of revenues 230,791 310,744 357,096 General and administrative expense 74,453 68,874 61,933 Depreciation and amortization 9,446 9,102 16,703 Total Operating Expenses 314,690 388,720 435,732 Operating income 84,178 46,472 24,761 Other (expense)/income: Interest expense (6,943) (9,334) (7,204) Interest and other income 99 109 129 Total Other (Expenses)/Income (6,844) (9,225) (7,075) Income before income tax expense 77,334 37,247 17,686 Income tax expense 16,259 11,142 6,483 Net income $ 61,075 $ 26,105 $ 11,203 Other Performance Metrics: Adjusted EBITDA (1) (2) $ 58,581 $ 56,855 $ 51,793 Retail Gross Margin (1) (3) $ 141,996 $ 136,650 $ 114,815 Customer Acquisition Costs $ 9,508 $ 6,736 $ 5,870 RCE Attrition 3.9 % 3.4 % 3.8 % Distributions paid to Class B non-controlling unit holders and dividends paid to Class A common shareholders $ (10,664) $ (7,182) $ (26,014) (1) Adjusted EBITDA and Retail Gross Margin are non-GAAP financial measures.
See Note 9 "Debt" for further information regarding the extension of the Subordinated Debt Facility. Uses of Liquidity and Capital Resources Repayment of Current Portion of Senior Credit Facility Our Senior Credit Facility matures in June 2025, and no amounts are due currently.
See Note 9 "Debt" in the notes to our condensed consolidated financial statements for further information. Uses of Liquidity and Capital Resources Repayment of Current Portion of Senior Credit Facility Our Senior Credit Facility matures in June 2027, and no amounts are due currently.
Total revenues for the year ended December 31, 2023 were approximately $435.2 million, a decrease of approximately $25.3 million, or 5%, from approximately $460.5 million for the year ended December 31, 2022.
Total revenues for the year ended December 31, 2023 decreased approximately $25.3 million, or 5%, from approximately $460.5 million for the year ended December 31, 2022.
Cash flows used in financing activities increased by $46.7 million for the year ended December 31, 2022.
Cash flows used in financing activities decreased by $8.7 million for the year ended December 31, 2023.
Dividends on the Series A Preferred Stock will be paid on April 15, 2024 to holders of record on April 1, 2024. The Board of Directors may be required to reduce, eliminate or suspend quarterly cash dividends to the holders of the Series A Preferred Stock.
The Board of Directors may be required to reduce, eliminate or suspend quarterly cash dividends to the holders of the Series A Preferred Stock.
We have historically included the financial impact of weather variability in the calculation of Retail Gross Margin.
We have historically included the financial impact of weather variability in the calculation of Adjusted EBITDA.
The following table presents a reconciliation of Adjusted EBITDA to these GAAP measures for each of the periods indicated. 55 Table of Contents Year Ended December 31, (in thousands) 2023 2022 2021 Reconciliation of Adjusted EBITDA to Net Income (Loss): Net income (loss) $ 26,105 $ 11,203 $ (5,413) Depreciation and amortization 9,102 16,703 21,578 Interest expense 9,334 7,204 4,926 Income tax expense 11,142 6,483 5,266 EBITDA 55,683 41,593 26,357 Less: Net, (loss) gain on derivative instruments (71,493) 17,821 21,200 Net, cash settlements on derivative instruments 66,632 (35,801) (15,692) Customer acquisition costs 6,736 5,870 1,415 Plus: Non-cash compensation expense 2,295 3,252 3,448 Non-recurring event - winter storm Uri — (5,162) 60,000 Non-recurring legal and regulatory settlements — — (2,225) Merger agreement expense 752 — — Adjusted EBITDA $ 56,855 $ 51,793 $ 80,657 56 Table of Contents The following table presents a reconciliation of Adjusted EBITDA to net cash provided by operating activities for each of the periods indicated.
Year Ended December 31, (in thousands) 2024 2023 2022 Reconciliation of Adjusted EBITDA to Net Income: Net income $ 61,075 $ 26,105 $ 11,203 Depreciation and amortization 9,446 9,102 16,703 Interest expense 6,943 9,334 7,204 Income tax expense 16,259 11,142 6,483 EBITDA 93,723 55,683 41,593 Less: Net, (loss) gain on derivative instruments (3,720) (71,493) 17,821 Net, cash settlements on derivative instruments 34,148 66,632 (35,801) Customer acquisition costs 9,508 6,736 5,870 Plus: Non-cash compensation expense 2,411 2,295 3,252 Non-recurring event - winter storm Uri — — (5,162) Merger agreement expense 2,383 752 — Adjusted EBITDA $ 58,581 $ 56,855 $ 51,793 47 Table of Contents The following table presents a reconciliation of Adjusted EBITDA to net cash provided by operating activities for each of the periods indicated.
See discussion below. (2) Adjusted EBITDA for the year ended December 31, 2022 includes a deduction of $5.2 million related to proceeds received under an ERCOT (winter storm Uri) securitization mechanism in June 2022. See further discussion below. (3) Adjusted EBITDA for the year ended December 31, 2023 includes a $0.8 million add back related to merger agreement expense.
(2) Adjusted EBITDA for the year ended December 31, 2022 includes a deduction of $5.2 million related to proceeds received under an ERCOT (winter storm Uri) securitization mechanism in June 2022.
Adjusted EBITDA and Retail Gross Margin are not presentations made in accordance with GAAP and have limitations as analytical tools. You should not consider Adjusted EBITDA or Retail Gross Margin in isolation or as a substitute for analysis of our results as reported under GAAP.
You should not consider Adjusted EBITDA or Retail Gross Margin in isolation or as a substitute for analysis of our results as reported under GAAP.
(4) Retail Gross Margin for the year ended December 31, 2022 includes a deduction of $9.6 million non-recurring credit related to winter storm Uri add back in 2021. (5) Adjusted EBITDA for the year ended December 31, 2023 includes a $0.8 million add back related to merger agreement expense. Total Revenues.
See " — Non-GAAP Performance Measures" for a reconciliation of Adjusted EBITDA and Retail Gross Margin to their most directly comparable GAAP financial measures (2) Adjusted EBITDA for the year ended December 31, 2024 and December 31, 2023 includes $2.4 million and $0.8 million add back related to merger agreement expense, respectively. .(3) Retail Gross Margin for the year ended December 31, 2022 includes a deduction of $9.6 million non-recurring credit related to winter storm Uri add back in 2021.
The following table shows our RCEs by segment as of December 31, 2023, 2022 and 2021: RCEs: December 31, (In thousands) 2023 2022 2021 Retail Electricity 217 201 298 Retail Natural Gas 118 130 110 Total Retail 335 331 408 The following table details our count of RCEs by geographical location as of December 31, 2023: RCEs by Geographic Location: (In thousands) Electricity % of Total Natural Gas % of Total Total % of Total New England 64 29% 12 10% 76 23% Mid-Atlantic 95 44% 51 43% 146 44% Midwest 20 9% 20 17% 40 12% Southwest 38 18% 35 30% 73 21% Total 217 100% 118 100% 335 100% The geographical locations noted above include the following states: • New England - Connecticut, Maine, Massachusetts and New Hampshire; 49 Table of Contents • Mid-Atlantic - Delaware, Maryland (including the District of Columbia), New Jersey, New York, Pennsylvania and Virginia; • Midwest - Illinois, Indiana, Michigan and Ohio; and • Southwest - Arizona, California, Colorado, Florida, Nevada and Texas.
The following table shows our RCEs by segment as of December 31, 2024, 2023 and 2022: RCEs: December 31, (In thousands) 2024 2023 2022 Retail Electricity 232 217 201 Retail Natural Gas 156 118 130 Total Retail 388 335 331 The following table details our count of RCEs by geographical location as of December 31, 2024: RCEs by Geographic Location: (In thousands) Electricity % of Total Natural Gas % of Total Total % of Total New England 53 23% 13 9% 66 17% Mid-Atlantic 118 51% 52 33% 170 44% Midwest 24 10% 24 15% 48 12% Southwest 37 16% 67 43% 104 27% Total 232 100% 156 100% 388 100% The geographical locations noted above 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, Pennsylvania and Virginia; • Midwest - Illinois, Indiana, Michigan and Ohio; and • Southwest - Arizona, California, Colorado, Florida, Nevada and Texas.
The following table presents a reconciliation of Retail Gross Margin to gross profit for each of the periods indicated. 57 Table of Contents Year Ended December 31, (in thousands) 2023 2022 2021 Reconciliation of Retail Gross Margin to Gross Profit: Total Revenues $ 435,192 $ 460,493 $ 393,485 Less: Retail cost of revenues 310,744 357,096 323,219 Gross Profit $ 124,448 $ 103,397 $ 70,266 Less: Net asset optimization expense (7,326) (2,322) (4,243) Net, (loss) gain on non-trading derivative instruments (70,304) 17,305 22,130 Net, cash settlements on non-trading derivative instruments 65,428 (35,966) (15,752) Non-recurring event - winter storm Uri — 9,565 (64,403) Retail Gross Margin $ 136,650 $ 114,815 $ 132,534 Retail Gross Margin - Retail Electricity Segment (1)(2) $ 87,566 $ 82,749 $ 96,009 Retail Gross Margin - Retail Natural Gas Segment $ 47,489 $ 32,066 $ 36,525 Retail Gross Margin - Other $ 1,595 $ — $ — (1) Retail Gross Margin for the year ended December 31, 2021 includes a $0.5 million reduction related to the winter storm Uri credit settlements received and includes a $64.4 million add back related to winter storm Uri.
The following table presents a reconciliation of Retail Gross Margin to gross profit for each of the periods indicated. 48 Table of Contents Year Ended December 31, (in thousands) 2024 2023 2022 Reconciliation of Retail Gross Margin to Gross Profit: Total Revenues $ 398,868 $ 435,192 $ 460,493 Less: Retail cost of revenues 230,791 310,744 357,096 Gross Profit $ 168,077 $ 124,448 $ 103,397 Less: Net asset optimization expense (2,326) (7,326) (2,322) Net, (loss) gain on non-trading derivative instruments (4,464) (70,304) 17,305 Net, cash settlements on non-trading derivative instruments 32,871 65,428 (35,966) Non-recurring event - winter storm Uri — — 9,565 Retail Gross Margin $ 141,996 $ 136,650 $ 114,815 Retail Gross Margin - Retail Electricity Segment (1) $ 93,669 $ 87,566 $ 82,749 Retail Gross Margin - Retail Natural Gas Segment $ 47,865 $ 47,489 $ 32,066 Retail Gross Margin - Other $ 462 $ 1,595 $ — (1) Retail Gross Margin for year ended December 31, 2022 includes a deduction of $9.6 million related to proceeds received under an ERCOT (winter storm Uri) securitization mechanism in June 2022.
Refer to Note 16 “Customer Acquisitions” for further discussion. Our ability to realize returns from acquisitions that are acceptable to us is dependent on our ability to successfully identify, negotiate, finance and integrate acquisitions. We will continue to evaluate potential acquisitions during 2024.
Refer to Note 16 “Customer Acquisitions” for further discussion. Our ability to realize returns from acquisitions that are acceptable to us is dependent on our ability to successfully identify, negotiate, finance and integrate acquisitions. RCE Activity The following table shows our RCE activity during the years ended December 31, 2024, 2023 and 2022.
For a description of the terms and conditions of our Senior Credit Facility, including descriptions of the interest rate, commitment fee, covenants and terms of default, please see Note 9 "Debt" in the notes to our condensed consolidated financial statements. As of December 31, 2023, we were in compliance with the covenants under our Senior Credit Facility.
As of December 31, 2024, we had total commitments of $205.0 million under our Senior Credit Facility, of which $131.6 million was outstanding, including $25.6 million of outstanding letters of credit. 56 Table of Contents For a description of the terms and conditions of our Senior Credit Facility, including descriptions of the interest rate, commitment fee, covenants and terms of default, please see Note 9 "Debt" in the notes to our condensed consolidated financial statements.
Unit margins were negatively impacted in 2022 compared to prior year primarily as a result of the higher natural cost supply costs due to higher commodity price environment in 2022. The volumes of natural gas sold decreased from 11,558,952 MMBtu for the year ended December 31, 2022 to 11,252,862 MMBtu for the year ended December 31, 2023.
Natural Gas unit margins improved in 2023 compared to prior year primarily as a result of the lower natural cost supply costs in 2023. The volumes of natural gas sold increased from 11,252,862 MMBtu for the year ended December 31, 2023 to 11,603,745 MMBtu for the year ended December 31, 2024.
Our customer growth strategy includes growing organically through traditional sales channels complemented by customer portfolio and business acquisitions. We measure our number of customers using residential customer equivalents ("RCEs").
Customer Growth Customer growth is a key driver of our operations. Our ability to acquire customers organically or by acquisition is important to our success as we experience ongoing customer attrition. Our customer growth strategy includes growing organically through traditional sales channels complemented by customer portfolio and business acquisitions. We measure our number of customers using residential customer equivalents ("RCEs").
The increase was primarily the result of increases related to customer acquisitions for the year ended December 31, 2022. Cash Flows Used in Financing Activities . Cash flows used in financing activities decreased by $8.7 million for the year ended December 31, 2023.
Cash flows used in investing activities increased by $3.3 million for the year ended December 31, 2024. The increase was primarily the result of customer acquisitions during the year ended December 31, 2024. Cash flows used in investing activities decreased by $5.4 million for the year ended December 31, 2023.
This decrease was primarily due to lower electricity volumes sold as a result of a smaller electricity customer book during 2023 as compared to 2022 offset by an increase in electricity unit revenue per MWh.
This decrease was primarily due to lower electricity and gas unit revenue as a result of decreased electricity and gas rates, partially offset by higher electricity and gas volumes sold as a result of a larger electricity and gas customer book during 2024 as compared to 2023.
This was offset by an increase in electricity costs of $65.6 million due to higher commodity price environment in 2022 and by an increase of $21.5 million due to a change in the value of our retail derivative portfolio used in hedging.
This decrease was primarily due to lower electricity costs of $37.5 million due to lower commodity price environment in 2024, a change in the value of our retail derivative portfolio used in hedging of $20.5 million, partially offset by higher volumes sold, resulting in a increase of $3.2 million.
Retail cost of revenues for the Retail Natural Gas Segment for the year ended December 31, 2022 increased approximately $43.0 million, or 112%, from approximately $38.4 million for the year ended December 31, 2021.
Retail cost of revenues for the Retail Natural Gas Segment for the year ended December 31, 2023, a decreased approximately $13.2 million, or 16%, from approximately $81.4 million for the year ended December 31, 2022.
Based upon existing covenants as of December 31, 2023, we had availability to borrow up to $48.4 million under the Senior Credit Facility. Maintaining compliance with our covenants under our Senior Credit Facility may impact our ability to pay dividends on our Series A Preferred Stock.
As of December 31, 2024, we were in compliance with the covenants under our Senior Credit Facility. Based upon existing covenants as of December 31, 2024, we had availability to borrow up to $73.4 million under the Senior Credit Facility.
These measures for the three years ended December 31, 2023 were as follows: Year Ended December 31, (in thousands) 2023 2022 2021 Adjusted EBITDA (1)(2)(3) $ 56,855 $ 51,793 $ 80,657 Retail Gross Margin (4)(5) $ 136,650 $ 114,815 $ 132,534 (1) Adjusted EBITDA for the year ended December 31, 2021 includes a $60.0 million add back related to winter storm Uri and also includes a deduction of $2.2 million non-recurring legal settlement related to an add back in 2019.
These measures for the three years ended December 31, 2024 were as follows: Year Ended December 31, (in thousands) 2024 2023 2022 Adjusted EBITDA (1)(2) $ 58,581 $ 56,855 $ 51,793 Retail Gross Margin (3) $ 141,996 $ 136,650 $ 114,815 (1) Adjusted EBITDA for the year ended December 31, 2024 and December 31, 2023 includes $2.4 million and 0.8 million add back related to merger agreement expense, respectively.
However, due to the revolving nature of the facility, excess cash available is generally used to reduce the balance outstanding, which at December 31, 2023 was $97.0 million.
However, due to the revolving nature of the facility, excess cash available is generally used to reduce the balance outstanding, which at December 31, 2024 was $131.6 million, including $25.6 million of outstanding letters of credit. The current variable interest rate on the facility at December 31, 2024 was 7.59%.
Our risk management policies direct that we hedge substantially all of our forecasted demand, which is typically hedged to long-term normal weather patterns. We also attempt to add additional protection through hedging from time to time to protect us from potential volatility in markets where we have historically experienced higher exposure to extreme weather conditions.
We also attempt to add additional protection through hedging from time to time to protect us from potential volatility in markets where we have historically experienced higher exposure to extreme weather conditions.
Our hedging strategy is based on forecasted customer energy usage, which can vary substantially as a result of weather patterns deviating from historical norms. We are particularly sensitive to this variability in our residential customer segment where energy usage is highly sensitive to weather conditions that impact heating and cooling demand.
Our hedging strategy is based on forecasted customer energy usage, which can vary substantially as a result of weather patterns deviating from historical norms.
We expect our customer growth to continue to increase, however, we are unable to predict the ultimate effect of market conditions on our organic sales, financial results, cash flows, and liquidity at this time. In December 2023, the FCC adopted rules that could limit the ability of third-party lead generators to identify large numbers of potential customers.
We expect our customer growth to continue to increase, however, we are unable to predict the ultimate effect of market conditions on our organic sales, financial results, cash flows, and liquidity at this time. We continue to target customer growth and seek to increase our customer growth to more historical levels.
This decrease was partially offset by higher electricity prices, resulting in an increase of $36.3 million. Total revenues for the Retail Electricity Segment for the year ended December 31, 2022 increased approximately $30.2 million, or 9%, from approximately $322.6 million for the year ended December 31, 2021.
This decrease was partially offset by higher electricity prices, which resulted in an increase of $36.3 million. 53 Table of Contents Retail cost of revenues for the Retail Electricity Segment for the year ended December 31, 2024 was approximately $186.2 million, a decrease of approximately $54.8 million, or 23%, from approximately $241.0 million for the year ended December 31, 2023.
Depreciation and amortization expense for the year ended December 31, 2022 decreased approximately $4.9 million, or 23%, from approximately $21.6 million for the year ended December 31, 2021. This decrease was primarily due to the decreased amortization expense associated with customer relationship intangibles. Customer Acquisition Cost .
Depreciation and amortization expense for the year ended December 31, 2024 was approximately $9.4 million, an increase of approximately $0.3 million, or 4%, from approximately $9.1 million for the year ended December 31, 2023. This increase was primarily due to the increased amortization expense associated with customer relationship intangibles that were acquired in 2024 .
Unit margins were negatively impacted in 2022 compared to prior year primarily as a result of the higher electricity cost due to higher commodity price environment in 2022. The volumes of electricity sold decreased from 2,433,906 MWh for the year ended December 31, 2022 to 2,008,947 MWh for the year ended December 31, 2023.
Unit margins improved in 2023 compared to prior year as a result of higher electricity prices resulting and higher unit margin per MWh sold. The volumes of electricity sold increased from 2,008,947 MWh for the year ended December 31, 2023 to 2,035,597 MWh for the year ended December 31, 2024.
Total revenues for the year ended December 31, 2022 increased approximately $67.0 million, or 17%, from approximately $393.5 million for the year ended December 31, 2021.
Customer acquisition cost for the year ended December 31, 2023 increased approximately $0.8 million, or 14% from approximately $5.9 million for the year ended December 31, 2022.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeEconomic conditions may affect our customers' ability to pay bills in a timely manner, which could increase customer delinquencies and may lead to an increase in bad debt expense. Our bad debt expense for the year ended December 31, 2023, 2022 and 2021 was approximately 1.7%, 3.0% and 0.2% of non-POR market retail revenues, respectively.
Biggest changeEconomic conditions may affect our customers' ability to pay bills in a timely manner, which could increase customer delinquencies and may lead to an increase in bad debt expense. Our bad debt expense for the year ended December 31, 2024, 2023 and 2022 was approximately 1.3%, 1.7% and 3.0% of non-POR market retail revenues, respectively.
During the same period, we paid these local regulated utilities a weighted average discount of approximately 1.0%, 0.9% and 0.9%, respectively, of total revenues for customer credit risk protection.
During the same period, we paid these local regulated utilities a weighted average discount of approximately 1.2%, 1.0% and 0.9%, respectively, of total revenues for customer credit risk protection.
In certain of the POR markets in which we operate, the utilities limit their collections exposure by retaining the ability to transfer a delinquent account back to us for collection when collections are past due for a specified period. 72 Table of Contents If our collection efforts are unsuccessful, we return the account to the local regulated utility for termination of service.
In certain of the POR markets in which we operate, the utilities limit their collections exposure by retaining the ability to transfer a delinquent account back to us for collection when collections are past due for a specified period. 63 Table of Contents If our collection efforts are unsuccessful, we return the account to the local regulated utility for termination of service.
See “Management's Discussion and Analysis of Financial Condition and Results of Operations—Drivers of Our Business—Customer Credit Risk” for an analysis of our bad debt expense related to non-POR markets during 2023. We are exposed to wholesale counterparty credit risk in our retail and asset optimization activities.
See “Management's Discussion and Analysis of Financial Condition and Results of Operations—Drivers of Our Business—Customer Credit Risk” for an analysis of our bad debt expense related to non-POR markets during 2024. We are exposed to wholesale counterparty credit risk in our retail and asset optimization activities.
The credit worthiness of the remaining exposure with other customers was evaluated with no material allowance recorded at December 31, 2023 and 2022. Interest Rate Risk We are exposed to fluctuations in interest rates under our Senior Credit Facility and our Series A Preferred Stock.
The credit worthiness of the remaining exposure with other customers was evaluated with no material allowance recorded at December 31, 2024 and 2023. Interest Rate Risk We are exposed to fluctuations in interest rates under our Senior Credit Facility and our Series A Preferred Stock.
Approximately 55%, 59% and 59% of our retail revenues were derived from territories in which substantially all of our credit risk was with local regulated utility companies as of December 31, 2023, 2022 and 2021, respectively, all of which had investment grade ratings as of such date.
Approximately 60%, 55% and 59% of our retail revenues were derived from territories in which substantially all of our credit risk was with local regulated utility companies as of December 31, 2024, 2023 and 2022, respectively, all of which had investment grade ratings as of such date.
At December 31, 2023, we were co-borrowers under the Senior Credit Facility, under which $97.0 million of variable rate indebtedness was outstanding. Based on the average amount of our variable rate indebtedness outstanding during the year ended December 31, 2023, a 1% percent increase in interest rates would have resulted in additional annual interest expense of approximately $1.0 million.
At December 31, 2024, we were co-borrowers under the Senior Credit Facility, under which $106.0 million of variable rate indebtedness was outstanding. Based on the average amount of our variable rate indebtedness outstanding during the year ended December 31, 2024, a 1% percent increase in interest rates would have resulted in additional annual interest expense of approximately $1.1 million.
Our net (loss)/gain on our non-trading derivative instruments, net of cash settlements, was $(4.9) million and $(18.7) million for the years ended December 31, 2023 and December 31, 2022, respectively. We have adopted risk management policies to measure and limit market risk associated with our fixed-price portfolio and our hedging activities.
Our net gain/(loss) on our non-trading derivative instruments, net of cash settlements, was $28.4 million and $(4.9) million for the years ended December 31, 2024 and December 31, 2023, respectively. We have adopted risk management policies to measure and limit market risk associated with our fixed-price portfolio and our hedging activities.
We manage this risk at a counterparty level and secure our exposure with collateral or guarantees when needed. At December 31, 2023 and 2022, approximately $2.1 million and $1.9 million of our total exposure of $2.8 million and $2.8 million, respectively, was either with a non-investment grade counterparty or otherwise not secured with collateral or a guarantee.
We manage this risk at a counterparty level and secure our exposure with collateral or guarantees when needed. At December 31, 2024 and 2023, approximately $4.4 million and $2.1 million of our total exposure of $6.1 million and $2.8 million, respectively, was either with a non-investment grade counterparty or otherwise not secured with collateral or a guarantee.
During the year ended December 31, 2023, we paid $10.3 million of dividends to holders of our Series A Preferred Stock, and as of December 31, 2023, based on the Series A Preferred Stock outstanding on December 31, 2023, a 1.0% increase in interest rates would have resulted in additional dividends of $0.9 million for the year. 73 Table of Contents
During the year ended December 31, 2024, we paid $10.9 million of dividends to holders of our Series A Preferred Stock, and as of December 31, 2024, based on the Series A Preferred Stock outstanding on December 31, 2024, a 1.0% increase in interest rates would have resulted in additional dividends of $0.9 million for the year. 64 Table of Contents
As of December 31, 2023, our Gas Non-Trading Fixed Price Open Position (hedges net of retail load) was a short position of 295,068 MMBtu. An increase of 10% in the market prices (NYMEX) from their December 31, 2023 levels would have decreased the fair market value of our net non-trading energy portfolio by less than $0.1 million.
As of December 31, 2024, our Gas Non-Trading Fixed Price Open Position (hedges net of retail load) was a short position of 446,837 MMBtu. An increase of 10% in the market prices (NYMEX) from their December 31, 2024 levels would have decreased the fair market value of our net non-trading energy portfolio by less than $0.1 million.
Likewise, a decrease of 10% in the market prices (NYMEX) from their December 31, 2023 levels would have increased the fair market value of our non-trading energy derivatives by less than $0.1 million. As of December 31, 2023, our Electricity Non-Trading Fixed Price Open Position (hedges net of retail load) was a short position of 280,418 MWhs.
Likewise, a decrease of 10% in the market prices (NYMEX) from their December 31, 2024 levels would have increased the fair market value of our non-trading energy derivatives by less than $0.1 million. As of December 31, 2024, our Electricity Non-Trading Fixed Price Open Position (hedges net of retail load) was a short position of 169,553 MWhs.
An increase of 10% in the forward market prices from their December 31, 2023 levels would have decreased the fair market value of our net non-trading energy portfolio by $1.3 million.
An increase of 10% in the forward market prices from their December 31, 2024 levels would have decreased the fair market value of our net non-trading energy portfolio by $1.2 million.
Likewise, a decrease of 10% in the forward market prices from their December 31, 2023 levels would have increased the fair market value of our non-trading energy derivatives by $1.3 million.
Likewise, a decrease of 10% in the forward market prices from their December 31, 2024 levels would have increased the fair market value of our non-trading energy derivatives by $1.2 million.

Other VIASP 10-K year-over-year comparisons