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DERIVATIVE INSTRUMENTS (Tables)
 9 Months Ended
Jun. 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 Unaudited Condensed Consolidated Balance Sheets as of:
 
 
 
Fair Value
 
 
June 30, 2016
 
September 30, 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
 
$
130

 
$
307

 
$
—

 
$
—

Financial commodity contracts
Derivatives - current
 
1,271

 
5,909

 
207

 
10,163

 
Derivatives - noncurrent
 
358

 
65

 
—

 
925

Interest rate contracts
Derivatives - noncurrent
 
—

 
22,632

 
—

 
4,228

NJRES:
 
 
 
 
 
 
 
 
 
Physical commodity contracts
Derivatives - current
 
5,735

 
9,450

 
4,854

 
9,281

 
Derivatives - noncurrent
 
2,725

 
500

 
1,718

 
—

Financial commodity contracts
Derivatives - current
 
33,011

 
66,634

 
35,682

 
13,347

 
Derivatives - noncurrent
 
566

 
1,370

 
2,626

 
386

Fair value of derivatives not designated as hedging instruments
 
$
43,796

 
$
106,867

 
$
45,087

 
$
38,330

Total fair value of derivatives
 
 
$
43,796

 
$
106,867

 
$
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 June 30, 2016:
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
NJRES
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
8,460

 
$
(3,431
)
 
$
—

 
$
5,029

Financial commodity contracts
 
33,577

 
(31,848
)
 
—

 
1,729

Total NJRES
 
$
42,037

 
$
(35,279
)
 
$
—

 
$
6,758

NJNG
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
130

 
$
(2
)
 
$
—

 
$
128

Financial commodity contracts
 
1,629

 
(1,629
)
 
—

 
—

Total NJNG
 
$
1,759

 
$
(1,631
)
 
$
—

 
$
128

Derivative liabilities:
 
 
 
 
 
 
 
 
NJRES
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
9,950

 
$
(3,432
)
 
$
—

 
$
6,518

Financial commodity contracts
 
68,004

 
(31,848
)
 
(36,156
)
 
—

Total NJRES
 
$
77,954

 
$
(35,280
)
 
$
(36,156
)
 
$
6,518

NJNG
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
307

 
$
(2
)
 
$
—

 
$
305

Financial commodity contracts
 
5,974

 
(1,629
)
 
(4,345
)
 
—

Interest rate contracts
 
22,632

 
—

 
—

 
22,632

Total NJNG
 
$
28,913

 
$
(1,631
)
 
$
(4,345
)
 
$
22,937

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 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 June 30, 2016:
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
NJRES
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
8,460

 
$
(3,431
)
 
$
—

 
$
5,029

Financial commodity contracts
 
33,577

 
(31,848
)
 
—

 
1,729

Total NJRES
 
$
42,037

 
$
(35,279
)
 
$
—

 
$
6,758

NJNG
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
130

 
$
(2
)
 
$
—

 
$
128

Financial commodity contracts
 
1,629

 
(1,629
)
 
—

 
—

Total NJNG
 
$
1,759

 
$
(1,631
)
 
$
—

 
$
128

Derivative liabilities:
 
 
 
 
 
 
 
 
NJRES
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
9,950

 
$
(3,432
)
 
$
—

 
$
6,518

Financial commodity contracts
 
68,004

 
(31,848
)
 
(36,156
)
 
—

Total NJRES
 
$
77,954

 
$
(35,280
)
 
$
(36,156
)
 
$
6,518

NJNG
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
307

 
$
(2
)
 
$
—

 
$
305

Financial commodity contracts
 
5,974

 
(1,629
)
 
(4,345
)
 
—

Interest rate contracts
 
22,632

 
—

 
—

 
22,632

Total NJNG
 
$
28,913

 
$
(1,631
)
 
$
(4,345
)
 
$
22,937

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 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
Nine Months Ended
 
 
June 30,
June 30,
Derivatives not designated as hedging instruments:
2016
 
2015
2016
 
2015
NJRES:
 
 
 
 
 
 
 
Physical commodity contracts
Operating revenues
$
3,997

 
$
6,183

$
24,999

 
$
21,130

Physical commodity contracts
Gas purchases
(2,463
)
 
(11,988
)
(29,283
)
 
(21,781
)
Financial commodity contracts
Gas purchases
(39,653
)
 
2,264

23,443

 
92,781

Total unrealized and realized (losses) gains
$
(38,119
)
 
$
(3,541
)
$
19,159

 
$
92,130

The following table reflects the (losses) gains associated with NJNG's derivative instruments as of:
 
Three Months Ended
Nine Months Ended
 
June 30,
June 30,
(Thousands)
2016
 
2015
2016
 
2015
NJNG:
 
 
 
 
 
 
Physical commodity contracts
$
(236
)
 
$
—

$
(14,764
)
 
$
—

Financial commodity contracts
4,937

 
(199
)
(5,849
)
 
(24,676
)
Interest rate contracts
(9,700
)
 
2,905

(18,405
)
 
2,905

Total unrealized and realized (losses) gains
$
(4,999
)
 
$
2,706

$
(39,018
)
 
$
(21,771
)
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 June 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)
 
Three Months Ended
Three Months Ended
Three Months Ended
 
June 30,
June 30,
June 30,
Derivatives in cash flow hedging relationships:
2016
2015
2016
2015
2016
2015
Foreign currency contracts
$
8

$
3

$
(15
)
$
15

$
—

$
—

 
Nine Months Ended
Nine Months Ended
Nine Months Ended
 
June 30,
June 30,
June 30,
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:
 
 
 
Volume (Bcf)
 
 
 
June 30,
2016
 
September 30,
2015
NJNG
Futures
 
14.6

 
25.8

 
Physical
 
3.5

 
—

NJRES
Futures
 
(97.6
)
 
(91.1
)
 
Options
 
5.7

 
1.2

 
Physical
 
123.7

 
48.2

    
Not included in the table above are NJNG’s treasury lock agreement as previously discussed and 142,500 SRECs at NJRES that are open as of June 30, 2016.
Schedule of Broker Margin Accounts by Company
The balances by company, are as follows:
(Thousands)
Balance Sheet Location
June 30,
2016
September 30,
2015
NJNG
Broker margin - Current assets
$
6,701

$
12,990

NJRES
Broker margin - Current assets
$
50,905

$
—

 
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 June 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
 
$
91,603

 
Noninvestment grade
 
12,590

 
Internally rated investment grade
 
9,433

 
Internally rated noninvestment grade
 
23,271

 
Total
 
$
136,897