Our system-wide total customer count at September 30, 2012, including the effects of the May 2011 tornado, is down approximately 1,200 customers from the pre-storm level. Although still below the customer count levels prior to the tornado, higher average customer counts during the third quarter of 2012 compared to the third quarter of 2011 increased revenues an estimated $3.7 million, as electric customers continue to return to our system following the tornado. This increase, along with a change in the Company’s estimate for unbilled revenue which contributed approximately $3.0 million to revenues and margin during the 2012 quarter, more than offset the negative weather impact described above, increasing margins. Off-system and miscellaneous revenues were relatively unchanged during the quarter.
Total electric fuel and purchased power expenses for the quarter decreased approximately $6.3 million compared to the 2011 quarter, reflecting milder weather and the lower fuel costs collected from customers. Gas volumes increased while coal volumes declined as we continue to shift generation from coal units to natural gas units to take advantage of gas prices that were 24% lower than the 2011 quarter.
In summary, electric segment gross margin increased approximately $1.4 million during the third quarter of 2012 when compared to the third quarter of 2011.
Regulated operating expenses increased approximately $0.9 million during the third quarter of 2012 compared to 2011. Increased expenses for healthcare, professional services, and transmission operations were offset in part by lower operating costs at our Asbury generating station. Total electric maintenance expenses increased approximately $1.1 million, due primarily to increased maintenance expenses at our Asbury and State Line Combined Cycle generating stations. Depreciation expense increased approximately $0.3 million during the 2012 quarter compared to the 2011 quarter. In summary, electric segment net income increased approximately $0.4 million during the third quarter of 2012 when compared to the 2011 quarter.