Energy Future Holdings, the company formerly known as TXU Corp., turned a loss in the first quarter of $1.3 billion because of the cost of protecting itself against rising natural gas prices.

That's wider than last year's first-quarter loss of $497 million, the company said in a filing with the Securities and Exchange Commission on Thursday.

Wholesale electricity sales rose during the quarter, but retail electricity sales dropped.

The power company's total operational revenue dropped to $787 million from $1.7 billion a year ago.

Those numbers include market losses on complicated financial trades designed to hedge the company's exposure to the volatile natural gas market.

Without those hedges, the company would gain when natural gas prices rise, because wholesale power prices follow natural gas prices.

However, with the hedges, a rise in natural gas prices tends to harm the company.

Energy Future said the revenue includes an unrealized loss of $1.6 billion for the first quarter, compared with a loss last year of $764 million.

That is, Energy Future recalculated the value of the hedges it owns, even though the company hasn't actually sold the hedges at a loss.

Peek behind the losses on paper, and the company didn't do so badly.

Wholesale revenue rose for the quarter to $623 million from $447 million.

Retail electricity sales dropped to $1.3 billion from $1.5 billion a year ago because of the milder winter.

People didn't have to use as much electricity for heat this year.

Also, TXU Energy dropped the price on its most popular rate plan, cutting into revenue.

Total electricity sales rose 3.9 percent to 21,393 gigawatt-hours.

Revenue for Oncor Electric Delivery, the regulated unit that operates power lines, dropped to $614 million from $619 million.

The company gained retail customers after losing ground since Texas deregulated the electricity industry.

In the first quarter, the company had 2.17 million residential and business customers, compared with 2.15 million previously.

Residential customer count rose to 1.89 million from 1.85 million a year ago.