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REVENUE Revenue | 3 Months Ended
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Dec. 31, 2018
Revenue from Contract with Customer [Abstract] |
Revenue | 3. REVENUE Revenue is recognized when a performance obligation is satisfied by transferring control of a product or service to a customer. Revenue is measured based on consideration specified in a contract with a customer using the output method of progress. The Company elected to apply the invoice practical expedient for recognizing revenue, whereby the amounts invoiced to customers represent the value to the customer and the Company’s performance completion as of the invoice date. Therefore we do not disclose related unsatisfied performance obligations. The Company also elected the practical expedient to exclude from the transaction price all sales taxes that are assessed by a governmental authority and therefore presents sales tax net in operating revenues on the Unaudited Condensed Consolidated Statements of Operations. Below is a listing of performance obligations that arise from contracts with customers, along with details on the satisfaction of each performance obligation, the significant payment terms and the nature of the goods and services being transferred, by reporting segment and other business operations:
Revenue Recognized Over Time:
Segment | Performance Obligation | Description
Natural Gas Distribution | Natural gas utility sales | NJNG's performance obligation is to provide natural gas to residential, commercial and industrial customers as demanded, based on regulated tariff rates, which are established by the BPU. Revenues from the sale of natural gas are recognized in the period that gas is delivered and consumed by customers, including an estimate for quantities consumed but not billed during the period. Payment is due each month for the previous month's deliveries. Natural gas sales to individual customers are based on meter readings, which are performed on a systematic basis throughout the billing period. The unbilled revenue estimates are based on estimated customer usage by customer type, weather effects and the most current tariff rates. NJNG is entitled to be compensated for performance completed until service is terminated. Customers may elect to purchase the natural gas commodity from NJNG or may contract separately to purchase natural gas directly from third-party suppliers. As NJNG is acting as an agent on behalf of the third party supplier, revenue is recorded for the delivery of natural gas to the customer.
Clean Energy Ventures | Commercial solar and wind electricity | Clean Energy Ventures operates wholly-owned solar and wind projects that recognize revenue as electricity is generated and transferred to the customer. The performance obligation is to provide electricity to the customer in accordance with contract terms or the interconnection agreement and is satisfied upon transfer of electricity generated. Revenue is recognized as invoiced and the payment is due each month for the previous month's services.
Clean Energy Ventures | Residential solar electricity | Clean Energy Ventures provides access to residential rooftop and ground-mount solar equipment to customers who then pay the Company a monthly fee. The performance obligation is to provide electricity to the customer based on generation from the underlying residential solar asset and is satisfied upon transfer of electricity generated. Revenue is derived from the contract terms and is recognized as invoiced, with the payment due each month for the previous month's services.
Energy Services | Wholesale natural gas services | The performance obligation of Energy Services is to provide the customer transportation, storage and asset management services on an as needed basis. Energy Services generates revenue through management fees, demand charges, reservation fees and transportation charges centered around the buying and selling of the natural gas commodity, representing one series of distinct performance obligations. Revenue is recognized based upon the underlying natural gas quantities physically delivered and the customer obtaining control. Energy Services invoices customers on a monthly basis in line with the terms of the contract and based on the services provided. Payment is due each month for the previous month's invoiced services.
Home Services and Other | Service contracts | Home Services enters into service contracts with homeowners to provide maintenance and replacement services of applicable heating, cooling or ventilation equipment. All services provided relate to a distinct performance obligation which is to provide services for the specific equipment over the term of the contract. Revenue is recognized on a straight line basis over the term of the contract and payment is due upon receipt of the invoice.
Revenue Recognized at a Point in Time:
Home Services and Other | Installations | Home Services installs appliances, including but not limited to, furnaces, air conditioning units, boilers and generators to customers. The distinct performance obligation is the installation of the contracted appliance, which is satisfied at the point in time the item is installed. The transaction price for each installation differs accordingly. Revenue is recognition at a point in time upon completion of the installation, which is when the customer is billed.
Disaggregated revenues from contracts with customers by product line and by reporting segment and other business operations during the three months ended December 31, 2018 is as follows:
| Regulated | Unregulated |
(Thousands) | Natural Gas Distribution | Clean Energy Ventures | Energy Services | Home Services and Other | Total
Natural gas utility sales | $ | 194,983 |  | — |  | — |  | — |  | $ | 194,983 |
Wholesale natural gas services | — |  | — |  | 10,080 |  | — |  | 10,080 |
Service contracts | — |  | — |  | — |  | 7,796 |  | 7,796 |
Installations and maintenance | — |  | — |  | — |  | 4,694 |  | 4,694 |
Electricity sales | — |  | 7,141 |  | — |  | — |  | 7,141 |
Eliminations(1) | — |  | — |  | — |  | (545 | ) | (545 | )
Revenues from contracts with customers | 194,983 |  | 7,141 |  | 10,080 |  | 11,945 |  | 224,149 |
Alternative revenue programs | (867 | ) | — |  | — |  | — |  | (867 | )
Derivative Instruments | 5,849 |  | 7,756 |  | 577,187 |  | — |  | 590,792 |
Eliminations(1) | — |  | — |  | (2,307 | ) | — |  | (2,307 | )
Revenues out of scope | 4,982 |  | 7,756 |  | 574,880 |  | — |  | 587,618 |
Total operating revenues | $ | 199,965 |  | 14,897 |  | 584,960 |  | 11,945 |  | $ | 811,767 |
(1) | Consists of transactions between subsidiaries that are eliminated in consolidation.
Disaggregated revenues from contracts with customers by customer type and by reporting segment and other business operations during the three months ended December 31, 2018 is as follows:
| Regulated | Unregulated |
(Thousands) | Natural Gas Distribution | Clean Energy Ventures | Energy Services | Home Services and Other | Total
Residential | $ | 133,690 |  | 2,132 |  | — |  | 11,717 |  | $ | 147,539 |
Commercial and industrial | 40,728 |  | 5,009 |  | 10,080 |  | 228 |  | 56,045 |
Firm transportation | 18,934 |  | — |  | — |  | — |  | 18,934 |
Interruptible and off-tariff | 1,631 |  | — |  | — |  | — |  | 1,631 |
Revenues out of scope | 4,982 |  | 7,756 |  | 574,880 |  | — |  | 587,618 |
Total operating revenues | $ | 199,965 |  | 14,897 |  | 584,960 |  | 11,945 |  | $ | 811,767 |
Customer Accounts Receivable/Credit Balances and Deposits The timing of revenue recognition, customer billings and cash collections result in accounts receivables, billed and unbilled, and customers’ credit balances and deposits on the Unaudited Condensed Consolidated Balance Sheets during the three months ended December 31, 2018 are as follows:
| Customer Accounts Receivable | Customers' Credit
(Thousands) | Billed | Unbilled | Balances and Deposits
Balance as of October 1, 2018 | $ | 205,490 |  | $ | 7,199 |  | $ | 27,325 |
Increase | 112,618 |  | 47,956 |  | 2,304 |
Balance as of December 31, 2018 | $ | 318,108 |  | $ | 55,155 |  | $ | 29,629 |
The following table provides information about receivables and revenue earned on contracts in progress in excess of billings, which are included within accounts receivable, billed and unbilled, and customers’ credit balances and deposits, respectively, on the Unaudited Condensed Consolidated Balance Sheets as of December 31, 2018:
(Thousands) | Natural Gas Distribution | Clean Energy Ventures | Energy Services | Home Services and Other | Eliminations | Total
Customer accounts receivable |  |  |  |  |  |
Billed | $ | 73,748 |  | 3,574 |  | 239,542 |  | 2,996 |  | (1,752 | ) | $ | 318,108 |
Unbilled | 55,155 |  | — |  | — |  | — |  | — |  | 55,155 |
Customers' credit balances and deposits | (29,627 | ) | — |  | — |  | (2 | ) | — |  | (29,629 | )
Total | $ | 99,276 |  | 3,574 |  | 239,542 |  | 2,994 |  | (1,752 | ) | $ | 343,634 |

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 + Details
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