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DERIVATIVE INSTRUMENTS (Tables) | 3 Months Ended
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Dec. 31, 2015
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 Unaudited Condensed Consolidated Balance Sheets as of:
|  |  | Fair Value
|  |  | December 31, 2015 |  | September 30, 2015
(Thousands) | Balance Sheet Location | Asset Derivatives | Liability Derivatives | Asset Derivatives | Liability Derivatives
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |
NJRES: |  |  |  |  |  |  |  |  |
Foreign currency contracts | Derivatives - current |  | $ | — |  |  | $ | 52 |  |  | $ | — |  |  | $ | — |
Fair value of derivatives designated as hedging instruments |  | $ | — |  |  | $ | 52 |  |  | $ | — |  |  | $ | — |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |
NJNG: |  |  |  |  |  |  |  |  |
Financial commodity contracts | Derivatives - current |  | $ | 820 |  |  | $ | 13,819 |  |  | $ | 207 |  |  | $ | 10,163 |
| Derivatives - noncurrent |  | — |  |  | — |  |  | — |  |  | 925 |
Interest rate contracts | Derivatives - noncurrent |  | $ | — |  |  | $ | 1,861 |  |  | $ | — |  |  | $ | 4,228 |
NJRES: |  |  |  |  |  |  |  |  |
Physical forward commodity contracts | Derivatives - current |  | $ | 9,844 |  |  | $ | 22,333 |  |  | $ | 4,854 |  |  | $ | 9,281 |
| Derivatives - noncurrent |  | 3,045 |  |  | 650 |  |  | 1,718 |  |  | — |
Financial commodity contracts | Derivatives - current |  | 48,314 |  |  | 15,675 |  |  | 35,682 |  |  | 13,347 |
| Derivatives - noncurrent |  | 696 |  |  | 95 |  |  | 2,626 |  |  | 386 |
Fair value of derivatives not designated as hedging instruments |  | $ | 62,719 |  |  | $ | 54,433 |  |  | $ | 45,087 |  |  | $ | 38,330 |
Total fair value of derivatives |  |  | $ | 62,719 |  |  | $ | 54,485 |  |  | $ | 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 Unaudited Condensed 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 December 31, 2015: |  |  |  |  |  |  |  |
Derivative assets: |  |  |  |  |  |  |  |
NJRES |  |  |  |  |  |  |  |
Physical forward commodity contracts |  | $ | 12,889 |  |  | $ | (809 | ) |  | $ | (1,000 | ) |  | $ | 11,080 |
Financial commodity contracts |  | 49,010 |  |  | (13,004 | ) |  | (25,136 | ) |  | 10,870 |
Total NJRES |  | $ | 61,899 |  |  | $ | (13,813 | ) |  | $ | (26,136 | ) |  | $ | 21,950 |
NJNG |  |  |  |  |  |  |  |
Financial commodity contracts |  | $ | 820 |  |  | $ | (820 | ) |  | $ | — |  |  | $ | — |
Total NJNG |  | 820 |  |  | (820 | ) |  | — |  |  | — |
Derivative liabilities: |  |  |  |  |  |  |  |
NJRES |  |  |  |  |  |  |  |
Physical forward commodity contracts |  | $ | 22,983 |  |  | $ | (809 | ) |  | $ | (1,200 | ) |  | $ | 20,974 |
Financial commodity contracts |  | 15,770 |  |  | (13,004 | ) |  | (2,766 | ) |  | — |
Foreign currency contracts |  | 52 |  |  | — |  |  | — |  |  | 52 |
Total NJRES |  | $ | 38,805 |  |  | $ | (13,813 | ) |  | $ | (3,966 | ) |  | $ | 21,026 |
NJNG |  |  |  |  |  |  |  |
Financial commodity contracts |  | $ | 13,819 |  |  | $ | (820 | ) |  | $ | (12,999 | ) |  | $ | — |
Interest rate contracts |  | $ | 1,861 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,861 |
Total NJNG |  | $ | 15,680 |  |  | $ | (820 | ) |  | $ | (12,999 | ) |  | $ | 1,861 |
As of September 30, 2015: |  |  |  |  |  |  |  |
Derivative assets: |  |  |  |  |  |  |  |
NJRES |  |  |  |  |  |  |  |
Physical forward 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 forward 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 FCM's 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 Unaudited Condensed 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 December 31, 2015: |  |  |  |  |  |  |  |
Derivative assets: |  |  |  |  |  |  |  |
NJRES |  |  |  |  |  |  |  |
Physical forward commodity contracts |  | $ | 12,889 |  |  | $ | (809 | ) |  | $ | (1,000 | ) |  | $ | 11,080 |
Financial commodity contracts |  | 49,010 |  |  | (13,004 | ) |  | (25,136 | ) |  | 10,870 |
Total NJRES |  | $ | 61,899 |  |  | $ | (13,813 | ) |  | $ | (26,136 | ) |  | $ | 21,950 |
NJNG |  |  |  |  |  |  |  |
Financial commodity contracts |  | $ | 820 |  |  | $ | (820 | ) |  | $ | — |  |  | $ | — |
Total NJNG |  | 820 |  |  | (820 | ) |  | — |  |  | — |
Derivative liabilities: |  |  |  |  |  |  |  |
NJRES |  |  |  |  |  |  |  |
Physical forward commodity contracts |  | $ | 22,983 |  |  | $ | (809 | ) |  | $ | (1,200 | ) |  | $ | 20,974 |
Financial commodity contracts |  | 15,770 |  |  | (13,004 | ) |  | (2,766 | ) |  | — |
Foreign currency contracts |  | 52 |  |  | — |  |  | — |  |  | 52 |
Total NJRES |  | $ | 38,805 |  |  | $ | (13,813 | ) |  | $ | (3,966 | ) |  | $ | 21,026 |
NJNG |  |  |  |  |  |  |  |
Financial commodity contracts |  | $ | 13,819 |  |  | $ | (820 | ) |  | $ | (12,999 | ) |  | $ | — |
Interest rate contracts |  | $ | 1,861 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,861 |
Total NJNG |  | $ | 15,680 |  |  | $ | (820 | ) |  | $ | (12,999 | ) |  | $ | 1,861 |
As of September 30, 2015: |  |  |  |  |  |  |  |
Derivative assets: |  |  |  |  |  |  |  |
NJRES |  |  |  |  |  |  |  |
Physical forward 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 forward 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 FCM's 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 Consolidated Statements of Operations | The following table reflects the effect of derivative instruments on the Unaudited Condensed Consolidated Statements of Operations as of:
(Thousands) | Location of gain (loss) recognized in income on derivatives | Amount of gain (loss) recognized in income on derivatives
|  | Three Months Ended
|  | December 31,
Derivatives not designated as hedging instruments: | 2015 |  | 2014
NJRES: |  |  |  |
Physical commodity contracts | Operating revenues | $ | 11,874 |  |  | $ | 16,091 |
Physical commodity contracts | Gas purchases | (21,237 | ) |  | (19,856 | )
Financial commodity contracts | Gas purchases | 41,276 |  |  | 117,721 |
Total unrealized and realized gains | $ | 31,913 |  |  | $ | 113,956 |
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 December 31:
(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)
| Three Months Ended | Three Months Ended | Three Months Ended
| December 31, | December 31, | December 31,
Derivatives in cash flow hedging relationships: | 2015 | 2014 | 2015 | 2014 | 2015 | 2014
Foreign currency contracts | $ | (64 | ) | $ | (24 | ) | $ | 12 |  | $ | (25 | ) | $ | — |  | $ | — |
Schedule of Outstanding Long (Short) Derivatives | NJNG and NJRES had the following outstanding long (short) derivatives as of:
|  |  | Volume (Bcf)
|  |  | December 31, 2015 |  | September 30, 2015
NJNG | Futures(1) |  | 19.5 |  |  | 25.8 |
NJRES | Futures |  | (120.8 | ) |  | (91.1 | )
| Options |  | 5.8 |  |  | 1.2 |
| Physical |  | 111.7 |  |  | 48.2 |
(1) | Not included is the notional amount of $125 million related to NJNG’s treasury lock agreement.
Schedule of Broker Margin Accounts by Company | The balances by company, are as follows:
(Thousands) | Balance Sheet Location | December 31, 2015 | September 30, 2015
NJNG | Broker margin - Current assets | $ | 17,487 |  | $ | 12,990 |
NJRES | Broker margin - Current assets | $ | 3,847 |  | $ | — |
| Broker margin - Current (liabilities) | $ | (19,307 | ) | $ | (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 December 31, 2015. 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 |  | $ | 99,405 |  |
Noninvestment grade |  | 9,693 |  |
Internally rated investment grade |  | 22,507 |  |
Internally rated noninvestment grade |  | 7,815 |  |
Total |  | $ | 139,420 |  |

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