Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from Dan Eggers from Credit Suisse.
Dan Eggers – Credit Suisse
Hi good morning. Caroline, I was wondering if you could talk a little bit to the migration of customers’ comment you made. First of all, I assume that means customer shopping. And then second, the $0.04 impact in the quarter, can you talk about kind of how that has been trending this year and what you guys are doing to prospectively come back to that customer migration trend?
Caroline Dorsa
Thanks Dan. Thanks for the questions. Yes. So, relative to migrations, this is a relatively new phenomenon, and while we have been watching it, obviously been something that’s really become material in this last quarter. And I think there’s something to keep in mind that helps explain this. What you have happened this particular summer, we had particularly pricing as you know, and we also had particularly cool weather, which depressed pricing overall. So, we had the commodity price and then the weather related impact on pricing, and of course in BGS, which is where we are seeing the migration from, you have as I am sure you know, a premium price that goes on BGS for the summer.
So, because of the disparity between the commodity levels and the impact on pricing from the reduced demand, relative to the pricing of BGS, which had a premium for the summer, that’s really what really caused or provided that headroom or that differential that resulted in the kind of migration that we saw. To point that out because I think it’s important to keep that in mind as we think about migration on a go-forward basis. Those were particularly unusual conditions, the cool weather, the low commodity pricing, the low power pricing with the BGS price that led to that margin and that gap.
If you look at where prices are now for example in the market relative to where they were in the summer, and you look at the forward curves, you don’t see that kind of pricing, and of course, you no longer have the BGS differential. So, I think that coming from those sort of historic differential, just something that’s coming more normal even now, even though it’s not like it has been historically. You should factor that into your thinking and certainly we do as we think about migration going forward. It was a particularly unusual period in this summer, and I don’t think we should think of it as a go-forward equivalent rate.
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