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DERIVATIVE INSTRUMENTS (Tables)
 3 Months Ended
Dec. 31, 2018
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, 2018
 
September 30, 2018
(Thousands)
Balance Sheet Location
Asset
Derivatives
Liability
Derivatives
Asset
Derivatives
Liability
Derivatives
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
Natural Gas Distribution:
 
 
 
 
 
 
 
 
 
Physical commodity contracts
Derivatives - current
 
$
1,555

 
$
325

 
$
85

 
$
192

Financial commodity contracts
Derivatives - current
 
3,529

 
2,335

 
94

 
—

Energy Services:
 
 
 
 
 
 
 
 
 
Physical commodity contracts
Derivatives - current
 
10,626

 
26,976

 
7,667

 
18,158

 
Derivatives - noncurrent
 
1,255

 
19,947

 
3,930

 
11,316

Financial commodity contracts
Derivatives - current
 
39,409

 
35,219

 
19,169

 
28,176

 
Derivatives - noncurrent
 
4,830

 
16,618

 
6,630

 
11,548

Foreign currency contracts
Derivatives - current
 
—

 
259

 
—

 
126

 
Derivatives - noncurrent
 
—

 
260

 
—

 
118

Home Services and Other:
 
 
 
 
 
 
 
 
 
Interest rate contracts
Derivatives - current
 
239

 
—

 
381

 
—

Total fair value of derivatives
 
 
$
61,443

 
$
101,939

 
$
37,956

 
$
69,634
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 Unaudited Condensed Consolidated Balance Sheets but elects not to.
(Thousands)
Amounts Presented on Balance Sheets (1)
Offsetting Derivative Instruments (2)
Financial Collateral Received/Pledged (3)
Net Amounts (4)
As of December 31, 2018:
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
11,881

 
$
(3,916
)
 
$
(200
)
 
$
7,765

Financial commodity contracts
 
44,239

 
(35,549
)
 
3,581

 
12,271

Total Energy Services
 
$
56,120

 
$
(39,465
)
 
$
3,381

 
$
20,036

Natural Gas Distribution
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
1,555

 
$
—

 
$
—

 
$
1,555

Financial commodity contracts
 
3,529

 
(2,335
)
 
(1,194
)
 
—

Total Natural Gas Distribution
 
$
5,084

 
$
(2,335
)
 
$
(1,194
)
 
$
1,555

Home Services and Other
 
 
 
 
 
 
 
 
Interest rate contracts
 
$
239

 
$
—

 
$
—

 
$
239

Total Home Services and Other
 
$
239

 
$
—

 
$
—

 
$
239

Derivative liabilities:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
46,923

 
$
(3,915
)
 
$
—

 
$
43,008

Financial commodity contracts
 
51,837

 
(35,549
)
 
(16,288
)
 
—

Foreign currency contracts
 
519

 
—

 
—

 
519

Total Energy Services
 
$
99,279

 
$
(39,464
)
 
$
(16,288
)
 
$
43,527

Natural Gas Distribution
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
325

 
$
—

 
$
—

 
$
325

Financial commodity contracts
 
2,335

 
(2,335
)
 
—

 
—

Total Natural Gas Distribution
 
$
2,660

 
$
(2,335
)
 
$
—

 
$
325

As of September 30, 2018:
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
11,597

 
$
(3,944
)
 
$
(200
)
 
$
7,453

Financial commodity contracts
 
25,799

 
(18,775
)
 
—

 
7,024

Total Energy Services
 
$
37,396

 
$
(22,719
)
 
$
(200
)
 
$
14,477

Natural Gas Distribution
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
85

 
$
(3
)
 
$
—

 
$
82

Financial commodity contracts
 
94

 
—

 
(94
)
 
—

Total Natural Gas Distribution
 
$
179

 
$
(3
)
 
$
(94
)
 
$
82

Home Services and Other
 
 
 
 
 
 
 
 
Interest rate contracts
 
$
381

 
$
—

 
$
—

 
$
381

Total Home Services and Other
 
$
381

 
$
—

 
$
—

 
$
381

Derivative liabilities:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
29,474

 
$
(3,944
)
 
$
—

 
$
25,530

Financial commodity contracts
 
39,724

 
(18,775
)
 
(20,949
)
 
—

Foreign currency contracts
 
244

 
—

 
—

 
244

Total Energy Services
 
$
69,442

 
$
(22,719
)
 
$
(20,949
)
 
$
25,774

Natural Gas Distribution
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
192

 
$
(3
)
 
$
—

 
$
189

Total Natural Gas Distribution
 
$
192

 
$
(3
)
 
$
—

 
$
189

(1)
Derivative assets and liabilities are presented on a gross basis on the balance sheet as the Company does not elect balance sheet offsetting under ASC 210-20.
(2)
Includes 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 Unaudited Condensed Consolidated Balance Sheets but elects not to.
(Thousands)
Amounts Presented on Balance Sheets (1)
Offsetting Derivative Instruments (2)
Financial Collateral Received/Pledged (3)
Net Amounts (4)
As of December 31, 2018:
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
11,881

 
$
(3,916
)
 
$
(200
)
 
$
7,765

Financial commodity contracts
 
44,239

 
(35,549
)
 
3,581

 
12,271

Total Energy Services
 
$
56,120

 
$
(39,465
)
 
$
3,381

 
$
20,036

Natural Gas Distribution
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
1,555

 
$
—

 
$
—

 
$
1,555

Financial commodity contracts
 
3,529

 
(2,335
)
 
(1,194
)
 
—

Total Natural Gas Distribution
 
$
5,084

 
$
(2,335
)
 
$
(1,194
)
 
$
1,555

Home Services and Other
 
 
 
 
 
 
 
 
Interest rate contracts
 
$
239

 
$
—

 
$
—

 
$
239

Total Home Services and Other
 
$
239

 
$
—

 
$
—

 
$
239

Derivative liabilities:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
46,923

 
$
(3,915
)
 
$
—

 
$
43,008

Financial commodity contracts
 
51,837

 
(35,549
)
 
(16,288
)
 
—

Foreign currency contracts
 
519

 
—

 
—

 
519

Total Energy Services
 
$
99,279

 
$
(39,464
)
 
$
(16,288
)
 
$
43,527

Natural Gas Distribution
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
325

 
$
—

 
$
—

 
$
325

Financial commodity contracts
 
2,335

 
(2,335
)
 
—

 
—

Total Natural Gas Distribution
 
$
2,660

 
$
(2,335
)
 
$
—

 
$
325

As of September 30, 2018:
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
11,597

 
$
(3,944
)
 
$
(200
)
 
$
7,453

Financial commodity contracts
 
25,799

 
(18,775
)
 
—

 
7,024

Total Energy Services
 
$
37,396

 
$
(22,719
)
 
$
(200
)
 
$
14,477

Natural Gas Distribution
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
85

 
$
(3
)
 
$
—

 
$
82

Financial commodity contracts
 
94

 
—

 
(94
)
 
—

Total Natural Gas Distribution
 
$
179

 
$
(3
)
 
$
(94
)
 
$
82

Home Services and Other
 
 
 
 
 
 
 
 
Interest rate contracts
 
$
381

 
$
—

 
$
—

 
$
381

Total Home Services and Other
 
$
381

 
$
—

 
$
—

 
$
381

Derivative liabilities:
 
 
 
 
 
 
 
 
Energy Services
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
29,474

 
$
(3,944
)
 
$
—

 
$
25,530

Financial commodity contracts
 
39,724

 
(18,775
)
 
(20,949
)
 
—

Foreign currency contracts
 
244

 
—

 
—

 
244

Total Energy Services
 
$
69,442

 
$
(22,719
)
 
$
(20,949
)
 
$
25,774

Natural Gas Distribution
 
 
 
 
 
 
 
 
Physical commodity contracts
 
$
192

 
$
(3
)
 
$
—

 
$
189

Total Natural Gas Distribution
 
$
192

 
$
(3
)
 
$
—

 
$
189

(1)
Derivative assets and liabilities are presented on a gross basis on the balance sheet as the Company does not elect balance sheet offsetting under ASC 210-20.
(2)
Includes 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 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:
2018
 
2017
Energy Services:
 
 
 
 
Physical commodity contracts
Operating revenues
$
(1,532
)
 
$
1,210

Physical commodity contracts
Gas purchases
(5,432
)
 
(22,697
)
Financial commodity contracts
Gas purchases
(2,956
)
 
(25,997
)
Foreign currency contracts
Gas purchases
(346
)
 
(48
)
Home Services and Other:
 
 
 
 
Interest rate contracts
Interest expense
(123
)
 
—

Total unrealized and realized losses
$
(10,389
)
 
$
(47,532
)
Effect of Derivative Instruments Designated as Cash Flow Hedges on OCI
The following table reflects the (losses) gains associated with NJNG's derivative instruments as of:
 
Three Months Ended
 
December 31,
(Thousands)
2018
 
2017
Natural Gas Distribution:
 
 
 
Physical commodity contracts
$
2,977

 
$
(2,976
)
Financial commodity contracts
4,396

 
(8,808
)
Interest rate contracts
—

 
(4,067
)
Total unrealized and realized gains (losses)
$
7,373

 
$
(15,851
)
Schedule of Outstanding Long (Short) Derivatives
NJNG and Energy Services had the following outstanding long (short) derivatives as of:
 
 
 
Volume (Bcf)
 
 
 
December 31,
2018
 
September 30,
2018
Natural Gas Distribution
Futures
 
30.6

 
27.9

 
Physical
 
15.5

 
23.1

Energy Services
Futures
 
(5.9
)
 
(7.0
)
 
Physical
 
19.8

 
51.2
Schedule of Broker Margin Accounts by Company
The balances are as follows:
(Thousands)
Balance Sheet Location
December 31,
2018
September 30,
2018
Natural Gas Distribution
Restricted broker margin accounts
$
—

$
2,038

 
Accounts payable and other
$
(757
)
$
—

Energy Services
Restricted broker margin accounts
$
85,784

$
51,681
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, 2018. 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
 
$
256,383

 
Noninvestment grade
 
51,076

 
Internally rated investment grade
 
51,914

 
Internally rated noninvestment grade
 
57,287

 
Total
 
$
416,660