Gulf Coast - South Central: Full-year adjusted EBITDA totaled $99 million; $26 million lower than 2011. Gross margin in 2012 decreased by $24 million due to 12% lower average realized prices as a result of lower natural gas prices. An 18% decline in coal generation at Big Cajun II was partially offset by a 36% increase in generation at Cottonwood.
Fourth-quarter adjusted EBITDA was $16 million; $3 million lower than the fourth quarter 2011. Gross margins declined $10 million driven by lower realized prices and a decline in volumes related to mild weather offset by lower operating expenses resulting from a maintenance outage performed on Big Cajun unit 1 in the fall of 2011.
East: Full-year adjusted EBITDA totaled $117 million; $29 million higher compared to 2011. For the year, gross margin was higher by $57 million as the region benefited from increased revenues resulting from the Reliability Support Services (RSS) Agreement in Western New York, additional energy sales to the Company’s retail providers and the GenOn merger. Meanwhile, lower realized capacity prices and higher delivered coal prices partially offset the gains. The GenOn transaction led to higher operating expenses; however, this was partially offset by favorable equity earnings with a full year of contribution from the GenConn Middletown facility, which became operational in June 2011.
Fourth-quarter adjusted EBITDA was $34 million; $40 million higher than the fourth quarter 2011. The improvement was the result of a $68 million increase in gross margin due to the addition of GenOn and contributions from the RSS Agreement in Western New York. Offsetting the increase in gross margin were higher operating expenses resulting from the GenOn acquisition.West: Full-year adjusted EBITDA totaled $87 million; $14 million higher than 2011. Favorable gross margin of $24 million was due to an over 900% increase in generation as our facilities were needed for system reliability as a result of the extended outage at the San Onofre nuclear plant. Also contributing to the higher gross margin was contingent rental income related to the Long Beach power purchase agreement (PPA) and contributions from the GenOn acquisition. Partially offsetting the gains in gross margin were higher operating expenses, which resulted from the addition of the GenOn assets. Fourth-quarter adjusted EBITDA was $18 million; $4 million higher than the fourth quarter 2011. Gross margin improved $13 million due to a nearly 1,900% increase in generation at our Encina facility. Offsetting the increase in gross margin were higher operating expenses resulting from the GenOn acquisition.
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