On an annual basis, operating revenues (exclusive of intracompany revenues of $88.2 million in 2012 and $93.1 million in 2011) decreased $89.1 million and resource costs decreased $96.9 million, which resulted in an increase of $7.8 million in gross margin. The gross margin on electric sales increased $12.9 million and the gross margin on natural gas sales decreased $5.1 million. The increase in electric gross margin was primarily due to general rate increases. This was partially offset by warmer weather during the heating season (primarily the first and fourth quarters) that reduced retail loads. In addition, electric gross margin growth was limited in part by lower usage at certain industrial customers due to temporary operational challenges. Natural gas gross margin decreased primarily due to warmer weather throughout the year that reduced retail heating loads. This was partially offset by general rate increases. For 2012, we recognized a pre-tax benefit of $6.0 million under the ERM in Washington compared to $6.4 million for 2011.
Electric revenues decreased $20.0 million for 2012, as compared to 2011. Retail electric revenues decreased by $5.9 million, sales of fuel decreased by $37.6 million, and other electric revenues decreased by $0.9 million, while wholesale electric revenues increased by $24.4 million.
Retail electric revenues decreased due to a decrease in total MWhs sold offset by an increase in revenue per MWh. The decrease in MWhs sold was primarily the result of warmer weather during the heating season, and in part due to lower usage at certain industrial customers. This was partially offset during the cooling season by warmer weather (and increased loads), which increased electric use per customer. Compared to 2011, residential electric use per customer decreased 4 percent. Cooling degree days at Spokane were 23 percent above historical average for 2012 and 26 percent above 2011. Heating degree days at Spokane were 6 percent below historical average for 2012, and 9 percent below 2011. The increase in revenue per MWh was primarily due to general rate increases.
Wholesale electric revenues increased due to an increase in sales volumes, partially offset by a decrease in sales prices. The increase in sales volumes was primarily due to the fact that our retail sales were lower than expected. We sold the resulting excess capacity and energy on the wholesale market through our optimization procedures.
When electric wholesale market prices are below the cost of operating our natural gas-fired thermal generating units, we sell the natural gas purchased for the generation of electricity into the wholesale market rather than operate the generating units. The revenues from sales of fuel decreased due to a decrease in sales of natural gas fuel as part of thermal generation resource optimization activities and higher usage of our thermal generation plants in 2012 as compared to 2011, as well as a decrease in natural gas prices. Higher usage of our thermal generation plants was due in part to decreased hydroelectric generation.
Natural gas revenues decreased $74.1 million for 2012, as compared to 2011, due to a decrease in both retail and wholesale natural gas revenues.
Retail natural gas revenues decreased $36.6 million primarily due to a decrease in volumes and lower retail rates. We sold less retail natural gas in 2012 as compared to 2011 primarily due to warmer weather. Compared to 2011, residential and commercial natural gas use per customer decreased 9 percent.
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