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DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended
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Sep. 30, 2016
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Fair Value of Derivative Assets and Liabilities | The following table reflects the fair value of NJR’s derivative assets and liabilities recognized on the Consolidated Balance Sheets as of September 30:
|  |  | Fair Value
|  |  | 2016 |  | 2015
(Thousands) | Balance Sheet Location | Asset Derivatives | Liability Derivatives | Asset Derivatives | Liability Derivatives
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |
NJNG: |  |  |  |  |  |  |  |  |
Physical commodity contracts | Derivatives - current |  | $ | 235 |  |  | $ | 1,154 |  |  | $ | — |  |  | $ | — |
Financial commodity contracts | Derivatives - current |  | 805 |  |  | 2,979 |  |  | 207 |  |  | 10,163 |
| Derivatives - noncurrent |  | 75 |  |  | 386 |  |  | — |  |  | 925 |
Interest rate contracts | Derivatives - noncurrent |  | — |  |  | 23,073 |  |  | — |  |  | 4,228 |
NJRES: |  |  |  |  |  |  |  |  |
Physical commodity contracts | Derivatives - current |  | 5,994 |  |  | 11,660 |  |  | 4,854 |  |  | 9,281 |
| Derivatives - noncurrent |  | 3,987 |  |  | 1,212 |  |  | 1,718 |  |  | — |
Financial commodity contracts | Derivatives - current |  | 22,929 |  |  | 45,255 |  |  | 35,682 |  |  | 13,347 |
| Derivatives - noncurrent |  | 1,165 |  |  | 581 |  |  | 2,626 |  |  | 386 |
Foreign currency contracts | Derivatives - current |  | 1 |  |  | 32 |  |  | — |  |  | — |
Total fair value of derivatives |  |  | $ | 35,191 |  |  | $ | 86,332 |  |  | $ | 45,087 |  |  | $ | 38,330 |
Offsetting Assets | The following table summarizes the reported gross amounts, the amounts that NJR has the right to offset but elects not to, financial collateral, as well as the net amounts NJR could present on the Consolidated Balance Sheets but elects not to.
(Thousands) | Amounts Presented in Balance Sheets (1) | Offsetting Derivative Instruments (2) | Financial Collateral Received/Pledged (3) | Net Amounts (4)
As of September 30, 2016: |  |  |  |  |  |  |  |
Derivative assets: |  |  |  |  |  |  |  |
NJRES |  |  |  |  |  |  |  |
Physical commodity contracts |  | $ | 9,981 |  |  | $ | (2,837 | ) |  | $ | (755 | ) |  | $ | 6,389 |
Financial commodity contracts |  | 24,094 |  |  | (17,945 | ) |  | (6,149 | ) |  | — |
Foreign currency contracts |  | 1 |  |  | (1 | ) |  | — |  |  | — |
Total NJRES |  | $ | 34,076 |  |  | $ | (20,783 | ) |  | $ | (6,904 | ) |  | $ | 6,389 |
NJNG |  |  |  |  |  |  |  |
Physical commodity contracts |  | $ | 235 |  |  | $ | (31 | ) |  | $ | — |  |  | $ | 204 |
Financial commodity contracts |  | 880 |  |  | (880 | ) |  | — |  |  | — |
Interest rate contracts |  | — |  |  | — |  |  | — |  |  | — |
Total NJNG |  | $ | 1,115 |  |  | $ | (911 | ) |  | $ | — |  |  | $ | 204 |
Derivative liabilities: |  |  |  |  |  |  |  |
NJRES |  |  |  |  |  |  |  |
Physical commodity contracts |  | $ | 12,872 |  |  | $ | (2,837 | ) |  | $ | 1,200 |  |  | $ | 11,235 |
Financial commodity contracts |  | 45,836 |  |  | (17,945 | ) |  | (27,891 | ) |  | — |
Foreign currency contracts |  | 32 |  |  | (1 | ) |  | — |  |  | 31 |
Total NJRES |  | $ | 58,740 |  |  | $ | (20,783 | ) |  | $ | (26,691 | ) |  | $ | 11,266 |
NJNG |  |  |  |  |  |  |  |
Physical commodity contracts |  | $ | 1,154 |  |  | $ | (31 | ) |  | $ | — |  |  | $ | 1,123 |
Financial commodity contracts |  | 3,365 |  |  | (880 | ) |  | (2,485 | ) |  | — |
Interest rate contracts |  | 23,073 |  |  | — |  |  | — |  |  | 23,073 |
Total NJNG |  | $ | 27,592 |  |  | $ | (911 | ) |  | $ | (2,485 | ) |  | $ | 24,196 |
As of September 30, 2015: |  |  |  |  |  |  |  |
Derivative assets: |  |  |  |  |  |  |  |
NJRES |  |  |  |  |  |  |  |
Physical commodity contracts |  | $ | 6,562 |  |  | $ | (1,326 | ) |  | $ | — |  |  | $ | 5,236 |
Financial commodity contracts |  | 38,308 |  |  | (13,734 | ) |  | 3,841 |  |  | 28,415 |
Total NJRES |  | $ | 44,870 |  |  | $ | (15,060 | ) |  | $ | 3,841 |  |  | $ | 33,651 |
NJNG |  |  |  |  |  |  |  |
Financial commodity contracts |  | $ | 207 |  |  | $ | (207 | ) |  | $ | — |  |  | $ | — |
Derivative liabilities: |  |  |  |  |  |  |  |
NJRES |  |  |  |  |  |  |  |
Physical commodity contracts |  | $ | 9,271 |  |  | $ | (1,326 | ) |  | $ | (1,200 | ) |  | $ | 6,745 |
Financial commodity contracts |  | 13,733 |  |  | (13,733 | ) |  | — |  |  | — |
Total NJRES |  | $ | 23,004 |  |  | $ | (15,059 | ) |  | $ | (1,200 | ) |  | $ | 6,745 |
NJNG |  |  |  |  |  |  |  |
Financial commodity contracts |  | $ | 11,088 |  |  | $ | (207 | ) |  | $ | (10,881 | ) |  | $ | — |
Interest rate contracts |  | 4,228 |  |  | — |  |  | — |  |  | 4,228 |
Total NJNG |  | $ | 15,316 |  |  | $ | (207 | ) |  | $ | (10,881 | ) |  | $ | 4,228 |
(1) | Derivative assets and liabilities are presented on a gross basis in the balance sheet as the Company does not elect balance sheet offsetting under ASC 210-20.
(2) | Offsetting derivative instruments include transactions with NAESB netting election, transactions held by FCMs with net margining and transactions with ISDA netting.
(3) | Financial collateral includes cash balances at FCMs, as well as cash received from or pledged to other counterparties.
(4) | Net amounts represent presentation of derivative assets and liabilities if the Company were to elect balance sheet offsetting under ASC 210-20.
Offsetting Liabilities | The following table summarizes the reported gross amounts, the amounts that NJR has the right to offset but elects not to, financial collateral, as well as the net amounts NJR could present on the Consolidated Balance Sheets but elects not to.
(Thousands) | Amounts Presented in Balance Sheets (1) | Offsetting Derivative Instruments (2) | Financial Collateral Received/Pledged (3) | Net Amounts (4)
As of September 30, 2016: |  |  |  |  |  |  |  |
Derivative assets: |  |  |  |  |  |  |  |
NJRES |  |  |  |  |  |  |  |
Physical commodity contracts |  | $ | 9,981 |  |  | $ | (2,837 | ) |  | $ | (755 | ) |  | $ | 6,389 |
Financial commodity contracts |  | 24,094 |  |  | (17,945 | ) |  | (6,149 | ) |  | — |
Foreign currency contracts |  | 1 |  |  | (1 | ) |  | — |  |  | — |
Total NJRES |  | $ | 34,076 |  |  | $ | (20,783 | ) |  | $ | (6,904 | ) |  | $ | 6,389 |
NJNG |  |  |  |  |  |  |  |
Physical commodity contracts |  | $ | 235 |  |  | $ | (31 | ) |  | $ | — |  |  | $ | 204 |
Financial commodity contracts |  | 880 |  |  | (880 | ) |  | — |  |  | — |
Interest rate contracts |  | — |  |  | — |  |  | — |  |  | — |
Total NJNG |  | $ | 1,115 |  |  | $ | (911 | ) |  | $ | — |  |  | $ | 204 |
Derivative liabilities: |  |  |  |  |  |  |  |
NJRES |  |  |  |  |  |  |  |
Physical commodity contracts |  | $ | 12,872 |  |  | $ | (2,837 | ) |  | $ | 1,200 |  |  | $ | 11,235 |
Financial commodity contracts |  | 45,836 |  |  | (17,945 | ) |  | (27,891 | ) |  | — |
Foreign currency contracts |  | 32 |  |  | (1 | ) |  | — |  |  | 31 |
Total NJRES |  | $ | 58,740 |  |  | $ | (20,783 | ) |  | $ | (26,691 | ) |  | $ | 11,266 |
NJNG |  |  |  |  |  |  |  |
Physical commodity contracts |  | $ | 1,154 |  |  | $ | (31 | ) |  | $ | — |  |  | $ | 1,123 |
Financial commodity contracts |  | 3,365 |  |  | (880 | ) |  | (2,485 | ) |  | — |
Interest rate contracts |  | 23,073 |  |  | — |  |  | — |  |  | 23,073 |
Total NJNG |  | $ | 27,592 |  |  | $ | (911 | ) |  | $ | (2,485 | ) |  | $ | 24,196 |
As of September 30, 2015: |  |  |  |  |  |  |  |
Derivative assets: |  |  |  |  |  |  |  |
NJRES |  |  |  |  |  |  |  |
Physical commodity contracts |  | $ | 6,562 |  |  | $ | (1,326 | ) |  | $ | — |  |  | $ | 5,236 |
Financial commodity contracts |  | 38,308 |  |  | (13,734 | ) |  | 3,841 |  |  | 28,415 |
Total NJRES |  | $ | 44,870 |  |  | $ | (15,060 | ) |  | $ | 3,841 |  |  | $ | 33,651 |
NJNG |  |  |  |  |  |  |  |
Financial commodity contracts |  | $ | 207 |  |  | $ | (207 | ) |  | $ | — |  |  | $ | — |
Derivative liabilities: |  |  |  |  |  |  |  |
NJRES |  |  |  |  |  |  |  |
Physical commodity contracts |  | $ | 9,271 |  |  | $ | (1,326 | ) |  | $ | (1,200 | ) |  | $ | 6,745 |
Financial commodity contracts |  | 13,733 |  |  | (13,733 | ) |  | — |  |  | — |
Total NJRES |  | $ | 23,004 |  |  | $ | (15,059 | ) |  | $ | (1,200 | ) |  | $ | 6,745 |
NJNG |  |  |  |  |  |  |  |
Financial commodity contracts |  | $ | 11,088 |  |  | $ | (207 | ) |  | $ | (10,881 | ) |  | $ | — |
Interest rate contracts |  | 4,228 |  |  | — |  |  | — |  |  | 4,228 |
Total NJNG |  | $ | 15,316 |  |  | $ | (207 | ) |  | $ | (10,881 | ) |  | $ | 4,228 |
(1) | Derivative assets and liabilities are presented on a gross basis in the balance sheet as the Company does not elect balance sheet offsetting under ASC 210-20.
(2) | Offsetting derivative instruments include transactions with NAESB netting election, transactions held by FCMs with net margining and transactions with ISDA netting.
(3) | Financial collateral includes cash balances at FCMs, as well as cash received from or pledged to other counterparties.
(4) | Net amounts represent presentation of derivative assets and liabilities if the Company were to elect balance sheet offsetting under ASC 210-20.
Effect of Derivative Instruments on the Consolidated Statements of Operations | The following table reflects the (losses) gains associated with NJNG’s derivative instruments as of September 30:
(Thousands) | 2016 |  | 2015 |  | 2014
NJNG: |  |  |  |  |
Physical commodity contracts | $ | (15,756 | ) |  | $ | — |  |  | $ | — |
Financial commodity contracts | (7,984 | ) |  | (33,428 | ) |  | 10,149 |
Interest rate contracts | (18,845 | ) |  | (4,228 | ) |  | — |
Total unrealized and realized (losses) gains | $ | (42,585 | ) |  | $ | (37,656 | ) |  | $ | 10,149 |
The following table reflects the effect of derivative instruments on the Consolidated Statements of Operations as of September 30:
(Thousands) | Location of gain (loss) recognized in income on derivatives | Amount of gain (loss) recognized in income on derivatives
Derivatives not designated as hedging instruments: | 2016 |  | 2015 |  | 2014
NJRES: |  |  |  |  |  |
Physical commodity contracts | Operating revenues | $ | 33,034 |  |  | $ | 32,568 |  |  | $ | (48,977 | )
Physical commodity contracts | Gas purchases | (45,637 | ) |  | (34,438 | ) |  | (83,847 | )
Financial commodity contracts | Gas purchases | 45,579 |  |  | 109,082 |  |  | (118,872 | )
Foreign currency contracts | Gas purchases | (34 | ) |  | — |  |  | — |
Total unrealized and realized gains (losses) | $ | 32,942 |  |  | $ | 107,212 |  |  | $ | (251,696 | )
Effect of Derivative Instruments Designated as Cash Flow Hedges on OCI | The following table reflects the effect of derivative instruments designated as cash flow hedges on OCI as of September 30:
(Thousands) | Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) | Amount of Gain or (Loss) Reclassified from OCI into Income (Effective Portion) | Amount of Gain or (Loss) Recognized on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Derivatives in cash flow hedging relationships: | 2016 | 2015 | 2016 | 2015 | 2016 | 2015
Foreign currency contracts | $ | (27 | ) | $ | (402 | ) | $ | 27 |  | $ | 557 |  | $ | — |  | $ | — |
Schedule of Outstanding Long (Short) Derivatives | NJNG and NJRES had the following outstanding long (short) derivatives as of September 30:
|  |  | Volume (Bcf)
|  |  | 2016 |  | 2015
NJNG | Futures |  | 23.6 |  |  | 25.8 |
| Physical |  | 9.2 |  |  | — |
NJRES | Futures |  | (79.1 | ) |  | (91.1 | )
| Financial Options |  | 1.2 |  |  | 1.2 |
| Physical |  | 94.6 |  |  | 48.2 |
Schedule of Broker Margin Accounts by Company | The Company maintains separate broker margin accounts for NJNG and NJRES. The balances as of September 30, by company, are as follows:
(Thousands) | Balance Sheet Location | 2016 | 2015
NJNG | Broker margin - Current assets | $ | 4,822 |  | $ | 12,990 |
NJRES | Broker margin - Current assets | $ | 42,822 |  | $ | — |
NJRES | Broker margin - Current (liabilities) | $ | — |  | $ | (4,103 | )
Summary of Gross Credit Exposures | The following is a summary of gross credit exposures grouped by investment and noninvestment grade counterparties, as of September 30, 2016.The amounts presented below have not been reduced by any collateral received or netting and exclude accounts receivable for NJNG retail natural gas sales and services and NJRCEV residential solar installations.
(Thousands) | Gross Credit Exposure
Investment grade |  | $ | 121,809 |  |
Noninvestment grade |  | 17,633 |  |
Internally-rated investment grade |  | 9,842 |  |
Internally-rated noninvestment grade |  | 12,299 |  |
Total |  | $ | 161,583 |  |

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