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DERIVATIVE INSTRUMENTS (Tables)
 12 Months Ended
Sep. 30, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Fair Value of Derivative Assets and Liabilities
The following table reflects the fair value of the Company’s derivative assets and liabilities recognized on the Consolidated Balance Sheets as of September 30:
 
 
 
Fair Value
 
 
 
2017
 
2016
(Thousands)
Balance Sheet Location
Asset
Derivatives
Liability
Derivatives
Asset
Derivatives
Liability
Derivatives
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
NJNG:
 
 
 
 
 
 
 
 
 
Physical commodity contracts
Derivatives - current
 
$
151

 
$
72

 
$
235

 
$
1,154

Financial commodity contracts
Derivatives - current
 
—

 
1,149

 
805

 
2,979

 
Derivatives - noncurrent
 
—

 
—

 
75

 
386

Interest rate contracts
Derivatives - current
 
—

 
8,467

 
—

 
—

Interest rate contracts
Derivatives - noncurrent
 
—

 
—

 
—

 
23,073

Energy Services:
 
 
 
 
 
 
 
 
 
Physical commodity contracts
Derivatives - current
 
14,588

 
16,589

 
5,994

 
11,660

 
Derivatives - noncurrent
 
7,127

 
8,710

 
3,987

 
1,212

Financial commodity contracts
Derivatives - current
 
15,302

 
20,267

 
22,929

 
45,255

 
Derivatives - noncurrent
 
2,033

 
2,620

 
1,165

 
581

Foreign currency contracts
Derivatives - current
 
40

 
—

 
1

 
32

 
Derivatives - noncurrent
 
4

 
—

 
—

 
—

Total fair value of derivatives
 
 
$
39,245

 
$
57,874

 
$
35,191

 
$
86,332
Offsetting Assets
The following table summarizes the reported gross amounts, the amounts that the Company has the right to offset but elects not to, financial collateral, as well as the net amounts the Company 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, 2017:
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
21,715

 
$
(2,173
)
 
$
(200
)
 
$
19,342

Financial commodity contracts
 
17,335

 
(14,121
)
 
—

 
3,214

Foreign currency contracts
 
44

 
—

 
—

 
44

Total Energy Services
 
$
39,094

 
$
(16,294
)
 
$
(200
)
 
$
22,600

NJNG
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
151

 
$
(20
)
 
$
—

 
$
131

Financial commodity contracts
 
—

 
—

 
—

 
—

Interest rate contracts
 
—

 
—

 
—

 
—

Total NJNG
 
$
151

 
$
(20
)
 
$
—

 
$
131

Derivative liabilities:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
25,299

 
$
(2,173
)
 
$
—

 
$
23,126

Financial commodity contracts
 
22,887

 
(14,121
)
 
(8,766
)
 
—

Foreign currency contracts
 
—

 
—

 
—

 
—

Total Energy Services
 
$
48,186

 
$
(16,294
)
 
$
(8,766
)
 
$
23,126

NJNG
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
72

 
$
(20
)
 
$
—

 
$
52

Financial commodity contracts
 
1,149

 
—

 
(1,149
)
 
—

Interest rate contracts
 
8,467

 
—

 
—

 
8,467

Total NJNG
 
$
9,688

 
$
(20
)
 
$
(1,149
)
 
$
8,519

As of September 30, 2016:
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
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 Energy Services
 
$
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:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
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 Energy Services
 
$
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

(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 the Company has the right to offset but elects not to, financial collateral, as well as the net amounts the Company 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, 2017:
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
21,715

 
$
(2,173
)
 
$
(200
)
 
$
19,342

Financial commodity contracts
 
17,335

 
(14,121
)
 
—

 
3,214

Foreign currency contracts
 
44

 
—

 
—

 
44

Total Energy Services
 
$
39,094

 
$
(16,294
)
 
$
(200
)
 
$
22,600

NJNG
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
151

 
$
(20
)
 
$
—

 
$
131

Financial commodity contracts
 
—

 
—

 
—

 
—

Interest rate contracts
 
—

 
—

 
—

 
—

Total NJNG
 
$
151

 
$
(20
)
 
$
—

 
$
131

Derivative liabilities:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
25,299

 
$
(2,173
)
 
$
—

 
$
23,126

Financial commodity contracts
 
22,887

 
(14,121
)
 
(8,766
)
 
—

Foreign currency contracts
 
—

 
—

 
—

 
—

Total Energy Services
 
$
48,186

 
$
(16,294
)
 
$
(8,766
)
 
$
23,126

NJNG
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
72

 
$
(20
)
 
$
—

 
$
52

Financial commodity contracts
 
1,149

 
—

 
(1,149
)
 
—

Interest rate contracts
 
8,467

 
—

 
—

 
8,467

Total NJNG
 
$
9,688

 
$
(20
)
 
$
(1,149
)
 
$
8,519

As of September 30, 2016:
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
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 Energy Services
 
$
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:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
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 Energy Services
 
$
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

(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)
2017
 
2016
 
2015
NJNG:
 
 
 
 
 
Physical commodity contracts
$
(12,303
)
 
$
(15,756
)
 
$
—

Financial commodity contracts
5,595

 
(7,984
)
 
(33,428
)
Interest rate contracts
14,606

 
(18,845
)
 
(4,228
)
Total unrealized and realized (losses) gains
$
7,898

 
$
(42,585
)
 
$
(37,656
)
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:
2017
 
2016
 
2015
Energy Services:
 
 
 
 
 
 
Physical commodity contracts
Operating revenues
$
8,912

 
$
33,034

 
$
32,568

Physical commodity contracts
Gas purchases
(27,461
)
 
(45,637
)
 
(34,438
)
Financial commodity contracts
Gas purchases
26,563

 
45,579

 
109,082

Foreign currency contracts
Gas purchases
41

 
(34
)
 
—

Total unrealized and realized gains (losses)
$
8,055

 
$
32,942

 
$
107,212
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:
2017
2016
2017
2016
2017
2016
Foreign currency contracts
$
—

$
(27
)
$
—

$
27

$
—

$
—
Schedule of Outstanding Long (Short) Derivatives
NJNG and Energy Services had the following outstanding long (short) derivatives as of September 30:
 
 
 
Volume (Bcf)
 
 
 
2017
 
2016
NJNG
Futures
 
18.2

 
23.6

 
Physical
 
32.1

 
9.2

Energy Services
Futures
 
(16.4
)
 
(79.1
)
 
Financial Options
 
—

 
1.2

 
Physical
 
(13.1
)
 
94.6
Schedule of Due to (from) Broker-Dealers and Clearing Organizations
The balances as of September 30, by company, are as follows:
(Thousands)
Balance Sheet Location
2017
2016
NJNG
Broker margin - Current assets
$
2,661

$
4,822

Energy Services
Broker margin - Current assets
$
23,166

$
42,822
Schedules of Concentration of Risk, by Risk Factor
The following is a summary of gross credit exposures grouped by investment and noninvestment grade counterparties, as of September 30, 2017.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 Clean Energy Ventures residential solar installations.
(Thousands)
Gross Credit
Exposure
Investment grade
 
$
136,804

 
Noninvestment grade
 
16,889

 
Internally-rated investment grade
 
16,378

 
Internally-rated noninvestment grade
 
68,498

 
Total
 
$
238,569